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Exhibit
10.9
AMENDED AND RESTATED
PEOPLE’S BANK
1998 LONG-TERM INCENTIVE
PLAN
§1. Purpose . The
purpose of the Plan is to promote the mutual interests of the Bank
and its shareholders by enabling key employees of the Bank, or of
the Parent or any Subsidiary of the Bank, to participate in the
Bank’s future growth. The Plan is designed to give those
employees upon whose judgment, initiative and efforts the
successful conduct of the Bank’s business depends, additional
incentives to perform in a superior manner. The Plan also provides
a means through which the Bank can attract, motivate and retain
people of experience and ability as employees.
§2. Definitions .
For purposes of the Plan, the following terms shall have the
meanings set forth below:
“Award” means a
grant of any Non-Statutory Stock Option, Incentive Stock Option,
Stock Appreciation Right, Restricted Stock Award, Performance Unit
Award, or any combination of the foregoing, under the provisions of
the Plan.
“Bank” means
People’s Bank, a Connecticut state-chartered capital stock
savings bank, and any successor thereto.
“Board” means the
Board of Directors of the Bank.
“Change of
Control” has the meaning set forth in Section 12(a)
hereof.
“Code” means the
Internal Revenue Code of 1986, as amended from time to time, and
any successor thereto.
“Committee” means
the Human Resources Committee referred to in Section 3
hereof.
“Disability” (and
terms substantially equivalent thereto) means permanent and total
disability as determined under procedures established by the
Committee for purposes of the Plan.
“employment with the
Bank” (and terms substantially equivalent thereto) means a
subsisting employer-employee relationship between the Bank and the
employee and includes employment with the Parent or any Subsidiary
. Employment shall be deemed to cease, for purposes of the
Plan, at such time as (a) the employee is no longer
actively
performing or no longer
remains obligated to perform services for the Bank in exchange for
which the Bank (or related employer) is obligated to pay
compensation to such employee in the form of wages, or (b) in
the case of an employee who is on leave for any reason whatsoever,
on the termination date specified by the Bank (or related employer)
in a written communication advising the employee that his or her
employment is being terminated. An employee shall be treated as
remaining obligated to perform services for the Bank within the
meaning of subsection (a) for the duration of any scheduled
time off which has been approved by the employee’s manager
and for which the employee is entitled to compensation pursuant to
the Bank’s paid time off policy (as the same may be amended
from time to time).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to
time, and any successor statute thereto.
“Fair Market
Value” means as of a particular date:
(i) if the Stock is not then
listed or admitted to trading on a national securities exchange (as
that term is used in Section 6 of the Exchange Act), and
prices of trades in Stock are regularly reported by NASDAQ, the
mean between the high and low selling prices for Stock on such date
as reported by NASDAQ, or, if no high or low selling prices for
Stock are reported by NASDAQ for such date, then the mean between
the high and low selling prices for Stock reported by NASDAQ for
the most recent day in respect of which both high and low selling
prices are so reported; or
(ii) if the Stock is then
listed or admitted to trading on one or more national securities
exchanges, the mean between the high and low selling prices at
which Stock is traded on the principal securities exchange on which
the Stock is traded on such date or, if Stock is not traded on such
exchange on that date, the mean between the high and low selling
prices at which Stock was traded on such exchange on the most
recent day on which Stock was so traded; or
(iii) if neither (i) nor
(ii) is applicable, such amount as the Committee shall
determine on the basis of such factors as it deems
relevant.
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“FDIC” means the
Federal Deposit Insurance Corporation or any successor agency
thereto.
“Incentive Stock
Option” means any Stock Option intended to be and designated
as an “incentive stock option” within the meaning of
Section 422 of the Code.
“NASDAQ” means
the National Association of Securities Dealers Automated Quotation
System.
“Non-Employee
Director” means a person who is a “Non-Employee
Director” within the meaning of Rule 16b-3(b)(3) of the
Exchange Act, or any successor definition adopted by the SEC or the
FDIC, and an “outside director” for purposes of
Section 162(m)(4) of the Code or any successor definition
adopted by the Internal Revenue Service.
“Non-Statutory Stock
Option” means any Stock Option that is not an Incentive Stock
Option.
“Option
Agreement” or “Stock Option Agreement” means the
written agreement between the Bank and a Participant confirming the
Stock Option and setting forth the terms and conditions upon which
it may be exercised, as described in Section 7(b)
hereof.
“Option Price”
means the price per share of Stock to be paid for the shares of
Stock being purchased pursuant to an Option Agreement.
“Parent” means
People’s Mutual Holdings, a Connecticut state-chartered
mutual holding company.
“Participant”
means an eligible employee (as described in Section 5 hereof)
who accepts an Award for a Stock Option, a Stock Appreciation
Right, Restricted Stock, Performance Units, or any one or more of
the foregoing (as described in Sections 7, 8, 9 and 10
hereof).
“Performance
Goals” means the objective criteria established by the
Committee from time to time in accordance with Section 11
hereof and upon which the performance of a Participant during a
Performance Period is to be measured for purposes of determining
the extent to which an Award has been earned.
“Performance
Period” means the measuring period for determining whether
Awards have been earned.
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“Performance Unit
Agreement” means the written agreement between the Bank and a
Participant confirming the Performance Unit Award and setting forth
the terms and conditions of such Award.
“Performance Unit
Award” means an Award under Section 10
hereof.
“Plan” means the
People’s Bank 1998 Long-Term Incentive Plan, as set forth
herein and as hereinafter amended from time to time.
“Predecessor
Plan” means the People’s Bank 1988 Long-Term Incentive
Plan.
“Restricted Stock
Agreement” means the written agreement between the Bank and a
Participant confirming the Restricted Stock Award and setting forth
the terms and conditions of such restrictions.
“Restricted
Stock” means an Award under Section 9 hereof.
“Restriction
Period” means the period determined by the Committee during
which restrictions shall be applicable to Restricted
Stock.
“Retirement” (and
terms substantially equivalent thereto) means the termination of an
employee’s employment at or after age 65.
“SAR Agreement”
means the written agreement between the Bank and a Participant
confirming the grant of Stock Appreciation Rights not granted in
connection with Stock Options, and setting forth the terms and
conditions upon which it may be exercised, as described in
Section 8(b) hereof.
“SEC” means the
Securities and Exchange Commission or any successor agency
thereto.
“Stock” means the
Common Stock of the Bank, having no par value.
“Stock Appreciation
Right” means a right granted under Section 8
hereof.
“Stock Option” or
“Option” means an option granted under Section 7
hereof.
“Subsidiary”
means any corporation in which the Bank owns, directly or
indirectly through one or more other Subsidiaries, at least 50% of
the total combined voting power of all classes of stock.
“termination for
Cause” (and terms substantially equivalent thereto) means a
termination of employment by reason of an employee’s act of
dishonesty, moral turpitude,
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insubordination, or an
intentional or grossly negligent act detrimental to the interests
of the Bank, or of its Parent or any Subsidiary.
§3.
Administration . The Plan shall be administered by the
Committee or such other committee of the Board that is designated
and empowered to perform the functions of the Committee, and in
either case, composed of not fewer than two Non-Employee Directors
of the Bank. In particular, the Committee shall have the authority,
subject to the terms of the Plan, to select the officers and other
key employees to whom Awards may from time to time be granted, to
determine whether and to what extent Incentive Stock Options,
Non-Statutory Stock Options, Stock Appreciation Rights, Restricted
Stock Awards, or Performance Unit Awards, or any combination
thereof are to be granted, and to determine the terms and
conditions of all such grants. The Committee shall supervise and
administer the Plan and shall have plenary powers and authority to
adopt, amend and rescind such rules and regulations and establish
such procedures as it deems appropriate for the administration of
the Plan and the Awards, including rules with respect to limiting
the use of shares of Common Stock of the Bank in full or part
payment of the Option Price of Stock Options and in full or part
payment of any applicable withholding taxes, and generally to
conduct and administer the Plan and to make all determinations in
connection therewith as may be necessary or advisable. Any
questions of interpretation of the Plan, any Awards issued under
it, or any such rules and regulations, shall be determined by the
Committee, and such determinations shall be binding and conclusive
for all purposes and upon all persons. The Committee may delegate
some or all of its authority under the Plan as the Committee deems
appropriate; provided, however, that no such delegation may be made
that would (i) cause Awards under the Plan to cease to be
exempt from Section 16(b) of the Exchange Act or
(ii) cause any Award to cease to qualify for exemption from
the deduction limitations under Section 162(m) of the
Code.
§4. Types of
Awards . The Committee shall have full and complete authority,
in its discretion, subject to the provisions of the Plan, to grant
Awards consisting of any one or a combination of Incentive Stock
Options (as provided in Section 7 hereof); Non-Statutory Stock
Options (as provided in Section 7 hereof); Stock Appreciation
Rights (as provided in Section 8
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hereof); Restricted Stock (as provided
in Section 9 hereof); and Performance Units (as provided in
Section 10 hereof).
§5. Eligibility .
Officers and other key employees of the Bank, its Parent and any
Subsidiaries (but excluding members of the Committee and any person
who serves only as a director of the Bank and/or any one more of
its Parent and any Subsidiaries) are eligible to be granted Awards
under the Plan. The employees who shall receive Awards under the
Plan shall be selected from time to time by the Committee in its
sole discretion, from among those eligible, and the Committee shall
determine, in its sole discretion, the size and form of each Award
to be granted to each such employee selected.
§6. Stock Subject to
Plan . As of July 19, 2007, the total number of shares of
Stock reserved and available for distribution pursuant to Awards
under the Plan, subject to adjustment as provided in
Section 13 hereof, shall be 7,593,797 shares (which amount
reflects adjustments to the number of shares previously reserved
for distribution as a result of stock splits effected in 2004 and
2005; the exchange of shares in connection with the conversion and
related stock offering effected by the Bank and the Parent in 2007;
and any shares available for distribution pursuant to awards under
any Predecessor Plan). Subject to the foregoing and to adjustment
as provided in Section 13 hereof, the maximum aggregate number
of shares of Stock that may be issued after July 19, 2007
pursuant to awards of Restricted Stock and/or issued in payment of
the value of Performance Units shall be three million (3,000,000).
Shares reserved and available for distribution pursuant to Awards
under the Plan may consist, in whole or in part, of authorized and
unissued shares or issued shares reacquired by the Bank and
currently or hereafter held as treasury shares, as the Committee
may from time to time determine. Shares attributable to any Award
made under the Plan in the form of a Stock Option or Restricted
Stock shall be unavailable for future grants so long as the Award
remains outstanding, or following the exercise or deemed exercise
of any Award made in the form of a Stock Option or the vesting of
any Award made in the form of Restricted Stock, to the extent of
such exercise, deemed exercise, or vesting (as the case may be). If
any Award made in the form of a Stock Option remains unexercised in
whole or in part at the expiration thereof or is terminated
unexercised in whole or
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in part, or if any Award made in the
form of Restricted Stock is forfeited in whole or in part prior to
the vesting of such Award, then in each case the shares
attributable to such Award shall be available for future grants
under the Plan to the extent such Award was not exercised or was
forfeited (as the case may be). Notwithstanding the foregoing, if a
Stock Appreciation Right granted in conjunction with a Stock Option
is exercised, such Stock Option shall be deemed to have been
exercised for purposes of determining whether the shares
attributable to such Stock Option shall be available for future
grants under the Plan. The maximum number of shares that may be
made the subject of all Awards to any Participant in any calendar
year in the form of Stock Options or Stock Appreciation Rights, or
any combination thereof, is 100,000 shares. The maximum number of
shares that may be made the subject of all Awards to any
Participant in any calendar year in the form of Restricted Stock is
30,000 shares.
§7. Stock Options
. The Committee may, from time to time, grant Stock Options, alone
or in addition to other Awards granted under the Plan. The two
types of Stock Options that may be granted are Incentive Stock
Options and Non-Statutory Stock Options, which may be granted by
the Committee to eligible employees (as described in Section 5
hereof) severally or together (in each case, with or without Stock
Appreciation Rights). If any Stock Option does not qualify as an
Incentive Stock Option, it shall constitute a Non-Statutory Stock
Option as provided in this Section 7. Stock Options granted
under the Plan shall be subject to the following terms and
conditions, and may contain such additional terms and conditions as
the Committee shall deem desirable.
(a) Grant Date . The
grant of a Stock Option shall occur on the date the Committee, by
resolution, (i) selects an eligible employee as grantee,
(ii) determines the number of Stock Options granted to such
employee, and (iii) specifies the terms and conditions of the
Option Agreement. In no event may the Committee grant a Stock
Option later than 10 years after the earlier of (x) the
initial date of adoption of the Plan, and (y) the date the
Plan is initially approved by the shareholders of the
Bank.
(b) Option Agreement .
Each Stock Option shall be evidenced by an Option Agreement, and
the terms and provisions of each Option Agreement may differ. Each
Option Agreement shall indicate on its face whether it is an
agreement for Incentive Stock
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Options or Non-Statutory
Stock Options. If Stock Appreciation Rights are granted in
connection with the grant of Stock Options, the Option Agreement
shall also evidence the grant of the related Stock Appreciation
Rights.
(c) Interpretation .
Notwithstanding any terms of the Plan to the contrary, no term of
the Plan relating to Incentive Stock Options shall be interpreted,
amended or altered to disqualify the Plan under Section 422 of
the Code.
(d) Price . The Option
Price for each share of Stock purchasable under a Stock Option
shall be an amount equal to the Fair Market Value of each share of
the Stock on the date of grant, or such higher price as the
Committee shall determine on or prior to such date; however, the
Option Price per share of Stock to an eligible employee who owns
Stock possessing more than 10% of the total combined voting power
of all classes of stock of the Bank shall be an amount not less
than 110% of the Fair Market Value of the Stock on the date the
Incentive Stock Option is granted. Except as provided in
Section 13, without the affirmative vote of holders of a
majority of the Stock cast in person or by proxy at a meeting of
shareholders of the Parent at which a quorum representing a
majority of all outstanding Stock is present or represented by
proxy, neither the Committee nor the Board shall approve a program
providing for either (a) the cancellation of outstanding Stock
Options and the grant in substitution therefor of any new awards,
including specifically any new Stock Options having a lower Option
Price, or (b) the amendment of outstanding Stock Options to
reduce the Option Price thereof.
(e) Term . The term of
each Stock Option shall be fixed by the Committee, but no Stock
Option (whether an Incentive Stock Option or a Non-Statutory Stock
Option) shall be exercisable more than 10 years after the date the
Stock Option is granted; however, no Incentive Stock Option granted
to an eligible employee who owns Stock possessing more than 10% of
the total combined voting power of all classes of stock of the Bank
shall be exercisable more than 5 years after the date the Stock
Option is granted.
(f) Exercisability .
Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the
Committee; provided, however, that except as provided in Sections
7(i), 12, 13, 14 and 16 hereof and unless otherwise determined by
the Committee, no Stock Option shall be exercisable prior to
the
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first anniversary date of the
date of grant of such Stock Option. If the Committee provides that
any Stock Option is exercisable only in installments, the Committee
may at any time waive such installment exercise provisions, in
whole or in part, based on such factors as the Committee may
determine.
(g) Method of Exercise
. Subject to the provisions of this Section 7, Stock Options
may be exercised, in whole or in part, at any time during the
Option term by the Participant’s giving written notice of
exercise to the Bank specifying the number of shares to be
purchased. If a Participant wishes to exercise an Incentive Stock
Option or to sell shares of Stock acquired upon the exercise of an
Incentive Stock Option in a manner or within a time period that
would make the Incentive Stock Option a Non-Statutory Stock Option,
the Participant shall specifically notify the Bank of that fact in
such notice or when such transaction occurs. Such notice shall be
accompanied by payment in full of the Option Price by cash,
certified or bank check, or such other form of payment as may be
lawful consideration for capital stock and as the Bank may accept.
With the consent of the Committee, payment in full or in part may
also be made in the form of Stock already owned by the Participant
or Restricted Stock (based on the Fair Market Value of such Stock
on the date the Stock Option is exercised), the share certificates
for which shall be endorsed in blank or accompanied by duly
executed stock powers with signatures guaranteed by a broker-dealer
firm that is a member of a national securities exchange or a
commercial bank or trust company (unless such signature guaranty is
waived by the Bank). The Committee may determine whether any
restrictions shall be applicable to any shares received if payment
of the Option Price for a Stock Option is made, in whole or in
part, in the form of Restricted Stock, and, if any restrictions are
so imposed, the terms of such restrictions. With the consent of the
Committee, a Participant may elect to pay the exercise price for a
Stock Option by authorizing a broker to sell shares of Stock (or a
sufficient portion of the shares of Stock) acquired by the
Participant upon exercise of the Option and to remit to the Bank a
sufficient portion of the sale proceeds to pay the exercise price
for the Stock Option and satisfy all tax withholding obligations
resulting from such exercise. The Bank shall have the authority to
delay the issuance of any shares
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of Stock pursuant to the
exercise of Stock Options until full payment therefor has been
made, which includes the satisfaction of any withholding tax
obligations related thereto.
(h) Transferability,
Assignability . Except as otherwise provided by the Committee,
Stock Options shall not be transferable by the Participant other
than by will or by the laws of descent and distribution, and shall
be exercisable during the Participant’s lifetime only by the
Participant for his or her individual account; or, in the event of
his or her legal incapacity, by his or her legal representative;
or, in the event of his or her Disability, by the Participant or
his or her legal representative (as the case may be).
(i) Incentive Stock Option
Limitations . To the extent required for “incentive stock
option” status under Section 422 of the Code, the
Committee is authorized to limit the aggregate Fair Market Value of
the Stock (determined as of the date of grant) with respect to
which Incentive Stock Options are exercisable for the first time by
a Participant during any calendar year under the Plan and any other
stock option plan of any subsidiary or parent corporation (within
the meaning of Section 424 of the Code). The Committee is
authorized to provide at grant that, to the extent permitted under
Section 422 of the Code, if an e
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