Exhibit 10.7(a)

 

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PERFORMANCE SHARE GRANT AGREEMENT

 

Employee Name:    [Participant Name] Number of Performance Shares Subject to
Grant (Target):    [Shares Granted] Award Date:    [Grant Date]

THIS PERFORMANCE SHARE GRANT AGREEMENT (this “Agreement”) is made as of the
Award Date shown above by People’s United Financial, Inc., a Delaware
corporation, and its subsidiaries (the “Company”), and is hereby communicated to
the employee named above (the “Employee”). Undefined capitalized terms used in
this Agreement shall have the meanings set forth in the Company’s 2014 Long-Term
Incentive Plan as may be amended from time to time (the “Plan”); provided, that
the term “Retirement” shall mean any “Retirement” as defined in the Plan that
occurs on or after the first anniversary of the Grant Date.

WHEREAS, the Company maintains the Plan.

WHEREAS, pursuant to Section 5 of the Plan, the Committee may grant awards of
Performance Shares to employees, representing the right to receive Shares based
on the extent specified performance goals are achieved.

WHEREAS, the Company desires to compensate the Employee with a grant of
Performance Shares for the Employee’s future services to the Company.

NOW, THEREFORE, in consideration of the premises, the Company grants the
Employee an Award of Performance Shares under the following terms and
conditions:

1. Grant of Performance Shares.

The Company hereby grants to the Employee a target Award of the number of
Performance Shares identified above (the “Grant”), which may be increased or
decreased depending on attainment of the performance criteria identified in this
Agreement (the “Performance Measure(s)”) to be issued in accordance with all of
the terms and conditions set forth in this Agreement and the Plan. Each
Performance Share shall be equivalent to one Share until such time as Shares are
issued in payment of Performance Shares in accordance with Section 6. All terms
and conditions set forth in the Plan are deemed to be incorporated herein in
their entirety.

2. Book Entry.

The number of Performance Shares granted pursuant to this Agreement shall be
credited to the Employee and shall be maintained on the books of the Company
until Shares have been issued to the Employee (or the Employee’s beneficiaries
if the Employee is deceased) in payment therefor in accordance with Section 6.
No funds shall be set aside or earmarked for any Performance Shares, which shall
be purely a bookkeeping device.

3. Performance Period and Vesting Provisions.

(a) The Performance Period is the period beginning on January 1,
                 and ending on December 31,                 .

(b) Except as provided in this Agreement, the Employee’s Performance Shares will
vest only upon the Employee’s continued employment through March 1 following the
end of the Performance Period, provided that the Committee certifies the
Performance Measure(s) for the Performance Period have been achieved as set
forth in Appendix A attached to this Agreement. Appendix A shall set forth the
applicable Performance Measures and payout percentages based on the attainment
of “Threshold,” “Target,” and “Maximum” performance levels for each Performance
Measure.

 

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(c) Notwithstanding any provision to the contrary, if at any time after the
Award Date, and before the date that Performance Shares are paid, the Employee’s
employment or service with the Company terminates due to death, Disability or
Retirement, the Employee shall vest in all of the Performance Shares granted
pursuant to this Agreement and related cash dividends, provided that payment of
any Award becoming vested pursuant to this subsection (c), including the number
of Shares to be issued in payment of the Award and determination of the time of
payment, shall be made in accordance with the provisions of Section 6(b).

4. Forfeiture Provisions.

(a) If before the date that the Company pays the Performance Shares the
Employee’s employment or service with the Company is terminated for any reason
other than death, Disability or Retirement, all of the Employee’s unvested
Performance Shares and any unvested cash dividends shall be forfeited.

(b) Notwithstanding any provision of this Agreement to the contrary, the
Committee may cause the Employee to forfeit all unvested Performance Shares and
require repayment of any amount previously paid under this Agreement in
accordance with the terms of the Company’s Incentive Compensation Clawback
Policy (“the Policy”), any other applicable policy of the Company, and any other
applicable laws and regulations.

(c) This Grant is subject to acceptance of all the terms, conditions and
limitations of the Plan. The Plan may be amended from time to time, including
but not limited to provisions on tax withholding and forfeiture. This Grant is
subject to such rules and regulations that the Committee may adopt for
administration of the Plan, and to all applicable laws, rules and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

5. Change in Control.

In the event of a Change in Control of the Company defined in Section 2(j) of
the Plan, the rights of the Employee with respect to the Performance Shares
shall be determined in accordance with the provisions of Section 17(b) of the
Plan.

6. Issuance of Stock.

(a) Except as provided in subsection (b), following completion of the
Performance Period, the Committee shall determine the extent to which applicable
Performance Measure(s) have been attained and shall calculate the number of
Shares to be issued in payment of each Performance Share in accordance with the
provisions of Appendix A. The Company will cause the number of Shares so
calculated to be delivered to or for the account of the Employee within 60 days
after the date the Performance Shares vest or as soon as administratively
possible after such date (but in no event later than December 31st of the year
after the year in which the Performance Period expired), except as otherwise
provided in Section 12 below. If the number of Shares so calculated is zero, the
Employee shall be deemed to have received payment in full for the Performance
Shares made the subject of this Grant even though no Shares are delivered or
deliverable.

(b) In the event Performance Shares become vested on an accelerated basis
pursuant to Section 3(c) due to the death or Disability of the Employee, the
Company will cause a number of Shares equal to the number of Performance Shares
granted pursuant to this Agreement to be delivered to or for the account of the
Employee as soon as administratively possible after the date such Performance
Shares became vested. In the event Performance Shares become vested on an
accelerated basis pursuant to Section 3(c) due to the Retirement of the
Employee, the number of Shares to be issued in payment of such Performance
Shares shall be calculated and such shares shall be delivered to or for the
account of the Employee in the manner and at the time described in subsection
(a); provided, however, that in the event of such Employee’s death prior to
March 1 following the end of the Performance Period, the Company will cause a
number of Shares equal to the number of Performance Shares granted pursuant to
this Agreement to be delivered to or for the account of the Employee as soon as
administratively possible after the date of the Employee’s death.

 

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(c) Notwithstanding any provision to the contrary, if, in the reasonable
determination of the Company, an Employee is a “specified employee” for purposes
of Section 409A of the Internal Revenue Code of 1986, as amended, and the
guidance promulgated thereunder (“Code Section 409A”), then, if necessary to
avoid the imposition on the Employee of excise tax and interest under Code
Section 409A, the Company shall not deliver the Shares otherwise payable upon
the Employee’s termination and separation of service until the date that is 30
days after 6 months following the Employee’s termination and separation of
service from the Company.

(d) The delivery of the Shares shall be subject to payment of the applicable
withholding tax liability as set forth in Section 7.

(e) If the Employee dies before the Company has distributed any portion of the
vested Performance Shares, the Company will transfer any Shares payable with
respect to the vested Performance Shares in accordance with the Employee’s
written beneficiary designation or to the Employee’s estate if no written
beneficiary designation is provided. If the Employee did not have a will, any
Shares payable with respect to the vested Performance Shares will be distributed
in accordance with the laws of descent and distribution.

7. Withholding Taxes.

The Company shall have the power and the right to deduct or withhold, or require
the Employee to remit to the Company, an amount sufficient to satisfy any
federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result
of this Agreement.

8. Non-transferability of Grant.

During the Performance Period, the Employee shall have no right to transfer,
sell, pledge, assign, or hypothecate, other than by will or the laws of descent
and distribution, any rights with respect to the Employee’s Award of Performance
Shares. No Performance Shares shall be subject to execution, attachment, or
similar process.

9. No Voting Rights as Stockholder.

The Employee shall not have any voting rights as a stockholder of the Company
with respect to the Performance Shares, but shall have such rights with respect
to any Shares issued to the Employee in payment of such Performance Shares.

10. Dividends.

To the extent that cash dividends are paid on Shares after the Award Date and
before the date the Employee receives Shares in payment for Performance Shares
subject to this Grant, the Employee shall receive credits of cash in a dividend
bookkeeping account (the “Dividend Account”). Such cash credits shall be equal
in value (based on the reported dividend rate on the date dividends were paid)
to the amount of dividends paid on the Shares delivered to or for the account of
the Employee in payment for the Performance Shares. The Employee shall vest in
the cash in the Dividend Account in accordance with Section 3 of the Agreement
in the same manner that the Employee vests in the Performance Shares granted
pursuant to this Agreement. A distribution of the cash in the Dividend Account
will be paid to the Employee as soon as practicable following the date that the
Employee receives the applicable distribution of Shares, but in no event later
than March 15 of the calendar year immediately following the applicable Share
distribution date.

 

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11. Capital Adjustment Provisions.

In the event of the occurrence of an event described in Section 17(a) of the
Plan, the number of Performance Shares granted to the Employee shall be adjusted
in accordance with the provisions of Section 17(a) of the Plan.

12. Securities Law Compliance.

The delivery of all or any of the Shares shall only be effective at such time
that the issuance of such Shares will not violate any state or federal
securities or other laws. The Company is under no obligation to effect any
registration of Shares under the Securities Act of 1933 or to effect any state
registration or qualification of the Shares. The Company may, in its sole
discretion, delay the delivery of the Shares or place restrictive legends on
such Shares in order to ensure that the issuance of any Shares will be in
compliance with federal or state securities laws and the rules of the NASDAQ
Global Select or any other exchange upon which the Company’s common stock is
traded. If the Company delays the delivery of the Shares in order to ensure
compliance with any state or federal securities or other laws, the Company shall
deliver the Shares at the earliest date at which the Company reasonably believes
that such delivery will not cause such violation, or at such other date that may
be permitted under Code Section 409A.

13. Plan Governs.

This Grant is made under the Plan. In the event of a conflict between one or
more provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. A copy of the Plan is available upon
request by contacting the Human Resources Department at the Company’s executive
offices.

14. No Right to Continued Employment.

The Employee understands and agrees that this Agreement does not impact in any
way the right of the Company to terminate or change the terms of the employment
of the Employee at any time for any reason whatsoever, with or without Cause,
nor confer upon any right to continue in the employ of the Company.

15. Addresses for Notices.

Any notice to be given to the Company under the terms of this Agreement shall be
addressed to the Company and directed to the attention of the Committee, care of
People’s United Bank, N.A., 850 Main Street, Bridgeport, CT 06604, or at such
other address as the Company may hereafter designate in writing. Any notice to
be given to the Employee shall be addressed to the Employee at the address
maintained on the books and records of the Company.

16. Captions.

Captions provided herein are for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.

17. Severability.

In the event that any provision in this Agreement shall be held invalid or
unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining
provisions of this Agreement.

18. Expenses.

Costs of administration of the terms and conditions of this Agreement will be
paid by the Company.

 

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19. Governing Law / Compliance with Applicable Law.

The terms and conditions of this Agreement shall be governed by the laws of the
State of Connecticut, except to the extent preempted by federal law.

20. Entire Agreement; Amendment; Code Section 409A Provisions.

This Agreement and the Plan contain the terms and conditions with respect to the
subject matter hereof and supersede any previous agreements, written or oral,
relating to the subject matter hereof. This Agreement shall be interpreted in
accordance with Code Section 409A. This Agreement shall be deemed to be modified
to the maximum extent necessary to be in compliance with Code Section 409A’s
rules. If the Employee is unexpectedly required to include in the Employee’s
current year’s income any amount of compensation relating to the Performance
Shares because of a failure to meet the requirements of Code Section 409A, then
to the extent permitted by Code Section 409A, the Employee may receive a
distribution of Shares or cash in an amount not to exceed the amount required to
be included in income as a result of the failure to comply with Code
Section 409A.

21. Non-Solicitation.

During the period of the Employee’s employment with the Company, and for a
period of                  months after the cessation of such employment for any
reason, whether with or without Cause, the Employee will not, directly or
indirectly, on his or her own behalf or on behalf of any other person, and
whether through his or her own efforts or through the efforts or employing the
assistance of any other person (including without limitation any consultant or
any person employed by or associated with any person with whom the Employee
become employed or associated):

 

  a) call on or solicit in any manner any customer of the Company for the
purpose of doing business of the type done by the Company with such customer.
For purposes of this Agreement, “customer” means any individual, firm,
partnership, corporation, or other entity or person (i) currently doing business
or who has done business with the Company in the 12 months prior to the
cessation of the Employee’s employment, or (ii) any prospective customer that
the Employee knows to be a prospective customer of the Company and with whom the
Company is in discussion with and reasonably expects to do business; or

 

  b) Solicit or otherwise induce any employee of the Company to leave the employ
of the Company.

By accepting and agreeing to the terms of this Agreement, the Employee
acknowledges that his or her receipt of the grant of the Award evidenced by this
Agreement represents adequate consideration for the undertaking set forth in
this Section 21.

22. Acceptance of Grant; Revocation.

No later than forty-five (45) days after the date of this Award (the “Acceptance
Date”), the Employee must formally accept and agree to the terms of the Award as
set forth in this Agreement. The Employee must do so (a) electronically if the
Employee is directed to do so at the time the Award is formally communicated to
him or her and the Employee receives a copy of this Agreement, or (b) by
returning a signed copy of this Agreement to the Executive Rewards Manager in
the Human Resources Department, 850 Main Street, BC-03, Bridgeport, CT 06604 so
that it is actually received no later than the close of business on the
Acceptance Date. If the Employee does not accept and agree to the terms and
conditions of the Award as set forth in this Agreement by the Acceptance Date,
the Award evidenced hereby shall be null and void, and shall be deemed to have
been revoked, on the first business day following the Acceptance Date. If the
45th day after the date of this Award is not a business day, the Acceptance Date
will be the first business day after such 45th day. A business day is any day
other than a Saturday, a Sunday or a day on which the Company’s banking offices
in Connecticut are not scheduled to be open for business.

 

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Approval and Acceptance

The Award evidenced by this Agreement was approved by the Board of Directors (or
by a duly authorized committee of the Board, or by the Chief Executive Officer
acting pursuant to delegated authority) of the Company on the Award Date. The
Employee’s acceptance of the Award evidenced by this Agreement, whether
electronically, by email or in such other form as is permitted by the Company,
also evidenced the Employee’s intent to be legally bound by the terms of this
Agreement effective as of the Award Date, regardless of the date of the
Employee’s acceptance.

 

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Appendix A

Performance Measures and Measurement

The Performance Measures for the 2017-2019 Performance Period are:

 

Performance Measure

  

Explanation

Change in Net Income    Average annual percentage change in net income over
performance period vs. designated target percentage Return on Average Tangible
Common Equity (ROATCE)    Average annual return on average tangible common
equity over performance period vs. designated target percentage Relative Total
Shareholder Return (RTSR)    The Company’s total shareholder return (TSR)
relative to the TSR for a peer group of financial institutions selected by the
Committee prior to or within 90 days following commencement of the Performance
Period

Following completion of the Performance Period, the Committee will evaluate and
certify the level of attainment for each Performance Measure compared to
performance targets approved by the Committee within 90 days following
commencement of the Performance Period for each Performance Measure. The level
of attainment compared to target will determine the level of payouts as follows:

 

Performance below Threshold:    zero payout Performance at Threshold:   
50% payout Performance at Target:    100% payout Performance at or above
Maximum:    150% payout

If the Performance Measures are achieved at a level that either is between
Threshold and Target, or between Target and Maximum, the amount of Performance
Shares that will be paid will be equal to an amount that is linearly
interpolated between the applicable payout percentages. Linear interpolation
means that an increase in a goal above one specified level but below another
level will result in a similar incremental increase in the payout percentage.

One-third of the payout depends on the results for each Performance Measure,
independent of the other two measures. For example, in the case of a grant of
1,500 Performance Shares where the payout percentage is 50% at Threshold, the
methodology described results in a payout of 250 Shares if one Performance
Measure is at Threshold and the other two measures are below Threshold.

 

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