People's United’s 2014 Plan, as amended and restated in 2017, and the predecessor 2008 Long-Term Incentive Plan (together the "Incentive Plans") provide for awards to officers and employees in the form of: (i) incentive stock options that may afford tax benefits to recipients; (ii) non-statutory stock options that do not afford tax benefits to recipients but may provide tax benefits to People's United; and (iii) stock appreciation rights, restricted stock and performance shares. A total of 75,850,000 shares of People's United common stock are reserved for issuance under the 2014 Plan. The number of shares of common stock reserved under the 2014 Plan is depleted by one share for each option or stock appreciation right, by 5.32 shares for each restricted stock award and by 7.98 shares for each performance share. At December 31, 2019, a total of  35,633,607 reserved shares remain available for future awards.

Non-statutory stock options have been granted under the Incentive Plans at exercise prices equal to the fair value of People’s United common stock at the grant dates. Option expiration dates are fixed at the grant date, with a maximum term of ten years. Prior to 2013, options granted under the Incentive Plans generally vested 50% after two years, 75% after three years and 100% after four years. Beginning in 2013, options granted under the Incentive Plans vest 33% after one year, 66% after  two years and 100% after three years. Unvested options become fully exercisable in the event of a change of control, as defined in the Incentive Plans.

People's United has also granted restricted stock awards under the Incentive Plans. Employees become fully vested in these shares generally after a three-year period, with requisite service conditions and no performance-based conditions to such vesting. During the vesting period, dividends are paid on the restricted stock (for grants occurring prior to February 2017) or accrued to the employees’ benefit (for grants occurring in or after February 2017) and the recipients are entitled to vote these restricted shares. The fair value of all restricted stock awards is measured at the grant date based on quoted market prices. Unvested restricted stock awards become fully vested in the event of a change in control, as defined in the Incentive Plans.

People's United has also granted performance shares under the 2014 Plan. A performance share represents the right to receive a share of People’s United common stock contingent upon the Company achieving certain pre-established performance goals and the employee satisfying requisite service conditions. Employees become fully vested in these performance shares upon completion of a three-year performance period beginning with the year in which the performance shares are granted. At the end of the three-year performance period, if performance goals have been achieved, the number of performance shares earned by each employee is determined by the level of achievement against the pre-established performance goals. During the performance period, dividend equivalents are accrued to the employees' benefit. Such dividends are paid out at the end of the performance period based on the number of performance shares earned. Unvested performance shares and dividend equivalents become fully vested in the event of a change in control, as defined in the Incentive Plans.


	Shares	Weighted-Average Grant Date Fair Value
Unvested performance shares outstanding at December 31, 2016	551,985	$	15.22
Granted	466,923	18.61
Forfeited	(34,073)	16.28
Unvested performance shares outstanding at December 31, 2017	984,835	16.80
Granted	532,740	19.78
Forfeited	(62,124)	17.82
Vested	(2,079)	16.70
Unvested performance shares outstanding at December 31, 2018	1,453,372	17.85
Granted	637,118	17.84
Forfeited	(80,319)	18.66
Vested	(505,755)	15.23
Unvested performance shares outstanding at December 31, 2019	1,504,416	$	18.68

Expense related to unvested performance shares is recognized on a straight-line basis, generally over the applicable service period, and totaled $12.2 million, $10.5 million and $7.0 million for the years ended December 31, 2019, 2018 and 2017, respectively. Unamortized cost for unvested performance shares, which reflects an estimated forfeiture rate of 5% per year over the vesting period, totaled $10.8 million at December 31, 2019, and is expected to be recognized over the remaining weighted-average vesting period of 1.8 years. The fair value of performance shares vested during the years ended December 31, 2019 and 2018 was $7.7 million and less than $0.1 million, respectively.

Following shareholder approval of the 2014 Plan in 2014, no new awards may be granted under the 2008 Long-Term Incentive Plan, the 2007 Stock Option Plan (the "SOP") or the RRP (together the "Prior Plans"). All awards granted under the Prior Plans and the 1998 Long-Term Incentive Plan that were unvested (in the case of stock options and restricted stock awards) or unexercised (in the case of stock options) as of the date of shareholder approval of the 2014 Plan continue to be governed by the terms of the plan under which such awards were granted and the applicable grant agreements.

The RRP and SOP (together the "2007 Plans") provided for awards to directors, officers and employees in the form of: (i) incentive stock options that may afford tax benefits to recipients; (ii) non-statutory stock options that do not afford tax benefits to recipients but may provide tax benefits to People's United; and (iii) restricted stock. Shares of People's United common stock were purchased in the open market in October 2007 by a trustee with funds provided by People's United for the maximum number of shares available to be awarded in the form of restricted stock.

Previously, non-statutory stock options were granted under the SOP at exercise prices equal to the fair value of People's United's common stock at the grant date based on quoted market prices. The fair value of all restricted stock awarded under the RRP was measured at the grant date based on quoted market prices. Prior to 2014, most restricted stock awards and stock options granted under the 2007 Plans were scheduled to vest in 20% annual increments over a five-year period with requisite service conditions and no performance-based conditions to such vesting. Beginning in 2014, awards made under the 2007 Plans in 2014 are scheduled to vest in one-third annual increments over a three-year period with requisite service conditions and no performance-based conditions to such vesting. During the vesting period, dividends are paid on the restricted stock and the recipients are entitled to vote these restricted shares. All restricted stock awards and stock options become fully vested and exercisable, respectively, in the event of a change of control, as defined in the 2007 Plans.

People's United granted a total of 2,807,692 stock options in 2019, 2,450,861 stock options in 2018 and 2,261,586 stock options in 2017 under the Incentive Plans. The estimated weighted-average grant-date fair value of all stock options granted in 2019, 2018 and 2017 was $2.04 per option, $2.31 per option and $1.97 per option, respectively, using the Black-Scholes  option-pricing model with assumptions as follows: dividend yield of 4.0% in 2019, 3.5% in 2018 and 3.6% in 2017; expected volatility rate of 19% in 2019 and 18% in both 2018 and 2017; risk-free interest rate of 2.6% in both 2019 and 2018, and  1.9% in 2017; and expected option life of approximately 4 years in 2019, 2018 and 2017.

In arriving at the grant date fair value of stock options using the Black-Scholes option-pricing model, expected volatilities were based on the historical volatilities of People's United traded common stock. The expected term of stock options represents the period of time that options granted are expected to be outstanding. People’s United used historical data to estimate voluntary suboptimal (early) exercises by continuing employees, and estimates of post-vest option exercise or forfeiture by terminated employees. Suboptimal exercise data and employee termination estimates are incorporated into Monte Carlo simulations of People’s United common stock prices to calculate the expected term. The risk-free interest rate approximated the U.S. Treasury rate curve matched to the expected option term at the time of the grant.


	Shares Subject To Option	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (1) (in millions)
Options outstanding at December 31, 2016	16,555,925	$	14.84
Granted	2,261,586	19.14
Forfeited	(459,576)	17.87
Exercised	(3,920,294)	15.97
Options outstanding at December 31, 2017	14,437,641	15.11
Granted	2,450,861	19.61
Forfeited	(294,474)	17.87
Exercised	(1,916,961)	14.55
Options outstanding at December 31, 2018	14,677,067	15.87
Granted	2,807,692	17.62
Forfeited	(652,965)	18.28
Exercised	(1,632,971)	14.77
Options outstanding at December 31, 2019	15,198,823	$	16.20	6.2	$	22.7
Options exercisable at December 31, 2019	10,551,014	$	15.21	5.2	$	22.7

Expense relating to stock options granted is recognized on a straight-line basis, generally over the applicable service period, and totaled $5.2 million, $5.2 million and $5.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Unamortized cost for unvested stock options, which reflects an estimated forfeiture rate of 5.0% per year over the vesting period, totaled $5.1 million at December 31, 2019, and is expected to be recognized over the remaining  weighted-average vesting period of 1.6 years. The total intrinsic value of stock options exercised was $3.2 million, $8.7 million and $11.2 million for the years ended December 31, 2019, 2018 and 2017, respectively.


Exercise Price Range	Options Outstanding												Options Exercisable
				Weighted-Average
		Number		Remaining Life (in years)			Exercise Price		Number			Weighted-Average Exercise Price
$11.53 — $14.54	3,531,960		3.4		$	13.53		3,525,520		$	13.53
14.55 — 14.88	4,970,387		5.0		14.73			4,970,387		14.73
14.89 — 18.40	2,689,105		9.0		17.60			57,997		16.47
18.41 — 19.71	4,007,371		7.6		19.45			1,997,110		19.36


	Shares	Weighted-Average Grant Date Fair Value
Unvested restricted shares outstanding at December 31, 2016	886,082	$	14.59
Granted	303,090	18.84
Forfeited	(31,828)	15.56
Vested	(485,023)	14.49
Unvested restricted shares outstanding at December 31, 2017	672,321	16.53
Granted	489,789	18.50
Forfeited	(29,426)	17.81
Vested	(402,134)	16.04
Unvested restricted shares outstanding at December 31, 2018	730,550	18.03
Granted	383,420	17.44
Forfeited	(68,091)	17.11
Vested	(347,078)	17.49
Unvested restricted shares outstanding at December 31, 2019	698,801	$	18.07

Expense relating to unvested restricted stock awards is recognized on a straight-line basis, generally over the applicable service period, and totaled $6.6 million, $5.8 million and $6.4 million for the years ended December 31, 2019, 2018 and 2017, respectively. Unamortized cost for unvested restricted stock awards, which reflects an estimated forfeiture rate of 5.0% per year over the vesting period, totaled $7.0 million at December 31, 2019, and is expected to be recognized over the remaining weighted-average vesting period of 1.5 years. The total fair value of restricted stock awards vested during the years ended December 31, 2019, 2018 and 2017 was $6.0 million, $7.5 million and $9.3 million, respectively.

During 2019, 2018 and 2017, employees of People's United tendered a total of 115,632 shares, 136,426 shares and 216,969 shares of common stock, respectively, in satisfaction of their related tax withholding obligations upon the vesting of restricted stock awards granted in prior periods and/or in payment of the exercise price and satisfaction of their related tax withholding obligations upon the exercise of stock options granted in prior periods. There is no limit on the number of shares that may be tendered by employees of People's United in the future for these purposes. Shares acquired in payment of the stock option exercise price or in satisfaction of tax withholding obligations are not eligible for reissuance in connection with any subsequent grants made pursuant to equity compensation plans maintained by People's United. Rather, all shares acquired in this manner are retired by People’s United, resuming the status of authorized but unissued shares of People’s United’s common stock. The total cost of shares repurchased and retired applicable to restricted stock awards during the years ended December 31, 2019, 2018 and 2017 was $2.0 million, $2.5 million and $3.3 million, respectively.

The People's United Financial, Inc. Directors' Equity Compensation Plan (the "Directors' Plan") provides for an annual award of shares of People's United common stock with a fair value of approximately $95,000 to each non-employee director immediately following each annual meeting of shareholders. Shares of People's United common stock issued pursuant to the Directors' Plan are subject to a one-year vesting period, with no post-vesting transfer restrictions. A total of 1,492,500 shares of People's United common stock are reserved for issuance under the Directors' Plan.

In 2019, 2018 and 2017, directors were granted a total of 58,340 shares, 51,680 shares and 49,050 shares, respectively, of People’s United common stock, with grant date fair values of $16.31 per share, $18.21 per share and $17.65 per share, respectively, at those dates. Expense totaling $0.9 million for the Directors’ Plan was recognized for each of the years ended December 31, 2019, 2018 and 2017. At December 31, 2019, a total of 333,981 shares remain available for issuance.