SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED).
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED).
COMMISSION FILE NUMBER 0-15213
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM
THAT OF THE ISSUER NAMED BELOW:
WEBSTER BANK EMPLOYEE INVESTMENT PLAN
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
WEBSTER FINANCIAL CORPORATION
WEBSTER PLAZA
WATERBURY, CT 06720
TELEPHONE (203) 753-2921
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
FORM 11-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
INDEX
Independent Auditors' Report .................................... 1
Statements of Net Assets Available for Benefits.................. 2
Statements of Changes in Net Assets Available for Benefits....... 3
Notes to Financial Statements ................................... 4-12
Schedule 1 - Item 27a - Schedule of Assets Held for Investment
Purposes ...................................................... 13
Schedule 2 - Item 27d - Schedule of Reportable Transactions...... 14
Signatures ...................................................... 15
Independent Auditors' Consent.................................... Exhibit 23
Note: The following schedules, as required by Section 103(c)(5) of the
Employees Retirement Income Securities Act, are not applicable:
Item 27a -Schedule of Assets Held for Investment Purposes that were Both
Acquired and Disposed of Within The Plan Year,
Item 27b -Schedule of Loans or Fixed Income Obligations,
Item 27c -Schedule of Leases in Default or Classified as Uncollectible,
Item 27e -Schedule of Non-Exempt Transactions.
<PAGE>
KPMG Peat Marwick LLP
CityPlace II
Hartford, CT 06103-4103
Independent Auditors' Report
----------------------------
The Board of Directors
Webster Bank:
We have audited the accompanying statements of net assets available for benefits
of the Webster Bank Employee Investment Plan as of December 31, 1997 and 1996,
and the related statements of changes in net assets available for benefits for
each of the years in the three-year period ended December 31, 1997. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Webster Bank
Employee Investment Plan, as of December 31, 1997 and 1996, and the changes in
net assets available for benefits for each of the years in the three-year period
ended December 31, 1997, in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes and reportable transactions are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audit of the basic financial
statements, and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ KPMG PEAT MARWICK LLP
Hartford, Connecticut
June 26, 1998
1
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
Statements of Net Assets Available for Benefits
DECEMBER 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Investments (Cost basis of ................. $25,470,558 $12,651,042
$19,818,595 in 1997 and
$11,530,659 in 1996)(Note 3)
Loans to Participants ...................... 598,418 321,714
Receivables ................................ 241,839 166,927
Cash ....................................... 4,669 5,695
----------- -----------
Total Assets ............................... $26,315,484 $13,145,378
=========== ===========
Net Assets Available for
Benefits ................................. $26,315,484 $13,145,378
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Net Investment Income:
Net Appreciation in Fair
Value of Investments ................ $ 5,670,768 $ 1,320,242 $ 1,539,992
Interest and Dividends ................ 359,842 345,517 324,867
Contributions:
Participants .......................... 3,374,353 2,856,883 1,058,216
Employer .............................. 835,701 622,532 426,228
Transfers from Other
Plans(Notes 1 and 6) ................ 4,659,785 -- --
----------- ----------- -----------
Total Additions ................ 14,900,449 5,145,174 3,349,303
----------- ----------- -----------
DEDUCTIONS
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits Paid to Participants .......... 1,729,293 781,825 1,169,056
Miscellaneous Expenses ................. 1,050 20,561 1,200
----------- ----------- -----------
Total Deductions ............... 1,730,343 802,386 1,170,256
----------- ----------- -----------
Net Increase ................... 13,170,106 4,342,788 2,179,047
----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year ..................... 13,145,378 8,802,590 6,623,543
----------- ----------- -----------
End of Year ........................... $26,315,484 $13,145,378 $ 8,802,590
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
1. DESCRIPTION OF THE PLAN
The following brief description of the Webster Bank Employee Investment
Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the full Plan document for a more complete
description of the Plan's provisions.
(a) General
The Plan is a qualified profit-sharing plan under Section 401(k)of the
Internal Revenue Code of 1986 that covers all Webster Bank (the "Bank")
employees who have attained age 21 and have completed one year of service(at
least 1,000 hours of service). The Plan is also subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA") as amended. Webster
Financial Corporation,("Webster"), through its subsidiary, Webster Bank,
delivers financial services to individuals, families and businesses throughout
Connecticut. The Bank is organized along four business lines- consumer,
business, mortgage banking and trust and investment management services, each
supported by centralized administration and operations. The Corporation has
grown significantly in recent years, primarily through a series of acquisitions
which have expanded and strengthened its franchise in Connecticut. The Bank was
founded in 1935 and converted from a federal mutual to a federal stock
institution in 1986.
The Plan was initially adopted by the Board of Directors of the Bank's
predecessor, First Federal Bank, effective as of October 1, 1984. Subsequent to
this date, the Plan was amended on various dates due to reasons that include:
certain legislative and regulatory changes, employer name change, plan merger,
plan name change and for various acquisitions. On March 3, 1994, Webster, the
parent of First Federal Bank, acquired Bristol Savings Bank. Effective May 1,
1994, the Bristol Savings Bank Employee Investment Plan was merged with the
First Federal Bank Employee Investment Plan with the latter being the surviving
Plan. On November 1, 1995, Bristol Savings Bank was converted from a state to a
federal charter under the new name of Webster Bank, at which time First Federal
Bank was merged into the renamed Webster Bank. The First Federal Bank Employee
Investment Plan was concurrently renamed the Webster Bank Employee Investment
Plan.
On January 31, 1997, Webster acquired DS Bancor, Inc.("Derby") and its
subsidiary, Derby Savings Bank. Effective April 1, 1997, the Derby Savings Bank
Thrift Plan was merged with the Webster Bank Employee Investment Plan. As a
result of this merger, total assets of $3,070,799 were transferred to the Plan.
Derby employees became eligible to participate in the Plan with the same level
of accumulated service that existed under the Derby Savings Bank Thrift Plan.
On January 2, 1996, the Plan's record keeper was changed from CPI
Qualified Plan Consultants, Incorporated to Benefit Concepts Incorporated. The
Plan year is the calendar year and participation in the Plan is completely
voluntary.
4
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
(b) Contributions
Employees who are members of the Plan, may make contributions of 1%
through 10% of their pay on a before tax basis. Total salary deferrals are
limited to $9,500 for 1997 and 1996 and $9,240 for the 1995 calendar year. The
Employer contributes a matching contribution to the Plan equal to 50% of the
first 6% of a participant's salary deferral contribution. The Bank may also make
a discretionary contribution to the Plan on behalf of employee participants. The
investment alternatives available under the Plan for the 1997 plan year are
summarized below:
AIM Constellation Fund: This fund invests in common stocks with
emphasis on medium-sized and smaller
emerging growth companies.
American New Perspective Fund: This fund invests primarily in the common
stocks of companies based around the
world.
Fidelity Advisor Growth This fund invests in common stocks of
Opportunities Fund: smaller to medium-sized companies. The
fund may also invest in debt securities
and cyclicals.
Webster Financial Corporation This fund invests 100% in the common
Common Stock: stock of Webster.
American Bond Fund of America: This fund invests in diversified bond
fixed income securities.
American Fundamental Investors This fund invests primarily in
Fund: diversified common stocks.
Paine Webber Stable Value Fund: This fund invests in units of the
Guaranteed Investment Contract (GIC)
portfolio under the Paine Webber Trust
Company pooled trust.
5
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
(c) Vesting
All amounts contributed to the 401(k) Plan are fully vested and non-
forfeitable at all times.
(d) Payment of Benefits
Under the Plan, a participant's "normal retirement date" is the date
age 65 is attained. Payment of a participants's account balance begins not later
than 60 days following the end of the Plan year during which retirement occurs.
Payment options available under the Plan are: Single Lump Sum; Lump
Sum/Installment; Installment; Joint and Survivor Annuity; Life Annuity and Life
Annuity with Term Certain Guaranteed. If a participant's employment with the
Bank terminates before normal retirement date, the participant is always 100%
vested for their account balance. In the event of death, while a participant is
actively employed, the account balance will be paid to the designated
beneficiary or beneficiaries. In the event of total and permanent disability, a
participant will receive payment of their account balance as if retirement had
occurred.
(e) Loans
Employees have the ability to borrow up to 50% of their account
balances, not to exceed $50,000. Interest is repaid to their account at
prevailing interest rates. Loans must generally be repaid within five years or,
if earlier, by normal retirement date of the borrower.
(f) Rollovers
Under the Plan, transfers from other tax-qualified retirement plans are
permitted. Rollovers must be deposited to the Plan trust fund within 60 days of
receipt. All rollovers will be invested and distributed in accordance with the
rules of the Plan.
(g) Hardship Withdrawals
Hardship withdrawals are permitted under the Plan for specific reasons
when the participant has met conditions required by the Plan.
6
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following are the significant accounting policies followed by the
Plan:
(a) Basis of Accounting
The accompanying financial statements of the Plan are prepared in
accordance with the accrual basis of accounting.
(b) Purchases and Sales Transactions
Transactions are recorded on a trade-date basis.
(c) Valuation of Assets
Investments are stated at current market values. Quoted market values
are used to value investments. Loans to participants are stated at amortized
cost, which approximates their market values.
(d) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(e) Administrative Expenses
Trustee's fees and other administrative expenses of the Plan are paid
by the Bank. Fees for 1997, 1996 and 1995 Plan years were: $93,960, $63,971 and
$52,610, respectively.
3. INVESTMENTS
The Plan's assets are invested in mutual funds and Webster common stock
through the Plan's investment advisor, Paine Webber and record keeper, Benefit
Concepts Incorporated. The Plan is sponsored and administered by the Bank. Plan
participants have the ability to direct their account balances to several Paine
Webber selected mutual funds or Webster common stock. The Paine Webber funds
include the: AIM Constellation Fund, American New Perspective Fund, Fidelity
Advisor Growth Opportunities Fund, American Fundamental Investors Fund, American
Bond Fund of America, and Paine Webber Stable Value Fund. The AIM Money Market
account holds cash which is designated primarily for the purchase of Webster
common stock until the purchase is made. The following Merrill Lynch investment
fund options available for the 1995 year were not options under the Plan for
1996 and 1997 Plan years: Ready Asset Fund, Corporate Bond Fund, Federal
Securities Trust Fund, Basic Value Fund and Retirement System Group, Inc. Single
and series of transactions that in aggregate are in excess of 5% of the fair
value of the Plan's 1997 beginning balance for net assets available for benefits
are presented in Item 27d.
7
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
The fair value of individual investments that represent 5% or more of
the Plan's net assets available for benefits at December 31, 1997 and 1996 is as
follows:
1997 1996
---------- ----------
AIM Constellation Fund ........... $1,638,466 $ 811,611
Fidelity Advisor Growth
Opportunities Fund ............. 2,594,499 777,003
American Fundamental Investor Fund 5,207,004 3,305,939
American Bond Fund of America .... 2,697,636 1,801,473
Webster Financial
Corporation Common Stock* ........ 8,938,664 3,814,246
Paine Webber Stable Value Fund ... 3,131,436 1,672,184
* Indicates party-in-interest to the Plan.
Activity in the investments during 1997, 1996 and 1995 was as follows:
8
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997,1996 and 1995
<TABLE>
<CAPTION>
American Fidelity
AIM New Advisor
1997 Fund Activity Constellation Perspective Growth Oppor.
Fund Fund Fund
- -------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Balance at Beg. Year $ 811,611 $ 468,586 $ 777,003
Interest & Dividends 0 16,431 26,876
Expenses (81) (75) (99)
Contributions 634,216 464,480 818,782
Gains and (Losses), Net 113,226 103,997 497,866
Benefits Paid to
Participants (138,235) (130,666) (408,868)
Transfers, Net 217,729 340,100 882,939
----------- ----------- -----------
Balance at 12/31/97 $ 1,638,466 $ 1,262,853 $ 2,594,499
=========== =========== ===========
</TABLE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
American Webster Paine
Fundamental American Financial Webber
1997 Fund Activity (continued) Investor Bond Fund Corporation Stable
Fund Of America Stock * Value Fund
- -------------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at Beg. Year $ 3,305,939 $ 1,801,473 $ 3,814,246 $ 1,672,184
Interest & Dividends 64,330 153,809 97,486 0
Expenses (252) (164) (218) (161)
Contributions 535,483 315,581 0 522,568
Gains and (Losses), Net 874,231 43,398 3,799,793 140,288
Benefits Paid to
Participants (349,642) (208,785) (398,990) (440,727)
Transfers, Net 776,915 592,324 1,626,347 1,237,284
----------- ----------- ----------- -----------
Balance at 12/31/97 $ 5,207,004 $ 2,697,636 $ 8,938,664 $ 3,131,436
=========== =========== =========== ===========
<CAPTION>
1997 Fund Activity Total Loan Cash
(continued) Investments Fund * Funds Total
- ----------------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance at Beg. Year $ 12,651,042 $ 321,714 $ 5,695 $ 12,978,451
Interest & Dividends 358,932 0 910 359,842
Expenses (1,050) 0 0 (1,050)
Contributions 3,291,110 (172,445) 1,016,477 4,135,142
Gains and (Losses), Net 5,572,799 0 97,969 5,670,768
Benefits Paid to
Participants (2,075,913) 348,052 (1,432) (1,729,293)
Transfers, Net 5,673,638 101,097 (1,114,950) 4,659,785
------------ ------------ ------------ ------------
Balance at 12/31/97 $ 25,470,558 $ 598,418 $4,669 $26,073,645
============ ============ ============ ============
</TABLE>
* Indicates party-in-interest to the Plan.
9
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
American Fidelity American Webster Paine
AIM New Advisor Fundamental American Financial Webber
1996 Fund Activity Constellation Perspective Growth Oppor. Investor Bond Fund Corporation Stable
Fund Fund Fund Fund Of America Stock * Value Fund
- ------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at Beg. Year $ -- $ -- $ -- $ -- $ -- $ 2,561,315 $ --
Interest & Dividends -- 7,309 11,282 51,354 123,492 64,309 86,723
Expenses (86) (59) (59) (403) (256) (189) (239)
Contributions 660,878 436,802 620,661 616,858 289,124 -- 242,509
Gains and (Losses), Net 23,042 33,531 72,094 540,197 (17,252) 661,669 --
Benefits Paid to
Participants (84,323) (46,430) (28,282) (387,127) (211,081) (149,079) (121,588)
Transfers, Net 212,100 37,433 101,307 2,485,060 1,617,446 676,221 1,464,779
----------- ----------- ----------- ----------- ----------- ----------- -----------
Balance at 12/31/96 $ 811,611 $ 468,586 $ 777,003 $ 3,305,939 $ 1,801,473 $ 3,814,246 $ 1,672,184
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Corporate Federal Basic
1996 Fund Activity Ready Bond Securities Value
(continued) Asset Fund ** Fund ** Trust ** Fund **
- --------------------------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance at Beg. Year $ 1,480,886 $ 1,078,752 $ 603,192 $ 2,798,030
Interest & Dividends -- -- --
Expenses -- -- -- --
Contributions -- -- -- --
Gains and (Losses), Net -- (10,934) (617) (45,935)
Benefits Paid to
Participants -- -- -- --
Transfers, Net (1,480,886) (1,067,818) (602,575) (2,752,095)
-------------- ------------ ------------ ------------
Balance at 12/31/96 $ 0 $ 0 $ 0 $ 0
============== ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Retirement
1996 Fund Activity Systems Total Loan Cash
(continued) Group Inc.** Investments Fund * Funds Total
- ------------------------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at Beg. Year $ 3,250 $ 8,525,425 $ 160,978 $ 581 $ 8,686,984
Interest & Dividends -- 344,469 1,048 345,517
Expenses -- (1,291) (19,261) (9) (20,561)
Contributions -- 2,866,832 (67,995) 629,257 3,428,094
Gains and (Losses), Net 453 1,256,248 -- 63,994 1,320,242
Benefits Paid to
Participants -- (1,027,910) 247,992 (1,907) (781,825)
Transfers, Net (3,703) 687,269 -- (687,269) --
------------ ------------ ------------ ------------ ------------
Balance at 12/31/96 $ 0 $ 12,651,042 $ 321,714 $ 5,695 $ 12,978,451
============ ============ ============ ============ ============
</TABLE>
* Indicates party-in-interest to the Plan.
** Merrill Lynch Funds available through 1995 Plan year.
10
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
WEBSTER
FINANCIAL
CORPORATE FEDERAL BASIC CORPORATION RETIREMENT
READY BOND SECURITIES VALUE COMMON SYSTEM TOTAL
1995 FUND ACTIVITY ASSET FUND FUND TRUST FUND STOCK* GRP STK INVESTMENTS
- ------------------ ---------- ---- ----- ---- ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT BEG. YEAR $ 1,469,074 $ 878,659 $ 456,141 $ 2,038,717 $ 1,467,950 $3,753 $ 6,314,294
INTEREST & DIVIDENDS 79,328 59,905 32,350 101,665 52,922 - 326,170
EXPENSES (925) - (50) (225) - - (1,200)
CONTRIBUTIONS 254,862 233,375 159,435 597,444 547 - 1,245,663
GAINS AND (LOSSES), NET - 105,001 37,412 531,401 866,168 10 1,539,992
BENEFITS PAID TO
PARTICIPANTS (303,604) (168,600) (67,602) (487,304) (116,846) (513) (1,144,469)
TRANSFERS, NET (17,849) (29,588) (14,494) 16,332 290,574 - 244,975
----------- ----------- --------- ----------- ----------- ------ -----------
BALANCE AT 12/31/95 $ 1,480,886 $ 1,078,752 $ 603,192 $ 2,798,030 $ 2,561,315 $3,250 $ 8,525,425
=========== =========== ========= =========== =========== ====== ===========
<CAPTION>
1995 FUND ACTIVITY LOAN WEBSTER
(continued) FUND LIQUIDITY TOTAL
- ------------------ ---- --------- -----
<S> <C> <C> <C>
BALANCE AT BEG. YEAR $ 158,371 $ 1,025 $ 6,473,690
INTEREST & DIVIDENDS (1,656) 353 324,867
EXPENSES - - (1,200)
CONTRIBUTIONS (156) 273,184 1,518,691
GAINS AND (LOSSES), NET - - 1,539,992
BENEFITS PAID TO
PARTICIPANTS (24,321) (266) (1,169,056)
TRANSFERS, NET 28,740 (273,715) -
--------- ----------- -----------
BALANCE AT 12/31/95 $ 160,978 $ 581 $ 8,686,984
========= =========== ===========
</TABLE>
* Indicates party-in-interest to the Plan.
11
<PAGE>
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
4. PLAN TERMINATION
Although the Bank has not expressed any intent to terminate the Plan
Agreement, it has the right to do so at any time. The rights of all employees to
benefits accrued under the Plan as of the date of such termination, partial
termination or discontinuation of contribution are fully vested and will be
nonforfeitable. After providing for the expenses of the Plan, the remaining
assets of the Plan will be allocated by the Human Resources Committee appointed
by the Board of Directors.
5. TAX STATUS
The Internal Revenue Service has determined and informed the Bank by a
letter dated June 5, 1997, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC").
Accordingly, no provision for income taxes has been made in the accompanying
financial statements. It is the opinion of the Plan administrator, that the Plan
is designed and is currently being operated in compliance with the applicable
requirements of the IRC.
6. AMENDMENTS
The Plan was amended as follows during 1997.
(1) On July 31, 1997, Webster acquired People's Savings Financial Corp.
of New Britain and its subsidiary People's Savings Bank & Trust
("People's"). On October 1, 1997, the People's Savings Bank of New
Britian Savings and Investment Plan ("People's Plan") was merged
with the Webster Bank Employee Investment Plan. As a result of this
merger, total assets of $1,366,651 were transferred to the Plan.
Peoples' employees became eligible to participate in the Plan with
the same level of accumulated service that existed under the
People's Plan.
(2) On August 1, 1997, Webster acquired Sachem Trust National
Association("Sachem Trust"). On October 1, 1997, the Sachem 401(k)
Plan was merged with the Webster Bank Employee Investment Plan. As
a result of this merger, total assets of $222,335 were transferred
to the Plan. Sachem's employees became eligible to participate in
the Plan with the same level of accumulated service that existed
under the Sachem 401(k) Plan.
7. SUBSEQUENT EVENTS
On April 15, 1998, Webster acquired Eagle Financial Corp. and its
subsidiary, Eagle Bank ("Eagle"). The Plan was amended in April 1998 to add
provisions for the former members of the Eagle Bank Thrift Plan. Effective on or
about July 1, 1998, certain assets and liabilities of the Eagle Savings Bank
Thrift Plan will transfer into the Webster Bank Employee Investment Plan. All
service with Eagle prior to the acquisition date shall constitute service
rendered for purposes of meeting eligibility requirements and for participation
under the Webster Bank Employee Investment Plan.
On June 1, 1998, Webster acquired Damman Associates, Inc.("Damman"). On
July 1, 1998, the Damman 401(k) Profit Sharing Plan will be merged with the
Webster Bank Employee Investment Plan. Damman employees will become eligible to
participate in the Plan with the same level of accumulated service that existed
under the Damman 401(k) Profit Sharing Plan.
12
<PAGE>
Schedule 1
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
ITEM 27a (Part I)- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number of Current
Identity of Issue Shares Held Cost Value
<S> <C> <C> <C>
AIM Constellation Fund 62,110.176 shares; net asset
value per share $26.38 $1,656,028 $1,638,466
American New Perspective 65,196.315 shares; net asset
Fund value per share $19.37 1,235,036 1,262,853
Fidelity Advisor Growth 61,118.935 shares; net asset
Opportunities Fund value per share $42.45 2,256,519 2,594,499
American Fundamental 190,036.649 shares; net asset
Investor Fund value per share $27.40 4,652,306 5,207,004
American Bond Fund 192,688.316 shares; net asset 2,669,809 2,697,636
of America value per share $14.00
Webster Financial Corporation 268,832.000 shares; net asset
Common Stock (*) (**) value per share $33.25 4,413,002 8,938,664
Paine Webber Stable Value Fund 264,725.326 shares; net asset
value per share $11.829 2,935,895 3,131,436
--------- ---------
Total Investments $19,818,595 $25,470,558
========== ===========
Loans to Participants* $ 598,418 $ 598,418
========== =========
</TABLE>
* Indicates party-in-interest to the Plan.
** Restated retroactively for effect of 2-for-1 stock split granted on April 6,
1998.
13
<PAGE>
Schedule 2
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Current
Value of
Assets on Net
Number of Purchase Sale Cost of Transaction Gain
Identity of Issue Transactions Price Price Assets Date (Loss)
- ------------------------- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions:
AIM Constellation Fund 176 $1,027,530 $ -- $1,027,530 $1,027,530 $ --
129 -- 199,566 186,067 199,566 13,499
American New Perspective 183 1,007,212 -- 1,007,212 1,007,212 --
Fund 139 -- 242,017 223,769 242,017 18,248
Fidelity Advisor Growth 185 2,049,128 -- 2,049,128 2,049,128 --
Opportunities Fund 130 -- 603,322 528,718 603,322 74,604
American Fundamental 183 2,130,144 -- 2,130,144 2,130,144 --
Investor Fund 149 -- 589,858 509,461 589,858 80,397
American Bond Fund 144 1,593,873 -- 1,593,873 1,593,873 --
of America 143 -- 740,392 731,439 740,392 8,953
Webster Financial 51 1,800,501 -- 1,800,501 1,800,501 --
Corporation Common Stock * 91 -- 573,408 343,206 573,408 230,202
Paine Webber Stable 133 2,102,907 -- 2,102,907 2,102,907 --
Stable Value Fund 167 -- 784,170 761,313 784,170 22,857
</TABLE>
* Indicates party-in-interest to the Plan.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrative committee of the Plan has duly caused this annual report to be
signed by the undersigned thereunto duly authorized.
WEBSTER BANK
EMPLOYEE INVESTMENT PLAN
Date: June 29, 1998 By: /s/ James C. Smith
------------------------ -------------------
James C. Smith
Executive Member of the
Retirement Plan Committee
Date: June 29, 1998 By: /s/ Renee P. Seefried
------------------------- ---------------------
Renee P. Seefried
Member of the Retirement
Plan Committee
15
<PAGE>
Exhibit Index
Exhibit
Number Description
- ------ -----------
23 Consent of KPMG Peat Marwick
Exhibit 23
KPMG Peat Marwick LLP
CityPlace II
Hartford, CT 06103-4103
Independent Auditors' Consent
-----------------------------
The Board of Directors
Webster Bank:
We consent to the incorporation by reference in the registration statement (No.
33-38286) on Form S-8 of Webster Financial Corporation of our report dated
June 26, 1998, relating to the statements of net assets available for benefits
of the Webster Bank Employee Investment Plan as of December 31, 1997 and 1996
and the related statements of changes in net assets available for benefits for
each of the years in the three-year period ended December 31, 1997, which report
appears in the December 31, 1997 annual report on Form 11-K of the Webster
Financial Corporation.
/s/ KPMG PEAT MARWICK LLP
Hartford, Connecticut
June 26, 1998
