SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Webster Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and state how
it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
--------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE>
WEBSTER FINANCIAL
CORPORATION
[LOGO]
March 19, 1999
TO THE SHAREHOLDERS OF
WEBSTER FINANCIAL CORPORATION:
You are cordially invited to attend the annual meeting of
shareholders (the "Annual Meeting") of Webster Financial Corporation ("Webster")
to be held on Thursday, April 22, 1999, at 4:00 p.m., local time, at the
Courtyard by Marriott, 63 Grand Street, Waterbury, Connecticut 06702.
At the Annual Meeting, you will be asked: (i) to elect four
directors, each to serve for a three-year term; (ii) to ratify the appointment
of KPMG LLP as independent auditors of Webster for the year ending December 31,
1999; and (iii) to transact such other business as may properly come before the
Annual Meeting or any adjournments of the meeting.
The Board of Directors unanimously recommends that you vote
FOR the election of all the Board's nominees for election as directors and FOR
ratification of Webster's independent auditors. We encourage you to read the
accompanying Proxy Statement, which provides information regarding Webster and
the matters to be voted on at the Annual Meeting. Also enclosed is our 1998
annual report to shareholders.
It is important that your shares be represented at the Annual
Meeting. Whether or not you plan to attend the Annual Meeting, you are requested
to complete, date, sign and return the enclosed proxy card in the enclosed
postage paid envelope.
Sincerely,
/s/ James C. Smith
James C. Smith
Chairman and Chief Executive Officer
<PAGE>
WEBSTER FINANCIAL CORPORATION
WEBSTER PLAZA
WATERBURY, CONNECTICUT 06702
(203) 753-2921
--------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 1999
--------------------------
TO THE SHAREHOLDERS OF
WEBSTER FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders
(the "Annual Meeting") of Webster Financial Corporation ("Webster") will be held
on Thursday, April 22, 1999, at 4:00 p.m., local time, at the Courtyard by
Marriott, 63 Grand Street, Waterbury, Connecticut 06702, for the following
purposes:
1. Election of Directors. To elect four directors, each to
serve for a three-year term (Proposal 1);
2. Ratification of Appointment of Auditors. To ratify the
appointment by the Board of Directors of the firm of KPMG LLP as independent
auditors of Webster for the fiscal year ending December 31, 1999 (Proposal 2);
and
3. Other Business. To transact such other business as may
properly come before the Annual Meeting or any adjournments of the meeting, in
accordance with the determination of a majority of Webster's Board of Directors.
The Board of Directors has fixed the close of business on
March 3, 1999, as the record date for the determination of shareholders entitled
to notice of and to vote at the Annual Meeting. Only shareholders of record at
the close of business on that date will be entitled to notice of and to vote at
the Annual Meeting or any adjournments thereof.
By order of the Board of Directors
/s/ James C. Smith
James C. Smith
Chairman and Chief Executive Officer
Waterbury, Connecticut
March 19, 1999
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING, PLEASE DATE, SIGN AND COMPLETE THE ENCLOSED
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
WEBSTER FINANCIAL CORPORATION
WEBSTER PLAZA
WATERBURY, CONNECTICUT 06702
(203) 753-2921
--------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 1999
--------------------------
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement (the "Proxy Statement") is being
furnished to the shareholders of Webster Financial Corporation, a Delaware
corporation ("Webster" or the "Corporation"), as part of the solicitation of
proxies by its board of directors (the "Board of Directors" or the "Board") from
holders of its outstanding shares of common stock, par value $.01 per share (the
"Common Stock"), for use at the Annual Meeting of Shareholders of Webster to be
held on Thursday, April 22, 1999, at 4:00 p.m., local time, at the Courtyard by
Marriott, 63 Grand Street, Waterbury, Connecticut 06702 (the "Annual Meeting")
and at any adjournments of the meeting. The Proxy Statement, together with the
enclosed proxy card, is being mailed to shareholders of Webster on or about
March 19, 1999.
The Annual Meeting has been called for the following purposes:
(i) to elect four directors, each to serve for a three-year term (Proposal 1);
(ii) to ratify the appointment by the Board of Directors of the firm of KPMG LLP
as independent auditors of Webster for the year ending December 31, 1999
(Proposal 2); and (iii) to transact such other business as may properly come
before the Annual Meeting or any adjournments of the meeting.
If the enclosed form of proxy is properly executed and
returned to Webster in time to be voted at the Annual Meeting, the shares
represented thereby will be voted in accordance with the instructions marked
thereon. EXECUTED BUT UNMARKED PROXIES WILL BE VOTED FOR THE ELECTION OF THE
BOARD'S NOMINEES AS DIRECTORS AND FOR RATIFICATION OF THE APPOINTMENT OF
WEBSTER'S INDEPENDENT AUDITORS. Except for procedural matters incident to the
conduct of the Annual Meeting, the Board of Directors does not know of any
matters other than those described in the Notice of Annual Meeting that are to
come before the Annual Meeting. If any other matters are properly brought before
the Annual Meeting, the persons named in the proxy will vote the shares
represented by such proxy on such matters as determined by a majority of the
Board of Directors. The proxies solicited hereby confer discretionary authority
to vote on any matter of which Webster did not have notice at least 30 days
prior to the date of the Annual Meeting.
The presence of a shareholder at the Annual Meeting will not
automatically revoke such shareholder's proxy. A shareholder may, however,
revoke a proxy at any time before it is voted by delivering a written notice of
revocation or a duly executed proxy bearing a later date to James M. Sitro, Vice
President, Investor Relations, Webster Financial Corporation, Webster Plaza,
Waterbury, Connecticut 06702, or by attending the Annual Meeting and voting in
person.
The cost of soliciting proxies for the Annual Meeting will be
borne by Webster. In addition to use of the mails, proxies may be solicited
personally or by telephone or telecopy by directors, officers and employees, who
will not be specially compensated for such activities. Webster will also request
persons, firms and companies holding shares in their names or in the name of
their nominees, which are beneficially owned by others, to send proxy materials
to and obtain proxies from such beneficial owners and will reimburse such
holders for their reasonable expenses incurred in
<PAGE>
that connection. Webster also has retained D.F. King & Co., Inc., a proxy
soliciting firm, to assist in the solicitation of proxies at a fee of $4,500,
plus reimbursement of certain out-of-pocket expenses.
The securities which can be voted at the Annual Meeting
consist of shares of Common Stock of Webster with each share entitling its owner
to one vote on all matters properly presented at the Annual Meeting. There is no
cumulative voting of shares. The Board of Directors has fixed the close of
business on March 3, 1999 as the record date for the determination of
shareholders of Webster entitled to notice of and to vote at the Annual Meeting.
On the record date, there were 6,578 holders of record of the 36,018,610 shares
of Common Stock then outstanding and eligible to be voted at the Annual Meeting.
The presence, in person or by proxy, of at least one-third of
the total number of outstanding shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum at the Annual Meeting.
Assuming the presence of a quorum at the Annual Meeting, directors will be
elected by a plurality of the votes of the shares of Common Stock present in
person or represented by proxy and entitled to vote. The affirmative vote of a
majority of the votes cast is required to ratify the appointment of the
Corporation's independent auditors. Shareholders' votes will be tabulated by the
persons appointed by the Board of Directors to act as inspectors of election for
the Annual Meeting. Abstentions and broker non-votes will be treated as shares
that are present, or represented, and entitled to vote for purposes of
determining the presence of a quorum at the Annual Meeting. Broker non-votes
will not be counted as a vote cast or entitled to vote on any matter presented
at the Annual Meeting. Abstentions will not be counted in determining the number
of votes cast in connection with any matter presented at the Annual Meeting.
A copy of the annual report to shareholders for the fiscal
year ended December 31, 1998 accompanies this Proxy Statement. WEBSTER IS
REQUIRED TO FILE AN ANNUAL REPORT ON FORM 10-K FOR ITS 1998 FISCAL YEAR WITH THE
SECURITIES AND EXCHANGE COMMISSION. SHAREHOLDERS MAY OBTAIN, FREE OF CHARGE, A
COPY OF THE FORM 10-K BY WRITING TO JAMES M. SITRO, VICE PRESIDENT, INVESTOR
RELATIONS, WEBSTER FINANCIAL CORPORATION, WEBSTER PLAZA, WATERBURY, CONNECTICUT
06702.
ELECTION OF DIRECTORS
(PROPOSAL 1)
At the Annual Meeting, four directors will be elected to serve
for three-year terms. Unless otherwise specified on the proxy, it is the
intention of the persons named in the proxy to vote the shares represented by
each properly executed proxy for the election as directors of the persons named
below as nominees. The Board of Directors believes that the nominees will stand
for election and will serve if elected as directors. If, however, any person
nominated by the Board fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such other person as the
Board of Directors may recommend. Assuming the presence of a quorum at the
Annual Meeting, directors will be elected by a plurality of the votes of the
shares of Common Stock present in person or represented by proxy and entitled to
vote at the Annual Meeting. There are no cumulative voting rights in the
election of directors.
Under the terms of Webster's April 1998 acquisition of Eagle
Financial Corp. ("Eagle"), Webster invited three former Eagle directors, Messrs.
Richard H. Alden, George T. Carpenter and John F. McCarthy, to serve as members
of the Board of the Corporation for terms expiring in 2001, 1999 and 2000,
respectively. The Board of Directors has renominated Mr. Carpenter, whose term
expires at the 1999 Annual Meeting. Under the terms of Webster's January 1997
acquisition of DS Bancor, Inc. ("DS Bancor"), Webster added two former DS Bancor
directors, Messrs. Achille A. Apicella and Harry P. DiAdamo, Jr., to serve on
the Board of the Corporation for terms expiring in 1999 and 1998, respectively.
Webster also agreed that one of the two former DS Bancor directors would be
renominated when his term expired. Mr. DiAdamo was renominated by the Board of
Directors for election at the 1998 Annual Meeting, and was elected by the
shareholders
2
<PAGE>
at such meeting for a three year term expiring in 2001. The Board of Directors
also has renominated Mr. Apicella for reelection at the 1999 Annual Meeting.
The Board of Directors currently consists of 14 members, and
is divided into three classes, one of which is composed of four directors and
two of which are composed of five directors. The term of office of only one
class of directors expires in each year, and their successors are elected for
terms of up to three years and until their successors are elected and qualified.
Messrs. Walter R. Griffin and J. Gregory Hickey, whose terms expire at the 1999
Annual Meeting, have decided to retire from the Board of Directors. Because
Webster's Restated Certificate of Incorporation provides that the three classes
of directors shall be as nearly equal in number as possible, Mr. John J.
Crawford, whose current term expires in 2000, has been nominated to stand for
reelection at the 1999 Annual Meeting for a term expiring in 2002. Assuming
election of all nominees, Webster's Board of Directors will then consist of 12
directors in three classes which are composed of four directors each.
INFORMATION AS TO NOMINEES AND OTHER DIRECTORS
The following table sets forth the names of the Board of
Directors' nominees for election as directors and the current directors of
Webster whose offices continue beyond the Annual Meeting. Also set forth is
certain other information with respect to each such person's age at December 31,
1998, the periods during which such person has served as a director of Webster
and positions currently held with Webster and its wholly owned subsidiary,
Webster Bank.
<TABLE>
<CAPTION>
POSITIONS HELD WITH
DIRECTOR NOMINEES FOR A AGE AT DIRECTOR EXPIRATION WEBSTER AND
THREE-YEAR TERM: DECEMBER 31, 1998 SINCE OF TERM WEBSTER BANK
- --------------- ----------------- ----- ------- ------------
<S> <C> <C> <C> <C>
Achille A. Apicella 55 1997 1999 Director
George T. Carpenter 58 1998 1999 Director
John J. Crawford 54 1996 2000 Director
C. Michael Jacobi 56 1993 1999 Director
CONTINUING DIRECTORS:
- ---------------------
Richard H. Alden 62 1998 2001 Director
Joel S. Becker 50 1986 2001 Director
O. Joseph Bizzozero, Jr. 64 1986 2000 Director
Harry P. DiAdamo, Jr. 55 1997 2001 Director
Robert A. Finkenzeller 48 1986 2000 Director
John F. McCarthy 58 1998 2000 Director
James C. Smith 49 1986 2001 Chairman,
President, Chief
Executive Officer
and Director
Sister Marguerite Waite, C.S.J. 60 1990 2000 Director
</TABLE>
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3
<PAGE>
ACHILLE A. APICELLA, C.P.A., is President of Apicella, Testa &
Company P.C., a certified public accounting firm in Shelton, Connecticut. He
served as a director of DS Bancor and Derby Savings Bank, which were acquired by
Webster in January 1997.
RICHARD H. ALDEN has been engaged in the private practice of
law since 1962, and is a principal of Anderson, Alden, Hayes, Ziogas & Storm,
L.L.C. in Bristol, Connecticut. Prior to the acquisition of Eagle by Webster in
April 1998, Mr. Alden served as a director of Eagle since 1988 and a director of
Eagle Bank or one of its predecessors since 1977.
JOEL S. BECKER is Chairman of the Board and Chief Executive
Officer of Torrington Supply Co., Inc., Waterbury, Connecticut.
O. JOSEPH BIZZOZERO, JR. is a practicing physician and the
President of Bizzozero Assoc. P.C. since September 1996. Prior to September
1996, he was the President and Chief Executive Officer of the BCB Medical Group.
Dr. Bizzozero has been affiliated with Waterbury Hospital since 1969. He also is
an Associate Clinical Professor of Medicine at the Yale University School of
Medicine.
GEORGE T. CARPENTER has been President and Treasurer of S.
Carpenter Construction Co. and Carpenter Realty Co. since 1977, which firms are
headquartered in Bristol, Connecticut. Mr. Carpenter is a director of the Barnes
Group, Inc., a manufacturer of springs and aircraft parts and a distributor of
automobile parts, which is headquartered in Bristol, Connecticut. Prior to the
acquisition of Eagle by Webster in April 1998, Mr. Carpenter served as a
director of Eagle since 1988 and a director of Eagle Bank or one of its
predecessors since 1972.
JOHN J. CRAWFORD is President and Chief Executive Officer of
the South Central Connecticut Regional Water Authority, New Haven, Connecticut.
From 1990 until October 1992, Mr. Crawford was President and Chief Executive
Officer of First Constitution Bank, which was acquired by Webster Bank in
October 1992. Subsequent to that acquisition and until April 1996, Mr. Crawford
served as a consultant to Webster Bank. Since October 1992, Mr. Crawford has
been President, Chief Executive Officer and a director of Aristotle Corporation,
New Haven, Connecticut, a holding company.
HARRY P. DIADAMO, JR. served as President and Chief Executive
Officer of DS Bancor and Derby Savings Bank, which were acquired by Webster in
January 1997.
ROBERT A. FINKENZELLER is President of Eyelet Crafters, Inc.,
a Waterbury-based company which manufactures deep drawn metal parts for the
cosmetics, writing instrument and drapery hardware fields.
C. MICHAEL JACOBI is President, Chief Executive Officer and a
director of Timex Corporation, headquartered in Middlebury, Connecticut. Prior
to his election as President and Chief Executive Officer in December 1993, Mr.
Jacobi served Timex in senior positions in finance, manufacturing, marketing and
sales. Mr. Jacobi is a certified public accountant and has served on corporate
boards in Europe and Asia.
JOHN F. MCCARTHY has been the President of J&M Sales, Inc., a
Torrington, Connecticut based beverage distributorship since 1970 and he has
been the Vice President of Thames River Recycling Co. in Middletown, Connecticut
since 1979. Prior to the acquisition of Eagle by Webster in April 1998, Mr.
McCarthy served as a director of Eagle since 1986 and a director of Eagle Bank
or one of its predecessors since 1984.
JAMES C. SMITH is Chairman, President, Chief Executive Officer
and a director of Webster and Webster Bank, having been elected Chairman in 1995
and Chief Executive Officer in 1987. Mr. Smith joined Webster Bank in 1975, and
was elected President and Chief Operating
4
<PAGE>
Officer of Webster Bank in 1982 and of Webster in 1986. He also is a director of
MacDermid, Incorporated, Waterbury, Connecticut, a manufacturer and wholesaler
of specialty chemicals. Mr. Smith is active in numerous community organizations
and economic development organizations and serves as co-chair of the Governor's
Council on Economic Competitiveness and Technology in Connecticut.
SISTER MARGUERITE WAITE, C.S.J., is President, Chief Executive
Officer and Treasurer of St. Mary's Hospital, Waterbury, Connecticut. Prior to
her election as President in 1986, Sister Marguerite Waite was Vice President
and Chief Operating Officer of St. Mary's Hospital.
CERTAIN BOARD COMMITTEES; NOMINATIONS BY SHAREHOLDERS
The Board of Directors has appointed a standing Audit
Committee that oversees the Corporation's financial reporting process, the
system of internal financial and accounting controls, the audit process and
compliance with applicable laws and regulations. The Audit Committee reviews the
Corporation's annual financial statements, including management's discussion and
analysis and regulatory examination findings. The Audit Committee recommends the
appointment of independent auditors. During 1998, the Audit Committee held 4
meetings. The members of the Audit Committee currently are Messrs.
Crawford (Chairman), Apicella, Carpenter, Hickey and Jacobi.
The Board of Directors also has appointed a Personnel
Resources Committee that reviews employee compensation on an annual basis and
makes recommendations to the full Board regarding compensation. The Personnel
Resources Committee also makes recommendations to the Stock Option Committee
concerning long-term incentive awards. All recommendations of the Personnel
Resources Committee regarding the compensation of executive officers (other than
long-term incentive awards, which are acted on by the Stock Option Committee)
are approved by Webster's Board of Directors which has ultimate responsibility
over such matters. During 1998, the Personnel Resources Committee held 3
meetings. The members of the Personnel Resources Committee currently are Mr.
Becker (Chairman), Dr. Bizzozero, Mr. Finkenzeller, Mr. McCarthy and Sister
Marguerite Waite.
The Stock Option Committee makes final determinations
concerning the granting of stock options under Webster's 1992 Stock Option Plan
and administers Webster's 1996-1998 Performance Incentive Plan and Qualified
Performance-Based Compensation Plan. During 1998, the Stock Option Committee
held 10 meetings. The members of the Stock Option Committee, which consists of
all disinterested non-employee directors of the Corporation, currently are
Messrs. Becker (Chairman), Alden and Apicella, Dr. Bizzozero, Messrs. Carpenter,
Crawford, DiAdamo, Finkenzeller, Hickey, Jacobi and McCarthy and Sister
Marguerite Waite.
During 1998, Webster held 11 meetings of its Board of
Directors. Each incumbent director attended at least 75% of the aggregate of (i)
the total number of meetings held by the Board of Directors during the period
that such individual served and (ii) the total number of meetings held by all
committees of the Board on which the director served during the period that such
individual served.
The Board has appointed a Corporate Governance Committee to
make initial recommendations to the full Nominating Committee. The members of
the Corporate Governance Committee are Messrs. Smith (Chairman), Alden, DiAdamo,
Griffin and Jacobi.
The Board of Directors acts as the full Nominating Committee
for selecting nominees for election as directors. Webster's Bylaws also permit
shareholders eligible to vote at the Annual Meeting to make nominations for
directors but only if such nominations are made pursuant to timely notice in
writing to the Secretary of Webster. To be timely, notice must be delivered to,
or mailed to and received at, the principal executive offices of Webster not
less than 30 days nor more than 90
5
<PAGE>
days prior to the date of the meeting, provided that at least 45 days' notice or
prior public disclosure of the date of the Annual Meeting is given or made to
shareholders. If less than 45 days' notice or prior public disclosure of the
date of the Annual Meeting is given or made to shareholders, notice by the
shareholder to be timely must be received by Webster not later than the close of
business on the 15th day following the day on which such notice of the date of
the Annual Meeting was mailed or such public disclosure was made. Public
disclosure of the date of the Annual Meeting was made by the issuance of a press
release on January 29, 1999 and by filing a Current Report on Form 8-K under the
Securities Exchange Act of 1934, as amended, with the Securities and Exchange
Commission on February 25, 1999. A shareholder's notice of nomination must also
set forth certain information specified in Article III, Section 13 of the
Corporation's Bylaws concerning each person the shareholder proposes to nominate
for election and the nominating shareholder.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE ELECTION OF ALL OF ITS DIRECTOR NOMINEES.
MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth certain information with
respect to the five highest paid executive officers of Webster, each of whom is
elected to serve for a one-year period. Each such officer currently holds the
same positions with Webster Bank and serves pursuant to an employment agreement
with Webster and Webster Bank. See "Employment Agreements" below.
<TABLE>
<CAPTION>
AGE AT POSITIONS HELD WITH WEBSTER
NAME DECEMBER 31, 1998 AND WEBSTER BANK
- ---- ----------------- -----------------
<S> <C> <C>
James C. Smith 49 Chairman, President, Chief Executive Officer
and Director
John V. Brennan 46 Executive Vice President, Chief Financial Officer
and Treasurer
William T. Bromage 53 Executive Vice President -- Business Banking
Peter K. Mulligan 54 Executive Vice President -- Consumer and Small
Business Banking
Ross M. Strickland 49 Executive Vice President -- Mortgage Banking
</TABLE>
Information concerning the principal occupation of these
executive officers of Webster and Webster Bank during at least the last five
years is set forth below.
JAMES C. SMITH is Chairman, President, Chief Executive Officer
and a director of Webster and Webster Bank, having been elected Chairman in 1995
and Chief Executive Officer in 1987. Mr. Smith joined Webster Bank in 1975 and
was elected President and Chief Operating Officer of Webster Bank in 1982 and of
Webster in 1986. He also is a director of MacDermid, Incorporated, Waterbury,
Connecticut, a manufacturer and wholesaler of specialty chemicals. Mr. Smith is
active in numerous community organizations and economic development
organizations and serves as co-chair of the Governor's Council on Economic
Competitiveness and Technology in Connecticut.
JOHN V. BRENNAN is Executive Vice President, Chief Financial
Officer and Treasurer of Webster and Webster Bank. Mr. Brennan, a certified
public accountant, joined Webster Bank in 1986 as Senior Vice President and
Treasurer. He was elected Chief Financial Officer in
6
<PAGE>
1990 and Executive Vice President in 1991. Prior to joining Webster Bank, he was
a senior manager with the accounting firm of KPMG LLP.
WILLIAM T. BROMAGE is Executive Vice President -- Business
Banking of Webster and Webster Bank, positions he has held since May 1996. Prior
to joining Webster, he was a Consultant at Aetna Life & Casualty in Hartford,
Connecticut from 1994 to 1995. Before his association with Aetna, he was
Executive Vice President in Credit Administration at Shawmut National
Corporation since 1990 and had served Shawmut in other positions since 1969.
PETER K. MULLIGAN is Executive Vice President -- Consumer and
Small Business Banking of Webster and Webster Bank, positions he has held since
employment in 1995. Prior to joining Webster Bank, he was the Director of
Product Management, Retail Sales and Insurance at The Bank of Boston from 1992
to 1995, and served as the Executive Vice President of the Banking Division at
The Society for Savings, Hartford, Connecticut from 1988 until 1992. Society was
acquired by The Bank of Boston in 1992.
ROSS M. STRICKLAND is Executive Vice President -- Mortgage
Banking of Webster and Webster Bank, positions he has held since his employment
in 1991. Prior to joining Webster Bank, he was Executive Vice President of
Residential Lending with the former Northeast Savings, F.A., Hartford,
Connecticut, from 1988 to 1991. Prior to joining Northeast Savings, he was
National Sales Manager, Credit Resources Group, for Shearson Lehman Brothers.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by
Webster or Webster Bank for services rendered in all capacities to Webster and
its subsidiaries during 1998, 1997 and 1996 to the Chief Executive Officer of
Webster and to each of the other four most highly compensated executive officers
of Webster serving at December 31, 1998 ("the named executive officers").
Webster has not granted any stock appreciation rights to its executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-------------------
ANNUAL COMPENSATION SECURITIES ALL
NAME AND -------------------- UNDERLYING OTHER
PRINCIPAL POSITIONS YEAR SALARY ($) BONUS ($) (a) OPTIONS (#)(b) COMPENSATION ($)(c)
- ------------------- ---- ---------- ------------- -------------- ----------------------
<S> <C> <C> <C> <C> <C>
James C. Smith 1998 $550,000 $1,424,000 400,000 $45,467
Chairman, President, 1997 475,000 639,739 44,000 41,388
Chief Executive Officer 1996 390,000 627,724 (d) 41,500 39,850
and a Director
John V. Brennan 1998 235,000 461,000 9,800 26,787
Executive Vice President, 1997 203,462 231,340 14,600 26,503
Chief Financial Officer and 1996 170,000 177,488 12,200 26,140
Treasurer
William T. Bromage 1998 210,000 351,000 8,750 36,172
Executive Vice President -- 1997 180,000 98,500 12,000 20,471
Business Banking 1996 146,537 -- 25,000 --
Peter K. Mulligan 1998 200,000 432,000 8,350 25,072
Executive Vice President -- 1997 170,000 93,100 12,000 23,044
Consumer and Small Business 1996 156,904 106,100 12,200 17,477
Banking
Ross M. Strickland 1998 200,000 548,000 8,350 25,037
Executive Vice President -- 1997 170,000 242,634 12,000 25,138
Mortgage Banking 1996 160,000 150,492 12,000 25,686
</TABLE>
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7
<PAGE>
(a) Cash bonuses awarded to the named executive officers for fiscal 1998 were
composed of one or more of the following components: (i) a bonus paid under
Webster's Qualified Performance-Based Compensation Plan, (ii) a bonus paid
under Webster's Economic Value Added ("EVA") Incentive Plan and (iii) a
bonus paid under Webster's 1996-1998 Performance Incentive Plan. Mr. Smith
was awarded a Qualified Performance-Based Compensation Plan bonus of
$368,000. Messrs. Brennan, Bromage, Mulligan and Strickland were awarded
EVA bonuses of $131,000, $171,000, $132,000 and $224,000, respectively. For
Messrs. Smith, Brennan, Bromage, Mulligan and Strickland, these bonuses
included bonus amounts that were placed in the individual's "bonus bank"
after fiscal 1997 and paid for fiscal 1998 of $126,000, $53,000, $35,000,
$33,000 and $33,000, respectively. Messrs. Smith, Brennan, Bromage,
Mulligan and Strickland also were awarded bonuses under Webster's 1996-1998
Performance Incentive Plan of $1,056,000, $330,000, $180,000, $300,000 and
$324,000, respectively. For Messrs. Smith, Brennan and Strickland, these
bonus amounts under Webster's 1996-1998 Performance Incentive Plan include
the value of shares of restricted stock awarded in lieu of a cash payment
as follows: For Mr. Smith, 20,850 shares with a market value of $576,000;
for Mr. Brennan, 6,515 shares with a market value of $180,000; and for Mr.
Strickland, 11,728 shares with a market value of $324,000. Each share of
restricted stock was valued at $27.625, which was the average price of
Webster's Common Stock during the last five trading days of fiscal 1998.
These restricted shares will vest in full on January 1, 2002. Dividends
will be paid on these shares during the vesting period. At December 31,
1998, Messrs. Smith, Brennan and Strickland held 36,758 shares, 8,035
shares and 11,728 shares, respectively, of restricted stock that were not
vested as of that date. No performance units were granted to executive
officers in 1998. The EVA Incentive Plan and its general terms are
described below in "Personnel Resources Committee Report on Executive
Compensation-- The Economic Value Added Incentive Plan."
(b) Restated to reflect the two-for-one split of Webster's Common Stock in
April 1998.
(c) All Other Compensation includes amounts contributed or allocated, as the
case may be, to the Webster Bank 401(k) plan (the "401(k) Plan"), the
Webster Bank non-contributory employee stock ownership plan (the "ESOP"),
cash dividends paid on restricted stock, and the Webster Bank nonqualified
supplemental retirement plan, on behalf of each executive officer. It also
includes a car allowance for each executive officer and a premium on a life
insurance policy for Mr. Smith. For 1998 matching contributions made by
Webster Bank to the 401(k) Plan on behalf of Messrs. Smith, Brennan,
Bromage, Mulligan and Strickland were $5,000 each. In addition, for 1998,
Messrs. Smith, Brennan, Bromage, Mulligan and Strickland were allocated 304
shares each pursuant to the ESOP, having a value based on the market value
of Webster's Common Stock at the date of allocation of $8,341. In 1998,
Messrs. Smith and Brennan received cash dividends on restricted stock of
$6,840 and $654, respectively. In 1998, Webster Bank also allocated
$11,327, $1,992, $1,231, $931 and $896 to the supplemental matching
contributions accounts of Messrs. Smith, Brennan, Bromage, Mulligan and
Strickland, respectively, pursuant to the Webster Bank nonqualified
supplemental retirement plan. The premium for Mr. Smith's term life
insurance for 1998 was $1,959.
(d) Includes the value of 15,908 shares of restricted stock with a market value
of $300,562 awarded to Mr. Smith in lieu of a cash payment under Webster's
1994-1996 Performance Incentive Plan. The value of each share of the
restricted stock granted to Mr. Smith under Webster's 1994-1996 Performance
Incentive Plan was valued at $37.7875, which reflects the average price of
Webster's Common Stock during the last five trading days of fiscal year
1996. The number of shares of restricted stock granted to Mr. Smith in 1996
has been restated to reflect the April 1998 two-for-one stock split.
Executive officers are eligible to participate in Webster
Bank's nonqualified deferred compensation plan. Under the terms of the plan,
executive officer participants may elect to defer all or any portion of their
bonuses. Deferred amounts are credited by Webster Bank to bookkeeping
8
<PAGE>
reserve accounts for each participant. Such accounts, plus accrued interest, are
payable upon termination of service, disability or death of the participant, in
a lump sum or in ten annual installments at the participant's election. For
1998, none of the executive officers elected to defer the bonus portion of his
annual compensation.
OPTION GRANTS
The following table contains information with respect to
grants of stock options to each of the named executive officers during the year
ended December 31, 1998.
OPTION GRANTS DURING 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (a)
------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES EXERCISE EXPIRATION GRANT DATE
NAME GRANTED IN FISCAL YEAR PRICE ($/SH) DATE PRESENT VALUE (d)
- ---- ------- -------------- ------------ ---- -----------------
<S> <C> <C> <C> <C> <C>
James C. Smith............. 200,000 (b) 31.88% $33.75 4/30/2008 $ 2,720,860
200,000 (b) 31.88% $33.88 6/30/2008 $ 2,691,300
John V. Brennan............ 9,800 (c) 1.56% $26.50 12/17/2008 $ 97,553
William T. Bromage......... 8,750 (c) 1.39% $26.50 12/17/2008 $ 87,101
Peter K. Mulligan.......... 8,350 (c) 1.33% $26.50 12/17/2008 $ 83,119
Ross M. Strickland......... 8,350 (c) 1.33% $26.50 12/17/2008 $ 83,119
</TABLE>
- --------------------------
(a) All option grants were made at 100% of the fair market value of the Common
Stock on the date of grant. Options not immediately exercisable may become
exercisable in full, or with respect to certain option grants, in part,
under certain circumstances when a "change in control" of Webster or
Webster Bank has occurred.
(b) Options were exercisable immediately.
(c) Options will become exercisable in full after three years following the
date of grant.
(d) Based on the Black-Scholes option pricing model adapted for use in valuing
executive stock options. The actual value, if any, an employee may realize
will depend on the excess of the stock price over the exercise price on the
date the option is exercised. There is no assurance that the value realized
by an employee will be at or near the value estimated by the Black-Scholes
model. The estimated values under that model are based on assumptions as to
variables such as the expected term of the option (8.66 years), the
risk-free interest rate for the expected term of the option (based upon the
rate available on the date of grant on a ten-year zero-coupon U.S. Treasury
Note), stock price volatility (based on the Corporation's month-end stock
price history over the three-year period prior to the date of grant), and
expected future dividend yield (based upon the dividend yield at date of
grant). No adjustments were made for non-transferability and risk of
forfeiture.
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<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to
each of the named executive officers concerning the exercise of stock options
during 1998 and the value of all unexercised options held by each of such
individuals at December 31, 1998.
AGGREGATED OPTION EXERCISES IN 1998
AND FISCAL YEAR-END OPTIONS VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS AT OPTIONS AT
ACQUIRED VALUE DECEMBER 31, 1998 (#) DECEMBER 31, 1998 ($)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (a)
- ---- --------------- ------------ ------------------------- -----------------------------
<S> <C> <C> <C> <C>
James C. Smith........ -- -- 657,036/50,464 $4,105,417/$77,365
John V. Brennan....... -- -- 67,464/29,636 $1,202,097/$52,875
William T. Bromage.... -- -- 25,000/20,750 $ 228,750/$8,203
Peter K. Mulligan..... -- -- 28,964/25,586 $ 380,481/$51,516
Ross M. Strickland.... -- -- 71,004/25,586 $1,270,812/$51,516
</TABLE>
- ---------------------
(a) Based on the market value of Common Stock at December 31, 1998, less the
exercise price, of all unexercised stock options having an exercise price
less than such market value.
RETIREMENT PLANS
Webster Bank maintains a defined benefit pension plan (the
"Pension Plan") for eligible employees of Webster Bank. The Pension Plan is a
qualified plan under the Internal Revenue Code of 1986, as amended (the "Code"),
and complies with the requirements of the Employee Retirement Income Security
Act of 1974, as amended. All employees of Webster Bank are eligible to
participate in the Pension Plan upon attaining age 21 and completing one year of
service.
Benefits under the Pension Plan are funded solely by
contributions made by Webster Bank. Under the Pension Plan's benefit formula, a
participant's monthly normal retirement benefit will equal the sum of: (a) his
or her accrued benefit as of December 31, 1986 (adjusted through August 31, 1996
to reflect certain future increases in compensation), plus (b) the sum of 2% of
the participant's monthly compensation for each year of credited service
beginning on or after January 1, 1987. In general, benefits may not be based on
more than 30 years of credited service. The normal form of benefit is an annuity
for the participant's lifetime with a minimum of 120 monthly payments
guaranteed. A Pension Plan participant becomes 100% vested in the benefits under
the Pension Plan upon completion of five years of service. Benefit payments to a
participant or beneficiary may commence upon a participant's early retirement
date (age 55), normal retirement date (generally age 65), deferred retirement
date or death. Participants may elect to receive their benefits in one of
several optional forms, including a lump sum or periodic payments during the
participant's lifetime or during the lifetime of the participant and his or her
surviving spouse or designated beneficiary. The lump sum option has been
eliminated for benefits earned after January 26, 1998.
The Board of Directors of Webster Bank has adopted a
nonqualified supplemental retirement plan (the "Supplemental Plan") for certain
management and other highly compensated employees who are also participants in
the Pension Plan to provide supplemental retirement income benefits which are
not currently available because annual compensation in excess of $160,000
(subject to cost of living increases) may not be used in the calculation of
retirement benefits under the Code and because pension benefits are currently
subject to a maximum of $130,000 (subject to cost of living increases). Benefits
under the Supplemental Plan are payable in monthly installments. The
Supplemental Plan also provides certain management and other highly compensated
employees who are participants in the 401(k) Plan with supplemental matching
contributions. See "Executive Compensation -- Summary Compensation Table" above.
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<PAGE>
The estimated annual benefits payable from the Pension Plan
upon retirement at normal retirement age for Messrs. Smith, Brennan, Bromage,
Mulligan and Strickland are $98,290, $86,480, $47,730, $46,510 and $74,500,
respectively. In addition, the estimated annual supplemental retirement income
benefits payable to Messrs. Smith, Brennan, Bromage, Mulligan and Strickland
under the Supplemental Plan are $219,450, $56,770, $26,880, $23,110 and $34,230,
respectively.
COMPENSATION OF DIRECTORS
During 1998, each non-employee director of Webster received an
annual retainer of 432 shares of Webster Common Stock with an aggregate value of
$13,000 at the date of grant, pursuant to the Directors' Retainer Fees Plan, as
amended, adopted by shareholders at the 1996 Annual Meeting (the "Fees Plan").
Under the Fees Plan, each non-employee director is granted shares of Common
Stock equal to the annual retainer (currently $13,000) divided by the average
quarterly value as of the grant date, on an annual basis. The average quarterly
value is based on the average of the closing prices of Common Stock of the four
calendar quarters preceding the grant date, which is the date of each Annual
Meeting of shareholders. Shares of Common Stock granted under the Fees Plan are
subject to vesting requirements and other substantial risks of forfeiture. In
addition, effective as of April 23, 1998, each non-employee director received
$1,000 for each Board meeting attended and $750 for each committee meeting
attended. Chairpersons of the Audit Committee and the Personnel Resources
Committee also received an annual retainer of $2,000. Non-employee directors of
Webster receive no additional compensation for serving as directors or committee
members of Webster Bank. Employee directors of Webster receive no additional
compensation for serving as directors or committee members of Webster or its
subsidiaries.
Directors are eligible to participate in Webster Bank's
nonqualified deferred compensation plan. Under the terms of the plan, director
participants may elect to defer all or any portion of their directors' fees.
Deferred amounts are credited by Webster Bank to bookkeeping reserve accounts
for each participant. Such accounts, plus accrued interest, are payable upon
termination of service, disability or death of the participant, in a lump sum or
in ten annual installments at the participant's election. For 1998, only Mr.
Griffin elected to defer compensation.
The Board of Directors of Webster adopted in 1992, with
shareholder approval, the 1992 Stock Option Plan for the benefit of directors,
officers and other full-time employees of Webster and its subsidiaries. The
option exercise price for options to non-employee directors is 100% of the fair
market value of the Common Stock on the date of grant of the option. Options
granted to non-employee directors may be exercised at any time after grant. The
1992 Stock Option Plan was amended in 1996 to increase the number of shares
reserved for issuance under the 1992 Stock Option Plan and to provide that the
number of options granted to non-employee directors upon election or re-election
shall be 4,000 shares (as adjusted for the April 1998 two-for-one split of
Webster's Common Stock). A director elected to the Board for less than a
three-year term will be entitled to an option for 4,000 shares on a pro-rated
basis for the number of months of his or her term as a percentage of 36 months.
The 1992 Stock Option Plan was amended in 1998 to increase the number of shares
of Common Stock reserved for issuance under the 1992 Stock Option Plan, to
increase the number of shares available for grants to any single employee during
any calendar year, and to extend the term of the 1992 Stock Option Plan from
March 23, 2002 to February 23, 2008. The 1992 Stock Option Plan was amended by
the Board of Directors in January 1999 to permit the transfer of nonqualified
stock options. Messrs. Apicella, Carpenter, Crawford and Jacobi each will be
granted options to purchase 4,000 shares upon reelection by the shareholders at
the Annual Meeting.
EMPLOYMENT AGREEMENTS
Webster and Webster Bank entered into revised employment
agreements with Messrs. Smith, Brennan, Bromage, Mulligan and Strickland
effective January 1, 1998, as amended, which replaced the prior employment
agreements with Messrs. Smith, Brennan, Mulligan and
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<PAGE>
Strickland dated January 1, 1997 and the employment agreement with Mr. Bromage
dated October 21, 1996. Webster also entered into change of control employment
agreements with those officers effective December 15, 1997. James C. Smith
serves as Chairman, President and Chief Executive Officer of both Webster and
Webster Bank; Mr. Brennan serves as Executive Vice President, Treasurer and
Chief Financial Officer of both Webster and Webster Bank; Mr. Bromage serves as
Executive Vice President -- Business Banking of both Webster and Webster Bank;
Mr. Mulligan serves as Executive Vice President -- Consumer and Small Business
Banking of both Webster and Webster Bank; and Mr. Strickland serves as Executive
Vice President -- Mortgage Banking of both Webster and Webster Bank.
Under their respective employment agreements, each executive
officer may receive annual cost of living increases and may also receive a merit
increase as determined by the Boards of Directors of Webster and Webster Bank.
Each executive officer is eligible to receive discretionary bonuses as may be
authorized by the Boards of Directors of Webster and Webster Bank and shall be
eligible to participate in any plan of Webster or Webster Bank relating to stock
options, stock purchases, pension, thrift, employee stock ownership, group life
insurance and medical coverage or other retirement or employee benefits that
Webster or Webster Bank has adopted or may adopt for the benefit of its
executive employees. In addition, each executive officer is provided with an
automobile allowance for business use. The employment agreements provide for
initial terms of three years ending December 31, 2000 with renewals for one
additional year following each anniversary date with the approval of the Board
of Directors, unless the executive officer gives written notice to the contrary.
Those agreements will terminate upon the "Effective Date" of their respective
change of control employment agreements (which are discussed below). The 1999
base salaries for Messrs. Smith, Brennan, Bromage, Mulligan and Strickland are
$572,000, $244,500, $225,000, $208,000 and $208,000 respectively, which salaries
may not be reduced under the employment agreements without the consent of the
executive officer.
The Boards of Directors of Webster and Webster Bank may
terminate the executive officer's employment at any time during the term of an
employment agreement. Unless the termination is for "cause" (as defined
therein), such executive officers would be entitled (a) to receive a lump sum
payment from Webster Bank equal to the sum of (x) the executive officer's then
current annual base salary and (y) the amount of any bonuses paid pursuant to
Webster's and Webster Bank's annual incentive compensation plan during the then
current fiscal year multiplied by a fraction the numerator of which is the
number of full months during the then current fiscal year in which the executive
officer was employed and the denominator of which is 12, and (b) subject to
certain limitations, to continue to be entitled to medical and dental coverage
for one year (or the remaining term of the agreement, if less) or until the
executive officer accepts other employment on a substantially full time basis if
earlier.
If during the term of the employment agreement an executive
officer terminates his employment without the consent of the Board of Webster or
Webster Bank, then the employment agreement, among other things, would restrict
him from having any other employment for one year or the remaining term of the
agreement plus six months, whichever is less, with a commercial bank, savings
bank, savings and loan association, or mortgage banking company, or a holding
company affiliate of any of the foregoing, which has an office out of which the
executive officer would be primarily based, located within 35 miles of Webster
Bank's home office.
Under the change of control employment agreements, Webster and
Messrs. Smith, Brennan, Bromage, Mulligan and Strickland, respectively, agreed
that the employment of each executive officer would continue for a period of two
years following the "Effective Date" under such agreements (the "Employment
Period"). The "Effective Date" is generally the date on which a "change of
control" (as defined below) of Webster occurs, except that, if the executive
officer's employment with Webster is terminated before a change of control at
the request of a third party who is effecting a change of control or otherwise
in connection with or in anticipation of a change of control, the Effective Date
is the day before the date of such termination, provided, in either case,
12
<PAGE>
that the Effective Date occurs during the "change of control period" (defined as
the two-year period ending on December 15, 2000, except that on December 15,
1999 and on each annual anniversary of such date, unless previously terminated,
the change of control period will be extended automatically so as to terminate
two years from such date, unless Webster has given the executive officer at
least 60 days prior notice that the change of control period will not be so
extended). As noted above, upon the Effective Date under the change of control
employment agreements, the employment agreements of these officers with Webster
and Webster Bank will terminate and the change of control employment agreements
will supersede such agreements.
During the Employment Period, each executive officer will
receive an annual base salary at a rate at least equal to 12 times his highest
monthly base salary from Webster and its affiliated companies during the
12-month period before the Effective Date (including any salary that was earned
but deferred). The base salary will be reviewed at least annually and shall not
be reduced from the amount then in effect. In addition, each executive officer
shall be awarded for each fiscal year ending during the Employment Period an
annual bonus in cash at least equal to his highest bonus under the EVA Incentive
Plan or any comparable bonus under any predecessor or successor plan for the
last three full fiscal years before the Effective Date. Each executive officer
will be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to other peer executives
of Webster and affiliated companies and the incentive, savings and retirement
benefit opportunities afforded to the executive officer shall not be less
favorable than those provided to him during the 120-day period before the
Effective Date (or, if more favorable to the executive officer, those provided
generally to other peer executives of Webster and affiliated companies). Each
executive officer and his family also will be eligible to participate in and
shall receive all welfare benefits (including medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance) applicable generally to other peer executives of Webster and
affiliated companies and the welfare benefits provided to the executive officer
shall not be less favorable than those provided to him during the 120-day period
before the Effective Date (or, if more favorable to the executive officer, those
provided generally to other peer executives of Webster and affiliated
companies). Each executive officer will be entitled to prompt reimbursement of
expenses and to fringe benefits during the Employment Period (including tax and
financial planning services, payment of club dues and, if applicable, use of an
automobile and payment of related expenses) in accordance with the most
favorable policies in effect with respect to such matters for such executive
officer during the 120-day period before the Effective Date (or, if more
favorable to the executive officer, those provided generally to other peer
executives of Webster and affiliated companies). Similar provisions will apply
to the office, support staff and vacation time to be provided to the executive
officers during the Employment Period.
If the employment of the executive officer is terminated
during the Employment Period by Webster without "cause" (as defined therein) and
other than because of his "disability" (as defined therein) or by the executive
officer with "good reason" (as defined therein), Webster will be required to pay
the executive officer a lump sum cash amount equal to the sum of: (i) the sum of
(a) his base salary through the termination date to the extent not previously
paid, (b) a prorated bonus reflecting the number of days he was employed during
the fiscal year based on the higher of the bonus required to be paid for such
fiscal year under the agreement or the bonus paid or payable for the most
recently completed fiscal year and (c) any previously deferred compensation and
any accrued vacation pay; (ii) three times the sum of the executive officer's
base salary and bonus (based on the higher of the two amounts described in
(i)(b) above); and (iii) the excess of (a) the actuarial equivalent of the
benefit the executive officer would have been entitled to receive under the
Pension Plan and the Supplemental Plan if his employment had continued for three
years after the date of termination based on the compensation amounts that would
have been required to be paid to him under the change of control employment
agreement over (b) the actuarial equivalent of his actual benefit under the
Pension Plan and the Supplemental Plan as of the termination date. In such
event, Webster will also be required to: (i) continue benefits to the executive
officer and his family at least equal to those that would have been provided to
them under the change of control employment agreement if the executive officer's
employment had continued for at least three years after the
13
<PAGE>
termination date; (ii) provide outplacement services to the executive officer at
its expense and (iii) pay or provide to the executive officer any other amounts
or benefits to which he is entitled under any agreement or plan of Webster and
its affiliated companies. If the executive officer would be subject to the
excise tax imposed by Section 4999 of the Code (relating to excess parachute
payments) on any payment or distribution by Webster or its affiliates to or for
the benefit of the executive officer, Webster will pay to the executive officer
a gross-up amount sufficient (after all taxes) to pay such excise tax (including
interest and penalties with respect to any such taxes). However, if the payments
and distributions do not exceed 110% of the maximum amount that could be paid to
the executive officer such that no excise tax would be imposed, no gross-up
payment will be made and the payments and distributions will be reduced to such
maximum amount.
For purposes of the change of control employment agreements, a
"change of control" means: (1) the acquisition by any individual, entity or
group (a "Person") of beneficial ownership of 20% or more of either (i) the
outstanding shares of the Common Stock of Webster or (ii) the combined voting
power of the then outstanding voting securities of Webster entitled to vote
generally in the election of directors ("Voting Securities"), except that any
such acquisition (a) directly from Webster, (b) by Webster, (c) by any employee
benefit plan or trust of Webster or any controlled corporation, or (d) pursuant
to a transaction that complies with clauses (3)(i), (ii) and (iii) below will
not constitute a change of control; (2) individuals who, as of December 15,
1997, constituted the Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board of Directors, except that
any individual becoming a director after such date whose election, or nomination
for election by the shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board of Directors; or (3)
consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of Webster or the
acquisition of assets of another entity (a "Business Combination"), in each
case, unless, following such Business Combination, (i) all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the outstanding Common Stock and Voting Securities immediately before the
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock (the "Resulting Common
Stock") and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (the "Resulting Voting
Securities"), as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns Webster or all or substantially all of Webster's
assets either directly or through one or more subsidiaries) (the "Resulting
Corporation") in substantially the same proportions as their ownership,
immediately before the Business Combination, of the outstanding Common Stock and
Voting Securities, as the case may be, (ii) no Person (excluding any employee
benefit plan or trust of Webster or the Resulting Corporation) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then outstanding
Resulting Common Stock or the combined voting power of the Resulting Voting
Securities, except to the extent that such ownership existed before the Business
Combination and (iii) at least a majority of the members of the board of
directors of the Resulting Corporation were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board of Directors, providing for such Business Combination; or (4) approval by
the shareholders of Webster of a complete liquidation or dissolution of Webster.
PERSONNEL RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Personnel Resources Committee of the Board of Directors
comprises five non-employee directors. The Committee recommends to the full
Board of Directors, which has ultimate responsibility over such matters,
executive officer salaries, bonuses and certain other forms of compensation, and
recommends to the Stock Option Committee, consisting of all disinterested
non-
14
<PAGE>
employee directors, long-term incentive awards. All recommendations of the
Personnel Resources Committee regarding executive officer compensation for the
1998 fiscal year were approved by the Board of Directors or the Stock Option
Committee, as the case may be.
Set forth below is a report addressing Webster's compensation
policies for fiscal year 1998 as they affected Webster's executive officers.
Compensation Policies for Executive Officers. Webster's
executive compensation policies are designed to provide competitive levels of
compensation, to assist Webster in attracting and retaining qualified executives
and to encourage superior performance. In determining levels of executive
officers' overall compensation, the Personnel Resources Committee considers the
qualifications and experience of the persons concerned, the size of the
institution and the complexity of its operations, the financial condition,
including income, of the institution, the compensation paid to other persons
employed by the institution and the compensation paid to persons having similar
duties and responsibilities in comparable financial institutions. The Personnel
Resources Committee employs outside consultants and refers to published survey
data in establishing compensation.
Relationship of Performance to Executive Compensation.
Compensation paid or awarded to Webster's executive officers in 1998 consisted
of the following components: base salary, bonuses, long-term incentives (awards
of stock options and payments of performance units previously granted) and
participation in Webster employee benefit plans. While each of these components
has a separate purpose and may have a different relative value to the total, a
significant portion of the total compensation package is highly dependent on the
financial success of Webster and total return to shareholders. Generally, base
salaries for executive officers are at or below the average salaries paid for
comparable positions at other financial institutions. Short-term and long-term
incentive compensation plans are designed to provide significant compensation
opportunities when Webster meets or exceeds its financial and other goals. The
value of long-term incentive compensation such as stock options is dependent
primarily on the performance of Webster's Common Stock, and the value of
performance units is dependent on the return on average equity over a three-year
period. Webster's executive officers may earn lower than average total
compensation than for similar positions at comparable financial institutions
should Webster not meet its goals, and they may earn higher than average total
compensation than for similar positions when Webster meets or exceeds its goals.
For 1998, the Personnel Resources Committee intended that total compensation for
executive officers be at or above the average for comparable financial
institutions.
Base Salary. The Personnel Resources Committee reviews
executive base salaries annually in January. Base salary is intended to signal
the internal value of the position and to track with the external marketplace.
All executive officers serve pursuant to employment agreements that provide for
a minimum base salary that may not be reduced without the consent of the
executive officer. In establishing the 1998 salary for each executive officer,
the Personnel Resources Committee considered the officer's responsibilities,
qualifications and experience, the size of the institution and the complexity of
its operations, the financial condition of the institution (based on levels of
income, asset quality and capital), and compensation paid to persons having
similar duties and responsibilities in comparable financial institutions. Base
salaries for executive officers increased in 1998 due in large part to the
record operating earnings for 1997, and to the increased size and complexity of
the institution. The Committee also considered the successful acquisition and
integration of DS Bancor, Peoples Savings Financial Corp., Sachem Trust National
Association and the signing of a definitive agreement to acquire Eagle.
The Economic Value Added Incentive Plan. In 1997, Webster
adopted an Economic Value Added ("EVA"(R)1) Incentive Plan ("Incentive Plan"),
the purpose of which is to provide incentive compensation to certain key
employees, including all executive officers, in a form which relates the
- ---------------------
1 EVA(R) is a registered trademark of Stern Stewart & Co.
15
<PAGE>
financial reward to an increase in Webster's economic value. The Incentive Plan
was developed based upon the recommendations and advice of Webster's consultant,
Stern Stewart & Co., a nationally recognized financial advisory firm. In
general, EVA is the net operating profit of Webster after taxes, less a capital
charge. The capital charge is intended to represent the return expected by the
providers of Webster's capital, and is determined in consultation with Webster's
financial consultant on the basis of a formula that takes into account the risk
and cost of providing such capital. Management is of the view that EVA
improvement is the financial performance measure most closely correlated with an
increase in shareholder value.
Participants in the Incentive Plan include senior officers,
other than the Chief Executive Officer (who participates in a separate Qualified
Performance-Based Compensation Plan), approved by the Personnel Resources
Committee. The Personnel Resources Committee makes recommendations to the Board
of Directors for awards under the Plan.
The Incentive Plan formula calls for the bonuses of executive
officers to be determined on the basis of EVA performance (for the Corporation
and/or lines of business) versus target performance. The target bonuses are set
relative to executive officers' responsibilities with such target bonuses not to
exceed 67.5% of the recipient's base salary. Additional or lesser bonuses can be
earned to the extent that EVA improvement exceeds or falls short of target,
through the application of a bonus multiple which equals 1 when the EVA target
is met and which increases or decreases to the extent that EVA improvement
exceeds or falls short of the target. This bonus multiple is then applied to the
target bonus set in January each year, and results in a "declared bonus" award.
The declared bonus award is placed into an individual's "bonus bank" from which
that year's target bonus and 1/3 of the remaining bonus bank balances are paid
each year. For 1998, awards to the executive officers were based on 50%
corporate EVA improvement and 50% line of business EVA improvement except in the
case of the Chief Financial Officer, whose award is based entirely on corporate
EVA improvement. Declared bonus awards for 1998 ranged from 49% to 274% of
target.
Qualified Performance-Based Compensation Plan. The Qualified
Performance-Based Compensation Plan (the "Plan") was adopted by the Board of
Directors effective January 1, 1998, and approved by shareholders at the 1998
annual meeting. The Plan is designed to further the growth and profitability of
Webster by providing the Chief Executive Officer and other selected executive
officers with the opportunity to earn additional cash compensation based on
business results, thereby enabling Webster to motivate key employees to achieve
high profitability for the Corporation. The Plan is intended to satisfy the
requirements of Section 162(m) of the Code with respect to the deduction of
qualified performance-based compensation. The Chief Executive Officer was the
only participant in the Plan for 1998, and his bonus was subject to attainment
of the designated performance objectives under the Plan and, for 1998, to
satisfaction of the EVA criteria described above.
Long Term Incentive Compensation. Webster uses stock options
and performance unit awards to provide long-term incentive compensation. The
Personnel Resources Committee makes recommendations to the Stock Option
Committee for awards under the 1992 Stock Option Plan and Webster's 1996-1998
Performance Incentive Plan. Long-term compensation, which emphasizes long-term
results, is targeted at 37.5% to 50% of the recipient's base salary depending
upon the executive officer's responsibilities.
The Board of Directors endorses the position that stock
ownership by management is beneficial in aligning management's and shareholders'
interests in the enhancement of shareholder value. The purpose of stock option
awards is to provide an opportunity for the recipients to acquire or increase a
proprietary interest in Webster, thereby creating a stronger incentive to expend
maximum effort for the long-term growth and success of Webster and encouraging
recipients to remain in the employ of Webster. Officers and other full-time
employees of Webster and its subsidiaries are eligible for grants under the
Corporation's 1992 Stock Option Plan. Stock options
16
<PAGE>
are normally granted each year as a component of long-term compensation with the
size of the grants generally tied to and weighted approximately equally based on
an officer's responsibility level, base salary and performance. The number of
options held is not considered when determining the option awards for executive
officers, including the Chief Executive Officer. During 1998, 35,250 stock
options were granted to Webster's executive officers, excluding special grants
to the CEO for a total of 400,000 stock options.
The purpose of Webster's 1996-1998 Performance Incentive Plan
is to further the growth and profitability of Webster by providing long-term
incentives that are dependent on achieving a specified return on average equity
over a three year period. Executive officers are granted awards of performance
units for a performance period of three consecutive fiscal years. During that
performance period, a specified return on average equity must be attained in
order to trigger a payout to the executive officers. During the 1996-1998
Performance Period, the return on average equity for the Corporation was 15.12%
which exceeded the performance target of 14.25% set at the beginning of the
period and qualified the participants for a maximum payment under Webster's
1996-1998 Performance Incentive Plan, the material terms of which were approved
by shareholders at the 1996 annual meeting. No performance units were granted to
executive officers in 1998.
Other. In addition to the compensation paid to executive
officers as described above, executive officers received, along with and on the
same terms as other employees, certain benefits pursuant to the 401(k) Plan,
ESOP and the Pension Plan. In addition, executive officers received certain
benefits under Webster's nonqualified supplemental retirement plan that is
otherwise limited by Internal Revenue Service caps on qualified plans.
CEO Compensation. The Personnel Resources Committee, in
determining the compensation for the Chief Executive Officer, considers
Webster's size and complexity, financial condition and results and progress in
meeting strategic objectives. The Chief Executive Officer's 1998 base salary was
increased by 15.8% to $550,000 based on the Corporation's increase in size and
complexity of operations, its 1997 financial results and its progress in meeting
strategic objectives. Base salary for the Chief Executive Officer was at the
average for comparable financial institutions. For the year 1998, the Personnel
Resources Committee intended that total compensation for the Chief Executive
Officer be at the average for comparable financial institutions. Regarding
short-term incentive compensation, the CEO's bonus was determined under the
Qualified Performance-Based Compensation Plan, the material terms of which were
approved by shareholders at the 1998 annual meeting. The Committee determined
that for 1998, it would require that the corporate EVA improvement target be
attained in order for the CEO to receive a target bonus (90% of base
compensation) under the Plan. For 1998, the CEO's bonus payout under the Plan
was $368,000, which comprised: 49% of the target bonus based on EVA improvement
results for the Corporation ($242,000); and the balance in the CEO's bonus bank
from the previous year ($126,000). Regarding long-term incentive compensation,
the CEO received a maximum payment under Webster's 1996-1998 Performance
Incentive Plan of $1,056,000 according to the terms of the plan and special
grants of a total of 400,000 stock options which were made during the first half
of 1998 in accordance with Webster's 1992 Stock Option Plan. The special stock
option grants were recommended by the Personnel Resources Committee in
recognition of the Corporation's performance under the CEO's leadership in his
capacity as Chairman, President and Chief Executive Officer, in particular as
measured by the Corporation's total shareholder return over 3, 5 and 7 year
periods ended December 31, 1997. The Corporation's returns exceeded its peer
group in all time frames. The special option grants were intended to provide a
strong incentive for further attainment of above average shareholder return.
Internal Revenue Code Section 162(m). In 1993, the Code was
amended to disallow publicly traded companies from receiving a tax deduction on
compensation paid to executive officers in excess of $1 million (section 162(m)
of the Code), unless, among other things, the compensation meets the
requirements for performance-based compensation. In structuring Webster's
17
<PAGE>
compensation programs and in determining executive compensation, the Committee
takes into consideration the deductibility limit for compensation.
PERSONNEL RESOURCES COMMITTEE
-----------------------------
Joel S. Becker (Chairman)
O. Joseph Bizzozero, Jr.
Robert A. Finkenzeller
John J. McCarthy
Sister Marguerite Waite
Compensation Committee Interlocks and Insider Participation
From time to time Webster Bank makes loans to its directors
and executive officers and related persons and entities for the financing of
homes, as well as home improvement, consumer and commercial loans. It is the
belief of management that these loans are made in the ordinary course of
business, are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and neither involve more than normal risk of collectibility nor
present other unfavorable features.
CERTAIN RELATIONSHIPS
For a description of loans made to Webster Bank's directors,
executive officers and related persons and entities, see "Personnel Resources
Committee Report on Executive Compensation -- Compensation Committee Interlocks
and Insider Participation."
George T. Carpenter, a director of Webster and Webster Bank,
is the President and Treasurer of Carpenter Realty Co. ("Carpenter Realty") and
S. Carpenter Construction Co. ("Carpenter Construction"). During fiscal 1998,
Webster Bank entered into a 15 year lease for office space with Carpenter Realty
for an annual rent for the first five years of the lease of $61,200. Webster
Bank also is a party to a three year lease with Carpenter Realty effective
August 1, 1996 for storage space at an annual rate of $6,300. In addition,
Webster paid Carpenter Construction management fees of $9,581 for work which was
competitively bid for renovations to other Webster properties for fiscal 1998.
18
<PAGE>
COMPARATIVE COMPANY PERFORMANCE
The following table sets forth comparative information
regarding Webster's cumulative shareholder return on its Common Stock over the
last five fiscal years. Total shareholder return is measured by dividing total
dividends (assuming dividend reinvestment) for the measurement period plus share
price change for a period by the share price at the beginning of the measurement
period. Webster's cumulative shareholder return over a five-year period is based
on an investment of $100 on December 31, 1993 and is compared to the cumulative
total return of the Standard & Poor's 500 Index ("S&P 500 Index"), the SNL All
Bank and Thrift Index and a peer group index prepared by SNL Securities LC. The
peer group index includes each of the 47 bank and thrift companies with reported
market capitalizations between $750 million and $2 billion at December 31, 1998,
with the returns of each issuer in the group weighted according to the issuer's
respective stock market capitalization at the beginning of each period for which
a return is indicated.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
WEBSTER, S&P 500 INDEX, SNL ALL BANK & THRIFT INDEX
AND SNL SECURITIES LC PEER GROUP INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
PERIOD ENDING
--------------------------------------------------------------------------
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Webster Financial Corporation 100.00 82.85 135.70 172.94 318.59 266.73
S&P 500 100.00 101.32 139.39 171.26 228.42 293.69
SNL All Bank & Thrift Index 100.00 97.79 152.24 211.02 323.93 343.85
Peer Group 100.00 103.76 138.67 179.41 287.84 274.69
</TABLE>
19
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires Webster's directors and officers, and persons who own more
than 10% of its Common Stock, to file with the Securities and Exchange
Commission initial reports of ownership of Webster's equity securities and to
file subsequent reports when there are changes in such ownership. Based on a
review of reports submitted to Webster, the Corporation believes that during the
fiscal year ended December 31, 1998, except as discussed below, all Section
16(a) filing requirements applicable to Webster's officers, directors, and more
than 10% owners were complied with on a timely basis. Mr. Hickey, a director of
the Corporation, filed on an untimely basis one Form 4 for five separate
transactions.
STOCK OWNED BY MANAGEMENT
The following table sets forth information as of March 3, 1999
with respect to the amount of Webster Common Stock beneficially owned by each
director of Webster, each nominee for election as a director, each of the named
executive officers and by all directors and executive officers of Webster as a
group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND POSITION(S) AND NATURE OF COMMON STOCK
WITH WEBSTER BENEFICIAL OWNERSHIP (a)(b) OUTSTANDING
------------ --------------------------- -----------
<S> <C> <C>
Richard H. Alden
Director.................................. 66,865 *
Achille A. Apicella
Director.................................. 27,112 *
Joel S. Becker
Director.................................. 24,069 *
O. Joseph Bizzozero, Jr.
Director.................................. 15,718 *
John V. Brennan
Executive Vice President, Chief
Financial Officer and Treasurer........... 144,690 *
William T. Bromage
Executive Vice President --
Business Banking.......................... 28,529 *
George T. Carpenter
Director.................................. 105,403 *
John J. Crawford
Director.................................. 8,900 *
Harry P. DiAdamo, Jr.
Director.................................. 108,950 *
Robert A. Finkenzeller
Director.................................. 12,258 *
Walter R. Griffin
Director.................................. 57,383 *
J. Gregory Hickey
Director.................................. 18,600 *
</TABLE>
20
<PAGE>
<TABLE>
<S> <C> <C>
C. Michael Jacobi
Director.................................. 13,586 *
John J. McCarthy
Director.................................. 70,884 *
Peter K. Mulligan
Executive Vice President --
Consumer and Small Business Banking....... 43,299 *
James C. Smith
Chairman, President and
Chief Executive Officer................... 976,711 2.66%
Ross M. Strickland
Executive Vice President --
Mortgage Banking.......................... 126,565 *
Sister Marguerite Waite, C.S.J.
Director.................................. 14,162 *
All directors and executive
officers as a group (18 persons).......... 1,863,684 5.03%
</TABLE>
(a) In accordance with Rule 13d-3 under the Securities Exchange Act of
1934, as amended, a person is deemed to be the beneficial owner, for
purposes of this table, of any shares of Common Stock if such person
has or shares voting power and/or investment power with respect to the
security, or has the right to acquire beneficial ownership at any time
within 60 days from March 3, 1999. As used herein, "voting power"
includes the power to vote or direct the voting of shares and
"investment power" includes the power to dispose or direct the
disposition of shares.
The table includes shares owned by spouses or other immediate family
members over which the persons named in the table possess shared voting
and/or shared investment power as follows: Mr. Alden, 265 shares; Mr.
Becker, 2,016 shares; Dr. Bizzozero, 1,144 shares; Mr. Carpenter, 3,750
shares; Mr. DiAdamo, 1,010 shares; Mr. Griffin, 20,000 shares; Mr.
Hickey, 1,157 shares; Mr. McCarthy, 8,427 shares; Mr. Smith, 69,522
shares; Sister Marguerite Waite, 220 shares; and all directors and
executive officers as a group, 107,511 shares. The table also includes
the following: 1,005,678 shares subject to outstanding options which
are exercisable within 60 days from March 3, 1998: 79,261 shares held
in the 401(k) Plan by the officers; 69,689 shares of restricted stock
that was not vested as of March 3, 1999; and 41,648 shares held in the
ESOP that have been allocated to the accounts of executive officers.
All other shares included in the table are held by persons who exercise
sole voting and sole investment power over such shares.
Outstanding options reflected in the table were held as follows: Mr.
Alden, 23,318 shares; Mr. Apicella, 11,322 shares; Mr. Becker, 8,400
shares; Dr. Bizzozero, 6,200 shares; Mr. Brennan, 67,464 shares; Mr.
Bromage, 25,000 shares; Mr. Carpenter, 23,318 shares; Mr. Crawford,
5,334 shares; Mr. DiAdamo, 4,000 shares; Mr. Finkenzeller, 6,200
shares; Mr. Griffin, 6,200 shares; Mr. Hickey, 10,600 shares; Mr.
Jacobi, 10,600 shares; Mr. McCarthy, 23,318 shares; Mr. Mulligan,
28,964 shares; Mr. Smith, 661,636 shares; Mr. Strickland, 71,004
shares; and Sister Marguerite Waite, 12,800 shares.
* Less than 1% of Common Stock outstanding.
21
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES OF WEBSTER
The following table sets forth information at March 3, 1999
with respect to ownership of Webster Common Stock by each person believed by
management to be the beneficial owner of more than 5% of the outstanding Webster
Common Stock. The information set forth below is based on the most recent
Schedule 13D or 13G filed on behalf of such person with the Securities and
Exchange Commission.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME AND ADDRESS AND NATURE OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
------------------- -------------------- -----------
<S> <C> <C>
Neuberger Berman, LLC....................... 2,132,000 (a) 5.92%
605 Third Avenue
New York, NY 10158-3698
</TABLE>
- -----------------------
(a) Neuberger Berman, LLC reports that it has sole voting power over
847,500 shares, shared voting power over 1,283,300 shares and shared
dispositive power over 2,132,000 shares. Neuberger Berman, LLC and
Neuberger Berman Management Inc. serve as sub-advisor and investment
manager, respectively, of Neuberger Berman's various mutual funds. No
other Neuberger Berman, LLC advisory client has an interest of more
than 5% of Webster.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 2)
The Board of Directors has appointed the firm of KPMG LLP to
continue as independent auditors for Webster for the year ending December 31,
1999, subject to ratification of such appointment by Webster's shareholders.
KPMG LLP was appointed as the independent auditors of Webster Bank in 1985, has
performed audits for Webster Bank for the years ended December 31, 1983 through
1998, and has similarly performed audits for Webster for the years ended
December 31, 1986 through 1998. Unless otherwise indicated, properly executed
proxies will be voted in favor of ratifying the appointment of KPMG LLP,
independent certified public accountants, to audit the books and accounts of
Webster for the year ending December 31, 1999. No determination has been made as
to what action the Board of Directors would take if Webster's shareholders do
not ratify the appointment.
Assuming the presence of a quorum at the Annual Meeting, the
affirmative vote of the holders of at least a majority of the votes cast is
required to ratify the appointment of KPMG LLP as Webster's independent auditors
for the year ending December 31, 1999.
Representatives of KPMG LLP are expected to be present at the
Annual Meeting. They will be given an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF KPMG LLP AS WEBSTER'S INDEPENDENT AUDITORS FOR THE YEAR
ENDING DECEMBER 31, 1999.
22
<PAGE>
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
FOR INCLUSION IN PROXY STATEMENT
Any proposal which a Webster shareholder wishes to have
included in Webster's proxy statement and form of proxy relating to Webster's
2000 annual meeting of shareholders under Rule 14a-8 of the Securities and
Exchange Commission must be received by Webster's secretary at Webster Plaza,
Waterbury, Connecticut 06702 by November 20, 1999. Nothing in this paragraph
shall be deemed to require Webster to include in its proxy statement and form of
proxy for such meeting any shareholder proposal which does not meet the
requirements of the Securities and Exchange Commission in effect at the time.
Any other proposal for consideration by shareholders at Webster's 2000 annual
meeting of shareholders must be delivered to, or mailed to and received by, the
secretary of Webster not less that 30 days nor more than 90 days prior to the
date of the meeting if Webster gives at least 45 days' notice or prior public
disclosure of the meeting date to shareholders.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors
does not know of any other matters to be presented for action by the
shareholders at the Annual Meeting. If, however, any other matters not now known
are properly brought before the meeting, the persons named in the accompanying
proxy will vote such proxy in accordance with the determination of a majority of
the Board of Directors.
By order of the Board of Directors
/s/ James C. Smith
James C. Smith
Chairman and Chief Executive Officer
Waterbury, Connecticut
March 19, 1999
23
<PAGE>
WEBSTER FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Webster Financial Corporation ("Webster"
or the "Corporation") hereby appoints Joel S. Becker and Sister Marguerite
Waite, or any of them, with full power of substitution in each, as proxies to
cast all votes which the undersigned shareholder is entitled to cast at the
annual meeting of shareholders (the "Annual Meeting") to be held at 4:00 p.m.,
local time, on Thursday, April 22, 1999, at the Courtyard by Marriott, 63 Grand
Street, Waterbury, Connecticut, and at any adjournments thereof, upon the
following matters. The undersigned shareholder hereby revokes any proxy or
proxies heretofore given.
This proxy will be voted as directed by the undersigned shareholder.
UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE NOMINEES LISTED IN PROPOSAL 1, FOR THE RATIFICATION OF WEBSTER'S APPOINTMENT
OF INDEPENDENT AUDITORS (PROPOSAL 2) AND IN ACCORDANCE WITH THE DETERMINATION OF
A MAJORITY OF THE BOARD OF DIRECTORS AS TO ANY OTHER MATTERS. The undersigned
shareholder may revoke this proxy at any time before it is voted by delivering
to the Vice President, Investor Relations of the Corporation either a written
revocation of the proxy or a duly executed proxy bearing a later date, or by
appearing at the Annual Meeting and voting in person. The undersigned
shareholder hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement.
IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND RETURN ALL
CARDS IN THE ACCOMPANYING ENVELOPE.
(CONTINUED AND TO BE DATED AND SIGNED ON THE REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD
BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
WEBSTER FINANCIAL CORPORATION
APRIL 22, 1999
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
[X] Please mark your votes as in this example
1. To elect four directors for three-year terms (Proposal 1)
FOR WITHHOLD AUTHORITY
all nominees listed to vote for all nominees listed below
[] []
Nominees: Achille A. Apicella
George T. Carpenter
John J. Crawford
C. Michael Jacobi
WITHHOLD AUTHORITY to vote for the following nominees only: (write the name
of the nominee(s) in the space below).
----------------------------------------------------------
2. To ratify the appointment by the Board of Directors of the firm KPMG
LLP as independent auditors of the Corporation for the fiscal year
ending December 31, 1999 (Proposal 2)
FOR AGAINST ABSTAIN
[] [] []
3. The Proxies are authorized to vote upon such other business as may
properly come before the Annual Meeting, or any adjournments of the
meeting, in accordance with the determination of a majority of the
Corporation's Board of Directors
Date: , 1999
- ------------------------------------------------------ -----------
SIGNATURE(S) OF SHAREHOLDER OR AUTHORIZED REPRESENTATIVE
NOTE: Please date and sign exactly as name(s) appear(s) hereon. Each
executor, administrator, trustee, guardian, attorney-in-fact and other
fiduciary should sign and indicate his or her full title. When stock
has been issued in the name of two or more persons, all should sign.
