Exhibit 10.12
Includes Amendment No. 4
WEBSTER BANK, A FEDERAL SAVINGS BANK
AMENDED AND RESTATED DEFERRED COMPENSATION PLAN
FOR DIRECTORS AND OFFICERS
ARTICLE I
PURPOSE
1.1 Purpose. THE WEBSTER BANK, A FEDERAL SAVINGS BANK, AMENDED AND RESTATED
DEFERRED COMPENSATION PLAN FOR DIRECTORS AND OFFICERS (the "Plan") is a
nonqualified deferred compensation plan designed to enable Directors, Advisory
Directors and Senior Officers (as defined below) to defer receipt of
compensation on a tax advantaged basis. The Plan is also expected to encourage
the continued employment of such employees and to facilitate the recruiting of
executive personnel, Directors and Advisory Directors in the future.
1.2 Effective Date. The Plan as amended and restated shall be effective as of
October 1st, 1994.
ARTICLE II
DEFINITIONS
2.1 Definitions. As used herein, the following terms shall have the following
meanings:
(a) Advisory Director. A member of the advisory board of the
Bank.
(b) Bank. Webster Bank, a federal savings bank, its successors
and assigns.
(c) Beneficiary. The person designated by the Participant to
receive Plan benefits in the event of the Participant's death.
(d) Board. The Board of Directors of the Bank.
(e) Committee. Any Committee authorized by the Board to
administer the Plan.
(f) Corporation. Webster Financial Corporation, the parent
corporation of the Bank.
(g) Director. A member of the Board of Directors of the
Corporation or the Bank.
(h) Disability. A Participant's permanent and total incapacity to
perform any substantial services for the Corporation or the Bank (as
applicable) by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less
than 12 months. Disability shall be deemed to exist only when a
written application has been filed with the Board by or on behalf of
the Participant and when such Disability is certified to the Board by
a licensed physician approved by the Board. However, in the event the
Participant meets the requirement for disability benefits under the
Social Security law then in effect, he shall thereafter be deemed to
have incurred a Disability within the meaning of this definition.
(i) Participant. A Director, an Advisory Director or a Senior
Officer who is eligible to participate in the Plan pursuant to Article
III.
(j) Plan. The Webster Bank, a federal savings bank Deferred
Compensation Plan, including any amendments, rules and regulations
adopted pursuant hereto.
(k) Senior Officer. An employee of the Bank who serves as a
Senior Vice President or any higher officer of the Bank.
ARTICLE III
ELIGIBILITY
3.1 Eligibility. Eligibility to participate in the Plan will be limited to a
select group of management or highly-compensated employees composed only of
Directors, Advisory Directors and Senior Officers who are designated by the
Board to participate in the Plan. The Board shall have absolute discretion as to
the Directors, Advisory Directors and Senior Officers it chooses to designate as
Participants.
ARTICLE IV
DEFERRED COMPENSATION
4.1 Deferral of Damages. A Participant who is a Senior Officer may elect to
defer all or any portion of any bonus he might be awarded under the Bank's
Incentive Compensation Plan (or under any other program or policy of the Bank)
with respect to his services during any calendar year provided that the
Participant irrevocably elects to defer such amounts before the first day of
such calendar year. In the case of a program or policy that provides for
incentive compensation that is earned over a period of two or more calendar
years, the election shall be made before the first day of the first such
calendar year.
4.2 Deferral of Directors' Fees. A Participant who is a Director or Advisory
Director may elect to defer all or any portion of any retainer fee or any board
or committee meeting fees (or such other compensation) he might earn with
respect to his services to the Corporation or the Bank during any single
calendar year provided that the Participant irrevocably elects to defer such
amounts prior to the commencement of such calendar year.
4.3 Election of Alternative Form of Benefit. At the time the Participant makes
any individual election pursuant to this Article IV to defer amounts earned
during a calendar year, the Participant may also elect that any amounts deferred
pursuant to such election be distributed upon termination of service or
employment pursuant to subsection 5.1(b) in ten annual installments. Otherwise,
all distributions upon termination of service or employment will be made in a
lump sum pursuant to subsection 5.1(a).
4.4 Accounting for Deferred Compensation. The amount of compensation deferred
under sections 4.1 and 4.2 above (collectively, "Deferred Compensation") by the
Participant shall be credited by the Corporation or the Bank (as applicable) to
one of two bookkeeping reserve accounts maintained for each Participant
(collectively, the "Bookkeeping Reserve Accounts"), one to be credited with only
those deferrals with respect to which the Participant elects installment
distributions pursuant to section 4.3 (the "Installment Account") and the other
for all other deferrals (the "Regular Account"). A deferral shall be credited to
the appropriate Bookkeeping Reserve Account at the end of the calendar month
with respect to which the deferral is made. A payment to a Participant or
Beneficiary shall be charged to the appropriate Bookkeeping Reserve Account as
of the time the payment is made. Interest, compounded monthly, shall be credited
on the balance credited to the Bookkeeping Reserve Accounts from time to time
(i) as of the last day of each calendar year during the period beginning when
the Deferred Compensation is first so credited, and ending on the last day of
the calendar year preceding the date described in (ii) below, and (ii) as of the
date of distribution of a final installment payment (pursuant to section 5.1(b)
or Section 5.3) or a lump sum payment (pursuant to sections 5.1(a), 5.3, 5.4 or
5.5) of the amounts credited to the Participant's Bookkeeping Reserve Accounts.
The rate of interest shall be the interest rate on ten year United
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States Treasury obligations, as reported from time to time in The Wall Street
Journal, plus 100 basis points, adjusted monthly.
ARTICLE V
DISTRIBUTION OF DEFERRED COMPENSATION
5.1 Payment Upon Termination of Service or Employment. Except as provided in
Sections 5.2 through 5.5 and Section 8.1, upon the termination of service or
employment of the Participant, amounts in the Participant's Bookkeeping Reserve
Accounts shall be distributed as follows (unless he is immediately thereafter in
the employ or service of the Corporation or the Bank):
(a) Amounts credited to the Regular Account of a Participant
shall be paid to such Participant in a single lump sum within 60 days
following the date on which the Participant terminates service or
employment with the Corporation or the Bank.
(b) Amounts credited to the Participant's Installment Account
shall be distributed in 10 substantially equal, annual installments.
The first installment shall be paid to the Participant 60 days
following the Participant's termination of service or employment.
Subsequent installments shall be paid to the Participant annually on
the 60th day of the calendar year commencing with the calendar year
immediately following the calendar year in which the Participant
received the first installment. Each installment shall be equal to the
balance credited to the Installment Account multiplied by a fraction,
the numerator of which is 1 and the denominator of which is 10 minus
the number of annual installments previously paid the Participant (so
that the first installment will be 1/10th of the account, the second
installment will be 1/9th of the account and so on).
5.2 Payment Upon Disability. Upon a Participant's Disability, the aggregate
amount credited to the participant's Bookkeeping Reserve Accounts shall be paid
to the Participant within 60 days following the Participant's termination of
service or employment on account of such Disability.
5.3 Payment Upon Death. Upon a Participant's death, the entire amount credited
to the Participant's Regular Account shall be paid to the Beneficiary within 60
days following the Participant's death. Installment distributions of the
amounts, if any, remaining in the Participant's Installment Account shall
continue or commence, within 60 days following the Participant's death, to the
Beneficiary pursuant to Section 5.1(b). If the Participant has not designated a
Beneficiary, or if the Beneficiary does not survive the Participant, the
aggregate amount credited to the Participant's Bookkeeping Reserve Accounts
shall be distributed in a single lump sum to the participant's estate.
5.4 Payment Upon Termination in Connection with Change Control. The amount
credited to a Participant's Bookkeeping Reserve Accounts shall be paid to the
Participant within 30 days following the date on which the Participant
terminates service or employment with the Corporation or the Bank (unless he is
immediately thereafter in the service or employ of the Corporation or the Bank),
voluntarily or involuntarily, in connection with or within one year after a
change in control of the Corporation or the Bank (as defined in the following
sentence) or the threat of a change in control of the Corporation. A "change in
control" of the Corporation shall be deemed to have taken place if: (i) any
person becomes the beneficial owner of 20 percent or more of the total number of
voting shares of the Corporation; (ii) any person becomes the beneficial owner
of 10 percent or more, but less than 20 percent of the total number of voting
shares of the Corporation, if the board of directors of the Corporation has made
a determination that such beneficial ownership constitutes or will constitute
control of the Corporation; (iii) any person (other than the persons named as
proxies solicited on behalf of the board of directors of the Corporation) holds
revocable or irrevocable proxies, as to the election or removal of two or more
directors of the Corporation, for 20 percent or more of the total number of
voting shares of the Corporation; (iv) any person has commenced a tender or
exchange offer, or entered into an agreement or received an option, to acquire
beneficial ownership of 20 percent or more of the total number of voting shares
of the Corporation, whether or not the requisite
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regulatory approval for such acquisition has been received; or (v) as the result
of, or in connection with, any cash tender or exchange offer, merger, or other
business combination, sale of assets or contested election, or any combination
of the foregoing transactions, the persons who were directors of the Corporation
before such transaction shall cease to constitute at least two-thirds of the
board of directors of the Corporation or any successor corporation. A "change in
control" of the Bank shall be deemed to have taken place if the Corporation's
beneficial ownership of the total number of voting shares of the Bank is reduced
to less than 50 percent. For purposes of this Section 5.4, a "person" includes
an individual, corporation, partnership, trust or group acting in concert. A
person for these purposes shall be deemed to be a beneficial owner as that term
is used in Rule 13d-3 under the Securities Exchange Act of 1934. Whether there
exists a threat of a change in control of the Corporation for purposes of this
Plan shall be determined by the board of directors of the Corporation, which
determination shall be final and conclusive.
ARTICLE VI
FUNDING
It is the intention of the Corporation and the Bank, the eligible
Participants and their Beneficiaries, and each other party to the Plan that the
arrangements hereunder be unfunded for tax purposes and for purposes of Title I
of the Employee Retirement Income Security Act of 1974, as amended. The rights
of eligible Participants and their Beneficiaries shall be solely those of a
general unsecured creditor of the Corporation or the Bank (as applicable). The
Plan constitutes a mere promise by the Corporation or the Bank (as applicable)
to make benefit payments in the future.
The obligation of the Corporation or the Bank (as applicable) to pay
benefits under this Plan shall be interpreted as a contractual obligation to pay
only those amounts described in Article IV in the manner and under the
conditions prescribed in Article V. Any assets set aside to fund Deferred
Compensation shall be subject to the claims of general creditors, and no person
other than the Corporation or the Bank (as applicable) shall, by virtue of the
provisions of the Plan, have any interest in such funds.
Prior to the occurrence of a change in control (as defined in this
Article VI), neither the Bank nor the Corporation shall have any obligation to
fund the benefits payable under this Plan. If the Corporation or the Bank
determines, prior to a change in control, that Deferred Compensation under the
Plan should be funded, it may utilize, singly or in combination, any method of
funding it may deem appropriate, including, but not limited to, terminal
funding, a group or individual trust, annuity contracts or life insurance
contracts.
Upon the occurrence of a change in control (as defined in this Article
VI), the Corporation shall (unless the Corporation's liabilities under the Plan
have been fully discharged) adopt and fully fund a trust, the terms of which
shall conform with the language of the model trust agreement set forth in
Revenue Procedure 92-64 issued by the Internal Revenue Service (or any successor
thereto) relating to trusts established in connection with unfunded deferred
compensation arrangements (or, if such trusts are no longer available for use in
connection with unfunded deferred compensation arrangements, any other
instrument which is designed to provide a similar level of security and to have
the same tax results as such trust).
For purposes of this Article VI, a "change in control" shall mean the
occurrence of any of the following events: (1) Any person becomes the beneficial
owner of twenty five percent (25%) or more of the total number of voting shares
of the Corporation;
(2) Any person becomes the beneficial owner of ten percent
(10%) or more, but less than twenty-five percent (25%), of the total number of
voting shares of the Corporation, unless
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the Director of the Office of Thrift Supervision (the "OTS Director") has
approved a rebuttal agreement filed by such person or such person has filed a
certification with the OTS Director;
(3) Any person (other than the persons named as proxies
solicited on behalf of the board of directors of the Corporation) holds
revocable or irrevocable proxies, as to the election or removal of two or more
directors of the Corporation, for twenty-five percent (25%) or more of the total
number of voting shares of the Corporation;
(4) Any person has received the approval of the OTS Director
under Section 10 of the Home Owners' Loan Act, as amended (the "Holding Company
Act"), or regulations issued thereunder, to acquire control of the Corporation;
(5) Any person has received approval of the OTS Director under
Section 7(j) of the Federal Deposit Insurance Act, as amended (the "Control
Act"), or regulations issued thereunder, to acquire control of the Corporation;
(6) Any person has commenced a tender or exchange offer, or
entered into an agreement or received an option, to acquire beneficial ownership
of twenty-five percent (25%) or more of the total number of voting shares of the
Corporation, whether or not the requisite approval for such acquisition has been
received under the Holding Company Act, the Control Act, or the respective
regulations issued thereunder;
(7) As a result of, or in connection with, any cash tender
offer or exchange offer, merger, or other business combination, sale of assets
or contested election, or any combination of the foregoing transactions, the
persons who were directors of the Corporation before such transaction shall
cease to constitute at least two-thirds of the board of directors of the
Corporation or any successor corporation; or
(8) The Corporation's beneficial ownership of the total number
of voting shares of the Bank is reduced to less than fifty percent (50%).
Notwithstanding the foregoing, a change in control will not be deemed to have
occurred under Section 2, Section 3, Section 4, Section 5 or Section 6 of this
Article VI if, within thirty (30) days of such action, the board of directors of
the Corporation (by a two-thirds affirmative vote of the directors in office
before such action occurred) makes a determination that such action does not and
is not likely to constitute a change in control of the Corporation for purposes
of this Article VI. For purposes of this Article VI, a "person" includes an
individual, corporation, partnership, trust, association, joint venture, pool,
syndicate, unincorporated organization, joint-stock company or similar
organization or group acting in concert. A person for these purposes shall be
deemed to be a beneficial owner as that term is used in Rule 13d-3 under the
Securities Exchange Act of 1934.
ARTICLE VII
ADMINISTRATION
7.1 Administration. The Plan will be administered by the Board or the Committee.
The Board or the Committee will have absolute discretion to:(a) interpret the
Plan,
(b) create and revise rules and procedures for the administration of
the Plan, and
(c) take any other actions and make any other determinations as it may
deem necessary and proper for the administration of the Plan. Any expenses
incurred in the administration of the Plan will be paid by the Bank.
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7.2 Determinations. All decisions and determinations by the Board or the
Committee shall be final and binding upon all Participants and Beneficiaries.
ARTICLE VIII
AMENDMENT, DISCONTINUANCE, AND TERMINATION
The Board retains the right to modify, amend, discontinue or terminate
the Plan at any time; provided, however, that no modification, amendment,
discontinuance or termination shall adversely affect the rights of Participants
to amounts credited to the Bookkeeping Reserve Accounts maintained on their
behalf before such modification, amendment, discontinuance or termination.
Notice of every such modification, amendment, discontinuance or termination
shall be given in writing to each Participant. In the case of termination of the
Plan, any amounts credited to the Bookkeeping Reserve Account of a Participant
shall be distributed in full to such Participant as soon as reasonably
practicable following such termination.
ARTICLE IX
MISCELLANEOUS
9.1 Non-Guarantee of Employment. Participation in the Plan does not give any
person any right to be retained in the service of the Bank or the Corporation.
The right and power of the Bank or the Corporation to terminate any individual
is expressly reserved.
9.2 Rights of Participants and Beneficiaries to Benefits. All rights of a
Participant or Beneficiary under the Plan to amounts credited to Bookkeeping
Reserve Accounts are mere unsecured contractual rights of the Participant or
Beneficiary and are solely those of unsecured, general creditors of the
Corporation or the Bank (as applicable).
9.3 No Assignment. No rights or benefits under the Plan shall be subject in any
way to voluntary or involuntary alienation, sale, transfer, assignment, pledge,
attachment, garnishment, execution, or encumbrance, and any attempt to
accomplish the same shall be void.
9.4 Withholding. The Corporation or the Bank shall have the right to deduct from
any distribution any taxes required by law to be withheld from a Participant
with respect to such award.
9.5 Account Statements. Periodically (as determined by the Board), each
Participant shall receive a statement indicating the amounts credited to and
distributed from the Participant's Bookkeeping Reserve Account during such
period.
9.6 Masculine, Feminine, Singular and Plural. The masculine shall be read in the
feminine, the singular in the plural, and vice versa, whenever the context shall
so require.
9.7 Governing Law. Except to the extent preempted by applicable federal laws,
the Plan shall be construed according to the laws of the State of Connecticut,
other than its choice of law principles.
9.8 Titles. The titles to Articles and Sections in this Plan are placed herein
for convenience of reference only, and the Plan is not to be construed by
reference thereto.
9.9 Other Plans. Nothing in this Plan shall be construed to affect the rights of
a Participant, his Beneficiaries, or his estate to receive any retirement or
death benefit under any tax qualified or nonqualified pension plan, deferred
compensation agreement, insurance agreement, tax-deferred annuity or other
retirement plan of the Bank or the Corporation.
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ANNEX I
Special Provisions for Certain Former Directors
of Derby Savings Bank
Effective as of January 31, 1997 (the "Acquisition Date"), Derby
Savings Bank ("Derby") was merged with and into the Bank. Effective as of the
Acquisition Date, all of the obligations of Derby under the Derby Savings Bank
Deferred Compensation Plan for Directors (the "Derby Plan") were transferred to,
and assumed by, the Bank.
(1) No person who was a participant in the Derby Plan on the
Acquisition Date shall become a Participant in the Plan unless the Board
specifically designates such person as being eligible to participate in the Plan
pursuant to Section 3.1. In the event the Board designates any such person as
being eligible to participate in the Plan during any portion of 1997, such
person's deferral election under the Derby Plan for the 1997 plan year shall
remain in effect as such person's deferral election under the Plan for the 1997
plan year.
(2) If a former participant in the Derby Plan becomes a Participant in
the Plan on or about the Acquisition Date, such person shall not be deemed to
have incurred a termination of service as a director under the Derby Plan and
shall not be entitled to receive (or commence to receive) a distribution of the
benefits which he accrued thereunder until he subsequently incurs a termination
of service under the Plan. However, if a former participant in the Derby Plan
does not become a Participant in the Plan on or about the Acquisition Date, such
person shall be deemed to have incurred a termination of service as a director
under the Derby Plan and shall be entitled to receive (or commence to receive) a
distribution of the benefits which he accrued thereunder.
(3) Each person who had an "Individual Deferred Compensation Account"
under the Derby Plan immediately prior to the Acquisition Date will have
established on his behalf a Bookkeeping Reserve Account under the Plan. Those
deferrals (and the earnings credited thereto) which such person elected to be
paid in installments under the Derby Plan shall be credited to an Installment
Account established for the benefit of such person under the Plan. All other
deferrals (and the earnings credited thereto) which such person elected under
the Derby Plan shall be credited to a Regular Account established for the
benefit of such person under the Plan.
(4) All amounts which had accrued under the Derby Plan and which are
credited to a person's Installment Account or Regular Account under the terms of
this Annex I shall be distributed at the time, and in the form, set forth in
Article V of the Plan.
(5) Except as otherwise provided in this Annex I, all of the provisions
of the Plan shall apply to each person who was a participant in the Derby Plan
immediately prior to the Acquisition Date.