EXHIBIT 10.2
CHANGE IN CONTROL
AGREEMENT
CHANGE IN CONTROL
AGREEMENT by and between Webster Financial Corporation, a Delaware
corporation (the “Company”) and Michelle Crecca (the
“Executive”), dated as of the 1
st
day of January,
2008 (this “Agreement”).
WHEREAS, the Executive and the
Company are parties to that certain Change of Control Agreement,
dated as of September 13, 2006 (the “ Original
Agreement ”);
WHEREAS, the Company now desires to
make certain amendments to the Original Agreement as deemed
advisable to prevent an inclusion of income or imposition of
penalties under Section 409A of the Internal Revenue Code of
1986, as amended (the “ Code ”) or as deemed
advisable to facilitate compliance with Section 409A of the
Code and to otherwise make certain revisions to the Original
Agreement to update them to current practice, including changes to
reflect the Company’s current benefit plans and practices;
and]
WHEREAS, the Board of Directors of
the Company (the “Board”), has determined that it is in
the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of
a Change in Control (as defined below) of the Company. The Board
believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control and to
encourage the Executive’s full attention and dedication to
the Company currently and in the event of any threatened or pending
Change in Control, and to provide the Executive with compensation
and benefits arrangements upon a Change in Control that ensure that
the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED
AS FOLLOWS:
1. Certain Definitions
.
(a) The “Effective Date”
shall mean the first date during the Change in Control Period (as
defined in Section 1(b)) on which a Change in Control (as
defined in Section 2) occurs. Anything in this Agreement to
the contrary notwithstanding, if a Change in Control occurs and if
the Executive’s employment with the Company is terminated
within the 12-month period prior to the date on which the Change in
Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the
request of a third party that has taken steps reasonably calculated
to effect a Change in Control or (ii) otherwise arose in
connection with or anticipation of a Change in Control (such a
termination of employment, an “Anticipatory
Termination”), then for all purposes of this Agreement the
“Effective Date” shall mean the date immediately prior
to the date of such termination of employment.
(b) The “Change in Control
Period” shall mean the period commencing on the date hereof
and ending on the second anniversary of the date hereof;
provided, however , that commencing on the date one year
after the date hereof, and on each annual anniversary of such date
(such date and each annual anniversary thereof shall be hereinafter
referred to as the “Renewal Date”), unless previously
terminated, the Change in Control Period shall be automatically
extended so as to terminate two years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall
give notice to the Executive that the Change in Control Period
shall not be so extended.
(c) “Affiliated
Companies” shall include any company controlled by,
controlling or under common control with the Company.
2. Change in Control . For
the purpose of this Agreement, a “Change in Control”
shall mean:
(a) Any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of either (i) the then outstanding shares
of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however , that
for purposes of this subsection (a), the following acquisitions
shall not constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
Affiliated Company or (iv) any acquisition pursuant to a
transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2;
or
(b) Any time at which individuals
who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however , that
any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s
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 a Person other than the Board;
or
(c) Consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar transaction involving the Company or any of its
subsidiaries, a sale or other disposition of all or substantially
all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any of its subsidiaries
(each a “Business Combination”), in each case, unless,
following such Business Combination, (i) all or substantially
all of the individuals and entities that were the beneficial
owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of common
stock (or, for a non-corporate entity, equivalent securities) and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (or, for a
non-corporate entity, equivalent governing body), as the case may
be, of the entity resulting from such Business Combination
(including, without limitation, an entity that, as a result of such
transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such Business
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Combination or the combined voting
power of the then outstanding voting securities of such
corporation, except to the extent that such ownership existed prior
to the Business Combination and (iii) at least a majority of
the members of the board of directors (or, for a non-corporate
entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(d) Approval by the shareholders of
the Company of a complete liquidation or dissolution of the
Company.
3. Employment Period . The
Company hereby agrees to continue the Executive in its employ, and
the Executive hereby agrees to remain in the employ of the Company,
subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second
anniversary of the Effective Date (the “Employment
Period”). The Employment Period shall terminate upon the
Executive’s termination of employment for any
reason.
4. Terms of Employment
.
(a) Position and Duties
.
(i) During the Employment Period,
(A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive’s
services shall be performed at the office where the Executive was
employed immediately preceding the Effective Date or at any other
office or location less than 35 miles from such office.
(ii) During the Employment Period,
and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use
the Executive’s reasonable best efforts to perform faithfully
and efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements
or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.
(b) Compensation .
(i) Base Salary . During the
Employment Period, the Executive shall receive an annual base
salary (“Annual Base Salary”), which shall be paid at a
monthly rate, at least equal to twelve times the highest monthly
base salary paid or payable, including any base salary that has
been earned but deferred, to the Executive by the Company and the
Affiliated Companies in respect of the twelve-month period
immediately preceding the month in which the Effective Date occurs.
During the Employment Period, the Annual Base Salary shall be
reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter
at least annually. Any increase in the Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive
under this Agreement. The Annual Base Salary shall not be reduced
after any such increase and the term “Annual Base
Salary” as utilized in this Agreement shall refer to the
Annual Base Salary as so increased.
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(ii) Annual Bonus . In
addition to Annual Base Salary, the Executive shall be awarded, for
each fiscal year ending during the Employment Period, an annual
bonus (the “Annual Bonus”) in cash at least equal to
the Executive’s highest bonus under the Webster Financial
Corporation and Webster Bank Annual Incentive Compensation Plan, or
any comparable bonus under any predecessor or successor plan, paid
with respect to any one of the last three Company fiscal years
prior to the Effective Date (the “Recent Annual
Bonus”). For purposes of determining the Recent Annual Bonus
under the foregoing sentence, if the Executive was not employed by
the Company for the whole of any of the last three fiscal years
prior to the Effective Date, then the bonus paid with respect to
such fiscal year shall be deemed to be the greater of (x) the
Executive’s target bonus as set forth in the
Executive’s employment offer letter, or (y) the actual
Annual Bonus paid to the Executive with respect to such fiscal
year. Each such Annual Bonus shall be paid no later than two and a
half months after the end of the fiscal for which the Annual Bonus
is awarded, unless the Executive shall elect to defer the receipt
of such Annual Bonus pursuant to an arrangement that meets the
requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).
(iii) Incentive, Savings and
Retirement Plans . During the Employment Period, the Executive
shall be entitled to participate in all cash and equity incentive,
savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and
the Affiliated Companies, but in no event shall such plans,
practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and the Affiliated Companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(iv) Welfare Benefit Plans .
During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(v) Expenses . During the
Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accordance with the most favorable policies, practices
and procedures of the Company and the Affiliated Companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
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(vi) Fringe Benefits . During
the Employment Period, the Executive shall be entitled to fringe
benefits, including, without limitation, 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 plans, practices, programs and policies of the
Company and the Affiliated Companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and the Affiliated Companies.
(vii) Office and Support
Staff . During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and the Affiliated
Companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(viii) Vacation . During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and the Affiliated Companies as in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
5. Termination of Employment
.
(a) Death or Disability . The
Executive’s employment shall terminate automatically upon the
Executive’s death during the Employment Period. If the
Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to
the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 12(b) of
this Agreement of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with
the Company shall terminate effective on the 30th day after receipt
of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this
Agreement, “Disability” shall mean the absence of the
Executive from the Executive’s duties with the Company on a
full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness that is determined to
be total and permanent by a physician selected by the Company or
its insurers and acceptable to the Executive or the
Executive’s legal representative.
(b) Cause . The Company may
terminate the Executive’s employment during the Employment
Period with or without Cause. For purposes of this Agreement,
“Cause” shall mean:
(i) the willful and continued
failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness or following the Executive’s
delivery of a Notice of Termination for Good Reason), after a
written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the
Company that specifically identifies the manner in which the Board
or the Chief Executive Officer believes that the Executive has not
substantially performed the Executive’s duties, or
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(ii) the willful engaging by the
Executive in illegal conduct or gross misconduct that is materially
and demonstrably injurious to the Company.
For purposes of this
Section 5(b), no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or
failure to act, based upon authority (A) given pursuant to a
resolution duly adopted by the Board, or if the Company is not the
ultimate parent corporation of the Affiliated Companies and is not
publicly-traded, the board of directors of the ultimate parent of
the Company (the “Applicable Board”), (B) upon the
instructions of the Chief Executive Officer of the Company or a
senior officer of the Company or (C) based upon the advice of
counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by the Executive in good faith and in the
best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Applicable Board at
a meeting of the Applicable Board called and held for such purpose
(after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel for the
Executive, to be heard before the Applicable Board), finding that,
in the good faith opinion of the board, the Executive is guilty of
the conduct described in subparagraph (i) or (ii) above,
and specifying the particulars thereof in detail.
(c) Good Reason . The
Executive’s employment may be terminated by the Executive for
Good Reason or by the Executive voluntarily without Good Reason.
For purposes of this Agreement, “Good Reason” shall
mean:
(i) the assignment to the Executive
of any duties inconsistent in any respect with the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other
action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken
in bad faith and that is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(ii) any failure by the Company to
comply with any of the provisions of Section 4(b) of this
Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and that is remedied by the
Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company’s requiring
the Executive to be based at any office or location other than as
provided in Section 4(a)(i)(B) hereof or the Company’s
requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the
Effective Date;
(iv) any purported termination by
the Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement; or
(v) any failure by the Company to
comply with and satisfy Section 11(c) of this
Agreement.
For purposes of this
Section 5(c), any good faith determination of “Good
Reason” made by the Executive shall be conclusive. The
Executive’s mental or physical incapacity following the
occurrence of an event described above in clauses (i) through
(v) shall not affect the Executive’s ability to
terminate employment for Good Reason.
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(d) Notice of Termination .
Any termination by the Company for Cause, or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice that (i) indicates
the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision
so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days
after the giving of such notice). The failure by the Executive or
the Co
