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WEBSTER BANK
DEFERRED COMPENSATION PLAN
FOR DIRECTORS AND OFFICERS
As Amended and Restated on October 22, 2007
Effective as of January 1, 2005
TABLE OF CONTENTS
General
ARTICLE I Definitions
ARTICLE II Eligibility
ARTICLE III Deferred Compensation
ARTICLE IV Supplemental Contributions
ARTICLE V Benefit Claims Procedure
ARTICLE VI Funding
ARTICLE VII Amendment and Termination
ARTICLE VIII Miscellaneous
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ANNEX I Special Provisions for Certain Former Participants in
the Derby Savings Bank Plan
ANNEX II Special Provisions for Certain Former Participants in
the Eagle Financial Corporation Plan
ANNEX III Special Provisions Relating to Certain Deferred
Compensation and Supplemental Contributions
ANNEX IV Special Provisions Relating to the Grandfathering of
Certain Benefits Under Code Section 409A
WEBSTER BANK
DEFERRED COMPENSATION PLAN
FOR DIRECTORS AND OFFICERS
General
The Webster Bank Deferred Compensation Plan for Directors and
Officers (the "Plan") is a nonqualified deferred compensation plan
designed: (a) to enable Directors, Advisory Directors and Senior
Officers (as defined below) to defer receipt of compensation on a
tax-advantaged basis; and (b) on and after July 1, 2006, to provide
supplemental contributions to a select group of management or
highly compensated employees. The Plan is also expected to
encourage the continued service of such individuals and to
facilitate the recruiting of executive personnel, Directors and
Advisory Directors in the future.
The Plan as amended and restated shall be effective as of
January 1, 2005. The Plan was originally effective as of December
7, 1987.
Prior to July 1, 2006, the Supplemental Retirement Plan for
Employees of Webster Bank provided supplemental matching
contributions to a select group of management or highly compensated
employees. Effective as of July 1, 2006, all liabilities relating
to such supplemental matching contributions were transferred to,
and assumed by, the Plan.
Under the terms of the Webster Bank Retirement Savings Plan: (a)
effective as of January 1, 2007, all employees who are first hired
on or after January 1, 2007 will be eligible to receive both
matching contributions and nonelective contributions; (b) effective
as of April 1, 2007, all employees who are rehired on or after
January 1, 2007 will be eligible to receive both matching
contributions and nonelective contributions; and (c) effective as
of January 1, 2008, all other employees will be eligible to receive
(i) both matching contributions and nonelective contributions, and
(ii) if the employees were employed on December 31, 2006 and were
active participants in the Webster Bank Pension Plan on December
31, 2007, transition contributions. Under the Plan, each eligible
employee will receive supplemental matching contributions,
supplemental nonelective contributions and supplemental transition
contributions determined by reference to the matching contributions
formula, nonelective contributions formula, and transition
contributions formula applicable to the employee under the Webster
Bank Retirement Savings Plan. In addition, the Chairman and Chief
Executive Officer, the President, and the Chief Financial Officer
of the Bank will be eligible to receive supplemental additional
transition contributions under the Plan.
ARTICLE I
Definitions
1.1 "Affiliate" means any corporation or other entity which is
under common control with the Bank and the Corporation within the
meaning of Section 414(b) or Section 414(c) of the Code. A
"Participating Affiliate" is an Affiliate which has assumed the
obligations of the Plan with the consent of the Board. A
"Nonparticipating Affiliate" is an Affiliate which has not assumed
the obligations of the Plan with the consent of the Board.
1.3 "Bank" means Webster Bank, National Association and any
successor corporation which hereafter assumes its obligations
hereunder.
1.4 "Beneficiary" means the person designated by a Participant
to receive benefits payable under the Plan in the event of the
Participant's death. If a Participant has not designated a
Beneficiary, or if the Beneficiary does not survive the
Participant, the Participant's Beneficiary will be his or her
surviving spouse or, if none, his or her estate.
1.5 "Board" means the board of directors of the Bank.
1.6 "Bonuses" means any bonuses that a Senior Officer may be
awarded under any incentive compensation plan maintained by the
Bank, the Corporation or a Participating Affiliate (or under any
other program or policy of the Bank, the Corporation or a
Participating Affiliate) and that constitute performance-based
compensation as defined under Section 409A(a)(4)(B)(iii) of the
Code and the regulations issued pursuant thereto. For this purpose,
performance-based compensation means compensation the amount of
which, or the entitlement to which, is contingent on the
satisfaction of preestablished organizational or individual
performance criteria relating to a performance period of at least
twelve (12) consecutive months. Organizational or individual
performance criteria are considered preestablished if they are
established in writing no later than ninety (90) days after the
commencement of the period of service to which the criteria
relates, provided that the outcome is substantially
uncertain at the time the criteria are established. Bonus
compensation does not include any amount or portion of any amount
that will be paid either regardless of performance, or based upon a
level of performance that is substantially certain to be met at the
time the criteria are established. In addition, bonus compensation
does not include any amounts that are determined by reference to
the value of the Bank, the Corporation or an Affiliate (or the
stock of the Bank, the Corporation or an Affiliate), unless
the amounts are based solely on an increase in the value of the
Bank, the Corporation or an Affiliate (or the stock of the Bank,
the Corporation or an Affiliate) after the date of a grant or
award.
Notwithstanding anything else herein to the contrary, Bonuses do
not include any bonuses payable to a Senior Officer following a
change in control (as defined in the incentive compensation plan,
program or policy maintained by the Bank, the Corporation or an
Affiliate that governs the payment of such bonuses) to the extent
the payment of such bonuses ceases to be dependent on the
satisfaction of preestablished organizational or individual
performance criteria as a result of such change in control.
1.7 "Change in Control" means the occurrence of any of the
following events:
(a) Any person becomes the beneficial owner of twenty-five
percent (25%) or more of the total number of voting shares of the
Corporation;
(b) 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 the Federal
Reserve Board (the "FRB") has approved a rebuttal agreement filed
by such person or such person has filed a certification with the
FRB;
(c) 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;
(d) Any person has received the approval of the FRB under the
Bank Holding Company Act, as amended (the "Holding Company Act"),
or regulations issued thereunder, to acquire control of the
Corporation;
(e) Any person has received approval of the FRB under the
Federal Deposit Insurance Act, as amended (the "Control Act"), or
regulations issued thereunder, to acquire control of the
Corporation;
(f) 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;
(g) 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
(h) 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 1.7(b), Section 1.7(c),
Section 1.7(d), Section 1.7(e) or Section 1.7(f) 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 Section 1.7, 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.
1.9 "Committee" means any committee authorized by the Board to
administer the Plan.
1.10 "Compensation" means compensation that a Senior Officer
receives from the Bank, the Corporation or a Participating
Affiliate as defined for purposes of determining the amount of the
Senior Officer's elective contributions under the 401(k) Plan;
provided, however, that Compensation shall be determined
without regard to the limitation on compensation set forth in
Section 401(a)(17) of the Code; and provided further , that
Compensation shall exclude any Bonuses.
1.11 "Corporation" means Webster Financial Corporation and any
successor corporation which hereafter assumes its obligations.
1.12 "Deferred Compensation" means the amount of compensation
that a Participant elects to defer under Section 3.1, Section 3.2
or Section 3.3.
1.13 "Deferred Compensation Account" means the bookkeeping
account maintained for each Participant to which the Participant's
Deferred Compensation (and the earnings and losses allocable
thereto) are credited.
Each Participant's Deferred Compensation Account shall be
divided into two bookkeeping subaccounts: (i) the "Installment
Subaccount" of the Deferred Compensation Account shall be credited
with any Deferred Compensation that the Participant elects to be
paid in installments pursuant to Section 3.9(a)(ii); and (ii) the
"Lump Sum Subaccount" of the Deferred Compensation Account shall be
credited with the Participant's remaining Deferred
Compensation.
1.14 "Director" means a member of the board of directors of the
Corporation or the Bank.
1.15 "Disability" means a condition: (a) which causes a
Participant to be unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which can be
expected to last for a continuous period of not less than twelve
months; or (b) which results in a Participant receiving, by reason
of any medically determinable physical or mental impairment which
can be expected to result in death or which can be expected to last
for a continuous period of not less than twelve months, income
replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Bank,
the Corporation or an Affiliate. Disability shall be deemed to
exist only when a written application has been filed with the
Committee by or on behalf of the Participant and, with respect to a
condition described in Section 1.15(a), when such Disability is
certified to the Committee by a licensed physician approved by the
Committee. The existence of a Disability shall be determined in
accordance with the requirements of Code Section 409A and the
regulations issued thereunder.
1.16 "Employee" means an individual who is an employee of either
the Bank, the Corporation or a Participating Affiliate.
1.17 "401(k) Plan" means the Webster Bank Retirement Savings
Plan and any subsequent amendments thereto. For the period prior to
January 1, 2007, the 401(k) Plan was known as the Webster Bank
Employee Investment Plan.
1.18 "Matching Percentage" means the percentage of a
Participant's elective deferrals to the 401(k) Plan (to the extent
such elective deferrals are not in excess of the Minimum Percentage
of the Participant's compensation) which the Bank, the Corporation
or a Participating Affiliate has agreed to contribute to the 401(k)
Plan on behalf of the Participant as matching contributions.
1.19 "Minimum Percentage" means the lowest percentage of
compensation which a Participant must elect to have contributed to
the 401(k) Plan as elective deferrals in order to receive the
maximum amount of matching contributions available under the terms
of the 401(k) Plan.
1.20 "Participant" means an individual who satisfied the
eligibility requirements of Article II and who is entitled to
receive Deferred Compensation under Article III or Supplemental
Contributions under Article IV.
1.21 "Plan" means the Webster Bank Deferred Compensation Plan
for Directors and Officers, as set forth herein, including any
amendments, rules and regulations adopted pursuant hereto.
1.22 "Section 409A Change in Control" means a change in
ownership of the Corporation, a change in effective control of the
Corporation, or a change in the ownership of a substantial portion
of the assets of the Corporation.
(a) A change in ownership of the Corporation occurs when any
person (or two or more persons acting as a group) acquires
ownership of stock of the Corporation which, together with stock
held by such person or group, constitutes more than fifty percent
(50%) of the stock of the Corporation. However, if any person or
group of persons is considered to own more than fifty percent (50%)
of the stock of the Corporation, the acquisition of additional
stock by the same person or group of persons is not considered to
result in a change in ownership of the Corporation.
(b) A change in effective control of the Corporation occurs
either: (i) when any person (or two or more persons acting as a
group) acquires (or has acquired during the preceding twelve month
period) ownership of stock of the Corporation possessing thirty
percent (30%) or more of the stock of the Corporation; or (ii) a
majority of the board of directors of the Corporation is replaced
during a twelve month period by persons who are not endorsed by a
majority of the board of directors of the Corporation in office
prior to such change. However, if any person or group of persons is
considered to have acquired effective control of the Corporation
pursuant to this Section 1.22(b), the acquisition of additional
control of the Corporation by the same person or group of persons
is not considered to result in a change in effective control of the
Corporation.
(c) A change in ownership of a substantial portion of the assets
of the Corporation occurs on the date that any one person (or two
or more persons acting as a group) acquires (or has acquired during
the preceding twelve month period) assets from the Corporation that
have a total gross fair market value equal to or greater than forty
percent (40%) of the total gross fair market value of all of the
assets of the Corporation immediately prior to such acquisition or
acquisitions. Gross fair market value means the value of the assets
of the Corporation, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such
assets.
1.23 "Senior Officer" means an Employee who is a highly
compensated employee (as defined for purposes of the 401(k) Plan)
and who serves as a senior vice president or any higher officer of
either the Bank, the Corporation, or a Participating Affiliate.
1.24 "Separation from Service" means an individual's termination
of service with the Bank, the Corporation and all Affiliates, as
defined for purposes of Section 409A of the Code.
1.25 "Supplemental Contributions" means the amount of
nonelective deferred compensation credited to the Supplemental
Contributions Account of a Participant under Section 4.1.
1.26 "Supplemental Contributions Account" means the bookkeeping
account maintained for each Participant to which the Participant's
Supplemental Contributions (and the earnings and losses allocable
thereto) are credited.
Each Participant's Supplemental Contributions Account shall be
divided into four bookkeeping subaccounts:
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(a) The Supplemental Matching Contributions Account consists of
the Supplemental Matching Contributions credited to the Participant
pursuant to Section 4.1(a)(i) (and the earnings and losses
allocable thereto).
(b) The Supplemental Nonelective Contributions Account consists
of the Supplemental Nonelective Contributions credited to the
Participant pursuant to Section 4.1(a)(ii) (and the earnings and
losses allocable thereto).
(c) The Supplemental Transition Contributions Account consists
of the Supplemental Transition Contributions credited to the
Participant pursuant to Section 4.1(a)(iii) (and the earnings and
losses allocable thereto).
(d) The Supplemental Additional Transition Contributions Account
consists of the Supplemental Additional Transition Contributions
credited to the Participant pursuant to Section 4.1(a)(iv) (and the
earnings and losses allocable thereto).
In addition, each Participant's Supplemental Matching
Contributions Account, Supplemental Nonelective Contributions
Account, Supplemental Transition Contributions Account, and
Supplemental Additional Transition Contributions Account shall be
further divided into two bookkeeping subaccounts: (i) the
"Installment Subaccount" shall be credited with any Supplemental
Matching Contributions, Supplemental Nonelective Contributions,
Supplemental Transition Contributions, or Supplemental Additional
Transition Contributions (as the case may be) that the Participant
elects to be paid in installments pursuant to Section 4.6(a)(ii);
and (ii) the "Lump Sum Subaccount" shall be credited with the
Participant's remaining Supplemental Matching Contributions,
Supplemental Nonelective Contributions, Supplemental Transition
Contributions, or Supplemental Additional Transition Contributions
(as the case may be).
1.27 "Unforeseeable Emergency" means a severe financial hardship
to the Participant resulting from: (a) an illness or accident of
the Participant, the Participant's spouse, the Participant's
Beneficiary, or a dependent of the Participant (as defined in
Section 152 of the Code, without regard to Section 152(b)(1),(b)(2)
and (d)(1)(B)); (b) loss of the Participant's property due to
casualty (including the need to rebuild a home following damage to
the home not otherwise covered by insurance); or (c) other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant. The determination
of an Unforeseeable Emergency shall be made by the Committee in its
sole discretion, based on such information as the Committee shall
deem to be necessary and in accordance with the requirements of
Code Section 409A and the regulations thereunder.
ARTICLE II
Eligibility
2.1 Eligibility . Eligibility to participate in the Plan
is limited as follows:
(a) Eligibility to elect Deferred Compensation pursuant to
Article III of the Plan is 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.
(b) Eligibility to receive Supplemental Contributions pursuant
to Article IV of the Plan is limited to those Employees who satisfy
the following conditions:
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(i) the Employee is a member of a select group of management or
highly compensated employees (as determined by the Board) and is an
executive vice president or above of the Bank, the Corporation or a
Participating Affiliate;
(ii) the Employee has satisfied the eligibility requirements of
the 401(k) Plan and has reached the entry date under the 401(k)
Plan; and
(iii) if the Employee had made the maximum elective deferrals
permitted by the terms of the 401(k) Plan for a calendar year, the
matching contributions which would have been allocated to the
account of the Employee under the 401(k) Plan for the calendar year
would have been limited due to the Employee's inability to make
elective contributions equal to at least the Minimum Percentage of
his or her compensation as a result of the applicability of the
limitations on elective deferrals under Section 402(g) of the Code,
the limitations on contributions under Section 415 of the Code, or
the limitations on compensation under Section 401(a)(17) of the
Code.
(c) If an Employee transfers employment from the Bank, the
Corporation or a Participating Affiliate to a Nonparticipating
Affiliate, the Employee shall not be credited with any Deferred
Compensation or Supplemental Contributions with respect to
compensation earned after the date of such transfer of
employment.
ARTICLE III
Deferred Compensation
3.1 Deferral of Compensation . A Participant who is a
Senior Officer may elect to defer a specified whole percentage not
less than 1% nor greater than 25% of the Compensation which is
payable to the Participant during a calendar year; provided,
however, that the Participant must irrevocably elect to defer
such amounts before the first day of the calendar year.
As of the last day of each calendar year, the Committee shall
determine the maximum amount of elective deferrals (including
catch-up contributions) that could have been made to the 401(k)
Plan on behalf of each Participant who is a Senior Officer. Such
determination shall be made as soon as administratively practicable
following the end of the calendar year. To the extent that the
elective deferrals actually made to the 401(k) Plan for the
calendar year on behalf of such a Participant are less than the
maximum amount of the elective deferrals that could have been made
to the 401(k) Plan for the calendar year on behalf of the
Participant, then all or a portion of the deferrals made under this
Section 3.1 shall be transferred to and contributed to the 401(k)
Plan as of the last day of the calendar year as elective deferrals
made on behalf of the Participant, so that either: (a) the total
elective deferrals made to the 401(k) Plan for the calendar year on
behalf of the Participant equals the maximum amount of elective
deferrals that could have been made to the 401(k) Plan for the
calendar year on behalf of the Participant; or (b) no deferrals are
credited to the Participant under this Section 3.1 for the calendar
year. The amount of such transfer cannot exceed the maximum amount
of elective deferrals (including catch-up contributions) specified
in Code Section 402(g)(1)(A),(B) and (C). The transfer under this
Section 3.1 shall occur as soon as administratively practicable
following the calendar year in which such deferrals occurred.
In the case of a Senior Officer who first becomes eligible to
participate in the Plan after the beginning of a calendar year, the
deferral election under this Section 3.1 shall be made not later
than thirty (30) days after becoming eligible to participate in the
Plan. The election shall apply only to Compensation that relates to
services performed subsequent to the date of the election.
3.2 Deferral of Bonuses . A Participant who is a Senior
Officer may elect to defer a specified whole percentage not less
than 1% nor greater than 100% of the Bonuses which are payable to
the Participant with respect to his or her services during the
applicable performance period; provided, however, that: (a)
the Participant must irrevocably elect to defer such amounts on or
before the date that is six months before the end of the
performance period; (b) the Participant must perform services
continuously from the later of the beginning of the performance
period or the date the performance criteria are established through
the date of such election; and (c) in no event can such election be
made after the payment of the Bonuses is substantially certain to
be made.
As of the last day of each calendar year, the Committee shall
determine the maximum amount of elective deferrals (including
catch-up contributions) that could have been made to the 401(k)
Plan on behalf of each Participant who is a Senior Officer. Such
determination shall be made as soon as administratively practicable
following the end of the calendar year. To the extent that the
elective deferrals actually made to the 401(k) Plan for the
calendar year on behalf of such a Participant are less than the
maximum amount of the elective deferrals that could have been made
to the 401(k) Plan for the calendar year on behalf of the
Participant, and if all amounts deferred under Section 3.1 for the
calendar year have been transferred to the 401(k) Plan pursuant to
the provisions of Section 3.1, then all or a portion of the
deferrals made under this Section 3.2 shall be transferred to and
contributed to the 401(k) Plan as of the last day of the calendar
year as elective deferrals made on behalf of the Participant, so
that either: (a) the total elective deferrals made to the 401(k)
Plan for the calendar year on behalf of the Participant equals the
maximum amount of elective deferrals that could have been made to
the 401(k) Plan for the calendar year on behalf of the Participant;
or (b) no deferrals are credited to the Participant under this
Section 3.2 for the calendar year. The sum of the amount of such
transfer and the transfer under Section 3.1 cannot exceed the
maximum amount of elective deferrals (including catch-up
contributions) specified in Code Section 402(g)(1)(A),(B) and (C).
The transfer under this Section 3.2 shall occur as soon as
administratively practicable following the calendar year in which
such deferrals occurred.
In the case of a plan, program or policy that provides for
incentive compensation that is earned over a period of two or more
performance periods, the deferral election shall be made on or
before the date that is six months before the end of the first
performance period.
In the case of a Senior Officer who first becomes eligible to
participate in the Plan after the date that is six months before
the end of the performance period, the deferral election under this
Section 3.2 shall be made not later than thirty (30) days after
becoming eligible to participate in the Plan; provided,
however , that the election shall apply only to Bonuses paid
for services performed subsequent to the date of the election.
3.3 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) that he or she might earn with respect to his
or her services to the Corporation or the Bank during a calendar
year and that would otherwise be payable in cash; provided,
however, that the Participant must irrevocably elect to defer
such amounts before the first day of the calendar year.
In the case of a Director or Advisory Director who first becomes
eligible to participate in the Plan after the beginning of a
calendar year, the deferral election under this Section 3.3 shall
be made not later than thirty (30) days after becoming eligible to
participate in the Plan. The election shall apply only to retainer
fees or board or committee meeting fees (or such other
compensation) that relate to services performed subsequent to the
date of the election.
3.4 Election of Time of Distribution . At the time a
Participant makes an election to defer Compensation pursuant to
Section 3.1, or an election to defer Bonuses pursuant to Section
3.2, or an election to defer directors' fees pursuant to Section
3.3, the Participant may elect that all or any portion of his or
her Deferred Compensation Account attributable to such election
will be distributed, or will commence to be distributed, on the
March 1 of any calendar year or calendar years specified by the
Participant.
Notwithstanding the above, a Participant who has not made an
election under this Section 3.4 may make such an election, and a
Participant who has made an election under this Section 3.4 may
elect to change such election, pursuant to the provisions of
Section 3.10.
3.5 Election of Form of Distribution . At the time a
Participant makes an election to defer Compensation pursuant to
Section 3.1, or an election to defer Bonuses pursuant to Section
3.2, or an election to defer directors' fees pursuant to Section
3.3, the Participant may elect that all or any portion of his or
her Deferred Compensation attributable to such election will be
credited to his or her Lump Sum Subaccount and distributed pursuant
to Section 3.9(a)(i) in a single lump sum, or will be credited to
his or her Installment Subaccount and distributed pursuant to
Section 3.9(a)(ii) in ten annual installments. If a Participant
fails to make an election, the Participant shall be deemed to have
elected that all of his or her Deferred Compensation attributable
to such election will be credited to his or her Lump Sum Subaccount
and distributed pursuant to Section 3.9(a)(i) in a single lump
sum.
Notwithstanding the above, a Participant may elect to change his
or her election, or deemed election, under this Section 3.5
pursuant to the provisions of Section 3.10.
3.6 Accounting for Deferred Compensation .
(a) A Participant's Deferred Compensation shall be credited by
the Corporation, the Bank or an Affiliate (as applicable) to the
Deferred Compensation Account maintained for the Participant. The
Deferred Compensation shall be credited to the Participant's
Deferred Compensation Account at the end of the calendar month with
respect to which the deferral is made.
Any distribution made to a Participant or Beneficiary shall be
charged to the Deferred Compensation Account of the Participant at
the time of the distribution. If the distribution is a lump sum
distribution, the distribution shall be charged to the Lump Sum
Subaccount of the Participant's Deferred Compensation Account. If
the distribution is made in installments, the distribution shall be
charged to the Installment Subaccount of the Participant's Deferred
Compensation Account.
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(b) (i) A Participant's Deferred Compensation shall be credited
with earnings and losses in the same manner as if the Deferred
Compensation were actually invested in one or more of the
investment options offered under the 401(k) Plan and elected by the
Participant; provided, however, that: (A) the Fidelity
Managed Income Portfolio shall not be deemed to be an investment
option available under the 401(k) Plan; (B) the Webster Stock Fund
shall not be deemed to be an investment option available under the
401(k) Plan, except that , effective on and after May 1,
2007, the Webster Stock Fund shall be deemed to be an investment
option available under the 401(k) Plan for the Chairman and Chief
Executive Officer, the President and Chief Operating Officer, and
the Chief Financial Officer of the Bank; and (C) a Fidelity money
market fund shall be deemed to be an investment option available
under the 401(k) Plan.
(ii) A Participant may specify the percentage of the Deferred
Compensation to be credited to the Plan on his or her behalf, or
the percentage of his or her Deferred Compensation Account, which
will be credited with earnings and losses based on the investment
options selected by the Participant. The Participant may change his
or her investment election at any time by providing notice to the
Committee, and any such change shall be effective as soon as
practicable after it is received by the Committee. Any change in a
Participant's investment election shall be effective on a
prospective basis only.
3.7 Vesting of Deferred Compensation . A Participant will
always have a nonforfeitable right to receive the entire amount
credited to his or her Deferred Compensation Account.
3.8 Time of Distribution of Deferred Compensation . A
Participant's Deferred Compensation (adjusted for the earnings and
losses allocable thereto) will be distributed, or will commence to
be distributed, at the time set forth below:
(a) If the Participant elected a time of distribution of such
Deferred Compensation pursuant to Section 3.4, then the Deferred
Compensation will be distributed, or will commence to be
distributed, on the earliest of the following:
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(i) The time of distribution elected pursuant to Section
3.4.
(ii) The first day of the month coinciding with or next
following the date of the Participant's Separation from Service
with the Corporation, the Bank and all Affiliates due to
Disability.
(iii) The first day of the month coinciding with or next
following the date that is sixty (60) days after the Participant's
death.
(iv) As soon as practicable following the Committee's approval
of a distribution due to the occurrence of an Unforeseeable
Emergency; provided, however, that the amount of Deferred
Compensation that may be distributed pursuant to an Unforeseeable
Emergency may not exceed the amount reasonably necessary to satisfy
such Unforeseeable Emergency, plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after
taking into account the extent to which such Unforeseeable
Emergency is or may be relieved through reimbursement or
compensation by insurance or otherwise, or by the liquidation of
the Participant's assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).
(b) If the Participant did not elect a time of distribution of
such Deferred Compensation pursuant to Section 3.4, then the
Deferred Compensation will be distributed, or will commence to be
distributed, on the earliest of the following:
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(i) The first day of the month coinciding
with or next following the date that is six months after the date
of the Participant's Separation from Service with the Corporation,
the Bank and all Affiliates.
(ii) The first day of the month coinciding with or next
following the date of the Participant's Separation from Service
with the Corporation, the Bank and all Affiliates due to
Disability.
(iii) The first day of the month coinciding with or next
following the date that is sixty (60) days after the Participant's
death.
(iv) As soon as practicable following the Committee's approval
of a distribution due to the occurrence of an Unforeseeable
Emergency; provided, however, that the amount of Deferred
Compensation that may be distributed pursuant to an Unforeseeable
Emergency may not exceed the amount reasonably necessary to satisfy
such Unforeseeable Emergency, plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after
taking into account the extent to which such Unforeseeable
Emergency is or may be relieved through reimbursement or
compensation by insurance or otherwise, or by the liquidation of
the Participant's assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).
3.9 Form of Distribution of Deferred Compensation .
(a) A Participant's Deferred Compensation will be distributed,
or will commence to be distributed, in the form of distribution
elected, or deemed elected, by the Participant pursuant to Section
3.5, depending on whether such Deferred Compensation is credited to
his or her Lump Sum Subaccount or the Installment Subaccount.
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(i) Amounts credited to the Participant's Lump Sum Subaccount
shall be distributed to the Participant in a single lump sum at the
time determined pursuant to Section 3.8.
(ii) Amounts credited to the Participant's Installment
Subaccount shall be distributed in ten substantially equal, annual
installments, commencing at the time determined pursuant to Section
3.8. Each installment shall be equal to the balance credited to the
Installment Subaccount multiplied by a fraction, the numerator of
which is one and the denominator of which is ten minus the number
of annual installments previously paid to 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).
If a Participant is entitled to receive installment payments due
to a Separation from Service pursuant to Section 3.8(b)(i), the
installment payment to which the Participant would otherwise have
been entitled if installment payments had commenced on the first
day of the month coinciding with or next following the date of his
or her Separation from Service will be segregated as of such date,
credited with earnings and losses, and paid on the first day of the
month coinciding with or next following the date that is six months
after his or her Separation from Service. The remainder of the
installments shall be paid to the Participant annually on each
subsequent anniversary of the first day of the month coinciding
with or next following the date of his or her Separation from
Service until the ten installments have been paid.
If a Participant begins to receive installment payments but he
or she dies before his or her entire Installment Subaccount has
been distributed, the remaining installment payments shall be made
to the Participant's Beneficiary.
If a Participant dies before beginning to receive his or her
installment payments, the first installment will be paid to the
Beneficiary on the first day of the month coinciding with or next
following the date that is sixty (60) days after the Participant's
death. Subsequent installments shall be paid to the Beneficiary
annually on each subsequent anniversary of such date until the ten
installments have been paid.
(b) Amounts payable under this Section 3.9 shall be paid in
cash, except that , prior to the commencement of payments,
at the election of the Chairman and Chief Executive Officer, the
President and Chief Operating Officer, or the Chief Financial
Officer of the Bank, or his or her Beneficiary if payments have not
commenced at the time of his or her death, the portion (if any) of
the Deferred Compensation Account that is then credited with
earnings and losses based on the value of Webster Financial
Corporation common stock shall be distributed in shares of such
common stock.
3.10 Changes in Time and Form of Distribution .
(a) Anything herein to the contrary notwithstanding, a
Participant may make an election pursuant to Section 3.4 regarding
the time of distribution of Deferred Compensation subsequent to the
date on which he or she elected to defer such compensation, or a
Participant may make an election pursuant to Section 3.5 regarding
the form of distribution of Deferred Compensation subsequent to the
date on which he or she elected to defer such compensation, subject
to the following requirements:
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(i) Any election pursuant to Section 3.4 that is made subsequent
to the date on which the Participant made his or her deferral
election, and any change in an election previously made pursuant to
Section 3.4: (A) must be made at least twelve months prior to the
date on which the distribution would otherwise have been made or
have commenced; (B) cannot become effective until at least twelve
months after the date on which the election or change in election
is made; and (C) must delay the date of payment (or the date of the
first payment) for at least five years from the date such payment
would otherwise have been made.
(ii) Any change in an election previously made (or deemed to be
made) pursuant to Section 3.5: (A) if it is related to a
distribution described in Section 3.4, must be made at least twelve
months prior to the date on which the distribution would otherwise
have been made or have commenced; (B) cannot become effective until
at least twelve months after the date on which the change in
election occurs; and (C) if it is related to a distribution
described in Section 3.4 or Section 3.8(b)(i), must delay the date
of payment (or the date of the first payment) for at least five
years from the date such payment would otherwise have been
made.
(iii) In no event can a change in an election (or deemed
election) made pursuant to Section 3.4 or Section 3.5 accelerate
the time or schedule of any payment of Deferred Compensation,
except to the extent permitted by Code Section 409A and the
regulations issued pursuant thereto.
(b) In Notice 2005-1, Question 19(c), as modified by the
preamble to the proposed regulations under Code Section 409A,
Notice 2006-79, and the preamble to the final regulations under
Code Section 409A (the "Election Guidance"), the Internal Revenue
Service stated that, with respect to deferred compensation subject
to Code Section 409A, a nonqualified defe
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