Edgar Filing: WEBSTER FINANCIAL CORP

PRE 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14A-101)

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Webster Financial Corporation

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LOGO

March 18, 2016

To the Shareholders of

Webster Financial Corporation:

You are cordially invited to attend the Webster Financial Corporation Annual Meeting of Shareholders to be held on Thursday, April 28, 2016 at 4:00 p.m., Eastern Time, at the Mattatuck Museum, 144 West Main Street, Waterbury, Connecticut 06702.

At the Annual Meeting, you will be asked: (i) to elect ten directors to serve for one-year terms; (ii) to approve, on a non-binding, advisory basis, the compensation of the named executive officers of Webster; (iii) to ratify the appointment of KPMG LLP as the independent registered public accounting firm of Webster for the year ending December 31, 2016; (iv) to approve the amendment and restatement of the 1992 Stock Option Plan and re-approve the material terms for payment of performance-based compensation under the 1992 Stock Option Plan, and (v) to approve an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, to provide that the Company’s shareholders may remove any director from office, with or without cause; and (vi) to transact any other business that properly comes before the Annual Meeting or any adjournments of the meeting.

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 2015 Annual Report.

It is important that your shares be represented at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, you may vote your common shares via a toll-free telephone number or on the Internet or you may complete, date, sign and return the enclosed proxy card in the enclosed postage-paid envelope. If you attend the meeting and prefer to vote in person, you may do so.

Sincerely,

LOGO

James C. Smith

Chairman and Chief Executive Officer

WEBSTER FINANCIAL CORPORATION

Webster Plaza

145 Bank Street

Waterbury, Connecticut 06702

800-325-2424

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON APRIL 28, 2016

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 28, 2016 at 4:00 p.m., Eastern Time, at the Mattatuck Museum, 144 West Main Street, Waterbury, Connecticut 06702, for the following purposes:

Election of Directors - To elect ten directors to serve for one-year terms (Proposal 1);

Say on Pay - To approve, on a non-binding, advisory basis, the compensation of the named executive officers of Webster (Proposal 2);

Ratification of Appointment of Independent Registered Public Accounting Firm - To ratify the appointment by the Board of Directors of KPMG LLP as the independent registered public accounting firm of Webster for the year ending December 31, 2016 (Proposal 3);

Amendment of 1992 Stock Option Plan - To approve the amendment and restatement of the 1992 Stock Option Plan and re-approve the material terms for payment of performance-based compensation under the 1992 Stock Option Plan (Proposal 4);

Shareholder’s Ability to Remove Directors With or Without Cause - To approve an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, to provide that the Company’s shareholders may remove any director from office, with or without cause (Proposal 5); and

Other Business - To transact any other business that properly comes before the Annual Meeting or any adjournments thereof, 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 February 29, 2016 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,

LOGO

James C. Smith

Chairman and Chief Executive Officer

Waterbury, Connecticut

March 18, 2016

IT IS IMPORTANT THAT YOU VOTE PROMPTLY. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE VOTE YOUR COMMON SHARES VIA THE TOLL-FREE TELEPHONE NUMBER LISTED ON THE PROXY CARD, THE INTERNET OR BY MAIL.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on April 28, 2016: This Proxy Statement, along with our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and our 2015 Annual Report, are available free of charge on the Investor Relations section of our website (www.wbst.com).

WEBSTER FINANCIAL CORPORATION

Webster Plaza

145 Bank Street

Waterbury, Connecticut 06702

800-325-2424

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON APRIL 28, 2016

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 “Company” or the “Corporation”), as part of the solicitation of proxies by its Board of Directors 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 28, 2016 at 4:00 p.m., Eastern Time, at the Mattatuck Museum, 144 West Main Street, Waterbury, Connecticut 06702 (the “Annual Meeting”) and at any adjournments thereof. The Proxy Statement, together with the enclosed proxy card, is being mailed to shareholders of Webster on or about March 18, 2016.

The Annual Meeting has been called for the following purposes:

1. To elect ten directors to serve for one-year terms (Proposal 1);

2. To approve, on a non-binding, advisory basis, the compensation of the named executive officers of Webster (Proposal 2);

3. To ratify the appointment by the Board of Directors of the firm of KPMG LLP as the independent registered public accounting firm of Webster for the year ending December 31, 2016 (Proposal 3);

4. To approve the amendment and restatement of the 1992 Stock Option Plan and re-approve the material terms for payment of performance-based compensation under the 1992 Stock Option Plan (Proposal 4);

5. To approve an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, to provide that the Company’s shareholders may remove any director from office, with or without cause (Proposal 5); and

6. To transact any other business that properly comes before the Annual Meeting or any adjournments thereof.

If you vote using the enclosed proxy card, your shares will be voted in accordance with the instructions indicated. Executed but unmarked proxies will be voted:

1. FOR the election of the Board’s nominees as directors;

2. FOR the approval, on a non-binding, advisory basis, of the compensation of the named executive officers of Webster;

3. FOR the ratification of the appointment of Webster’s independent registered public accounting firm;

4. FOR the approval of the amendment and restatement of the 1992 Stock Option Plan and re-approve the material terms for payment of performance-based compensation under the 1992 Stock Option Plan; and

5. FOR the approval of an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, to provide that the Company’s shareholders may remove any director from office, with or without cause.

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 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 that shareholder’s proxy. A shareholder may, however, revoke a proxy at any time before it is voted: (i) by delivering either a written notice of revocation of the proxy or a duly executed proxy bearing a later date to Frederik F. Erikson, Assistant Secretary, Webster Financial Corporation, 145 Bank Street, Waterbury, Connecticut 06702; (ii) by re-voting by telephone or on the Internet; or (iii) 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 also will 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 those beneficial owners and will reimburse those holders for their reasonable expenses incurred in that connection. Webster also has retained Morrow & Co., LLC, a proxy soliciting firm, to assist in the solicitation of proxies at a fee of $7,500 plus reimbursement of certain out-of-pocket expenses.

Who Can Vote - 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 February 29, 2016 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 6,414 holders of record of the 91,420,698 shares of Common Stock then outstanding and eligible to be voted at the Annual Meeting.

Voting - If your Common Stock is held by a broker, bank or other nominee (i.e., in “street name”), you should receive instructions from that person or entity that you must follow in order to have your shares of Common Stock voted. If you hold your Common Stock in your own name and not through a broker or another nominee, you may vote your shares of Common Stock:

•

by using the toll-free telephone number listed on the proxy card,

•

by using the Internet website listed on the proxy card,

•

by signing, dating and mailing the proxy card in the enclosed postage-paid envelope, or

•

by attending the Annual Meeting and voting in person.

Whichever of these methods you select to transmit your instructions, the proxy holders will vote your Common Stock in accordance with your instructions. If you give a proxy without specific voting instructions, your proxy will be voted by the proxy holders as recommended by the Board of Directors.

Vote by Telephone - If you hold your Common Stock in your own name and not through your broker or another nominee, you can vote your shares of Common Stock by telephone by dialing the toll-free telephone number printed on your proxy card. Telephone voting is available 24 hours a day until 11:59 p.m., Eastern Time, on April 27, 2016. Easy-to-follow voice prompts allow you to vote your shares of Common Stock and confirm that your instructions have been properly recorded. If you vote by telephone, you do not need to return your proxy card.

Vote by Internet - If you hold your Common Stock in your own name and not through your broker or another nominee, you can vote via the Internet. The website for Internet voting is printed on your proxy card.

Internet voting is available 24 hours a day until 11:59 p.m., Eastern Time, on April 27, 2016. As with telephone voting, you will be given the opportunity to confirm that your instructions have been properly recorded. If you vote via the Internet, you do not need to return your proxy card.

Vote by Mail - You can vote by mail by signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope.

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 majority of the votes cast by shares present in person or represented by proxy and entitled to vote. The affirmative vote of the majority of the votes cast is required to approve the non-binding, advisory vote on the compensation of the named executive officers of Webster, to approve the amendment and restatement of the 1992 Stock Option Plan and re-approve the material terms for payment of performance-based compensation under the 1992 Stock Option Plan and to ratify the appointment of Webster’s independent registered public accounting firm. The affirmative vote of at least 66 2/3% of our Common Stock outstanding is required to approve an amendment of the Third Amended and Restated Certificate of Incorporation, to provide that the Company’s shareholders may remove any director from office, with or without cause. Shareholders’ votes will be tabulated by the persons appointed by the Board of Directors to act as inspectors of election for the Annual Meeting.

Under New York Stock Exchange Rule 452, which governs NYSE brokerage members, brokerage firms may not vote on non-routine matters in their discretion on behalf of their clients if such clients have not furnished voting instructions. A “broker non-vote” occurs when a broker’s customer does not provide the broker with voting instructions on non-routine matters for shares owned by the customer but held in the name of the broker. Proposal 3 concerns a routine matter and thus brokerage firms may vote, in person or by proxy, on such proposal on behalf of their clients without voting instructions. Because none of the other matters to be voted upon at the Annual Meeting are considered routine matters under Rule 452, there potentially can be broker non-votes at the Annual Meeting. Both abstentions and broker non-votes will be treated as shares present for purposes of determining the presence of a quorum at the Annual Meeting. Abstentions and broker non-votes will not be counted for purposes of determining the number of votes cast on Proposals 1, 2, or 4 and, therefore, will have no effect on the outcome of the votes for those proposals. Abstentions will not be counted for purposes of determining the number of votes cast on Proposal 3 and, therefore, will have no effect on the outcome of the vote for that proposal. Proposal 3 concerns a routine matter, and thus brokerage firms may vote. Proposal 5 requires approval of the holders of at least 66 2/3% of our outstanding Common Stock and, therefore, a broker non-vote or abstention will have the same effect as a vote against Proposal 5.

Electronic Delivery of Proxy Materials - As a shareholder, you have the option of electing to receive future proxy materials (including annual reports) online over the Internet. This online service provides savings to Webster by eliminating printing, mailing, processing and postage costs associated with hard copy distribution. You may enroll for this service on the Internet after you vote your shares in accordance with the instructions for Internet voting set forth on the enclosed proxy card. You may also enroll for electronic delivery of future Webster proxy materials at any time on the Company’s website at www.wbst.com. Under “Electronic Enrollment,” select the “Click Here To Enroll” link. Then select the box indicating your appropriate form of share ownership, and follow the instructions for electronic delivery enrollment. In the future, you will receive an email message, at the address you provided while enrolling, informing you that the Webster proxy materials are available to be viewed online on the Internet. Follow the instructions to view the materials and vote your shares. Your enrollment in electronic delivery of Webster proxy materials will remain in effect until revoked by you.

Annual Report on Form 10-K - Webster is required to file an annual report on Form 10-K for its 2015 fiscal year with the Securities and Exchange Commission (“SEC”). Shareholders may obtain, free of charge, a copy of the Form 10-K by writing to Frederik F. Erikson, Assistant Secretary, Webster Financial Corporation, 145 Bank Street, Waterbury, Connecticut 06702. Our annual report on Form 10-K is available on the Company’s website, www.wbst.com.

ELECTION OF DIRECTORS

(Proposal 1)

At the Annual Meeting, ten directors will be elected to serve for one-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 majority of the votes cast by shares 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.

As required by Webster’s Bylaws, directors must be elected by a majority of the votes cast with respect to such director in uncontested elections (number of shares voted “for” a director must exceed the number of votes cast “against” that director). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. In addition, under Webster’s Bylaws, incumbent directors nominated for reelection are required, as a condition to such nomination, to submit a conditional letter of resignation. In the event an incumbent nominee for director fails to receive a majority of the votes cast at an annual meeting, the Nominating and Corporate Governance Committee will consider the resignation and make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. The director who failed to receive a majority of the votes cast will not participate in the Board’s decision.

Information as to Nominees

The following table sets forth the names of the Board of Directors’ nominees for election as directors, all of whom are current directors of Webster. Also set forth in the table is certain other information with respect to each such person’s age at December 31, 2015, 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, National Association (“Webster Bank”). In keeping with the Board’s replenishment plan, including its goal to reduce average director tenure, Mr. Finkenzeller will retire at the 2016 Annual Meeting. He has served on the Board since the formation of the holding company in 1986. The Board of Directors greatly appreciates Mr. Finkenzeller’s faithful service and his contributions to the Board and to Webster’s success and growth. Additionally, in keeping with Webster’s Qualification Guidelines for Board Members, Mr. Jacobi will not be nominated for an additional term in 2017, since he will have reached age 75.

Following the table are biographies of each of the nominees which contain information regarding each such person’s business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that such person should serve as a director as of the time of filing of this Proxy Statement. Each director brings a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a wide variety of areas, including corporate governance, board service, executive management, business, finance and marketing. The process undertaken by the Nominating and Corporate Governance Committee in recommending qualified candidates is described beginning on page 13 under “Corporate Governance—Director Qualifications and Nominations.”


Director Nominees:	Age at 12/31/2015		Director Since	Expiration of Term	Positions Held with Webster and Webster Bank	Committee Membership
William L. Atwell		65	2014	2016	Director	Compensation; Risk
Joel S. Becker		67	1986	2016	Director	Compensation; Risk
John J. Crawford		71	1996	2016	Lead Director	Audit; Executive; & Nominating & Corporate Governance (Chair);
Elizabeth E. Flynn		55	2014	2016	Director	Audit; Nominating & Corporate Governance
C. Michael Jacobi		73	1993	2016	Director	Risk
Laurence C. Morse		64	2004	2016	Director	Compensation; Nominating & Corporate Governance
Karen R. Osar		66	2006	2016	Director	Audit (Chair); Executive; Risk
Mark Pettie		59	2009	2016	Director	Audit; Executive; Risk (Chair)
Charles W. Shivery		70	2009	2016	Director	Compensation (Chair); Executive; Nominating and Corporate Governance
James C. Smith		66	1986	2016	Chairman and Chief Executive Officer; Director	Executive (Chair)

William L. Atwell is managing director of Atwell Partners, LLC, a Darien, Connecticut based company which provides consulting services and market insights to the financial services industry. Mr. Atwell was President of CIGNA International at CIGNA Corporation from 2008 to 2012. Earlier in his career, Mr. Atwell held various senior positions with The Charles Schwab Corporation, including President, Individual Investor Enterprise and Schwab Bank. Mr. Atwell began his career at Citibank where he held various senior executive roles. Mr. Atwell serves as an independent trustee of AQR Mutual Funds (AQR Capital Management LLC) and chairs its nominating and governance committee and is a member of its audit committee. Mr. Atwell

serves as a trustee and is the former Chairman (2012-2015) of the Fairfield University board of trustees. Mr. Atwell is a member of the Compensation Committee and the Risk Committee.

Mr. Atwell’s role as a former President of CIGNA International and 35 years of executive experience in the retail financial services industry, including banking, brokerage and insurance, provides insight regarding Webster’s opportunities and challenges.

Joel S. Becker is Chairman and Chief Executive Officer of Torrco, a Waterbury, Connecticut based wholesale distributor of plumbing, heating and industrial pipe valve and fitting supplies to contractors and industry. Mr. Becker is a member of the Compensation Committee and the Risk Committee.

Mr. Becker’s experience as Chairman and Chief Executive Officer of a local business in Webster’s market area combined with more than 25 years of experience on Webster’s Board gives him unique insight into Webster’s challenges, opportunities and operations. He also has extensive experience in public company executive compensation as a result of his over nine years of service as Chair of the Compensation Committee.

John J. Crawford is President of Strategem LLC, a New Haven, Connecticut based company which provides consulting services to the business and not-for-profit community on business and financial strategies. Mr. Crawford served as President, Chief Executive Officer and a director of Aristotle Corporation, a New Haven, Connecticut based education training company from October 1992 through December 2002. Mr. Crawford continued to serve on the Board of Directors of Aristotle Corporation until August 31, 2005. From 1994 until December 2000, he served as President and Chief Executive Officer of the South Central Connecticut Regional Water Authority, New Haven, Connecticut. Mr. Crawford is Lead Director, Chair of the Nominating and Corporate Governance Committee and a member of the Audit Committee and the Executive Committee.

Mr. Crawford’s extensive executive and corporate governance experience as a former Chief Executive Officer of three companies, including a financial institution, and his more than 15 years of service on Webster’s Board, including thirteen years as the Lead Director, provides him with a seasoned view of Webster’s operations and challenges.

Elizabeth E. Flynn was Vice Chairman of Marsh, LLC in New York, New York, a global leader in insurance broking and risk management until her retirement on December 31, 2015. Ms. Flynn was President of Marsh’s Insurance Services Group from September 2012 to May 2013, and CEO and President of Marsh U.S. Consumer from October 2011 to September 2012. From June 2010 to October 2011, she served as Global Chief Operating Officer at Guy Carpenter & Company, LLC. Earlier in her career, Ms. Flynn was Senior Vice President, Restructuring Office/Divestitures, at American International Group, and worked more than 20 years at JP Morgan Chase & Company in various senior executive roles. Ms. Flynn is a member of the Audit Committee and the Nominating and Corporate Governance Committee.

Ms. Flynn’s former role as Vice Chairman of Marsh, LLC and extensive operational and transformational leadership in numerous financial services organizations, including retail banking units while at JP Morgan Chase, brings meaningful and relevant experience to Webster.

C. Michael Jacobi is President of Stable House 1, LLC, a Middlebury, Connecticut based company engaged in real estate development. Mr. Jacobi served from June 2001 to May 2005 as President, Chief Executive Officer and a director of Katy Industries, Inc., a publicly held company headquartered in Middlebury, Connecticut engaged in the design, manufacture and distribution of maintenance and electrical products. Mr. Jacobi is a certified public accountant. He is a director of Corrections Corporation of America (NYSE:CXW), a publicly held company headquartered in Nashville, Tennessee engaged in the ownership and management of prisons for federal, state and local governments, a director and chairman of the board of Sturm Ruger & Co., Inc. (NYSE:RGR), a publicly held company headquartered in Southport, Connecticut engaged in

manufacturing and distribution of consumer products, a director of Kohlberg Capital Corporation (NASDAQ:KCAP), a publicly held company headquartered in New York, New York specializing in middle market companies, and a director of Performance Sports Group (NYSE:PSG), a publicly held company headquartered in Exeter, New Hampshire engaged in the design and manufacture of sports equipment. Mr. Jacobi is a member of the Risk Committee.

Mr. Jacobi provides the Board with extensive experience and expertise in corporate finance and accounting as a Certified Public Accountant, having served as Chair of the Audit Committee of Webster for many years. His former service as the Chief Executive Officer of a public company also brings strong executive experience to the Board.

Laurence C. Morse is the Managing Partner of Fairview Capital Partners, Inc., in West Hartford, Connecticut based investment management firm established in 1994 that oversees venture capital funds, some of which invest capital in venture capital partnerships and similar investment vehicles that provide capital primarily to minority-controlled companies. Mr. Morse is a director of the Institute of International Education, a member of the Board of Trustees of Harris Associates Investment Trust (which oversees the Oakmark Family of Mutual Funds), a member of the Board of Trustees of Princeton University, and is a director of Princeton University Investment Company and a former director and chairman of the National Association of Investment Companies, a private, not-for-profit trade association that represents 52 private equity and specialty finance investment firms. Mr. Morse is a member of the Compensation Committee and the Nominating and Corporate Governance Committee.

Mr. Morse’s entire career has been spent in the investment management field, including as the co-founder and Managing Partner of an investment management firm, which provides the Board with extensive knowledge of the capital markets and accounting issues. His experience has made him adept at performing rigorous risk assessments of managers and management teams, and assessing new technologies, products and services, business strategies, markets and industries.

Karen R. Osar was Executive Vice President and Chief Financial Officer of Chemtura Corporation (NYSE:CHMT), a specialty chemicals company headquartered in Middlebury, Connecticut from 2004 until her retirement in March 2007. From 1999 to April 2003, Ms. Osar served as Senior Vice President and Chief Financial Officer of Westvaco Corporation and Mead Westvaco Corporation. She is a director and audit committee chair of Innophos Holdings, Inc. (NASDAQ:IPHS), a publicly held specialty chemicals company headquartered in Cranbury, New Jersey, a director and audit committee member of Sappi Limited (JSE:SAP), a publicly held company and one of the largest global producers of coated paper and chemical cellulose, headquartered in Johannesburg, South Africa, and from 1999 through 2006 she served as a director and audit and finance committee chair of Allergan, Inc., a publicly held multi-specialty health care company focused on developing and commercializing pharmaceuticals. Ms. Osar is Chair of the Audit Committee and a member of the Risk Committee and the Executive Committee.

Ms. Osar’s experience as the former Chief Financial Officer of a public company, her previous corporate finance experience at JPMorgan Chase & Company, and her service as Chair of the Audit Committee for Webster and as the chair of the audit committee of another public company, provides the Board with strong corporate finance and accounting experience. Her board committee service also provides corporate governance and executive compensation expertise.

Mark Pettie is President of Blackthorne Associates, LLC, a Woodcliff Lake, New Jersey based company which provides consulting services to firms investing in a wide range of consumer oriented businesses. Mr. Pettie served as Chairman and Chief Executive Officer of Prestige Brands Holdings, Inc. (NYSE:PBH), a publicly held company headquartered in Irvington, New York which develops, sells, distributes and markets over-the-counter drugs, household cleaning products and personal care items, from January 2007 until September 2009. He was President of the Dairy Foods Group with ConAgra from 2005 to 2006. From

1981 to 2004, Mr. Pettie held various positions of increasing responsibility in general management, marketing and finance at Kraft Foods and was named Executive Vice President and General Manager of Kraft Food’s Coffee Division in 2002. He is Chair of the Risk Committee and a member of the Audit Committee and the Executive Committee.

Mr. Pettie’s former experience as Chief Executive Officer of a public company brings strong executive experience to the Board, along with his expertise in finance and marketing. He also has extensive business and corporate governance experience as a director for both public and private companies.

Charles W. Shivery is former non-executive Chairman of the Board of Northeast Utilities (NYSE:NU) (now known as Eversource Energy). He joined Northeast Utilities in 2002 and was Chairman, President and Chief Executive Officer from March 2004 until April 2012, upon the completion of the merger with NSTAR, and then served as non-executive Chairman of the Board until October 2013. He previously held posts with the company including interim President, President-Competitive Group of Northeast Utilities, and President and Chief Executive Officer of NU Enterprises, Inc., the unregulated subsidiary of the Northeast Utilities system. Prior to that, he was co-president of the Constellation Energy Group, the parent company of Baltimore Gas & Electric and other energy related businesses. Mr. Shivery is a director and audit committee member of Portland General Electric Company (NYSE:POR), an electrical utility company headquartered in Portland, Oregon. He is Chair of the Compensation Committee, and a member of the Executive Committee and the Nominating and Corporate Governance Committee.

Mr. Shivery’s former service as the President and Chief Executive Officer of an energy company provides extensive experience managing a sizable, highly regulated business. Northeast Utilities (now known as Eversource Energy), conducts business in a large part of the region serviced by Webster, so certain variables impact both businesses similarly. Mr. Shivery also provides the Webster Board with corporate governance and executive compensation knowledge.

James C. Smith is Chairman and Chief Executive Officer of Webster and Webster Bank. Mr. Smith joined Webster Bank in 1975 and was appointed CEO of the bank and the holding company in 1987 and Chairman in 1995. He was elected President, Chief Operating Officer and a director of Webster Bank in 1982 and of the holding company at its inception in 1986. He served as President of Webster and Webster Bank until 2000, and again from 2008 through 2011. Mr. Smith serves as Vice Chairman of the Midsize Banks Coalition of America. He is a past member of the board of directors of the American Bankers Association and served as co-chairman of the ABA’s American Bankers Council for midsize banks. He is a past member of the board of directors of the Financial Services Roundtable. Mr. Smith served as a member of the Federal Advisory Council, which advises the deliberations of the Federal Reserve Board of Governors, and served on the board of directors of the Federal Reserve Bank of Boston. He served on the board of directors of the Federal Home Loan Bank of Boston. He served on the executive committee of the Connecticut Bankers Association. Mr. Smith is actively engaged in community service and supports numerous civic organizations including as a member of the board of Saint Mary’s Health System in Waterbury, Connecticut. Mr. Smith is Chair of the Executive Committee.

Mr. Smith’s position and extensive experience as Chairman and Chief Executive Officer of Webster and his day to day leadership of the Company provide him with thorough knowledge of Webster’s opportunities, challenges and operations.

The Board of Directors recommends that shareholders vote FOR the election of all of its director nominees.

CORPORATE GOVERNANCE

General

The business and affairs of Webster are managed under the direction of the Board of Directors (the “Board”). Members of the Board are kept informed of Webster’s business through discussions with the Chairman of the Board and Webster’s other executive officers, by reviewing materials provided to them and by participating in meetings and strategic planning sessions of the Board and its committees. The Board is also kept apprised by the Chairman of the Board and management of continuing educational programs on corporate governance and fiduciary duties and responsibilities. In addition, new directors of Webster participate in an orientation program, which is designed to familiarize them with Webster’s business and operations and with their duties as directors under applicable laws and regulations. Each member of the Board also serves as a director of Webster Bank.

Webster believes in the importance of sound and effective corporate governance. Over the years, Webster has forged an explicit link between its corporate culture and corporate governance by identifying its core values, communicating them and living them every day. With uncompromising commitment to its core principles, Webster continues to add value for its customers, shareholders, employees and the communities it serves. The Board has adopted corporate governance practices and policies which the Board and senior management believe promote this philosophy. Certain of such practices and policies are listed in the chart below and certain of those listed are discussed in greater detail elsewhere in this Proxy Statement.


Board and Governance Information		2015
Size of Board		11
Number of Independent Directors		10
Annual Election of All Directors		Yes
Majority Voting for Directors		Yes
Lead Independent Director		Yes
Independent Directors Meet Without Management Present		Yes
Annual Equity Grant to Non-Employee Directors		Yes
Board Orientation / Education Program		Yes
Code of Business Conduct & Ethics for Directors		Yes
Stock Ownership Guidelines for Directors		Yes
No Poison Pill		Yes
Policy Prohibiting Hedging / Pledging of Company Stock		Yes
Annual Board & Committee Evaluations		Yes

Board Leadership

At Webster, the roles of Chairman of the Board and principal executive officer are combined, both held by Mr. Smith. In addition, there is a lead independent director who is appointed in accordance with Webster’s Corporate Governance Policy, which provides that the Board shall appoint an independent director to serve as the Lead Director of the Board for a one-year term, or until a successor is appointed. The lead independent director presides over the executive sessions of independent directors and assists and advises the Chairman of the Board. During fiscal year 2015, Mr. Crawford served as the lead independent director. The Board believes that having a combined Chairman and principal executive officer, coupled with a lead independent director, is the most appropriate leadership structure for Webster, especially given Mr. Smith’s long service as Chief Executive Officer and his extensive knowledge of the Company and its governance. This

structure allows Board discussions regarding performance and strategic matters to be led by the person who oversees Webster’s strategy and operations and establishes a single voice to speak on behalf of Webster, while the lead independent director component of the structure provides independent leadership that mitigates any real or perceived conflicts of interest.

Director Independence

Pursuant to the New York Stock Exchange (“NYSE”) listing standards, Webster is required to have a majority of “independent directors” on its Board. In addition, the Audit Committee, Compensation Committee and the Nominating and Corporate Governance Committee must be composed solely of independent directors. The NYSE listing standards define specific relationships that would disqualify a director from being independent and further require that for a director to qualify as “independent,” the board of directors must affirmatively determine that the director has no material relationship with the Company.

The Board, with the assistance of the Nominating and Corporate Governance Committee, conducted an evaluation of director independence, based primarily on a review of the responses of the directors and executive officers to questions regarding employment and compensation history, affiliations and family and other commercial, industrial, banking consulting, legal, accounting, charitable and legal relationships with Webster, including those relationships described under “Compensation Committee Interlocks and Insider Participation” and “Certain Relationships” on page 47 of this Proxy Statement, and on discussions with the Board.

As a result of this evaluation, the Board affirmatively determined that each of Messrs. Atwell, Becker, Crawford, Finkenzeller, Jacobi, Morse, Pettie, Shivery and Mses. Flynn and Osar is an “independent director” for purposes of Section 303A of the Listed Company Manual of the NYSE and applicable SEC rules and regulations. In connection with this evaluation, the Board considered that Webster provides lending and other financial services to directors, their immediate family members, and their affiliated organizations in the ordinary course of business and without preferential terms or rates. The Board also considered that C. Michael Jacobi’s son, Gregory Jacobi, was employed by Webster Bank in 2015 as a Senior Vice President. Mr. Jacobi’s son’s employment position with Webster Bank does not violate the independence standards contained in the NYSE rules and the Board determined that this relationship is not material and would not impair Mr. Jacobi’s independence, in part because Mr. Jacobi’s son is not an executive officer of Webster and his compensation and benefits were established in accordance with the compensation policies and practices applicable to Webster employees in comparable positions.

Mr. Smith is not considered independent because he is an executive officer of Webster and Webster Bank.

Executive Sessions of Independent Directors

In keeping with Webster’s Corporate Governance Policy, in 2015 the Board held 3 meetings that were limited to independent directors. The lead independent director presides over the executive sessions of independent directors.

Risk Oversight

The Board administers its risk oversight function primarily through the Risk Committee, which is described in more detail below. The Risk Committee meets frequently throughout the year and reports its findings to the full Board on an ongoing basis. In addition, the Compensation Committee and the Risk Committee review and assess risks as related to Webster’s compensation programs. Webster also has a Chief Risk Officer, Daniel H. Bley, who reports in that capacity to the Risk Committee, as well as two senior risk officers who report to the Chief Risk Officer.

Board and Committee Meetings

During 2015, Webster held 10 meetings of its Board. Each incumbent director attended at least 75 percent of the aggregate of (i) the total number of meetings held by the Board during the period that the individual served and (ii) the total number of meetings held by all committees of the Board on which the individual served during the period that the individual served.

Committees of the Board; Code of Business Conduct and Ethics and Corporate Governance Guidelines

The Board has established five standing committees. The standing committees are the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, the Executive Committee and the Risk Committee. The Board has adopted a charter for each of these committees, as well as corporate governance guidelines that address the make-up and functioning of the Board and qualification guidelines for board members. The Board has also adopted a code of business conduct and ethics (the “Code of Conduct”) that applies to all employees, officers and directors. Each employee, officer and director participates in an annual training session that focuses on topics covered by Webster’s Code of Conduct. The training reinforces Webster’s core values and Webster’s commitment to full compliance with applicable laws and regulations. You can find links to these materials on the Company’s website at: www.wbst.com.

You can also obtain a printed copy of any of the materials referred to above, without charge, by contacting us at the following address:

Webster Financial Corporation

145 Bank Street

Waterbury, Connecticut 06702

Attn: Harriet Munrett Wolfe, Esq.

Executive Vice President, General Counsel and Secretary

The Board has determined that all of the Directors who serve on the Audit, Compensation, and Nominating and Corporate Governance committees are “independent” for purposes of Section 303A of the Listed Company Manual of the NYSE. In addition, all of the Directors who serve on the Risk Committee are “independent.”

Audit Committee

The Board has appointed an Audit Committee that oversees the Company’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 Company’s annual financial statements, including management’s discussion and analysis, and regulatory examination findings. The Audit Committee recommends the appointment of an independent registered public accounting firm and is responsible for the oversight of such firm. A copy of the Audit Committee’s charter is available on the Company’s website at: www.wbst.com. During 2015, the Audit Committee held 5 meetings. The members of the Audit Committee currently are Ms. Osar (Chair) and Messrs. Crawford, Finkenzeller, Pettie, and Ms. Flynn. Each of the members of the Audit Committee meets the independence requirements of the rules of the NYSE and applicable rules and regulations of the SEC. The Board has determined that each of the members of the Audit Committee is financially literate and that Ms. Osar and Mr. Crawford qualify as “audit committee financial experts,” as that term is defined in Item 407(d)(5) of Regulation S-K.

Compensation Committee

The Board has appointed a Compensation Committee. During 2015, the Compensation Committee held 4 meetings. Compensation Committee meetings are attended by Webster’s Chief Executive Officer (“CEO”) and President, other than while their compensation and benefits are discussed. For a description of the

role of Webster’s CEO in determining or recommending the amount of compensation paid to our named executive officers during 2015, see “Compensation Discussion and Analysis.” The members of the Compensation Committee currently are Messrs. Shivery (Chair), Atwell, Becker, Finkenzeller and Morse. Each of the members of the Compensation Committee meets the independence requirements of the rules of the NYSE, and also serves as the Compensation Committee of the Company’s subsidiary, Webster Bank. A copy of the Compensation Committee’s charter is available on the Company’s website at: www.wbst.com. The Compensation Committee may delegate to its chairperson or any other Compensation Committee member such power and authority as the Compensation Committee deems appropriate, except such powers and authorities required by law to be exercised by the whole Compensation Committee or subcommittee thereof.

Pursuant to the Compensation Committee’s charter, among other responsibilities, the Committee is charged with annually reviewing and approving annual bonus arrangements and long term incentive compensation paid to the CEO. The Committee reviews and makes recommendations to the Board with respect to the annual base salary, and severance and/or change in control or similar agreements/provisions, if any, for the CEO; annually determining such compensation and benefits for the members of the Company’s Executive Management Committee other than the CEO; annually recommending to the Board the content of the annual performance evaluation for the CEO and reviewing performance evaluations for all members of the Executive Management Committee; administering and implementing the Company’s performance based incentive plans; reviewing the talent management and succession planning processes to ensure that there is a pool of qualified candidates to fill future Executive Management Committee positions; and reviewing and approving on a periodic basis the Company’s employee stock ownership guidelines. The Committee also reviews and makes recommendations to the Board with respect to director compensation.

For information on the role of compensation consultants determining or recommending the amount or form of executive or director compensation, see “Compensation Discussion and Analysis – Compensation Consultant.”

Executive Committee

The Board has appointed an Executive Committee that has responsibility for serving as an exploratory committee for mergers and acquisitions and to serve as an ad hoc committee as needed. The Executive Committee did not meet during 2015. The members of the Executive Committee are Messrs. Smith (Chair), Crawford, Pettie, Shivery and Ms. Osar.

Nominating and Corporate Governance Committee

The Board has appointed a Nominating and Corporate Governance Committee that has overall responsibility for recommending corporate governance process and board operations for the Company. The Nominating and Corporate Governance Committee identifies director candidates, reviews the qualifications and experience of each person considered as a nominee for election or reelection as a director, and recommends director nominees to fill vacancies on the Board and for approval by the Board and the shareholders. A copy of the Nominating and Corporate Governance Committee’s charter is available on the Company’s website at: www.wbst.com. During 2015, the Nominating and Corporate Governance Committee held 3 meetings. The members of the Nominating and Corporate Governance Committee are Messrs. Crawford (Chair), Morse, Shivery and Ms. Flynn. Each member of the Nominating and Corporate Governance Committee meets the independence requirements of the rules of the NYSE.

Risk Committee

The Board has appointed a Risk Committee whose primary function is to assist the Board in fulfilling its oversight responsibilities regarding the Company’s enterprise risk management, receiving information regarding the Company’s policies, procedures and practices relating to risk, and discussing material regulatory

issues, compliance matters, and emerging risks to the Company. The Risk Committee also has responsibility for overseeing management’s monitoring of security issues. During 2015, the Risk Committee held 5 meetings. The members of the Risk Committee are Messrs. Pettie (Chair), Atwell, Becker, Jacobi, and Ms. Osar.

Director Qualifications and Nominations

The Board believes that it should be composed of directors with diverse experience in business and in areas that are relevant to the Company, and that directors should, at a minimum, possess the highest personal and professional ethics, integrity and values, and be committed to representing the long term interests of the shareholders. Directors should also have an objective perspective and practical wisdom, and should be willing and able to devote the required amount of time to Webster’s business. These attributes are embodied in Webster’s Qualification Guidelines for Board Members, which specifies that diversity is one of the factors to be considered in deciding on nominations for directors.

When considering candidates for the Board, the Nominating and Corporate Governance Committee takes into account a number of factors, including the following:

•

independence from management;

•

judgment, skill, integrity and reputation;

•

relevant specific industry experience;

•

age, gender and ethnic background;

•

current position with another business or entity;

•

potential conflicts of interests with other pursuits; and

•

existing ties to the Company’s and Bank’s markets.

When seeking candidates for director, the Nominating and Corporate Governance Committee may solicit suggestions from incumbent directors, management or others, including third party search firms. The Committee will review the qualifications and experience of each candidate. If the Committee believes a candidate would be a valuable addition to the Board, it will recommend to the full Board that candidate’s election. The Nominating and Corporate Governance Committee reviews and assesses the effectiveness of the Qualification Guidelines for Board Members periodically.

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 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 February 15, 2016 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 16, 2016. The Nominating and Corporate Governance Committee will consider candidates for director suggested by shareholders applying the criteria for candidates described above and considering the additional information required by Article III, Section 13 of Webster’s Bylaws, which must be set forth in a shareholder’s notice of nomination. Section 13 of Webster’s Bylaws requires that the notice include: (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of Webster which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations or proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act

of 1934, as amended (including without limitation such person’s written consent to being named in the Proxy Statement as a nominee and to serving as a director if elected); and (b) as to the shareholder giving notice, (i) the name and address, as they appear on Webster’s books, of such shareholder, and (ii) the class and number of shares of Webster which are beneficially owned by such shareholder. In considering any nominees for directors recommended by a shareholder, the Nominating and Corporate Governance Committee considers, among other things, the same factors set forth above.

Compensation of Directors

The following table summarizes the compensation paid to Webster’s non-employee directors during 2015. Employee directors of Webster receive no additional compensation for serving as directors or committee members of Webster or its subsidiaries. Beyond these and other standard arrangements described below, no other compensation was paid to any such director.


Name	Fees Earned or Paid in Cash ($) 1	Stock Awards ($) 2	Option Awards ($) 3	All Other Compensation ($) 4		Total ($)

William L. Atwell	52,750	60,126	—		2,379		115,255

Joel S. Becker	54,150	60,126	—		3,582		117,858

John J. Crawford	82,550	60,126	—		3,582		146,258

Robert A. Finkenzeller	55,750	60,126	—		3,582		119,458

Elizabeth E. Flynn	51,350	60,126	—		2,090		113,566

C. Michael Jacobi	50,350	60,126	—		2,441		112,917

Laurence C. Morse	51,150	60,126	—		3,582		114,858

Karen R. Osar	68,950	60,126	—		3,582		132,658

Mark Pettie	63,950	60,126	—		3,582		127,658

Charles W. Shivery	61,350	60,126	—		3,582		125,058

¹	Includes meeting fees, fees paid to Mr. Crawford as Lead Director and committee chair, to Messrs. Pettie, Shivery and Ms. Osar as committee chairs and the $32,000 annual retainer fee.

The amounts in this column represent the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The grant date fair value of the restricted shares awarded to Mses. Flynn and Osar and Messrs. Atwell, Becker, Crawford, Finkenzeller, Jacobi, Morse, Pettie and Shivery in 2015 was $36.09 per share. The assumptions used to calculate the amount recognized for these stock awards are set forth in footnote 19 to Webster’s audited financial statements contained in Webster’s Form 10-K for the year ended December 31, 2015. As of December 31, 2015, Ms. Osar and Messrs. Becker, Crawford, Finkenzeller, Morse, Pettie and Shivery had 3,847 unvested restricted shares from the annual equity grants in 2013, 2014 and 2015, and Messrs. Atwell and Jacobi and Ms. Flynn had 2,674, 2,970, 2,437 unvested restricted shares, respectively.

No stock options were granted to non-employee directors in 2015. As of December 31, 2015, each director had the following number of options outstanding, all of which are currently exercisable: Mr. Atwell 0; Mr. Becker, 46,528; Mr. Crawford, 46,528; Mr. Finkenzeller, 46,528; Ms. Flynn, 0; Mr. Jacobi, 46,528; Mr. Morse, 46,528; Ms. Osar, 46,528; Mr. Pettie, 25,423; and Mr. Shivery, 13,274.

⁴	Reflects the dollar amount of dividends paid on unvested restricted stock for the fiscal year ended December 31, 2015.

Webster uses a combination of cash and restricted stock to attract and retain qualified candidates to serve on the Board. Webster targets director compensation to be at the median for its peer group (as described in “Compensation Discussion and Analysis” below), with the opportunity to earn significantly more based on Webster’s total shareholder return. Stock Ownership Guidelines have also been established for directors to closely align directors’ interests with those of Webster’s shareholders.

During 2015, each non-employee director of Webster received an annual retainer of $32,000. In addition, non-employee directors of Webster received 1,666 shares of restricted stock, which vest incrementally over three years.

In addition, except as set forth below, each non-employee director received $1,200 for each Webster or Webster Bank Board meeting attended, $1,200 for each committee meeting attended, and $600 for each telephonic Webster or Webster Bank Board and committee meeting called by either Webster or Webster Bank. Each non-employee director of both Webster and Webster Bank received a total of $2,000 for separate board meetings of Webster and Webster Bank that were held on the same day. Non-employee directors receive $1,000 for a committee meeting if it is held on the same day as a Board meeting and $1,000 for a second committee meeting if more than one committee meeting is held on the same day. Webster also reimburses directors for reasonable travel expenses incurred in connection with attending Board meetings.

In 2015, the Lead Director received an additional annual retainer of $22,500. The Chair of the Audit Committee received an annual additional retainer of $15,000, the Chair of the Compensation Committee and the Chair of the Risk Committee received additional annual retainers of $10,000 and the Chair of the Nominating and Corporate Governance Committee received an additional annual retainer of $7,500.

Webster stock ownership guidelines require non-employee directors to own Webster Common Stock with a market value equal to at least $200,000. Effective April 2016, this will increase to $300,000. Non-employee directors who do not meet the guidelines agree to hold all long term incentives, which include vested restricted stock and exercised stock options (net of exercise price and taxes), until they achieve the required ownership threshold of Webster Common Stock.

Communications with Directors

The Company’s shareholders and other interested persons who want to communicate with the Board of Directors, any individual Director, the Lead Director, the non-management directors as a group or any other group of directors, can write to:

[Name of Director or Directors]

c/o Lead Director of the Board of Directors

Webster Financial Corporation

P.O. Box 1074

754 Chapel Street

New Haven, Connecticut 06510

All communications received (except for communications that are primarily commercial in nature or relate to an improper or irrelevant topic) will be forwarded to the intended recipient(s) or the full Board, as appropriate.

Director Attendance at Annual Meetings

Webster typically schedules a meeting of the Board of Directors in conjunction with the annual meeting and expects that the Board of Directors will attend the annual meeting, absent a valid reason, such as a previously scheduled conflict. Last year all of the individuals then serving as directors attended the annual meeting.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

Named Executive Officers of Webster Financial Corporation

The following table sets forth information regarding the Chief Executive Officer, the Chief Financial Officer, and the three other most highly compensated executive officers who were serving on December 31, 2015 (the “named executive officers” or “NEOs”).


Name	Age as of December 31, 2015	Positions with Webster and Webster Bank
James C. Smith	66	Chairman, Chief Executive Officer and Director

Joseph J. Savage	63	Executive Vice Chairman and Director of Webster Bank

John R. Ciulla	50	President and Director of Webster Bank

Glenn I. MacInnes	54	Executive Vice President and Chief Financial Officer

Charles L. Wilkins	54	Executive Vice President, HSA Bank

Provided below is biographical information for each of Webster’s NEOs, other than Mr. Smith. For information regarding Mr. Smith, see “Election of Directors-Information as to Nominees.”

Joseph J. Savage is Executive Vice Chairman of Webster and Webster Bank. He joined Webster in April 2002 as Executive Vice President, Commercial Banking and was promoted to President of Webster Bank and elected to the board of directors of Webster Bank in January of 2014. He was appointed to his current position in October 2015. Prior to joining Webster, Mr. Savage was Executive Vice President of the Communications and Energy Banking Group for CoBank in Denver, Colorado from 1996 to April 2002. Mr. Savage serves as a director of the Travelers Championship Committee. He serves on the board of The Bushnell and The Connecticut Bankers Association. He was also the chair of the 2013-14 United Way Campaign for United Way of Central and Northeastern Connecticut.

John R. Ciulla is President of Webster and Webster Bank. Mr. Ciulla joined Webster in 2004 and has served in a variety of management positions at the Company, including Chief Credit Risk Officer and Senior Vice President, Commercial Banking, where he was responsible for several business units. He was promoted from Executive Vice President and Head of Middle Market Banking to lead Commercial Banking in January 2014 and President in October 2015. Prior to joining Webster, Mr. Ciulla was Managing Director of the Bank of New York, where he worked from 1997 to 2004. He is the Vice Chairman of the board of the Connecticut Business & Industry Association and serves on the board of the Business Council of Fairfield County.

Glenn I. MacInnes is Executive Vice President and Chief Financial Officer of Webster and Webster Bank. He joined Webster in 2011. Prior to that, Mr. MacInnes was Chief Financial Officer at New Alliance Bancshares for two years and was employed for 11 years at Citigroup in a series of positions, including deputy CFO for Citibank North America and CFO of Citibank (West) FSB. Mr. MacInnes serves on the board of Wellmore Behavioral Health, Inc.

Charles L. Wilkins is Executive Vice President, Head of HSA Bank of Webster and Webster Bank. He joined Webster in 2014. Prior to joining Webster, he was president of his own consulting practice specializing in healthcare and financial services from June 2012 to December 2013. Prior to this, Mr. Wilkins was General Manager and Chief Executive Officer of OptumHealth Financial Services, a division of UnitedHealth Group in Minnesota from August 2007 to June 2012. He is an active volunteer with the United Way, Special Olympics and Crossroad Career Network.

Compensation Committee Report

The Compensation Committee met with management to review and discuss the Compensation Discussion and Analysis disclosures that follow. Based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Form 10-K for its 2015 fiscal year, and the Board has approved the recommendation.

Compensation Committee

Charles W. Shivery (Chair)

William L. Atwell

Joel S. Becker

Robert A. Finkenzeller

Laurence C. Morse

Compensation Discussion and Analysis

The Compensation Discussion and Analysis (“CD&A”) discusses in detail the 2015 executive compensation program for the Company’s NEOs. The Compensation Committee (“Committee”) recommends the base salary for the Chief Executive Officer (“CEO”) to the Board of Directors, approves the annual cash incentive and long term equity-based incentives (“LTI”) for the CEO, and approves the compensation for Webster’s other NEOs. Non-NEO members of the Executive Management Committee are also compensated under the same compensation program.

At the annual meeting of shareholders held on April 23, 2015, Webster held an advisory vote on executive compensation. Approximately 98% of the shares of Webster Common Stock that were voted on the proposal were voted for the approval of the compensation of the NEOs as discussed in Webster’s 2015 Proxy Statement. The Committee considers the outcome of the vote when determining compensation policies and setting NEO compensation and believes that the results show strong support for Webster’s compensation policies and procedures. No changes in the overall structure of the programs were made in 2015.

Executive Summary

Highlights of 2015 Operating Performance

Webster reported record net income driven by higher revenue, disciplined expense management, and further improvement in asset quality. Strong loan demand boosted core revenue for another year of positive growth. Webster continued to invest in strategies that are expected to increase Economic Profit¹ over time.

Highlights Summary (results versus prior year)

•

Record net income of $206.3 million, up 3.31%

•

Record net income applicable to common shareholders of $197.0 million, up 4.50%

•

Record core pre-provision net revenue of $350.6 million, up 7.01%

•

Efficiency ratio of 59.73% and 91^st percentile rank relative to the Compensation Peer Group (“Peer Group”), improved by 0.8%.

•

Continued improvement in asset quality; annualized net charge-offs as a percentage of average loans and leases of 0.23%, flat compared to 2014.

•

Growth in commercial and commercial real estate loans of 13.6%, and overall loan growth of 12.7%

¹	Economic Profit is a non-GAAP measure and is calculated at the consolidated and business unit level. Economic Profit is defined as net income less the imputed cost of capital.

•

Deposit growth of 14.7%

•

Return on Average Tangible Common Shareholders’ Equity of 12.05% versus 11.90%

•

Return on Average Common Shareholders’ Equity of 8.77% versus 8.85%

•

Return on Average Assets of 0.87% versus 0.93%

Objectives of Compensation Program

Webster’s executive compensation program is designed to attract, engage and retain qualified executives and to reward actions and results that the Committee and Board of Directors believe will increase Economic Profit and maximize shareholder return. Special attention is given to ensuring that compensation plans do not encourage NEOs or other executives to take unnecessary or excessive risks.

Webster’s executive compensation program is highly performance based and closely aligns total compensation with achievement of Webster’s financial and strategic goals. A meaningful portion of total compensation is variable and tied to future shareholder return, thereby rewarding NEOs and other executives for pursuing strategies that are expected to increase Economic Profit over time.

The compensation program has four primary objectives:

•

Equity Based - A meaningful portion of the total compensation opportunity is equity-based and is highly dependent on the Company’s return on equity (“ROE”) and total shareholder return (“TSR”) over a three-year period relative to the Peer Group.

•

Performance Based - A majority of total compensation is intended to be variable based on the Company’s success in achieving predetermined financial and strategic goals and its performance relative to the Peer Group, ROE, and TSR.

•

Competitive - Total compensation opportunities should be competitive, thus enabling Webster to attract, engage and retain highly qualified NEOs and other executive officers who will be motivated to achieve Webster’s financial and strategic goals.

•

Safety and Soundness - Webster’s incentive compensation programs reward individual actions and behaviors that support Webster’s mission, business strategies and performance based culture and do not encourage unnecessary or excessive risk taking.

Compensation Best Practices

The Committee annually reviews best practices in executive compensation and governance and continues to enhance our policies and practices, which include the following:

2015 Compensation and Governance Best Practices


We Do		We Do Not
Ö A substantial portion of each NEO’s total compensation opportunity is variable, such that actual compensation is closely tied to financial performance and business results and TSR		Ø No employment agreements
Ö Stock ownership guidelines are robust to help ensure that the interests of the executives are aligned with long term shareholder value and reviewed annually by the Committee		Ø No stock option repricing
Ö The value of LTI granted in February each year is determined based in part on the NEO’s performance in the prior year		Ø No excise tax gross-up provisions in any agreements with our NEOs
Ö LTI program is 75% performance based driving a pay for performance culture		Ø No stock options may be granted below fair market value
Ö Annual risk review of the Company’s compensation plans is performed		Ø No dividends paid on unearned performance shares
Ö The incentive compensation clawback policy is robust		Ø Perquisites available to NEOs and other executive officers have been limited and are reviewed annually by the Committee
Ö CEO and senior leadership succession planning process reviewed annually by the Committee and Board of Directors		Ø No liberal share counting (see page A-2)

Setting 2015 Compensation

In February 2015, the Committee reviewed all elements of compensation for NEOs and approved the compensation structure consistent with the objectives outlined above. Total direct compensation comprises base salary, annual cash incentive and LTI. The annual cash incentive rewards current year performance, while the LTI aligns the NEOs’ interests with the long term goals and performance of the Company. LTI grants made in February 2016, based in part on NEOs’ 2015 performance, consisted of a 75/25 mix of performance based shares and time-based restricted stock. Performance shares have a three-year performance period and time-based restricted stock has a three-year vesting schedule of one-third on each anniversary date of the grant. The 2016 LTI grants are disclosed in the non-required 2016 Long Term Incentive Compensation table on page 31 and the two-year supplemental Summary Compensation Table on page 36.

For 2015, the Committee approved total compensation for NEOs which is somewhat higher than compensation for 2014, given the continuing improvement in financial and credit-related results, considerable progress toward achieving strategic goals, and financial performance that exceeded the Peer Group’s performance. The Committee intended that total direct compensation should be commensurate with that of like institutions with similar performance. Given 2015 financial performance that was slightly below plan yet well above the peer median, the Committee intended that total direct compensation (including the February 2016 LTI grants based on 2015 performance) be equal to or somewhat higher than median Peer Group compensation.

Compensation Consultant

In carrying out its responsibilities, the Committee engages McLagan, an independent compensation consultant, to offer market perspectives on annual pay, current executive compensation trends and compensation programs currently in place at Webster. The consultant also provides insight into regulatory issues affecting compensation. The Committee has the authority to hire and terminate the consultant and determine the nature and scope of the consultant’s assignments. The Committee has engaged McLagan since June 2010. The Committee reviewed the work performed by McLagan and, under SEC and NYSE regulations, determined that the work did not create a conflict of interest.

McLagan provided the Committee ongoing insights relating to trends in executive compensation in the banking sector. At the direction of the Committee, McLagan reviewed all elements of compensation for the NEOs and other executive officers and made recommendations with regard to plan design. McLagan also reviewed an analysis of Webster’s 2015 performance to date (through the first three quarters of 2015) relative to peers and opined on management’s proposals to the Committee regarding 2015 executive compensation. McLagan attended the majority of Committee meetings and in each one of those meetings had the opportunity to meet with the Committee in executive session. The Committee weighs the consultant’s perspective as part of its decision-making process. The Committee communicates compensation decisions directly to management. The Committee utilized market context and recommendations from McLagan when determining the amount and form of compensation paid to Webster’s executive officers and directors during 2015.

Compensation Peer Group

The Committee regularly uses proxy information for the Peer Group to review annually the compensation of Webster’s NEOs relative to comparable positions. This review is supplemented by available market survey data. The Committee may also use comparisons to the Peer Group to consider other market practices relevant to the scope of the NEOs’ responsibilities. This may include, for example, change in control provisions and stock ownership guidelines.

In 2015, the Committee considered actual and, where available, target compensation data from the Peer Group. This data was presented by McLagan and contributed to an assessment of the competitiveness of actual and target pay for Webster NEOs.

The Committee reviews the composition of the Peer Group annually with the assistance of McLagan with the objective of maintaining a group of peer banks that individually and collectively represent suitable comparators for compensation-related analyses. Suitability is defined using a number of factors, including size, scope, business mix and geographic focus. Scope measures include total assets, net revenue, market capitalization and number of employees. Business mix is reflected by an analysis of loan composition (consumer, real estate, commercial and construction) and revenue composition (sources and proportion of net interest income and non-interest income). Banks with a geographic focus outside the continental United States are excluded regardless of the appropriateness of their scope and business mix. In 2015, McLagan, at the request of the Committee, prepared an evaluation of our Peer Group and determined that our current Peer Group met the criteria stated above and no action was needed. While Susquehanna Bancshares had announced an acquisition by BB&T in 2015, the closing occurred after the Peer Group was affirmed. The Committee approved the recommendation and identified the 13 companies listed below as the Peer Group for 2015:


2015 Compensation Peer Group¹
Company		Total Assets (in millions)
Associated Banc-Corp	$	26,822
BancorpSouth, Inc.	$	13,326
BOK Financial Corporation	$	29,090
City National Corporation²	$	32,610
Commerce Bancshares, Inc.	$	23,994
Cullen/Frost Bankers, Inc.	$	28,278
First Niagara Financial Group, Inc.	$	38,551
Fulton Financial Corporation	$	17,125
Hancock Holding Company	$	20,747
People’s United Financial, Inc.	$	35,997
Susquehanna Bancshares, Inc. ²	$	18,661
TCF Financial Corporation	$	19,395
Valley National Bancorp	$	18,794


75th Percentile	$	29,090
Median	$	23,994
25th Percentile	$	18,794
Webster	$	22,533
Percent Rank		46%

¹	Data as of 12/31/2014 and is provided by Equilar Insight

²	SUSQ and CNY were acquired in 2015 by BB&T and Royal Bank of Canada, respectively.

Given the acquisition of Susquehanna Bancshares and City National in 2015, their financial performance data is no longer available. They are not included in the annual cash incentive peer performance calculation; however, they are counted in the lowest quartile in the TSR calculation, which is standard market practice when a peer gets acquired.

Elements of 2015 Compensation

Webster’s compensation program has three basic elements: base salary, annual cash incentive and LTI. All elements of compensation are reviewed annually by the Committee, both separately and in aggregate, to ensure that the total amount of compensation is within appropriate competitive parameters based on data from independent sources and based on the performance of the Company and NEOs. The program is intended to provide NEOs with a compensation opportunity commensurate with persons with similar duties and responsibilities at other financial institutions with comparable performance. In determining levels of NEOs’ overall compensation, the Committee also considers the qualifications and experience of the respective officer, Webster’s size and complexity of operations and, to a certain extent, the compensation paid to other persons employed by the Company. The Committee uses external data as input for the Committee’s analysis and to obtain a general understanding of current compensation practices rather than strict rules for establishing compensation. A meaningful portion of pay is tied to financial and strategic performance. Consequently, actual compensation received will vary from targeted compensation.

In early 2015, the Committee engaged McLagan to provide an analysis of Webster’s total compensation as well as the individual components compared to the Peer Group and McLagan’s 2014 Top Management Survey. This data contributed to an assessment of the competitiveness of actual and target pay for Webster’s NEOs. Based on the findings, the Committee set the components of pay and the weight of each component creating a structure that reflects Webster’s objectives for compensation outlined above while allowing individual variations based on job scope, tenure, retention risk, and other factors relevant to the Committee.

The chart below breaks down total compensation by element, target and pay mix of each component by NEO for the program approved in February 2015. For purposes of this table, “pay mix” represents the percentage of total direct compensation represented by each component.


2015 Components of Total Direct Compensation at Target

Name and Principal Position	Salary					Annual Cash Incentive					Total Cash Compensation					Long-Term Incentive					Total Direct Compensation
Name and Principal Position	Year-End 2015		Pay Mix			Target		Pay Mix			Target		Pay Mix			Target		Pay Mix			Target		Pay Mix
James C. Smith Chairman and CEO	$	925,000		26	%	$	925,000		26	%	$	1,850,000		52	%	$	1,711,250		48	%	$	3,561,250		100	%

Joseph J. Savage Executive Vice Chairman¹	$	454,704		37	%	$	341,028		28	%	$	795,732		65	%	$	431,969		35	%	$	1,227,701		100	%
John R. Ciulla President²	$	480,000		42	%	$	318,500		28	%	$	798,500		70	%	$	341,250		30	%	$	1,139,750		100	%

Glenn I. MacInnes EVP and CFO	$	454,704		38	%	$	303,151		25	%	$	757,855		64	%	$	431,969		36	%	$	1,189,824		100	%
Charles L. Wilkins EVP, HSA Bank	$	345,000		43	%	$	224,250		28	%	$	569,250		70	%	$	241,500		30	%	$	810,750		100	%

¹	Effective October 28, 2015, Mr. Savage was appointed Executive Vice Chairman of Webster and Webster Bank. There was no effect on his 2015 compensation targets.

²	Effective October 28, 2015, Mr. Ciulla was promoted from Executive Vice President, Commercial Banking to President of Webster and Webster Bank. The 2015 incentives and pay mix referenced above are based on a blended mix of his salary from both positions.

³	Mr. Wilkins received a special one-time award in January 2015 (not shown in this table).

Salary

Annual salary is the only fixed component of Webster’s executive compensation program. In setting salary, the Committee looks at current pay practices, Peer Group comparisons and general market analysis in consultation with its compensation consultant, McLagan. The Committee then establishes salaries that are competitive to the Peer Group for similar positions. The salaries are reviewed on an annual basis by the Committee.

In the case of a change in role, an officer’s new responsibilities, external pay practices, internal equity, past performance and experience are all considered in determining whether a change in salary is warranted.

As part of the Committee’s annual salary review, salaries were determined to be reasonably competitive when compared with the actual proxy data of the Peer Group and benchmark survey information. In 2015, two of the NEOs received an adjustment to base salary as a result of this review. Mr. Smith’s salary was increased from $883,544 to $925,000. Mr. Ciulla’s salary was increased from $364,944 to $450,000 and, as of October 28, from $450,000 to $480,000, which reflects his promotional increase from Executive Vice President, Commercial Banking to President of Webster and Webster Bank.

Annual Cash Incentive Compensation—Plan Overview

Annual cash incentive compensation is variable based on performance and ties a significant portion of the NEOs’ compensation to achievement of the Company’s annual financial goals and to financial performance relative to the Peer Group. Measurements for the plan are approved annually by the Committee. For 2015, target incentives were set for each of the NEOs between 25% and 28% of total compensation. The plan is designed so that the weighted average performance for the financial measures must exceed a predetermined threshold before a payout can be made.

The plan is structured to calculate incentives based on two Primary Components:

Corporate Component - This component has two elements: Financial Performance and Performance Relative to Peer Group. Financial Performance is determined by scoring performance against four pre-established financial measures. Each measure is weighted based on relative importance and then the measures are totaled to determine a weighted score. Adjustments to this score may then be made based on the Committee’s assessment of the Company’s performance against financial performance goals and their degree of difficulty and the four pre-established financial measures relative to its Peer Group (Performance Relative to Peer Group). In 2015, other than a positive adjustment for Performance Relative to the Peer Group, there were no adjustments to the score.

Line of Business Component - The Line of Business Component is determined based on the financial performance of the line of business against its goals for the year and an assessment of results against strategic objectives. Adjustments may then be made based on the CEO’s and the Committee’s assessment of the competitive environment and the degree of difficulty of the goals. The program dictates that the Line of Business Component is not scored or paid out unless the Corporate Component is scored at or above its threshold payout level. Mr. Ciulla, in his previous role of Webster’s Executive Vice President, Commercial Banking, and Mr. Wilkins, Webster’s Executive Vice President, HSA Bank, are the two lines of business heads among the NEOs.

The two Primary Components are weighted based on each NEO’s responsibilities. The weighting of the Primary Components is shown in the chart below:


2015 Weight of Primary Components

Name and Principal Position	Corporate Performance			Line of Business Performance
James C. Smith, Chairman and CEO		100	%		0	%

Joseph J. Savage, Executive Vice Chairman¹		100	%		0	%
John R. Ciulla, President²		40	%		60	%

Glenn I. MacInnes, EVP and CFO		100	%		0	%
Charles L. Wilkins, EVP, HSA Bank		40	%		60	%

¹	Effective October 28, 2015, Mr. Savage, formerly President, was appointed Executive Vice Chairman of Webster and Webster Bank. Both positions carry a 100% weighting for Corporate Performance.

²	Effective October 28, 2015, Mr. Ciulla was promoted from Executive Vice President, Commercial Banking to President of Webster and Webster Bank. The 2015 compensation weightings referenced above are in conjunction with his prior position as Executive Vice President, Commercial Banking.

CEO Discretion Adjustment for Individual Performance

Based on the CEO’s assessment of each NEO’s individual performance measured against specific performance objectives, the CEO may use discretion to determine a positive or negative adjustment to the annual cash award. Additionally, the CEO in consultation with the Chief Risk Officer considers potential adjustments based on each NEOs record of identifying, managing and mitigating risk, including an assessment of outcomes in the areas of compliance, operating risk, credit, audit findings or regulatory citing, or other contributions that should be taken into account.

Annual Cash Incentive Scoring

Corporate Component - The Corporate Component is determined by calculating a weighted performance score against four pre-established financial measures (Financial Performance). The resulting score may then be modified up or down at the Committee’s discretion by up to 20% based on performance against those four pre-established financial measures relative to Webster’s Peer Group. In 2015 the Committee made a 2.1% positive adjustment for financial performance in the 65^th percentile of the Peer Group. The Committee has discretion to make adjustments for extraordinary, unusual or non-recurring items. There were adjustments made in the pre-tax pre-provision income and ROE targets to reflect the appropriate treatment of the amortization of the intangible asset due to the acquisition of JP Morgan Chase’s HSA business. Scores below 50% on an individual measure are reduced to zero and a total weighted score below 50% on the four goals in the aggregate earns no payout.

The Corporate Component rating generates a potential funding of 0% to 150% of target. A score of 100% would pay out at target. There is an aggregate threshold score of approximately 70%, which generates a payout of 50% of target, below which no payout is earned.

Financial Performance - Webster’s 2015 results compared to plan and to 2014 are set forth in the table below.



2015 Annual Cash Incentive - Corporate Financial Performance

Financial Metric	Threshold		Target		Maximum		Actual		Score		Weight		Payout		2014 Actual²
(1) Pre-Tax Pre-Provision Income	$	299.4	$	356.5	$	413.6	$	349.6		94.0%		35%		32.9%	$	325.7
(2)Return on Average Equity		7.36%		8.90%		10.44%		8.64%		91.4%		30%		27.4%		8.66%
(3)Efficiency Ratio		62.00%		59.36%		58.35%		59.73%		92.9%		20%		18.6%		59.50%
(4)Credit
(4a) NPL’s / Average Loans¹		1.35%		1.09%		0.83%		1.03%		111.2%		7.5%		8.3%		0.95%
(4b) NCO’s / Average Loans¹		0.25%		0.20%		0.15%		0.22%		75.9%		7.5%		5.7%		N/A
TOTAL												100%		92.9%

¹	NPL is an abbreviation for non-performing loans and NCO is an abbreviation for net charge-offs.

²	Pre-Tax Pre-Provision Income, Return on Average Equity and Efficiency Ratio exclude non-recurring items for 2014.

Performance Relative to Peer Group - The Committee has discretion to adjust the weighted score within the Corporate Component by 20% plus or minus of target based on Webster’s performance relative to its Peer Group against the same four measures. Due to the acquisitions of Susquehanna Bancshares and City National, and their financial performance data no longer being available, they were not included in the Peer Group comparison for 2015. The table below shows Webster’s performance relative to the eleven remaining companies in the Peer Group:



2015 Annual Cash Incentive - Performance Relative to Peer Group

	2015²								2014³

Financial Metric¹	Results		% Rank		Weight		Weighted Score		% Rank		Weight		Weighted Score

(1) Pre-Tax Pre-Prov Income/Avg. Assets		1.48%		73%		35%		25.45%		73%		35%		25.45%

(2) Return on Average Equity		8.64%		64%		30%		19.08%		64%		30%		19.08%

(3) Efficiency Ratio		59.97%		91%		20%		18.20%		91%		20%		18.20%

(4) Credit

(4a) NPL’s / Total Loans %		1.03%		9%		7.5%		0.68%		27%		7.5%		2.05%

(4b) NCO’s / Total Loans %		0.22%		27%		7.5%		2.05%		36%		7.5%		2.73%

		Weighted Score:						65.46%		Weighted Score:				67.51%

¹	Data as reported by SNL Securities for comparability.

²	Based on 2015 Peer Group as described on page 21.

³	2014 has been adjusted to reflect the change in the Peer Group that occurred in 2015.

Final Corporate Component - The Committee recognized Webster’s continued strong performance relative to the Peer Group and determined that a positive adjustment of 2.1% relative to the Peer Group was appropriate. This compares to a 2.2% positive adjustment in 2014.

The Corporate Component is then calculated by taking the Financial Performance score of 92.9% and applying the upward adjustment of 2.1% for Performance Relative to Peer Group for a final score of 95.0% of target. There were no other adjustments made.


2015 Annual Cash Incentive - Financial Performance and Adjustments
Financial Performance	Peer Group Adjustment	Total Adjusted Payout
92.9%	2.1%	95.0%

Line of Business Component - Given Mr. Ciulla’s responsibilities as Head of the Commercial Banking business segment and Mr. Wilkins’ as Head of the HSA Bank business segment, 60% of each NEO’s target bonus is payable based on the financial results of his Line of Business and on results relative to strategic initiatives. The results of Commercial Banking and HSA Bank are noted below:

Mr. Ciulla led the Commercial Banking segment to a record year in which it achieved solid revenue growth and strong year-over-year performance in several key categories resulting in a Line of Business score of 95.6%. Strong loan volume offset continuing pressure on spreads caused by the lower than anticipated interest rate environment, while credit metrics slightly underperformed plan. Credit quality remained strong with commercial classified, non-performing loans and net charge offs within established risk tolerance levels. The Commercial Banking segment delivered $105.6 million in Net Income and a 14.9% Return on Allocated Capital. All five Commercial business units once again delivered positive net income. Commercial Banking continued to generate earnings in excess of the cost of capital and reported solid Economic Profit. Fueled by record loan originations of $3.0 billion, the commercial loan portfolio grew $950 million (+14.5%) to $7.5 billion. Loan growth was evident across all business units and across all geographies, with particular strength in Middle Market banking ($556 million (+18%)) and Commercial Real Estate ($204 million (+9%)), two areas that remain a strategic focus. In addition to core operating relationships, transaction account balances of $2.0 billion represent 64.1% of total commercial deposits, up from 63.7% a year ago. The disciplined deposit pricing strategy with respect to non-transactional accounts continues to yield positive results. Commercial Banking’s Treasury and Payment Solutions Group continued to invest and enhance its capabilities to help clients manage cash flow, while driving higher Non-Interest Income. In February, 2016, Webster was awarded two additional Greenwich Excellence awards for client satisfaction for 2015, evidencing its continuing successful focus on high service quality and relationship banking.

Mr. Wilkins led the HSA Bank segment through a year of dramatic growth and change in which it more than doubled accounts, deposits and revenue resulting in a Line of Business score of 124.2%. The growth is a reflection of the successful execution of the business segment’s strategy to upgrade its technology and data processing platform, add notional products, enhance capabilities, and expand distribution through carriers and large employers. During the year, HSA Bank completed the implementation and integration of a new processing platform and converted over 1,500,000 accounts to the new experience. In addition, HSA Bank closed on a transaction in January to purchase the JP Morgan Chase HSA portfolio adding approximately 829,000 accounts and over $1.4 billion in deposits including relationships with two national health plan partners. The acquisition and strong organic growth drove a 154% increase in accounts (to 1.75 million), and a 108% increase in deposit balances (to $3.8 billion) year-over-year. As a result, interest income grew 89% to $73 million and fee income increased 125% to $64 million leading to an increase in net revenue of 104% to $138 million and an increase in pre-provision net revenue of 115% to $57 million. HSA Bank has executed the system and portfolio conversions to date with quality and efficiency causing minimal disruption to customers and partners. HSA Bank is well positioned to capitalize on this success in 2016.

The chart below summarizes each NEO’s performance for 2015:


Name and Principal Position		Performance Summary
James C. Smith Chairman and CEO		Mr. Smith led Webster’s strong financial performance year-over-year and as compared to Webster’s Peer Group. He effectively guided Webster’s strategic choices including the allocation of capital and other resources to strategies that create value for customers and maximize Economic Profit over time. Notable achievements were record core revenue for the sixth straight year, record net income, another full year with efficiency ratio less than 60% and 92% percentile rank against its Peer Group, improved credit quality, and strong risk management. Webster missed plan for pre-provision net revenue as strong loan growth and disciplined expense control were offset by spread pressure from lower than anticipated interest rates. Webster’s value-based culture is strong as measured by continuing strong banker engagement survey results.
Joseph J. Savage Executive Vice Chairman		Mr. Savage served as President of Webster and Webster Bank until the end of October. In this capacity, he provided oversight and guidance to Commercial Banking which achieved superior performance in several key categories, and to Webster Private Bank which completed its shift to a new business model and expanded into Boston. He also provided oversight for Human Resources, introducing new programs that further inculcate Webster’s values-guided culture, and upgrading leadership development curriculums that help further build a leadership pipeline. Effective October 28, 2015, Mr. Savage was appointed Executive Vice Chairman in recognition of his continuous contributions and leadership. He retains oversight of Human Resources, chairs the Incentive Compensation Oversight Team and continues to lead key internal leadership development activities and external client development initiatives.
John R. Ciulla President		Effective October 28, 2015, in recognition of his contributions and leadership, Mr. Ciulla was promoted to President of Webster and Webster Bank, and appointed to the Board of Directors of Webster Bank. Mr. Ciulla led the Commercial Bank segment to a record year in which it achieved strong revenue growth and high performance in several key categories, including record loan originations, and increased Economic Profit. Four of the five Commercial Banking business units generated Economic Profit in 2015. Webster was again recognized by Greenwich Associates for excellence in client satisfaction.
Glenn I. MacInnes EVP and CFO		Mr. MacInnes developed initiatives and provided guidance enabling Webster to improve year-over-year financial performance and achieve the Company’s financial goals. He further optimized the balance sheet in anticipation of the changing interest rate environment. He led Webster’s successful regulatory stress test submission and played an important role in corporate development initiatives, including the acquisition of the JP Morgan Chase HSA portfolio as well as 17 prominently located banking centers in a turn-key de novo transaction in Greater Boston. He further enhanced the financial planning process and internal and external financial reporting.
Charles L. Wilkins EVP, HSA Bank		Mr. Wilkins led the HSA Bank segment through a year of dramatic growth and change in which it more than doubled accounts, deposits and revenue resulting in a Line of Business score of 124.2%. The acquisition of JP Morgan Chase’s HSA portfolio accelerated HSA Bank’s growth strategy and vaulted HSA Bank to the leading market share in its fast-growing field with more than $4 billion in assets under administration and 1.7 million accounts in all 50 states. The growth is a reflection of the successful execution of the business segment’s strategy to upgrade its technology platform in order to add new products and expand distribution through carriers and large employers. During the year, HSA Bank completed the implementation and integration of a new processing platform and converted over 1,500,000 accounts to the new experience.

CEO Discretion Based on Individual Performance

The individual performance is determined through the annual review process as part of the Company-wide performance management process. Each NEO is evaluated based on achievement of individual performance objectives which include strategic goals, personal behavior, risk management, regulatory compliance, and people leadership. The Committee evaluates the CEO, and the CEO evaluates the other NEOs in consultation with the Committee.

Total 2015 Annual Cash Incentive Compensation - Upon completing scoring of the two Primary Components (Corporate, and Line of Business), the scores are applied to the CEO’s and each NEO’s annual cash incentive target based on the weightings in the Weight of Primary Component Table on page 24 to calculate the award. The Committee retains discretion to adjust the CEO’s calculated annual cash incentive award. The CEO retains discretion, in consultation with the Committee, to adjust the NEOs’ calculated annual cash incentive awards. A thorough review of risk management across the company, including the areas of regulatory, internal audit, credit and operating risk, compliance and Sarbanes-Oxley (SOX) controls resulted in adjustments to Messrs. MacInnes’ and Wilkins’ incentives at the discretion of the CEO. No other adjustments were made. The final tabulations for annual cash incentive compensation are set forth below.


2015 Annual Cash Incentive Compensation
Name and Principal Position	Annual Cash Incentive Target	Corporate Score¹	Line of Business Score (if applicable)¹	Calculated Award	CEO Discretionary Adjustment	Total Annual Cash Incentive Award	Award as a Percent of Target
James C. Smith Chairman and CEO	$925,000	95.0%		$878,750		$878,750	95%
Joseph J. Savage Executive Vice Chairman	$341,028	95.0%		$323,977		$323,977	95%
John R. Ciulla President	$318,500	95.0%	95.6%	$303,849		$303,849	95.4%
Glenn I. MacInnes EVP and CFO	$303,151	95.0%		$287,994	($10,000)	$277,994	91.7%
Charles L. Wilkins EVP, HSA Bank	$224,250	95.0%	124.2%	$252,281	($5,000)	$247,281	110.3%

¹	Corporate Officers are weighted 100% on the Corporate Component; Line of Business Officers are weighted 40% on the Corporate Component, 60% on the Line of Business Component.

2013 Performance Shares Paid in 2016

In 2013, Performance Shares were granted to executives, including the NEOs except for Mr. Wilkins who was not an employee at that time. These had a three-year performance period ending December 31, 2015. 50% of the payout was based on the average of Webster’s ROE calculated annually each year during the three-year period and the other 50% was based on relative TSR against peers at the end of three-years. Payout ranges were set for both metrics with a threshold level set at 50% payout and maximum performance at 200% payout. The actual results for the 2013 Performance Shares was a payout of 145.7%.

2015 Long-Term Incentive Compensation Granted in February 2016 – Plan Overview

Following a market review in late 2013 against the Peer Group and in consideration of certain emerging trends in LTI practices, including the declining usage of stock options in the market, it was decided to cease the practice of granting stock options and to replace a portion of that grant with time-vested restricted shares, while increasing the portion of performance based restricted stock (“Performance Shares”) as a portion of LTI awards. Accordingly, the Board approved the Committee’s recommendation to increase the weighting of Performance Shares as a portion of LTI from 60% to 75%, consistent with Webster’s pay-for-performance compensation philosophy, and to grant 25% of LTI in the form of time-vested restricted shares. The Committee believes that increasing the portion of Performance Shares and replacing the balance of stock options with restricted shares, coupled with its decision to reduce the maximum Performance Share payout to 150% from 200%, ensures that our compensation programs are closely aligned with shareholders’ interests and do not encourage excessive risk taking.

The Committee may increase or decrease the CEO’s LTI or the other NEOs’ LTI based on a variety of factors including the Company’s prior year performance against financial and strategic goals. The Committee determines the recommended grant for the CEO and considers the CEO’s recommendation for the other NEOs.

Long Term Incentive Vehicles: Webster awarded two forms of LTI grants, performance shares and restricted stock as displayed in the table below:


Long Term Incentive Vehicles
Vehicle	Vesting	Rationale	Vehicle Mix
Performance Shares	Vests at the conclusion of three-year performance period	To align LTI to the achievement of Company total shareholder return and return on equity	75%
Time-Vested Restricted Stock	One third vests per year	To provide LTI and retention value to the NEOs and other executives	25%

Performance Shares: Performance Shares vest at the conclusion of the three-year performance period and the Committee certifies the results based 50% on Company three-year total shareholder return relative to Webster’s Peer Group and 50% on the three-year average return on equity compared to plan. Performance must meet threshold levels or the shares are forfeited.

•

Three-year Total Shareholder Return reflects the rate of return reflecting price appreciation plus reinvestment of dividends calculated as follows: (ending stock price – beginning price + dividends paid per share) / beginning stock price.

•

Peer Group reflects Webster’s Compensation Peer Group listed in the Compensation Peer Group section.

•

Average Return on Equity is calculated as the ratio of adjusted net income to adjusted average equity. The average return on equity targets are set annually during the performance period by the Committee giving consideration to the Board approved strategic plan set at the end of the prior year. The score is calculated each year and then averaged over three years.


Payout Determination for Performance Shares Granted in February 2016 Based on 2016-2018 Performance
Payout Metric	Below Threshold Payout			Threshold Payout			Target Payout			Maximum Payout
Peer-relative three-year Total Shareholder Return		0	%		62	%		100	%		150	%
Average Return on Equity over three-year period		0	%		10	%		100	%		150	%

The Company does not vest performance based restricted stock for performance below threshold. A threshold level of performance must be met for each metric in order for payment to be earned. For Total Shareholder Return, threshold performance is the 31^st percentile of our Peer Group and for ROE, threshold performance is 83% of target. Once threshold performance is achieved, actual awards will be interpolated between threshold and 150% of target based on performance relative to market, below which there is no payout. As noted above, beginning with 2014 awards, the maximum funding payout was reduced to 150% of target, from 200%, consistent with the Committee’s goal to ensure our compensation programs do not encourage excessive risk taking.

2016 Long Term Incentive Grant - The February 2016 LTI grants were made in the form of 75% Performance Shares and 25% time-vested restricted stock, as described above, based in part on each NEO’s 2015 performance and granted based on the NEOs’ 2015 base pay and LTI target percent. The Committee approved grants at 100% of that target for Mr. Smith and, based on Mr. Smith’s recommendation at 100% of target for Messrs. Savage, Ciulla, MacInnes and Wilkins. The individual performance of each NEO on which the February 2016 grants were based is described in detail beginning on page 28.

The 2016 grants are shown in two non-required tables below for the purpose of setting forth clearly the compensation earned for 2015 performance. The first table is 2016 Long Term Annual Incentive Compensation based on 2015 performance and the second is the two-year supplemental Summary Compensation Table. Note that grants made in 2016, even though made in part based on 2015 performance, are not reflected in the required Summary Compensation Table on page 36 and will be reflected in next year’s Summary Compensation Table.



2016 Long-Term Incentive Compensation (for 2015 Performance)
Name and Principal Position	Long-Term Incentive Target		Grant as a Percent of 2015 Target	Long-Term Incentive Grant
James C. Smith, Chairman and CEO	$	1,711,250	100%	$	1,711,250
Joseph J. Savage, Executive Vice Chairman	$	431,969	100%	$	432,000
John R. Ciulla, President	$	341,250	100%	$	341,300
Glenn I. MacInnes, EVP and CFO	$	431,969	100%	$	432,000
Charles L. Wilkins, EVP, HSA Bank	$	241,500	100%	$	241,500

The chart below shows total direct compensation approved by the Committee for 2015 and 2014 performance. LTI grants made in February 2016 are based in part on 2015 performance and are reflected in 2015 Total Direct Compensation. LTI grants made in February 2015 are based in part on 2014 performance and are reflected in 2014 Total Direct Compensation. Although the 2016 grants will be discussed in next year’s CD&A, we have determined to voluntarily disclose the grants in the table set forth below under year 2015 Total Direct Compensation. The 2016 and 2015 grants were in Performance Shares and time-vested restricted stock as described above.

Two-year Supplemental Summary Compensation Table (reflects 2016 Long-Term Incentive Grants for 2015 Performance and 2015 Long-Term Incentive Grants for 2014 Performance)


Name and Principal Position	Performance Year	Year-End Salary		Annual Cash Incentive		2016 Long-Term Incentive Grants for 2015 Performance¹ 2015 Long-Term Incentive Grants for 2014 Performance²		Total Direct Compensation Received for Performance $

James C. Smith Chairman and CEO	2015	$	925,000	$	878,750	$	1,697,706	$	3,515,000
James C. Smith Chairman and CEO	2014	$	883,544	$	861,455	$	1,790,492	$	3,535,491

Joseph J. Savage Executive Vice Chairman	2015	$	454,704	$	323,977	$	428,566	$	1,210,681
Joseph J. Savage Executive Vice Chairman	2014	$	454,704	$	295,600	$	451,981	$	1,202,285

John R. Ciulla President	2015	$	480,000	$	303,849	$	338,603	$	1,125,149
John R. Ciulla President	2014	$	364,944	$	290,000	$	353,105	$	1,008,049

Glenn I. MacInnes EVP and CFO	2015	$	454,704	$	277,994	$	428,566	$	1,164,698
Glenn I. MacInnes EVP and CFO	2014	$	454,704	$	295,600	$	451,981	$	1,202,285

Charles L. Wilkins EVP, HSA Bank	2015	$	345,000	$	247,281	$	239,593	$	833,781
Charles L. Wilkins EVP, HSA Bank	2014	$	295,000	$	220,000	$	252,657	$	767,657

¹	2016 LTI Performance Share grants for 2015 performance are based on the following valuation: for the portion based on ROE, Webster used the closing price of February 24, 2016; for the portion based on TSR, Webster used the Monte Carlo valuation.

²	2015 LTI Performance Share grants for 2014 performance are based on the following valuation: for the portion based on ROE, Webster used the closing price of February 25, 2015; for the portion based on TSR, Webster used the Monte Carlo valuation.

2015 Long Term Incentive Grant - Similarly, LTI grants made in February 2015 were based in part on each NEO’s 2014 performance and granted based on the NEOs’ 2015 compensation components. The Committee approved grants as shown in the chart below. The individual performance of each NEO on which the February 2015 grants were based is described in detail beginning on page 33 and is included as 2015 compensation in the required 2015 Summary Compensation Table on page 36.



2015 Long-Term Annual Incentive Compensation (for 2014 Performance)
Name and Principal Position	Long-Term Incentive Target		Grant as a Percent of 2014 Target	Long-Term Incentive Grant
James C. Smith, Chairman and CEO	$	1,634,556	105%	$	1,711,250
Joseph J. Savage, Executive Vice Chairman	$	404,232	107%	$	431,970
John R. Ciulla, President	$	284,656	119%	$	337,500
Glenn I. MacInnes, EVP and CFO	$	404,232	107%	$	431,970
Charles L. Wilkins, EVP, HSA Bank	$	241,500	100%	$	241,500

NEO 2014 Performance as previously reported:


Name and Principal Position	LTI 2015 Grants Awarded as a % of target (Based on 2014 Performance)	2014 Performance Summary
James C. Smith Chairman and CEO	100%	Mr. Smith led Webster’s strong financial performance year-over-year and as compared to Webster’s Peer Group. He effectively guided Webster’s strategic choices including the allocation of capital and other resources. Notable achievements were record core revenue for the fifth straight year, a much improved efficiency ratio to less than 60%, improved credit quality, and strong risk management. Net income and EPS increased year-over-year. Webster’s value-based culture is strong as measured by continuing strong banker engagement scores. Mr. Smith provided strategic guidance and oversight with regard to the acquisition of JP Morgan Chase’s HSA platform.
Joseph J. Savage Executive Vice Chairman	100%	Effective January 1, 2014, in recognition of his contributions and leadership, Mr. Savage was promoted to President of Webster and Webster Bank, and appointed to the Board of Directors of Webster Bank. Mr. Savage provided oversight and guidance to Commercial Banking which achieved high performance in several key categories, and to Webster Private Bank, which completed a strategic model shift and significant reorganization in 2014. He led recruitment of new leadership for Human Resources, introduced programs that further inculcate Webster’s value-guided culture, and upgraded Webster’s Talent Management and Leadership Development programs.
John R. Ciulla President	100%	Promoted to Head of Commercial Banking effective January 1, 2014, Mr. Ciulla led the segment to a record year in which it achieved double digit revenue growth, and high performance in several key categories, including growth in Economic Profit, loan originations and operating balances. All five Commercial Banking business units generated Economic Profit in 2014. Commercial Banking exceeded Plan on all critical asset quality metrics. Webster was again recognized by Greenwich Associates for excellence in middle market customer satisfaction in the northeast and nationally.
Glenn I. MacInnes EVP and CFO	100%	Mr. MacInnes developed initiatives and provided guidance enabling Webster to improve year-over-year financial performance and achieve the company’s financial goals, including efficiency ratio and operating leverage targets. He further optimized the balance sheet in anticipation of the changing interest rate environment. He led corporate development initiatives, including the acquisition of JP Morgan Chase’s HSA platform, and other successful capital actions during the year. He further improved Webster’s internal controls and enhanced the financial planning process and internal and external financial reporting.
Charles L. Wilkins¹ EVP, HSA Bank	100%	Mr. Wilkins led the HSA Bank segment through a year of strategic change and record growth as multiple investments were made to position HSA Bank to better serve our account holders and enhance our long-term competitiveness. HSA Bank broadened its product set and deployed an industry leading technology platform for healthcare accounts in order to deliver a best-in-class experience to partners, employers and consumers. In September 2014, HSA Bank reached agreement to acquire the health savings account business of JP Morgan Chase which resulted in HSA Bank becoming the industry leader with more than 1.6 million accounts and over $4.5 billion in assets under administration.

¹	Mr. Wilkins’ performance was not previously disclosed

Retirement Plans

Pension Plan - Webster Bank maintains a frozen defined benefit pension plan. Webster stopped benefit accruals under the plan for all employees, including the NEOs, after December 31, 2007. The Pension Benefits section of this Proxy Statement details pension benefits for the NEOs.

401(k) Plan - Webster Bank maintains a defined contribution 401(k) plan for eligible employees, including the NEOs. All participants in the plan, including each of the NEOs, are eligible to make pre-tax contributions from 1% to 25% of their pay, up to Internal Revenue Code (“IRC”) limits ($18,000 in 2015). Webster Bank matches the employee’s contributions on a dollar for dollar basis for the first 2% of pay the employee contributes and then 50 cents on the dollar for up to the next 6% of pay the employee contributes. In addition, Webster provides transition credits ranging from 1% to 6% of pay for those employees, including NEOs, who were hired before January 1, 2007 and had reached age 35 or older on January 1, 2008. The purpose of transition credits is to help offset the impact of freezing the pension plan. A two-year vesting schedule applies to all Webster contributions. Under IRC limits, annual compensation in excess of $265,000 in 2015 may not be taken into account for determining benefits or contributions under the qualified plan. Employees who are age 50 or older by the last day of the year may contribute an additional $6,000 to the plan.

Supplemental Defined Benefit Plan - Webster Bank maintains a frozen non-qualified supplemental defined benefit plan for certain executives, including NEOs, who were participants in the pension plan. The purpose of the plan was to provide these individuals with supplemental pension benefits in excess of IRC limits for tax qualified pension plans. The plan was frozen as of December 31, 2007. Thus, service and compensation after this date are not used in calculating an NEO’s benefit from the plan.

Supplemental Defined Contribution Plan - Webster Bank maintains a non-qualified supplemental defined contribution plan for certain executives, including the NEOs. This plan provides each NEO with an allocation to their supplemental 401(k) account equal to the additional match and transition credit contributions that the NEO would have received in the qualified 401(k) plan if there were no IRC compensation or deferral limits.

Non-Qualified Deferred Compensation Plan - The executive officers, including each of the NEOs, were eligible to participate in a voluntary non-qualified deferred compensation plan. The plan allowed employees at the senior vice president level and above to defer a portion of their compensation because of the statutory limits under the qualified plan. All deferrals under this plan ceased as of January 1, 2012.

Employment Agreements

The NEOs do not have employment agreements; however, Messrs. Smith, Savage, Ciulla, MacInnes and Wilkins are subject to change in control and non-competition agreements.

Other Executive Benefits

Webster offers a limited number of benefits to the NEOs and other executives in addition to the broad-based employee benefits program. Each benefit supports a specific objective, but falls within the overall purpose of recognizing leadership responsibility and contributions to the Company’s goals. Management reviews the benefits with the Committee for consistency with Webster’s organizational culture and market practices. These benefits are described in footnote 5 to the Summary Compensation Table.

Post-Termination Arrangements

Webster’s change in control practices are designed to retain the NEOs during rumored and actual change in control activity. During these times, continuity is a key factor in preserving the value of the business. Webster also provided other termination benefits designed to facilitate changes in key executives as needed.

The amounts payable, triggering events and other terms of Webster’s change in control and other termination arrangements are set at the time of hire by the Committee based on Company policy and competitive market information. Webster reviews the provisions of the change in control agreements annually. In 2012 and 2013, Webster amended all of the change in control agreements for the NEOs, removing the gross-up provisions and modifying the severance formula so that the bonus component is based on target bonus rather than the highest bonus in the prior three years. In 2012, Webster also amended the Stock Option Plan to provide for accelerated vesting of equity awards if a change in control occurs and the eligible individual is terminated without cause or resigns for good reason within two years following the change in control.

Executive Stock Ownership

Webster believes stock ownership by management is beneficial in aligning the interests of management and shareholders. Executive Stock Ownership Guidelines are established to enhance shareholder value and focus each executive’s attention on the long term success of the Company. Webster has adopted formal stock ownership guidelines for all of the executive officers, including the NEOs.

2015 Stock Ownership Guidelines

Name and Principal Position

Multiple of Base
Salary

Value of
Multiple

Target Ownership
Status

James C. Smith, Chairman and CEO

5,550,000

Met

Joseph J. Savage, Executive Vice Chairman

1,818,816

Met

John R. Ciulla, President

1,920,000

Has Not Met

Glenn I. MacInnes, EVP and CFO

1,364,112

Met

Charles L Wilkins, EVP, HSA Bank

1,035,000

Has Not Met

Once achieved, ownership of the guideline amount must be maintained for as long as the executive is subject to the stock ownership guidelines. Even if stock ownership guidelines have been achieved, NEOs are required to continue to hold all net vested restricted stock and Performance Shares and net shares of Common Stock delivered after exercising stock options for a minimum of one year. NEOs who do not meet the guidelines further agree to hold all net Common Stock received through LTI awards until they achieve their respective ownership thresholds. As of December 31, 2015, Messrs. Smith, Savage, and MacInnes met the stock ownership guidelines. As of December 31, 2015, Messrs. Ciulla and Wilkins are making satisfactory progress toward the ownership goal.

Directors, officers and employees of Webster are prohibited from hedging their ownership of Webster securities, including through the use of options, puts, calls, short sales, futures contracts, equity swaps, collars or other derivative instruments relating to Webster securities, regardless of whether such directors, officers and employees have material non-public information about Webster. Directors and Executive Officers are prohibited from pledging their Webster securities as collateral for a loan.

Policy on Internal Revenue Code Section 162(m)

The Internal Revenue Code Section 162(m) limits the deduction available for compensation paid to the CEO and the three most highly compensated executive officers other than the chief financial officer to the extent the compensation paid to any such person exceeds $1,000,000, unless such compensation was based on performance goals determined by a Committee consisting solely of two or more non-employee directors and the performance goals are approved by the shareholders prior to payment.

Webster’s compensation programs are generally structured to comply with IRC Section 162(m). Where applicable, Webster will endeavor to structure compensation as exempt performance based compensation. Webster does, however, reserve the right to determine to pay compensation to the executive officers, including the CEO, which may not be deductible under Section 162(m) of the IRC.

COMPENSATION OF EXECUTIVE OFFICERS

The following tables contain certain compensation information for the CEO, the Executive Vice Chairman, the President, the Chief Financial Officer and the Executive Vice President, HSA Bank.

Summary Compensation Table

Salary, bonus, incentive payments and other compensation amounts to Webster’s NEOs are summarized in the following table. Some of the amounts below represent the opportunity to earn future compensation under performance based compensation incentives that may be forfeited based on future performance vesting. As a result of mixing compensation paid and contingent compensation, the totals shown in the Summary Compensation Table includes amounts that the named executives may never receive.


Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)¹		Option Awards ($)²		Non-Equity Incentive Plan Compensation ($)³		Change in Pension Value and Non- qualified Deferred Compensation Earnings ($)⁴		All Other Compensation ($)⁵		Total ($)
James C. Smith		2015		925,000		—		1,790,492		—		878,750		442,200		354,998		4,391,440
Chairman & Chief		2014		882,435		—		1,626,823		—		861,455		1,543,500		245,273		5,159,486
Executive Officer		2013		879,800		—		1,139,256		1,385,048		792,000		0		709,416		4,905,520

Joseph J. Savage⁶		2015		454,704		—		451,981		—		323,977		1,700		108,164		1,340,526
Executive Vice		2014		453,310		—		399,830		—		295,600		78,900		91,075		1,318,715
Chairman		2013		380,000		—		214,509		260,793		271,000		0		96,143		1,222,445

John R. Ciulla⁷		2015		455,768		—		797,345		—		303,849		0		78,298		1,635,260
President		2014		363,479		—		280,895		—		290,000		3,200		52,111		1,009,685
		2013		310,708		—		139,985		170,187		241,136		0		58,542		920,558

Glenn I. MacInnes		2015		454,704		—		451,981		—		277,994		—		63,639		1,248,318
Executive Vice		2014		453,310		—		399,830		—		295,600		—		43,298		1,192,037
President, Chief Financial Officer		2013		400,000		—		244,992		297,838		225,000		—		54,325		1,222,155

Charles L. Wilkins⁸		2015		345,000		—		575,657		—		247,281		—		97,716		1,265,654
Executive Vice		2014		294,059		220,000		233,793		—		20,300		—		98,583		866,735
President, HSA Bank		2013		—		—		—		—		—		—		—		—

Amounts shown in this column are based on the grant date fair value related to restricted stock awards at target made in 2013, 2014 and 2015, in accordance with FASB ASC Topic 718. In 2014 and 2015, Webster granted 25% time-vested restricted stock with a vesting schedule where one-third of the award will vest each year and 75% as performance vested stock with a three-year performance period. In 2013, Webster granted 60% of the equity award in performance vested stock with a three-year performance period and 40% in stock options. For more information, see “Compensation Discussion and Analysis” herein.

²	Amounts shown in this column are based on the grant date fair value related to stock option awards made in 2013, in accordance with FASB ASC Topic 718. No stock options were granted in 2014 and 2015.

³	Amounts shown in this column represent cash awards paid under the performance based annual incentive plan.

⁴

Webster Bank maintains both a frozen tax-qualified pension plan and a frozen non-qualified supplemental defined benefit plan. These are described more fully in the Pension Benefits section of this Proxy Statement. Benefit accruals for service and compensation were frozen after December 31, 2007. The change in pension value in 2015 is primarily due to the increase in interest rates used to calculate the present value of the benefits and actuarial increases for executives over age 65. The amounts in this column reflect the change in the actuarial present value of the NEOs’ benefits under both plans determined using interest rate and mortality assumptions consistent with those used in the Company’s financial statements. Specifically, the assumptions used to value the accumulated benefits at December 31, 2015 consisted of a 4.20% interest rate for the qualified plan versus 3.85% in 2014, a 3.75% interest rate for the non-qualified supplemental plan (4.20% for benefits payable as a lump sum) versus 3.50% in 2014, and the RP-2014 with MMP-2007 Mortality Table. The changes in pension value in 2015 under the tax-qualified pension plan and non-qualified pension plan for each NEO were as follows:


Name	Change in Qualified Pension Value ($)			Change in Non-Qualified Pension Value ($)		Total ($)
James C. Smith		(17,600	)		459,800		442,200
Joseph J. Savage		900			800		1,700
John R. Ciulla		0			—		0
Glenn I. MacInnes		—			—		—
Charles L. Wilkins		—			—		—

⁵

All Other Compensation includes amounts contributed or allocated, as the case may be, to the 401(k) plan (excluding the NEOs’ contributions to the qualified 401(k) plan), the non-qualified supplemental defined contribution plan, dividends paid on unvested restricted stock and on earned performance-based stock awards, a car allowance, which was discontinued in 2014, a premium on a term life insurance policy and costs for a home security system for 2013, which was discontinued in 2014. Mr. Smith also received a premium on a supplemental Long Term Disability policy in 2013, which was discontinued in 2014. Mr. Smith received a one-time premium of $55,280 on a term life insurance policy in 2015. Mr. Wilkins received relocation benefits of $48,183 in 2015 and $84,737 in 2014. All Other Compensation items in the Summary Compensation Table include the following amounts:


Name	Company Contributions to 401(k) Plan ($)		Supplemental Defined Contribution Plan ($)		Dividends ($)
James C. Smith		27,547		168,963		89,883
Joseph J. Savage		27.547		54,987		21,466
John R. Ciulla		16,947		35,257		22,589
Glenn I. MacInnes		11,647		25,868		23,728
Charles L. Wilkins		11,647		16,368		12,573

⁶	Mr. Savage was appointed to Executive Vice Chairman effective October 28, 2015.

⁷

Mr. Ciulla was promoted to President effective October 28, 2015. The salary for Mr. Ciulla was $450,000 until October 28, 2015; effective October 28, 2015, the salary for Mr. Ciulla was $480,000. The amount in the Stock Awards column for Mr. Ciulla includes a special award of restricted stock, granted March 20, 2015, of $444,240.

⁸

Mr. Wilkins was hired on January 3, 2014 as Executive Vice President, HSA Bank. The amount in the Stock Awards column for Mr. Wilkins includes a special award of restricted stock, granted January 2, 2015 of $323,000. For 2014, Mr. Wilkins was given a sign-on bonus of $25,000 and a guaranteed bonus of $195,000. Mr. Wilkins was also given an equity award of restricted stock valued at $49,893 at hire.

Grants of Plan-Based Awards

During the fiscal year ended December 31, 2015, the following table sets out all non-equity incentive plan and equity incentive plan awards that were made to the NEOs.


			Estimated Possible Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards						All Other Stock Awards: Number of Shares of stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/Sh)		Closing Price on Grant Date ($)		Grant Date Fair Value of Stock and Option Awards ($)³
Name	Grant Date		Threshold ($)¹		Target ($)¹		Maximum ($)¹		Threshold (#)²		Target (#)²		Maximum (#)²								Closing Price on Grant Date ($)
James C. Smith		02/25/2015		462,500		925,000		1,850,000		14,096		37,593		56,390		12,531		—		—		34.45		1,790,491
Joseph J. Savage		02/25/2015		170,514		341,028		682,056		3,559		9,490		14,235		3,163		—		—		34.45		451,981
John R. Ciulla		02/25/2015		159,250		318,500		637,000		2,780		7,414		11,121		2,471		—		—		34.45		353,105
		03/20/2015														12,000		—		—		37.02		444,240
Glenn I. MacInnes		02/25/2015		151,576		303,151		606,302		3,559		9,490		14,235		3,163		—		—		34.45		451,981
Charles L. Wilkins		01/02/2015														10,000		—		—		32.30		323,000
Charles L. Wilkins		02/25/2015		112,125		224,250		448,500		1,989		5,305		7,958		1,768		—		—		34.45		252,657

Columns represent the potential payouts to each of the NEOs resulting from an award pursuant to the annual incentive compensation plan, subject to achievement of pre-established performance goals discussed on page 25 of this Proxy Statement. Actual amounts earned by Messrs. Smith, Savage, Ciulla, MacInnes and Wilkins are set forth under the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 36 of this Proxy Statement.

Represents the threshold, target and maximum number of Performance Shares that may vest if performance targets with regard to the 2015 through 2017 performance period are satisfied. Dividends will be deferred on the unearned Performance Shares and will be paid out upon conclusion of the performance period to the extent earned.

³	Represents the grant date fair value, computed in accordance with FASB ASC Topic 718 of all equity awards granted in 2015.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth outstanding option awards and unvested stock awards held by Webster’s NEOs as of December 31, 2015.


	Option Awards									Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options¹ (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Price ($)		Option Expiration Date		Number of Shares or Units That Have Not Vested (#)			Market Value of Shares or Units That Have Not Vested² ($)		Equity Incentive Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)			Equity Incentive Awards: Market of Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested² ($)
James C. Smith		64,483					48.88		12/19/2016
		106,199					32.03		12/18/2017
		163,674					12.85		12/16/2018
		112,371					23.81		2/22/2022
		84,248		42,125			23.00		2/20/2023							47,390	³		1,762,434
																41,035	⁵		1,526,092
											12,531	⁶		466,028		37,593	⁷		1,398,084
Joseph J. Savage		10,079					48.88		12/19/2016
		16,601					32.03		12/18/2017
		21,335					23.81		2/22/2022
		15,863		7,932			23.00		2/20/2023							8,923	³		331,846
											2,242	⁴		83,380		10,085	⁵		375,061
											3,163	⁶		117,632		9,490	⁷		352,933
John R. Ciulla		11,579					43.26		9/18/2017
		8,622					32.03		12/18/2017
		22,899					12.85		12/16/2018
		13,808					23.81		2/22/2022
		10,352		5,176			23.00		2/20/2023							5,823	³		216,557
											1,575	⁴		58,574		7,085	⁵		263,491
											2,471	⁶		91,896		7,414	⁷		275,727
											12,000	⁹		446,280
Glenn I. MacInnes		24,164					23.81		2/22/2022
		18,116		9,059			23.00		2/20/2023							10,191	³		379,003
											2,242	⁴		83,380		10,085	⁵		375,061
											3,163	⁶		117,632		9,490	⁷		352,933
Charles L. Wilkins											1,638	⁸		60,917
											1,005	⁴		37,376		4,522	⁵		168,173
											10,000	¹⁰		371,900
											1,768	⁶		65,752		5,305	⁷		197,293

¹	The remaining unexercisable stock options were fully vested on February 20, 2016.

²	Market value calculated by multiplying the closing market price of Webster’s Common Stock on December 31, 2015, or $37.19, by the number of shares of stock.

³	The performance criteria will be evaluated after the close of the performance period on December 31, 2015.

⁴	One third of the restricted stock award has vested and was transferred on February 19, 2015, the first anniversary of the grant; one-third of the restricted stock award will vest and be transferable on

February 19, 2016, the second anniversary of the grant; the final third of the restricted stock award will vest and be transferable on February 19, 2017, the third anniversary of the grant.

⁵	The performance criteria will be evaluated after the close of the performance period on December 31, 2016.

⁶

One third of the restricted stock award will vest and be transferable on February 25, 2016, the first anniversary of the grant; one-third of the restricted stock award will vest and be transferable on February 25, 2017, the second anniversary of the grant; the final third of the restricted stock award will vest and be transferable on February 25, 2018, the third anniversary of the grant.

⁷	The performance criteria will be evaluated after the close of the performance period on December 31, 2017.

⁸	The restricted stock award will vest entirely and be transferable on January 3, 2017, the third anniversary of the grant.

⁹

One fourth of the restricted stock award will vest and be transferable on March 20, 2018, the third anniversary of the grant; one fourth of the restricted stock award will vest and be transferable on March 20, 2019, the fourth anniversary of the grant; the final half of the restricted stock award will vest and be transferable on March 20, 2020, the fifth anniversary of the grant.

¹⁰	One half of the restricted stock award will vest and be transferable on January 2, 2018, the third anniversary of the grant; the final half of the restricted stock award will vest and be transferable on January 2, 2020, the fifth anniversary of the grant.

Option Exercises and Stock Vested in 2015

The table below sets forth the number of shares of stock acquired in fiscal 2015 upon the exercise of stock options awarded to the NEOs and as a result of the vesting of shares of restricted stock awarded to the NEOs under Webster’s compensatory equity programs.


	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise¹ ($)		Number of Shares Acquired on Vesting (#)			Value Realized on Vesting² ($)
James C. Smith		50,000		1,369,000		63,613	³		2,201,744

Joseph J. Savage		34,400		835,576		10,600			367,844

John R. Ciulla		—		—		6,923			240,198

Glenn I. MacInnes		—		—		11,857			411,575

Charles L. Wilkins		—		—		502			17,369

¹	Value realized calculated based on the difference between the market price of Webster’s Common Stock on the date of exercise and the exercise price.

²	Value realized calculated by multiplying the number of shares vesting by the fair market value of Webster’s Common Stock on the vesting date.

The number of shares acquired by Mr. Smith include 13,678 restricted stock units that vested but were deferred from distribution with a value of $464,505, which amount is also reported in the Non-Qualified Deferred Compensation table on page 42 hereof. Mr. Smith will receive distribution at termination. Dividends are not paid on these units until they are distributed.

Pension Benefits

The following table shows the present value of accumulated benefits payable to each of the NEOs, including the number of years of service credited to each such NEO, under both the frozen pension plan and the frozen supplemental defined benefit plan as of December 31, 2015. The accumulated benefit value is based upon the benefit that is payable at the NEOs’ Normal Retirement Age (65).

Pension Benefits¹


Name	Plan Name	Number of Years Credited Service (#)		Present Value of Accumulated Benefit ($)		Payments During Last Fiscal Year ($)

James C. Smith	Webster Bank Pension Plan		30.0		329,100		25,300
	Supplemental Defined Benefit Plan for Executive Officers		32.3		8,653,200		0

Joseph J. Savage	Webster Bank Pension Plan		6.0		242,100		0

	Supplemental Defined Benefit Plan for Executive Officers		6.0		219,000		0

John R. Ciulla	Webster Bank Pension Plan		4.0		78,900		0

Mr. Ciulla was not eligible for the supplemental defined benefit plan at the time that the plan was frozen. Messrs. MacInnes and Wilkins joined Webster after the pension plan and supplemental defined benefit plan were frozen and therefore have accumulated no credited years of service under either plan.

Webster Bank maintains a frozen pension plan for eligible employees of Webster Bank and affiliated companies that have adopted the plan. Pension benefits in the pension plan were frozen as of December 31, 2007. Thus, service and compensation after this date will not be used in calculating a benefit from this plan.

The pension plan is a qualified plan under the IRC and complies with the requirements of the Employee Retirement Income Security Act of 1974, as amended. All employees hired before January 1, 2007 were 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 through August 31, 2004, plus (c) the sum of 1.25% of the participant’s monthly compensation if the participant has less than 10 years of credited service at the beginning of the year, or 1.50% of the participant’s monthly compensation if the participant has 10 or more years of credited service at the beginning of the year, for each year of credited service beginning on or after September 1, 2004 through December 31, 2007. In general, benefits may not be based on more than 30 years of credited service. The normal form of benefit is a life annuity for the participant’s lifetime. 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 (age 65), deferred retirement date or death. Benefits payable at early retirement date are reduced 1/15^th each year for the first five years and 1/30^th each year for the next five years before normal retirement date. Mr. Smith elected to receive a distribution of pension plan benefits in 2014 and is currently receiving distributions, and Mr. Savage is eligible for early retirement benefits. 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 a surviving spouse or designated beneficiary. The lump sum option has been eliminated for benefits earned after January 26, 1998.

Webster Bank also maintains a frozen non-qualified supplemental defined benefit plan for executive officers. As with the qualified pension plan, pension benefits in the non-qualified supplemental defined benefit plan were frozen as of December 31, 2007. Thus, service and compensation after this date will not be used in calculating an executive’s benefit from this plan.

The frozen supplemental defined benefit plan provides supplemental pension benefits that are not available under the pension plan because annual compensation in excess of $265,000 in 2015 (subject to cost of living increases) may not be used in the calculation of retirement benefits under the IRC and because annual pension benefits are subject to a maximum of $210,000 in 2015 (subject to cost of living increases). Annual compensation for both the qualified pension plan and the supplemental defined benefit plan is defined as base pay, overtime, commissions, and bonuses (including bonuses for which the participant has deferred to a future year).

In place of the pension formula in the supplemental plan, Mr. Smith receives a benefit at age 65 equal to 60% of the average of the highest compensation during five consecutive calendar years, reduced by benefits from the pension plan and Social Security. The 60% is prorated based upon service at the time the benefits were frozen to service at age 65. Credited service is not limited to 30 years under the plan. The benefit is also reduced in the event of retirement before age 65 in the same manner as the pension plan. Benefits under the supplemental defined benefit plan are payable in monthly installments or a lump sum. The assumptions used to determine the present value of the accumulated benefits for purposes of the Pension Benefits table consisted of a 4.20% interest rate for the qualified plan, a 3.75% interest rate for the non-qualified supplemental defined benefit plan (4.20% for benefits payable as a lump sum), and the RP-2014 with MMP-2007 Mortality Table.

Non-Qualified Deferred Compensation

The following table shows the contributions to, the earnings of, and the distributions from each NEO’s account under Webster’s non-qualified deferred compensation plans for the fiscal year ended December 31, 2015.

Non-Qualified Deferred Compensation


Name	Executive Contributions in Last FY¹ ($)		Registrant Contributions in Last FY² ($)		Aggregate Earnings in Last FY³ ($)			Aggregate Withdrawals/ Distributions ($)		Aggregated Balance at Last FYE ($)
James C. Smith		464,505		168,963		2,018,391			—		14,070,461

Joseph J. Savage		—		54,987		10,654			—		394,227

John R. Ciulla		—		35,257		(221	)		—		147,867

Glenn I. MacInnes		—		25,868		5			—		72,940

Charles L. Wilkins		—		16,368		—			—		16,368

¹	The amount in this column is the value of restricted stock units that vested but were deferred from distribution by Mr. Smith, also reported in the Options Exercises and Stock Vested in 2015 table on page 40 of this Proxy Statement.

²	The amounts in this column are reported as supplemental defined contribution plan contributions in “All Other Compensation” in the Summary Compensation Table on page 36 of this Proxy Statement.

³	The amounts in this column show the investment gain or loss for each NEO during 2015, based on the investment choices selected by each NEO.

Deferred Compensation

Prior to January 1, 2011, participants could elect to defer up to 25% of their base pay and up to 100% of their bonuses. Effective January 1, 2011, Webster suspended the ability of participants to defer their base pay into the plan. Starting January 1, 2012, all deferrals of base pay and bonuses into the plan were suspended. All deferred compensation accounts are payable upon death, disability, termination of service or a specified date after the year of deferral. Distribution elections may be paid in a lump sum or in ten annual installments, except in the case of disability, where lump sum distribution is required.

Potential Payments on Termination or Change in Control

Historically, Webster has entered into Change in Control Agreements and Non-Competition or Non-Solicitation Agreements with its NEOs, which provide post-termination payments to the NEOs.

Change in Control Agreements

Change in control provisions benefit Webster’s shareholders by assisting with retention of executives during rumored and actual change in control activity when continuity is a key factor in preserving the value of the business. Other termination benefits are provided based on the time needed by executives of that level to find new employment and to facilitate changes in key executives as needed.

Webster has entered into a Change in Control Agreement with each of the NEOs. Pursuant to the Change in Control Agreements with Messrs. Smith, Savage, Ciulla, MacInnes and Wilkins, each executive is eligible to receive payments and other benefits, subject to the conditions described below, in the event the executive is terminated during the two year period following a change in control. A change in control is defined by the agreements as:

•

with certain exceptions, the acquisition by any person of beneficial ownership of 20% or more of either (i) the outstanding shares of the Common Stock or (ii) the combined voting power of the outstanding voting securities of Webster entitled to vote generally in the election of directors;

•

individuals who, as of the date of each executive’s agreement, constituted the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors, except for individuals subsequently joining the Board who are approved by at least a majority 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;

•

generally, consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Webster (with certain standard exceptions); or

•

approval by the shareholders of a complete liquidation or dissolution of Webster.

Payments and Benefits - The payments and benefits payable to the NEOs under the Change in Control Agreements are as follows:

•

Death or Disability - If an executive’s employment is terminated by reason of death or disability (defined as the absence of the executive from his or her duties on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness determined to be total and permanent), following a change in control, the executive, or the executive’s estate, as the case may be, is entitled to receive the executive’s accrued salary, bonus, deferred compensation (together with accrued interest or earnings thereon), any accrued vacation pay plus any other amounts or benefits required to be paid or provided to the executive under any agreement or plan of Webster and its affiliated companies.

•

Cause - If an executive’s employment is terminated for Cause following a change in control, the Change in Control Agreement terminates and the executive is entitled to receive only his or her annual base salary through the date of termination, the amount of any compensation

previously deferred by the executive, and any other amounts or benefits required to be paid or provided to the executive under any agreement or plan of Webster and its affiliated companies. Cause is defined as:

the willful and continued failure by the executive to perform substantially the executive’s duties with Webster or one of its affiliates (other than a failure resulting from incapacity due to physical or mental illness), after written demand for performance is delivered to the executive by the Chief Executive Officer, or

the willful engaging by the executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to Webster.

•

For Good Reason or Other than for Cause, Death or Disability - Executives are entitled to certain payments and continued benefits in the event of a termination following a change in control other than for Cause, Death or Disability, or in the event the executive terminates his or her employment for “Good Reason.” Good Reason is defined as:

the assignment to the executive of duties inconsistent with the executive’s position, authority, duties or responsibilities resulting in a diminution in such position, authority, duties or responsibilities;

the failure by Webster to comply with the compensation terms of the executive’s change in control agreement;

a material change in the office or location at which the executive is primarily based or Webster’s requiring the executive to travel on company business to a substantially greater extent than required immediately prior to the change in control;

the termination by Webster of the executive’s employment other than expressly as permitted by the change in control agreement; or

the failure by Webster to require that any successor assume, and perform according to, the executive’s change in control agreement.

In the event of a termination under the above circumstances, the executive is entitled to:

•

the executive’s base salary through the termination date to the extent not previously paid;

•

a bonus based on the target bonus in effect for the executive;

•

any previously deferred compensation and accrued vacation pay;

•

in the event of a Good Reason resignation or termination other than for Cause, death or disability, an amount equal to three times the sum of the executive’s base salary and bonus for Messrs. Smith and Savage and two times for the other NEOs;

•

the additional amounts that would have been contributed or credited to his or her 401(k) accounts in both the qualified and supplemental 401(k) plans if the executive’s 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 or her under the change of control agreement for Messrs. Smith and Savage and two years for the other NEOs;

•

continued benefits for the executive and his or her family for a period of three years following termination for Messrs. Smith and Savage and two years for the other NEOs;

•

outplacement services; and

•

any other amounts or benefits to which he or she is entitled under any agreement or plan of Webster and its affiliated companies.

Non-Change in Control Executive Severance Plan

Under Webster’s Non-Competition Agreement with Messrs. Smith, Savage, Ciulla, MacInnes and Wilkins, if Webster terminates the executive without Cause (and under circumstances in which payment would not be due under the Change in Control Agreements) severance benefits become payable. The executive’s severance benefits for involuntary termination without Cause are (a) a lump sum payment equal to the sum of (x) the executive officer’s then current annual base salary and (y) the prorated amount of any target bonus to be paid pursuant to Webster’s annual incentive compensation plan during the then current fiscal year, and (b) subject to certain limitations, continued medical and dental coverage for the shorter of one year or until the executive officer accepts other employment on a substantially full time basis if earlier. The executive’s receipt of the foregoing severance payments and benefits is conditioned upon the executive entering into a general release and waiver in favor of Webster, and in consideration of the payment the executive agrees to a one-year non-competition and non-solicitation covenant. Pursuant to Webster’s Amended and Restated 1992 Stock Option Plan, in the event an executive is terminated by Webster without Cause, and the termination occurs prior to the full vesting and exercisability of an executive’s options, the portion of the executive’s options considered vested and exercisable is to be determined by reference to the length of time the executive was employed by Webster.

The NEOs are not entitled to any gross-up payment in the event they would be subject to excise tax under Section 4999 of the IRC (relating to excess parachute payments).

Assuming a December 31, 2015 termination event, the aggregate value of the payments and benefits to which each NEO would be entitled in the event of termination other than for Cause, Death or Disability, or in the event the executive terminates employment for Good Reason would be as follows:

No payments would be due in the case of a voluntary termination occurring on December 31, 2015.


Payment Type	James C. Smith		Joseph J. Savage		John R. Ciulla		Glenn I. MacInnes		Charles L. Wilkins
Severance
Salary Payments and Bonus ($)		1,850,000		795,732		798,500		757,855		569,250
Accrued Deferred Compensation and Vacation ($)		—		—		—		—		—
Health Programs ($)		12,150		15,275		15,275		12,150		15,275
Value of Accelerated Equity ($)		3,344,390		751,879		506,306		814,148		179,591

Total Severance Benefits		5,206,540		1,562,886		1,320,081		1,584,153		764,116


Change in Control/Involuntary Termination Not for Cause or Termination for Good Reason
Salary Payments and Bonus ($)		5,550,000		2,387,196		1,632,000		1,515,408		1,138,500
Accrued Deferred Compensation and Vacation ($)		—		—		—		—		—
Qualified and Non-qualified 401(k) Contribution Equivalent ($)		589,530		247,600		104,408		75,030		56,030
Benefits and Health Programs ($)		127,363		109,516		88,402		79,886		99,045
Value of Accelerated Equity ($)¹		71,127		15,818		10,842		16,593		12,433

Total Termination Benefits		6,338,020		2,760,130		1,835,652		1,686,917		1,306,008

In the event of a change in control, if an NEO is terminated, all equity awards granted under Webster’s Amended and Restated 1992 Stock Option Plan that are outstanding immediately prior to the change in control shall become fully vested and exercisable (provided that they have been held for a period of one year).

Risk Assessment Disclosure

The Compensation Committee has discussed, evaluated and reviewed each compensation program applicable to Webster’s NEOs and other employees. The Compensation Committee concluded that Webster’s compensation programs do not incentivize excessive risk taking by its NEOs or other employees. The Compensation Committee furthermore concluded that the structure provides appropriate incentives to balance risk and reward, provides sufficient risk controls and aligns the interests of the employees with those of shareholders.

The following features of the compensation programs, agreements and organizational structure restrain risk taking to acceptable levels and strongly discourage the manipulation of earnings for personal gain:

•

The “clawback” feature applicable to NEOs and certain other executives encourages executives and staff to maintain accurate books and records and comply with relevant accounting policies. Under the “clawback,” any bonus or incentive compensation for executives is subject to recovery by Webster if such compensation is based on criteria that are later shown to be materially inaccurate, without regard to whether the inaccuracy arose from any misconduct.

•

The vesting elements of the equity awards align the interests of the officers with the long-term health of Webster, the quality of earnings, and the interests of shareholders.

•

The programs include a mix of cash and equity awards, which support an appropriate balance of short-term and long-term risk and reward decision making. Equity awards include a performance element with a payout dependent upon achieving designated goals.

•

Strong governance structure, which includes key elements such as a code of conduct and ethics policy, various risk management and board committees, and a new activity process with embedded risk controls and executive approvals.

•

Risk function reports outside of the lines of business and the pay of risk managers is not determined by the businesses they evaluate.

•

Stock ownership requirements that align executive officers with the interests of the shareholders.

•

Strong independent internal credit oversight and quality controls.

•

Shared accountability for incentive design, budget and payout with oversight by the Incentive Compensation Oversight Committee and the Compensation Committee with input from the Chief Risk Officer.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee are Messrs. Shivery (Chair), Atwell, Becker, Finkenzeller and Morse. No person who served as a member of the Compensation Committee during 2015 was a current or former officer or employee of Webster or any of its subsidiaries or, except as disclosed below, engaged in certain transactions with Webster required to be disclosed by regulations of the SEC. Additionally, there were no compensation committee “interlocks” during 2015, which generally means that no executive officer of Webster served as a director or member of the compensation committee of another entity, one of whose executive officers served as a director or member of the Compensation Committee of Webster.

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. 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 not related to Webster or Webster Bank, and neither involve more than normal risk of collectability nor present other unfavorable features.

Certain Relationships

Gregory Jacobi, son of C. Michael Jacobi, a director of Webster and Webster Bank, is employed by Webster Bank as a Senior Vice President. At the end of fiscal year 2015, Gregory Jacobi’s base salary rate was $226,600. For 2015, Mr. Jacobi received a bonus of $82,000 and a restricted stock award with a value of $45,000 at the time of the grant.

Policies and Procedures Regarding Transactions with Related Persons

Pursuant to Webster’s Code of Business Conduct and Ethics, any transactions between Webster and a Webster affiliate, director, employee, an immediate family member of a Webster director or employee or business entities in which a Webster director or employee or an immediate family member of a Webster director or employee is an officer, director and/or controlling shareholder must be conducted at arm’s length. Prior approval of the Board of Directors for any such transactions are governed by Federal Reserve Regulation O, and the related person’s interest in any such transaction requiring Board action must be disclosed to the Board prior to any action being taken. Any consideration paid or received by Webster in such a transaction must be on terms no less favorable than terms available to an unaffiliated third party under similar circumstances. Any interest of a director or officer in such transactions that do not require prior Board approval shall be reported to the Board of Directors at least annually.

Audit Committee Report

The Company’s Audit Committee currently has five members, Ms. Osar (Chair) and Messrs. Crawford, Finkenzeller, Pettie, and Ms. Flynn. As of the date of the Proxy Statement, each of the Committee members is an “independent director” under the New York Stock Exchange rules. The Audit Committee’s responsibilities are described in a written charter that was adopted by the Company’s Board of Directors.

The Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2015 with Webster’s management. The Audit Committee has discussed with KPMG LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees” issued by the Public Company Accounting Oversight Board (PCAOB”). The Audit Committee has received the written disclosures from KPMG LLP required by relevant professional and regulatory standards, and has discussed with KPMG LLP the independence of KPMG LLP. Based on the review and discussions described in this paragraph, the Audit Committee recommended to Webster’s Board of Directors that the Company’s audited consolidated financial statements for the year ended December 31, 2015 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 for filing with the Securities and Exchange Commission.

Audit Committee

Karen R. Osar (Chair)

John J. Crawford

Robert A. Finkenzeller

Elizabeth E. Flynn

Mark Pettie

STOCK OWNED BY MANAGEMENT

The following table sets forth information as of February 1, 2016 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 NEOs and by all directors and executive officers of Webster as a group.


Name and Position(s) with Webster	Number of Shares and Nature of Beneficial Ownership ¹		Percent of Common Stock Outstanding

William L. Atwell Director		10,178		*

Joel S. Becker Director		91,580		*

John R. Ciulla President		106,948		*

John J. Crawford Director		69,133		*

Robert A. Finkenzeller Director		67,954		*

Elizabeth E. Flynn Director		11,071		*

C. Michael Jacobi Director		67,608		*

Glenn I. MacInnes Executive Vice President and Chief Financial Officer		95,914		*

Laurence C. Morse Director		68,021		*

Karen R. Osar Director		67,598		*

Mark Pettie Director		44,018		*

Joseph J. Savage Executive Vice Chairman		138,661		*

Charles W. Shivery Director		32,614		*

James C. Smith Chairman, Chief Executive Officer, Director		1,252,160		1.36	%

Charles L. Wilkins Executive Vice President, HSA Bank.		14,710		*

All Directors and Executive Officers as a group (22 persons)		2,408,428		2.59	%

*	Less than 1% of Common Stock outstanding.

In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended for purposes of this table, a person is deemed to be the beneficial owner 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 February 1, 2016. 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, other immediate family members and others over which the persons named in the table possess shared voting and/or shared investment power as follows: Mr. Becker, 2,016 shares; Mr. Smith, 16,252 shares; and all directors and executive officers as a group, 18,268 shares. The table also includes the following: 1,245,528 shares subject to outstanding options which are exercisable within 60 days from February 1, 2016; 160,489 shares held in the 401(k) Plan by executive officers; 14,057 shares purchased by executive officers through the Employee Stock Purchase Plan held by Fidelity Investments; 109,096 shares of restricted stock that were not vested as of February 1, 2016; and 144,668 shares of Common Stock underlying restricted stock for Mr. Smith that were deferred pursuant to the terms of the Stock Option Plan. 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. Becker, 46,528 shares; Mr. Crawford, 46,528 shares; Mr. Ciulla, 72,436; Mr. Finkenzeller, 46,528 shares; Mr. Jacobi, 46,528 shares; Mr. MacInnes, 51,339 shares; Mr. Morse, 46,528 shares; Ms. Osar, 46,528 shares; Mr. Pettie, 25,423 shares; Mr. Savage, 71,810 shares; Mr. Shivery, 13,274 shares; and Mr. Smith, 573,100 shares. Also reflected are 227,178 shares of phantom stock held by Mr. Smith in the Webster Bank Deferred Compensation Plan for Directors and Officers.

PRINCIPAL HOLDERS OF VOTING SECURITIES OF WEBSTER

The following table sets forth information as of January 31, 2016 with respect to the beneficial ownership of Common Stock by any person or group as defined in Section 13(d)(3) of the Exchange Act who is known to the Company to be the beneficial owner of more than five percent of the Common Stock.


Name and Addresses of Beneficial Owners	Number of Shares; Nature of Beneficial Ownership ¹			Percent of Common Stock Owned
BlackRock, Inc. 55 East 52^nd Street New York, NY 10055		7,960,470	²		8.70	%

Dimensional Fund Advisors LP Building One 6300 Bee Cave Road Austin, TX 78746		5,797,920	³		6.32	%

The Vanguard Group 100 Vanguard Boulevard Malvern, PA 19355		6,027,744	⁴		6.69	%

Based on information in the most recent Schedule 13D or 13G filed with the Securities and Exchange Commission pursuant to the Exchange Act, unless otherwise indicated. In accordance with Rule 13d-3 under the Exchange Act, 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 January 31, 2016. 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.

²	BlackRock, Inc. reported that it had sole voting and sole dispositive power over 7,758,592 and 7,960,470 shares, respectively.

Dimensional Fund Advisors LP reported that it had sole voting and sole dispositive power over 5,731,328 and 5,797,920 shares, respectively. All securities over which Dimensional Fund Advisors LP reported that it had sole dispositive or sole voting power are owned by investment companies, trusts and accounts, to which Dimensional Fund Advisors LP furnishes investment advice. Dimensional Fund Advisors LP disclaims beneficial ownership of such securities.

⁴	The Vanguard Group reported that it had sole voting power over 115,651 shares and sole dispositive power over 6,027,744 shares and shared voting power and shared dispositive power over 4,000 and 114,251 shares, respectively.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires Webster’s directors, certain officers and persons who own more than 10 percent 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 Company believes that during the fiscal year ended December 31, 2015, all Section 16(a) filing requirements applicable to Webster’s directors, officers and more than 10% owners were complied with on a timely basis.

NON-BINDING, ADVISORY VOTE REGARDING THE COMPENSATION OF THE NAMED

EXECUTIVE OFFICERS OF WEBSTER

(Proposal 2)

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), requires Webster to provide its shareholders an opportunity to vote to approve, on a non-binding, advisory basis, the compensation of its named executive officers (“NEOs”) as disclosed in this Proxy Statement. At the 2011 Annual Meeting of Shareholders, Webster’s shareholders voted on a non-binding, advisory basis to hold a non-binding, advisory vote on the compensation of NEOs of Webster annually. In light of the results, the Board of Directors determined to hold the vote annually.

The compensation of our NEOs is disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and narrative disclosure contained on pages 17-45 of this Proxy Statement. As discussed in those disclosures, the Board of Directors believes that Webster’s executive compensation philosophy, policies and procedures provide a strong link between each NEO’s compensation and Webster’s short and long-term performance. The objective of Webster’s executive compensation program is to provide compensation which is competitive, variable based on Webster’s performance, and aligned with the long-term interests of shareholders.

Webster is asking its shareholders to indicate their support for its NEO compensation as described in this Proxy Statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives Webster’s shareholders the opportunity to express their views on the compensation of Webster’s NEOs. Accordingly, shareholders are being asked to vote “FOR” the following resolution:

“RESOLVED, that the shareholders of Webster Financial Corporation approve, on an advisory basis, the compensation of the named executive officers, as described in the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and narrative disclosure contained on pages 17-45 of this Proxy Statement.”

Your vote on this Proposal 2 is advisory, and therefore not binding on Webster, the Compensation Committee or the Board of Directors. The Board of Directors and Compensation Committee value the opinions of Webster’s shareholders and to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, Webster will consider its shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

A majority of the votes present in person or represented by proxy at the Annual Meeting is required to approve Proposal 2. Abstentions and broker non-votes will have no effect on the vote for this proposal. If no voting instructions are given, the accompanying proxy will be voted for this Proposal 2.

The Board of Directors recommends that the shareholders vote FOR the approval of the compensation of Webster’s named executive officers, as described in the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and narrative disclosure contained on pages 17-45 of this Proxy Statement.

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

(Proposal 3)

The Board of Directors, upon the recommendation of the Audit Committee, has approved the appointment of KPMG LLP (“KPMG”) to serve as the independent registered public accounting firm for Webster for the year ending December 31, 2016. KPMG audited Webster’s financial statements for the year ended December 31, 2015.

Unless otherwise indicated, properly executed proxies will be voted in favor of ratifying the appointment of KPMG, an independent registered public accounting firm, to audit the consolidated financial statements of Webster for the year ending December 31, 2016 and the internal control over financial reporting of Webster as of December 31, 2016. 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 majority of the votes cast is required to ratify the appointment of KPMG as Webster’s independent registered public accounting firm for the year ending December 31, 2016.

Representatives of KPMG 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 that shareholders vote FOR ratification of the appointment of KPMG LLP as Webster’s independent registered public accounting firm for the year ending December 31, 2016.

Auditor Fee Information

The following table presents the aggregate fees and expenses incurred by Webster for professional audit services rendered by KPMG in connection with their audit of Webster’s annual financial statements for the years ended December 31, 2015 and December 31, 2014, respectively, and fees billed for other services rendered during those periods.


	Fiscal 2015		Fiscal 2014
Audit Fees¹	$	1,499,045	$	1,425,000
Audit-Related Fees²		120,000		120,000
Tax Fees³		50,910		0
All Other Fees⁴		0		27,820

Total	$	1,669,955	$	1,572,820

Audit Fees consist of fees billed for professional services rendered for the audit of Webster’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by the respective independent public accounting firm in connection with statutory and regulatory filings or engagements. Audit Fees also include activities related to internal control reporting under Section 404 of the Sarbanes-Oxley Act. Fiscal 2014 includes additional services related to corporate equity transaction filings.

Audit Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of Webster’s consolidated financial statements and are not reported under “Audit Fees.” This category includes fees related to financial statement audits of certain employee benefit plans.

³	Tax Fees consist of fees billed for professional services rendered for tax compliance and tax advice.

⁴	Other Fees consist of fees for products and services other than for services for which fees were reported as Audit Fees, Audit-Related Fees and Tax Fees.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Registered Public Accounting Firm

Consistent with Securities and Exchange Commission requirements regarding auditor independence, the Audit Committee has adopted a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Audit Committee has delegated authority to the Chair of the Audit Committee to pre-approve up to $100,000 in audit and permissible non-audit services. Any decisions by the Chair of the Audit Committee under this delegated authority will be reported at the next meeting of the Audit Committee. Management is required to report, on a quarterly basis, to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.

All engagements of the independent registered public accounting firm to perform any audit services and non-audit services after implementation of the pre-approval policy have been pre-approved by the Audit Committee in accordance with the policy. The pre-approval policy has not been waived in any instance. All engagements of the independent registered public accounting firm to perform any audit services and non-audit services prior to the date the pre-approval policy was implemented were approved by the Audit Committee in accordance with its normal functions, and none of those engagements made use of the de minimus exception to pre-approval contained in the Commission’s rules.

PROPOSED AMENDMENT AND RESTATEMENT OF THE 1992 STOCK OPTION PLAN AND

RE-APPROVAL OF THE MATERIAL TERMS FOR PAYMENT OF PERFORMANCE-BASED COMPENSATION

UNDER THE 1992 STOCK OPTION PLAN

(Proposal 4)

The shareholders are being asked to consider and vote upon a proposal to amend and restate the Webster Financial Corporation 1992 Stock Option Plan, as amended (the “Plan”) and to re-approve certain material terms and conditions relating to performance-based compensation under the Plan. The Board of Directors established the Plan in 1992, and the shareholders originally approved the Plan at the 1992 annual meeting. The Plan was amended by the shareholders of the Company in 1994, 1996, 1998, and 2000; was amended and restated in its entirety in April 2001, January 2005, and October 2006; and was further amended in January 2007, April 2007, February 2008, April 2008, February 2010, February 2012, and February 2015.

In February 2016, upon recommendation by the Compensation Committee, the Board of Directors voted to amend and restate the Plan, subject to shareholder approval at the Annual Meeting, which would, among other things: (i) increase the total number of shares authorized for issuance under the Plan by 2,500,000 shares (from 10,861,000 shares to 13,361,000 shares), (ii) extend the term of the Plan from February 26, 2020 to April 27, 2026, and (iii) limit the aggregate fair market value of Incentive Awards (as defined below) granted in a calendar year to a non-employee director to $250,000. A copy of the Plan, as amended and restated, is attached as Annex A to this Proxy Statement.

The Board of Directors believes the Plan is vital to attract and retain the best talent in this competitive marketplace. The Board of Directors also believes that equity compensation awards are an important tool to attract, retain, and motivate highly qualified directors, officers, and other key employees, to enable them to acquire a larger personal financial interest in the Company through the acquisition and ownership of Common Stock, and to encourage them to identify with shareholders through stock ownership. As of January 1, 2016, 1,339,337 shares remained available for future grants of Incentive Awards (as defined below) under the Plan. The Board of Directors has concluded that it is advisable that the Company and its shareholders continue to have equity compensation awards available under the Plan and to continue to have the ability to grant performance-based compensation under the Plan, in each case as a means of attracting and retaining directors, officers, and other key employees.

If our shareholders approve the amendment and restatement of the Plan, the Plan as amended and restated will become effective on the date of the Annual Meeting, which is scheduled for April 28, 2016. If our shareholders do not approve the amendment and restatement of the Plan, the Plan will continue and remain as is, and the Company may continue to grant Incentive Awards under the Plan to the extent there are shares of Common Stock available for issuance under the Plan.

We are also asking our shareholders to approve the material terms and conditions for performance-based compensation intended to qualify under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), included in the Plan. The material terms and conditions of performance-based compensation are: (i) eligibility for Incentive Awards, (ii) the maximum amount of performance-based compensation that may be paid under the Plan during a specified period to any eligible person, and (iii) the performance measures that may be used under the Plan to establish performance goals as a condition to payment (together, the “Performance Terms”).

If our shareholders approve the Performance Terms, compensation paid to the Company’s covered employees upon achievement of performance goals based on one or more of the performance measures in the Plan, subject to the Company’s satisfaction of the other requirements of Section 162(m) of the Code, may continue to be fully deductible by the Company under Section 162(m) of the Code until our annual meeting of shareholders in 2021, when the Company will be required to obtain shareholder re-approval of these terms and conditions. If our shareholders do not approve the Performance Terms, the Compensation Committee will continue granting performance-based Incentive Awards using the performance measures in the Plan, but shareholder re-approval would be required at our annual meeting of shareholders in 2020 for any performance-based compensation to be eligible to be fully deductible by the Company thereafter.

Key Terms of the Plan

As described in more detail below, certain key terms of the Plan, as proposed to be amended and restated, include:


Plan Term		If the proposal to extend the term of the Plan is approved by the requisite vote of our shareholders, the Plan will terminate on April 27, 2026.

Administration		The Plan is administered by the Compensation Committee, which consists of two or more directors, all of whom must be “non-employee” directors for purposes of the Exchange Act, “outside directors” for purposes of Section 162(m) of the Code, and “independent directors” for purposes of the New York Stock Exchange. However, the Board of Directors also retains the authority to amend or terminate the Plan.

Eligible Participants		As of February 1, 2016, there were approximately 3,022 full-time employees of the Company and its subsidiaries and 10 non-employee directors of the Company and its subsidiaries who were eligible to participate in the Plan.

Shares Authorized		If the proposal to amend the Plan to increase the number of shares that may be issued pursuant to the Plan is approved by the requisite vote of our shareholders, 13,361,000 shares will be authorized for issuance under the Plan, which is subject to adjustment to reflect stock splits and similar events.

Dilution Level		If the proposal to amend the Plan to increase the number of shares that may be issued pursuant to the Plan is approved by the requisite vote of our shareholders, the 2,500,000 additional shares will result in a 6.48% dilution level based on the following information as of December 31, 2015: 91.677 million shares issued and outstanding; 1.339 million shares available for grant; 1.527 million shares subject to options and stock appreciation rights (“SARs”) that are granted but not exercised; and 0.990 million shares subject to restricted stock, performance-based stock, and restricted stock unit awards. Webster’s burn rate for the past three years has been between .51% and 1.03%.

Award Types		Options, SARs, restricted stock, performance-based stock, and restricted stock units (collectively, “Incentive Awards”). Performance-based stock awards may entitle the grantee to receive unrestricted stock and/or restricted stock upon satisfaction of the applicable performance criteria.

Service Requirement		All Incentive Awards granted from the 2.2 million additional shares approved by the shareholders at the 2003 annual meeting, the 1.6 million approved by the shareholders at the 2007 annual meeting, the 2.6 million additional shares approved by the shareholders at the 2010 annual meeting, and, if approved, the 2.5 million additional shares subject to approval at the Annual Meeting have a minimum one-year service requirement, with exceptions in the case of death or disability.

Award Limits		The maximum number of shares that may be granted under the Plan to any officer or other employee of the Company or any subsidiary as options or SARs in any calendar year is 500,000. The maximum number of shares that may be awarded under the Plan to any officer or other employee of the Company or any subsidiary as restricted stock, performance-based stock, and restricted stock units in any calendar year is 100,000. The maximum aggregate grant date fair market value of Incentive Awards that may be granted under the Plan in any calendar year to any non-employee director may not exceed $250,000.

Prohibitions		• Repricing of options and SARs is prohibited. • Liberal share counting is prohibited (i.e., shares derived from any of the following may not be added back to the Plan’s reserve: (i) shares tendered in payment of an option, (ii) shares withheld for taxes, (iii) shares repurchased by the Company using option proceeds, or (iv) SARs settled in stock when only the shares delivered are counted against the Plan reserve). • No option or SAR may be granted below fair market value. • All shares are subject to flexible share utilization with full-value awards counting as two shares.

Proposed Amendment and Restatement

The Board of Directors has concluded that it is advisable that the Company and its shareholders continue to have equity compensation awards available under the Plan as a means of attracting and retaining directors, officers, and key employees. This objective is served by (i) amending the Plan to increase the number of available shares and (ii) extending the term of the Plan. In addition, due to certain changes in applicable law, the Board of Directors has concluded that it is advisable that the Plan set a limit on the value of Incentive Awards that may be granted each calendar year to a non-employee director. Accordingly, the Board of Directors has voted to amend and restate the Plan, subject to shareholder approval at the Annual Meeting, which would, among other things:

•

increase the total number of shares authorized for issuance under the Plan by 2,500,000 shares, from 10,861,000 to 13,361,000 shares,

•

extend the term of the Plan from February 26, 2020 to April 27, 2026, and

•

limit the maximum aggregate grant date fair market value of Incentive Awards that may be granted under the Plan in any calendar year to any non-employee director to an amount that may not exceed $250,000.

Summary Description of the Material Terms of the Plan

A summary description of the provisions of the Plan, as amended and restated, is set forth below. This summary description is qualified in its entirety by the detailed provisions of the Plan, which is incorporated by reference into this proposal and which is attached as Annex A to this Proxy Statement.

Administration. The Board of Directors has delegated administration of the Plan to the Compensation Committee, which consists of two or more non-employee, outside, and independent directors appointed by the Board of Directors. The Compensation Committee has authority to grant and administer Incentive Awards made with respect to any eligible individuals, including the authority to make subsequent modifications to any such awards consistent with the Plan and to establish performance criteria in connection with any such awards. However, the Board of Directors also retains the authority to amend or terminate the Plan. In addition, the Board of Directors may delegate to any officer of the Company the power and authority to grant Incentive Awards under the Plan to any employee of the Company or any subsidiary, who is employed at a level below Executive Vice President (but not in excess of the aggregate maximum number of shares specified by the Board for such purpose at the time of delegation or the number of shares remaining available for issuance under the Plan). References below to the Compensation Committee include reference to the Board of Directors and/or other delegates of the Board of Directors for those periods when the Board of Directors or such other delegate(s) appointed by the Board of Directors are acting.

Eligibility. The Plan provides for the grant of options that are intended to qualify as “incentive stock options” under Section 422 of the Code and the regulations promulgated thereunder, as well as nonqualified stock options, SARs, restricted stock, performance-based stock, and restricted stock units to eligible full-time employees and non-employee directors of the Company and its subsidiaries (each a “grantee”).

Common Stock Reserved for Issuance under the Plan. The stock that may be issued pursuant to Incentive Awards granted under the Plan will be shares of Common Stock, which shares may be treasury shares or authorized but unissued shares. The number of shares of Common Stock that may be issued pursuant to Incentive Awards granted under the Plan will not exceed in the aggregate 13,361,000 shares, which number of shares is subject to adjustment upon changes in the Company’s capitalization. If any Incentive Award expires, terminates, or is terminated for any reason before exercise or vesting in full, the shares of Common Stock that were subject to the unexercised, forfeited, expired, or terminated portion of such Incentive Award will be available for future grants of Incentive Awards under the Plan. Liberal share counting is not permitted under the

Plan, which means that no shares of Common Stock derived from any of the following circumstances may be added to the Plan’s reserve of shares: (i) shares tendered in payment of an option, (ii) shares withheld for taxes, (iii) shares repurchased by the Company using option proceeds, or (iv) SARs settled in Common Stock when only the shares delivered are counted against the Plan reserve.

Award Limitations. The Plan contains limitations on the maximum number of shares available for issuance with respect to specified types of Incentive Awards. Subject to adjustments for changes in the Company’s capitalization:

•

the maximum number of shares subject to options or SARs that may be granted under the Plan in any calendar year to any officer or other employee will be 500,000 shares, such that options and SARs granted with an exercise price of at least fair market value of our Common Stock on the date of grant will be deemed to satisfy qualifying performance criteria in accordance with Section 162(m) of the Code without further application of any of the qualifying performance criteria described below;

•

the maximum number of shares subject to restricted stock, performance-based stock, and restricted stock units that may be granted under the Plan in any calendar year to any officer or other employee will be 100,000 shares; and

•

the maximum aggregate grant date fair market value of Incentive Awards that may be granted under the Plan in any calendar year to any non-employee director of the Company may not exceed $250,000.

Service Requirement. The following Incentive Awards will have a minimum one year service requirement: (1) all SARs and restricted stock units, (2) options, restricted stock, and performance-based stock awards granted (i) from the 2.2 million additional shares approved by the shareholders at the Company’s 2003 annual meeting, (ii) from the 1.6 million additional shares approved by the shareholders at the Company’s 2007 annual meeting, and (iii) from the 2.6 million additional shares approved by the shareholders at the Company’s 2010 annual meeting, and (3) if approved at the Annual Meeting, all Incentive Awards granted from the 2.5 million additional shares subject to approval at the Annual Meeting.

Options. The option exercise price under the Plan may not be less than the greater of par value or 100% of the fair market value of the Common Stock on the date of grant of the option (or 110% in the case of an incentive stock option granted to a grantee beneficially owning more than 10% of the outstanding Common Stock). The maximum option term is 10 years (or five years in the case of an incentive stock option granted to a grantee beneficially owning more than 10% of the outstanding Common Stock). Options may be exercised at any time after grant, except to the extent subject to the minimum one year service requirement described in the preceding paragraph or as otherwise provided in the particular award agreement. There is also a $100,000 limit on the value of stock (determined at the time of grant) covered by incentive stock options that first become exercisable by a grantee in any calendar year. No option may be granted after the expiration of the term of the Plan on April 27, 2026. Options are non-transferable other than by reason of the death of the grantee, unless otherwise specified in the award agreement (for example, the Company may permit limited transfers of nonqualified stock options for the benefit of immediate family members of grantees to help with estate planning concerns).

Payment for shares purchased under the Plan may be made either in cash or by exchanging shares of Common Stock of the Company with a fair market value equal to the total option exercise price. Options may, if permitted by the particular award agreement, be exercised by directing that certificates for the shares purchased be delivered to a licensed broker as agent for the grantee, provided that the broker tenders to the Company cash or cash equivalents equal to the option exercise price plus the amount of any taxes that the Company may be required to withhold in connection with the exercise of the option.

Stock Appreciation Rights. A SAR confers on the grantee to whom it is awarded the right to receive, upon exercise, the excess of (i) the fair market value of a share of Common Stock on the date of exercise, as determined in good faith by the Board of Directors, over (ii) the grant price. The grant price of the SAR will be no less than the fair market value of a share of Common Stock on the date of grant. Each SAR will be settled in whole shares of Common Stock, with any fractional share of Common Stock that would result from exercise of the SAR eliminated entirely.

Annual Limit on Awards of Options and SARs. The maximum number of shares that may be granted as options or SARs to any eligible employee of the Company or any subsidiary under the Plan in any calendar year is 500,000 shares, subject to adjustments for changes in the Company’s capitalization.

Restricted Stock. Restricted stock is shares of Common Stock awarded to a grantee, subject to forfeiture restrictions based on the grantee’s length of service or other non-performance-based criteria. Unless the Compensation Committee otherwise provides in an award agreement, a grantee of restricted stock will have the right to vote such Common Stock and the right to receive any dividends declared or paid with respect to such Common Stock.

Performance-Based Stock. Performance-based stock awards are Incentive Awards granted to a grantee which are subject to the attainment of pre-established performance goals over a performance period of at least one year and up to ten years, the attainment of which would, subject to the terms of the Plan, entitle the grantee to receive unrestricted stock and/or restricted stock in a pre-determined amount or an amount determined pursuant to the performance criteria formulation. Performance-based stock awards granted to individuals who are “covered employees” under Section 162(m) of the Code, or who the Compensation Committee designates as likely to be covered in the future, may qualify as “performance-based compensation” under Section 162(m) of the Code. Unless the Compensation Committee otherwise provides in an award agreement, a grantee of performance-based stock will have the right to vote such Common Stock and the right to receive any dividends declared or paid with respect to such Common Stock.

Restricted Stock Units. Restricted stock units are rights to receive shares of Common Stock, which may be (i) subject to forfeiture restrictions based on the grantee’s length of service or other non-performance-based criteria (a “time-based restricted stock unit”) or (ii) subject to the attainment of pre-established performance goals over a performance period of at least one year and up to ten years, the attainment of which would, subject to the terms of the Plan, entitle the grantee to receive unrestricted stock and/or restricted stock in a pre-determined amount or an amount determined pursuant to the performance criteria formulation (a “performance-based restricted stock unit,” and together with a time-based restricted stock unit, “restricted stock units”). Performance-based restricted stock units granted to individuals who are “covered employees” under Section 162(m) of the Code, or who the Compensation Committee designates as likely to be covered in the future, may qualify as “performance-based compensation” under Section 162(m) of the Code. Grantees of restricted stock units shall have no right to vote any Common Stock promised upon settlement of the restricted stock unit or to vote the restricted stock unit.

Section 162(m) of the Internal Revenue Code. Section 162(m) of the Code limits publicly-held companies such as the Company to an annual deduction for federal income tax purposes of $1 million for compensation paid to their covered employees. For this purpose, “covered employees” are the Chief Executive Officer of the Company and the other three highest compensated executive officers (other than the Chief Financial Officer). However, performance-based compensation is excluded from the $1 million limitation. The Plan is designed to permit the Compensation Committee to grant awards that qualify as performance-based for purposes of satisfying the conditions of Section 162(m) of the Code.

To qualify as performance-based compensation under Section 162(m) of the Code:

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the compensation must be paid solely on account of the attainment of one or more pre-established, objective performance goals;

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the performance goal under which compensation is paid must be established by a compensation committee comprised solely of two or more directors who qualify as “outside directors” for purposes of the exception;

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the material terms of the performance goal under which the compensation is to be paid must be disclosed to and subsequently approved by shareholders of the Company before payment is made; and

•

the Compensation Committee must certify in writing, before payment of the compensation, that the performance goals and any other material terms were in fact satisfied.

Under the Code, a director is an “outside director” of the Company if he or she (i) is not a current employee of the Company; (ii) is not a former employee who receives compensation for prior services (other than under a qualified retirement plan); (iii) has not been an officer of the Company; and (iv) does not receive, directly or indirectly (including amounts paid to an entity that employs the director or in which the director has at least a five percent ownership interest), remuneration from the Company in any capacity other than as a director.

In the case of compensation attributable to options or SARs, the performance goal requirement (summarized in the first bullet above) is deemed satisfied, and the certification requirement (summarized in the fourth bullet above) is inapplicable, if (i) the grant or award is made by the Compensation Committee; (ii) the plan under which the option or SAR is granted states the maximum number of shares with respect to which options and SARs may be granted during a specified period to an employee; and (iii) under the terms of the option or SAR, the amount of compensation is based solely on an increase in the value of the Common Stock after the date of grant.

Performance Objectives for Performance-Based Stock Awards and Performance-Based Restricted Stock Unit Awards. The performance objectives for a performance-based stock award or performance-based restricted stock unit award under the Plan must be established in writing by the Compensation Committee before the 90^th day after the beginning of any performance period applicable to such Incentive Award and while the outcome is substantially uncertain, or at such other date as may be required or permitted for performance-based compensation under Section 162(m) of the Code. Performance objectives will be based on one or more of the following criteria of the Company:

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total shareholder return;

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income;

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the Common Stock price;

•

earnings per share;

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return on assets, equity, or investments;

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operational efficiency;

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operating profit;

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operating revenue;

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operating expenses;

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loan quality, including without limitation, acceptable, adverse, criticized, past due, nonaccrual, and charge-off criteria, either in absolute terms or relative to loan portfolio or assets;

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net interest spreads;

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financial ratings by outside agencies;

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fee income;

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capital, including without limitation, capital adequacy, capital regulatory achievements or compliance, and capital surplus;

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revenue targets;

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expense targets;

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market or market segment share or penetration;

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shareholders equity;

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assets and liabilities; or

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any combination of the foregoing.

Performance objectives may include positive results, maintaining the status quo or limiting economic loses. The Compensation Committee may provide in any performance-based stock award or performance-based restricted stock unit award that evaluation of performance may include or exclude any of the following events that occur during a performance period:

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asset write-downs or loan losses;

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litigation or claims, judgments, or settlements;

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the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results;

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any reorganization or restructuring events or programs or discontinued operations;

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extraordinary, non-core, non-operating, or non-recurring items and items that are either of an unusual nature or of a type that indicates infrequency of occurrence as a separate component of income from continuing operations;

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acquisitions or divestitures;

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foreign exchange gains and losses;

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the impact of shares of Common Stock purchased through share repurchase programs or share offerings;

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tax valuation allowance reversals; and

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impairment expense.

Upon attainment of the specified performance objectives (or, to the extent specified by the Compensation Committee, partial attainment of such objectives), the grantee of a performance-based stock award or performance-based restricted stock unit award will be entitled to receive the shares of unrestricted stock and/or restricted stock specified in the grant (or the portion of such shares earned by partial attainment of the objectives, as applicable), except to the extent issuance of such shares of unrestricted stock and/or restricted stock would constitute a violation of law.

Annual Limit on Restricted Stock, Performance-Based Stock, and Restricted Stock Unit Awards. The maximum number of shares that may be awarded as restricted stock, performance-based stock, and restricted stock units to any eligible employee of the Company or any subsidiary under the Plan in any calendar year is 100,000 shares, subject to adjustments for changes in the Company’s capitalization.

Termination of Service or Employment. Except as otherwise provided in the applicable award agreement, if a grantee’s employment or service with the Company or its subsidiaries terminates by reason of death or disability:

•

with respect to an employee, his or her options and SARs, whether or not then exercisable, may be exercised at any time subsequent to such termination of employment and before the expiration of the term of the option or SAR unless a different date is otherwise provided in the particular award agreement (but not later than the date the option or SAR would otherwise expire);

•

restricted stock and time-based restricted stock units held by such grantee will fully vest, and the grantee will be entitled to the shares of stock as specified in the grantee’s award agreement; and

•

performance-based stock and performance-based restricted stock units held by such grantee will fully vest if and when the ordinary performance period for the award ends, but only to the extent that the applicable performance criteria are satisfied.

Except as otherwise provided in an award agreement, if a grantee’s employment or service with the Company or its subsidiaries terminates for any reason other than attaining normal retirement age (as defined in the Company’s pension plan), death, or disability:

•

with respect to an employee, his or her options and SARs will terminate three months after the date of such termination unless a different date is otherwis