On September 19, 2017, Webster Financial Corporation (the "Company") issued a press release announcing that James C. Smith, Chairman and Chief Executive Officer of the Company, plans to retire from his position as Chief Executive Officer effective December 31, 2017. The Company also announced that the Company's Board of Directors (the "Board") has selected John R. Ciulla, who currently serves as President of the Company, to succeed Mr. Smith as Chief Executive Officer of the Company, and join the Board, effective January 1, 2018. Following his retirement as Chief Executive Officer, Mr. Smith will continue to serve as non-executive Chairman of the Board and, at the request of the Board, will serve as an advisor to the Company.
Mr. Ciulla, age 52, is currently President of the Company and Webster Bank, N.A. Mr. Ciulla joined the Company in 2004 and has served in a variety of management positions at the Company, including chief credit risk officer, senior vice president, commercial banking, where he was responsible for several business units, and executive vice president and head of Middle Market Banking. He was promoted to lead Commercial Banking in January 2014 and to President in October 2015. Prior to joining the Company, Mr. Ciulla was managing director of The Bank of New York, where he worked from 1997 to 2004. He is the Chairman of the board of the Connecticut Business & Industry Association and serves on the board of the Business Council of Fairfield County. Mr. Ciulla's assumption of the position of Chief Executive Officer of the Company, in which capacity he will provide leadership of the Company, led to the conclusion that he should serve as a director. There are no family relationships between Mr. Ciulla and any director or executive officer of the Company or relationships or related transactions between Mr. Ciulla and the Company that are required to be reported.
Retirement and Advisory Services Agreement with Mr. Smith
In connection with Mr. Smith's agreement to serve as an advisor to the Company following his retirement as Chief Executive Officer, Mr. Smith and the Company have entered into an agreement providing for advisory services commencing on January 1, 2018 and ending on December 31, 2019, subject to renewal by the Company. In addition to Mr. Smith providing advisory services to the Company, the agreement extends the duration of Mr. Smith's current non-solicitation and non-competition covenants to cover the period during which Mr. Smith is providing advisory services to the Company, and one year thereafter in the event Mr. Smith voluntarily terminates his advisory services. Pursuant to the agreement, Mr. Smith will be paid director fees at the rate of $250,000 per year in respect of his service as Chairman of the Board and an annual advisory fee of $450,000 in respect of his service as an advisor to the Company. In addition, in recognition of the superior shareholder value created and maintained through the development of the Company's executive team, Mr. Smith's implementation of the Company's succession plan, and the orderly transition of his responsibilities as Chief Executive Officer to his successor, Mr. Smith will receive a cash award of $2 million, which will vest and be paid on July 2, 2018, subject to Mr. Smith's performance under the agreement through that date.
Upon certain qualifying terminations of Mr. Smith's advisory services, Mr. Smith would also be entitled to receive the cash award and advisory fees through the end of the then-current term.
The foregoing description of the retirement and advisory services agreement with Mr. Smith does not purport to be complete and is qualified in its entirety by reference to the full text of the agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.