EXHIBIT 4.2
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                          WEBSTER FINANCIAL CORPORATION

                               AMENDMENT NUMBER 1
                                       TO
                              AMENDED AND RESTATED
                             1992 STOCK OPTION PLAN

         The Webster Financial Corporation 1992 Stock Option Plan, as amended
and restated (the "Plan") is hereby amended as set forth below:

         1.   Section 6(a) of the Plan is amended to add the following new
              provision at the end thereof:

              "No option may be exercisable after grant prior to the completion
              of a minimum of one year of service for the Company from the date
              of such grant to the Optionee, unless the Board has provided that
              such service will not be required in the case of the death or
              disability of the Optionee; this service requirement applies
              solely with respect to options granted by reason of the 2,200,000
              increase in Shares that may be awarded pursuant to Amendment
              Number 2 to the Plan. The Board shall account for which Options
              were granted pursuant to such amendment in its sole and complete
              discretion."

         2.   Section 6(b) of the Plan is amended to add the following new
              provisions at the end thereof:

              "The Corporation or any Subsidiary, as the case may be, shall have
              the right to deduct from payments of any kind otherwise due to the
              Holder or Optionee any Federal, state, or local taxes of any kind
              required by law to be withheld with respect to the vesting of or
              other lapse of restrictions applicable to Restricted Stock or with
              respect to the exercise of Options. At the time of the vesting, or
              lapse of Restricted Stock or the exercise of Options, the
              Corporation or any Subsidiary may direct the Holder or Optionee to
              pay to the Corporation or such Subsidiary, as the case may be, any
              amount that the Corporation or such Subsidiary may reasonably
              determine to be necessary to satisfy the withholding obligation.
              Subject to the prior approval of the Corporation or any
              Subsidiary, as the case may be, which may be withheld in the sole
              discretion thereof, the Holder or Optionee may elect to satisfy
              these obligations, in whole or in part, (i) by causing the
              Corporation or such Subsidiary to withhold shares of Stock
              otherwise deliverable or by withholding from the Stock to be
              issued upon the exercise of an Option or (ii) by delivering to the
              Corporation or such Subsidiary shares of Stock already owned by
              the Holder or Optionee. The shares of Stock so delivered or
              withheld shall have a fair market value equal to the withholding
              obligations. The fair market value of the shares of Stock used to
              satisfy the withholding obligation shall be determined by the
              Corporation or any Subsidiary as of the date that the amount of
              tax to be withheld is to be determined.

              No Restricted Stock Awards may be issued pursuant to a grant prior
              to the completion of a minimum of one year of service for the
              Company from the date of such grant to the Holder, unless the
              Board has provided that such service will not be required in the
              case of the death or disability of the Holder; this service
              requirement applies solely with respect to Restricted Stock Awards
              granted by reason of the 2,200,000 increase in Shares that may be
              awarded pursuant to Amendment Number 2 to the Plan. The Board
              shall account for which Restricted Stock Awards were granted
              pursuant to such amendment in its sole and complete discretion.

              Of the increase in Incentive Awards by 2,200,000 Shares pursuant
              to Amendment Number 2 to the Plan, no more than 220,000 Shares
              therefore may be actually issued as

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              Restricted Stock Awards. The Board shall account for which
              Restricted Stock Awards were granted pursuant to such amendment in
              its sole and complete discretion."

         3.   Section 9 of the Plan is amended to add the following sentence at
              the end thereof:

              "No Option granted under the Plan shall be amended or modified so
              as to reduce the Option Price of such Option and no other action
              shall be taken to reprice any Option if such amendment,
              modification or other repricing would result in a charge against
              the earning of the Company or any of its Affiliates."

         4.   Section 12(a) of the Plan is amended to read in its entirety as
              follows:

              "(a) Employees and Subsidiary Directors. Upon the termination of
              the employment or service of an Optionee (other than a
              Non-Employee Director) with the Corporation or a Subsidiary, other
              than by reason of the Normal Retirement (as defined below), death
              or "permanent and total disability" (within the meaning of Section
              22(e)(3) of the Code) of such Optionee, any Option granted
              pursuant to the Plan shall terminate three months after the date
              of such termination of employment or service, unless earlier
              terminated pursuant to Section 10(a) above, and such Optionee
              shall have no further right to purchase shares of Stock pursuant
              to such Option; provided, however, that the Board may provide, by
              inclusion of appropriate language in an Option Agreement, that an
              Optionee may (subject to the general limitations on exercise set
              forth in Section 10(b) above), in the event of termination of
              employment or service of the Optionee with the Corporation or a
              Subsidiary, exercise an Option, in whole or in part, at any time
              subsequent to such termination of employment or service and before
              termination of the Option as provided in Section 10(a) above,
              either subject to or without regard to any installment limitation
              on exercise imposed pursuant to Section 10(b) above. Upon the
              termination of the employment or service of a Holder with the
              Corporation or a Subsidiary other than by reason of Normal
              Retirement, death or "permanent and total disability" (within the
              meaning of Section 22(e)(3) of the Code), any restricted Stock
              issued to such Holder that has not vested, or with respect to
              which all applicable restrictions and conditions have not lapsed,
              shall immediately be deemed forfeited, unless the Board, in its
              discretion, determines otherwise. Upon forfeiture of restricted
              Stock, the Holder shall have no further rights with respect to
              such Stock, including but not limited to any right to vote
              restricted Stock or any right to receive dividends with respect to
              such shares of restricted Stock. Whether a leave of absence or
              leave on military or government service shall constitute a
              termination of employment or service for purposes of the Plan
              shall be determined by the Board, which determination shall be
              final and conclusive. For purposes of the Plan, a termination of
              employment or service with the Corporation or a Subsidiary shall
              not be deemed to occur if immediately thereafter the Optionee or
              Holder is employed with the Corporation or any Subsidiary or is
              serving as a Subsidiary Director. Upon the termination of the
              employment or service of an Optionee (other than a Non-Employee
              Director) with the Corporation or a Subsidiary by reason of the
              Optionee's retirement after attaining age 65 ("Normal
              Retirement"), such Optionee shall have the right (subject to the
              general limitations on exercise set forth in Section 10(b) above),
              at any time before termination of the Option as provided in
              Section 10(a) above, to exercise, in whole or in part, any Option
              held by such Optionee at the date of such termination of
              employment or service, whether or not such Option was exercisable
              immediately before such termination of employment or service;
              provided, however, that the Board may provide, by inclusion of
              appropriate language in the Option Agreement, that the Optionee
              may (subject to the general limitations on exercise set forth in
              Section 10(b) above), in the event of the termination of
              employment or service of the Optionee with the Corporation or a
              Subsidiary by reason of Normal Retirement, exercise an Option, in
              whole or in part, at any time subsequent to such termination of
              employment or service and before termination of the Option as
              provided in Section 10(a) above, either subject to or without
              regard to any installment limitation on exercise imposed pursuant
              to Section 10(b) above. If a Holder terminates employment or
              service with the Corporation or a Subsidiary by reason of Normal
              Retirement, except as provided in the applicable Award Agreement,
              all shares of restricted Stock granted to such Holder shall fully
              vest upon such termination of employment or service."

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         5.   The Plan shall otherwise be unchanged by this Amendment Number 1.

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