Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-276034
PROSPECTUS SUPPLEMENT
(To prospectus dated December 14, 2023)
WEBSTER FINANCIAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
1,000,000 Shares of Common Stock
This prospectus supplement relates to shares of common stock we may offer and sell from time to time according to the terms of the Webster Financial Corporation Dividend Reinvestment and Stock Purchase Plan (the “Plan”). Participants should retain this prospectus supplement for future reference.
The Plan provides participants with a convenient and economical means of purchasing shares of our common stock by reinvesting the cash dividends paid on our common stock and by making additional optional cash purchases. In addition, new investors may make an initial investment in our common stock under the Plan. The minimum purchase amount for initial cash purchases is $250 and for subsequent optional cash purchases is $50. The maximum aggregate purchase per transaction is $5,000 and the maximum limit for both initial and optional cash purchases is $60,000 per year, unless we grant a waiver of these amounts. This prospectus supplement describes and constitutes the Plan.
Your participation in the Plan is entirely voluntary, and you may terminate your participation at any time. Holders of our common stock not electing to participate in the Plan will continue to receive cash dividends, if and when declared by our Board of Directors, in the usual manner.
Shares of common stock will be (i) purchased on the open market or (ii) purchased directly from us from authorized but unissued shares or from treasury shares.
We have appointed Broadridge Corporate Issuer Solutions, LLC (the “Plan Administrator”) to serve as the administrator of the Plan. You may enroll in the Plan through the Plan Administrator’s website (http://www.shareholder.broadridge.com/Webster) or by calling 1-855-222-4926 toll free and responding to the appropriate prompts. You may also enroll in the Plan by obtaining an enrollment form from the Plan Administrator and returning the completed form to the Plan Administrator.
Our common stock is listed for trading on the New York Stock Exchange under the symbol “WBS.”
Investing in our common stock involves risks. You should carefully review and consider the risk factors incorporated by reference into this prospectus supplement, as well as any additional risk factors included in, or incorporated by reference into, the base prospectus before buying any of our securities. See “Risk Factors” on page S-6 of this prospectus supplement.
None of the Securities and Exchange Commission, any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The offered securities are not savings accounts, deposits, or other obligations of any bank or non-bank subsidiary of ours. The securities are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality and are subject to investment risks.
The date of this prospectus supplement is December 14, 2023.
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ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus form part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”). This prospectus supplement, which does not include all of the information in the registration statement, provides you with a general description of the Plan and the securities offered under the Plan. The registration statement, prospectus and the exhibits to the registration statement provide additional information about us and the securities offered. The registration statement can be read at the SEC website or at the SEC offices mentioned under the heading “Where You Can Find More Information.”
If there is any inconsistency between the information in this prospectus supplement and the prospectus (including the information incorporated by reference therein), you should rely on the information in this prospectus supplement. You should read both this prospectus supplement and the prospectus, together with additional information described under the heading “Where You Can Find More Information.”
We have not authorized any other person to provide you with any information other than that contained or incorporated by reference in the registration statement prepared by or on behalf of us or to which we have referred you. We are not responsible for and can provide no assurance as to the accuracy of any other information that any other person may give you. You should not assume that the information in the registration statement is accurate as of any date other than the dates on the front of those documents. This prospectus supplement and the registration statement do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities described in this prospectus supplement, and do not constitute an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful.
Unless otherwise indicated or the context requires otherwise, references in this prospectus supplement to “Webster,” the “Company,” “we,” “us,” and “our” are to Webster Financial Corporation and its consolidated subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public at the SEC’s web site at www.sec.gov. These documents and other information we file with the SEC may also be accessed on our website at www.websterbank.com. Information contained on our website is not incorporated by reference into this prospectus and you should not consider information contained on our website to be part of this prospectus.
This prospectus supplement is part of a registration statement filed with the SEC and does not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us as indicated above.
The SEC allows us to “incorporate by reference” the information we file with the SEC into this prospectus supplement and the prospectus, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of the registration statement. Any information incorporated by reference into the registration statement that we file with the SEC after the date of this prospectus supplement will automatically update and supersede the information contained herein, as well as any earlier incorporated information.
Webster incorporates by reference the documents and information listed below that we have previously filed with the SEC:
| • | our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 10, 2023; |
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| • | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, filed with the SEC on May 8, 2023, August 8, 2023, and November 7, 2023, respectively; |
| • | our Current Reports on Form 8-K, filed with the SEC on January 11, 2023, January 26, 2023, March 3, 2023, April 5, 2023, April 20, 2023, April 28, 2023, July 20, 2023 and, October 19, 2023, respectively (except, with respect to each of the foregoing, for portions of such reports that were deemed to be furnished and not filed); |
| • | the audited consolidated financial statements of Sterling Bancorp and related notes as of December 31, 2021 and 2020, and for each of the fiscal years ended December 31, 2021, 2020, and 2019, which are filed as Exhibit 99.1 to our Current Report on Form 8-K/A, filed with the SEC on April 15, 2022; |
| • | the portions of the Definitive Proxy Statement for the 2023 Annual Meeting of Shareholders, filed with the SEC on March 15, 2023, solely to the extent incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2022; and |
| • | the description of Webster’s common stock contained in Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 10, 2023, as incorporated by reference into the Company’s Registration Statement on Form 8-A, filed with the SEC on December 2, 1986 (including any amendments or reports filed for the purpose of updating such descriptions) of our common stock and preferred stock. |
We also incorporate by reference any additional documents that we may file with the SEC in the future under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (in each case other than those documents or portions of those documents furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K or other information “furnished” in accordance with SEC rules), from the date of the registration statement of which this prospectus supplement is part until the termination of the offering of the securities to be issued under the registration statement. These documents may include annual, quarterly, and current reports, as well as proxy statements. Any material that we later file with the SEC will automatically update and replace the information previously filed with the SEC. These documents are available to you without charge. See “Where You Can Find More Information.”
We will provide to each person, including any beneficial owner, to whom a prospectus supplement (or a notice of registration in lieu thereof) is delivered a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically incorporated by reference as an exhibit to this prospectus) at no cost, upon a request to us by writing or telephoning us at the following address or telephone number:
Webster Financial Corporation
200 Elm Street
Stamford, Connecticut 06902
(203) 578-2202
Attention: Emlen Harmon, Senior Managing Director, Investor Relations
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement and the information included or incorporated by reference in it contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may,” “plans,” “estimates” and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to:
| • | projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; |
| • | statements of plans, objectives, and expectations of Webster or its management or Board of Directors; |
| • | statements of future economic performance; and |
| • | statements of assumptions underlying such statements. |
Forward-looking statements are based on Webster’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Webster’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause our actual results to differ materially from those discussed in any forward-looking statements include, but are not limited to:
| • | our ability to successfully execute our business plan and strategic initiatives, and manage any risks or uncertainties; |
| • | any continuation of the recent turmoil in the banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by government agencies in response; |
| • | volatility in Webster’s stock price due to investor sentiment, including in light of the recent turmoil in the banking industry; |
| • | local, regional, national, and international economic conditions, and the impact they may have on us or our customers; |
| • | volatility and disruption in national and international financial markets, including as a result of geopolitical conflict; |
| • | unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; |
| • | changes in laws and regulations, or existing laws and regulations that we become subject to, including those concerning banking, taxes, dividends, securities, insurance, and healthcare, with which we and our subsidiaries must comply; |
| • | adverse conditions in the securities markets that could lead to impairment in the value of our securities portfolio; |
| • | inflation, monetary fluctuations, the possibility of a recession, and changes in interest rates, including the impact of such changes on economic conditions, customer behavior, funding costs, and our loans and leases and securities portfolios; |
| • | possible changes in governmental monetary and fiscal policies, including, but not limited to, the Board of Governors of the Federal Reserve System (“Federal Reserve”) policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit, as needed; |
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| • | the impact of a potential U.S. federal government shutdown; |
| • | the timely development and acceptance of new products and services, and the perceived value of those products and services by customers; |
| • | changes in deposit flows, consumer spending, borrowings, and savings habits; |
| • | our ability to implement new technologies and maintain secure and reliable technology systems; |
| • | the effects of any cyber threats, attacks or events, or fraudulent activity, including those that involve our third-party vendors and service providers; |
| • | performance by our counterparties and third-party vendors; |
| • | our ability to increase market share and control expenses; |
| • | changes in the competitive environment among banks, financial holding companies, and other traditional and non-traditional financial service providers; |
| • | our ability to maintain adequate sources of funding and liquidity; |
| • | changes in the level of non-performing assets and charge-offs; |
| • | changes in estimates of future reserve requirements based upon periodic review under relevant regulatory and accounting requirements; |
| • | the effect of changes in accounting policies and practices applicable to us, including impacts of recently adopted accounting guidance; |
| • | our inability to remediate the material weaknesses in our internal control related to ineffective information technology general controls; |
| • | legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; and |
| • | our ability to appropriately address any environmental, social, governmental, and sustainability concerns that may arise from our business activities. |
Some of these and other factors are discussed in our annual and quarterly reports previously filed with the SEC. These factors could have an adverse impact on our financial position and our results of operations. All forward-looking statements in this prospectus supplement speak only as of the date they are made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by federal securities laws. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus supplement or in the incorporated documents might not occur, and you should not put undue reliance on any forward-looking statements.
Webster Financial Corporation is a bank holding company and financial holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), incorporated under the laws of Delaware in 1986, and headquartered in Stamford, Connecticut. Webster Bank, National Association (“Webster Bank”), along with HSA Bank, a division of Webster Bank (“HSA Bank”), is a leading commercial bank in the Northeast that delivers a wide range of digital and traditional financial solutions to businesses, individuals, families, and partners across its three differentiated lines of business: Commercial Banking, HSA Bank, and Consumer Banking. While our core footprint spans from New York to Rhode Island and Massachusetts, certain of our businesses operate in extended geographies. HSA Bank is one of the largest providers of employee benefit solutions in the United States, which includes health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter benefits.
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On January 31, 2022, Webster completed a merger with Sterling Bancorp in an all-stock transaction valued at $5.2 billion. The merger expanded our geographic footprint and combined two complementary organizations to create one of the largest commercial banks in the northeastern U.S.
Our common stock is listed on the New York Stock Exchange under the symbol “WBS”. Our principal executive offices are located at 200 Elm Street, Stamford, Connecticut 06902. Our telephone number is (203) 578-2202.
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Investing in our securities involves certain risks. Before you invest in the securities offered by this prospectus supplement, in addition to the other information included in, or incorporated by reference into, the registration statement, you should carefully consider the risk factors contained in Item 1A under the caption “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, which are incorporated into this registration statement by reference, as updated by our annual or quarterly reports for subsequent fiscal years or fiscal quarters that we file with the SEC and that are so incorporated. See “Where You Can Find More Information” for information about how to obtain a copy of these documents.
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We will receive proceeds from the sale of common stock that the Plan Administrator purchases directly from us. We will not receive proceeds from the sale of common stock that the Plan Administrator purchases in the open market or in privately negotiated transactions. We intend to use the net proceeds from our sale of common stock that the Plan Administrator purchases directly from us to fund our business operations and for general corporate purposes. We cannot estimate either the number of shares of common stock or the prices of the shares that we will sell in connection with the plan.
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DESCRIPTION OF OUR DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The following questions and answers explain and constitute our Dividend Reinvestment and Stock Purchase Plan. If you are a stockholder and do not participate in the Plan, you will receive cash dividends in the usual manner, as and when we declare and pay them. All references in this prospectus supplement to “common stock” refer to our common stock, par value $0.01 per share.
This Plan supersedes the former Webster Financial Corporation Dividend Reinvestment and Stock Purchase Plan and this prospectus supplement constitutes notice of the termination of the former plan. If you participated in the former plan at the time of the plan’s adoption, then you automatically are a participant in this Plan in the same manner, and to the same extent, as you participated in the former plan, unless you elect to terminate your participation in this Plan or wish to change your participation in some way (e.g., opt for partial reinvestment rather than full reinvestment of your Webster dividends).
PURPOSE
1. What is the purpose of the plan?
The primary purpose of the Plan is to provide both our existing stockholders and new investors with a simple, convenient and economical means of purchasing shares of our common stock, including through new cash purchases and the reinvestment of dividends on shares held in your Plan account. The Plan also provides us with an economical and flexible mechanism to raise additional capital for general corporate purposes through the sale of our common stock.
ADVANTAGES AND DISADVANTAGES
2. What are the advantages of participation in the Plan?
| • | You do not need to be a current stockholder, nor do you need to have a broker, to buy our common stock through the Plan. |
| • | You can start investing with a relatively small amount of money, or with a single larger investment – whichever you prefer. |
| • | You may send a check to the Plan Administrator or arrange for funds to be deducted from your savings or checking account. |
| • | Dividends and optional cash purchases can be fully invested in additional shares of our common stock because the Plan permits fractional shares to be credited to your accounts. Dividends on fractional shares may also be reinvested in additional shares. |
| • | If you are already a stockholder, you can consolidate all your holdings of our common stock into a single account. You can deposit your stock certificates into your Plan account or, if you hold shares with a broker, you can transfer those shares into your own name and deposit them into your Plan account. |
| • | The Plan offers you flexibility when you decide to sell your shares. You may request the sale of some or all of your shares through the Plan Administrator at any time. Or, if you prefer to have complete control over timing and price at which you sell, you may withdraw your shares from the Plan, at no cost to you, and sell them through a broker of your choice. |
3. What are the disadvantages of participation in the Plan?
| • | Because the prices at which shares are purchased are determined as of specified dates or as of dates otherwise beyond your control, you may lose some advantages otherwise available to you in being able |
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to select the timing of your investments. For example, because the price charged to you for shares purchased on the open market is the average price paid by a broker-dealer engaged by the Plan Administrator to obtain shares for all participants who acquire shares through the Plan on the same day, you may pay a higher price for shares purchased under the Plan than for shares purchased on the investment date outside of the Plan. |
| • | We will not pay interest on funds we hold pending investment. |
| • | Your reinvestment of cash dividends will result in you being treated for federal income tax purposes as having received a dividend on the dividend payment date, to the extent of our earnings and profits. The dividend may give rise to a liability for the payment of income tax without providing you with immediate cash to pay the tax when it becomes due. |
| • | Sales of shares for participants are irrevocable and will be made at market prices at the time of sale. You will not be able to control the timing of such sales or to place “limit orders” specifying the prices at which you are willing to sell your shares. |
| • | To sell your shares through a broker of your choice, you must first arrange to obtain a physical stock certificate from the Plan Administrator and have the certificate delivered to you, or ask the Plan Administrator to transfer shares held for you in the Plan directly to your broker. The Plan Administrator will promptly process your instructions, but you should leave ample time for preparation and receipt of your stock certificate if you decide to go that route. |
| • | You may not pledge shares of common stock deposited in your Plan account unless you withdraw the shares from the Plan. |
| • | Shares held in the Plan by the Plan Administrator are not covered by the customer protection provisions of the Securities Investor Protection Act of 1970 relating to customers of failed securities broker-dealer firms. |
| • | If you direct the Plan Administrator to facilitate the sale of less than all of your shares of common stock held by the Plan, you may not be able to specifically identify which shares are sold for purposes of determining whether the sale results in short-term or long-term gain or loss for income tax purposes. |
ADMINISTRATION
4. Who administers the Plan for the participant?
The Plan is administered by Broadridge Corporate Issuer Solutions, LLC, a limited liability company independent of, and not affiliated with, us. The Plan Administrator:
| • | acts as your agent; |
| • | keeps records of all Plan accounts; |
| • | sends your account statements to you; |
| • | facilitates the purchase and sale, on your behalf, of all shares of common stock under the Plan; and |
| • | performs other duties relating to the Plan. |
Please refer to Question 33 herein for the Plan Administrator’s website, phone numbers and addresses.
Successor to the Plan Administrator: We may replace the Plan Administrator at any time. The Plan Administrator may resign as Plan Administrator at any time. In either case, we will appoint a successor Plan Administrator, and will notify you of the change.
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PARTICIPATION
5. Who is eligible to participate in the Plan?
Any person or legal entity is eligible to participate in the Plan. You do not have to be a current stockholder, nor do you have to reside or be located in the U.S. or be a U.S. citizen. However, you must become a stockholder of record in order to participate in the dividend reinvestment component of the Plan. In all cases, optional cash purchases of shares through the plan must be made in U.S. currency drawn on a U.S. bank. In addition, before investing in our common stock, each participant who resides or is located outside the U.S. is responsible for reviewing the laws of his or her country of residence or other applicable laws to determine if there are any restrictions on his or her ability to invest through the Plan.
6. How can I participate in the Plan?
Eligible stockholders as well as new investors can enroll either by going to the Plan Administrator’s website or by requesting an enrollment form from the Plan Administrator and returning the completed form by mail. An automated voice response system is also available for eligible stockholders to elect dividend reinvestment of their dividends. Please refer to Question 33 herein for the Plan Administrator’s website, phone numbers and addresses.
DIVIDEND REINVESTMENT
7. How does the reinvestment process work?
As a participant in the Plan, you may elect to reinvest all, part or none of the dividends paid on your Webster common stock, and your preference should be indicated on the enrollment form. If you complete and return an enrollment form without selecting one of these three options, all of your dividends will be automatically reinvested in shares of Webster.
| • | Full dividend reinvestment: If you select this option, all of the cash dividends paid on the shares you enroll in the Plan will automatically be reinvested to purchase additional shares of Webster stock. |
| • | Partial dividend reinvestment: If you select this option, a portion of your cash dividends will be paid to you in cash, and the remaining portions of your dividends will be automatically reinvested to purchase additional shares of Webster common stock. If you choose partial reinvestment, you must specify on the enrollment form the number of whole shares on which you wish to continue to receive cash dividends by check or to have directly deposited into your designated checking or savings account, as further described below. The remaining dividends will be automatically reinvested. |
| • | No dividend reinvestment: If you select this option, all of your dividends will be paid to you in cash. You may choose to have your cash dividends directly deposited into your designated checking or savings account or sent to you by check. |
| • | To arrange to have your dividends directly deposited into your designated bank account, you must complete and return a direct deposit authorization form. You may request an authorization form by calling the Plan Administrator at 1-855-222-4926, or you may authorize the direct deposit of dividends when you enroll in the Plan online, or access your account online at http://www.shareholder.broadridge.com/Webster. |
8. When will the reinvestment of my dividends begin?
The reinvestment of your dividends will begin with the first quarterly cash dividend that we pay following your enrollment, but only if your enrollment is received by the date that is five (5) days prior to the record date for that dividend. If your enrollment is received between a record date and a payable date, the reinvestment of your dividends will commence with the dividend payment in the following quarter.
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9. Can I deposit stock certificates for safekeeping with the Plan Administrator?
You may deposit any or all of your Webster stock certificates for safekeeping. This added feature relieves you of the worry associated with the possibility of loss, theft or destruction of the certificates. This service is provided to Plan participants without charge.
INITIAL AND OPTIONAL CASH PURCHASES.
10. When and how can I make initial or optional cash purchases?
New investors may make an initial cash purchase when enrolling in the Plan by enclosing a check with their enrollment form, or by authorizing an automatic debit from a designated bank account when enrolling online at the Plan Administrator’s website. In both cases, the minimum initial cash purchase amount is $250.
As a Plan participant, you may also make optional cash purchases of our common stock. The minimum cash purchase accepted per transaction is $50. You may make purchases up to a maximum of $5,000 per transaction and the maximum limit for both initial and optional purchases is $60,000 per year, unless we grant you a waiver of these amounts. The purchase, less the appropriate service fee as set forth in the schedule in Question 12, will be applied toward the purchase of shares for your account as promptly as practicable, usually within five (5) business days upon receipt of funds by the Plan Administrator.
Your cash purchases may be commingled by the Plan Administrator with dividends and with other participants’ cash purchases for the purpose of buying shares of common stock. You cannot specify the prices or timing of purchases, nor can you make any other limitations on the purchase of shares other than those specified under these terms and conditions. No interest will be paid on optional cash purchases pending investment.
If you choose to submit a check, be sure to use the contribution form that appears on your Plan statement, and mail it to the address specified on the form. Alternatively, if you wish to make regular monthly purchases, you may authorize automatic deductions from your bank account. This feature enables you to make ongoing investments in an amount that is comfortable for you, without having to write a check. You also may authorize individual debits from your bank account through the Plan Administrator’s website.
In the event that your optional cash purchase check or EFT is returned unpaid for any reason, you will be charged a $35.00 return fee. Further, the Plan Administrator will remove from your account shares that were purchased in anticipation of the collection of such funds plus the return fee. These shares will be sold to recover any uncollected funds and the return fee. If the net proceeds of the sale of such shares are insufficient to recover in full the uncollected amounts plus the return fee, the Plan Administrator reserves the right to facilitate the sale of such additional shares from any of your accounts maintained by the Plan Administrator as may be necessary to recover in full the uncollected balance plus the return fee.
11. Am I obligated to make cash purchases if I enroll in the Plan?
No. Cash purchases are entirely voluntary. You may supplement the reinvestment of your dividends with optional cash purchases as often as you like, or not at all. Or you may buy shares with optional cash purchases and choose not to reinvest any or all of your dividends.
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FEES
12. What fees may I incur by participating in the Plan?
Dividends are reinvested at no charge to Plan Participants. However, you will be charged a service fee for each optional cash investment. The amount of the service fee will vary, depending on the form of payment and the frequency of purchases, as follows:
Method of Payment | Per Investment | |||
By Check | $ | 5.00 | ||
By Electronic Debit | $ | 2.00 | ||
In addition, you will incur a trading fee of $0.10 per share for shares acquired on the open market with reinvested dividends, initial and optional cash purchases. A $15.00 transaction fee, plus a trading fee of $0.10 per share, will be charged each time Plan shares are sold on your behalf.
PURCHASE OF SHARES
13. What is the source of the common stock that may be purchased through the Plan?
At our discretion, share purchases will be made on the open market or directly from Webster. Shares purchased from Webster may come from our authorized but unissued shares or from our treasury shares. Share purchases on the open market may be made on any stock exchange where our common stock is traded or through negotiated transactions, on such terms as the Plan Administrator determines. Neither we nor you will have any authority to direct the date, time, or price at which shares may be purchased by the broker-dealer engaged by the Plan Administrator.
14. How will shares be purchased under the Plan?
| • | Upon receipt of your funds, the Plan Administrator will facilitate initial investments and additional cash purchases as promptly as practicable, normally within five (5) business days. |
| • | Shares will be posted to your account in whole and fractional shares, computed to six decimal places. A confirmation of your transaction will be sent by e-mail or via a paper statement to the Internet or postal address you give us when you enroll in the Plan. |
| • | In the unlikely event that, due to unusual market conditions, the Plan Administrator is unable to facilitate the investment of the funds within thirty-five (35) calendar days, the Plan Administrator will return the funds to you by check. No interest will be paid on funds held by the Plan Administrator pending investment. |
| • | For automatic monthly purchases, the amounts you have authorized will be withdrawn from your bank account on the 25th day of each month, or on the next succeeding business day if the 25th falls on a weekend or a holiday. The funds will be credited to your Plan account and normally invested within five (5) business days after receipt by the Plan Administrator. |
| • | The Plan Administrator will use your cash to facilitate the purchase of as many full and fractional shares as possible. |
15. How will the price for my shares be determined?
For shares purchased on the open market, the purchase price will be the average price that the Plan Administrator pays to obtain shares for all participants who acquire shares through the Plan for the same investment date. For shares purchased by investors directly from Webster, the purchase price will be 100% of the average of the high and low sales prices of our common stock, as reported in the New York Stock Exchange Composite Transactions listing, on the investment date, less any discount that we may decide to offer.
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16. Will shares be offered to Plan participants at a discount?
We will establish a waiver discount only for shares that are purchased directly from us pursuant to a waiver request. For each pricing period, we may establish a discount from the market price applicable to optional cash purchases and initial investments made pursuant to a request for waiver (please see Question 17). This waiver discount, if any, will range from 0% to 5% of the purchase price and may vary for each pricing period. The waiver discount, if any, will be established at our sole discretion after a review of current market conditions, the level of participation in the Plan, the attractiveness of obtaining additional funds through the sale of our common shares as compared to other sources of funds, and our need for additional funds. You may obtain information regarding the maximum waiver discount, if any, by contacting the Plan Administrator at 1-855-222-4926 or shareholder@broadridge.com. Setting a waiver discount for a particular pricing period will not affect the setting of a waiver discount for any subsequent pricing period. The waiver discount, if any, will apply only to optional cash purchases and initial investments in excess of $60,000. The waiver discount, if any, will apply to the entire optional cash purchase or initial investment made pursuant to a waiver and not just the portion in excess of $60,000.
17. May I invest more than the Plan maximums of $5,000 per transaction and $60,000 per account per year?
Yes, if you request a waiver of these limits and we grant your waiver request. Upon receipt of a written waiver form from an investor, we will consider waiving the maximum transaction or annual investment limit. Grants of waiver requests will be made in our sole discretion based on a variety of factors, which may include: our current and projected capital needs, prevailing market prices of our common stock and other securities, and general economic and market conditions.
Shares purchased in excess of the Plan maximum investment amounts of $5,000 per transaction and $60,000 per year will be priced as follows:
| • | Investments for which a waiver has been granted will be made subject to a “pricing period,” which will generally consist of one (1) to fifteen (15) separate days during which trading of our common stock is reported on the New York Stock Exchange. Each of these separate days will be an “investment date,” and an equal proportion of the investment amount will be invested on each trading day during such pricing period, subject to the qualifications listed below. The purchase price for shares acquired on a particular investment date will be equal to 100% (subject to change as provided below) of the volume-weighted average price (less any applicable discount), rounded to six decimal places, of our common stock as reported by the New York Stock Exchange only, obtained from Bloomberg, LP for that investment date. Funds for such investments must be received by the Plan Administrator not later than the business day before the first day of the pricing period. |
| • | We may establish a minimum, or “threshold,” price for any pricing period that the volume-weighted average price, rounded to six decimal places, of our common stock must equal or exceed during each trading day of the pricing period for investments made pursuant to a waiver request. |
| • | If we decide to establish a threshold price for a particular pricing period, the threshold price for any investments made pursuant to a request for waiver will be a stated dollar amount that the volume-weighted average price, rounded to six decimal places, of our common stock, as reported by the New York Stock Exchange for each trading day in the relevant pricing period, must equal or exceed. If the threshold price is not satisfied for a trading day in the pricing period, then that trading day and the trading prices for that day will be excluded from the pricing period. |
| • | We will only establish a threshold price if shares will be purchased directly from us in connection with the relevant pricing period (please see first bullet above). If we have established a threshold price with respect to the relevant pricing period, then we will exclude from the pricing period any trading day that the volume-weighted average price is less than the threshold price and refund that day’s proportional |
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investment amount. For example, if the threshold price is not met for two (2) of the trading days in a ten-day pricing period, then we will return 20% of the funds you submitted in connection with your waiver request, without interest, unless we have activated the pricing period extension feature for the pricing period, as described below. |
| • | Neither we nor the Plan Administrator are required to notify you that a threshold price has been established for any pricing period. |
| • | We may elect to activate for any particular pricing period a pricing period extension feature which will provide that the initial pricing period be extended by the number of days that the threshold price is not satisfied, subject to a maximum of five (5) trading days. If we elect to activate the pricing period extension feature and the threshold price is satisfied for any additional day that has been added to the initial pricing period, that day will be included as one of the trading days for the pricing period instead of the day on which the threshold price was not met. For example, if the determined pricing period is ten (10) days, and the threshold price is not satisfied for three (3) out of those ten (10) days in the initial pricing period, and we had previously announced in the bid-waiver form that the pricing period extension feature was activated, then the pricing period will be automatically extended, and if the threshold price is satisfied on the next three (3) trading days (or a subset thereof), then those three (3) days (or subset thereof) will become investment dates in lieu of the three (3) days on which the threshold price was not met. As a result, because there were ten (10) trading days during the initial and extended pricing period on which the threshold price was satisfied, all of the funds that you include with your request for waiver will be invested. |
| • | Newly issued shares purchased pursuant to a request for waiver will be posted to participants’ accounts within three (3) business days following the end of the applicable pricing period, or, if we elect to activate the continuous settlement feature, within three (3) business days of each separate investment date beginning on the first investment date in the relevant pricing period and ending on the final investment date in the relevant pricing period, with an equal amount being invested on each day, subject to the qualifications set forth above. During any month when we are proposing to grant requests for waiver for one or more investments, we may elect to activate the continuous settlement feature for such investments by announcing in the bid-waiver form that we will be doing so. The purchase price of shares acquired on each investment date will be equal to the volume-weighted average price obtained from Bloomberg, LP (unless such service is unavailable, in which case we will designate another service to be utilized before the beginning of the pricing period), rounded to six decimal places for each of the investment dates during the pricing period, assuming the threshold price is met on that day, less any discount that we may decide to offer. For each pricing period (assuming the threshold price is met on each trading day of that pricing period), we would have a separate settlement of each investment dates’ purchases, each based on the volume-weighted average price for the trading day relating to each of the investment dates during the pricing period. |
Waiver request forms and information regarding the establishment of a threshold price, if any, may be obtained by contacting the Plan Administrator at 1-855-222-4926 or shareholder@broadridge.com.
SALE OF PLAN SHARES
18. How can I sell the shares of common stock that are held in my Plan account?
You may request that the Plan Administrator facilitate the sale of some or all of the shares held in your Plan account. The broker-dealer engaged by the Plan Administrator will aggregate all shares for which requests to sell were received and will sell the whole shares on the open market through such broker-dealer. In such event, you will receive proceeds based on the average sale price of all shares sold, less a transaction fee of $15.00, plus a trading fee of $0.10 per share. The Plan Administrator will deduct these amounts from the cash proceeds paid to you. Shares being sold for you may be aggregated with those of other Plan participants who have requested sales.
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If you opt to sell all of the shares held for you in the Plan, your participation in the Plan will be automatically terminated.
Alternatively, you may choose to sell your shares through a broker-dealer of your choice, in which case you will have to request that the Plan Administrator either (a) electronically transfer your shares to your stockbroker, or (b) issue the shares in certificate form for delivery to your stockbroker before settlement of the sale.
The Plan Administrator may determine the price for the fractional shares either by (a) facilitating the sale of shares on the open market through a registered broker-dealer, or (b) using the current price of our common stock on the New York Stock Exchange, or as quoted by a registered broker-dealer on the date of the request.
19. If I request the sale of the shares held in my Plan account, when will they be sold?
If you request the sale of shares that are held for you in the Plan, the Plan Administrator will use its best efforts to facilitate the sale of your shares on the open market by the broker-dealer engaged by the Plan Administrator within five (5) business days after receipt of your sale instructions, or as soon as otherwise practicable. A check in payment of the net proceeds will be mailed to you as soon as practicable after the sale has taken place.
There can be no assurances with respect to the ability of the broker-dealer engaged by the Plan Administrator to sell your shares and no assurances as to the prices or timing of such sales, or the terms under which such sales may be transacted. Neither we nor the Plan Administrator has any obligation under the Plan, and assume no responsibility, to facilitate the purchase of whole shares credited to your Plan account if such shares cannot be sold by the broker-dealer engaged by the Plan Administrator.
DIVIDENDS
20. How will I be credited with the dividends paid on the shares I have enrolled in the Plan and/or that are being held in my Plan account?
The Plan Administrator will receive the cash dividends (less the amount of any taxes withheld) paid by us on all whole and fractional shares that are enrolled and/or held in the Plan at the dividend record date, and will credit such dividends to your Plan account on the payable date. The dividends received by the Plan Administrator will automatically be reinvested in shares of our common stock.
21. What if I decide that I would like to receive in cash some of the dividends paid on the shares enrolled or held in the Plan, rather than having them reinvested?
The Plan permits partial reinvestment of dividends. Please see Question 7.
REPORTS TO PARTICIPANTS
22. What reports will I receive as a participant in the Plan?
As soon as practicable after each transaction, you will receive a statement with information about your Plan account, including amounts invested, the purchase and/or sale prices, and the number of shares purchased and/or sold. This statement will provide a record of purchases and sales transacted on your behalf under the Plan and you should retain it for income tax purposes. As a stockholder, you also will receive various communications, including our annual report to stockholders, notices of stockholder meetings, proxy statements, and information for income tax reporting.
ISSUANCE AND DEPOSIT OF STOCK CERTIFICATES
23. Will certificates be issued to me for shares of common stock purchased through the Plan?
Certificates for shares of common stock that are purchased through the Plan will not be issued to you, unless you request that the Plan Administrator do so. All shares will be issued to the Plan Administrator or its nominee(s) as
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agent, and credited to your Plan account in book entry form. The number of shares credited to your Plan account will appear on your account statements. This convenient process protects against loss, theft, or destruction of stock certificates, and reduces our costs.
Shares credited to your Plan account may not be assigned or pledged in any way. If you wish to assign or pledge the whole shares credited to your account, you must request that certificates for those shares be issued to you in your name.
Upon receipt of your request, the Plan Administrator will issue you a certificate for any number of whole shares credited to your Plan account. Certificates for fractional shares will not be issued under any circumstances.
The name on your Plan account will be identical to the name that appears on the certificate(s) underlying the shares you have enrolled in the Plan and/or that are held for you in the Plan in book entry form. Certificates for whole shares issued to you from the Plan will be registered in the same manner.
24. How can I arrange for my stock certificate(s) to be held in safekeeping by the Plan Administrator?
If you wish to submit your stock certificate(s) to the Plan Administrator for safekeeping, you should mail them (unendorsed) by registered mail, with a note requesting that they be credited to your Plan account.
If the current market value of the shares represented by the certificate(s) you are mailing to the Plan Administrator exceeds $3,000, you should insure the certificate(s) for 1% of the current market value, as this is the amount you will be charged for surety protection should your certificate(s) be lost in the mail.
TERMINATION OF PLAN PARTICIPATION
25. How do I terminate my participation in the Plan?
Participation in the Plan is entirely voluntary. You may terminate your participation at any time by providing notice and instructions to the Plan Administrator. Upon receipt, the Plan Administrator, in accordance with your instructions, will either (a) discontinue the reinvestment of the dividends paid on the shares enrolled and/or held in your Plan account, but continue to hold those shares in book form on your behalf; (b) issue a certificate for the whole shares credited to your Plan account and issue a cash payment for any cash in lieu of a fractional share; or (c) instruct the broker-dealer engaged by the Plan Administrator to sell the whole shares credited to your Plan account and issue a cash payment for the proceeds plus any cash in lieu of a fractional share, less associated trading fees of $0.10 per share and the $15.00 transaction fee.
TAX INFORMATION
26. What are the tax consequences of my participation in the plan?
The following is a brief summary of the material U.S. federal income tax consequences of participation in the Plan to U.S. Holders (as defined below) which is for general information only, and does not constitute tax advice. It is based on the Internal Revenue Code of 1986, as amended (“Code”), final, temporary and proposed Treasury regulations promulgated thereunder, administrative pronouncements of the Internal Revenue Service (the “IRS”), and judicial decisions, all as in effect on the date of this prospectus supplement and all subject to change or differing interpretations, possibly with retroactive effect. This summary does not purport to address all of the tax consequences that may be relevant to you in light of your particular circumstances or to Plan participants that are subject to special federal income tax laws (including, but not limited to, U.S. Holders that: (a) are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) are financial institutions, insurance companies, real estate investment trusts, or regulated investment companies; (c) are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) have a “functional currency” other than the U.S. dollar; (e) own shares
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of common stock as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other integrated transaction; (f) acquire shares of common stock in connection with the exercise of employee stock options or otherwise as compensation for services; (g) hold shares of common stock other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) are subject to special tax accounting rules). In addition, this summary does not address U.S. federal tax laws other than those pertaining to U.S. federal income tax (such as U.S. federal estate or gift tax and the Medicare contribution tax on certain net investment income), nor does it address any aspects of U.S. state, local or non-U.S. taxes. If a partnership (or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding common stock, you should consult your own tax advisors. You are urged to consult your personal tax advisor as to all federal, state, local, foreign and other tax implications of your participation in the Plan, including in connection with the reinvestment of dividends and purchase of shares of common stock under the plan, your tax basis and holding period for shares acquired under the plan and the character, amount and tax treatment of any gain or loss realized on the disposition of shares.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes: (a) an individual who is a citizen or resident of the United States; (b) a corporation (or other entity or arrangement treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (d) a trust, if (i) a court within the United States can exercise primary supervision over the administration of the trust and one or more U.S. persons has authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable Treasury regulations to be treated as a United States person.
Tax Consequences of Dividend Reinvestment
In general, even though you do not actually receive dividends that are reinvested under the Plan, you will be treated for U.S. federal income tax purposes as having received a cash distribution. The amount of such distribution, in the case of reinvested dividends used to purchase shares of common stock (including fractional shares) on the open market, generally will be equal to the cash dividend used to purchase those shares, plus the amount of your allocable portion of any brokerage fees paid by us in connection with those open-market purchases. The amount of such distribution, in the case of reinvested dividends used to purchase shares directly from us, will be equal to the fair market value of the purchased shares (including fractional shares) on the dividend payment date, plus the discount, if any, at which the common shares were purchased. These distributions will be treated as dividend income to you to the extent paid out of our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. To the extent that such distributions exceed our current and accumulated earnings and profits, the excess will constitute a return of capital that is applied against, and will reduce, your tax basis in our common stock, but not below zero, and then will be treated as gain from the sale of such stock. Certain individuals and other non-corporate Plan participants may be eligible to be taxed at reduced rates of tax with respect to distributions treated as qualified dividend income if certain holding period and other requirements are satisfied. You are urged to consult your own tax advisors regarding the treatment of distributions as qualified dividend income in light of your particular circumstances.
Optional Cash Purchases
In general, you will not realize income, gain or loss for U.S. federal income tax purposes as a result of the purchase of shares of common stock pursuant to the Plan’s optional cash purchase feature. However, if you participate in the Plan’s dividend reinvestment feature and you make optional cash purchases in our common stock under the Plan, you may be treated for U.S. federal income tax purposes as having received a taxable distribution in an amount equal to, (i) in the case of shares of common stock purchased on the open market, the amount of your allocable portion of any brokerage fees paid by us in connection with those open-market
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purchases, and (ii) in the case of shares of common stock purchased directly from us, the excess, if any, of the fair market value of the common stock purchased (plus the discount, if any, at which the common shares were purchased) over the amount of your optional cash purchase.
Tax Basis of Shares
For U.S. federal income tax purposes, the tax basis of shares of our common stock purchased (including in connection with optional cash purchased under the Plan) generally is the purchase price of the shares plus any brokerage commissions and fees paid in connection with the purchase. The tax basis of shares of our common stock purchased with reinvested dividends generally will equal the total amount of distributions you are treated as having received, which will include (i) your allocable portion of any brokerage fees paid by us in connection with open-market purchases, or (ii) the discount, if any, at which the common shares were purchased in connection with reinvested dividends used to purchase shares directly from us. The tax basis of shares of our common stock acquired will be reported in accordance with applicable Treasury regulations. Your holding period for shares acquired pursuant to either program under the Plan will begin on the day following the applicable purchase date.
Deposit, Withdrawal or Sale of Shares
You generally will not realize any taxable income or any gain or loss for U.S. federal income tax purposes when you deposit shares into your Plan account or when whole shares are withdrawn from your Plan account, either upon request for withdrawal by you, upon termination of your participation in the Plan or upon termination of the Plan by us. You generally will, however, recognize capital gain or loss when you receive cash payments (a) for fractional shares credited to your account upon your withdrawal from the Plan, (b) upon termination of your participation in the Plan, and (c) upon the Plan’s termination. You generally will also recognize capital gain or loss when shares of common stock acquired under the Plan (including fractions of a share) are sold by the Plan Administrator or by you after withdrawal of the shares from the Plan. The amount of gain or loss described herein will be equal to the difference (if any) between the amount you realize for your shares (or fractional shares) and your adjusted tax basis in the shares. In general, any capital gain or loss will be long-term if your holding period for the shares (or fractional shares) is more than one year and will be short-term if your holding period is one year or less. Your holding period for shares of common stock acquired pursuant to the Plan generally begins on the day following the date the shares are credited to your account. Long-term capital gains of individuals and other non-corporate taxpayers generally are eligible for reduced rates of taxation. The deductibility of capital losses is subject to certain limitations. You should consult your tax advisor as to the consequences of a sale of our shares in view of your particular circumstances.
Net Investment Income Tax
Certain U.S. Holders that are individuals, estates or trusts will be subject to a 3.8% Net Investment Income tax on, among other things, dividends on, and capital gains from the sale or other disposition of, stock, subject to certain exceptions. If you are a participant that is an individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of the Net Investment Income tax to your income and gains in respect of your investment in the shares acquired under the plan.
IRS Reports
The Plan Administrator reports dividend income to participants and the IRS on IRS Form 1099-DIV. The Plan Administrator reports the proceeds from the sale of Plan shares to the selling participants and the IRS on IRS Form 1099-B
Backup Withholding
Under some circumstances, U.S. Holders may be subject to backup withholding (currently at a rate of 24%) on dividend payments made with respect to, or cash proceeds of a sale or exchange of, shares. Backup withholding
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will generally apply only if you fail to provide a correct taxpayer identification number (which, for an individual, would be his or her social security number) on a properly completed IRS Form W-9 to the Plan Administrator. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the IRS. In any case in which backup withholding applies to dividends that are reinvested under the plan, the administrator reinvests an amount equal to the dividends less the amount of tax withheld. For IRS reporting purposes, the amount of the tax withheld is included in the participant’s dividend income.
OTHER INFORMATION
27. What happens if I decide to sell or transfer all of the certificated shares enrolled in the Plan but not the shares that are held in my Plan account?
If you sell or transfer all of the certificated shares enrolled in the Plan, but continue to hold shares in your Plan account, the cash dividends on the shares held in your Plan account will continue to be reinvested, unless you instruct the Plan Administrator to terminate your participation in the Plan.
28. If Webster issues additional shares of common stock in connection with a stock dividend or a stock split, how will I receive the additional shares?
Any shares representing stock dividends or stock splits that we distribute on shares of our common stock that you have enrolled in the Plan and/or that are being held in your Plan account will be credited to your Plan account.
29. How will I be able to vote the shares held in my Plan account?
The shares credited to your Plan account will be automatically added to the shares covered by the proxy provided to you with respect to your certificated and book entry form of common stock, and may be voted by you pursuant to such proxy.
30. What are the responsibilities of Webster and the Plan Administrator under the Plan?
Except as described below, the Plan Administrator has no responsibility with respect to the preparation or the contents of this Plan. Neither we nor the Plan Administrator or its nominee(s), in administering the Plan, will be liable for any act done in good faith. Neither we nor the Plan Administrator will be liable for any good faith omission to act, including, without limitation, any claims of liability arising out of: (a) failure to terminate a participant’s account upon the participant’s death before the receipt of notice in writing of the death; (b) the prices and times at which shares of common stock are purchased or sold for the participant’s account or the terms under which such purchases or sales are made; or (c) fluctuations in the market value of our common stock. Neither we nor the Plan Administrator can assure you of a profit, or protect you against a loss, from the shares purchased or sold through the Plan. An investment in our common stock is subject to significant market fluctuations, as are all equity investments. We cannot control purchases facilitated by the Plan Administrator under the Plan and cannot assure you that dividends on our common stock will not be reduced or eliminated in the future.
31. Who interprets the Plan?
Webster and the Plan Administrator reserve the right to interpret the Plan as they deem necessary or desirable. Any such interpretation will be final. The Plan, and any related Plan documentation and Plan accounts, will be governed by, and construed in accordance with, the laws of the State of Delaware.
32. May the Plan be changed or discontinued?
While we currently expect to offer a dividend reinvestment and stock purchase plan indefinitely, we reserve the right to suspend, modify, or terminate the Plan at any time. You will receive notification of any such suspension,
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material modification, or termination. We and the Plan Administrator also reserve the right to change any administrative procedures of the Plan (including fees and expenses) at any time without notice to you, and any such changes shall not be deemed material modifications to the Plan.
33. Who do I contact if I have a question about the Plan?
The Plan Administrator will answer any questions you have about buying or selling our common stock through the Plan or about any other Plan services. You may contact the Plan Administrator in the following ways:
| • | Internet: In order to access your account online, you must first set up log in credentials for the Portal. To do that, please go to our website at http://shareholder.broadridge.com/Webster, at the top right of the homepage, click on “Log In”, and follow the instructions respective to your account’s registration. |
If you have an individual or joint tenant registration and have a Taxpayer Identification Number (TIN) on file, you can go to http://shareholder.broadridge.com/Webster to access your account online. If your TIN is not certified, please contact us to request a W-9 form to tax certify your account.
| • | Written Inquiries: You may make an e-mail inquiry by following the email link on the http://shareholder.broadridge.com/Webster website or by directly e-mailing shareholder@broadridge.com. |
Please address all other correspondence concerning the Plan to the Plan Administration at the following address:
| For Standard Mail: Broadridge DSP c/o Broadridge Shareholder Services | For Overnight Delivery Services: Broadridge Corporate Issuer Solutions, LLC Attn: IWS | ||
P.O. Box 1342 Brentwood, NY 11717-0718 | 1155 Long Island Avenue Edgewood, NY 11717 |
Be sure to reference Webster Financial Corporation on all written correspondence and include your name, address, daytime telephone number and account number.
| • | Telephone Inquiries: The Plan Administrator may be reached directly by dialing: |
1-855-222-4926—a toll free dedicated number in the United States and Canada
1-720-864-4321—international phone number for shareholders outside of the United States and Canada
An interactive voice response system is available 24 hours a day, 7 days a week. Customer Service Representatives are available from 9:00 a.m. to 6:00 p.m., Eastern Time, Monday through Friday, except holidays.
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Except to the extent the broker-dealer engaged by the Plan Administrator purchases common stock in the open market or in privately negotiated transactions with third parties, the common stock acquired under the Plan will be sold directly by us through the Plan. We may sell our common stock to owners of shares (including brokers or dealers) who, in connection with any resales of such shares, may be deemed to be underwriters. These shares, including shares acquired through waivers granted with respect to the stock purchase program of the Plan, may be resold in market transactions (including coverage of short positions) on any national security exchange or automated quotation system on which our common stock trades or is quoted, or in privately negotiated transactions. Our common stock is currently listed on the New York Stock Exchange. The difference between the price owners who may be deemed to be underwriters pay us for our common stock acquired under the Plan and the price at which such shares are resold, may be deemed to constitute underwriting commissions received by these owners in connection with such transactions.
Subject to the availability of common stock registered for issuance under the Plan, there is no total maximum number of shares that can be issued pursuant to the reinvestment of dividends.
Upon your withdrawal from the Plan by the sale of common stock held under the Plan, you will receive the proceeds of such sale less a $15 service fee per transaction and a $0.10 per share sales commission to the Plan Administrator and any other applicable fees.
Common stock may not be available under the Plan in all states. This prospectus supplement does not constitute an offer to sell, or a solicitation of an offer to buy, any common stock or other securities in any state or any other jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction.
The validity of the common stock offered by this prospectus supplement has been passed upon by Squire Patton Boggs (US) LLP, New York, New York.
The consolidated financial statements of Webster Financial Corporation appearing in Webster Financial Corporation’s Annual Report on Form 10-K as of December 31, 2022 and 2021, and for each of the years in the three-year period ended December 31, 2022, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2022 have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG LLP, independent auditor, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report on the effectiveness of internal control over financial reporting as of December 31, 2022, expresses an opinion that Webster Financial Corporation did not maintain effective internal control over financial reporting as of December 31, 2022 because of the effect of a material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states Webster Financial Corporation did not have effective general information technology controls related to Sterling which was acquired during 2022. Specifically, the Company did not design and implement appropriate logical access controls including deprovisioning, privileged access, and user access reviews. These control deficiencies were a result of ineffective risk assessment associated with the IT environment and individuals with insufficient knowledge and training associated with designing and implementing the controls. As a result, process level automated controls and manual controls that are dependent on the completeness and accuracy of information derived from the affected IT systems are considered ineffective because they could have been adversely impacted.
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The consolidated financial statements of Sterling Bancorp as of December 31, 2021 and 2020, and for each of the fiscal years ended December 31, 2021, 2020, and 2019 appearing in Webster Financial Corporation’s Current Report on Form 8-K/A filed with the SEC on April 15, 2022 have been incorporated by reference herein and in the registration statement in reliance upon the report of Crowe LLP, independent auditor, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
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PROSPECTUS
WEBSTER FINANCIAL CORPORATION
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Purchase Contracts
Units
Warrants
Webster Financial Corporation and/or one or more selling securityholders to be identified in the future may offer the securities listed above from time to time in one or more offerings. When we or any selling securityholders offer securities, you will be provided with a prospectus supplement describing the specific terms of the securities, including the price of the securities. We or any selling securityholders may offer and sell these securities to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed basis. You should read this prospectus and the applicable prospectus supplement carefully before you decide to invest. This prospectus may not be used to sell securities unless it is accompanied by a prospectus supplement that further describes the securities being delivered to you.
Our common stock is listed for trading on the New York Stock Exchange under the symbol “WBS.” We will provide information in the prospectus supplement for the trading market, if any, for any other securities we or selling securityholders may offer.
Investing in our securities involves risks. You should carefully review and consider the risk factors incorporated by reference into this prospectus, as well as any additional risk factors included in, or incorporated by reference into, the applicable prospectus supplement before buying any of our securities. See “Risk Factors” on page 6 of this prospectus.
None of the Securities and Exchange Commission, any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The offered securities are not savings accounts, deposits, or other obligations of any bank or non-bank subsidiary of ours. The securities are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality and are subject to investment risks.
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The date of this prospectus is December 14, 2023.
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This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration statement, we may from time to time sell, either separately or together, common stock, preferred stock, debt securities, depositary shares, purchase contracts, units and warrants described in this prospectus in one or more offerings.
This prospectus provides you with a general description of the securities we may offer and sell. Each time we sell securities we will provide a prospectus supplement containing specific information about the terms of the securities being offered. The prospectus supplement may include a discussion of any risk factors or other special considerations that apply to those securities. The prospectus supplement may also add, update or change the information in this prospectus. If there is any inconsistency between the information in this prospectus (including the information incorporated by reference herein) and any prospectus supplement, you should rely on the information in the applicable prospectus supplement. You should read both this prospectus and any prospectus supplement together with additional information described under the heading “Where You Can Find More Information.”
We have not authorized any other person to provide you with any information other than that contained or incorporated by reference in this prospectus or any applicable prospectus supplement prepared by or on behalf of us or to which we have referred you. We are not responsible for and can provide no assurance as to the accuracy of any other information that any other person may give you. You should not assume that the information in this prospectus or the applicable prospectus supplement is accurate as of any date other than the dates on the front of those documents. This prospectus and the applicable prospectus supplement do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities described in the applicable prospectus supplement, and do not constitute an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful.
Unless otherwise indicated or the context requires otherwise, references in this prospectus to “Webster,” the “Company,” “we,” “us,” and “our” are to Webster Financial Corporation and its consolidated subsidiaries. In this prospectus, we sometimes refer to the debt securities, common stock, preferred stock, depository shares, purchase contracts, units, and warrants collectively as “offered securities.”
WHERE YOU CAN FIND MORE INFORMATION
We have filed our registration statement on Form S-3 with the SEC under the Securities Act of 1933, as amended (the “Securities Act”). The registration statement that contains this prospectus, including the exhibits and the information incorporated by reference, contains additional information about us and the securities, agreements and other documents described in this prospectus.
We also file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public at the SEC’s web site at www.sec.gov. These documents and other information we file with the SEC may also be accessed on our website at www.websterbank.com. Information contained on our website is not incorporated by reference into this prospectus and you should not consider information contained on our website to be part of this prospectus.
This prospectus and any prospectus supplement are part of a registration statement filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us as indicated above. Forms of any indenture or other documents establishing the terms of the offered securities are filed as exhibits to the registration statement or will be filed through an amendment to our registration statement on Form S-3 or under cover of a Current Report on Form 8-K and incorporated into this prospectus by reference.
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The SEC allows us to “incorporate by reference” the information we file with the SEC into this prospectus, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Any information incorporated by reference into this prospectus that we file with the SEC after the date of this prospectus will automatically update and supersede the information contained in this prospectus, as well as any earlier incorporated information.
Webster incorporates by reference the documents and information listed below that we have previously filed with the SEC:
| • | our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 10, 2023; |
| • | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, filed with the SEC on May 8, 2023, August 8, 2023, and November 7, 2023, respectively; |
| • | our Current Reports on Form 8-K, filed with the SEC on January 11, 2023, January 26, 2023, March 3, 2023, April 5, 2023, April 20, 2023, April 28, 2023, July 20, 2023 and, October 19, 2023, respectively (except, with respect to each of the foregoing, for portions of such reports that were deemed to be furnished and not filed); |
| • | the audited consolidated financial statements of Sterling Bancorp and related notes as of December 31, 2021 and 2020, and for each of the fiscal years ended December 31, 2021, 2020, and 2019, which are filed as Exhibit 99.1 to our Current Report on Form 8-K/A, filed with the SEC on April 15, 2022; |
| • | the portions of the Definitive Proxy Statement for the 2023 Annual Meeting of Shareholders, filed with the SEC on March 15, 2023, solely to the extent incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2022; and |
| • | the description of Webster’s common stock contained in Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 10, 2023, as incorporated by reference into the Company’s Registration Statement on Form 8-A, filed with the SEC on December 2, 1986 (including any amendments or reports filed for the purpose of updating such descriptions) of our common stock and preferred stock. |
We also incorporate by reference any additional documents that we may file with the SEC in the future under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (in each case other than those documents or portions of those documents furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K or other information “furnished” in accordance with SEC rules), from the date of the registration statement of which this prospectus is part until the termination of the offering of the securities to be issued under the registration statement. These documents may include annual, quarterly, and current reports, as well as proxy statements. Any material that we later file with the SEC will automatically update and replace the information previously filed with the SEC. These documents are available to you without charge. See “Where You Can Find More Information.”
We will provide to each person, including any beneficial owner, to whom a prospectus (or a notice of registration in lieu thereof) is delivered a copy of any of these filings (other than an exhibit to these filings, unless the exhibit is specifically incorporated by reference as an exhibit to this prospectus) at no cost, upon a request to us by writing or telephoning us at the following address or telephone number:
Webster Financial Corporation
200 Elm Street
Stamford, Connecticut 06902
(203) 578-2202
Attention: Emlen Harmon, Senior Managing Director, Investor Relations
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the information included or incorporated by reference in it contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “continue,” “remain,” “will,” “should,” “may,” “plans,” “estimates” and similar references to future periods; however, such words are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to:
| • | projections of revenues, expenses, income or loss, earnings or loss per share, and other financial items; |
| • | statements of plans, objectives, and expectations of Webster or its management or Board of Directors; |
| • | statements of future economic performance; and |
| • | statements of assumptions underlying such statements. |
Forward-looking statements are based on Webster’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Webster’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Factors that could cause our actual results to differ materially from those discussed in any forward-looking statements include, but are not limited to:
| • | our ability to successfully execute our business plan and strategic initiatives, and manage any risks or uncertainties; |
| • | any continuation of the recent turmoil in the banking industry, including the associated impact of any regulatory changes or other mitigation efforts taken by government agencies in response; |
| • | volatility in Webster’s stock price due to investor sentiment, including in light of the recent turmoil in the banking industry; |
| • | local, regional, national, and international economic conditions, and the impact they may have on us or our customers; |
| • | volatility and disruption in national and international financial markets, including as a result of geopolitical conflict; |
| • | unforeseen events, such as pandemics or natural disasters, and any governmental or societal responses thereto; |
| • | changes in laws and regulations, or existing laws and regulations that we become subject to, including those concerning banking, taxes, dividends, securities, insurance, and healthcare, with which we and our subsidiaries must comply; |
| • | adverse conditions in the securities markets that could lead to impairment in the value of our securities portfolio; |
| • | inflation, monetary fluctuations, the possibility of a recession, and changes in interest rates, including the impact of such changes on economic conditions, customer behavior, funding costs, and our loans and leases and securities portfolios; |
| • | possible changes in governmental monetary and fiscal policies, including, but not limited to, the Board of Governors of the Federal Reserve System (“Federal Reserve”) policies in connection with continued inflationary pressures and the ability of the U.S. Congress to increase the U.S. statutory debt limit, as needed; |
| • | the impact of a potential U.S. federal government shutdown; |
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| • | the timely development and acceptance of new products and services, and the perceived value of those products and services by customers; |
| • | changes in deposit flows, consumer spending, borrowings, and savings habits; |
| • | our ability to implement new technologies and maintain secure and reliable technology systems; |
| • | the effects of any cyber threats, attacks or events, or fraudulent activity, including those that involve our third-party vendors and service providers; |
| • | performance by our counterparties and third-party vendors; |
| • | our ability to increase market share and control expenses; |
| • | changes in the competitive environment among banks, financial holding companies, and other traditional and non-traditional financial service providers; |
| • | our ability to maintain adequate sources of funding and liquidity; |
| • | changes in the level of non-performing assets and charge-offs; |
| • | changes in estimates of future reserve requirements based upon periodic review under relevant regulatory and accounting requirements; |
| • | the effect of changes in accounting policies and practices applicable to us, including impacts of recently adopted accounting guidance; |
| • | our inability to remediate the material weaknesses in our internal control related to ineffective information technology general controls; |
| • | legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; and |
| • | our ability to appropriately address any environmental, social, governmental, and sustainability concerns that may arise from our business activities. |
Some of these and other factors are discussed in our annual and quarterly reports previously filed with the SEC. These factors could have an adverse impact on our financial position and our results of operations. All forward-looking statements in this prospectus speak only as of the date they are made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by federal securities laws. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus or in the incorporated documents might not occur, and you should not put undue reliance on any forward-looking statements.
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Webster Financial Corporation is a bank holding company and financial holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), incorporated under the laws of Delaware in 1986, and headquartered in Stamford, Connecticut. Webster Bank, National Association (“Webster Bank”), along with HSA Bank, a division of Webster Bank (“HSA Bank”), is a leading commercial bank in the Northeast that delivers a wide range of digital and traditional financial solutions to businesses, individuals, families, and partners across its three differentiated lines of business: Commercial Banking, HSA Bank, and Consumer Banking. While our core footprint spans from New York to Rhode Island and Massachusetts, certain of our businesses operate in extended geographies. HSA Bank is one of the largest providers of employee benefit solutions in the United States, which includes health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter benefits.
On January 31, 2022, Webster completed a merger with Sterling Bancorp in an all-stock transaction valued at $5.2 billion. The merger expanded our geographic footprint and combined two complementary organizations to create one of the largest commercial banks in the northeastern U.S.
Our common stock is listed on the New York Stock Exchange under the symbol “WBS”. Our principal executive offices are located at 200 Elm Street, Stamford, Connecticut 06902. Our telephone number is (203) 578-2202.
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Investing in our securities involves certain risks. Before you invest in any of our securities, in addition to the other information included in, or incorporated by reference into, this prospectus, you should carefully consider the risk factors contained in Item 1A under the caption “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, which are incorporated into this prospectus by reference, as updated by our annual or quarterly reports for subsequent fiscal years or fiscal quarters that we file with the SEC and that are so incorporated. See “Where You Can Find More Information” for information about how to obtain a copy of these documents. You should also carefully consider the risks and other information that may be contained in, or incorporated by reference into, any prospectus supplement relating to specific offerings of securities.
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Unless otherwise indicated in the applicable prospectus supplement, we expect to use the net proceeds from the sale of offered securities for general corporate purposes, including:
| • | refinancing, reduction or repayment of debt; |
| • | investments in Webster Bank and our other subsidiaries as regulatory capital or to otherwise finance their activities; |
| • | financing of possible future acquisitions; |
| • | expansion of the business; |
| • | payment of dividends; |
| • | repurchase of shares of our common stock or other securities; |
| • | investments at the holding company level; and |
| • | other general corporate purposes. |
We will not receive proceeds from sales of securities by selling securityholders except as otherwise stated in an applicable prospectus supplement.
The prospectus supplement with respect to an offering of offered securities may identify different or additional uses for the proceeds of that offering. Except as otherwise stated in an applicable prospectus supplement, pending the application of the net proceeds, we expect to temporarily invest the proceeds from the sale of offered securities in short-term obligations, which may include securities or held in deposits of our affiliated banks.
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DESCRIPTION OF DEBT SECURITIES
General
The following description sets forth certain general terms and provisions of the debt securities to which any prospectus supplement may relate. A prospectus supplement will describe the terms relating to any debt securities to be offered in greater detail and may provide information that is different from this prospectus. If the information in the prospectus supplement with respect to the particular debt securities being offered differs from the general description in this prospectus, you should rely on the information in the prospectus supplement. Please note that in this section titled “Description of Debt Securities,” references to “Webster,” “we,” “our,” and “us” refer solely to Webster Financial Corporation as the issuer of the applicable series of debt securities and not to any subsidiaries, unless the context requires otherwise.
We may offer and issue, in one or more series, senior debt securities and/or subordinated debt securities, which in each case will be unsecured, direct, general obligations of Webster.
The senior debt securities will rank equally with all our other unsecured and unsubordinated debt. The subordinated debt securities will be subordinate and junior in priority of payment to senior debt securities of Webster, as described below under “—Subordination of Subordinated Debt Securities” and in the prospectus supplement applicable to any subordinated debt securities that we may offer. For purposes of the descriptions under the heading “—Description of Senior Debt Securities and Subordinated Debt Securities,” we may refer to the senior debt securities and the subordinated debt securities collectively as the “debt securities.” The debt securities will be effectively subordinated to the creditors and preferred equity holders of our subsidiaries.
We will issue senior debt securities under a senior debt indenture and subordinated debt securities under a separate subordinated debt indenture. Provisions relating to the issuance of debt securities may also be set forth in a supplemental indenture to either of the indentures. For purposes of the descriptions under the heading “—Description of Senior Debt Securities and Subordinated Debt Securities,” we may refer to the senior debt indenture and the subordinated debt indenture and any related supplemental indentures, as “an indenture” or, collectively, as “the indentures.” The indentures will be qualified under and governed by the Trust Indenture Act of 1939 (the “Trust Indenture Act”).
Each indenture will be between Webster and a trustee that meets the requirements of the Trust Indenture Act. We expect that each indenture will provide that there may be more than one trustee under that indenture, each with respect to one or more series of debt securities. Any trustee under an indenture may resign or be removed with respect to one or more series of debt securities and, in that event, we may appoint a successor trustee. Except as otherwise provided in the indenture or supplemental indenture, any action permitted to be taken by a trustee may be taken by that trustee only with respect to the one or more series of debt securities for which it is trustee under the applicable indenture.
The descriptions under the heading “—Description of Senior Debt Securities and Subordinated Debt Securities” relating to the debt securities and the indentures are summaries of their provisions. The summaries are not complete and are qualified in their entirety by reference to the actual indentures and debt securities and the further descriptions in the applicable prospectus supplement. A form of the senior debt indenture and a form of the subordinated debt indenture under which we may issue our senior debt securities and subordinated debt securities, respectively, and the forms of the debt securities, have been filed with the SEC as exhibits to the registration statement that includes this prospectus and will be available as described under the heading “Where You Can Find More Information” above. Whenever we refer in this prospectus or in any prospectus supplement to particular sections or defined terms of an indenture, those sections or defined terms are incorporated by reference in this prospectus or in the prospectus supplement, as applicable. You should refer to the provisions of the indentures for provisions that may be important to you.
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The terms and conditions described under this heading are terms and conditions that apply generally to the debt securities. The particular terms of any series of debt securities will be summarized in the applicable prospectus supplement. Those terms may differ from the terms summarized below.
Except as set forth in the applicable indenture or in a supplemental indenture and described in an applicable prospectus supplement, the indentures do not limit the amount of debt securities we may issue under the indentures. We are not required to issue all of the debt securities of one series at the same time and, unless otherwise provided in the applicable indenture or supplemental indenture and described in the applicable prospectus supplement, we may, from time to time, reopen any series and issue additional debt securities under that series without the consent of the holders of the outstanding debt securities of that series. Additional notes issued in this manner will have the same terms and conditions as the outstanding debt securities of that series, except for their original issue date and issue price, and will be consolidated with, and form a single series with, the previously outstanding debt securities of that series.
Terms of Debt Securities to be Included in the Prospectus Supplement
The prospectus supplement relating to any series of debt securities that we may offer will set forth the price or prices at which the debt securities will be offered, and will contain the specific terms of the debt securities of that series. These terms may include, without limitation, the following:
| • | the title of the debt securities and whether they are senior debt securities or subordinated debt securities; |
| • | the amount of debt securities issued and any limit on the amount that may be issued; |
| • | the price(s) (expressed as a percentage of the principal amount) at which the debt securities will be issued; |
| • | if other than the principal amount of those debt securities, the portion of the principal amount payable upon declaration of acceleration of the maturity of those debt securities; |
| • | the maturity date or dates, or the method for determining the maturity date or dates, on which the principal of the debt securities will be payable and any rights of extension; |
| • | the rate or rates, which may be fixed or variable, or the method of determining the rate or rates at which the debt securities will bear interest, if any; |
| • | the date or dates from which any interest will accrue and the date or dates on which any interest will be payable, the regular related record dates and whether we may elect to extend or defer such interest payment dates; |
| • | the place or places where payments will be payable, where the debt securities may be surrendered for registration of transfer or exchange and where notices or demands to or upon us may be served; |
| • | the period or periods within which, the price or prices at which and the other terms and conditions upon which the debt securities may be redeemed, in whole or in part, at our option, if we are to have such an option; |
| • | our obligation, if any, to redeem, repay or purchase the debt securities pursuant to any sinking fund or analogous provision or at the option of a holder of the debt securities, and the period or periods within which, or the date and dates on which, the price or prices at which and the other terms and conditions upon which the debt securities will be redeemed, repaid or purchased, in whole or in part, pursuant to that obligation; |
| • | the currency or currencies in which the debt securities may be purchased, are denominated and are payable, which may be a foreign currency or units of two or more foreign currencies or a composite currency or currencies, and the related terms and conditions, including whether we or the holders of any such debt securities may elect to receive payments in respect of such debt securities in a currency or currency unit other than that in which such debt securities are stated to be payable; |
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| • | whether the amount of payments of principal of and premium, if any, or interest, if any, on the debt securities may be determined with reference to an index, formula or other method, which index, formula or method may, but need not be, based on a currency, currencies, currency unit or units or composite currency or currencies or with reference to changes in prices of particular securities or commodities, and the manner in which the amounts are to be determined; |
| • | any additions to, modifications of or deletions from the terms of the debt securities with respect to events of default, amendments, merger, consolidation and sale or covenants set forth in the applicable indenture; |
| • | whether the debt securities will be issued in certificated or book-entry form; |
| • | whether the debt securities will be in registered or bearer form or both and, if in registered form, their denominations, if other than $1,000 and any integral multiple thereof, and, if in bearer form, their denominations, if other than $5,000, and the related terms and conditions; |
| • | if the debt securities will be issuable only in global form, the depository or its nominee with respect to the debt securities and the circumstances under which the global security may be registered for transfer or exchange in the name of a person other than the depository or its nominee; |
| • | the applicability, if any, of the defeasance and covenant defeasance provisions of the indenture and any additional or different terms on which the series of debt securities may be defeased; |
| • | whether and the extent to which the debt securities will be guaranteed, any guarantors and the form of any guarantee; |
| • | whether the debt securities can be converted into or exchanged for other securities of Webster, and the related terms and conditions; |
| • | in the case of subordinated debt securities, provisions relating to any modification of the subordination provisions described elsewhere in this prospectus; |
| • | whether the debt securities will be sold as part of units consisting of debt securities and other securities; |
| • | if the debt securities are to be issued upon the exercise of warrants, the time, manner and place for the debt securities to be authenticated and delivered; |
| • | any trustee, depositary, authenticating agent, paying agent, transfer agent, registrar or other agent with respect to the debt securities; and |
| • | any other terms of the debt securities. |
Unless otherwise specified in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange.
We may offer and sell our debt securities at a substantial discount below their stated principal amount. These debt securities may be original issue discount securities, which means that less than the entire principal amount of the original issue discount securities will be payable upon declaration of acceleration of their maturity. Special federal income tax, accounting and other considerations applicable to original issue discount securities will be described in the applicable prospectus supplement.
We may issue debt securities with a fixed interest rate or a floating interest rate. Any material federal income tax considerations applicable to any discounted debt securities or to debt securities issued at par that are treated as having been issued at a discount for federal income tax purposes will be described in the applicable prospectus supplement.
Except as set forth in the applicable indenture or in a supplemental indenture, the applicable indenture will not contain any provisions that would limit our ability to incur indebtedness or that would afford holders of debt
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securities protection in the event of a highly leveraged or similar transaction involving Webster . The applicable indenture may contain provisions that would afford debt security holders protection in the event of a change of control. You should refer to the applicable prospectus supplement for information with respect to any deletions from, modifications of or additions to the events of default or covenants of Webster that are described below, including any addition of a covenant or other provision providing event risk or similar protection.
For purposes of the descriptions under the heading “—Description of Senior Debt Securities and Subordinated Debt Securities”:
| • | “subsidiary” means a corporation or a partnership or a limited liability company a majority of the outstanding voting stock or partnership or membership interests, as the case may be, of which is owned or controlled, directly or indirectly, by Webster or by one or more other subsidiaries of Webster. For the purposes of this definition, “voting stock” means stock having voting power for the election of directors, or trustees, as the case may be, whether at all times or only so long as no senior class of stock has voting power by reason of any contingency; and |
| • | “significant subsidiary” means any subsidiary of Webster that is a “significant subsidiary,” within the meaning of Regulation S-X promulgated by the SEC under the Securities Act. |
Ranking
Senior Debt Securities
Payment of the principal of and premium, if any, and interest on debt securities we issue under the senior debt indenture will rank equally with all of our unsecured and unsubordinated debt.
Subordination of Subordinated Debt Securities
To the extent provided in the subordinated debt indenture and any supplemental indenture, and as described in the prospectus supplement describing the applicable series of subordinated debt securities, the payment of the principal of and premium, if any, and interest on any subordinated debt securities, including amounts payable on any redemption or repurchase, will be subordinated in right of payment and junior to senior debt, which is defined below. If there is a distribution to creditors of Webster in a liquidation or dissolution of Webster, or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Webster , the holders of senior debt will first be entitled to receive payment in full of all amounts due on the senior debt (or provision shall be made for such payment in cash) before any payments may be made on the subordinated debt securities. Because of this subordination, general creditors of Webster may recover more, ratably, than holders of subordinated debt securities in the event of a distribution of assets upon insolvency.
The supplemental indenture will set forth the terms and conditions under which, if any, we will not be permitted to pay principal, premium, if any, or interest on the related subordinated debt securities upon the occurrence of an event of default or other circumstances arising under or with respect to senior debt.
The indentures will place no limitation on the amount of senior debt that we may incur. We expect to incur from time to time additional indebtedness constituting senior debt, which may include indebtedness that is senior to the subordinated debt securities but subordinate to our other obligations.
“Senior debt” means the principal of, and premium, if any, and interest, including interest accruing after the commencement of any bankruptcy proceeding relating to Webster, on, or substantially similar payments we will make in respect of the following categories of debt, whether that debt is outstanding at the date of execution of the applicable indenture or thereafter incurred, created or assumed:
| • | “existing senior debt,” which, as of September 30, 2023, means indebtedness of Webster in the amount of (i) $132.6 million evidenced by 4.375% senior fixed rate notes due February 15, 2024 and (ii) $329.4 million evidenced by 4.100% senior fixed-rate notes due March 25, 2029; |
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| • | other indebtedness of Webster evidenced by notes, debentures, or bonds or other securities issued under the provisions of any indenture, fiscal agency agreement, note purchase agreement or other agreement, including the senior debt securities that may be offered by means of this prospectus and one or more prospectus supplements; |
| • | indebtedness of Webster for money borrowed or represented by purchase-money obligations, as defined below; |
| • | our obligations as lessee under leases of property either made as part of a sale and leaseback transaction to which we are a party or otherwise; |
| • | indebtedness, obligations and liabilities of others in respect of which we are liable contingently or otherwise to pay or advance money or property or as guarantor, endorser or otherwise or which we have agreed to purchase or otherwise acquire and indebtedness of partnerships and joint ventures that is included in the Company’s consolidated financial statements; |
| • | reimbursement and other obligations relating to letters of credit, bankers’ acceptances and similar obligations; |
| • | obligations under various hedging arrangements and agreements, including interest rate and currency hedging agreements; |
| • | all our obligations issued or assumed as the deferred purchase price of property or services, but excluding trade accounts payable and accrued liabilities arising in the ordinary course of business; and |
| • | deferrals, renewals or extensions of any of the indebtedness or obligations described in the eight clauses above. |
However, “senior debt” excludes:
| • | any indebtedness, obligation or liability referred to in the nine clauses above as to which, in the instrument creating or evidencing that indebtedness, obligation or liability, it is expressly provided that the indebtedness, obligation or liability is not senior in right of payment to subordinated debt securities or ranks equally with the subordinated debt securities, |
| • | any indebtedness, obligation or liability that is subordinated to indebtedness of Webster to substantially the same extent as or to a greater extent than the subordinated debt securities are subordinated, and, unless expressly provided in the terms thereof and, |
| • | any indebtedness of Webster to its subsidiaries. |
As used above, the term “purchase-money obligations” means indebtedness, obligations or guarantees evidenced by a note, debenture, bond or other instrument, whether or not secured by a lien or other security interest, and any deferred obligation for the payment of the purchase price of property but excluding indebtedness or obligations for which recourse is limited to the property purchased, issued or assumed as all or a part of the consideration for the acquisition of property or services, whether by purchase, merger, consolidation or otherwise, but does not include any trade accounts payable. There will not be any restrictions in an indenture relating to subordinated debt securities upon the creation of additional senior debt.
The applicable prospectus supplement may further describe the provisions, if any, applicable to the subordination of the subordinated debt securities of a particular series. The applicable prospectus supplement or the information incorporated by reference in the applicable prospectus supplement or in this prospectus will describe as of a recent date the approximate amount of our senior debt outstanding as to which the subordinated debt securities of that series will be subordinated.
Structural Subordination
Because Webster is a holding company, our cash flows and consequent ability to service our obligations, including our debt securities, are dependent on distributions and other payments of earnings and other funds by
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our subsidiaries to us. The payment of dividends and other distributions by our subsidiaries is contingent on their earnings and is subject to the requirements of federal banking regulations and other restrictions. In addition, the debt securities will be structurally subordinated to all indebtedness and other liabilities of Webster’s subsidiaries, since any right of Webster to receive any assets of its subsidiaries upon their liquidation or reorganization, and the consequent right of the holders of the debt securities to participate in those assets, will be effectively subordinated to the claims of that subsidiary’s creditors. If Webster itself is recognized as a creditor of that subsidiary, the claims of Webster would still be subordinate to any security interest in the assets of that subsidiary and any indebtedness of that subsidiary senior to that held by Webster. Claims from creditors (other than us) on subsidiaries may include long-term and medium-term debt and substantial obligations related to deposit liabilities, federal funds purchased, securities sold under repurchase agreements and other short-term borrowings. Any capital loans that we make to Webster Bank would be subordinate in right of payment to deposits and to other indebtedness of the bank.
Conversion or Exchange of Debt Securities
The applicable prospectus supplement will set forth the terms, if any, on which a series of debt securities may be converted into or exchanged for our other securities. These terms will include whether conversion or exchange is mandatory, or is at our option or at the option of the holder. We will also describe in the applicable prospectus supplement how we will calculate the number of securities that holders of debt securities would receive if they were to convert or exchange their debt securities, the conversion price and other terms related to conversion and any anti-dilution protections.
Redemption of Securities
We may redeem the debt securities at any time, in whole or in part, at the prescribed redemption price, at the times and on the terms described in the applicable prospectus supplement.
From and after notice has been given as provided in the indentures, if we have made available funds for the redemption of any debt securities called for redemption on the applicable redemption date, the debt securities will cease to bear interest on the date fixed for the redemption specified in the notice, and the only right of the holders of the debt securities will be to receive payment of the redemption price.
Notice of any optional redemption by us of any debt securities is required to be given to holders at their addresses, as shown in the security register. The notice of redemption will be required to specify, among other items, the redemption price and the principal amount of the debt securities held by the holder to be redeemed.
If we elect to redeem debt securities, we will be required to notify the trustee of the aggregate principal amount of debt securities to be redeemed and the redemption date. If fewer than all the debt securities are to be redeemed, the trustee is required to select the debt securities to be redeemed equally, by lot or in a manner it deems fair and appropriate.
Denomination, Interest, Registration and Transfer
Unless otherwise specified in the applicable prospectus supplement, we will issue the debt securities (i) in denominations of $1,000 or integral multiples of $1,000 if the debt securities are in registered form and (ii) in denominations of $5,000 if the debt securities are in bearer form.
Unless otherwise specified in the applicable prospectus supplement, we will pay the principal of, and applicable premium, if any, and interest on any series of debt securities at the corporate trust office of the trustee, the address of which will be stated in the applicable prospectus supplement. At our option, we may pay interest by check mailed to the address of the person entitled to the interest payment as it appears in the register for the applicable debt securities or by wire transfer of funds to that person at an account maintained within the United States.
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Any defaulted interest, which means interest not punctually paid or duly provided for on any interest payment date with respect to a debt security, will immediately cease to be payable to the registered holder on the applicable regular record date by virtue of his having been the registered holder on such date. We may pay defaulted interest either to the person in whose name the debt security is registered at the close of business on a special record date for the payment of the defaulted interest to be fixed by the trustee, notice of which is to be given to the holder of the debt security not less than ten days before the special record date, or at any time in any other lawful manner, all as more completely described in the applicable indenture or supplemental indenture.
Subject to limitations imposed upon debt securities issued in book-entry form, the holder may exchange debt securities of any series for other debt securities of the same series and of a like aggregate principal amount and tenor of different authorized denominations upon surrender of the debt securities at the corporate trust office of the applicable trustee. In addition, subject to limitations imposed upon debt securities issued in book-entry form, the holder may surrender debt securities of any series for registration of transfer or exchange at the corporate trust office of the applicable trustee. Every debt security surrendered for registration of transfer or exchange must be duly endorsed or accompanied by a written instrument of transfer. No service charge will be imposed for any registration of transfer or exchange of any debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with any registration of transfer or exchange of any debt securities. If the applicable prospectus supplement refers to any transfer agent, in addition to the applicable trustee, initially designated by us with respect to any series of debt securities, we may at any time rescind the designation of that transfer agent or approve a change in the location through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for that series. We may at any time designate additional transfer agents with respect to any series of debt securities.
If we redeem the debt securities of any series, neither we nor any trustee will be required to:
| • | issue, register the transfer of, or exchange debt securities of any series during a period beginning at the opening of business 15 days before any selection of debt securities of that series to be redeemed and ending at the close of business on the day of mailing of the relevant notice of redemption; |
| • | register the transfer of, or exchange any debt security, or portion of any debt security, called for redemption, except the unredeemed portion of any debt security being redeemed in part; or |
| • | issue, register the transfer of, or exchange any debt security that has been surrendered for repayment at the option of the holder, except the portion, if any, of the debt security not to be repaid. |
Global Securities
We may issue the debt securities of a series in whole or in part in the form of one or more global securities to be deposited with, or on behalf of, a depository or with a nominee for a depository identified in the applicable prospectus supplement relating to that series. We may issue global securities in either registered or bearer form and in either temporary or permanent form. The specific terms of the depository arrangement with respect to a series of debt securities will be described in the prospectus supplement relating to that series.
Our obligations with respect to the debt securities, as well as the obligations of the applicable trustee, run only to persons who are registered holders of debt securities. For example, once we make payment to the registered holder, we have no further responsibility for that payment even if the recipient is legally required to pass the payment along to an individual investor but fails to do so. As an indirect holder, an investor’s rights relating to a global security will be governed by the account rules of the investor’s financial institution and of the depositary, as well as general laws relating to transfers of debt securities.
An investor should be aware that when debt securities are issued in the form of global securities:
| • | the investor cannot have debt securities registered in his or her own name; |
| • | the investor cannot receive physical certificates for his or her debt securities; |
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| • | the investor must look to his or her bank or brokerage firm for payments on the debt securities and protection of his or her legal rights relating to the debt securities; |
| • | the investor may not be able to sell interests in the debt securities to some insurance or other institutions that are required by law to hold the physical certificates of debt that they own; |
| • | the depositary’s policies will govern payments, transfers, exchanges and other matters relating to the investor’s interest in the global security; and |
| • | the depositary will usually require that interests in a global security be purchased or sold within its system using same-day funds. |
The prospectus supplement for a series of debt securities will list the special situations, if any, in which a global security will terminate and interests in the global security will be exchanged for physical certificates representing debt securities. After that exchange, the investor may choose whether to hold debt securities directly or indirectly through an account at the investor’s bank or brokerage firm. In that event, investors must consult their banks or brokers to find out how to have their interests in debt securities transferred to their own names so that they may become direct holders. When a global security terminates, the depositary, and not us or one of the trustees, is responsible for deciding the names of the institutions that will be the initial direct holders.
Merger, Consolidation or Sale of Assets
We will not be permitted to consolidate with or merge into any other entity, or sell, lease, transfer or convey all or substantially all of our properties and assets, either in one transaction or a series of transactions, to any other entity and no other entity will consolidate with or merge into us, or sell, lease, transfer or convey all or substantially all of its properties and assets to us unless:
(1) either:
| • | Webster is the continuing entity, or |
| • | the successor entity, if other than Webster, formed by or resulting from any consolidation or merger, or which has received the transfer of Webster’s assets, expressly assumes payment of the principal of, and premium, if any, and interest on all of the outstanding debt securities and the due and punctual performance and observance of all of the covenants and conditions contained in the indentures, and |
(2) immediately after giving effect to the transaction and treating any indebtedness that becomes an obligation of Webster or any subsidiary as a result of that transaction as having been incurred by Webster or a subsidiary at the time of the transaction, no event of default under the indentures or supplemental indentures, and no event which, after notice or the lapse of time, or both, would become an event of default, will have occurred and be continuing;
provided, however, that the conditions described in (1) and (2) above will not apply to the direct or indirect transfer of the stock, assets or liabilities of any of our subsidiaries to another of our direct or indirect subsidiaries.
Except as provided in this prospectus or as may otherwise be provided in the applicable prospectus supplement, the indenture and the terms of the debt securities will not contain any event risks or similar covenants that are intended to afford protection to holders of any debt securities in the event of a merger, a highly leveraged transaction or other significant corporate event involving us or our subsidiaries, whether or not resulting in a change of control, which may adversely affect holders of the debt securities.
Additional Covenants and/or Modifications to the Covenant Described Above
Any additional covenants of Webster and/or modifications to the covenant described above with respect to any series of debt securities, including any covenants relating to limitations on incurrence of indebtedness or other financial covenants, will be set forth in the applicable indenture or supplemental indenture and described in the prospectus supplement relating to that series of debt securities.
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Unless the applicable prospectus supplement indicates otherwise, the subordinated indenture does not contain the restrictive covenant stated above, nor does it contain any other provision that restricts us from, among other things:
| • | incurring or becoming liable on any secured or unsecured senior indebtedness or general obligations; or |
| • | paying dividends or making other distributions on our capital stock; or |
| • | purchasing or redeeming our capital stock; or |
| • | creating any liens on our property for any purpose. |
Events of Default, Waiver and Notice
Events of Default.
The events of default with respect to any series of debt securities issued under it, subject to any modifications or deletions provided in any supplemental indenture with respect to any specific series of debt securities, include the following events:
failure to pay any installment of interest or any additional amounts payable on any debt security of the series for 30 days;
| • | failure to pay principal of, or premium, if any, on, any debt security of the series when due, whether at maturity, upon redemption, by declaration or acceleration of maturity or otherwise; |
| • | default in making any sinking fund payment when due, for any debt security of the series; |
| • | default in the performance or breach of any other covenant or warranty of Webster contained in the applicable indenture, other than a covenant added to the indenture solely for the benefit of any other series of debt securities issued under that indenture, continued for 90 days after written notice as provided in the applicable indenture; |
| • | specific events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of Webster or any significant subsidiary or either of their property; and |
| • | any other event of default provided with respect to a particular series of debt securities. |
If an event of default under any indenture with respect to debt securities of any series at the time outstanding occurs and is continuing, then in every case other than in the case described in the fifth bullet above, in which case acceleration will be automatic, the applicable trustee or the holders of not less than 25% of the principal amount of the outstanding debt securities of that series will have the right to declare the principal amount, or, if the debt securities of that series are original issue discount securities or indexed securities, the portion of the principal amount as may be specified in the terms of that series, of all the debt securities of that series to be due and payable immediately by written notice to us, and to the applicable trustee if given by the holders. At any time after a declaration of acceleration has been made with respect to debt securities of a series, or of all debt securities then outstanding under any indenture, as the case may be, but before a judgment or decree for payment of the money due has been obtained by the applicable trustee, however, the holders of not less than a majority in principal amount of the outstanding debt securities of that series, or of all debt securities then outstanding under the applicable indenture, as the case may be, may annul the declaration of acceleration and waive any default in respect of those debt securities if:
| • | we have deposited with the applicable trustee all required payments due otherwise than by acceleration of the principal of, and premium, if any, and interest on the debt securities of that series, or of all debt securities then outstanding under the applicable indenture, as the case may be, plus specified fees, expenses, disbursements and advances of the applicable trustee, and |
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| • | all events of default, other than the non-payment of all or a specified portion of the accelerated principal, with respect to debt securities of that series, or of all debt securities then outstanding under the applicable indenture, as the case may be, have been cured or waived as provided in the applicable indenture. |
Waiver
Each indenture also will provide that the holders of not less than a majority in principal amount of the outstanding debt securities of any series, or of all debt securities then outstanding under the applicable indenture, as the case may be, may waive any past default with respect to that series and its consequences, except a default:
| • | in the payment of the principal of, or premium, if any, or interest on any debt security of that series, or |
| • | in respect of a covenant or provision contained in the applicable indenture that, by the terms of that indenture, cannot be modified or amended without the consent of each affected holder of an outstanding debt security. |
Notice
Each trustee will be required to give notice to the holders of the applicable debt securities within 90 days of a default under the applicable indenture unless the default has been cured or waived; but the trustee may withhold notice of any default, except a default in the payment of the principal of, or premium, if any, or interest on the debt securities or in the payment of any sinking fund installment in respect of the debt securities, if specified responsible officers of the trustee consider the withholding to be in the interest of the holders.
The holders of debt securities of any series may not institute any proceedings, judicial or otherwise, with respect to the indentures or for any remedy under the indentures, except in the case of failure of the applicable trustee, for 60 days, to act after the trustee has received a written request to institute proceedings in respect of an event of default from the holders of not less than 25% in principal amount of the outstanding debt securities of that series, as well as an offer of indemnity reasonably satisfactory to the trustee, and provided that no direction inconsistent with such written request has been given to the trustee during such 60-day period by the holders of a majority of the outstanding debt securities of that series. However, any holder of debt securities is not prohibited from instituting suit for the enforcement of payment of the principal of, and premium, if any, and interest on the debt securities at their respective due dates.
Subject to the trustee’s duties in case of default, no trustee will be under any obligation to exercise any of its rights or powers under an indenture at the request or direction of any holders of any series of debt securities then outstanding under that indenture, unless the holders offer to the trustee reasonable security or indemnity. Subject to such provisions for the indemnification of the trustee, the holders of not less than a majority in principal amount of the outstanding debt securities of any series, or of all debt securities then outstanding under an indenture, as the case may be, will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the applicable trustee, or of exercising any trust or power conferred upon the trustee. A trustee may refuse, however, to follow any direction that is in conflict with any law or the applicable indenture that may involve the trustee in personal liability or may be unduly prejudicial to the holders of debt securities of that series not joining in the direction.
Within 180 days after the end of each fiscal year, we will be required to deliver to each trustee a certificate, signed by one of several specified officers, stating whether or not that officer has knowledge of any default under the applicable indenture and, if so, specifying each default and the nature and status of the default.
Modification of the Indentures
Except as otherwise specifically provided in the applicable indenture, with the consent of the holders of not less than a majority in principal amount of all outstanding debt securities issued under that indenture that are affected by the modification or amendment, we may enter into supplemental indentures with the trustee for the purpose of
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adding any provisions to or changing in any manner or eliminating any of the provisions of such indenture or of modifying in any manner the rights of the holders under debt securities issued under such indenture. However, no modification or amendment may, without the consent of the holder of each debt security affected by the modification or amendment, except as described in the prospectus supplement relating to such debt security:
| • | extend the stated maturity of the principal of, or any installment of interest or any additional amounts, or the premium, if any, on, any debt security, |
| • | reduce the principal amount of, or the rate or amount of interest on, or change the manner of calculating the rate, or any premium payable on redemption of, any debt security, or reduce the amount of principal of an original issue discount security that would be due and payable upon declaration of acceleration of its maturity or would be provable in bankruptcy, or adversely affect any right of repayment of the holder of any debt security, |
| • | extend the time of payment of interest on any debt security or any additional amounts, |
| • | change any of the conversion, exchange or redemption provisions of any debt security, |
| • | change the place of payment, or the coin or currency for payment, of principal, or premium, if any, including any amount in respect of original issue discount or interest on any debt security, |
| • | impair the right to institute suit for the enforcement of any payment on or with respect to any debt security or for the conversion or exchange of any debt security in accordance with its terms, |
| • | release any guarantors from their guarantees of the debt securities, or, except as contemplated in any supplemental indenture, make any change in a guarantee of a debt security that would adversely affect the interests of the holders of those debt securities, |
| • | in the case of subordinated debt securities, modify the ranking or priority of the securities, |
| • | reduce the percentage of outstanding debt securities of any series necessary to modify or amend the applicable indenture, to waive compliance with specific provisions of or certain defaults and consequences under the applicable indenture, or to reduce the quorum or voting requirements set forth in the applicable indenture, or |
| • | modify any of the provisions relating to the waiver of specific past defaults or specific covenants, except to increase the required percentage to effect that action or to provide that specific other provisions may not be modified or waived without the consent of the holder of that debt security. |
The holders of not less than a majority in principal amount of the outstanding debt securities of each series affected by the modification or amendment will have the right to waive compliance by Webster with specific covenants in the indenture.
Webster and the respective trustee may modify and amend an indenture without the consent of any holder of debt securities for any of the following purposes:
| • | to evidence the succession of another person to Webster as obligor under the indenture or to evidence the addition or release of any guarantor in accordance with the indenture or any supplemental indenture; |
| • | to add to the covenants of Webster for the benefit of the holders of all or any series of debt securities or to surrender any right or power conferred upon Webster in the indenture; |
| • | to add events of default for the benefit of the holders of all or any series of debt securities; |
| • | to add or change any provisions of the indenture to facilitate the issuance of, or to liberalize specific terms of, debt securities in bearer form, or to permit or facilitate the issuance of debt securities in uncertificated form, provided that the action will not adversely affect the interests of the holders of the debt securities of any series in any material respect; |
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| • | to change or eliminate any provisions of an indenture, if the change or elimination becomes effective only when there are no debt securities outstanding of any series created prior to the change or elimination that are entitled to the benefit of the changed or eliminated provision; |
| • | to secure or provide for the guarantee of the debt securities; |
| • | to establish the form or terms of debt securities of any series and any related coupons; |
| • | to provide for the acceptance of appointment by a successor trustee or facilitate the administration of the trusts under an indenture by more than one trustee; |
| • | to cure any ambiguity or correct any inconsistency in an indenture provided that the cure or correction does not adversely affect the holders of the debt securities; |
| • | to supplement any of the provisions of an indenture to the extent necessary to permit or facilitate defeasance and discharge of any series of debt securities, provided that the supplement does not adversely affect the interests of the holders of the debt securities of any series in any material respect; |
| • | to make provisions with respect to the conversion or exchange terms and conditions applicable to the debt securities of any series; |
| • | to add to, delete from or revise the conditions, limitations or restrictions on issue, authentication and delivery of debt securities; |
| • | to conform any provision in an indenture to the requirements of the Trust Indenture Act; or |
| • | to make any change that does not adversely affect the legal rights under an indenture of any holder of debt securities of any series issued under that indenture. |
In determining whether the holders of the requisite principal amount of outstanding debt securities of a series have given any request, demand, authorization, direction, notice, consent or waiver under the indenture or whether a quorum is present at a meeting of holders of debt securities:
| • | the principal amount of an original issue discount security that is deemed to be outstanding will be the amount of the principal of that original issue discount security that would be due and payable as of the date of the determination upon declaration of acceleration of the maturity of that original issue discount security; |
| • | the principal amount of any debt security denominated in a foreign currency that is deemed outstanding will be the U.S. dollar equivalent, determined on the issue date for that debt security, of the principal amount, or, in the case of an original issue discount security, the U.S. dollar equivalent on the issue date of that debt security of the amount determined as provided in the immediately preceding bullet point; |
| • | the principal amount of an indexed security that is deemed outstanding will be the principal face amount of the indexed security at original issuance, unless otherwise provided with respect to the indexed security under the applicable indenture; and |
| • | debt securities owned by Webster or any other obligor upon the debt securities or any affiliate of Webster or of any other obligor are to be disregarded. |
Discharge, Defeasance and Covenant Defeasance
Discharge
We may be permitted under the applicable indenture to discharge specific obligations to holders of any series of debt securities (i) that have not already been delivered to the applicable trustee for cancellation and (ii) that either have become due and payable or will, within one year, become due and payable or scheduled for redemption, by irrevocably depositing with the applicable trustee, in trust, money or funds certified to be sufficient to pay when due, whether at maturity, upon redemption or otherwise, the principal of, and premium, if any, on and interest on the debt securities.
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Defeasance and Covenant Defeasance
If the provisions in that indenture relating to defeasance and covenant defeasance are made applicable to the debt securities of or within any series, we may elect either:
| • | defeasance, which means we elect to defease and be discharged from any and all obligations with respect to the debt securities, except for the obligations to register the transfer or exchange of the debt securities, to replace temporary or mutilated, destroyed, lost or stolen debt securities, to maintain an office or agency in respect of the debt securities and to hold moneys for payment in trust; or |
| • | covenant defeasance, which means we elect to be released from our obligations with respect to the debt securities under specified sections of the applicable indenture relating to covenants, as described in the applicable prospectus supplement and any omission to comply with its obligations will not constitute an event of default with respect to the debt securities; in either case upon the irrevocable deposit by us with the applicable trustee, in trust, of an amount, in currency or currencies or government obligations, or both, sufficient without reinvestment to make scheduled payments of the principal of, and premium, if any, and interest on the debt securities, when due, whether at maturity, upon redemption or otherwise, and any mandatory sinking fund or analogous payments. |
A trust will only be permitted to be established if, among other things:
| • | we have delivered to the applicable trustee an opinion of counsel, as specified in the applicable indenture, to the effect that the holders of the debt securities will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance or covenant defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance or covenant defeasance had not occurred, and the opinion of counsel, in the case of defeasance, will be required to refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable U.S. federal income tax law occurring after the date of the indenture; |
| • | no event of default or any event that after notice or lapse of time or both would be an event of default has occurred; |
| • | the defeasance or covenant defeasance will not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which Webster is a party or by which it is bound; |
| • | certain other provisions set forth in the indenture are met; |
| • | we will have delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent to the defeasance or covenant defeasance have been complied with; and |
| • | in the case of the subordinated debt indenture, no event or condition will exist that, pursuant to certain provisions described under “—Subordination of Subordinated Debt Securities” would prevent Webster from making payments of principal of and premium, if any, and interest on the subordinated debt securities at the date of the irrevocable deposit referred to above. |
In general, if we elect covenant defeasance with respect to any debt securities and payments on those debt securities are declared due and payable because of the occurrence of an event of default, the amount of money and/or government obligations on deposit with the applicable trustee would be sufficient to pay amounts due on those debt securities at the time of their stated maturity, but may not be sufficient to pay amounts due on those debt securities at the time of the acceleration resulting from the event of default. In that case, we would remain liable to make payment of the amounts due on the debt securities at the time of acceleration.
The applicable prospectus supplement may further describe the provisions, if any, permitting defeasance or covenant defeasance, including any modifications to the provisions described above, with respect to the debt securities of or within a particular series.
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Option to Extend Interest Payment Period
If indicated in the applicable prospectus supplement, we will have the right, as long as no event of default under the applicable series of debt securities has occurred and is continuing, at any time and from time to time during the term of the series of debt securities to defer the payment of interest on one or more series of debt securities for the number of consecutive interest payment periods specified in the applicable prospectus supplement, subject to the terms, conditions and covenants, if any, specified in the prospectus supplement, provided that no extension period may extend beyond the stated maturity of the debt securities. Material United States federal income tax consequences and special considerations applicable to these debt securities will be described in the applicable prospectus supplement. Unless otherwise indicated in the applicable prospectus supplement, at the end of the extension period, we will pay all interest then accrued and unpaid together with interest on accrued and unpaid interest compounded semiannually at the rate specified for the debt securities to the extent permitted by applicable law. However, unless otherwise indicated in the applicable prospectus supplement, during the extension period neither we nor any of our subsidiaries may:
| • | declare or pay dividends on, make distributions regarding, or redeem, purchase, acquire or make a liquidation payment with respect to, any of our capital stock, other than: |
| • | purchases of our capital stock in connection with any employee or agent benefit plans or the satisfaction of our obligations under any contract or security outstanding on the date of the event requiring us to purchase capital stock, |
| • | in connection with the reclassifications of any class or series of our capital stock, or the exchange or conversion of one class or series of our capital stock for or into another class or series of our capital stock, |
| • | the purchase of fractional interests in shares of our capital stock in connection with the conversion or exchange provisions of that capital stock or the security being converted or exchanged, |
| • | dividends or distributions in our capital stock, or rights to acquire capital stock, or repurchases or redemptions of capital stock solely from the issuance or exchange of capital stock, or |
| • | any non-cash dividends declared in connection with the implementation of a shareholder rights plan by us; |
| • | make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem, any debt securities issued by us that rank equally with or junior to the debt securities; or |
| • | make any guarantee payments regarding the foregoing. |
Prior to the termination of any extension period, as long as no event of default under the applicable indenture has occurred and is continuing, we may further defer payments of interest, subject to the above limitations set forth in this section, by extending the interest payment period; provided, however, that, the extension period, including all previous and further extensions, may not extend beyond the maturity of the debt securities. Upon the termination of any extension period and the payment of all amounts then due, we may commence a new extension period, subject to the terms set forth in this section. No interest during an extension period, except at the end of the extension period, will be due and payable, but we may prepay at any time all or any portion of the interest accrued during an extension period.
We do not currently intend to exercise our right to defer payments of interest by extending the interest payment period on the senior debt securities or the subordinated debt securities. We will give the holders of these debt securities notice of our selection of an extension period at least two business days before the earlier of (i) the next succeeding interest payment date or (ii) the date upon which we are required to give notice to the New York Stock Exchange, or other applicable self-regulatory organization, or to holders of such debt securities of the record or payment date of the related interest payment.
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Regarding the Trustees
We will designate the trustee under the senior and subordinated indentures in a prospectus supplement. From time to time, we may enter into banking or other relationships with any of such trustees or their affiliates.
There may be more than one trustee under each indenture, each with respect to one or more series of debt securities. Any trustee may resign or be removed with respect to one or more series of debt securities, and a successor trustee may be appointed to act with respect to such series.
If two or more persons are acting as trustee with respect to different series of debt securities, each trustee will be a trustee of a trust under the indenture separate from the trust administered by any other such trustee. Except as otherwise indicated in this prospectus, any action to be taken by the trustee may be taken by each such trustee with respect to, and only with respect to, the one or more series of debt securities for which it is trustee under the indenture.
Governing Law
The senior debt securities, the subordinated debt securities and the related indentures will be governed by, and construed in accordance with, the internal laws of the State of New York.
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The following description is a general summary of the terms of our common stock. The description below does not purport to be complete and is subject to and qualified in its entirety by reference to our Fourth Amended & Restated Certificate of Incorporation, as further amended by the Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation effective as of January 31, 2022 (the “Certificate of Incorporation”), our Bylaws (as amended, effective March 15, 2020, and as further amended by the Bylaw Amendment effective as of January 31, 2022) (the “Bylaws”), and applicable Delaware law.
The description herein does not contain all of the information that you may find useful or that may be important to you. You should refer to the provisions of our Certificate of Incorporation, Bylaws, and the applicable provisions of the Delaware General Corporation Law (“DGCL”) and federal law governing bank holding companies because they, and not the summaries, define the rights of holders of shares of our common stock. You can obtain copies of our Certificate of Incorporation and Bylaws by following the directions under the heading “Where You Can Find More Information.”
General
Our Certificate of Incorporation provides the authority to issue 400,000,000 shares of common stock, par value $0.01 per share. At December 8, 2023, there were 182,778,045 shares of common stock issued and we had outstanding stock options granted to directors, officers and other employees for 10,972 shares of our common stock. Also at December 8, 2023, we had no issued and outstanding warrants to purchase shares of our common stock.
Each share of our common stock has the same relative rights and is identical in all respects to each other share of our common stock. Our common stock is non-withdrawable capital, is not of an insurable type and is not insured by the Federal Deposit Insurance Corporation or any other governmental entity.
Voting Rights
Holders of our common stock are entitled to one vote per share on each matter properly submitted to stockholders for their vote, including the election of directors. Holders of our common stock do not have the right to cumulate their votes for the election of directors, which means that the holders of more than 50% of the shares of common stock voting for the election of directors can elect 100% of the directors standing for election at any meeting if they choose to do so. In that event, the holders of the remaining shares voting for the election of directors will not be able to elect any person or persons to our board of directors at that meeting.
Liquidation Rights
The holders of our common stock and the holders of any class or series of stock entitled to participate with the holders of our common stock as to the distribution of assets in the event of any liquidation, dissolution or winding-up of Webster, whether voluntary or involuntary, will become entitled to participate equally in the distribution of any of our assets remaining after we have paid, or provided for the payment of, all of our debts and liabilities and after we have paid, or set aside for payment, to the holders of any class of stock having preference over the common stock in the event of liquidation, dissolution or winding-up, the full preferential amounts, if any, to which they are entitled.
Dividends
The holders of our common stock and any class or series of stock entitled to participate with the holders of our common stock are entitled to receive dividends declared by our board of directors out of any assets legally available for distribution. The board may not declare, and we may not pay, dividends or other distributions,
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unless we have paid or the board has declared or set aside all accumulated dividends and any sinking fund, retirement fund or other retirement payments on any class of stock having preference as to payments of dividends over our common stock. As a holding company, our ability to pay distributions is affected by the ability of our subsidiaries to pay dividends. The ability of our bank subsidiary, and our ability, to pay dividends in the future is, and could in the future be further, influenced by bank regulatory requirements and capital guidelines.
Miscellaneous
The holders of our common stock have no preemptive or conversion rights for any shares that may be issued. Our common stock is not subject to additional calls or assessments, and all shares of our common stock currently outstanding are fully paid and nonassessable. All shares of common stock offered pursuant to a prospectus supplement, or issuable upon conversion, exchange or exercise of the preferred stock or other convertible securities, will, when issued, be fully paid and non-assessable, which means that the full purchase price of the shares will have been paid and the holders of the shares will not be assessed any additional monies for the shares.
Some Important Charter Provisions
Any amendment to our Certificate of Incorporation must be approved by at least two-thirds of our board of directors at a duly constituted meeting called for that purpose and also by stockholders by the affirmative vote of at least a majority of the shares entitled to vote thereon at a duly called annual or special meeting; provided, however, that approval by the affirmative vote of at least two-thirds of the shares entitled to vote is required to amend the provisions regarding amendment of our Certificate of Incorporation, directors, Bylaws, approval for acquisitions of control and offers to acquire control, criteria for evaluating offers, the calling of special meetings of stockholders, greenmail, and stockholder action by written consent. In addition, the provisions regarding business combinations may be amended only by the affirmative vote of at least 80% of the shares entitled to vote on the matter. Our Bylaws may be amended by the affirmative vote of at least two-thirds of the board of directors or by stockholders by the affirmative vote of at least two-thirds of the total votes eligible to be voted, at a duly constituted meeting called for that purpose.
Our Certificate of Incorporation also provides that no individual, firm, corporation or other entity may, alone or based on shared power, make any offer to buy or acquire, any solicitation of an offer to sell, any tender offer for, or any request or invitation for tender of, 10% or more of our outstanding shares of capital stock generally entitled to vote for directors without either:
| (1) | receiving the approval of at least two-thirds of our directors then in office; or |
| (2) | obtaining approval from the appropriate federal regulatory authorities pursuant to applicable laws and regulations. |
Our Certificate of Incorporation requires that business combinations between Webster or any majority-owned subsidiary of Webster and a 10% or more stockholder or its affiliates or associates, referred to collectively in this section as the “interested stockholder,” be approved either by:
| (1) | at least 80% of the total number of outstanding shares of capital stock entitled to vote generally in the election of directors; |
| (2) | at least two-thirds of our continuing directors, which means those directors unaffiliated with the interested stockholder and serving before the interested stockholder became an interested stockholder; or |
| (3) | meet specified price and procedure requirements that provide for consideration per share generally equal to or greater than that paid by the interested stockholder when it acquired its block of stock. |
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The types of business combinations with an interested stockholder covered by this provision include:
| • | any merger, consolidation or share exchange |
| • | any sale, lease, exchange, mortgage, pledge or other transfer of assets other than in the usual and regular course of business; |
| • | any issuance or transfer of equity securities having an aggregate market value in excess of 5% of the aggregate market value of our outstanding shares; |
| • | the adoption of any plan or proposal of liquidation proposed by or on behalf of an interested stockholder; or |
| • | any reclassification of securities, recapitalization of Webster or any merger or consolidation of Webster with any of its subsidiaries or any other transaction that has the effect of increasing the proportionate ownership of the interested stockholder. |
These provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of Webster.
Our Certificate of Incorporation excludes our employee stock purchase plans and other employee benefit plans from the definition of interested stockholder.
Since the terms of our Certificate of Incorporation and Bylaws may differ from the general information we are providing, you should only rely on the actual provisions of our Certificate of Incorporation and Bylaws. If you would like to read our Certificate of Incorporation and Bylaws, you may request a copy from us by following the directions under the heading “Where You Can Find More Information.”
NYSE Listing
Our common stock is listed on the New York Stock Exchange under the symbol “WBS.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Broadridge Corporate Issuer Solutions, LLC.
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DESCRIPTION OF PREFERRED STOCK
The following description is a general summary of the terms of the preferred stock that we may issue. The description below and in any prospectus supplement does not purport to be complete and is subject to and qualified in its entirety by reference to our Certificate of Incorporation, and the applicable certificate of designation to our Certificate of Incorporation, determining the terms of the related series of preferred stock and our Bylaws, as amended, each of which we will make available upon request. The descriptions herein and in the applicable prospectus supplement do not contain all of the information that you may find useful or that may be important to you. You should refer to the provisions of our Certificate of Incorporation, the applicable certificate of designation and our Bylaws because they, and not the summaries, define your rights as holders of shares of our preferred stock.
General
We are authorized to issue 3,000,000 shares of preferred stock, par value $0.01 per share. As of December 8, 2023, 6,000 shares of 5.25% Series F Non-Cumulative Perpetual Preferred Stock (“Series F Preferred Stock”) and 135,000 shares of 6.50% Series G Non-Cumulative Perpetual Preferred Stock (“Series G Preferred Stock”) were issued and outstanding. On December 12, 2017, we closed on a public offering of 6,000,000 depositary shares, which each represent 1/1000th ownership interest in a share of our outstanding Series F Preferred Stock. Additionally, in connection with the Sterling Bancorp (“Sterling”) merger, on January 31, 2022, the Company registered and issued 5,400,000 depositary shares, each representing 1/40th interest in a share of our outstanding Series G Preferred Stock. The Series G Preferred Stock ranks on parity with the Series F Preferred Stock and senior to our common stock, with respect to the payment of dividends and distributions upon the liquidation, dissolution, or winding-up of the Company. For information relating to the rights, preferences and other terms of our Series F Preferred Stock and our Series G Preferred Stock, see Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is incorporated in this prospectus by reference.
Our Certificate of Incorporation, subject to limitations prescribed in our Certificate of Incorporation and subject to limitations prescribed by Delaware law, authorizes the board of directors, from time to time by resolution or duly authorizing committee of the board and without further stockholder action, to provide for the issuance of shares of preferred stock, in one or more series, and to fix the relative rights and preferences of the shares, including voting powers, dividend rights, liquidation preferences, redemption rights and conversion privileges. As a result of its broad discretion with respect to the creation and issuance of preferred stock without stockholder approval, the board of directors could adversely affect the voting power of the holders of common stock and, by issuing shares of preferred stock with certain voting, conversion and/or redemption rights, could discourage any attempt to obtain control of Webster.
Terms of the Preferred Stock That We May Offer and Sell to You
You should refer to the prospectus supplement relating to the class or series of preferred stock being offered for the specific terms of that class or series, including:
| • | the title and stated value of the preferred stock being offered; |
| • | the number of shares of preferred stock being offered, their liquidation preference per share and their purchase price; |
| • | the dividend rate(s), period(s) and/or payment date(s) or method(s) of calculating the payment date(s) applicable to the preferred stock being offered; |
| • | whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends on the preferred stock being offered will accumulate; |
| • | the procedures for any auction and remarketing, if any, for the preferred stock being offered; |
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| • | the provisions for a sinking fund, if any, for the preferred stock being offered; |
| • | the provisions for redemption, if applicable, of the preferred stock being offered; |
| • | any listing of the preferred stock being offered on any securities exchange or market; |
| • | the terms and conditions, if applicable, upon which the preferred stock being offered will be convertible into or exchangeable for other securities or rights, or a combination of the foregoing, including the name of the issuer of the securities or rights, conversion or exchange price, or the manner of calculating the conversion or exchange price, and the conversion or exchange date(s) or period(s) and whether we will have the option to convert such preferred stock into cash; |
| • | voting rights, if any, of the preferred stock being offered; |
| • | whether interests in the preferred stock being offered will be represented by depositary shares and, if so, the terms of those shares; |
| • | a discussion of any material and/or special United States federal income tax considerations applicable to the preferred stock being offered; |
| • | the relative ranking and preferences of the preferred stock being offered as to dividend rights and rights upon liquidation, dissolution or winding up of the affairs of Webster; |
| • | any limitations on the issuance of any class or series of preferred stock ranking senior to or equally with the series of preferred stock being offered as to dividend rights and rights upon liquidation, dissolution or winding up of the affairs of Webster; and |
| • | any other specific terms, preferences, rights, limitations or restrictions of the preferred stock being offered. |
Ranking
Unless otherwise specified in the applicable prospectus supplement, the preferred stock will, with respect to distribution rights and rights upon liquidation, dissolution or winding up of Webster, rank:
| • | senior to all classes or series of our common stock and to all equity securities the terms of which specifically provide that the equity securities rank junior to the preferred stock being offered; |
| • | equally with all equity securities issued by us other than those referred to in the first and last bullet points of this subheading; and |
| • | junior to all equity securities issued by us the terms of which specifically provide that the equity securities rank senior to the preferred stock being offered. |
For purposes of this subheading, the term “equity securities” does not include convertible debt securities.
Distributions
Holders of the preferred stock of each series will be entitled to receive, when, as and if declared by our board of directors, out of our assets legally available for payment to stockholders, cash distributions, or distributions in kind or in other property if expressly permitted and described in the applicable prospectus supplement, at the rates and on the dates as we will set forth in the applicable prospectus supplement. We will pay each distribution to holders of record as they appear on our stock transfer books on the record dates determined by our board of directors.
Distributions on any class or series of preferred stock, if cumulative, will be cumulative from and after the date set forth in the applicable prospectus supplement. If our board of directors fails to declare a distribution payable on a distribution payment date on any class or series of preferred stock for which distributions are
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non-cumulative, then the holders of that class or series of preferred stock will have no right to receive a distribution in respect of the distribution period ending on that distribution payment date, and we will have no obligation to pay the distribution accumulated for that period, whether or not distributions on that series are declared payable on any future distribution payment date.
If any shares of the preferred stock of any class or series are outstanding, no full dividends will be declared or paid or set apart for payment on our preferred stock of any other class or series ranking, as to dividends, equally with or junior to the preferred stock of the class or series for any period unless all required dividends are paid. The phrase “all required dividends are paid” when used in this prospectus with respect to class or series of preferred stock means that:
| • | if the class or series of preferred stock has a cumulative dividend, full cumulative dividends on the preferred stock of the class or series have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment is set apart for payment for all past dividend periods and the then current dividend period, or |
| • | if the class or series of preferred stock does not have a cumulative dividend, full dividends on the preferred stock of the class or series have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment is set apart for the payment for the then current dividend period. |
When dividends are not paid in full, or a sum sufficient for the full payment is not so set apart, upon the shares of preferred stock of any class or series and the shares of any other class or series of preferred stock ranking equally as to dividends with the preferred stock of the class or series, all dividends declared upon shares of preferred stock of the class or series and any other class or series of preferred stock ranking equally as to dividends with the preferred stock will be declared equally so that the amount of dividends declared per share on the preferred stock of the class or series and the other class or series of preferred stock will in all cases bear to each other the same ratio that accrued and unpaid dividends per share on the shares of preferred stock of the class or series, which will not include any accumulation in respect of unpaid dividends for prior dividend periods if the preferred stock does not have cumulative dividend, and the other class or series of preferred stock bear to each other. No interest, sum of money in lieu of interest, will be payable in respect of any dividend payment or payments on preferred stock of the class or series that may be in arrears.
Except as provided in the immediately preceding paragraph, unless all required dividends are paid, no dividends, other than in common stock or other stock ranking junior to the preferred stock of the class or series as to dividends and upon liquidation, dissolution or winding-up of Webster, will be declared or paid or set aside for payment or other distribution will be declared or made upon the common stock or any of our other stock ranking junior or equally with the preferred stock of the class or series as to dividends or upon liquidation, nor will any common stock or any of our other capital stock ranking junior to or equally with preferred stock of the class or series as to dividends or upon liquidation, dissolution or winding-up of Webster be redeemed, purchased or otherwise acquired for any consideration, or any moneys be paid to or made available for a sinking fund for the redemption of any shares of any stock, by us except by conversion into or exchange for our other stock ranking junior to the preferred stock of the class or series as to dividends and upon liquidation, dissolution or winding-up of Webster.
Any dividend payment made on shares of a class or series of preferred stock will first be credited against the earliest accrued but unpaid dividend due with respect to shares of the class or series that remains payable.
Redemption
If so provided in the applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or redemption at our option, in whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in the prospectus supplement.
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The prospectus supplement relating to a class series of preferred stock that is subject to mandatory redemption will specify the number of shares of the preferred stock that will be redeemed by us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with an amount equal to all accumulated and unpaid dividends thereon, which will not, if the preferred stock does not have a cumulative dividend, include an accumulation in respect of unpaid dividends for prior dividends periods, to the date of redemption. The redemption price may be payable in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series is payable only from the net proceeds of the issuance of our stock, the terms of the preferred stock may provide that, if no stock will have been issued or to the extent the net proceeds from any issuance are insufficient to pay in full the aggregate redemption price then due, the preferred stock will automatically and mandatorily be converted into shares of our applicable stock pursuant to conversion provisions specified in the applicable prospectus supplement.
Notwithstanding the foregoing, unless provided otherwise for any class or series of preferred stock, unless all required dividends are paid:
| • | no shares of the applicable class or series of preferred stock will be redeemed unless all outstanding shares of preferred stock of the class or series are simultaneously redeemed, and |
| • | we will not purchase or otherwise acquire directly or indirectly any shares of the applicable class or series of preferred stock, except by conversion into or exchange for stock of Webster ranking junior to the preferred stock of the class or series as to dividends and upon liquidation, dissolution or winding-up of Webster, |
provided, however, that the above restrictions will not prevent the purchase or acquisition of shares of preferred stock of the class or series pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of preferred stock of the class or series.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of Webster, then, before any distribution or payment will be made to the holders of any common stock or any other class or series of shares of our capital stock ranking junior to the preferred stock in the distribution of assets upon any liquidation, dissolution or winding up of Webster, the holders of each series or class of preferred stock will be entitled to receive out of our assets legally available for distribution to stockholders liquidating distributions in the amount of the liquidation preference set forth in the applicable prospectus supplement, plus an amount equal to all accumulated and unpaid distributions. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of shares of preferred stock will have no right or claim to any of our remaining assets. If, upon the voluntary or involuntary liquidation, dissolution or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of preferred stock and the corresponding amounts payable on all shares of other classes or series of shares of our capital stock ranking equally with the preferred stock in the distribution of assets, then the holders of the preferred stock and all other classes or series of shares of capital stock will share ratably in any distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.
If liquidating distributions will have been made in full to all holders of preferred stock, our remaining assets will be distributed among the holders of any other classes or series of shares of capital stock ranking junior to the preferred stock upon liquidation, dissolution or winding up, according to their respective rights and preferences and in each case according to their respective number of shares.
For those purposes, the consolidation or merger of Webster with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of the property or business of Webster, will not be deemed to constitute a liquidation, dissolution or winding up of Webster.
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Voting Rights
Holders of preferred stock will not have any voting rights, except as set forth below or as otherwise from time to time required by law, or as otherwise provided in the certificate of designation or the resolutions establishing such series and as indicated in the applicable prospectus supplement.
Under the Delaware General Corporation Law, holders of outstanding shares of a series of preferred stock may be entitled to vote as a separate class on a proposed amendment to the terms of that series of preferred stock or our Certificate of Incorporation, if the amendment would:
| (1) | increase or decrease the aggregate number of authorized shares of that series of preferred stock, |
| (2) | increase or decrease the par value of the shares of that series of preferred stock, or |
| (3) | alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely, in which case the approval of the proposed amendment would require the affirmative vote of at least a majority of the outstanding shares of that series of preferred stock. |
Conversion Rights
The terms and conditions, if any, upon which any class or series of preferred stock are convertible into or exchangeable for other securities or rights of Webster or other issuers, including, without limitation, common stock, debt securities or another series of preferred stock, or any combination of the foregoing, will be set forth in the applicable prospectus supplement relating to the preferred stock. The terms will include the name of the issuer of the other securities or rights and the number or principal amount of the securities or rights into which the shares of preferred stock are convertible or exchangeable, the conversion or exchange price or rate or the manner of calculating the price, the conversion or exchange date(s) or period(s), provisions as to whether conversion or exchange will be at the option of the holders of the preferred stock or at Webster’s or other issuer’s option, the events requiring an adjustment of the conversion or exchange price or rate and provisions affecting conversion or exchange in the event of the redemption of the series of preferred stock.
Transfer Agent and Registrar
The transfer agent and registrar for the preferred stock is Broadridge Corporate Issuer Solutions, LLC.
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DESCRIPTION OF DEPOSITARY SHARES
The following description, together with the applicable prospectus supplements, summarizes certain terms and provisions of the depositary shares that we may offer under this prospectus and the related deposit agreements and depositary receipts. The following summary relates to terms and conditions applicable to these types of securities generally. The particular terms of any series of depositary shares will be those set forth in the applicable deposit agreement and summarized in the applicable prospectus supplement. If indicated in the applicable prospectus supplement, the terms of any series may differ from the terms summarized below.
Specific deposit agreements and depositary receipts will contain additional important terms and provisions and will be incorporated by reference into the registration statement that includes this prospectus before we issue any depositary shares. The descriptions herein and in the applicable prospectus supplement do not restate those agreements and receipts in their entirety and do not contain all of the information that you may find useful or that may be important to you. You should refer to the provisions of the applicable deposit agreement and deposit certificate because they, and not the summaries, define your rights as holders of the depositary shares. For more information, please review the forms of these documents, which will be filed with the SEC promptly after the offering of depositary shares or depositary share units and will be available as described under the heading “Where You Can Find More Information” above.
General
We may elect to offer fractional shares of preferred stock rather than full shares of preferred stock. If so, we will issue “depositary receipts” for these “depositary shares.” Each depositary share will represent a fraction of a share of a particular series of preferred stock. Each holder of a depositary share will be entitled, in proportion to the fraction of preferred stock represented by that depositary share, to the rights and preferences of the preferred stock, including dividend, voting, redemption, conversion and liquidation rights, if any. We will enter into a deposit agreement with a depositary, which will be named in the related prospectus supplement.
In order to issue depositary shares, we will issue preferred stock and immediately deposit these shares with the depositary. The depositary will then issue depositary receipts in accordance with the terms of the deposit agreement to the persons who purchase depositary shares. Each whole depositary share issued by the depositary may represent a fraction of a share held by the depositary. The depositary will issue depositary receipts in a form that reflects whole depositary shares, and each depositary receipt may evidence any number of whole depositary shares.
We issued 6,000,000 depositary shares in a public offering, which each represent 1/1000th ownership interest in a share of our outstanding Series G Preferred Stock. Additionally, in connection with the Sterling merger, we issued and registered 5,400,000 depositary shares, each representing 1/40th interest in a share of our outstanding Series G Preferred Stock. The depositary shares representing our Series G Preferred Stock and our Series G Preferred Stock both trade on the New York Stock Exchange under the ticker symbols “WBS-PrF” and “WBS-PrG”. For information relating to the depositary shares for our Series F Preferred Stock and for our Series G Preferred Stock, see Exhibit 4.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is incorporated in this prospectus by reference.
Dividends and Other Distributions
The depositary will distribute all cash and non-cash dividends and distributions it receives with respect to the underlying preferred stock to the record holders of depositary shares in proportion to the number of depositary shares they hold. In the case of non-cash distributions, the depositary may determine that it is not feasible to make the distribution. If so, the depositary may, with our approval, sell the property and distribute the net proceeds from the sale to the holders. The amounts distributed by the depositary will be reduced by any amount required to be withheld by us or the depositary on account of taxes.
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Redemption of Depositary Shares
If we redeem the series of preferred stock that underlies the depositary shares, the depositary will redeem the depositary shares from the proceeds it receives from the redemption of the preferred stock it holds. The depositary will redeem the number of depositary shares that represent the amount of underlying preferred stock that we have redeemed. The redemption price for depositary shares will be in proportion to the redemption price per share that we paid for the underlying preferred stock. If we redeem less than all of the depositary shares, the depositary will select which depositary shares to redeem by lot, or some substantially equivalent method.
After a redemption date is fixed, the depositary shares to be redeemed no longer will be considered outstanding. The rights of the holders of the depositary shares will cease, except for the rights to receive money or other property upon redemption. In order to redeem their depositary shares, holders will surrender their depositary receipts to the depositary.
Voting the Preferred Stock
We will notify the depositary about any meeting at which the holders of preferred stock are entitled to vote, and the depositary will mail the information to the record holders of depositary shares related to that preferred stock. Each record holder of depositary shares on the record date will be entitled to instruct the depositary on how to vote the shares of preferred stock represented by that holder’s depositary shares. The depositary will vote the preferred stock represented by the depositary shares in accordance with these instructions, provided the depositary receives these instructions sufficiently in advance of the meeting. If the depositary does not receive instructions from the holders of the depositary shares, the depositary will abstain from voting the preferred stock that underlies those depositary shares.
Withdrawal of Preferred Stock
When a holder surrenders depositary receipts at the corporate trust office of the depositary, and pays any necessary taxes, charges or other fees, the holder will be entitled to receive the number of whole shares of the related series of preferred stock, and any money or other property, if any, represented by the holder’s depositary shares. Once a holder exchanges depositary shares for whole shares of preferred stock, that holder cannot “re-deposit” these shares of preferred stock with the depositary, or exchange them for depositary shares. If a holder delivers depositary receipts that represent a number of depositary shares that exceeds the number of whole shares of related preferred stock the holder seeks to withdraw, the depositary will issue a new depositary receipt to the holder that evidences the excess number of depositary shares.
Amendment and Termination of the Deposit Agreement
Webster and the depositary can agree, at any time, to amend the form of depositary receipt and any provisions of the depositary receipt and any provisions of the deposit agreement. However, if an amendment has a material adverse effect on the rights of the holders of related depositary shares, the holders of at least a majority of the depositary shares then outstanding must first approve the amendment. Every holder of a depositary receipt at the time an amendment becomes effective will be bound by the amended deposit agreement. However, subject to any conditions in the deposit agreement or applicable law, no amendment can impair the right of any holder of a depositary share to receive shares of the related preferred stock, or any money or other property represented by the depositary shares, when they surrender their depositary receipts.
We can terminate the deposit agreement at any time, as long as the depositary mails notice of termination to the record holders of depositary shares then outstanding at least 30 days prior to the date fixed for termination. Upon termination, the depositary shall deliver to each holder of depositary receipts, upon surrender of the depositary receipts held by such holder, such number of whole or fractional shares of preferred stock as are represented by the depositary shares evidenced by such depositary receipts, together with any other property held by the depositary with respect to such depositary receipt.
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Charges of Depositary
We will pay all transfer and other taxes and the government charges that relate solely to the depositary arrangements. We will also pay the charges of each depositary, including charges in connection with the initial deposit of the related series of preferred stock, the initial issuance of the depositary shares, and all withdrawals of shares of the related series of preferred stock. However, holders of depositary receipts will pay the fees and expenses of the depositary for any duties requested by such holders to be performed that are outside of those expressly provided for in the deposit agreement.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering written notice of its decision to us. We may remove the depositary at any time. Any resignation or removal will take effect when we appoint a successor depositary. We must appoint the successor depositary within 60 days after delivery of the notice of resignation or removal. The successor depositary must be a bank or trust company that has its principal office in the United States and has a combined capital and surplus of at least $50,000,000.
Miscellaneous
We will be required to furnish certain information to the holders of the preferred stock underlying any depositary shares. The depositary, as the holder of the underlying preferred stock, will forward any report or information it receives from us to the holders of depositary shares.
Neither the depositary nor Webster will be liable if its ability to perform its obligations under the deposit agreement is prevented or delayed by law or any circumstance beyond its control. Both Webster and the depositary will be obligated to use their best judgment and to act in good faith in performing their respective duties under the deposit agreement. Each of Webster and the depositary will be liable only for gross negligence and willful misconduct in performing their duties under the deposit agreement. They will not be obligated to appear in, prosecute or defend any legal proceeding with respect to any depositary receipts, depositary shares or preferred stock unless they receive what they, in their sole discretion, determine to be a satisfactory indemnity from one or more holders of the depositary shares. Webster and the depositary will evaluate any proposed indemnity in order to determine whether the financial protection afforded by the indemnity is sufficient to reduce each party’s risk to a satisfactory and customary level. Webster and the depositary may rely on the advice of legal counsel or accountants of their choice. They may also rely on information provided by persons they believe, in good faith, to be competent, and on documents they believe, in good faith, to be genuine.
The applicable prospectus supplement will identify the depositary’s corporate trust office. Unless the prospectus supplement indicates otherwise, the depositary will act as transfer agent and registrar for depositary receipts, and if we redeem shares of preferred stock, the depositary will act as redemption agent for the corresponding depositary receipts.
Title
Webster, each depositary and any agent of Webster or the applicable depositary may treat the registered owner of any depositary share as the absolute owner of the depositary shares for all purposes, including making payment, regardless of whether any payment in respect of the depositary share is overdue and regardless of any notice to the contrary.
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General
We may issue warrants to purchase our debt securities, common stock or preferred stock or units of two or more of these types of securities, which are collectively referred to in this prospectus as “underlying warrant securities”. We may issue warrants independently or together with any underlying warrant securities and such warrants may be attached to or separate from those underlying warrant securities. We will issue the warrants under warrant agreements to be entered into between us and a bank or trust company, as warrant agent, as more fully described in the applicable prospectus supplement. The warrant agent will act solely as our agent in connection with the warrants of the series being offered and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. As of December 14, 2023, no warrants to purchase shares of our common stock were issued and outstanding.
The applicable prospectus supplement will contain a description of the following terms:
| • | the title of the warrants; |
| • | the designation, amount and terms of the underlying warrant securities for which the warrants are exercisable; |
| • | the designation and terms of the underlying warrant securities, if any, with which the warrants are to be issued and the number of warrants issued with each underlying warrant security; |
| • | the price or prices at which the warrants will be issued; |
| • | the aggregate number of warrants; |
| • | any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants; |
| • | the price or prices at which the underlying warrant securities purchasable upon exercise of the warrants may be purchased; |
| • | if applicable, the date on and after which the warrants and the underlying warrant securities purchasable upon exercise of the warrants will be separately transferable; |
| • | if applicable, a discussion of the material United States federal income tax considerations applicable to the exercise of the warrants; |
| • | the date on which the right to exercise the warrants will commence, and the date on which the right will expire; |
| • | the currency or currencies (including composite currencies), and/or the securities (if any), in which the exercise price of the warrants may be payable; and, if the exercise price is payable in whole or in part with securities, the basis for determining the amount or number of such securities to be provided as such payment; |
| • | the maximum or minimum number of warrants that may be exercised at any time; |
| • | information with respect to book-entry procedures, if any; and |
| • | any other terms, including terms, procedures and limitations relating to the exercise and exchange of the warrants. |
Exercise of Warrants
Each warrant will entitle its holder to purchase, for cash and/or securities (as will be specified in the applicable prospectus supplement), the amount or number of debt securities, shares of preferred stock, or shares of common
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stock, at the exercise price, as will in each case be set forth in, or be determinable as set forth in, the applicable prospectus supplement. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the prospectus supplement relating to the warrants offered thereby. After the close of business on the expiration date, unexercised warrants will become void.
Holders of warrants may exercise their respective warrants as set forth in the prospectus supplement relating to such warrants. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the prospectus supplement, we will, as soon as practicable, forward the underlying warrant securities purchasable upon exercise of the warrants. If a holder exercises less than all of the warrants represented by the warrant certificate, the warrant agent will issue a new warrant certificate for the remaining warrants.
Prior to the exercise of any warrants to purchase debt securities or other securities, including shares of preferred stock or common stock, holders of the warrants will not have any of the rights of holders of the debt securities or other securities, including shares of preferred stock or common stock purchasable upon exercise, including:
| • | in the case of warrants for the purchase of debt securities, the right to receive payments of principal of, or any premium or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or |
| • | in the case of warrants for the purchase of shares of preferred stock or shares of common stock, the right to vote or to receive any payments of dividends on the shares of preferred stock or common stock purchasable upon exercise. |
The descriptions of the warrant agreements in this prospectus and in any prospectus supplement are summaries of certain material provisions of the applicable warrant agreements. These descriptions do not restate those agreements in their entirety and do not contain all of the information that you may find useful or that may be important to you. You should refer to the provisions of the applicable warrant agreement and warrant certificate relating to the warrants because they, and not the summaries, define your rights as holders of the warrants or any warrant units. For more information, please review the forms of these documents, which will be filed with the SEC promptly after the offering of warrants or warrant units and will be available as described under the heading “Where You Can Find More Information” above.
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DESCRIPTION OF PURCHASE CONTRACTS
As may be specified in a prospectus supplement, we may issue purchase contracts obligating holders to purchase from Webster, and obligating Webster to sell to the holders, a number of debt securities, shares of our common stock, or preferred stock or depositary shares or warrants, at a future date or dates. The price per purchase contract security may be fixed at the time the purchase contracts are issued or may be determined by reference to a specific formula set forth in the purchase contracts. Under the purchase contracts, we may be required to make periodic payments to the holders of the units or vice versa. These payments may be unsecured or prefunded on some basis to be specified in the applicable prospectus supplement.
The purchase contracts may require holders to secure their obligations under the contracts in a specified manner and, in specified circumstances, we may deliver newly issued prepaid purchase contracts, or prepaid securities, when we transfer to a holder any collateral securing the holder’s obligations under the original purchase contract.
The purchase contracts may be issued separately or as part of units consisting of a purchase contract and one or more other securities, which may include debt securities, depositary shares, preferred securities, common stock, warrants or debt obligations of Webster, or government securities, and which may secure the holder’s obligations to purchase the purchase contract security under the purchase contract.
The prospectus supplement relating to any purchase contracts we are offering will specify the material terms of the purchase contracts, whether they will be issued separately or as part of units, and any applicable pledge or depository arrangements.
The descriptions of the purchase contracts and any applicable underlying security or pledge or depository arrangements in this prospectus and in any prospectus supplement are summaries of certain material provisions of the applicable agreements. These descriptions do not restate those agreements in their entirety and do not contain all of the information that you may find useful or that may be important to you. You should refer to the provisions of the applicable agreements because they, and not the summaries, define your rights as holders of the purchase contracts. We will make copies of the relevant agreements available as described under the heading “Where You Can Find More Information” above.
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As specified in the applicable prospectus supplement, we may issue units comprised of one or more of the other securities described in this prospectus in any combination. Each unit may also include debt obligations of third parties, such as U.S. Treasury securities. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The prospectus supplement will describe:
| • | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances the securities comprising the units may be held or transferred separately; |
| • | a description of the terms of any unit agreement governing the units; |
| • | a description of the provisions for the payment, settlement, transfer or exchange of the units; and |
| • | whether the units will be issued in fully registered or global form. |
The descriptions of the units and any applicable underlying security or pledge or depository arrangements in this prospectus and in any prospectus supplement are summaries of the material provisions of the applicable agreements. These descriptions do not restate those agreements in their entirety and do not contain all of the information that you may find useful or that may be important to you. You should refer to the provisions of the applicable agreements because they, and not the summaries, define your rights as holders of the units. We will make copies of the relevant agreements available as described under the heading “Where You Can Find More Information” above.
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Webster or the selling securityholders may sell the offered securities:
| • | directly to purchasers, |
| • | through agents, |
| • | through dealers, |
| • | through underwriters, |
| • | directly to its stockholders, or |
| • | through a combination of any of these methods of sale. |
The prospectus supplement relating to a series of the offered securities will set forth its offering terms, including the name or names of any underwriters, dealers or agents, the purchase price of the offered securities and the proceeds to Webster and/or selling securityholder from the sale, any underwriting discounts, commissions and other items constituting underwriters’ compensation, any initial public offering price and any underwriting discounts, commissions and other items allowed or reallowed or paid to dealers or agents and any securities exchanges on which the offered securities may be listed.
Webster or the selling securityholders may use one or more underwriters in the sale of the offered securities, in which case the offered securities will be acquired by the underwriter or underwriters for their own account and may be resold from time to time in one or more transactions either:
| • | at a fixed price or prices, which may be changed, |
| • | at market prices prevailing at the time of sale, |
| • | at prices related to the prevailing market prices, or |
| • | at negotiated prices. |
Webster or a selling securityholder may directly solicit offers to purchase offered securities. Agents designated by Webster or a selling securityholder from time to time may also solicit offers to purchase offered securities. Any agent designated by Webster or a selling securityholder, who may be deemed to be an “underwriter” as that term is defined in the Securities Act, involved in the offer or sale of the offered securities in respect of which this prospectus is delivered will be named, and any commissions payable by Webster or a selling securityholder to such agent will be set forth in the prospectus supplement.
If a dealer is utilized in the sale of the offered securities in respect of which this prospectus is delivered, Webster or the selling securityholder will sell the offered securities to the dealer, as principal. The dealer, who may be deemed to be an “underwriter” as that term is defined in the Securities Act, may then resell the offered securities to the public at varying prices to be determined by the dealer at the time of resale.
If an underwriter is, or underwriters are, used in the sale, Webster or a selling securityholder (if any) will execute an underwriting agreement with the underwriters at the time of sale to the underwriters. The names of the underwriters will be set forth in the prospectus supplement, which will be used by the underwriter to make resales of the offered securities in respect of which this prospectus is delivered to the public. In connection with the sale of offered securities, the underwriter may be deemed to have received compensation from Webster or the selling securityholder in the form of underwriting discounts or commissions and may also receive commissions from purchasers of offered securities for whom they may act as agents. Underwriters may also sell offered securities to or through dealers, and the dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents.
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If so indicated in the applicable prospectus supplement, Webster or a selling securityholder will authorize underwriters, dealers or other persons to solicit offers by certain institutions to purchase offered securities from Webster or a selling securityholder at the public offering price set forth in the applicable prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a future date or dates. Institutions with which these contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others. The obligations of any purchasers under any delayed delivery contract will not be subject to any conditions except that:
| • | the purchase of the offered securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the purchaser is subject, and |
| • | if the offered securities are also being sold to underwriters, Webster or a selling securityholder will have sold to the underwriters the offered securities not sold for delayed delivery. |
The underwriters, dealers and other persons will not have any responsibility in respect of the validity or performance of such contracts. The prospectus supplement relating to the contracts will set forth the price to be paid for offered securities pursuant to the contracts, the commission payable for solicitation of the contracts and the date or dates in the future for delivery of offered securities pursuant to the contracts.
Offered securities may also be offered and sold, if so indicated in the prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for Webster or a selling securityholder. Any remarketing firm will be identified and the terms of its agreement, if any, with Webster or a selling securityholder and its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed to be underwriters in connection with their remarketing of offered securities.
Unless otherwise set forth in the applicable prospectus supplement, the obligations of underwriters to purchase the offered securities will be subject to certain conditions precedent and such underwriters will be obligated to purchase all such securities, if any are purchased. In connection with the offering of securities, we or the selling securityholder may grant to the underwriters an option to purchase additional securities to cover over-allotments at the initial public offering price, with an additional underwriting commission, as may be set forth in the accompanying prospectus supplement. If we or the selling securityholder grants any over-allotment option, the terms of such over-allotment option will be set forth in the prospectus supplement for such securities.
Underwriters, dealers, remarketing firms and agents may be entitled, under agreements that may be entered into with Webster or a selling securityholder, to indemnification by Webster or a selling securityholder against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments that they may be required to make in respect thereof and may engage in transactions with, or perform services for, Webster or the selling securityholder in the ordinary course of business.
Any underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short-covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
The anticipated date of delivery of offered securities will be set forth in the applicable prospectus supplement relating to each offer.
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Sales by Selling Securityholders
Selling securityholders may use this prospectus in connection with the resale of securities. The applicable prospectus supplement will identify the selling securityholders and the terms of the securities. Selling securityholders may be deemed to be underwriters in connection with the securities they resell and any profits on the sales may be deemed to be underwriting discounts and commissions under the Securities Act. The selling securityholders will receive all the proceeds from the sale of securities. We will not receive any proceeds from sales by selling securityholders.
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Unless otherwise specified in a prospectus supplement accompanying this prospectus, the validity of the securities offered by this prospectus will be passed upon by Squire Patton Boggs (US) LLP, New York, New York. Any underwriters will be advised about legal matters by their own counsel, which will be named in a prospectus supplement to the extent required by law.
The consolidated financial statements of Webster Financial Corporation appearing in Webster Financial Corporation’s Annual Report on Form 10-K as of December 31, 2022 and 2021, and for each of the years in the three-year period ended December 31, 2022, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2022 have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG LLP, independent auditor, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report on the effectiveness of internal control over financial reporting as of December 31, 2022, expresses an opinion that Webster Financial Corporation did not maintain effective internal control over financial reporting as of December 31, 2022 because of the effect of a material weaknesses on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states Webster Financial Corporation did not have effective general information technology controls related to Sterling which was acquired during 2022. Specifically, the Company did not design and implement appropriate logical access controls including deprovisioning, privileged access, and user access reviews. These control deficiencies were a result of ineffective risk assessment associated with the IT environment and individuals with insufficient knowledge and training associated with designing and implementing the controls. As a result, process level automated controls and manual controls that are dependent on the completeness and accuracy of information derived from the affected IT systems are considered ineffective because they could have been adversely impacted.
The consolidated financial statements of Sterling Bancorp as of December 31, 2021 and 2020, and for each of the fiscal years ended December 31, 2021, 2020, and 2019 appearing in Webster Financial Corporation’s Current Report on Form 8-K/A filed with the SEC on April 15, 2022 have been incorporated by reference herein and in the registration statement in reliance upon the report of Crowe LLP, independent auditor, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
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