This excerpt taken from the WBS 10-K filed Mar 2, 2009.
Websters participation in the U.S. Treasurys Capital Purchase Program restricts the Companys ability to increase dividends on its common stock, undertake stock repurchase programs and compensate key executives.
In November 2008, the U.S. Treasury invested in $400 million in preferred stock of the Company pursuant to the Capital Purchase Program. The terms of the Capital Purchase Program require Webster to pay preferred cumulative dividends to the Treasury and restrict Websters ability to increase dividends on its common stock, redeem the Treasurys investment, undertake stock repurchase programs and pay executive compensation. More stringent restrictions primarily on executive compensation were imposed by Congress in February 2009 as part of ARRA, and these restrictions apply retroactively. Congress may impose additional restrictions in the future which may also apply retroactively. These restrictions may have a material adverse affect on Websters operations, revenue and financial condition, on the ability to pay dividends, or on Websters ability to attract and retain executive talent.