Document:

cubi-12312019xex47abs

As of December 31, 2021, Customers Bancorp had four classes of securities registered under Section 12(b) of the  Securities Exchange Act of 1934:   1. Voting Common Stock, par value of $1.00 per share  2. Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, 6.45% Series E, par value $1.00 per  share  3. Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, 6.00% Series F, par value $1.00 per  share  4. 5.375% Subordinated Notes due 2034  Description of the Securities  The following description summarizes the general provisions of the debt securities we may offer and issue under this  prospectus.  The applicable prospectus supplement relating to a specific offer and issuance of debt securities by us  will provide additional information regarding the terms of the debt securities. You should read any prospectus  supplement related to the specific debt securities being offered and issued, as well as the provisions of the indenture  and any supplemental indenture and the form of debt security relating to such debt securities that provide the terms  of such debt securities.  The debt securities offered and issued by this prospectus will be unsecured obligations of Customers, unless  otherwise provided in the applicable prospectus supplement, and will be either senior or subordinated debt.  Any  debt securities we issue will be issued under an indenture between us and a trustee to be determined prior to the time  of issuance, a  copy of which is incorporated by reference as an exhibit to the registration statement of which this  prospectus forms a part.  DESCRIPTION OF CAPITAL STOCK  The following description of our capital stock is a  summary, and to the extent inconsistent with the  description of our capital stock included in the accompanying prospectus, this summary supersedes that description.  This summary is not complete and is qualified in its entirety by reference to the complete text of our articles of  incorporation, as amended (including our Statement with Respect to Shares filed in connection with the creation and  designation of our outstanding shares of preferred stock), and our bylaws, copies of which are available upon request  from us, and the applicable provisions of the Pennsylvania Business Corporation Law and federal laws governing  bank holding companies.  General    Under our articles of incorporation, we are authorized to issue up to an aggregate amount of 300,000,000  shares of stock, comprising:     •    100,000,000 shares of voting common stock, par value $1.00 per share;   •    100,000,000 shares of Class B non-voting common stock, par value $1.00 per share; and   •    100,000,000 shares of preferred stock.    Our board of directors has the authority to establish and divide the authorized and unissued shares of voting  common stock and of Class B non-voting common stock into series or classes, or both, and to fix and determine, to  the extent not already determined in our articles of incorporation, the designations, preferences, and relative,  participating, optional or other special rights, if any, and the qualifications, limitations, or restrictions on those  rights, if any, attributable to any wholly unissued series of stock or any entire class if none of the shares in such class  have been issued, the number of shares constituting any such series or class and the terms and conditions of the issue  thereof. As of December 31, 2021, there were 32,913,267 shares of voting common stock and no shares of Class B  non-voting common stock outstanding.    Our board of directors also has the authority to establish and divide the authorized and unissued shares of  preferred stock into series or classes, or both, and to fix and determine whether or not shares in any series or class of  preferred stock have par value and, if so, the par value, whether or not the shares in a series or class have voting  rights and if so whether those voting rights are full or limited or no voting rights and for each series or class of  preferred stock, the designations, preferences, relative, participating, optional or other special rights, if any,  

 

including dividend rights, conversion rights, redemption rights and liquidation preferences, if any, and the  qualifications, limitations, or restriction on those rights, if any, attributable to any wholly unissued series of stock or  any entire class if none of the shares in such class have been issued, the number of shares constituting any such  series or class and the terms and conditions of the issue thereof. As of December 31, 2021, there were 2,300,000  shares of our Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series E outstanding and 3,400,000  shares of our Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F outstanding.    Our board of directors previously created four series of preferred stock, Fixed Rate Perpetual Preferred  Stock, Series A, Fixed Rate Cumulative Perpetual Preferred Stock, Series B, Fixed-to-Floating Rate Non- Cumulative Perpetual Preferred Stock, Series C and Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred  Stock, Series D.  All of the shares of these four series of preferred stock have been repurchased or redeemed and are  no longer outstanding. The shares of these series were canceled, and the authorized number of shares of each such  series have reverted to authorized but unissued shares of preferred stock and may be issued as part of any series of  preferred stock hereafter designated by the board of directors.    Our board of directors, in its sole discretion, has authority to sell any treasury stock and/or unissued  securities, options, warrants, or other rights to purchase any of our securities, upon such terms as it deems advisable.  Subject to applicable law and the provisions of our articles of incorporation and bylaws, our board of directors could  issue preferred stock, or additional shares of voting common stock or Class B non-voting common stock, with terms  different from those of our existing common stock, at any time.   Common Stock  Voting Rights  Except as otherwise required by law and except as provided by the terms of any other class or series of  stock, holders of voting common stock have the exclusive power to vote on all matters presented to our  shareholders, including the election of directors. Each holder of voting common stock is entitled to one vote per  share. The holders of voting common stock do not have the right to vote their shares cumulatively in the election of  directors. This means that, for each director position to be elected, a shareholder may only cast a number of votes  equal to the number of shares held by the shareholder.    Any action that would significantly and adversely affect the rights of the Class B non-voting common stock  with respect to the modification of the terms of those securities or dissolution requires the approval of the holders of  Class B non-voting common stock voting separately as a class. Otherwise, the holders of the Class B non-voting  common stock have no voting power, and do not have the right to participate in or have notice of any meeting of  shareholders.    Because our articles of incorporation permit the board of directors to set the voting rights of preferred  stock, it is possible that holders of one or more series of preferred stock issued in the future could have voting rights  of any sort, which could limit the effect of the voting rights of holders of voting common stock.    Dividend Rights    The holders of our common stock and Class B non-voting common stock are entitled to receive dividends  declared by our board of directors out of any assets legally available for distribution. In no event shall any stock  dividends or stock splits or combinations of stock be declared or made on our common stock or Class B non-voting  common stock unless the shares of common stock and Class B non-voting common stock at the time outstanding are  treated equally and identically.  We may not pay dividends or other distributions unless we have paid, 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 dividends is affected by the ability of our subsidiaries, including Customers Bank, to pay dividends or otherwise  transfer funds to us. The ability of our subsidiaries to pay dividends or make other distributions to us, and our ability  to pay dividends to shareholders is, and could in the future be, subject to or influenced by bank regulatory  requirements and capital guidelines.    

 

Because our articles of incorporation permit our board of directors to set the dividend rights of preferred  shares, it is possible that holders of one or more series of preferred shares issued in the future could have dividend  rights that differ from those of the holders of our common stock, or could have no right to the payment of dividends.  If the holders of a class or series of preferred stock is given dividend rights, the right of holders of preferred shares  to receive dividends could have priority over the right of holders of our common stock to receive dividends. As  discussed above under "—General" we have currently issued and outstanding shares of preferred stock that have  priority over the right of holders of our common stock to receive dividends.    Summary of Other Terms of Preferred Stock Outstanding by Series    Series E Preferred Stock (Trading Symbol CUBI/PE)    General    Under our articles of incorporation, we have authority to issue up to 100,000,000 shares of preferred stock,  and our board of directors is authorized to establish the rights and privileges with respect to one or more classes or  series of preferred stock that we may issue.        Prior to the issuance of the Series E Preferred Stock, we filed with the Pennsylvania Secretary of State a  Statement with Respect to Shares, which had the effect of amending our existing articles of incorporation to  establish the terms of the Series E Preferred Stock. The Statement with Respect to Shares initially authorized  2,300,000 shares of Series E Preferred Stock. We may, without notice to or the consent of holders of the Series E  Preferred Stock, issue additional shares of Series E Preferred Stock from time to time.     We will generally be able to pay dividends and distributions upon our liquidation, dissolution or winding  up only out of lawfully available funds for such payment (i.e., after taking account of all indebtedness, other non- equity and other senior claims). When the shares of Series E Preferred Stock are issued in connection with the  offering contemplated by this prospectus supplement, such shares will be fully paid and non-assessable when issued,  which means that holders of such shares will have paid their purchase price in full and we may not ask them to pay  additional funds in respect of their shares of Series E Preferred Stock.    Holders of Series E Preferred Stock will not have preemptive or subscription rights to acquire more stock  of Customers Bancorp. The Series E Preferred Stock will not be convertible into or exchangeable for our common  stock or any other class or series of our capital stock. The Series E Preferred Stock does not have a stated maturity  date, will not be subject to any sinking fund or any other obligation of us for their repurchase, redemption or  retirement and will be perpetual unless redeemed at our option.    Ranking    Shares of the Series E Preferred Stock will rank, with respect to the payment of dividends and distributions  upon our liquidation, dissolution or winding-up, respectively:    • senior to our common stock and to any class or series of our capital stock we may issue that is not  expressly stated to be on parity with or senior to the Series E Preferred Stock;     • on parity with, or equally to, with any class or series of our capital stock expressly stated to be on parity  with the Series E Preferred Stock, including our Series F Preferred Stock; and     • junior to any class or series of our capital stock expressly stated to be senior to the Series E Preferred  Stock (issued with the requisite consent of the holders of at least two-thirds of the outstanding Series E  Preferred Stock).        

 

Dividends    Dividends on shares of the Series E Preferred Stock are discretionary and will not be cumulative. Holders  of the Series E Preferred Stock will be entitled to receive, if, when and as declared by our board of directors, or a   duly authorized committee of the board, out of legally available assets, non-cumulative cash dividends from the  original issue date (in the case of the initial dividend period only, as described below) or the immediately preceding  dividend payment date, quarterly in arrears on the 15th day of March, June, September and December of each year  (each such date being referred to herein as a "dividend payment date"), commencing on June 15, 2016. Dividends on  each share of Series E Preferred Stock will accrue on the liquidation preference amount of $25.00 per share at a rate  per annum equal to 6.45% with respect to each dividend period from and including the original issue date to, but  excluding, June 15, 2021 (the "fixed rate period"), and thereafter at a rate per annum equal to the three-month  LIBOR (as defined below) on the related dividend determination date plus a spread of 5.14% per annum (the  "floating rate period").  In the event that we issue additional shares of Series E Preferred Stock after the original  issue date, dividends on such shares may accrue from the original issue date or any other date we specify at the time  such additional shares are issued. We will not pay interest or any sum of money instead of interest on any dividend  payment that may be in arrears on the Series E Preferred Stock.    Dividends will be payable to holders of record of Series E Preferred Stock as they appear on our books on  the applicable record date (each such date being referred to herein as a "dividend record date"), which shall be the  15th calendar day before the dividend payment date or such other record date fixed by our board of directors, or any  duly authorized committee of the board, that is not less than 15 calendar days or more than 30 calendar days before  the applicable dividend payment date.    A dividend period is the period from and including a dividend payment date to but excluding the next  dividend payment date or any earlier redemption date, except that the initial dividend period will commence on and  include the original issue date of the Series E Preferred Stock and will end on and exclude the June 15, 2016  dividend payment date. Any dividend payable on shares of the Series E Preferred Stock for any dividend period  during the fixed rate period will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends for the initial dividend period will be calculated from the original issue date. Any dividend payable on  shares of the Series E Preferred Stock for any dividend period during the floating rate period will be computed on  the basis of a  360-day year and the actual number of days elapsed in such dividend period. Dollar amounts resulting  from that calculation will be rounded to the nearest cent, with one-half cent being rounded upward. If any dividend  payment date applicable to the fixed rate period is not a  business day, then the related payment of dividends will be  made on the next succeeding business day, and no additional dividends will accrue on such payment. If any dividend  payment date applicable to the floating rate period is not a  business day, then the dividend payment date will be  postponed to the next succeeding business day and dividends will accrue to, but exclude the next succeeding  business day.    For any dividend period during the floating rate period, three-month LIBOR (the London interbank offered  rate) shall be determined by the calculation agent on the second London business day immediately preceding the  first day of such dividend period (which we refer to as the "dividend determination date") in the following manner:    (i) Three-month LIBOR will be the rate for deposits in U.S. dollars having an index maturity of three  months in amounts of at least $1,000,000, as that rate appears on Reuters screen page "LIBOR01", or  any successor page, as of 11:00 a.m., London time, on that dividend determination date.          (ii) If no offered rate appears on Reuters screen page "LIBOR01" on the relevant dividend determination  date at approximately 11:00 a.m., London time, then the calculation agent, after consultation with us,  will select four major banks in the London interbank market and will request each of their principal  London offices to provide a quotation of the rate at which three-month deposits in U.S. dollars in  amounts of at least $1,000,000 are offered by it to prime banks in the London interbank market, on that  date and at that time, that is representative of single transactions at that time. If at least two quotations  are provided, three-month LIBOR will be the arithmetic average (rounded upward if necessary to the  nearest .00001 of 1%) of the quotations provided. Otherwise, the calculation agent will select three  

 

major banks in New York City and will request each of them to provide a quotation of the rate offered  by it at approximately 11:00 a.m., New York City time, on the dividend determination date for loans in  U.S. dollars to leading European banks having an index maturity of three months for the applicable  dividend period in an amount of at least $1,000,000 that is representative of single transactions at that  time. If three quotations are provided, three-month LIBOR will be the arithmetic average (rounded  upward if necessary to the nearest .00001 of 1%) of the quotations provided. Otherwise, three-month  LIBOR for the next dividend period will be equal to three-month LIBOR in effect for the then-current  dividend period.    The calculation agent then will add three-month LIBOR as determined on the dividend determination date  and any applicable spread.    The calculation agent will be appointed prior to the first dividend payment date on June 15, 2016. The  calculation agent's determination of any dividend rate, and its calculation of the amount of dividends for any  dividend period, will be on file at our principal offices, will be made available to any holder of Series E Preferred  Stock upon request and will be final and binding in the absence of manifest error.     The term "business day" means any day, other than a Saturday or Sunday, that is neither a legal holiday  nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New  York. The term "London business day" means a day that is a  Monday, Tuesday, Wednesday, Thursday or Friday  and is a  day on which dealings in U.S. dollars are transacted in the London interbank market.    Dividends on shares of the Series E Preferred Stock will not be cumulative. Accordingly, if our board of  directors, or a  duly authorized committee of the board, does not declare a full dividend on the Series E Preferred  Stock payable in respect of any dividend period before the related dividend payment date, such dividend will not  accrue and we will have no obligation to pay a dividend for that dividend period on the dividend payment date or at  any future time, whether or not dividends on the Series E Preferred Stock are declared for any future dividend  period.    We are subject to statutory and regulatory prohibitions and other limitations on our ability to declare and  pay dividends on the Series E Preferred Stock. Dividends on the Series E Preferred Stock will not be declared, paid  or set aside for payment if we fail to comply, or if and to the extent such act would cause us to fail to comply, with  applicable laws and regulations. In particular, dividends on the Series E Preferred Stock may not be declared or set  aside for payment if and to the extent such dividends would cause us to fail to comply with the capital adequacy  guidelines of the Federal Reserve (or, as and if applicable, the capital adequacy guidelines or regulations of any  successor appropriate federal banking agency) applicable to us.  The Federal Reserve and the FDIC also have the  authority to prohibit or to limit the payment of dividends by a banking organization under its jurisdiction if, in the  regulator's opinion, the organization is engaged in or is about to engage in an unsafe or unsound practice.  Federal  Reserve policy also states that dividends on capital stock should be paid from current earnings.    As a Pennsylvania corporation, our payment of cash dividends is also subject to the restrictions under  Pennsylvania law on the declaration of cash dividends. Under such provisions, cash dividends may not be paid if a   corporation will not be able to pay its debts as they become due in the usual course of business after paying such a  cash dividend or if the corporation's total assets would be less than the sum of its total liabilities plus the amount that  would be needed to satisfy certain liquidation preferential rights.    Priority of Dividends    The Series E Preferred Stock will rank junior as to payment of dividends to any class or series of our  preferred stock that we may issue in the future that is expressly stated to be senior to the Series E Preferred Stock. If  at any time we do not pay, on the applicable dividend payment date, accrued dividends on any shares that rank in  priority to the Series E Preferred Stock with respect to dividends, we may not pay any dividends on the Series E  Preferred Stock or repurchase, redeem or otherwise acquire for consideration any shares of Series E Preferred Stock  until we have paid, or set aside for payment, the full amount of the unpaid dividends on the shares that rank in  

 

priority with respect to dividends that must, under the terms of such shares, be paid before we may pay dividends on,  repurchase, redeem or otherwise acquire for consideration, the Series E Preferred Stock.      So long as any share of Series E Preferred Stock remains outstanding, unless the full dividends for the most recently  completed dividend period have been declared and paid, or set aside for payment, on all outstanding shares of Series  E Preferred Stock:  • no dividend or distribution shall be declared, paid or set aside for payment on any junior stock (other than  (i) a  dividend payable solely in junior stock or (ii) a  dividend in connection with the implementation of a  shareholders' rights plan, or the issuance of rights, stock or other property under any such plan, or the  redemption or repurchase of any rights under any such plan);         • no junior stock shall be repurchased, redeemed or otherwise acquired for consideration by us, directly or  indirectly (other than (i) as a result of a  reclassification of junior stock for or into other junior stock, (ii) the  exchange or conversion of shares of junior stock for or into other shares of junior stock, (iii) through the  use of the proceeds of a substantially contemporaneous sale of other shares of junior stock, (iv) purchases,  redemptions or other acquisitions of shares of the junior stock in connection with any employment contract,  benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or  consultants, (v) purchases of shares of junior stock pursuant to a contractually binding requirement to buy  junior stock existing prior to the most recently completed dividend period, including under a contractually  binding stock repurchase plan, or (vi) the purchase of fractional interests in shares of junior stock pursuant  to the conversion or exchange provisions of such stock or the security being converted or exchanged; nor  shall any monies be paid to or made available for a sinking fund for the redemption of any such securities;  and         • no parity stock, including the Series F Preferred Stock, shall be repurchased, redeemed or otherwise  acquired for consideration by us, directly or indirectly (other than (i) pursuant to pro rata offers to purchase  all, or a  pro rata portion, of the Series E Preferred Stock and any parity stock, (ii) as a result of a   reclassification of any parity stock for or into other parity stock, (iii) the exchange or conversion of any  parity stock for or into other parity stock or junior stock, (iv) through the use of the proceeds of a  substantially contemporaneous sale of other shares of parity stock, (v) purchases of shares of parity stock  pursuant to a contractually binding requirement to buy parity stock existing prior to the most recently  completed dividend period, including under a contractually binding stock repurchase plan, or (vi) the  purchase of fractional interests in shares of parity stock pursuant to the conversion or exchange provisions  of such stock or the security being converted or exchanged, nor shall any monies be paid to or made  available for a sinking fund for the redemption of any such securities.  Notwithstanding the foregoing, if dividends are not paid in full, or set aside for payment in full, on any  dividend payment date  upon the shares of the Series E Preferred Stock and any shares of parity stock, including the  Series F Preferred Stock,, all dividends declared upon the Series E Preferred Stock and all such parity stock payable  on such dividend payment date  shall be declared pro rata so that the respective amounts of such dividends shall  bear the same ratio to each other as all accrued but unpaid dividends per share on the Series E Preferred Stock and  all parity stock payable on such dividend payment date bear to each other.    As used in this prospectus supplement, "junior stock" means our common stock and any other class or  series of our capital stock over which the Series E Preferred Stock has preference or priority in the payment of  dividends and in the distribution of assets on any liquidation, dissolution or winding up of Customers Bancorp.  Junior stock includes our common stock.    As used in this prospectus supplement, "parity stock" means any other class or series of our capital stock  that ranks equally with the Series E Preferred Stock in the payment of dividends and in the distribution of assets on  any liquidation, dissolution or winding up of Customers Bancorp. Parity stock includes our Series F Preferred Stock.    Subject to the foregoing, dividends (payable in cash, stock or otherwise) may be declared and paid on our  junior stock, which includes our common stock, from time to time out of any assets legally available for such  

 

payment, and the holders of Series E Preferred Stock or parity stock shall not be entitled to participate in any such  dividend.     Redemption  The Series E Preferred Stock is perpetual and has no maturity date, and is not subject to any mandatory  redemption, sinking fund or other similar provisions. The holders of the Series E Preferred Stock will not have any  right to require the redemption or repurchase of their shares of Series E Preferred Stock.    We may, at our option, redeem the Series E Preferred Stock (1) in whole or in part, from time to time, on  any dividend payment date on or after June 15, 2021, or (2) in whole but not in part at any time within 90 days  following a "regulatory capital treatment event," in each case at a price equal to $25.00 per share, plus the per share  amount of any declared and unpaid dividends, without regard to any undeclared dividends, on the Series E Preferred  Stock prior to the date fixed for redemption, which we refer to as the redemption date. Investors should not expect  us to redeem the Series E Preferred Stock on or after the date it becomes redeemable at our option.    We are a bank holding company regulated by the Federal Reserve. We intend to treat the Series E Preferred  Stock as "Additional Tier 1" capital (or its equivalent) for purposes of the capital adequacy guidelines of the Federal  Reserve (or, as and if applicable, the capital adequacy guidelines or regulations of any successor appropriate federal  banking agency) applicable to us.    A "regulatory capital treatment event" means the good faith determination by us that, as a result of any:    • amendment to, or change in, the laws or regulations of the United States or any political subdivision of or  in the United States that is enacted or becomes effective after the initial issuance of any share of the Series  E Preferred Stock;         • proposed change in those laws or regulations that is announced or becomes effective after the initial  issuance of any share of the Series E Preferred Stock; or         • official administrative decision or judicial decision or administrative action or other official  pronouncement interpreting or applying those laws or regulations that is announced or becomes effective  after the initial issuance of any share of the Series E Preferred Stock;  there is more than an insubstantial risk that we will not be entitled to treat the full liquidation preference amount of  $25.00 per share of the Series E Preferred Stock then outstanding as additional Tier 1 capital (or its equivalent) for  purposes of the capital adequacy guidelines or regulations of the Federal Reserve or other appropriate federal  banking agency, as then in effect and applicable, for as long as any share of Series E Preferred Stock is outstanding.    Under regulations applicable to us, we may not exercise our option to redeem any shares of preferred stock  without obtaining the prior approval of the Federal Reserve. Under such regulations, unless the Federal Reserve  authorizes us to do otherwise in writing, we may not redeem the Series E Preferred Stock unless it is replaced with  other Tier 1 capital instruments or unless we can demonstrate to the satisfaction of the Federal Reserve that  following redemption, we will continue to hold capital commensurate with its risk.    If shares of the Series E Preferred Stock are to be redeemed, the notice of redemption shall be given to the  holders of record of the Series E Preferred Stock to be redeemed, either by first class mail, postage prepaid,  addressed to the holders of record of such shares to be redeemed at their respective last addresses appearing on our  stock register not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided  that, if the shares of Series E Preferred Stock are held in book-entry form through The Depository Trust Company,  or DTC, we may give such notice in any manner permitted by DTC). Each notice of redemption will include a  statement setting forth:    • the redemption date;         

 

• the number of shares of the Series E Preferred Stock to be redeemed and, if less than all the shares held by  such holder are to be redeemed, the number of such shares to be redeemed from such holder;  • the redemption price; and  • that dividends on the shares to be redeemed will cease to accrue on the redemption date.  If notice of redemption of any shares of Series E Preferred Stock has been duly given and if the funds  necessary for such redemption have been set aside by us for the benefit of the holders of any shares of Series E  Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on  such shares of Series E Preferred Stock, such shares of Series E Preferred Stock shall no longer be deemed  outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption  price, without interest.    In case of any redemption of only part of the shares of the Series E Preferred Stock at the time outstanding,  the shares to be redeemed shall be selected either pro rata, by lot or in such other manner as we may determine to be  equitable and permitted by the rules of any national securities exchange on which the Series E Preferred Stock is  listed.    Liquidation Rights    In the event that we voluntarily or involuntarily liquidate, dissolve or wind up our affairs, holders of the  Series E Preferred Stock are entitled to receive out of our assets available for distribution to shareholders, after  satisfaction of liabilities or obligations to creditors, if any, and subject to the rights of holders of any shares of  capital stock then outstanding ranking senior to or on parity with the Series E Preferred Stock with respect to  distributions upon the voluntary or involuntary liquidation, dissolution or winding-up of our business and affairs,  and before we make any distribution of assets to the holders of our common stock or any other class or series of our  capital stock ranking junior to the Series E Preferred Stock with respect to distributions upon our liquidation,  dissolution or winding-up, an amount per share equal to the fixed liquidation preference of $25.00 per share plus any  declared and unpaid dividends prior to the payment of the liquidating distribution (but without any amount in respect  of dividends that have not been declared prior to the date of payment of the liquidating distribution). After payment  of the full amount of the liquidating distribution described above, the holders of the Series E Preferred Stock shall  not be entitled to any further participation in any distribution of our assets.    In any such distribution, if our assets are not sufficient to pay the liquidation preference in full to all holders  of Series E Preferred Stock and all holders of any shares of our capital stock ranking as to any such liquidation  distribution on parity with the Series E Preferred Stock, including the Series F Preferred Stock, the amounts paid to  the holders of Series E Preferred Stock and to such other shares will be paid pro rata in accordance with the  respective aggregate liquidation preferences of those holders. In any such distribution, the "liquidation preference"  of any holder of preferred stock means the amount otherwise payable to such holder in such distribution (assuming  no limitation on our assets available for such distribution), including any declared but unpaid dividends (and, in the  case of any holder of stock other than the Series E Preferred Stock and on which dividends accrue on a cumulative  basis, an amount equal to any unpaid, accrued, cumulative dividends, whether or not declared, as applicable). If the  liquidation preference per share of Series E Preferred Stock has been paid in full to all holders of Series E Preferred  Stock and the liquidation preference per share of any other capital stock ranking on parity with the Series E  Preferred Stock as to liquidation rights has been paid in full, the holders of our common stock or any other capital  stock ranking, as to liquidation rights, junior to the Series E Preferred Stock will be entitled to receive all of our  remaining assets according to their respective rights and preferences.    The Series E Preferred Stock may be fully subordinate to interests held by the U.S. government in the event  of a receivership, insolvency, liquidation, or similar proceeding, including a proceeding under the "orderly  liquidation authority" provisions of the Dodd-Frank Act.    For purposes of the liquidation rights, neither the sale, conveyance, exchange or transfer of all or  substantially all of our assets or business, nor the consolidation or merger by us with or into any other entity or by  

 

another entity with or into us, whether for cash, securities or other property, individually or as part of a series of  transactions, will constitute a liquidation, dissolution or winding-up of our affairs.     Voting Rights    Except as provided below and as determined by our board of directors, or a  duly authorized committee  thereof, the holders of the Series E Preferred Stock will have no voting rights.    Whenever dividends on any shares of the Series E Preferred Stock, or any parity stock upon which similar  voting rights have been conferred ("special voting preferred stock"), shall have not been declared and paid for an  aggregate amount equal to the amount of dividends payable on the Series E Preferred Stock as contemplated herein  for six or more quarterly dividend payments, whether or not for consecutive dividend periods (which we refer to as a  "nonpayment"), the holders of the Series E Preferred Stock, voting together as a class with holders of any special  voting preferred stock then outstanding, will be entitled to vote (based on respective liquidation preferences) for the  election of a total of two additional members of our board of directors (which we refer to as the "preferred  directors") provided that our board of directors shall at no time include more than two preferred directors. In that  event, the number of directors on our board of directors shall automatically increase by two and, at the request of  any holder of Series E Preferred Stock, a  special meeting of the holders of Series E Preferred Stock and such special  voting preferred stock for which dividends have not been paid shall be called for the election of the two directors  (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the  shareholders, in which event such election shall be held at such next annual or special meeting of shareholders),  followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends  have been paid on the Series E Preferred Stock and such special voting preferred stock for at least four consecutive  quarterly dividend periods following the nonpayment.    If and when full dividends have been paid for at least four consecutive quarterly dividend periods following  a nonpayment on the Series E Preferred Stock and such special voting preferred stock, the holders of the Series E  Preferred Stock and such special voting preferred stock shall be divested of the foregoing voting rights (subject to  revesting in the event of each subsequent nonpayment) and the term of office of each preferred director so elected  shall terminate and the number of directors on our board of directors shall automatically decrease by two.    Any preferred director may be removed at any time without cause by the holders of a majority of the  outstanding shares of the Series E Preferred Stock and such special voting preferred stock, voting together as a class,  when they have the voting rights described above. So long as a nonpayment shall continue, any vacancy in the office  of a preferred director (other than prior to the initial election of the preferred directors) may be filled by the written  consent of the preferred director remaining in office, or if none remains in office, by a vote of the holders of a  majority of the outstanding shares of Series E Preferred Stock and such special voting preferred stock, voting  together as a class, to serve until the next annual meeting of shareholders. The preferred directors shall each be  entitled to one vote per director on any matter.    Under regulations adopted by the Federal Reserve, if the holders of one or more series of preferred stock  are or become entitled to vote for the election of directors, such series entitled to vote for the same director(s) will be  deemed a class of voting securities and a company holding 25% or more of the series, or 10% or more if it otherwise  exercises a "controlling influence" over us, will be subject to regulation as a bank holding company under the Bank  Holding Company Act of 1956, as amended (the "BHC Act"). In addition, if the series is/are deemed to be a class of  voting securities, any other bank holding company will be required to obtain the prior approval of the Federal  Reserve under the BHC Act to acquire or retain more than 5% of that series. Any other person (other than a bank  holding company) will be required to obtain the non-objection of the Federal Reserve Board under the Change in  Bank Control Act of 1978, as amended, to acquire or retain 10% or more of that series. While we do not believe the  Series E Preferred Stock are considered "voting securities" currently, holders of such stock should consult their own  counsel with regard to regulatory implications. A holder or group of holders may also be deemed to control us if  they own more than one-third of our total equity, both voting and non-voting, aggregating all shares held by the  holders across all classes of stock.    So long as any shares of Series E Preferred Stock remain outstanding, in addition to any other vote or  consent of shareholders required by law or our articles of incorporation, the affirmative vote or consent of the  

 

holders of at least two-thirds of all of the then-outstanding shares of Series E Preferred Stock entitled to vote  thereon, voting separately as a single class, shall be required to:    • authorize, create, issue or increase the authorized amount of any class or series of our capital stock  ranking senior to the Series E Preferred Stock with respect to payment of dividends or as to distributions  upon our liquidation, dissolution or winding-up, or issue any obligation or security convertible into or  exchangeable for evidencing the right to purchase any such class or series of our capital stock;  • amend, alter or repeal the provisions of our articles of incorporation, including the Statement with Respect  to Shares creating the Series E Preferred Stock, whether by merger, consolidation or otherwise, so as to  materially and adversely affect the special powers, preferences, privileges or rights of the Series E  Preferred Stock, taken as a whole; or        • consummate a binding share-exchange or reclassification involving the Series E Preferred Stock, or sale,  conveyance, exchange or transfer of all or substantially all of our assets or business or a merger or  consolidation of us with or into another entity, unless in each case, the shares of the Series E Preferred  Stock (i) remain outstanding or (ii) are converted into or exchanged for preference securities of the  surviving entity or any entity controlling such surviving entity and such new preference securities have  powers, preferences, privileges and rights that are not materially less favorable to the holders thereof than  the powers, preferences, privileges and rights of the Series E Preferred Stock, taken as a whole.  When determining the application of the voting rights described in this section, the authorization, creation  and issuance, or an increase in the authorized or issued amount of, junior stock or any class or series of capital stock  that by its terms expressly provides that it ranks on parity with the Series E Preferred Stock with respect to the  payment of dividends (whether such dividends are cumulative or non-cumulative) and as to distributions upon our  liquidation, dissolution or winding-up, or any securities convertible into or exchangeable or exercisable for junior  stock or any class or series of capital stock, shall not be deemed to materially and adversely affect the special  powers, preferences, privileges or rights, and shall not require the affirmative vote or consent of, the holders of any  outstanding shares of Series E Preferred Stock.    The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which  such vote would otherwise be required shall be effected, all outstanding shares of Series E Preferred Stock shall  have been redeemed or called for redemption upon proper notice and sufficient funds shall have been set aside by us  for the benefit of the holders of the Series E Preferred Stock to effect such redemption.         Series F Preferred Stock (Trading Symbol CUBI/PF)    General    Under our articles of incorporation, we have authority to issue up to 100,000,000 shares of preferred stock,  and our board of directors is authorized to establish the rights and privileges with respect to one or more classes or  series of preferred stock that we may issue.     Prior to the issuance of the Series F Preferred Stock, we filed with the Pennsylvania Secretary of State a  Statement with Respect to Shares, which had the effect of amending our existing articles of incorporation to  establish the terms of the Series F Preferred Stock. The Statement with Respect to Shares authorized 3,450,000  shares of Series F Preferred Stock. We may, without notice to or the consent of holders of the Series F Preferred  Stock, issue additional shares of Series F Preferred Stock from time to time.     We will generally be able to pay dividends and distributions upon our liquidation, dissolution or winding  up only out of lawfully available funds for such payment (i.e., after taking account of all indebtedness, other non- equity and other senior claims). Shares of Series F Preferred Stock were fully paid and non-assessable when issued,  

 

which means that holders of such shares have paid their purchase price in full and we may not ask them to pay  additional funds in respect of their shares of Series F Preferred Stock.    Holders of Series F Preferred Stock will not have preemptive or subscription rights to acquire more stock of  Customers Bancorp. The Series F Preferred Stock will not be convertible into or exchangeable for our common  stock or any other class or series of our capital stock. The Series F Preferred Stock does not have a stated maturity  date, will not be subject to any sinking fund or any other obligation of us for their repurchase, redemption or  retirement and will be perpetual unless redeemed at our option.    Ranking    Shares of the Series F Preferred Stock will rank, with respect to the payment of dividends and distributions  upon our liquidation, dissolution or winding-up, respectively:    • senior to our common stock and to any class or series of our capital stock we may issue that is  not expressly stated to be on parity with or senior to the Series F Preferred Stock;     • on parity with, or equally to, with any class or series of our capital stock expressly stated to be on  parity with the Series F Preferred Stock, including our Series E Preferred Stock; and     • junior to any class or series of our capital stock expressly stated to be senior to the Series F  Preferred Stock (issued with the requisite consent of the holders of at least two-thirds of the  outstanding Series F Preferred Stock).    Dividends    Dividends on shares of the Series F Preferred Stock are discretionary and will not be cumulative. Holders  of the Series F Preferred Stock will be entitled to receive, if, when and as declared by our board of directors, or a   duly authorized committee of the board, out of legally available assets, non-cumulative cash dividends from the  original issue date (in the case of the initial dividend period only, as described below) or the immediately preceding  dividend payment date, quarterly in arrears on the 15th day of March, June, September and December of each year  (each such date being referred to herein as a "dividend payment date"), commencing on December 15, 2016.  Dividends on each share of Series F Preferred Stock will accrue on the liquidation preference amount of $25.00 per  share at a rate per annum equal to 6.00% with respect to each dividend period from and including the original issue  date to, but excluding, December 15, 2021 (the "fixed rate period"), and thereafter at a  rate per annum equal to the  three-month LIBOR (as defined below) on the related dividend determination date plus a spread of 4.762% per  annum (the "floating rate period").  In the event that we issue additional shares of Series F Preferred Stock after the  original issue date, dividends on such shares may accrue from the original issue date or any other date we specify at  the time such additional shares are issued. We will not pay interest or any sum of money instead of interest on any  dividend payment that may be in arrears on the Series F Preferred Stock.    Dividends will be payable to holders of record of Series F Preferred Stock as they appear on our books on  the applicable record date (each such date being referred to herein as a "dividend record date"), which shall be the  15th calendar day before the dividend payment date or such other record date fixed by our board of directors, or any  duly authorized committee of the board, that is not less than 15 calendar days or more than 30 calendar days before  the applicable dividend payment date.    A dividend period is the period from and including a dividend payment date to but excluding the next  dividend payment date or any earlier redemption date, except that the initial dividend period will commence on and  include the original issue date of the Series F Preferred Stock and will end on and exclude the December 15, 2016  dividend payment date. Any dividend payable on shares of the Series F Preferred Stock for any dividend period  during the fixed rate period will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends for the initial dividend period will be calculated from the original issue date. Any dividend payable on  shares of the Series F Preferred Stock for any dividend period during the floating rate period will be computed on  the basis of a  360-day year and the actual number of days elapsed in such dividend period. Dollar amounts resulting  from that calculation will be rounded to the nearest cent, with one-half cent being rounded upward. If any dividend  

 

payment date applicable to the fixed rate period is not a  business day, then the related payment of dividends will be  made on the next succeeding business day, and no additional dividends will accrue on such payment. If any dividend  payment date applicable to the floating rate period is not a  business day, then the dividend payment date will be  postponed to the next succeeding business day and dividends will accrue to, but exclude the next succeeding  business day.    For any dividend period during the floating rate period, three-month LIBOR (the London interbank offered  rate) shall be determined by the calculation agent on the second London business day immediately preceding the  first day of such dividend period (which we refer to as the "dividend determination date") in the following manner:    (i) Three-month LIBOR will be the rate for deposits in U.S. dollars having an index maturity of three  months in amounts of at least $1,000,000, as that rate appears on Reuters screen page "LIBOR01",  or any successor page, as of 11:00 a.m., London time, on that dividend determination date.           (ii) If no offered rate appears on Reuters screen page "LIBOR01", or any successor page, on the  relevant dividend determination date at approximately 11:00 a.m., London time, then the  calculation agent, after consultation with us, will select four major banks in the London interbank  market and will request each of their principal London offices to provide a quotation of the rate at  which three-month deposits in U.S. dollars in amounts of at least $1,000,000 are offered by it to  prime banks in the London interbank market, on that date and at that time, that is representative of  single transactions at that time. If at least two quotations are provided, three-month LIBOR will be  the arithmetic average (rounded upward if necessary to the nearest .00001 of 1%) of the quotations  provided. Otherwise, the calculation agent will select three major banks in New York City and  will request each of them to provide a quotation of the rate offered by it at approximately 11:00  a.m., New York City time, on the dividend determination date for loans in U.S. dollars to leading  European banks having an index maturity of three months for the applicable dividend period in an  amount of at least $1,000,000 that is representative of single transactions at that time. If three  quotations are provided, three-month LIBOR will be the arithmetic average (rounded upward if  necessary to the nearest .00001 of 1%) of the quotations provided. Otherwise, three-month LIBOR  for the next dividend period will be equal to three-month LIBOR in effect for the then-current  dividend period, or, in the case of the first floating rate period, the most recent rate that could have  been determined had the floating rate period been applicable prior to the first floating rate period.      The calculation agent then will add three-month LIBOR as determined on the dividend determination date  and any applicable spread.  The calculation agent will be appointed prior to the first dividend payment date on December 15, 2016. The  calculation agent's determination of any dividend rate, and its calculation of the amount of dividends for any  dividend period, will be on file at our principal offices, will be made available to any holder of Series F Preferred  Stock upon request and will be final and binding in the absence of manifest error.     The term "business day" means any day, other than a Saturday or Sunday, that is neither a legal holiday  nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New  York. The term "London business day" means a day that is a  Monday, Tuesday, Wednesday, Thursday or Friday  and is a  day on which dealings in U.S. dollars are transacted in the London interbank market.    Dividends on shares of the Series F Preferred Stock will not be cumulative. Accordingly, if our board of  directors, or a  duly authorized committee of the board, does not declare a full dividend on the Series F Preferred  Stock payable in respect of any dividend period before the related dividend payment date, such dividend will not  accrue and we will have no obligation to pay a dividend for that dividend period on the dividend payment date or at  any future time, whether or not dividends on the Series F Preferred Stock are declared for any future dividend  period.    We are subject to statutory and regulatory prohibitions and other limitations on our ability to declare and  pay dividends on the Series F Preferred Stock. Dividends on the Series F Preferred Stock will not be declared, paid  or set aside for payment if we fail to comply, or if and to the extent such act would cause us to fail to comply, with  

 

applicable laws and regulations. In particular, dividends on the Series F Preferred Stock may not be declared or set  aside for payment if and to the extent such dividends would cause us to fail to comply with the capital adequacy  rules of the Federal Reserve (or, as and if applicable, the capital adequacy rules or regulations of any successor  appropriate federal banking agency) applicable to us.  The Federal Reserve and the FDIC also have the authority to  prohibit or to limit the payment of dividends by a banking organization under its jurisdiction if, in the regulator's  opinion, the organization is engaged in or is about to engage in an unsafe or unsound practice.  Federal Reserve  policy also states that dividends on capital stock should be paid from current earnings.    As a Pennsylvania corporation, our payment of cash dividends is also subject to the restrictions under  Pennsylvania law on the declaration of cash dividends. Under such provisions, cash dividends may not be paid if a   corporation will not be able to pay its debts as they become due in the usual course of business after paying such a  cash dividend or if the corporation's total assets would be less than the sum of its total liabilities plus the amount that  would be needed to satisfy certain liquidation preferential rights.    Priority of Dividends    The Series F Preferred Stock will rank junior as to payment of dividends to any class or series of our  preferred stock that we may issue in the future that is expressly stated to be senior to the Series F Preferred Stock. If  at any time we do not pay, on the applicable dividend payment date, accrued dividends on any shares that rank in  priority to the Series F Preferred Stock with respect to dividends, including the Series E Preferred Stock, we may not  pay any dividends on the Series F Preferred Stock or repurchase, redeem or otherwise acquire for consideration any  shares of Series F Preferred Stock until we have paid, or set aside for payment, the full amount of the unpaid  dividends on the shares that rank in priority with respect to dividends that must, under the terms of such shares, be  paid before we may pay dividends on, repurchase, redeem or otherwise acquire for consideration, the Series F  Preferred Stock.     So long as any share of Series F Preferred Stock remains outstanding, unless the full dividends for the most recently  completed dividend period have been declared and paid, or set aside for payment, on all outstanding shares of Series  F Preferred Stock:        • no dividend or distribution shall be declared, paid or set aside for payment on any junior stock (other than  (i) a  dividend payable solely in junior stock or (ii) a  dividend in connection with the implementation of a  shareholders' rights plan, or the issuance of rights, stock or other property under any such plan, or the  redemption or repurchase of any rights under any such plan); and        • no junior stock shall be repurchased, redeemed or otherwise acquired for consideration by us, directly or  indirectly (other than (i) as a result of a  reclassification of junior stock for or into other junior stock, (ii) the  exchange or conversion of shares of junior stock for or into other shares of junior stock, (iii) through the  use of the proceeds of a substantially contemporaneous sale of other shares of junior stock, (iv) purchases,  redemptions or other acquisitions of shares of the junior stock in connection with any employment contract,  benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or  consultants, (v) purchases of shares of junior stock pursuant to a contractually binding requirement to buy  junior stock existing prior to the most recently completed dividend period, including under a contractually  binding stock repurchase plan, or (vi) the purchase of fractional interests in shares of junior stock pursuant  to the conversion or exchange provisions of such stock or the security being converted or exchanged) nor  shall any monies be paid to or made available for a sinking fund for the redemption of any such securities;  and             • no parity stock, including the Series E Preferred Stock, shall be repurchased, redeemed or otherwise  acquired for consideration by us, directly or indirectly (other than (i) pursuant to pro rata offers to purchase  all, or a  pro rata portion, of the Series F Preferred Stock and any parity stock, (ii) as a result of a   reclassification of any parity stock for or into other parity stock, (iii) the exchange or conversion of any  parity stock for or into other parity stock or junior stock, (iv) through the use of the proceeds of a  substantially contemporaneous sale of other shares of parity stock, (v) purchases of shares of parity stock  pursuant to a contractually binding requirement to buy parity stock existing prior to the most recently  

 

completed dividend period, including under a contractually binding stock repurchase plan, or (vi) the  purchase of fractional interests in shares of parity stock pursuant to the conversion or exchange provisions  of such stock or the security being converted or exchanged) nor shall any monies be paid to or made  available for a sinking fund for the redemption of any such securities.    Notwithstanding the foregoing, if dividends are not paid in full, or set aside for payment in full, on any  dividend payment date  upon the shares of the Series F Preferred Stock and any shares of parity stock, including the  Series E Preferred Stock, all dividends declared upon the Series F Preferred Stock and all such parity stock payable  on such dividend payment date  shall be declared pro rata so that the respective amounts of such dividends shall  bear the same ratio to each other as all accrued but unpaid dividends per share on the Series F Preferred Stock and  all parity stock payable on such dividend payment date bear to each other.    As used in this prospectus supplement, "junior stock" means our common stock and any other class or  series of our capital stock over which the Series F Preferred Stock has preference or priority in the payment of  dividends and in the distribution of assets on any liquidation, dissolution or winding up of Customers Bancorp.  Junior stock includes our common stock.    As used in this prospectus supplement, "parity stock" means any other class or series of our capital stock  that ranks equally with the Series F Preferred Stock in the payment of dividends and in the distribution of assets on  any liquidation, dissolution or winding up of Customers Bancorp. Parity stock includes our Series E Preferred Stock.    Subject to the foregoing, dividends (payable in cash, stock or otherwise) may be declared and paid on our  junior stock, which includes our common stock, from time to time out of any assets legally available for such  payment, and the holders of Series F Preferred Stock or parity stock shall not be entitled to participate in any such  dividend.     Redemption    The Series F Preferred Stock is perpetual and has no maturity date, and is not subject to any mandatory  redemption, sinking fund or other similar provisions. The holders of the Series F Preferred Stock will not have any  right to require the redemption or repurchase of their shares of Series F Preferred Stock.    We may, at our option, redeem the Series F Preferred Stock (1) in whole or in part, from time to time, on  any dividend payment date on or after December 15, 2021, or (2) in whole but not in part at any time within 90 days  following a "regulatory capital treatment event," in each case at a price equal to $25.00 per share, plus the per share  amount of any declared and unpaid dividends, without regard to any undeclared dividends, on the Series F Preferred  Stock prior to the date fixed for redemption, which we refer to as the redemption date. Investors should not expect  us to redeem the Series F Preferred Stock on or after the date it becomes redeemable at our option.    We are a bank holding company regulated by the Federal Reserve. We intend to treat the Series F Preferred  Stock as "Additional Tier 1" capital (or its equivalent) for purposes of the capital adequacy rules of the Federal  Reserve (or, as and if applicable, the capital adequacy rules or regulations of any successor appropriate federal  banking agency) applicable to us.    A "regulatory capital treatment event" means the good faith determination by us that, as a result of any:    • amendment to, or change in, the laws or regulations of the United States or any political subdivision of or  in the United States that is enacted or becomes effective after the initial issuance of any share of the Series  F Preferred Stock;        • proposed change in those laws or regulations that is announced or becomes effective after the initial  issuance of any share of the Series F Preferred Stock; or  

 

• official administrative decision or judicial decision or administrative action or other official  pronouncement interpreting or applying those laws or regulations that is announced or becomes effective  after the initial issuance of any share of the Series F Preferred Stock;  there is more than an insubstantial risk that we will not be entitled to treat the full liquidation preference amount of  $25.00 per share of the Series F Preferred Stock then outstanding as additional Tier 1 capital (or its equivalent) for  purposes of the capital adequacy rules or regulations of the Federal Reserve or other appropriate federal banking  agency, as then in effect and applicable, for as long as any share of Series F Preferred Stock is outstanding.    Under regulations applicable to us, we may not exercise our option to redeem any shares of preferred stock  without obtaining the prior approval of the Federal Reserve. Under such regulations, unless the Federal Reserve  authorizes us to do otherwise in writing, we may not redeem the Series F Preferred Stock unless it is replaced with  other Tier 1 capital instruments or unless we can demonstrate to the satisfaction of the Federal Reserve that  following redemption, we will continue to hold capital commensurate with its risk.    If shares of the Series F Preferred Stock are to be redeemed, the notice of redemption shall be given to the  holders of record of the Series F Preferred Stock to be redeemed, either by first class mail, postage prepaid,  addressed to the holders of record of such shares to be redeemed at their respective last addresses appearing on our  stock register not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided  that, if the shares of Series F Preferred Stock are held in book-entry form through The Depository Trust Company,  or DTC, we may give such notice in any manner permitted by DTC). Each notice of redemption will include a  statement setting forth:     • the redemption date;   • the number of shares of the Series F Preferred Stock to be redeemed and, if less than all the shares held by  such holder are to be redeemed, the number of such shares to be redeemed from such holder;    • the redemption price; and    • that dividends on the shares to be redeemed will cease to accrue on the redemption date.  If notice of redemption of any shares of Series F Preferred Stock has been duly given and if the funds  necessary for such redemption have been set aside by us for the benefit of the holders of any shares of Series F  Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on  such shares of Series F Preferred Stock, such shares of Series F Preferred Stock shall no longer be deemed  outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption  price, without interest.    In case of any redemption of only part of the shares of the Series F Preferred Stock at the time outstanding,  the shares to be redeemed shall be selected either pro rata, by lot or in such other manner as we may determine to be  equitable and permitted by the rules of any national securities exchange on which the Series F Preferred Stock is  listed.    Liquidation Rights    In the event that we voluntarily or involuntarily liquidate, dissolve or wind up our affairs, holders of the  Series F Preferred Stock are entitled to receive out of our assets available for distribution to shareholders, after  satisfaction of liabilities or obligations to creditors, if any, and subject to the rights of holders of any shares of  capital stock then outstanding ranking senior to or on parity with the Series F Preferred Stock with respect to  distributions upon the voluntary or involuntary liquidation, dissolution or winding-up of our business and affairs,  and before we make any distribution of assets to the holders of our common stock or any other class or series of our  capital stock ranking junior to the Series F Preferred Stock with respect to distributions upon our liquidation,  dissolution or winding-up, an amount per share equal to the fixed liquidation preference of $25.00 per share plus any  declared and unpaid dividends prior to the payment of the liquidating distribution (but without any amount in respect  of dividends that have not been declared prior to the date of payment of the liquidating distribution). After payment  

 

of the full amount of the liquidating distribution described above, the holders of the Series F Preferred Stock shall  not be entitled to any further participation in any distribution of our assets.    In any such distribution, if our assets are not sufficient to pay the liquidation preference in full to all holders  of Series F Preferred Stock and all holders of any shares of our capital stock ranking as to any such liquidation  distribution on parity with the Series F Preferred Stock, including the Series E Preferred Stock, the amounts paid to  the holders of Series F Preferred Stock and to such other shares will be paid pro rata in accordance with the  respective aggregate liquidation preferences of those holders. In any such distribution, the "liquidation preference"  of any holder of preferred stock means the amount otherwise payable to such holder in such distribution (assuming  no limitation on our assets available for such distribution), including any declared but unpaid dividends (and, in the  case of any holder of stock other than the Series F Preferred Stock and on which dividends accrue on a cumulative  basis, an amount equal to any unpaid, accrued, cumulative dividends, whether or not declared, as applicable). If the  liquidation preference per share of Series F Preferred Stock has been paid in full to all holders of Series F Preferred  Stock and the liquidation preference per share of any other capital stock ranking on parity with the Series F  Preferred Stock as to liquidation rights has been paid in full, the holders of our common stock or any other capital  stock ranking, as to liquidation rights, junior to the Series F Preferred Stock will be entitled to receive all of our  remaining assets according to their respective rights and preferences.    The Series F Preferred Stock may be fully subordinate to interests held by the U.S. government in the event  of a receivership, insolvency, liquidation, or similar proceeding, including a proceeding under the "orderly  liquidation authority" provisions of the Dodd-Frank Act.    For purposes of the liquidation rights, neither the sale, conveyance, exchange or transfer of all or  substantially all of our assets or business, nor the consolidation or merger by us with or into any other entity or by  another entity with or into us, whether for cash, securities or other property, individually or as part of a series of  transactions, will constitute a liquidation, dissolution or winding-up of our affairs.     Voting Rights    Except as provided below and as determined by our board of directors, or a  duly authorized committee  thereof, the holders of the Series F Preferred Stock will have no voting rights.    Whenever dividends on any shares of the Series F Preferred Stock, or any parity stock upon which similar  voting rights have been conferred ("special voting preferred stock"), shall have not been declared and paid for an  aggregate amount equal to the amount of dividends payable on the Series F Preferred Stock as contemplated herein  for six or more quarterly dividend payments, whether or not for consecutive dividend periods (which we refer to as a  "nonpayment"), the holders of the Series F Preferred Stock, voting together as a class with holders of any special  voting preferred stock then outstanding, will be entitled to vote (based on respective liquidation preferences) for the  election of a total of two additional members of our board of directors (which we refer to as the "preferred  directors") provided that our board of directors shall at no time include more than two preferred directors. In that  event, the number of directors on our board of directors shall automatically increase by two and, at the request of  any holder of Series F Preferred Stock, a special meeting of the holders of Series F Preferred Stock and such special  voting preferred stock for which dividends have not been paid shall be called for the election of the two directors  (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the  shareholders, in which event such election shall be held at such next annual or special meeting of shareholders),  followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends  have been paid on the Series F Preferred Stock and such special voting preferred stock for at least four consecutive  quarterly dividend periods following the nonpayment.    If and when full dividends have been paid for at least four consecutive quarterly dividend periods following  a nonpayment on the Series F Preferred Stock and such special voting preferred stock, the holders of the Series F  Preferred Stock and such special voting preferred stock shall be divested of the foregoing voting rights (subject to  revesting in the event of each subsequent nonpayment) and the term of office of each preferred director so elected  shall terminate and the number of directors on our board of directors shall automatically decrease by two.    

 

Any preferred director may be removed at any time without cause by the holders of a majority of the  outstanding shares of the Series F Preferred Stock and such special voting preferred stock, voting together as a class,  when they have the voting rights described above. So long as a nonpayment shall continue, any vacancy in the office  of a preferred director (other than prior to the initial election of the preferred directors) may be filled by the written  consent of the preferred director remaining in office, or if none remains in office, by a vote of the holders of a  majority of the outstanding shares of Series F Preferred Stock and such special voting preferred stock, voting  together as a class, to serve until the next annual meeting of shareholders. The preferred directors shall each be  entitled to one vote per director on any matter.    Under regulations adopted by the Federal Reserve, if the holders of one or more series of preferred stock  are or become entitled to vote for the election of directors, such series entitled to vote for the same director(s) will be  deemed a class of voting securities and a company holding 25% or more of the series, or 10% or more if it otherwise  exercises a "controlling influence" over us, will be subject to regulation as a bank holding company under the Bank  Holding Company Act of 1956, as amended (the "BHC Act"). In addition, if the series is/are deemed to be a class of  voting securities, any other bank holding company will be required to obtain the prior approval of the Federal  Reserve under the BHC Act to acquire or retain more than 5% of that series. Any other person (other than a bank  holding company) will be required to obtain the non-objection of the Federal Reserve Board under the Change in  Bank Control Act of 1978, as amended, to acquire or retain 10% or more of that series. While we do not believe the  Series F Preferred Stock are considered "voting securities" currently, holders of such stock should consult their own  counsel with regard to regulatory implications. A holder or group of holders may also be deemed to control us if  they own more than one-third of our total equity, both voting and non-voting, aggregating all shares held by the  holders across all classes of stock.    So long as any shares of Series F Preferred Stock remain outstanding, in addition to any other vote or  consent of shareholders required by law or our articles of incorporation, the affirmative vote or consent of the  holders of at least two-thirds of all of the then-outstanding shares of Series F Preferred Stock entitled to vote  thereon, voting separately as a single class, shall be required to:      • authorize, create, issue or increase the authorized amount of any class or series of our capital stock  ranking senior to the Series F Preferred Stock with respect to payment of dividends or as to distributions  upon our liquidation, dissolution or winding-up, or issue any obligation or security convertible into or  exchangeable for evidencing the right to purchase any such class or series of our capital stock;       • amend, alter or repeal the provisions of our articles of incorporation, including the Statement with Respect  to Shares creating the Series F Preferred Stock, whether by merger, consolidation or otherwise, so as to  materially and adversely affect the special powers, preferences, privileges or rights of the Series F Preferred  Stock, taken as a whole; or         • consummate a binding share-exchange or reclassification involving the Series F Preferred Stock, or sale,  conveyance, exchange or transfer of all or substantially all of our assets or business or a merger or  consolidation of us with or into another entity, unless in each case, the shares of the Series F Preferred  Stock (i) remain outstanding or (ii) are converted into or exchanged for preference securities of the  surviving entity or any entity controlling such surviving entity and such new preference securities have  powers, preferences, privileges and rights that are not materially less favorable to the holders thereof than  the powers, preferences, privileges and rights of the Series F Preferred Stock, taken as a whole.  When determining the application of the voting rights described in this section, the authorization, creation  and issuance, or an increase in the authorized or issued amount of, junior stock or any class or series of capital stock  that by its terms expressly provides that it ranks on parity with the Series F Preferred Stock with respect to the  payment of dividends (whether such dividends are cumulative or non-cumulative) and as to distributions upon our  liquidation, dissolution or winding-up, or any securities convertible into or exchangeable or exercisable for junior  stock or any class or series of capital stock, shall not be deemed to materially and adversely affect the special  powers, preferences, privileges or rights, and shall not require the affirmative vote or consent of, the holders of any  outstanding shares of Series F Preferred Stock.    

 

The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which  such vote would otherwise be required shall be effected, all outstanding shares of Series F Preferred Stock shall have  been redeemed or called for redemption upon proper notice and sufficient funds shall have been set aside by us for  the benefit of the holders of the Series F Preferred Stock to effect such redemption.      Description of 5.375% Subordinated Notes due 2034 (Trading Symbol CUBB)  The following summary is not complete. Please refer to the First Supplemental Indenture related to the 5.375%  Subordinated Notes due 2034 and the prospectus supplement for the complete terms of the notes.  General     The notes are our unsecured and subordinated obligations and are intended to qualify as Tier 2 Capital  under the guidelines established by the Federal Reserve for bank holding companies. The notes were issued in an  initial aggregate principal amount of $65,000,000 and will mature on December 30, 2034, unless earlier redeemed  by us. The notes rank equally among themselves, junior to our existing and future Senior Indebtedness, effectively  junior to our secured subordinated indebtedness to the extent of the value securing the same and effectively  subordinated to all existing and future indebtedness, deposits and other liabilities and preferred equity of Customers  Bank and Customer Bancorp’s other subsidiaries. See “—Ranking” below. The notes are not be subject to, or  entitled to the benefits of, a  sinking fund or repurchase by us at the option of the holders. The notes were issued only  in fully registered book-entry form without coupons and in minimum denominations of $25 and integral multiples of  $25 in excess thereof. Currently, there is no public market for the notes. The notes are listed on the New York Stock  Exchange (CUBB).     The registered holder of a note will be treated as the owner of it for all purposes. Only registered holders  have rights under the Indenture. Payment of the principal of, and interest on, the notes represented by a global note  registered in the name of or held by DTC or its nominee will be made in immediately available funds to DTC or its  nominee, as the case may be, as the registered owner and holder of such global note.     Holders of the notes and the Trustee have no right to accelerate the maturity of the notes in the event we  fail to pay interest or principal on the notes, fail to perform any other obligation under the notes or in the Indenture  or default on any other securities issued by us. See “—Events of Default; Limitation on Suits” below.     The Indenture contains no covenants or restrictions restricting the incurrence of Senior Indebtedness, parity  indebtedness or secured subordinated indebtedness by us or the incurrence or issuance by our subsidiaries of any  indebtedness, deposits or other liabilities or any preferred stock. The Indenture contains no financial covenants and  does not restrict us from paying dividends or issuing or repurchasing other securities, and does not contain any  provision that would provide protection to the holders of the notes against a sudden and dramatic decline in credit  quality resulting from a merger, takeover, recapitalization or similar restructuring or any other event involving us or  our subsidiaries that may adversely affect our credit quality, except to the extent described under the headings “—  Merger, Consolidation, Sale, Lease or Conveyance” and “— Certain Covenants” below.     The notes will not be savings accounts, deposits or other obligations of any of our subsidiaries and will not  be insured or guaranteed by the FDIC or any other governmental agency or instrumentality.     We may, without notice to or the consent of the holders of notes, but in compliance with the terms of the  Indenture, issue additional notes having the same ranking, interest rate, maturity date and other terms as the notes  other than issue date and offering price. Any such additional notes, together with the notes being issued hereby, will  constitute a single series under the Indenture; provided, however, that no additional notes may be issued unless they  will be fungible with the notes offered hereby for U.S. federal income tax and securities law purposes; and provided,  further, that the additional notes have the same CUSIP number as the notes offered hereby. No additional notes may  be issued if any event of default (as defined below) has occurred and is continuing with respect to the notes.     Interest  

 

   Interest on the notes will accrue at the rate of 5.375% per annum. Interest on the notes will be payable  quarterly in arrears on March 30, June 30, September 30 and December 30 of each year, commencing on March 30,  2020. We will make each interest payment on the applicable interest payment date to the registered holders of notes  at the close of business on the fifteenth day (whether or not a  business day) immediately preceding the applicable  interest payment date. Interest on the notes at the maturity date or earlier redemption will be payable to the persons  to whom principal is payable. Interest on the notes will be computed on the basis of a 360-day year consisting of  twelve 30-day months. Interest payments on the notes will be the amount of interest accrued from and including  December 9, 2019 or the most recent interest payment date on which interest has been paid to but excluding the  interest payment date or the maturity date or earlier redemption, as the case may be.    Methods of Payment     If any interest payment date or the stated maturity or earlier redemption of the notes is not a  business day,  then the related payment of interest or principal payable, as applicable, on such date will be paid on the next  succeeding business day with the same force and effect as if made on such interest payment date or stated maturity  and no further interest will accrue as a result of such delay. A “business day” means any day other than a Saturday,  Sunday or a day in the City of New York, New York, the City of Wilmington, Delaware or a place of payment on  which banking institutions or trust companies are authorized or required by law, regulation or executive order to  remain closed. For notes held in definitive form, payments of interest may be made, at our option, by (i) mailing a  check for such interest payable to or upon the written order of the person entitled thereto, to the address of such  person as it appears on the security register or (ii) transfer to an account maintained by the payee located inside the  United States. For notes held in global form, payments shall be made through DTC, or its nominee, as the registered  owner of the notes.    Ranking     Our obligation to make any payment on account of the principal of, or interest on, the notes will be  subordinate and junior in right of payment to the prior payment in full of all of our Senior Indebtedness.     “Senior Indebtedness” is defined to include principal of (and premium, if any) and interest, if any, on,  and any other payment due pursuant to, any of the following:      • our obligations for money borrowed;             • indebtedness evidenced by bonds, debentures, notes or similar instruments;             • similar obligations arising from off-balance sheet guarantees and direct credit substitutes;             • reimbursement obligations with respect to letters of credit, bankers’ acceptances or similar facilities;           • obligations issued or assumed as the deferred purchase price of property or services (but excluding trade  accounts payable or accrued liabilities arising in the ordinary course of business);             • capital lease obligations;           • obligations associated with derivative products, including but not limited to securities contracts, foreign  currency exchange contracts, swap agreements (including interest rate and foreign exchange rate swap  agreements), cap agreements, floor agreements, collar agreements, interest rate agreements, foreign  exchange rate agreements, options, commodity futures contracts, commodity option contracts and similar  financial instruments;           • debt of others described in the preceding clauses that we have guaranteed or for which we are otherwise  liable;  

 

         • any deferrals, renewals or extensions of debt, guarantees or other liabilities described in the preceding  clauses; and             • General Obligations (as defined below);     unless, in any case, in the instrument creating or evidencing any such indebtedness or obligation, or pursuant to  which the same is outstanding, it is expressly provided that such indebtedness or obligation is not superior in  right of payment to the notes or to other debt that is pari passu with or subordinate to the notes.  Senior Indebtedness will not include:          • indebtedness owed by us to Customers Bank or other subsidiaries; or          • any indebtedness the terms of which expressly provide that such indebtedness ranks equally with, or   junior to, the notes or to other debt that is equal with or junior to the notes, including guarantees of such  indebtedness.  “General Obligations” are defined as all of our obligations to pay claims of general creditors, other than obligations  on the notes and our indebtedness for money borrowed ranking equally or subordinate to the notes. Notwithstanding  the foregoing, if the Federal Reserve (or other competent regulatory agency or authority) promulgates any rule or  issues any interpretation that defines general creditor(s), the main purpose of which is to establish a criteria for  determining whether the subordinated debt of a bank holding company is to be included in its capital, then the term  “General Obligations” will mean obligations to general creditors as described in that rule or interpretation.     If certain events in bankruptcy, insolvency or reorganization occur, we will first pay all Senior  Indebtedness, including any interest accrued after the events occur, in full before we make any payment or  distribution, whether in cash, securities or other property, on account of the principal of or interest on the notes. In  such an event, we will pay or deliver directly to the holders of Senior Indebtedness any payment or distribution  otherwise payable or deliverable to holders of the notes. We will make the payments to the holders of Senior  Indebtedness according to priorities existing among those holders until we have paid all Senior Indebtedness,  including accrued interest, in full. If, notwithstanding the preceding sentence, the Trustee or the holder of any note  receives any payment or distribution before all Senior Indebtedness is paid in full, and if such fact shall, at or prior  to the time of such payment or distribution, have been made known to the Trustee or such holder, then such payment  or distribution shall be paid over or delivered for application to the payment of all Senior Indebtedness remaining  unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment  or distribution to or for the holders of Senior Indebtedness.     If such events of bankruptcy, insolvency or reorganization occur, after we have paid in full all amounts  owed on Senior Indebtedness, the holders of notes together with the holders of any of our other obligations that rank  equally with the notes will be entitled to receive from our remaining assets any principal, premium or interest due at  that time on the notes and such other obligations before we make any payment or other distribution on account of  any of our capital stock or obligations ranking junior to the notes.     In addition, if any principal, premium or interest in respect of Senior Indebtedness is not paid within any  applicable grace period (including at maturity) or any other default on Senior Indebtedness occurs and the maturity  of such Senior Indebtedness is accelerated in accordance with its terms, we may not pay the principal of, or interest  on, the notes or repurchase, redeem or otherwise retire any notes, unless, in each case, the default has been cured or  waived and any such acceleration has been rescinded or such Senior Indebtedness has been paid in full in cash,  subject to certain exceptions as provided in the Indenture. If the notes are accelerated before their stated maturity,  the holders of Senior Indebtedness outstanding at the time the notes so become due and payable shall be entitled to  receive payment in full of all amounts due or to become due on or in respect of such Senior Indebtedness before the  holders of the notes are entitled to receive any payment on the notes. If, notwithstanding the foregoing, we make any  payment to the Trustee or the holder of any note prohibited by the preceding sentences, and if such fact shall, at or  prior to the time of such payment, have been made known to the Trustee or such holder, such payment must be paid  over and delivered to us.     

 

Because of the subordination provisions of the Indenture, if we become insolvent, holders of Senior  Indebtedness may receive more, ratably, and holders of the notes may receive less, ratably, than our other creditors.     As discussed above, neither the notes nor the indenture contains any limitation on the amount of Senior  Indebtedness, parity indebtedness or secured subordinated indebtedness that we may incur or any indebtedness,  deposits or other liabilities or any preferred stock that Customers Bank or any of our other subsidiaries may incur or  issue. Indebtedness, deposits and other liabilities and any preferred equity of Customers Bank or our other  subsidiaries do not fall within the definition of Senior Indebtedness, but the notes are structurally subordinated to all  of them.   Optional Redemption     We may, at our option, beginning with the interest payment date of December 30, 2029 and on any interest  payment date thereafter, redeem the notes, in whole or in part, at a redemption price equal to 100% of the principal  amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption,  subject to prior approval of the Federal Reserve, to the extent that such approval is required. In case of any such  election, notice of redemption must be provided to the holders of the notes not less than 30 days nor more than 60  days prior to the redemption date. The selection of notes to be redeemed in any partial redemption will be made in  accordance with DTC’s applicable procedures. If any note is to be redeemed in part only, the notice of redemption  relating to such note shall state it is a  partial redemption and the portion of the principal amount thereof to be  redeemed. If we redeem only a portion of the notes on any date of redemption, we may subsequently redeem  additional notes.     In addition, we may, at our option and subject to prior approval of the Federal Reserve, to the extent that  such approval is required, redeem the notes, in whole but not in part, at any time prior to the stated maturity date, at  a  redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest to, but  excluding, the date of redemption, in the event of the occurrence of a Tax Event, a  Tier 2 Capital Event or an  Investment Company Event.     A “Tax Event” is defined as the receipt by us of an opinion of independent tax counsel to the effect that as  a result of:    A “Tax Event” is defined as the receipt by us of an opinion of independent tax counsel to the effect that as a result  of:   • an amendment to or change (including any announced prospective amendment or change) in any law or  treaty, or any regulation thereunder, of the United States or any of its political subdivisions or taxing  authorities;     • a  judicial decision, administrative action, official administrative pronouncement, ruling, regulatory  procedure, regulation, notice or announcement, including any notice or announcement of intent to adopt or  promulgate any ruling, regulatory procedure or regulation;        • an amendment to or change in any official position with respect to, or any interpretation of, a  judicial  decision, administrative action, official administrative pronouncement, ruling, regulatory procedure,  regulation, notice or announcement or a law or regulation of the United States that differs from the  previously generally accepted position or interpretation, or         • a  threatened challenge asserted in writing in connection with an audit of our federal income tax returns or  positions or a similar audit of any of our subsidiaries or a publicly known threatened challenge asserted in  writing against any other taxpayer that has raised capital through the issuance of securities that are  substantially similar to the notes,  in each case, which change or amendment or challenge becomes effective or which pronouncement, decision or  challenge is announced on or after the original issue date of the notes, there is more than an insubstantial risk that  

 

interest payable by us on the notes is not, or, within 90 days of the date of such opinion, will not be, deductible by  us, in whole or in part, for United States federal income tax purposes.     A “Tier 2 Capital Event” is defined to mean our reasonable determination that, as a result of (a) any  amendment to, or change in, the laws, rules, regulations, policies or guidelines of the United States (including, for  the avoidance of doubt, any agency or instrumentality of the United States, including the Federal Reserve and other  federal bank regulatory agencies) or any political subdivision of or in the United States that is enacted or becomes  effective after the initial issuance of the notes; (b) any proposed change in those laws, rules, regulations, policies or  guidelines that is announced or becomes effective after the initial issuance of the notes; or (c) any official  administrative decision or judicial decision or administrative action or other official pronouncement interpreting or  applying those laws, rules, regulations, policies or guidelines or policies with respect thereto that is announced after  the original issue date of the notes, there is more than an insubstantial risk that we will not be entitled to treat the  notes then outstanding as “Tier 2 capital” (or its equivalent) for purposes of the capital adequacy rules or regulations  of the Federal Reserve (or, as and if applicable, the capital adequacy rules or regulations of any successor  appropriate federal banking agency) as then in effect and applicable, for so long as any notes are outstanding.     An “Investment Company Event” is defined to mean our becoming required to register as an investment  company pursuant to the Investment Company Act of 1940, as amended.    Our election to redeem any notes upon the occurrence of any of the enumerated events above will be  provided to the Trustee in the form of an officers’ certificate at least 60 days prior to the redemption date, or such  shorter notice as may be acceptable to the Trustee. In case of any such election, notice of redemption must be  provided to the holders of the notes not less than 30 days nor more than 60 days prior to the redemption date. Any  such redemption may be subject to the satisfaction of conditions precedent as may be set forth in the applicable  notice of redemption. If any such conditions precedent have not been satisfied, we shall provide written notice to the  Trustee and each holder of the notes prior to the close of business of the business day prior to the redemption date in  the same manner in which the notice of redemption was given. Upon receipt of such notice, the notice of redemption  shall be rescinded or delayed as provided in such notice. In no event shall the Trustee be responsible to satisfy any  such condition precedent, including making a deposit of money required to effectuate the redemption.     The notes are not subject to repurchase at the option of the holders of the notes.     Events of Default; Limitation on Suits     Under the Indenture, an event of default will occur with respect to the notes only upon the occurrence of  any one of the following events:    • the entry of a decree or order for relief in respect of Customers Bancorp by a court having jurisdiction in the  premises in an involuntary case under any applicable bankruptcy, insolvency, or reorganization law, now or  hereafter in effect of the United States or any political subdivision thereof, and such decree or order shall have  continued unstayed and in effect for a period of 60 consecutive days;        • the commencement by Customers Bancorp of a voluntary case under any applicable bankruptcy, insolvency, or  reorganization law, now or hereafter in effect of the United States or any political subdivision thereof, or the consent  by Customers Bancorp to the entry of a decree or order for relief in an involuntary case under any such law; or     • in the event a receiver, conservator or similar official is appointed for Customers Bancorp’s major subsidiary  depository institution (currently, Customers Bank).  If an event of default occurs, the outstanding principal amount and all accrued but unpaid interest on the  notes will become due and payable immediately. The foregoing provision would, in the event of the bankruptcy or  insolvency involving Customers Bancorp, be subject as to enforcement to the broad equity powers of a federal  bankruptcy court and to the determination by that court of the nature and status of the payment claims of the holders  of the notes. Subject to certain conditions, but before a judgment or decree for payment of the money due has been  obtained, an acceleration may be annulled by the holders of a majority in principal amount of the outstanding notes.     

 

There is no automatic acceleration or right of acceleration in the case of a default in the payment of  principal of or interest on the notes or in our non-performance of any other obligation under the notes or the  Indenture. If we default in our obligation to pay any interest on the notes when due and payable and such default  continues for a period of 30 days, or if we default in our obligation to pay the principal amount due upon maturity,  or if we breach any covenant or agreement contained in the Indenture, then the Trustee may, subject to certain  limitations and conditions, seek to enforce its rights and the rights of the holders of the notes of the performance of  any covenant or agreement in the Indenture.     The Indenture provides that, subject to the duty of the Trustee upon the occurrence of an event of default to  act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers  under the Indenture at the request or direction of any of the holders of notes unless such holders shall have offered to  the Trustee indemnity or security satisfactory to it against the costs, expenses and liabilities which may be incurred  by it in complying with such request or direction. Subject to certain provisions, the holders of a majority in principal  amount of the outstanding notes will have the right to direct the time, method and place of conducting any  proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with  respect to the notes.     No holder of a note will have any right to institute any proceeding, judicial or otherwise, with respect to the  Indenture, or for the appointment of a receiver or trustee, or for any other remedy under the Indenture, unless:     such holder has previously given written notice to the Trustee of a continuing event of default with respect to the  notes;  • the holders of not less than 25% in principal amount of the notes shall have made written request to the  Trustee to institute proceedings in respect of such event of default in its own name as Trustee under the  Indenture;       • such holder or holders have offered to the Trustee indemnity satisfactory to it against the costs, expenses,  and liabilities to be incurred in complying with such request;         • the Trustee for 60 days after its receipt of such notice, request, and offer of indemnity has failed to  institute any such proceeding; and         • no direction inconsistent with such written request has been given to the Trustee during such 60 day- period by the holders of a majority in principal amount of the outstanding notes.  Merger, Consolidation, Sale, Lease or Conveyance   The Indenture provides that we may not merge or consolidate with or into any person, or sell, lease or  convey, in a single transaction or in a series of transactions, all or substantially all of our assets to any  person, unless:   • we are the continuing corporation, or the successor corporation or the person that acquires all or  substantially all of our assets is a  corporation organized and existing under the laws of the United  States or a state thereof or the District of Columbia and expressly assumes all our obligations  under the notes and the Indenture;         • immediately after giving effect to such merger, consolidation, sale, lease or conveyance there is  no default (as defined above) or event of default under the Indenture; and         • we shall have delivered to the Trustee an officers’ certificate and an opinion of counsel, each  stating, among other things, that such transaction complies with the terms of the Indenture and that  all conditions precedent provided for in the Indenture relating to such transaction have been  complied with.  Upon any such consolidation or merger, sale, lease or conveyance, the successor corporation formed, or  into which we are merged or to which such sale, conveyance or transfer is made, shall succeed to, and be substituted  

 

for, us under the Indenture with the same effect as if it had been an original party to the Indenture. As a result, we  will be released from all our liabilities and obligations under the Indenture and under the notes.     Although there is a  limited body of case law interpreting the phrase “substantially all” and similar phrases,  there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances  there may be a degree of uncertainty as to whether a particular transaction would involve “substantially all” of the  property or assets of a person.     Satisfaction and Discharge     The Indenture will be discharged and will cease to be of further effect as to all notes, when:    (1)       either:   (i) all notes that have been authenticated, except lost, stolen or destroyed notes that have been  replaced or paid and notes for whose payment money has been deposited in trust and thereafter  repaid to us or discharged from such trust, have been delivered to the Trustee for cancellation; or   (ii) all such notes not previously delivered to the Trustee for cancellation have become due and  payable by reason of the mailing of a notice of redemption or otherwise, or will become due and  payable within one year and we have irrevocably deposited with the Trustee (or the paying agent if  other than the Trustee), in trust, for the benefit of the holders of the notes, cash in United States  dollars, non-callable government securities or a combination thereof, in such amounts as will be  sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay  and discharge the entire indebtedness on the notes not delivered to the Trustee for cancellation for  principal and accrued interest, to the date of maturity or redemption;   (2)       we have paid or caused to be paid all sums payable by us under the Indenture with respect to the  notes;  (3)       we have delivered irrevocable instructions to the Trustee to apply the deposited money toward the  payment of the notes at maturity or on the redemption date, as the case may be; and     (4)       we have delivered to the Trustee an officers’ certificate and an opinion of counsel stating that the  conditions precedent to the satisfaction and discharge of the notes have been satisfied.     Defeasance     We will be deemed to have paid and will be discharged from any and all obligations in respect of the notes  and the Indenture on the 91st day after we have made the deposit referred to below, and the provisions of the  Indenture will cease to be applicable with respect to the notes (except for, among other matters, certain obligations  to register the transfer of or exchange of the notes, to replace stolen, lost or mutilated notes, to maintain paying  agencies and to hold funds for payment in trust) if:     (1)       we have irrevocably deposited with the Trustee, in trust, for the benefit of the holders of the notes,  cash in United States dollars, non-callable government securities, or a  combination thereof, in such  amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public  accountants, to pay the principal of and accrued interest on the notes at the time such payments are due in  accordance with the terms of the Indenture;     (2)       we have delivered to the Trustee:     (i)       an opinion of counsel to the effect that holders of the notes will not recognize income, gain  or loss for U.S. federal income tax purposes as a result of the defeasance and will be subject to  U.S. federal income tax on the same amounts and in the same manner and at the same times as  

 

would have been the case if such defeasance had not occurred, which opinion of counsel must be  based upon a ruling of the U.S. Internal Revenue Service, referred to as the IRS, to the same effect  or a  change in applicable U.S. federal income tax law or related treasury regulations after the date  of the Indenture;     (ii)       an opinion of counsel confirming that, among other things, the defeasance trust does not  constitute an “investment company” within the meaning of the Investment Company Act of 1940,  as amended; and     (iii)       an opinion of counsel to the effect that (subject to customary qualifications and  assumptions) after the 91st day following the deposit, the trust funds will not be subject to the  effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’  rights generally;     (3)       no default (as defined above) or event of default with respect to the notes will have occurred and be  continuing on the date of such deposit, or insofar as events of default due to certain events of bankruptcy,  insolvency or reorganization in respect of us are concerned, during the period ending on the 91st day after  the date of such deposit, and such deposit shall not (i) cause the Trustee to have a conflicting interest within  the meaning of the Trust Indenture Act in respect of the notes or (ii) result in a breach or violation of, or  constitute a default under, any material agreement or instrument (other than the Indenture) to which we are  a party or by which we are bound;     (4)       we have delivered to the Trustee an officers’ certificate stating that the deposit was not made by us  with the intent of preferring the holders of notes over any other creditors of ours or with the intent of  defeating, hindering, delaying or defrauding any other creditors of ours;     (5)        we have delivered to the Trustee an officers’ certificate and an opinion of counsel, each stating that,  subject to customary assumptions and exclusions, all conditions precedent provided for or relating to the  defeasance have been complied with; and     (6)       the Trustee shall have received such other documents, assurances and opinions of counsel as the  Trustee shall have reasonably required.     Supplemental Indentures/Amendments     Except as set forth below, we and the Trustee may enter into an indenture supplemental to the Indenture,  with the consent of the holders of a majority in principal amount of the notes then outstanding affected by such  amendment, voting as a single class. However, without the consent of each affected holder of the notes, an  amendment may not:     • reduce the principal amount of the outstanding notes the consent of whose holders is required for any  amendment, supplement or waiver;        • reduce the rate of or extend the time for payment of interest on any note;         • reduce the principal of or change the maturity date of any note;         • reduce the amount of the principal which would be due and payable upon an acceleration of the stated  maturity thereof;  • waive a default or event of default in the payment of the principal or interest on any note;  • make any note payable in money other than those stated in the notes;  • waive a redemption payment with respect to the notes;   

 

• impair the right of any holder to institute suit for the enforcement of any payment with respect to the  notes;   • change the definition of Senior Indebtedness except to reduce the scope thereof; or  • make any changes to the sections of the Indenture regarding waiver of past defaults, the unconditional  rights of holders to receive payment or the prohibition on amendments reducing the principal amount of or  interest on, or extending the time for payment on, any note without the consent of each affected holder.  We and the Trustee may enter into one or more indentures supplemental to the Indenture, without the consent of any  holder of the notes, for any of the following purposes:  • to cure any ambiguity, defect or inconsistency;  • to provide for the assumption of the Company’s obligations to holders of the notes by a successor to the  Company pursuant to the Indenture;  • to make any change that would provide any additional rights or benefits to the holders of the notes or that  does not adversely affect the legal rights under the Indenture of any such holder;  • to provide for the issuance of and establish the form and terms and conditions of notes  as permitted by  the Indenture;  • to comply with requirements of the SEC in order to effect or maintain the qualification of an indenture  under the TIA;  • to conform the text of the Indenture or the notes to any provision of the description thereof set forth in this  prospectus supplement, the accompanying prospectus or term sheet;  • to add any guarantor or to provide any collateral to secure any notes;  • to add additional obligors under the Indenture and the notes; or  • to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect  to the debt securities of one or more series and to add to or change any of the provisions of this Indenture as  shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one  Trustee.  Subject to the requirements for the holders to waive a default and to pursue a remedy with respect to the  Indenture or the notes and the rights of any holder of a note to receive payment of principal of and interest on such  note, holders of a majority in aggregate principal amount of the notes voting as a single class may waive compliance  in a particular instance by us with any provision of the Indenture or the note, except as otherwise stated above.     Outstanding Notes; Determinations of Holders’ Actions     Notes outstanding at any time are the notes authenticated by the Trustee except for those cancelled by it,  those mutilated, destroyed, lost or stolen that have been replaced by the Trustee, those delivered to the Trustee for  cancellation and those described below as not outstanding. A note does not cease to be outstanding because we or an  affiliate of us holds the note; provided, however, that in determining whether the holders of the requisite principal  amount of notes have given or concurred in any request, demand, authorization, direction, notice, consent,  amendment or waiver, notes owned by us or an affiliate of us will be disregarded and deemed not to be outstanding.  If the paying agent holds on a redemption date money or securities sufficient to pay notes payable on that date, then  immediately after such redemption date such notes will cease to be outstanding.    The Trustee may make reasonable rules for action by or at a meeting of holders of the notes. The registrar  or paying agent may make reasonable rules and set reasonable requirements for its functions.     Limitation on Individual Liability  

 

   No director, officer, employee, incorporator or stockholder of us, as such, will have any liability for any  obligations of us under the notes or the Indenture or for any claim based on, in respect of, or by reason of, such  obligations or their creation. Each holder of a note, by accepting a note waives and releases such liability. The  waiver and release are part of the consideration for the issuance of the notes. Such waiver may not be effective to  waive liabilities under the federal securities laws.     Trustee     Wilmington Trust acts as Trustee for the notes under the Indenture, as permitted by the terms thereof. At all  times, the Trustee must be a corporation organized and doing business under the laws of the United States or any  state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision and  examination by federal or state authorities and that, together with its direct parent, if any, has a combined capital and  surplus of at least $250,000,000. The Indenture shall always have a trustee that satisfies the applicable requirements  of the Trust Indenture Act. The Trustee may resign at any time by giving us written notice; and may be removed as  Trustee with respect to the notes:    • by the holders of a majority in aggregate principal amount of the then outstanding notes by notification in  writing to us and the Trustee; or         • by us if (i) the Trustee fails to comply with the eligibility requirements described above; (ii) the Trustee is  adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any  bankruptcy law; (iii) a  custodian or public officer takes charge of the Trustee or its property; or (iv) the  Trustee otherwise becomes incapable of acting.  If the Trustee resigns or is removed or if a  vacancy exists in the office of the Trustee for any reason, we  will promptly appoint a  successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment  to the retiring Trustee and to us. Thereupon, the resignation or removal of the retiring Trustee shall become  effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee will mail a  notice of its succession to holders of the notes.     The occurrence of any default under the Indenture could create a conflicting interest for the Trustee under  the Trust Indenture Act. If that default has not been cured or waived within 90 days after the Trustee has or acquired  a conflicting interest, the Trustee would generally be required by the Trust Indenture Act to eliminate that  conflicting interest or resign as Trustee with respect to the notes issued under the Indenture. If the Trustee resigns,  we are required to promptly appoint a  successor trustee with respect to the notes.     The Trust Indenture Act also imposes certain limitations on the right of the Trustee, as a creditor of ours, to  obtain payment of claims in certain cases, or to realize on certain property received in respect of any cash claim or  otherwise. The Trustee will be permitted to engage in other transactions with us, provided that, if it acquires a  conflicting interest within the meaning of Section 310 of the Trust Indenture Act, it must generally either eliminate  that conflict or resign.     Wilmington Trust and/or certain of its affiliates have in the past and may in the future provide banking,  investment and other services to us. A trustee under the Indenture may act as trustee under any of our other  indentures.    Notes Intended to Qualify as Tier 2 Capital   The notes are intended to qualify as Tier 2 Capital under the capital rules established by the Federal Reserve for  bank holding companies that became effective January 1, 2014. The rules set forth specific criteria for instruments to  qualify as Tier 2 Capital. Among other things, the notes must:   • be unsecured;         • have a minimum original maturity of at least five years;     

 

• be subordinated to general creditors and all senior indebtedness of the Company: that is, the notes must be  subordinated at a minimum to all borrowed money, similar obligations arising from off-balance sheet  guarantees and direct credit substitutes, and obligations associated with derivative products such as interest  rate and foreign exchange contracts, commodity contracts, and similar arrangements;         • not contain provisions permitting the holders of the notes to accelerate payment of principal prior to  maturity except in the event of receivership, insolvency, liquidation or similar proceedings of the Company  or of a major subsidiary institution of the Company;         • by their terms be callable by the Company only after five years, unless there occurs (i) a  Tax Event, (ii) a   Tier 2 capital  or (iii) an Investment Company Event;        • not contain credit sensitive features, such as an interest rate reset, based in whole or in part, on the credit  standing of the Company;        • redemption or repurchase of the notes requires prior Federal Reserve approval; and         • not contain provisions permitting the institution to redeem or repurchase the notes prior to the maturity  date without prior approval of the Federal Reserve.  Notices   Any notices required to be given to the holders of the notes will be given to DTC, and DTC will  communicate these notices to DTC participants in accordance with its standard procedures.   Governing Law   The Indenture and the notes are governed by, and will be construed in accordance with, the laws of the  State of New York.  Book-Entry, Delivery and Form of Notes  General     The notes will be issued in registered, global form in minimum denominations of $25 and integral multiples  of $25 thereof. The notes will be issued on the issue date therefor only against payment in immediately available  funds.     The notes initially will be represented by one or more permanent global certificates (which may be  subdivided) in definitive fully registered form without interest coupons, referred to as the global notes. The global  notes will be deposited with, or on behalf of, DTC and will be registered in the name of DTC or its nominee.  Investors may hold their beneficial interests in a global note directly through DTC or indirectly through  organizations which are participants in the DTC system.     Except as set forth in this prospectus supplement, the global notes may be transferred, in whole and not in  part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global  notes may not be exchanged for notes in certificated form except in the limited circumstances described below under  “— Exchange of Book-Entry Notes for Certificated Notes.” Transfer of beneficial interests in the global notes will  be subject to the applicable rules and procedures of DTC and its direct and indirect participants, which may change  from time to time.  Depositary Procedures     The following description of the operations and procedures of DTC are provided solely as a matter of  convenience. These operations and procedures are solely within the control of the respective settlement systems and  are subject to changes by them.  

 

   We do not take any responsibility for these operations and procedures and urge investors to contact the  systems or their participants to directly discuss these matters. DTC has advised us that it is a  limited-purpose trust  company organized under the New York Banking Law, a “banking organization” within the meaning of the New  York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the  Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the  Exchange Act. DTC was created to hold securities for its participating organizations, referred to as participants, and  to facilitate the clearance and settlement of transactions in those securities between participants through electronic,  computerized book-entry changes in accounts of its participants, thereby eliminating the need for physical  movement of certificates. Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust  companies, clearing corporations and certain other organizations. Indirect access to DTC’s system is also available  to banks, securities brokers, dealers, trust companies and clearing corporations that clear through or maintain a  custodial relationship with a participant, either directly or indirectly, referred to as indirect participants. Persons who  are not participants may beneficially own securities held by or on behalf of DTC only through participants or  indirect participants. The ownership interest and transfer of ownership interest of each actual purchaser of each  security held by or on behalf of DTC are recorded on the records of participants and indirect participants.  DTC has advised us that, pursuant to procedures established by it:  • upon deposit of the global notes, DTC will credit the accounts of participants designated by the underwriters with  portions of the principal amount of the global notes; and         • ownership of interests in the global notes will be shown on, and the transfer of ownership of the global notes will  be effected only through, records maintained by DTC (with respect to participants) or by participants and indirect  participants (with respect to other owners of beneficial interests in the global notes).  Upon issuance, a  holder may hold its interests in the global notes directly through DTC if it is a  participant,  or indirectly through organizations that are participants or indirect participants. The depositaries, in turn, will hold  interests in the notes in customers’ securities accounts in the depositaries’ names on the books of DTC.     All interests in a global note will be subject to the procedures and requirements of DTC. The laws of some  jurisdictions require that certain persons take physical delivery in certificated form of securities that they own.  Consequently, the ability to transfer beneficial interests in a global note to those persons will be limited to that  extent. Because DTC can act only on behalf of participants, which in turn act on behalf of indirect participants and  certain banks, the ability of a person having beneficial interests in a global note to pledge its interests to persons or  entities that do not participate in the DTC system, or otherwise take actions in respect of its interests, may be  affected by the lack of a physical certificate evidencing its interests. For certain other restrictions on the  transferability of the notes, see “— Exchange of Book-Entry Notes for Certificated Notes.”     Except as described below, owners of interests in the global notes will not have notes registered in their  name, will not receive physical delivery of notes in certificated form and will not be considered the registered  owners or holders thereof under the Indenture for any purpose.    Payments on the global notes registered in the name of DTC, or its nominee, will be payable in  immediately available funds by the Trustee (or the paying agent if other than the Trustee) to DTC or its nominee in  its capacity as the registered holder under the Indenture. We and the Trustee, as applicable, will treat the persons in  whose names the notes, including the global notes, are registered as the owners thereof for the purpose of receiving  such payments and for any and all other purposes whatsoever. Neither the Trustee nor any agent thereof has or will  have any responsibility or liability for:     • any aspect of DTC’s records or any participant’s or indirect participant’s records relating to, or payments  made on account of, beneficial ownership interests in the global notes, or for maintaining, supervising or  reviewing any of DTC’s records or any participant’s or indirect participant’s records relating to the  beneficial ownership interests in the global notes; or           • any other matter relating to the actions and practices of DTC or any of its participants or indirect  participants.  

 

   DTC has advised us that its current practice, upon receipt of any payment in respect of securities such as  the notes (including principal and interest), is to credit the accounts of the relevant participants with the payment on  the payment date, in amounts proportionate to their respective holdings in the principal amount of the relevant  security as shown on the records of DTC, unless DTC has reason to believe it will not receive payment on such  payment date. Payments by participants and indirect participants to the beneficial owners of notes will be governed  by standing instructions and customary practices and will be the responsibility of participants or indirect participants  and will not be the responsibility of DTC, the Trustee, as applicable, or us.    Neither we nor the Trustee will be liable for any delay by DTC or any of its participants or indirect  participants in identifying the beneficial owners of the notes, and we and the Trustee may conclusively rely on and  will be protected in relying on instructions from DTC or its nominee for all purposes.    If less than all of the notes are being redeemed, DTC’s current practice is to determine by lot the amount of  the interest of each participant in such global notes to be redeemed.    Initial settlement for the notes will be made in immediately available funds. Any secondary market trading  activity in interests in the global notes will settle in immediately available funds, subject in all cases to the rules and  procedures of DTC and its participants. Transfers between participants in DTC will be effected in accordance with  DTC’s procedures, and will settle in same-day funds.    DTC has advised us that it will take any action permitted to be taken by a holder of notes only at the  direction of one or more participants who have an interest in DTC’s global notes in respect of the portion of the  principal amount of the notes as to which the participant or participants has or have given direction. However, if an  event of default exists under the Indenture, DTC reserves the right to exchange the global notes for notes in  certificated form and to distribute the certificated notes to its participants.    We believe that the information in this section concerning DTC and its book-entry system has been  obtained from reliable sources, but we do not take responsibility for the accuracy or completeness of this  information. Although DTC will agree to the procedures described in this section to facilitate transfers of interests in  the global notes among participants in DTC, DTC is not obligated to perform or to continue to perform these  procedures, and these procedures may be discontinued at any time by giving reasonable notice. Neither we nor the  Trustee will have any responsibility or liability for any aspect of the performance by DTC or its participants or  indirect participants of any of their respective obligations under the rules and procedures governing their operations  or for maintaining, supervising or reviewing any records relating to the global notes that are maintained by DTC or  any of its participants or indirect participants.    Exchange of Book-Entry Notes for Certificated Notes  A global note is exchangeable for certificated notes in definitive, fully registered form without interest  coupons if:     • DTC notifies us that it is unwilling or unable to continue as depositary for the global notes and we fail to  appoint a successor depositary within 90 days of receipt of DTC’s notice, or DTC has ceased to be a  clearing agency registered under the Exchange Act and we fail to appoint a  successor depositary within 90  days of becoming aware of this condition; or           • at our request, DTC notifies holders of the notes that they may utilize DTC’s procedures to cause the  notes to be issued in certificated form, and such holders request such issuance.  In addition, beneficial interests in a global note may be exchanged by or on behalf of DTC for certificated  notes upon request by DTC, but only upon at least 20 days prior written notice given to the Trustee in accordance  with DTC’s customary procedures. In all cases, certificated notes delivered in exchange for any global note or  beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by  or on behalf of the depository in accordance with its customary procedures.Document

EXHIBIT 4.6

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

As of December 31, 2021, FirstCash Holdings, Inc. (the “Company,” “us,” “we,” or “our”) had one class of securities, our common stock, par value $0.01 per share, registered under Section 12 of the Securities Exchange Act of 1934, as amended.

Description of Common Stock

The following description of our Common Stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our amended and restated certificate of incorporation and our amended and restated bylaws, which are filed as exhibits to our Annual Report on Form 10-K and are incorporated by reference herein, as well as the applicable provisions of the Delaware General Corporation Law. We encourage you to carefully review our amended and restated certificate of incorporation, our amended and restated bylaws and the applicable provisions of the Delaware General Corporation Law, for additional information.

General

Our authorized capital stock consists of 90,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share. 

Voting Rights

Each share of our common stock is entitled to one vote per share of record on all matters to be voted upon by our stockholders. Generally, a matter submitted for stockholder action shall be decided by the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote thereon.  Other than in a contested election where directors are elected by a plurality vote, each nominee for director shall be elected by the vote of the majority of the votes cast, in person or by proxy, with respect to the director nominee at the meeting.  

Dividends

Subject to the preferential rights of the holders of any preferred stock that may at the time be outstanding, each share of common stock will entitle the holder of that share to an equal and ratable right to receive dividends or other distributions if declared from time to time by our board of directors and if there are sufficient funds to legally pay a dividend.

Rights Upon Liquidation

In the event of the Company’s liquidation, dissolution or winding up, whether voluntary or involuntary, the holders of our common stock will be entitled to share ratably in all assets remaining after payments to creditors and after satisfaction of the liquidation preference, if any, of the holders of any preferred stock that may at the time be outstanding. 

Other Rights

Holders of our common stock have no preemptive or redemption rights and will not be subject to further calls or assessments by the Company. 

Preferred Stock

The authorized preferred stock will be available for issuance from, time to time, at the discretion of our board of directors without stockholder approval. Our board of directors has the authority to prescribe for each series of preferred stock it establishes the number of shares in that series, the number of votes, if any, to which the shares in that series are entitled, the consideration for the shares in that series and the powers, designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, of the shares in that series. Depending upon the rights prescribed for a series of preferred stock, the issuance of preferred stock could have an adverse effect on the voting power of 

the holders of our common stock and could adversely affect holders of our common stock by delaying or preventing a change in control of the Company, making removal of the Company’s management more difficult or imposing restrictions upon the payment of dividends and other distributions to the holders of our common stock.

Certain Provisions That May Have an Anti-Takeover Effect

Certain other provisions of our amended and restated certificate of incorporation and amended and restated bylaws may delay or make more difficult unsolicited acquisitions or changes of control of the Company. These provisions could have the effect of discouraging third parties from making proposals involving an unsolicited acquisition or change in control of the Company, although these proposals, if made, might be considered desirable by a majority of the Company’s stockholders. These provisions may also have the effect of making it more difficult for third parties to cause the replacement of the current management without the concurrence of our board of directors. These provisions include:

•The division of our board of directors into three classes serving staggered terms of office of three years. With a classified board of directors, it would generally take a majority stockholder two annual meetings of stockholders to elect a majority of the board of directors. As a result, a classified board may discourage proxy contests for the election of directors or purchases of a substantial block of stock because it could operate to prevent obtaining control of the board in a relatively short period of time.

•A prohibition of stockholder action by written consent of stockholders. Action by written consent may, in some circumstances, permit the taking of stockholders’ action opposed by the board of directors more rapidly than would be possible if a meeting of stockholders were required. The prohibition contained in the amended and restated certificate of incorporation will restrict the ability of controlling stockholders to take action at any time other than at an annual meeting and will generally force a takeover bidder to negotiate directly with the board of directors.

•Permitting only the Company’s board of directors, a duly authorized committee of the board of directors, the chairman or the vice chairman of our board of directors or the chief executive officer to call a special meeting of the Company’s stockholders. This provision could prevent a stockholder from, among other things, calling a special meeting of stockholders to consider the stockholder’s proposed slate of directors or a transaction that might result in a change of control of the corporation.

•An advance notice procedure with regard to stockholder nomination of candidates for election as directors and other business to be brought before an annual meeting of our stockholders. Although our amended and restated bylaws will not give our board of directors any power to approve or disapprove stockholder nominations for the election of directors or other proposals for action, these advance notice procedures may have the effect of precluding a contest for the election of directors or the consideration of other stockholder proposals if the established procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve another proposal without regard to whether consideration of those nominees or proposals might be harmful or beneficial to the Company and our stockholders.

•Elimination, subject to certain exceptions, of the personal liability of directors of the Company for monetary damages for breaches of fiduciary duty by such directors. The amended and restated certificate of incorporation will not provide for the elimination of or any limitation on the personal liability of a director for (i) any breach of the director’s duty of loyalty to the Company or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) unlawful corporate distributions, or (iv) any transaction from which such director derives an improper personal benefit. This provision of the amended and restated certificate of incorporation will limit the remedies available to a stockholder who is dissatisfied with a decision of the board of directors protected by this provision, and such stockholder’s only remedy in that circumstance may be to bring a suit to prevent the action of the board. In many situations, this remedy may not be effective, as for example when stockholders are not aware of a transaction or an event prior to board action in respect of such transaction or event. In these cases, the stockholders and the corporation could be injured by the board’s decision and have no effective remedy.

•Permitting the removal of directors only for cause by a vote of the holders of a majority of the outstanding shares of stock entitled to vote in an election of directors.

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•Permitting the board of directors, in evaluating any takeover offer, to consider all relevant factors, including the potential economic and social impact of the offer on our stockholders, employees, customers, creditors, the communities in which the Company operates and any other factors the directors consider pertinent. Once the board, in exercising its business judgment, has determined that a proposed action is not in the best interests of the Company, it has no duty to remove any barriers to the success of the action, including a shareholder rights plan.

Section 203 of the Delaware General Corporation Law

The Company is subject to Section 203 (“Section 203”) of the DGCL, which, subject to certain exceptions, prohibits a Delaware corporation from engaging in any business combinations with any interested stockholder for a period of three years following the date that such stockholder became an interested stockholder, unless (i) before such date the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (x) by persons who are directors and also officers and (y) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or (iii) on or after such date the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

Section 203 defines business combination to include (i) any merger or consolidation involving the corporation and the interested stockholder, (ii) any sale, lease, exchange, mortgage, transfer, pledge or other disposition involving the interested stockholder of 10% or more of assets of the corporation, (iii) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder, (iv) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder or (v) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such an entity or person.

Section 203 may delay, prevent or make more difficult certain unsolicited acquisitions, tender offers or changes of control of the Company and also may have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions which our stockholders may otherwise deem to be in their best interest.
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