11, 1999 to be “so closely related to banking ... as to be a proper incident thereto.” This authority would permit the  Company to engage in a variety of banking-related businesses, including the ownership and operation of a savings  association, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service  bureau (including software development) and mortgage banking and brokerage. The BHCA generally does not place  territorial restrictions on the domestic activities of nonbank subsidiaries of bank holding companies.  Additionally, bank holding companies that meet certain eligibility requirements prescribed by the BHCA  and elect to operate as financial holding companies may engage in, or own shares in companies engaged in, a wider  range of nonbanking activities, including securities and insurance underwriting and sales, merchant banking and any  other activity that the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation  or order is financial in nature or incidental to any such financial activity or that the Federal Reserve determines by  order to be complementary to any such financial activity and does not pose a substantial risk to the safety or  soundness of depository institutions or the financial system generally. As of the date of this filing, the Company has  not applied for approval to operate as a financial holding company.  Federal law also prohibits any person or company from acquiring “control” of an FDIC-insured depository  institution or its holding company without prior notice to the appropriate federal bank regulator. “Control” is  conclusively presumed to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or  bank holding company, but may arise under certain circumstances between 10% and 24.99% ownership. Capital Requirements. Bank holding companies are required to maintain minimum levels of capital in  accordance with Federal Reserve capital adequacy guidelines, as affected by the Dodd-Frank Act and Basel III. For  a discussion of capital requirements, see “—The Increasing Regulatory Emphasis on Capital” above.  U.S. Government Investment in Bank Holding Companies. Events in the U.S. and global financial  markets in 2008 and 2009, including deterioration of the worldwide credit markets, created significant challenges for  financial institutions throughout the country. In response to this crisis affecting the U.S. banking system and  financial markets, on October 3, 2008, the U.S. Congress passed, and the President signed into law, the Emergency  Economic Stabilization Act of 2008 (the “EESA”). The EESA authorized the Secretary of the Treasury to  implement various temporary emergency programs designed to strengthen the capital positions of financial  institutions and stimulate the availability of credit within the U.S. financial system. Financial institutions  participating in certain of the programs established under the EESA are required to adopt the Treasury’s standards  for executive compensation and corporate governance. On October 14, 2008, the Treasury announced that it would provide Tier 1 capital (in the form of perpetual  preferred stock) to eligible financial institutions. This program, known as the TARP Capital Purchase Program (the  “CPP”), allocated $250 billion from the $700 billion authorized by the EESA to the Treasury for the purchase of  senior preferred shares from qualifying financial institutions (the “CPP Preferred Stock”). Under the program,  eligible institutions were able to sell equity interests to the Treasury in amounts equal to between 1% and 3% of the  institution’s risk-weighted assets. The CPP Preferred Stock is nonvoting and pays dividends at the rate of 5% per  annum for the first five years and thereafter at a rate of 9% per annum. In conjunction with the purchase of the CPP  Preferred Stock, the Treasury received warrants to purchase common stock from the participating public institutions  with an aggregate market price equal to 15% of the preferred stock investment. Participating financial institutions  were required to adopt the Treasury’s standards for executive compensation and corporate governance for the period  during which the Treasury holds equity issued under the CPP. The Company elected not to participate in the CPP.  Dividend Payments. The Company’s ability to pay dividends to its stockholders may be affected by both  general corporate law considerations and policies of the Federal Reserve applicable to bank holding companies. As  a Delaware corporation, the Company is subject to the limitations of the Delaware General Corporation Law  (the “DGCL”). The DGCL allows the Company to pay dividends only out of its surplus (as defined and computed in  accordance with the provisions of the DGCL) or if the Company has no such surplus, out of its net profits for the  fiscal year in which the dividend is declared and/or the preceding fiscal year. As a general matter, the Federal Reserve indicates that the board of directors of a bank holding company  should eliminate, defer or significantly reduce the dividends if: (i) the company’s net income available to  shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully  fund the dividends; (ii) the prospective rate of earnings retention is inconsistent with the company’s capital needs and  overall current and prospective financial condition; or (iii) the company will not meet, or is in danger of not meeting,  20 