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FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-10469
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 30, 1996) [LOGO OF WELLS FARGO & COMPANY]
$3,500,000,000
WELLS FARGO & COMPANY
MEDIUM-TERM NOTES AND SUBORDINATED MEDIUM-TERM NOTES, SERIES B
DUE FROM 9 MONTHS TO 12 YEARS FROM DATE OF ISSUE
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Wells Fargo & Company (the "Company") is offering by this Prospectus
Supplement two series of notes, its Medium-Term Notes ("Senior Notes") and
Subordinated Medium-Term Notes, Series B ("Subordinated Notes") (together, the
"Notes") in an aggregate principal amount of up to $3,500,000,000 or the
equivalent thereof in other currencies or composite currencies, subject to
possible reduction as a result of the sale of other debt securities or
preferred stock of the Company. See "Description of Medium-Term Notes" and
"Plan of Distribution." Senior Notes will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company and Subordinated
Notes will be subordinated as described under "Description of Notes--
Subordination of Subordinated Notes" in the Prospectus to which this
Prospectus Supplement relates. Unless otherwise indicated in the applicable
Pricing Supplement to this Prospectus Supplement (a "Pricing Supplement"), the
Interest Payment Dates for Fixed Rate Notes will be each April 1 and October
1. Interest Payment Dates for Floating Rate Notes will be set forth in the
applicable Pricing Supplement. Each Note will mature on a day from 9 months to
12 years from the Original Issuance Date (as defined herein), as set forth on
the face of such Note, and may be subject to optional redemption by the
Company, or obligate the Company to redeem or purchase such Note pursuant to a
sinking fund or analogous provisions or at the option of the holder thereof,
in each case as indicated in the applicable Pricing Supplement. The Notes will
be issued only in denominations of $1,000 and integral multiples of $1,000 in
excess thereof.
Each Note will be issued only in fully registered form and will be
represented by either a Global Security (as defined herein) registered in the
name of The Depository Trust Company, as Depositary (a "Book-Entry Note") or a
nominee of the Depositary, or a certificate issued in definitive form (a
"Certificated Note"), as set forth in the applicable Pricing Supplement.
Beneficial interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, the records maintained by the
Depositary's participants. Except as described in "Description of Medium-Term
Notes--Book-Entry Notes," owners of beneficial interests in Book-Entry Notes
will not be entitled to receive Notes in definitive form and will not be
considered the holders thereof.
The specific designation, ranking as senior or subordinated debt, aggregate
principal amount, interest rate or interest rate formula, if any, issue price,
Earliest Redemption Date, if any, Stated Maturity and any additional
information for each Note will be established by the Company at the Original
Issuance Date of such Note and will be indicated in an accompanying Pricing
Supplement. Unless otherwise indicated in the applicable Pricing Supplement,
the Notes, except Zero-Coupon Notes, will bear interest at a fixed rate or at
a rate or rates determined by reference to LIBOR, the Treasury Rate, the
Commercial Paper Rate, the Prime Rate, the CD Rate, the CMT Rate, the Federal
Funds Effective Rate, or the Eleventh District Cost of Funds Rate (each as
defined herein), as adjusted by a Spread and/or Spread Multiplier (each as
defined herein), if any is applicable to such Notes. Zero-Coupon Notes will be
issued at a discount from the principal amount payable at maturity thereof,
but holders of Zero-Coupon Notes will not receive periodic payments of
interest on such Notes. Payment of principal of the Subordinated Notes may be
accelerated only in the case of certain events of bankruptcy, insolvency or
reorganization of the Company or Wells Fargo Bank, National Association (the
"Bank"). There is no right of acceleration in the case of a default in the
performance of any convenant with respect to the Subordinated Notes, including
a default in the payment of interest or principal.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE NOTES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE
UNSECURED DEBT OBLIGATIONS OF WELLS FARGO & COMPANY AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
<TABLE>
<CAPTION>
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PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note............... 100% .125%-.625% 99.875%-99.375%
- ------------------------------------------------------------------------------------------------------
Total(4)............... $3,500,000,000 $4,375,000-$21,875,000 $3,495,625,000-$3,478,125,000
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise specified in a Pricing Supplement, Notes will be issued
at 100% of their principal amount.
(2) The Company will pay Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, CS First Boston Corporation, Goldman, Sachs & Co.,
Lehman Brothers, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated
or Salomon Brothers Inc (the "Agents") a commission ranging from .125% to
.625% of the principal amount of any Note, depending on maturity, sold
through such Agent. The Company also may sell Notes to any Agent for
resale to investors or other purchasers at varying prices related to
prevailing market prices at the time of resale to be determined by such
Agent or, if so agreed, at a fixed public offering price. Unless otherwise
specified in the applicable Pricing Supplement, any Note sold to an Agent
as principal will be purchased by such Agent at a price equal to 100% of
the principal amount thereof less a percentage equal to the commission
applicable to an agency sale of a Note of identical maturity, and may be
resold by such Agent. The Company has agreed to indemnify the Agents
against certain liabilities, including certain liabilities under the
Securities Act of 1933.
(3) Assuming that the Notes are issued at 100% of principal amount and before
deducting expenses payable by the Company estimated at $2,417,000.
(4) Or the equivalent thereof in other currencies or composite currencies.
-------------
The Notes may be offered by the Company through the Agents, each of which
has agreed to use best efforts to solicit offers to purchase the Notes. The
Company also may sell Notes to any Agent acting as principal for resale to one
or more purchasers. The Notes may also be sold by the Company or an affiliate
of the Company directly to purchasers on behalf of the Company in those
jurisdictions where it is authorized to do so. The Notes will not be listed on
any securities exchange, and there can be no assurance that the Notes offered
by this Prospectus Supplement will be sold or that there will be a secondary
market for the Notes. The Company reserves the right to withdraw, cancel or
modify the offer or solicitations of offers made hereby without notice. The
Company or any Agent, if it solicits such offer, may reject any offer to
purchase Notes, in whole or in part. See "Plan of Distribution."
-------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
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The date of this Prospectus Supplement is September 11, 1996.
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IN CONNECTION WITH THIS OFFERING, ANY AGENT MAY OVERALLOT OR EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OR OTHER DEBT
SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
DESCRIPTION OF MEDIUM-TERM NOTES
GENERAL
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Notes set forth under the
heading "Description of Notes" in the accompanying Prospectus, to which
the meanings assigned to such terms in the Prospectus.
At the option of the Company, the Notes may be issued as Medium-Term
Notes which constitute senior debt securities ("Senior Notes") and as
Subordinated Medium-Term Notes, Series B which constitute subordinated debt
securities ("Subordinated Notes") (together the "Notes"). The Senior Notes,
an additional $2,096,950,000 of which have been previously issued under separate
Prospectuses and are outstanding as of the date of this Prospectus Supplement,
constitute a single series of debt securities under the Senior Indenture (as
defined below) and will be issued under an Indenture, dated as of September 1,
1984, as amended by the First Supplemental Indenture dated as of April 15, 1986,
the Second Supplemental Indenture dated as of June 30, 1987, and the Third
Supplemental Indenture dated as of January 23, 1991 (together, the "Senior
Indenture"), between the Company and The Chase Manhattan Bank (formerly known
as Chemical Bank), as successor Trustee (the "Senior Trustee"). The
Subordinated Notes, none of which has been previously issued, will be issued
under an Indenture dated as of December 10, 1992 (the "Subordinated
Indenture"), between the Company and Marine Midland Bank, as Trustee (the
"Subordinated Trustee"). In this Prospectus Supplement, the Senior Indenture
and the Subordinated Indenture are referred to as the "Indentures." The Senior
Trustee and the Subordinated Trustee are referred to as the "Trustees." The
Indentures do not limit the amount of debt securities which can be issued
thereunder and provide that debt securities of any series may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The terms of Notes, including applicable interest
rates, maturity dates and repayment or redemption provisions, may vary as
provided in the applicable Pricing Supplement.
Senior Notes will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company and Subordinated Notes will be
subordinated as described under "Description of Notes-Subordination of
Subordinated Notes" in the Prospectus. Payment of the principal of the
Subordinated Notes may be accelerated only in the case of certain events of
bankruptcy, insolvency or reorganization of the Company or the Bank. There is no
right of acceleration in the case of a default in the performance of any
covenant with respect to the Subordinated Notes, including a default in the
payment of interest or principal. See "Description of Notes-Events of Default"
in the Prospectus.
Each Note will mature on a day from 9 months to 12 years from its date
of issue (the "Original Issuance Date"), as selected by the initial purchaser
and agreed to by the Company ("Stated Maturity"). The Notes will be issuable
only in fully registered form in denominations of $1,000 and integral multiples
of $1,000 in excess thereof.
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note. See "Book-Entry Notes."
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Payments of principal and premium, if any, and interest payable at the
Stated Maturity or at any earlier Redemption Date or Repayment Date (as defined
below) on Senior and Subordinated Notes will be made in immediately available
funds at the principal corporate trust office of The Chase Manhattan Bank
(formerly known as Chemical Bank), as paying agent, in the Borough of Manhattan,
The City of New York, or Chemical Trust Company of California, as paying agent,
in the City and County of San Francisco, California (each, a "Paying Agent"),
provided that the Note is presented to a Paying Agent in time for such Paying
Agent to make such payments in such funds in accordance with its normal
procedures. For interest payments on Notes of U.S. $5,000,000 or more in
principal amount, the holder of such Notes may elect at any time to have payment
made in immediately available funds, and interest payments on Notes of less than
U.S. $5,000,000 in principal amount will be made in immediately available funds
only if agreed to on a case-by-case basis by the Company and otherwise will be
made by check mailed on the Interest Payment Date to the registered holder
thereof, except that interest payments made at any Redemption Date, Repayment
Date or at the Stated Maturity will be made as described above. Interest
payments on Notes will not be made in immediately available funds unless written
instructions have been presented to a Paying Agent at least 15 days prior to the
Regular Record Date from and after which a holder has elected to receive
payments in immediately available funds. Notwithstanding the foregoing
provisions of this paragraph, payments of principal and premium, if any, and
interest on Book-Entry Notes registered in the name of the Depositary or its
nominee will be made to the Depositary or its nominee, as the case may be, as
the registered owner of such Book-Entry Notes, in immediately available funds
(provided that, in the case of payments of principal, premium, if any, and
interest at Stated Maturity or on any earlier Redemption Date or Repayment Date,
the Book-Entry Note is presented to a Paying Agent in time for such Paying Agent
to make such payment in accordance with its normal procedures); and the Company
expects that the Depositary, upon receipt of such payment, will credit the
accounts of its Participants in amounts proportionate to their respective
beneficial interests in the Book-Entry Notes. See "Description of Notes--Global
Securities" in the attached Prospectus. The Notes may be presented for
registration of transfer or exchange at the offices or agencies to be maintained
by the Company in the City and County of San Francisco, California and in the
Borough of Manhattan, The City of New York, State of New York.
FOREIGN CURRENCIES
Unless otherwise indicated in the applicable Pricing Supplement, the
Notes will be denominated in U.S. dollars and payments of principal of, premium,
if any, and interest on the Notes will be made in U.S. dollars. If any of the
Notes are to be denominated in a currency, including a composite currency, other
than U.S. dollars or if the principal of, premium, if any, or interest on any of
the Notes is to be payable at the option of the holder or the Company in a
currency, including a composite currency, other than that in which such Note is
denominated, the applicable Pricing Supplement will provide additional
disclosure pertaining to the terms of such Notes and other matters of interest
to the holders thereof.
INTEREST
Each Note, except a Zero-Coupon Note (as defined below), will bear
interest from the Original Issuance Date or, if later, from the most recent
Interest Payment Date to which interest on such Note (or one or more predecessor
Notes, in exchange for or upon transfer of which such Note was issued between
the Regular Record Date for payment of such interest and such Interest Payment
Date) has been paid or duly provided for at the fixed interest rate per annum,
or at the interest rate per annum determined pursuant to the interest rate
formula, set forth therein and in the applicable Pricing Supplement, until the
principal thereof is paid or made available for payment. Unless otherwise
indicated in the applicable Pricing Supplement, the Interest Payment Dates for
the Fixed Rate Notes (as defined below) will be April 1 and October 1 and the
Interest Payment Dates for the Floating Rate Notes (as defined below) are as set
forth below. Interest on a Note will also be paid on the Stated Maturity or on
any earlier Redemption Dates or Repayment Dates (but only as to the principal
due on such earlier dates). Interest payable on any Note on an Interest Payment
Date will be payable to the person in whose name such Note (or one or more
predecessor Notes in exchange for or upon transfer of which such Note was issued
between the Regular Record Date for payment of such interest and such Interest
Payment Date), is registered at the close of business on the Regular Record Date
for payment of such interest; provided, however, that interest payable on a Note
at Stated Maturity or, if applicable, upon earlier redemption or repayment, will
be payable to the person to whom principal is paid. The first payment of
interest on any Note originally issued between a Regular Record Date and an
Interest Payment Date will be made on the Interest Payment Date following the
next succeeding Regular Record Date to the registered holder at the close of
business on such next succeeding Regular Record Date. Unless otherwise indicated
in the applicable Pricing Supplement, the "Regular Record Date" with respect to
Floating Rate Notes shall be the date 15 calendar days
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prior to each Interest Payment Date, whether or not such date shall be a
Business Day (as defined below). Unless otherwise indicated in the applicable
Pricing Supplement, the Regular Record Dates with respect to the Fixed Rate
Notes shall be March 15 and September 15 next preceding the April 1 and October
1 Interest Payment Date.
Interest rates, or interest rate formulas, are subject to change by
the Company from time to time, but no such change will affect the interest rate
or interest rate formula on any Note already issued or as to which an offer to
purchase has been accepted by the Company.
Interest rates offered by the Company with respect to the Notes may
differ depending upon, among other things, the aggregate principal amount of the
Notes purchased in any single transaction.
Each Note, except a Zero-Coupon Note, will bear interest at either (a)
a fixed rate or rates (a "Fixed Rate Note") or (b) a variable rate or rates
determined by reference to an interest rate formula (a "Floating Rate Note"),
which may be adjusted by adding or subtracting the Spread and/or multiplying by
the Spread Multiplier (each term as defined below), if specified in the
applicable Pricing Supplement. A "Zero Coupon Note" is a Note that provides for
the periodic accretion of principal instead of the payment of interest, and that
is offered at a discount from the principal amount thereof. A Floating Rate Note
may also have either or both of the following: (a) a maximum numerical interest
rate limitation, or ceiling, on the rate of interest which may accrue during any
interest period and (b) a minimum numerical interest rate limitation, or floor,
on the rate of interest which may accrue during any interest period; provided,
however, that in no event shall the interest rate on any Floating Rate Note be
greater than the maximum interest rate permitted by applicable law. The
"Spread" is the number of basis points specified in the applicable Pricing
Supplement as being applicable to the interest rate for such Floating Rate Note
and the "Spread Multiplier" is the percentage specified in the applicable
Pricing Supplement as being applicable to the interest rate for such Floating
Rate Note. "Business Day" means (a) with respect to any Note, any day which is
not a Saturday or Sunday and which, in the City of San Francisco or The City of
New York, is neither a legal holiday nor a day on which banking institutions are
authorized by law or regulation to close, and (b) with respect to LIBOR Notes
only, any such day on which dealings in deposits in U.S. dollars are transacted
in the London interbank market (a "London Business Day"). "Index Maturity"
means, with respect to a Floating Rate Note, the period to maturity of the
instrument or obligation on which the interest rate formula is based, as
specified in the applicable Pricing Supplement.
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate the rate of interest per annum payable on such Fixed Rate Note. The
applicable Pricing Supplement relating to a Floating Rate Note will designate an
interest rate basis (the "Interest Rate Basis") for such Floating Rate Note. The
Interest Rate Basis may be: (a) the Commercial Paper Rate, in which case such
Note will be a Commercial Paper Rate Note, (b) the Prime Rate, in which case
such Note will be a Prime Rate Note, (c) LIBOR, in which case such Note will be
a LIBOR Note, (d) the Treasury Rate, in which case such Note will be a Treasury
Rate Note, (e) the Certificate of Deposit Rate ("CD Rate"), in which case such
Note will be a CD Rate Note, (f) the CMT Rate ("CMT Rate"), in which case such
Note will be a CMT Rate Note, (g) the Federal Funds Effective Rate, in which
case such Note will be a Federal Funds Rate Note, (h) the Eleventh District Cost
of Funds Rate, in which case such Note will be an Eleventh District Cost of
Funds Rate Note, or (i) such other interest rate formula as is set forth in such
Pricing Supplement. The applicable Pricing Supplement for a Floating Rate Note
will specify, if applicable: the Spread and/or Spread Multiplier, the Initial
Interest Rate (as defined below), the Index Maturity, the Interest Reset
Frequency (as defined below), and the maximum or minimum interest rate
limitation applicable to such Floating Rate Note. In addition, each Pricing
Supplement will define or particularize for each Note the following terms, if
applicable: Interest Payment Dates, Earliest Redemption Date, Repayment Dates,
the principal amount, the issue price, the Stated Maturity and any redemption
premium.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset
Date"), as specified in the applicable Pricing Supplement (the
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frequency with which the rate of interest on any Floating Rate Note will be
reset is hereinafter called the "Interest Reset Frequency"). Unless otherwise
specified in the applicable Pricing Supplement, the Interest Reset Dates will
be, in the case of Floating Rate Notes which reset daily, each Business Day; in
the case of Floating Rate Notes (other than Treasury Rate Notes) which reset
weekly, the Wednesday of each week; in the case of Treasury Rate Notes which
reset weekly, the Tuesday of each week (except as set forth in the penultimate
sentence of the second succeeding paragraph below); in the case of Floating Rate
Notes which reset monthly (other than Eleventh District Cost of Funds Rate
Notes), the third Wednesday of each month or, in the case of Eleventh District
Cost of Funds Rate Notes, all of which reset monthly, the first calendar day of
each month; in the case of Floating Rate Notes which reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes which reset semi-annually, the third Wednesday of two months of each year
that are six months apart, as specified in the applicable Pricing Supplement;
and in the case of Floating Rate Notes which reset annually, the third Wednesday
of one month of each year, as specified in the applicable Pricing Supplement;
provided, however, that the interest rate in effect from the Original Issuance
Date to the first Interest Reset Date with respect to a Floating Rate Note will
be the Initial Interest Rate. If any Interest Reset Date for any Floating Rate
Note would otherwise be a day that is not a Business Day for such Floating Rate
Note, the Interest Reset Date for such Floating Rate Note shall be postponed to
the next day that is a Business Day for such Floating Rate Note, except that in
the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day.
"Initial Interest Rate" means the rate at which a Floating Rate Note
will bear interest from its Original Issuance Date to the first Interest Reset
Date, as indicated in the applicable Pricing Supplement. Interest on Floating
Rate Notes will be calculated on the basis of actual days elapsed and a year of
360 days, except that interest on Treasury Rate Notes and CMT Rate Notes will be
calculated on the basis of the actual number of days in the year.
The Interest Determination Date pertaining to an Interest Reset Date
for (a) a Commercial Paper Rate Note (the "Commercial Paper Interest
Determination Date"), (b) a Prime Rate Note (the "Prime Rate Interest
Determination Date"), (c) a CD Rate Note (the "CD Interest Determination Date"),
(d) a CMT Rate Note (the "CMT Rate Interest Determination Date") and (e) a
Federal Funds Rate Note (the "Federal Funds Interest Determination Date") will
be the second Business Day preceding the Interest Reset Date with respect to
such Note. The Interest Determination Date pertaining to an Interest Reset Date
for an Eleventh District Cost of Funds Rate Note ("the Eleventh District Cost of
Funds Rate Interest Determination Date") will be the last working day of the
month immediately preceding such Interest Reset Date on which the Federal Home
Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as
defined below under "Eleventh District Cost of Funds Rate Note"). The Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note (the
"LIBOR Interest Determination Date") will be the second London Business Day
preceding such Interest Reset Date. The Interest Determination Date pertaining
to an Interest Reset Date for a Treasury Rate Note (the "Treasury Interest
Determination Date") will be the day of the week in which such Interest Reset
Date falls on which Treasury bills would normally be auctioned. Treasury bills
are usually sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If, as the result
of a legal holiday, an auction is so held on the preceding Friday, such Friday
will be the Treasury Interest Determination Date pertaining to the Interest
Reset Date occurring in the next succeeding week. If an auction date shall fall
on any Interest Reset Date for a Treasury Rate Note, then such Interest Reset
Date shall instead be the first Business Day immediately following such auction
date. Any of the terms set forth in this paragraph may be varied in a Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement and
except as provided below, interest will be payable, in the case of Floating Rate
Notes which reset daily, weekly or monthly (except for Eleventh District Cost of
Funds Rate Notes), on the third Wednesday of each month or on the third
Wednesday
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of March, June, September and December of each year (as indicated in the
applicable Pricing Supplement); in the case of Eleventh District Cost of Funds
Rate Notes, which reset monthly, on the first Business Day of each month or the
first Business Day of March, June, September and December as specified in the
applicable Pricing Supplement; in the case of Floating Rate Notes which reset
quarterly, on the third Wednesday of March, June, September and December of each
year; in the case of Floating Rate Notes which reset semi-annually, on the third
Wednesday of the two months of each year specified in the applicable Pricing
Supplement; and in the case of Floating Rate Notes which reset annually, on the
third Wednesday of the month specified in the applicable Pricing Supplement
(each an "Interest Payment Date"), and in each case, at any Redemption Date,
Repayment Date or Stated Maturity. If an Interest Payment Date with respect to
any Floating Rate Note (other than an Interest Payment Date that falls on a
Redemption Date or a Repayment Date with respect to the principal amount due and
payable on such date, and other than an Interest Payment Date which falls on the
Stated Maturity) would otherwise fall on a day that is not a Business Day with
respect to such Note, the Interest Payment Date will be postponed to the
following day that is a Business Day with respect to such Note, except that in
the case of a LIBOR Note, if such Business Day falls in the next calendar month,
such Interest Payment Date will be the preceding day that is a Business Day with
respect to such LIBOR Note.
Interest payments shall be for the amount of interest accrued to, but
excluding, the Interest Payment Date. With respect to any Floating Rate Note,
accrued interest from the Original Issuance Date or from the last date to which
interest has been paid is calculated by multiplying the principal amount of such
Floating Rate Note by an accrued interest factor. Such accrued interest factor
is computed by adding the interest factor calculated for each day from the
Original Issuance Date, or from the last date to which interest has been paid,
to the date for which accrued interest is being calculated. The interest factor
(expressed as a decimal and rounded upwards if five one-millionths or more of a
percentage point and rounded downwards if less than five one-millionths of a
percentage point, if necessary, to the next higher or lower, as the case may be,
one hundred-thousandth of a percentage point (e.g., 9.876545% or .09876545 being
rounded to 9.87655% or .0987655, respectively)) for each such day is computed by
dividing the interest rate (expressed as a decimal rounded upwards if five one-
millionths or more of a percentage point and downwards if less than five one-
millionths of a percentage point, if necessary, to the next higher or lower, as
the case may be, one hundred-thousandth of a percentage point) applicable to
such date by 360, in the case of Commercial Paper Rate Notes, Prime Rate Notes,
LIBOR Notes, CD Rate Notes, Federal Funds Rate Notes or Eleventh District Cost
of Funds Rate Notes, or by the actual number of days in the year, in the case of
CMT Rate Notes and Treasury Rate Notes. All dollar amounts used in or resulting
from such calculation on Floating Rate Notes will be rounded to the nearest cent
(with one-half cent being rounded upwards). Any of the terms set forth in this
paragraph may be varied in a Pricing Supplement.
Unless otherwise provided in the applicable Pricing Supplement, the
Senior Trustee initially will be the calculation agent (the "Calculation Agent")
with respect to the Floating Rate Notes issued under both the Senior Indenture
and the Subordinated Indenture. The Company, at a later date, may choose to have
the Bank or any other person serve as the Calculation Agent. Upon the request of
the registered holder of any Floating Rate Note, the Calculation Agent will
provide the interest rate then in effect, and, if different, the interest rate
which will become effective as a result of a determination made on the most
recent Interest Determination Date with respect to such Floating Rate Note.
Any payment of principal, premium, if any, or interest required to be
made on an Interest Payment Date, any Redemption Date or Repayment Date or at
the Stated Maturity of a Fixed Rate Note which is not a Business Day need not be
made on such day, and any payment of principal, premium, if any, or interest
required to be made on any Redemption Date or Repayment Date or at the Stated
Maturity of a Floating Rate Note which is not a Business Day need not be made on
such day, but in each such case such payment may be made on the next succeeding
Business Day with the same force and effect as if made on the Interest Payment
Date, Redemption Date or Repayment Date or the Stated Maturity, as the case may
be, and no interest shall
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accrue for the period from and after such Interest Payment Date, Redemption Date
or Repayment Date or the Stated Maturity.
Unless otherwise specified in an applicable Pricing Supplement, the
"Interest Calculation Date," where applicable, pertaining to any Interest
Determination Date will be the earlier of (a) the tenth calendar day after such
Interest Determination Date, or, if any such day is not a Business Day, the next
succeeding Business Day, or (b) the Business Day preceding the applicable
Interest Payment Date, Redemption Date, Repayment Date or Stated Maturity, as
the case may be.
Fixed Rate Notes
Each Fixed Rate Note will bear interest from the Original Issuance
Date at the annual rate or rates stated on the face thereof. Unless otherwise
specified in the applicable Pricing Supplement, the Interest Payment Dates for a
Fixed Rate Note will be April 1 and October 1 of each year. Unless otherwise
specified in the applicable Pricing Supplement, the Regular Record Dates for any
regular payment of interest on any Interest Payment Date will be the March 15 or
September 15, as the case may be (whether or not a Business Day), next preceding
such Interest Payment Date. Interest on Fixed Rate Notes will be calculated on
the basis of a 360-day year of twelve 30-day months.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any), and will be payable on the dates, specified on the
face of the Commercial Paper Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to each Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity specified
in the applicable Pricing Supplement as published by the Board of Governors of
the Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates" or any successor publication of the Board of Governors of the Federal
Reserve System ("H.15(519)") under the heading "Commercial Paper." In the event
that such rate is not published prior to 3:00 P.M. New York City time, on the
Interest Calculation Date pertaining to such Commercial Paper Interest
Determination Date, then the Commercial Paper Rate shall be the Money Market
Yield of the rate on such Commercial Paper Interest Determination Date for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement as published by the Federal Reserve Bank of New York in its daily
statistical release, Composite 3:30 P.M. Quotations for U.S. Government
Securities" ("Composite Quotations") under the heading "Commercial Paper." If by
3:00 P.M., New York City time, on such Interest Calculation Date such rate is
not yet published in either H.15(519) or Composite Quotations, the rate for that
Commercial Paper Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean
(rounded to the nearest one hundred-thousandth of a percentage point) of the
offered rates, as of 11:00 A.M., New York City time, on that Commercial Paper
Interest Determination Date, of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent (which, if other than the
Company or the Bank, shall be selected by the Calculation Agent after
consultation with the Company) for commercial paper of the Index Maturity
specified in the applicable Pricing Supplement placed for an industrial issuer
whose bond rating is "AA," or the equivalent, from a nationally recognized
rating agency; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate then in effect on such
Commercial Paper Interest Determination Date.
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"Money Market Yield" shall be a yield (expressed as a percentage
rounded to the next higher one hundred-thousandth of a percentage point)
calculated in accordance with the following formula:
Money Market Yield = D x 360
--------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Prime Rate Notes
Prime Rate Notes will bear interest at the interest rates (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any), and will be payable on the dates, specified on the face of the Prime Rate
Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Prime Rate" means, with respect to any Prime Rate Interest Determination Date,
the rate set forth on such date in H.15(519) under the heading "Bank Prime
Loan." In the event that such rate is not published prior to 9:00 A.M., New York
City time, on the Interest Calculation Date pertaining to such Prime Rate
Interest Determination Date, then the Prime Rate will be determined by the
Calculation Agent and will be the arithmetic mean of the rates of interest
publicly announced by each bank that appear on the Reuters Screen NYMF Page (as
defined below) as such bank's prime rate or base lending rate as in effect for
that Prime Rate Interest Determination Date. If fewer than four such rates but
more than one such rate appear on the Reuters Screen NYMF Page for the Prime
Rate Interest Determination Date, the Prime Rate will be determined by the
Calculation Agent and will be the arithmetic mean of the prime rates quoted on
the basis of the actual number of days in the year divided by a 360-day year as
of the close of business on such Prime Rate Interest Determination Date by
three, or two if only two such rates are quoted, major money center banks in The
City of New York selected by the Calculation Agent (which, if other than the
Company or the Bank, shall be selected by the Calculation Agent after
consultation with the Company). If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by three, or
two if only two such rates are quoted, substitute banks or trust companies
organized and doing business under the laws of the United States, or any State
thereof, having total equity capital of at least U.S. $500,000,000 and being
subject to supervision or examination by federal or state authority, selected by
the Calculation Agent (which, if other than the Company or the Bank, shall be
selected by the Calculation Agent after consultant with the Company) to provide
such rate or rates; provided, however, that if fewer than two such substitute
banks or trust companies selected as aforesaid are quoting as mentioned in this
sentence, the Prime Rate will remain the Prime Rate in effect on such Prime Rate
Interest Determination Date. "Reuters Screen NYMF Page" means the display
designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks).
LIBOR Notes
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any), and will be
payable on the dates, specified on the face of the LIBOR Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"LIBOR" will be determined by the Calculation Agent in accordance with the
following provisions:
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(a) With respect to any LIBOR Interest Determination Date,
either, as specified in the applicable Pricing Supplement: (i) the
arithmetic mean of the offered rates for deposits in U.S. dollars for
the period of the Index Maturity specified in the applicable Pricing
Supplement, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, which appear on the
Reuters Screen LIBO Page as of 11:00 A.M., London time, on the LIBOR
Interest Determination Date, if at least two such offered rates appear
on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (ii) the rate
for deposits in U.S. dollars having the Index Maturity designated in
the applicable Pricing Supplement, commencing on the second London
Business Day immediately following that LIBOR Interest Determination
Date, that appears on the Telerate Page 3750 as of 11:00 A.M., London
time, on that LIBOR Interest Determination Date ("LIBOR Telerate").
Unless otherwise indicated in the applicable Pricing Supplement,
"Reuters Screen LIBO Page" means the display designated as Page "LIBO"
on the Reuters Monitor Money Rate Service (or such other page as may
replace the LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks). "Telerate Page 3750"
means the display designated as page "3750" on the Telerate Service
(or such other page as may replace the 3750 page on that service or
such other service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor
LIBOR Telerate is specified in the applicable Pricing Supplement,
LIBOR will be determined as if LIBOR Telerate had been specified. If
fewer than two offered rates appear on the Reuters Screen LIBO Page,
or if no rate appears on the Telerate Page 3750, as applicable, LIBOR
in respect of that LIBOR Interest Determination Date will be
determined as if the parties had specified the rate described in (b)
below.
(b) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear on the Reuters Screen LIBO Page,
as described in (a)(i) above, or on which no rate appears on the
Telerate Page 3750, as specified in (a)(ii) above, as applicable,
LIBOR will be determined on the basis of the rates at which deposits
in U.S. dollars having the Index Maturity designated in the applicable
Pricing Supplement are offered at approximately 11:00 A.M., London
time, on such LIBOR Interest Determination Date by four major banks
("Reference Banks") in the London interbank market selected by the
Calculation Agent (which, if other than the Company or the Bank, shall
be selected by the Calculation Agent after consultation with the
Company) to prime banks in the London interbank market commencing on
the second London Business Day immediately following such LIBOR
Interest Determination Date and in a principal amount of not less than
U.S. $1,000,000 that is representative for a single transaction in
such market at such time. The Calculation Agent will request the
principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided,
LIBOR for such LIBOR Interest Determination Date will be the
arithmetic mean (rounded to the nearest one hundred-thousandth of a
percentage point) of such quotations. If fewer than two quotations are
provided, LIBOR for such LIBOR Interest Determination Date will be the
arithmetic mean (rounded to the nearest one hundred-thousandth of a
percentage point) of the rates quoted at approximately 11:00 A.M., New
York City time, on such LIBOR Interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent
(which, if other than the Company or the Bank, shall be selected by
the Calculation Agent after consultation with the Company) for loans
in U.S. dollars to leading European banks having the specified Index
Maturity designated in the applicable Pricing Supplement commencing on
the second London Business Day immediately following such LIBOR
Interest Determination Date and in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a
single transaction in such market at such time; provided, however,
that if the banks selected as aforesaid by the
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Calculation Agent are not quoting as mentioned in this sentence, LIBOR
will be LIBOR then in effect on such LIBOR Interest Determination
Date.
Treasury Rate Notes
Treasury Rate Notes will bear interest at the interest rates
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) and will be payable on the dates, specified on the face of
the Treasury Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the Pricing Supplement, "Treasury Rate"
means, with respect to any Treasury Interest Determination Date, the rate for
the most recent auction of direct obligations of the United States ("Treasury
bills") having the Index Maturity specified in the applicable Pricing Supplement
as published in H.15(519) under the heading "U.S. Government Securities-Treasury
Bills/Auction Average (Investment)" or, if not so published by 3:00 P.M., New
York City time, on the Interest Calculation Date pertaining to such Treasury
Interest Determination Date, the auction average rate (expressed as a bond
equivalent, rounded to the nearest one hundred-thousandth of a percentage point,
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury bills
having the Index Maturity designated in the applicable Pricing Supplement are
not published or reported as provided above by 3:00 P.M., New York City time, on
such Interest Calculation Date, or if no such auction is held in that particular
week, then the Treasury Rate shall be calculated by the Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent, rounded to the
nearest one hundred-thousandth of a percentage point, on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean of the secondary market bid rates as of approximately 3:30 P.M., New York
City time, on such Treasury Interest Determination Date, of three leading
primary United States government securities dealers selected by the Calculation
Agent (which, if other than the Company or the Bank, shall be selected by the
Calculation Agent after consultation with the Company), for the issue of
Treasury bills with a remaining maturity closest to the specified Index
Maturity; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate will be the Treasury Rate in effect on such Treasury Interest Determination
Date.
CD Rate Notes
CD Rate Notes will bear interest at the interest rate (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any), and
will be payable on the dates, specified on the face of the CD Rate Note and in
the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD
Rate" means, with respect to any CD Interest Determination Date, the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)." In the event that such rate is not so
published by 3:00 P.M., New York City time, on the Interest Calculation Date
pertaining to such CD Interest Determination Date, the CD Rate will be the rate
on such CD Interest Determination Date for negotiable certificates of deposit
having the Index Maturity specified in the applicable Pricing Supplement as
published in Composite Quotations under the heading "Certificates of Deposit."
If such rate is neither published in H.15(519) nor in Composite Quotations by
3:00 P.M., New York City time, on such Interest Calculation Date the CD Rate for
such CD Interest Determination Date will be calculated by the Calculation Agent
and will be the arithmetic mean (rounded to the nearest one hundred-thousandth
of a percentage point) of the secondary market offered rates as of 10:00 A.M.,
New York City time, on such CD Interest Determination Date, of three leading
nonbank dealers of negotiable U.S. dollar certificates of deposit in The City of
New York selected by the Calculation Agent (which, if other than the Company or
the Bank, shall be selected by the Calculation Agent after consultation with
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the Company) for negotiable certificates of deposit of major United States money
center banks (in the market for negotiable certificates of deposit) with a
remaining maturity closest to the Index Maturity indicated in the applicable
Pricing Supplement in a denomination of U.S. $5,000,000; provided, however, that
if the dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate will be the CD Rate in effect on such CD
Interest Determination Date.
CMT Rate Notes
CMT Rate Notes will bear interest at the interest rate (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any),
and will be payable on the dates, specified on the face of the CMT Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CMT
Rate" means, with respect to any CMT Rate Interest Determination Date, the rate
displayed on the Designated CMT Telerate Page under the caption " . . . Treasury
Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays
Approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index
for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the rate for the week, or the month, as applicable, ended immediately
preceding the week in which the related CMT Rate Interest Determination Date
occurs. If such rate is no longer displayed on the relevant page, or if not
displayed by 3:00 P.M., New York City time, on the related Interest Calculation
Date, then the CMT Rate for such CMT Rate Interest Determination Date will be
such Treasury Constant Maturity rate for the Designated CMT Maturity Index as
published in the relevant H.15(519). If such rate is no longer published, or if
not published by 3:00 P.M., New York City time, on the related Interest
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such Treasury Constant Maturity rate for the Designated CMT
Maturity Index (or other United States Treasury rate for the Designated CMT
Maturity Index) for the CMT Rate Interest Determination Date with respect to
such Interest Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 P.M., New York
City time, on the related Interest Calculation Date, then the CMT Rate for the
CMT Rate Interest Determination Date will be calculated by the Calculation Agent
and will be a yield to maturity, based on the arithmetic mean (rounded to the
nearest one hundred-thousandth of a percentage point) of the secondary market
closing offer side prices as of approximately 3:30 P.M., New York City time, on
the CMT Rate Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
(each, a "Reference Dealer") in The City of New York selected by the Calculation
Agent (from five such Reference Dealers selected by the Calculation Agent
(which, if other than the Company or the Bank, shall be selected by the
Calculation Agent after consultation with the Company) and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States ("Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent
cannot obtain three such Treasury Note quotations, the CMT Rate for such CMT
Rate Interest Determination Date will be calculated by the Calculation Agent and
will be a yield to maturity based on the arithmetic mean (rounded to the nearest
one hundred-thousandth of a percentage point) of the secondary market offer side
prices as of approximately 3:30 P.M., New York City time, on the CMT Rate
Interest Determination Date of three Reference Dealers in The City of New York
(from five such Reference Dealers selected by the Calculation Agent (which, if
other than the Company or the Bank, shall be selected by the Calculation Agent
after consultation with the Company) and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest quotation (or, in
the event of equality, one of the lowest)), for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in
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an amount of at least $100 million. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean (rounded to the nearest one hundred-thousandth of a
percentage point) of the offer prices obtained and neither the highest nor
lowest of such quotes will be eliminated; provided, however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the third preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the Treasury
Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated in the applicable Pricing Supplement (or
any other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement under "Index Maturity" with
respect to which the CMT Rate will be calculated. If no such Index Maturity is
specified in the applicable Pricing Supplement, the Designated CMT Maturity
Index shall be 2 years.
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the interest rate
(calculated with reference to the Federal Funds Effective Rate and the Spread
and/or Spread Multiplier, if any), and will be payable on the dates, specified
on the face of the Federal Funds Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Federal Funds Effective Rate" means, with respect to any Federal Funds Interest
Determination Date, the rate on that date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)." In the event that such
rate is not so published by 3:00 P.M., New York City time, on the Interest
Calculation Date pertaining to such Federal Funds Interest Determination Date,
the Federal Funds Effective Rate will be the rate on such Federal Funds Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is neither published in H.15(519)
nor in Composite Quotations by 3:00 P.M., New York City time, on such Interest
Calculation Date, the Federal Funds Effective Rate for such Federal Funds
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean (rounded to the nearest one hundred-thousandth of a
percentage point) of the rates as of 9:00 A.M., New York City time, on such
Federal Funds Interest Determination Date for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds transactions in
The City of New York selected by the Calculation Agent (which, if other than the
Company or the Bank, shall be selected by the Calculation Agent after
consultation with the Company); provided, however, that if the brokers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Effective Rate will be the Federal Funds Effective
Rate in effect on such Federal Funds Interest Determination Date.
Eleventh District Cost of Funds Rate Notes
Eleventh District Cost of Funds Rate Notes will bear interest at the
interest rate (calculated with reference to the Eleventh District Cost of Funds
Rate and the Spread and/or Spread Multiplier, if any), and will be payable on
the dates, specified on the face of the Eleventh District Cost of Funds Rate
Note and in the applicable Pricing Supplement.
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Unless otherwise indicated in the applicable Pricing Supplement,
"Eleventh District Cost of Funds Rate" means, with respect to any Eleventh
District Cost of Funds Rate Interest Determination Date, the rate equal to the
monthly weighted average cost of funds for the calendar month immediately
preceding the month in which such Eleventh District Cost of Funds Rate Interest
Determination Date falls, as set forth under the caption "11th District" on
Telerate Page 7058 (as defined below) as of 11:00 A.M., San Francisco time, on
such Eleventh District Cost of Funds Rate Interest Determination Date. If such
rate does not appear on Telerate Page 7058 on any related Eleventh District Cost
of Funds Rate Interest Determination Date, the Eleventh District Cost of Funds
Rate for such Eleventh District Cost of Funds Rate Interest Determination Date
shall be the monthly weighted average cost of funds paid by member institutions
of the Eleventh Federal Home Loan Bank District that was most recently announced
(the "Index") by the FHLB of San Francisco as such cost of funds for the
calendar month immediately preceding the date of such announcement. If the FHLB
of San Francisco fails to announce such rate for the calendar month immediately
preceding such Eleventh District Cost of Funds Rate Interest Determination Date,
then the Eleventh District Cost of Funds Rate determined as of such Eleventh
District Cost of Funds Rate Interest Determination Date shall be the Eleventh
District Cost of Funds Rate in effect on such Eleventh District Cost of Funds
Rate Interest Determination Date.
"Telerate Page 7058" means the display designated as page "7058" on
the Dow Jones Telerate Service (or such other page as may replace the 7058 page
on that service for the purpose of displaying the monthly weighted average cost
of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District).
OTHER PROVISIONS; ADDENDA
Any provision with respect to the determination or calculation of the
interest rate or interest rate formula applicable to any Floating Rate Note, the
Interest Payment Dates of any Note or any other variable term of a Note to be
issued by the Company may be modified by the terms as specified under "Other
Provisions" on the face thereof or in an Addendum relating thereto, if so
specified on the face thereof or in an Addendum thereto and in the applicable
Pricing Supplement.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes having the same ranking (senior or
subordinated), original issuance date, Interest Payment Dates, redemption or
repayment provisions, if any, original issue discount provisions, if any, Stated
Maturity and in the case of Fixed Rate Notes, interest rate, or in the case of
Floating Rate Notes, Initial Interest Rate, interest rate formula, Index
Maturity, Spread and/or Spread Multiplier (if any), minimum interest rate
limitation (if any), maximum interest rate limitation (if any) and Interest
Reset Dates, will be represented by a single global security ("Global
Security"). Each Global Security representing Book-Entry Notes will be deposited
with, or on behalf of, The Depository Trust Company, as Depositary (the
"Depositary"), and registered in the name of a nominee of the Depositary. Book-
Entry Notes will not be exchangeable for Certificated Notes, provided that if
the Depositary is at any time unwilling or unable to continue as depositary and
a successor depositary is not appointed by the Company within 90 days, the
Company will issue Certificated Notes in exchange for the Global Security or
Securities representing Book-Entry Notes. In addition, the Company may at any
time and in its sole discretion determine not to have Book-Entry Notes
represented by Global Securities and, in such event, will issue Certificated
Notes in exchange for all Global Securities representing such Book-Entry Notes.
A further description of the Depositary's procedures with respect to
Global Securities representing Book-Entry Notes is set forth in the attached
Prospectus under "Description of Notes-Global Securities." The Depositary has
confirmed to the Company and the Trustees that it intends to follow such
procedures.
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REDEMPTION OR REPAYMENT
A Note is not subject to redemption prior to the Earliest Redemption
Date, if any, fixed at the time of sale and set forth in the applicable Pricing
Supplement. If no Earliest Redemption Date is indicated with respect to a Note,
such Note is not redeemable at the option of the Company prior to its Stated
Maturity. On and after the Earliest Redemption Date, if any, specified in the
applicable Pricing Supplement, the Note will be redeemable at the option of the
Company, in whole or from time to time in part in increments of $1,000 (provided
that any remaining principal amount of such Note shall be at least $1,000), at
the applicable Redemption Price. The "Redemption Price" shall initially be the
"Initial Redemption Price" set forth in the applicable Pricing Supplement and
shall decline, at each anniversary of the Earliest Redemption Date, to an amount
equal to the prior Redemption Price less the "Annual Redemption Price Reduction"
indicated in the applicable Pricing Supplement, or if no Initial Redemption
Price is set forth in the applicable Pricing Supplement, at 100% of the
principal amount to be redeemed (unless otherwise provided in the applicable
Pricing Supplement), together with accrued interest thereon to the Redemption
Date. The Company will redeem the specified portion of the principal amount of a
Note ("Sinking Fund Amount") on each of the sinking fund redemption dates, if
any, set forth in the applicable Pricing Supplement ("Sinking Fund Redemption
Dates") together with accrued interest to the applicable Sinking Fund Redemption
Date. If no Sinking Fund Amount is set forth in the applicable Pricing
Supplement, the Company will not have any obligation to redeem such Note before
its Stated Maturity. The Company may reduce the Sinking Fund Amount to be
redeemed on any Sinking Fund Redemption Date by subtracting 100% of the
principal amount (excluding premium) of any Note owned by the Company and
surrendered to the Trustee for cancellation or that the Company has otherwise
redeemed or repaid other than pursuant to the second preceding sentence, in each
case on or before the applicable Sinking Fund Redemption Date. The Company may
so credit the same principal amount of such Note only once. Notice of any
redemption will be given not more than 60 nor less than 30 days prior to the
Redemption Date. In the event of redemption of any Note in part only, a new Note
or Notes of the same series, of like tenor and terms and in authorized
denominations, for the unredeemed portion of the Note will be issued in the name
of the registered holder of such Note upon the cancellation of such Note. In
case of redemption at the option of the Company of less than all of the Senior
Notes or Subordinated Notes, as the case may be, at the time outstanding, the
Company may, by written notice to the Senior or Subordinated Trustee, as the
case may be, direct that Senior Notes or Subordinated Notes, as the case may be,
to be redeemed shall be selected from among groups of such Notes having
specified tenor or terms, and the Senior or Subordinated Trustee, as the case
may be, shall thereafter select the particular Notes to be redeemed in such
manner as the Senior or Subordinated Trustee, as the case may be, deems fair, as
provided in the Indenture. As used herein, the term "Redemption Date" means any
Sinking Fund Redemption Date and any date fixed for redemption of all or any of
the Notes at the option of the Company.
In addition, the applicable Pricing Supplement will indicate either
that the Company will be obligated to purchase a Note at the option of the
holder thereof or that the Company will not be so obligated. If the Company will
be so obligated, the applicable Pricing Supplement will set forth the date or
dates (each a "Repayment Date") and the price or prices at which the applicable
Notes will be purchased, in whole or in part, in integral multiples of $1,000,
pursuant to such obligation. To be repaid at the option of the holder, a Note
must be received at the office of a paying and transfer agent not less than 15
nor more than 45 days prior to the relevant Repayment Date.
FEDERAL TAX CONSIDERATIONS
The following summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the Notes is based on
laws, regulations, rulings and decisions now in effect, all of which are subject
to change or possible differing interpretations. It deals only with Notes held
as capital assets and does not deal with persons in special tax situations, such
as financial institutions, insurance companies, regulated investment companies,
dealers in securities or currencies, persons holding Notes as a hedge against
currency risks or as a position in a "straddle" for tax purposes, or persons
whose functional currency is
S-14
<PAGE>
not the United States dollar. This discussion does not generally deal with tax
consequences to holders other than original purchasers. Persons considering the
purchase of the Notes should consult their own tax advisors concerning the
application of United States federal income tax laws to their particular
situations as well as any consequences of the purchase, ownership and
disposition of the Notes arising under the laws of any other taxing
jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a
Note that is for United States federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source or
(iv) any other person whose income or gain in respect of a Note is effectively
connected with the conduct of a United States trade or business. As used herein,
the term "non-U.S. Holder" means a holder of a Note that is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest
Payments of interest on a Note, including qualified stated interest
payments (as defined below), generally will be taxable to a U.S. Holder as
ordinary interest income at the time such payments are accrued or are received
(in accordance with the U.S. Holder's method of accounting for tax purposes).
Original Issue Discount
The following summary is a general discussion of the United States
federal income tax consequences to U.S. Holders of the purchase, ownership and
disposition of Notes issued with original issue discount ("Discount Notes"). The
following summary is based, in part, upon final Treasury regulations issued by
the Internal Revenue Service ("IRS") prescribing rules of accounting for
original issue discount ("OID Regulations").
For United States federal income tax purposes, "original issue
discount" is defined as the excess of the stated redemption price at maturity of
a Note over its issue price, if such excess equals or exceeds a de minimis
amount (generally 1/4 of 1% of the Note's stated redemption price at maturity
multiplied by the number of complete years to its maturity from its issue date).
The issue price of an issue of Notes will generally equal the first price at
which a substantial amount of such Notes are sold. The stated redemption price
at maturity of a Note is the sum of all payments provided by the Note other than
"qualified stated interest" payments. The term "qualified stated interest"
generally means stated interest that is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually at either
(i) a single fixed rate that appropriately takes into account the length of the
interval between payments or (ii) the current values of (a) a single "qualified
floating rate" (as defined in the OID Regulations) or (b) a single "objective
rate" (as defined in the OID regulations).
A U.S. Holder of a Discount Note that matures more than one year from
its date of issuance must include original issue discount in income for United
States federal income tax purposes as it accrues under a constant yield method
in advance of receipt of the cash payments attributable to such income,
regardless of such U.S. Holder's method of accounting for tax purposes. In
general, the amount of original issue discount included in income by the initial
holder of a Discount Note is the sum of the "daily portions" of original issue
discount with respect to such Note for each day during the taxable year on which
such holder held such Note. The daily portion of original issue discount on any
Discount Note is determined by allocating to each day in any "accrual period" a
ratable portion of the original issue discount allocable to that accrual period.
An accrual period may be of any length and the accrual periods may vary in
length over the term of the debt instrument,
S-15
<PAGE>
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs on the first day or the final day of an
accrual period. The amount of original issue discount allocable to each accrual
period is equal to the difference between (i) the product of the Discount Note's
adjusted issue price at the beginning of such accrual period and its yield to
maturity (determined on the basis of compounding at the close of each accrual
period and appropriately adjusted to take into account the length of the
particular accrual period) and (ii) the amount of any qualified stated interest
payments allocable to such accrual period. The "adjusted issue price" of a
Discount Note at the beginning of any accrual period is the sum of the issue
price of the Discount Note plus the amount of original issue discount allocable
to all prior accrual periods minus the amount of any prior payments on the
Discount Note that were not qualified stated interest payments. Under these
rules, holders will generally have to include in income increasingly greater
amounts of original issue discount in successive accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is
greater than its adjusted issue price as of the purchase date and less than or
equal to the sum of all amounts payable on the Discount Note after the purchase
date other than payments of qualified stated interest, will be considered to
have purchased the Discount Note at an "acquisition premium." Under the
acquisition premium rules, the amount of original issue discount which such U.S.
Holder must include in its gross income with respect to such Discount Note for
any taxable year (or portion thereof in which the holder holds the Discount
Note) will be reduced (but not below zero) by the portion of the acquisition
premium properly allocable to the period.
Certain of the Notes (i) may be redeemable at the option of the
Company prior to their stated maturity (a "call option") and/or (ii) may be
repayable at the option of the holder prior to their stated maturity (a "put
option"). Notes containing such features may be subject to rules that differ
from the general rules discussed above. Investors intending to purchase Notes
with such features should consult their tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and features
of such Notes.
In general, an individual or other cash method U.S. Holder is not
required to accrue original issue discount on Notes that have a fixed maturity
of one year or less ("Short-Term Notes") as income unless the holder elects to
do so. If such an election is not made, any gain recognized by the U.S. Holder
on the sale, exchange or maturity of the Short-Term Note will be ordinary income
to the extent of the original issue discount accrued on a straight-line basis
(or, upon election, a constant yield method based on daily compounding) through
the date of sale or maturity, and a portion of the deductions otherwise
allowable to the holder for interest on borrowings allocable to the Short-Term
Note will be deferred until a corresponding amount of income is realized. U.S.
Holders who report income for federal income tax purposes under the accrual
method and certain other holders, including banks and dealers in securities, are
required to accrue original issue discount on a Short-Term Note on a straight-
line basis unless an election is made to accrue the original issue discount
under a constant yield method (based on daily compounding).
U.S. Holders may generally, upon election, include in income all
interest (including stated interest, original issue discount, de minimis
original issue discount, market discount, de minimis market discount, and
unstated interest, as adjusted by any amortizable bond premium or acquisition
premium) on a debt instrument by using the constant yield method applicable to
original issue discount, subject to certain limitations and exceptions.
Any special United States Federal income tax considerations applicable
to a particular Floating Rate Note will be described in the applicable Pricing
Supplement.
Market Discount
If a U.S. Holder purchases a Note other than a Discount Note for an
amount that is less than its issue price (or, in the case of a subsequent
purchaser, its stated redemption price at maturity) or purchases
S-16
<PAGE>
a Discount Note for an amount that is less than its adjusted issue price as of
the purchase date, such U.S. Holder will be treated as having purchased such
Note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to
treat any partial principal payment on a Note (or, in the case of a Discount
Note, any payment that does not constitute qualified stated interest on the
Discount Note) or any gain realized on the sale, exchange, retirement or other
disposition of a Note as ordinary income to the extent of the lesser of (i) the
amount of such payment or realized gain or (ii) the market discount which has
not previously been included in income and is treated as having accrued on such
Note at the time of such payment or disposition. Market discount will be
considered to accrue ratably during the period from the date of acquisition to
the maturity date of the Note, unless the U.S. Holder elects to accrue market
discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a
portion of the interest paid or accrued on any indebtedness incurred or
maintained to purchase or carry a Note with market discount until the maturity
of the Note or certain earlier dispositions. A U.S. Holder may elect to include
market discount in income currently as it accrues (on either a ratable or
semiannual compounding basis), in which case the rules described above regarding
the treatment as ordinary income of gain upon the disposition of the Note and
upon the receipt of certain cash payments and regarding the deferral of interest
deductions will not apply. Generally, such currently included market discount is
treated as interest for federal income tax purposes.
Premium
If a U.S. Holder purchases a Note for an amount that is greater than
the sum of all amounts payable on the Note after the purchase date other than
payments of qualified stated interest, such U.S. Holder will be considered to
have purchased the Note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a constant yield
method over the remaining term of the Note and may offset interest otherwise
required to be included in respect of the Note during any taxable year by the
amortized amount for the taxable year. However, if the Note may be optionally
redeemed after the U.S. Holder acquires it at a price in excess of its stated
redemption price at maturity, special rules would apply which could result in a
deferral of the amortization of some bond premium until later in the term of the
Note.
Disposition of a Note
Upon the sale, exchange or retirement of a Note, a U.S. Holder
generally will recognize taxable gain or loss equal to the difference between
the amount realized on the sale, exchange or retirement (other than amounts
representing accrued and unpaid interest) and such U.S. Holder's adjusted tax
basis in the Note. A U.S. Holder's adjusted tax basis in a Note generally will
equal such U.S. Holder's initial investment in the Note increased by any
original issue discount included in income (and accrued market discount, if any,
if the holder has included such market discount in income) and decreased by the
amount of any payments, other than qualified stated interest payments, received
and premium amortization deductions taken with respect to such Note. Except as
discussed above under "Original Issue Discount" and "Market Discount," such gain
or loss generally will be long-term capital gain or loss if the Note has been
held for more than one year.
NON-U.S. HOLDERS
Subject to the discussion of backup withholding below, a non-U.S.
Holder will generally not be subject to United States federal income taxes or
withholding on payments of principal, premium (if any) or interest (including
original issue discount, if any) on a Note, unless such non-U.S. Holder is a
direct or indirect 10% or greater shareholder of the Company, a controlled
foreign corporation related to the Company or a bank receiving interest
described in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended ("Code").
S-17
<PAGE>
To qualify for the exemption from taxation, the last United States payor in the
chain of payment prior to payment to a non-U.S. Holder (the "Withholding Agent")
must have received in the year in which a payment of interest or principal
occurs, or in either of the two preceding calendar years, a statement that (i)
is signed by the beneficial owner of the Note under penalties of perjury, (ii)
certifies that such owner is not a U.S. Holder and (iii) provides the name and
address of the beneficial owner. The statement may be made on an IRS Form W-8 or
a substantially similar form, and the beneficial owner must inform the
Withholding Agent of any change in the information on the statement within 30
days of such change. If a Note is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form W-
8 or the substitute form provided by the beneficial owner to the organization or
institution. The Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.
Generally, a non-U.S. Holder will not be subject to federal income
taxes on any amount which constitutes capital gain upon retirement or
disposition of a Note. Certain exceptions to this rule may be applicable, and a
non-U.S. Holder should consult its tax advisor in this regard.
The Notes will not be includible in the estate of a non-U.S. Holder
unless the individual is a direct or indirect 10% or greater shareholder of the
Company or, at the time of such individual's death, payments in respect of the
Notes would have been effectively connected with the conduct by such individual
of a trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of federal income tax at a rate of 31% may apply to
payments made in respect of the Notes to registered owners who are not "exempt
recipients" and who fail to provide certain identifying information (such as the
registered owner's taxpayer identification number) in the required manner.
Generally, individuals are not exempt recipients, whereas corporations and
certain other entities generally are exempt recipients. Payments made in respect
of the Notes to a U.S. Holder must be reported to the IRS unless the U.S. Holder
is an exempt recipient or otherwise establishes an exemption. Compliance with
the certification procedures described under "Non-U.S. Holders" above would
establish an exemption from backup withholding for those non-U.S. Holders who
are not exempt recipients.
In addition, upon the sale of a Note to (or through) a broker, the
broker must withhold 31% of the entire purchase price, unless either (i) the
broker determines that the seller is a corporation or other exempt recipient or
(ii) the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such seller is
a non-U.S. Holder (and certain other conditions are satisfied). Such a sale must
also be reported by the broker to the IRS unless either (i) the broker
determines that the seller is an exempt recipient or (ii) the seller certifies
its non-U.S. status (and certain other conditions are satisfied). Certification
of the registered owner's non-U.S. status would be made normally on an IRS Form
W-8 under penalties of perjury, although in certain cases it may be possible to
submit other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment
to a beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax, provided certain required
information is furnished to the IRS.
S-18
<PAGE>
PLAN OF DISTRIBUTION
The Notes may be offered by the Company through Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston Corporation,
Goldman, Sachs & Co., Lehman Brothers, Lehman Brothers Inc., Morgan Stanley &
Co. Incorporated or Salomon Brothers Inc, as Agents, each of which has agreed to
use its best efforts to solicit offers to purchase the Notes. The Company will
pay each Agent a commission which, depending on the maturity of the Note, will
range from .125% to .625% of the principal amount of any Note sold through such
Agent. The Company also may sell Notes to any Agent at a discount for resale to
purchasers at varying prices related to prevailing market prices at the time of
resale, to be determined by such Agent, or, if so agreed, at fixed public
offering prices. The Company or an affiliate of the Company may sell Notes
directly to purchasers on behalf of the Company in those jurisdictions where it
is authorized to do so.
Unless otherwise indicated in the applicable Pricing Supplement,
payment of the purchase price of the Notes will be required to be made in funds
immediately available in The City of New York. The Company reserves the right to
withdraw, cancel or modify the offer or solicitations of offers made hereby
without notice. The Company or any Agent, if it solicits such offer, may reject
any offer to purchase Notes, in whole or in part.
In addition, the Agents may offer the Notes they have purchased as
principal to other dealers. The Agents may sell Notes to any dealer at a
discount and, unless otherwise specified in the applicable Pricing Supplement,
such discount allowed to any dealer will not be in excess of the discount to be
received by such Agent from the Company. Unless otherwise indicated in the
applicable Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount thereof
less a percentage equal to the commission applicable to any agency sale of a
Note of identical maturity, and may be resold by the Agent to investors and
other purchasers from time to time in one or more transactions, including
negotiated transactions, at varying prices determined at the time of sale or, if
so agreed, at a fixed public offering price. After the initial public offering
of Notes to be resold to investors and other purchasers, the public offering
price (if resold on a fixed public offering price basis), concession and
discount may be changed.
Each of the Agents may from time to time purchase and sell Notes in
the secondary market, but is not obligated to do so, and there can be no
assurance that there will be a secondary market for the Notes or liquidity in
the secondary market if one develops. From time to time, each of the Agents may
make a market in the Notes. None of the Agents is obligated to do so, however,
and any Agent may discontinue making a market at any time without notice. No
assurance can be given as to the liquidity of any trading market for the Notes.
Each Agent may be deemed to be an "Underwriter" within the meaning of
the Securities Act of 1933. The Company has agreed to indemnify each Agent
against certain liabilities, including liabilities under such Act, or to
contribute to payments the Agent may be required to make in respect thereof. The
Company has also agreed to reimburse the Agents for certain expenses.
Each Agent may engage in transactions with and perform services for
the Company in the ordinary course of its business.
S-19
<PAGE>
$3,500,000,000
WELLS FARGO & COMPANY
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
PREFERRED STOCK
WELLS FARGO & COMPANY (the "Company") intends to offer and sell from time to
time its debt securities (the "Notes") and its Preferred Stock, $5.00 par value
("Preferred Stock"), with an aggregate public offering price of $3,500,000,000
(or the equivalent in foreign currencies or composite currencies) on terms to
be determined by market conditions at the time of sale. The Notes and the
Preferred Stock (together the "Offered Securities") may be offered separately
or together, in separate series, in amounts and at prices and terms to be set
forth in an accompanying Prospectus Supplement ("Prospectus Supplement"). At
the option of the Company, the Notes may be issued as senior debt securities
("Senior Notes") or as subordinated debt securities ("Subordinated Notes"). The
Offered Securities may be denominated in United States dollars or, at the
option of the Company, in any other currency, in a composite currency or in
amounts determined by reference to an index which is specified in the
Prospectus Supplement. The specific terms of the Offered Securities in respect
of which this Prospectus is being delivered will be set forth in an
accompanying Prospectus Supplement. The Notes may be convertible or
exchangeable into Preferred Stock or Common Stock of the Company. The Preferred
Stock may be convertible or exchangeable into Notes or Common Stock of the
Company.
The Offered Securities may be offered and sold directly by the Company or
through one or more underwriters or agents. In addition, the Prospectus
Supplement will set forth the terms of sale of the Offered Securities and the
identity of any underwriters or agents. Any underwriters, dealers or agents
participating in any offering of the Offered Securities may be deemed
"underwriters" within the meaning of the Securities Act of 1933, as amended.
See "Plan of Distribution."
Payment of the principal of the Subordinated Notes may be accelerated only in
the case of certain events of bankruptcy, insolvency or reorganization of the
Company or the Bank. There is no right of acceleration in the case of a default
in the performance of any covenant with respect to the Subordinated
Notes, including the payment of interest or principal. See "Description of
Notes -- Events of Default."
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCU-
RACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE OFFERED SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT
ARE UNSECURED DEBT OBLIGATIONS OF, OR EQUITY INTERESTS IN,
WELLS FARGO & COMPANY AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
-------------------------
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
-------------------------
The date of this Prospectus is August 30, 1996
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and the
Prospectus Supplement in connection with the offering made hereby, and if
given or made, such information or representations must not be relied upon as
having been authorized by the Company or by any underwriters or agents.
Neither the delivery of this Prospectus and the Prospectus Supplement nor any
sale made thereunder shall, under any circumstances, create any implication
that information herein or therein is correct as of any time subsequent to the
date hereof or thereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Act") and in accordance therewith files reports and
other information with the Securities and Exchange Commission (the
"Commission"). Proxy statements, reports and other information concerning the
Company can be inspected at the Commission's office at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, and the Commission's Regional Offices
in New York (7 World Trade Center, Suite 1300, New York, New York 10048) and
Chicago (Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511), and copies of such material can be obtained
from such facilities and the Public Reference Section of the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed
rates. Such material may also be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov. In addition,
such material can be inspected at the offices of the New York and Pacific
Stock Exchanges on which certain of the Company's securities are listed. This
Prospectus does not contain all information set forth in the Registration
Statement and Exhibits thereto which the Company has filed with the Commission
under the Securities Act of 1933 and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus the
following reports filed with the Commission pursuant to Section 13 of the Act:
(i) the Company's Annual Report on Form 10-K for the year ended December 31,
1995, (ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1996; (iii) the Company's Current Reports on Form 8-K
filed on January 16, January 24, January 31, February 29, April 1, April 5,
April 10, April 16, July 16 and August 9, 1996 and (iv) the consolidated
financial statements of First Interstate Bancorp ("First Interstate") as of
December 31, 1995 and 1994 and for each of the years in the three-year period
ended December 31, 1995, as contained in First Interstate's Annual Report on
Form 10-K for the year ended December 31, 1995. All documents filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Act subsequent to
the date of this Prospectus and prior to the termination of the offering of
the Offered Securities offered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents.
Any person receiving a copy of this Prospectus may obtain without charge,
upon oral or written request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information that
the Prospectus incorporates. Requests should be directed to Wells Fargo &
Company, Investor/Public Relations, MAC #0163-029, 343 Sansome Street, San
Francisco, California 94163, telephone (415) 396-0560.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
2
<PAGE>
WELLS FARGO & COMPANY
Wells Fargo & Company ("Company") is a bank holding company registered under
the Bank Holding Company Act of 1956, as amended. On April 1, 1996, the Company
completed its acquisition of First Interstate Bancorp ("First Interstate"). On
the basis of assets as of June 30, 1996, the Company was the ninth largest bank
holding company in the United States. As of June 30, 1996, the Company had
loans of $70.5 billion, total assets of $108.6 billion, total deposits of $83.9
billion and stockholders' equity of $15.0 billion. Its principal subsidiary is
Wells Fargo Bank, National Association (the "Bank"). The Bank is primarily
engaged in retail, commercial and corporate banking, real estate lending and
trust and investment services.
The Company is a legal entity separate and distinct from the Bank and its
other affiliates. There are various legal limitations on the extent to which
the Bank may extend credit, pay dividends or otherwise supply funds to the
Company or various of its affiliates. The executive offices of the Company are
located at 420 Montgomery Street, San Francisco, California 94163. The
Company's telephone number is (415) 477-1000.
Since the Company is a holding company, the rights of the Company to
participate in any distribution of assets of any subsidiary upon its
liquidation or reorganization or otherwise (and thus the ability of holders of
the Offered Securities to benefit indirectly from such distribution) are
subject to the prior claims of creditors of that subsidiary, except to the
extent that the Company may itself be a creditor of that subsidiary. Claims on
the Company's subsidiaries by creditors other than the Company include long-
term debt and substantial obligations in respect of federal funds purchased,
securities sold under repurchase agreements and certain other short-term
borrowings, as well as deposit liabilities.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities will be used for
general corporate purposes. Specific allocations of the proceeds to such
purposes have not been determined. The net proceeds may be used to reduce
outstanding commercial paper and other debt of the Company. Based upon the
anticipated future funding requirements of the Company and its subsidiaries,
the Company expects that it will, from time to time, engage in additional
financings of a character and in amounts to be determined and that its
commercial paper borrowings and other short-term debt may be increased above
the level prevailing after the initial use of proceeds.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges and the historical ratios of earnings to fixed charges and preferred
stock dividends of the Company for the periods indicated:
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1996 JUNE 30, 1996 1995 1994 1993 1992 1991
------------- ---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Ratios of
Earnings to Fixed
Charges /1/,/3/
Including interest on
deposits.............. 2.11 2.19 2.19 2.20 1.90 1.33 1.02
Excluding interest on
deposits.............. 5.73 5.55 4.56 5.04 4.53 2.56 1.10
Consolidated Ratios of
Earnings to Fixed
Charges and Preferred
Stock
Dividends /1/,/2/,/3/
Including interest on
deposits.............. 2.00 2.08 2.09 2.07 1.77 1.26 1.00
Excluding interest on
deposits.............. 4.58 4.59 3.99 4.18 3.51 2.02 1.01
</TABLE>
- --------
/1/For purposes of computing these ratios, earnings represent income before
income tax expense plus fixed charges. Fixed charges represent interest expense
plus the estimated interest component of net rental expense.
/2/The preferred stock dividends are increased to amounts representing the
pretax earnings required to cover such dividends.
/3/These computations are included herein in compliance with Securities and
Exchange Commission regulations. However, management believes the fixed charge
ratios are not meaningful measures for the business of the Company because of
two factors. First, even if there were no change in net income, the ratios
would decline with an increase in the proportion of income which is tax-exempt
or, conversely, they would increase with a decrease in the proportion of income
which is tax-exempt. Second, even if there were no change in net income, the
ratios would decline if interest income and interest expense increase by the
same amount due to an increase in the level of interest rates or, conversely,
they would increase if interest income and interest expense decrease by the
same amount due to a decrease in the level of interest rates.
3
<PAGE>
DESCRIPTION OF NOTES
The Senior Notes will be issued under an Indenture, dated as of September 1,
1984, as amended by the First Supplemental Indenture dated as of April 15,
1986, the Second Supplemental Indenture dated as of June 30, 1987, and the
Third Supplemental Indenture dated as of January 23, 1991 (together, the
"Senior Indenture"), between the Company and The Chase Manhattan Bank
(formerly known as Chemical Bank), as successor Trustee (the "Senior
Trustee"). The Subordinated Notes will be issued under an Indenture dated as
of December 10, 1992 (the "Subordinated Indenture"), between the Company and
Marine Midland Bank, as Trustee (the "Subordinated Trustee"). In this
Prospectus, the Senior Indenture and the Subordinated Indenture are referred
to as the "Indentures." The Senior Trustee and the Subordinated Trustee are
referred to as the "Trustees." As used in this Prospectus, the term "Senior
Notes" means the Senior Notes offered hereby and, unless the context otherwise
requires, any other debt securities heretofore or hereafter issued under the
Senior Indenture, the term "Subordinated Notes" means the Subordinated Notes
offered hereby and, unless the context otherwise requires, any other debt
securities heretofore or hereafter issued under the Subordinated Indenture,
and the term "Notes" means the Notes offered hereby and, unless the context
otherwise requires, any other debt securities heretofore or hereafter issued
under the Indentures; and references to "principal" of the Notes shall be
deemed to include, unless the context otherwise requires, a reference to
premium, if any, on the Notes. Copies of the Indentures and the forms of the
Notes are filed or incorporated by reference as exhibits to the Registration
Statement. The following summaries of certain provisions of the Indentures and
the summary of certain provisions of a particular series of Notes set forth in
the Prospectus Supplement relating thereto do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indentures and the respective forms of the Notes, including
the definitions therein of certain terms. Whenever particular Sections,
Articles or defined terms of the Indentures are referred to, it is intended
that such Sections, Articles or defined terms shall be incorporated herein by
reference.
GENERAL
The Indentures do not limit the amount of debt securities which can be
issued thereunder and provide that debt securities of any series may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The Indentures do not limit the amount of other
indebtedness or securities which may be issued by the Company. The Notes may
be issued at various times with different maturity dates and different
principal repayment provisions, may bear interest at different rates, may be
payable in currencies other than United States dollars, in composite
currencies or in amounts determined by reference to an index and may otherwise
vary, all as provided in the Indentures.
The Prospectus Supplement will set forth the following specific terms
regarding the series of Notes offered thereby: (i) the designation and
aggregate principal amount of Notes of such series; (ii) the ranking of the
Notes as Senior Notes or Subordinated Notes; (iii) the percentage of their
principal amount at which such Notes will be issued; (iv) the date or dates on
which such Notes will mature, if any; (v) the rate per annum or the method of
determining the rate or rates per annum, if any, at which such Notes will bear
interest; (vi) the dates from and on which such interest, if any, will accrue
and be payable and the designated record dates for such interest payments;
(vii) the currency (which may be a composite currency) in which payment of
principal and interest, if any, shall be payable if other than United States
dollars; (viii) the index, if any, upon which the amount of principal or
interest is determined; (ix) any redemption terms; (x) any conversion or
exchange provisions; (xi) provisions for issuance of global securities; and
(xii) other specific terms. If so indicated in the applicable Prospectus
Supplement, the terms of the Notes offered thereby may differ from those set
forth herein.
Some of the Notes may be issued as discounted Notes (bearing no interest or
interest at a rate which at the time of issuance is below market rates) to be
sold at a discount below their stated principal amount. Some of the Notes may
be perpetual and have no stated maturity. Federal income tax consequences and
other special considerations applicable to such perpetual or discounted Notes
will be described in the Prospectus Supplement relating thereto.
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Interest on the Notes of any series will be payable to the persons in whose
names the Notes are registered at the close of business on the record date
designated for an interest payment date (Section 2.03). The Notes may be
presented for the payment of principal and interest, if any, transfer and
exchange at the offices or agencies of the Company maintained for such
purposes in San Francisco and New York City. Payment of any installment of
interest may be made at the option of the Company by check, mailed to the
address of the person entitled thereto as it appears on the Register of the
Notes of such series (Sections 2.05, 4.01 and 4.02). The Notes will be issued
in fully registered form, without coupons, in denominations of $1,000 and any
whole multiple of $1,000, unless different authorized denominations are stated
in the Prospectus Supplement. No service charge will be made for any exchange
or registration of transfer of a Note, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge (Section 2.05).
The Indentures provide that if a series of Notes is denominated in a currency
other than United States dollars or in a composite currency, in the absence of
a contrary provision in the Notes any action or distribution under the
Indentures will be based on the relative amount of United States dollars that
could be obtained on such reasonable basis of exchange on such date as is
specified by the Company to the Trustee (Sections 14.10 of the Senior
Indenture and 16.10 of the Subordinated Indenture).
All of the Notes will be unsecured general obligations of the Company. The
Senior Notes will not be subordinated in right of payment to any other
indebtedness of the Company. Unless otherwise set forth in the applicable
Prospectus Supplement, neither the Indentures nor the Notes contain provisions
which would afford holders of the Notes protection in the event of a takeover,
recapitalization or similar restructuring involving the Company which could
adversely affect the Notes.
SUBORDINATION OF SUBORDINATED NOTES
The obligation of the Company to make any payment on account of the
principal of and interest on the Subordinated Notes of any series will be
subordinate and junior in right of payment to the Company's obligations to the
holders of Senior Indebtedness of the Company to the extent described in the
next paragraph. Senior Indebtedness of the Company includes the Senior Notes
and means (i) any indebtedness of the Company for borrowed or purchased money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, (ii) obligations under letters of credit, (iii) any indebtedness
or other obligations of the Company with respect to commodity contracts,
interest rate and currency swap agreements, cap, floor and collar agreements,
currency spot and forward contracts, and other similar agreements or
arrangements designed to protect against fluctuations in currency exchange or
interest rates, and (iv) any guarantees, endorsements (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business) or other similar contingent obligations in respect of obligations of
others of a type described in (i), (ii) or (iii) above, whether or not such
obligation is classified as a liability on a balance sheet prepared in
accordance with generally accepted accounting principles, in each case listed
in (i), (ii), (iii) and (iv) above, whether outstanding on the date of
execution of the Subordinated Indenture or thereafter incurred, other than
obligations "ranking on a parity" with the Subordinated Notes or "ranking
junior" to the Subordinated Notes (as those terms are defined in the
Subordinated Indenture) (Section 1.01). The definition of senior indebtedness
in certain previously issued subordinated debt of the Company (the "Prior
Subordinated Debt", which term excludes any Subordinated Notes issued under
the Subordinated Indenture) includes only indebtedness of or guaranteed by the
Company for borrowed money and any deferred obligation for the payment of the
purchase price of property or assets, other than obligations ranking on a
parity with or junior to such subordinated indebtedness. As a result of this
difference, the holders of Subordinated Notes are subordinated to greater
amounts of senior indebtedness of the Company than holders of such Prior
Subordinated Debt and, under the circumstances described in the following
paragraph, holders of Subordinated Notes may receive less, ratably, than
holders of such Prior Subordinated Debt. As of June 30, 1996, there was $2.6
billion of Senior Indebtedness of the Company and $2.6 billion of obligations
ranking on a parity (as defined in the Subordinated Indenture) with the
Subordinated Notes. The Subordinated Indenture does not limit the amount of
Senior Indebtedness of the Company.
In the case of any insolvency, receivership, conservatorship,
reorganization, readjustment of debt, marshalling of assets and liabilities or
similar proceedings or any liquidation or winding-up of or relating to the
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Company as a whole, whether voluntary or involuntary, all obligations of the
Company to holders of Senior Indebtedness of the Company shall be entitled to
be paid in full before any payment shall be made on account of the principal
of or interest on the Subordinated Notes. In the event of any such proceeding,
after payment in full of all sums owing with respect to Senior Indebtedness of
the Company, the holders of the Subordinated Notes, together with the holders
of any obligations of the Company ranking on a parity with the Subordinated
Notes, shall be entitled to be paid from the remaining assets of the Company
the amounts at the time due and owing on account of unpaid principal of and
interest on the Subordinated Notes before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any
capital stock or any obligations of the Company ranking junior to the
Subordinated Notes (Section 14.01). By reason of such subordination, in the
event of the insolvency of the Company, holders of Senior Indebtedness of the
Company may receive more, ratably, and holders of the Subordinated Notes
having a claim pursuant to the Subordinated Notes may receive less, ratably,
than the other creditors of the Company. Such subordination will not prevent
the occurrence of any Event of Default in respect of the Subordinated Notes
(Section 14.10).
GLOBAL SECURITIES
The Notes of a series may be issued in whole or in part in the form of one
or more global securities ("Global Security") that will be deposited with, or
on behalf of, a depositary identified in the Prospectus Supplement relating to
such series. Global Securities will be issued in registered form and in either
temporary or definitive form. Unless and until it is exchanged in whole or in
part for Notes in definitive form, a Global Security may not be transferred
except as a whole by the depositary for such Global Security to a nominee of
such depositary or by a nominee of such depositary to such depositary or
another nominee of such depositary or by such depositary or any such nominee
to a successor of such depositary or a nominee of such successor (Sections
2.02 and 2.05).
The specific terms of the depositary arrangement with respect to any Notes
of a series will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Upon the issuance of a Global Security, the depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Notes represented by such Global Security
to the accounts of institutions that have accounts with such depositary
("Participants"). The accounts to be credited shall be designated by the
underwriters of such Notes, by certain agents of the Company or by the
Company, if such Notes are offered and sold directly by the Company. Ownership
of beneficial interests in a Global Security will be limited to Participants
or persons that may hold interests through Participants. Ownership of
beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained
by the depositary with respect to Participants' interests in such Global
Security or by Participants or by persons that hold through Participants with
respect to beneficial owners' interests. The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such ownership limits and such laws may impair the ability to
transfer beneficial interests in a Global Security.
So long as the depositary for a Global Security, or its nominee, is the
holder of such Global Security, such depositary or such nominee, as the case
may be, will be considered the sole owner or holder of the Notes represented
by such Global Security for all purposes under the Indenture governing such
Notes. Except as set forth below, owners of beneficial interests in a Global
Security will not be entitled to have Notes of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Notes of such series in definitive form and will
not be considered the owners or holders thereof under the Indenture governing
such Notes.
Principal and interest payments on Notes registered in the name of or held
by a depositary or its nominee will be made to the depositary or its nominee,
as the case may be, as the registered owner of the Global Security
representing such Notes. The Company expects that the depositary for Notes of
a series, upon receipt of any
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payment of principal or interest in respect of a Global Security, will
immediately credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security as shown on the records of such depositary. The
Company also expects that payments by Participants or persons who hold
interests through Participants to owners of beneficial interests in such
Global Security held through such Participants or persons will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participants or persons.
None of the Company, the Trustee for such Notes, any paying agent or any
registrar for such Notes will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security for such Notes or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
If a depositary for Notes of a series is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue Notes of such series in
definitive form in exchange for the Global Security or Securities representing
the Notes of such series. In addition, the Company may at any time and in its
sole discretion determine not to have any Notes of a series represented by one
or more Global Securities and, in such event, will issue Notes of such series
in definitive form in exchange for the Global Security or Securities
representing such Notes.
CONVERSION AND EXCHANGE
The terms, if any, on which Notes of any series are convertible into or
exchangeable for Common Stock or Preferred Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder, or at
the option of the Company, in which the number of shares of Common Stock or
Preferred Stock to be received by the holders of Notes would be calculated
according to the market price of Common Stock or Preferred Stock as of a time
stated in the Prospectus Supplement.
LIMITATION ON SALE OR ISSUANCE OF CAPITAL STOCK OR CONVERTIBLE SECURITIES OF,
AND MERGER OR SALE OF ASSETS BY, THE BANK
The Senior Indenture contains a covenant that (i) the Company will not, and
will not permit the Bank to issue, sell, transfer, assign, pledge or otherwise
dispose of any shares of Capital Stock of any class of the Bank or any
securities convertible or exchangeable into shares of Capital Stock of any
class of the Bank, unless, after giving effect to such transaction and to
shares issuable upon conversion or exchange of outstanding securities
convertible or exchangeable into such Capital Stock (including such
securities, if any, which may be the subject of such transaction), at least
80% of the outstanding shares of Capital Stock of each class of the Bank shall
be owned at that time directly or indirectly by the Company; and (ii) the
Company will not permit the Bank to merge or consolidate or convey or transfer
all or substantially all of its assets, unless at least 80% of the outstanding
shares of Capital Stock of each class (after giving effect to such transaction
and to shares issuable upon conversion or exchange of outstanding securities
convertible or exchangeable into Capital Stock, including such securities, if
any, which may be issued in such transaction) of the surviving corporation in
the case of merger or consolidation or of the transferee corporation in the
case of a conveyance or transfer shall be owned at that time directly or
indirectly by the Company (Section 4.07 of the Senior Indenture). There is no
similar covenant in the Subordinated Indenture.
EVENTS OF DEFAULT
An Event of Default with respect to any series of Senior Notes is defined in
the Senior Indenture as being: (a) default for 30 days in payment of any
installment of interest on Senior Notes of such series; (b) default in payment
of any principal on Senior Notes of such series; (c) default by the Company in
performance in any material respect of any of the covenants or agreements in
the Senior Notes or in the Senior Indenture specifically contained therein for
the benefit of the Senior Notes of such series which shall not have been
remedied for a
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period of 90 days after written notice to the Company by the Trustee or to the
Company and the Trustee by the holders of not less than 25% in principal
amount of the Senior Notes of such series and all other series so benefited
(all such series voting as one class) then outstanding; or (d) certain events
of bankruptcy, insolvency or reorganization of the Company or of the Bank
(Section 6.01 of the Senior Indenture). No Event of Default described in
clause (a), (b) or (c) above with respect to a particular series of Senior
Notes necessarily constitutes an Event of Default with respect to any other
series of Senior Notes. In addition, the Senior Indenture also defines an
Event of Default with respect to any series of Senior Notes as being default
in the payment of any indebtedness for borrowed money of the Company
(including a default with respect to Senior Notes of any series other than
such series) or of the Bank in principal amount in excess of $1,000,000 and
the expiration of any period of grace with respect thereto, or the occurrence
of any event of default as defined in any mortgage, indenture or instrument
(including the Senior Indenture) evidencing, securing or under which there is
issued any indebtedness for borrowed money of the Company or of the Bank in
principal amount in excess of $1,000,000 that results in the acceleration of
such indebtedness, and such default in payment is not cured or such
acceleration is not rescinded or annulled within 10 days after written notice
to the Company by the Trustee or to the Company and the Trustee by the holders
of not less than 25% in principal amount of all Senior Notes then outstanding
(all series voting as one class), provided that so long as the Company or the
Bank, as the case may be, is contesting in good faith such default in payment
or event of default and the Company delivers to the Trustee a certificate that
the Company or the Bank, as the case may be, is contesting in good faith the
existence of such payment default or event of default, then no Event of
Default shall be deemed to exist under this clause; such Event of Default is
herein called a "Cross Default."
The Senior Indenture provides that if an Event of Default under clause (a),
(b) or (c) above shall have occurred and be continuing (but only if, in the
case of clause (c), the Event of Default is with respect to less than all
series of Senior Notes then outstanding under such Indenture), either the
Trustee or the holders of not less than 25% in principal amount of the then
outstanding Senior Notes of the series as to which the Event of Default has
occurred (each such series voting as a separate class in the case of an Event
of Default under clause (a) or (b), and all such series voting as one class in
the case of an Event of Default under clause (c)) may declare the principal
(or portion thereof specified in the terms of such series) of all the Senior
Notes of such series, or of all such series in the case of an Event of Default
under clause (c) above, in each case together with any accrued interest, to be
due and payable immediately. The Senior Indenture also provides that if an
Event of Default under clause (c) or (d) above or the Cross Default clause
shall have occurred and be continuing (but only if, in the case of clause (c),
the Event of Default is with respect to all the Senior Notes then outstanding
under the Senior Indenture), either the Trustee or the holders of not less
than 25% in principal amount of all the Senior Notes then outstanding (voting
as one class) may declare the principal (or portion thereof specified in the
terms of any series) of all the Senior Notes, together with any accrued
interest, to be due and payable immediately. Upon certain conditions, such
declaration (including a declaration caused by a default in the payment of
principal or interest, the payment for which has subsequently been provided)
may be annulled by the holders of a majority in principal amount of the Senior
Notes of the series then outstanding as were entitled to declare such default
(such series or all series voting as one class, if more than one series is so
entitled). In addition, past defaults may be waived by the holders of a
majority in principal amount of the Senior Notes of all series then
outstanding (all series voting as one class), except a default in the payment
of principal of or interest on the Senior Notes or in respect of a covenant or
provision of the Senior Indenture which cannot be modified or amended without
the consent of the holder of each Senior Note so affected (Sections 6.01 and
6.06 of the Senior Indenture).
An Event of Default with respect to any series of Subordinated Notes is
defined in the Subordinated Indenture as being: (a) default for 30 days in
payment of any installment of interest on Subordinated Notes of such series;
(b) default in payment of any principal on Subordinated Notes of such series;
(c) default by the Company in performance in any material respect of any of
the covenants or agreements in the Subordinated Notes or in the Subordinated
Indenture specifically contained therein for the benefit of the Subordinated
Notes of such series which shall not have been remedied for a period of 90
days after written notice to the Company by the Trustee or to the Company and
the Trustee by the holders of not less than 25% in principal amount of the
Subordinated Notes of such series and all other series so benefited (all such
series voting as one class) then
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outstanding; or (d) certain events of bankruptcy, insolvency or reorganization
of the Company or the Bank (Section 6.01 of the Subordinated Indenture). No
Event of Default described in clause (a), (b) or (c) above with respect to a
particular series of Subordinated Notes necessarily constitutes an Event of
Default with respect to any other series of Subordinated Notes. No Event of
Default described in clause (a), (b) or (c) above permits acceleration of the
payment of principal of the Subordinated Notes. The Subordinated Indenture
provides that if an Event of Default under clause (d) above shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of all the then outstanding Subordinated Notes of each
series as to which such Event of Default has occurred (voting as one class)
may declare the principal (or a portion thereof specified in the terms of any
series) of all Subordinated Notes as to which such Event of Default under
clause (d) has occurred, together with any accrued interest, to be due and
payable immediately. Upon certain conditions, such declaration may be annulled
by a majority in principal amount of the Subordinated Notes of the series then
outstanding as were entitled to declare such Event of Default (such series or
all series voting as one class, if more than one series is so entitled). In
addition, past defaults may be waived by the holders of a majority in
principal amount of the Subordinated Notes of all series then outstanding as
to which the default has occurred (all series voting as one class), except a
default in the payment of principal or interest on any such Subordinated Notes
or in respect of a covenant or provision of the Subordinated Indenture which
cannot be modified or amended without the consent of the holder of each
Subordinated Note so affected (Sections 6.01 and 6.06 of the Subordinated
Indenture).
As a result of the provisions stated in the prior paragraph, the
Subordinated Indenture does not provide for any right to accelerate the
payment of principal of the Subordinated Notes upon a default in payment of
principal or interest or in the performance of any covenant or agreement in
the Subordinated Notes or the Subordinated Indenture, or upon a default in the
payment or acceleration of other indebtedness of the Company. In the case of a
default in the payment of principal or interest, the Trustee, subject to
certain limitations and conditions, may institute judicial proceedings to
enforce payment of such principal or interest (Section 6.02 of the
Subordinated Indenture).
Each Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care,
to be indemnified by the holders of Notes issued under such Indenture before
proceeding to exercise any right or power under the Indenture at the request
of such holders (Section 7.02). Each Indenture also provides that the holders
of a majority in principal amount of the outstanding Notes issued thereunder
of all series affected (voting as one class) may 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 of such series (Section 6.06).
Each Indenture contains a covenant that the Company will file annually with
the Trustee a certificate as to the absence of any default or specifying any
default that exists (Section 4.06).
MODIFICATION OF THE INDENTURE AND WAIVER
Each Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than 66 2/3% in principal amount
of the Notes of all series then outstanding under such Indenture affected by
such supplemental indenture (voting as one class), to execute supplemental
indentures adding any provisions to or changing or eliminating any of the
provisions of such Indenture or modifying the rights of the holders of Notes
of each such series, except that no such supplemental indenture may (i) extend
the fixed maturity of any Notes, or reduce the rate or extend the time of
payment of any interest thereon or on any overdue principal amount, or reduce
the principal amount thereof, or reduce any amount payable upon any redemption
thereof, or change the currency of payment of principal of or any interest
thereon or on any overdue principal amount, without the consent of the holder
of each Note so affected, or (ii) reduce the aforesaid percentage of Notes,
the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of all outstanding Notes under
such Indenture (Section 10.02).
Each Indenture provides that the Company may omit in any particular instance
to comply with any covenant or condition specifically contained in such
Indenture for the benefit of one or more series of Notes (including in
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the case of the Senior Indenture, the covenant described above under
"Limitation on Sale or Issuance of Capital Stock or Convertible Securities of,
and Merger or Sale of Assets by, the Bank") if before the time for such
compliance the holders of a majority in principal amount of the Notes of all
series then outstanding under such Indenture, and, in the case of the
Subordinated Indenture, affected by the omission (voting as one class) waive
such compliance in such instance, but such waiver shall not extend to or
affect such covenant or condition except to the extent so expressly waived
(Section 4.08 of the Senior Indenture and Section 4.07 of the Subordinated
Indenture).
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each Indenture provides that the Company may not merge or consolidate or
sell or convey all or substantially all of its assets unless the successor
corporation (if other than the Company) is a domestic corporation, assumes the
Company's obligations under such Indenture and on the Notes issued under such
Indenture, and, after giving effect to such transaction, the Company or the
successor corporation would not be in default under such Indenture (Section
11.01).
CONCERNING THE TRUSTEES
The Chase Manhattan Bank (formerly known as Chemical Bank) is the successor
Trustee under the Senior Indenture. Notices to the Senior Trustee should be
directed to The Chase Manhattan Bank, Corporate Trust Department, 450 West
33rd Street, New York, New York 10001, Attention: Vice President. The Company
and the Bank maintain deposit accounts and conduct other banking transactions
with the Senior Trustee in the ordinary course of business. Marine Midland
Bank is the Trustee under the Subordinated Indenture. Notices to the
Subordinated Trustee should be directed to Marine Midland Bank, 140 Broadway,
New York, New York 10015, Attention: Vice President--Corporate Trust
Administration. The Bank has entered into correspondent banking relationships
with the Subordinated Trustee and with its corporate parent, The Hong Kong and
Shanghai Banking Corporation Limited ("HSBC"), involving various banking
transactions in the ordinary course of business. As part of their
relationship, the Bank and HSBC have an arrangement providing for the referral
of customers to each other. The Company and the parent of HSBC established a
jointly owned trade bank called Wells Fargo HSBC Trade Bank.
DESCRIPTION OF PREFERRED STOCK
The following description of Preferred Stock sets forth certain general
terms and provisions of the series of Preferred Stock to which any Prospectus
Supplement may relate. The specific terms of a particular series of Preferred
Stock will be described in the Prospectus Supplement relating to such series
of Preferred Stock. If so indicated in the Prospectus Supplement relating
thereto, the terms of any such series of Preferred Stock may differ from the
terms set forth below. The description of Preferred Stock set forth below and
the description of the terms of a particular series of Preferred Stock set
forth in the Prospectus Supplement relating thereto do not purport to be
complete and are qualified in their entirety by reference to the Company's
Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), and the Certificate of Designation relating to such series of
Preferred Stock, which are filed or incorporated by reference as an exhibit to
the Registration Statement of which this Prospectus is a part.
GENERAL
The Company is authorized to issue 25,000,000 shares of Preferred Stock. The
Board of Directors has the authority to issue Preferred Stock in one or more
series and to fix the specific number of shares, title, liquidation preference
of each share, issue price, dividend rate or rates (or method of calculation),
dividend periods, dividend payment dates, any redemption or sinking fund
provisions, any conversion provisions and any other specific terms of any
series without any further action by stockholders of the Company unless action
is required by applicable laws or regulations or by the terms of other
outstanding preferred stock. As of the date of this
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Prospectus, the Company had five series of Preferred Stock outstanding
consisting of 1,500,000 shares of Adjustable Rate Cumulative Preferred Stock,
Series B ("Adjustable Rate Preferred Stock"), 477,500 shares of 9% Preferred
Stock, Series C ("9% Preferred Stock") represented by 9,550,000 Depositary
Shares each representing a one-twentieth interest in a share of 9% Preferred
Stock, 350,000 shares of 8 7/8% Preferred Stock, Series D (the "8 7/8%
Preferred Stock" and together with the 9% Preferred Stock, the "Fixed Rate
Preferred Stock") represented by 7,000,000 Depositary Shares each representing
a one-twentieth interest in a share of 8 7/8% Preferred Stock, 1,000,000
shares of 9 7/8% Preferred Stock, Series F ("9 7/8% Preferred Stock")
represented by 8,000,000 Depositary Shares each representing a one-eighth
interest in a share of 9 7/8% Preferred Stock and 750,000 shares of 9%
Preferred Stock, Series G ("9% Series G Preferred Stock" and together with the
9 7/8% Preferred Stock, the "New Wells Fargo Preferred Stock") represented by
6,000,000 Depositary Shares each representing a one-eighth interest in a share
of 9% Series G Preferred Stock. The Adjustable Rate Preferred Stock has a
liquidation preference of $50 per share, the Fixed Rate Preferred Stock has a
liquidation preference of $500 per share or $25 per Depositary Share and the
New Wells Fargo Preferred Stock has a liquidation preference of $200 per share
or $25 per Depositary Share. See "Description of Capital Stock--Existing
Preferred Stock." Unless otherwise specified in the Prospectus Supplement
relating thereto, the shares of each series of Preferred Stock will rank on a
parity as to dividends and distributions of assets with each other and with
the Adjustable Rate Preferred Stock, the Fixed Rate Preferred Stock and the
New Wells Fargo Preferred Stock.
The Prospectus Supplement will set forth the following specific terms
regarding the series of Preferred Stock offered thereby: (i) the designation,
number of shares and liquidation preference per share; (ii) the initial public
offering price; (iii) the dividend rate or rates, or the method of determining
the dividend rate or rates; (iv) the index, if any, upon which the amount of
dividends, if any, is determined; (v) the dates on which dividends, if any,
will accrue and be payable and the designated record dates for determining the
holders entitled to such dividends; (vi) any redemption or sinking fund
provisions; (vii) any conversion or exchange provisions; (viii) whether the
Company has elected to offer Depositary Shares as described under "Description
of Depositary Shares"; (ix) provisions for issuance of global securities; (x)
the currency (which may be composite currency) in which payment of dividends,
if any, shall be payable if other than United States dollars; (xi) voting
rights, if different from those described under "Description of Preferred
Stock--Voting Rights"; and (xii) any additional terms, preferences or rights.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer depositary shares ("Depositary Shares") evidenced
by depositary receipts ("Depositary Receipts"), each representing a fractional
interest (to be specified in the Prospectus Supplement relating to the
particular series of the Preferred Stock) in a share of the particular series
of the Preferred Stock issued and deposited with a Depositary (as defined
below).
Under regulations adopted by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), if the holders of shares of any series
of preferred stock of the Company become entitled to vote for the election of
directors because the Board of Directors of the Company has failed to declare
or pay dividends on such series (see "Description of Preferred Stock Voting
Rights"), such series may then be deemed a class of "voting securities" and a
holder of 25 percent or more of such series (or a holder of five percent or
more if it otherwise exercises a "controlling influence" over the Company) may
then be subject to regulation as a bank holding company in accordance with the
Bank Holding Company Act of 1956, as amended. In addition, at such time as
such series is deemed a class of voting securities, any other bank holding
company may be required to obtain the prior approval of the Federal Reserve
Board to acquire five percent or more of such series and any person other than
a bank holding company may be required to obtain the prior approval of the
Federal Reserve Board to acquire ten percent or more of such series.
The shares of Preferred Stock will, when issued, be fully paid and
nonassessable and will have no preemptive rights.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for the Preferred Stock will be specified in the Prospectus Supplement
relating thereto.
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DIVIDENDS
The holders of the Preferred Stock of each series will be entitled to
receive, when, as and if declared by the Board of Directors of the Company,
out of funds legally available therefor, cumulative or non-cumulative cash or
other dividends at such rate or rates and on such dates as will be set forth
in the Prospectus Supplement relating to such series. Such rates may be fixed
or variable or both. If variable, the formula used for determining the
dividend rate for each dividend period will be set forth in the Prospectus
Supplement. Dividends will be payable to the holders of record as they appear
on the stock books of the Company on such record dates as will be fixed by the
Board of Directors of the Company and specified in the Prospectus Supplement.
If the Board of Directors of the Company fails to declare a dividend payable
on a dividend payment date on any series of the Preferred Stock for which
dividends are noncumulative ("Noncumulative Preferred Stock"), then the
holders of such series of the Preferred Stock will have no right to receive a
dividend in respect of the dividend period ending on such dividend payment
date, and the Company will have no obligation to pay a dividend for such
period, whether or not dividends on such series are declared payable on any
future dividend payment dates.
No dividends may be declared in respect of any dividend period on any other
series or class of preferred stock ranking on a parity as to dividends with
the Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred
Stock or New Wells Fargo Preferred Stock unless full cumulative dividends on
all outstanding shares of each series of Preferred Stock on which dividends
are cumulative and on the Adjustable Rate Preferred Stock, the Fixed Rate
Preferred Stock and the New Wells Fargo Preferred Stock shall have been paid
in full or contemporaneously are declared and paid through the most recent
dividend payment date, unless otherwise indicated in the Prospectus
Supplement. In the event that full cumulative dividends on such Preferred
Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New
Wells Fargo Preferred Stock have not been declared and paid or set apart when
due, the Company may not declare or pay any dividends on, or make other
distributions on or make any payment on account of the purchase, redemption,
or other retirement, of its Common Stock or any other stock of the Company
ranking as to dividends or upon liquidation junior to such Preferred Stock,
Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo
Preferred Stock (other than, in the case of dividends or distributions,
dividends or distributions paid in shares of, or options, warrants or rights
to subscribe for or purchase shares of, Common Stock or such other junior
ranking stock), until full cumulative dividends on such Preferred Stock,
Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells
Fargo Preferred Stock are made or set apart for payment, unless otherwise
indicated in the Prospectus Supplement.
When dividends are not paid in full upon any series of Preferred Stock, the
Adjustable Rate Preferred Stock, the Fixed Rate Preferred Stock, the New Wells
Fargo Preferred Stock and any other preferred stock ranking on a parity
therewith all dividends declared or made upon shares of Preferred Stock,
Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock, New Wells Fargo
Preferred Stock and any other series of preferred stock ranking on a parity
therewith shall be declared pro rata so that the amount of dividends declared
per share on Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate
Preferred Stock, New Wells Fargo Preferred Stock and such other preferred
stock shall in all cases bear to each other the same ratio that accrued
dividends per share (which, in the case of Noncumulative Preferred Stock,
shall not include any accumulation in respect of unpaid dividends for prior
dividend periods) on shares of each series of the Preferred Stock, Adjustable
Rate Preferred Stock, Fixed Rate Preferred Stock, New Wells Fargo Preferred
Stock and such other preferred stock bear to each other. No interest shall be
payable in respect of any dividend payment which may be in arrears unless
otherwise indicated in the Prospectus Supplement.
REDEMPTION
The shares of any series of Preferred Stock may be redeemable at the option
of the Company and may be subject to mandatory redemption pursuant to a
sinking fund or otherwise, in each case upon the terms, on the date or dates
and at the redemption price or prices set forth in the Prospectus Supplement
relating to such series. If fewer than all shares of Preferred Stock are to be
redeemed, the shares to be redeemed shall be selected by the Company pro rata
or by lot, or by any other method determined by the Board of Directors to be
equitable.
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Under regulations of the Federal Reserve Board, any perpetual preferred
stock with a feature permitting redemption at the option of the issuer may
qualify as capital only if the redemption is subject to prior approval of the
Federal Reserve Board. Therefore, any redemption of Preferred Stock at the
option of the Company will require the prior approval of the Federal Reserve
Board in order for the Preferred Stock to qualify as capital for bank
regulatory purposes.
If any dividends on shares of any series of Preferred Stock are in arrears,
no shares of Common Stock or shares of capital stock ranking junior to or on
parity with the Preferred Stock shall be redeemed and no shares of such series
of Preferred Stock shall be redeemed unless all outstanding shares of such
series are simultaneously redeemed, and the Company shall not purchase or
otherwise acquire any shares of such series; provided, however, that the
foregoing shall not prevent the purchase or acquisition of shares of such
series pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of such series.
Notice of redemption shall be given by mailing the same to each record
holder of the shares to be redeemed, not less than 40 nor more than 70 days
prior to the date fixed for redemption thereof (and, in the case of New Wells
Fargo Preferred Stock, not less than 40 nor more than 60 days' notice), to the
respective addresses of such holders as the same shall appear on the Company's
stock books. Each such notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Stock to be redeemed; (iii) the
redemption price and the manner in which such redemption price is to be paid
and delivered; (iv) the place or places where certificates for such shares of
Preferred Stock are to be surrendered for payment of the redemption price; and
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date. If fewer than all shares of any series of the Preferred Stock
held by any holder are to be redeemed, the notice mailed to such holder shall
also specify the number of shares to be redeemed from such holder.
If notice of redemption has been given, from and after the redemption date
for the shares of the series of the Preferred Stock called for redemption
(unless default shall be made by the Company in providing money for the
payment of the redemption price of the shares so called for redemption),
dividends on the shares of Preferred Stock so called for redemption will cease
to accrue, any right to convert the shares of Preferred Stock will terminate,
such shares will no longer be deemed to be outstanding, and all rights of the
holders thereof as stockholders of the Company (except the right to receive
the redemption price) will cease. Upon surrender in accordance with such
notice of the certificates representing any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors of the Company
will so require and the notice shall so state), the redemption price set forth
above will be paid out of funds provided by the Company. If fewer than all of
the shares represented by any such certificate are redeemed, a new certificate
will be issued representing the unredeemed shares without cost to the holder
thereof.
LIQUIDATION PREFERENCE
Upon any liquidation, dissolution or winding up of the Company, the holders
of shares of each series of Preferred Stock and of the Adjustable Rate
Preferred Stock, the Fixed Rate Preferred Stock and the New Wells Fargo
Preferred Stock shall be entitled to receive out of the assets of the Company
available for distribution to stockholders, before any distribution of assets
is made to or set apart for the holders of Common Stock or of any other shares
of stock of the Company ranking as to such a distribution junior to the shares
of such series, with respect to the Preferred Stock, an amount described in
the Prospectus Supplement relating to such series of Preferred Stock, and with
respect to the Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and
New Wells Fargo Preferred Stock, an amount equal to the liquidation value of
such shares. See "Description of Capital Stock--Existing Preferred Stock." If,
in any case of any such liquidation, dissolution or winding up of the Company,
the assets of the Company or the proceeds thereof shall be insufficient to pay
in full the amounts payable with respect to shares of each series of Preferred
Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New
Wells Fargo Preferred Stock and any other shares of stock of the Company
ranking as to any such distribution on a parity therewith, the holders of
shares of such series of Preferred Stock, Adjustable Rate Preferred Stock,
Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock and of such
other shares will share ratably in any such distribution of assets of the
Company in proportion to the full respective
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preferential amounts to which they are entitled. After payment to the holders
of shares of such series of Preferred Stock, Adjustable Rate Preferred Stock,
Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock of the full
preferential amounts to which they are entitled, the holders of shares of such
series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate
Preferred Stock and New Wells Fargo Preferred Stock will not be entitled to
any further participation in any distribution of assets by the Company, unless
otherwise provided in the Prospectus Supplement. A consolidation or merger of
the Company with one or more corporations shall not be deemed to be a
liquidation, dissolution or winding up of the Company.
CONVERSION AND EXCHANGE
The terms, if any, on which shares of any series of Preferred Stock are
convertible into or exchangeable for Notes or Common Stock will be set forth
in the Prospectus Supplement relating thereto. Such terms may include
provisions for conversion or exchange, either mandatory, at the option of the
holder, or at the option of the Company, in which the number of shares of
Common Stock to be received by the holders of Preferred Stock would be
calculated according to the market price of Common Stock as of a time stated
in the Prospectus Supplement.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular series of the Preferred Stock, or except as expressly required by
applicable law, the holders of Preferred Stock will not be entitled to vote.
On matters on which holders of such series and holders of any other series
of Preferred Stock are entitled to vote as a single class, each full share of
any series of the Preferred Stock shall be entitled to one vote. Therefore,
the voting power of such series will depend on the number of shares in such
series, not the liquidation preference or initial offering price of the shares
of such series of the Preferred Stock. However, as more fully described under
"Description of Depositary Shares," if the Company elects to provide for the
issuance of Depositary Shares representing fractional interests in a share of
a series of the Preferred Stock, the holders of each such Depositary Share
will, in effect, be entitled through the Depositary to such fraction of a
vote, rather than a full vote. To the extent the Depositary does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock, it will vote such shares of Preferred Stock in accordance
with the recommendation of the Company, unless otherwise indicated in the
Prospectus Supplement.
Whenever the Board of Directors shall have failed to declare and pay
dividends on a series of Preferred Stock, Adjustable Rate Preferred Stock,
Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock for dividend
periods, whether or not consecutive, containing in the aggregate a number of
days equivalent to six calendar quarters, the holders of such series of
Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock
or New Wells Fargo Preferred Stock (voting as a class with all other affected
series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate
Preferred Stock and New Wells Fargo Preferred Stock ranking on a parity
therewith either as to dividends or upon liquidation and upon which like
voting rights have been conferred and are exercisable) will be entitled to
vote for the election of two of the authorized number of directors of the
Company at the next annual meeting of stockholders and at each subsequent
meeting until all dividends which the Board of Directors failed to declare or
pay on such series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed
Rate Preferred Stock or New Wells Fargo Preferred Stock have been fully paid
or set apart for payment. In addition, under such circumstances, certain
holders of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate
Preferred Stock and New Wells Fargo Preferred Stock may become subject to
regulation as a bank holding company. See "Description of Preferred Stock--
General." The term of office of all directors elected by the holders of
Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock
and New Wells Fargo Preferred Stock shall terminate immediately upon the
termination of the right of the holders of Preferred Stock, Adjustable Rate
Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred
Stock to vote for directors.
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So long as any shares of Preferred Stock, Adjustable Rate Preferred Stock,
Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock remain
outstanding, the Company shall not, without the consent of the holders of at
least two-thirds of the shares of the affected series of Preferred Stock,
Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells
Fargo Preferred Stock outstanding at the time (voting separately as a class
with all other affected series of Preferred Stock ranking on a parity with the
affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed
Rate Preferred Stock and New Wells Fargo Preferred Stock), (i) authorize,
create or issue, or increase the authorized amount of, any class or series of
stock ranking prior to the affected series of Preferred Stock, Adjustable Rate
Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred
Stock as to dividends or upon liquidation; or (ii) amend, alter or repeal the
provisions of the Company's Restated Certificate of Incorporation, whether by
merger, consolidation or otherwise, so as to materially and adversely affect
any right, preference, privilege or voting power of the affected series of
Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock
or New Wells Fargo Preferred Stock or the holders thereof; provided, however,
that any increase in the amount of the authorized Common Stock or authorized
Preferred Stock or the creation and issuance of other series of common stock
or preferred stock ranking on a parity with or junior to the affected series
of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred
Stock or New Wells Fargo Preferred Stock as to dividends and upon liquidation
shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the form of Deposit
Agreement and form of Depositary Receipts relating to each series of the
Preferred Stock which are filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus is a part.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock. The shares of any series of the Preferred Stock
underlying the Depositary Shares will be deposited under a separate Deposit
Agreement (the "Deposit Agreement") between the Company and a bank or trust
company selected by the Company (the "Depositary"). The Prospectus Supplement
relating to a series of Depositary Shares will set forth the name and address
of the Depositary. Subject to the terms of the Deposit Agreement, each owner
of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Share, to all the rights and preferences of the Preferred Stock underlying
such Depositary Share (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the fractional
interest in a share of a particular series of the Preferred Stock described in
the Prospectus Supplement.
Unless otherwise specified in the Prospectus Supplement, a holder of
Depositary Shares is not entitled to receive the whole shares of Preferred
Stock underlying the Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary
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Shares a fraction of one cent, and any balance not so distributed shall be
added to and treated as part of the next sum received by the Depositary for
distribution to record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement also contains provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Depositary resulting from the redemption, in whole or
in part, of such series of the Preferred Stock held by the Depositary. The
redemption price per Depositary Share will be equal to the applicable fraction
of the redemption price per share payable with respect to such series of the
Preferred Stock. If less than all the Depositary Shares are to be redeemed,
the Depositary Shares to be redeemed will be selected by lot or pro rata as
may be determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares. Any funds deposited by the Company with the Depositary for
any Depositary Shares which the holders thereof fail to redeem shall be
returned to the Company after a period of two years from the date such funds
are so deposited.
VOTING
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Stock underlying such holder's Depositary Shares. The Depositary will
endeavor, insofar as practicable, to vote the number of shares of Preferred
Stock underlying such Depositary Shares in accordance with such instructions,
and the Company will agree to take all action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so. To the extent the
Depositary does not receive specific instructions from the holders of
Depositary Shares relating to such Preferred Stock, it will vote shares of
Preferred Stock in accordance with the recommendation of the Company, unless
otherwise indicated in the Prospectus Supplement.
AMENDMENT OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary, provided, however, that any amendment
which materially and adversely alters the rights of the existing holder of
Depositary Shares will not be effective unless such amendment has been
approved by the record holders of at least a majority of the Depositary Shares
then outstanding.
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CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
that arise solely from the existence of the depositary arrangements. The
Company will pay charges of the Depositary in connection with the initial
deposit of the Preferred Stock and any redemption of the Preferred Stock.
Holders of Depositary Shares will pay all other transfer and other taxes and
governmental charges, and, in addition, such other charges as are expressly
provided in the Deposit Agreement to be for their accounts.
TAXATION
Owners of Depositary Shares will be treated for Federal income tax purposes
as if they were owners of the Preferred Stock represented by such Depositary
Shares and, accordingly, will be entitled to take into account for Federal
income tax purposes income and deductions to which they would be entitled if
they were holders of such Preferred Stock. In addition, (i) no gain or loss
will be recognized for Federal income tax purposes upon the withdrawal of
Preferred Stock in exchange for Depositary Shares as provided in the Deposit
Agreement, (ii) the tax basis of each share of Preferred Stock to an
exchanging owner of Depositary Shares will, upon such exchange, be the same as
the aggregate tax basis of the Depositary Shares exchanged therefor, and (iii)
the holding period for shares of the Preferred Stock in the hands of an
exchanging owner of Depositary Shares who held such Depositary Shares at the
time of the exchange thereof for Preferred Stock will include the period
during which such person owned such Depositary Shares.
MISCELLANEOUS
The Company, or at the option of the Company, the Depositary, will forward
to the holders of Depositary Shares all reports and communications from the
Company which the Company is required to furnish to the holders of the
Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares
or Preferred Stock unless satisfactory indemnity is furnished. They may rely
upon written advice of counsel or accountants, or information provided by
persons presenting Preferred Stock for deposit, holders of Depositary Shares
or other persons believed to be competent and on documents believed to be
genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY; TERMINATION OF THE DEPOSIT AGREEMENT
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary will be appointed by the Company within 60 days after delivery of
the notice of resignation or removal. The Deposit Agreement may be terminated
at the direction of the Company or by the Depositary if a period of 90 days
shall have expired after the Depositary has delivered to the Company written
notice of its election to resign and a successor depositary shall not have
been appointed. Upon termination of the Deposit Agreement, the Depositary will
discontinue the transfer of Depositary Receipts, will suspend the distribution
of dividends to the holders thereof, and will not give any further notices
(other than notice of such termination) or perform any further acts under the
Deposit Agreement except that the Depositary will continue to deliver
Preferred Stock certificates together with such dividends and distributions
and the net proceeds of any sales of rights, preferences, privileges or other
property in exchange for Depositary Receipts surrendered. Upon request of the
Company, the Depositary shall deliver all books, records, certificates
evidencing Preferred Stock, Depositary Receipts and other documents respecting
the subject matter of the Deposit Agreement to the Company.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company is authorized to issue 150,000,000 shares of Common Stock, par
value $5.00 per share, and 25,000,000 shares of preferred stock, par value
$5.00 per share.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share of Common
Stock held. All outstanding shares of Common Stock are fully paid and
nonassessable.
Holders of Common Stock are entitled to receive such dividends as are
declared by the Board of Directors out of funds legally available therefor
subject to the limitations described below. In the event of liquidation,
holders of the Common Stock are entitled to receive pro rata any assets
distributable after payment of liabilities and the liquidation preference, if
any, on any shares of Preferred Stock then outstanding. There are no
conversion, preemptive or redemption rights of the Common Stock. The dividend
rights and liquidation preferences relating to the preferred stock are
superior to those relating to the Common Stock.
The transfer agent and registrar for the Common Stock is First Chicago Trust
Company of New York, New York.
EXISTING PREFERRED STOCK
As of the date of this Prospectus, the Company had five series of preferred
stock outstanding, consisting of 1,500,000 shares of Adjustable Rate
Cumulative Preferred Stock, Series B, 477,500 shares of 9% Preferred Stock,
Series C represented by 9,550,000 Depositary Shares each representing a one-
twentieth interest in a share of 9% Preferred Stock, 350,000 shares of 8 7/8%
Preferred Stock, Series D represented by 7,000,000 Depositary Shares each
representing a one-twentieth interest in a share of 8 7/8% Preferred Stock,
1,000,000 shares of 9 7/8% Preferred Stock, Series F represented by 8,000,000
Depositary Shares each representing a one-eighth interest in a share of 9 7/8%
Preferred Stock and 750,000 shares of 9% Preferred Stock, Series G represented
by 6,000,000 Depositary Shares each representing a one-eighth interest in a
share of 9% Series G Preferred Stock. The Adjustable Rate Preferred Stock has
a liquidation preference of $50 per share, the Fixed Rate Preferred Stock has
a liquidation preference of $500 per share or $25 per Depositary Share and the
New Wells Fargo Preferred Stock has a liquidation preference of $200 per share
or $25 per Depositary Share. Unless full cumulative dividends on the Preferred
Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New
Wells Fargo Preferred Stock have been paid, the Company may not declare
dividends on or make any other payment in respect of any class of stock
ranking junior to the Preferred Stock, Adjustable Rate Preferred Stock, Fixed
Rate Preferred Stock or New Wells Fargo Preferred Stock, including the Common
Stock. Whenever the Board of Directors of the Company shall have failed to
declare and pay dividends on any series of Preferred Stock, Adjustable Rate
Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock
for dividend periods, whether or not consecutive, containing in the aggregate
a number of days equivalent to six calendar quarters, the holders of such
series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate
Preferred Stock or New Wells Fargo Preferred Stock (voting as a class with all
other affected series of Preferred Stock, Adjustable Rate Preferred Stock,
Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock ranking on a
parity therewith either as to dividends or upon liquidation and upon which
like voting rights have been conferred and are exercisable) will be entitled
to vote for the election of two of the authorized number of directors of the
Company at the next annual meeting of stockholders and at each subsequent
meeting until all dividends which the Board of Directors failed to declare or
pay on the affected series of Preferred Stock, Adjustable Rate Preferred
Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock have been
fully paid or set apart for payment. The holders of Preferred Stock,
Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells
Fargo Preferred Stock have preference and priority over holders of Common
Stock in the event of liquidation for payment of the liquidation preference of
the Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred
Stock and New Wells Fargo Preferred Stock plus an amount equal to all accrued
and unpaid dividends thereon.
18
<PAGE>
PLAN OF DISTRIBUTION
The Company may offer and sell the Offered Securities to one or more
underwriters for resale by them or through agents, or to investors directly.
The Prospectus Supplement with respect to each series of Offered Securities
will set forth the terms of the offering of the Offered Securities, including
the name or names of any underwriters or agents, the purchase price of the
Offered Securities and the net proceeds to the Company from such sale, any
underwriting discounts, agency fees and other items constituting underwriters'
or agents' compensation, any initial public offering price and any discounts
or concessions allowed, reallowed or paid to dealers.
If any underwriters are involved in the offer and sale, the Offered
Securities will be acquired by the underwriters for their own account and may
be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Unless otherwise set forth in the accompanying Prospectus
Supplement, the obligations of the underwriters to purchase the Offered
Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Offered Securities
described in such Prospectus Supplement if any are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Underwriters and agents may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act of 1933.
Employees of the Bank may act as finders of purchasers of Offered
Securities. Their activities will be limited to contacting customers and
informing them of the terms of the Offered Securities offered by the Company.
The Company believes that such persons are not required to be registered as
brokers or dealers under Section 3(a)(4) and 3(a)(5) of the Act since they are
acting as employees on behalf of a bank.
LEGAL OPINIONS
The legality of the Offered Securities offered hereby will be passed upon
for the Company by Brobeck, Phleger & Harrison LLP, San Francisco, for the
underwriters, if any, by Davis Polk & Wardwell, New York City and for the
agents, if any, by Brown & Wood LLP, San Francisco. Davis Polk & Wardwell may
rely on the opinion of Brobeck, Phleger & Harrison LLP as to matters of
California law. Davis Polk & Wardwell represents the Company from time to
time.
EXPERTS
The consolidated financial statements of the Company as of December 31, 1995
and 1994 and for each of the years in the three-year period ended December 31,
1995 incorporated by reference in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 incorporated by reference herein and
elsewhere in the Registration Statement have been incorporated by reference
herein and in the Registration Statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
The consolidated financial statements of First Interstate as of December 31,
1995 and 1994 and for each of the three years in the period ended December 31,
1995 incorporated by reference herein have been incorporated by reference
herein in reliance upon the report of Ernst & Young LLP, independent auditors,
incorporated by reference herein, given upon the authority of said firm as
experts in accounting and auditing.
19
<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNECTION WITH
THE OFFERING COVERED BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE AGENTS. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF AN OFFER
TO BUY, THE NOTES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY
CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
OR IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Description of Medium-Term Notes........................................... S-2
Federal Tax Considerations................................................. S-14
Plan of Distribution....................................................... S-19
PROSPECTUS
Available Information....................................................... 2
Incorporation of Certain Documents by Reference............................. 2
Wells Fargo & Company....................................................... 3
Use of Proceeds............................................................. 3
Ratio of Earnings to Fixed Charges.......................................... 3
Description of Notes........................................................ 4
Description of Preferred Stock.............................................. 10
Description of Depositary Shares............................................ 15
Description of Capital Stock................................................ 18
Plan of Distribution........................................................ 19
Legal Opinions.............................................................. 19
Experts..................................................................... 19
</TABLE>
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$3,500,000,000
[LOGO of WELLS FARGO & COMPANY]
MEDIUM-TERM NOTES
AND
SUBORDINATED MEDIUM-TERM
NOTES, SERIES B
DUE FROM 9 MONTHS TO
12 YEARS FROM DATE OF ISSUE
---------------
PROSPECTUS SUPPLEMENT
---------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
SEPTEMBER 11, 1996
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[RECYCLE LOGO]
