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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Wells Fargo & Company
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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March , 1999
Dear Stockholder:
The annual meeting of stockholders will be held on Tuesday, April 27, 1999,
at 1:00 p.m., in the Penthouse Boardroom, 420 Montgomery Street, San
Francisco, California.
At the annual meeting, you will be asked to elect directors, to vote on the
Company's proposals to increase the number of shares that may be awarded under
the Long-Term Incentive Compensation Plan and to ratify the appointment of
auditors for the year 1999, and to vote on a stockholder proposal to adopt
cumulative voting in the election of directors.
For reasons explained in the accompanying proxy statement, the Board of
Directors recommends that you vote FOR the first three proposals and AGAINST
the proposal relating to cumulative voting.
We hope that you will be able to attend the meeting. In any case, to make
sure that your vote is received, please complete, sign and return your proxy
card in the enclosed envelope. Thank you for your interest in the Company.
Sincerely,
Paul Hazen Richard M. Kovacevich
Chairman President and
Chief Executive Officer
-----------------------------
Please sign and date the enclosed proxy card and return it promptly in the
enclosed envelope
regardless of whether you plan to attend the meeting. If you later decide to
vote
in person at the meeting, or for any other reason wish to revoke your proxy,
you may do so at any time before it is voted.
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Notice Of Annual Meeting Of Stockholders
April 27, 1999
To the Holders of
Common Stock of Wells Fargo & Company:
The annual meeting of stockholders of Wells Fargo & Company (the "Company")
will be held in the Penthouse Boardroom, 420 Montgomery Street, San Francisco,
California, on Tuesday, April 27, 1999, at 1:00 p.m. The purpose of the
meeting is to:
1. Elect directors.
2. Vote on a proposal to increase the number of shares of common stock that
may be awarded under the Long-Term Incentive Compensation Plan by
40,000,000.
3. Vote on a proposal to ratify the appointment by the Board of Directors
of KPMG LLP to audit the books of the Company and subsidiaries for the
year ending December 31, 1999.
4. Vote on a stockholder proposal requesting the Board of Directors to
provide for cumulative voting for directors.
5. Act on any other matters that properly come before the meeting.
The Board recommends that stockholders vote FOR the director nominees named
in the accompanying proxy statement, FOR Items 2 and 3, and AGAINST Item 4, as
described above in this Notice.
Only holders of common stock at the close of business on March 9, 1999, may
vote at the annual meeting or at any adjournment thereof. A list of
stockholders of record who may vote at such meeting will be available during
business hours for any stockholder of the Company to examine for any purpose
relevant to the meeting. The list will be available for at least ten days
before the meeting at the office of the general counsel of the Company, 633
Folsom Street, San Francisco, California 94163.
By Order of the Board of Directors,
Laurel A. Holschuh
Secretary
March , 1999
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Table Of Contents
Page No.
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Outstanding Shares.................................................... 2
Voting................................................................ 2
Item 1. Election of
Directors............................................................ 4
The Board of Directors and Committees................................ 8
Director Compensation................................................ 10
Common Stock Owned by Directors and Executive Officers................ 12
Executive Compensation (How the Company Pays Its Executive Officers).. 14
Report of the Human Resources Committee on Executive Compensation.... 14
Stock Performance Graphs............................................. 20
Compensation Tables and Information.................................. 22
Other Information About Directors and Executive Officers.............. 31
Item 2. Proposal to Amend the Long-Term Incentive Compensation Plan... 34
Item 3. Appointment of Auditors....................................... 38
Item 4. Stockholder Proposal Relating to Cumulative Voting............ 38
Deadline for Submitting Stockholder Proposals......................... 40
Annual Reports........................................................ 40
Exhibit A-Amendment to Long-Term Incentive Compensation Plan.......... A-1
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Wells Fargo & Company
420 Montgomery Street
San Francisco, California 94104
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Proxy Statement
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The Board of Directors of Wells Fargo & Company is soliciting proxies from
its stockholders to be used at the annual meeting on Tuesday, April 27, 1999.
On November 2, 1998, Norwest Corporation changed its name to "Wells Fargo &
Company" upon the merger (the "Merger") of the former Wells Fargo & Company
(the "former Wells Fargo") into a wholly owned subsidiary of Norwest
Corporation. Norwest Corporation as it existed prior to the Merger is referred
to as the "former Norwest." As used in this proxy statement, the "Company"
refers to the corporation named Norwest Corporation before the Merger and now
named Wells Fargo & Company.
This Proxy Statement and the accompanying proxy card were mailed to
stockholders of the Company beginning on or about March , 1999.
Shares of common stock may be voted by stockholders in person at the annual
meeting or voted by proxy. If shares of common stock are voted by proxy, the
shares will be voted as the stockholder instructs in the proxy card except
when votes are cast for persons who are not nominees for director. If a
stockholder does not give any voting instructions in the proxy card, the
shares will be voted: FOR the election of the directors named in this Proxy
Statement (Item 1), FOR the amendment to the Long-Term Incentive Compensation
Plan to increase the number of shares of common stock that may be awarded
under the plan (Item 2), FOR the ratification of the appointment of KPMG LLP
as independent auditors for 1999 (Item 3), and AGAINST the stockholder
proposal relating to cumulative voting (Item 4). A stockholder may revoke a
proxy at any time before it is voted.
The cost of soliciting proxies will be paid by the Company. The Company has
retained Georgeson & Company Inc. to aid in the solicitation for a fee of
$15,000 plus out-of-pocket expenses. Proxies may also be solicited by
employees and directors of the Company by mail, telephone, fax, e-mail or in
person.
As far as the Company's Board of Directors and management know, stockholders
at the meeting will vote only on the matters described in this Proxy
Statement. However, if any other matters properly come before the meeting, the
persons named as proxies for stockholders will vote on those matters as they
consider appropriate.
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Outstanding Shares
On March 9, 1999, the record date for stockholders who may vote at the
meeting, there were shares of common stock outstanding. Each outstanding
share is entitled to one vote.
The Company does not know of any person or group that beneficially owned
more than 5% of its common stock on December 31, 1998. A person is the
beneficial owner of securities, as defined by the Securities and Exchange
Commission, if he or she has or shares voting power or investment power for
such securities or has the right to obtain beneficial ownership within 60 days
after such date.
Voting
Vote Required
To Elect Directors. Under Delaware law, directors are elected by a plurality
of the shares voted, so the 24 nominees receiving the greatest number of votes
will be elected.
To Approve Other Matters. Delaware law requires the affirmative vote of a
majority of the shares represented at the meeting to approve the amendment to
the Long-Term Incentive Compensation Plan (Item 2), the appointment of
auditors (Item 3), and the stockholder proposal relating to cumulative voting
(Item 4).
How a Quorum is Determined. A quorum consisting of the holders of a majority
of the outstanding shares of common stock on the record date must be present
in person or represented by proxy for the transaction of business at the
annual meeting. Shares present at the meeting that are not voted for a
director nominee or shares present by proxy where the stockholder has withheld
authority to vote for a nominee will nevertheless be counted in determining
the presence of a quorum. Abstentions are considered as shares present at the
meeting for quorum purposes but are treated as negative votes on the matter.
Stock exchange rules prohibit a broker from voting shares held in a brokerage
account on some proposals unless the beneficial owner has given voting
instructions to the broker (a "broker non-vote"). Shares that are subject to a
broker non-vote are counted for determining the quorum but not as having
voted. Under New York Stock Exchange rules, a member broker may not vote in
its discretion on Item 4, the stockholder proposal being presented at the
annual meeting.
Confidential Voting Policy
It is the Company's policy that all stockholder meeting proxies, ballots,
and voting records that identify the vote of a particular stockholder are
confidential. The vote of any stockholder will not be disclosed to any third
party before the final vote count at the annual stockholders' meeting except
(i) to meet legal requirements; (ii) to assert claims for or defend claims
against the Company; (iii) to allow the inspectors of election to certify the
results of the stockholder vote; (iv) if a proxy solicitation in opposition to
the Board of Directors takes place; or (v) to respond to stockholders who have
written comments on proxy cards or who have requested disclosure. Inspectors
of election and those who count stockholder votes may not be employees of the
Company but may be employees of an affiliated bank who have been instructed to
comply with this policy.
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PHOTO OF
PHOTO OF
PHOTO OF
PHOTO OF
Leslie S. Biller J.A. Blanchard III Michael R. Bowlin Edward M.
Carson
PHOTO OF
PHOTO OF
PHOTO OF
PHOTO OF
David A. Christensen William S. Davila Susan E. Engel Paul Hazen
PHOTO OF
PHOTO OF
PHOTO OF
PHOTO OF
William A. Hodder Rodney L. Jacobs Reatha Clark King Richard M.
Kovacevich
PHOTO OF
PHOTO OF
PHOTO OF
PHOTO OF
Richard D. McCormick Cynthia H. Milligan Benjamin F. Montoya Philip J.
Quigley
PHOTO OF
PHOTO OF
PHOTO OF
PHOTO OF
Donald B. Rice Ian M. Rolland Judith M. Runstad Susan G.
Swenson
PHOTO OF
PHOTO OF
PHOTO OF
PHOTO OF
Daniel M. Tellep Chang-Lin Tien Michael W. Wright John A. Young
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Item 1. Election Of Directors
Upon completion of the Merger, the Board of Directors of the Company was
increased to, and currently consists of, 24 persons. The Board has set 24
directors as the number to be elected at the annual meeting and has nominated
the individuals named below. All nominees are currently directors of the
Company.
Twelve of the 24 nominees were directors of Norwest Corporation who
continued as directors of the Company after the Merger. The remaining nominees
were directors of the former Wells Fargo who became directors of the Company
in November 1998 when the Merger was completed.
Directors are elected to hold office until the next annual meeting and until
their successors are properly elected and qualified. All nominees have
informed the Company that they are willing to serve as directors. If any
nominee is no longer a candidate for director at the annual meeting, the
proxyholders will vote for the rest of the nominees and may vote for a
substitute nominee in their discretion.
Biographical and business experience information about each director appears
below.
Leslie S. Biller Mr. Biller, 51, is vice chairman and chief operating officer
of the Company. Prior to the Merger, he served as president and chief
operating officer of Norwest Corporation from February 1997 to November 1998
and as executive vice president and head of South Central Community Banking
from 1990. Mr. Biller is also a director of Ecolab Inc. and Minnesota Life
Insurance Company. He had served as a director of Norwest Corporation since
1997.
J. A. Blanchard III Mr. Blanchard, 56, has been president and chief executive
officer of Deluxe Corporation in Shoreview, Minnesota since May 1995, and
chairman since May 1996. Deluxe Corporation supplies paper products and
electronic payment, payment protection and related services to the financial
and retail industries. From January 1994 until May 1995, he served as
executive vice president of General Instrument Corporation, a supplier of
systems and equipment to the cable and satellite television industry. Mr.
Blanchard is also a director of Deluxe Corporation and Saville Systems PLC. He
had served as a director of Norwest Corporation since 1996.
Michael R. Bowlin Mr. Bowlin, 56, has been chairman of the board of Atlantic
Richfield Company (ARCO), an integrated petroleum products company in Los
Angeles, California, since 1995. He has also been chief executive officer of
ARCO since 1994 and president and chief operating officer of ARCO since June
1993. Mr. Bowlin is also a director of ARCO. He had served as a director of
the former Wells Fargo since 1996.
Edward M. Carson Mr. Carson, 69, was chairman of the board of First Interstate
Bancorp, a bank holding company in Los Angeles, California, from 1990 through
his retirement in April 1995, and chief executive officer from 1990 through
1994. First Interstate Bancorp was acquired by the former Wells Fargo in 1996.
He is also a director of Aztar Corporation, Castle & Cook, Inc., Schuff Steel,
Inc., and Terra Industries, Inc. Mr. Carson was a director of First Interstate
Bancorp from 1985 until 1996, when he joined the board of the former Wells
Fargo.
David A. Christensen Mr. Christensen, 63, has been president and chief
executive officer of Raven Industries, Inc., a diversified manufacturer of
plastics, electronics and special-fabric products in Sioux Falls, South
Dakota, since 1971. He also serves as a director of Beta
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Raven, Inc., Glasstite, Inc., Northern States Power Company, and Raven
Industries, Inc. Mr. Christensen had served as a director of Norwest
Corporation since 1977.
William S. Davila Mr. Davila, 67, served as president and chief operating
officer of The Vons Companies, Inc., a Los Angeles-based chain of
supermarkets, from 1984 until his retirement in 1992. He is now president
emeritus of The Vons Companies, Inc., and serves as a director of Geo. A.
Hormel & Company, Pacific Gas and Electric Company, and PG&E Corporation. Mr.
Davila had served as a director of the former Wells Fargo since 1990.
Susan E. Engel Ms. Engel, 52, became chairwoman, president and chief executive
officer of Department 56 Inc., a designer and marketer of collectibles and
specialty giftware in Eden Prairie, Minnesota, in November 1996. She had been
president and chief operating officer of the company from September 1994 until
November 1996. From 1991 until 1994, Ms. Engel was president and chief
executive officer of Champion Products, Inc., the athletic apparel division of
Sara Lee Corporation. She also serves as a director of Coty Inc., Department
56 Inc., K2 Inc., and The Penn Traffic Company. Ms. Engel had served as a
director of Norwest Corporation since May 1998.
Paul Hazen Mr. Hazen, 57, served as chairman of the board and chief executive
officer of the former Wells Fargo from 1995 to November 1998, when he was
named chairman of the board of the Company following the Merger. He served as
president of the former Wells Fargo from 1984 to 1995 and again from July 1997
to May 1998. He is a director of AirTouch Communications, Phelps Dodge
Corporation, and Safeway, Inc. Mr. Hazen had served as a director of the
former Wells Fargo since 1984.
William A. Hodder Mr. Hodder, 67, served as chairman and chief executive
officer of Donaldson Company, Inc., a manufacturer of filtration and emission
control products in Minneapolis, Minnesota, from August 1994 until his
retirement in 1996. Prior to August 1994, he served as chairman, president,
and chief executive officer of the company. Mr. Hodder is also a director of
Musicland Stores Corporation, ReliaStar Financial Corp., and SUPERVALU INC.
Mr. Hodder had served as a director of Norwest Corporation since 1971.
Rodney L. Jacobs Mr. Jacobs, 58, had been vice chairman and chief financial
officer of the former Wells Fargo from 1991 to May 1998, when he became
president. He held this position until November 1998, when he became vice
chairman and chief financial officer of the Company following the Merger. Mr.
Jacobs had served as a director of the former Wells Fargo since May 1998.
Reatha Clark King Ms. King, 60, has been president and executive director of
the General Mills Foundation, a charitable foundation in Minneapolis,
Minnesota, since 1988. She also serves as a vice president of General Mills,
Inc., with responsibility for its citizenship programs. She is a director of
Exxon Corporation, H.B. Fuller Company, and Minnesota Life Insurance Company.
Ms. King had served as a director of Norwest Corporation since 1986.
Ricahrd M. Kovacevich Mr. Kovacevich, 55, was chief executive officer of
Norwest Corporation from January 1993 to November 1998. During this time he
also served as president through January 1997 and as chairman from May 1995 to
November 1998. He was named president and chief executive officer of the
Company in November 1998 following the Merger. Mr. Kovacevich also serves as a
director of Cargill, Incorporated, Dayton Hudson Corporation, Northern States
Power
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Company, and ReliaStar Financial Corp. Mr. Kovacevich had served as a director
of Norwest Corporation since 1986.
Richard D. McCormick Mr. McCormick, 58, has been chairman of the board of U S
WEST, Inc., a telecommunications and data networking company in Denver,
Colorado, since June 1998. Before June 1998, when MediaOne Group was separated
from U S WEST, Inc., he had been chairman, president, and chief executive
officer since 1992 of their former parent company, also called U S WEST, Inc.
Mr. McCormick also serves as a director of Concept Five Technologies, U S
WEST, Inc., United Airlines Corporation, and United Technologies Corporation.
He had served as a director of Norwest Corporation since 1983.
Cynthia H. Milligan Ms. Milligan, 52, became dean of the College of Business
Administration at the University of Nebraska-Lincoln in June 1998. From 1991
to 1998, she was president and chief executive officer of Cynthia Milligan &
Associates in Lincoln, Nebraska, a consulting firm to financial institutions.
Ms. Milligan also serves as a director of The Gallup Organization. She had
served as a director of Norwest Corporation since 1992.
Benjamin F. Montoya Mr. Montoya, 63, has been president and chief executive
officer of Public Service Company of New Mexico, a public utility in
Albuquerque, New Mexico, since August 1993. He is also a director of Brown and
Caldwell, The Environmental Company, Furrs Corp., and Public Service Company
of New Mexico. Mr. Montoya had served as a director of Norwest Corporation
since 1996.
Philip J. Quigley Mr. Quigley, 56, had been chairman, president, and chief
executive officer since 1994 of Pacific Telesis Group, a telecommunications
holding company, prior to his retirement in December 1997. From 1987 to 1994,
he was president and chief executive officer of Pacific Bell, the California
operating subsidiary of Pacific Telesis Group. Mr. Quigley also serves as a
director of SRI International. Mr. Quigley had served as a director of the
former Wells Fargo since 1994.
Donald B. Rice Mr. Rice, 59, has been president, chief executive officer, and
a director of UroGenesys, Inc., a biotechnology research and development
company in Santa Monica, California, since 1996. He was president, chief
operating officer, and a director of Teledyne, Inc. from 1993 to 1996, and
Secretary of the Air Force from 1989 to 1993. He is also a director and
chairman of the board of Scios, Inc., and a director of Vulcan Materials
Company and Unocal Corporation. Mr. Rice had served as a director of the
former Wells Fargo from 1980 to 1989, and again since 1993.
Ian M. Rolland Mr. Rolland, 65, retired in June 1998 as chief executive
officer of Lincoln National Corporation, an insurance holding company in Fort
Wayne, Indiana, where he continued as chairman of the board until December
1998. He had been chief executive officer of the company since 1977. Mr.
Rolland also serves as a director of Bright Horizons Family Solutions, Inc.,
Lincoln National Corporation, NIPSCO Industries, Inc., and Tokheim
Corporation. He had served as a director of Norwest Corporation since 1993.
Judith M. Runstad Ms. Runstad, 54, is of counsel to Foster Pepper & Shefelman
PLLC, a law firm in Seattle, Washington, and was a partner of the firm from
1981 to 1998. She specializes in real estate development, land use and
environmental law. She is also a director of SAFECO Corporation. Ms. Runstad
had served as a director of the former Wells Fargo since May 1998.
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Susan G. Swenson Ms. Swenson, 50, has been president and chief executive
officer of Cellular One, a cellular telecommunications company in South San
Francisco, California, since 1994. From 1979 to 1994, she held various
operating positions within Pacific Telesis Group, including president of
PacTel Cellular for two and a half years and general manager of Pacific Bell's
second largest operating area for one year. She is also a director of General
Magic, Inc. and Working Assets Funding Service. Ms. Swenson had served as a
board member of the former Wells Fargo since 1994.
Daniel M. Tellep Until his retirement at the end of 1996, Mr. Tellep, 67,
served during 1996 as chairman of the board and during 1995 as chairman of the
board and chief executive officer of Lockheed Martin Corporation, an aerospace
manufacturer created by merger in 1995 and based in Bethesda, Maryland. He had
been chairman and chief executive officer of Lockheed Corporation from 1989
until the Merger. He is also a director of Edison International and Southern
California Edison Company. Mr. Tellep had been a director of First Interstate
Bancorp from 1991 until 1996, when he joined the board of the former Wells
Fargo.
Chang-Lin Tien Mr. Tien, 63, holds the NEC Distinguished Professor of
Engineering chair at the University of California, Berkeley, where he was
chancellor from 1990 to 1997. He is also a director of AirTouch
Communications, Chevron Corporation, and Raychem Corporation. Mr. Tien had
served on the board of the former Wells Fargo since 1990.
Michael W. Wright Mr. Wright, 60, has been chairman, president, and chief
executive officer of SUPERVALU INC., a food distributor and retailer in
Minneapolis, Minnesota, since 1982. He also serves as a director of Cargill,
Incorporated, Honeywell, Inc., S. C. Johnson & Son, Musicland Stores
Corporation, and SUPERVALU INC. Mr. Wright had served as a director of Norwest
Corporation since 1991.
John A. Young Mr. Young, 66, retired in 1992 as president, chief executive
officer, and a director of Hewlett-Packard Company, a manufacturer of
computers and peripheral equipment based in Palo Alto, California. He had held
these positions since 1978. He is a director of Affymetrix Corp., Chevron
Corporation, International Integration, Inc., Lucent Technologies, Novell,
Inc., and SmithKline Beecham PLC. Mr. Young had served as a director of the
former Wells Fargo since 1977.
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THE BOARD OF DIRECTORS AND COMMITTEES
Meetings
The Board of Directors held six regular and one special meeting during 1998.
The Board has established committees, including committees with audit,
compensation, and nominating responsibilities, that also met during 1998.
Director attendance at these meetings averaged 94% during 1998. Each director,
except Ms. Engel and Mr. Rolland, attended 75% or more of the total number of
Board and committee meetings on which he or she served.
Committees
Audit and Examination Committee
Members: Philip J. Quigley (Chair) Cynthia H. Milligan
J. A. Blanchard III Benjamin F. Montoya
David A. Christensen Judith M. Runstad
William S. Davila Susan G. Swenson
Reatha Clark King Chang-Lin Tien
Purpose: Recommends independent auditors for the Company to
the Board of Directors.
Reviews the scope and results of the audit engagement
with the independent auditors; the scope, frequency,
and results of internal audits and examinations; the
adequacy of internal accounting controls; bonding and
insurance coverage; and examination reports.
Number of Meetings
in 1998:
Three
Board Affairs Committee
Members: Donald B. Rice (Chair) William A. Hodder
J. A. Blanchard III Philip J. Quigley
Edward M. Carson Michael W. Wright
David A. Christensen John A. Young
Purpose: Provides advice and assistance relating to corporate
governance, the organization and function of the
Board and its committees, selection of members for
the Board and appointments to its committees, and
director compensation.
Reviews and makes recommendations on matters relating
to the effectiveness of the Board, including the
Board meeting schedule, its agenda, and information
provided to the Board.
The Committee Chair also determines the agenda for,
and presides at executive sessions of the Board at
which management directors are not present.
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As part of its nominating responsibilities, the Board
Affairs Committee will consider qualified nominees
recommended by a stockholder if the recommendation is
made in writing to the Secretary of the Company no
later than the December 31 before the annual meeting.
Any recommendation must include sufficient
information to enable the Committee to evaluate the
qualifications of the proposed nominee.
Number of Meetings
in 1998:
Three
Credit Committee
Members: David A. Christensen (Chair) Philip J. Quigley
J.A. Blanchard III Susan G. Swenson
Edward M. Carson Daniel M. Tellep
Susan E. Engel Michael W. Wright
Reatha Clark King John A. Young
Purpose: Reviews credit policies and examination reports,
trends in domestic and international loans
outstanding, the adequacy of the allowance for credit
losses, and the Company's Community Reinvestment Act
activities.
Number of Meetings
in 1998:
Three
Finance Committee
Members: Richard D. McCormick (Chair) Benjamin F. Montoya
Michael R. Bowlin Ian M. Rolland
William S. Davila Judith M. Runstad
Susan E. Engel Daniel M. Tellep
Cynthia H. Milligan Chang-Lin Tien
Purpose: Reviews and makes recommendations to the Board
regarding annual and long-term financial plans,
including proposed debt and equity issues and
dividends.
Reviews policies regarding capital structure and
investment portfolio composition.
Number of Meetings
in 1998:
Three
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Human Resources Committee
Members: Michael W. Wright (Chair) Donald B. Rice
Michael R. Bowlin Ian M. Rolland
William A. Hodder Daniel M. Tellep
Richard D. McCormick John A. Young
Purpose: Approves compensation arrangements for senior
management.
Recommends adoption of benefit and compensation plans
to the Board and approves plan awards to senior
management.
Monitors and evaluates management succession plans.
The Committee Chair also coordinates the evaluation
of the Chief Executive Officer and presides at
executive sessions of the Board at which this
evaluation is discussed.
Number of Meetings
in 1998:
Four
Director Compensation
Annual Compensation. Half of the annual retainer for non-employee directors
is paid in common stock in the form of a stock award made under the Directors'
Formula Stock Award Plan discussed below under "Directors' Formula Plan."
Within five years after joining the Board, directors are required to own
common stock having a value equal to five times the cash portion of the annual
retainer. For the period January 1 through November 1, 1998, each non-employee
director who served on the Board of the Company prior to the Merger received a
cash retainer of $30,000 plus $1,500 for each Board or committee meeting
attended. Effective November 2, 1998, the annual cash retainer was set at
$32,000. The Chairs of the Audit and Examination, Board Affairs, Credit,
Finance, and Human Resources Committees were paid an additional fee of $5,000.
Information about the stock award paid to directors for services in 1998 is
provided below.
Directors' Formula Plan. The Directors' Formula Plan pays non-employee
directors for their services in shares of Company common stock.
Under this plan, a non-employee director who is on the Board at the end of a
year will receive on February 1 of the following year an award of shares of
Company common stock equal in value to the cash portion of the annual retainer
in effect on the immediately preceding January 1. Stock awards to non-employee
directors who serve less than a full year are prorated.
On February 1, 1999, as payment for services in 1998, each person who had
been a non-employee director of the Company before the Merger received 942
shares of Company common stock, except for Susan E. Engel, who joined the
Board in May 1998 and received 628 shares. Each non-employee director who had
served on the Board of Directors of the former Wells Fargo and became a
director of the Company after the Merger received 157 shares. Each director's
award for 1998 services was based on the number of months he or she served on
the Board of the Company and the $32,000 cash retainer in effect on January 1,
1999.
Directors' Retirement Plan. All directors' credited service under the former
Norwest
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directors' retirement plan and the former Wells Fargo directors' retirement
plan was frozen as of November 2, 1998. Directors who were participants in
either plan have a one-time right to convert the accrued value of their
benefit under the plans (equal to their years of service times the current
annual retainer) into Company common stock equivalents under the deferral plan
described below. If no conversion election is made, a director who
participated in either plan will receive upon retirement a payout based on the
cash retainer in effect as of the directors' retirement date and up to ten
years of his or her actual service as of November 2, 1998.
Consulting Agreement and Other Transactions with Certain Directors. The
Company has entered into a consulting agreement with Chang-Lin Tien for a
yearly fee of $200,000. Under the agreement, Mr. Tien agrees to advise the
Company on its international marketing strategies and to serve on the board of
directors of Shanghai Commercial Bank, in which the Company has a 20%
interest. The agreement is terminable at any time by either party.
Edward M. Carson and Benjamin F. Montoya, who are directors of the Company,
also received certain services or payments from the Company and one of its
bank subsidiaries. Mr. Carson is a retired chairman of the board of First
Interstate Bancorp, a predecessor of the former Wells Fargo. At the time of
his retirement, First Interstate agreed to provide Mr. Carson with office
space and secretarial services for his personal use and to reimburse him for
the cost of two club memberships. The Company acquired these obligations as a
result of the Merger. Mr. Montoya received $1,000 in 1998 for serving as a
community (advisory) director of Norwest Bank New Mexico, N.A.
Directors' Stock Option Plan. Under this plan, each non-employee director
elected or re-elected at the annual meeting of stockholders automatically
receives an option valued at $25,000 to purchase Company common stock. Non-
employee directors joining the Board at other times receive stock options with
a prorated value. The options become exercisable six months after grant and
remain exercisable for ten years at an option exercise price equal to the
current market value of the common stock at the time of grant. The first
option grants under this plan will be made to those persons elected directors
at the 1999 annual meeting.
Deferral. Non-employee directors may defer all or part of their annual
retainer, meeting fees, formula stock awards, and gains from the exercise of
stock options using previously owned stock. Until June 30, 1999, non-employee
directors also have the one-time option to defer accrued benefits under the
directors' retirement plans described above. The annual retainer and meeting
fees may be deferred into either an interest-bearing account or Company common
stock with dividends reinvested. All other deferrals may be made only into
Company common stock with the reinvestment of dividends. Deferred amounts are
paid in the same form in which they are invested, either in a lump sum or in
installments, at the election of the director.
11
<PAGE>
Common Stock Owned By Directors And Executive Officers
The table below shows the shares of common stock beneficially owned and
common stock share equivalents held on February 28, 1999, by current
directors, executive officers named in the Summary Compensation Table on page
of this Proxy Statement, and all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Amount and Nature of Ownership(1)
------------------------------------------------------------------
(a) (b) (c) (d)
Options Exercisable Common Stock
Shares of Common within 60 Days of Share Equivalents
Name Stock(2)(3)(4) 2/28/99 (5)(6) Total
---- ---------------- ------------------- ----------------- -----------
<S> <C> <C> <C> <C>
Les Biller.............. 471,636 833,729 183,431 1,488,796
J.A. Blanchard III...... 2,108 -- 5,406 7,514
Michael R. Bowlin....... 1,067 14,160 -- 910
Edward M. Carson........ 140,347 10,000 -- 138,590
David A. Christensen.... 21,164 -- 57,036 78,200
William S. Davila....... 29,407 30,730 -- 29,250
Susan E. Engel.......... 325 -- 1,268 1,593
Paul Hazen.............. 1,198,837 1,669,700 -- 1,198,837
William A. Hodder....... 21,564 -- 51,885 73,449
Rodney L. Jacobs........ 263,036 773,530 -- 263,039
Reatha Clark King....... 16,598 -- 3,042 19,640
Richard M. Kovacevich... 1,202,575 1,935,701 99,210 3,197,546
Richard D. McCormick.... 11,516 -- 14,174 25,690
Cynthia H. Milligan..... 4,964 -- 3,469 8,433
Benjamin F. Montoya..... 323 -- 6,625 6,948
Kenneth R. Murray....... 674,843 652,959 125,999 1,453,801
Philip J. Quigley....... 17,487 29,340 -- 17,330
Donald B. Rice.......... 73,357 10,000 -- 73,200
Ian M. Rolland.......... 12,474 -- 11,999 24,473
Judith M. Runstad....... 2,187 -- -- 2,030
Susan G. Swenson........ 2,157 16,680 -- 2,000
Daniel M. Tellep........ 4,487 21,730 -- 4,330
Chang-Lin Tien.......... 1,157 49,880 -- 1,000
Michael W. Wright....... 7,438 -- 22,568 30,006
John A. Young........... 11,377 69,150 -- 11,220
All directors and
executive officers as a
group (37
individuals)........... 4,179,122 12,943,9907
</TABLE>
- --------
(1) Each individual owns less than 1% of the Company's outstanding shares of
common stock. All directors and executive officers as a group own %.
Except as may otherwise be stated in the footnotes below, each director
and executive officer has sole voting and investment power for all shares
of common stock shown opposite his or her name.
(2) Includes shares of restricted stock or shares subject to certain transfer
restrictions held by certain executive officers as follows: Les Biller,
24,324 shares of restricted stock; Paul Hazen, 250,000 shares; Richard M.
Kovacevich, 182,520 shares of restricted stock; Kenneth R. Murray, 4,324
shares; all executive officers as a group (5 persons), 504,708 shares.
(3) Amounts include shares of common stock allocated to the accounts of the
executive officers under the Norwest Corporation Savings Investment Plan
or the Wells Fargo & Company Tax Advantage and Retirement Plan as of
December 31, 1998.
12
<PAGE>
(4) Share amounts for the following directors and executive officers and for
all directors and executive officers as a group include certain shares
over which they may have shared voting and investment power: Les Biller,
132,682 shares held by his spouse, and 52,753 shares held in a trust for
Mr. Biller as beneficiary; Michael R. Bowlin, 1,067 shares held in a trust
for which he is a co-trustee; William S. Davila, 28,250 shares held in a
trust for which he is a co-trustee; Rodney L. Jacobs, 221,330 shares held
in a trust for which he is a co-trustee; Richard M. Kovacevich, 3,117
shares held by his spouse and 4,324 held in a revocable trust for his
children for which he is co-trustee; Kenneth R. Murray, 740 shares held by
his spouse and 193,515 held in trusts in which he has a direct or indirect
beneficial interest; Philip J. Quigley, 17,330 shares held in a trust for
which he is co-trustee; Donald B. Rice, 1,520 shares held by his spouse;
Judith M. Runstad, 2,000 shares held by her spouse; John A. Young, 3,810
shares held in a trust for which he is a co-trustee; for all directors and
executive officers as a group, shares held by members of his or her
immediate family and 705,937 shares held in trust.
(5) Amounts include common stock share equivalents credited to the accounts of
those executive officers of the Company who were also employees of the
former Norwest or are employees of the Company's mortgage lending
subsidiary as of December 31, 1998 pursuant to deferrals made under the
terms of various compensation and deferral plans maintained by the
Company.
(6) Amounts include common stock share equivalents credited as of February 28,
1999 to Deferred Stock Accounts for non-employee directors under deferral
provisions contained in the various plans for the directors described
above under "Director Compensation."
13
<PAGE>
EXECUTIVE COMPENSATION
(How the Company Pays Its Executive Officers)
Report of the Human Resources Committee on Executive Compensation
Each year, the Board's Human Resources Committee (the "Committee") decides
the compensation to be paid to the Company's Chief Executive Officer and other
executive officers, including those named in the Summary Compensation Table
(page ). Following the Merger, the Committee expanded its membership to
include four directors who were members of the former Wells Fargo Management
Development and Compensation Committee. This report discusses the Committee's
objectives and the procedures used to determine 1998 compensation for the
Chief Executive Officer and the four other executive officers listed in the
Summary Compensation Table.
Objectives
The Committee's compensation policies have two goals: first, to help the
Company compete with the largest banking institutions and other large
corporations in the United States in attracting and retaining highly-qualified
individuals as executive officers, and second, to pay executive officers based
on their contributions to the Company's performance. The Committee has adopted
its "Performance-Based Compensation Policy" (the "Policy") to comply with
Section 162(m) of the Internal Revenue Code. This law places limits on tax
deductions for annual compensation expense in excess of $1,000,000 to certain
highly-paid executive officers. These deduction limits do not apply if:
. The amount of the compensation is subject to a maximum;
. The executive officer has met pre-established business performance goals;
and
. The maximum compensation amount and the business criteria on which the
performance goals are based have been approved by stockholders.
The Policy, which contains these business criteria and the maximum
compensation amount, was originally approved by stockholders at the 1994
annual meeting, and amended and reapproved by stockholders at the 1998 annual
meeting.
The Committee based 1998 annual incentive compensation for the executive
officers named in the Summary Compensation Table, including the Chief
Executive Officer, on each executive officer's achieving one or more pre-
established performance goals, subject to the maximum compensation amount in
the Policy. As the result of the Merger, certain executive officers of the
former Wells Fargo became executive officers of the Company and are included
among the executive officers named in the Summary Compensation Table. These
executive officers, and their 1998 compensation, were also subject to the
Policy. The Policy and the procedures used by the Committee to make incentive
compensation awards are discussed in greater detail in this report under the
heading "Executive Officer Compensation--Annual Compensation."
Executive Officer Compensation
Compensation for the executive officers named in the Summary Compensation
Table consists of annual compensation (base salary and an incentive
compensation award under the Policy) and long-term compensation. The Committee
sets base salary ranges for executive officers using available compensation
data for the prior year from a comparison group of banking organizations. The
Committee also
14
<PAGE>
awards annual incentive compensation under the Policy and long-term
compensation in the form of stock options under the Company's Long-Term
Incentive Compensation Plan (the "LTICP") to the executive officers named in
the Summary Compensation Table. The following discussion applies generally to
the 1998 annual salary, incentive compensation, and long-term compensation for
Mr. Kovacevich, as Chief Executive Officer of the Company. A more complete
description of Mr. Kovacevich's 1998 compensation can be found under the
heading "Chief Executive Officer" below.
Of the five executive officers named in the Summary Compensation Table,
Richard M. Kovacevich, Les Biller, and Kenneth R. Murray were executive
officers of the Company before the Merger. Paul Hazen and Rodney L. Jacobs,
who were executive officers of the former Wells Fargo, each entered into
employment agreements with the Company in connection with the Merger and
became executive officers of the Company. Mr. Hazen's employment agreement
provides for base salary and annual incentive compensation and is discussed in
detail on page of the proxy statement.
Annual Compensation. To establish base salaries and determine final annual
incentive compensation awards under the Policy, the Committee considered
available competitive compensation data from a comparison group (the
"Comparison Group"). The Comparison Group for 1998 was selected from banking
organizations included in the "Peer Group Index" used in the performance graph
that appears in the Proxy Statement for the 1998 annual meeting of
stockholders/1/. For compensation purposes in 1999 and subsequent years, the
Committee has re-defined the Comparison Group as the 15 largest publicly-
traded bank holding companies based on total market capitalization. The
Committee considers that these banking organizations, based on their size and
prominence in the financial services market, more closely compete with the
Company for talented management, and thus set the competitive compensation
levels the Company must consider in order to retain and attract talented
management.
- --------
1 The Comparison Group, for purposes of 1998 compensation, consisted of the
following 27 banking organizations: BB&T Corporation, BankAmerica
Corporation, BankBoston Corporation, Bank One Corporation, The Bank of New
York Company, Inc., The Chase Manhattan Corporation, Comerica Incorporated,
Fifth Third Bancorp, First Union Corporation, Fleet Financial Group, Inc.,
Huntington Bancshares, Incorporated, KeyCorp, Mellon Bank Corporation,
Mercantile Bancorporation, Inc., National City Corporation, Northern Trust
Corporation, PNC Bank Corp., Regions Financial Corporation, Republic New
York Corporation, State Street Corporation, SouthTrust Corporation, Summit
Bancorp., SunTrust Banks, Inc., Union BanCal Corporation, U.S. Bancorp,
Wachovia Corporation, and Wells Fargo & Company. The "Peer Group Index," for
purposes of the performance graph included in the Company's annual proxy
statement, is defined as the 35 largest publicly-traded banking
organizations (ranked based on their total assets on December 31 of the
immediately preceding year). Information on total assets is obtained from
year-end financial results published by these organizations. (See page for
a listing of the banking organizations constituting the 1998 Peer Group
Index for purposes of the performance graph.) Although most of the banking
organizations in the Comparison Group are also included in the 1998 Peer
Group Index, the two groups are not identical. The differences reflect
changes in the banking organizations included in the Peer Group Index due to
mergers occurring or announced in 1998, and the fact that 1998 salary and
incentive compensation decisions are made before the 1998 Peer Group Index
can be determined. They also reflect the Committee's decision in 1994 to
eliminate J.P. Morgan & Co. and Bankers Trust Corporation of New York from
the Comparison Group for future incentive compensation purposes, because the
business mix of such banks is not, in the Committee's judgment, comparable
to the businesses of the Company.
15
<PAGE>
Mr. Kovacevich, as the Company's Chief Executive Officer, recommends the
individual base salaries for all other executive officers. The Committee
approves base salaries for these executive officers and sets Mr. Kovacevich's
base salary. The Company agreed to pay Mr. Hazen a base salary for 1998 and
for each subsequent year during the term of his employment agreement equal to
that set by the Committee for the Chief Executive Officer. Salaries are
reviewed each year and adjusted periodically, typically at intervals of 12
months or more. The Committee adjusts salaries after considering the
relationship of the executive officer's current salary to the base salary
range for the position and after its subjective evaluation of the executive
officer's overall performance. Base salaries paid in 1998 to executive
officers named in the Summary Compensation Table were near the median of
estimated base salaries paid by the Comparison Group banks.
The Policy governs annual incentive compensation for each "covered executive
officer." The Policy defines a "covered executive officer" as an individual
who, on the last day of a taxable year, is the Chief Executive Officer of the
Company or is acting in such capacity or is among the four highest paid
executive officers (other than the Chief Executive Officer) of the Company
determined under Securities and Exchange Commission rules. Each person named
in the Summary Compensation Table is a covered executive officer under the
Policy.
Under the Policy, payment of an incentive compensation award to a covered
executive officer depends upon achievement of one or more performance goals.
The Committee establishes these goals in writing at the beginning of each
year. The Committee has the discretion under the Policy to reduce the
incentive compensation award to a covered executive officer from the maximum
award permitted by the Policy, even though the officer may have met the
performance goals. In exercising this discretion, the Committee reviews
available competitive market data from the prior year and reasonable estimates
of incentive compensation to be paid by the Comparison Group banking
organizations to their executive officers for the most recently completed
year. To set the Chief Executive Officer's incentive compensation award, the
Committee also considers the quality of the Company's earnings based on the
factors discussed below under the heading "Chief Executive Officer." For
covered executive officers other than the Chief Executive Officer, the
Committee also reviews the Chief Executive Officer's recommendations.
For 1998, the Committee established alternative performance goals for Mr.
Kovacevich as Chief Executive Officer and for each other covered executive
officer. These performance goals were based on the Company's "Earnings Per
Share" and "Return on Realized Common Equity," as defined in the Policy. Mr.
Hazen and Mr. Jacobs, as covered executive officers of the Company, were
automatically subject to the Policy and the performance goals set by the
Committee. The Committee also established an additional performance goal for
Kenneth R. Murray based on the "Business Unit Net Earnings" of the business
unit managed by him. The business criteria on which the performance goals were
based are defined in the Policy.
The maximum amount of an incentive compensation award payable under the
Policy for any year to any covered executive officer who has met one or more
of his or her pre-established performance goals may not be greater than eight-
tenths of one percent (0.8%)
16
<PAGE>
of the Company's Net Income/2/. for the year. Based on the Company's 1998 Net
Income of $1.472 billion, as adjusted pursuant to the Policy, the maximum
incentive compensation award payable under the Policy would have been
$11,776,000 (0.8% of $1.472 billion)
For 1998, each covered executive officer, including Mr. Kovacevich, met one
or more of his performance goals. Based on the Committee's certification that
one or more performance goals established by the Committee were met, its
review of projected 1998 executive officer incentive compensation data from
the Comparison Group, and recommendations of the Chief Executive Officer, the
Committee awarded to each executive officer named in the Summary Compensation
Table an incentive award under the Policy. Each incentive award consists of
cash in the amount shown for 1998 in column (d) and for Mr. Kovacevich and Mr.
Hazen, shares of restricted stock having the market value shown for 1998 in
column (f) of the Summary Compensation Table. No covered executive officer,
including the Chief Executive Officer, received the maximum incentive
compensation award under the Policy. The Committee exercised its negative
discretion to establish Mr. Hazen's annual incentive
- --------
2 For purposes of the Policy, the term "Net Income" means the Company's net
income as reported in the Company's consolidated financial statements for
the applicable Performance Period, adjusted to eliminate the effect of (1)
restatements of prior periods' financial results relating to an acquisition
accounted for as a pooling of interests; (2) losses resulting from
discontinued operations; (3) extraordinary gains or losses; (4) the
cumulative effect of changes in generally accepted accounting principles;
and (5) any other unusual, non-recurring gain or loss which is separately
identified and quantified in the Company's financial statements. Net Income
for 1998, in accordance with the Policy, was adjusted to eliminate the
effect of pooling-of-interests accounting on prior period financial results
relating to the acquisition of the former Wells Fargo and of $1.0 billion of
merger-related expenses identified in the Company's 1998 consolidated
financial statements.
compensation award for 1998 using the samefactors it evaluated in connection
with Mr. Kovacevich's annual incentive compensation award. These factors are
discussed under the heading "Chief Executive Officer" below.
Long-Term Compensation. Long-term compensation is provided in the form of
stock options granted under the LTICP. The purpose of long-term compensation
is to increase management ownership of stock and to provide an incentive to
executive officers to improve the long-term performance of the Company. Stock
options granted by the Committee to covered executive officers under the LTICP
are considered performance-based compensation under Section 162(m) of the
Internal Revenue Code, and are not subject to the Policy. Each executive
officer is assigned stock ownership goals to be met by specified dates.
Executive officers achieve these goals primarily by exercising stock options
and retaining a substantial portion of the stock acquired. Once the basic
ownership level is met, the goal continues to increase each time an executive
officer exercises a stock option or a restricted stock grant vests. All
executive officers named in the Summary Compensation Table have exceeded their
ownership goals.
In determining original option grants, the Committee considers the number of
shares of common stock owned by the executive officer compared to the
executive officer's ownership goal, and the stock option grant practices of
the Comparison Group at the time of grant. Prior to 1999, the Committee made
original grants of stock options every three years. Beginning in 1999, the
Committee expects to make original stock option grants annually. If the
executive officer does not meet his or her stock ownership goal, the number of
stock options granted by the Committee to the executive officer in the future
will be less than banks in the Comparison Group would grant to their executive
officers with comparable positions. The Committee also
17
<PAGE>
encourages executive officers to achieve their stock ownership goals by
including in original option grants a reload feature. If the optionee
exercises the original option by delivering shares of previously owned common
stock to pay for the option shares, the optionee receives a reload option.
Under a reload option, the optionee can purchase the same number of whole
shares of stock, at their fair market value on the date of the reload, as were
used to pay the purchase price of the shares acquired upon exercise of the
original option and related taxes. Reload options are exercisable at any time
during the remaining term applicable to the original option. Reload options
allow the exercise of the original option early in its term while preserving
the executive officer's opportunity for future appreciation in the shares
delivered to exercise the original option. The Committee believes that the
reload feature in original option grants encourages executive officers to
acquire and retain the Company's stock.
Except for Mr. Hazen, none of the executive officers named in the Summary
Compensation Table received original option grants in 1998. Les Biller and
Kenneth R. Murray received reload options in 1998 because they exercised
original stock options granted prior to 1998 that had the reload feature. The
reload options granted to these executive officers appear in the table headed
"Option/SAR Grants in Last Fiscal Year" (page ). On November 2, 1998, Paul
Hazen received an option grant to acquire 500,000 shares of the Company's
common stock pursuant to the terms of his employment agreement.
Other Compensation. Executive officers also receive various perquisites and
supplemental retirement benefits of a type and value comparable to those made
available to executive officers of Comparison Group banking organizations.
They also receive retirement and medical benefits generally available to the
Company's employees.
Chief Executive Officer. The Committee determined Mr. Kovacevich's 1998
salary based on the salary procedures described above for covered executive
officers. With respect to Mr. Kovacevich's incentive award under the Policy,
the Committee certified that Mr. Kovacevich had met his performance goal based
on the Company's 1998 Return on Realized Common Equity, as determined pursuant
to the Policy. The Committee concluded that Mr. Kovacevich was eligible to
receive the maximum amount for an incentive compensation award under the
Policy, subject to reduction of the amount of such award in the Committee's
discretion.
In exercising its discretion, the Committee evaluated the quality of the
Company's earnings based on its review of the following factors: return on
realized common equity, return on assets, earnings per share growth,
efficiency ratio (including a review of these factors on a "cash return"
basis), non-performing assets and loan loss reserves as a percentage of
assets, and Tier 1 capital. To evaluate the Company's overall performance for
purposes of determining Mr. Kovacevich's incentive award under the Policy, the
Committee also compared the Company's performance to that of banking
organizations included in the Comparison Group using these same factors. The
Committee noted particularly that the Company was in the top quartile of the
Comparison Group in earnings per share growth, cash return on realized common
equity, and cash return on assets. The Committee ultimately exercised its
discretion to set Mr. Kovacevich's 1998 incentive award based on (a) its
subjective evaluation of the Company's overall performance and the quality of
its earnings compared to the performance of the Comparison Group using the
factors described above, and (b) the aggregate compensation paid by Comparison
Group banking organizations to their chief executive officers.
18
<PAGE>
Based on Mr. Kovacevich's achievement of his performance goal, and the
Committee's exercise of its discretion under the Policy, the Committee awarded
incentive compensation for 1998 to Mr. Kovacevich of $4,500,000, of which
$3,000,000 was paid in cash and $1,500,000 was paid in the form of 39,934
shares of restricted stock (valued based on a closing market price of $37.5625
on February 22, 1999, the trading day preceding the date of the award). The
shares of restricted stock paid to Mr. Kovacevich are subject to certain
vesting requirements. These shares will be forfeited unless Mr. Kovacevich
remains employed by the Company or an affiliate until the restrictions
terminate. This forfeiture provision does not apply if Mr. Kovacevich's
employment with the
Company ends because of his death, disability, retirement, or a change in
control of the Company. Until the restrictions on these shares end, Mr.
Kovacevich is entitled to vote and receive dividends on the restricted shares
but may not sell or otherwise transfer them. The restrictions on the
restricted stock grant included in Mr. Kovacevich's 1998 incentive
compensation award end in 2002 as to 30% of the shares, in 2003 to an
additional 30% of the shares, and in 2004 with respect to the remainder of the
shares. That portion of Mr. Kovacevich's incentive compensation award under
the Policy made in the form of restricted shares is governed by the provisions
(other than the provisions dealing with computation of the award) of the
LTICP.
Members of the Committee:
Michael W. Wright, Chair
Michael R. Bowlin
William A. Hodder
Richard D. McCormick
Donald B. Rice
Ian M. Rolland
Daniel M. Tellep
John A. Young
19
<PAGE>
STOCK PERFORMANCE GRAPHS
The stock performance graphs presented below compare the cumulative total
return on the Company's common stock for the five- and ten-year periods ended
December 31, 1998, with the cumulative total returns for the same periods on
the S&P 500 Index, the Keefe, Bruyette and Woods 50 Total Return Index (the
"KBW 50 Index"), and the "Peer Group Index" described below.
Prior to the Merger, the former Norwest used an index of the stock
performance of a peer group consisting of the 35 largest bank holding
companies ranked by total assets as of the end of the prior year (the "Peer
Group Index") for purposes of the stock performance graph that appeared in its
proxy statement. The former Wells Fargo used the KBW 50, a published banking
industry index prepared by an investment banking firm, for its stock
performance graph. Following the Merger, the Company has elected to measure
the cumulative return on its common stock against that of the banking
organizations included in the KBW 50 and to discontinue using the Peer Group
Index. The Company believes that the total stock return of the 50 banks in an
objective published index like the KBW 50 represents a more comprehensive and
accessible indicator against which to measure the performance of the Company's
common stock. However, as required by the rules of the Securities and Exchange
Commission, each graph shown below includes a comparison of the cumulative
total return on the Company's common stock with the cumulative total returns
of the Peer Group Index for the indicated periods. The banking organizations
in the 1998 Peer Group Index are listed following the stock performance
graphs.
The cumulative total stockholder return computations in the graphs assume
the investment of $100 in Company common stock, the S&P 500 Index and the Peer
Group Index for the periods indicated and the reinvestment of all dividends.
For purposes of these graphs, the stock performance used to compute total
stockholder return for the Company is the stock performance of the former
Norwest, as the ongoing company after the Merger.
[GRAPH APPEARS HERE]
1993 1994 1995 1996 1997 1998
---------------------------------------------
Wells Fargo $100 99 144 195 355 373
S&P 500 $100 101 140 171 229 294
KBW 50 $100 95 152 206 315 341
Peer Group $100 93 143 199 300 331
20
<PAGE>
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Wells Fargo $100 145 140 255 310 360 355 517 701 1,275 1,340
S&P 500 $100 132 128 168 179 197 200 275 338 451 580
KBW 50 $100 119 85 135 172 182 173 276 391 571 619
Peer Group $100 122 100 176 225 233 217 333 462 699 769
</TABLE>
For purposes of the above graphs, the banking organizations in the 1998 Peer
Group Index are: BankAmerica Corporation; The Chase Manhattan Corporation;
Bank One Corporation; J.P. Morgan & Co. Incorporated; First Union Corporation;
Wells Fargo & Company; Bankers Trust Corporation; Fleet Financial Group, Inc.;
SunTrust Banks, Inc.; National City Corporation; KeyCorp; PNC Bank Corp.; U.S.
Bancorp;, BankBoston Corporation; Wachovia Corporation; The Bank of New York
Company, Inc.; Mellon Bank Corporation; Republic New York Corporation; State
Street Corporation; Firstar Corporation; SouthTrust Corporation; Regions
Financial Corporation; Comerica Incorporated; Mercantile Bancorporation Inc.;
BB&T Corporation; Summit Bancorp.; UnionBanCal Corporation; Union Planters
Corporation; Fifth Third Bancorp; Huntington Bancshares Incorporated; Northern
Trust Corporation; MBNA Corporation; Popular, Inc.; First Security
Corporation; and Marshall & Ilsley Corporation.
21
<PAGE>
Compensation Tables and Information
The table below shows the cash and non-cash compensation paid to the Chief
Executive Officer and the four next highest paid executive officers of the
Company for the last three years. The compensation shown for Paul Hazen and
Rodney L. Jacobs for the years 1996 through 1998 is compensation paid to them
in 1996 and 1997, and for part of 1998 by the former Wells Fargo. During those
years, Mr. Hazen served as Chairman and Chief Executive Officer, and as
President from July 1997 to May 1998 of the former Wells Fargo and Mr. Jacobs
served as Vice Chair and as President from May 1998 to October 1998 of the
former Wells Fargo.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
------------------------------------ ----------------------------
Other annual Restricted stock All other
compensation award(s) Options/ compensation
Name and principal position Year Salary ($) Bonus ($)(1) ($)(2) ($)(3)(4)(5) SARs (#)(5) ($)(6)
(a) (b) (c) (d) (e) (f) (g) (i)
- --------------------------- ---- ---------- ------------ ------------ ---------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich... 1998 $925,000 $3,000,000 $68,747 $1,500,000 -0- $193,500
President and Chief 1997 900,000 2,300,000 86,111 1,632,313 1,720,844 186,000
Executive Officer 1996 900,000 2,200,000 39,290 814,000 588,706 185,220
Paul Hazen.............. 1998 862,500 3,000,000 8,059 10,796,875 881,000 89,583
Chairman 1997 850,000 2,000,000 7,828 -0- 218,300 85,000
1996 850,000 2,000,000 11,478 -0- 295,600 84,583
Les Biller.............. 1998 525,417 2,500,000 13,896 -0- 236,405 143,125
Vice Chairman and 1997 510,833 1,860,000 162,545 -0- 890,478 93,425
Chief Operating Officer 1996 465,000 1,046,250 31,293 508,750 229,982 90,675
Rodney L. Jacobs........ 1998 570,833 2,000,000 4,029 -0- 213,300 57,083
Vice Chairman and 1997 425,000 1,000,000 14,867 -0- 65,500 42,500
Chief Financial Officer 1996 425,000 750,000 19,188 -0- 118,300 41,667
Kenneth R. Murray....... 1998 465,833 1,457,000 83,674 -0- 100,976 102,470
Group Executive Vice 1997 460,000 1,242,000 21,149 -0- 672,434 89,700
President 1996 451,667 1,035,000 26,677 -0- -0- 86,500
</TABLE>
- --------
(1) The amounts shown for 1998 represent that part of the 1998 incentive
compensation awards paid in cash under the Performance-Based Compensation
Policy. This policy is discussed above in the Report of the Human
Resources Committee on Executive Compensation on pages through .
(2) The amounts shown include (i) for the years 1996-1998, reimbursements to
each named executive officer for the payment of taxes on perquisites, and
(ii) perquisites and other personal benefits totaling more than $50,000
received by Richard M. Kovacevich, Les Biller, and Kenneth R. Murray. The
total amount of these perquisites and personal benefits (and the amount
and type of each perquisite or personal benefit that was greater than 25%
of the total received) is: Mr. Kovacevich: 1997--$58,081 and 1998--$54,502
(includes $29,698 and $27,144, respectively, for executive life
insurance); Mr. Biller, 1997--$86,649, (includes $51,701 for club dues and
fees); Mr. Murray, 1998--$60,386 (includes $21,103 for a car allowance and
$24,250 for executive life insurance). The other named executive officers
also received certain perquisites and personal benefits for the years
1996-1998, none of which had a total value greater than $50,000.
(3) Restricted stock awards are valued as of the trading dates immediately
preceding the dates of their respective grants, based on the closing
market price of the Company's common stock on such trading dates. The
dollars shown as a restricted stock award for 1998 to Richard M.
Kovacevich
22
<PAGE>
represent 39,934 shares of Wells Fargo common stock. These shares are that
part of Mr. Kovacevich's 1998 incentive compensation award paid in
restricted stock under the policy referred to in footnote (1) above. These
shares were valued as of February 22, 1999, the trading date immediately
preceding the date the restricted stock award was made, based on a closing
market price of the Company's common stock of $37.5625 per share and
rounded up to the nearest whole share.
The dollars shown as a restricted stock award for 1998 for Paul Hazen
represent 39,934 shares as part of Mr. Hazen's incentive compensation award
paid in restricted stock calculated as described above for Mr. Kovacevich
and an award of 250,000 shares of the Company's common stock made on
November 2, 1998, the effective date of the Merger. This award was made
pursuant to Mr. Hazen's employment agreement with the Company and was
valued on November 2, 1998, based on a closing market price of the
Company's common stock of $37.1875 per share.
(4) The total number of shares of restricted stock held on December 31, 1998
by each person named and their market value, based on a closing market
price for the Company's common stock of $39.9375 per share on that date,
were as follows: Richard M. Kovacevich, 142,580 shares, $5,694,289; Paul
Hazen, 250,000 shares, $9,984,375; and Les Biller, 20,000 shares,
$798,750. Dividends are paid on shares of restricted stock on the same
dates and at the same rate as those paid to all holders of Wells Fargo's
common stock. All the restricted stock awards vest over a period of five
years, beginning in the third year after the date of the original award.
(5) Mr. Hazen's options for 1998 include an option to purchase 500,000 shares
of the Company's common stock granted under the terms of his employment
agreement. Additional information about this option is found below in the
table headed "Option/SAR Grants in Last Fiscal Year": and the discussion
under "Employment Agreements." The options shown for Mr. Hazen and
Mr. Jacobs for the years 1996-1998 represent options to acquire shares of
former Wells Fargo common stock that were converted into options to
acquire shares of the Company's common stock upon completion of the
Merger.
(6) The amounts shown for Messrs. Kovacevich, Biller, and Murray are the total
of the Company's contributions to the Savings Investment Plan ("SIP"), a
401(k) plan in which all employees are eligible to participate, and
contributions to the Company's Supplemental Savings Investment Plan, a
non-qualified supplemental executive retirement plan ("Supplemental SIP").
For the year ended December 31, 1998, the Company's contribution to SIP
for each such executive officer was $9,600 (the maximum allowable
contribution under SIP). The Company's contribution to Supplemental SIP
for the year ended December 31, 1998, for these officers was as follows:
Mr. Kovacevich, $183,900; Mr. Biller, $133,525; and Mr. Murray, $92,870.
The amount shown for Paul Hazen and Rodney L. Jacobs is the total of the
former Wells Fargo's contributions to its Tax Advantage and Retirement Plan
("TAP"), a 401(k) retirement plan in which all former Wells Fargo employees
participate, and the Benefits Restoration Program ("BRP"), a non-qualified
supplemental executive retirement plan maintained by the former Wells Fargo
for its executive officers. Messrs. Hazen and Jacobs will continue to
participate in TAP and BRP until the Company combines all qualified and
non-qualified retirement plans for all employees and executive officers.
For the year ended December 31, 1998, the contribution to TAP for each of
Messrs. Hazen and Jacobs was $14,440 (the maximum allowable contribution
under TAP). The contributions to BRP for the year ended December 31, 1998,
for each of these officers were as follows: Mr. Hazen, $75,539; Mr. Jacobs,
$43,039.
23
<PAGE>
Option Grants and Exercises
These tables summarize for 1998 under the Company's Long-Term Incentive
Compensation Plan option grants to and option exercises by the executive
officers named in the Summary Compensation Table, and the value of the options
held by them at December 31, 1998.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential realizable value
at assumed annual rates of
stock price appreciation
Individual Grants for option term(4)
- ----------------------------------------------------------------------------------- ---------------------------
Percent of total
options/SARs
granted to
Options/SARs employees in Exercise or base Expiration
Name granted (#) fiscal year(3) price ($/Share) date 5% ($) 10% ($)
---- ------------ ---------------- ---------------- ---------- ------------- -------------
(a) (b) (c) (d) (e) (f) (g)
<S> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich... -0- * $ -- -- -- --
Paul Hazen (1).......... 381,000 * 32.1600 02/04/08 7,705,821 19,210,283
500,000 37.3750 11/01/08 11,752,468 29,783,062
Les Biller.............. 236,405(2) * 39.1250 07/22/07 4,897,548 11,964,738
Rodney L. Jacobs (1).... 213,300 * 32.1600 01/20/08 4,314,046 10,932,640
Kenneth R. Murray....... 100,976(2) * 39.4375 07/23/01 561,020 1,169,387
</TABLE>
- --------
*Represents less than 1.0% of all stock options granted to employees in 1998.
(1) The options listed in the second line opposite Mr. Hazen's name were
granted to him on November 2, 1998 pursuant to the terms of his employment
agreement. See "Employment Agreements" below for a discussion of Mr.
Hazen's stock options under the terms of this agreement.
(2) The options listed opposite Mr. Biller's and Mr. Murray's names are
immediately exercisable "reload options" granted as the result of each
officer's exercise of stock options in 1998. The general terms of reload
options are described in the Report of the Human Resources Committee on
Executive Compensation.
(3) Includes options granted to selected employees under the Company's Long-
Term Incentive Compensation Plan and the former Wells Fargo Long-Term
Incentive Plan and options granted to all eligible employees of the
Company and its subsidiaries under the Best Practices PartnerShares(R)
Plan. Participants in the Long-Term Incentive Compensation Plan are not
eligible for option grants under the PartnerShares Plan.
(4) The dollar amounts under columns (f) and (g) are based on assumed 5% and
10% annual rates of appreciation set by the Securities and Exchange
Commission (the "Commission"). These amounts should not be viewed as, and
are not intended to be, a forecast of possible future appreciation, if
any, in the Company's stock price.
24
<PAGE>
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value (*) of unexercised
Number of securities in-the-
underlying unexercised money(*) options/SARs
options/SARs at fiscal year end
Shares Value at fiscal year end (#) (in dollars)
acquired on realized (*) (in shares) Exercisable/ Exercisable/
Name exercise (#) ($) Unexercisable Unexercisable
---- ------------ ------------ ------------------------ ------------------------
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Richard M. Kovacevich... -- $ -- 1,935,701 / 986,667 $35,302,111 / $8,934,270
Paul Hazen.............. -- -- 2,663,080 / 1,125,070 70,611,198 / 6,688,457
Les Biller.............. 266,666 2,199,995 833,729 / 533,334 13,896,002 / 4,829,339
Rodney L. Jacobs........ -- -- 680,600 / 296,400 15,778,723 / 2,513,025
Kenneth R. Murray....... 133,333 2,466,661 652,959 / 266,667 7,842,361 / 2,414,670
</TABLE>
- --------
* For purposes of column (c), the "value" of exercised options means the
difference between the option exercise price and the market value of the
underlying shares based on the closing price of the Company's common stock
on the option exercise date; for purposes of column (e), the "value" of
unexercised options means the difference between the option exercise price
and the market value of the underlying shares based on the closing price
for the Company's common stock on December 31, 1998. As used in column (e),
an option is "in the money" on a particular date if the option exercise
price is less than the market value of the underlying shares based on the
closing price for the Company's common stock on that date.
Pension Plans and Other Retirement Arrangements
The Company currently maintains the "Norwest Corporation Pension Plan" (the
"Norwest Pension Plan") and the Norwest Corporation Supplemental Pension Plan
(the "Norwest Supplemental Pension Plan") (the "Norwest Plans"). Subject to
any necessary governmental approvals, the Company intends to restate the
Norwest Pension Plan effective July 1, 1999 into a cash balance defined
benefit plan. The Company also plans to amend and restate the Norwest
Supplemental Pension Plan to coordinate its provisions with the restated cash
balance plan. For purposes of the following description of the Norwest Plans,
references to "employees" mean only those persons who were employees of former
Norwest and its participating subsidiaries as of November 2, 1998. Employees
of the former Wells Fargo (including Paul Hazen and Rodney L. Jacobs) do not
currently participate in the Norwest Pension Plans, but will be eligible to
participate in the restated cash balance plan and the amended supplemental
pension plan.
Norwest Pension Plan. The Norwest Pension Plan is a defined benefit plan
qualified under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and the Internal Revenue Code (the "Code"). Benefits under
the Norwest Pension Plan are determined by age, years of service, and
compensation. The monthly benefit at regular retirement age is a life annuity
equal to 1.1% of final average monthly earnings up to the "Integration Level"
and 1.6% of final average monthly earnings above the Integration Level for
each year of credited service. The Norwest Pension Plan does not take into
account more than 35 years of credited service. Under the Norwest Pension
Plan, the Integration Level for any year is $1,400 times the Social Security
Wage Base for the Current Year ($ for 1999) divided by $48,000. The
Integration Level (stated as an amount per month) is $2,117.50 for
participants retiring in 1999.
A participant's final average earnings are the highest average monthly
compensation paid during any 36 consecutive months within the last 120 months
of employment. Compensation for purposes of
25
<PAGE>
this calculation means generally all compensation paid to a participant during
the year which is reportable on Form W-2, plus salary reduction amounts made
under Section 401(k) and Section 125 of the Code. Compensation for this
purpose generally excludes contributions to any non-qualified deferred
compensation plan maintained by the Company, perquisites, severance pay,
gross-ups, payments in lieu of vacation, and stock option or equity-like
gains. Incentive compensation amounts will be included in compensation for
Norwest Pension Plan purposes in the year received rather than the year
earned.
Compensation under the Norwest Pension Plan for a plan year is limited by
Code Section 401(c)(17). The Section 401(c)(17) limit for the 1999 plan year
is $160,000. In addition, Section 415 of the Code places certain limitations
on the amount of the annual pension that can be paid to a participant from a
tax-qualified pension plan. The annual limit currently in effect is $130,000,
but depending on when a participant retires, the annual benefit may be greater
than that amount.
Norwest Supplemental Pension Plan. As permitted by ERISA and the Code,
employees who participate in the Norwest Supplemental Pension Plan will
receive amounts that would be payable under the Norwest Pension Plan but for
the Code Sections 401(c)(17) and 415 limits. Compensation under the
Supplemental Pension Plan means the participant's basic compensation, as well
as amounts earned or received under designated incentive compensation plans of
Company, whether or not that compensation is deferred under any non-qualified
deferred compensation plan maintained by Company or deferred under Section
401(k) or Section 125 of the Code. Incentive compensation amounts are included
in compensation for plan purposes in the year received, rather than the year
earned.
The table below shows the estimated total annual average retirement benefits
payable under the Norwest Plans for individuals with various combinations of
annualized final average compensation and years of credited service. These
estimated benefits do not take into account any Internal Revenue Code limits
on retirement benefits. The annual amounts shown below, as estimated and when
paid, are not reduced by the amount of Social Security benefits.
<TABLE>
<CAPTION>
Years of Service at Retirement
Final Avg ---------------------------------------------------------
Comp 10 15 20 25 30 35
- --------- ------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
250,000.............. 38,730 58,094 77,459 96,824 116,189 135,553
500,000.............. 78,730 118,094 157,459 196,824 236,189 275,553
750,000.............. 118,730 178,094 237,459 296,824 356,189 415,553
1,000,000............ 158,730 238,094 317,459 396,824 476,189 555,553
1,250,000............ 198,730 298,094 397,459 496,824 596,189 695,553
1,500,000............ 238,730 358,094 477,459 596,824 716,189 835,553
1,750,000............ 278,730 418,094 557,459 696,824 836,189 975,553
2,000,000............ 318,730 478,094 637,459 796,824 956,189 1,115,553
2,250,000............ 358,730 538,094 717,459 896,824 1,076,189 1,255,553
2,500,000............ 398,730 598,094 797,459 996,824 1,196,189 1,395,553
2,750,000............ 438,730 658,094 877,459 1,096,824 1,316,189 1,535,553
3,000,000............ 478,730 718,094 957,459 1,196,824 1,436,189 1,675,553
3,250,000............ 518,730 778,094 1,037,459 1,296,824 1,556,189 1,815,553
3,500,000............ 558,730 838,094 1,117,459 1,396,824 1,676,189 1,955,553
3,750,000............ 598,730 898,094 1,197,459 1,496,824 1,796,189 2,095,553
4,000,000............ 638,730 958,094 1,277,459 1,596,824 1,916,189 2,235,553
4,250,000............ 678,730 1,018,094 1,357,459 1,696,824 2,036,189 2,375,553
4,500,000............ 718,730 1,078,094 1,437,459 1,796,824 2,156,189 2,515,553
4,750,000............ 758,730 1,138,094 1,517,459 1,896,824 2,276,189 2,655,553
5,000,000............ 798,730 1,198,094 1,597,459 1,996,824 2,396,189 2,795,553
</TABLE>
26
<PAGE>
For the executive officers named in the Summary Compensation Table who
currently participate in the Norwest Pension Plans, the compensation
recognized under the Norwest Pension Plans for 1999 is the amount shown in the
table for the year 1998 as "Salary" (column (c)) and, under the transition
rules described above, as "Bonus" (column (d)). As of December 31, 1998, their
individual credited service was as follows: Mr. Kovacevich, 13 years, 10
months; Mr. Biller, 12 years, 4 months; Mr. Murray, 17 years. Paul Hazen and
Rodney L. Jacobs, who were employees of the former Wells Fargo, do not
currently participate in the Norwest Pension Plans. Information on retirement
benefits payable to Mr. Hazen and Mr. Jacobs under the former Wells Fargo
retirement plans and under their employment agreements are discussed below and
under the heading "Employment Agreements" on page 28.
Under Former Wells Fargo Retirement Plans. Mr. Hazen and Mr. Jacobs also
participated in a defined benefit plan sponsored by the former Wells Fargo.
This plan was terminated in 1994, and annuities were purchased for all
participants eligible to receive benefits under this plan, including Mr. Hazen
and Mr. Jacobs. Because ERISA limited individual annual benefits payable under
the former Wells Fargo plan, Mr. Hazen and Mr. Jacobs also participated in the
former Wells Fargo Benefits Restoration Plan ("BRP"). The BRP is a non-
qualified supplemental executive retirement plan maintained by the former
Wells Fargo for its executive officers, under which they will receive
retirement benefits in excess of the ERISA limits. The combined annual
benefits payable under the annuities and the BRP beginning at age 65 are: Mr.
Hazen, $187,490; and Mr. Jacobs, $27,573.
Long-Term Disability Plans
The executive officers named in the Summary Compensation Table can
participate in the Company's Long-Term Disability Plan, which is available to
all employees. This plan covers compensation of up to $500,000 in salary and
payments made under designated incentive compensation plans. The plan provides
a monthly benefit to an employee scheduled to work 20 or more hours per week
who has elected to participate in the plan and who becomes totally disabled
for more than 22 weeks. The monthly benefit equals 65% of the participant's
average covered compensation, up to a monthly benefit (based on a maximum
annual compensation of $500,000) of $27,083. The Supplemental Long-Term
Disability Plan extends similar disability coverage for the base salary earned
by Richard M. Kovacevich in excess of $500,000. The monthly benefit payable
under either plan may be offset by other sources of income. Pursuant to the
terms of his employment agreement with the Company, the base salary earned by
Paul Hazen is covered by this supplemental plan on the same basis as Mr.
Kovacevich's base salary.
Severance Agreements
The Company has severance agreements with Richard M. Kovacevich, Les Biller,
and Kenneth R. Murray, all of whom are named in the Summary Compensation
Table. The Company also has termination of employment arrangements with Paul
Hazen and Rodney L. Jacobs, who are also named in the Summary Compensation
Table. These arrangements are included in the terms of the employment
agreements of Messrs. Hazen and Jacobs and are discussed below under the
heading "Employment Agreements."
27
<PAGE>
The severance agreements with Mr. Kovacevich, Mr. Biller, and Mr. Murray are
intended to encourage them to continue to carry out their duties if there is a
change of control of the Company. Under the terms of these agreements, these
executive officers may receive certain payments if their employment is
terminated or if their job duties or compensation and benefits are
substantially reduced within three years following a change of control of the
Company. The maximum payments are two times the sum of each of these executive
officer's (i) base salary rate, (ii) the value of perquisites provided by the
Company, and (iii) the highest potential incentive compensation award or, in
the case of Mr. Kovacevich, an amount equal to the two-year average of his
incentive compensation awards. The agreements also continue certain medical,
dental and life insurance benefits for up to two years after termination. If
payments received by any such officer as a result of a change of control
result in an excise tax liability for such officer, the Company also will pay
to the officer an additional amount equal to the excise tax plus a gross-up
for additional income taxes, interest, and penalties related to the excise
tax.
The Company also has a plan that provides severance pay to employees who are
discharged under certain circumstances. All of the executive officers named in
the Summary Compensation Table may participate in this plan. The amount of
severance pay is based on years of service, job level, and the severance
option the employee chooses, and includes payment of base salary and
continuation of benefits for specified monthly periods. Mr. Kovacevich also
can receive benefits of a minimum payment of 12 months' salary (less the
amount of any other severance payments to which he may be entitled under any
severance plan of the Company then in effect), a pro rata portion of his
incentive compensation, and certain life and health insurance benefits. The
benefits are payable if his employment is terminated by the Company for a
reason other than cause or if his job duties are substantially reduced and he
resigns within 90 days thereafter.
Employment Agreements
In connection with the Merger, the Company entered into an employment
agreement with Paul Hazen and Rodney L. Jacobs. Under these employment
agreements with the Company, Mr. Hazen will be employed for a term of five
years and Mr. Jacobs will be employed for a term of three years, in each case
beginning on November 2, 1998. During the term of his employment, Mr. Hazen
will serve as Chairman of the Board of Directors. Under his employment
agreement, Mr. Jacobs will serve as an executive officer of the Company,
reporting directly to the Chief Executive Officer or the Chairman of the
Board. Following his employment by the Company, Mr. Jacobs was elected as Vice
Chairman and Chief Financial Officer of the Company, and reports to Richard M.
Kovacevich, as President and Chief Executive Officer. In addition, Messrs.
Hazen and Jacobs will each serve as members of the Board of Directors during
the terms of their employment.
Compensation. Under his employment agreement, Mr. Hazen is entitled to
receive an annual base salary and bonus of not less than the annual base
salary and bonus of the Chief Executive Officer (currently, Richard M.
Kovacevich). The amounts Mr. Hazen received in 1998 as salary and bonus are
shown in columns (b) and (c) of the Summary Compensation Table. Also pursuant
to his employment agreement, Mr. Hazen received a restricted stock award of
250,000 shares, and was granted an option to purchase 500,000 shares of the
Company's common stock under its Long-Term Incentive Compensation Plan on
November 2, 1998. Information about Mr. Hazen's restricted stock award is
included in column (f) of the Summary Compensation Table. Information about
Mr. Hazen's stock
28
<PAGE>
option grant is included in column (g) of the Summary Compensation Table and
opposite his name in the table on page of this proxy statement captioned
"Option/SAR Grants in Last Fiscal Year." On November 2, 1999 and November 2,
2000 Mr. Hazen is entitled to receive 125,000 additional shares of restricted
stock and an option to purchase 250,000 additional shares of the Company's
common stock. Under his employment agreement, Mr. Jacobs' annual base salary,
annual bonus, and long-term incentive compensation (stock option grants and
restricted stock grants) will be determined each year by the Human Resources
Committee using the procedures for executive officers described in the
Committee's report on page .
Retirement and Other Benefits. Mr. Hazen and Mr. Jacobs will each receive an
annual retirement benefit, payable immediately upon the termination of their
employment for any reason, equal to not less than 25% of their 1997 taxable
compensation as defined in their employment agreements. This benefit will be
reduced by the amount of any retirement benefits accrued after the date of
their employment by the Company that may be payable to them under any
qualified or non-qualified defined benefit retirement plan of the Company.
They are also entitled to participate in all employee benefit, stock
incentive, welfare, and other plans, practices, policies, and perquisites
applicable to, and on the same basis, in Mr. Hazen's case, as the Chief
Executive Officer, and in Mr. Jacobs' case, as his "peer executive officer."
For purposes of his employment agreement, Mr. Jacobs' peer executive officer
is defined as the highest paid executive officer of the Company, other than
the Chairman and the Chief Executive Officer (currently, Les Biller, Vice
Chairman and Chief Operating Officer).
Termination of Employment. Mr. Hazen and Mr. Jacobs are each entitled to
certain payments under their employment agreements if their employment is
terminated other than for cause, death, or disability, or if they terminate
their employment with the Company for "good reason." "Good reason" includes
the Company's assigning any duties, authority, titles, offices or reporting
requirements inconsistent with either Mr. Hazen's or Mr. Jacobs' positions
with the Company specified under the terms of their employment agreements,
failure by the Company to comply (other than inadvertently) with the
compensation provisions of their employment agreements, an attempt by the
Company to terminate Mr. Hazen's or Mr. Jacobs' employment other than pursuant
to the terms of his agreement, or the failure by any successor to the
Company's business or substantially all its assets to assume and perform the
Company's obligations under the employment agreements. Upon termination, Mr.
Hazen and Mr. Jacobs will each be entitled to a lump-sum cash payment of (i)
any unpaid base salary and (ii) a pro rata annual bonus, based on the highest
bonus each of them received for the three years preceding the date their
employment terminates (the "termination date"). Mr. Hazen will also receive a
cash payment in an amount equal to (i) the sum of his base salary and his
highest annual bonus in the three years preceding his termination date times
(ii) the number of months from his termination date to the end of his
contractual employment period divided by 12. Mr. Hazen and Mr. Jacobs will
also continue to participate in all medical, dental, welfare, and other plans
and benefits in which they were eligible to participate.
If either Mr. Hazen's or Mr. Jacobs' employment terminates because of death
or permanent total disability, he (or his estate, in the case of death) will
receive a lump-sum cash payment equal to his unpaid base salary plus a pro
rata annual bonus based on his highest bonus for the three years preceding the
date of his death or disability.
29
<PAGE>
In the event Mr. Hazen's employment terminates under any of the
circumstances described above, all outstanding stock options and awards of
restricted stock held by Mr. Hazen as of the date employment terminates will
become exercisable or vest in full.
If any payment or distribution received by Mr. Hazen or Mr. Jacobs under the
terms of his employment agreement would result in an excise tax liability, the
Company will make an additional payment to him so that after the payment of
all income and excise taxes, he will be in the same after-tax position as if
no excise tax had been imposed.
Non-Competition. Under their employment agreements, Mr. Hazen and Mr. Jacobs
may not disclose confidential information or compete with the Company during
the term of their employment and for specified periods thereafter. If either
of them breaches the non-competition provision, the Company's obligation to
pay that executive officer's retirement benefit will be suspended and will
recommence only when he is no longer in violation of the provision, but with a
50% reduction of the retirement benefit.
30
<PAGE>
Other Information About Directors
And Executive Officers
Loans
During the past year some directors (including the directors discussed below
under "Compensation Committee Interlocks and Insider Participation"),
executive officers, one or more members of their immediate families, and one
or more of their associates had banking transactions, including loans, in the
ordinary course of business with Wells Fargo and Norwest bank subsidiaries. In
addition, Norwest Investment Services, Inc., a broker-dealer subsidiary, made
margin loans in the ordinary course of business to some executive officers.
All loans were made on substantially the same terms, including interest rates
and collateral, as those available at the time for similar transactions with
other persons. The loans did not involve more than the normal risk of
collection or have other unfavorable features.
Three non-employee directors and nine executive officers of the Company
(including executive officers named in the Summary Compensation Table), as
well as members of the immediate families of three non-employee directors and
nine executive officers, also obtained mortgage loans from Norwest Mortgage,
Inc. ("NMI") and WFC Holdings Corporation, both subsidiaries of the Company.
Certain of these loans were interest-free loans under the Company's
relocation program for employees who relocate to high cost areas (the
"Relocation Program"). Under this program, an employee who relocates to a
designated high-cost area is eligible to receive a 30-year, interest-free loan
in an amount up to 100% of his or her annual salary. The loan must be used to
purchase a new primary residence which must be comparable in size and
amenities to the employee's previous home. The loan will be secured by a
mortgage on the residence purchased (although this mortgage may be subordinate
to mortgage financing provided by a third party) and must be repaid in full if
the employee terminates employment with the Company or retires, or if the
employee sells or refinances other mortgage debt on the residence.
With respect to any mortgage loans made by NMI other than pursuant to the
Relocation Program, NMI waived an origination fee equal to 1% of the loan
amount for each loan to a director or executive officer under its policy
available to all Company employees.
Information about loans to these directors and the executive officer listed
in the Summary Compensation Table, as well as to a member of a director's
immediate family, is shown in the table below:
31
<PAGE>
<TABLE>
<CAPTION>
Highest Outstanding Outstanding
Name and Loan Balance Loan Balance on Annual Interest
Principal Position Since 1/1/98 1/31/99 Rate
------------------ ------------------- --------------- -------------------
<S> <C> <C> <C>
Les Biller.............. 474,000 -0- 7.1250% (adjustable)
Vice Chairman and Chief
Operating Officer and
Director
Paul Hazen.............. $1,344,914 $1,313,078 6.1700% (fixed)
Chairman
Richard M. Kovacevich... 995,000 995,000 (1)
President and
Chief Executive Officer
Richard D. 628,840 -0- 6.3750% (adjustable)
McCormick(2)...........
Director
Benjamin F. Montoya..... 61,000 60,803 7.1250% (fixed)
Director
Michael W. Wright(3).... 972,000 -0- 7.8750% (fixed)
Director
Immediate Family Members (4) (4) (4)
of Other Directors.....
</TABLE>
- --------
(1) The indicated loan was an interest-free loan made to Richard M. Kovacevich
under the Company's Relocation Program for his purchase of a new primary
residence in the San Francisco area in connection with the relocation of
the Company's headquarters to that city from Minneapolis, Minnesota.
The daughter of Richard M. Kovacevich also had a mortgage loan with NMI
during 1998. The interest rate on the loan was 7.125% (fixed) and the
highest outstanding loan balance during 1998 was $225,000. Because NMI sold
the mortgage loan in 1998, no amount is shown as outstanding as of December
31, 1998.
(2) The son of Richard D. McCormick also had a mortgage loan with NMI during
1998. The interest rate on the loan was 6.750% (fixed) and the highest
outstanding loan balance during 1998 was $150,000. Because NMI sold the
mortgage loan in 1998, no amount was outstanding as of December 31, 1998.
(3) Two daughters of Michael W. Wright also had mortgage loans with NMI during
1998. The interest rates on the loans were 7.125% (fixed) and 6.500%
(fixed) and the highest outstanding loan balances were $130,400 and
$156,800, respectively. Because NMI sold the mortgage loans in 1998, no
amounts were outstanding as of December 31, 1998.
(4) The daughter of Ian M. Rolland had a mortgage loan with NMI during 1998.
The interest rate on the loan was 7.250% (adjustable) and the highest
outstanding loan balance during 1998 was $74,000. The outstanding balance
as of December 31, 1998 is $73,942.
32
<PAGE>
The remaining seven executive officers and six immediate family members of
the executive officers were indebted to NMI and WFC Holdings Corporation in
the total amount of $6,725,503 during 1998. The NMI and WFC Holdings
Corporation mortgage loans had fixed and adjustable interest rates ranging
from 5.375% to 8.250% per annum. In addition, one other executive officer
received an interest-free mortgage loan in 1998 in the amount of $315,000
pursuant to the Relocation Program to purchase a home in San Francisco.
Of the mortgage loans discussed above, seven have been sold by NMI in the
secondary real estate mortgage market.
Compensation Committee Interlocks and Insider Participation
Each year the Human Resources Committee (the "Committee") determines the
compensation to be paid to Wells Fargo's Chief Executive Officer and other
executive officers, including the executive officers named in the Summary
Compensation Table. The members of the Committee for 1998 were Michael W.
Wright (Chair), Michael R. Bowlin, William A. Hodder, Richard D. McCormick,
Donald B. Rice, Ian M. Rolland, Daniel M. Tellep, and John A. Young. During
1998, Richard D. McCormick and Michael W. Wright had banking transactions,
including loans, in the ordinary course of business with one or more of the
Norwest bank subsidiaries. All loans were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons. These loans did not
involve more than the normal risk of collection or present other unfavorable
features. Mr. McCormick, a member of his immediate family, Mr. Wright, two
members of his immediate family, and a member of Mr. Rolland's immediate
family had mortgage loans with Norwest Mortgage, Inc.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 and related regulations
require the Company's directors, executive officers, and anyone holding more
than 10% of the Company's common stock ("reporting persons") to report their
initial ownership of common stock and any changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange. The
Company is required to disclose in this Proxy Statement the failure of any
reporting person to file these reports when due. All reporting persons of the
Company satisfied these filing requirements, except Les Biller and James R.
Campbell, executive officers of the Company. Mr. Biller failed to file a Form
4 when due to report a gift to him by his spouse made in 1997. Mr. Campbell
failed to file a Form 4 when due to report a gift to his children made in
1998. Mr. Biller and Mr. Campbell ultimately reported these transactions on
Form 4. In making these disclosures, the Company relied on written
representations of each reporting person and copies of the reports filed with
Commission.
33
<PAGE>
Item 2. Proposal To Amend The
Long-Term Incentive Compensation Plan
The Board of Directors has approved an amendment (the "Plan Amendment") to
the Company's Long-Term Incentive Compensation Plan (the "Plan") to increase
the maximum number of shares of common stock that may be awarded under the
Plan by an additional 40,000,000 shares. In order for the Plan Amendment to
take effect, stockholders must approve it at the 1999 annual meeting.
The Board believes that the Plan is an important way to attract, retain and
motivate key employees, and that it is appropriate to increase the number of
shares available for awards under the Plan. Approval of the proposed Plan
Amendment will ensure that enough shares are available under the Plan to
encourage stock ownership by executive officers and key employees and to help
the Company attract and retain individuals who will contribute to the
Company's success.
A copy of the Plan Amendment is included at the end of this Proxy Statement
as Exhibit A.
The Plan
Key employees (including executive officers and directors who are employees)
of the Company and its subsidiaries selected by the Human Resources Committee
(the "Committee") are eligible to become participants in the Plan. Key
employees selected by the Committee may receive awards in the form of stock
options, stock appreciation rights, restricted stock, performance shares,
performance units or stock. As of December 31, 1998 a total of persons
participated in the Plan. No employee may be granted stock options or stock
appreciation rights covering more than 7,000,000 shares in any calendar year.
In February 1999, the Board also adopted certain amendments to the Plan
which do not require stockholder approval under the terms of the Plan. These
amendments (i) make certain definitions consistent with other Company plans,
(ii) limit the number of shares that may be issued pursuant to certain stock
awards that have vesting periods of less than three years, (iii) generally
require a minimum term for restricted stock of three years, and (iv) make
administrative changes or clarifications to various sections of the Plan
affected by these amendments.
Stock options may be granted as non-qualified stock options or incentive
stock options, and must be granted at a price no lower than the fair market
value of the stock on the day of grant. Fair market value on any day means the
immediately preceding trading day's closing price of a share of common stock
reported on the New York Stock Exchange for that day. Stock options may be
exercised during a period of time fixed by the Committee, except that no stock
option may be exercised more than ten years after the day it is granted. At
the discretion of the Committee, the purchase price for stock acquired by
exercising an option may be paid for in cash, in other shares of Company
common stock, or by delivering to the Company irrevocable instructions to a
broker to promptly deliver to the Company sale or loan proceeds sufficient to
pay the purchase price.
Stock options granted under the Plan may include a reload feature. When an
option with this feature is exercised, the participant receives a reload
option to purchase the number of shares of common stock equal to the number of
whole shares used by the participant to pay the purchase price of the original
option. If shares are withheld by the Company to pay the participant's
withholding taxes, the reload option will also include a number of shares
equal to the number of shares withheld. The exercise price of the reload
option is the fair
34
<PAGE>
market value of the Company's common stock on the date the reload option is
granted. A reload option expires on the same date as the original option and
may be exercised at any time between its grant date and the expiration date of
the original option. Reload options are intended to encourage participants to
exercise options early in their terms by allowing the participant to preserve
the opportunity for future appreciation over the remaining life of the
original option.
A stock appreciation right granted under the Plan entitles a participant to
receive a payment, in cash or common stock or a combination of both, in an
amount equal to the difference between the fair market value of the stock at
the time of exercise and the fair market value as of the date of grant. Stock
appreciation rights may be exercised during a period of time fixed by the
Committee not to exceed ten years after the grant date.
A grant of restricted stock consists of a specified number of shares of
common stock which are subject to restrictions on transfer, conditions of
forfeiture, and any other terms and conditions for periods determined by the
Committee. Under the terms of each grant, and except in the case of a
participant's death, disability or retirement or a change of control of the
Company, a participant forfeits the right to receive the shares if he or she
is not continuously employed by the Company or an affiliate until the
restrictions end. Prior to the termination of the restrictions, a participant
may vote and receive dividends on the restricted stock but may not sell or
otherwise transfer the shares. The Committee may also make awards of common
stock without restrictions.
A grant of performance shares or performance units entitles a participant to
receive cash, common stock (which may be restricted stock), or a combination
of both, based on the degree of achievement of pre-established performance
targets over a performance cycle of two to five years, as determined by the
Committee. The Committee may set maximum and minimum performance targets
relating to corporate, group, unit or individual earnings growth, or any other
standard. The Committee also sets the maximum number of performance shares or
dollars of performance units may be received if that participant achieves the
maximum performance target. For performance that falls below the maximum but
exceeds the minimum performance target, the Committee may pay a portion of the
award.
Under the Plan Amendment approved by the Board in February 1999, no more
than 5% of the sum of the number of shares available for awards under the plan
as of April 27, 1999 and 40,000,000 shares if the Plan Amendment is approved
by stockholders may be made subject to (i) restricted stock awards that vest
in fewer than three years from the award date, (ii) stock awards without
restrictions (other than stock awards made in lieu of salary, bonus, or other
cash compensation), or (iii) awards of performance shares or performance units
with a performance cycle of less than three years.
The Committee has the discretion to determine the period of time up to the
original expiration date during which options or stock appreciation rights may
be exercised after a participant's death, permanent disability, or retirement.
The Board of Directors may modify, suspend or terminate the Plan but may not,
without the prior approval of the stockholders of the Company, make any change
to the Plan that increases the total amount of common stock which may be
awarded (except to reflect changes in capitalization), changes the class of
employees eligible to participate, withdraws the administration from the
Committee or permits any person, while a member of the Committee, to be
eligible to participate.
35
<PAGE>
On February 28, 1999, shares were covered by options (including reload
options) granted under the Plan, at option prices ranging from $ to $ per
share and with expiration dates ranging from , 19 to , 20 , and
shares were subject to restricted stock awards granted under the Plan that
vest in full on dates ranging from February , 1999 to February , 20 . On
February , 1999, the closing market price of a share of Company common stock
was $ . Other than stock options and restricted stock awards, no stock
appreciation rights or other types of awards are outstanding under the Plan.
Information about options granted in 1998 under the Plan to the Chief
Executive Officer and the four other most highly compensated executive
officers can be found in the table under the heading "Options/SAR Grants in
Last Fiscal Year" on page of this Proxy Statement. In 1998, options
(including reload options) totaling shares were granted to current
executive officers as a group under the Plan, and options (including reload
options) totaling shares were granted under the Plan to all employees
(excluding executive officers) as a group. Options (other than reload options)
generally become exercisable in three annual installments beginning one year
after the date of the option grant. All reload options are exercisable upon
grant.
No information can be provided with respect to options or awards that may be
granted in the future under the Plan, as amended by the Plan Amendment. Such
awards are within the discretion of the Committee. The Committee has not
decided future awards or who might receive them.
The Plan Amendment
Increase in Available Shares. As of February 28, 1999, awards (including
options and restricted stock awards) covering shares were outstanding and
shares were available for grant under the Plan. If stockholders approve
the Plan Amendment at the 1999 annual meeting, the estimated maximum number of
shares that may be issued under the Plan (in addition to shares subject to
awards as of April 27, 1999) would be increased to shares. This number
represents shares available for, but not yet subject to, an award as of the
date of the annual meeting ( shares, assuming no awards are made under the
Plan between February 15, 1999 and that date), and the additional 40,000,000
shares authorized by the Plan Amendment.
Either authorized but unissued shares or treasury shares of common stock may
be issued in connection with awards under the Plan. In addition, the following
shares can also be re-used for a new award: (1) any shares subject to an award
which are forfeited or not issued because the terms and conditions of the
award are not met, (2) any shares used to pay all or part of an option
exercise price, (3) any shares subject to awards paid in cash, and (4) any
shares relating to exercised stock appreciation rights.
Certain Federal Income Tax Consequences. The following discussion summarizes
the federal income tax consequences to participants who receive options under
the Plan. This summary is based upon the provisions, regulations, and
interpretations of the Code in effect as of January 1, 1999.
Non-Qualified Stock Options. A participant who is granted a non-qualified
stock option will not have income and the Company will not be allowed a
deduction at the time the option is granted. When a participant exercises a
non-qualified stock option, the difference between the option price and any
higher market value of the stock on the date of exercise (the "stock
36
<PAGE>
option gains") will be ordinary income to the participant and will be allowed
as a deduction for federal income tax purposes to the Company or a subsidiary.
The capital gain holding period of the shares acquired will begin one day
after the date the stock option is exercised. When a participant disposes of
shares acquired by the exercise of the option, any amount received that is
more than the fair market value of the shares on the exercise date will be
treated as short-term or long-term capital gain, depending upon the holding
period of the shares. If the amount received is less than the market value of
the shares on the exercise date, the loss will be treated as short-term or
long-term capital loss, depending upon the holding period of the shares.
The tax consequences to a participant and to the Company of the exercise of
a non-qualified stock option described above assume that the participant has
not elected to defer stock option gains under the Company's Employees'
Deferred Compensation Plan. The amount of the stock option gains deferred is
credited in the form of shares to the participant's deferral account (the
"Deferral Account"). Dividends paid on Company common stock are also credited
to and reinvested in Company common stock in participant's Deferral Account. A
participant who elects to defer stock option gains will not have ordinary
income until shares credited to the Deferral Account, including dividend
reinvestment shares, are actually distributed to the participant. The Company
will be entitled to a deduction equal to the value of all shares distributed
for federal income tax purposes at that time.
Incentive Stock Options. A participant who is granted an incentive stock
option also will not have income and the Company will not be allowed a
deduction at the time the option is granted. When a participant exercises an
incentive stock option while employed by the Company or a subsidiary or within
the three-month period (one-year period, in the case of disability) after his
or her employment ends, the participant will not recognize any ordinary income
at that time. However, any excess of the fair market value of the shares
acquired by such exercise over the option price will be an item of tax
preference for purposes of any federal alternative minimum tax applicable to
individuals. If the shares acquired upon exercise are disposed of more than
two years after the date of grant and one year after the date of transfer of
the shares to the participant ("statutory holding periods"), any sale proceeds
that are more than the total option price of these shares will be long-term
capital gain. Except in the event of death, if the shares are disposed of
prior to the expiration of the statutory holding periods (a "Disqualifying
Disposition"), generally, the amount by which the fair market value of the
shares at the time of exercise is more than the total option price will be
ordinary income at the time of such Disqualifying Disposition. If a
Disqualifying Disposition occurs, the Company will be entitled to a federal
tax deduction for a similar amount.
Payment of Option Price in Shares. If a participant pays the exercise price
of a non-qualified or incentive stock option with previously owned shares of
Company common stock and the transaction is not a Disqualifying Disposition,
the shares received equal to the number of shares surrendered are treated as
having been received in a tax-free exchange. The shares received in excess of
the number surrendered will not be taxable if an incentive stock option is
being exercised, but will be taxable as ordinary income to the extent of their
fair market value if a non-qualified option is being exercised. The
participant does not recognize income and the Company receives no deduction as
a result of the tax-free portion of the exchange transaction. If the use of
previously-acquired incentive stock option shares to pay the exercise price of
another
37
<PAGE>
incentive stock option constitutes a Disqualifying Disposition, the tax
results are as described under the heading "Incentive Stock Options."
Stock Appreciation Rights. A participant who receives stock appreciation
rights will not recognize income and the Company will not be allowed a
deduction at the time such stock appreciation rights are granted. When a
participant exercises stock appreciation rights, the amount of cash and the
fair market value of the shares of common stock of the Company received will
be ordinary income to the participant and will be allowed as a deduction for
federal income tax purposes to the Company or its subsidiary.
Recommendation; Vote Required
Approval of the Plan Amendment requires a vote in favor of the Plan
Amendment by the holders of a majority of the Company's shares of common stock
present in person or represented by proxy at the annual meeting.
The Board of Directors recommends that stockholders vote FOR
the proposal to amend the Long-Term Incentive Compensation
Plan. This proposal is identified as Item 2 on the enclosed
proxy card.
Item 3. Appointment Of Auditors
Stockholders will also vote at the annual meeting to ratify the appointment
by the Board of Directors of KPMG LLP, independent certified public
accountants, as auditors of the Company and its subsidiaries for the year
ending December 31, 1999. KPMG LLP or its predecessors have examined books and
records of the Company each year since 1931.
Representatives of KPMG LLP are expected to be present at the annual meeting
of stockholders to answer appropriate questions and to make a statement if
they wish.
The Board of Directors recommends that stockholders vote FOR
the proposal to ratify the appointment of auditors. This
proposal is identified as Item 3 on the enclosed proxy card.
Item 4. Stockholder Proposal Relating To
Cumulative Voting
Mr. Gerald R. Armstrong, 910 Fifteenth Street, No. 754, Denver, Colorado
80202-2924, who held 18,443 shares of common stock on November 9, 1998,
intends to submit a resolution to stockholders for approval at the 1999 annual
meeting. Mr. Armstrong's resolution and supporting statement are printed
below.
Resolution
That the shareholders of WELLS FARGO & COMPANY, assembled in person and by
proxy in an annual meeting, now request the Board of Directors to take those
steps necessary to provide for cumulative voting in the election of directors,
which means that each shareholder shall be entitled to vote as many votes as
shall equal the number of shares owned multiplied by the number of directors
to be elected, and cast all of the accumulated votes for a single nominee, or
for two or more nominees as the shareholder may see fit.
38
<PAGE>
Statement
Within the merger of Wells Fargo and Norwest, there are two groups of
shareholders with each one owning nearly half of the shares outstanding.
If one group were to garner a simple majority of the shares being voted, it
could elect all directors and leave the owners of 49% of the shares without
representation on the board.
The National Bank Act and laws of Minnesota and California require
cumulative voting for shareholders; however, holding companies like Wells
Fargo escape it by incorporating in Delaware.
Many acquisitions made by Wells Fargo, and its predecessors, had cumulative
voting. These included United Banks of Colorado, Goldenbanks of Colorado, Cal
Rep Bancorp, and others. It is the proponent's opinion that the shareholders
of these entities were not compensated for the loss of these voting rights.
The use of cumulative voting was present in the 1996 annual meeting of
Professional Bancorp where shareholders owning significant shares were able to
elect their nominees over the incumbents; however, the former directors,
because of their ownership, were able to elect representatives of their
choice. In 1998, Professional Bancorp paid its first cash dividends.
A California law requires that all state pension holdings and state college
funds invested in voting shares, must be voted in favor of cumulative voting
proposals which shows increasing recognition of the importance of this
democratic means for electing directors.
In view of the large number of shares being allocated to management and
employees, it is essential that voting rights be proportionate. Also, it
appears that fewer acquisitions are being made by holding companies as the
market prices of shares have increased significantly denying the shareholders
a meaningful premium. The proponent believes that enhanced voting rights can
be an attraction to shareholders seeking the best offer and this is why
Westamerica Bancorporation has made many acquisitions.
Many successful corporations have cumulative voting. For example, Pennzoil
which defeated Texaco in litigation. Ingersoll-Rand has cumulative voting and
was recognized by FORTUNE magazine as second in its industry as "America's
Most Admired Corporations" and WALL STREET TRANSCRIPT noted "on almost any
criteria . . . Ingersoll-Rand excels." It has usually increased its dividend
greater than Wells Fargo.
Lockheed-Martin and VWR Corporation now have provisions that if any entity
acquires 40% of their shares, cumulative voting applies for all shareholders.
American Premier adopted cumulative voting in 1995.
IF YOU AGREE WITH THIS PROPOSAL, PLEASE MARK YOUR PROXY FOR.
Position of the Board of Directors
The Board of Directors recommends that stockholders vote AGAINST this
proposal, which is identified as Item 4 on the enclosed proxy card, for the
following reasons:
Under the Company's Restated Certificate of Incorporation and By-Laws, each
stockholder may cast one vote per share owned in favor of, or may withhold his
or her votes from, each director-nominee at the annual meeting. A director is
elected by receiving the votes of a plurality of the shares represented at the
meeting. Under the cumulative voting proposal advocated by Mr. Armstrong, each
stockholder would be entitled to a number of votes equal to the number of
shares owned by the stockholder
39
<PAGE>
multiplied by the number of director-nominees. These votes could be divided
among the nominees for director or they could all be cast for a single
nominee.
Mr. Armstrong also presented a cumulative voting proposal at the 1997 and
1998 annual meetings of Norwest Corporation. His current cumulative voting
proposal is similar to the proposal he submitted in 1997. His 1998 proposal,
however, provided that cumulative voting rights would be triggered only when a
single stockholder, or group of affiliated stockholders, holds at least 30% of
the outstanding common stock. Under his proposal this year, cumulative voting
would be required for all elections of directors.
In 1997, stockholders holding approximately 68% of the outstanding common
stock that voted on the cumulative voting proposal voted against it. In 1998,
stockholders holding approximately 67% of the outstanding common stock that
voted on the cumulative voting proposal also voted against it.
Cumulative voting operates to permit a small faction of the stockholders to
elect a director or directors to the board to represent the faction's point of
view. Cumulative voting will facilitate the election of "special interest"
directors to the Company's Board of Directors. The Board of Directors believes
that a board composed of factions focused on the special interests of one or
more groups will function less effectively than a board whose members are
elected by and consider themselves representatives of all stockholders.
Especially in light of the combination of the companies that formed the new
Wells Fargo & Company, the perspective of every director should be the
interest of all stockholders. Accordingly, the Board of Directors recommends
that stockholders vote AGAINST this proposal.
DEADLINE FOR SUBMITTING STOCKHOLDER PROPOSALS
Any proposal to be presented at the 2000 annual meeting from a stockholder
who wishes to have the proposal included in the Company's proxy materials sent
to stockholders for the 2000 annual meeting using the processes contained in
Rule 14a-8 of the Securities Exchange Act of 1934 must be received by the
Secretary of the Company, at Norwest Center, Sixth and Marquette, Minneapolis,
Minnesota 55479-1026, no later than November 23, 1999.
Any proposal from a stockholder to be presented at the 2000 annual meeting
of the stockholders of the Company that is submitted outside the processes of
Rule 14a-8 and therefore will not be included in proxy materials to be sent to
stockholders by the Company, must be received by the Secretary of the Company,
at Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-1026, not
earlier than December 28, 1999 and not later than January 28, 2000 in order to
be considered timely received under the By-laws of the Company.
ANNUAL REPORTS
The Company's 1998 Annual Report has been sent to stockholders. Please read
the Annual Report together with the "Addendum to 1998 Annual Report to
Stockholders" appearing on the last page of this proxy statement. The Company
will send a copy of the Company's Annual Report on Form 10-K for 1998,
including the financial statements and schedules, as filed with the Securities
and Exchange Commission without charge to any
40
<PAGE>
stockholder who requests a copy in writing. A stockholder may also request
copies of any exhibit to the Form 10-K. The Company will charge a fee to cover
expenses to prepare and send any exhibits. Please send requests to: Corporate
Secretary, Wells Fargo & Company, Norwest Center, Sixth and Marquette,
Minneapolis, Minnesota 55479-1026.
41
<PAGE>
EXHIBIT A
PROPOSED AMENDMENT TO
LONG-TERM INCENTIVE COMPENSATION PLAN
The proposed language to be added to Section 4 of the Long-Term Incentive
Compensation Plan is underlined and the language to be deleted in enclosed in
brackets.
4. Shares Available Under the Plan; Limitation on Awards. The maximum
number of Shares that may be issued under this Plan on and after April 27,
1999 [April 28, 1998] (in addition to Shares which prior to April 27, 1999
[April 28, 1998] were subject to Awards) shall not exceed the sum of (i)
the number of Shares available for, but not yet subject to, an Award as of
April 27, 1999 [April 28, 1998], plus (ii) 40,000,000 [37,000,000] Shares.
A-1
<PAGE>
Addendum To 1998 Annual Report To Stockholders
Supplementary Financial Data--Quarterly Financial Information (Unaudited)
The following condensed, consolidated statement of income presents the
Company's results of operations for the eight quarters ended December 31,
1998. This information should be read in conjunction with the Financial Review
and the Financial Statements contained in the 1998 Annual Report to
Stockholders.
<TABLE>
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
1998 1997
Quarter ended Quarter ended
------------------------------------------ --------------------------------------------
(inmillions, except per share amounts) Dec. 31 Sept. 30(1) June 30(1) Mar. 31(1) Dec. 31(1) Sept. 30(1) June 30(1) Mar. 31(1)
- --------------------------------------- ------- ----------- ---------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
interest income $ 3,598 $ 3,528 $ 3,490 $ 3,439 $ 3,445 $ 3,400 $ 3,377 $ 3,380
interest expense 1,297 1,265 1,258 1,245 1,263 1,251 1,230 1,210
------- ------- ------- ------- ------- ------- ------- -------
net interest
income 2,301 2,263 2,232 2,194 2,182 2,149 2,147 2,170
Provision for loan
losses 624 307 309 305 343 320 263 214
------- ------- ------- ------- ------- ------- ------- -------
Net interest
income after
provision for
loan losses 1,677 1,956 1,923 1,889 1,839 1,829 1,884 1,956
------- ------- ------- ------- ------- ------- ------- -------
noninterest income
Service charges on
deposit accounts 364 356 332 305 315 311 308 310
Trust and
investment fees
and commissions 274 267 269 259 244 247 235 228
Credit card fee
revenue 136 136 128 121 126 119 107 96
Other fees and
commissions 252 241 232 221 213 214 206 193
Mortgage banking 252 275 303 276 258 254 188 226
Insurance 70 73 111 95 72 74 100 90
Net venture
capital gains
(losses) (4) 4 53 59 26 53 93 19
Net gains on
securities
available for
sale 8 76 66 19 50 22 22 5
Other 205 193 221 178 175 133 169 173
------- ------- ------- ------- ------- ------- ------- -------
Total noninterest
income 1,557 1,621 1,715 1,533 1,479 1,427 1,428 1,340
------- ------- ------- ------- ------- ------- ------- -------
noninterest
expense
Salaries and
benefits 1,292 1,061 1,055 1,007 979 958 933 940
Equipment 328 192 196 184 195 181 187 176
Net occupancy 200 188 187 189 181 179 176 183
Goodwill 104 108 104 104 112 103 113 105
Core deposit
intangible 60 58 61 63 67 68 71 67
Net losses on
dispositions of
premises and
equipment 270 7 41 7 19 11 7 39
Operating losses 46 35 33 39 72 62 190 50
Other 1,182 698 775 703 633 634 686 612
------- ------- ------- ------- ------- ------- ------- -------
Total noninterest
expense 3,482 2,347 2,452 2,296 2,258 2,196 2,363 2,172
------- ------- ------- ------- ------- ------- ------- -------
income (loss)
before income tax
expense (benefit) (248) 1,230 1,186 1,126 1,060 1,060 949 1,124
Income tax expense
(benefit) (54) 488 467 442 410 430 392 462
------- ------- ------- ------- ------- ------- ------- -------
net income (loss) $ (194) $ 742 $ 719 $ 684 $ 650 $ 630 $ 557 $ 662
======= ======= ======= ======= ======= ======= ======= =======
net income (loss)
applicable to
common stock $ (203) $ 733 $ 710 $ 676 $ 640 $ 619 $ 546 $ 650
======= ======= ======= ======= ======= ======= ======= =======
earnings (loss)
per common share $ (.12) $ .45 $ .44 $ .42 $ .40 $ .38 $ .33 $ .39
======= ======= ======= ======= ======= ======= ======= =======
diluted earnings
(loss) per common
share $ (.12) $ .45 $ .43 $ .41 $ .39 $ .38 $ .33 $ .39
======= ======= ======= ======= ======= ======= ======= =======
dividends declared
per common share $ .185 $ .185 $ .165 $ .165 $ .165 $ .15 $ .15 $ .15
======= ======= ======= ======= ======= ======= ======= =======
Average common
shares
outstanding 1,642.4 1,617.3 1,610.3 1,615.7 1,621.1 1,623.6 1,639.1 1,654.8
======= ======= ======= ======= ======= ======= ======= =======
Diluted average
common shares
outstanding 1,642.4 1,640.7 1,632.2 1,639.1 1,641.9 1,646.4 1,663.1 1,679.7
======= ======= ======= ======= ======= ======= ======= =======
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Amounts have been restated to reflect the pooling-of-interests accounting
treatment of the Merger. The restated amounts include adjustments to conform
the accounting policies of the former Norwest and the former Wells Fargo. In
noninterest expense, salaries and benefits decreased by approximately $2
million in each of the quarters that preceded the fourth quarter 1998 to
conform the accounting treatment for the postretirement transition obligation
identified with the implementation of FAS 106, Employers' Accounting for
Postretirement Benefits Other than Pensions. Additionally, equipment expense
increased $2 million for the quarter ended June 30, 1998 and $6 million, $4
million, $6 million and $2 million for the quarters ended December 31, 1997,
September 30, 1997, June 30, 1997 and March 31, 1997, respectively.
<PAGE>
LONG-TERM INCENTIVE COMPENSATION PLAN
(As amended effective February 23, 1999)
1. Purpose. The purpose of Wells Fargo & Company's Long-Term Incentive
Compensation Plan (the "Plan") is to motivate key employees to produce a
superior return to the stockholders of Wells Fargo & Company by offering
them an opportunity to participate in stockholder gains, by facilitating
stock ownership and by rewarding them for achieving a high level of
corporate financial performance. The Plan is also intended to facilitate
recruiting and retaining talented executives for key positions by providing
an attractive capital accumulation opportunity.
2. Definitions.
2.1 The following terms, whenever used in this Plan, shall have the
meanings set forth below:
(a) "Affiliate" means any corporation or limited liability company, a
majority of the voting stock or membership interests of which is
directly or indirectly owned by the Company, and any partnership
or joint venture designated by the Committee in which any such
corporation or limited liability company is a partner or joint
venturer.
(b) "Award" means a grant made under this Plan in the form of
Performance Shares, Restricted Stock, Stock Options, Performance
Units, Stock Appreciation Rights, or Stock.
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means a committee selected by the Board and
consisting of two or more members of the Board.
(e) "Company" means Wells Fargo & Company, a Delaware corporation
formerly known as Norwest Corporation.
(f) "Employee" means a regular salaried employee (including an
officer or director who is also an employee) of the Company or an
Affiliate.
(g) "Fair Market Value" as of any date means the immediately
preceding trading day's closing price of a share of Stock as
reported by the consolidated tape of the New York Stock Exchange.
(h) "Incentive Stock Option" means any Option designated as such and
granted in accordance with the requirements of Section 422A of
the Internal Revenue Code of 1986, as amended.
(i) "Non-Qualified Stock Option" means an Option other than an
Incentive Stock Option.
(j) "Option" means a right to purchase Stock.
<PAGE>
(k) "Participant" means a person designated by the Committee to
receive an Award under the Plan who is an Employee at the time of
such designation.
(l) "Performance Cycle" means the period of time of not fewer than
two years nor more than five years as specified by the Committee
over which Performance Shares or Performance Units are to be
earned.
(m) "Performance Shares" means an Award made pursuant to Section 6
which entitles a Participant to receive Shares, their cash
equivalent or a combination thereof based on the achievement of
performance targets during a Performance Cycle.
(n) "Performance Units" means an Award made pursuant to Section 6
which entitles a Participant to receive cash, Stock or a
combination thereof based on the achievement of performance
targets during a Performance Cycle.
(o) "Plan" means this Long-Term Incentive Compensation Plan, as
amended from time to time.
(p) "Restricted Stock" means Stock granted under Section 7 that is
subject to restrictions imposed pursuant to said Section.
(q) For all Awards outstanding on November 2, 1998, "Retirement"
means retirement which would entitle a Participant to a benefit
under Section 6.1 or Section 6.2 of the Norwest Corporation
Pension Plan or under Section 4.1 or Section 4.2 of the Norwest
Financial Pension Plan if such plans had remained in effect under
their terms as of November 2, 1998. For all Awards granted
subsequent to November 2, 1998, "Retirement" means termination of
employment after reaching the earlier of (i) age 55 with 10
completed years of service, or (ii) 80 points (with one point
credited for each completed age year and one point credited for
each completed year of service), or (iii) age 65. For purposes of
this definition, a Participant is credited with one year of
service after completion of each full 12-month period of
employment with the Company or an Affiliate as determined by the
Company or Affiliate.
(r) "Share" means a share of Stock.
(s) "Stock" means the common stock, $1-2/3 par value per share, of
the Company.
(t) "Stock Appreciation Right" means the right to receive a payment
in cash or in Stock or a combination thereof in an amount equal
to the excess of the Fair Market Value of the Stock at the time
of exercise over the Fair Market Value of the Stock at the time
of grant.
(u) "Successor" means the legal representative of the estate of a
deceased Participant or the person or persons who may acquire the
right to exercise an Option or to receive Shares issuable in
satisfaction of an Award, by bequest or inheritance.
-2-
<PAGE>
(v) "Term" means the period during which an Option or Stock
Appreciation Right may be exercised or the period during which
the restrictions placed on Restricted Stock are in effect.
2.2 Gender and Number. Except when otherwise indicated by context,
reference to the masculine gender shall include, when used, the
feminine gender and any term used in the singular shall also include
the plural.
3. Administration. The Plan shall be administered by the Committee. Subject to
the provisions of the Plan, the Committee shall have exclusive power to
determine when and to whom Awards will be granted, the form of each Award,
the amount of each Award, and any other terms or conditions of each Award.
The Committee's interpretation of the Plan and of any Awards made under the
Plan shall be final and binding on all persons with an interest therein.
The Committee shall have the authority, subject to the provisions of the
Plan, to establish, adopt and revise rules and regulations relating to the
Plan as it may deem necessary or advisable for the administration of the
Plan.
4. Shares Available Under the Plan; Limitation on Awards. The maximum number
of Shares that may be issued under this Plan on and after April 27, 1999*
[April 28, 1998] (in addition to Shares which prior to April 27, 1999*
[April 28, 1998] were subject to Awards) shall not exceed the sum of (i)
the number of Shares available for, but not yet subject to, an Award as of
April 27, 1999* [April 28, 1998], plus (ii) 40,000,000* [37,000,000]
Shares. These Shares may consist, in whole or in part, of authorized but
unissued Stock or treasury Stock not reserved for any other purpose. Any
Shares subject to the terms and conditions of an Award under this Plan
which are forfeited or not issued because the terms and conditions of the
Award are not met or for which payment is not made in Stock and any Shares
which are used for full or partial payment of the purchase price of Shares
with respect to which an Option is exercised may again be used for an Award
under the Plan. No Employee may be awarded in any calendar year Options or
Stock Appreciation Rights covering an aggregate of more than 7,000,000
Shares. On and after the date referred to in clause (i) above, no more than
five percent of the sum of the numbers of Shares described in clauses (i)
and (ii) above shall be issued pursuant to Awards of unrestricted Stock not
granted in lieu of salary, cash bonus or other cash compensation, Awards of
Performance Shares or Performance Units earned over a Performance Cycle of
less than three years, and Awards of Restricted Stock having Terms of less
than three years at the time of grant.
5. Participation. Participation in the Plan shall be limited to key Employees
of the Company or an Affiliate selected by the Committee. Participation is
entirely at the discretion of the Committee, and is not automatically
continued after an initial period of participation.
6. Performance Shares and Performance Units. An Award of Performance Shares or
Performance Units under the Plan shall entitle the Participant to future
payments or Shares or a combination thereof based upon the achievement of
pre-established performance targets.
- ----------
* As proposed to be amended at the 1999 Annual Meeting of Stockholders.
-3-
<PAGE>
6.1 Amount of Award. The Committee shall establish a maximum amount of a
Participant's Award, which amount shall be denominated in Shares in
the case of Performance Shares or in dollars in the case of
Performance Units.
6.2 Communication of Award. Written notice of the maximum amount of a
Participant's Award and the Performance Cycle determined by the
Committee shall be given to a Participant as soon as practicable after
approval of the Award by the Committee.
6.3 Amount of Award Payable. The Committee shall establish maximum and
minimum performance targets to be achieved during the applicable
Performance Cycle. Performance targets established by the Committee
shall relate to corporate, group, unit or individual performance and
may be established in terms of earnings, growth in earnings, ratios of
earnings to equity or assets, or such other measures or standards
determined by the Committee. Multiple performance targets may be used
and the components of multiple performance targets may be given the
same or different weighting in determining the amount of an Award
earned, and may relate to absolute performance or relative performance
measured against other groups, units, individuals or entities.
Achievement of the maximum performance target shall entitle the
Participant to payment (subject to Section 6.5) at the full or maximum
amount specified with respect to the Award; provided, however, that
notwithstanding any other provisions of this Plan, in the case of an
Award of Performance Shares the Committee in its discretion may
establish an upper limit on the amount payable (whether in cash or
Stock) as a result of the achievement of the maximum performance
target. The Committee may also establish that a portion of a full or
maximum amount of a Participant's Award will be paid (subject to
Section 6.5) for performance which exceeds the minimum performance
target but falls below the maximum performance target applicable to
such Award.
6.4 Adjustments. At any time prior to payment of a Performance Share or
Performance Unit Award, the Committee may adjust previously
established performance targets or other terms and conditions to
reflect events such as changes in law, regulation, or accounting
practice, or mergers, acquisitions or divestitures.
6.5 Payment of Awards. Following the conclusion of each Performance Cycle,
the Committee shall determine the extent to which performance targets
have been attained, and the satisfaction of any other terms and
conditions with respect to an Award relating to such Performance
Cycle. The Committee shall determine what, if any, payment is due with
respect to an Award and whether such payment shall be made in cash,
Stock or some combination. Payment shall be made in a lump sum or
installments, as determined by the Committee, commencing as promptly
as practicable following the end of the applicable Performance Cycle,
subject to such terms and conditions and in such form as may be
prescribed by the Committee. Payment in Stock may be in Restricted
Stock.
6.6 Termination of Employment. If a Participant ceases to be an Employee
before the end of a Performance Cycle by reason of his death,
permanent disability or
-4-
<PAGE>
Retirement, the Performance Cycle for such Participant for the purpose
of determining the amount of Award payable shall end at the end of the
calendar quarter immediately preceding the date on which such
Participant ceased to be an Employee. The amount of an Award payable
to a Participant to whom the preceding sentence is applicable shall be
paid at the end of the Performance Cycle and shall be that fraction of
the Award computed pursuant to the preceding sentence the numerator of
which is the number of calendar quarters during the Performance Cycle
during all of which said Participant was an Employee and the
denominator of which is the number of full calendar quarters in the
Performance Cycle. Upon any other termination of employment of a
Participant during a Performance Cycle, participation in the Plan
shall cease and all outstanding Awards of Performance Shares or
Performance Units to such Participant shall be cancelled.
7. Restricted Stock Awards. An Award of Restricted Stock under the Plan shall
consist of Shares subject to restrictions on transfer, conditions of
forfeiture, and such other terms and conditions as the Committee shall
determine.
7.1 Agreements. An Award of Restricted Stock shall be evidenced by a
Restricted Stock agreement in such form and not inconsistent with this
Plan as the Committee shall approve from time to time, which shall
include the following terms and conditions:
(a) Restrictions. A statement of the terms, conditions, and
restrictions to which the Restricted Stock awarded is subject,
including, without limitation, terms requiring forfeiture and
imposing restriction on transfer for such Term or Terms as shall
be determined by the Committee subject to the provisions of this
Plan. The Committee shall have the authority to permit in its
discretion an acceleration of the expiration of the applicable
Term with respect to any part or all of the Restricted Stock
awarded to a Participant in connection with severance
arrangements or changes in law, regulation or accounting
practice.
(b) Lapse of Restrictions. A statement of the terms and any other
conditions upon which any restrictions upon Restricted Stock
awarded shall lapse, as determined by the Committee subject to
the provisions of this Plan. Upon the lapse of the restrictions,
Shares free of restrictive legend, if any, shall be issued to the
Participant or his Successor.
7.2 Term. Subject to acceleration of the expiration of the Term as
provided in or permitted by this Plan, the minimum Term for Restricted
Stock shall be three years unless the lapse of restrictions is
conditioned on the achievement of one or more pre-established
performance targets, in which case the minimum Term shall be not less
than one year, or the Restricted Stock is granted in lieu of salary,
cash bonus or other cash compensation, in which case there may be no
minimum Term.
7.3 Nontransferability. Restricted Stock awarded, and the right to vote
such Restricted Stock and to receive dividends thereon, may not be
sold, assigned, transferred, exchanged, pledged, or otherwise
encumbered, during the Term applicable to the Award. A Participant
with a Restricted Stock Award shall
-5-
<PAGE>
have all the other rights of a stockholder including, but not limited
to, the right to receive dividends and the right to vote the Shares.
7.4 Termination of Employment. If a Participant ceases to be an Employee
prior to the lapse of restrictions by reason of his death, permanent
disability or Retirement, all restrictions on Shares of Restricted
Stock held for his benefit shall immediately lapse. Upon any other
termination of employment prior to the lapse of restrictions,
participation in the Plan shall cease and all Shares of Restricted
Stock held for the benefit of a Participant shall be forfeited by the
Participant.
7.5 Certificates. Each certificate issued in respect to an Award of
Restricted Stock shall be deposited with the Company or its designee
and may, at the election of the Committee, bear the following legend:
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture provisions
and restrictions against transfer) contained in the Long-Term
Incentive Compensation Plan and an Agreement entered into between the
registered owner and Wells Fargo & Company. Release from such terms
and conditions shall obtain only in accordance with the provisions of
the Plan and Agreement, a copy of each of which is on file in the
office of the Secretary of Wells Fargo & Company."
8. Stock Awards. Awards of Stock without restrictions may be made according to
terms and conditions established by the Committee.
9. Stock Options.
9.1 Agreements. An Award of an Option shall be evidenced by an Option
agreement in such form and not inconsistent with the Plan as the
Committee shall approve from time to time, which shall include the
following terms and conditions:
(a) Type of Option; Number of Shares. A statement identifying the
Option represented thereby as an Incentive Stock Option or
Non-Qualified Stock Option, as the case may be, and the number of
Shares to which the Option applies.
(b) Option Price. A statement of the purchase price of the Stock
subject to Option which shall not be less than the Fair Market
Value, and in any event not less than the par value, of the Stock
on the date the Option is granted.
(c) Exercise Term. A statement of the Term of each Option granted as
established by the Committee, provided that no Option shall be
exercisable after ten years from the date of grant. The Committee
shall have the authority to permit an acceleration of previously
established Terms, at its discretion.
(d) Payment for Shares. A statement that the purchase price of the
Shares with respect to which an Option is exercised shall be
payable at the time of
-6-
<PAGE>
exercise in accordance with procedures established by the
Company. The purchase price may be payable in cash, in Stock
having a Fair Market Value on the date the Option is exercised
equal to the Option price of the Stock being purchased pursuant
to the Option, or a combination thereof, as the Committee shall
determine.
(e) Nontransferability. Each Option agreement shall state that the
Option is not transferable other than by will, the laws of
descent and distribution or by the Participant designating a
beneficiary in accordance with this Section 9.1(e). During the
lifetime of the Participant, Options may be exercised only by the
Participant or by the Participant's legal representative. The
Participant may, by completing and signing a written beneficiary
designation form which is delivered to and accepted by the
Company, designate a beneficiary to exercise and receive any
outstanding Options (and all outstanding Stock Appreciation
Rights granted in conjunction with Options) upon the
Participant's death. If at the time of the Participant's death
there is not on file a fully effective beneficiary designation
form, or if the designated beneficiary did not survive the
Participant, the legal representative of the Participant's estate
shall have the right to exercise the Option.
(f) Incentive Stock Options. In the case of an Incentive Stock
Option, each Option agreement shall be subject to any terms,
conditions and provisions as the Committee determines necessary
or desirable in order to qualify the Option as an Incentive Stock
Option (within the meaning of Section 422A of the Internal
Revenue Code of 1986, or any amendment or regulation pertaining
to it) or any other law or regulation providing special tax
treatment for stock options and related stock. Provided, however,
that the aggregate Fair Market Value (as determined at the
effective date of the grant) of the Stock with respect to which
Incentive Stock Options are exercisable for the first time by the
Participant during any calendar year shall not exceed $100,000.
9.2 Termination of Employment Due to Death, Disability, or Retirement.
(a) If a Participant ceases to be an Employee by reason of his death,
permanent disability or Retirement, each outstanding Option shall
become exercisable to the extent and for such period or periods
determined by the Committee but not beyond the expiration date of
said Option. If a Participant dies before exercising all
outstanding Options, the outstanding Options shall be exercisable
by the Participant's beneficiary determined in accordance with
Section 9.1(e).
(b) If a Participant ceases to be an Employee by reason of his death,
permanent disability or Retirement, each outstanding Stock
Appreciation Right granted in conjunction with an Option shall
become exercisable to the extent and for such period or periods
determined by the Committee but not beyond the expiration date of
said Stock Appreciation Right. If a Participant dies before
exercising all outstanding Stock Appreciation Rights granted in
conjunction with Options, said outstanding Stock
-7-
<PAGE>
Appreciation Rights shall be exercisable by the Participant's
beneficiary determined in accordance with Section 9.1(e).
9.3 Termination of Employment for Reasons Other Than Death, Disability, or
Retirement. Except as otherwise determined by the Committee, in the
event a Participant ceases to be an Employee for any reason other than
his death, permanent disability or Retirement, all rights of the
Participant under this Plan shall immediately terminate without notice
of any kind.
10. Stock Appreciation Rights. An Award of a Stock Appreciation Right shall
entitle the Participant, subject to terms and conditions determined by the
Committee, to receive upon exercise of the right all or a portion of the
excess of (i) the Fair Market Value of a specified number of Shares at the
time of exercise over (ii) a specified price which shall not be less than
100% of the Fair Market Value of the Shares at the time of grant. Stock
Appreciation Rights may be granted in connection with a previously or
contemporaneously granted Option, or independent of any Option. If issued
in connection with an Option, the Committee may impose a condition that
exercise of a Stock Appreciation Right cancels the Option with which it is
connected. A Stock Appreciation Right may not be exercised at any time when
the Fair Market Value of the Shares of Stock to which it relates does not
exceed the exercise price of the Option associated with those Shares.
10.1 Agreement. An Award of a Stock Appreciation Right shall be evidenced
by a Stock Appreciation Right agreement in such form and not
inconsistent with this Plan as the Committee shall approve from time
to time, which shall include a statement of the Term within which the
Stock Appreciation Right may be exercised subject to terms and
conditions prescribed by the Committee, provided that no Stock
Appreciation Right shall be exercisable after ten years from the date
of grant. The Committee shall have the authority to permit an
acceleration of previously established exercise Terms.
10.2 Termination of Employment Due to Death, Disability, or Retirement. If
a Participant ceases to be an Employee by reason of his death,
permanent disability or Retirement, each Stock Appreciation Right then
outstanding which was granted independent of any Option shall become
exercisable to the extent and for such period or periods determined by
the Committee but not beyond the expiration date of said Stock
Appreciation Right.
10.3 Termination of Employment for Reasons Other Than Death, Disability, or
Retirement. Except as otherwise determined by the Committee, in the
event a Participant ceases to be an Employee for any reason other than
his death, permanent disability or Retirement, all rights of the
Participant under this Plan shall immediately terminate without notice
of any kind.
10.4 Payment. Upon exercise of a Stock Appreciation Right, payment shall be
made in the form of cash or Stock or some combination thereof as
determined by the Committee. However, notwithstanding any other
provisions of this Plan, in no event may the payment (whether in cash
or Stock) upon exercise of a Stock Appreciation Right exceed an amount
equal to 100% of the Fair Market Value of the Shares at the time of
grant.
-8-
<PAGE>
11. Nontransferability of Rights. Except as otherwise set forth in this Plan,
no rights under any Award will be transferable other than by will or the
laws of descent and distribution, and the rights and the benefits of any
Award may be exercised and received during the lifetime of the Participant
only by the Participant or by the Participant's legal representative.
12. Termination of Employment.
12.1 Transfers of employment between the Company and an Affiliate, or
between Affiliates, will not constitute termination of employment for
purposes of any Award.
12.2 The Committee may specify in the agreement relating to an Award
whether any authorized leave of absence or absence for military or
government service or for any other reasons will constitute a
termination of employment for purposes of the Award and the Plan.
13. Reorganization. If substantially all of the assets of the Company are
acquired by another corporation or in case of a reorganization of the
Company involving the acquisition of the Company by another entity, then as
to each Participant who is an Employee immediately prior to the
consummation of the transaction:
(a) All outstanding Options and Stock Appreciation Rights shall
become exercisable immediately prior to the consummation of the
transaction.
(b) All restrictions with respect to Restricted Stock shall lapse
immediately prior to the consummation of the transaction.
(c) All Performance Cycles for the purpose of determining the amounts
of Awards of Performance Shares and Performance Units payable
shall end at the end of the calendar quarter immediately
preceding the consummation of the transaction. The amount of an
Award payable shall be that fraction of the Award computed
pursuant to the preceding sentence the numerator of which is the
number of calendar quarters completed in the Performance Cycle
through the end of the calendar quarter immediately preceding the
consummation of the transaction and the denominator of which is
the number of full calendar quarters in the Performance Cycle.
The amount of an Award payable shall be paid within sixty days
after consummation of the transaction.
The Committee shall take such action as in their discretion may be
necessary or advisable to carry out the provisions of this Section.
14. Board Changes. On the date that a majority of the Board shall be persons
other than persons (a) for whose election proxies shall have been solicited
by the Board or (b) who are then serving as directors appointed by the
Board to fill vacancies on the Board caused by death or resignation (but
not by removal) or to fill newly-created directorships, then as to any
Participant who is an Employee immediately prior to said date and who
ceases to be an Employee within six months after said date for any reason
other than as a result of death, permanent disability or Retirement:
-9-
<PAGE>
(i) All outstanding Options and Stock Appreciation Rights shall become
immediately exercisable and may be exercised at any time within six
months after the Participant ceases to be an Employee.
(ii) All restrictions with respect to Restricted Stock shall lapse and
Shares free of restrictive legend shall be delivered to the
Participant.
(iii) All Performance Cycles for the purpose of determining the amounts of
Awards of Performance Shares and Performance Units payable shall end
at the end of the calendar quarter immediately preceding the date on
which said Participant ceased to be an Employee. The amount of an
Award payable to said Participant shall be that fraction of the Award
computed pursuant to the preceding sentence the numerator of which is
the number of calendar quarters during the Performance Cycle during
all of which said Participant was an Employee and the denominator of
which is the number of full calendar quarters in the Performance
Cycle. The amount of an Award payable shall be paid within sixty days
after said Participant ceases to be an Employee.
The Committee shall take such action as in their discretion may be
necessary or advisable to carry out the provisions of this Section.
15. Effective Date of the Plan.
15.1 Effective Date. The Plan shall become effective as of September 25,
1984 upon the approval and ratification of the Plan by the affirmative
vote of the holders of a majority of the outstanding Shares of Stock
present or represented and entitled to vote in person or by proxy at a
meeting of the stockholders of the Company.
15.2 Duration of the Plan. The Plan shall remain in effect until all Stock
subject to it shall be distributed, until the Term of all Options or
Stock Appreciation Rights granted under this Plan shall expire, until
all restrictions on Restricted Stock granted under this Plan shall
lapse, or until the Performance Cycle for any Performance Shares or
Performance Units awarded under this Plan shall end.
16. Right to Terminate Employment. Nothing in the Plan shall confer upon any
Participant the right to continue in the employment of the Company or any
Affiliate or affect any right which the Company or any Affiliate may have
to terminate employment of the Participant.
17. Withholding Taxes. The Company and its Affiliates shall have the right to
deduct from all payments under this Plan, whether in cash or in Stock, an
amount necessary to satisfy any federal, state or local withholding tax
requirements.
18. Deferral of Payments. The Company may, from time to time, establish rules
and conditions under which a Participant may defer the payment of Awards.
Such terms and conditions shall be included in a deferral agreement signed
by a Participant electing such deferral.
-10-
<PAGE>
19. Amendment, Modification and Termination of the Plan. The Board or Committee
may at any time terminate, suspend or modify the Plan, except that the
Board or Committee will not, without authorization of the stockholders of
the Company, effect any change (other than through adjustment for changes
in capitalization as provided in Section 20) which will:
(a) Increase the total amount of Stock which may be awarded under the
Plan.
(b) Change the class of Employees eligible to participate in the Plan.
(c) Withdraw the administration of the Plan from the Committee.
(d) Permit any person, while a member of the Committee, to be eligible to
participate in the Plan.
(e) Extend the duration of the Plan.
No termination, suspension, or modification of the Plan will adversely
affect any right acquired by any Participant or any Successor under an
Award granted before the date of termination, suspension, or modification,
unless otherwise agreed to by the Participant; but it will be conclusively
presumed that any adjustment for changes in capitalization provided for in
Section 20 does not adversely affect any right.
20. Adjustment for Changes in Capitalization. Any change in the number of
outstanding Shares occurring through Stock splits, reverse Stock splits, or
Stock dividends after the grant of an Award will be reflected
proportionately in the aggregate number of Shares then available for Awards
and in the number of Shares subject to Awards then outstanding; and a
proportionate change will be made in the per share Option price as to any
outstanding Options. Any fractional Shares resulting from adjustments will
be rounded to the nearest whole Share.
-11-
<PAGE>
---------------------
COMPANY #
CONTROL #
---------------------
WELLS FARGO & COMPANY
420 Montgomery Street, San Francisco, California 94163
- --------------------------------------------------------------------------------
VOTE BY TELEPHONE--Call Toll Free on a Touch-Tone Telephone--1-800-240-6326
Your telephone vote authorizes Patricia R. Callahan, Ely L. Licht, and Stanley
S. Stroup, and each of them, with full power of substitution, as proxies to vote
your shares in the same manner as if you had marked, signed and returned your
proxy card. The deadline for telephone voting is noon (ET) on April 23, 1999.
1. Using a touch-tone telephone, dial 1-800-240-6326. You may dial this toll
free number at your convenience 7 days/week, 24 hours/day.
2. When prompted, enter the 3-digit Company Number located in the box on the
upper right hand corner of the proxy card.
3. When prompted, enter your 7-digit numeric Control Number that follows the
Company Number.
OPTION #1: To vote on ALL items as the Wells Fargo & Company Board
of Directors recommends and to authorize the proxies named
above to vote the proxy in their discretion with respect to
any other matters properly coming before the Annual Meeting
or any postponements or adjournments: Press "1." When asked,
please confirm your vote by pressing "1." - THANK YOU FOR
VOTING.
OPTION #2: If you choose to vote on each item separately: Press
"0." You will hear these instructions:
Item 1: To vote FOR all nominees, press "1"; to WITHHOLD FOR
------ ALL nominees, press "9"; to WITHHOLD FOR AN
INDIVIDUAL nominee, press "0" and listen to the
instructions.
Item 2: To vote FOR, press "1"; AGAINST, press "9," ABSTAIN,
------ press "0."
The instructions are the same for all remaining items.
When asked, please confirm your vote by pressing "1." - THANK YOU FOR
VOTING
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK YOUR PROXY CARD
This proxy is solicited by the Board of Directors of Wells Fargo &
Company ("Company") for use at the Annual Meeting of
Stockholders on Tuesday, April 27, 1999 at 1:00 p.m. at 420
Montgomery Street, San Francisco, California 94163.
By signing this proxy, you revoke all prior proxies, and you appoint Patricia R.
Callahan, Ely L. Licht, and Stanley S. Stroup, and each of them, with full
power of substitution, as proxies to vote all shares of common stock, par value
$1-2/3 per share ("Company Common Stock") of Wells Fargo held of record by you
at the close of business on March 9, 1999, which you would be entitled to vote
if personally present at the Annual Meeting or at any adjournments or
postponements thereof, as you specify on this proxy card:
| |
\ / Please fold here \ /
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 through 3.
Item 1. Election of directors:
<TABLE>
<S> <C> <C> <C> <C>
01 Leslie S. Biller 07 Susan E. Engel 13 Richard D. McCormick 19 Judith M. Runstad [_] Vote FOR
02 J.A. Blanchard III 08 Paul Hazen 14 Cynthia H. Milligan 20 Susan G. Swenson all nominees
03 Michael R. Bowlin 09 William A. Hodder 15 Benjamin F. Montoya 21 Daniel M. Tellep
04 Edward M. Carson 10 Rodney L. Jacobs 16 Philip J. Quigley 22 Chang-Lin Tien
05 David A. Christensen 11 Reatha Clark King 17 Donald B. Rice 23 Michael W. Wright [_] Vote WITHHELD
06 William S. Davila 12 Richard M. Kovacevich 18 Ian M. Rolland 24 John A. Young from all nominees
<CAPTION>
<S> <C>
-------------------------------------
(Instructions: To withhold authority to vote for any indicated nominee, write
the number(s) in the box provided to the right.)
-------------------------------------
<CAPTION>
<S> <C> <C> <C>
Item 2. Approve an increase in the shares available for awards under the
Long-Term Incentive Compensation Plan. [_] For [_] Against [_] Abstain
Item 3. Ratify the appointment of KPMG LLP as independent auditors for
the year 1999. [_] For [_] Against [_] Abstain
The Board of Directors recommends a vote "AGAINST" Item 4.
Item 4. Approve stockholder proposal relating to cumulative voting. [_] For [_] Against [_] Abstain
Item 5. In the proxies' discretion, vote on any matter properly before the
annual meeting, or any adjournment or postponement thereof.
</TABLE>
IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED ABOVE. IF NO
DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1 THROUGH 3, AGAINST
ITEM 4, AND IN THE MANNER SET FORTH IN ITEM 5 ABOVE.
This proxy will be valid until the first of the following two dates to occur:
the date that is one year from the date shown below and the date the Annual
Meeting is completed.
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Dated ________________________________ , 1999
Please sign exactly as name appears on proxy
-----------------------------------------------
-----------------------------------------------
Signature(s) in Box
If held in joint tenancy, all persons must
sign. Trustees, administrators, etc., should
include title and authority. Corporations
should provide full name of corporation and
title of authorized officer signing the proxy.
- --------------------------------------------------------------------------------
<PAGE>
------------------
COMPANY #
CONTROL #
------------------
WELLS FARGO & COMPANY
420 Montgomery Street, San Francisco, California 94163
- --------------------------------------------------------------------------------
VOTE BY TELEPHONE--Call Toll Free on a Touch-Tone Telephone--1-800-240-6326
Your telephone vote authorizes Merrill Lynch Trust Company FSB to vote your
shares in the same manner as if you had marked, signed and returned your
instruction card. The deadline for telephone voting is noon (ET) on April 20,
1999.
1. Using a touch-tone telephone, dial 1-800-240-6326. You may dial this toll
free number at your convenience 7 days/week, 24 hours/day.
2. When prompted, enter the 3-digit Company Number located in the box on the
upper right hand corner of the proxy card.
3. When prompted, enter your 7-digit numeric Control Number that follows the
Company Number.
OPTION #1: To vote on ALL items as the Wells Fargo & Company Board
of Directors recommends and to authorize the proxies named
above to vote the proxy in their discretion with respect to
any other matters properly coming before the Annual Meeting
or any postponements or adjournments: Press "1." When asked,
please confirm your vote by pressing "1." THANK YOU FOR
VOTING.
OPTION #2: If you choose to vote on each item separately: Press "0."
You will hear these instructions:
Item 1: To vote FOR all nominees, press "1"; to WITHHOLD
------ FOR ALL nominees, press "9"; to WITHHOLD FOR AN
INDIVIDUAL nominee, press "0" and listen to the
instructions.
Item 2: To vote FOR, press "1"; AGAINST, press "9,"
------ ABSTAIN, press "0."
The instructions are the same for each of all remaining
items.
When asked, please confirm your vote by pressing "1." - THANK YOU FOR
VOTING
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK YOUR INSTRUCTION CARD
This instruction card is solicited by the Board of Directors of Wells
Fargo & Company ("Company") for use at the Annual Meeting of Stockholders
to be held on Tuesday, April 27, 1999, at 1:00 p.m. at 420 Montgomery
Street, San Francisco, California 94163 from persons who participate in the
Wells Fargo & Company Tax Advantage and Retirement Plan ("TAP").
By signing this instruction card you revoke any prior instructions, and you
hereby instruct Merrill Lynch Trust Company FSB, as Trustee of the TAP to
exercise the voting rights relating to any shares of Company common stock
allocable to the your TAP account as of March 9, 1999, at the Annual Meeting or
any adjournments or postponements thereof as you specify on this card
This instruction card must be returned to Norwest Bank Minnesota, National
Association, by April 20, 1999, if your instructions are to be honored. The
Trustee will vote the shares allocable to a participant's TAP account as the
participant instructs.
| |
\ / Please fold here \ /
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 through 3.
Item 1. Election of directors:
<TABLE>
<S> <C> <C> <C> <C>
01 Leslie S. Biller 07 Susan E. Engel 13 Richard D. McCormick 19 Judith M. Runstad
02 J.A. Blanchard III 08 Paul Hazen 14 Cynthia H. Milligan 20 Susan G. Swenson [_] Vote FOR all nominees
03 Michael R. Bowlin 09 William A. Hodder 15 Benjamin F. Montoya 21 Daniel M. Tellep
04 Edward M. Carson 10 Rodney L. Jacobs 16 Philip J. Quigley 22 Chang-Lin Tien [_] Vote WITHHELD from
05 David A. Christensen 11 Reatha Clark King 17 Donald B. Rice 23 Michael W. Wright all nominees
06 William S. Davila 12 Richard M. Kovacevich 18 Ian M. Rolland 24 John A. Young
<CAPTION>
<S> <C>
(Instructions: To withhold authority to vote for any indicated nominee, write ----------------------------------------
the number(s) in the box provided to the right.) ----------------------------------------
Item 2. Approve an increase in the shares available for awards under the [_] For [_] Against [_] Abstain
Long-Term Incentive Compensation Plan.
Item 3. Ratify the appointment of KPMG LLP as independent auditors for the
year 1999. [_] For [_] Against [_] Abstain
The Board of Directors recommends a vote "AGAINST" Item 4.
Item 4. Approve stockholder proposal relating to cumulative voting. [_] For [_] Against [_] Abstain
Item 5. In the trustee's discretion, vote on any matter properly before the
annual meeting, or any adjournment or postponement thereof.
</TABLE>
IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED ABOVE. IF NO
DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1 THROUGH 3, AGAINST
ITEM 4, AND IN THE MANNER SET FORTH IN ITEM 5 ABOVE.
This proxy will be valid until the first of the following two dates to occur:
the date that is one year from the date shown below and the date the Annual
Meeting is completed.
PLEASE SIGN, DATE, AND RETURN THE INSTRUCTION CARD AND PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
Dated _______________________________________________ , 1999
Please sign exactly as name appears on proxy
------------------------------------------------------------
------------------------------------------------------------
Signature(s) in Box
If held in joint tenancy, all persons must sign. Trustees,
administrators, etc., should include title and authority.
Corporations should provide full name of corporation and
title of authorized officer signing the proxy.
- --------------------------------------------------------------------------------
<PAGE>
----------------------
COMPANY #
CONTROL #
----------------------
WELLS FARGO & COMPANY
420 Montgomery Street, San Francisco, California 94163
- --------------------------------------------------------------------------------
VOTE BY TELEPHONE--Call Toll Free on a Touch-Tone Telephone--1-800-240-6326
Your telephone vote authorizes the SIP Trustee, Patricia R. Callahan, Ely L.
Licht, and Stanley S. Stroup, and each of them, with full power of substitution,
as proxies, or both, as applicable to vote your shares in the same manner as if
you had marked, signed and returned your instruction card and proxy. The
deadline for telephone voting is noon (ET) on April 20, 1999.
1. Using a touch-tone telephone, dial 1-800-240-6326. You may dial this toll
free number at your convenience 7 days/week, 24 hours/day.
2. When prompted, enter the 3-digit Company Number located in the box on the
upper right hand corner of the proxy card.
3. When prompted, enter your 7-digit numeric Control Number that follows the
Company Number.
OPTION #1: To vote on ALL items as the Wells Fargo & Company Board
of Directors recommends and to authorize the proxies named
above to vote the proxy in their discretion with respect to
any other matters properly coming before the Annual Meeting
or any postponements or adjournments: Press "1." When asked,
please confirm your vote by pressing "1." THANK YOU FOR
VOTING.
OPTION #2: If you choose to vote on each item separately: Press "0."
You will hear these instructions:
Item 1: To vote FOR all nominees, press "1"; to WITHHOLD
------ FOR ALL nominees, press "9"; to WITHHOLD FOR AN
INDIVIDUAL nominee, press "0" and listen to the
instructions.
Item 2: To vote FOR, press "1"; AGAINST, press "9,"
------ ABSTAIN, press "0."
The instructions are the same for all remaining items.
When asked, please confirm your vote by pressing "1." - THANK YOU FOR VOTING
IF YOU VOTE BY TELEPHONE, DO NOT MAIL BACK YOUR PROXY CARD
This instruction card and proxy is solicited by the Board of Directors of Wells
Fargo & Company ("Wells Fargo") for use at the Annual Meeting of Stockholders
on Tuesday, April 27, 1999, from persons who participate in either (1) the
Savings Investment Plan ("SIP"), or (2) Invest Norwest , or (3) both SIP and
Invest Norwest.
By signing this instruction card and proxy: (a) if you participate in SIP, you
revoke any prior instructions, and you hereby instruct Norwest Bank Minnesota,
N.A., as Trustee of the Norwest Corporation Master Savings Trust (the "Trust")
to exercise the voting rights relating to any shares of Wells Fargo common stock
allocable to the your SIP account as of March 9, 1999, at the Annual Meeting or
any adjournments or postponements thereof as you specify on this card, and (b)
if you participate in Invest Norwest, you revoke any prior proxies and appoint
Patricia R. Callahan, Ely L. Licht and Stanley S. Stroup, and each of them,
attorneys and agents with full power of substitution to vote all shares of
common stock, par value $1-2/3 per share ("Wells Fargo Common Stock") held for
your INVEST NORWEST account as of March 9, 1999 at the Annual Meeting as you
specify on this card.
This instruction card and proxy must be returned to Norwest Bank Minnesota,
National Association, by April 22, 1999, if your shares are to be voted. For SIP
participants, the Trustee will tabulate the votes from all participants received
by the deadline and will determine the ratio of votes for and against each item.
The Trustee will then vote all shares held in the Trust according to these
ratios.
| |
\ / Please fold here \ /
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 through 3.
Item 1. Election of directors:
<TABLE>
<S> <C> <C> <C> <C>
01 Leslie S. Biller 07 Susan E. Engel 13 Richard D. McCormick 19 Judith M. Runstad
02 J.A. Blanchard III 08 Paul Hazen 14 Cynthia H. Milligan 20 Susan G. Swenson [_] Vote FOR all
03 Michael R. Bowlin 09 William A. Hodder 15 Benjamin F. Montoya 21 Daniel M. Tellep nominees
04 Edward M. Carson 10 Rodney L. Jacobs 16 Philip J. Quigley 22 Chang-Lin Tien
05 David A. Christensen 11 Reatha Clark King 17 Donald B. Rice 23 Michael W. Wright [_] Vote WITHHELD
06 William S. Davila 12 Richard M. Kovacevich 18 Ian M. Rolland 24 John A. Young from all nominees
<CAPTION>
<S> <C>
(Instructions: To withhold authority to vote for any indicated nominee, write ---------------------------------------
the number(s) in the box provided to the right.) ---------------------------------------
Item 2. Approve an increase in the shares available for awards under the [_] For [_] Against [_] Abstain
Long-Term Incentive Compensation Plan.
Item 3. Ratify the appointment of KPMG LLP as independent auditors for the
year 1999. [_] For [_] Against [_] Abstain
The Board of Directors recommends a vote "AGAINST" Item 4.
Item 4. Approve stockholder proposal relating to cumulative voting. [_] For [_] Against [_] Abstain
Item 5. In the trustee's discretion, vote on any matter properly before the
annual meeting, or any adjournment or postponement thereof.
</TABLE>
IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED ABOVE. IF NO
DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1 THROUGH 3, AGAINST
ITEM 4, AND IN THE MANNER SET FORTH IN ITEM 5 ABOVE.
This proxy will be valid until the first of the following two dates to occur:
the date that is one year from the date shown below and the date the Annual
Meeting is completed.
PLEASE SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Dated _______________________________________________ , 1999
Please sign exactly as name appears on proxy
------------------------------------------------------------
------------------------------------------------------------
Signature(s) in Box
If held in joint tenancy, all persons must sign. Trustees,
administrators, etc., should include title and authority.
Corporations should provide full name of corporation and
title of authorized officer signing the proxy.
- --------------------------------------------------------------------------------
