<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[X] Filed by the Registrant
[_] Filed by a Party other than the Registrant
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss. 240.14a-12
Wells Fargo & Company
- ---------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------
(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:
-----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------
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 is calculated and state how it was determined):
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------
5) Total fee paid:
--------------------------------------------------------
[_] Fee paid previously by written 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:
--------------------------------------------
2) Form Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[LOGO OF WELLS FARGO & COMPANY]
March 21, 2000
Dear Stockholder:
The annual meeting of stockholders will be held on Tuesday, April 25, 2000,
at 9:30 a.m., Pacific daylight time, in the Penthouse Boardroom, 420
Montgomery Street, San Francisco, California.
At the annual meeting, you will be asked to elect directors, to ratify the
appointment of independent auditors for the year 2000, 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 two 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,
/s/ Richard M. Kovacevich
Richard M. Kovacevich
President and
Chief Executive Officer
---------------------------------
Please sign and date the enclosed proxy card and return it
promptly in the accompanying envelope regardless of
whether you plan to attend the meeting. You may
later decide to vote in person at the
meeting, or you may revoke your proxy
for any other reason at any
time before it is voted.
---------------------------------
[LOGO OF WELLS FARGO & COMPANY STAGECOACH]
<PAGE>
[LOGO OF WELLS FARGO & COMPANY]
Notice of Annual Meeting of Stockholders
April 25, 2000
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 25, 2000, at 9:30 a.m., Pacific daylight time.
The purpose of the meeting is to:
1. Elect directors.
2. Vote on a proposal to ratify the appointment by the Board of
Directors of KPMG LLP to audit the books of the Company and its
subsidiaries for the year ending December 31, 2000.
3. Vote on a stockholder proposal requesting the Board of Directors to
provide for cumulative voting for directors.
4. Act on any other matters that may properly come before the meeting.
The Board recommends that stockholders vote FOR the director nominees named
in the accompanying proxy statement, FOR Item 2, and AGAINST Item 3.
Only holders of common stock at the close of business on March 7, 2000, may
vote at the annual meeting or at any adjournment thereof. A list of
stockholders of record who may vote at the 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.
By Order of the Board of Directors,
/s/ Laurel A. Holschuh
Laurel A. Holschuh
Secretary
March 21, 2000
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
About the Annual
Meeting................ 1
Stock Ownership......... 4
Election of Directors
(Item 1)............... 6
Executive Compensation
(How the Company Pays
Its Executive
Officers).............. 15
Stock Performance....... 20
Compensation Tables and
Information............ 21
Other Information About
Directors and Executive
Officers............... 31
Appointment of
Independent Auditors
(Item 2)............... 35
Stockholder Proposal
Relating to Cumulative
Voting (Item 3)........ 35
Additional Information.. 37
</TABLE>
i
<PAGE>
420 Montgomery Street
San Francisco, California 94104
-----------------------------
Proxy Statement
-----------------------------
The Board of Directors of Wells Fargo & Company is soliciting proxies from
its stockholders to be used at the annual meeting on Tuesday, April 25, 2000.
This proxy statement contains information related to the annual meeting.
In November 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 21, 2000.
ABOUT THE ANNUAL MEETING
What is the purpose of the annual meeting?
At the annual meeting, stockholders will be asked to elect directors, to
ratify the appointment of independent auditors for the year 2000, and to vote
on a stockholder proposal recommending that the Company adopt cumulative
voting in the election of directors.
Will stockholders be asked to vote on any other matters?
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 in the manner they consider appropriate.
Who is entitled to vote at the annual meeting?
Only stockholders of record at the close of business on March 7, 2000 may
vote at the meeting. On March 7, 2000, the record date for the meeting, there
were 1,623,809,701 shares of common stock outstanding. Each outstanding share
is entitled to one vote.
What are the Board's recommendations on how to vote my shares?
The Board recommends that stockholders vote:
. FOR the election of directors named in this proxy statement (Item 1).
<PAGE>
. FOR the ratification of the appointment of KPMG LLP as independent
auditors for the year 2000 (Item 2).
. AGAINST the stockholder proposal relating to cumulative voting (Item 3).
How do I vote? Can I vote by telephone or electronically?
You may vote your shares of common stock in person at the annual meeting or
by proxy by returning your signed proxy card. If your shares of common stock
are voted by proxy, the shares will be voted as you instruct. If you do not
give any voting instructions on your proxy card, your shares will be voted by
the persons named in the proxy card by following the Board's recommendations
given above.
You may also vote your shares by proxy by telephone or electronically
through the Internet. The deadline for voting by telephone or electronically
is 12 noon, Central daylight time on April 24, 2000.
Can I change my vote after I return my proxy card?
You may revoke your signed proxy card at any time before it is voted--
either by signing and returning a proxy card with a later date or by attending
the annual meeting in person and voting your shares by ballot at the meeting.
If you have voted your shares by telephone or electronically, you may revoke
your prior telephone or electronic vote by recording a different vote, or by
signing and returning a proxy card dated as of a date that is later than your
last telephone or electronic vote.
How do I vote my shares held in the Company's 401(k) Plan or the Stock Direct
Purchase Plan for employees?
Whether you participate in the Company's 401(k) Plan or its Stock Direct
Purchase Plan (the "SDP Plan") or both plans, you will have received, with a
copy of this proxy statement, a single instruction and proxy card which
reflects all shares you may vote under each of these plans. Under the terms of
the Company's 401(k) Plan, all shares held by the 401(k) Plan are voted by
Norwest Bank Minnesota, N.A. as Trustee (the "Trustee"), but you have the
right to instruct the Trustee to vote any shares of the Company's common stock
allocable to your 401(k) Plan account as of March 7, 2000, the record date for
the annual meeting. Under the SDP Plan, you may vote all your shares directly.
You may instruct the Trustee how to vote your 401(k) Plan shares and/or vote
your SDP Plan shares (as applicable) by marking and returning the instruction
and proxy card, by telephone, or electronically by using the Internet
following the instructions on the card. The deadline for giving your voting
instructions to the Trustee and for voting your SDP Plan shares, whether by
returning your card, by telephone, or electronically, is 12 noon, Central
daylight time on April 20, 2000. With respect to your 401(k) Plan shares only,
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 401(k) Plan according to these
ratios.
Who pays the cost for soliciting proxies?
The cost of soliciting proxies will be paid by the Company. The Company has
retained Georgeson Shareholder Communications 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.
2
<PAGE>
What vote is required to approve each item?
<TABLE>
<C> <S>
. To Elect Directors: Under Delaware law, directors are elected by a
plurality of the shares voted, so the 18
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 appointment of
independent auditors (Item 2) and the
stockholder proposal relating to cumulative
voting (Item 3).
</TABLE>
How is the vote counted?
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 in
person 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 be counted in determining whether a quorum is present, but will
not count toward a nominee's plurality. Shares properly voted as "ABSTAIN" on
a particular matter are considered as shares present at the meeting for quorum
purposes but are treated as having voted against the matter.
If a stockholder holds shares through a broker, stock exchange rules
prohibit a broker from voting shares held in a brokerage account on some
proposals (a "broker non-vote") unless the beneficial owner has given voting
instructions to the broker. 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
3, the stockholder proposal being presented at the annual meeting.
Is my vote confidential?
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.
3
<PAGE>
STOCK OWNERSHIP
Does any stockholder own more than 5% of the Company's common stock?
The Company does not know of any person or group that beneficially owned
more than 5% of its common stock on December 31, 1999. A person is the
beneficial owner of securities, as defined by the Securities and Exchange
Commission, if he or she has or shares voting or investment power for such
securities or has the right to obtain beneficial ownership within 60 days
after such date.
How much stock do the Company's directors and executive officers own?
The table below shows for current directors, executive officers named in
the Summary Compensation Table on page 21 of this proxy statement, and all
directors and executive officers as a group, the shares of common stock
beneficially owned as of February 29, 2000 unless otherwise indicated, and
phantom common shares credited to plan accounts as of January 1, 2000.
<TABLE>
<CAPTION>
Amount and Nature of Ownership(1)
------------------------------------------------------------
(a) (b) (c) (d)
Options Exercisable
Shares of Common within 60 Days of Phantom
Name Stock(2)(3)(4) 2/29/00 Shares(5)(6) Total
- ------------------------ ---------------- ------------------- ------------ ----------
<S> <C> <C> <C> <C>
Les Biller 478,231 1,124,666 213,981 1,816,878
J.A. Blanchard III 2,148 1,858 9,019 13,025
Michael R. Bowlin 1,067 21,018 760 22,845
Edward M. Carson 139,547 16,858 -- 156,405
David A. Christensen 21,164 1,858 67,302 90,324
William S. Davila 52,947 14,048 18,053 85,048
Terri A. Dial 135,289 765,017 371 900,677
Susan E. Engel 1,000 1,858 3,462 6,320
Paul Hazen 1,296,605 2,145,860 738 3,443,203
William A. Hodder 22,314 1,858 60,956 85,128
David A. Hoyt 72,639 513,964 371 586,974
Rodney L. Jacobs 279,064 714,067 482 993,613
Robert L. Joss 215,390 1,093 -- 216,483
Reatha Clark King 16,878 1,858 10,945 29,681
Richard M. Kovacevich 1,400,932 1,898,283 106,816 3,406,031
Richard D. McCormick 23,540 1,858 23,724 49,122
Cynthia H. Milligan 5,810 1,858 8,024 15,692
Benjamin F. Montoya 863 1,858 12,038 14,759
Philip J. Quigley 17,487 36,198 10,295 63,980
Donald B. Rice 73,357 16,858 8,316 98,531
Ian M. Rolland 12,474 1,858 17,968 32,300
Judith M. Runstad 2,937 6,478 -- 9,415
Susan G. Swenson 2,157 23,538 4,878 30,573
Daniel M. Tellep 7,574 21,928 5,603 35,105
Chang-Lin Tien 1,907 45,938 37,448 85,293
Michael W. Wright 8,188 1,858 29,526 39,572
John A. Young 4,310 68,348 8,939 81,597
All directors and
executive officers as a
group (40 individuals) 5,884,628 10,614,300 945,213 17,444,141
</TABLE>
4
<PAGE>
- --------
(1) Each individual and all directors and executive officers as a group own
less than 1% of the Company's outstanding shares of common stock. 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 held by the following executive
officers: Les Biller, 14,000 shares; Richard M. Kovacevich, 120,134
shares.
(3) Amounts include shares of common stock allocated to the accounts of
executive officers and two directors under the Wells Fargo & Company
401(k) Plan as of January 1, 2000.
(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 34,465 shares held in a trust of
which he is a beneficiary; Michael R. Bowlin, 1,067 shares held in a trust
for which he is co-trustee; Edward M. Carson, 130,000 shares held in a
trust for which he is co-trustee; William S. Davila, 51,790 shares held in
a trust for which he is co-trustee; Rodney L. Jacobs, 221,330 shares held
in a trust for which he is co-trustee; Reatha Clark King, 1,285 shares
held jointly with her spouse; Richard M. Kovacevich, 930 shares held by
his spouse and 3,176 shares held in trusts for his children for which he
is co-trustee; Philip J. Quigley, 17,487 shares held in a trust for which
he is co-trustee; Donald B. Rice, 39,000 shares held in a Keogh plan and
1,520 shares held by his spouse; Judith M. Runstad, 2,000 shares held by
her spouse; Daniel M. Tellep, 7,574 shares held in a trust for which he is
co-trustee; John A. Young, 4,310 shares held in a trust for which he is
co-trustee; for all directors and executive officers as a group 390,825
shares held by members of their immediate families and 687,140 shares held
in trust.
(5) Amounts include phantom shares credited to the accounts of executive
officers as of January 1, 2000, pursuant to deferrals made under the terms
of various compensation and deferral plans maintained by the Company.
(6) Amounts include phantom shares credited to the accounts of directors as of
January 1, 2000, pursuant to deferrals made under the terms of various
compensation and deferral plans for the directors described below under
the heading "Director Compensation."
5
<PAGE>
ITEM 1--ELECTION OF DIRECTORS
Directors Standing for Election.
The Board has set 18 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.
Directors are elected to hold office until the next annual meeting and
until their successors are 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 information about each director appears below. Except for
information about their stock ownership and certain loan and other
transactions, no information is being given about directors Edward M. Carson,
William S. Davila, William A. Hodder, Ian M. Rolland, Daniel M. Tellep, and
John A. Young, all of whom are retiring as directors at the 2000 annual
meeting.
[PHOTO]
Leslie S. Biller Mr. Biller, 52, is vice chairman and chief
operating officer of the Company. He served as president and
chief operating officer of the former Norwest from February
1997 to November 1998 and as executive vice president and head
of South Central Community Banking from 1990 until February
1997. Mr. Biller is also a director of Ecolab Inc., Minnesota
Mutual Companies, Inc., and Minnesota Life Insurance Company.
He became a director of the former Norwest in 1997.
[PHOTO] J. A. Blanchard III Mr. Blanchard, 57, 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 ADC Telecommunications Inc. He became a
director of the former Norwest in 1996.
[PHOTO] Michael R. Bowlin Mr. Bowlin, 57, 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 since June
1993. Mr. Bowlin is also a director of ARCO. He became a
director of the former Wells Fargo in 1996.
[PHOTO] David A. Christensen Mr. Christensen, 64, 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 Raven, Inc.,
Medcomp Software, Inc., Northern States Power Company, and
Raven Industries, Inc. Mr. Christensen became a director of
the former Norwest in 1977.
6
<PAGE>
[PHOTO] Susan E. Engel Ms. Engel, 53, 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. Ms. Engel also serves as a director of
Coty Inc., Department 56, Inc., K2 Inc., and SUPERVALU INC.
She became a director of the former Norwest in 1998.
[PHOTO]
Paul Hazen Mr. Hazen, 58, 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 Company
following the Merger. Effective January 1, 2000, he became
chairman of the Board of Directors. 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 Phelps Dodge
Corporation, Vodafone AirTouch, plc, E.piphany, Inc., Shanghai
Commercial Bank Limited, and Safeway, Inc. Mr. Hazen became a
director of the former Wells Fargo in 1984.
[PHOTO]
Robert L. Joss Mr. Joss, 58, became dean of the Graduate
School of Business at Stanford University in September 1999.
From 1993 to 1999, he served as chief executive officer and
managing director of Westpac Banking Corporation, Australia's
second largest banking organization. Prior to joining Westpac,
Mr. Joss held a variety of positions at Wells Fargo Bank,
N.A., including vice chairman from 1986 to 1993. He is also a
director of BEA Systems, Inc. and E.piphany, Inc. Mr. Joss
became a director of the Company in October 1999.
[PHOTO]
Reatha Clark King Dr. King, 61, 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 Mobil Corporation, H.B. Fuller Company, and
Minnesota Mutual Companies, Inc. Dr. King became a director of
the former Norwest in 1986.
[PHOTO] Richard M. Kovacevich Mr. Kovacevich, 56, was chief executive
officer of the former Norwest 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 and Target
Corporation. Mr. Kovacevich became a director of the former
Norwest in 1986.
7
<PAGE>
[PHOTO] Richard D. McCormick Mr. McCormick, 59, served as chairman of
the board of U S WEST, Inc., a telecommunications and data
networking company in Denver, Colorado, from June 1998 until
his retirement in 1999. From May 1992 to June 1998, he had
been chairman, president, and chief executive officer of U S
WEST, Inc. Mr. McCormick also serves as a director of Concept
Five Technologies, United Airlines Corporation, and United
Technologies Corporation. He became a director of the former
Norwest in 1983.
[PHOTO] Cynthia H. Milligan Ms. Milligan, 53, 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 Gallup, Inc. and Calvert Funds and as a trustee of the W.
K. Kellogg Foundation. She became a director of the former
Norwest in 1992.
[PHOTO]
Benjamin F. Montoya Mr. Montoya, 64, served as president and
chief executive officer of Public Service Company of New
Mexico, a public utility in Albuquerque, New Mexico, from 1993
until March 2000, and continues as chief executive officer. He
has also served as chairman of the board since June 1999. He
is also a director of Brown and Caldwell, The Environmental
Company, Furrs Corp., and Public Service Company of New
Mexico. Mr. Montoya became a director of the former Norwest in
1996.
[PHOTO] Philip J. Quigley Mr. Quigley, 57, had been chairman,
president, and chief executive officer since 1994 of Pacific
Telesis Group, a telecommunications holding company, until his
retirement in December 1997. He also serves as a director of
SRI International and as an advisory director of Thomas Weisel
Partners LLC. Mr. Quigley became a director of the former
Wells Fargo in 1994.
[PHOTO]
Donald B. Rice Mr. Rice, 60, 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. He is also a director and serves as chairman of the
board of Scios, Inc., and as a director of Vulcan Materials
Company and Unocal Corporation. Mr. Rice served as a director
of the former Wells Fargo from 1980 to 1989, and rejoined the
board of the former Wells Fargo in 1993.
[PHOTO]
Judith M. Runstad Ms. Runstad, 55, is of counsel to Foster
Pepper & Shefelman PLLC, a law firm in Seattle, Washington,
and was a partner of the firm from 1979 to 1998. She
specializes in real estate development, land use and
environmental law. She is also a director of SAFECO
Corporation and Potlatch Corporation. Ms. Runstad became a
director of the former Wells Fargo in May 1998.
8
<PAGE>
[PHOTO]
Susan G. Swenson Ms. Swenson, 51, became president of Leap
Wireless International, and chief executive officer of Cricket
Communications, Inc., both wireless communications carriers in
San Diego, California, in July 1999. From 1994 to 1999, she
was president and chief executive officer of Cellular One, a
cellular telecommunications company in South San Francisco,
California. She is also a director of General Magic, Inc.,
Palm, Inc., and Working Assets Funding Service. Ms. Swenson
became a director of the former Wells Fargo in 1994.
[PHOTO]
Chang-Lin Tien Mr. Tien, 64, holds the University Professor
Statewide Chair and 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 Chevron Corporation and Shanghai Commercial Bank
Limited. Mr. Tien became a director of the former Wells Fargo
in 1990.
[PHOTO]
Michael W. Wright Mr. Wright, 61, has been chairman,
president, and chief executive officer of SUPERVALU INC., a
food distributor and retailer headquartered in Minneapolis,
Minnesota, since 1982. He also serves as a director of
Cargill, Incorporated, Honeywell International, S. C. Johnson
& Son, Inc., Musicland Stores Corporation, and SUPERVALU INC.
Mr. Wright became a director of the former Norwest in 1991.
9
<PAGE>
Meetings of the Board
The Board of Directors held six regular meetings during 1999. The Board has
established committees, including committees with audit, compensation, and
nominating responsibilities, that also met during 1999. Director attendance at
these meetings averaged 96% during 1999. Each director attended 75% or more of
the total number of Board and committee meetings on which he or she served.
Committees of the Board
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 1999: Five
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 other than
sessions involving executive compensation, at which
the Chair of the Human Resources Committee presides.
10
<PAGE>
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 1999: 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
Robert L. Joss John A. Young
Reatha Clark King
Purpose: Reviews credit policies and examination reports,
trends in domestic and international loans
outstanding, and the adequacy of the allowance for
credit losses.
Number of
Meetings in 1999: 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 reports to the Board on strategies for
achieving financial objectives, financial
performance, proposed debt and equity issues,
dividends, various funding requirements, and certain
capital expenditures.
Reviews policies and procedures and status of
financial risk management programs regarding
investment portfolio composition, interest
sensitivity and liquidity, capital funding and debt
structure, and derivatives usage.
Number of
Meetings in 1999:
Three
11
<PAGE>
Human Resources Committee
Members: Michael W. Wright (Chair) Donald B. Rice
Michael R. Bowlin Ian M. Rolland
William A. Hodder Daniel M. Tellep
Robert L. Joss John A. Young
Richard D. McCormick
Purpose:
Approves compensation arrangements for senior
management, other than those administered by the
Section 162(m) Committee.
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 1999: Three
Section 162(m) 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:
Created in November 1999 to administer the Company's
Performance-Based Compensation Policy (the "Policy").
Establishes performance goals at the beginning of
each fiscal year and awards incentive compensation
under the Policy for executive officers who achieve
these goals.
Also determines stock-based compensation awards to
executive officers under the Company's Long-Term
Incentive Compensation Plan.
Members of this Committee are all members of the
Human Resources Committee who qualify as outside
directors under Section 162(m) of the Internal
Revenue Code and related Internal Revenue Service
("IRS") regulations. Robert L. Joss, who is a member
of the Human Resources Committee, is not a member of
the Section 162(m) Committee because he was an
officer of the former Wells Fargo during a period
that ended in 1993, and thus not a qualified outside
director under IRS rules.
Number of
Meetings in 1999:
None
12
<PAGE>
Director Compensation
Annual Compensation. Half of the annual retainer for non-employee directors
is paid in common stock under the 1999 Directors Formula Stock Award Plan
discussed below under "Directors Formula Plan." Within five years after
joining the Board, directors are expected to own Company common stock having a
value equal to five times the cash portion of the annual retainer. Each non-
employee director who served on the Board of the Company during 1999 received
a cash retainer at an annual rate of $32,000 plus $1,500 for each Board or
committee meeting attended. The Chairs of the Audit and Examination, Board
Affairs, Credit, Finance, and Human Resources Committees were paid an
additional fee of $5,000. Effective April 1, 2000, this fee was increased to
$10,000.
Directors Formula Plan. Under the 1999 Directors Formula Stock Award Plan,
a non-employee director who has served on the Board for at least the month of
April in any year and is re-elected as a director at the annual meeting of
stockholders held that year or who is elected to the Board before September 30
in that year will receive as of the date of his or her election an award of
shares of Company common stock worth $32,000. Non-employee directors who are
elected to the Board at other times and who attend at least one meeting
receive an award of $16,000 worth of Company stock. For their service on the
Board for 1999, all current non-employee directors received 750 shares of
common stock under this plan as of April 27, 1999, except for Robert L. Joss,
who joined the Board on October 1, 1999. He will receive common stock with a
value of $16,000 as of April 25, 2000.
Directors Stock Option Plan. Under the 1999 Directors Stock Option Plan,
each non-employee director elected or re-elected at the annual meeting of
stockholders receives an option having a Black-Scholes value of $25,000 to
purchase Company common stock at an option exercise price equal to the market
value of the common stock as of the date of the meeting. 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. Directors who exercise an option under the
plan by delivering shares of previously owned common stock or shares purchased
in the market are granted a reload option. A reload option allows the director
to purchase the same number of whole shares of common stock, at their fair
market value on the date the original option was exercised, as were used to
pay the option exercise price. A reload option is exercisable at any time
during the remaining term of the original option. Under this plan, all current
non-employee directors received options to purchase 1,858 shares of common
stock at $42.6875 per share as of April 27, 1999, except for Robert L. Joss,
who received an option to purchase 1,093 shares at $39.625 per share as of
October 1, 1999.
Directors' Retirement Plans. All non-employee directors' credited service
under the former Norwest directors' retirement plan and the former Wells Fargo
directors' retirement plan was frozen as of November 2, 1998. As of July 1,
1999, current directors who participated in either plan elected to convert the
accrued value of their benefit under the plans (up to ten years of actual
service multiplied by the current annual cash retainer) into phantom shares of
Company common stock under the deferral plan described below, except for
Edward M. Carson, who will receive payments at the rate of $32,000 per year
for 10 years upon his retirement from the Board.
Deferral Plan. Non-employee directors may defer all or part of their annual
retainer, meeting fees, formula stock awards, accrued benefits under the
directors' retirement plans described above, and gains from the exercise of
stock options using previously owned stock. The annual retainer and meeting
fees may be deferred into either an interest-bearing account
13
<PAGE>
or phantom shares of Company common stock with dividends reinvested. All other
deferrals may be made only into phantom shares of 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.
Consulting Agreement and Other Transactions with Certain Directors. The
Company has 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 Limited in which the Company has a 20% interest. The
agreement is terminable at any time by either party.
Edward M. Carson, who is a director of the Company, 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. Benjamin F. Montoya, who is also
a director of the Company, received $1,500 in 1999 for serving as a community
(advisory) director of Wells Fargo Bank New Mexico, N.A.
14
<PAGE>
EXECUTIVE COMPENSATION
(How the Company Pays Its Executive Officers)
Report of the Human Resources and Section 162(m) Committees on Executive
Compensation
This Report on Executive Compensation is furnished jointly by the Board's
Human Resources Committee (the "HRC") and the Section 162(m) Committee (the
"162(m) Committee") (collectively, the "Committees"). This report describes,
using a question-and-answer format, the Committees' objectives and the
procedures used to determine 1999 compensation for the Chief Executive Officer
and the other executive officers listed in the Summary Compensation Table.
What are the goals of the Company's compensation policies?
The Company's compensation policies have two goals:
. 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.
. To pay executive officers based on their contributions to the Company's
performance.
What is the function of the Committees?
The Committees jointly review competitive compensation data, including
salary, bonus, and long-term incentives, from a comparison group of financial
institutions for the purpose of establishing overall compensation for
executive officers. The HRC sets annual base salaries for executive officers,
including the Chief Executive Officer and the executive officers named in the
Summary Compensation Table. Prior to November 1999, the HRC also administered
the Company's "Performance-Based Compensation Policy" (the "Performance
Policy" or "Policy"). In November 1999, the Board created the 162(m) Committee
to administer the Performance Policy. The members of this Committee include
all of the members of the HRC, except Robert L. Joss. Because Mr. Joss was an
officer of the former Wells Fargo during a period that ended in 1993, he is
not considered an "outside director" under Internal Revenue Code regulations.
The 162(m) Committee now administers the Performance Policy, including
establishing performance goals at the beginning of each year for executive
officers covered by the Performance Policy, certifying achievement of the
goals and determining the amount of annual incentive compensation payable to
executive officers who have met their goals, subject to the maximum limit on
incentive compensation under the Policy. The 162(m) Committee also determines
long-term compensation awards for executive officers in the form of stock
options and other stock-based awards under the Company's Long-Term Incentive
Compensation Plan (the "LTICP").
More detailed information on the Committees and their procedures for
determining compensation for the Chief Executive Officer and the executive
officers named in the Summary Compensation Table can be found below under "How
does the Company pay its executive officers?"
What is the purpose of the Performance Policy?
The Company adopted the Performance Policy to comply with Section 162(m) of
the Internal Revenue Code with respect to incentive compensation. This law
places limits on tax deductions for annual compensation expense in excess of
$1,000,000 with respect to each of the executive officers named in the
Company's proxy statement. These deduction limits do not apply if:
. The amount of the compensation is subject to a maximum;
15
<PAGE>
. The executive officer has met one or more 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 Performance Policy, which contains these business criteria and the
maximum compensation amount, was originally approved by stockholders at the
1994 annual meeting, and was amended and reapproved by stockholders at the
1998 annual meeting.
How does the Company pay its executive officers?
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 HRC sets
base salary ranges for executive officers using available compensation data
for the prior year from a comparison group of 15 banking organizations. The
162(m) Committee awards annual incentive compensation under the Policy and
long-term compensation in the form of stock options under the Company's LTICP
to the executive officers named in the Summary Compensation Table. The
discussion below applies generally to the 1999 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 1999 compensation can be found below under the heading "How is
the Chief Executive Officer's compensation determined?"
Paul Hazen and Rodney L. Jacobs, two of the executive officers named in the
Summary Compensation Table, terminated their employment as executive officers
of the Company in January 2000. Mr. Hazen and Mr. Jacobs had each entered into
an employment agreement with the Company. Mr. Hazen's and Mr. Jacobs'
employment agreements provided for base salary and annual incentive
compensation for 1999 and are discussed in detail on pages 28 through 30 of
this proxy statement.
Annual Compensation. To establish base salaries and determine final annual
incentive compensation awards under the Policy, the Committees considered
available competitive compensation data from a comparison group (the "Peer
Group"), defined as the 15 largest publicly-traded bank holding companies
based on total market capitalization as of June 30, 1999./1/ The Committees
consider that these banking organizations, based on their size and prominence
in the financial services market, compete directly with the Company for
talented management. As a result, these companies set the competitive
compensation levels the Company must consider in order to retain and attract
talented management.
Base Salaries. Mr. Kovacevich, as the Company's Chief Executive Officer,
recommends the individual base salaries for all other executive officers. The
HRC approves base salaries for these executive officers and sets Mr.
Kovacevich's base salary. Under his employment agreement with the Company, Mr.
Hazen's 1999 base salary was equal to that set by the HRC for the Chief
Executive Officer. For other executive officers, salaries are reviewed each
year and adjusted periodically, typically at intervals of 12 months or more.
The HRC 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 1999 to executive officers named in the Summary Compensation
Table were near the median of estimated base salaries of the Peer Group.
- --------
/1/The bank holding companies included in the Peer Group in addition to the
Company are: Bank of America Corporation, Bank of New York Company, Inc.,
Bank One Corporation, Chase Manhattan Corporation, Citigroup, Inc., Fifth
Third Bancorp, Firstar Corporation, First Union Corporation, Fleet Boston
Financial, J.P. Morgan & Company, Mellon Financial Corporation, National
City Corporation, Sun Trust Banks, Inc., and U.S. Bancorp.
16
<PAGE>
Incentive Compensation. 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. Terri A. Dial and David A. Hoyt had equivalent compensation
and thus each of them was treated as a "covered executive officer."
Under the Policy, payment of an incentive compensation award to a covered
executive officer depends upon achievement of one or more performance goals.
The 162(m) Committee establishes these goals in writing at the beginning of
each year. The 162(m) 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 162(m) Committee
reviews available competitive market data from the prior year and reasonable
estimates of incentive compensation to be paid by the banking organizations in
the Peer Group to their executive officers for the most recently completed
year. To set the Chief Executive Officer's incentive compensation award, the
162(m) Committee also considers the quality of the Company's earnings based on
the factors discussed below under the heading "How is the Chief Executive
Officer's compensation determined?" For covered executive officers other than
the Chief Executive Officer, the 162(m) Committee also reviews the Chief
Executive Officer's recommendations.
For 1999, the HRC, as the predecessor to the 162(m) 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.
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%) of the Company's Net Income/2/ for the year.
Based on the Company's 1999 Net Income of $3.747 billion, the maximum
incentive compensation award payable under the Policy would have been
$29,976,000 (0.8% of $3.747 billion).
For 1999, each covered executive officer, including Mr. Kovacevich, met one
or more of his or her performance goals. Based on the 162(m) Committee's
certification that one or more performance goals established by the HRC had
been met, its review of projected 1999 executive officer incentive
compensation data from the Peer Group, and recommendations of the Chief
Executive Officer, the 162(m) 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 1999 in column
(d) of the Summary Compensation Table. No covered executive officer, including
the Chief Executive Officer, received the maximum incentive compensation award
under the Policy. The 162(m) Committee exercised its negative discretion to
establish
- --------
/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 year 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.
17
<PAGE>
Mr. Hazen's annual incentive compensation award for 1999 using the same
factors it evaluated in connection with Mr. Kovacevich's annual incentive
compensation award. These factors are discussed below under the heading "How
is the Chief Executive Officer's compensation determined?"
Long-Term Compensation. Long-term compensation is provided in the form of
stock options granted each year 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 162(m) 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
Performance 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 each year, the 162(m) 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 Peer Group at the time of grant. If the executive officer
does not meet his or her stock ownership goal, the number of stock options
granted by the 162(m) Committee to the executive officer in the future will be
less than banking organizations in the Peer Group would grant to their
executive officers with comparable positions. The 162(m) Committee also
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 and pays for the option shares by delivering
shares of previously owned common stock or shares purchased in the market, 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 the original option is exercised, as were used to pay the option
exercise price and related taxes. Reload options are exercisable at any time
during the remaining term of 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 162(m) Committee believes that
the reload feature encourages executive officers to acquire and retain the
Company's stock.
Information with respect to grants (including reload options) under the
LTICP made in 1999 to the executive officers named in the Summary Compensation
Table appears in the table headed "Option/SAR Grants in Last Fiscal Year"
(page 23). Mr. Hazen also received an option grant to acquire 250,000 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 Peer Group banking organizations. They also
receive retirement and medical benefits generally available to the Company's
employees. Certain executive officers also received relocation benefits under
the Company's Relocation Program described on page 33 of this proxy statement.
How is the Chief Executive Officer's compensation determined?
The HRC determined Mr. Kovacevich's 1999 salary based on the salary
procedures described above for covered executive officers. With respect to
Mr. Kovacevich's incentive
18
<PAGE>
award under the Policy, the 162(m) Committee certified that Mr. Kovacevich had
met his performance goals based on the Company's 1999 Return on Realized
Common Equity and Earnings Per Share, as determined pursuant to the Policy.
The 162(m) Committee concluded that Mr. Kovacevich was eligible to receive the
maximum incentive compensation award under the Policy, but used its discretion
to reduce the award.
In exercising its discretion, the 162(m) 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, earnings per
share growth (including a review of each of these factors, as applicable, on a
"cash return" basis), loan loss reserves and non-performing assets 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 162(m) Committee also compared the Company's performance to
that of banking organizations included in the Peer Group using these same
factors. The 162(m) Committee noted particularly that the Company's
performance was in the top quartile of the Peer Group in earnings per share
growth, cash return on common equity, and cash return on assets. The 162(m)
Committee ultimately exercised its discretion to set Mr. Kovacevich's 1999
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 Peer Group using the factors described above, and (b) the
aggregate compensation paid by Peer Group banking organizations to their chief
executive officers.
Based on Mr. Kovacevich's achievement of his performance goals, and the
162(m) Committee's exercise of its discretion under the Policy, the 162(m)
Committee awarded incentive compensation for 1999 to Mr. Kovacevich of
$4,500,000.
Members of the Human Resources Members of the Section 162(m)
Committee: Committee:
Michael W. Wright, Chair Michael W. Wright, Chair
Michael R. Bowlin Michael R. Bowlin
William A. Hodder William A. Hodder
Robert L. Joss Richard D. McCormick
Richard D. McCormick Donald B. Rice
Donald B. Rice Ian M. Rolland
Ian M. Rolland Daniel M. Tellep
Daniel M. Tellep John A. Young
John A. Young
19
<PAGE>
STOCK PERFORMANCE
The graphs presented below compare the cumulative total return on the
Company's common stock for the five- and ten-year periods ended December 31,
1999, with the cumulative total returns for the same periods for the S&P 500
Index and the Keefe, Bruyette and Woods 50 Total Return Index (the "KBW 50
Index").
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 KBW
50 Index. For purposes of these graphs, the stock performance used to compute
total stockholder return for the Company for all years prior to 1998 is the
stock performance of the former Norwest, as the ongoing company after the
Merger.
Five-Year Performance
[STOCK PERFORMANCE GRAPH APPEARS HERE]
------------------------------------------------------
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------
Wells Fargo $100 146 197 359 377 390
- ----------------------------------------------------------------------
S&P 500 $100 138 169 226 290 351
- ----------------------------------------------------------------------
KBW 50 $100 160 227 331 359 346
- ----------------------------------------------------------------------
Ten-Year Performance
[STOCK PERFORMANCE GRAPH APPEARS HERE]
---------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------
Wells Fargo $100 96 176 213 247 244 356 482 878 922 952
- ---------------------------------------------------------------------
S&P 500 $100 97 126 136 150 152 209 257 342 440 533
- ---------------------------------------------------------------------
KBW 50 $100 72 114 145 153 145 232 329 481 520 502
- ---------------------------------------------------------------------
20
<PAGE>
COMPENSATION TABLES AND INFORMATION
The table below shows the cash and non-cash compensation paid to the Chief
Executive Officer and the five next highest paid executive officers of the
Company for the last three years. For 1999, two executive officers, Terri A.
Dial and David A. Hoyt, each received similar salary and bonus. As a result,
compensation information for both Ms. Dial and Mr. Hoyt has been included in
the Summary Compensation Table. The compensation shown for Paul Hazen, Rodney
L. Jacobs, Ms. Dial, and Mr. Hoyt for 1997 and 1998 includes compensation paid
to them by the former Wells Fargo. During 1997 and the first ten months of
1998, these individuals served in the following capacities at the former Wells
Fargo: Mr. Hazen, as Chairman and Chief Executive Officer, and as President
from July 1997 to May 1998; Mr. Jacobs, as a Vice Chair and as President from
May 1998 to November 1998; Ms. Dial and Mr. Hoyt, each as a Vice Chair.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards
------------------------------------ -----------------------
Restricted Securities
Other annual stock underlying All other
Name and principal compensation award(s) options/ compensation
position Year Salary ($) Bonus ($)(1) ($)(2) ($)(3)(4) SARs (#)(5) ($)(6)
(a) (b) (c) (d) (e) (f) (g) (i)
- ----------------------- ---- ---------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich 1999 $983,333 $4,500,000 $784,852 $ -0- 246,200 $239,000
President and Chief 1998 925,000 3,000,000 68,747 1,500,000 -0- 193,500
Executive Officer 1997 900,000 2,300,000 86,111 1,632,313 1,720,844 186,000
Paul Hazen 1999 983,333 4,500,000 21,672 5,859,375 250,000 78,433
Chairman 1998 862,500 3,000,000 8,059 10,796,875 881,000 89,583
1997 850,000 2,000,000 7,828 -0- 218,300 85,000
Les Biller 1999 715,000 2,800,000 731,217 -0- 427,670 192,900
Vice Chairman and Chief 1998 525,417 2,500,000 13,896 -0- 236,405 143,125
Operating Officer 1997 510,833 1,860,000 162,545 -0- 890,478 93,425
Rodney L. Jacobs 1999 641,667 2,000,000 20,665 -0- 254,900 51,167
Vice Chairman and Chief 1998 570,833 2,000,000 15,309 -0- 213,300 57,083
Financial Officer 1997 425,000 1,000,000 14,867 -0- 65,500 42,500
Terri A. Dial 1999 500,000 1,350,000 20,181 -0- 175,900 40,000
Group Executive Vice 1998 479,167 1,000,000 14,976 -0- 213,300 47,917
President 1997 366,667 700,000 16,961 -0- 21,800 36,667
David A. Hoyt 1999 483,333 1,350,000 14,075 -0- 175,900 38,333
Group Executive Vice 1998 383,333 1,000,000 13,081 -0- -0- 102,470
President 1997 300,000 750,000 11,774 -0- 120,100 21,850
</TABLE>
- --------
(1) The amounts shown for 1999 represent the 1999 incentive compensation
awards paid under the Performance-Based Compensation Policy. This policy
is discussed above in the Report of the Human Resources and the Section
162(m) Committees on Executive Compensation on pages 15 through 19 of
this proxy statement.
(2) The amounts shown include (i) for the years 1997-1999, reimbursements to
each named executive officer for the payment of taxes on perquisites, and
for each of Mr. Jacobs and Mr. Biller, a cash car allowance, and (ii)
perquisites and other personal benefits totaling more than $50,000
received by Messrs. Kovacevich and Biller. The total amount of these
perquisites and personal benefits for 1999 (and the amount and type of
each perquisite or personal benefit that was greater than 25% of the
total received) is: Mr. Kovacevich, $698,871 (includes $508,825 and
$190,046 in aggregate payments made to, or expenses paid on behalf of Mr.
Kovacevich by the Company relating to, respectively, his purchase of a
new primary residence in San Francisco, California, and his sale of his
residence in Minnesota); and Mr. Biller, $645,811 (includes $348,264 and
$297,547 in
21
<PAGE>
aggregate payments made to, or expenses paid on behalf of Mr. Biller by the
Company relating to, respectively, his purchase of a new primary residence
in Los Angeles, California, and his sale of his residence in Minnesota).
These amounts were paid to or on behalf of Mr. Kovacevich and Mr. Biller
under the Company's relocation program in connection with the relocation of
the Company's headquarters to San Francisco, California following the
Merger. Additional information about this program may be found on pages 33
and 34 of this proxy statement under the heading "Other Information About
Directors and Executive Officers-Relocation Program." The other named
executive officers also received certain perquisites and personal benefits
for the years 1997-1999, none of which had a total value greater than
$50,000.
(3) The amount shown for 1999 for Mr. Hazen represents an award of 125,000
shares of restricted stock made on November 2, 1999 pursuant to Mr.
Hazen's employment agreement and was valued based on a closing market
price of the Company's common stock on November 1, 1999 of $46.875 per
share.
(4) The total number of shares of restricted stock held on December 31, 1999
by each person named and their market value, based on a closing market
price for the Company's common stock of $40.6250 per share on that date,
were as follows: Mr. Kovacevich, 158,094 shares, $6,422,569; Mr. Hazen,
364,934 shares, $14,825,444; and Mr. Biller, 20,000 shares, $812,500.
Dividends are paid on shares of restricted stock on the same dates and at
the same rate as those paid to all holders of the Company's common stock.
Each of the restricted stock awards except Mr. Hazen's vests over a
period of five years, beginning in the third year after the date of the
original award. Mr. Hazen's awards vest as provided under the terms of
his employment agreement described on pages 28 through 30 of this proxy
statement.
(5) Mr. Hazen's options for 1999 represent an option to purchase 250,000
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 Messrs.
Hazen, Jacobs, and Hoyt, and Ms. Dial for 1997 represent, and for 1998
include 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 each of the executive officers named above are the
total of the Company's contributions to the 401(k) Plan (formerly called
the "Savings Investment Plan") in which all Company employees are
generally eligible to participate, and contributions to the Company's
Supplemental 401(k) Plan, a non-qualified supplemental executive
retirement plan ("Supplemental 401(k)"). For the year ended December 31,
1999, the Company's contribution to the 401(k) Plan for each such
executive officer was $9,600 (the maximum allowable contribution under
the plan). The Company's contributions to the Supplemental 401(k) for the
year ended December 31, 1999, for these officers were as follows: Mr.
Kovacevich, $229,400; Mr. Hazen, $29,850; Mr. Biller, $183,300; Mr.
Jacobs, $19,500; Ms. Dial, $15,000; and Mr. Hoyt, $15,000.
The amounts shown for Messrs. Hazen, Jacobs, and Hoyt, and Ms. Dial for the
years 1997 and 1998 and for a portion of 1999 are the total contributions
made by the former Wells Fargo and by the Company following the Merger
under the former Wells Fargo's Tax Advantage and Retirement Plan ("TAP"), a
401(k) plan in which all eligible former Wells Fargo employees
participated, and the Benefits Restoration Program ("BRP"), a non-qualified
supplemental executive retirement plan maintained by the former Wells
Fargo. Messrs. Hazen, Jacobs, and Hoyt and Ms. Dial continued to
participate in TAP and BRP until July 1, 1999, when the Company combined
the former Wells Fargo's and the former Norwest's qualified and all non-
qualified retirement plans. For the year ended December 31, 1999, the total
contributions to TAP and BRP for each of these officers was as follows: Mr.
Hazen, $48,583; Mr. Jacobs, $31,667; Ms. Dial, $25,000; and Mr. Hoyt,
$23,333.
22
<PAGE>
Option Grants and Exercises
These tables summarize for 1999 option grants under the Company's Long-Term
Incentive Compensation Plan, option exercises by the executive officers named
in the Summary Compensation Table, and the value of the options held by them
as of December 31, 1999.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential realizable
value
at assumed annual
rates of stock price
appreciation
Individual Grants for option term
- -------------------------------------------------------------------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g)
Number of Percent of total
securities options/SARs
underlying granted to
options/SARs employees in Exercise or base Expiration
Name granted (#) fiscal year price ($/Share) date 5% ($)(3) 10% ($)(3)
- --------------------- ------------ ---------------- ---------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich 246,200 1.46% $37.5625 02/23/09 $5,815,947 $14,738,751
Paul Hazen (1) 250,000 1.49% 46.8750 11/02/09 7,369,859 18,676,669
Les Biller (2) 205,100 1.22% 37.5625 02/23/09 4,845,047 12,278,301
222,570 1.32% 44.7500 07/22/07 4,569,772 10,867,040
Rodney L. Jacobs 254,900 1.52% 37.5625 02/23/09 6,021,466 15,259,576
David A. Hoyt 175,900 1.05% 37.5625 02/23/09 4,155,260 10,530,245
Terri A. Dial 175,900 1.05% 37.5625 02/23/09 4,155,260 10,530,245
</TABLE>
- --------
(1) The option listed in the first line opposite Mr. Hazen's name was granted
to him on November 2, 1999, pursuant to the terms of his employment
agreement. See "Employment Agreements" below for a discussion of Mr.
Hazen's stock options under the terms of this agreement.
(2) The option listed in the second line opposite Mr. Biller's name is an
immediately exercisable "reload option" granted in connection with his
exercise of stock options in 1999. The general terms of reload options
are described in the "Report of the Human Resources and Section 162(m)
Committees on Executive Compensation."
(3) The dollar amounts under columns (f) and (g) are based on assumed 5% and
10% annual rates of appreciation set by the Securities and Exchange
Commission. These amounts should not be viewed as, and are not intended
to be, a forecast of possible future appreciation, if any, in the
Company's stock price.
Aggregated Option/SAR Exercises in
Last Fiscal Year and Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of securities Value (*) of unexercised
underlying unexercised in-the-money(*)
Shares Value options/SARs at fiscal options/SARs at fiscal
acquired on realized year-end (#) (in shares) year-end ($)
Name exercise (#) (*) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------- ------------ ----------- ------------------------- -------------------------
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Richard M. Kovacevich 612,818 $20,598,358 1,816,216 / 739,534 $24,966,145 / $5,563,994
Paul Hazen 191,000 6,880,775 1,301,707 / 844,153 29,344,566 / 3,296,149
Les Biller 266,667 3,700,005 1,056,299 / 471,767 14,469,191 / 3,228,122
Rodney L. Jacobs 276,800 8,667,627 536,170 / 418,930 9,363,410 / 2,185,081
Terri A. Dial 149,750 5,647,650 639,023 / 354,827 14,452,489 / 1,871,790
David A. Hoyt 144,140 4,100,277 455,330 / 215,930 9,359,016 / 1,012,849
</TABLE>
23
<PAGE>
- --------
* For purposes of column (c), the "value realized" from an exercised option
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 trading day prior to 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 $40.6250, the closing price for the Company's common stock on
December 31, 1999. As used in column (e), an option was "in-the-money" on
December 31, 1999 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
Effective July 1, 1999, the Company adopted the "Wells Fargo & Company Cash
Balance Plan" (the "Cash Balance Plan") and the "Wells Fargo & Company
Supplemental Cash Balance Plan" (the "Supplemental Cash Balance Plan") (the
"Combined Plans"). These Plans amended and restated the former Norwest
Corporation Pension Plan and the former Norwest Corporation Supplemental
Pension Plan (the "Norwest Plans"). All employees of the Company who meet
certain eligibility requirements automatically participate in the Combined
Plans.
Cash Balance Plan. The Cash Balance Plan is a defined benefit plan intended
to qualify under the Internal Revenue Code (the "Code") and comply with the
Employee Retirement Income Security Act of 1974 ("ERISA"). Under the Cash
Balance Plan, pension benefits generally are determined by the value of the
employee's vested cash balance account (the "Account"). On July 1, 1999,
employees who were active participants in the Norwest Plans and the retirement
plan of a predecessor corporation to the former Wells Fargo, including Richard
M. Kovacevich and Les Biller, each of whom is an executive officer named in
the Summary Compensation Table, were assigned an opening Account balance using
the Cash Balance Plan's formula and certain actuarial assumptions. All other
employees, including Paul Hazen, Rodney L. Jacobs, Terri A. Dial, and David A.
Hoyt, each of whom is an executive officer named in the Summary Compensation
Table, became participants in the Combined Plans as of July 1, but no balances
were assigned to their Accounts. Each quarter, an employee's Account is
credited with compensation credits and investment credits. Compensation
credits to the Account are based on a percentage of the employee's certified
compensation for each quarter. Certified compensation means all compensation
paid to an employee during the year which is reportable on Form W-2, subject
to an annual IRS maximum ($160,000 for 1999). Certified compensation includes
salary reduction amounts made under Section 401(k) and Section 125 of the
Code, but 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-based
gains. Incentive compensation amounts will be included in compensation for
Cash Balance Plan purposes in the year received rather than the year earned.
The Cash Balance Plan bases the percentage on which compensation credits are
calculated on "points" assigned to each employee equal to the sum of the
employee's age and years of credited service as of the end of each quarter.
This percentage ranges from 4% to 8% of an employee's certified compensation.
The Account balance vests 100% after five years of service with the Company.
All employees of the former Wells Fargo received credit for vesting purposes
for their years of service with the former Wells Fargo.
As of the quarter ended December 31, 1999, the years of credited service,
and the percentages used to calculate compensation credits under the
24
<PAGE>
Combined Plans for each of the executive officers named in the Summary
Compensation Table are as follows: Mr. Kovacevich, 13 years, 10 months, 6%;
Mr. Hazen, 29 years, 6 months, 8%; Mr. Biller, 12 years, 4 months, 6%;
Ms. Dial, 26 years, 10 months, 7%; and Mr. Hoyt, 18 years, 3 months, 6%.
Each Account will also be credited, on the last day of each quarter, with
"investment credits." For 1999, the quarterly investment credit was determined
by multiplying the amount of the Account balance by 25% of an average of 30-
year U.S. Treasury rates (adjusted quarterly), plus .75%. The value of the
vested Account balance is payable to the employee upon termination of
employment with the Company either in a lump sum or as a monthly annuity.
Supplemental Cash Balance Plan. As permitted by ERISA and the Code,
employees who participate in the Cash Balance Plan, including the executive
officers named in the Summary Compensation Table, whose benefits under the
Cash Balance Plan are limited pursuant to Code Sections 401(a)(17) and 415,
also participate in the Supplemental Cash Balance Plan. Under this plan,
participants also receive compensation and investment credits to their plan
accounts, determined by points assigned to each employee at the end of each
year based on years of service and age. Certified compensation under the
Supplemental Cash Balance Plan includes the participant's base salary as well
as designated incentive compensation, whether or not that compensation is
deferred.
For 1999, in the case of each of the executive officers named in the
Summary Compensation Table, only that portion of the amount shown as "Salary"
(column (c)) in the table that was received by each executive officer after
July 1, 1999 was treated as certified compensation under the Combined Plans.
All amounts shown as "Bonus" (column (d)) represent incentive compensation
awards to such officers for 1999 performance paid in 2000, and will be
included in the executive officer's certified compensation for purposes of
compensation credits to his or her Account for 2000.
Under the Combined Plans, "normal retirement age" is defined as the earlier
of completion of five years of service with the Company or age 65. As of
December 31, 1999, each of the named executive officers in the Summary
Compensation Table had attained "normal retirement age" for purposes of the
Combined Plans and had accrued an estimated benefit under the Combined Plans,
assuming payment of such annual benefit in the form of a single-life annuity,
as follows: Richard M. Kovacevich, $384,801; Paul Hazen, $3,377; Les Biller,
$172,653; Terri A. Dial, $1,328; and David A. Hoyt, $1,071.
Alternate Retirement Benefits Under the Former Norwest Plans. Participants
in the former Norwest Plans who were at least 45 years of age and had at least
five years of credited service on June 30, 1999, will receive the greater of
the benefits under the Combined Plans or the benefits he or she would have
received under the Norwest Plans. Richard M. Kovacevich and Les Biller, each
of whom is an executive officer named in the Summary Compensation Table, are
eligible to receive retirement benefits under this formula. Messrs.
Kovacevich's and Biller's years of credited service as of December 31, 1999
for purposes of computing their alternate benefits are 13 years, 10 months,
and 12 years, 4 months, respectively.
Benefits based on the former Norwest Plans formula are determined by age,
years of credited 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" plus 1.6% of final average monthly
earnings greater than the Integration Level multiplied by years of credited
service. The Norwest Plans do not take into account more than 35 years of
credited service. The Integration Level for any year is $1,400 times the
Social Security wage base for the current year ($72,600 for 1999) divided by
$48,000. The Integration Level (stated as an amount per month) is $2,117.50
for participants retiring in 1999.
25
<PAGE>
A participant's final average earnings are defined as the highest average
monthly compensation paid during any 36 consecutive months within the last 120
months of employment. Compensation for purposes of this calculation is similar
to the definition of "certified compensation" under the Combined Plans.
Compensation under the alternate Norwest Plans benefit for a plan year is
limited by Code Section 401(a)(17). The limit for 1999 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 may be increased for future retirees.
The table below shows the estimated total annual average retirement
benefits that would be payable using the former Norwest Plans formula 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>
Final
Average Years of Service at Retirement
Compensation 10 15 20 25 30 35
- ------------ ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 250,000 $ 38,667 $ 58,000 $ 77,333 $ 96,666 $ 116,000 $ 135,333
500,000 78,667 118,000 157,333 196,666 236,000 275,333
750,000 118,667 178,000 237,333 296,666 356,000 415,333
1,000,000 158,667 238,000 317,333 396,666 476,000 555,333
1,250,000 198,667 298,000 397,333 496,666 596,000 695,333
1,500,000 238,667 358,000 477,333 596,666 716,000 835,333
1,750,000 278,667 418,000 557,333 696,666 836,000 975,333
2,000,000 318,667 478,000 637,333 796,666 956,000 1,115,333
2,250,000 358,667 538,000 717,333 896,666 1,076,000 1,255,333
2,500,000 398,667 598,000 797,333 996,666 1,196,000 1,395,333
2,750,000 438,667 658,000 877,333 1,096,666 1,316,000 1,535,333
3,000,000 478,667 718,000 957,333 1,196,666 1,436,000 1,675,333
3,250,000 518,667 778,000 1,037,333 1,296,666 1,556,000 1,815,333
3,500,000 558,667 838,000 1,117,333 1,396,666 1,676,000 1,955,333
3,750,000 598,667 898,000 1,197,333 1,496,666 1,796,000 2,095,333
4,000,000 638,667 958,000 1,277,333 1,596,666 1,916,000 2,235,333
4,250,000 678,667 1,018,000 1,357,333 1,696,666 2,036,000 2,375,333
4,500,000 718,667 1,078,000 1,437,333 1,796,666 2,156,000 2,515,333
4,750,000 758,667 1,138,000 1,517,333 1,896,666 2,276,000 2,655,333
5,000,000 798,667 1,198,000 1,597,333 1,996,666 2,396,000 2,795,333
5,250,000 838,667 1,258,000 1,677,333 2,096,666 2,516,000 2,935,333
5,500,000 878,667 1,318,000 1,757,333 2,196,666 2,636,000 3,075,333
5,750,000 918,667 1,378,000 1,837,333 2,296,666 2,756,000 3,215,333
6,000,000 958,667 1,438,000 1,917,333 2,396,666 2,876,000 3,355,333
6,250,000 998,667 1,498,000 1,997,333 2,496,666 2,996,000 3,495,333
6,500,000 1,038,667 1,558,000 2,077,333 2,596,666 3,116,000 3,635,333
</TABLE>
26
<PAGE>
Former Wells Fargo Retirement Plans. Paul Hazen, Rodney L. Jacobs, Terri A.
Dial and David A. Hoyt also participated in a defined benefit plan sponsored
by the former Wells Fargo. This plan was terminated in 1984, and annuities
were purchased for all participants eligible to receive benefits under this
plan. The annual benefits payable under the annuities beginning at age 65 are:
Mr. Hazen, $90,000; Mr. Jacobs, $27,573; Ms. Dial, $55,411; and Mr. Hoyt,
$16,226. Because the Code limited individual annual benefits payable under the
former Wells Fargo plan, Mr. Hazen also participated in the former Wells Fargo
Benefits Restoration Plan ("BRP"). The BRP was 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 Code limits. The annual benefit payable under the BRP for Mr.
Hazen beginning at age 65 is $97,490.
Other Retirement Benefits. Information on retirement benefits payable to
Mr. Hazen and Mr. Jacobs under their employment agreements is presented under
the heading "Employment Agreements" beginning on page 28 of this proxy
statement.
As a result of their resignations as executive officers of the Company, any
amounts Mr. Hazen and Mr. Jacobs are entitled to receive under the Combined
Plans and the former Wells Fargo Retirement Plans discussed above will reduce
any amounts payable under the terms of their respective employment agreements
discussed below.
Long-Term Disability Plans
The Company's Long-Term Disability Plan covers compensation of up to a
total of $500,000 in salary and designated incentive compensation. The plan
provides a monthly benefit to an eligible employee, who is totally disabled
for more than 22 weeks, equal to 65% of the participant's average covered
compensation, up to a maximum compensation of $500,000 per year and a maximum
monthly benefit 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.
Severance Agreements
The Company has severance agreements with Messrs. Kovacevich, Biller, and
Hoyt, and Ms. Dial, each 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 with
Messrs. Hazen and Jacobs and are discussed below under the heading "Employment
Agreements."
The change-of-control severance agreements with Messrs. Kovacevich and
Biller 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 the 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.
27
<PAGE>
Mr. Kovacevich also has a severance agreement with the Company under which
he 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. The Company also has a plan that provides
severance pay to employees who are discharged under certain circumstances and
who do not have other separation agreements with the Company. Les Biller, an
executive officer named in the Summary Compensation Table, is eligible to
participate in this plan. The amount of severance pay under this plan 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.
As a result of the Merger, Terri A. Dial and David A. Hoyt, both of whom
are executive officers named in the Summary Compensation Table, are each
entitled to certain severance benefits under the former Wells Fargo's Change
of Control Severance Plan (the "Change of Control Plan") if their employment
is terminated by the Company (other than for cause) or by the executive
officer for "good reason" as defined in the Plan, within two years after
November 2, 1998, the effective date of the Merger. In such case, the
executive officer would receive a severance benefit under the Plan equal to
three times the sum of (i) base salary and (ii) the greater of (a) the
executive officer's highest annual bonus earned in the three years prior to
the Merger or (b) the annual bonus earned in the most recent fiscal year prior
to the date employment terminates. Ms. Dial and Mr. Hoyt would also be
entitled to receive continued welfare benefits coverage and other benefits for
three years following the date of termination. In addition, if Ms. Dial
terminates her employment with the Company between April and October 31, 2000,
she will be entitled to receive severance benefits of $100,000 per month for a
period of 18 months, or if the Company participates in another "merger-of-
equals" transaction or is acquired at any time before October 31, 2000, and
Ms. Dial elects to terminate her employment as a result of that transaction,
she will be entitled to receive the benefits described above under the Change
of Control Plan.
Employment Agreements
In connection with the Merger, the Company entered into employment
agreements with Paul Hazen and Rodney L. Jacobs. Under these agreements, Mr.
Hazen was employed as Chairman of the Company for a term of five years and Mr.
Jacobs was employed as an executive officer of the Company for a term of three
years, in each case beginning on November 2, 1998. Following the Merger,
Mr. Jacobs was elected Vice Chairman and Chief Financial Officer of the
Company, reporting to the Chief Executive Officer. The employment agreements
also provided that Messrs. Hazen and Jacobs would each serve as members of the
Board of Directors during the terms of their employment. Effective January 25,
2000, Mr. Jacobs terminated his employment as an executive officer and
resigned as a director of the Company. Effective January 1, 2000, Mr. Hazen
terminated his status as an active employee within the meaning of his
employment agreement, but he is expected to continue as a director and to
serve as Chairman of the Board of Directors.
Compensation. Under his employment agreement, Mr. Hazen was entitled to 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 for 1999 as salary and bonus are shown in columns (c) and
(d) of the Summary Compensation Table. Also
28
<PAGE>
pursuant to his employment agreement, Mr. Hazen received a restricted stock
award of 250,000 shares and the grant of an option to purchase 500,000 shares
of the Company's common stock under its Long-Term Incentive Compensation Plan
on November 2, 1998, and a restricted stock award of 125,000 shares and the
grant of an option to purchase 250,000 shares of the Company's common stock
under its Long Term Incentive Compensation Plan on November 2, 1999.
Information about Mr. Hazen's restricted stock awards is included in column
(f) of the Summary Compensation Table. Information about Mr. Hazen's stock
option grants is included in column (g) of the Summary Compensation Table.
Information about his November 2, 1999 stock option grant is included opposite
his name in the table on page 23 of this proxy statement captioned "Option/SAR
Grants in Last Fiscal Year." Under his employment agreement, Mr. Jacobs'
annual base salary, annual bonus, and long-term incentive compensation (stock
option grants and restricted stock grants) would be determined each year using
the procedures for executive officers described in the Committees' report
beginning on page 15 of this proxy statement.
Retirement and Other Benefits. Each of Mr. Hazen's and Mr. Jacobs'
employment agreements provided for an annual retirement benefit, commencing
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 is 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. As the result of the terminations described in
the first paragraph of this section, each of Messrs. Hazen and Jacobs is
entitled to receive the foregoing benefit. Under their employment agreements,
Mr. Hazen and Mr. Jacobs also participated 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."
Mr. Jacobs' employment agreement defined his peer executive officer 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 were to
be terminated by the Company other than for cause, death, or disability, or if
they terminated their employment with the Company for "good reason." The
employment agreements defined "good reason" to mean 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. Mr. Hazen's and Mr. Jacob's employment agreements also
provided that, upon termination of their employment by the Company (other than
for cause, death or disability) or by them for good reason, they would 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 he received for the three
years preceding the date his employment terminates (the "termination date").
Mr. Hazen would also receive a cash payment in an amount equal to (i) the sum
of his base salary and his highest annual bonus with respect to the three
years preceding his termination date times (ii) the
29
<PAGE>
number of months from his termination date to the end of his contractual
employment period divided by 12. Mr. Hazen and Mr. Jacobs would also continue
to receive lifetime medical and dental benefits on the same basis as prior to
termination of their agreements, and certain other benefits. In connection
with the termination described in the first paragraph of this section, Messrs.
Hazen and Jacobs received the payments, and Mr. Hazen became entitled to the
benefits described above.
Under the terms of his employment agreement, if Mr. Hazen's employment were
to terminate under any of the circumstances described above (other than by the
Company for cause or by Mr. Hazen without "good reason"), all outstanding
stock options and awards of restricted stock held by Mr. Hazen as of the date
employment terminated would become exercisable and vest in full, which
occurred as a result of the termination described in the first paragraph of
this section.
Each of Mr. Hazen's and Mr. Jacobs' employment agreements also obligates
the Company to make an additional payment 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 so that after the payment of
all income and excise taxes, he would be in the same after-tax position as if
no excise tax had been imposed.
Non-Competition. Their employment agreements provide that Mr. Hazen and
Mr. Jacobs were not to disclose confidential information or compete with the
Company during the term of their employment and are not to do so 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 1999, certain directors, executive officers, members of their
immediate families, and their associates had banking transactions, including
loans, in the ordinary course of business with the Company's bank
subsidiaries. In addition, Norwest Investment Services, Inc., a broker-dealer
subsidiary, made margin loans in the ordinary course of business to certain
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.
Certain directors, executive officers, and members of their immediate
families had mortgage and other loans from two of the Company's non-bank
subsidiaries. Information on these loans is given below.
One non-employee director and five executive officers of the Company
(including executive officers named in the Summary Compensation Table), as
well as members of the immediate families of certain executive officers,
obtained mortgage loans from Norwest Mortgage, Inc. ("NMI"), a mortgage
lending subsidiary of the Company. In connection with these mortgage loans,
NMI waived an origination fee equal to 1% of the loan amount for each loan to
a director or executive officer, a benefit available to all Company employees.
Of the mortgage loans made by NMI, three loans were made to executive
officers who relocated to San Francisco or Los Angeles, California, in
connection with the relocation of the Company's headquarters. These loans were
made under the Company's relocation program for employees who relocate to
high-cost areas (the "Relocation Program") described below.
During 1999, certain executive officers of the Company (including an
executive officer named in the Summary Compensation Table) who were officers
of the former Wells Fargo had outstanding mortgage loans made under its
Executive Loan Program and outstanding loans to facilitate their exercise of
stock options granted under the former Wells Fargo's Long-Term Incentive Plan.
These loans are now held by WFC Holdings Corporation ("WFC Holdings") as
successor to the former Wells Fargo pursuant to the Merger. Under the
Executive Loan Program, an eligible employee could obtain a mortgage loan for
purchasing, constructing, improving, or refinancing the employee's principal
residence. Mortgage loans were available in amounts which, when aggregated
with other debt secured by the residence, would not exceed the lesser of
$1,500,000 or 100% of the fair market value of the residence. New mortgage
loans under this loan program are no longer being made. The stock option loans
had maximum terms of six years and variable interest rates that were adjusted
each year based on the greater of the average annual rate for three-year U.S.
Treasury notes for the immediately preceding calendar year and the applicable
rate under the Internal Revenue Code.
31
<PAGE>
Information about loans made or held by NMI or WFC Holdings, as the case
may be, to directors and to the executive officers named in the Summary
Compensation Table is shown in the table below.
<TABLE>
<CAPTION>
Highest Outstanding Outstanding Annual
Name and Loan Balance Loan Balance Interest
Principal Position Since 1/1/99 on 12/31/99 Rate
- ------------------------------ ------------------- ------------ --------------
<S> <C> <C> <C>
Les Biller (1) $1,000,000 $ 995,320 6.375% (fixed)
Vice Chairman and Chief
Operating Officer 750,000 750,000 Interest Free
Paul Hazen (2) 1,315,603 -0- 6.17% (fixed)
Chairman 597,777 298,889 5.14%
Richard M. Kovacevich (3) 1,805,000 1,790,694 6.75%
President and Chief Executive
Officer 995,000 995,000 Interest Free
Terri A. Dial (4) 177,500 177,500 6.08%
Group Executive Vice President 42,600 42,600 5.14%
David A. Hoyt (4) 99,997 99,997 6.63%
Group Executive Vice President 299,536 299,536 5.64%
Chang-Lin Tien (5) 397,450 397,450 7.25% (fixed)
Director 599,627 599,627 8.375% (fixed)
Immediate Family Member of
Director (6) 73,942 -0- 7.25%
</TABLE>
- --------
(1) The loan shown on the first line opposite Mr. Biller's name is a first
mortgage loan from NMI to purchase Mr. Biller's principal residence. The
loan shown on the second line is a down payment loan made under the
Relocation Program described on page 33 of this proxy statement.
(2) The loan shown on the first line opposite Mr. Hazen's name is a first
mortgage, 30-year loan originally made by the former Wells Fargo under
its Executive Loan Program to refinance the purchase of Mr. Hazen's
principal residence. The loan shown on the second line is a loan made
under the former Wells Fargo's Long-Term Incentive Plan in connection
with Mr. Hazen's exercise of a stock option to purchase shares of the
former Wells Fargo's common stock.
(3) The loan shown on the first line opposite Mr. Kovacevich's name is a
first mortgage loan from NMI to purchase Mr. Kovacevich's principal
residence. The loan shown on the second line is a down payment made under
the Relocation Program described on page 33 of this proxy statement.
(4) The loans shown on the first and second lines opposite each of Ms. Dial's
and Mr. Hoyt's names are loans made under the former Wells Fargo's Long-
Term Incentive Plan in connection with their exercise of stock options to
purchase shares of the former Wells Fargo's common stock.
(5) The loans shown on the first and second lines opposite Mr. Tien's name
are mortgage loans made by NMI to Mr. Tien during 1999.
(6) The daughter of Ian M. Rolland had a mortgage loan from NMI during 1999.
32
<PAGE>
Three executive officers not named in the Summary Compensation Table and
two members of their immediate families had outstanding mortgage loans
(including mortgage loans to one executive officer under the Relocation
Program) from NMI during 1999 totaling $2,598,842. The mortgage loans (other
than an interest-free down payment loan under the Relocation Program) had
interest rates ranging from 6.625% (adjustable) to 8.125% (adjustable) per
annum. Of these loans, one was sold by NMI in the secondary real estate
mortgage market.
Two executive officers of the Company who were officers of the former Wells
Fargo had mortgage loans under the Executive Loan Program now held by WFC
Holdings, totaling $2,289,810, with fixed interest rates ranging from 5.33% to
5.69% per annum; and two executive officers of the Company had stock option
loans held by WFC Holdings totaling $1,009,204, with interest rates during
1999 ranging from 5.14% to 6.63% per annum. The balances stated in this and
the preceding paragraph are the highest outstanding balances during 1999.
Relocation Program
The Company offers a relocation program (the "Relocation Program") for
employees who relocate at the Company's request to designated high cost areas.
The Company believes this program is an attractive incentive to retain key
employees. The Relocation Program provides a relocating employee who is
eligible for benefits under the Program with financial assistance, both in
purchasing a residence in a designated high cost area, and in selling his or
her existing home. Under the Relocation Program, an employee who relocates to
a designated high-cost area is eligible to receive a first mortgage loan
(subject to applicable lending guidelines) from NMI, and a 30-year, interest-
free second mortgage down payment loan in an amount up to 100% of his or her
annual base salary to purchase a new primary residence. The Company may also
provide a mortgage interest subsidy on the first mortgage loan of up to 25% of
the employee's annual base salary, payable over a period not less than the
first three years of the first mortgage loan. The second mortgage loan must be
repaid in full if the employee terminates employment with the Company or
retires, or if the employee sells the residence or refinances the mortgage
loans. In addition to first mortgage and down payment loan assistance, the
Company may provide a transfer bonus of up to 30% of the eligible relocating
employee's base salary and will generally pay all related home purchase
closing costs and moving expenses for the relocating employee.
With the exception of expenses paid to or on behalf of the employee to move
household goods, the benefits described above (other than the mortgage loans)
are treated as taxable income to the employee. The Relocation Program also
includes, as an additional benefit, reimbursement of the amount of taxes paid
on the taxable portion of amounts received by the employee under the
Relocation Program.
The Relocation Program also assists employees relocating to a designated
high cost area in defraying costs associated with selling their current
residences. Available benefits may include payment of selling costs
customarily incurred by a seller of residential real estate (such as real
estate commissions, title and appraisal fees, and other routine closing
costs), purchase of the relocating employee's home at its appraised market
value by a third party relocation company using Company funds, and certain
cash incentives to employees who locate buyers for their homes directly.
The Company has designated the San Francisco Bay area and Los Angeles
County, California as high-cost areas, among others, under the Relocation
Program. During 1999, Richard M. Kovacevich and Les Biller each received the
maximum benefits available under the Relocation Program in connection with the
relocation of the Company's headquarters to San
33
<PAGE>
Francisco, California. Information about the amount of benefits received by
each of them under the Relocation Program in 1999 is included in column (e) of
the Summary Compensation Table and footnote (2) on page 21 of this proxy
statement.
Compensation Committee Interlocks and Insider Participation
The Human Resources Committee (the "HRC") and the Section 162(m) Committee
(the "162(m) Committee") determine the compensation to be paid to the
Company's Chief Executive Officer and other executive officers, including the
executive officers named in the Summary Compensation Table. The members of the
HRC for 1999 were Michael W. Wright (Chair), Michael R. Bowlin, William A.
Hodder, Robert L. Joss, Richard D. McCormick, Donald B. Rice, Ian M. Rolland,
Daniel M. Tellep, and John A. Young. The members of the 162(m) Committee for
1999 consisted of all the members of the HRC except Mr. Joss.
The 162(m) Committee was created in November 1999 to administer the
Company's Performance Policy to conform to the requirements of Section 162(m)
of the Internal Revenue Code. In order for certain compensation to be
deductible by the Company, Section 162(m) regulations require that
compensation of executive officers named in the proxy statement be determined
under the Policy by a committee of at least three outside directors. Robert L.
Joss, who is a member of the HRC, is not eligible to serve on the 162(m)
Committee under IRS regulations relating to Section 162(m) because he was an
officer of the former Wells Fargo during a period that ended in 1993.
In addition, a member of the immediate family of Ian M. Rolland, a director
and member of the HRC and the 162(m) Committee, had a mortgage loan from NMI
during 1999. Information on this loan is included above under the heading
"Loans."
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 the Company's common stock and any changes
in that ownership to the Securities and Exchange Commission (the "SEC") 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 five executive officers and two directors. Richard McCormick, a
director, did not report when due the conversion of his stock in the former
Wells Fargo into Company common stock as a result of the Merger in November
1998. Terri Dial, an executive officer, did not report when due the grant to
her of employee stock options in November 1998. David Hoyt, an executive
officer, erroneously reported the number of shares he sold in January 1999.
Benjamin Montoya, a director, did not report when due a purchase of stock he
made in February 1999. John Nelson, an executive officer, did not report when
due his exercise of employee stock options and his sale of the resulting
shares in April 1999. John Berg, an executive officer, erroneously reported
the number of shares he donated to a charitable foundation and did not report
when due a gift of shares to his daughter, both in December 1999. Stanley
Stroup, an executive officer, did not report when due a gift of shares he made
in December 1999. These transactions were subsequently reported on Forms 4 or
amendments to Forms 4 previously filed, as the case may be. In making these
disclosures, the Company relied on written representations of each reporting
person and copies of the reports filed with the SEC.
34
<PAGE>
ITEM 2--APPOINTMENT OF INDEPENDENT AUDITORS
Stockholders will also vote at the annual meeting to ratify the appointment
by the Board of Directors of KPMG LLP, certified public accountants, as
independent auditors of the Company and its subsidiaries for the year ending
December 31, 2000. KPMG LLP or its predecessors have examined the financial
statements of the Company each year since 1931.
Representatives of KPMG LLP are expected to be present at the annual
meeting 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, which is identified as Item 2 on the
enclosed proxy card.
ITEM 3--STOCKHOLDER PROPOSAL RELATING TO CUMULATIVE VOTING
Gerald R. Armstrong, 910 Fifteenth Street, No. 754, Denver, Colorado 80202-
2924, who held 19,282 shares of common stock on November 14, 1999, intends to
submit a resolution to stockholders for approval at the 2000 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.
Statement
Within the merger of Wells Fargo and Norwest, there are two groups of
shareholders--each owning nearly half of the shares.
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 shareholders of
these entities were not compensated for the loss of these voting rights. North
County Bancorp shareholders will lose their cumulative voting rights upon its
merger into Wells Fargo.
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 dividends.
Cumulative voting rights of WestAmerica Bancorporation, a most successful
bank holding company in northern California, were one of its selling points
for using its shares to make acquisitions.
A California law requires that all state pension holdings and state college
funds invested in voting shares, must be voted in favor
35
<PAGE>
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.
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 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. Unmarked
proxies are automatically voted against.
Position of the Board of Directors
The Board of Directors recommends that stockholders vote AGAINST this
proposal, which is identified as Item 3 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 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 1999
annual meeting of the Company, and at the 1997 and 1998 annual meetings of
Norwest Corporation. His current cumulative voting proposal is similar to the
proposals he submitted in 1997 and 1999. 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 and 1998, stockholders holding approximately 68% and 67%,
respectively, of the outstanding common stock that voted on the cumulative
voting proposal voted against it. In 1999, stockholders holding approximately
65% 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.
The perspective of every director should be the interest of all
stockholders. Accordingly, the Board of Directors recommends that stockholders
vote AGAINST this proposal.
36
<PAGE>
ADDITIONAL INFORMATION
Advance Notice Procedures
Under the Company's By-Laws, no business may be brought before an annual
meeting unless it is specified in the notice of the meeting or is otherwise
brought before the meeting by or at the direction of the Board or by a
stockholder entitled to vote who has delivered advance notice to the Company.
Such notice must contain certain information specified in the By-Laws and be
delivered to the President and Chief Executive Officer of the Company at 420
Montgomery Street, San Francisco, CA 94104, not less than 90 or more than 120
days prior to the first anniversary of the preceding year's annual meeting.
These requirements are separate from and in addition to the SEC's requirements
that a stockholder must meet in order to have a stockholder proposal included
in the Company's proxy statement pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934.
Stockholder Proposals for the 2001 Annual Meeting
Stockholders interested in submitting a proposal for inclusion in the proxy
materials for the Company's annual meeting of stockholders in 2001 may do so
by following the procedures prescribed in SEC Rule 14a-8. To be eligible for
inclusion, stockholder proposals must be received by the Company's President
and Chief Executive Officer at 420 Montgomery Street, San Francisco, CA 94104,
no later than November 21, 2000.
37
<PAGE>
-------------------------
COMPANY #
CONTROL #
-------------------------
WELLS FARGO & COMPANY
420 Montgomery Street, San Francisco, California 94104
- --------------------------------------------------------------------------------
This proxy is solicited by the Board of Directors of Wells Fargo & Company
(the "Company") for use at the Annual Meeting of Stockholders on
Tuesday, April 25, 2000 at 9:30 a.m., Pacific daylight time,
at 420 Montgomery Street, San Francisco, California 94104.
By signing this proxy, the undersigned hereby revokes all prior proxies, and
appoints 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 the
Company's common stock held of record by the undersigned at the close of
business on March 7, 2000, which the undersigned would be entitled to vote if
personally present at the Annual Meeting or at any adjournments or postponements
thereof, as specified on this proxy card.
VOTE BY TELEPHONE OR INTERNET--SEE THE REVERSE SIDE OF THIS PROXY CARD
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 and 2.
<TABLE>
<CAPTION>
Item 1. Election of directors:
<S> <C> <C> <C> <C>
[_] Vote FOR all
01 Leslie S. Biller 06 Paul Hazen 11 Cynthia H. Milligan 16 Susan G. Swenson nominees
02 J.A. Blanchard III 07 Robert L. Joss 12 Benjamin F. Montoya 17 Chang-Lin Tien
03 Michael R. Bowlin 08 Reatha Clark King 13 Philip J. Quigley 18 Michael W. Wright [_] Vote WITHHELD
04 David A. Christensen 09 Richard M. Kovacevich 14 Donald B. Rice from all nominees
05 Susan E. Engel 10 Richard D. McCormick 15 Judith M. Runstad
</TABLE>
(Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) in the box provided to the right.)
--------------------------------------
--------------------------------------
[_] For [_] Against [_] Abstain
Please fold here -- Do not separate
- --------------------------------------------------------------------------------
Item 2. Ratify appointment of KPMG LLP as independent auditors for the year
2000.
[_] For [_] Against [_] Abstain
The Board of Directors recommends a vote "AGAINST" Item 3.
Item 3. Stockholder proposal relating to cumulative voting.
[_] For [_] Against [_] Abstain
Item 4. In the proxies' discretion, to vote on any matter properly before the
annual meeting, or any adjournment or postponement thereof.
IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED ABOVE. IF NO
DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2, AGAINST ITEM
3, AND IN THE MANNER SET FORTH IN ITEM 4 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.
Address change? Mark Box [_]
Indicate changes below:
Dated _______________________, 2000
Please sign exactly as name appears on proxy card
-------------------------------------------------
-------------------------------------------------
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>
WELLS FARGO & COMPANY
420 MONTGOMERY STREET
SAN FRANCISCO, CALIFORINIA 94104
2000 ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, APRIL 25, 2000
9:30 A.M., Pacific daylight time
(LOGO)
Please fold here -- Do not separate
- --------------------------------------------------------------------------------
VOTE BY TELEPHONE OR INTERNET
You may vote by telephone or Internet at your convenience 7 days/week,
24 hours/day.
Your telephone or Internet 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 the proxy card.
The deadline for telephone or Internet voting is noon (CDT) on
April 24, 2000.
TO VOTE BY TELEPHONE: 1. CALL TOLL FREE ON A TOUCH TONE TELEPHONE:
- -------------------- 1-800-240-6326.
2. When prompted, enter the 3-digit
Company Number and 7-digit Control
Number which are located in the box on
the upper right hand corner on the
reverse side of the instruction card
and proxy.
3. Follow the simple instructions when prompted
TO VOTE BY INTERNET: 1. GO TO THE WEB SITE ADDRESS: http://www.eproxy.com/wfc/
- ------------------- 2. When prompted, enter the 3-digit
Company Number and 7-digit Control
Number which are located in the box on
the upper right hand corner on the
reverse side of the instruction card
and proxy.
3. Follow the simple instructions when prompted.
IF YOU HAVE VOTED BY TELEPHONE OR INTERNET,
PLEASE DO NOT MAIL BACK YOUR PROXY CARD.
<PAGE>
-------------------------
COMPANY #
CONTROL #
-------------------------
WELLS FARGO & COMPANY
420 Montgomery Street, San Francisco, California 94104
- --------------------------------------------------------------------------------
This instruction card and proxy is solicited by the Board of Directors
of Wells Fargo & Company (the "Company") for use at the Annual Meeting
of Stockholders on Tuesday, April 25, 2000 at 9:30 a.m., Pacific
daylight time, from persons who participate in either (1) the
Wells Fargo 401(k) Plan (the "401(k) Plan"), or (2) The
Wells Fargo Stock Direct Purchase Plan (the "SDP Plan"),
or (3) both the 401(k) Plan and the SDP Plan.
By signing this instruction and proxy card: (a) if the undersigned participates
in the 401(k) Plan, the undersigned revokes any prior instructions, and hereby
instructs Norwest Bank Minnesota, N.A., as Trustee, to exercise the voting
rights relating to any shares of the Company's common stock allocable to the
your 401(k) Plan account as of March 7, 2000, at the Annual Meeting or any
adjournments or postponements thereof as specified on the instruction and proxy
card, and (b) if the undersigned participates in the SDP Plan, the undersigned
revokes any prior proxies and appoints Patricia R. Callahan, Ely L. Licht and
Stanley S. Stroup, and each of them, as proxies, with full power of substitution
to vote all shares of the Company's common stock held for your SDP Plan account
as of March 7, 2000 at the Annual Meeting or any adjournments or postponements
thereof as specified on the instruction and proxy card.
This instruction and proxy card must be returned to Norwest Bank Minnesota,
National Association, by April 20, 2000, if your shares are to be voted. For the
401(k) Plan 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 401(k)
Plan according to these ratios.
VOTE BY TELEPHONE OR INTERNET -- SEE REVERSE SIDE OF THIS INSTRUCTION
AND PROXY CARD.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" Items 1 and 2.
<TABLE>
<CAPTION>
Item 1. Election of directors:
<S> <C> <C> <C> <C>
[_] Vote FOR all
01 Leslie S. Biller 06 Paul Hazen 11 Cynthia H. Milligan 16 Susan G. Swenson nominees
02 J.A. Blanchard III 07 William A. Hodder 12 Benjamin F. Montoya 17 Chang-Lin Tien
03 Michael R. Bowlin 08 Reatha Clark King 13 Philip J. Quigley 18 Michael W. Wright [_] Vote WITHHELD from
04 David A. Christensen 09 Richard M. Kovacevich 14 Donald B. Rice all nominees
05 Susan E. Engel 10 Richard D. McCormick 15 Judith M. Runstad
</TABLE>
(Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) in the box provided to the right.)
--------------------------------------
--------------------------------------
[_] For [_] Against [_] Abstain
Please fold here -- Do not separate
- --------------------------------------------------------------------------------
Item 2. Ratify appointment of KPMG LLP as independent auditors for the year
2000.
[_] For [_] Against [_] Abstain
The Board of Directors recommends a vote "AGAINST" Item 3.
Item 3. Stockholder proposal relating to cumulative voting.
[_] For [_] Against [_] Abstain
Item 4. In the proxies's discretion, vote on any matter properly before the
annual meeting, or any adjournment or postponement thereof.
IF THIS INSTRUCTION AND PROXY CARD IS PROPERLY EXECUTED, YOUR SHARES WILL BE
VOTED AS DIRECTED ABOVE. IF NO DIRECTION IS INDICATED, YOUR SHARES WILL BE VOTED
FOR ITEMS 1 AND 2, AGAINST ITEM 3, AND IN THE MANNER SET FORTH IN ITEM 4 ABOVE.
This instruction and 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 AND PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Address change? Mark Box [_]
Indicate changes below:
Dated _______________________, 2000
Please sign exactly as name appears on proxy card
-------------------------------------------------
-------------------------------------------------
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>
WELLS FARGO & COMPANY
420 MONTGOMERY STREET
SAN FRANCISCO, CALIFORINIA 94104
2000 ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, APRIL 25, 2000
9:30 A.M., Pacific daylight time
(LOGO)
Please fold here -- Do not separate
- --------------------------------------------------------------------------------
VOTE BY TELEPHONE OR INTERNET
You may vote by telephone or Internet at your convenience 7 days/week,
24 hours/day.
Your telephone or Internet vote authorizes, as applicable, the 401(k) Plan
Trustee, and/or 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 instruction and
proxy card.
The deadline for telephone or Internet voting is noon (CDT) on
April 20, 2000.
To vote by Telephone: 1. CALL TOLL FREE ON A TOUCH TONE TELEPHONE:
- -------------------- 1-800-240-6326.
2. When prompted, enter the 3-digit
Company Number and 7-digit Control
Number which are located in the box on
the upper right hand corner on the
reverse side of the instruction card
and proxy.
3. Follow the simple instructions when prompted
To vote by Internet: 1. Go to the Web site address: http://www.eproxy.com/wfc/
- -------------------- 2. When prompted, enter the 3-digit
Company Number and 7-digit Control
Number which are located in the box on
the upper right hand corner on the
reverse side of the instruction card
and proxy.
3. Follow the simple instructions when prompted.
IF YOU HAVE VOTED BY TELEPHONE OR INTERNET,
PLEASE DO NOT MAIL BACK YOUR INSTRUCTION AND PROXY CARD.
