-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WQficjf+g6VNqPQMNNWlvLAHMaaKBIAsI+i/dPqZa0TMuwIdIPiM0ofuKPKhsjDa Q5wFgiapRqGs6j04+NJXeg== 0000898430-96-004297.txt : 19960912 0000898430-96-004297.hdr.sgml : 19960912 ACCESSION NUMBER: 0000898430-96-004297 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960911 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELLS FARGO & CO CENTRAL INDEX KEY: 0000105598 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 132553920 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 1933 Act SEC FILE NUMBER: 333-10469 FILM NUMBER: 96628770 BUSINESS ADDRESS: STREET 1: 420 MONTGOMERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94163 BUSINESS PHONE: 4154771000 MAIL ADDRESS: STREET 1: 343 SANSOME ST 3RD FL STREET 2: WELLS FARGO BANK CITY: SAN FRANCISCO STATE: CA ZIP: 94163 424B5 1 PROSPECTUS SUPPLEMENT DATED 9/11/96 FILED PURSUANT TO RULE 424(b)(5) REGISTRATION NO. 333-10469 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED AUGUST 30, 1996) [LOGO OF WELLS FARGO & COMPANY] $3,500,000,000 WELLS FARGO & COMPANY MEDIUM-TERM NOTES AND SUBORDINATED MEDIUM-TERM NOTES, SERIES B DUE FROM 9 MONTHS TO 12 YEARS FROM DATE OF ISSUE ------------- Wells Fargo & Company (the "Company") is offering by this Prospectus Supplement two series of notes, its Medium-Term Notes ("Senior Notes") and Subordinated Medium-Term Notes, Series B ("Subordinated Notes") (together, the "Notes") in an aggregate principal amount of up to $3,500,000,000 or the equivalent thereof in other currencies or composite currencies, subject to possible reduction as a result of the sale of other debt securities or preferred stock of the Company. See "Description of Medium-Term Notes" and "Plan of Distribution." Senior Notes will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company and Subordinated Notes will be subordinated as described under "Description of Notes-- Subordination of Subordinated Notes" in the Prospectus to which this Prospectus Supplement relates. Unless otherwise indicated in the applicable Pricing Supplement to this Prospectus Supplement (a "Pricing Supplement"), the Interest Payment Dates for Fixed Rate Notes will be each April 1 and October 1. Interest Payment Dates for Floating Rate Notes will be set forth in the applicable Pricing Supplement. Each Note will mature on a day from 9 months to 12 years from the Original Issuance Date (as defined herein), as set forth on the face of such Note, and may be subject to optional redemption by the Company, or obligate the Company to redeem or purchase such Note pursuant to a sinking fund or analogous provisions or at the option of the holder thereof, in each case as indicated in the applicable Pricing Supplement. The Notes will be issued only in denominations of $1,000 and integral multiples of $1,000 in excess thereof. Each Note will be issued only in fully registered form and will be represented by either a Global Security (as defined herein) registered in the name of The Depository Trust Company, as Depositary (a "Book-Entry Note") or a nominee of the Depositary, or a certificate issued in definitive form (a "Certificated Note"), as set forth in the applicable Pricing Supplement. Beneficial interests in Book-Entry Notes will be shown on, and transfers thereof will be effected only through, the records maintained by the Depositary's participants. Except as described in "Description of Medium-Term Notes--Book-Entry Notes," owners of beneficial interests in Book-Entry Notes will not be entitled to receive Notes in definitive form and will not be considered the holders thereof. The specific designation, ranking as senior or subordinated debt, aggregate principal amount, interest rate or interest rate formula, if any, issue price, Earliest Redemption Date, if any, Stated Maturity and any additional information for each Note will be established by the Company at the Original Issuance Date of such Note and will be indicated in an accompanying Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, the Notes, except Zero-Coupon Notes, will bear interest at a fixed rate or at a rate or rates determined by reference to LIBOR, the Treasury Rate, the Commercial Paper Rate, the Prime Rate, the CD Rate, the CMT Rate, the Federal Funds Effective Rate, or the Eleventh District Cost of Funds Rate (each as defined herein), as adjusted by a Spread and/or Spread Multiplier (each as defined herein), if any is applicable to such Notes. Zero-Coupon Notes will be issued at a discount from the principal amount payable at maturity thereof, but holders of Zero-Coupon Notes will not receive periodic payments of interest on such Notes. Payment of principal of the Subordinated Notes may be accelerated only in the case of certain events of bankruptcy, insolvency or reorganization of the Company or Wells Fargo Bank, National Association (the "Bank"). There is no right of acceleration in the case of a default in the performance of any convenant with respect to the Subordinated Notes, including a default in the payment of interest or principal. ------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE NOTES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE UNSECURED DEBT OBLIGATIONS OF WELLS FARGO & COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
- ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ PRICE TO AGENTS' PROCEEDS TO PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3) - ------------------------------------------------------------------------------------------------------ Per Note............... 100% .125%-.625% 99.875%-99.375% - ------------------------------------------------------------------------------------------------------ Total(4)............... $3,500,000,000 $4,375,000-$21,875,000 $3,495,625,000-$3,478,125,000 - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------
(1) Unless otherwise specified in a Pricing Supplement, Notes will be issued at 100% of their principal amount. (2) The Company will pay Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston Corporation, Goldman, Sachs & Co., Lehman Brothers, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated or Salomon Brothers Inc (the "Agents") a commission ranging from .125% to .625% of the principal amount of any Note, depending on maturity, sold through such Agent. The Company also may sell Notes to any Agent for resale to investors or other purchasers at varying prices related to prevailing market prices at the time of resale to be determined by such Agent or, if so agreed, at a fixed public offering price. Unless otherwise specified in the applicable Pricing Supplement, any Note sold to an Agent as principal will be purchased by such Agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to an agency sale of a Note of identical maturity, and may be resold by such Agent. The Company has agreed to indemnify the Agents against certain liabilities, including certain liabilities under the Securities Act of 1933. (3) Assuming that the Notes are issued at 100% of principal amount and before deducting expenses payable by the Company estimated at $2,417,000. (4) Or the equivalent thereof in other currencies or composite currencies. ------------- The Notes may be offered by the Company through the Agents, each of which has agreed to use best efforts to solicit offers to purchase the Notes. The Company also may sell Notes to any Agent acting as principal for resale to one or more purchasers. The Notes may also be sold by the Company or an affiliate of the Company directly to purchasers on behalf of the Company in those jurisdictions where it is authorized to do so. The Notes will not be listed on any securities exchange, and there can be no assurance that the Notes offered by this Prospectus Supplement will be sold or that there will be a secondary market for the Notes. The Company reserves the right to withdraw, cancel or modify the offer or solicitations of offers made hereby without notice. The Company or any Agent, if it solicits such offer, may reject any offer to purchase Notes, in whole or in part. See "Plan of Distribution." ------------- MERRILL LYNCH & CO. CS FIRST BOSTON GOLDMAN, SACHS & CO. LEHMAN BROTHERS MORGAN STANLEY & CO. INCORPORATED SALOMON BROTHERS INC ------------- The date of this Prospectus Supplement is September 11, 1996. IN CONNECTION WITH THIS OFFERING, ANY AGENT MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OR OTHER DEBT SECURITIES OF THE COMPANY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. DESCRIPTION OF MEDIUM-TERM NOTES GENERAL The following description of the particular terms of the Notes offered hereby supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of Notes set forth under the heading "Description of Notes" in the accompanying Prospectus, to which the meanings assigned to such terms in the Prospectus. At the option of the Company, the Notes may be issued as Medium-Term Notes which constitute senior debt securities ("Senior Notes") and as Subordinated Medium-Term Notes, Series B which constitute subordinated debt securities ("Subordinated Notes") (together the "Notes"). The Senior Notes, an additional $2,096,950,000 of which have been previously issued under separate Prospectuses and are outstanding as of the date of this Prospectus Supplement, constitute a single series of debt securities under the Senior Indenture (as defined below) and will be issued under an Indenture, dated as of September 1, 1984, as amended by the First Supplemental Indenture dated as of April 15, 1986, the Second Supplemental Indenture dated as of June 30, 1987, and the Third Supplemental Indenture dated as of January 23, 1991 (together, the "Senior Indenture"), between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as successor Trustee (the "Senior Trustee"). The Subordinated Notes, none of which has been previously issued, will be issued under an Indenture dated as of December 10, 1992 (the "Subordinated Indenture"), between the Company and Marine Midland Bank, as Trustee (the "Subordinated Trustee"). In this Prospectus Supplement, the Senior Indenture and the Subordinated Indenture are referred to as the "Indentures." The Senior Trustee and the Subordinated Trustee are referred to as the "Trustees." The Indentures do not limit the amount of debt securities which can be issued thereunder and provide that debt securities of any series may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Company. The terms of Notes, including applicable interest rates, maturity dates and repayment or redemption provisions, may vary as provided in the applicable Pricing Supplement. Senior Notes will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company and Subordinated Notes will be subordinated as described under "Description of Notes-Subordination of Subordinated Notes" in the Prospectus. Payment of the principal of the Subordinated Notes may be accelerated only in the case of certain events of bankruptcy, insolvency or reorganization of the Company or the Bank. There is no right of acceleration in the case of a default in the performance of any covenant with respect to the Subordinated Notes, including a default in the payment of interest or principal. See "Description of Notes-Events of Default" in the Prospectus. Each Note will mature on a day from 9 months to 12 years from its date of issue (the "Original Issuance Date"), as selected by the initial purchaser and agreed to by the Company ("Stated Maturity"). The Notes will be issuable only in fully registered form in denominations of $1,000 and integral multiples of $1,000 in excess thereof. Each Note will be issued initially as either a Book-Entry Note or a Certificated Note. See "Book-Entry Notes." S-2 Payments of principal and premium, if any, and interest payable at the Stated Maturity or at any earlier Redemption Date or Repayment Date (as defined below) on Senior and Subordinated Notes will be made in immediately available funds at the principal corporate trust office of The Chase Manhattan Bank (formerly known as Chemical Bank), as paying agent, in the Borough of Manhattan, The City of New York, or Chemical Trust Company of California, as paying agent, in the City and County of San Francisco, California (each, a "Paying Agent"), provided that the Note is presented to a Paying Agent in time for such Paying Agent to make such payments in such funds in accordance with its normal procedures. For interest payments on Notes of U.S. $5,000,000 or more in principal amount, the holder of such Notes may elect at any time to have payment made in immediately available funds, and interest payments on Notes of less than U.S. $5,000,000 in principal amount will be made in immediately available funds only if agreed to on a case-by-case basis by the Company and otherwise will be made by check mailed on the Interest Payment Date to the registered holder thereof, except that interest payments made at any Redemption Date, Repayment Date or at the Stated Maturity will be made as described above. Interest payments on Notes will not be made in immediately available funds unless written instructions have been presented to a Paying Agent at least 15 days prior to the Regular Record Date from and after which a holder has elected to receive payments in immediately available funds. Notwithstanding the foregoing provisions of this paragraph, payments of principal and premium, if any, and interest on Book-Entry Notes registered in the name of the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of such Book-Entry Notes, in immediately available funds (provided that, in the case of payments of principal, premium, if any, and interest at Stated Maturity or on any earlier Redemption Date or Repayment Date, the Book-Entry Note is presented to a Paying Agent in time for such Paying Agent to make such payment in accordance with its normal procedures); and the Company expects that the Depositary, upon receipt of such payment, will credit the accounts of its Participants in amounts proportionate to their respective beneficial interests in the Book-Entry Notes. See "Description of Notes--Global Securities" in the attached Prospectus. The Notes may be presented for registration of transfer or exchange at the offices or agencies to be maintained by the Company in the City and County of San Francisco, California and in the Borough of Manhattan, The City of New York, State of New York. FOREIGN CURRENCIES Unless otherwise indicated in the applicable Pricing Supplement, the Notes will be denominated in U.S. dollars and payments of principal of, premium, if any, and interest on the Notes will be made in U.S. dollars. If any of the Notes are to be denominated in a currency, including a composite currency, other than U.S. dollars or if the principal of, premium, if any, or interest on any of the Notes is to be payable at the option of the holder or the Company in a currency, including a composite currency, other than that in which such Note is denominated, the applicable Pricing Supplement will provide additional disclosure pertaining to the terms of such Notes and other matters of interest to the holders thereof. INTEREST Each Note, except a Zero-Coupon Note (as defined below), will bear interest from the Original Issuance Date or, if later, from the most recent Interest Payment Date to which interest on such Note (or one or more predecessor Notes, in exchange for or upon transfer of which such Note was issued between the Regular Record Date for payment of such interest and such Interest Payment Date) has been paid or duly provided for at the fixed interest rate per annum, or at the interest rate per annum determined pursuant to the interest rate formula, set forth therein and in the applicable Pricing Supplement, until the principal thereof is paid or made available for payment. Unless otherwise indicated in the applicable Pricing Supplement, the Interest Payment Dates for the Fixed Rate Notes (as defined below) will be April 1 and October 1 and the Interest Payment Dates for the Floating Rate Notes (as defined below) are as set forth below. Interest on a Note will also be paid on the Stated Maturity or on any earlier Redemption Dates or Repayment Dates (but only as to the principal due on such earlier dates). Interest payable on any Note on an Interest Payment Date will be payable to the person in whose name such Note (or one or more predecessor Notes in exchange for or upon transfer of which such Note was issued between the Regular Record Date for payment of such interest and such Interest Payment Date), is registered at the close of business on the Regular Record Date for payment of such interest; provided, however, that interest payable on a Note at Stated Maturity or, if applicable, upon earlier redemption or repayment, will be payable to the person to whom principal is paid. The first payment of interest on any Note originally issued between a Regular Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Regular Record Date to the registered holder at the close of business on such next succeeding Regular Record Date. Unless otherwise indicated in the applicable Pricing Supplement, the "Regular Record Date" with respect to Floating Rate Notes shall be the date 15 calendar days S-3 prior to each Interest Payment Date, whether or not such date shall be a Business Day (as defined below). Unless otherwise indicated in the applicable Pricing Supplement, the Regular Record Dates with respect to the Fixed Rate Notes shall be March 15 and September 15 next preceding the April 1 and October 1 Interest Payment Date. Interest rates, or interest rate formulas, are subject to change by the Company from time to time, but no such change will affect the interest rate or interest rate formula on any Note already issued or as to which an offer to purchase has been accepted by the Company. Interest rates offered by the Company with respect to the Notes may differ depending upon, among other things, the aggregate principal amount of the Notes purchased in any single transaction. Each Note, except a Zero-Coupon Note, will bear interest at either (a) a fixed rate or rates (a "Fixed Rate Note") or (b) a variable rate or rates determined by reference to an interest rate formula (a "Floating Rate Note"), which may be adjusted by adding or subtracting the Spread and/or multiplying by the Spread Multiplier (each term as defined below), if specified in the applicable Pricing Supplement. A "Zero Coupon Note" is a Note that provides for the periodic accretion of principal instead of the payment of interest, and that is offered at a discount from the principal amount thereof. A Floating Rate Note may also have either or both of the following: (a) a maximum numerical interest rate limitation, or ceiling, on the rate of interest which may accrue during any interest period and (b) a minimum numerical interest rate limitation, or floor, on the rate of interest which may accrue during any interest period; provided, however, that in no event shall the interest rate on any Floating Rate Note be greater than the maximum interest rate permitted by applicable law. The "Spread" is the number of basis points specified in the applicable Pricing Supplement as being applicable to the interest rate for such Floating Rate Note and the "Spread Multiplier" is the percentage specified in the applicable Pricing Supplement as being applicable to the interest rate for such Floating Rate Note. "Business Day" means (a) with respect to any Note, any day which is not a Saturday or Sunday and which, in the City of San Francisco or The City of New York, is neither a legal holiday nor a day on which banking institutions are authorized by law or regulation to close, and (b) with respect to LIBOR Notes only, any such day on which dealings in deposits in U.S. dollars are transacted in the London interbank market (a "London Business Day"). "Index Maturity" means, with respect to a Floating Rate Note, the period to maturity of the instrument or obligation on which the interest rate formula is based, as specified in the applicable Pricing Supplement. The applicable Pricing Supplement relating to a Fixed Rate Note will designate the rate of interest per annum payable on such Fixed Rate Note. The applicable Pricing Supplement relating to a Floating Rate Note will designate an interest rate basis (the "Interest Rate Basis") for such Floating Rate Note. The Interest Rate Basis may be: (a) the Commercial Paper Rate, in which case such Note will be a Commercial Paper Rate Note, (b) the Prime Rate, in which case such Note will be a Prime Rate Note, (c) LIBOR, in which case such Note will be a LIBOR Note, (d) the Treasury Rate, in which case such Note will be a Treasury Rate Note, (e) the Certificate of Deposit Rate ("CD Rate"), in which case such Note will be a CD Rate Note, (f) the CMT Rate ("CMT Rate"), in which case such Note will be a CMT Rate Note, (g) the Federal Funds Effective Rate, in which case such Note will be a Federal Funds Rate Note, (h) the Eleventh District Cost of Funds Rate, in which case such Note will be an Eleventh District Cost of Funds Rate Note, or (i) such other interest rate formula as is set forth in such Pricing Supplement. The applicable Pricing Supplement for a Floating Rate Note will specify, if applicable: the Spread and/or Spread Multiplier, the Initial Interest Rate (as defined below), the Index Maturity, the Interest Reset Frequency (as defined below), and the maximum or minimum interest rate limitation applicable to such Floating Rate Note. In addition, each Pricing Supplement will define or particularize for each Note the following terms, if applicable: Interest Payment Dates, Earliest Redemption Date, Repayment Dates, the principal amount, the issue price, the Stated Maturity and any redemption premium. The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset Date"), as specified in the applicable Pricing Supplement (the S-4 frequency with which the rate of interest on any Floating Rate Note will be reset is hereinafter called the "Interest Reset Frequency"). Unless otherwise specified in the applicable Pricing Supplement, the Interest Reset Dates will be, in the case of Floating Rate Notes which reset daily, each Business Day; in the case of Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes which reset weekly, the Tuesday of each week (except as set forth in the penultimate sentence of the second succeeding paragraph below); in the case of Floating Rate Notes which reset monthly (other than Eleventh District Cost of Funds Rate Notes), the third Wednesday of each month or, in the case of Eleventh District Cost of Funds Rate Notes, all of which reset monthly, the first calendar day of each month; in the case of Floating Rate Notes which reset quarterly, the third Wednesday of March, June, September and December; in the case of Floating Rate Notes which reset semi-annually, the third Wednesday of two months of each year that are six months apart, as specified in the applicable Pricing Supplement; and in the case of Floating Rate Notes which reset annually, the third Wednesday of one month of each year, as specified in the applicable Pricing Supplement; provided, however, that the interest rate in effect from the Original Issuance Date to the first Interest Reset Date with respect to a Floating Rate Note will be the Initial Interest Rate. If any Interest Reset Date for any Floating Rate Note would otherwise be a day that is not a Business Day for such Floating Rate Note, the Interest Reset Date for such Floating Rate Note shall be postponed to the next day that is a Business Day for such Floating Rate Note, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. "Initial Interest Rate" means the rate at which a Floating Rate Note will bear interest from its Original Issuance Date to the first Interest Reset Date, as indicated in the applicable Pricing Supplement. Interest on Floating Rate Notes will be calculated on the basis of actual days elapsed and a year of 360 days, except that interest on Treasury Rate Notes and CMT Rate Notes will be calculated on the basis of the actual number of days in the year. The Interest Determination Date pertaining to an Interest Reset Date for (a) a Commercial Paper Rate Note (the "Commercial Paper Interest Determination Date"), (b) a Prime Rate Note (the "Prime Rate Interest Determination Date"), (c) a CD Rate Note (the "CD Interest Determination Date"), (d) a CMT Rate Note (the "CMT Rate Interest Determination Date") and (e) a Federal Funds Rate Note (the "Federal Funds Interest Determination Date") will be the second Business Day preceding the Interest Reset Date with respect to such Note. The Interest Determination Date pertaining to an Interest Reset Date for an Eleventh District Cost of Funds Rate Note ("the Eleventh District Cost of Funds Rate Interest Determination Date") will be the last working day of the month immediately preceding such Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined below under "Eleventh District Cost of Funds Rate Note"). The Interest Determination Date pertaining to an Interest Reset Date for a LIBOR Note (the "LIBOR Interest Determination Date") will be the second London Business Day preceding such Interest Reset Date. The Interest Determination Date pertaining to an Interest Reset Date for a Treasury Rate Note (the "Treasury Interest Determination Date") will be the day of the week in which such Interest Reset Date falls on which Treasury bills would normally be auctioned. Treasury bills are usually sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is usually held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week. If an auction date shall fall on any Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date shall instead be the first Business Day immediately following such auction date. Any of the terms set forth in this paragraph may be varied in a Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement and except as provided below, interest will be payable, in the case of Floating Rate Notes which reset daily, weekly or monthly (except for Eleventh District Cost of Funds Rate Notes), on the third Wednesday of each month or on the third Wednesday S-5 of March, June, September and December of each year (as indicated in the applicable Pricing Supplement); in the case of Eleventh District Cost of Funds Rate Notes, which reset monthly, on the first Business Day of each month or the first Business Day of March, June, September and December as specified in the applicable Pricing Supplement; in the case of Floating Rate Notes which reset quarterly, on the third Wednesday of March, June, September and December of each year; in the case of Floating Rate Notes which reset semi-annually, on the third Wednesday of the two months of each year specified in the applicable Pricing Supplement; and in the case of Floating Rate Notes which reset annually, on the third Wednesday of the month specified in the applicable Pricing Supplement (each an "Interest Payment Date"), and in each case, at any Redemption Date, Repayment Date or Stated Maturity. If an Interest Payment Date with respect to any Floating Rate Note (other than an Interest Payment Date that falls on a Redemption Date or a Repayment Date with respect to the principal amount due and payable on such date, and other than an Interest Payment Date which falls on the Stated Maturity) would otherwise fall on a day that is not a Business Day with respect to such Note, the Interest Payment Date will be postponed to the following day that is a Business Day with respect to such Note, except that in the case of a LIBOR Note, if such Business Day falls in the next calendar month, such Interest Payment Date will be the preceding day that is a Business Day with respect to such LIBOR Note. Interest payments shall be for the amount of interest accrued to, but excluding, the Interest Payment Date. With respect to any Floating Rate Note, accrued interest from the Original Issuance Date or from the last date to which interest has been paid is calculated by multiplying the principal amount of such Floating Rate Note by an accrued interest factor. Such accrued interest factor is computed by adding the interest factor calculated for each day from the Original Issuance Date, or from the last date to which interest has been paid, to the date for which accrued interest is being calculated. The interest factor (expressed as a decimal and rounded upwards if five one-millionths or more of a percentage point and rounded downwards if less than five one-millionths of a percentage point, if necessary, to the next higher or lower, as the case may be, one hundred-thousandth of a percentage point (e.g., 9.876545% or .09876545 being rounded to 9.87655% or .0987655, respectively)) for each such day is computed by dividing the interest rate (expressed as a decimal rounded upwards if five one- millionths or more of a percentage point and downwards if less than five one- millionths of a percentage point, if necessary, to the next higher or lower, as the case may be, one hundred-thousandth of a percentage point) applicable to such date by 360, in the case of Commercial Paper Rate Notes, Prime Rate Notes, LIBOR Notes, CD Rate Notes, Federal Funds Rate Notes or Eleventh District Cost of Funds Rate Notes, or by the actual number of days in the year, in the case of CMT Rate Notes and Treasury Rate Notes. All dollar amounts used in or resulting from such calculation on Floating Rate Notes will be rounded to the nearest cent (with one-half cent being rounded upwards). Any of the terms set forth in this paragraph may be varied in a Pricing Supplement. Unless otherwise provided in the applicable Pricing Supplement, the Senior Trustee initially will be the calculation agent (the "Calculation Agent") with respect to the Floating Rate Notes issued under both the Senior Indenture and the Subordinated Indenture. The Company, at a later date, may choose to have the Bank or any other person serve as the Calculation Agent. Upon the request of the registered holder of any Floating Rate Note, the Calculation Agent will provide the interest rate then in effect, and, if different, the interest rate which will become effective as a result of a determination made on the most recent Interest Determination Date with respect to such Floating Rate Note. Any payment of principal, premium, if any, or interest required to be made on an Interest Payment Date, any Redemption Date or Repayment Date or at the Stated Maturity of a Fixed Rate Note which is not a Business Day need not be made on such day, and any payment of principal, premium, if any, or interest required to be made on any Redemption Date or Repayment Date or at the Stated Maturity of a Floating Rate Note which is not a Business Day need not be made on such day, but in each such case such payment may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date or Repayment Date or the Stated Maturity, as the case may be, and no interest shall S-6 accrue for the period from and after such Interest Payment Date, Redemption Date or Repayment Date or the Stated Maturity. Unless otherwise specified in an applicable Pricing Supplement, the "Interest Calculation Date," where applicable, pertaining to any Interest Determination Date will be the earlier of (a) the tenth calendar day after such Interest Determination Date, or, if any such day is not a Business Day, the next succeeding Business Day, or (b) the Business Day preceding the applicable Interest Payment Date, Redemption Date, Repayment Date or Stated Maturity, as the case may be. Fixed Rate Notes Each Fixed Rate Note will bear interest from the Original Issuance Date at the annual rate or rates stated on the face thereof. Unless otherwise specified in the applicable Pricing Supplement, the Interest Payment Dates for a Fixed Rate Note will be April 1 and October 1 of each year. Unless otherwise specified in the applicable Pricing Supplement, the Regular Record Dates for any regular payment of interest on any Interest Payment Date will be the March 15 or September 15, as the case may be (whether or not a Business Day), next preceding such Interest Payment Date. Interest on Fixed Rate Notes will be calculated on the basis of a 360-day year of twelve 30-day months. Commercial Paper Rate Notes Commercial Paper Rate Notes will bear interest at the interest rates (calculated with reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier, if any), and will be payable on the dates, specified on the face of the Commercial Paper Rate Note and in the applicable Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, "Commercial Paper Rate" means, with respect to each Commercial Paper Interest Determination Date, the Money Market Yield (calculated as described below) of the rate on such date for commercial paper having the Index Maturity specified in the applicable Pricing Supplement as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" or any successor publication of the Board of Governors of the Federal Reserve System ("H.15(519)") under the heading "Commercial Paper." In the event that such rate is not published prior to 3:00 P.M. New York City time, on the Interest Calculation Date pertaining to such Commercial Paper Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate on such Commercial Paper Interest Determination Date for commercial paper having the Index Maturity specified in the applicable Pricing Supplement as published by the Federal Reserve Bank of New York in its daily statistical release, Composite 3:30 P.M. Quotations for U.S. Government Securities" ("Composite Quotations") under the heading "Commercial Paper." If by 3:00 P.M., New York City time, on such Interest Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, the rate for that Commercial Paper Interest Determination Date shall be calculated by the Calculation Agent and shall be the Money Market Yield of the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of the offered rates, as of 11:00 A.M., New York City time, on that Commercial Paper Interest Determination Date, of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company) for commercial paper of the Index Maturity specified in the applicable Pricing Supplement placed for an industrial issuer whose bond rating is "AA," or the equivalent, from a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate will be the Commercial Paper Rate then in effect on such Commercial Paper Interest Determination Date. S-7 "Money Market Yield" shall be a yield (expressed as a percentage rounded to the next higher one hundred-thousandth of a percentage point) calculated in accordance with the following formula: Money Market Yield = D x 360 --------------- x 100 360 - (D x M) where "D" refers to the per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and "M" refers to the actual number of days in the interest period for which interest is being calculated. Prime Rate Notes Prime Rate Notes will bear interest at the interest rates (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier, if any), and will be payable on the dates, specified on the face of the Prime Rate Note and in the applicable Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, "Prime Rate" means, with respect to any Prime Rate Interest Determination Date, the rate set forth on such date in H.15(519) under the heading "Bank Prime Loan." In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Interest Calculation Date pertaining to such Prime Rate Interest Determination Date, then the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appear on the Reuters Screen NYMF Page (as defined below) as such bank's prime rate or base lending rate as in effect for that Prime Rate Interest Determination Date. If fewer than four such rates but more than one such rate appear on the Reuters Screen NYMF Page for the Prime Rate Interest Determination Date, the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by three, or two if only two such rates are quoted, major money center banks in The City of New York selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company). If fewer than two such rates appear on the Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation Agent on the basis of the rates furnished in The City of New York by three, or two if only two such rates are quoted, substitute banks or trust companies organized and doing business under the laws of the United States, or any State thereof, having total equity capital of at least U.S. $500,000,000 and being subject to supervision or examination by federal or state authority, selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultant with the Company) to provide such rate or rates; provided, however, that if fewer than two such substitute banks or trust companies selected as aforesaid are quoting as mentioned in this sentence, the Prime Rate will remain the Prime Rate in effect on such Prime Rate Interest Determination Date. "Reuters Screen NYMF Page" means the display designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such other page as may replace the NYMF page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). LIBOR Notes LIBOR Notes will bear interest at the interest rates (calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if any), and will be payable on the dates, specified on the face of the LIBOR Note and in the applicable Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR" will be determined by the Calculation Agent in accordance with the following provisions: S-8 (a) With respect to any LIBOR Interest Determination Date, either, as specified in the applicable Pricing Supplement: (i) the arithmetic mean of the offered rates for deposits in U.S. dollars for the period of the Index Maturity specified in the applicable Pricing Supplement, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, which appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time, on the LIBOR Interest Determination Date, if at least two such offered rates appear on the Reuters Screen LIBO Page ("LIBOR Reuters"), or (ii) the rate for deposits in U.S. dollars having the Index Maturity designated in the applicable Pricing Supplement, commencing on the second London Business Day immediately following that LIBOR Interest Determination Date, that appears on the Telerate Page 3750 as of 11:00 A.M., London time, on that LIBOR Interest Determination Date ("LIBOR Telerate"). Unless otherwise indicated in the applicable Pricing Supplement, "Reuters Screen LIBO Page" means the display designated as Page "LIBO" on the Reuters Monitor Money Rate Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks). "Telerate Page 3750" means the display designated as page "3750" on the Telerate Service (or such other page as may replace the 3750 page on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable Pricing Supplement, LIBOR will be determined as if LIBOR Telerate had been specified. If fewer than two offered rates appear on the Reuters Screen LIBO Page, or if no rate appears on the Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR Interest Determination Date will be determined as if the parties had specified the rate described in (b) below. (b) With respect to a LIBOR Interest Determination Date on which fewer than two offered rates appear on the Reuters Screen LIBO Page, as described in (a)(i) above, or on which no rate appears on the Telerate Page 3750, as specified in (a)(ii) above, as applicable, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars having the Index Maturity designated in the applicable Pricing Supplement are offered at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date by four major banks ("Reference Banks") in the London interbank market selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company) to prime banks in the London interbank market commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time. The Calculation Agent will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of such quotations. If fewer than two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of the rates quoted at approximately 11:00 A.M., New York City time, on such LIBOR Interest Determination Date by three major banks in The City of New York selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company) for loans in U.S. dollars to leading European banks having the specified Index Maturity designated in the applicable Pricing Supplement commencing on the second London Business Day immediately following such LIBOR Interest Determination Date and in a principal amount equal to an amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid by the S-9 Calculation Agent are not quoting as mentioned in this sentence, LIBOR will be LIBOR then in effect on such LIBOR Interest Determination Date. Treasury Rate Notes Treasury Rate Notes will bear interest at the interest rates (calculated with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if any) and will be payable on the dates, specified on the face of the Treasury Rate Note and in the applicable Pricing Supplement. Unless otherwise indicated in the Pricing Supplement, "Treasury Rate" means, with respect to any Treasury Interest Determination Date, the rate for the most recent auction of direct obligations of the United States ("Treasury bills") having the Index Maturity specified in the applicable Pricing Supplement as published in H.15(519) under the heading "U.S. Government Securities-Treasury Bills/Auction Average (Investment)" or, if not so published by 3:00 P.M., New York City time, on the Interest Calculation Date pertaining to such Treasury Interest Determination Date, the auction average rate (expressed as a bond equivalent, rounded to the nearest one hundred-thousandth of a percentage point, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) for such auction as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury bills having the Index Maturity designated in the applicable Pricing Supplement are not published or reported as provided above by 3:00 P.M., New York City time, on such Interest Calculation Date, or if no such auction is held in that particular week, then the Treasury Rate shall be calculated by the Calculation Agent and shall be a yield to maturity (expressed as a bond equivalent, rounded to the nearest one hundred-thousandth of a percentage point, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates as of approximately 3:30 P.M., New York City time, on such Treasury Interest Determination Date, of three leading primary United States government securities dealers selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company), for the issue of Treasury bills with a remaining maturity closest to the specified Index Maturity; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate will be the Treasury Rate in effect on such Treasury Interest Determination Date. CD Rate Notes CD Rate Notes will bear interest at the interest rate (calculated with reference to the CD Rate and the Spread and/or Spread Multiplier, if any), and will be payable on the dates, specified on the face of the CD Rate Note and in the applicable Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate" means, with respect to any CD Interest Determination Date, the rate on such date for negotiable certificates of deposit having the Index Maturity specified in the applicable Pricing Supplement as published in H.15(519) under the heading "CDs (Secondary Market)." In the event that such rate is not so published by 3:00 P.M., New York City time, on the Interest Calculation Date pertaining to such CD Interest Determination Date, the CD Rate will be the rate on such CD Interest Determination Date for negotiable certificates of deposit having the Index Maturity specified in the applicable Pricing Supplement as published in Composite Quotations under the heading "Certificates of Deposit." If such rate is neither published in H.15(519) nor in Composite Quotations by 3:00 P.M., New York City time, on such Interest Calculation Date the CD Rate for such CD Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of the secondary market offered rates as of 10:00 A.M., New York City time, on such CD Interest Determination Date, of three leading nonbank dealers of negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with S-10 the Company) for negotiable certificates of deposit of major United States money center banks (in the market for negotiable certificates of deposit) with a remaining maturity closest to the Index Maturity indicated in the applicable Pricing Supplement in a denomination of U.S. $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the CD Rate will be the CD Rate in effect on such CD Interest Determination Date. CMT Rate Notes CMT Rate Notes will bear interest at the interest rate (calculated with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any), and will be payable on the dates, specified on the face of the CMT Rate Note and in the applicable Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, "CMT Rate" means, with respect to any CMT Rate Interest Determination Date, the rate displayed on the Designated CMT Telerate Page under the caption " . . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the rate for the week, or the month, as applicable, ended immediately preceding the week in which the related CMT Rate Interest Determination Date occurs. If such rate is no longer displayed on the relevant page, or if not displayed by 3:00 P.M., New York City time, on the related Interest Calculation Date, then the CMT Rate for such CMT Rate Interest Determination Date will be such Treasury Constant Maturity rate for the Designated CMT Maturity Index as published in the relevant H.15(519). If such rate is no longer published, or if not published by 3:00 P.M., New York City time, on the related Interest Calculation Date, then the CMT Rate for such CMT Rate Interest Determination Date will be such Treasury Constant Maturity rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with respect to such Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in the relevant H.15(519). If such information is not provided by 3:00 P.M., New York City time, on the related Interest Calculation Date, then the CMT Rate for the CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of the secondary market closing offer side prices as of approximately 3:30 P.M., New York City time, on the CMT Rate Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers (each, a "Reference Dealer") in The City of New York selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company) and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States ("Treasury Notes") with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year. If the Calculation Agent cannot obtain three such Treasury Note quotations, the CMT Rate for such CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of the secondary market offer side prices as of approximately 3:30 P.M., New York City time, on the CMT Rate Interest Determination Date of three Reference Dealers in The City of New York (from five such Reference Dealers selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company) and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index and in S-11 an amount of at least $100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of the offer prices obtained and neither the highest nor lowest of such quotes will be eliminated; provided, however, that if fewer than three Reference Dealers selected by the Calculation Agent are quoting as described herein, the CMT Rate will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the quotes for the Treasury Note with the shorter remaining term to maturity will be used. "Designated CMT Telerate Page" means the display on the Dow Jones Telerate Service on the page designated in the applicable Pricing Supplement (or any other page as may replace such page on that service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519)), for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified in the applicable Pricing Supplement, the Designated CMT Telerate Page shall be 7052 for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified in the applicable Pricing Supplement under "Index Maturity" with respect to which the CMT Rate will be calculated. If no such Index Maturity is specified in the applicable Pricing Supplement, the Designated CMT Maturity Index shall be 2 years. Federal Funds Rate Notes Federal Funds Rate Notes will bear interest at the interest rate (calculated with reference to the Federal Funds Effective Rate and the Spread and/or Spread Multiplier, if any), and will be payable on the dates, specified on the face of the Federal Funds Rate Note and in the applicable Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, "Federal Funds Effective Rate" means, with respect to any Federal Funds Interest Determination Date, the rate on that date for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)." In the event that such rate is not so published by 3:00 P.M., New York City time, on the Interest Calculation Date pertaining to such Federal Funds Interest Determination Date, the Federal Funds Effective Rate will be the rate on such Federal Funds Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate." If such rate is neither published in H.15(519) nor in Composite Quotations by 3:00 P.M., New York City time, on such Interest Calculation Date, the Federal Funds Effective Rate for such Federal Funds Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean (rounded to the nearest one hundred-thousandth of a percentage point) of the rates as of 9:00 A.M., New York City time, on such Federal Funds Interest Determination Date for the last transaction in overnight Federal Funds arranged by three leading brokers of Federal Funds transactions in The City of New York selected by the Calculation Agent (which, if other than the Company or the Bank, shall be selected by the Calculation Agent after consultation with the Company); provided, however, that if the brokers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Federal Funds Effective Rate will be the Federal Funds Effective Rate in effect on such Federal Funds Interest Determination Date. Eleventh District Cost of Funds Rate Notes Eleventh District Cost of Funds Rate Notes will bear interest at the interest rate (calculated with reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any), and will be payable on the dates, specified on the face of the Eleventh District Cost of Funds Rate Note and in the applicable Pricing Supplement. S-12 Unless otherwise indicated in the applicable Pricing Supplement, "Eleventh District Cost of Funds Rate" means, with respect to any Eleventh District Cost of Funds Rate Interest Determination Date, the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which such Eleventh District Cost of Funds Rate Interest Determination Date falls, as set forth under the caption "11th District" on Telerate Page 7058 (as defined below) as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest Determination Date. If such rate does not appear on Telerate Page 7058 on any related Eleventh District Cost of Funds Rate Interest Determination Date, the Eleventh District Cost of Funds Rate for such Eleventh District Cost of Funds Rate Interest Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Index") by the FHLB of San Francisco as such cost of funds for the calendar month immediately preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate for the calendar month immediately preceding such Eleventh District Cost of Funds Rate Interest Determination Date, then the Eleventh District Cost of Funds Rate determined as of such Eleventh District Cost of Funds Rate Interest Determination Date shall be the Eleventh District Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate Interest Determination Date. "Telerate Page 7058" means the display designated as page "7058" on the Dow Jones Telerate Service (or such other page as may replace the 7058 page on that service for the purpose of displaying the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District). OTHER PROVISIONS; ADDENDA Any provision with respect to the determination or calculation of the interest rate or interest rate formula applicable to any Floating Rate Note, the Interest Payment Dates of any Note or any other variable term of a Note to be issued by the Company may be modified by the terms as specified under "Other Provisions" on the face thereof or in an Addendum relating thereto, if so specified on the face thereof or in an Addendum thereto and in the applicable Pricing Supplement. BOOK-ENTRY NOTES Upon issuance, all Book-Entry Notes having the same ranking (senior or subordinated), original issuance date, Interest Payment Dates, redemption or repayment provisions, if any, original issue discount provisions, if any, Stated Maturity and in the case of Fixed Rate Notes, interest rate, or in the case of Floating Rate Notes, Initial Interest Rate, interest rate formula, Index Maturity, Spread and/or Spread Multiplier (if any), minimum interest rate limitation (if any), maximum interest rate limitation (if any) and Interest Reset Dates, will be represented by a single global security ("Global Security"). Each Global Security representing Book-Entry Notes will be deposited with, or on behalf of, The Depository Trust Company, as Depositary (the "Depositary"), and registered in the name of a nominee of the Depositary. Book- Entry Notes will not be exchangeable for Certificated Notes, provided that if the Depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within 90 days, the Company will issue Certificated Notes in exchange for the Global Security or Securities representing Book-Entry Notes. In addition, the Company may at any time and in its sole discretion determine not to have Book-Entry Notes represented by Global Securities and, in such event, will issue Certificated Notes in exchange for all Global Securities representing such Book-Entry Notes. A further description of the Depositary's procedures with respect to Global Securities representing Book-Entry Notes is set forth in the attached Prospectus under "Description of Notes-Global Securities." The Depositary has confirmed to the Company and the Trustees that it intends to follow such procedures. S-13 REDEMPTION OR REPAYMENT A Note is not subject to redemption prior to the Earliest Redemption Date, if any, fixed at the time of sale and set forth in the applicable Pricing Supplement. If no Earliest Redemption Date is indicated with respect to a Note, such Note is not redeemable at the option of the Company prior to its Stated Maturity. On and after the Earliest Redemption Date, if any, specified in the applicable Pricing Supplement, the Note will be redeemable at the option of the Company, in whole or from time to time in part in increments of $1,000 (provided that any remaining principal amount of such Note shall be at least $1,000), at the applicable Redemption Price. The "Redemption Price" shall initially be the "Initial Redemption Price" set forth in the applicable Pricing Supplement and shall decline, at each anniversary of the Earliest Redemption Date, to an amount equal to the prior Redemption Price less the "Annual Redemption Price Reduction" indicated in the applicable Pricing Supplement, or if no Initial Redemption Price is set forth in the applicable Pricing Supplement, at 100% of the principal amount to be redeemed (unless otherwise provided in the applicable Pricing Supplement), together with accrued interest thereon to the Redemption Date. The Company will redeem the specified portion of the principal amount of a Note ("Sinking Fund Amount") on each of the sinking fund redemption dates, if any, set forth in the applicable Pricing Supplement ("Sinking Fund Redemption Dates") together with accrued interest to the applicable Sinking Fund Redemption Date. If no Sinking Fund Amount is set forth in the applicable Pricing Supplement, the Company will not have any obligation to redeem such Note before its Stated Maturity. The Company may reduce the Sinking Fund Amount to be redeemed on any Sinking Fund Redemption Date by subtracting 100% of the principal amount (excluding premium) of any Note owned by the Company and surrendered to the Trustee for cancellation or that the Company has otherwise redeemed or repaid other than pursuant to the second preceding sentence, in each case on or before the applicable Sinking Fund Redemption Date. The Company may so credit the same principal amount of such Note only once. Notice of any redemption will be given not more than 60 nor less than 30 days prior to the Redemption Date. In the event of redemption of any Note in part only, a new Note or Notes of the same series, of like tenor and terms and in authorized denominations, for the unredeemed portion of the Note will be issued in the name of the registered holder of such Note upon the cancellation of such Note. In case of redemption at the option of the Company of less than all of the Senior Notes or Subordinated Notes, as the case may be, at the time outstanding, the Company may, by written notice to the Senior or Subordinated Trustee, as the case may be, direct that Senior Notes or Subordinated Notes, as the case may be, to be redeemed shall be selected from among groups of such Notes having specified tenor or terms, and the Senior or Subordinated Trustee, as the case may be, shall thereafter select the particular Notes to be redeemed in such manner as the Senior or Subordinated Trustee, as the case may be, deems fair, as provided in the Indenture. As used herein, the term "Redemption Date" means any Sinking Fund Redemption Date and any date fixed for redemption of all or any of the Notes at the option of the Company. In addition, the applicable Pricing Supplement will indicate either that the Company will be obligated to purchase a Note at the option of the holder thereof or that the Company will not be so obligated. If the Company will be so obligated, the applicable Pricing Supplement will set forth the date or dates (each a "Repayment Date") and the price or prices at which the applicable Notes will be purchased, in whole or in part, in integral multiples of $1,000, pursuant to such obligation. To be repaid at the option of the holder, a Note must be received at the office of a paying and transfer agent not less than 15 nor more than 45 days prior to the relevant Repayment Date. FEDERAL TAX CONSIDERATIONS The following summary of certain United States federal income tax consequences of the purchase, ownership and disposition of the Notes is based on laws, regulations, rulings and decisions now in effect, all of which are subject to change or possible differing interpretations. It deals only with Notes held as capital assets and does not deal with persons in special tax situations, such as financial institutions, insurance companies, regulated investment companies, dealers in securities or currencies, persons holding Notes as a hedge against currency risks or as a position in a "straddle" for tax purposes, or persons whose functional currency is S-14 not the United States dollar. This discussion does not generally deal with tax consequences to holders other than original purchasers. Persons considering the purchase of the Notes should consult their own tax advisors concerning the application of United States federal income tax laws to their particular situations as well as any consequences of the purchase, ownership and disposition of the Notes arising under the laws of any other taxing jurisdiction. As used herein, the term "U.S. Holder" means a beneficial owner of a Note that is for United States federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate or trust the income of which is subject to United States federal income taxation regardless of its source or (iv) any other person whose income or gain in respect of a Note is effectively connected with the conduct of a United States trade or business. As used herein, the term "non-U.S. Holder" means a holder of a Note that is not a U.S. Holder. U.S. HOLDERS Payments of Interest Payments of interest on a Note, including qualified stated interest payments (as defined below), generally will be taxable to a U.S. Holder as ordinary interest income at the time such payments are accrued or are received (in accordance with the U.S. Holder's method of accounting for tax purposes). Original Issue Discount The following summary is a general discussion of the United States federal income tax consequences to U.S. Holders of the purchase, ownership and disposition of Notes issued with original issue discount ("Discount Notes"). The following summary is based, in part, upon final Treasury regulations issued by the Internal Revenue Service ("IRS") prescribing rules of accounting for original issue discount ("OID Regulations"). For United States federal income tax purposes, "original issue discount" is defined as the excess of the stated redemption price at maturity of a Note over its issue price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1% of the Note's stated redemption price at maturity multiplied by the number of complete years to its maturity from its issue date). The issue price of an issue of Notes will generally equal the first price at which a substantial amount of such Notes are sold. The stated redemption price at maturity of a Note is the sum of all payments provided by the Note other than "qualified stated interest" payments. The term "qualified stated interest" generally means stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at either (i) a single fixed rate that appropriately takes into account the length of the interval between payments or (ii) the current values of (a) a single "qualified floating rate" (as defined in the OID Regulations) or (b) a single "objective rate" (as defined in the OID regulations). A U.S. Holder of a Discount Note that matures more than one year from its date of issuance must include original issue discount in income for United States federal income tax purposes as it accrues under a constant yield method in advance of receipt of the cash payments attributable to such income, regardless of such U.S. Holder's method of accounting for tax purposes. In general, the amount of original issue discount included in income by the initial holder of a Discount Note is the sum of the "daily portions" of original issue discount with respect to such Note for each day during the taxable year on which such holder held such Note. The daily portion of original issue discount on any Discount Note is determined by allocating to each day in any "accrual period" a ratable portion of the original issue discount allocable to that accrual period. An accrual period may be of any length and the accrual periods may vary in length over the term of the debt instrument, S-15 provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs on the first day or the final day of an accrual period. The amount of original issue discount allocable to each accrual period is equal to the difference between (i) the product of the Discount Note's adjusted issue price at the beginning of such accrual period and its yield to maturity (determined on the basis of compounding at the close of each accrual period and appropriately adjusted to take into account the length of the particular accrual period) and (ii) the amount of any qualified stated interest payments allocable to such accrual period. The "adjusted issue price" of a Discount Note at the beginning of any accrual period is the sum of the issue price of the Discount Note plus the amount of original issue discount allocable to all prior accrual periods minus the amount of any prior payments on the Discount Note that were not qualified stated interest payments. Under these rules, holders will generally have to include in income increasingly greater amounts of original issue discount in successive accrual periods. A U.S. Holder who purchases a Discount Note for an amount that is greater than its adjusted issue price as of the purchase date and less than or equal to the sum of all amounts payable on the Discount Note after the purchase date other than payments of qualified stated interest, will be considered to have purchased the Discount Note at an "acquisition premium." Under the acquisition premium rules, the amount of original issue discount which such U.S. Holder must include in its gross income with respect to such Discount Note for any taxable year (or portion thereof in which the holder holds the Discount Note) will be reduced (but not below zero) by the portion of the acquisition premium properly allocable to the period. Certain of the Notes (i) may be redeemable at the option of the Company prior to their stated maturity (a "call option") and/or (ii) may be repayable at the option of the holder prior to their stated maturity (a "put option"). Notes containing such features may be subject to rules that differ from the general rules discussed above. Investors intending to purchase Notes with such features should consult their tax advisors, since the original issue discount consequences will depend, in part, on the particular terms and features of such Notes. In general, an individual or other cash method U.S. Holder is not required to accrue original issue discount on Notes that have a fixed maturity of one year or less ("Short-Term Notes") as income unless the holder elects to do so. If such an election is not made, any gain recognized by the U.S. Holder on the sale, exchange or maturity of the Short-Term Note will be ordinary income to the extent of the original issue discount accrued on a straight-line basis (or, upon election, a constant yield method based on daily compounding) through the date of sale or maturity, and a portion of the deductions otherwise allowable to the holder for interest on borrowings allocable to the Short-Term Note will be deferred until a corresponding amount of income is realized. U.S. Holders who report income for federal income tax purposes under the accrual method and certain other holders, including banks and dealers in securities, are required to accrue original issue discount on a Short-Term Note on a straight- line basis unless an election is made to accrue the original issue discount under a constant yield method (based on daily compounding). U.S. Holders may generally, upon election, include in income all interest (including stated interest, original issue discount, de minimis original issue discount, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium) on a debt instrument by using the constant yield method applicable to original issue discount, subject to certain limitations and exceptions. Any special United States Federal income tax considerations applicable to a particular Floating Rate Note will be described in the applicable Pricing Supplement. Market Discount If a U.S. Holder purchases a Note other than a Discount Note for an amount that is less than its issue price (or, in the case of a subsequent purchaser, its stated redemption price at maturity) or purchases S-16 a Discount Note for an amount that is less than its adjusted issue price as of the purchase date, such U.S. Holder will be treated as having purchased such Note at a "market discount," unless such market discount is less than a specified de minimis amount. Under the market discount rules, a U.S. Holder will be required to treat any partial principal payment on a Note (or, in the case of a Discount Note, any payment that does not constitute qualified stated interest on the Discount Note) or any gain realized on the sale, exchange, retirement or other disposition of a Note as ordinary income to the extent of the lesser of (i) the amount of such payment or realized gain or (ii) the market discount which has not previously been included in income and is treated as having accrued on such Note at the time of such payment or disposition. Market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the Note, unless the U.S. Holder elects to accrue market discount on the basis of semiannual compounding. A U.S. Holder may be required to defer the deduction of all or a portion of the interest paid or accrued on any indebtedness incurred or maintained to purchase or carry a Note with market discount until the maturity of the Note or certain earlier dispositions. A U.S. Holder may elect to include market discount in income currently as it accrues (on either a ratable or semiannual compounding basis), in which case the rules described above regarding the treatment as ordinary income of gain upon the disposition of the Note and upon the receipt of certain cash payments and regarding the deferral of interest deductions will not apply. Generally, such currently included market discount is treated as interest for federal income tax purposes. Premium If a U.S. Holder purchases a Note for an amount that is greater than the sum of all amounts payable on the Note after the purchase date other than payments of qualified stated interest, such U.S. Holder will be considered to have purchased the Note with "amortizable bond premium" equal in amount to such excess. A U.S. Holder may elect to amortize such premium using a constant yield method over the remaining term of the Note and may offset interest otherwise required to be included in respect of the Note during any taxable year by the amortized amount for the taxable year. However, if the Note may be optionally redeemed after the U.S. Holder acquires it at a price in excess of its stated redemption price at maturity, special rules would apply which could result in a deferral of the amortization of some bond premium until later in the term of the Note. Disposition of a Note Upon the sale, exchange or retirement of a Note, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange or retirement (other than amounts representing accrued and unpaid interest) and such U.S. Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a Note generally will equal such U.S. Holder's initial investment in the Note increased by any original issue discount included in income (and accrued market discount, if any, if the holder has included such market discount in income) and decreased by the amount of any payments, other than qualified stated interest payments, received and premium amortization deductions taken with respect to such Note. Except as discussed above under "Original Issue Discount" and "Market Discount," such gain or loss generally will be long-term capital gain or loss if the Note has been held for more than one year. NON-U.S. HOLDERS Subject to the discussion of backup withholding below, a non-U.S. Holder will generally not be subject to United States federal income taxes or withholding on payments of principal, premium (if any) or interest (including original issue discount, if any) on a Note, unless such non-U.S. Holder is a direct or indirect 10% or greater shareholder of the Company, a controlled foreign corporation related to the Company or a bank receiving interest described in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended ("Code"). S-17 To qualify for the exemption from taxation, the last United States payor in the chain of payment prior to payment to a non-U.S. Holder (the "Withholding Agent") must have received in the year in which a payment of interest or principal occurs, or in either of the two preceding calendar years, a statement that (i) is signed by the beneficial owner of the Note under penalties of perjury, (ii) certifies that such owner is not a U.S. Holder and (iii) provides the name and address of the beneficial owner. The statement may be made on an IRS Form W-8 or a substantially similar form, and the beneficial owner must inform the Withholding Agent of any change in the information on the statement within 30 days of such change. If a Note is held through a securities clearing organization or certain other financial institutions, the organization or institution may provide a signed statement to the Withholding Agent. However, in such case, the signed statement must be accompanied by a copy of the IRS Form W- 8 or the substitute form provided by the beneficial owner to the organization or institution. The Treasury Department is considering implementation of further certification requirements aimed at determining whether the issuer of a debt obligation is related to holders thereof. Generally, a non-U.S. Holder will not be subject to federal income taxes on any amount which constitutes capital gain upon retirement or disposition of a Note. Certain exceptions to this rule may be applicable, and a non-U.S. Holder should consult its tax advisor in this regard. The Notes will not be includible in the estate of a non-U.S. Holder unless the individual is a direct or indirect 10% or greater shareholder of the Company or, at the time of such individual's death, payments in respect of the Notes would have been effectively connected with the conduct by such individual of a trade or business in the United States. BACKUP WITHHOLDING Backup withholding of federal income tax at a rate of 31% may apply to payments made in respect of the Notes to registered owners who are not "exempt recipients" and who fail to provide certain identifying information (such as the registered owner's taxpayer identification number) in the required manner. Generally, individuals are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. Payments made in respect of the Notes to a U.S. Holder must be reported to the IRS unless the U.S. Holder is an exempt recipient or otherwise establishes an exemption. Compliance with the certification procedures described under "Non-U.S. Holders" above would establish an exemption from backup withholding for those non-U.S. Holders who are not exempt recipients. In addition, upon the sale of a Note to (or through) a broker, the broker must withhold 31% of the entire purchase price, unless either (i) the broker determines that the seller is a corporation or other exempt recipient or (ii) the seller provides, in the required manner, certain identifying information and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S. Holder (and certain other conditions are satisfied). Such a sale must also be reported by the broker to the IRS unless either (i) the broker determines that the seller is an exempt recipient or (ii) the seller certifies its non-U.S. status (and certain other conditions are satisfied). Certification of the registered owner's non-U.S. status would be made normally on an IRS Form W-8 under penalties of perjury, although in certain cases it may be possible to submit other documentary evidence. Any amounts withheld under the backup withholding rules from a payment to a beneficial owner would be allowed as a refund or a credit against such beneficial owner's United States federal income tax, provided certain required information is furnished to the IRS. S-18 PLAN OF DISTRIBUTION The Notes may be offered by the Company through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston Corporation, Goldman, Sachs & Co., Lehman Brothers, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated or Salomon Brothers Inc, as Agents, each of which has agreed to use its best efforts to solicit offers to purchase the Notes. The Company will pay each Agent a commission which, depending on the maturity of the Note, will range from .125% to .625% of the principal amount of any Note sold through such Agent. The Company also may sell Notes to any Agent at a discount for resale to purchasers at varying prices related to prevailing market prices at the time of resale, to be determined by such Agent, or, if so agreed, at fixed public offering prices. The Company or an affiliate of the Company may sell Notes directly to purchasers on behalf of the Company in those jurisdictions where it is authorized to do so. Unless otherwise indicated in the applicable Pricing Supplement, payment of the purchase price of the Notes will be required to be made in funds immediately available in The City of New York. The Company reserves the right to withdraw, cancel or modify the offer or solicitations of offers made hereby without notice. The Company or any Agent, if it solicits such offer, may reject any offer to purchase Notes, in whole or in part. In addition, the Agents may offer the Notes they have purchased as principal to other dealers. The Agents may sell Notes to any dealer at a discount and, unless otherwise specified in the applicable Pricing Supplement, such discount allowed to any dealer will not be in excess of the discount to be received by such Agent from the Company. Unless otherwise indicated in the applicable Pricing Supplement, any Note sold to an Agent as principal will be purchased by such Agent at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to any agency sale of a Note of identical maturity, and may be resold by the Agent to investors and other purchasers from time to time in one or more transactions, including negotiated transactions, at varying prices determined at the time of sale or, if so agreed, at a fixed public offering price. After the initial public offering of Notes to be resold to investors and other purchasers, the public offering price (if resold on a fixed public offering price basis), concession and discount may be changed. Each of the Agents may from time to time purchase and sell Notes in the secondary market, but is not obligated to do so, and there can be no assurance that there will be a secondary market for the Notes or liquidity in the secondary market if one develops. From time to time, each of the Agents may make a market in the Notes. None of the Agents is obligated to do so, however, and any Agent may discontinue making a market at any time without notice. No assurance can be given as to the liquidity of any trading market for the Notes. Each Agent may be deemed to be an "Underwriter" within the meaning of the Securities Act of 1933. The Company has agreed to indemnify each Agent against certain liabilities, including liabilities under such Act, or to contribute to payments the Agent may be required to make in respect thereof. The Company has also agreed to reimburse the Agents for certain expenses. Each Agent may engage in transactions with and perform services for the Company in the ordinary course of its business. S-19 $3,500,000,000 WELLS FARGO & COMPANY SENIOR DEBT SECURITIES SUBORDINATED DEBT SECURITIES PREFERRED STOCK WELLS FARGO & COMPANY (the "Company") intends to offer and sell from time to time its debt securities (the "Notes") and its Preferred Stock, $5.00 par value ("Preferred Stock"), with an aggregate public offering price of $3,500,000,000 (or the equivalent in foreign currencies or composite currencies) on terms to be determined by market conditions at the time of sale. The Notes and the Preferred Stock (together the "Offered Securities") may be offered separately or together, in separate series, in amounts and at prices and terms to be set forth in an accompanying Prospectus Supplement ("Prospectus Supplement"). At the option of the Company, the Notes may be issued as senior debt securities ("Senior Notes") or as subordinated debt securities ("Subordinated Notes"). The Offered Securities may be denominated in United States dollars or, at the option of the Company, in any other currency, in a composite currency or in amounts determined by reference to an index which is specified in the Prospectus Supplement. The specific terms of the Offered Securities in respect of which this Prospectus is being delivered will be set forth in an accompanying Prospectus Supplement. The Notes may be convertible or exchangeable into Preferred Stock or Common Stock of the Company. The Preferred Stock may be convertible or exchangeable into Notes or Common Stock of the Company. The Offered Securities may be offered and sold directly by the Company or through one or more underwriters or agents. In addition, the Prospectus Supplement will set forth the terms of sale of the Offered Securities and the identity of any underwriters or agents. Any underwriters, dealers or agents participating in any offering of the Offered Securities may be deemed "underwriters" within the meaning of the Securities Act of 1933, as amended. See "Plan of Distribution." Payment of the principal of the Subordinated Notes may be accelerated only in the case of certain events of bankruptcy, insolvency or reorganization of the Company or the Bank. There is no right of acceleration in the case of a default in the performance of any covenant with respect to the Subordinated Notes, including the payment of interest or principal. See "Description of Notes -- Events of Default." ------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCU- RACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE- SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE OFFERED SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS BUT ARE UNSECURED DEBT OBLIGATIONS OF, OR EQUITY INTERESTS IN, WELLS FARGO & COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY. ------------------------- This Prospectus may not be used to consummate sales of Offered Securities unless accompanied by a Prospectus Supplement. ------------------------- The date of this Prospectus is August 30, 1996 No person has been authorized to give any information or to make any representations other than those contained in this Prospectus and the Prospectus Supplement in connection with the offering made hereby, and if given or made, such information or representations must not be relied upon as having been authorized by the Company or by any underwriters or agents. Neither the delivery of this Prospectus and the Prospectus Supplement nor any sale made thereunder shall, under any circumstances, create any implication that information herein or therein is correct as of any time subsequent to the date hereof or thereof. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (the "Act") and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Proxy statements, reports and other information concerning the Company can be inspected at the Commission's office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and the Commission's Regional Offices in New York (7 World Trade Center, Suite 1300, New York, New York 10048) and Chicago (Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511), and copies of such material can be obtained from such facilities and the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. Such material may also be accessed electronically by means of the Commission's home page on the Internet at http://www.sec.gov. In addition, such material can be inspected at the offices of the New York and Pacific Stock Exchanges on which certain of the Company's securities are listed. This Prospectus does not contain all information set forth in the Registration Statement and Exhibits thereto which the Company has filed with the Commission under the Securities Act of 1933 and to which reference is hereby made. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company hereby incorporates by reference in this Prospectus the following reports filed with the Commission pursuant to Section 13 of the Act: (i) the Company's Annual Report on Form 10-K for the year ended December 31, 1995, (ii) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 1996; (iii) the Company's Current Reports on Form 8-K filed on January 16, January 24, January 31, February 29, April 1, April 5, April 10, April 16, July 16 and August 9, 1996 and (iv) the consolidated financial statements of First Interstate Bancorp ("First Interstate") as of December 31, 1995 and 1994 and for each of the years in the three-year period ended December 31, 1995, as contained in First Interstate's Annual Report on Form 10-K for the year ended December 31, 1995. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Offered Securities offered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any person receiving a copy of this Prospectus may obtain without charge, upon oral or written request, a copy of any of the documents incorporated by reference herein, except for the exhibits to such documents unless such exhibits are specifically incorporated by reference into the information that the Prospectus incorporates. Requests should be directed to Wells Fargo & Company, Investor/Public Relations, MAC #0163-029, 343 Sansome Street, San Francisco, California 94163, telephone (415) 396-0560. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. 2 WELLS FARGO & COMPANY Wells Fargo & Company ("Company") is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. On April 1, 1996, the Company completed its acquisition of First Interstate Bancorp ("First Interstate"). On the basis of assets as of June 30, 1996, the Company was the ninth largest bank holding company in the United States. As of June 30, 1996, the Company had loans of $70.5 billion, total assets of $108.6 billion, total deposits of $83.9 billion and stockholders' equity of $15.0 billion. Its principal subsidiary is Wells Fargo Bank, National Association (the "Bank"). The Bank is primarily engaged in retail, commercial and corporate banking, real estate lending and trust and investment services. The Company is a legal entity separate and distinct from the Bank and its other affiliates. There are various legal limitations on the extent to which the Bank may extend credit, pay dividends or otherwise supply funds to the Company or various of its affiliates. The executive offices of the Company are located at 420 Montgomery Street, San Francisco, California 94163. The Company's telephone number is (415) 477-1000. Since the Company is a holding company, the rights of the Company to participate in any distribution of assets of any subsidiary upon its liquidation or reorganization or otherwise (and thus the ability of holders of the Offered Securities to benefit indirectly from such distribution) are subject to the prior claims of creditors of that subsidiary, except to the extent that the Company may itself be a creditor of that subsidiary. Claims on the Company's subsidiaries by creditors other than the Company include long- term debt and substantial obligations in respect of federal funds purchased, securities sold under repurchase agreements and certain other short-term borrowings, as well as deposit liabilities. USE OF PROCEEDS The net proceeds from the sale of the Offered Securities will be used for general corporate purposes. Specific allocations of the proceeds to such purposes have not been determined. The net proceeds may be used to reduce outstanding commercial paper and other debt of the Company. Based upon the anticipated future funding requirements of the Company and its subsidiaries, the Company expects that it will, from time to time, engage in additional financings of a character and in amounts to be determined and that its commercial paper borrowings and other short-term debt may be increased above the level prevailing after the initial use of proceeds. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the historical ratios of earnings to fixed charges and the historical ratios of earnings to fixed charges and preferred stock dividends of the Company for the periods indicated:
QUARTER ENDED SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1996 JUNE 30, 1996 1995 1994 1993 1992 1991 ------------- ---------------- ---- ---- ---- ---- ---- Consolidated Ratios of Earnings to Fixed Charges /1/,/3/ Including interest on deposits.............. 2.11 2.19 2.19 2.20 1.90 1.33 1.02 Excluding interest on deposits.............. 5.73 5.55 4.56 5.04 4.53 2.56 1.10 Consolidated Ratios of Earnings to Fixed Charges and Preferred Stock Dividends /1/,/2/,/3/ Including interest on deposits.............. 2.00 2.08 2.09 2.07 1.77 1.26 1.00 Excluding interest on deposits.............. 4.58 4.59 3.99 4.18 3.51 2.02 1.01
- -------- /1/For purposes of computing these ratios, earnings represent income before income tax expense plus fixed charges. Fixed charges represent interest expense plus the estimated interest component of net rental expense. /2/The preferred stock dividends are increased to amounts representing the pretax earnings required to cover such dividends. /3/These computations are included herein in compliance with Securities and Exchange Commission regulations. However, management believes the fixed charge ratios are not meaningful measures for the business of the Company because of two factors. First, even if there were no change in net income, the ratios would decline with an increase in the proportion of income which is tax-exempt or, conversely, they would increase with a decrease in the proportion of income which is tax-exempt. Second, even if there were no change in net income, the ratios would decline if interest income and interest expense increase by the same amount due to an increase in the level of interest rates or, conversely, they would increase if interest income and interest expense decrease by the same amount due to a decrease in the level of interest rates. 3 DESCRIPTION OF NOTES The Senior Notes will be issued under an Indenture, dated as of September 1, 1984, as amended by the First Supplemental Indenture dated as of April 15, 1986, the Second Supplemental Indenture dated as of June 30, 1987, and the Third Supplemental Indenture dated as of January 23, 1991 (together, the "Senior Indenture"), between the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as successor Trustee (the "Senior Trustee"). The Subordinated Notes will be issued under an Indenture dated as of December 10, 1992 (the "Subordinated Indenture"), between the Company and Marine Midland Bank, as Trustee (the "Subordinated Trustee"). In this Prospectus, the Senior Indenture and the Subordinated Indenture are referred to as the "Indentures." The Senior Trustee and the Subordinated Trustee are referred to as the "Trustees." As used in this Prospectus, the term "Senior Notes" means the Senior Notes offered hereby and, unless the context otherwise requires, any other debt securities heretofore or hereafter issued under the Senior Indenture, the term "Subordinated Notes" means the Subordinated Notes offered hereby and, unless the context otherwise requires, any other debt securities heretofore or hereafter issued under the Subordinated Indenture, and the term "Notes" means the Notes offered hereby and, unless the context otherwise requires, any other debt securities heretofore or hereafter issued under the Indentures; and references to "principal" of the Notes shall be deemed to include, unless the context otherwise requires, a reference to premium, if any, on the Notes. Copies of the Indentures and the forms of the Notes are filed or incorporated by reference as exhibits to the Registration Statement. The following summaries of certain provisions of the Indentures and the summary of certain provisions of a particular series of Notes set forth in the Prospectus Supplement relating thereto do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Indentures and the respective forms of the Notes, including the definitions therein of certain terms. Whenever particular Sections, Articles or defined terms of the Indentures are referred to, it is intended that such Sections, Articles or defined terms shall be incorporated herein by reference. GENERAL The Indentures do not limit the amount of debt securities which can be issued thereunder and provide that debt securities of any series may be issued thereunder up to the aggregate principal amount which may be authorized from time to time by the Company. The Indentures do not limit the amount of other indebtedness or securities which may be issued by the Company. The Notes may be issued at various times with different maturity dates and different principal repayment provisions, may bear interest at different rates, may be payable in currencies other than United States dollars, in composite currencies or in amounts determined by reference to an index and may otherwise vary, all as provided in the Indentures. The Prospectus Supplement will set forth the following specific terms regarding the series of Notes offered thereby: (i) the designation and aggregate principal amount of Notes of such series; (ii) the ranking of the Notes as Senior Notes or Subordinated Notes; (iii) the percentage of their principal amount at which such Notes will be issued; (iv) the date or dates on which such Notes will mature, if any; (v) the rate per annum or the method of determining the rate or rates per annum, if any, at which such Notes will bear interest; (vi) the dates from and on which such interest, if any, will accrue and be payable and the designated record dates for such interest payments; (vii) the currency (which may be a composite currency) in which payment of principal and interest, if any, shall be payable if other than United States dollars; (viii) the index, if any, upon which the amount of principal or interest is determined; (ix) any redemption terms; (x) any conversion or exchange provisions; (xi) provisions for issuance of global securities; and (xii) other specific terms. If so indicated in the applicable Prospectus Supplement, the terms of the Notes offered thereby may differ from those set forth herein. Some of the Notes may be issued as discounted Notes (bearing no interest or interest at a rate which at the time of issuance is below market rates) to be sold at a discount below their stated principal amount. Some of the Notes may be perpetual and have no stated maturity. Federal income tax consequences and other special considerations applicable to such perpetual or discounted Notes will be described in the Prospectus Supplement relating thereto. 4 Interest on the Notes of any series will be payable to the persons in whose names the Notes are registered at the close of business on the record date designated for an interest payment date (Section 2.03). The Notes may be presented for the payment of principal and interest, if any, transfer and exchange at the offices or agencies of the Company maintained for such purposes in San Francisco and New York City. Payment of any installment of interest may be made at the option of the Company by check, mailed to the address of the person entitled thereto as it appears on the Register of the Notes of such series (Sections 2.05, 4.01 and 4.02). The Notes will be issued in fully registered form, without coupons, in denominations of $1,000 and any whole multiple of $1,000, unless different authorized denominations are stated in the Prospectus Supplement. No service charge will be made for any exchange or registration of transfer of a Note, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge (Section 2.05). The Indentures provide that if a series of Notes is denominated in a currency other than United States dollars or in a composite currency, in the absence of a contrary provision in the Notes any action or distribution under the Indentures will be based on the relative amount of United States dollars that could be obtained on such reasonable basis of exchange on such date as is specified by the Company to the Trustee (Sections 14.10 of the Senior Indenture and 16.10 of the Subordinated Indenture). All of the Notes will be unsecured general obligations of the Company. The Senior Notes will not be subordinated in right of payment to any other indebtedness of the Company. Unless otherwise set forth in the applicable Prospectus Supplement, neither the Indentures nor the Notes contain provisions which would afford holders of the Notes protection in the event of a takeover, recapitalization or similar restructuring involving the Company which could adversely affect the Notes. SUBORDINATION OF SUBORDINATED NOTES The obligation of the Company to make any payment on account of the principal of and interest on the Subordinated Notes of any series will be subordinate and junior in right of payment to the Company's obligations to the holders of Senior Indebtedness of the Company to the extent described in the next paragraph. Senior Indebtedness of the Company includes the Senior Notes and means (i) any indebtedness of the Company for borrowed or purchased money, whether or not evidenced by bonds, debentures, notes or other written instruments, (ii) obligations under letters of credit, (iii) any indebtedness or other obligations of the Company with respect to commodity contracts, interest rate and currency swap agreements, cap, floor and collar agreements, currency spot and forward contracts, and other similar agreements or arrangements designed to protect against fluctuations in currency exchange or interest rates, and (iv) any guarantees, endorsements (other than by endorsement of negotiable instruments for collection in the ordinary course of business) or other similar contingent obligations in respect of obligations of others of a type described in (i), (ii) or (iii) above, whether or not such obligation is classified as a liability on a balance sheet prepared in accordance with generally accepted accounting principles, in each case listed in (i), (ii), (iii) and (iv) above, whether outstanding on the date of execution of the Subordinated Indenture or thereafter incurred, other than obligations "ranking on a parity" with the Subordinated Notes or "ranking junior" to the Subordinated Notes (as those terms are defined in the Subordinated Indenture) (Section 1.01). The definition of senior indebtedness in certain previously issued subordinated debt of the Company (the "Prior Subordinated Debt", which term excludes any Subordinated Notes issued under the Subordinated Indenture) includes only indebtedness of or guaranteed by the Company for borrowed money and any deferred obligation for the payment of the purchase price of property or assets, other than obligations ranking on a parity with or junior to such subordinated indebtedness. As a result of this difference, the holders of Subordinated Notes are subordinated to greater amounts of senior indebtedness of the Company than holders of such Prior Subordinated Debt and, under the circumstances described in the following paragraph, holders of Subordinated Notes may receive less, ratably, than holders of such Prior Subordinated Debt. As of June 30, 1996, there was $2.6 billion of Senior Indebtedness of the Company and $2.6 billion of obligations ranking on a parity (as defined in the Subordinated Indenture) with the Subordinated Notes. The Subordinated Indenture does not limit the amount of Senior Indebtedness of the Company. In the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the 5 Company as a whole, whether voluntary or involuntary, all obligations of the Company to holders of Senior Indebtedness of the Company shall be entitled to be paid in full before any payment shall be made on account of the principal of or interest on the Subordinated Notes. In the event of any such proceeding, after payment in full of all sums owing with respect to Senior Indebtedness of the Company, the holders of the Subordinated Notes, together with the holders of any obligations of the Company ranking on a parity with the Subordinated Notes, shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid principal of and interest on the Subordinated Notes before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company ranking junior to the Subordinated Notes (Section 14.01). By reason of such subordination, in the event of the insolvency of the Company, holders of Senior Indebtedness of the Company may receive more, ratably, and holders of the Subordinated Notes having a claim pursuant to the Subordinated Notes may receive less, ratably, than the other creditors of the Company. Such subordination will not prevent the occurrence of any Event of Default in respect of the Subordinated Notes (Section 14.10). GLOBAL SECURITIES The Notes of a series may be issued in whole or in part in the form of one or more global securities ("Global Security") that will be deposited with, or on behalf of, a depositary identified in the Prospectus Supplement relating to such series. Global Securities will be issued in registered form and in either temporary or definitive form. Unless and until it is exchanged in whole or in part for Notes in definitive form, a Global Security may not be transferred except as a whole by the depositary for such Global Security to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary or a nominee of such successor (Sections 2.02 and 2.05). The specific terms of the depositary arrangement with respect to any Notes of a series will be described in the Prospectus Supplement relating to such series. The Company anticipates that the following provisions will apply to all depositary arrangements. Upon the issuance of a Global Security, the depositary for such Global Security will credit, on its book-entry registration and transfer system, the respective principal amounts of the Notes represented by such Global Security to the accounts of institutions that have accounts with such depositary ("Participants"). The accounts to be credited shall be designated by the underwriters of such Notes, by certain agents of the Company or by the Company, if such Notes are offered and sold directly by the Company. Ownership of beneficial interests in a Global Security will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests in such Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary with respect to Participants' interests in such Global Security or by Participants or by persons that hold through Participants with respect to beneficial owners' interests. The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such ownership limits and such laws may impair the ability to transfer beneficial interests in a Global Security. So long as the depositary for a Global Security, or its nominee, is the holder of such Global Security, such depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Security for all purposes under the Indenture governing such Notes. Except as set forth below, owners of beneficial interests in a Global Security will not be entitled to have Notes of the series represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of Notes of such series in definitive form and will not be considered the owners or holders thereof under the Indenture governing such Notes. Principal and interest payments on Notes registered in the name of or held by a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the Global Security representing such Notes. The Company expects that the depositary for Notes of a series, upon receipt of any 6 payment of principal or interest in respect of a Global Security, will immediately credit Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security as shown on the records of such depositary. The Company also expects that payments by Participants or persons who hold interests through Participants to owners of beneficial interests in such Global Security held through such Participants or persons will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participants or persons. None of the Company, the Trustee for such Notes, any paying agent or any registrar for such Notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security for such Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. If a depositary for Notes of a series is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within 90 days, the Company will issue Notes of such series in definitive form in exchange for the Global Security or Securities representing the Notes of such series. In addition, the Company may at any time and in its sole discretion determine not to have any Notes of a series represented by one or more Global Securities and, in such event, will issue Notes of such series in definitive form in exchange for the Global Security or Securities representing such Notes. CONVERSION AND EXCHANGE The terms, if any, on which Notes of any series are convertible into or exchangeable for Common Stock or Preferred Stock will be set forth in the Prospectus Supplement relating thereto. Such terms may include provisions for conversion or exchange, either mandatory, at the option of the holder, or at the option of the Company, in which the number of shares of Common Stock or Preferred Stock to be received by the holders of Notes would be calculated according to the market price of Common Stock or Preferred Stock as of a time stated in the Prospectus Supplement. LIMITATION ON SALE OR ISSUANCE OF CAPITAL STOCK OR CONVERTIBLE SECURITIES OF, AND MERGER OR SALE OF ASSETS BY, THE BANK The Senior Indenture contains a covenant that (i) the Company will not, and will not permit the Bank to issue, sell, transfer, assign, pledge or otherwise dispose of any shares of Capital Stock of any class of the Bank or any securities convertible or exchangeable into shares of Capital Stock of any class of the Bank, unless, after giving effect to such transaction and to shares issuable upon conversion or exchange of outstanding securities convertible or exchangeable into such Capital Stock (including such securities, if any, which may be the subject of such transaction), at least 80% of the outstanding shares of Capital Stock of each class of the Bank shall be owned at that time directly or indirectly by the Company; and (ii) the Company will not permit the Bank to merge or consolidate or convey or transfer all or substantially all of its assets, unless at least 80% of the outstanding shares of Capital Stock of each class (after giving effect to such transaction and to shares issuable upon conversion or exchange of outstanding securities convertible or exchangeable into Capital Stock, including such securities, if any, which may be issued in such transaction) of the surviving corporation in the case of merger or consolidation or of the transferee corporation in the case of a conveyance or transfer shall be owned at that time directly or indirectly by the Company (Section 4.07 of the Senior Indenture). There is no similar covenant in the Subordinated Indenture. EVENTS OF DEFAULT An Event of Default with respect to any series of Senior Notes is defined in the Senior Indenture as being: (a) default for 30 days in payment of any installment of interest on Senior Notes of such series; (b) default in payment of any principal on Senior Notes of such series; (c) default by the Company in performance in any material respect of any of the covenants or agreements in the Senior Notes or in the Senior Indenture specifically contained therein for the benefit of the Senior Notes of such series which shall not have been remedied for a 7 period of 90 days after written notice to the Company by the Trustee or to the Company and the Trustee by the holders of not less than 25% in principal amount of the Senior Notes of such series and all other series so benefited (all such series voting as one class) then outstanding; or (d) certain events of bankruptcy, insolvency or reorganization of the Company or of the Bank (Section 6.01 of the Senior Indenture). No Event of Default described in clause (a), (b) or (c) above with respect to a particular series of Senior Notes necessarily constitutes an Event of Default with respect to any other series of Senior Notes. In addition, the Senior Indenture also defines an Event of Default with respect to any series of Senior Notes as being default in the payment of any indebtedness for borrowed money of the Company (including a default with respect to Senior Notes of any series other than such series) or of the Bank in principal amount in excess of $1,000,000 and the expiration of any period of grace with respect thereto, or the occurrence of any event of default as defined in any mortgage, indenture or instrument (including the Senior Indenture) evidencing, securing or under which there is issued any indebtedness for borrowed money of the Company or of the Bank in principal amount in excess of $1,000,000 that results in the acceleration of such indebtedness, and such default in payment is not cured or such acceleration is not rescinded or annulled within 10 days after written notice to the Company by the Trustee or to the Company and the Trustee by the holders of not less than 25% in principal amount of all Senior Notes then outstanding (all series voting as one class), provided that so long as the Company or the Bank, as the case may be, is contesting in good faith such default in payment or event of default and the Company delivers to the Trustee a certificate that the Company or the Bank, as the case may be, is contesting in good faith the existence of such payment default or event of default, then no Event of Default shall be deemed to exist under this clause; such Event of Default is herein called a "Cross Default." The Senior Indenture provides that if an Event of Default under clause (a), (b) or (c) above shall have occurred and be continuing (but only if, in the case of clause (c), the Event of Default is with respect to less than all series of Senior Notes then outstanding under such Indenture), either the Trustee or the holders of not less than 25% in principal amount of the then outstanding Senior Notes of the series as to which the Event of Default has occurred (each such series voting as a separate class in the case of an Event of Default under clause (a) or (b), and all such series voting as one class in the case of an Event of Default under clause (c)) may declare the principal (or portion thereof specified in the terms of such series) of all the Senior Notes of such series, or of all such series in the case of an Event of Default under clause (c) above, in each case together with any accrued interest, to be due and payable immediately. The Senior Indenture also provides that if an Event of Default under clause (c) or (d) above or the Cross Default clause shall have occurred and be continuing (but only if, in the case of clause (c), the Event of Default is with respect to all the Senior Notes then outstanding under the Senior Indenture), either the Trustee or the holders of not less than 25% in principal amount of all the Senior Notes then outstanding (voting as one class) may declare the principal (or portion thereof specified in the terms of any series) of all the Senior Notes, together with any accrued interest, to be due and payable immediately. Upon certain conditions, such declaration (including a declaration caused by a default in the payment of principal or interest, the payment for which has subsequently been provided) may be annulled by the holders of a majority in principal amount of the Senior Notes of the series then outstanding as were entitled to declare such default (such series or all series voting as one class, if more than one series is so entitled). In addition, past defaults may be waived by the holders of a majority in principal amount of the Senior Notes of all series then outstanding (all series voting as one class), except a default in the payment of principal of or interest on the Senior Notes or in respect of a covenant or provision of the Senior Indenture which cannot be modified or amended without the consent of the holder of each Senior Note so affected (Sections 6.01 and 6.06 of the Senior Indenture). An Event of Default with respect to any series of Subordinated Notes is defined in the Subordinated Indenture as being: (a) default for 30 days in payment of any installment of interest on Subordinated Notes of such series; (b) default in payment of any principal on Subordinated Notes of such series; (c) default by the Company in performance in any material respect of any of the covenants or agreements in the Subordinated Notes or in the Subordinated Indenture specifically contained therein for the benefit of the Subordinated Notes of such series which shall not have been remedied for a period of 90 days after written notice to the Company by the Trustee or to the Company and the Trustee by the holders of not less than 25% in principal amount of the Subordinated Notes of such series and all other series so benefited (all such series voting as one class) then 8 outstanding; or (d) certain events of bankruptcy, insolvency or reorganization of the Company or the Bank (Section 6.01 of the Subordinated Indenture). No Event of Default described in clause (a), (b) or (c) above with respect to a particular series of Subordinated Notes necessarily constitutes an Event of Default with respect to any other series of Subordinated Notes. No Event of Default described in clause (a), (b) or (c) above permits acceleration of the payment of principal of the Subordinated Notes. The Subordinated Indenture provides that if an Event of Default under clause (d) above shall have occurred and be continuing, either the Trustee or the holders of not less than 25% in principal amount of all the then outstanding Subordinated Notes of each series as to which such Event of Default has occurred (voting as one class) may declare the principal (or a portion thereof specified in the terms of any series) of all Subordinated Notes as to which such Event of Default under clause (d) has occurred, together with any accrued interest, to be due and payable immediately. Upon certain conditions, such declaration may be annulled by a majority in principal amount of the Subordinated Notes of the series then outstanding as were entitled to declare such Event of Default (such series or all series voting as one class, if more than one series is so entitled). In addition, past defaults may be waived by the holders of a majority in principal amount of the Subordinated Notes of all series then outstanding as to which the default has occurred (all series voting as one class), except a default in the payment of principal or interest on any such Subordinated Notes or in respect of a covenant or provision of the Subordinated Indenture which cannot be modified or amended without the consent of the holder of each Subordinated Note so affected (Sections 6.01 and 6.06 of the Subordinated Indenture). As a result of the provisions stated in the prior paragraph, the Subordinated Indenture does not provide for any right to accelerate the payment of principal of the Subordinated Notes upon a default in payment of principal or interest or in the performance of any covenant or agreement in the Subordinated Notes or the Subordinated Indenture, or upon a default in the payment or acceleration of other indebtedness of the Company. In the case of a default in the payment of principal or interest, the Trustee, subject to certain limitations and conditions, may institute judicial proceedings to enforce payment of such principal or interest (Section 6.02 of the Subordinated Indenture). Each Indenture contains a provision entitling the Trustee, subject to the duty of the Trustee during default to act with the required standard of care, to be indemnified by the holders of Notes issued under such Indenture before proceeding to exercise any right or power under the Indenture at the request of such holders (Section 7.02). Each Indenture also provides that the holders of a majority in principal amount of the outstanding Notes issued thereunder of all series affected (voting as one class) may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Notes of such series (Section 6.06). Each Indenture contains a covenant that the Company will file annually with the Trustee a certificate as to the absence of any default or specifying any default that exists (Section 4.06). MODIFICATION OF THE INDENTURE AND WAIVER Each Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66 2/3% in principal amount of the Notes of all series then outstanding under such Indenture affected by such supplemental indenture (voting as one class), to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of such Indenture or modifying the rights of the holders of Notes of each such series, except that no such supplemental indenture may (i) extend the fixed maturity of any Notes, or reduce the rate or extend the time of payment of any interest thereon or on any overdue principal amount, or reduce the principal amount thereof, or reduce any amount payable upon any redemption thereof, or change the currency of payment of principal of or any interest thereon or on any overdue principal amount, without the consent of the holder of each Note so affected, or (ii) reduce the aforesaid percentage of Notes, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all outstanding Notes under such Indenture (Section 10.02). Each Indenture provides that the Company may omit in any particular instance to comply with any covenant or condition specifically contained in such Indenture for the benefit of one or more series of Notes (including in 9 the case of the Senior Indenture, the covenant described above under "Limitation on Sale or Issuance of Capital Stock or Convertible Securities of, and Merger or Sale of Assets by, the Bank") if before the time for such compliance the holders of a majority in principal amount of the Notes of all series then outstanding under such Indenture, and, in the case of the Subordinated Indenture, affected by the omission (voting as one class) waive such compliance in such instance, but such waiver shall not extend to or affect such covenant or condition except to the extent so expressly waived (Section 4.08 of the Senior Indenture and Section 4.07 of the Subordinated Indenture). CONSOLIDATION, MERGER AND SALE OF ASSETS Each Indenture provides that the Company may not merge or consolidate or sell or convey all or substantially all of its assets unless the successor corporation (if other than the Company) is a domestic corporation, assumes the Company's obligations under such Indenture and on the Notes issued under such Indenture, and, after giving effect to such transaction, the Company or the successor corporation would not be in default under such Indenture (Section 11.01). CONCERNING THE TRUSTEES The Chase Manhattan Bank (formerly known as Chemical Bank) is the successor Trustee under the Senior Indenture. Notices to the Senior Trustee should be directed to The Chase Manhattan Bank, Corporate Trust Department, 450 West 33rd Street, New York, New York 10001, Attention: Vice President. The Company and the Bank maintain deposit accounts and conduct other banking transactions with the Senior Trustee in the ordinary course of business. Marine Midland Bank is the Trustee under the Subordinated Indenture. Notices to the Subordinated Trustee should be directed to Marine Midland Bank, 140 Broadway, New York, New York 10015, Attention: Vice President--Corporate Trust Administration. The Bank has entered into correspondent banking relationships with the Subordinated Trustee and with its corporate parent, The Hong Kong and Shanghai Banking Corporation Limited ("HSBC"), involving various banking transactions in the ordinary course of business. As part of their relationship, the Bank and HSBC have an arrangement providing for the referral of customers to each other. The Company and the parent of HSBC established a jointly owned trade bank called Wells Fargo HSBC Trade Bank. DESCRIPTION OF PREFERRED STOCK The following description of Preferred Stock sets forth certain general terms and provisions of the series of Preferred Stock to which any Prospectus Supplement may relate. The specific terms of a particular series of Preferred Stock will be described in the Prospectus Supplement relating to such series of Preferred Stock. If so indicated in the Prospectus Supplement relating thereto, the terms of any such series of Preferred Stock may differ from the terms set forth below. The description of Preferred Stock set forth below and the description of the terms of a particular series of Preferred Stock set forth in the Prospectus Supplement relating thereto do not purport to be complete and are qualified in their entirety by reference to the Company's Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), and the Certificate of Designation relating to such series of Preferred Stock, which are filed or incorporated by reference as an exhibit to the Registration Statement of which this Prospectus is a part. GENERAL The Company is authorized to issue 25,000,000 shares of Preferred Stock. The Board of Directors has the authority to issue Preferred Stock in one or more series and to fix the specific number of shares, title, liquidation preference of each share, issue price, dividend rate or rates (or method of calculation), dividend periods, dividend payment dates, any redemption or sinking fund provisions, any conversion provisions and any other specific terms of any series without any further action by stockholders of the Company unless action is required by applicable laws or regulations or by the terms of other outstanding preferred stock. As of the date of this 10 Prospectus, the Company had five series of Preferred Stock outstanding consisting of 1,500,000 shares of Adjustable Rate Cumulative Preferred Stock, Series B ("Adjustable Rate Preferred Stock"), 477,500 shares of 9% Preferred Stock, Series C ("9% Preferred Stock") represented by 9,550,000 Depositary Shares each representing a one-twentieth interest in a share of 9% Preferred Stock, 350,000 shares of 8 7/8% Preferred Stock, Series D (the "8 7/8% Preferred Stock" and together with the 9% Preferred Stock, the "Fixed Rate Preferred Stock") represented by 7,000,000 Depositary Shares each representing a one-twentieth interest in a share of 8 7/8% Preferred Stock, 1,000,000 shares of 9 7/8% Preferred Stock, Series F ("9 7/8% Preferred Stock") represented by 8,000,000 Depositary Shares each representing a one-eighth interest in a share of 9 7/8% Preferred Stock and 750,000 shares of 9% Preferred Stock, Series G ("9% Series G Preferred Stock" and together with the 9 7/8% Preferred Stock, the "New Wells Fargo Preferred Stock") represented by 6,000,000 Depositary Shares each representing a one-eighth interest in a share of 9% Series G Preferred Stock. The Adjustable Rate Preferred Stock has a liquidation preference of $50 per share, the Fixed Rate Preferred Stock has a liquidation preference of $500 per share or $25 per Depositary Share and the New Wells Fargo Preferred Stock has a liquidation preference of $200 per share or $25 per Depositary Share. See "Description of Capital Stock--Existing Preferred Stock." Unless otherwise specified in the Prospectus Supplement relating thereto, the shares of each series of Preferred Stock will rank on a parity as to dividends and distributions of assets with each other and with the Adjustable Rate Preferred Stock, the Fixed Rate Preferred Stock and the New Wells Fargo Preferred Stock. The Prospectus Supplement will set forth the following specific terms regarding the series of Preferred Stock offered thereby: (i) the designation, number of shares and liquidation preference per share; (ii) the initial public offering price; (iii) the dividend rate or rates, or the method of determining the dividend rate or rates; (iv) the index, if any, upon which the amount of dividends, if any, is determined; (v) the dates on which dividends, if any, will accrue and be payable and the designated record dates for determining the holders entitled to such dividends; (vi) any redemption or sinking fund provisions; (vii) any conversion or exchange provisions; (viii) whether the Company has elected to offer Depositary Shares as described under "Description of Depositary Shares"; (ix) provisions for issuance of global securities; (x) the currency (which may be composite currency) in which payment of dividends, if any, shall be payable if other than United States dollars; (xi) voting rights, if different from those described under "Description of Preferred Stock--Voting Rights"; and (xii) any additional terms, preferences or rights. As described under "Description of Depositary Shares," the Company may, at its option, elect to offer depositary shares ("Depositary Shares") evidenced by depositary receipts ("Depositary Receipts"), each representing a fractional interest (to be specified in the Prospectus Supplement relating to the particular series of the Preferred Stock) in a share of the particular series of the Preferred Stock issued and deposited with a Depositary (as defined below). Under regulations adopted by the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), if the holders of shares of any series of preferred stock of the Company become entitled to vote for the election of directors because the Board of Directors of the Company has failed to declare or pay dividends on such series (see "Description of Preferred Stock Voting Rights"), such series may then be deemed a class of "voting securities" and a holder of 25 percent or more of such series (or a holder of five percent or more if it otherwise exercises a "controlling influence" over the Company) may then be subject to regulation as a bank holding company in accordance with the Bank Holding Company Act of 1956, as amended. In addition, at such time as such series is deemed a class of voting securities, any other bank holding company may be required to obtain the prior approval of the Federal Reserve Board to acquire five percent or more of such series and any person other than a bank holding company may be required to obtain the prior approval of the Federal Reserve Board to acquire ten percent or more of such series. The shares of Preferred Stock will, when issued, be fully paid and nonassessable and will have no preemptive rights. The transfer agent, registrar, dividend disbursing agent and redemption agent for the Preferred Stock will be specified in the Prospectus Supplement relating thereto. 11 DIVIDENDS The holders of the Preferred Stock of each series will be entitled to receive, when, as and if declared by the Board of Directors of the Company, out of funds legally available therefor, cumulative or non-cumulative cash or other dividends at such rate or rates and on such dates as will be set forth in the Prospectus Supplement relating to such series. Such rates may be fixed or variable or both. If variable, the formula used for determining the dividend rate for each dividend period will be set forth in the Prospectus Supplement. Dividends will be payable to the holders of record as they appear on the stock books of the Company on such record dates as will be fixed by the Board of Directors of the Company and specified in the Prospectus Supplement. If the Board of Directors of the Company fails to declare a dividend payable on a dividend payment date on any series of the Preferred Stock for which dividends are noncumulative ("Noncumulative Preferred Stock"), then the holders of such series of the Preferred Stock will have no right to receive a dividend in respect of the dividend period ending on such dividend payment date, and the Company will have no obligation to pay a dividend for such period, whether or not dividends on such series are declared payable on any future dividend payment dates. No dividends may be declared in respect of any dividend period on any other series or class of preferred stock ranking on a parity as to dividends with the Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock unless full cumulative dividends on all outstanding shares of each series of Preferred Stock on which dividends are cumulative and on the Adjustable Rate Preferred Stock, the Fixed Rate Preferred Stock and the New Wells Fargo Preferred Stock shall have been paid in full or contemporaneously are declared and paid through the most recent dividend payment date, unless otherwise indicated in the Prospectus Supplement. In the event that full cumulative dividends on such Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock have not been declared and paid or set apart when due, the Company may not declare or pay any dividends on, or make other distributions on or make any payment on account of the purchase, redemption, or other retirement, of its Common Stock or any other stock of the Company ranking as to dividends or upon liquidation junior to such Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock (other than, in the case of dividends or distributions, dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Common Stock or such other junior ranking stock), until full cumulative dividends on such Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock are made or set apart for payment, unless otherwise indicated in the Prospectus Supplement. When dividends are not paid in full upon any series of Preferred Stock, the Adjustable Rate Preferred Stock, the Fixed Rate Preferred Stock, the New Wells Fargo Preferred Stock and any other preferred stock ranking on a parity therewith all dividends declared or made upon shares of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock, New Wells Fargo Preferred Stock and any other series of preferred stock ranking on a parity therewith shall be declared pro rata so that the amount of dividends declared per share on Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock, New Wells Fargo Preferred Stock and such other preferred stock shall in all cases bear to each other the same ratio that accrued dividends per share (which, in the case of Noncumulative Preferred Stock, shall not include any accumulation in respect of unpaid dividends for prior dividend periods) on shares of each series of the Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock, New Wells Fargo Preferred Stock and such other preferred stock bear to each other. No interest shall be payable in respect of any dividend payment which may be in arrears unless otherwise indicated in the Prospectus Supplement. REDEMPTION The shares of any series of Preferred Stock may be redeemable at the option of the Company and may be subject to mandatory redemption pursuant to a sinking fund or otherwise, in each case upon the terms, on the date or dates and at the redemption price or prices set forth in the Prospectus Supplement relating to such series. If fewer than all shares of Preferred Stock are to be redeemed, the shares to be redeemed shall be selected by the Company pro rata or by lot, or by any other method determined by the Board of Directors to be equitable. 12 Under regulations of the Federal Reserve Board, any perpetual preferred stock with a feature permitting redemption at the option of the issuer may qualify as capital only if the redemption is subject to prior approval of the Federal Reserve Board. Therefore, any redemption of Preferred Stock at the option of the Company will require the prior approval of the Federal Reserve Board in order for the Preferred Stock to qualify as capital for bank regulatory purposes. If any dividends on shares of any series of Preferred Stock are in arrears, no shares of Common Stock or shares of capital stock ranking junior to or on parity with the Preferred Stock shall be redeemed and no shares of such series of Preferred Stock shall be redeemed unless all outstanding shares of such series are simultaneously redeemed, and the Company shall not purchase or otherwise acquire any shares of such series; provided, however, that the foregoing shall not prevent the purchase or acquisition of shares of such series pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of such series. Notice of redemption shall be given by mailing the same to each record holder of the shares to be redeemed, not less than 40 nor more than 70 days prior to the date fixed for redemption thereof (and, in the case of New Wells Fargo Preferred Stock, not less than 40 nor more than 60 days' notice), to the respective addresses of such holders as the same shall appear on the Company's stock books. Each such notice shall state: (i) the redemption date; (ii) the number of shares and series of the Preferred Stock to be redeemed; (iii) the redemption price and the manner in which such redemption price is to be paid and delivered; (iv) the place or places where certificates for such shares of Preferred Stock are to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date. If fewer than all shares of any series of the Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares to be redeemed from such holder. If notice of redemption has been given, from and after the redemption date for the shares of the series of the Preferred Stock called for redemption (unless default shall be made by the Company in providing money for the payment of the redemption price of the shares so called for redemption), dividends on the shares of Preferred Stock so called for redemption will cease to accrue, any right to convert the shares of Preferred Stock will terminate, such shares will no longer be deemed to be outstanding, and all rights of the holders thereof as stockholders of the Company (except the right to receive the redemption price) will cease. Upon surrender in accordance with such notice of the certificates representing any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors of the Company will so require and the notice shall so state), the redemption price set forth above will be paid out of funds provided by the Company. If fewer than all of the shares represented by any such certificate are redeemed, a new certificate will be issued representing the unredeemed shares without cost to the holder thereof. LIQUIDATION PREFERENCE Upon any liquidation, dissolution or winding up of the Company, the holders of shares of each series of Preferred Stock and of the Adjustable Rate Preferred Stock, the Fixed Rate Preferred Stock and the New Wells Fargo Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders, before any distribution of assets is made to or set apart for the holders of Common Stock or of any other shares of stock of the Company ranking as to such a distribution junior to the shares of such series, with respect to the Preferred Stock, an amount described in the Prospectus Supplement relating to such series of Preferred Stock, and with respect to the Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock, an amount equal to the liquidation value of such shares. See "Description of Capital Stock--Existing Preferred Stock." If, in any case of any such liquidation, dissolution or winding up of the Company, the assets of the Company or the proceeds thereof shall be insufficient to pay in full the amounts payable with respect to shares of each series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock and any other shares of stock of the Company ranking as to any such distribution on a parity therewith, the holders of shares of such series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock and of such other shares will share ratably in any such distribution of assets of the Company in proportion to the full respective 13 preferential amounts to which they are entitled. After payment to the holders of shares of such series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock of the full preferential amounts to which they are entitled, the holders of shares of such series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock will not be entitled to any further participation in any distribution of assets by the Company, unless otherwise provided in the Prospectus Supplement. A consolidation or merger of the Company with one or more corporations shall not be deemed to be a liquidation, dissolution or winding up of the Company. CONVERSION AND EXCHANGE The terms, if any, on which shares of any series of Preferred Stock are convertible into or exchangeable for Notes or Common Stock will be set forth in the Prospectus Supplement relating thereto. Such terms may include provisions for conversion or exchange, either mandatory, at the option of the holder, or at the option of the Company, in which the number of shares of Common Stock to be received by the holders of Preferred Stock would be calculated according to the market price of Common Stock as of a time stated in the Prospectus Supplement. VOTING RIGHTS Except as indicated below or in the Prospectus Supplement relating to a particular series of the Preferred Stock, or except as expressly required by applicable law, the holders of Preferred Stock will not be entitled to vote. On matters on which holders of such series and holders of any other series of Preferred Stock are entitled to vote as a single class, each full share of any series of the Preferred Stock shall be entitled to one vote. Therefore, the voting power of such series will depend on the number of shares in such series, not the liquidation preference or initial offering price of the shares of such series of the Preferred Stock. However, as more fully described under "Description of Depositary Shares," if the Company elects to provide for the issuance of Depositary Shares representing fractional interests in a share of a series of the Preferred Stock, the holders of each such Depositary Share will, in effect, be entitled through the Depositary to such fraction of a vote, rather than a full vote. To the extent the Depositary does not receive specific instructions from the holders of Depositary Shares relating to such Preferred Stock, it will vote such shares of Preferred Stock in accordance with the recommendation of the Company, unless otherwise indicated in the Prospectus Supplement. Whenever the Board of Directors shall have failed to declare and pay dividends on a series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock for dividend periods, whether or not consecutive, containing in the aggregate a number of days equivalent to six calendar quarters, the holders of such series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock (voting as a class with all other affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock ranking on a parity therewith either as to dividends or upon liquidation and upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of two of the authorized number of directors of the Company at the next annual meeting of stockholders and at each subsequent meeting until all dividends which the Board of Directors failed to declare or pay on such series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock have been fully paid or set apart for payment. In addition, under such circumstances, certain holders of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock may become subject to regulation as a bank holding company. See "Description of Preferred Stock-- General." The term of office of all directors elected by the holders of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock shall terminate immediately upon the termination of the right of the holders of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock to vote for directors. 14 So long as any shares of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock remain outstanding, the Company shall not, without the consent of the holders of at least two-thirds of the shares of the affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock outstanding at the time (voting separately as a class with all other affected series of Preferred Stock ranking on a parity with the affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock), (i) authorize, create or issue, or increase the authorized amount of, any class or series of stock ranking prior to the affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock as to dividends or upon liquidation; or (ii) amend, alter or repeal the provisions of the Company's Restated Certificate of Incorporation, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of the affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock or the holders thereof; provided, however, that any increase in the amount of the authorized Common Stock or authorized Preferred Stock or the creation and issuance of other series of common stock or preferred stock ranking on a parity with or junior to the affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock as to dividends and upon liquidation shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. DESCRIPTION OF DEPOSITARY SHARES The description set forth below and in any Prospectus Supplement of certain provisions of the Deposit Agreement (as defined below) and of the Depositary Shares and Depositary Receipts does not purport to be complete and is subject to, and qualified in its entirety by reference to, the form of Deposit Agreement and form of Depositary Receipts relating to each series of the Preferred Stock which are filed with the Commission as an exhibit to the Registration Statement of which this Prospectus is a part. GENERAL The Company may, at its option, elect to offer fractional interests in shares of Preferred Stock. The shares of any series of the Preferred Stock underlying the Depositary Shares will be deposited under a separate Deposit Agreement (the "Deposit Agreement") between the Company and a bank or trust company selected by the Company (the "Depositary"). The Prospectus Supplement relating to a series of Depositary Shares will set forth the name and address of the Depositary. Subject to the terms of the Deposit Agreement, each owner of a Depositary Share will be entitled, in proportion to the applicable fractional interest in a share of Preferred Stock underlying such Depositary Share, to all the rights and preferences of the Preferred Stock underlying such Depositary Share (including dividend, voting, redemption, conversion and liquidation rights). The Depositary Shares will be evidenced by Depositary Receipts issued pursuant to the Deposit Agreement, each of which will represent the fractional interest in a share of a particular series of the Preferred Stock described in the Prospectus Supplement. Unless otherwise specified in the Prospectus Supplement, a holder of Depositary Shares is not entitled to receive the whole shares of Preferred Stock underlying the Depositary Shares. DIVIDENDS AND OTHER DISTRIBUTIONS The Depositary will distribute all cash dividends or other cash distributions received in respect of the Preferred Stock to the record holders of Depositary Shares relating to such Preferred Stock in proportion to the numbers of such Depositary Shares owned by such holders on the relevant record date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any holder of Depositary 15 Shares a fraction of one cent, and any balance not so distributed shall be added to and treated as part of the next sum received by the Depositary for distribution to record holders of Depositary Shares. In the event of a distribution other than in cash, the Depositary will distribute property received by it to the record holders of Depositary Shares entitled thereto, unless the Depositary determines that it is not feasible to make such distribution, in which case the Depositary may, with the approval of the Company, sell such property and distribute the net proceeds from such sale to such holders. The Deposit Agreement also contains provisions relating to the manner in which any subscription or similar rights offered by the Company to holders of the Preferred Stock shall be made available to holders of Depositary Shares. REDEMPTION OF DEPOSITARY SHARES If a series of the Preferred Stock underlying the Depositary Shares is subject to redemption, the Depositary Shares will be redeemed from the proceeds received by the Depositary resulting from the redemption, in whole or in part, of such series of the Preferred Stock held by the Depositary. The redemption price per Depositary Share will be equal to the applicable fraction of the redemption price per share payable with respect to such series of the Preferred Stock. If less than all the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will be selected by lot or pro rata as may be determined by the Depositary. After the date fixed for redemption, the Depositary Shares so called for redemption will no longer be deemed to be outstanding and all rights of the holders of the Depositary Shares will cease, except the right to receive the moneys payable upon such redemption and any money or other property to which the holders of such Depositary Shares were entitled upon such redemption upon surrender to the Depositary of the Depositary Receipts evidencing such Depositary Shares. Any funds deposited by the Company with the Depositary for any Depositary Shares which the holders thereof fail to redeem shall be returned to the Company after a period of two years from the date such funds are so deposited. VOTING Upon receipt of notice of any meeting at which the holders of the Preferred Stock are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of the Depositary Shares relating to such Preferred Stock. Each record holder of such Depositary Shares on the record date (which will be the same date as the record date for the Preferred Stock) will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the number of shares of Preferred Stock underlying such holder's Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote the number of shares of Preferred Stock underlying such Depositary Shares in accordance with such instructions, and the Company will agree to take all action which may be deemed necessary by the Depositary in order to enable the Depositary to do so. To the extent the Depositary does not receive specific instructions from the holders of Depositary Shares relating to such Preferred Stock, it will vote shares of Preferred Stock in accordance with the recommendation of the Company, unless otherwise indicated in the Prospectus Supplement. AMENDMENT OF THE DEPOSIT AGREEMENT The form of Depositary Receipt evidencing the Depositary Shares and any provision of the Deposit Agreement may at any time be amended by agreement between the Company and the Depositary, provided, however, that any amendment which materially and adversely alters the rights of the existing holder of Depositary Shares will not be effective unless such amendment has been approved by the record holders of at least a majority of the Depositary Shares then outstanding. 16 CHARGES OF DEPOSITARY The Company will pay all transfer and other taxes and governmental charges that arise solely from the existence of the depositary arrangements. The Company will pay charges of the Depositary in connection with the initial deposit of the Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary Shares will pay all other transfer and other taxes and governmental charges, and, in addition, such other charges as are expressly provided in the Deposit Agreement to be for their accounts. TAXATION Owners of Depositary Shares will be treated for Federal income tax purposes as if they were owners of the Preferred Stock represented by such Depositary Shares and, accordingly, will be entitled to take into account for Federal income tax purposes income and deductions to which they would be entitled if they were holders of such Preferred Stock. In addition, (i) no gain or loss will be recognized for Federal income tax purposes upon the withdrawal of Preferred Stock in exchange for Depositary Shares as provided in the Deposit Agreement, (ii) the tax basis of each share of Preferred Stock to an exchanging owner of Depositary Shares will, upon such exchange, be the same as the aggregate tax basis of the Depositary Shares exchanged therefor, and (iii) the holding period for shares of the Preferred Stock in the hands of an exchanging owner of Depositary Shares who held such Depositary Shares at the time of the exchange thereof for Preferred Stock will include the period during which such person owned such Depositary Shares. MISCELLANEOUS The Company, or at the option of the Company, the Depositary, will forward to the holders of Depositary Shares all reports and communications from the Company which the Company is required to furnish to the holders of the Preferred Stock. Neither the Depositary nor the Company will be liable if it is prevented or delayed by law or any circumstance beyond its control in performing its obligations under the Deposit Agreement. The obligations of the Company and the Depositary under the Deposit Agreement will be limited to performance in good faith of their duties thereunder and they will not be obligated to prosecute or defend any legal proceeding in respect of any Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished. They may rely upon written advice of counsel or accountants, or information provided by persons presenting Preferred Stock for deposit, holders of Depositary Shares or other persons believed to be competent and on documents believed to be genuine. RESIGNATION AND REMOVAL OF DEPOSITARY; TERMINATION OF THE DEPOSIT AGREEMENT The Depositary may resign at any time by delivering to the Company notice of its election to do so, and the Company may at any time remove the Depositary, any such resignation or removal to take effect upon the appointment of a successor Depositary and its acceptance of such appointment. Such successor Depositary will be appointed by the Company within 60 days after delivery of the notice of resignation or removal. The Deposit Agreement may be terminated at the direction of the Company or by the Depositary if a period of 90 days shall have expired after the Depositary has delivered to the Company written notice of its election to resign and a successor depositary shall not have been appointed. Upon termination of the Deposit Agreement, the Depositary will discontinue the transfer of Depositary Receipts, will suspend the distribution of dividends to the holders thereof, and will not give any further notices (other than notice of such termination) or perform any further acts under the Deposit Agreement except that the Depositary will continue to deliver Preferred Stock certificates together with such dividends and distributions and the net proceeds of any sales of rights, preferences, privileges or other property in exchange for Depositary Receipts surrendered. Upon request of the Company, the Depositary shall deliver all books, records, certificates evidencing Preferred Stock, Depositary Receipts and other documents respecting the subject matter of the Deposit Agreement to the Company. 17 DESCRIPTION OF CAPITAL STOCK GENERAL The Company is authorized to issue 150,000,000 shares of Common Stock, par value $5.00 per share, and 25,000,000 shares of preferred stock, par value $5.00 per share. COMMON STOCK Holders of Common Stock are entitled to one vote for each share of Common Stock held. All outstanding shares of Common Stock are fully paid and nonassessable. Holders of Common Stock are entitled to receive such dividends as are declared by the Board of Directors out of funds legally available therefor subject to the limitations described below. In the event of liquidation, holders of the Common Stock are entitled to receive pro rata any assets distributable after payment of liabilities and the liquidation preference, if any, on any shares of Preferred Stock then outstanding. There are no conversion, preemptive or redemption rights of the Common Stock. The dividend rights and liquidation preferences relating to the preferred stock are superior to those relating to the Common Stock. The transfer agent and registrar for the Common Stock is First Chicago Trust Company of New York, New York. EXISTING PREFERRED STOCK As of the date of this Prospectus, the Company had five series of preferred stock outstanding, consisting of 1,500,000 shares of Adjustable Rate Cumulative Preferred Stock, Series B, 477,500 shares of 9% Preferred Stock, Series C represented by 9,550,000 Depositary Shares each representing a one- twentieth interest in a share of 9% Preferred Stock, 350,000 shares of 8 7/8% Preferred Stock, Series D represented by 7,000,000 Depositary Shares each representing a one-twentieth interest in a share of 8 7/8% Preferred Stock, 1,000,000 shares of 9 7/8% Preferred Stock, Series F represented by 8,000,000 Depositary Shares each representing a one-eighth interest in a share of 9 7/8% Preferred Stock and 750,000 shares of 9% Preferred Stock, Series G represented by 6,000,000 Depositary Shares each representing a one-eighth interest in a share of 9% Series G Preferred Stock. The Adjustable Rate Preferred Stock has a liquidation preference of $50 per share, the Fixed Rate Preferred Stock has a liquidation preference of $500 per share or $25 per Depositary Share and the New Wells Fargo Preferred Stock has a liquidation preference of $200 per share or $25 per Depositary Share. Unless full cumulative dividends on the Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock have been paid, the Company may not declare dividends on or make any other payment in respect of any class of stock ranking junior to the Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock, including the Common Stock. Whenever the Board of Directors of the Company shall have failed to declare and pay dividends on any series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock for dividend periods, whether or not consecutive, containing in the aggregate a number of days equivalent to six calendar quarters, the holders of such series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock (voting as a class with all other affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock ranking on a parity therewith either as to dividends or upon liquidation and upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of two of the authorized number of directors of the Company at the next annual meeting of stockholders and at each subsequent meeting until all dividends which the Board of Directors failed to declare or pay on the affected series of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock or New Wells Fargo Preferred Stock have been fully paid or set apart for payment. The holders of Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock have preference and priority over holders of Common Stock in the event of liquidation for payment of the liquidation preference of the Preferred Stock, Adjustable Rate Preferred Stock, Fixed Rate Preferred Stock and New Wells Fargo Preferred Stock plus an amount equal to all accrued and unpaid dividends thereon. 18 PLAN OF DISTRIBUTION The Company may offer and sell the Offered Securities to one or more underwriters for resale by them or through agents, or to investors directly. The Prospectus Supplement with respect to each series of Offered Securities will set forth the terms of the offering of the Offered Securities, including the name or names of any underwriters or agents, the purchase price of the Offered Securities and the net proceeds to the Company from such sale, any underwriting discounts, agency fees and other items constituting underwriters' or agents' compensation, any initial public offering price and any discounts or concessions allowed, reallowed or paid to dealers. If any underwriters are involved in the offer and sale, the Offered Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Unless otherwise set forth in the accompanying Prospectus Supplement, the obligations of the underwriters to purchase the Offered Securities will be subject to certain conditions precedent and the underwriters will be obligated to purchase all the Offered Securities described in such Prospectus Supplement if any are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. Underwriters and agents may be entitled, under agreements entered into with the Company, to indemnification by the Company against certain liabilities, including liabilities under the Securities Act of 1933. Employees of the Bank may act as finders of purchasers of Offered Securities. Their activities will be limited to contacting customers and informing them of the terms of the Offered Securities offered by the Company. The Company believes that such persons are not required to be registered as brokers or dealers under Section 3(a)(4) and 3(a)(5) of the Act since they are acting as employees on behalf of a bank. LEGAL OPINIONS The legality of the Offered Securities offered hereby will be passed upon for the Company by Brobeck, Phleger & Harrison LLP, San Francisco, for the underwriters, if any, by Davis Polk & Wardwell, New York City and for the agents, if any, by Brown & Wood LLP, San Francisco. Davis Polk & Wardwell may rely on the opinion of Brobeck, Phleger & Harrison LLP as to matters of California law. Davis Polk & Wardwell represents the Company from time to time. EXPERTS The consolidated financial statements of the Company as of December 31, 1995 and 1994 and for each of the years in the three-year period ended December 31, 1995 incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 1995 incorporated by reference herein and elsewhere in the Registration Statement have been incorporated by reference herein and in the Registration Statement in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The consolidated financial statements of First Interstate as of December 31, 1995 and 1994 and for each of the three years in the period ended December 31, 1995 incorporated by reference herein have been incorporated by reference herein in reliance upon the report of Ernst & Young LLP, independent auditors, incorporated by reference herein, given upon the authority of said firm as experts in accounting and auditing. 19 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE AGENTS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF AN OFFER TO BUY, THE NOTES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. --------------- TABLE OF CONTENTS
PAGE ---- PROSPECTUS SUPPLEMENT Description of Medium-Term Notes........................................... S-2 Federal Tax Considerations................................................. S-14 Plan of Distribution....................................................... S-19 PROSPECTUS Available Information....................................................... 2 Incorporation of Certain Documents by Reference............................. 2 Wells Fargo & Company....................................................... 3 Use of Proceeds............................................................. 3 Ratio of Earnings to Fixed Charges.......................................... 3 Description of Notes........................................................ 4 Description of Preferred Stock.............................................. 10 Description of Depositary Shares............................................ 15 Description of Capital Stock................................................ 18 Plan of Distribution........................................................ 19 Legal Opinions.............................................................. 19 Experts..................................................................... 19
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $3,500,000,000 [LOGO of WELLS FARGO & COMPANY] MEDIUM-TERM NOTES AND SUBORDINATED MEDIUM-TERM NOTES, SERIES B DUE FROM 9 MONTHS TO 12 YEARS FROM DATE OF ISSUE --------------- PROSPECTUS SUPPLEMENT --------------- MERRILL LYNCH & CO. CS FIRST BOSTON GOLDMAN, SACHS & CO. LEHMAN BROTHERS MORGAN STANLEY & CO. INCORPORATED SALOMON BROTHERS INC SEPTEMBER 11, 1996 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [RECYCLE LOGO] -----END PRIVACY-ENHANCED MESSAGE-----