WELLS FARGO & COMPANY
1999 DEFERRAL PLAN FOR DIRECTORS
I. PURPOSE
The purpose of the Wells Fargo & Company 1999 Deferral Plan for Directors is to
provide an opportunity to non-employee members of the Board of Directors of the
Company to defer receipt of all or a portion of their compensation received in
consideration for personal services rendered in their capacity as directors of
the Company. This Plan is effective as of January 1, 1999 and is applicable to
compensation earned after that date.
II. DEFINITIONS
When used in this Plan, the following capitalized terms shall have the meanings
indicated below:
BOARD The Board of Directors of the Company.
CASH COMPENSATION The annual retainer fees and Board meeting
fees.
COMMON STOCK Common Stock of the Company, $1-2/3 par
value.
COMPANY Wells Fargo & Company.
DEFERRAL ELECTION An irrevocable election to defer receipt of
all or a part of Eligible Compensation.
ELIGIBLE COMPENSATION Eligible compensation includes Cash
Compensation, Formula Stock Awards, Stock
Option Gains, Retirement Conversion Amounts
or any other compensation deemed eligible by
the Board.
FAIR MARKET VALUE The closing price per share of the Common
Stock reported on the consolidated tape of
the New York Stock Exchange as of the
trading day immediately preceding the
transaction and/or grant date.
FORMULA STOCK AWARD Any Award made pursuant to the Wells Fargo &
Company Directors Formula Stock Award Plan.
INTEREST The average annual rate for 3-Year Treasury
Notes for the immediately preceding calendar
year plus 2%.
NON-EMPLOYEE DIRECTOR Any member of the Board who is not an
employee of the Company or of a subsidiary
of the Company.
1
PARTICIPANT Any Non-Employee Director who elects to
defer Eligible Compensation under the Plan.
DEFERRAL YEAR January 1 through December 31 of the year in
which Eligible Compensation is earned.
PLAN Wells Fargo & Company 1999 Deferral Plan for
Directors.
PLAN ADMINISTRATOR The Director of Human Resources of the
Company.
RETIREMENT CONVERSION A dollar amount equal to the accrued
AMOUNT benefits under the former Wells Fargo &
Company Directors' Retirement Plan or the
Norwest Corporation Retirement Plan for
Non-Employee Directors, calculated as if the
Director's service on the Board had ended as
of November 2, 1998.
STOCK OPTION GAIN The difference between the stock option
exercise price and the Fair Market Value of
the Common Stock on the exercise date when
the option is exercised using the stock swap
method.
III. ELIGIBILITY
Any non-employee members of the Board of Directors of the Company are eligible
to participate in the Plan.
An eligible Non-Employee Director becomes a Participant in the Plan by filing a
Deferral Election to 1) defer receipt of all or a part of Eligible Compensation,
2) designate the year in which distributions will commence, and 3) designate the
form of distribution (which may be made in either a lump sum or in up to 10
annual installments). A Deferral Election, once made, will be irrevocable and
will apply to the Deferral Year for which it was made. An eligible Non-Employee
Director who becomes a Participant continues as a Participant until the date of
the last distribution provided in Section VII.
IV. COMPENSATION ELIGIBLE FOR DEFERRAL
Forms of compensation eligible for irrevocable deferral include the following:
A. CASH COMPENSATION. Directors may elect to defer receipt of all
or a portion of their Cash Compensation into either cash or stock
deferral accounts.
B. FORMULA STOCK AWARDS. Directors may elect to defer all or a
portion of Formula Stock Awards into deferred stock accounts.
C. STOCK OPTION GAINS. Directors may elect to defer receipt of Stock
Option Gains realized by exercising stock options using the stock
swap method. Stock option gain deferrals will be credited to the
deferred stock accounts.
2
Gains realized from any other method of exercising stock options
are not eligible for deferral.
D. RETIREMENT CONVERSION AMOUNT. Directors may elect to defer the
entire Retirement Conversion Amount into a deferred stock account.
E. OTHER. Directors may elect to defer any other compensation deemed
to be Eligible Compensation by the Board.
V. DEFERRAL ELECTIONS
A. CASH COMPENSATION AND FORMULA STOCK AWARD DEFERRAL ELECTIONS.
Deferral Elections must be filed with the Company prior to the
beginning of the year in which Eligible Compensation is earned.
New Directors must make Deferral Elections within thirty days of
being notified of eligibility to participate in the Plan in order
to defer Eligible Compensation earned in the year they are deemed
eligible. New Deferral Elections must be filed for each Deferral
Year. Notwithstanding the foregoing, a Deferral Election for Cash
Compensation in 1999 or for a Formula Stock Award to be issued in
the year 2000 may be filed with the Company no later than March
31, 1999.
B. STOCK OPTION GAINS DEFERRAL ELECTION. Deferral Elections may be
filed with the Company at any time following the stock option
grant date and at least one year before the stock options are
exercised. A new Deferral Election must be filed for each stock
option grant. The Deferral Election applies to all gains
associated with a specific grant even if options are exercised on
different dates.
C. RETIREMENT CONVERSION AWARD. A Deferral Election must be filed no
later than June 30, 1999.
D. DESIGNATION OF BENEFICIARY. A Participant may, from time to time,
designate and/or revoke his or her beneficiary designation and
file a new beneficiary designation with the Company. The
Designation of Beneficiary will apply to all of the Participant's
Deferred Account balances.
VI. DEFERRED ACCOUNTS
A. DEFERRED CASH ACCOUNT. Any Cash Compensation deferred into the
Deferred Cash Account will be credited to the account on the date
the Cash Compensation would have otherwise been paid.
B. DEFERRED STOCK ACCOUNT. Any Cash Compensation, Formula Stock
awards, Stock Option Gains, or Retirement Conversion Amounts that
are deferred into the Deferred Stock Account will receive a credit
to the Deferred Stock Account on the date the Cash Compensation,
Formula Stock Award, Retirement Conversion Amount, or Stock Option
Gain would have otherwise been paid or realized. Cash amounts will
be converted into shares of Common Stock in the Deferred Stock
Account based on
3
the Fair Market Value of the Common Stock as of the day the
compensation would have otherwise been paid or realized.
C. INTEREST. Deferred Cash Accounts will earn Interest. Interest will
be compounded annually and will be credited on the last day of
each calendar quarter until all funds in the Deferred Cash Account
have been distributed in accordance with Section VII.A.
D. DIVIDEND EQUIVALENTS. Deferred Stock Accounts will receive
dividend credits each time dividends are paid on the Common Stock.
The Deferred Accounts of each Participant will be divided into a series of
sub-accounts, one for each type of Eligible Compensation and one for each year
Eligible Compensation is deferred. Each Stock Option Gain which is deferred will
be accounted for in a separate sub-account. All Common Stock share calculations
will be rounded to the third decimal place. Each Participant will, at all times,
have a fully vested and non-forfeitable right to all amounts properly credited
to his or her Deferred Accounts.
VII. DISTRIBUTION OF DEFERRED ACCOUNTS
A. DISTRIBUTION FROM THE DEFERRED CASH ACCOUNT. A Participant's
deferred cash sub-accounts will be distributed in cash.
Distributions will be made in a lump sum or in up to 10 annual
installments, as specified in Participant's Deferral Election, as
of: 1) March 1 of the first calendar year following termination of
a Participant's service as a Non-Employee Director, or 2) March 1
of any other year elected by the Participant which begins at least
12 months following the year in which the deferred compensation
would otherwise have been received, or 3) July 1 of the calendar
year in which a Participant's service as a Non-Employee Director
terminates if such termination occurs on or before June 30;
provided, however, that if July 1 installments are elected,
subsequent annual installments shall be payable as of March 1 of
each year thereafter. The amount of each installment distribution
will be equal to the total amount of the account divided by the
number of installments remaining to be made, including the current
installment.
B. DISTRIBUTION FROM THE DEFERRED STOCK ACCOUNT. A Participant's
deferred stock sub-accounts will be distributed in whole shares of
Common Stock. Distributions will be made in a lump sum or in up to
10 annual installments, as specified in Participant's Deferral
Election, as of: 1) March 1 of the first calendar year following
termination of a Participant's service as a Non-Employee Director,
or 2) March 1 of any other year elected by the Participant which
begins at least 12 months following the year in which the deferred
compensation would otherwise have been received, or 3) July 1 of
the calendar year in which a Participant's service as a
Non-Employee Director terminates if such termination occurs on or
before June 30; provided, however, that if July 1 installments are
elected, subsequent annual installments shall be payable as of
March 1 of each year thereafter. The amount of each installment
distribution will be equal to the total amount of the account
divided by the number of installments remaining to be made,
including the current installment, rounded up to the nearest whole
share and the whole number of shares so distributed shall be
4
deducted from the total amount of the account. The final
distribution will be rounded up to the nearest whole share.
C. IN THE EVENT OF DEATH. If a Participant dies before receiving all
distributions to which he or she is entitled under the Plan, all
remaining distributions will be made in one lump sum. Such
distribution will be made in accordance with the Participant's
Designation of Beneficiary form. In the absence of a valid
designation, or if the designated beneficiary does not survive the
Participant, the distribution will be made to the Participant's
estate. If any beneficiary dies after becoming entitled to receive
Plan distributions, the remaining distribution will be made to the
beneficiary's estate.
VIII. PLAN ADMINISTRATOR
The Plan Administrator is the Company's Director of Human Resources. The Plan
Administrator's responsibilities include, but are not limited to, the following:
- To adopt rules for administration of the Plan.
- To interpret and implement the provisions of the Plan.
- To resolve all questions regarding the administration,
interpretation and application of the Plan.
- To have all other powers as may be necessary to discharge
responsibilities under the Plan.
The Plan Administrator's determinations will be conclusive and binding on all
Participants.
IX. TRUST FUND
Shares of Common Stock credited to Deferred Stock Account under this Plan may,
in the sole discretion of the Company, be held and administered in trust ("Trust
Fund") in accordance with the terms of this Plan. The Trust Fund will be held
under a trust agreement between the Company and Norwest Bank Minnesota, N.A., as
Trustee, or any duly appointed successor trustee. All Common Stock in the Trust
Fund will be held on a commingled basis and will be subject to the claims of
general creditors of the Company. The Trustee, in its discretion, will vote
shares of Common Stock held in any Trust Fund under this Plan.
X. UNSECURED OBLIGATION
All amounts deferred pursuant to this Plan and credited to a Deferred Account
will be unsecured obligations of the Company. Each Participant's right will be
as an unsecured general creditor of the Company.
XI. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION
The Plan may be amended, modified, suspended or terminated by action of the
Board or the Board Affairs Committee, or any successor committee, of the Board;
provided however, that if
5
at the time of any such proposed amendment, modification, suspension or
termination, any member of such committee does not satisfy the requirements
applicable to committee approval contained in regulations of the Securities
and Exchange Commission promulgated under Section 16 of the Securities
Exchange Act of 1934, and applicable interpretations thereof, any such
amendment, modification, suspension or termination must be approved by the
Board. No termination, suspension or modification of the Plan will adversely
affect any benefits to which a Participant would have been entitled under the
Plan if termination of the Participant's service as a Non-Employee Director
had occurred on the day prior to the date such action was taken, unless
agreed to by the Participant.
XII. NO GUARANTEE OF SERVICE
Participation in this Plan does not constitute a guarantee or contract of
service as a Non-Employee Director of the Company.
XIII. NON-ASSIGNABILITY
No right to receive distributions under this Plan will be assignable or
transferable by a Participant except:
- - By will or the laws of descent and distribution.
- - Pursuant to a qualified domestic relations order as defined by the
Internal Revenue Code of 1986, as amended, Title I of the Employee
Retirement Income Security Act, or rules thereunder.
The designation of a beneficiary by a Participant as provided in Section V.D.
does not constitute a transfer.
XIV. CHANGE OF CONTROL
At the time of a Deferral Election, a Participant may also elect to have all
amounts deferred pursuant to this Plan become payable immediately if (i) a third
person, including a "group" as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, becomes the beneficial owner, directly or indirectly, of
25% or more of the combined voting power of the Company's outstanding voting
securities ordinarily having the right to vote for the election of the directors
of the Company, or (ii) individuals who constitute the Board of the Company as
of January 1, 1999 (Incumbent Board) cease for any reason to constitute at least
two-thirds thereof, provided that any person becoming a director subsequent to
said date whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board shall be, for purposes of this clause (ii),
considered as though such person were a member of the Incumbent Board. The value
of a Participant's Deferred Stock Account, Deferred Formula Stock Award Account
and Deferred Stock Option Gain Account for purposes of a distribution under this
Section XIV shall be the Fair Market Value of the Common Stock for a day
selected by the Plan Administrator which occurs not more than seven days prior
to the date payment is made to the Participant pursuant to this Section XIV.
6
XV. GOVERNING LAW
The Plan and all determinations made and actions taken pursuant hereto shall be
governed by and construed in accordance with the law of the State of Delaware.
1999 Deferral Plan for Directors
1/26/99
3/8/00
7