Wells Fargo 2007 Annual Report Download - page 113

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We are authorized to issue 20 million shares of preferred
stock and 4 million shares of preference stock, both without
par value. Preferred shares outstanding rank senior to common
shares both as to dividends and liquidation preference but
have no general voting rights. We have not issued any
preference shares under this authorization.
ESOP CUMULATIVE CONVERTIBLE PREFERRED STOCK All shares of
our ESOP (Employee Stock Ownership Plan) Cumulative
Convertible Preferred Stock (ESOP Preferred Stock) were
issued to a trustee acting on behalf of the Wells Fargo &
Company 401(k) Plan (the 401(k) Plan). Dividends on the
ESOP Preferred Stock are cumulative from the date of initial
issuance and are payable quarterly at annual rates ranging
Note 18: Preferred Stock
from 8.50% to 12.50%, depending upon the year of
issuance. Each share of ESOP Preferred Stock released from
the unallocated reserve of the 401(k) Plan is converted into
shares of our common stock based on the stated value of
the ESOP Preferred Stock and the then current market price
of our common stock. The ESOP Preferred Stock is also
convertible at the option of the holder at any time, unless
previously redeemed. We have the option to redeem the
ESOP Preferred Stock at any time, in whole or in part, at a
redemption price per share equal to the higher of (a) $1,000
per share plus accrued and unpaid dividends or (b) the fair
market value, as defined in the Certificates of Designation
for the ESOP Preferred Stock.
Shares issued Carrying amount
and outstanding (in millions) Adjustable
December 31, December 31, dividend rate
2007 2006 2007 2006 Minimum Maximum
ESOP Preferred Stock (1):
2007 135,124 —$ 135 $ — 10.75% 11.75%
2006 95,866 115,521 96 116 10.75 11.75
2005 73,434 84,284 73 84 9.75 10.75
2004 55,610 65,180 56 65 8.50 9.50
2003 37,043 44,843 37 45 8.50 9.50
2002 25,779 32,874 26 33 10.50 11.50
2001 16,593 22,303 17 22 10.50 11.50
2000 9,094 14,142 914 11.50 12.50
1999 1,261 4,094 14 10.30 11.30
1998 — 563 — 110.75 11.75
Total ESOP Preferred Stock 449,804 383,804 $ 450 $ 384
Unearned ESOP shares (2) $(482) $(411)
(1) Liquidation preference $1,000. At December 31, 2007 and 2006, additional paid-in capital included $32 million and $27 million, respectively, related to preferred stock.
(2) In accordance with the American Institute of Certified Public Accountants (AICPA) Statement of Position 93-6, Employers’ Accounting for Employee Stock Ownership Plans,
we recorded a corresponding charge to unearned ESOP shares in connection with the issuance of the ESOP Preferred Stock. The unearned ESOP shares are reduced as
shares of the ESOP Preferred Stock are committed to be released. For information on dividends paid, see Note 19.
Note 19: Common Stock and Stock Plans
Common Stock
The table to the right presents our reserved, issued and
authorized shares of common stock at December 31, 2007.
Number of shares
Dividend reinvestment and
common stock purchase plans 9,315,728
Director plans 1,022,372(2)
Stock plans (1) 455,861,120(3)
Total shares reserved 466,199,220
Shares issued 3,472,762,050
Shares not reserved 2,061,038,730
Total shares authorized 6,000,000,000
(1) Includes employee option, restricted shares and restricted share rights, 401(k),
profit sharing and compensation deferral plans.
(2) On January 22, 2008, the Board of Directors authorized an additional 100,000
shares of common stock for issuance under the Directors Stock Compensation
and Deferral Plan for compensation deferrals only.
(3) Includes 10,285,112 shares available for future awards at December 31, 2007,
under the PartnerShares Stock Option Plan. No awards have been granted under
this plan since 2002, and as a result of action taken by the Board of Directors
on January 22, 2008, no future awards will be granted under this plan.