Wells Fargo 2011 Annual Report Download - page 213

The following table presents the weighted-average per share
fair value of options granted and the assumptions used, based on
a Black-Scholes option valuation model. Substantially all of the
options granted in 2011 and 2010 resulted from the reload
feature.
Year ended December 31,
2011
2010
2009
Per share fair value of options granted
$
3.78
6.11
3.29
Expected volatility
32.7
%
44.3
53.9
Expected dividends
$
0.32
0.20
0.33
Expected term (in years)
1.0
1.3
4.5
Risk-free interest rate
0.2
%
0.6
1.8
Employee Stock Ownership Plan
The Wells Fargo & Company 401(k) Plan (401(k) Plan) is a
defined contribution plan with an Employee Stock Ownership
Plan (ESOP) feature. Effective December 31, 2009, the Wachovia
Savings Plan, which also had an ESOP feature, merged into the
401(k) Plan, and all of its shares of our common stock were
transferred to the 401(k) Plan. The ESOP feature enables the
401(k) Plan to borrow money to purchase our preferred or
common stock. From 1994 through 2011, with the exception of
2009, we loaned money to the 401(k) Plan to purchase shares of
our ESOP Preferred Stock. As our employer contributions are
made to the 401(k) Plan and are used by the Plan to make ESOP
loan payments, the ESOP Preferred Stock in the 401(k) Plan is
released and converted into our common shares. Dividends on
the common shares allocated as a result of the release and
conversion of the ESOP Preferred Stock reduce retained
earnings and the shares are considered outstanding for
computing earnings per share. Dividends on the unallocated
ESOP Preferred Stock do not reduce retained earnings, and the
shares are not considered to be common stock equivalents for
computing earnings per share. Loan principal and interest
payments are made from our employer contributions to the
401(k) Plan, along with dividends paid on the ESOP Preferred
Stock. With each principal and interest payment, a portion of the
ESOP Preferred Stock is released and converted to common
shares, which are allocated to the 401(k) Plan participants and
invested in the 401(k) Plan’s ESOP Fund.
The balance of common stock held in the ESOP fund, the
dividends on allocated shares of common stock and unreleased
ESOP Preferred Stock paid to the 401(k) Plan and the fair value
of unreleased ESOP Preferred Stock were:
Shares outstanding
December 31,
(in millions, except shares)
2011
2010
2009
Allocated shares (common)
131,046,406
118,901,327
110,157,999
Unreleased shares (preferred)
858,759
618,382
414,019
Unreleased shares (common)
-
-
203,755
Fair value of unreleased ESOP Preferred shares
$
859
618
414
Fair value of unreleased ESOP Common shares
-
-
5
Dividends paid
Year ended December 31,
2011
2010
2009
Allocated shares (common)
$
60
23
45
Unreleased shares (preferred)
95
76
51
Deferred Compensation Plan for Independent Sales
Agents
WF Deferred Compensation Holdings, Inc. is a wholly-owned
subsidiary of the Parent formed solely to sponsor a deferred
compensation plan for independent sales agents who provide
investment, financial and other qualifying services for or with
respect to participating affiliates.
The Nonqualified Deferred Compensation Plan for Independent
Contractors, which became effective January 1, 2002, allows
participants to defer all or part of their eligible compensation
payable to them by a participating affiliate. The Parent has fully
and unconditionally guaranteed the deferred compensation
obligations of WF Deferred Compensation Holdings, Inc. under
the plan.
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