Wells Fargo 2012 Annual Report Download - page 227

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 the years shown resulted from the reload
feature.
Year ended December 31,
2012 2011 2010
Per share fair value of options granted $ 2.79 3.78 6.11
Expected volatility 29.2 % 32.7 44.3
Expected dividends $ 0.68 0.32 0.20
Expected term (in years) 0.7 1.0 1.3
Risk-free interest rate 0.1 % 0.2 0.6
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. The ESOP feature enables the 401(k) Plan
to borrow money to purchase our preferred or common stock.
From 1994 through 2012, 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 401(k) Plan to make ESOP loan
payments, the ESOP preferred stock in the 401(k) Plan is
released and converted into our common stock shares.
Dividends on the common stock 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
stock shares, which are allocated to the 401(k) Plan participants
and invested in the Wells Fargo ESOP Fund within the 401(k)
Plan.
The balance of common stock and unreleased preferred stock
held in the Wells Fargo ESOP Fund, the fair value of unreleased
ESOP preferred stock and the dividends on allocated shares of
common stock and unreleased ESOP preferred stock paid to the
401(k) Plan were:
Shares outstanding
December 31,
(in millions, except shares) 2012 2011 2010
Allocated shares (common) 136,821,035 131,046,406 118,901,327
Unreleased shares (preferred) 910,934 858,759 618,382
Fair value of unreleased ESOP preferred shares $ 911 859 618
Dividends paid
Year ended December 31,
2012 2011 2010
Allocated shares (common) $ 117 60 23
Unreleased shares (preferred) 115 95 76
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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