Overview

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Further information on Dividend Equalization Preferred Shares

What are Dividend Equalization Preferred Shares?

Dividend Equalization Preferred Shares, or DEPs, are preferred shares that were issued in connection with the September 1, 2001, merger between First Union and the former Wachovia to shareholders of the former Wachovia who elected to receive the DEPs rather than a one-time cash payment of 48 cents per share. This new class of preferred shares was intended to ensure that a holder received dividends equal to the difference between the last dividend paid by the former Wachovia (equivalent to 30 cents per share) and the common stock dividend that was declared in 2001 by the combined company.

Dividend rights of the DEPs ceased following the fourth quarter of 2003 common stock dividend payment, when Wachovia’s total dividends paid to common stockholders for four consecutive quarters equaled at least $1.20 per common share. Dividend Equalization Preferred Shares (DEPs) are not listed on a stock exchange. Wells Fargo issued DEP shares in the merger to former holders of Wachovia DEPs.

Do Wells Fargo DEP Shares have any value now that the dividend rights have ceased?

The Wells Fargo DEP Shares have little or no economic value. Please contact your broker regarding the market value of your Wells Fargo DEP Shares. The market value is likely to be affected by liquidity issues since very few, if any, brokers are making a market in the Wells Fargo DEP Shares.

Rank. With regard to distributions upon liquidation or dissolution, the Wells Fargo DEP Shares will rank junior to any other class or series of Wells Fargo preferred stock issued in exchange for preferred stock established by the Wachovia board of directors after September 1, 2001, and each class or series of preferred stock established by the Wells Fargo board of directors following the issuance of the Wells Fargo DEP Shares, and will rank senior to the common stock for the $10.00 liquidation preference described below.

Dividends. Holders of Wells Fargo DEP Shares will not be entitled to receive any dividends.

Redemption. The Wells Fargo DEP Shares will not be convertible or exchangeable. The Wells Fargo DEP Shares will be redeemable, in whole or in part, at Wells Fargo ‘s option after December 31, 2021, for an amount equal to $10.00 per Wells Fargo DEP Share (or $0.01 per one one-thousandth of a Wells Fargo DEP Share, which is equivalent to the redemption price for the Wachovia DEP Shares). Wells Fargo must provide no less than 30 and no more than 60 days notice prior to any date specified for redemption of Wells Fargo DEP Shares. If Wells Fargo redeems less than all outstanding Wells Fargo DEP Shares, then Wells Fargo must redeem all shares held by holders of fewer than one-tenth of a share, or by holders that would hold fewer than one-tenth of a share following the redemption.

Rights Upon Liquidation. In the event of liquidation, holders of Wells Fargo DEP Shares will be entitled to receive, before any distribution is made to the holders of common stock or any other junior stock, but after any distribution to any other class or series of Wells Fargo preferred stock issued in exchange for preferred stock established by the Wachovia board of directors after September 1, 2001, an amount equal to $10.00 per Wells Fargo DEP Share. The holders of Wells Fargo DEP Shares will have no other right or claim to any of the remaining assets of the company. Each one one-thousandth of a Wells Fargo DEP Share will have a corresponding liquidation preference of $0.01, which is equivalent to the liquidation preference of the Wachovia DEP Shares.

Voting. Holders of Wells Fargo DEP Shares do not have voting rights, except those required by applicable law or the rules of a securities exchange on which the Wells Fargo DEP Shares may be listed. The Wells Fargo DEP Shares are not currently listed on any securities exchange, but are traded on the over-the-counter Bulletin Board.

1 Non-redeemable at company option; optionally convertible at any time by holder; mandatorily convertible at company option after 3/15/13 if minimum market price. Currently converts to 6.3814 common shares (Wachovia- Wells Fargo merger conversion rate of 0.1991 times 32.0513 common shares noted in prospectus.)