UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): September 27, 2016

 

 

WELLS FARGO & COMPANY

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   001-02979   No. 41-0449260

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

420 Montgomery Street, San Francisco, California 94104

(Address of Principal Executive Offices) (Zip Code)

1-866-249-3302

(Registrant’s Telephone Number, Including Area Code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 27, 2016, the Board of Directors of Wells Fargo & Company (the “Company”) announced certain compensation and employment actions relating to recent legal and regulatory settlements entered into by the Company regarding its retail banking sales practices. As part of these actions, the Company agreed with Carrie Tolstedt, former Senior Executive Vice President (Community Banking), that Ms. Tolstedt would separate from employment effective September 27, 2016, that Ms. Tolstedt would not exercise any outstanding stock options previously awarded by the Company until the completion of the ongoing investigation being conducted by the Company and its Board of Directors and that, at the conclusion of such investigation, the Board of Directors would have the authority to determine the extent to which such options will be forfeited. To ensure that no stock options could be exercised pending this agreement, the Board of Directors issued a precautionary notice of termination for cause, which was rescinded.

The Company’s news release announcing these actions is attached to this report as Exhibit 99.1 and is incorporated by reference into this Item 5.02. The agreement between the Company and Ms. Tolstedt is attached to this report as Exhibit 10(a) and is also incorporated by reference into this Item 5.02.

 

Item 8.01. Other Events.

Federal, state and local government agencies, including the United States Department of Justice, and state attorneys general and prosecutors’ offices, as well as Congressional committees, have undertaken formal or informal inquiries, investigations or examinations relating to certain sales practices of the Company that were the subject of settlements with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Office of the Los Angeles City Attorney announced by the Company on September 8, 2016. The Company has responded, and continues to respond, to requests from a number of the foregoing seeking information regarding these sales practices and the circumstances of the settlements and related matters. A number of lawsuits have also been filed by non-governmental parties seeking damages or other remedies related to these sales practices.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits.

 

  10(a) Letter Agreement, effective September 27, 2016, between the Company and Carrie Tolstedt

 

  99.1 News Release dated September 27, 2016

 

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: September 28, 2016     WELLS FARGO & COMPANY
    By:   /s/ Hope A. Hardison
      Hope A. Hardison
     

Senior Executive Vice President and Chief

Administrative Officer

 

3

EXHIBIT INDEX

 

Exhibit No.

 

Description

  

Location

10(a)   Letter Agreement, effective September 27, 2016, between the Company and Carrie Tolstedt    Filed herewith
99.1   News Release dated September 27, 2016    Filed herewith

 

4

Exhibit 10(a)

WELLS FARGO & COMPANY

Notice of Separation and Agreement Not to Exercise

You are hereby given notice that you will separate from your employment with Wells Fargo & Company (the “Company”) and its affiliates effective at 5 PM on Tuesday, September 27, 2016. By your signature below, you agree that, until your receipt of written notice from Company of the completion of the ongoing investigations being conducted by the Company and its Board of Directors into your conduct and activities as Senior Executive Vice President (Community Banking), you will not exercise any of the stock options awarded to you by the Company, and the Company will not give effect to any purported exercise by you of any such options. You acknowledge and agree that, at the conclusion of such investigation, the Board of Directors of the Company will have the authority to determine the extent to which your stock options will be forfeited.

In consideration of you agreement and acknowledgement set forth in the preceding paragraph, the Company hereby rescinds the Notice of Termination for Cause delivered to you on September 26, 2016.

September 26, 2016

 

Accepted and agreed:
/s/ Carrie L. Tolstedt

Carrie L. Tolstedt

 

WELLS FARGO & COMPANY
By:   /s/ Timothy J. Sloan
  Name:   Timothy J. Sloan
  Title:   President

Exhibit 99.1

 

LOGO   LOGO

Independent Directors of Wells Fargo Conducting Investigation

of Retail Banking Sales Practices and Related Matters

 

  •   Independent Directors Have Retained Shearman & Sterling to Assist in the Investigation

 

  •   John Stumpf to Forfeit Unvested Equity Awards Valued at Approximately $41 Million; Will Forgo Salary During Investigation

 

  •   Carrie Tolstedt Has Left the Company; Will Receive No Severance; Has Forfeited Unvested Equity Awards Valued at Approximately $19 Million; Will Not Exercise Outstanding Options During Investigation

 

  •   Neither Executive Will Receive a Bonus for 2016

NEW YORK, Sept. 27, 2016 – The Independent Directors of the Board of Directors of Wells Fargo & Company (NYSE: WFC) today announced that they have launched an independent investigation into the Company’s retail banking sales practices and related matters. A Special Committee of Independent Directors will lead the investigation, working with the Board’s Human Resources Committee and independent counsel Shearman & Sterling LLP. Chairman and CEO John Stumpf, a member of the Board, has recused himself from all matters related to the Independent Directors’ investigation and deliberations.

The Independent Directors have taken a number of initial steps they believe are appropriate to promote accountability at the Company. They have agreed with Mr. Stumpf that he will forfeit all of his outstanding unvested equity awards, valued at approximately $41 million based on today’s closing share price, and that he will forgo his salary during the pendency of the investigation. In addition, he will not receive a bonus for 2016. Carrie Tolstedt, until recently Head of Community Banking, has left the Company, and the Independent Directors have determined that she will forfeit all of her outstanding unvested equity awards, valued at approximately $19 million based on today’s closing share price. Ms. Tolstedt will not receive a bonus for 2016 and will not be paid severance or receive any retirement enhancements in connection with her separation from the Company. She has also agreed that she will not exercise her outstanding options during the pendency of the investigation. These initial actions will not preclude additional steps being taken with respect to Mr. Stumpf, Ms. Tolstedt or other executives as a consequence of the information developed in the investigation.

Stephen Sanger, Lead Independent Director, said, “We are deeply concerned by these matters, and we are committed to ensuring that all aspects of the Company’s business are conducted with integrity, transparency, and oversight. We will conduct this investigation with the diligence it deserves – and will follow the facts wherever they lead. Our thousands of outstanding team members and millions of loyal customers and shareholders deserve no less. Based on the results of the investigation, the Independent Members of the Board will take such other actions as they collectively deem appropriate, which may include further compensation actions before any additional equity awards vest or bonus decisions are made early next year, clawbacks of compensation already paid out, and other employment-related actions. We will proceed with a sense of urgency but will take the time we need to conduct a thorough investigation. We will then take all appropriate actions to reinforce the right culture and ensure that lessons are learned, misconduct is addressed, and systems and processes are improved so there can be no repetition of similar conduct.”

 

LOGO

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries and territories to support customers who conduct business in the global economy. With approximately 268,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories .

Cautionary Statement About Forward-Looking Statements

This news release contains forward-looking statements about our future financial performance and business. Because forward-looking statements are based on our current expectations and assumptions regarding the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov[sec.gov] .

Media

Sard Verbinnen & Co.

George Sard/Paul Scarpetta/Chris Kittredge

212-687-8080

WellsFargo-svc@sardverb.com

Columbia Clancy | Sard Verbinnen & Co

630 Third Avenue | New York, NY 10017

T: 212.687.8080 | F: 212.687.8344

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