The Notes due May 26, 2026 are senior unsecured debt securities of Wells Fargo & Company and are
part of a series entitled Medium-Term Notes, Series K.
You should read this pricing supplement together with the prospectus supplement dated March 18, 2015 and prospectus dated
March 18, 2015 for additional information about the notes. Information included in this pricing supplement supersedes information in the prospectus supplement and prospectus to the extent it is different from that information. Certain defined
terms used but not defined herein have the meanings set forth in the prospectus supplement.
You may access the prospectus supplement and
prospectus on the SEC website www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):
The notes are not designed for, and may not be a suitable investment for, investors who:
PRS-2
Step-Up Callable Notes
Notes due May 26, 2026
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Pricing Date:
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May 23, 2016.
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Issue Date:
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May 26, 2016. (T+3)
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Original Offering
Price:
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$1,000 per note. References in this pricing supplement to a
note
are to a note with a principal amount of $1,000.
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Stated Maturity
Date:
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May 26, 2026. The notes are subject to redemption by Wells Fargo prior to the
stated maturity date as set forth below under Optional Redemption. The notes are not subject to repayment at the option of any holder of the notes prior to the stated maturity date.
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Payment at
Maturity:
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Unless redeemed prior to stated maturity by Wells Fargo, a holder will be entitled
to receive on the stated maturity date a cash payment in U.S. dollars equal to $1,000 per note, plus any accrued and unpaid interest.
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Interest Payment
Dates:
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Each May 26 and November 26, commencing November 26, 2016 and at stated maturity
or earlier redemption. Except as described below for the first interest period, on each interest payment date, interest will be paid for the period commencing on and including the immediately preceding interest payment date and ending on and
including the day immediately preceding that interest payment date. This period is referred to as an
interest period
. The first interest period will commence on and include the issue date and end on and include November 25, 2016.
Interest payable with respect to an interest period will be computed on the basis of a 360-day year of twelve 30-day months. If a scheduled interest payment date is not a business day, interest will be paid on the next business day, and interest on
that payment will not accrue during the period from and after the scheduled interest payment date.
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Interest Rate:
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The per annum interest rate that will apply during the interest periods are as
follows:
Commencing May 26, 2016 and ending May 25,
2020 2.25%
Commencing May 26, 2020 and ending May 25,
2023 2.75%
Commencing May 26, 2023 and ending May 25,
2025 4.00%
Commencing May 26, 2025 and ending May 25,
2026 6.00%
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Optional
Redemption:
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The notes are redeemable by Wells Fargo, in whole but not in part, on any optional
redemption date occurring on or after May 26, 2020, at 100% of their principal amount plus accrued and unpaid interest to, but excluding, the redemption date. Wells Fargo will give notice to the holders of the notes at least 5 days and not more
than 30 days prior to the date fixed for redemption in the manner described in the accompanying prospectus supplement under Description of NotesRedemption and Repayment.
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Optional
Redemption Dates:
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Quarterly on the 26
th
day of
each February, May, August and November, beginning May 26, 2020 and ending February 26, 2026.
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No Listing:
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The notes will not be listed on any securities exchange or automated quotation
system.
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PRS-3
Step-Up Callable Notes
Notes due May 26, 2026
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Terms of the Notes (Continued)
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Agent:
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Wells Fargo Securities, LLC, a wholly owned subsidiary of Wells Fargo &
Company. The agent may resell the notes to other securities dealers at the original offering price of the notes less a concession not in excess of $12.50 per note. Such securities dealers may include Wells Fargo Advisors, LLC, one of our
affiliates.
The agent or another affiliate of ours
expects to realize hedging profits projected by its proprietary pricing models to the extent it assumes the risks inherent in hedging our obligations under the notes. If any dealer participating in the distribution of the notes or any of its
affiliates conducts hedging activities for us in connection with the notes, that dealer or its affiliate will expect to realize a profit projected by its proprietary pricing models from such hedging activities. Any such projected profit will be in
addition to the discount or concession received in connection with the sale of the notes to you.
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Denominations:
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$1,000 and any integral multiple of $1,000
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CUSIP:
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94986RM65
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Material Tax
Consequences:
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A note will be treated for U.S. federal income tax purposes as a fixed rate
debt instrument that is issued without original issue discount (
OID
). Accordingly, you will generally be required to include interest on the notes in income at the time the interest is paid or accrued, depending on your
method of accounting for tax purposes. Both U.S. and non-U.S. persons considering an investment in a note should read the discussion under United States Federal Tax Considerations below.
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PRS-4
Step-Up Callable Notes
Notes due May 26, 2026
Your investment in the notes will involve risks not associated with an investment in conventional debt
securities. You should carefully consider the risk factors set forth below as well as the other information contained in the prospectus supplement and prospectus, including the documents they incorporate by reference. You should reach an investment
decision only after you have carefully considered with your advisors the suitability of an investment in the notes in light of your particular circumstances.
The Amount Of Interest You Receive May Be Less Than The Return You Could Earn On Other Investments.
Interest rates may change significantly over the term of the notes, and it is impossible to predict what interest rates will be at any point
in the future. Although the interest rate on the notes will increase to preset rates at scheduled intervals during the term of the notes, the interest rate that will apply at any time on the notes may be more or less than prevailing market interest
rates at such time. As a result, the amount of interest you receive on the notes may be less than the return you could earn on other investments.
The
Per Annum Interest Rate Applicable At A Particular Time Will Affect Our Decision To Redeem The Notes.
It is more likely that we will
redeem the notes prior to the stated maturity date during periods when the remaining interest is to accrue on the notes at a rate that is greater than that which we would pay on a conventional fixed-rate non-redeemable note of comparable maturity.
If we redeem the notes prior to the stated maturity date, you may not be able to invest in other notes that yield as much interest as the notes.
The
Step-Up Feature Presents Different Investment Considerations Than Fixed Rate Notes.
The interest rate payable on the notes during
their term will increase from the initial interest rate, subject to our right to redeem the notes. If we do not redeem the notes, the interest rate will step up as described herein. You should not expect to earn the higher stated interest rates
which are applicable only after the first four years of the term of the notes because, unless general interest rates rise significantly, the notes are likely to be redeemed prior to the stated maturity date. When determining whether to invest in the
notes, you should consider, among other things, the overall annual percentage rate of interest to redemption or maturity as compared to other equivalent investment alternatives rather than the higher stated interest rates which are applicable only
after the first four years of the term of the notes.
An Investment In The Notes May Be More Risky Than An Investment In Notes With A Shorter Term.
The notes have a term of ten years, subject to our right to redeem the notes starting on May 26, 2020. By purchasing notes with
a longer term, you will bear greater exposure to fluctuations in interest rates than if you purchased a note with a shorter term. In particular, you may be negatively affected if interest rates begin to rise because the likelihood that we will
redeem your notes will decrease and the interest rate applicable to your notes during a particular interest period may be less than the amount of interest you could earn on other investments available at such time. In addition, if you tried to sell
your notes at such time, the value of your notes in any secondary market transaction would also be adversely affected.
The Notes Are Subject To The
Credit Risk Of Wells Fargo.
The notes are our obligations and are not, either directly or indirectly, an obligation of any third
party, and any amounts payable under the notes are subject to our creditworthiness. As a result, our actual and perceived creditworthiness may affect the value of the notes and, in the event we were to default on our obligations, you may not receive
any amounts owed to you under the terms of the notes.
The Agent Discount, Offering Expenses And Certain Hedging Costs Are Likely To
Adversely Affect The Price At Which You Can Sell Your Notes.
Assuming no changes in market conditions or any other relevant factors,
the price, if any, at which you may be able to sell the notes will likely be lower than the original offering price. The original offering price includes, and any price quoted to you is likely to exclude, the agent discount paid in connection with
the initial distribution, offering expenses and the projected profit that our hedge counterparty (which may be one of our affiliates) expects to realize in consideration for assuming the risks inherent in hedging our obligations under the notes. In
addition, any such price is also likely to reflect dealer discounts, mark-ups and other transaction costs, such as a discount to account for costs associated with establishing or unwinding any related hedge transaction. The price at which the agent
or any other potential buyer may be willing to buy your notes will also be affected by the interest rates provided by the notes and by the market and other conditions discussed in the next risk factor.
PRS-5
Step-Up Callable Notes
Notes due May 26, 2026
The Value Of The Notes Prior To Stated Maturity Will Be Affected By Numerous Factors, Some
Of Which Are Related In Complex Ways.
The value of the notes prior to stated maturity will be affected by interest rates at that time
and a number of other factors, some of which are interrelated in complex ways. The effect of any one factor may be offset or magnified by the effect of another factor. The following factors, among others, are expected to affect the value of the
notes. When we refer to the
value
of your note, we mean the value that you could receive for your note if you are able to sell it in the open market before the stated maturity date.
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Interest Rates
. The value of the notes may be affected by changes in the interest rates in the U.S.
markets.
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Our Creditworthiness
. Actual or anticipated changes in our creditworthiness may affect the value of the
notes. However, because the return on the notes is dependent upon factors in addition to our ability to pay our obligations under the notes, such as whether we exercise our option to redeem the notes, an improvement in our creditworthiness will not
reduce the other investment risks related to the notes.
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The Notes Will Not Be Listed On Any Securities Exchange And
We Do Not Expect A Trading Market For The Notes To Develop.
The notes will not be listed or displayed on any securities exchange or
any automated quotation system. Although the agent and/or its affiliates may purchase the notes from holders, they are not obligated to do so and are not required to make a market for the notes. There can be no assurance that a secondary market will
develop. Because we do not expect that any market makers will participate in a secondary market for the notes, the price at which you may be able to sell your notes is likely to depend on the price, if any, at which the agent is willing to buy your
notes.
If a secondary market does exist, it may be limited. Accordingly, there may be a limited number of buyers if you decide to sell
your notes prior to stated maturity. This may affect the price you receive upon such sale. Consequently, you should be willing to hold the notes to stated maturity.
A Dealer Participating In The Offering Of The Notes Or Its Affiliates May Realize Hedging Profits Projected By Its Proprietary Pricing
Models In Addition To Any Selling Concession, Creating A Further Incentive For The Participating Dealer To Sell The Notes To You.
If
any dealer participating in the offering of the notes, which we refer to as a participating dealer, or any of its affiliates conducts hedging activities for us in connection with the notes, that participating dealer or its affiliates
will expect to realize a projected profit from such hedging activities, if any, and this projected hedging profit will be in addition to the concession that the participating dealer realizes for the sale of the notes to you. This additional
projected profit may create a further incentive for the participating dealer to sell the notes to you.
PRS-6
Step-Up Callable Notes
Notes due May 26, 2026
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United States Federal Tax Considerations
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The following is a discussion of the material U.S. federal income and certain estate tax consequences of the
ownership and disposition of the notes. It applies to you only if you purchase a note for cash in the initial offering at the
issue price
, which is the first price at which a substantial amount of the notes is sold to the public,
and hold the note as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the
Code
). It does not address all of the tax consequences that may be relevant to you in light of your
particular circumstances or if you are an investor subject to special rules, such as:
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a financial institution;
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a regulated investment company;
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a real estate investment trust;
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a tax-exempt entity, including an individual retirement account or Roth IRA;
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a dealer or trader subject to a mark-to-market method of tax accounting with respect to the notes;
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a person holding a note as part of a straddle or conversion transaction or who has entered into a
constructive sale with respect to a note;
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a U.S. holder (as defined below) whose functional currency is not the U.S. dollar; or
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an entity classified as a partnership for U.S. federal income tax purposes.
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If an entity that is classified as a partnership for U.S. federal income tax purposes holds the notes, the U.S. federal income tax treatment of
a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partnership holding the notes or a partner in such a partnership, you should consult your tax adviser as to the particular U.S. federal
tax consequences of holding and disposing of the notes to you.
This discussion is based on the Code, administrative pronouncements,
judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof, changes to any of which subsequent to the date hereof may affect the tax consequences described herein, possibly with retroactive effect. This
discussion does not address the effects of any applicable state, local or non-U.S. tax laws, any alternative minimum tax consequences or the potential application of the Medicare tax on net investment income. You should consult your tax adviser
concerning the application of U.S. federal income and estate tax laws to your particular situation, as well as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
General
In the opinion
of our counsel, Davis Polk & Wardwell LLP, the notes will be treated as fixed rate debt instruments that are issued without OID for U.S. federal income tax purposes.
Tax Consequences to U.S. Holders
This section applies only to U.S. holders. You are a
U.S. holder
if you are a beneficial owner of a note that is, for U.S.
federal income tax purposes:
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a citizen or individual resident of the United States;
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a corporation created or organized in or under the laws of the United States, any state therein or the
District of Columbia; or
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an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
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PRS-7
Step-Up Callable Notes
Notes due May 26, 2026
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United States Federal Tax Considerations (Continued)
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Interest on the Notes.
Stated interest on the notes will generally be taxable to you
as ordinary interest income at the time it accrues or is received in accordance with your method of accounting for U.S. federal income tax purposes.
Under applicable Treasury regulations, we will generally be presumed to exercise our option to redeem the notes if the exercise of the option
would lower the yield on the notes. The yield on the notes would be lowered if we redeemed the notes before the initial increase in the interest rate, and therefore the notes will not be treated as issued with OID. If, contrary to the presumption in
the applicable Treasury regulations, we do not redeem the notes before the initial increase in the interest rate, solely for purposes of calculating OID, the notes will be treated as if they were redeemed and new notes were issued on the presumed
exercise date for the notes principal amount. The same analysis will generally apply to the subsequent increases in the interest rate, which means a note that is deemed reissued will generally be treated as redeemed prior to any subsequent
increase in the interest rate, and therefore as issued without OID. The rules governing short-term debt instruments may apply to a note deemed reissued in conjunction with the final scheduled increase in the interest rate. You should consult your
tax adviser concerning the possible application of these rules.
Sale, Exchange or Retirement of the Notes.
You will recognize
capital gain or loss on the sale, exchange or retirement of a note equal to the difference between the amount received (other than amounts received in respect of accrued interest, which will be treated as described under Interest on the
Notes) and your adjusted tax basis in the note. Your gain or loss generally will be long-term capital gain or loss if at the time of the sale, exchange or retirement you held the notes for more than one year, and short-term capital gain
or loss otherwise. Long-term capital gains recognized by non-corporate U.S. holders are generally subject to taxation at reduced rates. Any capital loss you recognize may be subject to limitations.
Your adjusted tax basis in a note generally will be equal to your original purchase price for the note.
Tax Consequences to Non-U.S. Holders
This section applies only to non-U.S. holders. You are a
non-U.S. holder
if you are a beneficial owner of a note that is,
for U.S. federal income tax purposes:
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an individual who is classified as a nonresident alien;
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a foreign corporation; or
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a foreign estate or trust.
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You are not a non-U.S. holder for purposes of this discussion if you are (i) an individual who is present in the United States for 183
days or more in the taxable year of disposition, (ii) a former citizen or resident of the United States or (iii) a person for whom income or gain in respect of the notes is effectively connected with the conduct of a trade or business in
the United States. If you are or may become such a person during the period in which you hold a note, you should consult your tax adviser regarding the U.S. federal tax consequences of an investment in the notes.
Subject to the discussions below concerning backup withholding and FATCA, you will not be subject to U.S. federal income or withholding tax in
respect of the notes, provided that:
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you do not own, directly or by attribution, ten percent or more of the total combined voting power of all
classes of our stock entitled to vote;
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you are not a controlled foreign corporation related, directly or indirectly, to us through stock ownership;
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you are not a bank receiving interest under Section 881(c)(3)(A) of the Code; and
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you provide to the applicable withholding agent an appropriate Internal Revenue Service
(
IRS
) Form W-8 on which you certify under penalties of perjury that you are not a U.S. person.
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PRS-8
Step-Up Callable Notes
Notes due May 26, 2026
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United States Federal Tax Considerations (Continued)
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U.S. Federal Estate Tax
Individual non-U.S. holders and entities the property of which is potentially includible in such an individuals gross estate for U.S.
federal estate tax purposes (for example, a trust funded by such an individual and with respect to which the individual has retained certain interests or powers) should consider the U.S. federal estate tax implications of an investment in the notes.
Absent an applicable treaty benefit, a note will be treated as U.S.-situs property subject to U.S. federal estate tax if payments on the note if received by the decedent at the time of death would have been subject to U.S. federal withholding tax
(even if the IRS Form W-8 certification requirement described above were satisfied and not taking into account an elimination of such U.S. federal withholding tax due to the application of an income tax treaty). You should consult your tax adviser
regarding the U.S. federal estate tax consequences of an investment in the notes in your particular situation and the availability of benefits provided by an applicable estate tax treaty, if any.
Backup Withholding and Information Reporting
Information returns generally will be filed with the IRS with respect to payments of interest on the notes and may be filed with the IRS in
connection with the payment of proceeds from a sale, exchange or other disposition of the notes. If you fail to provide certain identifying information (such as an accurate taxpayer identification number if you are a U.S. holder) or meet certain
other conditions, you may also be subject to backup withholding at the rate specified in the Code. If you are a non-U.S. holder that provides an appropriate IRS Form W-8, you will generally establish an exemption from backup withholding. Amounts
withheld under the backup withholding rules are not additional taxes and may be refunded or credited against your U.S. federal income tax liability, provided the relevant information is timely furnished to the IRS.
FATCA Legislation
Legislation commonly referred to as
FATCA
generally imposes a withholding tax of 30% on payments to certain non-U.S.
entities (including financial intermediaries) with respect to certain financial instruments, unless various U.S. information reporting and due diligence requirements have been satisfied. An intergovernmental agreement between the United States and
the non-U.S. entitys jurisdiction may modify these requirements. Withholding under these rules (if applicable) applies to payments of amounts treated as interest on the notes and to payments of gross proceeds of the disposition (including upon
retirement) of the notes. Pursuant to published guidance issued by the IRS, withholding on the payment of gross proceeds of a disposition (other than any amount treated as interest) will be required only for dispositions after December 31,
2018. If withholding applies to the notes, we will not be required to pay any additional amounts with respect to amounts withheld. Both U.S. and non-U.S. holders should consult their tax advisers regarding the potential application of FATCA to the
notes.
The preceding discussion constitutes the full opinion of Davis Polk & Wardwell LLP regarding the material U.S. federal
tax consequences of owning and disposing of the notes.
PRS-9
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