Wells Fargo Finance LLC
Medium–Term Notes, Series A
Fully and Unconditionally Guaranteed by Wells
Fargo & Company
$6,700,000
0.25% Equity Linked Notes due November 1, 2024
Linked to the Common Stock of Bristol-Myers Squibb
Company
Terms
of the Notes
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Issuer:
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Wells
Fargo Finance LLC
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Guarantor:
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Wells
Fargo & Company
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Reopening:
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The
purpose of this pricing supplement is to offer additional notes with an aggregate principal amount of $6,700,000 (the “reopened
notes”). The reopened notes will be a further issuance of, and form a single tranche with, and have the same terms
as the $70,775,000 aggregate principal amount of notes issued by Wells Fargo Finance LLC on October 31, 2019 (the “original
notes”) pursuant to Pricing Supplement No. 218 dated October 29, 2019 to the Prospectus Supplement dated May 18,
2018 and the Prospectus dated April 5, 2019 and the $1,974,000 aggregate principal amount of notes issued by Wells Fargo Finance
LLC on November 1, 2019 (the “first reopened notes,” and together with the original notes, the “existing
notes”) pursuant to Pricing Supplement No. 218/U dated October 30, 2019 to the Prospectus Supplement dated May 18,
2018 and the Prospectus dated April 5, 2019. The reopened notes will have the same CUSIP number as the existing notes, will
trade interchangeably with the existing notes immediately upon settlement and will increase the aggregate principal amount
of the tranche of the notes to $79,449,000. References to the “notes” herein collectively refer to the reopened
notes and the existing notes.
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Underlying
Stock:
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Common
stock of Bristol-Myers Squibb Company (Ticker: BMY). Bristol-Myers Squibb Company, the issuer of the Underlying
Stock (the “Underlying Stock Issuer”), is not involved with this offering and has no obligations relating
to, and does not sponsor or endorse, the notes.
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Reopening
Pricing Date:
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November
7, 2019.
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Reopening
Issue Date:
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November
12, 2019. (T+2)
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Reopening
Offering Price:
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$1,012.50
per reopened note, which includes accrued interest from October 31, 2019, the issue date for the original notes (the “original
issue date”).
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Principal
Amount:
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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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November
1, 2024. If the final determination date is postponed, the stated maturity date will be the later of (i) November 1, 2024
and (ii) three business days after the final determination date as postponed. See “—Final Determination Date”
and “Additional Terms of the Notes—Market Disruption Events” for information about the circumstances that
may result in a postponement of the final determination date. If the stated maturity date is not a business day, the payment
required to be made on the notes on the stated maturity date will be made on the next succeeding business day with the same
force and effect as if it had been made on the stated maturity date. The notes are not subject to redemption by Wells Fargo
Finance LLC or repayment at the option of any holder of the notes prior to the stated maturity date.
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Interest:
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The
notes will bear interest on the principal amount at a rate of 0.25% per annum, payable on each interest payment date.
See “Description of Notes—Interest and Principal Payments” and “—Fixed Rate Notes” in
the prospectus supplement for a discussion of the manner in which interest on the notes will be calculated, accrued and paid.
Because the reopening offering price per reopened note includes accrued interest from the original issue date to the reopening
issue date, the interest payment made on May 1, 2020 on the reopened notes will reflect accrued interest on the principal
amount of the reopened notes from and including the original issue date.
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Interest
Payment Dates:
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Semi-annually
on the 1st day of each May and November, commencing May 1, 2020 and ending on the stated maturity date. If any
scheduled interest payment date is not a business day, we will pay interest on the next business day, but interest on that
payment will not accrue during the period from and after the scheduled interest payment date.
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Maturity
Payment Amount:
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You
will be entitled to receive on the stated maturity date a cash payment per note in U.S. dollars equal to the maturity payment
amount plus the final interest payment. The “maturity payment amount” per note will equal the greater of
the principal amount and final parity.
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Share
Ratio:
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13.37812.
The share ratio will remain constant for the term of the notes, subject to adjustment for certain corporate events relating
to the Underlying Stock Issuer, including changes in dividend payments. See “Additional Terms of the Notes—Adjustment
Events.”
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Terms
of the notes continued on the next page
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On the
date of this pricing supplement, the estimated value of the notes is $1,007.79 per note. The estimated value of the notes was
determined for us by Wells Fargo Securities, LLC using its proprietary pricing models. It is not an indication of actual profit
to us or to Wells Fargo Securities, LLC or any of our other affiliates, nor is it an indication of the price, if any, at which
Wells Fargo Securities, LLC or any other person may be willing to buy the notes from you at any time after issuance. See “Estimated
Value of the Notes” in this pricing supplement.
The notes
have complex features and investing in the notes involves risks not associated with an investment in conventional debt securities.
See “Risk Factors” herein on page PS-7.
The
notes are the unsecured obligations of Wells Fargo Finance LLC, and, accordingly, all payments are subject to credit risk. If
Wells Fargo Finance LLC, as issuer, and Wells Fargo & Company, as guarantor, default on their obligations, you could lose
some or all of your investment. The notes are not savings accounts, deposits or other obligations of a depository institution
and are not insured by the Federal Deposit Insurance Corporation, the Deposit Insurance Fund or any other governmental agency.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these notes or determined
if this pricing supplement or the accompanying prospectus supplement and prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
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Reopening Offering
Price
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Agent Discount(1)
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Proceeds to
Wells Fargo Finance LLC
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Per
Note
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$1,012.50
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—
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$1,012.50
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Total
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$6,783,750.00
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—
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$6,783,750.00
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(1)
Wells Fargo Securities, LLC, an affiliate of Wells Fargo Finance LLC and a wholly owned subsidiary of Wells Fargo & Company,
is the agent for the distribution of the notes and is acting as principal. See “Terms of the Notes—Agent” and
“Estimated Value of the Notes” in this pricing supplement for further information.
Wells Fargo Securities
Terms
of the notes continued from the previous page
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Reopening
Strike Parity:
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$767.9522,
which is equal to the share ratio multiplied by the reopening stock price, and which is less than the reopening offering
price and the principal amount of the notes. Although you will receive at least the principal amount of the
notes at maturity, the reopening offering price is greater than the principal amount. You will not receive any positive return
on the reopened notes in excess of the below-market interest payments unless the Underlying Stock appreciates by more than
approximately 31.84% from the reopening stock price.
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Final Parity:
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The
share ratio multiplied by the final stock price, each as determined on the final determination date.
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Reopening
Stock Price:
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$57.4036
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Final
Stock Price:
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The
closing price of the Underlying Stock on the final determination date.
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Final
Determination Date:
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October
29, 2024. If such day is not a trading day, the final determination date will be postponed to the next succeeding trading
day. The final determination date is also subject to postponement due to the occurrence of a market disruption event. See
“Additional Terms of the Notes—Market Disruption Events.”
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Calculation
Agent:
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Wells
Fargo Securities, LLC
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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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Agent:
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Wells
Fargo Securities, LLC, an affiliate of Wells Fargo Finance LLC and a wholly owned subsidiary of Wells Fargo & Company.
The agent may resell the notes to other securities dealers at the reopening offering price of the notes.
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 any 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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95001HC41
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Additional Information about the Issuer, the
Guarantor and the Notes
You should read this pricing supplement together
with the prospectus supplement dated May 18, 2018 and the prospectus dated April 5, 2019 for additional information about the notes.
When you read the accompanying prospectus supplement, please note that all references in such supplement to the prospectus dated
April 27, 2018, or to any sections therein, should refer instead to the accompanying prospectus dated April 5, 2019 or to the corresponding
sections of such prospectus, as applicable. 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. When we refer to “we,” “us” or “our”
in this pricing supplement, we refer only to Wells Fargo Finance LLC and not to any of its affiliates, including Wells Fargo &
Company. 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 filing for the relevant date on the SEC website):
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Prospectus Supplement dated May 18, 2018:
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https://www.sec.gov/Archives/edgar/data/72971/000119312518167593/d523952d424b2.htm
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Prospectus dated April 5, 2019:
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https://www.sec.gov/Archives/edgar/data/72971/000138713119002551/wfc-424b2_040519.htm
Estimated Value of the Notes
The reopening offering price of each note of $1,012.50
includes certain costs that are borne by you. Because of these costs, the estimated value of the notes on the reopening pricing
date is less than the reopening offering price. The costs included in the reopening offering price relate to selling, structuring,
hedging and issuing the notes, as well as to our funding considerations for debt of this type.
The costs related to selling, structuring, hedging
and issuing the notes include (i) the agent discount (if any), (ii) the projected profit that our hedge counterparty (which may
be one of our affiliates) expects to realize for assuming risks inherent in hedging our obligations under the notes and (iii) hedging
and other costs relating to the offering of the notes.
Our funding considerations take into account the
higher issuance, operational and ongoing management costs of market-linked debt such as the notes as compared to conventional debt
of Wells Fargo & Company of the same maturity, as well as our and our affiliates’ liquidity needs and preferences. Our
funding considerations are reflected in the fact that we determine the economic terms of the notes based on an assumed rate that
is generally lower than our internal funding rate, which is described below and is used in determining the estimated value of the
notes.
If the costs relating to selling, structuring,
hedging and issuing the notes were lower, or if the assumed rate we use to determine the economic terms of the notes were higher,
the economic terms of the notes would be more favorable to you and the estimated value would be higher. The estimated value of
the notes as of the reopening pricing date is set forth on the cover page of this pricing supplement.
Determining the estimated value
Our affiliate, Wells Fargo Securities, LLC (“WFS”),
calculated the estimated value of the notes set forth on the cover page of this pricing supplement based on its proprietary pricing
models. Based on these pricing models and related market inputs and assumptions referred to in this section below, WFS determined
an estimated value for the notes by estimating the value of the combination of hypothetical financial instruments that would replicate
the payout on the notes, which combination consists of a non-interest bearing, fixed-income bond (the “debt component”)
and one or more derivative instruments underlying the economic terms of the notes (the “derivative component”).
The estimated value of the debt component is based
on an internal funding rate that reflects, among other things, our and our affiliates’ view of the funding value of the notes.
This rate is used for purposes of determining the estimated value of the notes since we expect secondary market prices, if any,
for the notes that are provided by WFS or any of its affiliates to generally reflect such rate. WFS determined the estimated value
of the notes based on this internal funding rate, rather than the assumed rate that we use to determine the economic terms of the
notes, for the same reason.
WFS calculated the estimated value of the derivative
component based on a proprietary derivative-pricing model, which generated a theoretical price for the derivative instruments that
constitute the derivative component based on various inputs, including the “derivative component factors” identified
in “Risk Factors—The Value Of The Notes Prior To Stated Maturity Will Be Affected By Numerous Factors, Some Of Which
Are Related In Complex Ways.” These inputs may be market-observable or may be based on assumptions made by WFS in its discretion.
The estimated value of the notes determined by
WFS is subject to important limitations. See “Risk Factors—The Estimated Value Of The Notes Is Determined By Our Affiliate’s
Pricing Models, Which May Differ From Those Of Other Dealers” and “—Our And The Guarantor’s Economic Interests
And Those Of Any Dealer Participating In The Offering Are Potentially Adverse To Your Interests.”
Valuation of the notes after issuance
The estimated value of the notes is not an indication
of the price, if any, at which WFS or any other person may be willing to buy the notes from you in the secondary market. The price,
if any, at which WFS or any of its affiliates may purchase the notes in the secondary market will be based upon WFS’s proprietary
pricing models and will fluctuate over the term of the notes due to changes in market conditions and other relevant factors. However,
absent changes in these market conditions and other relevant factors, except as otherwise described in the following paragraph,
any secondary market price will be lower than the estimated value on the reopening pricing date because the secondary market price
will be reduced by a bid-offer spread, which may vary depending on the aggregate principal amount of the notes to be purchased
in the secondary market transaction, and the expected cost of unwinding any related hedging transactions. Accordingly, unless market
conditions and other relevant factors change significantly in your favor, any secondary market price for the notes is likely to
be less than the reopening offering price.
If WFS or any of its affiliates makes a secondary
market in the reopened notes at any time up to the issue date for the reopened notes or during the period ending 5 months after
the original issue date, the secondary market price offered by WFS or any of its affiliates will be increased by an amount reflecting
a portion of the costs associated with selling, structuring, hedging and issuing the notes that are included in the reopening offering
price. Because this portion of the costs is not fully deducted upon issuance, any secondary market price offered by WFS or any
of its affiliates during this period will be higher than it would be if it were based solely on WFS’s proprietary pricing
models less the bid-offer spread and hedging unwind costs described above. The amount of this increase in the secondary market
price will decline steadily to zero over the period referred to above. If you hold the reopened notes through an account at WFS
or any of its affiliates, we expect that this increase will also be reflected in the value indicated for the reopened notes on
your brokerage account statement.
If WFS or any of its affiliates makes a secondary
market in the notes, WFS expects to provide those secondary market prices to any unaffiliated broker-dealers through which the
notes are held and to commercial pricing vendors. If you hold your notes through an account at a broker-dealer other than WFS or
any of its affiliates, that broker-dealer may obtain market prices for the notes from WFS
(directly or indirectly), but could also
obtain such market prices from other sources, and may be willing to purchase the notes at any given time at a price that differs
from the price at which WFS or any of its affiliates is willing to purchase the notes. As a result, if you hold your notes through
an account at a broker-dealer other than WFS or any of its affiliates, the value of the notes on your brokerage account statement
may be different than if you held your notes at WFS or any of its affiliates.
The notes will not be listed or displayed on
any securities exchange or any automated quotation system. Although WFS and/or its affiliates may buy the notes from investors,
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.
Investor Considerations
We have designed the notes for investors who:
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seek an investment with semi-annual interest payments
at a rate of 0.25% per annum;
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seek the opportunity to participate in a portion
of the appreciation of the Underlying Stock if, and only to the extent that, final parity exceeds the reopening offering price;
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understand they will not receive any positive
return on the reopened notes in excess of the below-market interest payments unless the Underlying Stock appreciates by more than
approximately 31.84% from the reopening stock price;
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are willing to forgo dividends on the Underlying
Stock; and
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are willing to hold the notes to maturity.
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The notes are not designed for, and may not be
a suitable investment for, investors who:
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seek interest payments at a market rate;
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seek a liquid investment or are unable or unwilling
to hold the notes to maturity;
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seek certainty of receiving a positive return
on their investment;
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are unwilling to purchase notes with an estimated
value as of the reopening pricing date that is lower than the reopening offering price, as set forth on the cover page;
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are unwilling to accept the risk of exposure to
the Underlying Stock;
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are unwilling to accept the credit risk of Wells
Fargo Finance LLC and Wells Fargo & Company; or
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prefer the lower risk of conventional fixed income
investments with comparable maturities issued by companies with comparable credit ratings.
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Risk Factors
The notes have complex features and investing
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 this pricing supplement and the accompanying prospectus
supplement and prospectus, including the documents they incorporate by reference. As described in more detail below, the value
of the notes may vary considerably before the stated maturity date due to events that are difficult to predict and are beyond our
control. 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.
You Will Incur A Loss On Your Investment In
The Reopened Notes Unless The Underlying Stock Appreciates Significantly From Its Reopening Stock Price.
Although you will receive at least the principal
amount of the reopened notes at maturity, the reopening offering price of the reopened notes is greater than the principal amount.
Accordingly, you will incur a loss on your investment in the reopened notes unless the value of the Underlying Stock appreciates
from the reopening stock price to such a degree that final parity exceeds not only the principal amount but also the reopening
offering price.
On the reopening pricing date, reopening strike
parity is $767.9522, which is significantly less than the reopening offering price and the principal amount of the reopened notes.
The Underlying Stock must appreciate by at least approximately 31.84% from the reopening stock price in order for final parity
to be at least equal to the reopening offering price. If the Underlying Stock has not appreciated by more than that amount on the
final determination date, you will incur a loss on your investment in the reopened notes.
The reopened notes accrue interest from the original
issue date at 0.25% per annum on the principal amount. This interest rate is lower than the interest rate that we would pay on
standard non-callable debt securities maturing at the same time as these reopened notes. Even if the Underlying Stock appreciates
sufficiently to enable you to earn a positive return on the reopened notes in excess of the below-market interest payments, your
effective yield may nevertheless be less than the yield you would earn if you bought a standard senior debt security of Wells Fargo
Finance LLC with the same issue price and the same maturity date. Your investment may not reflect the full opportunity cost to
you when you take into account factors that affect the time value of money.
There Is No Assurance That You Will Receive
The Principal Amount Unless You Hold Your Notes To Maturity.
You will be entitled under the notes to receive
the principal amount only if you hold your notes to maturity. If you sell your notes at any time prior to maturity, you may receive
significantly less than the principal amount of your notes. In addition, because the reopening offering price is greater than the
principal amount, a maturity payment amount equal to the principal amount will represent an effective loss on your investment (excluding
interest payments).
The Reopened Notes Offer The Opportunity To
Participate In The Appreciation Of The Underlying Stock Only To The Extent That Final Parity Exceeds The Reopening Offering Price.
The reopened notes offer the opportunity to participate
in the appreciation of the Underlying Stock only to the extent that final parity exceeds the reopening offering price. Because
reopening strike parity on the reopening pricing date is significantly less than the reopening offering price, the Underlying Stock
must appreciate significantly before you will participate in any appreciation of the Underlying Stock, and then you will participate
in the appreciation of the Underlying Stock only to the extent that final parity exceeds the reopening offering price amount.
If the Underlying Stock appreciates, but not sufficiently so that final parity exceeds the reopening offering price, you will not
receive any positive return on the reopened notes in excess of the below-market interest payments, even though a direct investment
in the Underlying Stock would have resulted in a positive return.
Even in scenarios where the Underlying Stock depreciates
moderately, the notes may underperform a direct investment in the Underlying Stock because, as an investor in the notes, you will
not receive the dividends paid on the Underlying Stock.
The Notes Are Subject To Credit Risk.
The notes are our obligations, are fully and unconditionally
guaranteed by the Guarantor and are not, either directly or indirectly, an obligation of any other third party. Any amounts payable
under the notes are subject to creditworthiness and you will have no ability to pursue the Underlying Stock for payment. As a result,
our and the Guarantor’s actual and perceived creditworthiness may affect the value of the notes and, in the event we and
the Guarantor were to default on the obligations under the notes and the guarantee, you may not receive any amounts owed to you
under the terms of the notes.
As A Finance Subsidiary, We Have No Independent
Operations And Will Have No Independent Assets.
As a finance subsidiary, we have no independent
operations beyond the issuance and administration of our securities and will have no independent assets available for distributions
to the holders of our securities, including the notes, if they make claims in respect of such securities in a bankruptcy, resolution
or similar proceeding. Accordingly, any recoveries by such holders will be limited to those available under the related guarantee
by the Guarantor and that guarantee will rank pari passu with all other unsecured, unsubordinated obligations of the
Guarantor. Holders will have recourse only to a single claim against the Guarantor and its assets under the guarantee. Holders
of the notes should accordingly assume that in any such proceedings they would not have any priority
over and should be treated pari
passu with the claims of other unsecured, unsubordinated creditors of the Guarantor, including holders of unsecured, unsubordinated
debt securities issued by the Guarantor.
Holders Of The Notes Have Limited Rights Of
Acceleration.
Payment of principal on the notes may be accelerated
only in the case of payment defaults that continue for a period of 30 days, certain events of bankruptcy or insolvency relating
to Wells Fargo Finance LLC only, whether voluntary or involuntary, certain situations under which the guarantee ceases to be in
full force and effect or if the Guarantor denies or disaffirms its obligations under the guarantee. If you purchase the notes,
you will have no right to accelerate the payment of principal on the notes if we fail in the performance of any of our obligations
under the notes, other than the obligations to pay principal and interest on the notes. See “Description of Debt Securities
of Wells Fargo Finance LLC—Events of Default and Covenant Breaches” in the accompanying prospectus.
Holders Of The Notes Could Be At Greater Risk
For Being Structurally Subordinated If Either We Or The Guarantor Convey, Transfer Or Lease All Or Substantially All Of Our Or
Its Assets To One Or More Of The Guarantor’s Subsidiaries.
Under the indenture, we may convey, transfer or
lease all or substantially all of our assets to one or more of the Guarantor’s subsidiaries. Similarly, the Guarantor may
convey, transfer or lease all or substantially all of its assets to one or more of its subsidiaries. In either case, third-party
creditors of the Guarantor’s subsidiaries would have additional assets from which to recover on their claims while holders
of the notes would be structurally subordinated to creditors of the Guarantor’s subsidiaries with respect to such assets.
See “Description of Debt Securities of Wells Fargo Finance LLC—Consolidation, Merger or Sale” in the accompanying
prospectus.
The Notes Will Not Have The Benefit Of Any Cross-Default
Or Cross-Acceleration With Other Indebtedness Of The Guarantor; Events Of Bankruptcy, Insolvency, Receivership Or Liquidation Relating
To The Guarantor And Failure By The Guarantor To Perform Any Of Its Covenants Or Warranties (Other Than A Payment Default Under
The Guarantee) Will Not Constitute An Event Of Default With Respect To The Notes.
The notes will not have the benefit of any cross-default
or cross-acceleration with other indebtedness of the Guarantor. In addition, events of bankruptcy, insolvency, receivership or
liquidation relating to the Guarantor and failure by the Guarantor to perform any of its covenants or warranties (other than a
payment default under the guarantee) will not constitute an event of default with respect to the notes.
The Estimated Value Of The Notes On The Reopening
Pricing Date, Based On WFS’s Proprietary Pricing Models, Is Less Than The Reopening Offering Price.
The reopening offering price of the reopened notes
includes certain costs that are borne by you. Because of these costs, the estimated value of the notes on the reopening pricing
date is less than the reopening offering price. The costs included in the reopening offering price relate to selling, structuring,
hedging and issuing the notes, as well as to our funding considerations for debt of this type. The costs related to selling, structuring,
hedging and issuing the notes include (i) the agent discount (if any), (ii) the projected profit that our hedge counterparty (which
may be one of our affiliates) expects to realize for assuming risks inherent in hedging our obligations under the notes and (iii)
hedging and other costs relating to the offering of the notes. Our funding considerations are reflected in the fact that we determine
the economic terms of the notes based on an assumed rate that is generally lower than our internal funding rate, which is described
above under “Estimated Value of the Notes—Determining the estimated value.” If the costs relating to selling,
structuring, hedging and issuing the notes were lower, or if the assumed rate we use to determine the economic terms of the notes
were higher, the economic terms of the notes would be more favorable to you and the estimated value would be higher.
The Estimated Value Of The Notes Is Determined
By Our Affiliate’s Pricing Models, Which May Differ From Those Of Other Dealers.
The estimated value of the notes was determined
for us by WFS using its proprietary pricing models and related market inputs and assumptions referred to above under “Estimated
Value of the Notes—Determining the estimated value.” Certain inputs to these models may be determined by WFS in its
discretion. WFS’s views on these inputs may differ from other dealers’ views, and WFS’s estimated value of the
notes may be higher, and perhaps materially higher, than the estimated value of the notes that would be determined by other dealers
in the market. WFS’s models and its inputs and related assumptions may prove to be wrong and therefore not an accurate reflection
of the value of the notes.
The Estimated Value Of The Notes Is Not An Indication
Of The Price, If Any, At Which WFS Or Any Other Person May Be Willing To Buy The Notes From You In The Secondary Market.
The price, if any, at which WFS or any of its affiliates
may purchase the notes in the secondary market will be based on WFS’s proprietary pricing models and will fluctuate over
the term of the notes as a result of changes in the market and other factors described in the next risk factor. Any such secondary
market price for the notes will also be reduced by a bid-offer spread, which may vary depending on the aggregate principal amount
of the notes to be purchased in the secondary market transaction, and the expected cost of unwinding any related hedging transactions.
Unless the factors described in the next risk factor change significantly in your favor, any such secondary market price for the
notes is likely to be less than the reopening offering price.
If WFS or any of its affiliates makes a secondary
market in the reopened notes at any time up to the issue date for the reopened notes or during the period ending 5 months after
the original issue date, the secondary market price offered by WFS or any of its affiliates will be increased by an amount reflecting
a portion of the costs associated with selling, structuring, hedging and issuing the notes that are included in the reopening offering
price. Because this portion of the costs is not fully deducted upon issuance, any secondary market price offered by WFS or any
of its affiliates during this period will be higher than it would be if it were based solely on WFS’s proprietary pricing
models less the bid-offer spread and hedging unwind costs described above. The amount of this increase in the secondary market
price will decline steadily to zero over the period referred to above. If you hold the reopened notes through an account at WFS
or any of its affiliates, we expect that this increase will also be reflected in the value indicated for the reopened notes on
your brokerage account statement. If you hold your notes through an account at a broker-dealer other than WFS or any of its affiliates,
the value of the notes on your brokerage account statement may be different than if you held your notes at WFS or any of its affiliates,
as discussed above under “Estimated Value of the Notes—Valuation of the notes after issuance.”
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 the then-current price of the Underlying Stock, 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, which we refer to as the “derivative component factors,” are expected to affect
the value of the notes. When we refer to the “value” of your note, we mean the value 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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Performance of the Underlying
Stock. The value of the notes prior to maturity will depend substantially on the then-current price of the Underlying Stock.
The price at which you may be able to sell the notes before stated maturity may be at a discount, which could be substantial, from
their reopening offering price, if the price of the Underlying Stock at such time is less than, equal to or not sufficiently above
its starting price.
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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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Volatility Of The Underlying
Stock. Volatility is the term used to describe the size and frequency of market fluctuations. The value of the notes may be
affected if the volatility of the Underlying Stock changes.
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Time Remaining To Maturity.
The value of the notes at any given time prior to maturity will likely be different from that which would be expected based on
the then-current price of the Underlying Stock. This difference will most likely reflect a discount due to expectations and uncertainty
concerning the price of the Underlying Stock during the period of time still remaining to the stated maturity date.
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Dividend Yield On The Underlying
Stocks. The value of the notes may be affected by the dividend yield on the Underlying Stock.
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In addition to the derivative component factors,
the value of the notes will be affected by actual or anticipated changes in our and the Guarantor’s creditworthiness. You
should understand that the impact of one of the factors specified above, such as a change in interest rates, may offset some or
all of any change in the value of the notes attributable to another factor, such as a change in the price the Underlying Stock.
Because numerous factors are expected to affect the value of the notes, changes in the price of the Underlying Stock may not result
in a comparable change in the value of the notes.
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.
Historical Performance Of The Underlying Stock
Should Not Be Taken As An Indication Of Its Future Performance During The Term Of The Notes.
It is impossible to predict whether the market
price of the Underlying Stock will rise or fall. The Underlying Stock has performed differently in the past and is expected to
perform differently in the future. The market price of the Underlying Stock will be influenced by complex and interrelated political,
economic, financial and other factors that can affect the Underlying Stock Issuer. Accordingly, any historical performance of the
Underlying Stock does not provide an indication of the future performance of the Underlying Stock. See “The Underlying Stock”
for a description of the Underlying Stock Issuer and historical data on the Underlying Stock.
You Will Not Have Any Shareholder Rights.
Investing in the notes is not equivalent to investing
in the Underlying Stock. As an investor in the notes, you will not have voting rights or rights to receive dividends or other distributions
or any other rights with respect to the Underlying Stock.
The Notes May Become Linked To The Common Stock
Of A Company Other Than The Original Underlying Stock Issuer.
Following certain corporate events relating to
the Underlying Stock, such as a stock-for-stock merger where the Underlying Stock Issuer is not the surviving entity, the shares
of a successor corporation to the Underlying Stock Issuer will be substituted for the Underlying Stock for all purposes of the
notes. Following certain other corporate events relating to the Underlying Stock in which holders of the Underlying Stock would
receive all of their consideration in cash and the surviving entity has no marketable securities outstanding or there is no surviving
entity (including, but not limited to, a leveraged buyout or other going private transaction involving the Underlying Stock Issuer,
or a liquidation of the Underlying Stock Issuer), the common stock of another company in the same industry group as the Underlying
Stock Issuer will be substituted for the Underlying Stock for all purposes of the notes. In the event of such a corporate event,
the equity-linked nature of the notes would be significantly altered. We describe the specific corporate events that can lead to
these adjustments and the procedures for selecting those other reference stocks in the section entitled “Additional Terms
of the Notes—Adjustment Events.” The occurrence of such corporate events and the consequent adjustments may materially
and adversely affect the market price of the notes.
We Cannot Control Actions By The Underlying
Stock Issuer.
Actions by the Underlying Stock Issuer may have
an adverse effect on the price of its stock and the value of the notes. Neither we nor the Guarantor are affiliated with the Underlying
Stock Issuer. The Underlying Stock Issuer is not involved in the offering of the notes and has no obligations with respect to the
notes, including any obligation to take our interests or your interests into consideration for any reason. The Underlying Stock
Issuer will not receive any of the proceeds of the offering of the notes made hereby and is not responsible for, and has not participated
in, the determination of the timing of, prices for, or quantities of, the notes to be issued. The Underlying Stock Issuer is not
involved with the administration, marketing or trading of the notes and has no obligations with respect to the amounts payable
on the notes.
We And Our Affiliates Have No Affiliation With
The Underlying Stock Issuer And Have Not Independently Verified Its Public Disclosure Of Information.
We and our affiliates are not affiliated in any
way with the Underlying Stock Issuer. This pricing supplement relates only to the notes and does not relate to the Underlying Stock.
The material provided herein concerning the Underlying Stock Issuer is derived from publicly available documents concerning such
company without independent verification. Neither we nor the agent has participated in the preparation of any of those documents
or made any “due diligence” investigation or any inquiry of the Underlying Stock Issuer. Furthermore, neither we nor
the agent knows whether the Underlying Stock Issuer has disclosed all events occurring before the date of this pricing supplement—including
events that could affect the accuracy or completeness of the publicly available documents referred to above. Subsequent disclosure
of any event of this kind or the disclosure of or failure to disclose material future events concerning the Underlying Stock Issuer
could affect the value of the notes and the amount payable on the notes. You, as an investor in the notes, should make your own
investigation into the Underlying Stock Issuer.
In addition, there can be no assurance that the
Underlying Stock Issuer will continue to be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and will distribute any reports, proxy statements, and other information required thereby
to its shareholders. In the event that the Underlying Stock Issuer ceases to be subject to such reporting requirements and the
notes continue to be outstanding, pricing information for the notes may be more difficult to obtain and the value and liquidity
of the notes may be adversely affected. Neither we nor any agent is responsible for the public disclosure of information by the
Underlying Stock Issuer, whether contained in filings with the Securities and Exchange Commission (the “SEC”)
or otherwise.
You Have Limited Antidilution Protection.
The calculation agent will, in its sole discretion,
adjust the share ratio for certain events affecting the Underlying Stock, such as stock splits and stock dividends, and certain
other corporate actions involving the Underlying Stock Issuer, such as mergers. However, the calculation agent is not required
to make an adjustment for every corporate event that can affect the Underlying Stock. For example, the calculation agent is not
required to make any adjustments to the share ratio if the Underlying Stock Issuer or anyone else makes a partial tender or partial
exchange offer for the Underlying Stock. Consequently, this could affect the market value of the notes. See “Additional Terms
of the Notes— Adjustment Events” for a description of the general circumstances in which the calculation agent will
make adjustments to the share ratio.
The Stated Maturity Date May Be Postponed If
The Final Determination Date Is Postponed.
The final determination date will be postponed
if the originally scheduled final determination date is not a trading day or if the calculation agent determines that a market
disruption event has occurred or is continuing on the final determination date. If such a postponement occurs, the stated maturity
date will be the later of (i) the initial stated maturity date and (ii) three business days after the final determination
date as postponed.
Our And The Guarantor’s Economic Interests
And Those Of Any Dealer Participating In The Offering Are Potentially Adverse To Your Interests.
You should be aware of the following ways in which
our and the Guarantor’s economic interests and those of any dealer participating in the distribution of the notes, which
we refer to as a “participating dealer,” are potentially adverse to your interests as an investor in the
notes.
In engaging in certain of the activities described below, our affiliates or any participating dealer or its affiliates may take
actions that may adversely affect the value of and your return on the notes, and in so doing they will have no obligation to consider
your interests as an investor in the notes. Our affiliates or any participating dealer or its affiliates may realize a profit from
these activities even if investors do not receive a favorable investment return on the notes.
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The calculation agent is
our affiliate and may be required to make discretionary judgments that affect the return you receive on the notes. WFS,
which is our affiliate, will be the calculation agent for the notes. As calculation agent, WFS will determine the closing price
of the Underlying Stock on any applicable date of determination and may be required to make other determinations that affect the
return you receive on the notes. In making these determinations, the calculation agent may be required to make discretionary judgments,
including determining whether a market disruption event has occurred on the final determination date, which may result in postponement
of the final determination date; determining the closing price of the Underlying Stock if the final determination date is postponed
to the last day to which it may be postponed and such day is not a trading day or a market disruption event occurs on that day;
determining the closing price of the Underlying Stock if it is not otherwise available; adjusting the share ratio in certain circumstances;
and if a replacement stock event occurs, selecting a replacement stock to be substituted for the Underlying Stock and making certain
other adjustments to the terms of the notes. In making these discretionary judgments, the fact that WFS is our affiliate may cause
it to have economic interests that are adverse to your interests as an investor in the notes, and WFS’s determinations as
calculation agent may adversely affect your return on the notes.
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The estimated value of the
notes was calculated by our affiliate and is therefore not an independent third-party valuation. WFS calculated the estimated
value of the notes set forth on the cover page of this pricing supplement, which involved discretionary judgments by WFS, as described
under “Risk Factors—The Estimated Value Of The Notes Is Determined By Our Affiliate’s Pricing Models, Which May
Differ From Those Of Other Dealers” above. Accordingly, the estimated value of the notes set forth on the cover page of this
pricing supplement is not an independent third-party valuation.
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Research reports by our
affiliates or any participating dealer or its affiliates may be inconsistent with an investment in the notes and may adversely
affect the price of the Underlying Stock. Our affiliates or any participating dealer or its affiliates may, at present
or in the future, publish research reports on the Underlying Stock. This research is modified from time to time without notice
and may, at present or in the future, express opinions or provide recommendations that are inconsistent with purchasing or holding
the notes. Any research reports on the Underlying Stock could adversely affect the price of the Underlying Stock and, therefore,
could adversely affect the value of and your return on the notes. You are encouraged to derive information concerning the Underlying
Stock from multiple sources and should not rely on the views expressed by us or our affiliates or any participating dealer or its
affiliates. In addition, any research reports on the Underlying Stock published on or prior to the reopening pricing date could
result in an increase in the price of the Underlying Stock on the reopening pricing date, which would adversely affect investors
in the reopened notes by increasing the price the Underlying Stock must attain in the future in order for you to receive a positive
return on the reopening offering price of the reopened notes.
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Business activities of our
affiliates or any participating dealer or its affiliates with the Underlying Stock Issuer may adversely affect the price of the
Underlying Stock. Our affiliates or any participating dealer or its affiliates may, at present or in the future, engage
in business with the Underlying Stock Issuer, including making loans to the Underlying Stock Issuer (including exercising creditors’
remedies with respect to such loans), making equity investments in the Underlying Stock Issuer or providing investment banking,
asset management or other advisory services to those Underlying Stock Issuer. These business activities could adversely affect
the price of the Underlying Stock and, therefore, could adversely affect the value of and your return on the notes. In addition,
in the course of these business activities, our affiliates or any participating dealer or its affiliates may acquire non-public
information about the Underlying Stock Issuer. If our affiliates or any participating dealer or its affiliates do acquire such
non-public information, we and they are not obligated to disclose such non-public information to you.
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Hedging activities by our
affiliates or any participating dealer or its affiliates may adversely affect the price of the Underlying Stock. We expect
to hedge our obligations under the notes through one or more hedge counterparties, which may include our affiliates or any participating
dealer or its affiliates. Pursuant to such hedging activities, our hedge counterparties may acquire the Underlying Stock or listed
or over-the-counter derivative or synthetic instruments related to the Underlying Stock. Depending on, among other things, future
market conditions, the aggregate amount and the composition of such positions are likely to vary over time. To the extent that
our hedge counterparties have a long hedge position in the Underlying Stock, or derivative or synthetic instruments related to
the Underlying Stock, they may liquidate a portion of such holdings at or about the time of the final determination date or at
or about the time of a change in the Underlying Stock. These hedging activities could potentially adversely affect the price of
the Underlying Stock and, therefore, could adversely affect the value of and your return on the notes.
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Trading activities by our
affiliates or any participating dealer or its affiliates may adversely affect the price of the Underlying Stock. Our affiliates
or any participating dealer or its affiliates may engage in trading in the Underlying Stock and other instruments relating to the
Underlying Stock on a regular basis as part of their general broker-dealer and other businesses. Any of these trading activities
could potentially adversely affect the price of the Underlying Stock and, therefore, could adversely affect the value of and your
return on the notes.
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A participating dealer 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 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 a participating dealer receives a concession for the sale of the notes to you,
this projected hedging profit will be in addition to the concession, creating a further incentive for the participating dealer
to sell the notes to you.
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Additional Terms of the Notes
Wells Fargo Finance LLC will issue the notes as
part of a series of senior unsecured debt securities entitled “Medium-Term Notes, Series A,” which is more fully described
in the prospectus supplement. Information included in this pricing supplement supersedes information in the prospectus supplement
and prospectus to the extent that it is different from that information.
Certain Definitions
A “trading day” means a day,
as determined by the calculation agent, on which trading is generally conducted on the principal trading market for the Underlying
Stock (as determined by the calculation agent, in its sole discretion), the Chicago Mercantile Exchange and the Chicago Board Options
Exchange and in the over-the-counter market for equity securities in the United States.
The “closing price” for one
share of the Underlying Stock (or one unit of any other security for which a closing price must be determined) on any trading day
means:
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if the Underlying Stock (or any
such other security) is listed or admitted to trading on a national securities exchange, the official closing price on such day
published by the principal United States securities exchange registered under the Exchange Act on which the Underlying Stock (or
any such other security) is listed or admitted to trading; or
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if the Underlying Stock (or any
such other security) is not listed or admitted to trading on any national securities exchange but is included in the OTC Bulletin
Board Service (the “OTC Bulletin Board”) operated by the Financial Industry Regulatory Authority, Inc. (“FINRA”),
the last reported sale price of the principal trading session on the OTC Bulletin Board on such day.
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If the Underlying Stock (or any such other security)
is listed or admitted to trading on any national securities exchange but the official closing price is not available pursuant to
the preceding sentence, then the closing price for one share of the Underlying Stock (or one unit of any such other security) on
any trading day will mean the last reported sale price of the principal trading session on the over-the-counter market as reported
on the OTC Bulletin Board on such day.
If the official closing price or the last reported
sale price, as applicable, for the Underlying Stock (or any such other security) is not available pursuant to either of the two
preceding sentences, then the closing price per share for any trading day will be the mean, as determined by the calculation agent,
of the bid price for the Underlying Stock (or any such other security) obtained from as many recognized dealers in such security,
but not exceeding three, as will make such bid prices available to the calculation agent. Bids of WFS or any of its affiliates
may be included in the calculation of such mean, but only to the extent that any such bid is the highest of the bids obtained.
The term “OTC Bulletin Board Service” will include any successor service thereto or, if the OTC Bulletin Board
Service is discontinued and there is no successor service thereto, the OTC Reporting Facility operated by FINRA.
Calculation Agent
Wells Fargo Securities, LLC, one of our affiliates
and a wholly owned subsidiary of Wells Fargo & Company, will act as calculation agent for the notes and may appoint agents
to assist it in the performance of its duties. Pursuant to a calculation agent agreement, we may appoint a different calculation
agent without your consent and without notifying you.
The calculation agent will determine the maturity
payment amount. In addition, the calculation agent will, among other things:
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determine whether a market disruption
event has occurred;
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determine the closing price of
the Underlying Stock under certain circumstances;
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determine if adjustments are required
to the closing price or share ratio of the Underlying Stock under various circumstances; and
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under certain circumstances, select
a replacement stock for the Underlying Stock.
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All determinations made by the calculation agent
will be at the sole discretion of the calculation agent and, in the absence of manifest error, will be conclusive for all purposes
and binding on us and you. The calculation agent will have no liability for its determinations.
Market Disruption Events
A “market disruption event”
means the occurrence or existence of any of the following events:
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a suspension, absence or material
limitation of trading in the Underlying Stock on its primary market for more than two hours of trading or during the one-half hour
before the close of trading in that market, as determined by the calculation agent in its sole discretion;
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a suspension, absence or material
limitation of trading in option or futures contracts relating to the Underlying Stock, if available, in the primary market for
those contracts for more than two hours of trading or during the one-half hour before the close of trading in that market, as determined
by the calculation agent in its sole discretion;
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the Underlying Stock does not
trade on the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or what was the primary market
for the Underlying Stock, as determined by the calculation agent in its sole discretion; or
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any other event, if the calculation
agent determines in its sole discretion that the event materially interferes with our ability or the ability of any of our affiliates
to unwind all or a material portion of a hedge with respect to the notes that we or our affiliates have effected or may effect.
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The following events will not be market disruption
events:
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a limitation on the hours or number
of days of trading in the Underlying Stock in its primary market, but only if the limitation results from an announced change in
the regular business hours of the relevant market; and
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a decision to permanently discontinue
trading in the option or futures contracts relating to the Underlying Stock.
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For this purpose, a “suspension, absence
or material limitation of trading” in the applicable market will not include any time when that market is itself closed for
trading under ordinary circumstances. In contrast, a “suspension, absence or material limitation of trading” in the
applicable market for the Underlying Stock or option or futures contracts relating to the Underlying Stock, as applicable, by reason
of any of:
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a price change exceeding limits
set by that market;
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an imbalance of orders relating
to the Underlying Stock or those contracts; or
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a disparity in bid and asked quotes
relating to the Underlying Stock or those contracts
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will constitute a “suspension, absence or
material limitation of trading” in the Underlying Stock or those contracts, as the case may be, in the applicable market.
If a market disruption event occurs or is continuing
on the final determination date, such final determination date will be postponed to the first succeeding trading day on which a
market disruption event has not occurred and is not continuing. If such first succeeding trading day has not occurred as of the
eighth scheduled trading day after the scheduled final determination date, that eighth scheduled trading day shall be deemed the
final determination date. If the final determination date has been postponed eight scheduled trading days after the scheduled final
determination date and such eighth scheduled trading day is not a trading day, or if a market disruption event occurs or is continuing
on such eighth scheduled trading day, the calculation agent will determine the closing price of the Underlying Stock on such eighth
scheduled trading day using its good faith estimate of the closing price that would have prevailed for the Underlying Stock on
such date.
Adjustment Events
The share ratio is subject to adjustment by the
calculation agent as a result of the dilution and reorganization events described in this section. The adjustments described below
do not cover all events that could affect the Underlying Stock and, consequently, the value of your notes, such as a tender or
exchange offer by the Underlying Stock Issuer for the Underlying Stock at a premium to its market price or a tender or exchange
offer made by a third party for less than all outstanding shares of the Underlying Stock. We describe the risks relating to dilution
above under “Risk Factors—You Have Limited Antidilution Protection.”
How adjustments will be made
If one of the events described below occurs with
respect to the Underlying Stock and the calculation agent determines that the event has a dilutive or concentrative effect on the
market price of the Underlying Stock, the calculation agent will calculate a corresponding adjustment to the share ratio as the
calculation agent deems appropriate to account for that dilutive or concentrative effect. For example, if an adjustment is required
because of a two-for-one stock split, then the share ratio will be adjusted by the calculation agent by multiplying the existing
share ratio by a fraction whose numerator is the number of shares of the Underlying Stock outstanding immediately after the stock
split and whose denominator is the number of shares of the Underlying Stock outstanding immediately prior to the stock split. Consequently,
the share ratio will be adjusted to double the prior share ratio, due to the corresponding decrease in the market price of the
Underlying Stock. Adjustments will be made for events with an effective date or ex-dividend date, as applicable, from but excluding
the date the original notes were priced for initial sale to the public to and including the final determination date (the “adjustment
period”).
The calculation agent will also determine the effective
date of that adjustment, and the replacement of the Underlying Stock, if applicable, in the event of a consolidation or merger
or certain other events in respect of the Underlying Stock Issuer. Upon making any such adjustment, the calculation agent will
give notice as soon as practicable to the trustee and the paying agent, stating the adjustment to the share ratio. In no event,
however, will an antidilution adjustment to the share ratio during the term of the notes be deemed to change the principal amount
per note.
If more than one event requiring adjustment occurs
with respect to the Underlying Stock, the calculation agent will make an adjustment for each event in the order in which the events
occur, and on a cumulative basis. Thus, having made an adjustment for the first event, the calculation agent will adjust the share
ratio for the second event, applying the required adjustment to the share ratio as already adjusted for the first event, and so
on for any subsequent events.
For any dilution event described below, other than
a consolidation or merger, the calculation agent will not have to adjust the share ratio unless the adjustment would result in
a change to the share ratio then in effect of at least 0.10%. The share ratio resulting from any adjustment will be rounded up
or down, as appropriate, to the nearest one-hundred thousandth.
If an event requiring an antidilution adjustment
occurs, the calculation agent will make the adjustment with a view to offsetting, to the extent practical, any change in your economic
position relative to your notes that results solely from that event. The calculation agent may, in its sole discretion, modify
the antidilution adjustments as necessary to ensure an equitable result.
The calculation agent will make all determinations
with respect to antidilution adjustments, including any determination as to whether an event requiring adjustment has occurred,
as to the nature of the adjustment required and how it will be made or as to the value of any property distributed in a reorganization
event, and will do so in its sole discretion. In the absence of manifest error, those determinations will be conclusive for all
purposes and will be binding on you and us, without any liability on the part of the calculation agent. You will not be entitled
to any compensation from us for any loss suffered as a result of any of these determinations by the calculation agent. The calculation
agent will provide information about the adjustments that it makes upon your written request.
If any of the adjustments specified below is required
to be made with respect to an amount or value of any cash or other property that is distributed by the Underlying Stock Issuer
organized outside the United States, such amount or value will be converted to U.S. dollars, as applicable, and will be reduced
by any applicable foreign withholding taxes that would apply to such distribution if such distribution were paid to a U.S. person
that is eligible for the benefits of an applicable income tax treaty, if any, between the United States and the jurisdiction of
organization of the Underlying Stock Issuer, as determined by the calculation agent, in its sole discretion.
No adjustments will be made for certain other events,
such as offerings of common stock by the Underlying Stock Issuer for cash or in connection with the occurrence of a partial tender
or exchange offer for the Underlying Stock by the Underlying Stock Issuer or any other person.
Ordinary Dividend Adjustments
In addition to any adjustments to the share ratio
described elsewhere in this section, the share ratio will be adjusted for changes (whether positive or negative) in the regular
quarterly cash dividend payable to holders of the Underlying Stock relative to the base quarterly dividend (as defined below).
If the Underlying Stock Issuer pays a regular quarterly cash dividend for which the ex-dividend date is within the adjustment period
and the amount of such regular quarterly cash dividend (the “current quarterly dividend”) differs from the base
quarterly dividend, the share ratio will be adjusted (an “ordinary dividend adjustment”) on such ex-dividend
date so that the new share ratio will equal the prior share ratio multiplied by the ordinary dividend adjustment factor. If the
Underlying Stock Issuer declares that it will pay no dividend in any quarter, other than in connection with a payment period adjustment
as discussed below, an adjustment will be made in accordance with this paragraph on the date determined by the calculation agent
that, but for the discontinuation of the regular quarterly cash dividend in such quarter, would have been the ex-dividend date
in such quarter, corresponding to the ex-dividend date in the immediately prior dividend payment period during which a regular
quarterly cash dividend was paid (or, if such date is not a trading day, the next day that is a trading day). If a reorganization
event occurs, no ordinary dividend adjustment will be made in respect of any new stock (other than spin-off stock), successor stock
or replacement stock (each as defined below).
The “ordinary dividend adjustment factor”
will equal a fraction, the numerator of which is the closing price of the Underlying Stock on the trading day preceding the ex-dividend
date for the payment of the current quarterly dividend (such closing price, the “ordinary dividend base closing price”),
and the denominator of which equals the ordinary dividend base closing price of the Underlying Stock on the trading day preceding
the ex-dividend date minus the dividend differential. If the dividend differential is negative (because the current quarterly dividend
is less than the base quarterly dividend), then the ordinary dividend adjustment factor will be less than 1, and the corresponding
adjustment to the share ratio will result in a reduction of the share ratio.
The “dividend differential”
equals the amount of the current quarterly dividend minus the base quarterly dividend.
The “base quarterly dividend”
means a quarterly dividend of $0.41 per share; provided that (i) if there occurs any corporate event with respect to the Underlying
Stock that requires an adjustment to the share ratio as described in this section “Adjustment Events” or (ii) if the
Underlying Stock Issuer effects a change in the periodicity of its dividend payments (e.g., from quarterly payments to semi-annual
payments) (a “payment period adjustment”), then in each case the calculation agent will make an appropriate
adjustment to the base quarterly dividend with a view to offsetting, to the extent practical, any change in your economic position
relative to the notes that results solely from that event, and references in this section to a quarter or a quarterly dividend
shall be deemed to refer instead to such other period or periodic dividend, as appropriate. In the event of a spin-off with respect
to the Underlying Stock, the base quarterly dividend for the original Underlying Stock will remain unchanged and the base quarterly
dividend with respect to the spin-off stock will be $0.00 per share.
Stock Splits and Reverse Stock Splits
A stock split is an increase in the number of a
corporation’s outstanding shares of stock without any change in its stockholders’ equity. Each outstanding share will
be worth less as a result of a stock split.
A reverse stock split is a decrease in the number
of a corporation’s outstanding shares of stock without any change in its stockholders’ equity. Each outstanding share
will be worth more as a result of a reverse stock split.
If the Underlying Stock is subject to a stock split
or a reverse stock split, then once the split has become effective the calculation agent will adjust the share ratio to equal the
product of the prior share ratio and the number of shares issued in such stock split or reverse stock split with respect to one
share of the Underlying Stock.
Stock Dividends
In a stock dividend, a corporation issues additional
shares of its stock to all holders of its outstanding stock in proportion to the shares they own. Each outstanding share will be
worth less as a result of a stock dividend.
If the Underlying Stock is subject to a stock dividend
payable in shares of the Underlying Stock that is given ratably to all holders of shares of the Underlying Stock, then once the
dividend has become effective the calculation agent will adjust the share ratio on the ex-dividend date to equal the sum of the
prior share ratio and the product of:
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the number of shares issued with respect to one share of
the Underlying Stock, and
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the prior share ratio.
The “ex-dividend date” for any
dividend or other distribution is the first day on and after which the Underlying Stock trades without the right to receive that
dividend or distribution.
No Adjustments for Other Dividends and Distributions
The share ratio will not be adjusted to reflect
dividends, including cash dividends, or other distributions paid with respect to the Underlying Stock, other than:
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ordinary dividend adjustments
described above,
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stock dividends described above,
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issuances of transferable rights
and warrants as described in “ — Transferable Rights and Warrants” below,
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•
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distributions that are spin-off
events described in “ — Reorganization Events” below, and
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•
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extraordinary dividends described
below.
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An “extraordinary dividend”
means each of (a) the full amount per share of the Underlying Stock of any cash dividend or special dividend or distribution that
is identified by the Underlying Stock Issuer as an extraordinary or special dividend or distribution, (b) the excess of any cash
dividend or other cash distribution (that is not otherwise identified by the Underlying Stock Issuer as an extraordinary or special
dividend or distribution) distributed per share of the Underlying Stock over the immediately preceding cash dividend or other cash
distribution, if any, per share of the Underlying Stock that did not include an extraordinary dividend (as adjusted for any subsequent
corporate event requiring an adjustment as described in this section, such as a stock split or reverse stock split) if such excess
portion of the dividend or distribution is more than 5.00% of the closing price of the Underlying Stock on the trading day preceding
the ex-dividend date for the payment of such cash dividend or other cash distribution (such closing price, the “extraordinary
dividend base closing price”) and (c) the full cash value of any non-cash dividend or distribution per share of the Underlying
Stock (excluding marketable securities, as defined below).
If the Underlying Stock is subject to an extraordinary
dividend, then once the extraordinary dividend has become effective the calculation agent will adjust the share ratio on the ex-dividend
date to equal the product of:
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•
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the prior share ratio, and
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•
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a fraction, the numerator of which
is the extraordinary dividend base closing price of the Underlying Stock on the trading day preceding the ex-dividend date and
the denominator of which is the amount by which the extraordinary dividend base closing price of the Underlying Stock on the trading
day preceding the ex-dividend date exceeds the extraordinary dividend.
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Notwithstanding anything herein, the initiation
by the Underlying Stock Issuer of an ordinary dividend on the Underlying Stock or any announced increase in the ordinary dividend
on the Underlying Stock will not constitute an extraordinary dividend requiring an adjustment.
To the extent an extraordinary dividend is not
paid in cash or is paid in a currency other than U.S. dollars, the value of the non-cash component or non-U.S. currency will be
determined by the calculation agent, in its sole discretion. A distribution on the Underlying Stock that is a dividend payable
in shares of Underlying Stock, an issuance of rights or warrants or a spin-off event and also an extraordinary dividend will result
in an adjustment to the share ratio only as described in “—Stock Dividends” above, “—Transferable
Rights and Warrants” below or “—Reorganization Events” below, as the case may be, and not as described
here.
Transferable Rights and Warrants
If the Underlying Stock Issuer issues transferable
rights or warrants to all holders of the Underlying Stock to subscribe for or purchase the Underlying Stock at an exercise price
per share that is less than the closing price of the Underlying Stock on the trading day before the ex-dividend date for the issuance,
then the share ratio will be adjusted to equal the product of:
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the prior share ratio, and
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a fraction, (1) the numerator
of which will be the number of shares of the Underlying Stock outstanding at the close of trading on the trading day before the
ex-dividend date (as adjusted for any subsequent event requiring an adjustment hereunder) plus the number of additional shares
of the Underlying Stock offered for subscription or purchase pursuant to the rights or warrants and (2) the denominator of which
will be the number of shares of the Underlying Stock outstanding at the close of trading on the trading day before the ex-dividend
date (as adjusted for any subsequent event requiring an adjustment hereunder) plus the number of additional shares of the Underlying
Stock (referred to herein as the “additional shares”) that the aggregate offering price of the total number
of shares of the Underlying Stock so offered for subscription or purchase pursuant to the rights or warrants would purchase at
the closing price on the trading day before the ex-dividend date for the issuance.
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The number of additional shares will be equal to:
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the product of (1) the total number
of additional shares of the Underlying Stock offered for subscription or purchase pursuant to the rights or warrants and (2) the
exercise price of the rights or warrants, divided by
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•
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the closing price of the Underlying
Stock on the trading day before the ex-dividend date for the issuance.
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If the number of shares of the Underlying Stock
actually delivered in respect of the rights or warrants differs from the number of shares of the Underlying Stock offered in respect
of the rights or warrants, then the share ratio will promptly be readjusted to the share ratio that would have been in effect had
the adjustment been made on the basis of the number of shares of the Underlying Stock actually delivered in respect of the rights
or warrants.
Reorganization Events
Each of the following is a reorganization event:
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the Underlying Stock is reclassified
or changed (other than in a stock split or reverse stock split),
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the Underlying Stock Issuer has
been subject to a merger, consolidation or other combination and either is not the surviving entity or is the surviving entity
but all outstanding shares of the Underlying Stock are exchanged for or converted into other property,
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a statutory share exchange involving
outstanding shares of the Underlying Stock and the securities of another entity occurs, other than as part of an event described
above,
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the Underlying Stock Issuer sells
or otherwise transfers its property and assets as an entirety or substantially as an entirety to another entity,
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the Underlying Stock Issuer effects
a spin-off, other than as part of an event described above (in a spin-off, a corporation issues to all holders of its common stock
equity securities of another issuer), or
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the Underlying Stock Issuer is
liquidated, dissolved or wound up or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law,
or another entity completes a tender or exchange offer for all the outstanding shares of the Underlying Stock.
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Adjustments for Reorganization Events
If a reorganization event occurs, then the calculation
agent will adjust the share ratio to reflect the amount and type of property or properties—whether cash, securities, other
property or a combination thereof—that a holder of one share of the Underlying Stock would have been entitled to receive
in relation to the reorganization event. We refer to this new property as the “reorganization property.”
Reorganization property can be classified into
two categories:
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an equity security listed on a
national securities exchange, which we refer to generally as a “marketable security” and, in connection with
a particular reorganization event, “new stock,” which may include any tracking stock, any stock received in
a spin-off (“spin-off stock”) or any marketable security received in exchange for the Underlying Stock; and
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cash and any other property, assets
or securities other than marketable securities (including equity securities that are not listed, that are traded over the counter
or that are listed on a non-U.S. securities exchange), which we refer to as “non-stock reorganization property.”
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For the purpose of making an adjustment required
by a reorganization event, the calculation agent, in its sole discretion, will determine the value of each type of the reorganization
property. For purposes of valuing any new stock, the calculation agent will use the closing price of the security on the relevant
trading day. The calculation agent will value non-stock reorganization property in any manner it determines, in its sole discretion,
to be appropriate. In connection with a reorganization event in which reorganization property includes new stock, for the purpose
of determining the share ratio for any new stock as described below, the term “new stock reorganization ratio”
means the product of (i) the number of shares of the new stock received with respect to one share of the Underlying Stock and (ii)
the share ratio on the trading day immediately prior to the effective date of the reorganization event.
If a holder of shares of the Underlying Stock may
elect to receive different types or combinations of types of reorganization property in the reorganization event, the reorganization
property will consist of the types and amounts of each type distributed to a holder of shares of the Underlying Stock that makes
no election, as determined by the calculation agent in its sole discretion.
If any reorganization event occurs, then on and
after the effective date for such reorganization event (or, if applicable, in the case of spinoff stock, the ex-dividend date for
the distribution of such spinoff stock) the term “Underlying Stock” in this pricing supplement will be deemed
to mean the following, and for each share of Underlying Stock, new stock and/or replacement stock so deemed to constitute Underlying
Stock, the share ratio will be equal to the applicable number indicated:
(a)
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if the Underlying Stock continues to be outstanding:
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(1)
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that Underlying Stock (if applicable, as reclassified upon the issuance of any tracking stock) at the share ratio in effect on the trading day immediately prior to the effective date of the reorganization event; and
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(2)
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if the reorganization property includes new stock, a number of shares of new stock equal to the new stock reorganization ratio;
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provided that, if any non-stock reorganization property is received in the reorganization event, the results of (a)(1) and (a)(2) above will each be multiplied by the “gross-up multiplier,” which will be equal to a fraction, the numerator of which is the closing price of the original Underlying Stock on the trading day immediately prior to the effective date of the reorganization event and the denominator of which is the amount by which such closing price of the original Underlying Stock exceeds the value of the non-stock reorganization property received per share of Underlying Stock as determined by the calculation agent as of the close of trading on such trading day; or
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(b)
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if the Underlying Stock is surrendered for reorganization property:
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(1)
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that includes new stock, a number of shares of new stock equal to the new stock reorganization ratio; provided that, if any non-stock reorganization property is received in the reorganization event, such number will be multiplied by the gross-up multiplier; or
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(2)
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that consists exclusively of non-stock reorganization property:
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(i)
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if the surviving entity has marketable securities outstanding following the reorganization event and either (A) such marketable securities were in existence prior to such reorganization event or (B) such marketable securities were exchanged for previously outstanding marketable securities of the surviving entity or its predecessor (“predecessor stock”) in connection with such reorganization event (in either case of (A) or (B), the “successor stock”), a number of shares of the successor stock determined by the calculation agent on the trading day immediately prior to the effective date of such reorganization event equal to the share ratio in effect on the trading day immediately prior to the effective date of such reorganization event multiplied by a fraction, the numerator of which is the value of the non-stock reorganization property per share of the Underlying Stock on such trading day and the denominator of which is the closing price of the successor stock on such trading day (or, in the case of predecessor stock, the closing price of the predecessor stock multiplied by the number of shares of the successor stock received with respect to one share of the predecessor stock); or
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(ii)
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if the surviving entity does not have marketable securities outstanding, or if there is no surviving entity (in each case, a “replacement stock event”), a number of shares of replacement stock (selected as defined below) with an aggregate value on the effective date of such reorganization event equal to the value of the non-stock reorganization property multiplied by the share ratio in
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effect on the trading day immediately prior to the effective date of such reorganization event.
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If a reorganization event occurs with respect to
the shares of the Underlying Stock and the calculation agent adjusts the share ratio to reflect the reorganization property in
the event as described above, the calculation agent will make further antidilution adjustments for any later events that affect
the reorganization property, or any component of the reorganization property, comprising the new share ratio. The calculation agent
will do so to the same extent that it would make adjustments if the shares of the Underlying Stock were outstanding and were affected
by the same kinds of events. If a subsequent reorganization event affects only a particular component of the number of shares of
the Underlying Stock, the required adjustment will be made with respect to that component as if it alone were the number of shares
of the Underlying Stock.
For purposes of adjustments for reorganization events,
in the case of a consummated tender or exchange offer or going-private transaction involving reorganization property of a particular
type, reorganization property will be deemed to include the amount of cash or other property paid by the offeror in the tender
or exchange offer with respect to such reorganization property (in an amount determined on the basis of the rate of exchange in
such tender or exchange offer or going-private transaction). In the event of a tender or exchange offer or a going-private transaction
with respect to reorganization property in which an offeree may elect to receive cash or other property, reorganization property
will be deemed to include the kind and amount of cash and other property received by offerees who elect to receive cash.
Replacement Stock Events
Following the occurrence of a replacement stock
event described in paragraph (b)(2)(ii) above or in “—Delisting of American Depositary Shares or Termination of American
Depositary Receipt Facility” below, the amount of cash payable on each note at maturity will be determined by reference to
a replacement stock and a share ratio (subject to any further antidilution adjustments) for such replacement stock as determined
in accordance with the following paragraphs.
The “replacement stock” will
be the stock having the closest “option period volatility” to the original Underlying Stock among the stocks that then
comprise the replacement stock selection index (or, if publication of such index is discontinued, any successor or substitute index
selected by the calculation agent in its sole discretion) with the same GICS Code (as defined below) as the original Underlying
Stock Issuer; provided, however, that a replacement stock will not include (i) any stock that is subject to a trading restriction
under the trading restriction policies of Wells Fargo Finance LLC or the Guarantor, the hedging counterparties of Wells Fargo Finance
LLC or any of their affiliates that would materially limit the ability of Wells Fargo Finance LLC, the hedging counterparties of
Wells Fargo Finance LLC or any of their affiliates to hedge the notes with respect to such stock or (ii) any stock for which the
aggregate number of shares to be referenced (equal to the product of (a) the share ratio that would be in effect immediately after
selection of such stock as the replacement stock and (b) the number of the notes outstanding) exceeds 25% of the ADTV (as defined
in Rule 100(b) of Regulation M under the Exchange Act) for such stock as of the effective date of the replacement stock event (an
“excess ADTV stock”).
If a replacement stock is selected in connection
with a reorganization event, the share ratio with respect to such replacement stock will be equal to the number of shares of such
replacement stock with an aggregate value, based on the closing price on the effective date of such reorganization event, equal
to the product of (a) the value of the non-stock reorganization property received per share of the Underlying Stock and (b) the
share ratio in effect on the trading day immediately prior to the effective date of such reorganization event. If a replacement
stock is selected in connection with an ADS termination event (as defined below), the share ratio with respect to such replacement
stock will be equal to the number of shares of such replacement stock with an aggregate value, based on the closing price on the
change date (as defined below), equal to the product of (x) the closing price of the original Underlying Stock on the change date
and (y) the share ratio in effect on the trading day immediately prior to the change date.
The “option period volatility”
means, in respect of any trading day, the volatility (calculated by referring to the closing price of the Underlying Stock on its
primary exchange) for a period equal to the 125 trading days immediately preceding the announcement date of the reorganization
event, as determined by the calculation agent.
“GICS Code” means the Global
Industry Classification Standard (“GICS”) sub-industry code assigned to the Underlying Stock Issuer; provided,
however, if (i) there is no other stock in the replacement stock selection index in the same GICS sub-industry or (ii) a replacement
stock (a) for which there is no trading restriction and (b) that is not an excess ADTV stock cannot be identified from the replacement
stock selection index in the same GICS sub-industry, the GICS Code will mean the GICS industry code assigned to the Underlying
Stock Issuer. If no GICS Code has been assigned to the Underlying Stock Issuer, the applicable GICS Code will be determined by
the calculation agent to be the GICS sub-industry code assigned to companies in the same sub-industry (or, subject to the proviso
in the preceding sentence, industry, as applicable) as the Underlying Stock Issuer at the time of the relevant replacement stock
event.
The “replacement stock selection index”
means the S&P 500® Index.
Delisting of American Depositary Shares or Termination
of American Depositary Receipt Facility. If the Underlying Stock is an ADS and the Underlying Stock is no longer listed or
admitted to trading on a U.S. securities exchange registered under the Exchange Act or included in the OTC Bulletin Board Service
operated by the FINRA, or if the American depositary receipt facility between the Underlying Stock Issuer and the depositary is
terminated for any reason (each, an “ADS termination event”), then, on the last trading day on which the Underlying
Stock is listed or admitted to trading or the last trading day immediately prior to the date of such termination, as applicable
(the “change date”), a replacement stock event shall be deemed to occur.
Events of Default and Acceleration
If an event of default with respect to the notes
has occurred and is continuing, the amount payable to a holder of a note upon any acceleration permitted by the notes, with respect
to each note, will be equal to the maturity payment amount, calculated as provided herein, plus accrued but unpaid interest, if
any, to but excluding the date of acceleration. The maturity payment amount will be calculated as though the date of acceleration
were the final determination date.
The Underlying Stock
According to publicly available information, Bristol-Myers
Squibb Company is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical
products. Its SEC file number is 001-01136. The principal U.S. exchange on which the common stock of Bristol-Myers Squibb Company
is listed is the New York Stock Exchange, where it trades under the ticker symbol “BMY.”
The Underlying Stock is registered under the Exchange
Act. Companies with securities registered under the Exchange Act are required to file periodically financial and other information
specified by the SEC. Information filed by the Underlying Stock Issuer with the SEC electronically can be reviewed through a website
maintained by the SEC. The address of the SEC’s website is http://www.sec.gov. Information filed with the SEC by the Underlying
Stock Issuer under the Exchange Act can be located by reference to its SEC file number. Information about the Underlying Stock
may also be obtained from other sources such as press releases, newspaper articles and other publicly disseminated documents, as
well as from the Underlying Stock Issuer’s website. None of such publicly available information is incorporated by reference
into this pricing supplement.
This pricing supplement relates only to the notes
offered hereby and does not relate to the Underlying Stock or other securities of the Underlying Stock Issuer. In connection with
the issuance of the notes, none of we, the Guarantor or the agent has participated in the preparation of the Underlying Stock Issuer’s
public filings or made any due diligence inquiry with respect to the Underlying Stock Issuer. Furthermore, we cannot give any assurance
that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of such public
filings or other publicly available information) that would affect the price of the Underlying Stock (and therefore the price of
such stock at the time we priced the notes) have been publicly disclosed. Subsequent disclosure of any such events or the disclosure
of or failure to disclose material future events concerning the Underlying Stock Issuer could affect any payment on the notes.
The Underlying Stock Issuer is not involved in
this offering of the notes in any way and will have no obligation of any kind with respect to the notes. The guarantor, the agent
and their affiliates may at present, or from time to time in the future, engage in business with the Underlying Stock Issuer, including
extending loans to (and exercising creditors’ remedies with respect to such loans), or making equity investments in, the
Underlying Stock Issuer, and in the course of such business, we, the guarantor, the agent or our affiliates may have obtained or
may in the future obtain material non-public information regarding the Underlying Stock Issuer, or any affiliate of the Underlying
Stock Issuer, and none of we, the guarantor, the agent or any such affiliate undertakes to disclose any such information to purchasers
of the notes. The guarantor, the agent and their affiliates from time to time may publish research reports with respect to the
Underlying Stock. Such research reports may or may not recommend that investors buy or hold the Underlying Stock. We, the guarantor,
the agent and our affiliates do not undertake to inform purchasers of the notes of any changes (positive or negative) to the recommendations
contained in future research reports.
Historical Information
We obtained the closing prices of the common stock
of Bristol-Myers Squibb Company in the graph below from Bloomberg Financial Markets, without independent verification. The historical
prices below may have been adjusted by Bloomberg to reflect any stock splits, reverse stock splits or other corporate transactions.
The following graph sets forth daily closing
prices of the common stock of Bristol-Myers Squibb Company for the period from January 1, 2014 to November 7, 2019. The closing
price on November 7, 2019 was $57.58. The historical performance of the common stock of Bristol-Myers Squibb Company should not
be taken as an indication of the future performance of the common stock of Bristol-Myers Squibb Company during the term of the
notes.
United States Federal Tax Considerations
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 this reopening at the price listed in the pricing supplement, 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:
•
a financial institution;
•
a “regulated investment company”;
•
a “real estate investment trust”;
•
a tax-exempt entity, including an “individual retirement
account” or “Roth IRA”;
•
a dealer or trader subject to a mark-to-market method of
tax accounting with respect to the notes;
•
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;
•
a U.S. holder (as defined below) whose functional currency
is not the U.S. dollar; or
•
an entity classified as a partnership for U.S. federal
income tax purposes.
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.
We will not attempt to ascertain whether the
Underlying Stock Issuer is treated as a “U.S. real property holding corporation” (“USRPHC”) within
the meaning of Section 897 of the Code. If the Underlying Stock Issuer were so treated, certain adverse U.S. federal income tax
consequences might apply to you, if you are a non-U.S. holder (as defined below), upon the sale, exchange or other disposition
of the notes. You should refer to information filed with the Securities and Exchange Commission or other governmental authorities
and consult your tax adviser regarding the possible consequences to you if the Underlying Stock Issuer is or becomes a USRPHC.
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 of this pricing supplement 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, the potential
application of the alternative minimum tax or the Medicare tax on net investment income or the consequences to taxpayers subject
to special tax accounting rules under Section 451(b) of the Code. You should consult your tax adviser concerning the application
of the 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. jurisdiction.
Tax Treatment of the Notes
The reopened notes will be treated as part of
the same issue as the original notes for U.S. federal income tax purposes. As a result, you will acquire the reopened notes with
a basis different from their adjusted issue price (as defined below).
In the opinion of our counsel, Davis Polk &
Wardwell LLP, the notes should be treated as “contingent payment debt instruments” for U.S. federal income tax
purposes, and the discussion herein is based on this treatment.
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:
•
a citizen or individual resident of the United States;
•
a corporation created or organized in or under the laws
of the United States, any state therein or the District of Columbia; or
•
an estate or trust the income of which is subject to U.S.
federal income taxation regardless of its source.
Interest Accruals on the Notes. Pursuant
to rules governing the tax treatment of contingent payment debt instruments (the “contingent debt regulations”),
you will be required to accrue interest income on the notes on a constant yield basis based on a comparable yield, as described
below, regardless of whether you use the cash or accrual method of accounting for U.S. federal income tax purposes. For
purposes
of determining the amount of interest you are required to include in your taxable income each year, these amounts must be adjusted
as described under “—Adjustments to Interest Accruals to Reflect the Difference Between Basis and Adjusted Issue Price.”
Under the contingent debt regulations, and subject
to the discussion below under “—Adjustments to Interest Accruals to Reflect the Difference Between Basis and Adjusted
Issue Price,” you must accrue an amount of ordinary interest income, as original issue discount (“OID”)
for U.S. federal income tax purposes, for each accrual period prior to and including the maturity date of the notes that equals
the product of:
•
the adjusted issue price (as defined below) of the notes
as of the beginning of the accrual period,
•
the comparable yield (as defined below) of the notes, adjusted
for the length of the accrual period, and
•
a fraction, the numerator of which is the number of days
during the accrual period that you held the notes and the denominator of which is the number of days in the accrual period.
The “adjusted issue price”
of a note is its issue price, which in this case is the issue price of the original notes, increased by any interest income previously
accrued, and decreased by the projected amount of any payments (in accordance with the projected payment schedule described below)
previously made with respect to the notes, determined without regard to any adjustments to interest accruals described below.
As used in the contingent debt regulations,
the term “comparable yield” means the greater of (i) the annual yield we would pay, as of the issue date, on
a fixed-rate, nonconvertible debt instrument with no contingent payments, but with terms and conditions otherwise comparable to
those of the notes, and (ii) the applicable federal rate.
The contingent debt regulations require that
we provide to U.S. holders, solely for U.S. federal income tax purposes, a schedule of the projected amounts of payments (the “projected
payment schedule”) on the notes. This schedule must produce a yield to maturity that equals the comparable yield. Holders
may obtain the comparable yield and projected payment schedule by submitting a written request for this information to us at: Wells
Fargo Securities, LLC, Investment Solutions Group, 375 Park Avenue, New York, NY 10152.
For U.S. federal income tax purposes, you
are required under the contingent debt regulations to use the comparable yield and the projected payment schedule established by
us in determining interest accruals and adjustments in respect of a note, unless you timely disclose and justify the use of a different
comparable yield and projected payment schedule to the Internal Revenue Service (the “IRS”).
Neither the comparable yield nor the projected
payment schedule constitutes a representation by us regarding the amount that we will pay on a note.
Adjustments to Interest Accruals to Reflect
the Difference Between Basis and Adjusted Issue Price. The reopened notes will be treated as part of the same issue as the
original notes for U.S. federal income tax purposes. As a result, you will generally acquire the reopened notes with a basis that
is different from their adjusted issue price. Under the contingent debt regulations, you are required to reasonably allocate any
difference between the adjusted issue price and the basis to daily portions of interest or projected payments over the remaining
term of the notes. You should consult your tax adviser regarding these adjustments.
Sale, Exchange or Retirement of Notes.
You will recognize taxable gain or loss on the sale, exchange or retirement of a note equal to the difference between the amount
received and your adjusted tax basis in the note. Any gain recognized will be treated as ordinary interest income and loss will
be ordinary loss to the extent of previous interest inclusions and capital loss thereafter. The amount of gain or loss on a sale,
exchange or retirement of a note will be equal to the difference between (a) the amount received by you and (b) your adjusted tax
basis in the note.
Your adjusted tax basis in a note generally
will be equal to your original purchase price for the note, increased by any interest income you previously accrued (taking into
account the adjustments under “Adjustments to Interest Accruals to Reflect the Difference Between Basis and Adjusted Issue
Price”) and decreased by the amount of any projected payments that previously have been scheduled to be made in respect of
the notes.
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.
Treatment of Income and Gain on the Notes.
Subject to the discussions above concerning Section 897 of the Code and below concerning Section 871(m) and FATCA, you generally
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 Wells Fargo & Company’s stock entitled
to vote;
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you are not a controlled foreign
corporation related, directly or indirectly, to Wells Fargo & Company 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 IRS Form W-8 on which you certify under penalties of perjury that you are not a U.S. person.
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Possible Withholding Under Section 871(m)
of the Code. Section 871(m) of the Code and Treasury regulations promulgated thereunder (“Section 871(m)”)
generally impose a 30% withholding tax on dividend equivalents paid or deemed paid to non-U.S. holders with respect to certain
financial instruments linked to U.S. equities (“U.S. underlying equities”) or indices that include U.S. underlying
equities. Section 871(m) generally applies to instruments that substantially replicate the economic performance of one or more
U.S. underlying equities, as determined based on tests set forth in the applicable Treasury regulations (a “specified
security”). However, the regulations exempt financial instruments issued prior to January 1, 2021 that do not have a
“delta” of one. Based on the terms of the notes and representations provided by us, our counsel is of the opinion that
the notes should not be treated as transactions that have a “delta” of one within the meaning of the regulations with
respect to any U.S. underlying equity and, therefore, should not be specified securities subject to withholding tax under Section
871(m).
A determination that the notes are not subject
to Section 871(m) is not binding on the IRS, and the IRS may disagree with this treatment. Moreover, Section 871(m) is complex
and its application may depend on your particular circumstances. For example, if you enter into other transactions relating to
a U.S. underlying equity, you could be subject to withholding tax or income tax liability under Section 871(m) even if the notes
are not specified securities subject to Section 871(m) as a general matter. You should consult your tax adviser regarding the potential
application of Section 871(m) to the notes.
In the event withholding applies, we will not be required to pay
any additional amounts with respect to amounts withheld.
U.S. Federal Estate Tax
Individual non-U.S. holders and entities the
property of which is potentially includible in such an individual’s 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 amounts treated as 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 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. entity’s jurisdiction may modify these requirements.
Withholding under these rules (if applicable) applies to any payment on the notes of amounts treated as interest or as “dividend
equivalents.” While existing Treasury regulations would also require withholding on payments of gross proceeds of the disposition
(including upon retirement) of financial instruments such as the notes, the U.S. Treasury Department has indicated in subsequent
proposed regulations its intent to eliminate this requirement. 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.
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