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Margin Disclosure Statement

IT IS IMPORTANT THAT YOU READ AND UNDERSTAND THIS INFORMATION PRIOR TO OPENING A MARGIN ACCOUNT.

Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC (hereinafter collectively referred to as “Wells Fargo Advisors” or “WFA”) are furnishing this document to you to provide some basic facts about purchasing securities on margin, and to alert you to the risks involved with trading securities in a margin account. Before trading stocks in a margin account, you should carefully review the margin agreement provided by WFA. Please consult your Financial Advisor regarding any questions or concerns you may have with your margin accounts.

When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price through WFA. If you choose to borrow funds from WFA, you will open a WFA margin account. The securities purchased are the collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and, as a result, WFA can take action, such as issue a margin call and/or sell securities or other assets in any of your accounts held with WFA, in order to maintain the required equity in the account. Irrespective of the margin value of collateral in your margin account, your total margin debt shall not at any time exceed $50,000,000 (or such higher amount as we may offer in our sole discretion and based on additional financial information provided by you, as periodically requested by us).

It is important that you fully understand the risks involved in trading securities on margin. These risks include the following:

  1. You can lose more funds than you deposit in the margin account. A decline in the value of securities that are purchased on margin may require you to provide additional funds to WFA, which has made the loan(s), to avoid the forced sale of those securities or other securities or assets in your account(s).
  2. WFA can force the sale of securities or other assets in your account(s). If the equity in your account falls below the maintenance margin requirements or our higher “house” requirements, WFA can sell the securities or other assets in any of your accounts held with us to cover the margin deficiency. You also will be responsible for any shortfall in the account after such a sale.
  3. WFA can sell your securities or other assets without contacting you. Some investors mistakenly believe that firms such as WFA must contact them for a margin call to be valid, and that the firm cannot liquidate securities or other assets in their accounts to meet the call unless the firm has contacted them first. This is not the case. While we will try to notify you of margin calls, we are not required to do so. However, even if we have notified you and provided a specific date by which you can meet a margin call, we can still take necessary steps to protect our financial interests, including immediately selling the securities without notice to you.
  4. You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call. Because the securities are collateral for the margin loan, WFA has the right to decide which security to sell in order to protect our interests.
  5. WFA can increase its “house” maintenance margin requirements at any time and is not required to provide you advance written notice. These changes in firm policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause us to liquidate or sell securities in your account(s).
  6. You are not entitled to an extension of time on a margin call. While an extension of time to meet margin requirements may be available to customers under certain conditions, a customer does not have a right to the extension.
  7. WFA has no obligation to extend credit on margin to you and can demand full or partial payment of any outstanding margin balance at our sole option without cause at any time, including interest, fees, and any costs of collection. Furthermore, all payments received, including interest, dividends, proceeds from liquidations, deposits or other transfers into your margin account may be applied at our sole discretion, first to repay any interest accrued, and then to any other amounts as otherwise payable to us under the Margin Account Agreement.

Upon your death, your margin loan shall be immediately due and payable, and we shall send a demand notice to your last address of record requesting payoff of the margin loan balance. If your beneficiaries or executor (as applicable) have not paid off the margin loan balance in full within ninety (90) days from the date of the demand notice, we shall liquidate positions in your account at our discretion to fully satisfy the margin loan and any applicable fees, interest, and/or charges.

If a margin account for an estate is opened in connection with the transfer of a margin loan from a decedent's account, the margin loan balance must be paid off in full by the thirtieth (30th) calendar day from account opening, at which time the margin feature of the account shall terminate. If the margin loan is not paid off by this time, we shall liquidate positions in your account at our discretion to fully satisfy the margin loan and any applicable fees, interest, and/or charges. We reserve the right to prohibit margin transactions in the account and to force the sale of securities in the account regardless of whether the equity is above the margin requirements or our higher "house" requirements.

Securities in your margin account may be loaned to or by WFA. To the extent WFA determines, in accordance with Federal tax regulations, that your securities have been loaned, payment received by you with respect to such securities (including payments in lieu of dividends) may be reclassified as substitute payments. Substitute payments may be reported on different tax reporting forms than payments received on the underlying securities and may be subject to different tax consequences and rates. You are advised to contact your tax advisor to discuss the tax treatment of substitute payments.

Your Financial Advisor may receive compensation based on the amount of your margin loans, which may take the form of a percentage of your margin balances or the interest you pay on an ongoing basis.

Investment products and services are offered through Wells Fargo Advisors, a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

Margin borrowing may not be appropriate for all investors. When you use margin, you are subject to a high degree of risk. Market conditions can magnify any potential for loss. The value of the securities you hold in your account, which will fluctuate, must be maintained above a minimum value in order for the loan to remain in good standing. If it is not, you will be required to deposit additional securities and/or cash in the account or securities in the account may be sold. Clients are not entitled to choose which securities in their accounts are sold. The sale of their pledged securities may cause clients to suffer adverse tax consequences. Clients should discuss the tax implications of pledging securities as collateral with their tax advisors. An increase in interest rates will affect the overall cost of borrowing. Margin strategies are not appropriate for retirement accounts. Please carefully review the Margin Agreement, which explains the terms and conditions of the margin account, including how the interest on the loan is calculated.

Margin is offered by Wells Fargo Advisors and margin accounts are carried by Wells Fargo Clearing Services, LLC.