A.G. Edwards, Inc.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities and Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate Box:
o     Preliminary Proxy Statement
o     Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x    Definitive Proxy Statement
o     Definitive Additional Materials
o     Soliciting Material Pursuant to §240.14a-12
A.G. Edwards, Inc.
 
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
         
x
  No fee required
o
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
  (1)   Title of each class of securities to which transaction applies:
 
  (2)   Aggregate number of securities to which transaction applies:
 
  (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
  (4)   Proposed maximum aggregate value of transaction:
 
  (5)   Total fee paid:
o
  Fee paid previously with preliminary materials
o
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
  (1)   Amount Previously Paid:
 
  (2)   Form, Schedule or Registration Statement No.:
 
  (3)   Filing Party:
 
  (4)   Date Filed:


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(A.G. EDWARD LOGO)
 
MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT
 
Our merger. Wachovia Corporation, which we refer to as Wachovia, and A.G. Edwards, Inc., which we refer to as A.G. Edwards, are proposing a merger of A.G. Edwards with and into a wholly-owned subsidiary of Wachovia. After the merger, we believe the combined company will be one of the nation’s leading financial services firms in securities brokerage and investment.
 
 
  Facts for A.G. Edwards stockholders:
•   In the merger, each of your shares of A.G. Edwards common stock will be converted into the right to receive 0.9844 Wachovia common shares plus $35.80 in cash.
•   Your board of directors unanimously recommends that you vote “FOR” the proposal to adopt the merger agreement. A copy of the merger agreement is attached as Appendix A to this document.
•   Wachovia expects to continue its current dividend policy. Based on the current Wachovia quarterly dividend of $0.64 per Wachovia common share and the exchange ratio in the merger (i.e., 0.9844), this would equal a quarterly dividend of $0.63 per A.G. Edwards common share.
•   Generally, the merger is intended to be tax-free to you, other than with respect to the cash you receive in the merger.
•   A.G. Edwards needs your vote to complete the merger. A.G. Edwards plans to hold a special stockholders’ meeting to vote on the merger agreement and other matters on September 28, 2007.
 
 
Merger consideration. The number of shares of Wachovia common stock and cash that A.G. Edwards stockholders will receive in the merger is fixed. As shown by the below information, the dollar value of the stock consideration A.G. Edwards stockholders will receive in the merger will change depending on changes in the market price of Wachovia common stock and will not be known at the time you vote on the merger.
 
                 
    Closing
    Value per share of
 
    Wachovia
    A.G. Edwards common stock
 
Date
  Share Price     (including cash amount)  
 
May 30, 2007 (the last trading day before we announced the execution of the merger agreement)   $ 54.55     $ 89.50  
August 27, 2007
  $ 49.66     $ 84.69  
 
You should obtain current market quotations for both Wachovia and A.G. Edwards common shares. Wachovia and A.G. Edwards are both listed on the New York Stock Exchange, under the symbols “WB” and “AGE”, respectively.
 
Voting. Even if you plan to attend the special meeting, please vote as soon as possible by completing and submitting the enclosed proxy card.
 
This document and risks. Please read this document carefully because it contains important information about the merger. Read carefully the section entitled “Risk Factors” beginning on page 14 for a discussion of the risks relating to the merger.
 
Thank you in advance for your cooperation and continued support.
 
Sincerely,
 
-s- Robert L. Bagby
Robert L. Bagby
Chairman and Chief Executive Officer
 
None of the U.S. Securities and Exchange Commission, which we refer to as the SEC, any state securities commission or the North Carolina Commissioner of Insurance has approved or disapproved the securities to be issued in the merger or determined if this document is accurate or adequate. Any representation to the contrary is a criminal offense.
 
The securities to be issued in the merger are not savings or deposit accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
 
Proxy statement-prospectus dated August 28, 2007, and first mailed to stockholders on
or about August 30, 2007.


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ADDITIONAL INFORMATION
 
This document incorporates important business and financial information about Wachovia and A.G. Edwards from other documents that are not included in or delivered with this document. This information is available to you without charge upon your written or oral request. You can obtain documents related to Wachovia and A.G. Edwards that are incorporated by reference into this document through the SEC’s web site at http://www.sec.gov or by requesting them in writing or by telephone from the appropriate company:
 
     
For Wachovia:
  For A.G. Edwards:
     
Wachovia Corporation
Investor Relations
301 South College Street
Charlotte, North Carolina 28288
Telephone: (704) 374-6782
  A.G. Edwards, Inc.
Investor Relations
One North Jefferson Avenue
St. Louis, Missouri 63103
Telephone: (314) 955-3782
 
If you would like to request documents, please do so by September 21, 2007 to receive them before the special meeting.
 
You also may obtain additional proxy cards and other information related to the proxy solicitation by contacting the appropriate contact listed above. You will not be charged for any of these documents that you request.
 
For more information, see “Where You Can Find More Information” beginning on page 76.
 
You should rely only on the information contained in or incorporated by reference into this document. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated August 28, 2007. You should not assume that the information contained in, or incorporated by reference into, this document is accurate as of any date other than that date. Neither our mailing of this document to A.G. Edwards stockholders nor the issuance by Wachovia of common stock in connection with the merger will create any implication to the contrary.
 
This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this document regarding Wachovia has been provided by Wachovia and information contained in this document regarding A.G. Edwards has been provided by A.G. Edwards.


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(A.G. EDWARD LOGO)
 
A.G. EDWARDS, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 28, 2007
 
To the Stockholders of A.G. Edwards, Inc.:
 
A special meeting of stockholders of A.G. Edwards, Inc., a Delaware corporation, is being held on September 28, 2007, at 10:00 a.m., local time, at A.G. Edwards’ home office, One North Jefferson Avenue, St. Louis, Missouri, for the following purposes:
 
  •  To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated May 30, 2007, by and among Wachovia Corporation, White Bird Holdings, Inc., a wholly-owned subsidiary of Wachovia, and A.G. Edwards, Inc., as more fully described in the attached proxy statement-prospectus.
 
  •  To consider and vote upon a proposal to approve the adjournment of the special meeting, including, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting for the foregoing proposal.
 
The close of business on August 13, 2007 has been fixed as the record date for determining those stockholders entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting. Only A.G. Edwards stockholders of record at the close of business on that date are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting. In order to adopt the merger agreement, the holders of a majority of the outstanding shares of A.G. Edwards common stock entitled to vote must vote in favor of the proposal. Abstentions and broker non-votes will have the same effect as votes against adoption of the merger agreement. If you wish to attend the special meeting and your shares are held in the name of a broker, trust, bank or other nominee, you must bring with you a proxy or letter from the broker, trustee, bank or nominee to confirm your beneficial ownership of the shares.
 
A.G. Edwards stockholders who do not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares, as determined by the Delaware Chancery Court, if the merger is completed, but only if they submit a written demand for appraisal to A.G. Edwards before the vote is taken on the merger agreement and comply with all applicable requirements of Delaware law. A summary of the applicable requirements of Delaware law is contained in the accompanying proxy statement-prospectus under the caption “Dissenters’ Appraisal Rights”. In addition, the text of the applicable provisions of Delaware law are attached to the proxy statement-prospectus as Appendix C.
 
By Order of the Board of Directors,
 
-s- Douglas L. Kelly
 
Douglas L. Kelly
Secretary
 
August 28, 2007
 
Whether or not you plan to attend the special meeting in person, please vote your proxy by telephone or through the Internet, as described on the enclosed proxy card, or complete, date, sign and return the enclosed proxy card in the enclosed envelope. The enclosed envelope requires no postage if mailed in the United States. If you attend the special meeting, you may vote in person if you wish, even if you have previously returned your proxy card or voted by telephone or through the Internet.
 
The A.G. Edwards board of directors unanimously recommends that you vote “FOR” adoption of the merger agreement.


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SUMMARY
 
This brief summary highlights material information from this document. We urge you to read carefully the entire document and the other documents to which we refer you for a more complete understanding of the proposed merger between A.G. Edwards and a subsidiary of Wachovia. In addition, we incorporate by reference into this document important business and financial information about Wachovia and A.G. Edwards. You may obtain the information incorporated by reference into this document without charge by following the instructions in the section entitled “Where You Can Find More Information” on page 76. Each item in this summary includes a page reference directing you to a more complete description of that item.
 
We Propose That Wachovia Acquire A.G. Edwards (Page 44)
 
We propose that Wachovia acquire A.G. Edwards by merging A.G. Edwards with and into White Bird Holdings, Inc., a wholly-owned subsidiary of Wachovia, with White Bird Holdings, Inc. as the surviving corporation. Following the merger, White Bird Holdings, Inc., which we refer to as White Bird Holdings, will continue to be a subsidiary of Wachovia. Following the merger, Wachovia will combine the retail securities brokerage businesses of A.G. Edwards with Wachovia’s retail securities brokerage businesses under the name “Wachovia Securities”. Wachovia’s common stock will continue to trade on the New York Stock Exchange, which we refer to as the NYSE, under the symbol “WB”. We expect to complete the merger in the fourth quarter of 2007.
 
A.G. Edwards Stockholders Will Receive in the Merger 0.9844 Shares of Wachovia Common Stock and $35.80 in Cash for Each Share of A.G. Edwards Common Stock (Page 44)
 
Each of your shares of A.G. Edwards common stock will be converted in the merger into the right to receive 0.9844 Wachovia common shares and $35.80 in cash.
 
Wachovia will not issue fractional shares in the merger. Instead, it will pay cash for fractional common shares based on the average of the NYSE closing price per Wachovia share on the five trading days before the merger completion date.
 
For example, if you own 100 shares of A.G. Edwards common stock immediately prior to the merger, when the proposed merger is completed, you will receive:
 
  •   98 Wachovia common shares;
 
  •   $3,580.00 in cash; and
 
  •   for the fractional Wachovia common share, cash equal to 0.44 (the remaining fractional interest in a Wachovia common share) multiplied by the average of the NYSE closing price per Wachovia share on the five trading days before the merger completion date.
 
You will need to surrender your A.G. Edwards common stock certificates to receive the merger consideration for those A.G. Edwards shares, and any dividends paid by Wachovia after merger completion. Please do not surrender your certificates until you receive written instructions from Wachovia after we have completed the merger.
 
The Number of Wachovia Common Shares Issued in the Merger Is Fixed, and Therefore the Value of the Merger Consideration Will Fluctuate with Market Prices (Page 44)
 
The number of Wachovia common shares and cash to be issued in the merger for each A.G. Edwards common share are fixed at 0.9844 and $35.80, respectively, and will not be adjusted for changes in the market price of either Wachovia common stock or A.G. Edwards common stock. Accordingly, any change in the price of Wachovia common stock prior to the merger will affect the market value of the merger consideration that A.G. Edwards stockholders will receive as a result of the merger. Neither of us is permitted to terminate the merger agreement or resolicit the vote of A.G. Edwards stockholders solely because of changes in the market prices of our respective common stocks.
 
You should obtain current stock price quotations for Wachovia common stock and A.G. Edwards common stock. Wachovia common stock and A.G. Edwards common stock are listed on the NYSE under the symbols “WB” and “AGE”, respectively. The following table shows the closing prices for Wachovia common stock and A.G. Edwards common stock and the implied per share value in


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the merger to A.G. Edwards stockholders for the following dates and periods:
 
  •   May 30, 2007, the last trading day before we announced the execution of the merger agreement;
 
  •   May 31, 2007, the first trading day after we announced the execution of the merger agreement;
 
  •   August 27, 2007, shortly before we mailed this document; and
 
  •   the high, low and average closing values for the period from May 30, 2007 through August 27, 2007.
 
                         
                Implied value per
 
          Closing
    A.G. Edwards
 
    Closing
    A.G.
    share (including
 
    Wachovia
    Edwards
    the $35.80 cash
 
    share price     share price     portion)  
 
May 30, 2007
  $ 54.55     $ 77.15     $ 89.50  
May 31, 2007
    54.19       88.16       89.14  
August 27, 2007
    49.66       83.43       84.69  
High (for period)
    54.55       88.75       89.50  
Low (for period)
    44.94       77.15       80.04  
Average (for period)
    50.71       84.04       85.71  
 
With respect to the portion of the merger consideration involving the issuance of Wachovia common stock, we agreed upon a fixed exchange ratio, and note the following:
 
  •   a fixed exchange ratio is customary for mergers of this type in the financial services industry;
 
  •   an exchange ratio that does not fluctuate with the price of our common stocks provides substantial certainty about the number of shares that will be issued in the merger; and
 
  •   the nominal dollar value of the Wachovia shares to be received by A.G. Edwards stockholders in the merger will fluctuate with the market price of Wachovia common stock before the merger is completed and could be materially different from the market price prevailing when we signed the merger agreement.
 
Wachovia’s Common Stock Dividend Policy Will Continue After the Merger; Coordination of Dividends (Page 61)
 
Wachovia expects to continue its common stock dividend policy after the merger, but this policy is subject to the determination of Wachovia’s board of directors and may change at any time. In the third quarter of 2007, Wachovia declared a dividend of $0.64 per share of Wachovia common stock and for the second quarter of 2008, A.G. Edwards declared a dividend of $0.20 per share of A.G. Edwards common stock. For comparison, based on the 0.9844 exchange ratio and Wachovia’s current quarterly dividend rate of $0.64 per share, following the merger, holders of A.G. Edwards common stock would receive a quarterly dividend equivalent to $0.63 per share of A.G. Edwards common stock (i.e., 0.9844 times $0.64).
 
The merger agreement permits A.G. Edwards to continue to pay regular quarterly cash dividends to A.G. Edwards stockholders consistent with past practice prior to merger completion. A.G. Edwards has agreed in the merger agreement to coordinate with Wachovia regarding dividend declarations and the related record dates and payment dates so that A.G. Edwards stockholders will not receive two dividends, or fail to receive one dividend, for any single quarter. Accordingly, prior to the merger, A.G. Edwards may coordinate and alter its dividend record dates in order to effect this policy.
 
The payment of dividends by Wachovia or A.G. Edwards on their common stock in the future, either before or after the merger is completed, is subject to the determination of their respective boards of directors and depends on cash requirements, their financial condition and earnings, legal and regulatory considerations and other factors.
 
The Merger Will Be Accounted for as a Purchase (Page 60)
 
The merger will be treated as a purchase by Wachovia of A.G. Edwards in conformity with accounting principles generally accepted in the U.S., which we refer to as GAAP.
 
The Merger Is Generally Intended to Be Tax-Free to Stockholders, Except with Respect to the Receipt of Cash (Page 58)
 
The merger is intended to constitute a reorganization within the meaning of Section 368(a) of the


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Internal Revenue Code of 1986, as amended, which we refer to as the Internal Revenue Code. Therefore, for U.S. federal income tax purposes as a result of the merger, A.G. Edwards stockholders will only recognize gain (but not loss) in an amount not to exceed the cash received as part of the merger consideration, and will recognize gain or loss with respect to any cash received in lieu of fractional share interests. The merger is conditioned on the receipt of legal opinions of Simpson Thacher & Bartlett LLP, special counsel to Wachovia, and Wachtell, Lipton, Rosen & Katz, special counsel to A.G. Edwards, that, for U.S. federal income tax purposes, the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. In addition, in connection with the effectiveness of the registration statement of which this document is a part, Wachovia and A.G. Edwards have each received a legal opinion to the same effect.
 
See “The Merger Agreement—Material U.S. Federal Income Tax Consequences” for more information.
 
The tax consequences of the merger to any particular stockholder will depend on that stockholder’s particular facts and circumstances. You are urged to consult your own tax advisor to determine your own tax consequences from the merger.
 
Goldman Sachs Provided an Opinion to the A.G. Edwards Board of Directors that the Stock Consideration and the Cash Consideration to be Received in the Merger, Taken in the Aggregate, Was Fair From a Financial Point of View to A.G. Edwards Stockholders (Page 29 and Appendix B)
 
On May 30, 2007, the date the A.G. Edwards board of directors approved the merger agreement, Goldman, Sachs & Co., which we refer to as Goldman Sachs, A.G. Edwards’ financial advisor, rendered an opinion to the A.G. Edwards board of directors that, as of that date and based upon and subject to the factors and assumptions set forth therein, the stock consideration and cash consideration to be received in the merger by A.G. Edwards stockholders, taken in the aggregate, pursuant to the merger agreement was fair from a financial point of view to such holders. The full text of Goldman Sachs’ written opinion is attached to this proxy statement-prospectus as Appendix B. You should read this opinion completely to understand the procedures followed, assumptions made, matters considered and limitations of the review undertaken by Goldman Sachs. Goldman Sachs’ opinion was provided for the information and assistance of the A.G. Edwards board of directors in connection with its consideration of the merger, does not in any manner address the decision of the A.G. Edwards board to proceed with or effect the merger and does not constitute a recommendation as to how any stockholder should vote with respect to the transaction or any other matter. The opinion of Goldman Sachs will not reflect any developments that may occur or may have occurred after the date of the opinion and prior to merger completion. A.G. Edwards does not currently expect to request an updated opinion from Goldman Sachs. Pursuant to an engagement letter, dated May 30, 2007, between A.G. Edwards and Goldman Sachs, Goldman Sachs is entitled to receive a transaction fee of $20 million, all of which is contingent upon the outcome of the transaction.
 
Interests of A.G. Edwards’ Directors and Executive Officers in the Merger (Page 37)
 
All A.G. Edwards directors and executive officers are stockholders of A.G. Edwards. Some of A.G. Edwards’ directors and executive officers have interests in the merger other than their interests as stockholders. The A.G. Edwards board of directors knew about these additional interests and considered them when it adopted the merger agreement.
 
Directors of A.G. Edwards.  Wachovia has agreed in the merger agreement to indemnify all present and former directors, officers and employees of A.G. Edwards and its subsidiaries against costs and expenses in connection with claims arising from matters existing or occurring prior to merger completion. In addition, Wachovia has agreed to obtain directors’ and officers’ liability insurance for present and former officers and directors of A.G. Edwards and its subsidiaries with respect to facts or events occurring prior to merger completion.
 
Executive Officers of A.G. Edwards.  A.G. Edwards has not maintained any employment agreements with its executive officers. In connection with entering into the merger agreement Wachovia entered into an employment arrangement with each of Robert L. Bagby, Chairman and Chief Executive Officer of A.G. Edwards, Douglas L. Kelly, CFO, Executive Vice President, Director of Law and Compliance, Director of Administration and Corporate Secretary, Paul F. Pautler, Executive Vice


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President and Director of Capital Markets, Peter M. Miller, Executive Vice President and Director of Sales and Marketing and Gene M. Diederich, Executive Vice President and Director of Branches.
 
The A.G. Edwards Board of Directors Recommends That You Vote “FOR” Adopting the Merger Agreement (Pages 22 and 26)
 
The A.G. Edwards board of directors believes that the merger and the other transactions contemplated by the merger agreement are in the best interests of A.G. Edwards stockholders and that the merger consideration is fair to A.G. Edwards stockholders, and unanimously recommends that you vote “FOR” the proposal to adopt the merger agreement. For the factors considered by the A.G. Edwards board of directors in reaching its decision to adopt the merger agreement and recommend adoption of the merger agreement to the A.G. Edwards stockholders, see “The Merger — A.G. Edwards’ Reasons for the Merger; Recommendation of the A.G. Edwards Board of Directors”.
 
We Have Agreed When and How A.G. Edwards Can Consider Third-Party Acquisition Proposals (Page 51)
 
In the merger agreement, A.G. Edwards agreed not to initiate, solicit or encourage proposals from third parties regarding acquiring A.G. Edwards or its businesses. In addition, A.G. Edwards agreed not to engage in negotiations with or provide confidential information to a third party regarding acquiring A.G. Edwards or its businesses. However, if A.G. Edwards receives an unsolicited acquisition proposal from a third party, A.G. Edwards can participate in negotiations with and provide confidential information to the third party if, among other steps, the A.G. Edwards board of directors concludes in good faith that the proposal is, or would reasonably be likely to result in, a superior proposal to our merger. A.G. Edwards’ receipt of a superior proposal or participation in such negotiations does not give A.G. Edwards the right to terminate the merger agreement.
 
Merger Agreement Adoption Requires the Affirmative Vote of a Majority of Outstanding Shares by A.G. Edwards Stockholders (Page 19)
 
In order to adopt the merger agreement, the holders of a majority of A.G. Edwards common shares outstanding as of August 13, 2007, the record date for the A.G. Edwards special meeting, must vote in favor of the merger agreement. As of that date, A.G. Edwards’ directors and executive officers beneficially owned about 1,205,392, or approximately 1.59%, of the shares entitled to vote at the A.G. Edwards special meeting. Wachovia and its directors and executive officers beneficially owned less than 1% of the shares entitled to vote at the A.G. Edwards special meeting (other than shares held by Wachovia in a fiduciary, custodial or agency capacity). We expect our respective directors and executive officers will vote to adopt the merger agreement although there is no requirement for them to do so.
 
Treatment of A.G. Edwards Options (Page 44)
 
In the merger, Wachovia will assume all A.G. Edwards employee stock options and shares of restricted stock (including phantom restricted units) and those options will become options to purchase Wachovia common stock. The number of Wachovia shares issuable under those restricted stock awards and options and the exercise prices will be adjusted to take into account the 1.6407 option exchange ratio for A.G. Edwards shares converted into Wachovia shares in the merger. This 1.6407 option exchange ratio was derived by including the cash portion of the merger consideration as if the merger consideration were all shares of Wachovia common stock rather than only 60% of the merger consideration.
 
A.G. Edwards Stockholders Have Appraisal Rights (Page 41 and Appendix C)
 
Under Section 262 of the Delaware General Corporation Law, holders of A.G. Edwards common stock may have the right to obtain an appraisal of the value of their shares of A.G. Edwards common stock in connection with the merger. To perfect appraisal rights, an A. G. Edwards stockholder must not vote for the adoption of the merger agreement and must strictly comply with all of the procedures required under Delaware law. Failure to strictly comply with Section 262 of the Delaware General Corporation Law by an A.G. Edwards stockholder may result in termination or waiver of that stockholder’s appraisal rights.
 
We have included a copy of Section 262 of the Delaware General Corporation Law as Appendix C to this proxy statement-prospectus.


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We Must Meet Several Conditions to Complete the Merger (Page 54)
 
Our obligations to complete the merger depend on a number of conditions being met. These include:
 
  •   adoption of the merger agreement by A.G. Edwards stockholders;
 
  •   listing the shares of Wachovia common stock to be issued in the merger on the NYSE (including shares to be issued following exercise of the A.G. Edwards employee stock options assumed by Wachovia);
 
  •   receiving the required approvals of applicable federal, state and foreign regulatory authorities;
 
  •   the absence of any government action or other legal restraint or prohibition that would prohibit the merger or make it illegal;
 
  •   receiving legal opinions that, for United States federal income tax purposes, the merger will be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. These opinions will be based on customary assumptions and on factual representations made by Wachovia, White Bird Holdings and A.G. Edwards and will be subject to various limitations; and
 
  •   the representations and warranties of the other party to the merger agreement being true and correct, except as would not have or would not reasonably be expected to have a material adverse effect, and the other party to the merger agreement must have performed in all material respects all of its obligations under the merger agreement.
 
Where the law permits, either of us could choose to waive a condition to our obligation to complete the merger even when that condition has not been satisfied. We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed. Although the merger agreement allows us to waive the tax opinion condition, we do not currently anticipate doing so. If either of us does waive the tax opinion condition, we will inform you of this fact and ask you to vote on the merger taking this into consideration.
 
We Must Obtain Regulatory Approvals to Complete the Merger (Page 56)
 
We cannot complete the merger unless we receive approvals or waivers of approval from applicable regulatory authorities. These include approvals, notices or waivers thereof by the Board of Governors of the Federal Reserve System, or the Federal Reserve Board, the National Association of Securities Dealers, Inc., which we refer to as the NASD, the NYSE, and various state and foreign securities regulators. We have filed the appropriate applications with these regulatory authorities. On August 14, 2007, the Federal Reserve Board notified Wachovia that it has approved the merger.
 
In addition, the merger is subject to review by antitrust authorities under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which we refer to as the HSR Act. On June 15, 2007, Wachovia and A.G. Edwards filed the requisite notices under the HSR Act with the Federal Trade Commission, which we refer to as the FTC, and the Antitrust Division of the Department of Justice, which we refer to as the DOJ. The merger received early termination of the HSR Act initial waiting period on June 22, 2007.
 
It is possible that one or more required regulatory approvals may not be received, may be received later than expected or may contain conditions that adversely affect our ability to obtain the anticipated benefits of the merger.
 
We May Terminate the Merger Agreement in Certain Circumstances (Page 54)
 
We can mutually agree at any time to terminate the merger agreement without completing the merger, even if the A.G. Edwards stockholders have adopted the merger agreement. Also, either of us can decide, without the consent of the other, to terminate the merger agreement:
 
  •   if there is a final denial of a required regulatory approval;
 
  •   if the merger is not completed on or before February 29, 2008, unless the failure to complete the merger by this date is due to the failure of the party seeking to terminate the merger agreement to perform its obligations under the merger agreement; or


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  •   if there is a continuing breach of the merger agreement by the other party, after 60 days’ written notice to the breaching party, as long as that breach would allow the non-breaching party not to complete the merger.
 
Also, Wachovia may terminate the merger agreement if:
 
  •   the A.G. Edwards board of directors fails to recommend adoption of the merger agreement to its stockholders, or withdraws or materially and adversely modifies its recommendation;
 
  •   A.G. Edwards materially breaches its obligations by failing to take all action necessary to convene and hold the special meeting in accordance with the merger agreement or materially breaches its obligations by failing to prepare and mail to its stockholders the proxy statement-prospectus in accordance with the merger agreement;
 
  •   A.G. Edwards materially breaches the terms of the merger agreement relating to non-solicitation of third-party acquisition proposals in any respect adverse to Wachovia;
 
  •   the A.G. Edwards board of directors negotiates or authorizes negotiations with a third party regarding an acquisition proposal other than the merger and those negotiations continue for at least 20 business days; or
 
  •   A.G. Edwards is the subject of a tender or exchange offer by a third party and the A.G. Edwards board of directors recommends that A.G. Edwards stockholders tender their shares in the tender or exchange offer or fails to recommend that stockholders reject the tender or exchange offer.
 
The failure of A.G. Edwards to obtain the stockholder vote required for the merger will not by itself give either company the right to terminate the merger agreement. As long as no other termination event has occurred, both companies would remain obligated to continue to use their reasonable best efforts to complete the merger until February 29, 2008, which, depending on timing, could include calling additional stockholder meetings or using their reasonable best efforts to restructure the merger.
 
Whether or not the merger is completed, we will each pay our own fees and expenses, except that we will evenly divide the costs and expenses that we incur in preparing, printing and mailing this proxy statement-prospectus and filing fees paid in connection with the registration statement and all applications for government approvals, except fees paid to counsel, financial advisors and accountants.
 
In certain circumstances involving a competing acquisition bid for A.G. Edwards, A.G. Edwards has agreed to pay Wachovia a termination fee of up to $270 million, upon termination of the merger agreement or, in some cases, within a specified period of time after termination. See “The Merger Agreement — Termination Fee” for a discussion of the circumstances under which a termination fee will be required to be paid.
 
We May Amend or Waive Merger Agreement Provisions (Page 56)
 
We may jointly amend the merger agreement, and each of us may waive our right to require the other party to follow particular provisions of the merger agreement. However, we may not amend the merger agreement after A.G. Edwards stockholders adopt the merger agreement if the amendment would legally require merger proposals to be resubmitted to A.G. Edwards stockholders or would violate Delaware law.
 
Wachovia may also change the structure of the merger, as long as any such change does not change the amount or type of stock or other payment to be received by A.G. Edwards stockholders and the holders of options to purchase A.G. Edwards common stock, does not materially delay the timing of merger completion, does not adversely affect the tax consequences of the merger to A.G. Edwards stockholders and does not cause any of the conditions to complete the merger to be incapable of being satisfied.
 
The Rights of A.G. Edwards Stockholders Following the Merger Will Be Different (Page 69)
 
The rights of Wachovia stockholders are governed by North Carolina law and by Wachovia’s articles of incorporation and by-laws. The rights of A.G. Edwards stockholders are governed by Delaware law and by A.G. Edwards’ certificate of incorporation and by-laws. A.G. Edwards stockholders should be aware of these differences when they vote at the special meeting because, upon merger completion, they will own shares of Wachovia common stock and therefore their rights will be


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governed by North Carolina law and Wachovia’s articles of incorporation and by-laws.
 
Information About the Companies (Page 64)
 
Wachovia Corporation
301 South College Street
Charlotte, North Carolina 28288
(704) 374-6565
 
Wachovia is a financial holding company organized under the laws of North Carolina and registered under the federal Bank Holding Company Act. Wachovia has approximately 3,400 full-service financial centers and more than 760 retail brokerage offices. Wachovia offers a comprehensive line of consumer and commercial banking products and services, personal trust, investment advisory, insurance, securities brokerage, investment banking, mortgage, credit card, cash management, international banking and other financial services.
 
At June 30, 2007, Wachovia had consolidated total assets of approximately $719.9 billion, consolidated total deposits of approximately $413.7 billion and consolidated stockholders’ equity of approximately $69.3 billion. Based on total assets at June 30, 2007, Wachovia was the 4th largest bank holding company in the United States.
 
A.G. Edwards, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
(314) 955-3000
 
A.G. Edwards is a Delaware corporation and is a financial services holding company incorporated in 1983 whose principal subsidiary, A.G. Edwards & Sons, Inc., is the successor to a partnership founded in 1887. A.G. Edwards and its subsidiaries provide securities and commodities brokerage, investment banking, trust services, asset management, financial and retirement planning, insurance products, and other related financial services to individual, corporate, governmental, municipal and institutional clients through one of the industry’s largest retail branch distribution systems. At May 31, 2007, A.G. Edwards had 743 locations in 50 states, the District of Columbia, London, England and Geneva, Switzerland and 15,368 full-time employees, including 6,623 financial consultants providing services for approximately 3.2 million active client accounts. At May 31, 2007, A.G. Edwards had consolidated total assets of approximately $5.1 billion and consolidated stockholders’ equity of approximately $2.2 billion.
 
White Bird Holdings, Inc.
301 South College Street
Charlotte, North Carolina 28288
(704) 374-6565
 
White Bird Holdings is a newly formed Delaware corporation and a wholly-owned subsidiary of Wachovia. White Bird Holdings was formed solely for the purpose of effecting the proposed merger with A.G. Edwards and has not carried on any activities other than in connection with the proposed merger.
 
Special Meeting of A.G. Edwards (Page 19)
 
A.G. Edwards plans to hold its special meeting of stockholders on September 28, 2007, at 10:00 a.m., local time, at A.G. Edwards’ home office, One North Jefferson Avenue, St. Louis, Missouri. At the special meeting, A.G. Edwards stockholders will be asked to adopt the merger agreement providing for the merger of A.G. Edwards with and into White Bird Holdings, a wholly-owned subsidiary of Wachovia. In addition, A.G. Edwards stockholders will be asked to vote upon a proposal to approve adjournment of the special meeting, if necessary.
 
A.G. Edwards stockholders can vote at the A.G. Edwards special meeting of stockholders if they owned A.G. Edwards common stock at the close of business on August 13, 2007. As of that date, there were 75,792,790 shares of A.G. Edwards common stock outstanding and entitled to vote. A.G. Edwards stockholders can cast one vote for each share of A.G. Edwards common stock that they owned on that date.


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Unaudited Comparative Per Share Data
 
The table on the following page shows historical information about our companies’ respective earnings per share, dividends per share and book value per share, and similar information reflecting the merger, which we refer to as “pro forma” information, at or for the three months ended March 31, 2007, and at or for the year ended December 31, 2006. In presenting the comparative pro forma information for the period shown, it is assumed that Wachovia and A.G. Edwards had been combined throughout the period.
 
It has been assumed that the merger will be accounted for under an accounting method known as “purchase accounting”. Under the purchase method of accounting, the assets and liabilities of the company not surviving a merger are recorded, as of the completion date of the merger, at their respective fair values and added to those of the surviving company. Financial statements of the surviving company issued after merger completion reflect such values and are not restated retroactively to reflect the historical financial position or results of operations of the company not surviving.
 
The information listed as “equivalent pro forma” for A.G. Edwards was obtained by multiplying the pro forma amounts listed by Wachovia by the 0.9844 exchange ratio.
 
The pro forma financial information includes customer relationship intangible, debt to fund the cash portion of the merger consideration, and estimated adjustments to record certain exit costs related to A.G. Edwards. The pro forma adjustments included herein are subject to updates as additional information becomes available and as additional analyses are performed. Certain assets and liabilities of A.G. Edwards may be subject to adjustment to their respective fair values, including additional intangible assets which may be identified. Pending more detailed analyses, no pro forma adjustments are included herein for these assets and liabilities. Any change in the fair value of the net assets of A.G. Edwards will change the amount of the purchase price allocable to goodwill. Additionally, changes to A.G. Edwards’ stockholders’ equity, including dividends and net income from June 1, 2007, through the date the merger is completed, will also change the amount of goodwill recorded. In addition, the final adjustments may be materially different from the unaudited pro forma adjustments presented herein.
 
Wachovia also anticipates that the merger will provide Wachovia with financial benefits that include increased revenue opportunities and reduced operating expenses, but these financial benefits are not reflected in the pro forma information. Accordingly, the pro forma information does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during the periods presented.
 
The information in the following tables is based on historical financial information and related notes that we have presented in our prior filings with the SEC. You should read all of the summary financial information provided in the following tables together with this historical financial information and related notes. The historical financial information is also incorporated into this document by reference. See “Where You Can Find More Information” for a description of where you can find this historical information.


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Unaudited Comparative Per Common Share Data of Wachovia and A.G. Edwards
 
                 
    Three Months
       
    Ended
    Year Ended
 
    March 31,
    December 31,
 
    2007     2006  
 
WACHOVIA
               
Basic earnings per common share
Income from continuing operations
               
Historical
  $ 1.22       4.70  
Pro forma
    1.20       4.60  
Diluted earnings per common share
Income from continuing operations
               
Historical
    1.20       4.61  
Pro forma
    1.18       4.52  
Dividends declared on common stock
               
Historical
    0.56       2.14  
Pro forma
    0.56       2.14  
Book value per common share
               
Historical
    36.47       36.61  
Pro forma
  $ 37.20       37.32  
 
                 
    Three Months
       
    Ended
    Year Ended
 
    May 31,
    February 28,
 
    2007     2007  
 
A.G. EDWARDS
               
Basic earnings per common share
               
Historical
  $ 1.12       4.44  
Equivalent pro forma
    1.18       4.53  
Diluted earnings per common share
               
Historical
    1.10       4.34  
Equivalent pro forma
    1.16       4.45  
Dividends declared on common stock
               
Historical
    0.20       0.80  
Equivalent pro forma
    0.55       2.11  
Book value per common share
               
Historical
    28.69       27.91  
Equivalent pro forma
  $ 36.62       36.74  


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Selected Financial Data
 
The following tables show summarized historical financial data for each of Wachovia and A.G. Edwards and also show similar pro forma information reflecting the merger. The historical financial data show the financial results actually achieved by Wachovia and A.G. Edwards for the periods indicated. The pro forma information reflects the pro forma effect of accounting for the merger under the purchase method of accounting. The pro forma income statement for the three months ended March 31, 2007, assumes a completion date of January 1, 2007. The pro forma income statement data for the year ended December 31, 2006, assumes a merger completion date of January 1, 2006. The pro forma balance sheet data assumes a merger completion date of March 31, 2007.
 
The pro forma financial information includes customer relationship intangible, debt to fund the cash portion of the merger consideration, and estimated adjustments to record certain exit costs related to A.G. Edwards. The pro forma adjustments included herein are subject to updates as additional information becomes available and as additional analyses are performed. Certain assets and liabilities of A.G. Edwards may be subject to adjustment to their respective fair values, including additional intangible assets which may be identified. Pending more detailed analyses, no pro forma adjustments are included herein for these assets and liabilities. Any change in the fair value of the net assets of A.G. Edwards will change the amount of the purchase price allocable to goodwill. Additionally, changes to A.G. Edwards’ stockholders’ equity, including net income from June 1, 2007, through the date the merger is completed, will also change the amount of goodwill recorded. In addition, the final adjustments may be materially different from the unaudited pro forma adjustments presented herein.
 
Wachovia’s fiscal year runs from January 1 to December 31 and A.G. Edwards’ fiscal year runs from March 1 to February 28. The pro forma financial information presented herein combines A.G. Edwards’ May 31 three months ended with the immediately preceding Wachovia March 31 three months ended and A.G. Edwards’ February 28 fiscal year-end with the immediately preceding Wachovia December 31 fiscal year-end.
 
The information in the tables on the following pages is based on historical financial information and related notes that we have presented in our prior filings with the SEC. You should read all of the summary financial information provided in the following tables together with this historical financial information and related notes. The historical financial information is also incorporated into this document by reference. See “Where You Can Find More Information” for a description of where you can find this historical information.
 
Wachovia also anticipates that the merger will provide Wachovia with financial benefits that include increased revenue opportunities and reduced operating expenses, but these financial benefits are not reflected in the pro forma information. Accordingly, the pro forma information does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during the periods presented.
 
Since announcement of the merger, our merger integration teams have been developing plans to integrate the operations of A.G. Edwards into Wachovia so that we will continue to provide premier service to our customers while at the same time planning for how we will begin to realize merger efficiencies. These plans will continue to be refined over the next several months and will address systems, facilities and equipment, personnel, contractual arrangements and other integration activities for both A.G. Edwards and Wachovia.
 
The costs associated with merger integration activities that impact certain A.G. Edwards systems, facilities and equipment, personnel and contractual arrangements will be recorded as purchase accounting adjustments as described above when the appropriate plans are in place with potential refinements up to one year after merger completion as additional information becomes available. Wachovia currently estimates that exit cost purchase accounting adjustments will amount to $120 million after-tax. The costs associated with integrating systems and operations will be recorded as merger-related expenses based on the nature and timing of the related expenses, but generally will be recorded as the expenses are incurred. Restructuring charges will be recorded based on the nature and timing of the expenses and generally will include merger integration activities that impact Wachovia systems, facilities and equipment, personnel and contractual arrangements. Wachovia expects merger-related and restructuring expenses will amount to $740 million after-tax and will be incurred and reported through 2009.


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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF WACHOVIA
 
                                                         
    Six Months Ended June 30,     Years Ended December 31,  
(In millions, except per share data)
  2007     2006     2006     2005     2004     2003     2002  
 
CONSOLIDATED SUMMARIES OF INCOME
                                                       
Interest income
  $ 20,509       14,111       32,265       23,689       17,288       15,080       15,632  
Interest expense
    11,628       6,980       17,016       10,008       5,327       4,473       5,677  
                                                         
Net interest income
    8,881       7,131       15,249       13,681       11,961       10,607       9,955  
Provision for credit losses
    356       120       434       249       257       586       1,479  
                                                         
Net interest income after provision for credit losses
    8,525       7,011       14,815       13,432       11,704       10,021       8,476  
Securities gains (losses)
    76       (23 )     118       89       (10 )     45       169  
Fee and other income
    7,899       7,123       14,427       12,130       10,789       9,437       7,721  
Merger-related and restructuring expenses
    42       92       179       292       444       443       387  
Other noninterest expense
    9,402       8,408       17,297       15,555       14,222       12,837       11,306  
Minority interest in income of consolidated subsidiaries
    275       185       414       342       184       143       6  
                                                         
Income from continuing operations before income taxes and cumulative effect of a change in accounting principle
    6,781       5,426       11,470       9,462       7,633       6,080       4,667  
Income taxes
    2,138       1,813       3,725       3,033       2,419       1,833       1,088  
                                                         
Income from continuing operations before cumulative effect of a change in accounting principle
    4,643       3,613       7,745       6,429       5,214       4,247       3,579  
Discontinued operations, net of income taxes
                46       214                    
                                                         
Income before cumulative effect of a change in accounting principle
    4,643       3,613       7,791       6,643       5,214       4,247       3,579  
Cumulative effect of a change in accounting principle, net of income taxes
                                  17        
                                                         
Net income
    4,643       3,613       7,791       6,643       5,214       4,264       3,579  
Dividends on preferred stock
                                  5       19  
                                                         
Net income available to common stockholders
  $ 4,643       3,613       7,791       6,643       5,214       4,259       3,560  
                                                         
PER COMMON SHARE DATA
                                                       
Basic
                                                       
Income from continuing operations before change in accounting principle
  $ 2.45       2.30       4.70       4.13       3.87       3.20       2.62  
Net income
    2.45       2.30       4.72       4.27       3.87       3.21       2.62  
Diluted
                                                       
Income from continuing operations before change in accounting principle
    2.42       2.26       4.61       4.05       3.81       3.17       2.60  
Net income
    2.42       2.26       4.63       4.19       3.81       3.18       2.60  
Cash dividends
    1.12       1.02       2.14       1.94       1.66       1.25       1.00  
Book value
    36.40       30.75       36.61       30.55       29.79       24.71       23.63  
CASH DIVIDENDS PAID ON COMMON STOCK
    2,137       1,637       3,589       3,039       2,306       1,665       1,366  
CONSOLIDATED PERIOD-END BALANCE SHEET ITEMS
                                                       
Assets
    719,922       553,614       707,121       520,755       493,324       401,188       342,033  
Loans, net of unearned income
    429,120       282,916       420,158       259,015       223,840       165,571       163,097  
Deposits
    413,665       327,614       407,458       324,894       295,053       221,225       191,518  
Long-term debt
    142,047       74,627       138,594       48,971       46,759       36,730       39,662  
Stockholders’ equity
  $ 69,266       48,872       69,716       47,561       47,317       32,428       32,078  
Common shares outstanding
    1,903       1,589       1,904       1,557       1,588       1,312       1,357  
CONSOLIDATED AVERAGE BALANCE SHEET ITEMS
                                                       
Assets
  $ 702,062       532,970       580,334       509,010       426,767       361,501       320,603  
Loans, net of unearned income
    418,275       267,960       307,722       227,922       172,033       158,327       154,452  
Deposits
    407,172       325,398       343,280       304,590       247,842       198,923       180,874  
Long-term debt
    142,746       63,932       87,178       47,774       39,780       36,676       38,902  
Stockholders’ equity
  $ 69,318       48,498       54,263       47,019       35,295       32,135       30,392  
Common shares outstanding
                                                       
Basic
    1,892       1,570       1,651       1,556       1,346       1,325       1,356  
Diluted
    1,922       1,599       1,681       1,585       1,370       1,340       1,369  
ASSET QUALITY
                                                       
Allowance for loan losses
  $ 3,390       3,021       3,360       2,724       2,757       2,348       2,604  
Nonperforming assets
    2,106       741       1,382       752       1,257       1,228       1,873  
Net charge-offs
  $ 305       110       366       207       300       652       1,122  
CONSOLIDATED PERCENTAGES
                                                       
Average assets to average stockholders’ equity
    10.13 X     10.99       10.69       10.83       12.09       11.25       10.55  
Return on average assets
    1.33 %(a)     1.37 (a)     1.34       1.31       1.22       1.18       1.12  
Return on average stockholders’ equity
    13.51 (a)     15.02 (a)     14.36       14.13       14.77       13.27       11.78  
Average stockholders’ equity to average assets
    9.87       9.10       9.35       9.24       8.27       8.89       9.49  
Stockholders’ equity to assets
    9.62       8.83       9.86       9.13       9.59       8.09       9.38  
Allowance for loan losses to
                                                       
Loans, net
    0.79       1.07       0.80       1.05       1.23       1.42       1.60  
Nonperforming assets
    161       408       243       362       219       191       139  
Net charge-offs to average loans, net
    0.15 (a)     0.08 (a)     0.12       0.09       0.17       0.41       0.73  
Nonperforming assets to loans, net, foreclosed properties and loans held for sale
    0.47       0.25       0.32       0.28       0.53       0.69       1.11  
Capital ratios
                                                       
Tier I capital
    7.47       7.81       7.42       7.50       8.01       8.52       8.22  
Total capital
    11.46       11.42       11.33       10.82       11.11       11.82       12.01  
Leverage
    6.23       6.57       6.01       6.12       6.38       6.36       6.77  
Net interest margin
    2.97 %(a)     3.19 (a)     3.12       3.24       3.41       3.72       3.97  
                                                         
(a) Annualized.


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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF A.G. EDWARDS
 
                                                         
    Three Months
       
    Ended May 31,     Years Ended February 28,  
(In millions, except per share data)
  2007     2006     2007     2006*     2005     2004     2003  
 
CONSOLIDATED SUMMARIES OF INCOME
                                                       
Interest income
  $ 55       54       231       181       129       96       107  
Interest expense
    4       4       16       11       4       3       6  
                                                         
Net interest income
    51       50       215       170       125       93       101  
Provision for credit losses
                      1       (1 )     1       9  
                                                         
Net interest income after provision for credit losses
    51       50       215       169       126       92       92  
Fee and other income
    791       715       2,895       2,569       2,483       2,430       2,114  
Noninterest expense
    708       642       2,590       2,397       2,315       2,277       2,035  
                                                         
Income before income taxes and cumulative effect of a change in accounting principle
    134       123       520       341       294       245       171  
Income taxes
    51       45       189       118       108       86       52  
                                                         
Cumulative effect of a change in
    83       78       331       223       186       159       119  
accounting principle, net of income taxes
                      3                    
                                                         
Net income
  $ 83       78       331       226       186       159       119  
                                                         
PER COMMON SHARE DATA
                                                       
Basic
                                                       
Income before change in accounting principle
  $ 1.12       1.03       4.44       2.91       2.39       1.99       1.48  
Net income
    1.12       1.03       4.44       2.95       2.39       1.99       1.48  
Diluted earnings
                                                       
Income before change in accounting principle
    1.10       1.01       4.34       2.89       2.37       1.97       1.46  
Net income
    1.10       1.01       4.34       2.93       2.37       1.97       1.46  
Cash dividends
    0.20       0.20       0.80       0.72       0.64       0.64       0.64  
Book value
    28.69       25.81       27.91       24.96       23.21       22.08       20.92  
CASH DIVIDENDS PAID ON COMMON STOCK
    15       15       61       52       50       51       51  
CONSOLIDATED PERIOD-END BALANCE SHEET ITEMS
                                                       
Assets
    5,066       4,413       5,312       4,672       4,688       4,436       3,980  
Loans, net of unearned income
    1,755       1,948       1,714       2,087       2,244       2,419       2,083  
Stockholders’ equity
  $ 2,174       1,972       2,102       1,887       1,788       1,778       1,689  
Common shares outstanding
    76       76       75       76       77       81       81  
CONSOLIDATED AVERAGE BALANCE SHEET ITEMS
                                                       
Assets
  $ 5,189       4,543       4,992       4,680       4,562       4,208       4,084  
Loans, net of unearned income
    1,735       2,018       1,901       2,166       2,332       2,251       2,291  
Stockholders’ equity
  $ 2,138       1,930       1,995       1,838       1,783       1,734       1,669  
Average common shares outstanding
                                                       
Basic
    74       75       75       77       78       80       80  
Diluted
    76       77       76       77       79       81       81  
ASSET QUALITY
                                                       
Allowance for loan losses
  $ 2       3       3       3       8       46       45  
CONSOLIDATED PERCENTAGES
                                                       
Average assets to average stockholders’ equity
    2.43 X     2.35       2.50       2.55       2.56       2.43       2.45  
Return on average assets
    6.49 %(a)     6.96 (a)     6.63       4.83       4.08       3.78       2.91  
Return on average stockholders’ equity
    15.74 (a)     16.39 (a)     16.59       12.30       10.43       9.17       7.13  
Average stockholders’ equity to average assets
    41.20       42.48       39.96       39.27       39.08       41.20       40.87  
Stockholders’ equity to assets
    42.91       44.69       39.57       40.39       38.14       40.08       42.44  
Allowance for loan losses to
                                                       
Loans, net
    0.11 %     0.15       0.18       0.14       0.36       1.90       2.16  
                                                         
 
* Fiscal 2006 amounts have been adjusted due to a change in accounting method related to stock-based compensation.


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SELECTED PRO FORMA CONDENSED COMBINED FINANCIAL DATA OF
WACHOVIA AND A.G. EDWARDS
 
                 
    Three Months
       
    Ended
    Year Ended
 
    March 31,
    December 31,
 
(In millions, except per share data)
  2007(b)     2006(c)  
 
CONSOLIDATED SUMMARIES OF INCOME
               
Interest income
  $ 10,203       32,496  
Interest expense
    5,732       17,191  
                 
Net interest income
    4,471       15,305  
Provision for credit losses
    177       434  
                 
Net interest income after provision for credit losses
    4,294       14,871  
Securities gains
    53       118  
Fee and other income
    4,475       17,322  
Merger-related and restructuring expenses
    10       179  
Other noninterest expense
    5,297       19,946  
Minority interest in income of consolidated subsidiaries
    136       414  
                 
Income before income taxes
    3,379       11,772  
Income taxes
    1,028       3,830  
                 
Net income
  $ 2,351       7,942  
                 
PER COMMON SHARE DATA
               
Basic (a)
  $ 1.20       4.60  
Diluted (a)
    1.18       4.52  
Dividends
    0.56       2.14  
Book value (a)
    37.20       37.32  
CONSOLIDATED PERIOD-END BALANCE SHEET ITEMS
               
Assets
    716,379        
Loans, net of unearned income
    423,418        
Deposits
    408,148        
Long-term debt
    145,012        
Stockholders’ equity
  $ 73,944        
Common shares outstanding
    1,988        
CONSOLIDATED PERCENTAGES
               
Return on average assets
    1.36 %(d)     1.36  
Return on average stockholders’ equity
    13.34 (d)     14.12  
Allowance for loan losses to
               
Loans, net
    0.80       0.80  
Nonperforming assets
    192       243  
Net charge-offs to average loans, net
    0.15 (d)     0.12  
Nonperforming assets to loans, net, foreclosed properties and loans held for sale
    0.40 %     0.32  
                 
 
(a) The basic and diluted per common share amounts were determined by dividing pro forma net income by the sum of (i) Wachovia’s respective historical average basic and diluted shares outstanding, and (ii) A.G. Edwards’ respective historical average basic and diluted shares outstanding as adjusted by the 0.9844 exchange ratio for each period presented. Dividends per share are the actual amounts per share paid by Wachovia for each period presented. The book value per common share amounts at March 31, 2007 and December 31, 2006, respectively, were determined by dividing pro forma stockholders’ equity by the sum of (i) Wachovia’s common shares outstanding at March 31, 2007 and December 31, 2006, respectively, and (ii) A.G. Edwards’ common shares outstanding at May 31, 2007 and February 28, 2007, respectively, as adjusted by the 0.9844 exchange ratio.
 
(b) The three months ended May 31, 2007, for A.G. Edwards.
 
(c) The year ended February 28, 2007, for A.G. Edwards.
 
(d) Annualized.


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RISK FACTORS
 
In addition to the other information contained in or incorporated by reference into this proxy statement-prospectus, including the matters addressed under the heading “Forward-Looking Statements”, you should carefully consider the following risk factors in deciding how to vote on the merger. For further discussion of risk factors relating to the businesses of each of Wachovia and A.G. Edwards, please see Wachovia’s and A.G. Edwards’ periodic reports and other documents incorporated by reference into this document. See “Where You Can Find More Information”, beginning on Page 76.
 
The Market Value of the Wachovia Common Stock That A.G. Edwards Stockholders Will Receive in the Merger May Fluctuate.
 
In the merger, A.G. Edwards stockholders will have the right to receive 0.9844 shares of Wachovia common stock and $35.80 in cash for each share of A.G. Edwards common stock. Because the number of Wachovia common shares and cash that will be issued in the merger to each A.G. Edwards stockholder is fixed and will not be adjusted for changes in the market price of either Wachovia common stock or A.G. Edwards common stock, any change in the price of Wachovia common stock will affect the market value of the merger consideration that A.G. Edwards stockholders will receive. Neither Wachovia nor A.G. Edwards is permitted to terminate the merger agreement or resolicit the vote of A.G. Edwards stockholders solely because of changes in the market price of their respective shares of common stock.
 
Stock price changes may result from a variety of factors, including general market and economic conditions, changes in our businesses, operations and prospects and regulatory considerations. Many of these factors are beyond either party’s control. The prices of Wachovia common stock and A.G. Edwards common stock at merger completion may vary from their respective prices on the date the merger agreement was executed, the date of this proxy statement-prospectus and the date of the special meeting. As a result, the value represented by the merger consideration also will vary. For example, based on the range of closing prices of Wachovia common stock during the period from May 30, 2007, the last trading day before public announcement of the execution of the merger agreement, through August 27, 2007, the merger consideration represented a value ranging from a high of $89.50 to a low of $80.04 for each share of A.G. Edwards common stock. Because the date the merger is completed may be later than the date of the special meeting, at the time of A.G. Edwards stockholders’ meeting, you will not necessarily know the market value of Wachovia common stock that A.G. Edwards stockholders will receive upon merger completion.
 
Combining Our Two Companies May Be More Difficult, Costly or Time-Consuming Than We Expect.
 
Wachovia and A.G. Edwards have operated and, until merger completion, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees or disruption of each company’s ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers and employees or to achieve the anticipated benefits of the merger. As with any merger of financial institutions, there also may be business disruptions that cause us to lose customers. The success of the combined company following the merger may depend in large part on the ability to integrate the two businesses, business models and cultures. If we are not able to integrate our operations successfully and timely, the expected benefits of the merger may not be realized.
 
Regulatory Approvals May Not Be Received, May Take Longer Than Expected or Impose Conditions Which Are Not Presently Anticipated.
 
The merger must be approved by the Federal Reserve Board and reviewed by the Federal Trade Commission and the Antitrust Division of the DOJ. The Federal Reserve Board, the Federal Trade Commission and/or the Antitrust Division of the DOJ will consider, among other factors, the competitive impact of the merger, the financial and managerial resources of our companies and the convenience and needs of the communities to be served. As part of that consideration, we expect that the Federal Reserve Board will review


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capital position, safety and soundness, and legal and regulatory compliance matters, and Community Reinvestment Act matters.
 
These and other regulatory approvals may not be received, or may be received later than anticipated. Regulatory approvals that are received may impose restrictions or conditions that restrict our activities or otherwise adversely affect our ability to obtain the anticipated benefits of the merger.
 
Future Results of the Combined Company May Differ Materially from the Summary Pro Forma Financial Information Presented in This Proxy Statement-Prospectus.
 
Wachovia’s future results may be materially different from those shown in the summary pro forma financial information presented in this proxy statement-prospectus that show only a combination of Wachovia’s and A.G. Edwards’ historical results. Wachovia has estimated that Wachovia will record approximately $740 million of aggregate after-tax merger-related and restructuring expenses, and $120 million of after-tax exit cost purchase accounting adjustments. The charges may be higher or lower than estimated, depending upon how costly or difficult it is to integrate our two companies. Furthermore, these charges may decrease Wachovia’s capital that could be used for income-earning investments in the future.
 
The Market Price of Wachovia Common Stock after the Merger May be Affected by Factors Different from Those Affecting A.G. Edwards Common Stock Currently.
 
The businesses of Wachovia and A.G. Edwards differ in many respects—primarily because of Wachovia’s banking businesses—and, accordingly, the results of operations of the combined company and the market price of Wachovia’s shares of common stock after the merger may be affected by factors different from those currently affecting the independent results of operations of A.G. Edwards. For a discussion of the businesses of Wachovia and A.G. Edwards and of certain factors to consider in connection with those businesses, see the documents incorporated by reference into this proxy statement-prospectus and referred to under “Where You Can Find More Information”.
 
Unless the Merger Is Completed, There Are Limits on Another Business Combination By A.G. Edwards Until February 29, 2008.
 
The failure of A.G. Edwards to obtain the stockholder vote required for the merger will not by itself give either company the right to terminate the merger agreement. As long as no other termination event has occurred, both companies would remain obligated to continue to use their reasonable best efforts to complete the merger (including by using their reasonable best efforts to restructure the merger) until February 29, 2008, which, depending on the timing of the failed meeting, could include calling an additional stockholder meeting.
 
During the period the merger agreement is in effect, A.G. Edwards cannot undertake any other mergers or business combination transactions without the consent of Wachovia. Furthermore, any decision by the A.G. Edwards board of directors to withdraw or adversely modify its recommendation of the merger, or negotiate or authorize negotiations with a third party regarding an acquisition proposal other than the merger will not give A.G. Edwards the right to terminate the merger agreement. The foregoing prohibitions could have the effect of delaying alternative strategic business combinations for a limited period.
 
We May Fail to Realize the Cost Savings Estimated for the Merger.
 
Wachovia estimates that approximately $395 million of annual after-tax cost savings would be realized from the merger by December 31, 2009. As with any estimate, it is possible that the estimates of the potential cost savings could turn out to be incorrect. For example, the combined purchasing power may not be as strong as expected, and therefore the cost savings could be reduced. In addition, unanticipated growth in Wachovia’s business may require Wachovia to continue to operate or maintain some facilities or support functions that are currently expected to be combined or reduced. The cost savings estimates also depend on our ability to combine the businesses of Wachovia and A.G. Edwards in a manner that permits those costs savings to be realized. If the estimates turn out to be incorrect or Wachovia is not able to combine our two companies


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successfully, the anticipated cost savings may not be fully realized or realized at all, or may take longer to realize than expected.
 
Uncertainties Associated with the Merger May Cause a Loss of Employees and May Otherwise Affect the Future Business and Operations of Wachovia and A.G. Edwards.
 
Wachovia’s success after the merger will depend in part upon its ability to retain key employees of Wachovia and A.G. Edwards. Current and prospective employees of Wachovia and A.G. Edwards may experience uncertainty about their roles with the combined company following the merger. This may adversely affect the ability of each of Wachovia and A.G. Edwards to attract and retain key management, sales, marketing, technical and other personnel. In addition, key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the merger. As a result, the combined company may not be able to attract or retain key employees of Wachovia and A.G. Edwards to the same extent that those companies have been able to attract or retain their own employees in the past.


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FORWARD-LOOKING STATEMENTS
 
This document, including information included or incorporated by reference into this document, contains forward-looking statements with respect to the financial condition, results of operations and business of each of Wachovia and A.G. Edwards and, assuming the completion of the merger, a combined Wachovia and A.G. Edwards. Such statements include, but are not limited to, statements relating to:
 
  •   synergies (including cost savings), and accretion/dilution to reported earnings expected to be realized from the merger;
 
  •   business opportunities and strategies potentially available to the combined company;
 
  •   merger-related and restructuring charges expected to be incurred;
 
  •   management, operations and policies of Wachovia after the merger; and
 
  •   statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates,” “intends,” “estimates,” “should” or similar expressions.
 
These forward-looking statements involve some risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among other things, the following possibilities:
 
  •   the risk that the businesses of Wachovia and A.G. Edwards will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected;
 
  •   the risk that expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected time frame;
 
  •   the risk that revenues following the merger may be lower than expected;
 
  •   broker attrition, operating costs, customer loss and business disruption following the merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected;
 
  •   the inability to obtain governmental approvals of the merger on the proposed terms and schedule;
 
  •   the failure of A.G. Edwards stockholders to adopt the merger agreement;
 
  •   competitive pressures among financial institutions may increase significantly and have an effect on pricing, spending, third-party relationships and revenues;
 
  •   the strength of the United States economy in general and the strength of the local economies in which Wachovia will conduct operations may be different than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on Wachovia’s loan portfolio and allowance for loan losses;
 
  •   changes in the United States and foreign legal and regulatory framework;
 
  •   unanticipated regulatory or judicial proceedings or rulings;
 
  •   the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;
 
  •   potential or actual litigation;
 
  •   inflation, interest rate, market and monetary fluctuations;
 
  •   the risk that management’s assumptions and estimates used in applying critical accounting policies prove unreliable, inaccurate or not predictive of actual results;
 
  •   the risk that the design of either company’s disclosure controls and procedures or internal controls prove inadequate, or are circumvented, thereby causing losses or errors in information or a delay in the detection of fraud;


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  •   adverse conditions in the stock market, the public debt market and other capital markets both domestically and abroad (including changes in interest rate conditions) and the impact of such conditions on Wachovia’s and A.G. Edwards’ capital markets and asset management activities; and
 
  •   the impact on Wachovia’s or A.G. Edwards’ businesses, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts.
 
Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements, and the factors that will determine these results are beyond Wachovia’s or A.G. Edwards’ ability to control or predict.
 
We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this proxy statement-prospectus, in the case of forward-looking statements contained in this proxy statement-prospectus, or the dates of the documents incorporated by reference in this proxy statement-prospectus, in the case of forward-looking statements made in those incorporated documents.
 
Except to the extent required by applicable law or regulation, Wachovia and A.G. Edwards undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement-prospectus or to reflect the occurrence of unanticipated events.
 
For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the reports that Wachovia and A.G. Edwards have filed with the SEC under “Where You Can Find More Information”.
 
All subsequent written or oral forward-looking statements concerning the merger or other matters addressed in this proxy statement-prospectus and attributable to Wachovia or A.G. Edwards or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.
 
Neither Wachovia’s nor A.G. Edwards’ independent registered public accounting firms have compiled, examined or otherwise applied procedures to the prospective financial information presented herein and, accordingly, do not express an opinion or any other form of assurance on such information or its achievability.


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A.G. EDWARDS SPECIAL MEETING
 
This section contains information about the special meeting of A.G. Edwards stockholders called to consider and adopt the merger agreement. This proxy statement-prospectus is being mailed to A.G. Edwards stockholders on or about August 30, 2007. Together with this proxy statement-prospectus, A.G. Edwards is also sending to you a form of proxy that the A.G. Edwards board of directors is soliciting for use at the special meeting and at any adjournments or postponements of the meeting. The special meeting will be held on September 28, 2007 at 10:00 a.m., local time, at A.G. Edwards’ home office, One North Jefferson Avenue, St. Louis, Missouri.
 
Matters To Be Considered
 
  •   To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated May 30, 2007, by and among Wachovia Corporation, White Bird Holdings, Inc., a wholly-owned subsidiary of Wachovia, and A.G. Edwards, Inc., pursuant to which, A.G. Edwards will merge with and into White Bird Holdings, as more fully described in this proxy statement-prospectus.
 
  •   To consider and vote upon a proposal to approve the adjournment of the special meeting, including, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting for the foregoing proposal.
 
Proxies
 
A.G. Edwards stockholders should complete and return the proxy card accompanying this document to ensure that their vote is counted at the special meeting, regardless of whether they plan to attend the special meeting. If you are a registered A.G. Edwards stockholder (that is, you hold A.G. Edwards common stock directly registered in your own name), you may also vote by telephone or through the Internet by following the instructions described on your proxy card. If your shares of A.G. Edwards common stock are held in nominee or “street name”, you will receive separate voting instructions from your broker or nominee, which will be included with your proxy materials. Most brokers and nominees offer telephone and Internet voting, but the availability of and procedures for these alternatives will depend on the arrangements established by each particular broker or nominee.
 
If you are a registered A.G. Edwards stockholder, you can revoke your proxy at any time before the vote is taken at the special meeting by submitting to A.G. Edwards’ corporate secretary written notice of revocation or a properly executed proxy of a later date, or by attending the special meeting and voting in person. Attendance at the special meeting will not by itself constitute revocation of a proxy. Written notices of revocation and other communications about revoking A.G. Edwards proxies should be addressed to:
 
A.G. Edwards, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
Attention: Corporate Secretary
 
If your shares are held in nominee or “street name”, you should contact your broker or other nominee regarding the revocation of proxies.
 
All shares of A.G. Edwards common stock represented by valid proxies that A.G. Edwards receives through this solicitation, and not revoked before they are exercised, will be voted in the manner specified on the proxies. If you make no specification on your proxy card, your proxy will be voted “FOR” adoption of the merger agreement and “FOR” approval of the proposal to adjourn the special meeting, including, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to adopt the merger agreement. However, brokers that hold shares of A.G. Edwards common stock in nominee or “street name” for customers who are the beneficial owners of those shares may not give a proxy to vote those shares on the merger agreement without specific instructions from those customers.


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The A.G. Edwards board of directors is presently unaware of any other matters that may be presented for action at the special meeting. If other matters do properly come before the special meeting, however, A.G. Edwards intends that shares represented by proxies in the form accompanying this proxy statement-prospectus will be voted by and at the discretion of the persons named as proxies on the proxy card.
 
Adopting the merger agreement requires the affirmative vote of a majority of the outstanding shares of A.G. Edwards common stock entitled to vote at the special meeting. As a result, abstentions and broker non-votes will have the same effect as votes against adoption of the merger agreement. Therefore, the A.G. Edwards board of directors urges A.G. Edwards stockholders to complete, date and sign the accompanying proxy and return it promptly in the enclosed, postage-paid envelope or, alternatively, to submit your proxy via the telephone or Internet procedures described under “—Voting via Telephone, Internet or Mail” below.
 
A.G. Edwards stockholders should NOT send in any stock certificates with their proxy card. The exchange agent will mail a transmittal letter with instructions for the surrender of stock certificates to A.G. Edwards stockholders as soon as practicable after the merger is completed.
 
Solicitation of Proxies
 
A.G. Edwards will bear the entire cost of soliciting proxies from its stockholders, except that A.G. Edwards and Wachovia have agreed to each pay one-half of the costs and expenses of printing and mailing this proxy statement-prospectus and all filing and other fees relating to the merger paid to the SEC. In addition to soliciting proxies by mail, A.G. Edwards will request banks, brokers and other record holders to send proxies and proxy material to the beneficial owners of A.G. Edwards common stock and secure their voting instructions. If necessary, A.G. Edwards will reimburse those banks, brokers and record holders for their reasonable fees and expenses in taking those actions. A.G. Edwards has also made arrangements with Innisfree M&A Incorporated to assist in soliciting proxies and has agreed to pay them $50,000 plus reasonable expenses for these services. If necessary, subject to applicable law, A.G. Edwards and Wachovia may also use several of their regular employees, who will not be specially compensated, to solicit proxies from A.G. Edwards stockholders, either personally or by telephone, the Internet, telegram, fax, letter or special delivery letter.
 
Record Date and Voting Rights
 
In accordance with Delaware law, A.G. Edwards’ by-laws and NYSE rules, A.G. Edwards has fixed August 13, 2007 as the record date for determining the A.G. Edwards stockholders entitled to notice of, and to vote at, the special meeting. Only A.G. Edwards stockholders of record at the close of business on the record date are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements of the special meeting. At the close of business on the record date, there were 75,792,790 shares of A.G. Edwards common stock outstanding, held by approximately 26,230 holders of record. The presence in person or by proxy of a majority of common shares outstanding on the record date will constitute a quorum for purposes of conducting business at the special meeting. On each matter properly submitted for consideration at the special meeting, you are entitled to one vote for each outstanding share of A.G. Edwards common stock you held as of the close of business on the record date.
 
Shares of A.G. Edwards common stock present in person at the special meeting but not voting, and shares of A.G. Edwards common stock for which A.G. Edwards has received proxies indicating that their holders have abstained, will be counted as present at the special meeting for purposes of determining whether there is a quorum for transacting business at the special meeting. Shares represented by proxies returned by a broker holding the shares in “street name” will be counted for purposes of determining whether a quorum exists, even if those shares are not voted by their beneficial owners on matters where the broker cannot vote the shares in its discretion (so-called “broker non-votes”).
 
As of the record date:
 
  •   A.G. Edwards’ directors and executive officers beneficially owned approximately 1,205,392 shares of A.G. Edwards common stock, representing approximately 1.59% of the shares entitled to vote at the


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  special meeting. A.G. Edwards currently expects that its directors and executive officers will vote the shares of A.G. Edwards common stock they beneficially own “FOR” adoption of the merger agreement;
 
  •   Wachovia and its directors and executive officers beneficially owned less than 1% of the shares entitled to vote at the A.G. Edwards special meeting (other than shares held as fiduciary, custodian or agent as described below);
 
  •   subsidiaries of Wachovia, as fiduciaries, custodians or agents, held a total of approximately 568,908 shares of A.G. Edwards common stock, representing approximately 0.75% of the shares entitled to vote at the annual meeting, and maintained sole or shared voting power over approximately 129,134 of these shares; and
 
  •   subsidiaries of A.G. Edwards, as fiduciaries, custodians or agents, held a total of approximately 82,067 shares of A.G. Edwards common stock, representing approximately 0.11% of the shares entitled to vote at the annual meeting, and maintained sole or shared voting power over approximately 82,067 of these shares.
 
Voting via Telephone, Internet or Mail
 
A.G. Edwards offers three ways for you to vote your proxy:
 
  •   Option 1—Vote by Telephone:
 
Call toll free 1-800-690-6903 before midnight (Eastern Time) on September 25, 2007 and follow the instructions on the enclosed proxy card.
 
  •   Option 2—Vote on the Internet:
 
Access the proxy form at www.proxyvote.com before midnight (Eastern Time) on September 25, 2007. Follow the instructions for Internet voting found there and on the enclosed proxy card. If you vote via the Internet, please be advised that there may be costs involved, including possibly access charges from Internet access providers and telephone companies. You will have to bear these costs.
 
If your shares are registered in the name of a brokerage, bank or other nominee, you may not be able to use telephone and Internet voting procedures. Please refer to the voting materials you receive, or contact your broker, bank or other nominee, to determine your options.
 
  •   Option 3—Mail your Proxy Card:
 
If you do not wish to vote by telephone or the Internet, please complete, sign, date and return the enclosed proxy card as described under “—Proxies” above.
 
In order to be effective, proxy instructions must be received before the times indicated above to allow for processing the results.
 
The voting procedures used by A.G. Edwards’ proxy service, Broadridge Financial Solutions, Inc., are designed to properly authenticate stockholders’ identities and to accurately record and count their proxies.
 
Delivery of Proxy Materials
 
To reduce the expenses of delivering duplicate proxy materials to A.G. Edwards stockholders, A.G. Edwards is relying upon SEC rules that permit it to deliver only one proxy statement-prospectus to multiple stockholders who share an address unless we receive contrary instructions from any stockholder at that address. If you share an address with another stockholder and have received only one proxy statement-prospectus, you may write or call us as specified below to request a separate copy of this document and we will promptly send it to you at no cost to you. For future A.G. Edwards stockholder meetings, if any, you may request separate copies of A.G. Edwards’ proxy materials, or request that A.G. Edwards send only one set of these materials to you if you are receiving multiple copies, by contacting us at: A.G. Edwards, Inc., Investor Relations, One North Jefferson Avenue, St. Louis, Missouri 63103, or by telephoning us at (314) 955-3782.


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Attending the Meeting
 
All A.G. Edwards stockholders, including stockholders of record and stockholders who hold their shares through banks, brokers, nominees or any other holder of record, are invited to attend the A.G. Edwards special meeting. Stockholders of record can vote in person at the special meeting. If you are not a stockholder of record, you must obtain a proxy executed in your favor, from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote in person at the special meeting. If you plan to attend the special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership and you must bring a form of personal photo identification with you in order to be admitted. We reserve the right to refuse admittance to anyone without proper proof of share ownership and without proper photo identification.
 
Proposal to Adopt the Agreement and Plan of Merger
 
Recommendations of the A.G. Edwards Board
 
The A.G. Edwards board of directors has unanimously approved and adopted the merger agreement. The A.G. Edwards board of directors believes that the merger agreement and the transactions it contemplates are in the best interests of A.G. Edwards and its stockholders, and unanimously recommends that A.G. Edwards stockholders vote “FOR” adoption of the merger agreement.
 
See “The Merger—A.G. Edwards’ Reasons for the Merger; Recommendation of the A.G. Edwards Board of Directors” for a more detailed discussion of the A.G. Edwards board’s recommendation with regard to the merger agreement.


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THE MERGER
 
The following discussion contains certain material information about the merger. The discussion is subject, and qualified in its entirety by reference, to the merger agreement and financial advisor opinion attached as Appendices to this document. We urge you to read carefully this entire document, including the merger agreement and financial advisor opinion attached as Appendices to this document, for a more complete understanding of the merger.
 
Wachovia’s and A.G. Edwards’ boards of directors have approved and adopted the merger agreement. The merger agreement provides for combining our companies through the merger of A.G. Edwards with and into White Bird Holdings, Inc., a wholly-owned subsidiary of Wachovia, with White Bird Holdings as the surviving corporation. Following the merger, Wachovia will combine the retail securities brokerage businesses of A.G. Edwards with Wachovia’s retail securities brokerage businesses under the name “Wachovia Securities”.
 
In the merger, each share of A.G. Edwards common stock will be converted into the right to receive 0.9844 shares of Wachovia common stock and $35.80 in cash for each such share. Shares of Wachovia common stock issued and outstanding at merger completion will remain outstanding and those stock certificates will be unaffected by the merger. Wachovia’s common stock will continue to trade on the NYSE under the Wachovia Corporation name with the symbol “WB” following the merger.
 
See “The Merger Agreement” for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the merger and the provisions for terminating or amending the merger agreement.
 
Background of the Merger
 
Each of Wachovia’s and A.G. Edwards’ board of directors has from time to time separately engaged with senior management of their respective companies in reviews and discussions of potential strategic alternatives, and has considered ways to enhance their respective performance and prospects in light of competitive and other relevant developments. These reviews and discussions have focused on, among other things, the business environment facing financial institutions generally and each respective company in particular, as well as conditions and ongoing consolidation in the financial services industry, including in the retail brokerage industry. For each company, these reviews have also included periodic discussions with respect to potential transactions that would better serve clients and employees, further its strategic objectives, and the potential benefits and risks of those transactions.
 
In November 2006, at a meeting of Robert L. Bagby, Chairman and Chief Executive Officer of A.G. Edwards, and the independent directors of the A.G. Edwards board of directors, discussions occurred concerning strategic matters relating to A.G. Edwards and the markets in which it operates. In connection with these discussions, Mr. Bagby discussed plans for a strategic planning session of the Executive Committee of the brokerage subsidiary of A.G. Edwards that would consider issues the A.G. Edwards board of directors had been discussing from time to time, including the strategic direction of the firm, the need for growth or change given the costs of technology, supervision and other regulatory requirements, the effects of globalization, efficient use of capital, the need for increased returns from current assets and additional products and services, changes in securities exchanges, trading and distribution arrangements, effects of regulatory and self-regulatory initiatives, and the increasingly competitive market for financial consultants. The strategic planning session would consider options including whether to change the existing business model and whether to consider a strategic transaction.
 
The Executive Committee of the brokerage subsidiary of A.G. Edwards held a strategic planning session at the end of November 2006. At the planning session, although no formal recommendation was made, a majority of the members of the Executive Committee favored consideration of a strategic transaction depending on the structure of the transaction and other factors. After the planning session, Mr. Bagby and Douglas L. Kelly, Chief Financial Officer of A.G. Edwards, discussed the session with the independent directors of the A.G. Edwards board of directors and thereafter explored the possibilities of a strategic


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transaction, including discussions with an investment banking firm who could act as a financial advisor and a law firm, each knowledgeable about the industry and strategic transactions.
 
During the period from November 2006 until May 2007, a small group of A.G. Edwards management performed diligence concerning the industry and the possibility of a strategic transaction. A.G. Edwards management consulted with Goldman Sachs concerning the retail brokerage industry, including changes in the operating environment and client behavior, public market trading performance of the brokerage industry and previous transactions involving retail broker dealers, as well as potential participants in a strategic transaction. Management also consulted with the law firm of Wachtell, Lipton, Rosen & Katz, which we refer to as Wachtell, Lipton. In connection with its review of a potential strategic transaction, A.G. Edwards subsequently retained Wachtell, Lipton as its legal advisor. During this time, the independent directors of the A.G. Edwards board of directors were briefed periodically by management on the actions taken by management.
 
Daniel J. Ludeman, President and Chief Executive Officer of Wachovia Securities, LLC, which we refer to as Wachovia Securities, and Mr. Bagby have known each other for several years, and periodically have spoken about their respective companies and the brokerage industry at industry meetings. On May 11, 2007, Mr. Ludeman and Mr. Bagby had a conversation in which Mr. Ludeman inquired about A.G. Edwards’ interest in a possible strategic transaction with Wachovia. Mr. Bagby subsequently contacted Mr. Ludeman and they agreed that representatives of Wachovia and A.G. Edwards should meet to discuss in general terms the possibility of such a strategic transaction.
 
On May 20, 2007, a meeting was held with G. Kennedy Thompson, Wachovia’s Chairman and Chief Executive Officer, David M. Carroll, Head of Wachovia’s Capital Management Group, Thomas J. Wurtz, Wachovia’s Chief Financial Officer, Mr. Ludeman, Mr. Bagby, Mr. Kelly, and Paul F. Pautler, Director of Capital Markets of A.G. Edwards. At this meeting, discussions focused on the potential opportunities that would be created by a possible strategic transaction to form a unified retail brokerage operations headquartered in St. Louis, Missouri with management and employees from each company and combined capital market activities. A general discussion of preliminary pricing considerations, including the need for a premium to A.G. Edwards stockholders, also occurred. Thereafter, Mr. Bagby apprised individual members of the A.G. Edwards board of directors of the status of his discussions with Wachovia representatives and discussed his intention to pursue these conversations further. In connection with the discussions with Wachovia, A.G. Edwards retained Goldman Sachs as its financial advisor and Wachovia retained Credit Suisse Securities (USA) LLC, which we refer to as Credit Suisse, and Wachovia Capital Markets LLC as its financial advisors and Simpson Thacher & Bartlett LLP, which we refer to as Simpson Thacher, as its legal advisor.
 
On May 21, 2007, the parties entered into a confidentiality agreement and thereafter commenced mutual due diligence. Negotiations continued between executive officers of Wachovia and A.G. Edwards regarding the terms of a potential strategic transaction focusing on the price to be paid to A.G. Edward stockholders by Wachovia, the representations and warranties to be given by each party and the conditions to closing. The negotiations on price included discussion of the premium to be paid relative to the recent market price levels of A.G. Edwards stock, how the price would be set in view of changes in stock price during the period of negotiations and whether payment to A.G. Edwards stockholders would be all stock or part stock and part cash. In addition, the parties discussed the importance of expeditiously concluding a transaction if a transaction were to occur. The parties, with advice from their financial advisors, ultimately agreed that the merger consideration would be set such that it would have a value of $89.50 per A.G. Edwards shares as of the close of business on the day the merger agreement was signed (with roughly 60% of the consideration in the form of Wachovia common stock and 40% of the consideration in cash). The terms and conditions of the merger were to be generally consistent with those between large publicly held financial institutions. While negotiations continued on other substantive terms, the parties, with the aid of outside counsel, began preliminary drafting of the transaction documents.
 
On May 30, 2007, the parties reached agreement on the merger consideration consisting of 0.9844 shares of Wachovia common stock and $35.80 in cash for each outstanding A.G. Edwards common share and 1.6407 shares of Wachovia common stock as the exchange ratio for each outstanding A.G. Edwards stock


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option and restricted share of A.G. Edwards. The parties and their respective counsel also completed negotiation of the terms contained in the definitive transaction documents.
 
On May 30, 2007, the board of directors of Wachovia met with senior management and their outside legal and financial advisors. Management reviewed for the Wachovia board of directors the background of discussions with A.G. Edwards and the progress of negotiations, and reported on Wachovia’s due diligence investigations of A.G. Edwards. Wachovia’s management and Credit Suisse reviewed with the Wachovia board of directors the structure and other terms of the proposed transaction, and financial information regarding A.G. Edwards, Wachovia and the transaction, as well as information regarding peer companies and comparable transactions.
 
Representatives of Simpson Thacher discussed with the Wachovia board of directors the legal standards applicable to its decisions and actions with respect to its consideration of the proposed transaction, and reviewed the legal terms of the proposed transaction agreements as well as employee benefits and compensation arrangements for A.G. Edwards employees. Representatives of Simpson Thacher also discussed with the Wachovia board of directors the A.G. Edwards stockholder vote and regulatory approvals that would be required to complete the proposed merger, the likely process and timetable of the merger including obtaining the required A.G. Edwards stockholder vote and regulatory approvals and compensation and benefits issues in connection with the merger. Simpson Thacher also reviewed with the Wachovia board the implications of the proposed A.G. Edwards merger on the joint ownership of Wachovia Securities, LLC and the options available to Wachovia’s joint venture partner following the merger. Mark C. Treanor, Wachovia’s General Counsel, reviewed for the Wachovia board of directors the resolutions relating to the proposed merger.
 
Following these discussions, and review and discussion among the members of the Wachovia board of directors, including consideration of the factors described under “—Wachovia’s Reasons for the Merger”, the Wachovia board of directors unanimously determined that the transactions contemplated by the merger agreement and the related transactions and agreements are advisable and in the best interests of Wachovia and its stockholders, and the directors voted unanimously to approve the merger with A.G. Edwards, to approve the merger agreement and to approve the related transactions and agreements.
 
The A.G. Edwards board of directors met on May 30, 2007. Mr. Bagby and other senior A.G. Edwards executives reviewed for the board of directors the strategic issues affecting the firm that the board of directors had discussed previously and that had been the subject of the strategic planning session of the Executive Committee of the brokerage subsidiary of A.G. Edwards, and the actions taken by management since the strategic planning session. Members of A.G. Edwards management also reviewed the discussions and negotiations with Wachovia, the due diligence process and the proposed terms of the transaction, including the proposed merger consideration.
 
Representatives from Goldman Sachs delivered a financial analysis of the transaction including evaluation of the implied merger consideration to be received by A.G. Edwards stockholders. They reviewed the current retail brokerage industry including the operating environment and client behavior, the importance of scale and scope, changes in the industry since 1995, a summary of business models of competitors and comments on the current strong operating performance of A.G. Edwards and the pressures the firm faces from increasingly diverse competitors including from industry participants with greater scale and capital resources. Goldman Sachs also gave a public market overview of A.G. Edwards stock and the stock of competitors, reviewed precedent transactions and reviewed information concerning retail brokerage firms and U.S. and international banks. The representatives of Goldman Sachs then advised the A.G. Edwards board of directors of the opinion of Goldman Sachs that, as of May 30, 2007, and based upon the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Goldman Sachs, all as set forth in its written opinion, the stock consideration and the cash consideration to be received in the merger, taken in the aggregate, pursuant to the merger agreement, was fair, from a financial point of view, to holders of A.G. Edwards common stock.
 
Representatives of Wachtell, Lipton advised the A.G. Edwards board of directors regarding certain legal matters related to the proposed transaction, including the fiduciary obligations of A.G. Edwards’ directors in connection with their consideration of the proposed merger agreement. Representatives of Wachtell, Lipton


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also presented information about the proposed merger agreement, including key terms relating to structure, covenants, representations and warranties and closing conditions and proposed agreements with management including Mr. Bagby. Wachtell, Lipton representatives also discussed regulatory and stockholder approvals required to complete the merger. Following the presentations, directors addressed questions to, and discussed the proposed transaction with, members of A.G. Edwards’ management, representatives of Wachtell, Lipton and representatives of Goldman Sachs.
 
The A.G. Edwards board of directors unanimously determined that the transactions contemplated by the merger agreement and the related transactions and agreements were advisable and in the best interests of A.G. Edwards and its stockholders, and the directors voted unanimously to approve the merger with Wachovia, to approve the merger agreement and to approve the related transactions and agreements.
 
The transaction was announced prior to the opening of trading on the NYSE on the morning of May 31, 2007 in a press release issued jointly by Wachovia and A.G. Edwards.
 
A.G. Edwards’ Reasons for the Merger; Recommendation of the A.G. Edwards Board of Directors
 
In reaching its decision to adopt the merger agreement and recommend adoption of the merger agreement to the A.G. Edwards stockholders, the A.G. Edwards board of directors consulted with A.G. Edwards’ management, as well as with its outside legal and financial advisors, and considered, among other things, the following material factors:
 
  •   The current environment in the financial services industry, including national and regional economic conditions, continued consolidation in the financial services industry, evolving trends in technology, regulatory compliance requirements, nationwide competition, and the likely effect of these factors on A.G. Edwards on both a stand-alone basis and in the context of the proposed merger.
 
  •   The A.G. Edwards board of directors’ belief that the merger would further important business strategies, including achieving strong earnings growth, improving customer and financial consultant attraction and retention and focusing on expense savings. The A.G. Edwards board of directors believed the merger would provide economies of scale, increased sales of banking products, new investment products from investment banking, cost savings opportunities, and enhanced opportunities for growth. Specifically,
 
  •   A.G. Edwards, while well-capitalized for a retail brokerage firm, does not have sufficient capital to permit use of large amounts of risk-capital in the type of transactions increasingly common in capital market activities. The A.G. Edwards board of directors believed that a transaction with Wachovia could provide capital for capital markets activities while reducing the need for the retail brokerage firm to maintain its current capital.
 
  •   Competitors are offering products and services, particularly access to loans or other banking related services, which are increasingly requested by clients and financial consultants. A.G. Edwards generally obtains the products and services from third parties with the results that clients sometimes dealt with competitors and that the return on client assets to A.G. Edwards is less than what competitors who offer all such services could earn. The A.G. Edwards board of directors believed that a transaction with Wachovia could provide access for clients and financial consultants to additional products and services while allowing the combined firms to earn returns on assets greater than that earned by A.G. Edwards alone.
 
  •   A.G. Edwards offers selected products to retail and institutional clients in the United States from foreign jurisdictions and provides selected services to persons or institutions resident in foreign countries. The A.G. Edwards board believed Wachovia has a broader international presence than A.G. Edwards.
 
  •   Recruiting and retaining financial consultants has been difficult for A.G. Edwards given the up-front money being paid by some competitors and the attraction of some financial consultants to independent contractor or other models. The A.G. Edwards board believed that a transaction with


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  Wachovia, which has successfully recruited financial consultants and which has an independent contractor model for some financial consultants, is more attractive in recruiting and retaining financial consultants.
 
  •   The combination of A.G. Edwards and Wachovia would produce the second largest retail brokerage firm in terms of number of financial consultants, giving the opportunity to leverage complementary business lines across a larger customer base and the scale to reduce on a per financial consultant basis certain costs including those for technology, operations and regulatory compliance.
 
  •   The expectation that the merger will qualify as a transaction of a type that is generally tax-free for United States federal income tax purposes to A.G. Edwards, Wachovia, and A.G. Edwards stockholders, except to the extent cash is received in the merger.
 
  •   Wachovia and A.G. Edwards will use a deliberate, disciplined approach to the combination, structured to generate positive operating leverage through expense control and quality revenue growth.
 
  •   The combined retail brokerage operations would include a senior management team composed of members from both organizations.
 
  •   The A.G. Edwards board’s understanding that the combined cash consideration and stock consideration as of the close of business on May 30, 2007 has a higher dollar value than the historical trading price of the A.G. Edwards stock and represents an approximate 16% premium over the closing price of A.G. Edwards common stock on the NYSE as of May 30, 2007, the day before the announcement of the signing of the merger agreement.
 
  •   The A.G. Edwards board’s belief that the merger is likely to increase value to stockholders. In particular, the dividend expected to be paid by Wachovia, on a pro forma basis based on Wachovia’s current dividend rate and the 0.9844 exchange ratio, will represent an approximately 176% increase in the dividend currently paid by A.G. Edwards on its common stock.
 
  •   Goldman Sachs’ financial presentation to the A.G. Edwards board of directors, including Goldman Sachs’ opinion, dated May 30, 2007, as to the fairness, from a financial point of view, to the holders of A.G. Edwards common stock of the stock consideration and the cash consideration, taken in the aggregate, pursuant to the merger agreement, as discussed in “—Opinion of A.G. Edwards’ Financial Advisor” below.
 
  •   The A.G. Edwards board’s understanding that the exchange ratio for the stock portion of the merger consideration was fixed and would not fluctuate.
 
  •   The review by the A.G. Edwards board of directors with its legal advisor, Wachtell, Lipton, of the provisions of the merger agreement, including the provisions of the merger agreement relating to the conditions to completion of the merger and employee benefit arrangements contemplated in the merger.
 
  •   The regulatory and other approvals required in connection with the merger, the possibility that meaningful branch divestitures might be required in overlapping markets in connection with obtaining necessary regulatory approvals, and the likelihood regulatory approvals will be received in a timely manner and without unacceptable conditions.
 
  •   The possibility that the merger and the related integration process could result in the loss of key employees, in the disruption of A.G. Edwards’ on-going business and in the loss of customers.
 
In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the A.G. Edwards board of directors did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger and the merger agreement and recommend that A.G. Edwards stockholders vote “FOR” the adoption of the merger agreement. In addition, individual members of the A.G. Edwards board of directors may have given differing weights to different factors. The A.G. Edwards board of directors


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conducted an overall analysis of the factors described above, including through discussions with, and questioning of, A.G. Edwards management and outside legal and financial advisors, as well as Goldman Sachs’ analysis of the financial terms of the merger and relied on its opinion as to the fairness, from a financial point of view, to the holders of A.G. Edwards common stock of the consideration to be received by A.G. Edwards stockholders.
 
It should be noted that this explanation of the A.G. Edwards board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Forward-Looking Statements”.
 
For the reasons set forth above, the A.G. Edwards board of directors determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interest of A.G. Edwards and its stockholders, and unanimously approved the merger agreement. The A.G. Edwards board of directors unanimously recommends that the A.G. Edwards stockholders vote “FOR” the adoption of the merger agreement.
 
Wachovia’s Reasons for the Merger
 
Wachovia’s board of directors believes that it is advantageous to build a financial services company with leading positions in its core businesses. To further that objective, Wachovia has concentrated on making selected acquisitions of companies engaged in providing financial services that complement or expand the financial services offered by Wachovia. Wachovia’s board believes that joining with A.G. Edwards is an excellent way to further develop Wachovia’s ability to provide expanded and complementary banking, brokerage and investment banking products to a broader range of customers.
 
The acquisition of A.G. Edwards will extend Wachovia’s retail securities brokerage business into a national business covering all 50 states, the District of Columbia and two foreign jurisdictions, and expand its market presence in the top 50 U.S. metropolitan areas. Following the merger, Wachovia expects its retail securities brokerage business to be second in the U.S. measured by revenues and the number of registered representatives and third in the U.S. measured by client assets under management. Wachovia believes substantial cost savings will result from the merger with A.G. Edwards of approximately $395 million after-tax per year following the integration period. Wachovia believes the acquisition will be accretive to Wachovia’s earnings per share, excluding merger-related and restructuring expense, in 2008 and beyond. Wachovia expects to recognize an estimated $740 million of aggregate after-tax merger-related and restructuring expenses in the merger through 2009, with 5% expected to be recognized in 2007, 61% expected to be recognized in 2008, and 34% expected to be recognized in 2009.
 
Wachovia is continually evaluating acquisition opportunities and frequently conducts due diligence activities in connection with possible acquisitions. As a result, acquisition discussions and, in some cases, negotiations frequently take place and future acquisitions involving cash, debt or equity securities can be expected. Acquisitions typically involve the payment of a premium over book and market values, and therefore, some dilution of Wachovia’s book value and net income per common share may occur in connection with any future acquisitions.
 
Cost Savings and Accounting Charges.  Although no assurances can be made, Wachovia believes that following the merger, the combined company can achieve cost savings of approximately 20% of the combined retail securities brokerage expenses excluding registered representative compensation (approximately $395 million in after-tax annual expense reductions) by 2009.
 
As part of these cost savings, Wachovia expects to reduce the combined company’s non-registered representative job positions by about 25% over the merger integration period. As part of the cost savings, Wachovia expects to consolidate about 230 brokerage offices during the integration period.
 
Wachovia expects to recognize an estimated $740 million of after-tax merger-related and restructuring expenses and $120 million of after-tax exit cost purchase accounting adjustments. A portion of these charges and adjustments will be recorded upon merger completion, with the remainder expected to be recorded in each year from the merger completion through early 2009.


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Opinion of A.G. Edwards’ Financial Advisor
 
Goldman Sachs rendered its opinion to the A.G. Edwards board of directors that, as of May 30, 2007, and based upon and subject to the factors and assumptions set forth therein, the merger consideration to be received by the holders of shares of A.G. Edwards common stock, taken in the aggregate pursuant to the merger agreement, was fair from a financial point of view to such holders.
 
The full text of the written opinion of Goldman Sachs, dated May 30, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix B. Goldman Sachs provided its opinion for the information and assistance of the A.G. Edwards board of directors in connection with its consideration of the transaction. The Goldman Sachs opinion is not a recommendation as to how any holder of A.G. Edwards shares should vote with respect to the transaction or on any other matter.
 
In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:
 
  •   the merger agreement;
 
  •   annual reports to stockholders and Annual Reports on Form 10-K of A.G. Edwards and Wachovia for the five fiscal years ended February 28, 2007 for A.G. Edwards and December 31, 2006 for Wachovia;
 
  •   certain interim reports to stockholders and Quarterly Reports on Form 10-Q of A.G. Edwards and Wachovia;
 
  •   certain other communications from A.G. Edwards and Wachovia to their respective stockholders;
 
  •   certain research analyst estimates of the future financial performance of A.G. Edwards and Wachovia;
 
  •   extrapolations of A.G. Edwards’ future financial performance under various scenarios provided by the management of A.G. Edwards (the “Company Analyses”); and
 
  •   analyses of certain cost savings and operating synergies projected to result from the transaction prepared by the managements of A.G. Edwards and Wachovia (the “Synergies”).
 
Goldman Sachs also held discussions with members of the senior management of Wachovia regarding the future financial performance of Wachovia, including discussions regarding their assessment of certain publicly available research analyst estimates related to Wachovia.
 
Goldman Sachs also held discussions with members of the senior managements of A.G. Edwards and Wachovia regarding their assessment of the strategic rationale for, and the potential benefits of, the transaction and the past and current business operations, financial condition and future prospects of their respective companies. In addition, Goldman Sachs reviewed the reported price and trading activity for A.G. Edwards common shares and Wachovia common shares, compared certain financial and stock market information for A.G. Edwards and Wachovia with similar financial and stock market information for certain other companies the securities of which are publicly traded, and reviewed the financial terms of certain recent business combinations in the brokerage industry specifically and in other industries generally and performed such other studies and analyses, and considered such other factors, as it considered appropriate.
 
For purposes of rendering its opinion, Goldman Sachs relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, accounting, legal, tax and other information discussed with or reviewed by it. In that regard, Goldman Sachs assumed with A.G. Edwards’ consent that the Company Analyses and the Synergies reflected the best available estimates and judgments of the management of A.G. Edwards and Wachovia, as the case may be. Goldman Sachs also assumed that the allowances for losses in loan and lease portfolios are in the aggregate adequate to cover such losses. In addition, Goldman Sachs did not review individual credit files, nor did Goldman Sachs make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of A.G. Edwards or Wachovia or any of their respective subsidiaries, nor


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was any evaluation or appraisal of the assets or liabilities of A.G. Edwards or Wachovia or any of their respective subsidiaries furnished to Goldman Sachs. Goldman Sachs also assumed, with A.G. Edwards’ consent, that all governmental, regulatory or other consents and approvals necessary for the consummation of the transaction contemplated by the merger agreement will be obtained without the imposition of any delay, limitation, restriction or condition that would have a material adverse effect on A.G. Edwards or Wachovia or on the expected benefits of the transaction in any way meaningful to its analysis. Goldman Sachs’ opinion does not address the underlying business decision of A.G. Edwards to engage in the transaction or the relative merits of the transaction as compared to any alternative business strategies or transactions that might be available to A.G. Edwards. In addition, Goldman Sachs did not express any opinion as to the prices at which the Wachovia common shares will trade at any time.
 
The following is a summary of the material financial analyses delivered by Goldman Sachs to the A.G. Edwards board of directors in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before May 29, 2007, and is not necessarily indicative of current market conditions.
 
Historical Stock Trading Analysis.  Goldman Sachs reviewed the historical trading prices for A.G. Edwards common shares and Wachovia common shares on a relative and absolute basis for the five-year period ended May 29, 2007 and compared the historical trading prices to the performance of indexes of other public companies in the brokerage or bank industry, as the case may be. In addition, Goldman Sachs analyzed the aggregate merger consideration to be received by holders of A.G. Edwards common stock pursuant to the merger agreement in relation to the latest closing price and all-time high price of A.G. Edwards common stock.
 
This analysis indicated that the implied market exchange ratio (calculated as A.G. Edwards’ closing share price divided by Wachovia closing share price), as of May 29, 2007, was 1.3991 and represented the maximum exchange ratio within the last five years ended May 29, 2007. Goldman Sachs also compared the May 29, 2007 exchange ratio to the five year average of 0.8955, three year average of 0.9132 and one year average of 1.0963. Goldman Sachs compared these historical implied market exchange ratios to the implied exchange ratio for the proposed transaction (calculated as the implied total consideration per A.G. Edwards common share of $89.50 based on the cash consideration plus the value of the stock consideration using the Wachovia closing price on May 29, 2007, divided by the Wachovia closing share price) of 1.6431. Additional analysis indicated that the consideration per share to be paid to A.G. Edwards stockholders pursuant to the merger agreement represented a premium of 17.4% based on the closing price on May 29, 2007, of $76.21, and a premium of 17.3% to the all-time high price as of May 29, 2007, of $76.30, each using an implied value for the stock consideration based on the closing price of the Wachovia common shares on May 29, 2007.
 
Selected Companies Analysis.  Goldman Sachs reviewed and compared certain financial information for A.G. Edwards to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the brokerage industry, consisting of regional companies and large capitalization companies:
 
  •   Regional companies:
 
  •   Raymond James Financial, Inc.;
 
  •   Jefferies Group, Inc.; and
 
  •   Piper Jaffray Companies.
 
  •   Large market capitalization companies:
 
  •   The Goldman Sachs Group, Inc.;


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  •   Morgan Stanley;
 
  •   Merrill Lynch & Co., Inc.;
 
  •   Lehman Brothers Holdings Inc.; and
 
  •   The Bear Stearns Companies Inc.
 
In addition, Goldman Sachs reviewed and compared certain financial information for Wachovia to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the banking industry, consisting of mid-size capitalization banks and large capitalization banks:
 
  •   Mid-size market capitalization banks:
 
  •   SunTrust Banks, Inc.;
 
  •   Regions Financial Corp.;
 
  •   PNC Financial Services Group;
 
  •   Fifth Third Bancorp;
 
  •   BB&T Corporation; and
 
  •   National City Corporation.
 
  •   Large market capitalization banks:
 
  •   Citigroup Inc.;
 
  •   Bank of America Corporation;
 
  •   JPMorgan Chase & Co.;
 
  •   Wells Fargo & Company; and
 
  •   U.S. Bancorp.
 
Although none of the selected companies is directly comparable to A.G. Edwards or Wachovia, the companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of A.G. Edwards or Wachovia, as the case may be.
 
Goldman Sachs calculated and compared various financial multiples and ratios based on financial data and the closing stock prices for A.G. Edwards and Wachovia as of May 29, 2007, as well as information obtained from SEC filings, data from SNL Financial and research estimates from IBES. The multiples and ratios for each of the selected companies were based on the closing stock prices as of May 29, 2007, as well as information obtained from SEC filings, data from SNL Financial and research estimates from IBES.
 
With respect to the selected companies for A.G. Edwards, Goldman Sachs calculated the selected companies’ estimated calendar years 2007 and 2008 price/earnings ratios and price/tangible book value ratios and compared those calculations to the results for A.G. Edwards. The following table presents the results of this analysis:
 
                         
    Selected Companies        
Ratio*:
  Range     Median     A.G. Edwards  
 
2007 Price/Earnings
                    16.4 x
Regional
    14.5x-20.7 x     18.5 x        
Large cap
    9.8x-11.2 x     10.5 x        
2008 Price/Earnings
                    14.9 x
Regional
    12.6x-17.6 x     16.2 x        
Large cap
    9.2x-11.0       10.1 x        
Price/Tangible Book Value
                    2.8 x
Regional
    1.7x-2.6 x     2.4 x        
Large cap
    1.5x-3.2 x     2.5 x        
 
 
* All figures based on data from SNL Financial, IBES estimates and publicly available filings; P/E ratios based on median IBES earnings estimates for calendar year.


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With respect to the selected companies for Wachovia, Goldman Sachs also calculated the selected companies’ estimated calendar years 2007 and 2008 price/earnings ratios and price/tangible book value ratios and compared those calculations to the results for Wachovia. The following table presents the results of this analysis:
 
                         
    Selected Companies        
Ratio*:
  Range     Median     Wachovia  
 
2007 Price/Earnings
                    11.0 x
Mid cap
    12.6x-15.4 x     13.4 x        
Large cap
    10.5x-13.2 x     12.3 x        
2008 Price/Earnings
                    10.1 x
Mid cap
    11.6x-14.1 x     11.9 x        
Large cap
    9.7x-12.1 x     11.0 x        
Price/Tangible Book Value
                    3.6 x
Mid cap
    2.6x-3.9 x     3.2 x        
Large cap
    2.7x-5.8 x     3.6 x        
 
 
* All figures based on data from SNL Financial.
 
Goldman Sachs also considered the ratio of assets to equity and, for the latest twelve months, pre-tax earnings margin, return on average assets (“ROAA”) and cash return on average tangible common equity (“Cash ROATCE”), each based on information for A.G. Edwards as of May 29, 2007, from SNL Financial, median IBES earnings estimates and the most recent publicly available filings.
 
The following table presents the results of this analysis:
 
                                         
    Regional Companies     Large Cap Companies        
    Range     Median     Range     Median     A.G. Edwards  
 
Ratio of Assets to Equity
    2.0x-15.2x       8.8 x     23.5x-31.1x       28.1 x     2.5 x
Pre-Tax Earnings Margin
    14.6%-24.3%       18.2 %     33.2%-39.4%       33.9 %     16.7 %
ROAA
    1.2%-10.8%       1.9 %     0.6%-1.3%       0.8 %     6.9 %
Cash ROATCE
    11.4%-17.3%       16.8 %     19.4%-40.1%       28.8 %     16.6 %
 
 
* All figures based on data from SNL Financial, IBES estimates and publicly available filings; P/E ratios based on median IBES earnings estimates for calendar year.
 
Illustrative Discounted Cash Flow Analysis.  Goldman Sachs performed a discounted cash flow analysis on A.G. Edwards using the Company Analyses and certain publicly available research analysts’ estimates for 2007 through 2013. Goldman Sachs calculated illustrative value indications per common share for A.G. Edwards using information from management and IBES estimates of EPS growth ranging from 6.3% per year to 11.5% per year for A.G. Edwards for the years 2007 through 2013, illustrative terminal multiples ranging from 13.6x estimated 2013 earnings to 17.6x estimated 2013 earnings, maintenance of its current tangible common equity/tangible assets ratio of 39.6% (assuming asset growth of 5% per year from 2008-2013) and discounting the illustrative free cash flows and terminal values using discount rates ranging from 9.6% to 13.6% to create implied indications of present value. The following table presents the results of these analyses:
 
             
          Merger Consideration as a
    Illustrative per
    Premium/(Discount) to
    Share Value
    Implied Discounted
    Indications     Cash Flow Value*
 
Illustrative Terminal Multiples of 13.6x-17.6x and Illustrative EPS Growth Rates of 6.3%-11.5%**
  $ 63.53-$92.46     (3.2%)-40.9%
Illustrative Discount Rates of 9.6%-13.6% and Illustrative EPS Growth Rates of 6.3%-11.5%***
  $ 65.63-$90.52     (1.1%)-36.4%


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* Assumes initial implied price for each share of A.G. Edwards common stock of $89.50 as of May 30, 2007.
 
** Assumes illustrative discount rate equal to 11.6%.
 
*** Assumes illustrative terminal multiple in 2013 equal to 15.6x which is equal to A.G. Edwards average price / next twelve months earnings per share estimate for the latest one and three year periods ending May 29, 2007.
 
Goldman Sachs also performed a discounted cash flow analysis on Wachovia using certain publicly available research analysts’ estimates for 2007 through 2011. Goldman Sachs calculated illustrative value indications per share for Wachovia using median estimated EPS from IBES for 2007 and 2008 with future EPS grown at the median IBES long-term EPS growth rate of 8.9% for 2009 through 2011, and variances on such estimated EPS ranging from $0.20 below estimated EPS to $0.20 above estimated EPS for each year, estimates of excess capital to maintain Tier 1 capital levels (assuming growth of risk-weighted assets of 5% per year from 2007 through 2011), and illustrative terminal multiples ranging from 9.5x estimated 2012 earnings to 13.5x estimated 2012 earnings (based on an existing trading multiple of 11.5x next twelve months earnings). Goldman Sachs discounted the illustrative free cash flows and terminal values using an illustrative discount rate of 9.1%. The following table presents the results of this analysis:
 
         
    Illustrative per
 
    Share Value
 
    Indications*  
 
Illustrative Terminal Multiples of 9.5x-13.5x and Variance from IBES Median Estimates of EPS of +/- $0.20 per year**
  $ 50.21-$70.32  
 
 
* Assumes a Tier 1 Capital Ratio of 8.28% for 2007 and 8.5% for 2008-2012, which is approximately equal to the median of Wachovia’s large market capitalization peers.
 
** Assumes illustrative discount rate equal to 9.1%.
 
Illustrative Recapitalization Scenario.  Goldman Sachs analyzed certain A.G. Edwards capitalization ratios to those of selected brokerage companies for the most recently reported fiscal period:
 
  •   Selected brokerage companies:
 
  •   Wachovia Securities, LLC;
 
  •   Raymond James Financial, Inc.;
 
  •   Jefferies Group, Inc.; and
 
  •   Piper Jaffray Companies.
 
                         
    Selected Statistics*        
    Excess Net
    Tangible
       
    Regulatory Capital
    Equity/Tangible
       
Company
  ($mm)     Assets     Debt/Total Capital  
 
A.G. Edwards
  $ 747       39.6 %     0.0 %
Peer High
  $ 347       43.9 %     5.6 %
Peer Low
  $ 237       10.9 %     43.9 %
Peer Median
  $ 289       23.3 %     38.1 %
 
 
* Statistics calculated from information available in most recently available public filings.
 
Goldman Sachs then analyzed the potential impact of an illustrative share repurchase ranging from $200 million to $500 million on 2009 fiscal year (year-end February 28, 2009) IBES estimated earnings per share. The analysis assumed that the first $200 million of the repurchase was funded through available liquid assets at an illustrative pre-tax opportunity cost of 5.0% and that any additional repurchase was funded through a debt issuance at an illustrative pre-tax cost of 6.5%. In addition, the analysis assumed that the shares would be repurchased at illustrative prices ranging from the May 29, 2007 closing share price up to a 10% premium


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to the closing share price on May 29, 2007. The results of the illustrative analysis showed a 2009 fiscal year EPS increase ranging from 1.3% to 4.1% and excess regulatory capital ranging from $747 million in the no repurchase scenario to $247 million in the $500 million scenario.
 
Selected Transactions Analysis.  Goldman Sachs analyzed certain information relating to the following selected transactions in the brokerage industry since August 20, 1997:
 
  •   UBS/Paine Webber;
 
  •   RBC/Dain Rauscher;
 
  •   Citigroup/Legg Mason;
 
  •   First Union/EVEREN;
 
  •   Regions/Morgan Keegan;
 
  •   UBS/Piper Jaffray;
 
  •   RBC/Tucker Anthony;
 
  •   U.S. Bancorp/Piper Jaffray;
 
  •   KeyCorp/McDonald Investments;
 
  •   Paine Webber/ J.C. Bradford & Co.;
 
  •   First Union/Wheat First; and
 
  •   UBS/McDonald Investments.
 
For each of the selected transactions, Goldman Sachs calculated and compared the ratio of the aggregate consideration to the target’s net revenue for the latest twelve months, the ratio of the aggregate consideration to the target’s earnings for the latest twelve months and the ratio of aggregate consideration to the target’s tangible book value based on the most recent publicly available public information prior to transaction announcement and compared these to the ratios for the proposed transaction. Goldman Sachs also calculated the premia offered compared to the market price of the target’s common stock one day prior to the announcement of the transaction.


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The following table presents the results of this analysis:
 
                                         
            Price/Net
    Price/
             
            Revenue
    Earnings
    Price/
    Premium/
 
Date of Announcement
  Target   Acquiror   (LTM)     (LTM)     TBV     Market  
 
12-July-2000
  Paine Webber   UBS     2.2 x     19.2 x     4.1 x     47.2 %
28-September-2000
  Dain Rauscher   RBC     1.3 x     13.4 x     3.8 x     18.9 %
24-June-2005
  Legg Mason   Citigroup     1.6 x     13.2 x     2.5 x     N/A  
26-April-1999
  EVEREN   First Union     1.5 x     18.8 x     2.9 x     26.5 %
18-December-2000
  Morgan Keegan   Regions     1.8 x     16.7 x     3.0 x     38.9 %
11-April-2006
  Piper Jaffray   UBS     2.2 x     N/A       N/A       N/A  
1-August-2001
  Tucker Anthony   RBC     1.0 x     21.2 x     2.3 x     0.2 %
14-December-1997
  Piper Jaffray   U.S. Bancorp     1.3 x     NM       3.9 x     25.2 %
15-June-1998
  McDonald   KeyCorp     2.0 x     17.7 x     3.4 x     13.6 %
28-April-2000
  J.C.Bradford & Co.   Paine Webber     N/A       N/A       N/A       N/A  
20-August-1997
  Wheat First   First Union     0.9 x     13.4 x     3.0 x     N/A  
6-September-2006
  McDonald Investment   UBS     1.4 x     N/A       N/A       N/A  
Low
            0.9 x     13.2 x     2.3 x     0.2 %
Median
            1.5 x     17.2 x     3.0 x     25.2 %
High
            2.2 x     21.2 x     4.1 x     47.2 %
Wachovia and A.G. Edwards Proposed Merger
            2.3 x     22.5 x     3.3 x     17.4 %
 
 
Source: SNL Financial, IBES estimates and most recently available public filings.
 
Pro Forma Merger Analysis.  Goldman Sachs prepared illustrative pro forma analyses of the potential financial impact of the merger using market data and IBES estimates as of May 29, 2007, and financial data as of February 28, 2007 for A.G. Edwards and as of March 31, 2007, for Wachovia. The pro forma analysis assumed that the transaction closes on September 30, 2007, that the combined entity will have an effective corporate tax rate of 38.5%, that cash earnings are equal to IBES estimated earnings, plus intangible asset amortization expense, that total restructuring charges will be equal to $1.5 billion pre-tax, phased in from the date of the closing through mid-2009, that assets for the combined entity will grow 5% per year and that the pre-tax cost of funding the consideration is 5.00%. Goldman Sachs also assumed that the excess of the purchase price over A.G. Edwards’ tangible book value is allocated first to identifiable intangibles in the amount of approximately $315 million and second to transaction goodwill. Based on discussions with the management of Wachovia, the pro forma analysis assumes annual pre-tax cost savings of approximately $650 million phased in 50% in 2008 and 100% thereafter.
 
For each of the years 2008 and 2009, Goldman Sachs compared the projected earnings per share of Wachovia’s common stock, on a standalone basis, to the projected earnings per share of the common stock of the combined companies. Based on such analyses, the proposed transaction would be accretive to Wachovia’s stockholders on an earnings per share basis in all of the above scenarios in the years 2008 and 2009.
 
In addition, based on the current annual dividends paid on A.G. Edwards common stock of $0.80 per share and Wachovia common stock of $2.24 per share and the number of Wachovia shares to be received by a holder of A.G. Edwards common stock, a holder of an A.G. Edwards share would receive an additional $1.41 annually in dividends on a pro forma per share basis.
 
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman


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Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to A.G. Edwards or Wachovia or the contemplated transaction.
 
Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the A.G. Edwards board of directors as to the fairness from a financial point of view of the merger consideration, taken in the aggregate, to be received by the holders of shares of A.G. Edwards common stock.
 
These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of A.G. Edwards, Wachovia, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.
 
The merger consideration was determined through arms’-length negotiations between A.G. Edwards and Wachovia and was approved by the A.G. Edwards board of directors. Goldman Sachs provided advice to A.G. Edwards during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to A.G. Edwards or its board of directors or that any specific amount of consideration constituted the only appropriate consideration for the transaction.
 
As described above, Goldman Sachs’ opinion to the A.G. Edwards board of directors was one of many factors taken into consideration by the A.G. Edwards board of directors in making its determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Appendix B.
 
Goldman Sachs and its affiliates, as part of their investment banking business, are continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and other transactions as well as for estate, corporate and other purposes. Goldman Sachs has acted as financial advisor to A.G. Edwards in connection with, and has participated in certain of the negotiations leading to, the transaction contemplated by the merger agreement. In addition, Goldman Sachs has provided certain investment banking services to Wachovia from time to time, including having acted as co-lead manager with respect to the offering by Wachovia of its 5.80% Wachovia Income Trust Securities (aggregate principal amount $2,500,000,000) in February 2006 and having acted as a financial advisor in connection with Wachovia’s acquisition of Westcorp and all of the outstanding shares of WFS Financial Inc. not owned by Westcorp in March 2006. Goldman Sachs also may provide investment banking services to A.G. Edwards and Wachovia in the future. In connection with the above-described investment banking services Goldman Sachs has received, and may receive in the future, compensation.
 
Goldman Sachs is a full service securities firm engaged, either directly or through its affiliates, in securities trading, investment management, financial planning and benefits counseling, risk management, hedging, financing and brokerage activities for both companies and individuals. In the ordinary course of these activities, Goldman Sachs and its affiliates may provide such service to A.G. Edwards, Wachovia and their respective affiliates, may actively trade the debt and equity securities of A.G. Edwards and Wachovia (or related derivative securities) for their own account and for the accounts of their customers and may at any time hold long and short positions of such securities. During the past two years, Goldman Sachs and its affiliates have received aggregate fees for services unrelated to the transaction of approximately $21.2 million from, or as a result of its relationship with, A.G. Edwards and its affiliates, approximately $19.0 million of which was in the form of net management and transfer fees paid by clients of A.G. Edwards to Goldman Sachs in respect of mutual fund accounts distributed by A.G. Edwards. Goldman Sachs or its affiliates may also have received fees for other services from A.G. Edwards or its affiliates during this period that were not material to Goldman Sachs.


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A.G. Edwards & Sons, Inc. and Goldman Sachs Asset Management, respectively affiliates of A.G. Edwards and Goldman Sachs, have selling and other related agreements under which A.G. Edwards & Sons, Inc. distributes mutual funds that are advised or sponsored by Goldman Sachs Asset Management and performs certain distribution, shareholder servicing, and/or recordkeeping activities with respect to these mutual funds.
 
The board of directors of A.G. Edwards selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the transaction. Pursuant to a letter agreement executed May 30, 2007, A.G. Edwards engaged Goldman Sachs to act as its financial advisor in connection with the contemplated transaction. Pursuant to the terms of this engagement letter, A.G. Edwards has agreed to pay Goldman Sachs a transaction fee of $20,000,000 all of which is contingent upon the outcome of the transaction. In addition, A.G. Edwards has agreed to reimburse Goldman Sachs for its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.
 
Interests of Certain Persons in the Merger
 
Some of A.G. Edwards’ directors and executive officers have interests in the merger other than their interests as A.G. Edwards stockholders. The A.G. Edwards and Wachovia boards were aware of these different interests and considered them, among other matters, in adopting the merger agreement and the transactions it contemplates.
 
Indemnification and Insurance.  The merger agreement provides that, upon merger completion, Wachovia will, to the fullest extent permitted by law, indemnify, defend and hold harmless all present and former directors, officers and employees of A.G. Edwards and its subsidiaries against all costs and liabilities arising out of actions or omissions occurring at or before merger completion to the same extent as directors, officers and employees of A.G. Edwards and its subsidiaries are indemnified or have the right to advancement of expenses under A.G. Edwards’ or its subsidiaries’ certificate of incorporation and by-laws, any indemnification agreements of A.G. Edwards or its subsidiaries and to the fullest extent permitted by law.
 
The merger agreement also provides that for a period of six years after merger completion, Wachovia will provide director’s and officer’s liability insurance for the present and former officers and directors of A.G. Edwards with respect to claims arising from facts or events occurring before the merger is completed. This director’s and officer’s liability insurance will contain at least the same coverage and amounts, and terms and conditions as in effect prior to the merger, but subject to a cap on premiums of not more than 250% of the annual premium paid by A.G. Edwards.
 
A.G. Edwards Stock Options.  Employees, including executive officers, have received, from time to time, grants of stock options, restricted stock awards or restricted stock units (phantom stock) under A.G. Edwards’ applicable stock incentive plans. The merger agreement provides that, upon completion of the merger, each A.G. Edwards stock option will be converted into a Wachovia stock option based on an implied exchange ratio based on the value of the total consideration assuming 100% stock consideration. In addition, restricted shares and phantom shares based on A.G. Edwards stock outstanding immediately before completing the merger will be converted upon the completion of the merger into a number of restricted shares or phantom shares of Wachovia based on an implied exchange ratio based on the value of the total consideration assuming 100% stock consideration.
 
Under the terms of the A.G. Edwards stock incentive plans, these stock awards do not vest upon merger completion. In connection with entering into the merger agreement, Wachovia and A.G. Edwards agreed that A.G. Edwards may amend its stock incentive plans to provide that those stock awards will vest in full following the merger in the event that an award-holder’s employment is terminated due to displacement, death, or retirement or in the event Wachovia becomes subject to a change in control. A.G. Edwards stock options so vested shall remain exercisable for the remainder of their original term. In the event of a termination of employment described above, the non-competition restriction applicable to those stock awards shall lapse.


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As of the date of this proxy statement-prospectus, A.G. Edwards executive officers held unvested options to acquire an aggregate of 37,423 shares of A.G. Edwards common stock at a weighted average exercise price of $34.09, and 308,966 unvested restricted shares (or restricted units) of A.G. Edwards common stock.
 
A.G. Edwards Profit Sharing and Excess Profit Sharing Plans.  In connection with entering into the merger agreement, Wachovia and A.G. Edwards agreed that A.G. Edwards may amend its Retirement and Profit Sharing Plan and Excess Profit Sharing Deferred Compensation Plans (together, the “Profit Sharing Plans”) to provide that (a) in addition to the existing vesting rights provided under the Profit Sharing Plans, if, during the two-year period following merger completion, the employment of any participant in those plans, including the employment of an executive officer, is terminated due to displacement, the participant’s Profit Sharing Plan accounts shall vest in full, and (b) from merger completion until December 31, 2007 (or February 29, 2008 if the merger doesn’t occur before December 31, 2007), the Profit Sharing Plans will continue in effect without amendment (except as may be required by applicable law), with contributions to be made generally on the same basis as contributions were made with respect to the 2006 plan year, to the extent that the amounts of contributions are accrued or are being accrued on the financial statements of A.G. Edwards in the ordinary course consistent with past practice.
 
Retention Awards.  Wachovia and A.G. Edwards also agreed in the merger agreement that A.G. Edwards may establish a cash retention bonus pool of, in the aggregate, $15 million (the “Pre-Closing Retention Pool”), to be granted to employees by Mr. Bagby, A.G Edwards’ Chairman and Chief Executive Officer. Following merger completion, if a retention award or portion thereof is forfeited by a participant, Mr. Bagby may reallocate the retention award (or unpaid portion thereof) to other legacy employees of A.G. Edwards, subject to Wachovia’s approval. Following merger completion, Wachovia shall honor the Pre-Closing Retention Pool and the awards granted thereunder.
 
Certain Tax Matters.  Wachovia agreed that A.G. Edwards may enter into agreements with any and all “disqualified individuals” (as defined in Section 280G of the Internal Revenue Code) to provide that the individual’s aggregate “excess parachute payments” (as defined in Section 280G of the Internal Revenue Code) in connection with the merger will be reduced to the extent necessary so the individual is not subject to the excise tax imposed under Section 4999 of the Internal Revenue Code, provided that the reduction will place the individual in a better-after tax position than had the payments not been reduced, but only to the extent that the reduction will not result in any taxes being imposed under Section 409A of the Internal Revenue Code.
 
Also, A.G. Edwards may enter into agreements with eight A.G. Edwards’ executive officers, including Mr. Bagby (which agreements will be assumed by White Bird Holdings after the merger), that will provide additional payments to make those individuals whole on an after-tax basis from taxes imposed on them by reason of Sections 280G and 4999 of the Internal Revenue Code (“Gross-ups”), if any, in connection with the merger; provided, however, that (i) each agreement shall state (a) a maximum amount in respect of which A.G. Edwards shall pay for Gross-up, and (b) that none of Wachovia, A.G. Edwards, White Bird Holdings nor any of their affiliates shall be liable for any amounts under the agreements in excess of the lesser of the Gross-up and that maximum amount, and (ii) the total amount payable under all eight agreements shall (x) be, in the aggregate, no more than $50 million, and (y) no later than immediately prior to the merger, be deposited into a grantor trust established for the benefit of those individuals to satisfy the obligations under the agreements.
 
Annual Incentive Awards.  Wachovia and A.G. Edwards agreed that participants in the A.G. Edwards Corporate Executive Bonus Plan and the 2004 Performance Plan for Executives shall be entitled to bonus awards for the period from March 1, 2007 through merger completion based on the bonus pool accrual schedules for fiscal 2008 established by the A.G. Edwards board of directors in February 2007, but only to the extent that the amount of those awards is accrued on the financial statements of A.G. Edwards in the ordinary course consistent with past practice. The cash portion of these incentive awards shall be paid at the time that White Bird Holdings pays cash bonuses for the 2007 calendar year to its employees; provided that, in the event the employment of an A.G. Edwards employee who participates in these bonus plans terminates due to displacement, death, disability or retirement prior to the bonus payment date, the employee shall be entitled to full payment. The stock portion of these incentive awards will be granted by Wachovia at the time Wachovia makes normal annual stock grants in the first quarter of 2008.


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Also, Wachovia agreed to make grants of restricted Wachovia common stock to the employees of A.G. Edwards who are eligible for “super stock” awards based on the eligibility criteria applicable for the “super stock” awards granted by A.G. Edwards in February 2007. The aggregate value of Wachovia common stock available for these “super stock” award grants shall not exceed $25 million. The allocation methodology and the terms of the awards shall be the same as the methodology and terms of the awards granted by A.G. Edwards in February 2007.
 
Robert L. Bagby Employment Arrangement.  In connection with the execution of the merger agreement, Wachovia also entered into an employment arrangement with Mr. Bagby which will become effective upon merger completion. The arrangement provides that, during the term of the agreement, Mr. Bagby will serve as Chairman of Wachovia Securities, LLC, the combined retail brokerage entity and will receive an annual base salary of not less than $600,000, and for calendar years 2008 and 2009, an annual incentive award of not less than $4.5 million. Mr. Bagby’s annual incentive award from March 1, 2007 through December 31, 2007 will be determined by the A.G. Edwards incentive plan as described above under “—Annual Incentive Awards”.
 
Upon merger completion, Mr. Bagby will receive a Wachovia restricted stock award valued at $7.5 million, in lieu of any other annual stock award grants during the term of his arrangement. This restricted stock award will vest on the third anniversary of the date of grant, subject to his continued employment. This restricted stock award will vest earlier, however, if his employment is terminated by Wachovia without cause, or he terminates employment for good reason, death, disability or retirement, provided that retirement within six months following merger completion would require Wachovia’s consent.
 
If Mr. Bagby’s employment is terminated by Wachovia without cause, or he terminates employment for good reason, death, disability or retirement (provided that retirement within six months following merger completion would require Wachovia’s consent), he will also receive (i) a lump sum payment of unpaid wages, his paid time off balance and unreimbursed expenses; (ii) a lump sum payment of (a) his unpaid incentive from the prior year if it has not been paid and (b) a pro-rata bonus payment for the then-current year based on the $4.5 million minimum annual incentive; (iii) a lump sum payment equal to two times the sum of (a) his salary and (b) the greater of (x) his minimum annual incentive ($4.5 million) and (y) the highest annual cash incentive bonus paid to him for the three most recently completed calendar years; (iv) benefits continuation for two years following termination on substantially similar terms to the benefits he was receiving at the time of his termination; (v) retiree medical benefits for him, his spouse and their dependents for the remainder of their respective lives upon the expiration of post-termination benefits; (vi) vesting of his equity grants; and (vii) office space allowance of up to $5,000 per month for two years. Following such a termination, Mr. Bagby has agreed that he will be subject to a two-year non-competition and non-solicitation of customers and employees covenant.
 
Employment Arrangements with Other A.G. Edwards Executive Officers.  After the execution of the merger agreement, Wachovia also entered into an employment arrangement with each of Messrs. Kelly, Pautler, Miller and Diederich which will become effective upon completion of the merger. Each respective arrangement provides that, during the term of the respective agreement, Mr. Kelly will serve as Chief Operating Officer of Wachovia Securities, LLC and each of Messrs. Pautler, Miller and Diederich will serve as Executive Vice President of Wachovia Securities, LLC. Under their respective contracts, the executives will each receive an annual base salary of not less than $250,000, and Mr. Kelly will receive an annual incentive award of not less than $2 million for each of calendar years 2008 and 2009, Mr. Pautler will receive an annual incentive award of not less than $1.25 million for calendar year 2008, and each of Messrs. Miller and Diederich will receive an annual incentive award of not less than $2,350,000 for calendar year 2008. The executives’ annual incentive award from March 1, 2007 through merger completion will be determined by the A.G. Edwards incentive plan as described above under “— Annual Incentive Awards.” Mr. Kelly will be paid an additional pro rata incentive payment for the number of days that he has worked from completion of the merger until the end of 2007 and Mr. Pautler has been guaranteed that his annual bonus for 2007 will not be less than $1.25 million. For 2009, Mr. Pautler will be eligible for a bonus under the applicable Corporate & Investment Bank incentive plan.


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On January 1, 2008, Mr. Pautler will receive a Wachovia restricted stock award valued at $1.1 million in lieu of any other annual stock award grants for such year and on each of January 1, 2008 and 2009, Mr. Kelly, will receive a Wachovia restricted stock award valued at $750,000 in lieu of any other annual stock award grants for such years. Mr. Kelly will also be paid an additional pro rata equity award based on the stock portion of the pre-closing bonus award for the number of days that he has worked from completion of the merger until the end of 2007 and Mr. Pautler has been guaranteed that his equity grant for 2007 will not be less than $1.1 million. If Mr. Pautler remains employed with Wachovia through December 31, 2008, he will also be paid a cash retention bonus of $1.5 million.
 
If, during the two-year period following completion of the merger, in the case of Mr. Kelly and during the 14 month period following completion of the merger, in the case of Messrs. Pautler, Miller and Diederich, an executive’s employment is terminated by Wachovia without cause, or in the case of Messrs. Kelly, Miller and Diederich, Wachovia breaches the employment arrangement, or in the case of Messrs. Miller and Diederich, the executive experiences a job displacement as defined in the Wachovia severance pay plan, the executive will receive:
 
  (i)  a lump sum payment of any accrued, but unpaid wages, paid time off and unreimbursed expenses;
 
  (ii)  any earned but unpaid incentive from the prior year;
 
  (iii)  a lump sum cash payment equal to $6 million, in the case of Mr. Kelly and $3,033,333, in the case of Mr. Pautler, less, in each case, the sum of (x) any guaranteed bonus amount that has been paid under the agreement and (y) the grant date value of the annual equity grant to the extent vested as of the termination; and a lump sum payment of $3,033,333 in the case of Messrs. Miller and Diederich, less any guaranteed bonus amount that has been paid under the agreement;
 
  (iv)  in the case of Messrs. Kelly and Pautler, benefits continuation for two years following termination on substantially similar terms to the benefits he was receiving at the time of his termination; and
 
  (v)  in the case of each of Messrs. Kelly, Miller and Diederich, to the extent that his A.G. Edwards’ equity awards are not vested upon the termination, a lump sum payment equal to the value of the A.G. Edwards’ equity awards that are forfeited as a result of the termination.
 
Each of the executives has agreed that he will be subject to a non-competition and non-solicitation of customers and employees covenant for 12 months following the completion of the merger in the case of Mr. Kelly and 14 months from completion of the merger in the case of Messrs. Pautler, Miller and Diederich.
 
Restrictions on Resales by Affiliates
 
The shares of Wachovia common stock that A.G. Edwards stockholders will own following merger completion have been registered under the Securities Act. As a result, these Wachovia shares may be traded freely and without restriction by you if you are not deemed to be an affiliate of Wachovia, A.G. Edwards or the combined company under the Securities Act. An “affiliate” of Wachovia, A.G. Edwards or the combined company, as defined by the rules under the Securities Act, is a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, Wachovia, A.G. Edwards or the combined company, as the case may be. Persons that are affiliates of Wachovia or A.G. Edwards at the time the merger is submitted for vote of the A.G. Edwards stockholders or of the combined company following merger completion may not sell their shares of Wachovia common stock acquired in the merger except pursuant to an effective registration statement under the Securities Act or an applicable exemption from the registration requirements of the Securities Act, including Rules 144 and 145 under the Securities Act. Affiliates generally include directors, executive officers and beneficial owners of 10% or more of any class of capital stock.
 
This proxy statement-prospectus does not cover any resale of Wachovia common stock received in the merger by any person that may be deemed to be an affiliate of A.G. Edwards, Wachovia or the combined company.


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Dissenters’ Appraisal Rights
 
Pursuant to Section 262 of the Delaware General Corporation Law, which we refer to as Section 262, holders of shares of A.G. Edwards common stock who do not wish to accept the merger consideration may dissent from the merger and elect to have the fair value of their shares of A.G. Edwards common stock (exclusive of any element of value arising from the accomplishment or expectation of the merger) judicially determined and paid in cash, together with a fair rate of interest, if any. An A.G. Edwards stockholder may only exercise these appraisal rights by strictly complying with Section 262.
 
The following is a brief summary of the statutory procedures to be followed by holders of A.G. Edwards common stock in order to dissent from the merger and perfect appraisal rights under the Delaware General Corporation Law. This summary is not intended to be complete, and is qualified in its entirety by reference to the full text of Section 262, the text of which is attached as Appendix C to this proxy statement-prospectus.
 
Any holder of A.G. Edwards common stock seeking to exercise its right to dissent from the merger and demand appraisal of its shares of A.G. Edwards common stock, or wishing to preserve its right to do so, should carefully review Section 262 and is urged to consult a legal advisor.
 
All references in Section 262 and in this summary to a “stockholder” are to the record holder of shares of A.G. Edwards common stock as to which appraisal rights are asserted. A person having a beneficial interest in shares of A.G. Edwards common stock held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow properly the steps summarized below and in a timely manner to perfect appraisal rights.
 
Under Section 262, if a proposed merger is to be submitted for adoption at a meeting of stockholders, as in the case of A.G. Edwards’ special meeting, A.G. Edwards must, not less than 20 days prior to the special meeting, notify each of its stockholders entitled to appraisal rights that these appraisal rights are available and include in the notice a copy of Section 262. This proxy statement-prospectus constitutes notice to the A.G. Edwards stockholders and Section 262 is attached as Appendix C to this proxy statement-prospectus.
 
An A.G. Edwards stockholder wishing to exercise the right to demand appraisal under Section 262 must satisfy each of the following conditions. The stockholder must:
 
  •   deliver a written demand for appraisal of its shares to A.G. Edwards before the taking of the vote with respect to the merger agreement at the special meeting. This demand will be sufficient if it reasonably informs A.G. Edwards of the stockholder’s identity and that the stockholder intends thereby to demand the appraisal of its shares. A proxy or vote against the merger will not constitute such a demand. The written demand for appraisal must be in addition to and separate from any proxy the stockholder delivers or vote the stockholder casts in person;
 
  •   not vote in favor of the merger agreement (voting against, abstaining from voting or not voting at all will satisfy this requirement). A vote in favor of the merger agreement, in person or by proxy, or the return of a signed proxy that does not contain voting instructions will, unless revoked, constitute a waiver of the stockholder’s appraisal rights and will nullify any previously filed written demand for appraisal; and
 
  •   continue to hold its shares of A.G. Edwards common stock from the date of making the demand through merger completion.
 
All written demands for appraisal should be mailed or delivered to:
 
A.G. Edwards, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
Attn: Corporate Secretary
 
To be effective, a demand for appraisal rights must be executed by or for the stockholder of record who held such shares of A.G. Edwards common stock on the date of making the demand, and who continuously holds


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such shares through the merger completion date, fully and correctly, as such stockholder’s name appears on the stock certificates.
 
If the shares of A.G. Edwards common stock are owned of record by a person in a fiduciary capacity, such as a trustee, guardian or custodian, the demand should be executed in that capacity. If the shares are owned of record by more than one person as in a joint tenancy or tenancy in common, the demand should be executed by or on behalf of all of the owners. An authorized agent, including an agent for two or more joint owners, may execute a demand for appraisal on behalf of a stockholder; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, the agent is acting as agent for such owner or owners. A record holder, such as a broker, who holds shares as nominee for several beneficial owners may exercise appraisal rights with respect to the shares held for one or more beneficial owners while not exercising these rights with respect to the shares held for one or more other beneficial owners. In that case, the written demand should set forth the number of shares as to which appraisal is sought, and where no number of shares is expressly mentioned the demand will be presumed to cover all shares held in the name of the record owner.
 
Stockholders who hold their shares of A.G. Edwards common stock in brokerage accounts or other nominee forms and who wish to exercise appraisal rights are urged to consult with their brokers to determine appropriate procedures for making a demand for appraisal.
 
Within 10 days after the date the merger is completed, White Bird Holdings, as successor to A.G. Edwards, will give written notice that the merger has become effective to each stockholder who satisfied the requirements of Section 262 and has not voted in favor of adopting the merger agreement.
 
Within 120 days after the date the merger is completed, White Bird Holdings, as successor to A.G. Edwards, or any stockholder who has complied with Section 262 and who is otherwise entitled to appraisal rights, may file a petition in the Delaware Court of Chancery, which we refer to as the Court of Chancery, demanding a determination of the value of the A.G. Edwards common stock held by all the dissenting stockholders entitled to appraisal rights. Any dissenting stockholder desiring to file a petition is advised to file on a timely basis unless the dissenting stockholder receives notice that another stockholder of A.G. Edwards has already filed a petition. The failure to file a petition timely could nullify any previous written demand for appraisal. Notwithstanding the foregoing, at any time within 60 days after the date the merger is completed, any stockholder shall have the right to withdraw its demand for appraisal and to accept the merger consideration. Any attempt to withdraw made more than 60 days after the effectiveness of the merger will require the written approval of White Bird Holdings and no appraisal proceeding before the Court of Chancery as to any stockholder will be dismissed without the approval of the Court of Chancery, which approval may be conditioned upon any terms the Court of Chancery deems just. If White Bird Holdings does not approve a stockholder’s request to withdraw a demand for appraisal when the approval is required or if the Court of Chancery does not approve the dismissal of an appraisal proceeding, the stockholder would be entitled to receive only the appraised value determined in any such appraisal proceeding. This value could be higher or lower than, or the same as, the value of the merger consideration.
 
Within 120 days after the date the merger is completed, any stockholder who has complied with Section 262 to that point in time shall be entitled to receive from White Bird Holdings, upon written request, a statement setting forth the aggregate number of shares of A.G. Edwards common stock not voted in favor of the merger agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Each written statement shall be mailed within 10 days after the stockholder’s written request for such statement is received by White Bird Holdings or within 10 days after expiration of the period for delivery of demands for appraisal under Section 262, whichever is later.
 
If a petition for appraisal is duly filed by a stockholder and a copy thereof is delivered to White Bird Holdings, it shall within 20 days file with the office of the Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreement as to the value of their shares has not been reached by White Bird Holdings. After notice to stockholders, the Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights. The


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Court of Chancery may require the stockholders who demanded appraisal for their shares and who hold stock represented by certificates to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with such direction, the Court of Chancery may dismiss the proceedings as to such stockholder.
 
After determining which stockholders are entitled to an appraisal, the Court of Chancery will appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. In determining fair value and, if applicable, a fair rate of interest, the Court of Chancery is to take into account all relevant factors, including the rate of interest which White Bird Holdings would have had to pay to borrow money during the pendency of the proceeding.
 
The Court of Chancery will direct the payment of the fair value of the shares, together with interest, if any, by White Bird Holdings to the stockholders entitled thereto. Interest may be simple or compound, as the Court may direct.
 
The costs of the proceedings may be determined by the Court of Chancery and taxed upon the parties as the Court of Chancery deems equitable in the circumstances. However, costs do not include attorneys’ or expert witness fees. Upon application of a stockholder, the Court of Chancery may order that all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding be charged pro rata against the value of all of the shares entitled to appraisal. These expenses may include, without limitation, reasonable attorneys’ fees and the fees and expenses of experts.
 
Failure to strictly follow the steps required by Section 262 for perfecting appraisal rights may result in the loss of appraisal rights, in which event dissenting A.G. Edwards stockholders will be entitled to receive the merger consideration with respect to their dissenting shares. In view of the complexity of the provisions of Section 262, any stockholder considering exercising its appraisal rights under the Section 262 is urged to consult its own legal advisor.


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THE MERGER AGREEMENT
 
The following summarizes the material provisions of the merger agreement, which is attached to this document as Appendix A and is incorporated by reference into this document. The merger agreement and the description of the material terms of the merger agreement have been included to provide investors and security holders with information regarding the terms of the merger agreement. The merger agreement and the description of the material terms of the merger agreement are not intended to provide any other factual information about A.G. Edwards, Wachovia, or their respective subsidiaries and affiliates. We urge you to read the merger agreement carefully and in its entirety.
 
Structure
 
In accordance with the terms and conditions of the merger agreement, and in accordance with Delaware law, at merger completion, A.G. Edwards will merge with and into White Bird Holdings, a wholly-owned subsidiary of Wachovia. White Bird Holdings will be the surviving corporation and will continue its corporate existence under the laws of Delaware as a wholly-owned subsidiary of Wachovia. When the merger is completed, the separate corporate existence of A.G. Edwards will terminate. White Bird Holdings’ certificate of incorporation will be the certificate of incorporation of the combined company, and White Bird Holdings’ by-laws will be the by-laws of the combined company. See “Comparison of Stockholder Rights”. After merger completion, former A.G. Edwards stockholders will own approximately 4% of the outstanding common stock of Wachovia and current Wachovia stockholders will own approximately 96% of the outstanding common stock of Wachovia.
 
Conversion of Stock; Treatment of Options
 
In the merger, each share of A.G. Edwards common stock will be converted into the right to receive 0.9844 shares of Wachovia common stock (with the appropriate number of attached stock purchase rights under Wachovia’s stockholder rights plan) and $35.80 in cash for each such share. See “Description of Wachovia Capital Stock—Shareholder Protection Rights Plan” for a description of the stock purchase rights under Wachovia’s stockholder rights plan. The exchange ratio for the stock portion of the consideration is subject to customary and proportionate adjustments in the event of stock splits, reverse stock splits or similar events with respect to Wachovia common stock before the merger is completed.
 
For example, if you own 100 shares of A.G. Edwards common stock immediately prior to the merger, when the proposed merger is completed, you will receive:
 
  •   98 Wachovia common shares;
 
  •   $3,580.00 in cash; and
 
  •   for the fractional Wachovia common share, cash equal to 0.44 (the remaining fractional interest in a Wachovia common share) multiplied by the average of the NYSE closing price per Wachovia common share on the five trading days before the merger completion date.
 
A.G. Edwards Stock Options
 
Each employee option to acquire A.G. Edwards common stock outstanding and unexercised immediately prior to merger completion will be converted into an option to purchase Wachovia common stock, with the following adjustments:
 
  •   the number of shares of Wachovia common stock subject to the new option will equal the product of the number of shares of A.G. Edwards common stock subject to the original option multiplied by 1.6407 (rounded down to the nearest whole share); and
 
  •   the exercise price per share of Wachovia common stock subject to the new option will equal the quotient of the exercise price under the original option divided by 1.6407 (rounded up to the nearest cent).


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This 1.6407 option exchange ratio was derived by including the cash portion of the merger consideration as if the merger consideration were all shares of Wachovia common stock rather than only 60% of the merger consideration. This 1.6407 option exchange ratio is subject to customary and proportionate adjustments in the event of stock splits, reverse stock splits or similar events before the merger is completed. The duration and other terms of each converted option will be substantially the same as the original A.G. Edwards option, except that we agreed in the merger agreement that A.G. Edwards stock options will generally vest and become exercisable in the event an optionholder’s employment is terminated by death, displacement or retirement following the merger. Options that are incentive stock options under the Internal Revenue Code will be adjusted in the manner prescribed by the Internal Revenue Code.
 
Wachovia will take the corporate actions that are necessary to reserve a sufficient number of shares of its common stock for issuance upon exercise of the new options. In addition, it will file appropriate registration statements with the SEC to register the shares of its common stock underlying the new options.
 
Restricted Stock Units
 
Each restricted share of A.G. Edwards common stock granted to employees pursuant to A.G. Edwards’ stock incentive plans that are issued and outstanding and subject to vesting restrictions at the time of merger completion will be converted into 1.6407 shares of restricted Wachovia common stock, having the same restrictions on transfer as the original A.G. Edwards restricted stock award. Similarly, A.G. Edwards restricted stock units, or phantom stock units, outstanding and subject to vesting restrictions at the time of merger completion will be converted into 1.6407 restricted stock units of Wachovia and will have the same vesting restrictions as the original A.G. Edwards restricted unit award, except that we agreed that the foregoing awards would generally vest and become free of restrictions in the event the holder’s employment is terminated by death, displacement or retirement. Any shares of A.G. Edwards restricted common stock that vest (or that are no longer subject to transfer restrictions) prior to merger completion will receive the merger consideration of 0.9844 shares of Wachovia common stock and $35.80 in cash.
 
Fixed Exchange Ratio Considerations
 
Because the exchange ratio with respect to the number of shares of Wachovia common stock to be issued as part of the merger consideration is fixed and because the market price of Wachovia common stock will fluctuate, the market value of the Wachovia common stock that A.G. Edwards stockholders will receive in the merger may increase or decrease both before and after the merger. However, the cash payment that holders of A.G. Edwards common stock will receive as merger consideration will not change. Based on the closing price of Wachovia common stock on May 30, 2007, the last trading day before we announced the execution of the merger agreement, approximately 60% of the value of the merger consideration was composed of Wachovia common stock and approximately 40% of the value of the merger consideration was composed of cash. The percentage of this allocation will fluctuate prior to the merger as the price of Wachovia common stock fluctuates.
 
Fixed exchange ratios, with no “collars”, are frequently used in mergers involving financial institutions. Such exchange ratios fix the percentage ownership of the parties in the combined company at the time the merger agreement is signed and symmetrically allocate the risks associated with movements in the price of the issuer’s stock. The use of a fixed exchange ratio is intended to capture the relative contribution of each company based on fundamental financial factors. In this respect, fixed exchange ratios reflect the intention to share risk and rewards generally presumed in stock-for-stock merger transactions.
 
Wachovia and A.G. Edwards believe that a fixed exchange ratio is appropriate in view of the long-term strategic purposes of the merger, including the goal to combine our companies into a platform that creates an opportunity for continued strong earnings growth. While a fixed exchange ratio exposes the recipient stockholders to a decline in nominal value if the price of the issuer’s stock falls in the period between announcement and closing, it also recognizes that Wachovia’s ultimate value will not be determined by movements in each party’s stock price between announcement and closing, but by Wachovia’s performance


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over time. Wachovia and A.G. Edwards believe that concerns about short-term market fluctuations generally should not outweigh judgments about longer-term value.
 
Exchange of Certificates; Fractional Shares
 
Exchange Procedures.  At merger completion, Wachovia will deposit with an exchange agent, which will be American Stock Transfer & Trust Company or another bank or trust company reasonably acceptable to each of Wachovia and A.G. Edwards, (1) certificates or, at Wachovia’s option, evidence of shares in book entry form, representing the shares of Wachovia common stock to be issued under the merger agreement and (2) sufficient cash to make the $35.80 per share cash payment as well as cash to be paid instead of any fractional shares of Wachovia common stock to be issued under the merger agreement.
 
Promptly after merger completion, Wachovia will mail a transmittal letter to A.G. Edwards stockholders. The transmittal letter will contain instructions about the surrender of A.G. Edwards common stock certificates for statements indicating book entry ownership of Wachovia common stock, the $35.80 per share cash payment and any cash to be paid instead of fractional shares of Wachovia common stock. A.G. Edwards stockholders may request in the transmittal letter to receive a Wachovia stock certificate instead of a statement indicating book entry ownership of Wachovia common stock.
 
A.G. Edwards common stock certificates should not be returned with the enclosed proxy card. They should not be forwarded to the exchange agent unless and until you receive a transmittal letter following merger completion.
 
A.G. Edwards common stock certificates presented for transfer after merger completion will be canceled and exchanged for, in addition to the $35.80 per share cash payment, statements indicating book entry ownership of Wachovia common stock or, if requested by an A.G. Edwards stockholder in the transmittal letter, stock certificates representing the applicable number of shares of Wachovia common stock. Any A.G. Edwards stockholder requesting that shares of Wachovia common stock be issued in a name other than that in which the certificate being surrendered is registered will have to pay to the exchange agent in advance any transfer taxes that may be owed.
 
After the merger, there will be no transfers of shares of A.G. Edwards common stock on the stock transfer books of A.G. Edwards or the surviving corporation.
 
All shares of Wachovia common stock into which shares of A.G. Edwards common stock are converted on the merger completion date will be deemed issued as of that date. After that date, former A.G. Edwards stockholders of record will be entitled to vote, at any meeting of Wachovia stockholders having a record date on or after the merger completion date, the number of whole shares of Wachovia common stock into which their shares of A.G. Edwards common stock have been converted, regardless of whether they have surrendered their A.G. Edwards stock certificates. Wachovia dividends having a record date on or after the merger completion date will include dividends on Wachovia common stock issued to A.G. Edwards stockholders in the merger. However, no dividend or other distribution payable to the holders of record of Wachovia common stock after the merger completion date will be distributed to the holder of any A.G. Edwards common stock certificates until that holder physically surrenders all of his or her A.G. Edwards common stock certificates as described above. Promptly after surrender of certificates formerly representing A.G. Edwards common stock, statements indicating book entry ownership of Wachovia common stock or, if requested by an A.G. Edwards stockholder in the transmittal letter, stock certificates to which that holder is entitled, all undelivered dividends and other distributions, the $35.80 per share cash payment and cash to be paid instead of any fractional shares of Wachovia common stock, if applicable, will be delivered to that holder, in each case without interest.
 
No Fractional Shares Will Be Issued.  Wachovia will not issue fractional shares of Wachovia common stock in the merger. There will be no dividends or voting rights with respect to any fractional common shares. For each fractional share of common stock that would otherwise be issued, Wachovia will pay cash in an amount equal to the fraction of a whole share that would otherwise have been issued, multiplied by the average closing sale price of Wachovia common stock on the NYSE for the five NYSE trading days immediately preceding the date the merger is completed. No interest will be paid or accrued on the cash.


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None of Wachovia, A.G. Edwards or any other person will be liable to any former holder of A.G. Edwards common stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.
 
Lost, Stolen or Destroyed A.G. Edwards Common Stock Certificates.  A.G. Edwards stockholders who have lost a certificate representing A.G. Edwards common stock, or whose certificate has been stolen or destroyed, will be issued the Wachovia common stock payable under the merger agreement once such stockholder posts a bond in a customary amount to protect against any claim that may be made against Wachovia about ownership of the lost, stolen or destroyed certificate.
 
For a description of Wachovia common stock and a description of the differences between the rights of A.G. Edwards stockholders and Wachovia stockholders, see “Description of Wachovia Capital Stock” and “Comparison of Stockholder Rights”.
 
Effective Time
 
The effective time of the merger will be the time set forth in the legal documents that we will file with the Secretary of State of the State of Delaware on the date the merger is completed. We plan to complete the merger on the third business day after the satisfaction or waiver, where waiver is legally permissible, of the last remaining condition to the merger unless we agree to another date or time. See “—Conditions to Completion of the Merger”.
 
We anticipate that we will complete the merger during the fiscal quarter ending December 31, 2007. However, completion could be delayed if there is a delay in obtaining the necessary regulatory approvals or for other reasons. It is also possible that one or more necessary approvals may not be obtained, in which case it is possible the merger may not be completed. If we do not complete the merger by February 29, 2008, either party may terminate the merger agreement without penalty unless the failure to complete the merger by this date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its obligations under the merger agreement. See “—Conditions to Completion of the Merger” and “—Regulatory Approvals Required for the Merger”. In some cases, A.G. Edwards’ obligation to pay Wachovia a termination fee up to $270 million upon the occurrence of specified events may continue for a period of time after termination of the merger agreement. The termination fee is described under “—Termination Fee”.
 
Representations and Warranties
 
The merger agreement contains representations and warranties of each of A.G. Edwards, on the one hand, and Wachovia and White Bird Holdings, on the other hand, made solely for the benefit of the other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the merger agreement. The disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the merger agreement. Moreover, the representations and warranties in the merger agreement were used for the purpose of allocating risk between A.G. Edwards, on the one hand, and Wachovia and White Bird Holdings, on the other hand. You should read the representations and warranties in the merger agreement not in isolation but also in conjunction with other information about A.G. Edwards, Wachovia and their subsidiaries that the respective companies include in reports, statements and other filings they make with the SEC. See “Where You Can Find More Information”.
 
The merger agreement contains representations and warranties A.G. Edwards made to Wachovia, as to, among other things:
 
  •   its and its subsidiaries’ corporate organization and existence and the valid ownership of its significant subsidiaries;
 
  •   its capitalization;
 
  •   its and its subsidiaries’ authority to enter into the merger agreement and make it valid and binding;


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  •   the fact that the merger agreement does not breach:
 
  •   its certificate of incorporation and by-laws,
 
  •   applicable law, and
 
  •   its agreements, instruments, judgments, orders or other obligations;
 
  •   governmental approvals;
 
  •   its financial statements and filings with the SEC;
 
  •   the absence of any liabilities outside the ordinary course of business, any material changes in its business, and any events which would have a material adverse effect since February 28, 2007;
 
  •   the absence of undisclosed legal proceedings and injunctions since February 28, 2007;
 
  •   regulatory investigations and orders;
 
  •   its regulatory status;
 
  •   its compliance with applicable law;
 
  •   the validity of, and the absence of material defaults under, its material contracts;
 
  •   its employee benefit plans and related matters;
 
  •   the filing and accuracy of its tax returns, and the tax treatment of the merger;
 
  •   the accuracy of its books and records;
 
  •   the inapplicability to the merger of state anti-takeover laws and the anti-takeover provisions in its certificate of incorporation and by-laws;
 
  •   its relationships with financial advisors;
 
  •   its compliance with the Sarbanes-Oxley Act of 2002;
 
  •   labor law matters;
 
  •   environmental law matters;
 
  •   its tangible and intangible properties and its intellectual property; and
 
  •   broker-dealer compliance matters and insurance matters.
 
The merger agreement contains representations and warranties of Wachovia to A.G. Edwards, as to, among other things:
 
  •   its and its subsidiaries’ corporate organization and existence and the valid ownership of its significant subsidiaries;
 
  •   its capitalization;
 
  •   its and its subsidiaries’ authority to enter into the merger agreement and make it valid and binding;
 
  •   the fact that the merger agreement does not breach:
 
  •   its articles of incorporation and by-laws,
 
  •   applicable law, and
 
  •   its agreements, instruments, judgments, orders or other obligations;
 
  •   governmental approvals;
 
  •   its financial statements and filings with the SEC;


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  •   the absence of any liabilities outside the ordinary course of business, any material changes in its business, and any events which would have a material adverse effect since December 31, 2006;
 
  •   the absence of undisclosed legal proceedings and injunctions since December 31, 2006;
 
  •   regulatory investigations and orders;
 
  •   its status under applicable federal banking regulations;
 
  •   its compliance with applicable law;
 
  •   the filing and accuracy of its tax returns, and the tax treatment of the merger;
 
  •   the inapplicability to the merger of state anti-takeover laws and the anti-takeover provisions in its articles of incorporation and by-laws;
 
  •   its relationships with financial advisors;
 
  •   its compliance with the Sarbanes-Oxley Act of 2002;
 
  •   having sufficient funds to pay the $35.80 per share cash payment on the date the merger is completed; and
 
  •   the corporate organization and existence of White Bird Holdings, the wholly-owned subsidiary into which A.G. Edwards will merge, White Bird Holdings’ capitalization, White Bird Holdings’ conduct of business, and White Bird Holdings’ authority to enter into the merger agreement and make it valid and binding.
 
Conduct of Business Pending the Merger
 
A.G. Edwards has agreed, except as expressly contemplated by the merger agreement or as disclosed prior to the signing of the merger agreement, that it will not and will cause each of its subsidiaries not to, and will not agree to, without Wachovia’s consent:
 
  •   conduct its business other than in the ordinary and usual course;
 
  •   fail to use reasonable best efforts to preserve intact its business organizations, assets and other rights, and its existing relations with customers, employees and other parties;
 
  •   take any action reasonably likely to impair materially its ability to perform its obligations under the merger agreement or complete the transactions contemplated by the merger agreement on a timely basis;
 
  •   enter into any new material line of business or change its material brokerage, investment, underwriting, risk, asset liability management or other material operating policies;
 
  •   adjust, split, combine, redeem, reclassify, purchase or otherwise acquire any of its own stock;
 
  •   declare or pay any dividend or distribution on any shares of its stock, other than:
 
  •   regular quarterly dividends on its common stock at the same rate paid by it in the fiscal quarter immediately preceding signing of the merger agreement, and
 
  •   dividends paid by any of its wholly-owned subsidiaries to it or any of its wholly-owned subsidiaries;
 
  •   with limited exceptions, permit any additional shares of stock to become subject to new grants of rights to acquire stock;
 
  •   issue, sell, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of capital stock or securities convertible into or exercisable for common stock;


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  •   sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any assets, deposits, business or properties, except in a nonmaterial transaction in the ordinary course of business consistent with past practice;
 
  •   acquire all or a material portion of any business entity or, except in the ordinary course of business consistent with past practice, make any other investment;
 
  •   except in the ordinary course of business consistent with past practice, incur, create, assume or guarantee any long-term indebtedness;
 
  •   knowingly take, or knowingly omit to take, any action that is reasonably likely to impede the merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, or any action that is reasonably likely to result in any of the conditions to the merger not being satisfied in a timely manner, except as may be required by applicable law or regulation;
 
  •   amend its certificate of incorporation or by-laws or comparable documents;
 
  •   change its accounting principles, practices or methods or the actuarial assumptions underlying its benefit plans, except as required by GAAP or applicable regulatory accounting requirements;
 
  •   enter into, amend, modify or renew any employment, consulting or severance agreements or arrangements or grant salary or wage increases or employee benefit increases except as required by applicable law, to satisfy previously existing and disclosed contractual obligations or for merit based or annual increases or arrangements with new hires, in each case in the ordinary course of business consistent with past practice;
 
  •   terminate the employment of any employee except as required by or for violation of applicable law or for violation of employment policies or in the ordinary course of business consistent with past practice upon elimination of such employee’s position;
 
  •   enter into, establish, adopt or amend any employee benefit plans, take any action to accelerate the vesting or exercisability of stock options, restricted shares or other compensation, change the manner in which contributions to employee benefit plans are made or determined, or add any new participants or increase the principal sum of any non-qualified retirement plan, except as required by applicable law, to satisfy previously existing and disclosed contractual obligations or for any amendments that do not increase benefits or administrative costs;
 
  •   make or change any tax elections, or method of tax accounting;
 
  •   make capital expenditures in excess of $5 million in the aggregate;
 
  •   settle any claim, action or proceeding involving money damages in excess of $400,000 individually or $5 million in the aggregate or involving any admission of wrongdoing, injunctive or other nonmonetary relief or restriction or, except in the ordinary course consistent with past practice, waive or release any material rights or claims;
 
  •   materially restructure its investment securities portfolio or the manner in which such portfolio is classified or reported, or materially alter the credit or risk concentrations associated with its businesses; or
 
  •   enter into, amend, terminate or fail to renew any material agreement.
 
Wachovia has agreed, except as expressly contemplated by the merger agreement or as disclosed prior to signing the merger agreement, that it will not, and will not agree to, without A.G. Edwards’ consent:
 
  •   knowingly take, or knowingly omit to take, any action that is reasonably likely to impede the merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, or any action that is reasonably likely to result in any of the conditions to the merger not being satisfied in a timely manner, except as may be required by applicable law or regulation; or


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  •   amend its articles of incorporation or by-laws in a manner that would materially and adversely affect the rights and privileges of holders of Wachovia’s common stock or prevent or materially delay completion of the transactions described in the merger agreement.
 
Acquisition Proposals by Third Parties
 
A.G. Edwards has agreed that it will not initiate, solicit, encourage or knowingly facilitate inquiries or proposals with respect to, or engage in any negotiations concerning, or provide any confidential or nonpublic information or data to, or have any discussions with, any person relating to, any acquisition proposal.
 
However, if A.G. Edwards receives an unsolicited acquisition proposal from a person other than a person A.G. Edwards negotiated with prior to the execution of the merger agreement and the A.G. Edwards board of directors concludes in good faith that it constitutes a superior proposal or would reasonably be likely to result in a superior proposal, A.G. Edwards may furnish nonpublic information and participate in negotiations or discussions if its board concludes in good faith (after considering the advice of outside counsel) that failure to take those actions would result in a violation of its fiduciary duties. Before providing any nonpublic information, A.G. Edwards must enter into a confidentiality agreement with the third party having terms no less favorable to it than the confidentiality agreement entered into by it with Wachovia. While A.G. Edwards has the right to enter into negotiations regarding a superior proposal under the foregoing circumstances, the merger agreement does not allow A.G. Edwards to terminate the merger agreement because it has received a superior proposal or entered into such negotiations.
 
For purposes of the merger agreement, the terms “acquisition proposal” and “superior proposal” have the following meanings:
 
  •   The term “acquisition proposal” means, other than the transactions contemplated by the merger agreement:
 
  •   a tender or exchange offer to acquire more than 15% of the voting power in A.G. Edwards or any of its significant subsidiaries;
 
  •   a proposal for a merger, consolidation or other business combination involving A.G. Edwards or any of its significant subsidiaries; or
 
  •   any other proposal to acquire more than 15% of the voting power in, or more than 15% of the business or assets of, A.G. Edwards or any of its significant subsidiaries.
 
  •   The term “superior proposal” means a written acquisition proposal (substituting “a majority” for “more than 15%” in the first and third bullet points above) which the A.G. Edwards board concludes in good faith to be more favorable from a financial point of view to its stockholders than the Wachovia merger and the other transactions contemplated in the merger agreement after:
 
  •   receiving the advice of its financial advisors;
 
  •   taking into account the likelihood and timing of completion of the proposed transaction; and
 
  •   taking into account legal, financial, regulatory and other aspects of such proposal.
 
A.G. Edwards has agreed to cease immediately any activities, negotiations or discussions conducted before the date of the merger agreement with any other persons with respect to acquisition proposals and to use reasonable best efforts to enforce any confidentiality, standstill or similar agreement relating to such acquisition proposals. A.G. Edwards has also agreed to notify Wachovia within 24 hours of receiving any acquisition proposal and the substance of the proposal, and will keep Wachovia apprised of any related developments, discussions and negotiations on a current basis.
 
In addition, A.G. Edwards agreed to use all reasonable best efforts to obtain the required adoption of the merger agreement from its stockholders. However, if the A.G. Edwards board of directors determines in good faith (after consultation with and considering the advice of outside counsel) because of either (1) receipt of an acquisition proposal after the date of the merger agreement that the A.G. Edwards board of directors concludes


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in good faith constitutes a superior proposal or (2) a material development or change in circumstances that occurs or arises after the date of the merger agreement that was neither known to the A.G. Edwards board of directors nor reasonably foreseeable, it would result in a violation of its fiduciary duties to continue to recommend the merger agreement, then it may submit the merger agreement without recommendation and communicate the basis for its lack of recommendation to its stockholders. A.G. Edwards agreed that the A.G. Edwards board of directors may not take the actions referred to in the preceding sentence unless A.G. Edwards has
 
  •   complied in all material respects with the merger agreement provision regarding acquisition proposals by third parties,
 
  •   provided to Wachovia at least five business days’ prior written notice advising Wachovia that the A.G. Edwards board of directors intends to take such action and specifying the reasons therefor, including the terms and conditions of any superior proposal that is the basis for the proposed action and the identity of the person making the proposal, and
 
  •   if Wachovia requests, engaged in good faith negotiations with Wachovia during that five-day period to amend the merger agreement in such a manner that any acquisition proposal no longer constitutes a superior proposal, and at the end of the five-day period, such acquisition proposal has not been withdrawn and continues to constitute a superior proposal (after taking into account any changes to the terms of the merger agreement proposed by Wachovia).
 
A.G. Edwards also agreed that its board may not submit any acquisition proposal to the vote of A.G. Edwards stockholders other than the merger.
 
Other Agreements
 
In addition to the agreements we have described above, we have also agreed in the merger agreement to take several other actions, including:
 
  •   to use all reasonable best efforts to complete the merger;
 
  •   subject to applicable law, to cooperate with each other and to prepare promptly and file all necessary documentation to obtain all required permits, consents, approvals and authorizations of third parties and governmental entities, including this proxy statement-prospectus and the registration statement for the Wachovia common stock to be issued in the merger;
 
  •   in the case of A.G. Edwards, to use reasonable best efforts to cause each of its affiliate stockholders to deliver to Wachovia and A.G. Edwards a written agreement restricting the ability of such person to sell or otherwise dispose of any Wachovia common stock or A.G. Edwards common stock held by that person other than in compliance with federal securities laws;
 
  •   to provide each other with information concerning our business and to give each other access to our books, records, properties and personnel and to cause our subsidiaries to do the same;
 
  •   to keep any nonpublic information of the other party confidential;
 
  •   to cooperate on stockholder and employee communications and press releases;
 
  •   in the case of A.G. Edwards, to convene a special meeting of its stockholders as soon as practicable to consider and vote on the proposed merger;
 
  •   in the case of A.G. Edwards, to take such action as is necessary to provide that, as of no later than three business days prior to the merger completion, no further shares of A.G. Edwards common stock will be purchased under the A.G. Edwards dividend reinvestment plan, provided, that such cessation of further purchases following the merger completion will be conditioned upon merger completion;
 
  •   in the case of A.G. Edwards, to take such action as is necessary to (1) terminate the offering period as in effect as of immediately prior to the signing of the merger agreement under the A.G. Edwards employee stock purchase plan, or ESPP, as of no later than seven business days prior to the signing of


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  the merger agreement; (2) cause any funds withheld for the benefit of the participants in the A.G. Edwards ESPP in respect of such period to be applied to the purchase of A.G. Edwards common stock in accordance with the terms of the A.G. Edwards ESPP as modified hereby; and (3) terminate the A.G. Edwards ESPP immediately upon the signing of the merger agreement;
 
  •   not to take any actions that would cause the transactions contemplated by the merger agreement to be subject to any takeover laws or takeover provisions of A.G. Edwards’ certificate of incorporation or by-laws or Wachovia’s articles of incorporation or by-laws;
 
  •   to give notice to the other party of any fact, event or circumstance that is reasonably likely, individually or in the aggregate, to result in any material adverse effect or that would cause or constitute a material breach of any of our respective representations, warranties, covenants or agreements in the merger agreement;
 
  •   in the case of Wachovia, upon merger completion, to indemnify and hold harmless all past and present officers, directors and employees of A.G. Edwards and its subsidiaries to the same extent they are indemnified or have the right to advancement of expenses under A.G. Edwards’ or its subsidiaries’ certificate, by-laws and indemnification agreements and to the fullest extent permitted by law;
 
  •   in the case of Wachovia, to use reasonable best efforts to provide directors’ and officers’ liability insurance for a period of six years after merger completion to the present and former directors and officers of A.G. Edwards or any of its subsidiaries;
 
  •   in the case of Wachovia, to continue providing benefits coverage to employees of A.G. Edwards that is substantially similar, in the aggregate, to the benefits coverage currently provided by A.G. Edwards until the benefits transition date when such employees become participants in Wachovia benefit arrangements;
 
  •   in the case of Wachovia, following the benefits transition date, to provide employees from A.G. Edwards who become employees of Wachovia with employee benefit coverage substantially similar to those provided to similarly situated Wachovia employees;
 
  •   to provide participants in the A.G. Edwards Corporate Executive Bonus Plan and the 2004 Performance Plan for Executives with bonus awards for the period from March 1, 2007 through the merger completion based on the bonus pool accrual schedules for fiscal 2008 established by the A.G. Edwards board of directors in February 2007, but only to the extent that the amount of those awards are accrued on the financial statements of A.G. Edwards in the ordinary course consistent with past practice;
 
  •   to make grants of restricted Wachovia common stock to the employees of A.G. Edwards who are eligible for “super stock” awards based on the eligibility criteria applicable for the “super stock” awards granted by A.G. Edwards in February 2007, not in excess of $25 million;
 
  •   in the case of A.G. Edwards, to cooperate with Wachovia in order to carry out a reorganization of A.G. Edwards and its subsidiaries on terms that Wachovia deems necessary or advisable to facilitate the combination on or after merger completion of the retail brokerage business of A.G. Edwards with the retail brokerage business of Wachovia; provided, however, A.G. Edwards shall not be required to take any such action that would materially interfere with A.G. Edwards’ business, would be binding or effective prior to merger completion or that would materially delay or make less likely the merger completion or adversely affect the tax treatment of the merger for A.G. Edwards stockholders; and
 
  •   Wachovia and A.G. Edwards together will establish a cash retention pool of, in the aggregate, up to an estimated $1.1 billion to be available for awards to be granted to Wachovia and A.G. Edwards employees, upon terms to be determined by Wachovia in consultation with Mr. Bagby, which terms will include the payment of the awards upon the earlier to occur of the end of a specified service period or a termination of a participant’s employment due to displacement.
 
See also “The Merger—Interests of Certain Persons in the Merger”.


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Conditions to Completion of the Merger
 
Wachovia’s and A.G. Edwards’ obligations to complete the merger are subject to the satisfaction or written waiver, where permissible, of a number of conditions including the following:
 
  •   A.G. Edwards stockholders’ adoption of the merger agreement being obtained;
 
  •   the Wachovia common stock that is to be issued in the merger must be approved for listing on the NYSE (including shares to be issued following exercise of the A.G. Edwards employee stock options assumed by Wachovia) and the registration statement filed with the SEC with this document must be effective;
 
  •   the required regulatory approvals must be obtained (and any waiting periods required by law must expire) without any conditions that would reasonably be expected to have a material adverse effect on the surviving corporation;
 
  •   there must be no governmental statute, rule or regulation or injunction or other order preventing merger completion;
 
Each party’s obligations are also subject to the satisfaction or written waiver of the following conditions:
 
  •   The party must have received an opinion of its tax counsel (Simpson Thacher in the case of Wachovia and Wachtell, Lipton in the case of A.G. Edwards) that, on the basis of facts, representations and assumptions set forth in each of these opinions, (1) the merger will be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code and (2) Wachovia, White Bird Holdings and A.G. Edwards will each be a party to that reorganization within the meaning of Section 368(b) of the Internal Revenue Code; and
 
  •   the representations and warranties of the other party to the merger agreement must be true and correct, except as would not or would not reasonably be likely to have a material adverse effect, as defined in the merger agreement, and the other party to the merger agreement must have performed in all material respects all obligations required to be performed by it under the merger agreement.
 
It is possible that one or more required regulatory approvals necessary to complete the merger may not be obtained or may be obtained later than expected, or that one or more other conditions to the merger may not be satisfied or waived by the party permitted to do so. As discussed below, if the merger is not completed on or before February 29, 2008, either Wachovia or A.G. Edwards may terminate the merger agreement, unless the failure to complete the merger by that date is due to the failure of the party seeking to terminate the merger agreement to perform or observe its covenants and agreements set forth in the merger agreement.
 
Termination of the Merger Agreement
 
The merger agreement may be terminated at any time before or after the merger agreement is adopted by A.G. Edwards stockholders:
 
  •   by our mutual consent;
 
  •   by either of us if any governmental entity that must grant a regulatory approval has denied approval of the merger by final and nonappealable action or if any governmental authority has issued any final order or taken any other final nonappealable action prohibiting the merger, but not by a party whose action or inaction caused or materially contributed to such denial or action;
 
  •   by either of us if the merger is not completed on or before February 29, 2008, but not by a party whose action or inaction caused or materially contributed to such delay;
 
  •   by either of us if the other party is in a continuing breach of a representation, warranty or covenant contained in the merger agreement, after 60 days’ written notice to the breaching party, as long as that breach would also allow the nonbreaching party not to complete the merger;
 
  •   by Wachovia (but not by A.G. Edwards) if


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  •   the A.G. Edwards board of directors shall have failed to recommend adoption of the merger agreement or shall have withdrawn, modified or qualified in any manner adverse to Wachovia such recommendation or shall have taken any other action or made a statement inconsistent with such recommendation;
 
  •   A.G. Edwards shall have materially breached its obligations by failing to take all action necessary to convene and hold the special meeting in accordance with the merger agreement or shall have materially breached its obligations by failing to prepare and mail to its stockholders the proxy statement-prospectus in accordance with the merger agreement;
 
  •   A.G. Edwards shall have materially breached the terms of the merger agreement relating to non-solicitation of third party acquisition proposals in any respect adverse to Wachovia;
 
  •   A.G. Edwards negotiates or authorizes negotiations with a third party regarding an acquisition proposal other than the merger (and 20 days shall have elapsed without those negotiations having been discontinued); or
 
  •   a tender offer or exchange offer for 25% or more of the outstanding shares of A.G. Edwards common stock is commenced and the A.G. Edwards board of directors recommends that A.G. Edwards stockholders tender their shares in such tender or exchange offer or otherwise fails to recommend that such stockholders reject such tender offer or exchange offer within the 10 business days period specified in Rule 14e-2(a) of the Exchange Act.
 
The failure of A.G. Edwards to obtain the stockholder vote required for the merger will not by itself give either company the right to terminate the merger agreement. As long as no other termination event has occurred, both companies will remain obligated to continue to use their reasonable best efforts to complete the merger until February 29, 2008, which, depending on the timing of the failed meeting, could include calling an additional stockholders’ meeting. During this period the A.G. Edwards board of directors cannot recommend or pursue any other mergers or business combination transactions unless certain steps have been followed and it is required by the directors’ fiduciary duties. Any decision by the A.G. Edwards board of directors to withdraw or adversely modify its recommendation of the merger, or negotiate or authorize negotiations with a third party regarding an acquisition proposal other than the merger will not give A.G. Edwards the right to terminate the merger agreement. If A.G. Edwards shall have failed to obtain the stockholder vote required for the merger, the parties have agreed that they shall in good faith use their reasonable best efforts to negotiate a restructuring of the transactions in the merger agreement (it being understood that does not obligate either party to alter or change the amount or kind of the merger consideration in a manner adverse to any party or to adversely affect the tax consequences to the A.G. Edwards stockholders), and/or to resubmit the transaction to A.G. Edwards stockholders for adoption.
 
Termination Fee
 
There are certain circumstances in which A.G. Edwards will be required to pay Wachovia a termination fee of up to $270 million. This payment is required as follows:
 
  •   if Wachovia terminates the merger agreement in the circumstances described in the last six bullet points under “—Termination of the Merger Agreement” above (i.e., the bullet points providing a termination right for Wachovia only), then A.G. Edwards shall pay the full termination fee on the business day following that termination;
 
  •   in the event
 
  •   (A) either party terminates the merger agreement in the circumstances described in the third bullet point under “—Termination of the Merger Agreement” above, either
 
  •   without the A.G. Edwards special meeting having been convened (or if convened without a vote on the merger having occurred) or


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  •   with the A.G. Edwards special meeting having been convened but the required A.G. Edwards stockholders’ adoption not having been obtained, and
 
  •   (B) an acquisition proposal shall have been made or communicated to A.G. Edwards’ board of directors or executive management (or any person shall have publicly announced, communicated or made known a bona fide intention to make an acquisition proposal) prior to the date of termination or the date of the A.G. Edwards special meeting, as applicable,
 
then A.G. Edwards shall pay 10% of the termination fee on the business day following termination of the merger agreement, and if within 18 months after the date of merger agreement termination, A.G. Edwards enters into a definitive agreement with respect to or otherwise consummates any acquisition proposal, then A.G Edwards shall pay the remaining 90% of the termination fee; and
 
  •   in the event
 
  •   (A) either party terminates the merger agreement in the circumstances described in the third bullet point under “—Termination of the Merger Agreement” above, or Wachovia terminates the merger agreement in the circumstances described in the fourth bullet point under “—Termination of the Merger Agreement” above,
 
  •   (B) at any time after the date of the merger agreement and before such termination there shall have been made public or communicated to the A.G. Edwards board or executive management an acquisition proposal (or any person shall have publicly announced, communicated or made known a bona fide intention to make an acquisition proposal), and
 
  •   (C) following the occurrence of such acquisition proposal A.G. Edwards shall have breached (and not cured after notice thereof) any of its representations, warranties, covenants or agreements in the merger agreement, which breach shall have materially contributed to the failure of the merger effective time to occur prior to merger agreement termination,
 
then A.G. Edwards shall pay 10% of the termination fee on the business day following termination of the merger agreement, and if within 18 months after the date of merger agreement termination, A.G. Edwards enters into a definitive agreement with respect to or otherwise consummates any acquisition proposal, then A.G Edwards shall pay the remaining 90% of the termination fee.
 
Waiver and Amendment of the Merger Agreement
 
At any time before merger completion, either of us may, to the extent legally allowed, waive in writing compliance by the other with any provision contained in the merger agreement. Subject to compliance with applicable law, we may amend the merger agreement by a written agreement at any time before or after A.G. Edwards stockholders adopt the merger agreement, except that after the A.G. Edwards stockholders have adopted the merger agreement, there may not be any amendment of the merger agreement that would require the merger to be resubmitted to A.G. Edwards stockholders.
 
Wachovia may also change the structure of the merger, as long as any change does not change the amount or type of consideration to be received by A.G. Edwards stockholders and the holders of employee options to purchase A.G. Edwards common stock, does not materially delay the timing of merger completion, does not adversely affect the tax consequences of the merger to A.G. Edwards stockholders and does not cause any of the conditions to complete the merger to be incapable of being satisfied.
 
Regulatory Approvals Required for the Merger
 
We have agreed to use all reasonable best efforts to obtain the regulatory approvals required for the merger. We refer to these approvals, along with the expiration of any statutory waiting periods related to these approvals, as the requisite regulatory approvals. These include approvals, notices or waivers thereof from the Federal Reserve Board, the NASD, the NYSE and various federal, state and foreign regulatory authorities. We have either filed or intend to complete the filing promptly after the date of this proxy statement-prospectus of applications and notifications to obtain the requisite regulatory approvals. The merger cannot proceed in the


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absence of the requisite regulatory approvals. It is possible that one or more requisite regulatory approvals may not be obtained or may be obtained later than expected. It is also possible that regulatory approvals obtained in connection with the proposed merger may contain conditions that adversely affect our ability to obtain the anticipated benefits of the merger. Likewise, it is also possible that the DOJ or a state attorney general may attempt to challenge the merger on antitrust grounds or that another third party may challenge our efforts to obtain regulatory approval of the merger.
 
We are not aware of any other material governmental approvals or actions that are required prior to merger completion other than those described below. We presently contemplate that if any additional governmental approvals or actions are required, these approvals or actions will be sought. However, it is possible that we may be unable to obtain one or more of these additional approvals or actions.
 
Federal Reserve Board.  The merger is subject to approval by the Federal Reserve Board under Section 4 of the Bank Holding Company Act. Wachovia filed the notification to acquire A.G. Edwards on July 9, 2007 and on August 14, 2007, the Federal Reserve Board notified Wachovia that it has approved the merger.
 
The Federal Reserve Board is prohibited from approving any transaction unless the transaction can reasonably be expected to produce benefits to the public that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. As part of its evaluation of a proposal under these public interest factors, the Federal Reserve Board reviews the financial and managerial resources of the companies involved, the effect of the proposal on competition in the relevant markets, the record of the relevant insured depository institutions under the Community Reinvestment Act and other public interest factors. The review of these factors relates to both the decision on the notification and the timing of that decision, as well as any conditions that might be imposed.
 
The Federal Reserve Board will furnish notice and a copy of the notification for approval of the merger to the Office of Thrift Supervision and the Federal Deposit Insurance Corporation. These agencies have 30 days to submit their views and recommendations to the Federal Reserve Board. The Federal Reserve Board is required to hold a public hearing in the event it receives a written recommendation of disapproval of the notification from any of these agencies within this 30-day period. Furthermore, the Bank Holding Company Act and Federal Reserve Board regulations require published notice of, and the opportunity for public comment on, the notification submitted by Wachovia for approval of the merger, and authorize the Federal Reserve Board to hold a public hearing or meeting if the Federal Reserve Board determines that a hearing or meeting would be appropriate. Any hearing or meeting or comments provided by third parties could prolong the period during which the notification is under review by the Federal Reserve Board.
 
If the DOJ were to commence an antitrust action, that action would stay the effectiveness of Federal Reserve Board approval of the merger unless a court specifically orders otherwise. In reviewing the merger, the DOJ could analyze the merger’s effect on competition differently than the Federal Reserve Board, and thus it is possible that the DOJ could reach a different conclusion than the Federal Reserve Board regarding the merger’s effects on competition. A determination by the DOJ not to object to the merger may not prevent the filing of antitrust actions by private persons or state attorneys general.
 
Antitrust.  Because the merger involves activities that are not subject to review by the Federal Reserve Board under Section 4 of the Bank Holding Company Act, it is partially subject to the HSR Act. The HSR Act prohibits the completion of transactions such as the merger unless the parties notify the FTC, and the DOJ in advance and a specified waiting period expires. Wachovia and A.G. Edwards filed pre-merger notification and report forms under the HSR Act with the FTC and the Antitrust Division of the DOJ on June 15, 2007. A transaction or portion of a transaction that is notifiable under the HSR Act may not be consummated until the expiration of a 30 calendar-day waiting period, or the early termination of that waiting period, following the filing of pre-merger notification and report forms by the parties with the FTC and DOJ. The merger received early termination of the HSR Act initial waiting period on June 22, 2007. At any time before or after the merger and the exchange of shares, the FTC or the DOJ could take whatever action under the antitrust laws it deems necessary or desirable in the public interest, including seeking to enjoin the merger or the exchange of shares, or seeking a divestiture of shares or assets.


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Wachovia and A.G. Edwards also filed a pre-merger notification with the German Bundeskartellamt, the German federal agency with responsibility for antitrust review of transactions. Under German law, Wachovia and A.G. Edwards are not permitted to complete the merger until expiration or termination of a 30-day waiting period. On July 31, 2007, the Bundeskartellamt notified Wachovia that the waiting period was terminated. At any time before or after the merger and the exchange of shares, the Bundeskartellamt could take whatever action under German law it deems necessary or desirable in the public interest, including seeking to enjoin the merger or the exchange of shares, or seeking a divestiture of shares or assets.
 
Other Regulatory Authorities.  Approvals also will be required from certain federal, state and foreign regulatory agencies in connection with changes, as a result of the merger, in the ownership of certain businesses A.G. Edwards controls. These agencies include state securities authorities in the states in which A.G. Edwards conducts securities businesses. Approvals, notices or waivers thereof are also required by the NYSE, the Commodity Futures Trading Commission, the Financial Services Authority, the NASD, other self-regulatory organizations, the Vermont Commissioner of Insurance, and may be required by certain other regulatory agencies. Applications or notifications have been or are being filed with such regulatory authorities or self-regulatory authorities. On July 13, 2007, the NASD notified Wachovia that Wachovia’s proposed acquisition of A.G. Edwards does not require NASD approval.
 
Material U.S. Federal Income Tax Consequences
 
The following summary describes the anticipated material U.S. federal income tax consequences of the merger to holders of A.G. Edwards common stock. This discussion addresses only those A.G. Edwards stockholders that hold their A.G. Edwards common stock as a capital asset within the meaning of Section 1221 of the Internal Revenue Code and does not address all the U.S. federal income tax consequences that may be relevant to particular A.G. Edwards stockholders in light of their individual circumstances or to A.G. Edwards stockholders that are subject to special rules, such as:
 
  •   financial institutions,
 
  •   investors in pass-through entities,
 
  •   insurance companies,
 
  •   tax-exempt organizations,
 
  •   dealers in securities or currencies,
 
  •   traders in securities that elect to use a mark to market method of accounting,
 
  •   persons that hold A.G. Edwards common stock as part of a straddle, hedge, constructive sale or conversion transaction,
 
  •   regulated investment companies,
 
  •   real estate investment trusts,
 
  •   persons whose “functional currency” is not the U.S. dollar,
 
  •   persons who are not citizens or residents of the United States, and
 
  •   stockholders who acquired their shares of A.G. Edwards common stock through the exercise of an employee stock option or otherwise as compensation.
 
The following summary is based upon the Internal Revenue Code, its legislative history, existing and proposed regulations thereunder and published rulings and decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local and foreign laws, or federal laws other than those pertaining to the income tax, are not addressed in this document. Determining the actual tax consequences of the merger to you may be complex. They will depend on your specific situation and on factors that are not within our control. You should consult with your own tax advisor as to the tax consequences of the merger in your particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local or foreign and other tax laws and of changes in those laws.


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If a partnership or other entity taxed as a partnership holds A.G. Edwards common stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Partnerships and partners in such a partnership should consult their tax advisers about the tax consequences of the merger to them.
 
Tax Consequences of the Merger Generally.  Based on representations contained in representation letters provided by Wachovia and A.G. Edwards and on customary factual assumptions, all of which must continue to be true and accurate in all material respects as of the effective time of the merger, and subject to the qualifications and limitations set forth above, it is the opinion of Simpson Thacher, counsel to Wachovia, and Wachtell, Lipton, counsel to A.G. Edwards, that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code and that the material U.S. federal income tax consequences of the merger will be as follows:
 
  •   no gain or loss will be recognized by Wachovia, White Bird Holdings or A.G. Edwards as a result of the merger;
 
  •   gain (but not loss) will be recognized by stockholders of A.G. Edwards who receive shares of Wachovia common stock and cash in exchange for shares of A.G. Edwards common stock pursuant to the merger, in an amount equal to the lesser of (i) the amount by which the sum of the fair market value of the Wachovia common stock and cash received by a stockholder of A.G. Edwards exceeds such stockholder’s basis in its A.G. Edwards common stock, and (ii) the amount of cash received by such stockholder of A.G. Edwards (except with respect to any cash received instead of fractional share interests in Wachovia common stock, which is discussed below under “—Cash Received Instead of a Fractional Share of Wachovia Common Stock”);
 
  •   the aggregate basis of the Wachovia common stock received in the merger (including fractional shares of Wachovia common stock deemed received and redeemed as described below) will be the same as the aggregate basis of the A.G. Edwards common stock for which it is exchanged, decreased by the amount of cash received in the merger (other than cash received instead of fractional share interests in Wachovia common stock), and increased by the amount of gain recognized on the exchange, other than with respect to cash received instead of fractional share interests in Wachovia common stock (regardless of whether such gain is classified as capital gain or as ordinary dividend income, as discussed below under “—Additional Considerations—Recharacterization of Gain as a Dividend”); and
 
  •   the holding period of Wachovia common stock received in exchange for shares of A.G. Edwards common stock (including fractional shares of Wachovia common stock deemed received and redeemed as described below) will include the holding period of the A.G. Edwards common stock for which it is exchanged.
 
If an A.G. Edwards stockholder acquired different blocks of A.G. Edwards common stock at different times or at different prices, any gain will be determined separately with respect to each block of A.G. Edwards common stock, and the cash and shares of Wachovia common stock received will be allocated pro rata to each such block of stock.
 
Merger completion is conditioned on, among other things, the receipt by A.G. Edwards and Wachovia of tax opinions from Wachtell, Lipton and Simpson Thacher, respectively, each dated the closing date of the merger, that for U.S. federal income tax purposes (i) the merger will be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, and (ii) Wachovia, White Bird Holdings and A.G. Edwards will each be a party to that reorganization within the meaning of Section 368(b) of the Internal Revenue Code. These opinions will be based on certain assumptions and on representation letters provided by A.G. Edwards and Wachovia to be delivered at the time of closing. Neither of these tax opinions will be binding on the Internal Revenue Service. Neither Wachovia nor A.G. Edwards intends to request any ruling from the Internal Revenue Service as to the U.S. federal income tax consequences of the merger.
 
Taxation of Capital Gain.  Except as described under “—Additional Considerations—Recharacterization of Gain as a Dividend” below, gain that A.G. Edwards stockholders recognize in connection with the merger generally will constitute capital gain and will constitute long-term capital gain if such stockholders have held


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(or are treated as having held) their A.G. Edwards common stock for more than one year as of the date of the merger. For A.G. Edwards stockholders that are non-corporate holders of A.G. Edwards common stock, long-term capital gain generally will be taxed at a maximum U.S. federal income tax rate of 15%.
 
Additional Considerations—Recharacterization of Gain as a Dividend.  All or part of the gain that a particular A.G. Edwards stockholder recognizes could be treated as dividend income rather than capital gain if (i) such A.G. Edwards stockholder is a significant stockholder of Wachovia or (ii) such A.G. Edwards stockholder’s percentage ownership, taking into account constructive ownership rules, in Wachovia after the merger is not meaningfully reduced from what its percentage ownership would have been if it had received solely shares of Wachovia common stock rather than a combination of cash and shares of Wachovia common stock in the merger. This could happen, for example, because of ownership of additional shares of Wachovia common stock by such A.G. Edwards stockholder, ownership of shares of Wachovia common stock by a person related to such A.G. Edwards stockholder or a share repurchase by Wachovia from other holders of Wachovia common stock. The Internal Revenue Service has indicated in rulings that any reduction in the interest of a minority stockholder that owns a small number of shares in a publicly and widely held corporation and that exercises no control over corporate affairs would result in capital gain as opposed to dividend treatment. Because the possibility of dividend treatment depends primarily upon such A.G. Edwards stockholder’s particular circumstances, including the application of certain constructive ownership rules, A.G. Edwards stockholders should consult their own tax advisor regarding the potential tax consequences of the merger to them.
 
Cash Received Instead of a Fractional Share of Wachovia Common Stock.  An A.G. Edwards stockholder who receives cash instead of a fractional share of Wachovia common stock will be treated as having received the fractional share pursuant to the merger and then as having exchanged the fractional share for cash in a redemption by Wachovia. As a result, such A.G. Edwards stockholder will generally recognize gain or loss equal to the difference between the amount of cash received and the basis in his or her fractional share interest as set forth above. This gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the merger, the holding period for such shares is greater than one year. The deductibility of capital losses is subject to limitations.
 
We urge you to consult with your own tax advisors about the particular tax consequences of the merger to you, including the effects of U.S. federal, state or local, or foreign and other tax laws.
 
Backup Withholding and Information Reporting.  Payments of cash to a holder of A.G. Edwards common stock pursuant to the merger may, under certain circumstances, be subject to information reporting and backup withholding unless the holder provides proof of an applicable exemption or, in the case of backup withholding, furnishes its taxpayer identification number and otherwise complies with all applicable requirements of the backup withholding rules. Any amounts withheld from payments to a holder under the backup withholding rules are not additional tax and will be allowed as a refund or credit against the holder’s U.S. federal income tax liability, provided the required information is timely furnished to the Internal Revenue Service.
 
An A.G. Edwards stockholder who receives Wachovia common stock as a result of the merger will be required to retain records pertaining to the merger. Each A.G. Edwards stockholder who is required to file a U.S. tax return and who is a “significant holder” that receives Wachovia common stock in the merger will be required to file a statement with the stockholder’s U.S. federal income tax return setting forth such stockholder’s basis in the A.G. Edwards common stock surrendered and the fair market value of the Wachovia common stock and cash received in the merger. A “significant holder” is an A.G. Edwards stockholder, who, immediately before the merger, owned at least 5% of the outstanding stock of A.G. Edwards.
 
Accounting Treatment
 
Wachovia will treat the merger as a purchase by Wachovia of A.G. Edwards under GAAP. Under the purchase method of accounting, the assets and liabilities of the company not surviving a merger are, as of merger completion, recorded at their respective fair values and added to those of the surviving company. Financial statements of the surviving company issued after merger completion reflect these values, but are not


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restated retroactively to reflect the historical financial position or results of operations of the company not surviving.
 
All unaudited pro forma financial information contained in this proxy statement-prospectus has been prepared using the purchase method to account for the merger. The final allocation of the purchase price will be determined after the merger is completed and after completion of a thorough analysis to determine the fair values of A.G. Edwards’ tangible and identifiable intangible assets and liabilities. In addition, estimates related to restructuring and merger-related charges are subject to final decisions related to combining the companies. Accordingly, the final purchase accounting adjustments, restructuring and merger-related charges may be materially different from the unaudited pro forma adjustments presented in this document. Any decrease in the net fair value of the assets and liabilities of A.G. Edwards as compared to the information shown in this document will have the effect of increasing the amount of the purchase price allocable to goodwill.
 
Stock Exchange Listing
 
Wachovia has agreed to use all reasonable best efforts to list the Wachovia common stock to be issued in the merger on the NYSE (including shares to be issued following exercise of the A.G. Edwards employee stock options assumed by Wachovia). It is a condition to merger completion that those shares be approved for listing on the NYSE, subject to official notice of issuance. Following the merger, Wachovia expects that its common stock will continue to trade on the NYSE under the symbol “WB”.
 
Expenses
 
The merger agreement provides that each party will pay its own expenses in connection with the merger and the transactions contemplated by the merger agreement. However, Wachovia and A.G. Edwards will divide equally the payment of all printing costs, filing fees and registration fees paid to the SEC in connection with the filing of this document and the payment of all fees paid for filings with governmental authorities.
 
Dividends
 
Before the merger, A.G. Edwards will coordinate with Wachovia the declaration and payment of regular quarterly cash dividends on A.G. Edwards common stock with the intent that A.G. Edwards stockholders will not receive more than one dividend, or fail to receive one dividend, for any single quarter.
 
After the merger, Wachovia’s dividend policy will continue, but this policy is subject to change at any time. In the third quarter of 2007, Wachovia declared a dividend of $0.64 per share of Wachovia common stock, payable on September 17, 2007 to Wachovia stockholders of record on August 31, 2007, and for the second quarter of 2008, A.G. Edwards declared a dividend of $0.20 per share of A.G. Edwards common stock. For comparison, based on the 0.9844 exchange ratio and Wachovia’s current quarterly dividend rate of $0.64 per share, following the merger, holders of A.G. Edwards common stock would receive a quarterly dividend equivalent to $0.63 per share of A.G. Edwards common stock equivalent. All dividends on Wachovia common stock will be payable when, as and if declared by its board of directors out of funds legally available for the payment of dividends by a North Carolina corporation. All dividends are also subject to certain legal limitations under federal banking law.
 
For further information, please see “Price Range of Common Stock and Dividends”.


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PRICE RANGE OF COMMON STOCK AND DIVIDENDS
 
Wachovia
 
Wachovia common stock is listed on the NYSE and traded under the symbol “WB”. The following table shows the high and low reported closing sales prices per share of Wachovia common stock on the NYSE composite transactions reporting system, and the quarterly cash dividends declared per share of Wachovia common stock for the periods indicated.
 
                         
    Price Range of
       
    Common Stock     Dividends
 
    High     Low     Declared  
 
2005
                       
First Quarter
  $ 56.01       49.91       0.46  
Second Quarter
    53.07       49.52       0.46  
Third Quarter
    51.34       47.23       0.51  
Fourth Quarter
    55.13       46.49       0.51  
2006
                       
First Quarter
    57.69       51.09       0.51  
Second Quarter
    59.85       52.03       0.51  
Third Quarter
    56.67       52.40       0.56  
Fourth Quarter
    57.49       53.37       0.56  
2007
                       
First Quarter
    58.77       53.88       0.56  
Second Quarter
    56.81       51.25       0.56  
Third Quarter (through August 27, 2007)
    52.64       44.94       0.64  
 
Past price performance is not necessarily indicative of likely future performance. Because market prices of Wachovia common stock will fluctuate, you are urged to obtain current market prices for shares of Wachovia common stock.
 
Wachovia may repurchase shares of its common stock and may purchase shares of A.G. Edwards common stock, in accordance with applicable legal guidelines. The actual amount of shares repurchased or purchased will depend on various factors, including: market conditions; legal limitations and considerations affecting the amount and timing of repurchase activity; the company’s capital position; internal capital generation; and alternative potential investment opportunities. Federal law prohibits Wachovia and A.G. Edwards from purchasing shares of Wachovia common stock from the date this proxy statement-prospectus is first mailed to stockholders until completion of the A.G. Edwards special meeting of stockholders. From January 1, 2007 to August 27, 2007, Wachovia repurchased approximately 21.8 million shares of Wachovia common stock, and approximately 6.5 million of such repurchases have occurred since May 31, 2007, the day we announced the execution of the merger agreement. All such repurchases were conducted in accordance with applicable laws, including Rule 10b-18 of the Exchange Act.


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A.G. Edwards
 
A.G. Edwards common stock is listed on the NYSE and traded under the symbol “AGE”. The following table shows the high and low reported closing sales prices per share of A.G. Edwards common stock on the NYSE, and the quarterly cash dividends declared per share of A.G. Edwards common stock for the periods indicated.
 
                         
    Price Range of
       
    Common Stock     Dividends
 
    High     Low     Declared  
 
2006
                       
First Quarter
  $ 45.70       38.66       0.16  
Second Quarter
    47.00       40.94       0.16  
Third Quarter
    46.73       38.41       0.20  
Fourth Quarter
    48.04       43.86       0.20  
2007
                       
First Quarter
    54.56       43.17       0.20  
Second Quarter
    56.17       47.77       0.20  
Third Quarter
    59.93       51.55       0.20  
Fourth Quarter
    69.04       56.70       0.20  
2008
                       
First Quarter
    88.16       61.55       0.20  
Second Quarter (through August 27, 2007)
    88.75       78.61       0.20  
 
Quarters denoted as 2006, 2007 and 2008 are based on fiscal years ending February 28, 2006, 2007 and 2008, respectively.
 
Past price performance is not necessarily indicative of likely future performance. Because market prices of A.G. Edwards common stock will fluctuate, you are urged to obtain current market prices for shares of A.G. Edwards common stock.
 
Under the merger agreement, A.G. Edwards is permitted to repurchase shares of A.G. Edwards common stock. The actual amount of shares repurchased or purchased will depend on various factors, including: market conditions; legal limitations and considerations affecting the amount and timing of repurchase activity; the company’s capital position; internal capital generation; and alternative potential investment opportunities. From January 1, 2007 to August 27, 2007, A.G. Edwards has repurchased approximately 2.0 million shares of A.G. Edwards common stock.
 
Dividend Policy
 
After the merger, Wachovia currently expects to pay (when, as and if declared by Wachovia’s board of directors out of funds legally available) regular quarterly cash dividends of $0.64 per share, in accordance with Wachovia’s current practice. The timing and amount of future dividends paid by corporations, including Wachovia and A.G. Edwards, is subject to determination by the applicable board of directors in its discretion and will depend upon earnings, cash requirements and the financial condition of the respective companies and their subsidiaries, applicable government regulations and other factors deemed relevant by the applicable company’s board of directors. Various United States federal and state laws limit the ability of affiliate banks to pay dividends to Wachovia and the same laws will apply following the merger. The merger agreement restricts the cash dividends that may be paid on A.G. Edwards common stock pending merger completion. See “The Merger Agreement—Conduct of Business Pending the Merger”. The declaration and payment of dividends pending the merger is set forth in the merger agreement. See “The Merger Agreement—Dividends”.
 
Moreover, Wachovia is subject to limitations on dividend capacity arising out of federal banking laws, other laws and debt instruments. See “Description of Wachovia Capital Stock”.


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INFORMATION ABOUT THE COMPANIES
 
Wachovia
 
Wachovia was incorporated under the laws of North Carolina in 1967 and is registered as a financial holding company and a bank holding company under the Bank Holding Company Act. Prior to our merger in September 2001 with the former Wachovia Corporation, Wachovia’s name was “First Union Corporation”. Wachovia provides a wide range of commercial and retail banking and trust services through full-service banking offices in Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Kansas, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Washington, D.C. Wachovia also provides various other financial services, including asset and wealth management, mortgage banking, credit card, investment banking, investment advisory, home equity lending, asset-based lending, leasing, insurance, international and securities brokerage services through its subsidiaries. Wachovia has approximately 3,400 full-service financial centers and more than 770 retail brokerage offices.
 
At June 30, 2007, Wachovia had consolidated total assets of approximately $719.9 billion, consolidated total deposits of approximately $413.7 billion and consolidated stockholders’ equity of approximately $69.3 billion. Based on total assets at June 30, 2007, Wachovia was the fourth largest bank holding company in the United States.
 
Wachovia’s principal executive offices are located at One Wachovia Center, Charlotte, North Carolina 28288-0013, and the telephone number is (704) 374-6565.
 
Since the 1985 Supreme Court decision upholding regional interstate banking legislation, Wachovia has concentrated its efforts on building a large, diversified financial services organization in attractive banking markets in the United States. Since November 1985, Wachovia has completed over 100 banking-related acquisitions.
 
Wachovia continually evaluates its operations and organizational structures to ensure they are closely aligned with its goal of maximizing performance in core business lines. When consistent with overall business strategy, Wachovia may consider the disposition of certain assets, branches, subsidiaries or lines of business. While acquisitions are no longer a primary business activity, Wachovia continues to explore routinely acquisition opportunities, particularly in areas that would complement core business lines, and frequently conducts due diligence activities in connection with possible acquisitions. As a result, acquisition discussions and, in some cases, negotiations frequently take place and future acquisitions involving cash, debt or equity securities can be expected.
 
White Bird Holdings
 
White Bird Holdings is a newly formed Delaware corporation and a wholly-owned subsidiary of Wachovia. White Bird Holdings was formed solely for the purpose of effecting the proposed merger with A.G. Edwards and has not carried on any activities other than in connection with the proposed merger.
 
White Bird Holdings’ principal executive offices are located at 301 South College Street, Charlotte, North Carolina 28288, and the telephone number is (704) 374-6565.
 
A.G. Edwards
 
A.G. Edwards is a Delaware corporation and is a financial services holding company incorporated in 1983 whose principal subsidiary, A.G. Edwards & Sons, Inc., is the successor to a partnership founded in 1887. A.G. Edwards and its subsidiaries provide securities and commodities brokerage, investment banking, trust services, asset management, financial and retirement planning, insurance products, and other related financial services to individual, corporate, governmental, municipal and institutional clients through one of the industry’s largest retail branch distribution systems. At May 31, 2007, A. G. Edwards had 743 locations in 50 states, the District of Columbia, London, England and Geneva, Switzerland and 15,368 full-time employees, including 6,623 financial consultants providing services for approximately 3.2 million active client accounts. At May 31, 2007, A.G. Edwards had consolidated total assets of approximately $5.1 billion and consolidated stockholders’ equity of approximately $2.2 billion.
 
The principal office of A.G. Edwards is located at One North Jefferson Avenue, St. Louis, Missouri 63103, and the telephone number is (314) 955-3000.


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DESCRIPTION OF WACHOVIA CAPITAL STOCK
 
As a result of the merger, A.G. Edwards stockholders will receive shares of Wachovia common stock. Your rights as stockholders of Wachovia will be governed by North Carolina law and the articles of incorporation and by-laws of Wachovia. The following description of the material terms of Wachovia’s capital stock, including the common stock to be issued in the merger, reflects the anticipated state of affairs upon merger completion. We urge you to read the applicable provisions of North Carolina law, Wachovia’s articles of incorporation and by-laws and federal law governing bank holding companies carefully and in their entirety.
 
Common Stock
 
Wachovia is authorized to issue up to 3 billion shares of common stock, par value $3.331/3 per share.
 
Voting and Other Rights.  Subject to the rights of any holders of any class of preferred stock outstanding, holders of Wachovia common stock will be entitled to one vote per share, and, in general, a majority of votes cast with respect to a matter will be sufficient to authorize action upon routine matters. Directors are elected in non-contested elections by a majority of the votes cast, and Wachovia stockholders do not have the right to cumulate their votes in the election of directors.
 
No Preemptive or Conversion Rights.  Wachovia common stock does not entitle its holders to any preemptive rights, subscription rights or conversion rights.
 
Assets upon Dissolution.  In the event of liquidation, holders of Wachovia common stock would be entitled to receive proportionately any assets legally available for distribution to Wachovia stockholders with respect to shares held by them, subject to any prior rights of any Wachovia preferred stock then outstanding.
 
Distributions.  Subject to the rights of holders of any class of preferred stock outstanding, holders of Wachovia common stock will be entitled to receive the dividends or distributions that the Wachovia board of directors may declare out of funds legally available for these payments. The payment of distributions by Wachovia will be subject to the restrictions of North Carolina law applicable to the declaration of distributions by a corporation. Under North Carolina law, a corporation may not make a distribution if as a result of the distribution the company would not be able to pay its debts, or would not be able to satisfy any preferential rights preferred stockholders would have if the company were to be dissolved at the time of the distribution.
 
Pursuant to an indenture between Wachovia and Wilmington Trust Company, as trustee, and an indenture between Wachovia and U.S. Bank, National Association, as trustee, in each case under which Wachovia junior subordinated debt securities were issued, Wachovia agreed that it generally will not pay any dividends on, or acquire or make a liquidation payment with respect to, any of Wachovia’s capital stock, including Wachovia common stock, Wachovia preferred stock and Wachovia class A preferred stock if, at any time, there is a default under the respective indenture or a related Wachovia guarantee or Wachovia has deferred interest payments on the securities issued under the respective indenture. In connection with a corporate reorganization of a Wachovia subsidiary, The Money Store LLC, Wachovia agreed that it could declare or pay a dividend on Wachovia common stock only after quarterly distributions of an estimated $1.8 million have been paid in full on The Money Store LLC preferred units for each quarterly period occurring prior to the proposed common stock cash dividend.
 
As a bank holding company, Wachovia’s ability to pay distributions will be affected by the ability of its banking subsidiaries to pay dividends. The ability of these banking subsidiaries, as well as Wachovia, to pay dividends in the future currently is, and could be further, influenced by bank regulatory requirements and capital guidelines.
 
Restrictions on Ownership.  The Bank Holding Company Act generally prohibits any company that is not engaged in banking activities and activities that are permissible for a bank holding company or a financial holding company from acquiring control of Wachovia. Control is generally defined as ownership of 25% or more of the voting stock or other exercise of a controlling influence. In addition, any existing bank holding company would require the prior approval of the Federal Reserve Board before acquiring 5% or more of the voting stock of Wachovia. In addition, the Change in Bank Control Act of 1978, as amended, prohibits a


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person or group of persons from acquiring “control” of a bank holding company unless the Federal Reserve Board has been notified and has not objected to the transaction. Under a rebuttable presumption established by the Federal Reserve Board, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Exchange Act, such as Wachovia, would, under the circumstances set forth in the presumption, constitute acquisition of control of the bank holding company.
 
Antitakeover Provisions.  Wachovia’s articles and by-laws contain various provisions which may discourage or delay attempts to gain control of Wachovia. Wachovia’s articles include provisions:
 
  •   authorizing the board of directors to fix the size of the board between nine and 30 directors;
 
  •   authorizing directors to fill vacancies on the board occurring between annual stockholder meetings, except that vacancies resulting from a director’s removal by a stockholder vote may only be filled by a stockholder vote;
 
  •   providing that directors may be removed only for a valid reason and only by majority vote of shares entitled to vote in electing directors, voting as a single class;
 
  •   authorizing only the board of directors, Wachovia’s Chairman or President to call a special meeting of stockholders, except for special meetings called under special circumstances for classes or series of stock ranking superior to common stock; and
 
  •   requiring an 80% stockholder vote by holders entitled to vote in electing directors, voting as a single class, to alter any of the above provisions.
 
Wachovia’s by-laws include specific conditions governing the conduct of business at annual stockholders’ meetings and the nominations of persons for election as Wachovia directors at annual stockholders’ meetings.
 
Preferred Stock
 
General.  Wachovia is authorized to issue up to 10 million shares of preferred stock, no par value, and 40 million shares of class A preferred stock, no par value. Wachovia’s board of directors are authorized to issue preferred stock and class A preferred stock in one or more series, to fix the number of shares in each series, and to determine dividend rates, liquidation prices, liquidation rights of holders, redemption, conversion and voting rights and other series terms. All shares of each series of Wachovia preferred stock must be of equal rank and have the same powers, preferences and rights and are subject to the same qualifications, limitations and restrictions, except with respect to dividend rights, redemption prices, liquidation amounts, terms of conversion or exchange and voting rights. Shares of Wachovia class A preferred stock rank prior to Wachovia common stock and on a parity with or junior to (but not prior to) Wachovia preferred stock or any series thereof, in respect of the right to receive dividends and/or the right to receive payments out of the net assets of Wachovia upon any involuntary or voluntary liquidation, dissolution or winding up of Wachovia. Subject to the foregoing, the terms of any particular series of Wachovia class A preferred stock may vary as to priority.
 
Dividend Equalization Preferred Shares (DEPs)
 
In connection with Wachovia’s merger in 2001 with the former Wachovia Corporation, it issued approximately 97 million shares of Dividend Equalization Preferred Shares, or DEPs, out of an authorized 500 million DEPs, no par value. The DEPs were authorized to be issued solely in connection with that merger and are not available for future issuance.
 
Ranking Upon Dividend Declaration and Upon Liquidation or Dissolution.  With regard to the receipt of dividends, the DEPs rank junior to any class or series of preferred stock established by Wachovia’s board of directors and rank equally with Wachovia’s common stock. With regard to distributions upon liquidation or dissolution of Wachovia, the DEPs rank junior to any class or series of preferred stock established by Wachovia’s board of directors after September 1, 2001 and rank senior to the common stock for the $0.01 liquidation preference described below.


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Cancellation.  DEPs that are redeemed, purchased or otherwise acquired by Wachovia or any of its subsidiaries will be cancelled and may not be reissued.
 
Dividends.  Following payment of Wachovia’s fourth quarter dividend in December 2003, holders of the DEPs are no longer entitled to receive future dividend payments. This is because Wachovia paid in excess of $1.20 per share in dividends in the aggregate over the preceding four quarters.
 
Assets Upon Dissolution.  In the event of liquidation, holders of DEPs will be entitled to receive, before any distribution is made to the holders of common stock or any other junior stock, but after any distribution to any class or series of preferred stock established by Wachovia’s board of directors after September 1, 2001, an amount equal to $0.01 per DEP, together with any accrued and unpaid dividends (whether or not earned or declared). The holders of DEPs will have no other right or claim to any of the remaining assets of Wachovia.
 
Redemption, Conversion and Exchange.  The DEPs are not convertible or exchangeable. The DEPs may be redeemed, at Wachovia’s option and with 30 to 60 days prior notice, after December 31, 2021, for an amount equal to $0.01 per DEP, together with any accrued and unpaid dividends.
 
Voting Rights.  Holders of DEPs will not have voting rights, except those required by applicable law.
 
Shareholder Protection Rights Plan
 
Wachovia has a rights plan for the protection of its stockholders that could discourage unwanted or hostile takeover attempts that are not approved by Wachovia’s board. The rights plan allows holders of Wachovia common stock to purchase shares in either Wachovia or an acquiror at a discount to market value in response to specified takeover events that are not approved in advance by Wachovia’s board. The rights plan is expected to continue in effect after the merger as Wachovia’s rights plan.
 
The Rights.  On December 19, 2000, Wachovia’s board declared a dividend of one preferred share purchase right for each Wachovia common share outstanding. The rights currently trade with, and are inseparable from, the common stock.
 
Exercise Price.  Each right allows its holder to purchase from Wachovia one one-hundredth of a Wachovia participating class A preferred share for $105. This portion of a preferred share will give the stockholder approximately the same dividend, voting and liquidation rights as would one share of common stock.
 
Exercisability.  The rights will not be exercisable until:
 
  •   ten days after a public announcement by Wachovia that a person or group has obtained beneficial ownership of 10% or more of Wachovia’s outstanding common stock; or
 
  •   ten business days after a person or group begins a tender or exchange offer that, if completed, would result in that person or group becoming the beneficial owner of 10% or more of Wachovia’s outstanding common stock.
 
The date when the rights become exercisable is referred to in the rights plan as the “separation time”. After that date, the rights will be evidenced by rights certificates that Wachovia will mail to all eligible holders of common stock. A person or member of a group that has obtained beneficial ownership of 10% or more of Wachovia’s outstanding common stock may not exercise any rights even after the separation time.
 
Consequences of a Person or Group Becoming an Acquiring Person.  A person or group that acquires beneficial ownership of 10% or more of Wachovia’s outstanding common stock is called an “acquiring person”.
 
Flip In.  Once Wachovia publicly announces that a person has acquired 10% or more of its outstanding common stock, Wachovia can allow for rights holders, other than the acquiring person, to buy $210 worth of its common stock for $105. This is called a “flip-in”. Alternatively, Wachovia’s board may elect to exchange 2 shares of Wachovia common stock for each right, other than rights owned by the acquiring person, thus terminating the rights.


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Flip Over.  If, after a person or group becomes an acquiring person, Wachovia merges or consolidates with another entity, or if 50% or more of Wachovia’s consolidated assets or earning power are sold, all holders of rights, other than the acquiring person, may purchase shares of the acquiring company at half their market value.
 
Wachovia’s board may elect to terminate the rights at any time before a flip-in occurs. Otherwise, the rights are currently scheduled to terminate in 2010.
 
The rights will not prevent a takeover of Wachovia. However, the rights may cause a substantial dilution to a person or group that acquires 10% or more of our common stock unless Wachovia’s board first terminates the rights. Nevertheless, the rights should not interfere with a transaction that is in Wachovia’s and its stockholders’ best interests because the rights can be terminated by the board before that transaction is completed.
 
The complete terms of the rights are contained in the “Shareholder Protection Rights Agreement”. The foregoing description of the rights and the rights agreement is qualified in its entirety by reference to the agreement. A copy of the rights agreement can be obtained upon written request to Wachovia Bank, National Association, 301 South College Street, Charlotte, North Carolina 28288-0206.


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COMPARISON OF STOCKHOLDER RIGHTS
 
The rights of Wachovia stockholders are governed by the North Carolina Business Corporation Act, which we refer to as the NCBCA, Wachovia’s articles of incorporation and by-laws. The rights of A.G. Edwards stockholders are governed by the Delaware General Corporation Law, which we refer to as the DGCL, A.G. Edwards’ certificate of incorporation and by-laws. After the merger, the rights of A.G. Edwards and Wachovia stockholders will be governed by the NCBCA and Wachovia’s articles of incorporation and by-laws. The following discussion summarizes the material differences between the rights of A.G. Edwards stockholders and the rights of Wachovia stockholders. We urge you to read Wachovia’s articles of incorporation, Wachovia’s by-laws, A.G. Edwards’ certificate of incorporation, A.G. Edwards’ by-laws, the NCBCA and the DGCL carefully and in their entirety.
 
Authorized Capital Stock
 
Wachovia.  Wachovia’s articles of incorporation authorize it to issue up to 3 billion shares of common stock, par value $3.331/3 per share, 10 million shares of preferred stock, no-par value per share, 40 million shares of class A preferred stock, no-par value per share, and 500 million DEPs. As of June 30, 2007, there were 1,903,014,678 shares of Wachovia common stock issued and outstanding, no shares of preferred stock outstanding, and approximately 96 million shares of DEPs outstanding. See “Description of Wachovia Capital Stock”.
 
A.G. Edwards.  The authorized capital stock of A.G. Edwards consists of 550 million shares of common stock, par value $1.00 per share, and 4 million shares of preferred stock, par value $25.00 per share. As of August 13, 2007, there were 75,792,790 shares of A.G. Edwards common stock issued and outstanding, and no shares of A.G. Edwards preferred stock were outstanding.
 
Size of Board of Directors
 
Wachovia.  Wachovia’s articles of incorporation provide for Wachovia’s board to consist of not less than nine nor more than 30 directors. The exact number is fixed by Wachovia’s board from time to time and is currently fixed at 18.
 
A.G. Edwards.  A.G. Edwards’ by-laws provide for the A.G. Edwards board of directors to consist of not less than three nor more than 15 directors. This number may be changed by the A.G. Edwards board of directors. The number of directors of A.G. Edwards is currently fixed at seven.
 
Classes of Directors
 
Wachovia.  Wachovia’s articles of incorporation have been amended to provide that, beginning with the election of directors at Wachovia’s 2008 annual meeting of stockholders, Wachovia’s board is to be elected annually for one-year terms. Prior to Wachovia’s 2008 annual meeting of stockholders, Wachovia’s board has been divided into three classes of directors as nearly equal in number as possible, with each class being elected to a staggered three-year term. Holders of shares of Wachovia common stock do not have the right to cumulate their votes in the election of directors.
 
A.G. Edwards.  The board of directors of A.G. Edwards is classified into three classes of directors. Each director serves for a three-year term. At each annual stockholders’ meeting, approximately one-third of the board of directors is elected. As a result, control of the board of directors of A.G. Edwards cannot be changed in one year. A holder of shares of A.G. Edwards common stock has the right to one vote for each share of A.G. Edwards common stock held by such stockholder. Holders of shares of A.G. Edwards common stock do not have the right to cumulate their votes in the election of directors.
 
Elections of Directors
 
Wachovia.  Wachovia’s articles of incorporation have been amended to provide that, beginning with the election of directors at Wachovia’s 2008 annual meeting of stockholders, nominees for election to Wachovia’s board in uncontested director elections must receive a majority of votes cast in order to be elected. Prior to


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Wachovia’s 2008 annual meeting of stockholders, nominees for election as Wachovia directors were elected by a plurality of votes cast. In the case of contested elections, Wachovia directors will continue to be elected by a plurality of votes cast.
 
A.G. Edwards.  Nominees for election to the A.G. Edwards board are elected by a plurality of votes cast at the applicable meeting.
 
Removal of Directors
 
Wachovia.  Under NCBCA Section 55-8-08, the stockholders may remove one or more directors with or without cause unless the articles of incorporation provide that the directors may be removed only for cause. Wachovia’s articles of incorporation provided that, except for directors elected under specified circumstances by holders of any stock class or series having a dividend or liquidation preference over Wachovia common stock, Wachovia directors may be removed only for cause and only by a majority vote of the shares then entitled to vote in the election of directors, voting together as a single class.
 
A.G. Edwards.  The DGCL provides that no director of a corporation having a classified board of directors, like that of A.G. Edwards, may be removed from office, by vote or other action by stockholders or otherwise, except for cause. Such removal for cause requires the affirmative vote of A.G. Edwards stockholders who hold at least a majority of the voting power of A.G. Edwards’ issued and outstanding capital stock that is entitled to vote for the election of directors.
 
Filling Vacancies on the Board of Directors
 
Wachovia.  Under Wachovia’s articles of incorporation, any vacancy occurring in Wachovia’s board shall be filled by a majority of the remaining directors unless the vacancy is a result of the director’s removal by a vote of the stockholders. In that case, the vacancy may be filled by a stockholder vote at the same meeting.
 
A.G. Edwards.  A.G. Edwards’ certificate of incorporation provides that any vacancies on the A.G. Edwards board of directors for any reason shall be filled only by the A.G. Edwards board, acting by a majority of the directors then in office. Stockholders shall have no right to take action to fill such vacancies. The new director will hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified.
 
Nomination of Director Candidates by Stockholders
 
Wachovia.  Wachovia’s by-laws establish procedures that stockholders must follow to nominate persons for election to Wachovia’s board. The stockholder making the nomination must deliver written notice to Wachovia’s Secretary between 60 and 90 days before the annual meeting at which directors will be elected. However, if less than 70 days’ notice is given of the meeting date, that written notice by the stockholder must be delivered by the tenth day after the day on which the meeting date notice was given. Notice will be deemed to have been given more than 70 days prior to the meeting if the meeting is called on the third Tuesday of April. The nomination notice must set forth certain information about the person to be nominated similar to information required for disclosure in proxy solicitations for director election pursuant to Exchange Act Regulation 14A, and must also include the nominee’s written consent to being nominated and to serving as a director if elected. The nomination notice must also set forth certain information about the person submitting the notice, including the stockholder’s name and address and the class and number of Wachovia shares that the stockholder owns of record or beneficially. The meeting chairman may, if the facts warrant, determine that a nomination was not made in accordance with Wachovia’s by-law provisions, and the defective nomination will be disregarded. These procedures do not apply to any director nominated under specified circumstances by holders of any stock class or series having a dividend or liquidation preference over Wachovia common stock.
 
A.G. Edwards.  Under A.G. Edwards’ by-laws, at any annual or special meeting of stockholders, an A.G. Edwards stockholder may nominate one or more persons for election as directors only if such stockholder has given notice of intent to make such nomination by delivering written notice of such intent to the Secretary of A.G. Edwards not less than 60 nor more than 90 days prior to the meeting; provided, however, that if less than


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70 days’ notice of prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder must be received not later than the close of business on the tenth day following the date on which the notice of such meeting was mailed or such public disclosure was made.
 
Any such notice must include the following information:
 
  •   the name and address of the stockholder intending to make the nomination;
 
  •   the name and address of the person or persons to be nominated;
 
  •   a written statement from any proposed nominee for director that the person consents to be named as a nominee and to serve as director if elected;
 
  •   a representation that the stockholder is a holder of record of A.G. Edwards common stock entitled to vote at such meeting and whether the stockholder intends to appear in person or by proxy at the meeting to nominate the person or persons;
 
  •   a description of all arrangements or understandings, if any, between the stockholder and each nominee and any other person or persons pursuant to which any nomination or nominations are to be made by the stockholder; and
 
  •   such other information regarding each nominee by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had the nominee been nominated by the A.G. Edwards board.
 
Anti-Takeover Provisions
 
Wachovia.  North Carolina has two anti-takeover statutes, The North Carolina Shareholder Protection Act and The North Carolina Control Share Acquisition Act. These statutes restrict business combinations with, and the accumulation of shares of voting stock of, certain North Carolina corporations. In accordance with the provisions of these statutes, Wachovia elected not to be covered by the restrictions imposed by these statutes. As a result, these statutes do not apply to Wachovia. In addition, North Carolina has a Tender Offer Disclosure Act, which contains certain prohibitions against deceptive practices in connection with making a tender offer and also contains a filing requirement with the North Carolina Secretary of State that has been held unenforceable as to its 30-day waiting period.
 
A.G. Edwards.  Under the DGCL, a corporation is prohibited from engaging in any business combination with an interested stockholder or any entity if the transaction is caused by the interested stockholder for a period of three years from the date on which the stockholder first becomes an interested stockholder. There is an exception to the three-year waiting period requirement if:
 
  •   prior to the stockholder becoming an interested stockholder, the board of directors approves the business combination or the transaction in which the stockholder became an interested stockholder;
 
  •   upon the completion of the transaction in which the stockholder became an interested stockholder, the interested stockholder owns at least 85% of the voting stock of the corporation other than shares held by directors who are also officers and certain employee stock plans; or
 
  •   the business combination is approved by the board of directors and by the affirmative vote of 662/3% of the outstanding voting stock not owned by the interested stockholder at a meeting.
 
The DGCL defines the term “business combination” to include transactions such as mergers, consolidations or transfers of 10% or more of the assets of the corporation. The DGCL defines the term “interested stockholder” generally as any person who (together with affiliates and associates) owns (or in certain cases, within the past three years did own) 15% or more of the outstanding voting stock of the corporation. A corporation can expressly elect not to be governed by the DGCL’s business combination provisions in its certificate of incorporation or bylaws, but A.G. Edwards has not done so.
 
A.G. Edwards’ certificate of incorporation requires the vote of the holders of 70% of the outstanding shares of A.G. Edwards common stock (including 50% of the shares held by stockholders other than the


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“related person”) to approve a transaction or a series of transactions with a “related person” that would result in A.G. Edwards being merged into or with another corporation or securities of A.G. Edwards being issued in a transaction that would permit control of A.G. Edwards to pass to another entity, or similar transactions having the same effect. An exception exists in cases in which certain price criteria are satisfied. A.G. Edwards’ certificate of incorporation defines the term “related person” generally as a person who is the beneficial owner, directly or indirectly, of 20% or more of A.G. Edwards’ common stock.
 
Rights Plan
 
Wachovia.  Wachovia has a rights plan for the protection of its stockholders, which will be in effect following the merger. This plan is described above in the section entitled “Description of Wachovia Capital Stock—Shareholder Protection Rights Plan”.
 
A.G. Edwards.  A.G. Edwards does not have a stockholder protection rights plan.
 
Calling Special Meetings of Stockholders
 
Wachovia.  A special meeting of stockholders may be called for any purpose only by Wachovia’s board, by Wachovia’s chairman of the board or by Wachovia’s president.
 
A.G. Edwards.  Pursuant to A.G. Edwards’ by-laws, a special meeting of stockholders may be called for any purpose by A.G. Edwards’ President or Chairman of the Board and shall be called by the President or Secretary at the request in writing of a majority of the A.G. Edwards board. This by-law provision may not be amended or repealed without the approval of 70% of the outstanding shares of A.G. Edwards common stock.
 
Stockholder Proposals
 
Wachovia.  Wachovia’s by-laws establish procedures a stockholder must follow to submit a proposal for a Wachovia stockholder vote at an annual stockholders’ meeting. The stockholder making the proposal must deliver written notice to Wachovia’s Secretary between 60 and 90 days prior to the meeting. However, if less than 70 days’ notice of the meeting is given, that written notice by the stockholder must be so delivered not later than the tenth day after the day on which such meeting date notice was given. Notice will be deemed to have been given more than 70 days prior to the meeting if the meeting is called on the third Tuesday of April. The stockholder proposal notice must set forth:
 
  •   a brief description of the proposal and the reasons for its submission;
 
  •   the name and address of the stockholder, as they appear on Wachovia’s books;
 
  •   the classes and number of Wachovia shares the stockholder owns; and
 
  •   any material interest of the stockholder in that proposal other than the holder’s interest as a Wachovia stockholder.
 
The meeting chairman may, if the facts warrant, determine that any proposal was not properly submitted in accordance with Wachovia’s by-laws, and the defective proposal will not be submitted to the meeting for a stockholder vote.
 
A.G. Edwards.  A.G. Edwards’ by-laws contain specific provisions relating to stockholder proposals. These are described above under “—Nomination of Director Candidates by Stockholders”.
 
Notice of Stockholder Meetings
 
Wachovia.  Wachovia’s by-laws provide that Wachovia must notify stockholders between ten and 60 days before any annual or special meeting of the date, time and place of the meeting. Wachovia must briefly describe the purpose or purposes of a special meeting or where otherwise required by law.
 
A.G. Edwards.  Pursuant to A.G. Edwards’ by-laws, written notice of the annual stockholders’ meeting shall be given to stockholders entitled to vote not less than ten nor more than 60 days before the date of the


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meeting. The A.G. Edwards’ by-laws also provide that written notice of a special stockholders’ meeting, stating the time, place and object of the meeting, shall be given to stockholders entitled to vote not less than ten nor more than 60 days before the date fixed for the special meeting.
 
Indemnification of Directors and Officers
 
Wachovia.  The NCBCA contains specific provisions relating to indemnification of directors and officers of North Carolina corporations. In general, the statute provides that:
 
  •   a corporation must indemnify a director or officer who is wholly successful in his defense of a proceeding to which he is a party because of his status as a director or officer, unless limited by the articles of incorporation, and
 
  •   a corporation may indemnify a director or officer if he is not wholly successful in that defense, if it is determined as provided in the statute that the director or officer meets a certain standard of conduct, provided that when a director or officer is liable to the corporation, the corporation may not indemnify him.
 
The statute also permits a director or officer of a corporation who is a party to a proceeding to apply to the courts for indemnification unless the articles of incorporation provide otherwise, and the court may order indemnification under certain circumstances set forth in the statute. The statute further provides that a corporation may in its articles of incorporation or by-laws or by contract or resolution provide indemnification in addition to that provided by the statute, subject to certain conditions set forth in the statute. The NCBCA does not permit eliminating liability with respect to:
 
  •   acts or omissions that the director at the time of the breach knew or believed were clearly in conflict with the best interests of the corporation;
 
  •   any liability for unlawful distributions;
 
  •   any transaction from which the director derived an improper personal benefit; or
 
  •   acts or omissions occurring prior to the date the provisions became effective.
 
Wachovia’s by-laws provide for the indemnification of Wachovia’s directors and executive officers by Wachovia against liabilities arising out of their status as directors or executive officers, excluding any liability relating to activities which were, at the time taken, known or believed by such person to be clearly in conflict with the best interests of Wachovia. Wachovia’s articles of incorporation eliminate personal liability of each Wachovia director to the fullest extent the NCBCA permits.
 
A.G. Edwards.  Under the DGCL, a Delaware corporation may indemnify directors, officers, employees and other representatives from liability if the person acted in good faith and in a manner reasonably believed by the person to be in or not opposed to the best interests of the corporation, and, in any criminal actions, if the person had no reason to believe his action was unlawful. In the case of an action by or on behalf of a corporation, indemnification may not be made if the person seeking indemnification is found liable, unless the court in which the action was brought determines the person is fairly and reasonably entitled to indemnification. The indemnification provisions of the DGCL require indemnification of a director or officer who has been successful on the merits in defense of any action, suit or proceeding that he was a party to by reason of the fact that he is or was a director or officer of the corporation. The indemnification authorized by the DGCL is not exclusive and is in addition to any other rights granted under the certificate of incorporation or by-laws of the corporation or to any agreement with the corporation. A.G. Edwards’ certificate of incorporation and by-laws provide that A.G. Edwards shall indemnify its directors, officers, employees and other representatives to the fullest extent permitted by law.
 
Amendments to Articles/Certificate of Incorporation and By-Laws
 
Wachovia.  Under North Carolina law, an amendment to the articles of incorporation generally requires the board to recommend the amendment, and either a majority of all shares entitled to vote thereon or a


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majority of the votes cast thereon, to approve the amendment, depending on the amendment’s nature. In accordance with North Carolina law, Wachovia’s board may condition the proposed amendment’s submission on any basis. Under certain circumstances, the affirmative vote of holders of at least two-thirds, or in some cases a majority, of the outstanding Wachovia preferred stock or Wachovia class A preferred stock is needed to approve an amendment to the articles of incorporation. In addition, amendments to provisions of Wachovia’s articles of incorporation or Wachovia’s by-laws related to the maximum and minimum number of directors, or the authority to call special stockholders’ meetings, require the approval of not less than 80% of the outstanding Wachovia shares entitled to vote in the election of directors, voting together as a single class. An amendment to Wachovia’s by-laws generally requires either the stockholders or Wachovia’s board to approve the amendment. Wachovia’s board generally may not amend any by-law the stockholders approve, in addition to the other restrictions against the board amending the by-laws.
 
A.G. Edwards.  Under the DGCL, the A.G. Edwards board of directors must propose an amendment to A.G. Edwards’ certificate of incorporation, and A.G. Edwards stockholders must approve the amendment by a majority of outstanding shares entitled to vote. A.G. Edwards’ certificate of incorporation provides that it may be amended in the manner Delaware law prescribes, provided that holders of 70% of the then-outstanding shares of A.G. Edwards capital stock must approve amendments to certain provisions of A.G. Edwards’ certificate of incorporation relating to business combinations, the number of directors, and the classified board of directors. A.G. Edwards’ by-laws may be amended by the A.G. Edwards board of directors or by A.G. Edwards stockholders, although the holders of 70% of the outstanding shares of A.G. Edwards common stock must approve certain by-laws amendments.


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LEGAL MATTERS
 
The validity of the Wachovia common stock to be issued in connection with the merger has been passed upon for Wachovia by Ross E. Jeffries, Jr., Senior Vice President and Deputy General Counsel of Wachovia, 301 South College Street, Charlotte, North Carolina 28288. Mr. Jeffries owns shares of Wachovia common stock and has options to purchase additional shares of Wachovia common stock.
 
Certain matters related to the United States federal income tax consequences of the merger have been passed upon for Wachovia and A.G. Edwards by Simpson Thacher and Wachtell, Lipton, respectively.
 
EXPERTS
 
The consolidated balance sheets of Wachovia Corporation as of December 31, 2006 and 2005, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2006, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2006, included in Wachovia’s 2006 Annual Report which is incorporated by reference in Wachovia’s Annual Report on Form 10-K for the year ended December 31, 2006, and incorporated by reference herein, have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
 
The audit report covering the December 31, 2006 consolidated financial statements of Wachovia Corporation refers to the fact that Wachovia Corporation changed its method of accounting for mortgage servicing rights, stock-based compensation and pension and other postretirement plans in 2006.
 
The consolidated financial statements of A.G. Edwards, Inc. as of February 28, 2007 and 2006, and for each of the three years in the period ended February 28, 2007, and management’s report on the effectiveness of internal control over financial reporting as of February 28, 2007 incorporated in this prospectus by reference from the A.G. Edwards’ Annual Report on Form 10-K for the year ended February 28, 2007 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports (which reports on the consolidated financial statements and financial statement schedule each expresses an unqualified opinion and includes an explanatory paragraph relating to the adoption, in fiscal year 2006, of Statement of Financial Accounting Standards No. 123 (revised 2004), “Shared-Based Payment,” and, the change in accounting policy for the recognition of equity awards granted to retirement-eligible employees effective fiscal year 2007, and the retrospective adjustment to the fiscal year 2006 consolidated financial statements for the change), which are incorporated herein by reference, and have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
 
STOCKHOLDER PROPOSALS FOR NEXT YEAR
 
Wachovia
 
If the merger is completed, A.G. Edwards stockholders will become stockholders of Wachovia. Stockholder proposals intended to be included in Wachovia’s proxy statement and voted on at Wachovia’s regularly scheduled 2008 Annual Meeting of Stockholders must be received at Wachovia’s offices at One Wachovia Center, Charlotte, North Carolina 28288-0013, Attention: Corporate Secretary, on or before November 10, 2007. Applicable SEC rules and regulations govern the submission of stockholder proposals and our consideration of them for inclusion in next year’s proxy statement and form of proxy.
 
Pursuant to Wachovia’s by-laws, in order for any business not included in the proxy statement for the 2008 Annual Meeting of Stockholders to be brought before the meeting by a stockholder entitled to vote at the meeting, the stockholder must give timely written notice of that business to Wachovia’s Corporate Secretary. That meeting is scheduled to be held on April 22, 2008, and to be timely, the notice must not be received any earlier than January 18, 2008 (90 days prior to April 17, 2008, the first anniversary of Wachovia’s 2007 annual meeting date), nor any later than February 17, 2008 (60 days prior to April 17, 2008). If the date of the


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meeting is advanced by more than 30 days or delayed by more than 60 days from April 22, 2008, the notice must be received no earlier than the 90th day prior to the 2008 annual meeting and not later than either the 60th day prior to the 2008 annual meeting or the tenth day after public disclosure of the actual meeting date, whichever is later. The notice must contain the information required by our by-laws. A proxy may confer discretionary authority to vote on any matter at a meeting if we do not receive notice of the matter within the time-frames described above. A copy of our by-laws is available upon request to: Wachovia Corporation, 301 South College Street, Charlotte, North Carolina 28288-0013, Attention: Corporate Secretary. The Chairman of the meeting may exclude matters that are not properly presented in accordance with these requirements.
 
A.G. Edwards
 
If the merger occurs, there will be no A.G. Edwards annual meeting of stockholders for 2008. In that case, stockholder proposals must be submitted to Wachovia’s Corporate Secretary in accordance with the procedures described above. In case the merger is not completed, according to A.G. Edwards’ by-laws, A.G. Edwards will provide notice of the annual meeting not less than 10 days nor more than 60 days before the date of the meeting. In order to be considered for inclusion in the proxy statement and proxy for A.G. Edwards’ 2008 annual meeting of stockholders, if it is held at all, stockholder proposals would need to be received by the Secretary of A.G. Edwards no later than January 16, 2008. In order for any business not included in the proxy statement and proxy for A.G. Edwards’ 2008 annual meeting of stockholders to be brought before the meeting, if held, by a stockholder entitled to vote at the meeting, the stockholder must give written notice of that business to A.G. Edwards’ Secretary in accordance with the procedures described in A.G. Edwards’ by-laws and summarized under “Comparison of Stockholder Rights—Nomination of Director Candidates by Stockholders”. Applicable SEC rules and regulations govern the submission of stockholder proposals and our consideration of them, both for inclusion in next year’s proxy statement and for bringing such business before the meeting.
 
OTHER MATTERS
 
As of the date of this proxy statement-prospectus, the A.G. Edwards board of directors knows of no matters that will be presented for consideration at the special meeting other than as described in this proxy statement-prospectus. If any other matters properly come before the A.G. Edwards special meeting, or any adjournment or postponement of the meeting, and are voted upon, the enclosed proxy will be deemed to confer discretionary authority on the individuals that it names as proxies to vote the shares represented by the proxy as to any of these matters. The individuals named as proxies intend to vote in accordance with the recommendation of the A.G. Edwards board of directors.
 
WHERE YOU CAN FIND MORE INFORMATION
 
Wachovia has filed a registration statement with the SEC under the Securities Act that registers the distribution to A.G. Edwards stockholders of the shares of common stock of Wachovia to be issued in the merger. The registration statement, including the attached exhibits and schedules, contains additional relevant information about Wachovia, A.G. Edwards and common stock of these companies. The rules and regulations of the SEC allow us to omit some information included in the registration statement from this document.
 
In addition, Wachovia (File No. 1-10000) and A.G. Edwards (File No. 1-8527) file reports, proxy statements and other information with the SEC under the Exchange Act. You may read and copy this information at the Public Reference Room of the SEC, 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
 
The SEC also maintains an Internet World Wide Web site that contains reports, proxy statements and other information about issuers, like Wachovia and A.G. Edwards, that file electronically with the SEC. The address of the site is http://www.sec.gov. Wachovia’s address on the World Wide Web is http://www.wachovia.com, and


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A.G. Edwards’ address is http://www.agedwards.com. The information on our web sites is not a part of this document.
 
You can also inspect reports, proxy statements and other information about Wachovia and A.G. Edwards at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
 
The SEC allows Wachovia and A.G. Edwards to “incorporate by reference” information into this document. This means that the companies can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this document, except for any information that is superseded by information that is included directly in this document.
 
This document incorporates by reference the documents listed below that Wachovia and A.G. Edwards have previously filed with the SEC (other than the portions of those documents not deemed to be filed). They contain important information about our companies and their financial condition.
 
     
WACHOVIA FILINGS
 
PERIOD OR DATE FILED
 
Annual Report on Form 10-K
 
Year ended December 31, 2006
Proxy Statement on Schedule 14A
 
Filed March 9, 2007
Quarterly Reports on Form 10-Q
 
Quarters ended March 31, 2007 and June 30, 2007
Current Reports on Form 8-K
 
January 23, 2007, February 13, 2007, February 15, 2007, February 21, 2007, April 16, 2007, April 18, 2007, May 8, 2007, May 31, 2007, May 31, 2007, June 28, 2007, July 20, 2007, and August 21, 2007
The description of Wachovia common stock set forth in the registration statement on Form 8-A12B filed pursuant to Section 12 of the Exchange Act, including any amendment or report filed with the SEC for the purpose of updating this description.    
The description of the rights agreement, contained in the registration statement on Form 8-A filed pursuant to Section 12 of the Exchange Act, including any amendment or report filed with the SEC for the purpose of updating this description.    
 
     
A.G. EDWARDS FILINGS
 
PERIOD OR DATE FILED
 
Annual Report on Form 10-K
 
Year ended February 28, 2007
Proxy Statement on Schedule 14A
 
Filed May 15, 2007
Quarterly Reports on Form 10-Q
 
Quarter ended May 31, 2007
Current Reports on Form 8-K
 
March 29, 2007, May 2, 2007, May 31, 2007, June 5, 2007, and June 21, 2007
The description of A.G. Edwards common stock set forth in the registration statement on Form 8-A12B filed pursuant to Section 12 of the Exchange Act, including any amendment or report filed with the SEC for the purpose of updating this description.    
 
Wachovia and A.G. Edwards incorporate by reference additional documents that either company may file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this document and the dates of their respective special meetings (other than the portions of those documents not deemed to be filed). These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.


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Wachovia has supplied all information contained or incorporated by reference in this document relating to Wachovia, as well as all pro forma financial information, and A.G. Edwards has supplied all such information relating to A.G. Edwards.
 
You can obtain any of the documents incorporated by reference in this document through Wachovia or A.G. Edwards, as the case may be, or from the SEC through the SEC’s World Wide Web internet site at the address described above. Documents incorporated by reference are available from the companies without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit in this document. You can obtain documents incorporated by reference in this document by requesting them in writing or by telephone from the appropriate company at the following addresses:
 
     
Wachovia Corporation   A.G. Edwards, Inc.
Investor Relations   Investor Relations
301 South College Street   One North Jefferson Avenue
Charlotte, North Carolina 28288   St. Louis, Missouri 63103
Telephone: (704) 374-6782   Telephone: (314) 955-3782
 
If you would like to request documents, please do so by September 21, 2007 to receive them before the special meeting. If you request any incorporated documents from us, we will mail them to you by first class mail, or another equally prompt means, within one business day after we receive your request.
 
We have not authorized anyone to give any information or make any representation about the merger or our companies that is different from, or in addition to, that contained in this document or in any of the materials that we have incorporated into this document. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this document or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document unless the information specifically indicates that another date applies.


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APPENDIX A
 
 
AGREEMENT AND PLAN OF MERGER
 
dated May 30, 2007
 
among
 
WACHOVIA CORPORATION,
 
WHITE BIRD HOLDINGS, INC.
 
and
 
A.G. EDWARDS, INC.
 


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TABLE OF CONTENTS
 
                 
        Page
 
ARTICLE I
Definitions; Interpretation
1.01.
  Definitions   A-1
1.02.
  Interpretation   A-6
 
ARTICLE II
The Merger
2.01.
  The Merger   A-7
2.02.
  Closing   A-7
2.03.
  Effective Time   A-7
2.04.
  Effects of the Merger   A-7
2.05.
  Constituent Documents   A-7
2.06.
  A.G. Edwards Board of Directors   A-7
 
ARTICLE III
Consideration; Exchange Procedures
3.01.
  Consideration   A-7
3.02.
  Cancellation of Shares   A-8
3.03.
  Rights as Stockholders; Stock Transfers   A-8
3.04.
  Exchange Procedures   A-8
3.05.
  Fractional Shares   A-9
3.06.
  Anti-Dilution Adjustments   A-9
3.07.
  Dissenting Stockholders   A-9
3.08.
  Effect on Merger Sub Common Stock   A-9
3.09.
  Effect on Wachovia Stock   A-9
3.10.
  Stock Options, Restricted Stock and PSUs   A-9
3.11
  A.G. Edwards ESPP; A.G. Edwards DRIP   A-10
 
ARTICLE IV
Conduct of Business Pending the Merger
4.01.
  Forebearances of A.G. Edwards   A-10
4.02.
  Forebearances of Wachovia   A-12
4.03.
  Coordination of Dividends   A-13
 
ARTICLE V
Representations and Warranties
5.01.
  Disclosure Schedules   A-13
5.02.
  Standard   A-13
5.03.
  Representations and Warranties of A.G. Edwards   A-13
5.04.
  Representations and Warranties of Wachovia   A-23


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        Page
 
ARTICLE VI
Covenants
6.01.
  Reasonable Best Efforts   A-27
6.02.
  A.G. Edwards Stockholder Approval   A-27
6.03.
  SEC Filings   A-28
6.04.
  Press Releases and Public Announcements   A-29
6.05.
  Access; Information   A-29
6.06.
  Acquisition Proposals   A-29
6.07.
  Affiliate Agreements   A-30
6.08.
  Takeover Laws and Provisions   A-30
6.09.
  Exchange Listing   A-30
6.10.
  Regulatory Applications; Pre-Closing Cooperation   A-30
6.11.
  Indemnification   A-31
6.12.
  Employee Matters   A-32
6.13.
  Notification of Certain Matters   A-33
6.14.
  Exemption from Liability Under Section 16(b)   A-33
6.15.
  Retail Brokerage Business Operations   A-33
6.16.
  Restructuring Efforts   A-33
 
ARTICLE VII
Conditions to the Merger
7.01.
  Conditions to Each Party’s Obligation to Effect the Merger   A-34
7.02.
  Conditions to A.G. Edwards’ Obligation   A-34
7.03.
  Conditions to Wachovia’s and Merger Sub’s Obligation   A-34
 
ARTICLE VIII
Termination
8.01.
  Termination   A-35
8.02.
  Effect of Termination and Abandonment   A-36
8.03.
  Termination Fee   A-36
 
ARTICLE IX
Miscellaneous
9.01.
  Survival   A-37
9.02.
  Waiver; Amendment   A-37
9.03.
  Counterparts   A-37
9.04.
  Governing Law   A-37
9.05.
  Expenses   A-37
9.06.
  Notices   A-37
9.07.
  Entire Understanding; No Third Party Beneficiaries   A-38
9.08.
  Severability   A-38
9.09.
  Alternative Structure   A-38
9.10.
  Specific Performance   A-38
 
             
Annex 1
  Form of A.G. Edwards, Inc. Affiliate Letter   A-40

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AGREEMENT AND PLAN OF MERGER, dated May 30, 2007 (this “Agreement”), among Wachovia Corporation, a North Carolina corporation (“Wachovia”), White Bird Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of Wachovia (“Merger Sub”), and A.G. Edwards, Inc., a Delaware corporation (“A.G. Edwards”).
 
RECITALS
 
A. The Proposed Transaction.  The parties intend to effect a strategic business combination through the merger of A.G. Edwards with and into Merger Sub (the “Merger”), with Merger Sub the surviving corporation (the “Surviving Corporation”).
 
B. Board Determinations.  The respective boards of directors of Wachovia, Merger Sub and A.G. Edwards have each determined that the Merger and the other transactions contemplated hereby are advisable and in the best interests of their respective stockholders and are consistent with, and will further, their respective business strategies and goals, and, therefore, have approved the Merger and this Agreement.
 
C. Approval of Stockholder of Merger Sub.  Wachovia, as the sole stockholder of Merger Sub, has approved this Agreement, the Merger and the other transactions contemplated hereby.
 
D. Intended Tax Treatment.  The parties intend the Merger to be treated as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and regulations thereunder, and intend for this Agreement to constitute a “plan of reorganization” within the meaning of the Code.
 
NOW, THEREFORE, in consideration of the premises, and of the mutual representations, warranties, covenants and agreements contained in this Agreement, Wachovia, Merger Sub and A.G. Edwards agree as follows:
 
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