FIRST BANK SYSTEM, INC.
1995
EXECUTIVE INCENTIVE PLAN
1. ESTABLISHMENT. On February 15, 1995, the Board of Directors of FIRST BANK
SYSTEM, INC., upon recommendation by the Compensation and Human Resources
Committee of the Board of Directors, approved a 1995 executive incentive plan
for executives as described herein, which plan shall be known as the "FIRST BANK
SYSTEM, INC. 1995 EXECUTIVE INCENTIVE PLAN." This Plan shall be submitted for
approval by the stockholders of First Bank System, Inc. at the 1995 Annual
Meeting of Stockholders. This Plan shall be effective as of January 1, 1995,
subject to its approval by the stockholders, and no benefits shall be issued
pursuant thereto until after this Plan has been approved by the stockholders.
2. PURPOSE. The purpose of this Plan is to advance the interests of First Bank
System, Inc. and its stockholders by attracting and retaining key employees, and
by stimulating the efforts of such employees to contribute to the continued
success and growth of the business of the Company.
3. DEFINITIONS. When the following terms are used herein with initial capital
letters, they shall have the following meanings:
3.1. BASE SALARY - a Participant's annualized base salary, as determined by
the Committee, as of the last day of a Performance Period.
3.2. CODE - the Internal Revenue Code of 1986, as it may be amended from
time to time, and any proposed, temporary or final Treasury Regulations
promulgated thereunder.
3.3. COMMITTEE - the Compensation and Human Resources Committee of the
Board of Directors of the Company designated by such Board to administer
the Plan which shall consist of members appointed from time to time by the
Board of Directors. Each member of the Committee shall be a "disinterested
person" within the meaning of Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934 and,
following the 1996 Annual Meeting of Stockholders of the Company, an
"outside director" within the meaning of Section 162(m) of the Code.
3.4. COMPANY - First Bank System, Inc. a Delaware corporation, and any of
its subsidiaries or affiliates, whether now or hereafter established.
3.5. MAXIMUM AWARD PERCENTAGE - a percentage, which may be greater or less
than 100%, as determined by the Committee with respect to each Performance
Period and with respect to each Performance Threshold.
3.6. PARTICIPANT - any executive officer of the Company who is also an
"officer" within the meaning of Section 16(a) of the Securities Exchange
Act of 1934 and who is designated by the Committee, as provided for herein,
to participate with respect to a Performance Period as a Participant in
this Plan. Directors of the Company who are not also employees of the
Company are not eligible to participate in the Plan.
3.7. PERFORMANCE THRESHOLD - the preestablished, objective performance
goals selected by the Committee with respect to each Performance Period and
which shall be based solely on ROA .
3.8. PERFORMANCE PERIOD - each consecutive twelve-month period commencing
on January 1 of each year during the term of this Plan and coinciding with
the Company's fiscal year.
3.9. PLAN - this FIRST BANK SYSTEM, INC., 1995 EXECUTIVE INCENTIVE PLAN.
3.10. RETURN ON ASSETS OR ROA - a percentage computed as the Company's
consolidated net income for its fiscal year divided by the Company's
consolidated total average assets for such fiscal year. The Company's
Return on Assets shall be computed in accordance with generally accepted
accounting principles, as in effect from time to time, as applied by the
Company in the preparation of its financial statements included as part of
its Form 10-K, as filed with the Securities and Exchange Commission. The
Company's Return on Assets computed in accordance with the foregoing for a
fiscal year shall be adjusted to eliminate the effect of (1) changes in
generally accepted accounting principles; (2) merger related charges; and
(3) extraordinary items.
3.11. TARGET AWARD - a percentage, which may be greater or less than 100%,
as determined by the Committee with respect to each Performance Period.
4. ADMINISTRATION.
4.1. POWER AND AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall have full power and authority, subject to all the
applicable provisions of the Plan and applicable law, to (a) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it deems
necessary or advisable for the proper administration of the Plan, (b) construe,
interpret and administer the Plan and any instrument or agreement relating to
the Plan, and (c) make all other determinations and take all other actions
necessary or advisable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, each determination made and each action taken by
the Committee pursuant to the Plan or any instrument or agreement relating to
the Plan (x) shall be within the sole discretion of the Committee, (y) may be
made at any time and (z) shall be final, binding and conclusive for all purposes
on all persons, including, but not limited to, Participants and their legal
representatives and beneficiaries, and employees of the Company.
4.2. DETERMINATIONS MADE PRIOR TO EACH PERFORMANCE PERIOD. At any time ending
on or before the 90th day of each Performance Period, the Committee shall:
(a) designate all Participants and their Target Awards for such Performance
Period; and
(b) With respect to each Participant, establish one or more objective
Performance Thresholds (including a minimum level of achievement), based
solely on ROA, and a corresponding Maximum Award Percentage for each
Performance Threshold;
4.3. CERTIFICATION. Following the close of each Performance Period and prior
to payment of any amount to any Participant under the Plan, the Committee must
certify in writing the Company's ROA for that Performance Period (and the
corresponding Performance Thresholds) and certify as to the attainment of all
other factors upon which any payments to a Participant for that Performance
Period are to be based.
4.4. STOCKHOLDER APPROVAL. The material terms of this Plan shall be disclosed
to and approved by stockholders of the Company in accordance with Section 162(m)
of the Code. No amount shall be paid to any Participant under this Plan unless
such stockholder approval has been obtained.
5. INCENTIVE PAYMENT.
5.1. FORMULA. Each Participant shall receive a bonus payment for each
Performance Period in an amount not greater than:
(a) the Participant's Base Pay for the Performance Period, multiplied by
(b) the Participant's Target Award for the Performance Period, multiplied
by
(c) the Participant's Maximum Award Percentage for the Performance Period
that corresponds to the Performance Threshold achieved by the Company
for that Performance Period.
5.2. LIMITATIONS.
(a) MINIMUM ROA ACHIEVEMENT. In no event shall any Participant receive any
payment hereunder unless the Company's ROA for a Performance Period is at
least equal to a minimum percentage as determined by the Committee for that
Performance Period.
(b) DISCRETIONARY REDUCTION. The Committee shall retain sole and full
discretion to reduce by any amount the incentive payment otherwise payable
to any Participant under this Plan.
(c) CONTINUED EMPLOYMENT. Except as otherwise provided by the Committee, no
incentive payment under this Plan with respect to a Performance Period
shall be paid or owed to a Participant whose employment terminates prior to
the last day of such Performance Period.
(d) MAXIMUM PAYMENTS. No Participant shall receive a payment under this
Plan for any Performance Period in excess of $1.5 million.
6. BENEFIT PAYMENTS.
6.1. TIME AND FORM OF PAYMENTS. Subject to any deferred compensation election
pursuant to any such plans of the Company applicable hereto, benefits shall be
paid to the Participant in a single lump sum cash payment as soon as
administratively feasible after the Committee has certified that the Company
Performance Threshold has been attained.
6.2. NONTRANSFERABILITY. Participants and beneficiaries shall not have the
right to assign, encumber or otherwise anticipate the payments to be made under
this Plan, and the benefits provided hereunder shall not be subject to seizure
for payment of any debts or judgments against any Participant or any
beneficiary.
6.3. TAX WITHHOLDING. In order to comply with all applicable federal or
state income, social security, payroll, withholding or other tax laws or
regulations, the Committee may establish such policy or policies as it deems
appropriate with respect to such laws and regulations, including without
limitation, the establishment of policies to ensure that all applicable federal
or state income, social security, payroll, withholding or other taxes, which are
the sole and absolute responsibility of the Participant, are withheld or
collected from such Participant.
7. AMENDMENT AND TERMINATION; ADJUSTMENTS. Except to the extent prohibited by
applicable law and unless otherwise expressly provided in the Plan:
(a) AMENDMENTS TO THE PLAN. The Committee may amend this Plan prospectively
at any time and for any reason deemed sufficient by it without notice to
any person affected by this Plan and may likewise terminate or curtail the
benefits of this Plan both with regard to persons expecting to receive
benefits hereunder in the future and persons already receiving benefits at
the time of such action.
(b) CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in
the Plan in the manner and to the extent it shall deem desirable to carry
the Plan into effect.
8. MISCELLANEOUS.
8.1. EFFECTIVE DATE. This Plan shall be deemed effective, subject to
stockholder approval, as of January 1, 1995.
8.2. HEADINGS. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
8.3. APPLICABILITY TO SUCCESSORS. This Plan shall be binding upon and inure
to the benefit of the Company and each Participant, the successors and assigns
of the Company, and the beneficiaries, personal representatives and heirs of
each Participant. If the Company becomes a party to any merger, consolidation or
reorganization, this Plan shall remain in full force and effect as an obligation
of the Company or its successors in interest.
8.4. EMPLOYMENT RIGHTS AND OTHER BENEFIT PROGRAMS. The provisions of this
Plan shall not give any Participant any right to be retained in the employment
of the Company. In the absence of any specific agreement to the contrary, this
Plan shall not affect any right of the Company, or of any affiliate of the
Company, to terminate, with or without cause, any Participant's employment at
any time. This Plan shall not replace any contract of employment, whether oral
or written, between the Company and any Participant, but shall be considered a
supplement thereto. This Plan is in addition to, and not in lieu of, any other
employee benefit plan or program in which any Participant may be or become
eligible to participate by reason of employment with the Company. No
compensation or benefit awarded to or realized by any Participant under the Plan
shall be included for the purpose of computing such Participant's compensation
under any compensation-based retirement, disability, or similar plan of the
Company unless required by law or otherwise provided by such other plan.
8.5. NO TRUST OR FUND CREATED. This Plan shall not create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between
the Company or any affiliate and a Participant or any other person. To the
extent that any person acquires a right to receive payments from the Company or
any affiliate pursuant to this Plan, such right shall be no greater than the
right of any unsecured general creditor of the Company or of any affiliate.
8.6. GOVERNING LAW. The validity, construction and effect of the Plan or any
incentive payment payable under the Plan shall be determined in accordance with
the laws of the State of Minnesota.
8.7. SEVERABILITY. If any provision of the Plan is or becomes or is deemed to
be invalid, illegal or unenforceable in any jurisdiction, such provision shall
be construed or deemed amended to conform to applicable laws, or if it cannot be
so construed or deemed amended without, in the determination of the Committee,
materially altering the purpose or intent of the Plan, such provision shall be
stricken as to such jurisdiction, and the remainder of the Plan shall remain in
full force and effect.
8.8. QUALIFIED PERFORMANCE-BASED COMPENSATION. All of the terms and
conditions of the Plan shall be interpreted in such a fashion as to qualify all
compensation paid hereunder as "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code.