EXHIBIT 10.6
[DATE]
[NAME]
[ADDRESS]
Dear [NAME]:
U.S. Bancorp recognizes that your contribution to the growth and success of the
Company (as defined herein) has been substantial and desires to assure the
Company of your continued employment. In this connection, the Board of Directors
(as defined herein) recognizes that, as is the case with many publicly held
companies, the possibility of a change in control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its shareholders.
The Board of Directors has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a change in control of the Company.
In order to induce you to remain in the employ of the Company, the Company
previously entered into a letter agreement with you dated [DATE] (the "Prior
Agreement") providing for certain severance benefits in the event your
employment with the Company is terminated subsequent to a "Change in Control"
(as defined in the Prior Agreement; "Change in Control" as used elsewhere in
this Agreement shall have the meaning set forth in this Agreement). Subject to
your agreement to the terms of this letter agreement (this "Agreement") as
evidenced by
your signature in the space provided below, you and the Company agree that the
Prior Agreement is hereby terminated and of no further force and effect (except
to the extent that the Prior Agreement was effective prior to August 1, 1997, in
which case it shall remain effective only with respect to terminations occurring
within 24 months following the Partial Change in Control that occurred on August
1, 1997), and the Company agrees that you shall receive the severance benefits
set forth in this Agreement in the event your employment with the Company is
terminated under the circumstances described below:
1. Term of Agreement. This Agreement will commence on the date hereof
and shall continue in effect until the third anniversary of the date
hereof; and, commencing on the first anniversary of the date hereof
and on each anniversary thereafter, the term of this Agreement shall
automatically be extended for one additional year unless, not later
than 90 days prior to any such date of automatic extension of this
Agreement, the Company shall have given notice that the Agreement
will not be so extended; provided, however, if a Change in Control
shall have occurred during the original or any extended term of this
Agreement, this Agreement shall in all events continue in effect for
a period of at least 24 months following a Change in Control;
provided, further, that if you become entitled to payments in
accordance with Sections 4 and 5 of this Agreement (or assert a
claim for such payments) during the term of this Agreement as
heretofore described, this Agreement will thereafter survive
indefinitely to ensure that you receive all payments and benefits to
which you are entitled pursuant to the terms hereof.
2. Definitions. When the following terms are used in this Agreement
with initial capital letters, they shall have the following
meanings.
2.1. "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such person, is the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities, but shall not include any
Company Entity.
2.2. "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 promulgated under the Exchange Act.
2.3. "Announcement Date" shall mean the date of the public
announcement of the transaction, event or course of action that
results in a Change in Control.
2.4. "Anticipatory Termination" shall mean a Termination of
Employment as a result of an act or event that occurs prior to a
Change in Control and after the Announcement Date and either (i) at
the request of any other party to a transaction, or any Person
associated with the event or course of events (other than the
Company or a Company Entity), that results in a Change in Control,
or (ii) otherwise in contemplation of a Change in Control.
2.5. "Associate" shall have the meaning ascribed to such term in
Rule 12b-2 promulgated under the Exchange Act.
2.6. "Beneficial Owner" shall have the meaning ascribed to such term
in Rule 13d-3 promulgated under the Exchange Act.
2.7. "Board of Directors" shall mean the board of directors of the
Company.
2.8. "Cause" shall mean (i) the continued (and in the case of a Full
Change in Control, willful) failure by you to substantially perform
your duties with the Company (other than any such failure resulting
from your disability or from termination by you for Good Reason),
after a written demand for substantial performance is delivered to
you that specifically identifies the manner in which the Company
believes that you have not substantially performed your duties, and
you have failed to resume substantial performance of your duties on
a continuous basis, (ii) in the case of a Full Change in Control,
the willful engaging by you in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise; and in
the case of a Partial Change in Control, gross and willful
misconduct during the course of employment (regardless of whether
the misconduct occurs on the Company's premises), including, but not
limited to, theft, assault, battery, malicious destruction of
property, arson, sabotage, embezzlement, harassment, acts or
omissions which violate the Company's rules or policies (such as
breaches of confidentiality), or other conduct which demonstrates a
willful or reckless disregard of the interests of the Company or its
Affiliates, or (iii) your conviction of a felony which impairs your
ability substantially to perform your duties with the Company.
2.9. "Change in Control" shall mean a Full Change in Control or a
Partial Change in Control.
2.10. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
2.11. "Company" shall mean U.S. Bancorp, a Delaware corporation, or
any successor thereto pursuant to Section 8 hereof (including a
Resulting Corporation) or by operation of law.
2.12. "Company Entity" shall mean the Company, any subsidiary of the
Company or any employee benefit plan of the Company or of any
subsidiary of the Company or any entity holding shares of the voting
capital stock of the Company organized, appointed or established
for, or pursuant to the terms of, any such plan.
2.13. "Continuing Director" shall mean any person who is a member of
the Board of Directors, while such person is a member of the Board
of Directors, who is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and who (x)
was a member of the Board of Directors as of the date of this
Agreement or (y) subsequently becomes a member of the Board of
Directors, if such person's initial nomination for election or
initial election to the Board of Directors has been approved in
advance by the Continuing Directors; provided that any director
designated by or on behalf of a Person who has entered into an
agreement with the Company (or who is contemplating entering into
such an agreement) to effect a consolidation or merger of the
Company or a Company Entity, or other reorganization, with or into
one or more entities which are not Company Entities, and any
director that serves in connection with the act of the Board of
Directors of increasing the number of directors and filling
vacancies in connection with, or in contemplation of, any such
transaction, shall not be deemed to have received such advance
approval for initial nomination or election, and any such director
shall not be deemed to be a Continuing Director, in each case solely
for the purpose of determining whether the addition of members of
the Board of Directors in connection with, or in contemplation of,
such transaction results in a Full Change in Control under clause
(B) of Section 2.16 of this Agreement.
2.14. "Date of Termination" shall mean the date specified in the
Notice of Termination (except in the case of your death, in which
case Date of Termination shall be the date of death); provided,
however, that if your employment is terminated by the Company, in
the case of a Full Change in Control the date specified in the
Notice of Termination shall be at least 30 days from the date the
Notice of Termination is given to you, except in the case of
termination for Cause which may be a shorter period, and if your
employment is terminated by you for Good Reason, the date specified
in the Notice of Termination shall not be more than 30 days from the
date the Notice of Termination is given to the Company.
Notwithstanding the foregoing, in the event of an Anticipatory
Termination, the Date of Termination shall be deemed to be the date
of the Change in Control. If Notice of Termination is given by you
for Good Reason (Partial), and prior to the Date of Termination the
Company terminates your employment for Cause, the Date of
Termination shall be the date specified in the Notice of Termination
provided by the Company in connection with the termination for
Cause. If Notice of Termination is given by you for Good Reason
(Full), the Company shall not be entitled to terminate your
employment for Cause following such Notice of Termination.
2.15. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
2.16. "Full Change In Control" shall mean any of the following
occurring after the date of this Agreement:
(A) the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or any
Person that a
Person (other than a Company Entity) has become the Beneficial
Owner, directly or indirectly, of securities of the Company (x)
representing 20% or more, but not more than 50%, of the combined
voting power of the Company's then outstanding securities unless the
transaction resulting in such ownership has been approved in advance
by the Continuing Directors or (y) representing more than 50% of the
combined voting power of the Company's then outstanding securities
(regardless of any approval by the Continuing Directors); or
(B) the Continuing Directors cease to constitute a
majority of the Board of Directors of the Company or the Resulting
Corporation, except in accordance with the terms of a Permitted
Transaction and except as a result of the death, retirement or
disability of one or more Continuing Directors; or
(C) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the consolidated assets of the Company and its
subsidiaries or the adoption of any plan of liquidation or
dissolution of the Company.
2.17. "Good Reason" shall mean either Good Reason (Full) or Good
Reason (Partial).
2.18. "Good Reason (Full)" shall mean the occurrence of any one or
more of the following events, without your express written consent,
within 24 months following a Full Change in Control (or prior to a
Full Change in Control in the event of an Anticipatory Termination):
(A) the assignment to you of any duties inconsistent in
any respect with your position (including status, offices, titles,
and reporting
requirements), authorities, duties, or other responsibilities as in
effect immediately prior to the Announcement Date or any other
action of the Company which results in a diminishment in such
position, authority, duties, or responsibilities, other than an
insubstantial and inadvertent action which is remedied by the
Company promptly after receipt of notice thereof given by you;
(B) a reduction by the Company in your base salary as in
effect immediately prior to the Announcement Date (or as in effect
following the Announcement Date, if greater);
(C) the failure by the Company to provide you total cash
compensation (consisting of base salary plus cash bonus) with
respect to any fiscal year or portion thereof at least equal to the
greatest of (i) actual total cash compensation paid to you with
respect to the prior fiscal year, (ii) the average annual total cash
compensation paid to you with respect to the prior two fiscal years
or (iii) if you were not an employee for the entire prior fiscal
year, your base salary plus target bonus as in effect immediately
prior to the Announcement Date (or as in effect following the
Announcement Date, if greater); (total cash compensation "with
respect to any fiscal year or portion thereof" shall be determined
at the time the bonus with respect to such fiscal year or portion
thereof is determined, even if such bonus is determined after the
24-month period following a Full Change in Control, and the bonus
portion of cash compensation for services rendered in any portion of
a fiscal year within 24 months following a Full Change in Control
shall be determined by reference to the pro-rata portion of any
annual bonus for such fiscal year);
(D) the Company's requiring you to be based at a
location that is both outside the same metropolitan area of, and in
excess of 30 miles from, the location of your principal office
immediately prior to the Announcement Date;
(E) the failure by the Company to provide employee
benefit plans, programs, policies and practices (including, without
limitation, retirement plans and medical, dental, life and
disability insurance coverage) to you and your family and dependents
(if applicable) that provide substantially similar benefits, in
terms of aggregate monetary value, to you and your family and
dependents (if applicable) at substantially similar costs to you as
the benefits provided by those plans, programs, policies and
practices in effect immediately prior to the Announcement Date (or
as in effect following the Announcement Date, if greater);
(F) the failure of the Company to obtain a satisfactory
agreement from the Resulting Corporation or any other successor to
the Company to assume and agree to perform this Agreement, as
contemplated in Section 8 hereof; and
(G) any purported termination by the Company of your
employment that is not effected pursuant to a Notice of Termination.
2.19. "Good Reason (Partial)" shall mean the occurrence of any one
or more of the following events, without your express written
consent, within 24 months following a Partial Change in Control (or
prior to a Partial Change in Control in the event of an Anticipatory
Termination):
(A) a reduction by the Company in your base salary as in
effect immediately prior to the Announcement Date;
(B) a reduction by the Company in your annual target
bonus or maximum bonus award opportunities as in effect immediately
prior to the Announcement Date;
(C) the Company's requiring you to be based at a
location that is both outside the same metropolitan area of, and in
excess of 30 miles from, the location of your principal office
immediately prior to the Announcement Date; and
(D) any purported termination by the Company of your
employment that is not effected pursuant to a Notice of Termination.
Any event which may otherwise constitute Good Reason
(Partial) shall cease to constitute Good Reason (Partial) if you do
not have a Termination of Employment within 90 days following such
event.
2.20. "Notice of Termination" shall mean a written notice which sets
forth the Date of Termination and, in reasonable detail, the facts
and circumstances claimed to provide a basis, if any, for
termination of your employment.
2.21. "Partial Change in Control" shall mean any of the following
occurring after the date of this Agreement:
(A) a consolidation or merger of the Company or a
Company Entity, or other reorganization, with or into one or more
entities which are not Company Entities, as a result of which less
than 60% of the outstanding
voting securities of the Resulting Corporation are, or are to be,
owned by former shareholders of the Company as determined
immediately prior to consummation of such transaction (excluding
voting securities of the Resulting Corporation owned, or to be
owned, by such shareholders by reason of their ownership prior to
such transaction of securities of any entity other than the Company)
and as a result of which the Continuing Directors constitute (i)
more than 50% of the Board of Directors of the Resulting Corporation
or (ii) exactly 50% of the Board of Directors of the Resulting
Corporation if the transaction resulting in such event is a
Permitted Transaction; or
(B) the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or any
Person that a Person (other than a Company Entity) has become the
Beneficial Owner, directly or indirectly, of securities of the
Company representing 20% or more, but not more than 50%, of the
combined voting power of the Company's then outstanding securities
if the transaction resulting in such ownership has been approved in
advance by the Continuing Directors.
2.22 "Permitted Director" shall mean a director who was a Continuing
Director immediately prior to consummation of a Permitted
Transaction and any director who fills a vacancy created by the
termination of service as a director or expiration of the term as a
director of any Permitted Director if such person was selected
solely by the then current Permitted Directors.
2.23. "Permitted Transaction" shall mean a transaction in which,
pursuant to a written agreement between the Company and all Persons
who have entered into an agreement with the Company to effect a
transaction described
in paragraph (A) of the definition of Partial Change in Control, it
is agreed that (w) the Chief Executive Officer of the Company
immediately prior to the consummation of such transaction shall be
the Chief Executive Officer of the Resulting Corporation for not
less than three years following consummation of such transaction,
(x) upon termination of service of any Permitted Director for any
reason, including upon death, disability or retirement, prior to the
expiration of such director's term during such three-year period,
the vacancy thereby created shall be filled by a nominee selected
solely by the Permitted Directors, (y) upon expiration of the term
of any Permitted Director during such three-year period, the nominee
to succeed such director shall be selected solely by the Permitted
Directors and (z) the parties will take other appropriate steps to
ensure that the Board of Directors of the Resulting Corporation will
be evenly divided between Permitted Directors and all directors
designated by other parties to the transaction during such
three-year period. Notwithstanding the foregoing, such agreement may
provide that directors added to the Board of Director (x) pursuant
to an expansion of the number of members of the Board of Directors
approved by 75% of the then current members of the Board of
Directors or (y) pursuant to the terms of any subsequent agreement
relating to an acquisition by or of the Company, shall not be
subject to the foregoing limitations. The determination of whether a
transaction constitutes a Permitted Transaction shall be made at the
time of consummation of such transaction, and no subsequent events
shall cause such transaction to no longer constitute a Permitted
Transaction.
2.24. "Person" shall have the meaning ascribed to such term as such
term is used in Sections 13(d) and 14(d) of the Exchange Act.
2.25. "Resulting Corporation" shall mean the surviving corporation
in any consolidation, merger or other reorganization to which the
Company is a
party; provided, however, that if the surviving corporation in any
such transaction is a subsidiary of another corporation, then the
Resulting Corporation is the ultimate parent corporation of such
surviving corporation; and provided, further, that in the event of a
consolidation, merger or other reorganization to which a Company
Entity (other than the Company) is a party, then the Company shall
be deemed the Resulting Corporation.
2.26. "Termination of Employment" shall mean termination of your
employment (a) by the Company for any reason other than Cause or (b)
by you for Good Reason; but shall not include termination by reason
of your death. If Notice of Termination is given by you for Good
Reason (Partial), and prior to the Date of Termination the Company
terminates your employment for Cause, the termination shall be
considered a termination by the Company for Cause and shall not be
considered a Termination of Employment.
3. Termination Procedures.
3.1. Notice of Termination. Any purported termination of your
employment by the Company or you (including a Termination of
Employment) (other than by reason of your death) within 24 months
following a Change in Control, and any Anticipatory Termination by
the Company or you, shall be communicated by a Notice of Termination
in accordance with Section 9 hereof. No purported termination by the
Company of your employment in such 24-month period (or prior thereto
in the event of an Anticipatory Termination) shall be effective if
it is not pursuant to a Notice of Termination. Failure by you to
provide Notice of Termination shall not limit any of your rights
under this Agreement except to the extent
the Company can demonstrate that it suffered actual damages by
reason of such failure.
3.2. Participant's Termination Rights. Your right to terminate your
employment pursuant to the terms of this Agreement shall not be
affected by your incapacity due to physical or mental illness. Your
continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason
(Full) pursuant to the terms of this Agreement. Termination of your
employment for Good Reason shall constitute termination for Good
Reason for all purposes of this Agreement, notwithstanding that you
may also thereby be deemed to have "retired" under any applicable
retirement programs of the Company.
4. Qualification for Severance Benefits. Except as otherwise provided
in this Section 4, to qualify for a severance payment from the
Company or the Resulting Corporation under this Agreement, a Change
in Control must occur and you must (a) be an employee of the Company
or its Affiliates immediately prior to the time of such Change in
Control (or, in the case of an Anticipatory Termination, immediately
prior to the Announcement Date), (b) have a Termination of
Employment that occurs within 24 months following such Change in
Control or have an Anticipatory Termination, and (c) execute an
effective general release of all claims against the Company and its
Affiliates in the form and manner prescribed by the Company on or
before the 60th day following the Date of Termination. Failure to
execute the release referenced in the preceding clause (c) in a
timely manner will result in a loss of qualification to receive any
payments or benefits under this Agreement. Notwithstanding the
foregoing, you shall be deemed to have a Termination of Employment
within 24 months following a Full Change in Control if the basis for
Termination of Employment is Good Reason (Full) and if the reason
that the Termination of Employment did not occur within such
24-month period is that cash compensation for services rendered in
any portion of a fiscal year within 24 months following a Full
Change in Control shall have been determined more than 24 months
following a Full Change in Control; provided, that the Termination
of Employment occurs within 10 days following determination of cash
compensation for such fiscal year or portion thereof. In the event
that a Partial Change in Control is followed by a Full Change in
Control, commencing on the date of the Full Change in Control,
provisions in this Agreement relating to a Full Change in Control
shall supersede provisions relating to a Partial Change in Control
if you are employed by the Company or its Affiliates on the date of
the Full Change in Control. You shall not qualify for a severance
payment from the Company or the Resulting Corporation under this
Agreement if you have announced in writing, prior to the date the
Company provides Notice of Termination to you, the intention to
terminate employment or retire (other than pursuant to a Termination
of Employment), provided, in the case of retirement, that any
earlier termination by the Company or the Resulting Corporation does
not result in the diminution of retirement benefits that you would
have received if such retirement had occurred on your intended
retirement date. Further, you shall not qualify for a severance
payment from the Company or the Resulting Corporation under this
Agreement if at least 30 days prior to the Announcement Date the
Company has announced that the business, line of business, unit,
staff group or other identifiable business group, whether or not a
legal entity, or operations in any designated geographical area, for
which you are at such time employed will be divested, sold,
downsized or restructured by the Company and you are informed in
writing, prior to the occurrence of the Change in Control, that your
employment will terminate as a result of such divestiture, sale,
downsizing or restructuring; provided, that
determinations and interpretations with respect to this provision
shall be in the sole discretion of the Company.
5. Compensation Upon Termination.
5.1. Amounts. Upon qualification for severance benefits pursuant to
this Agreement, you shall be entitled to the benefits, to be funded
from the general assets of the Company, provided below:
(A) your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination
is given;
(B) an amount equal to three times the sum of (i) your
annual base salary in effect at the time Notice of Termination is
given or immediately prior to the date of the Change in Control,
whichever is greater, plus (ii) the average actual incentive pay for
the three fiscal years preceding the year in which the Announcement
Date occurs, or, if you were not an employee of the Company for such
three-year period, the average actual incentive pay for any prior
full fiscal years, or, if you were not an employee of the Company
for any such full fiscal year, your annual target bonus potential
available at the time Notice of Termination is given or immediately
prior to the date of the Change in Control, whichever is greater;
(C) for a 36-month period after the Date of Termination,
the Company will arrange to provide you and your dependents (if
applicable) with welfare benefits (including, without limitation,
medical, dental, life, and individual disability insurance
coverage), perquisites and other employee benefits that provide
substantially similar benefits, in terms of aggregate monetary
value, to you and your dependents (if applicable) at substantially
similar costs to you as the welfare benefits, perquisites and other
employee benefits (i) in effect immediately prior to the Change in
Control (or as in effect following the Change in Control, if
greater), in the case of a Full Change in Control, or (ii) that
would have been provided to you from time to time if you had not had
a Termination of Employment, in the case of a Partial Change in
Control; but benefits otherwise receivable by you pursuant to this
clause (C) shall be discontinued if you obtain full-time employment
providing comparable welfare benefits during the 36-month period
following such termination;
(D) the full amount of any long-term cash incentive
award for any plan periods then in progress to the extent not
provided for in such plan or plans;
(E) the year-to-date pro-rata amount of any annual cash
incentive award for any plan as in effect immediately prior to the
Change in Control to the extent not provided for in such plan or
plans and the amount of any annual cash incentive award for any plan
as in effect for the immediately prior year if you would have
received such an award if there had not been a Termination of
Employment in the then current year;
(F) credit for five (5) additional years of service
under section1.2.2(c)(iii) of the U.S. Bancorp Nonqualified
Supplemental Executive Retirement Plan (or any appropriate successor
to such section and/or plan) for purposes of determining the
additional years of service with which you will be credited in the
formulation of your Accrued SERP benefit in that plan;
(G) to the extent not otherwise provided in the
Company's qualified or non-qualified retirement plans, three (3)
additional years of accruals
premised on the assumption that you had continued in service with
the Company and had received remuneration in the amount determined
in accordance with Section 5.1(B) above; and
(H) individual outplacement counseling services.
5.2. Group Disability. The Company shall not be required to continue
to provide group disability benefits following your Date of
Termination other than with respect to benefits to which you became
entitled prior to the Date of Termination and which are required to
be paid following such Date of Termination in accordance with the
terms of applicable disability plans or policies in effect prior to
such Date of Termination.
5.3. Time and Form of Cash Payments. The cash payments provided for
in Sections 5.1(A), (B), (D) and (E) above shall be made not later
than 20 days following the date on which all of the qualification
requirements set forth in Section 4 are met; provided, however, that
if the amounts of such payments cannot be finally determined on or
before such day, the Company shall pay to you on such day an
estimate as determined in good faith by the Company of the minimum
amount of such payments and shall pay the remainder of such payments
(together with interest from the date of such estimated payment at
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later than 45
days after the Date of Termination. In the event that the amount of
the estimated payment exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to
you payable no later than 30 days after demand by the Company
(together with interest from the date of such estimated payment at
the rate provided in Section 1274(b)(2)(B) of the Code).
5.4. Legal Fees and Expenses. The Company shall also pay to you any
legal fees and expenses incurred by you (i) as a result of
successful litigation against the Company for nonpayment of any
benefit hereunder or (ii) in connection with any dispute with any
Federal, state or local governmental agency with respect to benefits
claimed under this Agreement. If you utilize arbitration to resolve
any such dispute, the Company will pay any legal fees and expenses
incurred by you in connection therewith.
5.5. No Mitigation. You shall not be required to mitigate the amount
of any payment provided for in this Section 5 by seeking other
employment or otherwise, nor shall the amount of any payment
provided for in this Section 5 be reduced by any compensation earned
by you as the result of employment by another employer after the
Date of Termination, or otherwise, except as set forth in Section
5.1(C) hereof.
6. Additional Payments. In the event you become entitled to payments
under Section 5 of this Agreement, the Company shall cause its
independent auditors promptly to review, at the Company's sole
expense, the applicability of Section 4999 of the Code to such
payments. If such auditors shall determine that any payment or
distribution of any type by the Company to you or for your benefit,
whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the "Total Payments"),
would be subject to the excise tax imposed by Section 4999 of the
Code, or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
collectively referred to as the "Excise Tax"), then you shall be
entitled to receive an additional cash payment (a "Gross-Up
Payment") within 30 days of such determination equal to an amount
such that after payment by you of all taxes (including any interest
or penalties imposed with respect to such taxes), including any
Excise Tax,
imposed upon the Gross-Up Payment, you would retain an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Total
Payments. For purposes of the foregoing determination, your tax rate
shall be deemed to be the highest statutory marginal state and
Federal tax rate (on a combined basis) (including your share of
F.I.C.A. and Medicare taxes) then in effect. If no determination by
the Company's auditors is made prior to the time a tax return
reflecting the Total Payments is required to be filed by you, you
will be entitled to receive a Gross-Up Payment calculated on the
basis of the Total Payments reported by you in such tax return,
within 30 days of the filing of such tax return. In all events, if
any tax authority determines that a greater Excise Tax should be
imposed upon the Total Payments than is determined by the Company's
independent auditors or reflected in your tax return pursuant to
this Section 6, you shall be entitled to receive the full Gross-Up
Payment calculated on the basis of the amount of Excise Tax
determined to be payable by such tax authority from the Company
within 30 days of such determination.
7. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit your continuing or future participation in any benefit, bonus,
incentive, retirement or other plan or program provided by the
Company and for which you may qualify, nor shall anything herein
limit or reduce such rights as you may have under any other
agreement with, or plan, program, policy or practice of, the
Company. Amounts which are vested benefits or which you are
otherwise entitled to receive under any agreement with, or plan,
program, policy or practice of, the Company (including, without
limitation, the cash-out of unused vacation days upon termination of
employment) shall be payable in accordance with such agreement,
plan, program, policy or practice, except as explicitly modified by
this Agreement. Notwithstanding the foregoing, if you become
entitled to benefits under this Agreement, you shall
not be entitled to receive payments under any other severance pay
plan or program sponsored or maintained by the Company or any of its
Affiliates.
8. Successors.
(A) The Company will require the Resulting Corporation
or any other successor (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of
the business and/or consolidated assets of the Company and its
subsidiaries to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. Failure
of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall entitle you to
compensation from the Company in the same amount and on the same
terms as you would be entitled under this Agreement if you met the
qualification requirements set forth in Section 4, except that for
purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of
Termination, and Notice of Termination shall be deemed to have been
given on such date.
(B) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and
legatees. If you should die while any amount would still be payable
to you hereunder if you had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement, to your devisee, legatee or other
designee or, if there is no such designee, to your estate or, if no
estate, in accordance with applicable law.
9. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by
United States registered mail, postage prepaid, addressed to the
other party as follows:
If to the Company, to:
U.S. Bancorp
Attention: Corporate Secretary
601 Second Avenue South
Minneapolis, Minnesota 55402
If to you, to:
[NAME]
[ADDRESS]
Either party to this Agreement may change its address for purposes
of this Section 8 by giving 15 days' prior notice to the other party
hereto.
10. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by you and such officer as may be
specifically designated by the Board. The validity, interpretation,
construction, and performance of this Agreement shall be governed by
the laws of the State of Minnesota.
11. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full
force and effect.
12. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.
13. Arbitration. If you so elect, any dispute or controversy arising
under or in connection with this Agreement shall be settled
exclusively by arbitration in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction;
provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or
in connection with this Agreement. If you do not elect arbitration,
you may pursue any and all legal remedies available to you.
14. Effective Date. This Agreement shall become effective as of the date
set forth above.
15. Employment. This Agreement does not constitute a contract of
employment or impose on the Company any obligation to retain you as
an employee, to continue your current employment status or to change
any employment policies of the Company.
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter
which will then constitute our agreement on this subject.
Sincerely,
U.S. BANCORP
By
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Name:
Title:
Agreed to and Accepted:
By
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Name: