[DATE]
[NAME]
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
agrees that you shall receive the severance benefits set forth in this letter
agreement ("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, that 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
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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 (as determined in accordance with the Company's
disability programs as in effect from time to time) 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 crime
(including, without limitation, a misdemeanor offense) which impairs
your ability substantially to perform your duties with the Company.
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Circumstances constituting Cause shall be determined in the sole
discretion of 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
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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.
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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 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.
Notwithstanding the foregoing, any of the foregoing events that would
constitute a Full Change in Control may be deemed to be a Partial
Change in Control in the sole discretion of the Board of Directors as
evidenced by adoption of a resolution by a majority of a quorum of the
Board of Directors at a duly held meeting or by unanimous written
action in lieu of a meeting, which determination may be made at any
time prior to the Change in Control or, in the case of subparagraph
(A) above, at any time within 20 days following the Change in Control.
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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 (including the fiscal year in which the Full Change
in Control occurs and the year prior to the fiscal year in which the
Full Change in Control occurs if the cash bonus for such prior fiscal
year has not been determined as of the date of the Full Change in
Control, and including a portion of a fiscal year if a fiscal year is
not complete at the end of the 24 month period following a Full Change
in Control) at least equal to the greatest of (i) actual total cash
compensation paid to you with respect to the fiscal year prior to the
fiscal year for which the calculation is made, (ii) the average annual
total cash compensation paid to you with respect to the two fiscal
years prior to the fiscal year for which the calculation is made or
(iii) if you were not an employee for the entire fiscal year prior to
the fiscal year for which
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the calculation is made, 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" shall be determined at the time the
bonus with respect to such fiscal year 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 a portion of a fiscal year determined at the end of 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) a reduction by the Company in your annual target bonus
or maximum bonus award opportunities as in effect immediately prior to
the Announcement Date (or as in effect following the Announcement
Date, if greater);
(E) 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;
(F) 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);
(G) 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
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(H) 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. In the event Notice of Termination is given by the
Company in connection with a Full Change in Control, the Company
cannot
-9-
withdraw such notice without your written consent. In the event
Notice of Termination is given by the Company in connection with a
Partial Change in Control, the Company can, on or before the scheduled
Date of Termination, withdraw the Notice of Termination by providing
you continued employment in your then current capacity or in another
capacity.
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 more than 50% of
the Board of Directors of the Resulting Corporation;
(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; or
(C) an event that would have constituted a Full Change in
Control but was deemed to be a Partial Change in Control in accordance
with the definition of Full Change in Control.
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2.22. "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.
2.23. "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.
2.24. "Termination of Employment" shall mean your actual cessation of
active employment as a result of a termination (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
-11-
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
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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 interpretation 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:
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(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)
and perquisites 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 and perquisites that would have been provided to you from
time to time if you had not had a Termination of Employment; provided,
however, that the Company may elect to pay the cash value of all or
any portion of the 36-month continuation of perquisites and welfare
benefits, other than those provided under a group welfare benefit
plan, in a lump sum pursuant to Section 5.3 based on such value as of
the date of the Change in Control (or, if greater, the date of
Termination of Employment); and provided further that benefits
otherwise receivable by you pursuant to this clause (C), other than
those settled in a lump sum payment, shall be discontinued if you
obtain full-time employment providing comparable welfare benefits
during the 36-month period following such termination;
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(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
section 1.2.2(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 defined benefit plans in which you
participate, if any, 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, but said payment shall not be grossed up to
reflect any tax deferral or other favorable tax treatment that would
have resulted if the payment had been made under the terms of a
qualified or non-qualified defined benefit plan; and
(H) individual outplacement counseling services.
Notwithstanding the foregoing, the Company shall provide medical
benefits pursuant to this section: (i) under the regular health
program(s) of the Company to the extent that the Company determines
that such benefits can be conferred without adverse effect on the
underwriting, regulatory or tax treatment intended for those
program(s), or (ii) under
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other arrangements selected by the Company which, in the sole
discretion of the Company, satisfy the obligation that welfare
benefits be substantially similar in terms of aggregate monetary value.
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), (C) (to the extent the Company elects), (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
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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
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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
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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, first to your surviving spouse, if any, and, if
there is no surviving spouse, to your estate.
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:
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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.
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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.
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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
-----------------------------
Name:
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