Contents:
Employment Agreement for Jerry A. Grundhofer
Form of Change in Control Agreement
 
                                                                   
 
                              EMPLOYMENT AGREEMENT
 
         AGREEMENT by and between U.S. Bancorp, a Delaware corporation (the
"Company") and Jerry A. Grundhofer (the "Executive"), is effective as of October
16, 2001.
 
         1. Certain Definitions. The "Effective Date" shall mean the first date
after the date hereof on which a Change of Control (as defined in Section 2)
occurs. Anything in this Agreement to the contrary notwithstanding, if a Change
of Control occurs and if the Executive's employment with the Company is
terminated prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment (i)
was at the request of a third party who has taken steps reasonably calculated to
effect a Change of Control or (ii) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this Agreement the
"Effective Date" shall mean the date immediately prior to the date of such
termination of employment.
 
         2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
 
                  (a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or
more of either (i) the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (ii) the combined voting power of
the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or
 
                  (b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
 
                  (c) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more
 
 
 
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than 50% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 35% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
 
                  (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
 
         3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the date hereof and ending on December 31, 2006 (the
"Employment Period").
 
         4. Terms of Employment.
 
                  (a) Position and Duties. (i) During the Employment Period, the
         Executive shall be President and Chief Executive Officer of the Company
         and, in such capacity, the Executive shall be responsible for the
         strategic direction and operations of the Company, and shall serve on
         the Company's Board of Directors and shall have such other duties,
         responsibilities and authorities as shall be consistent therewith. The
         Executive shall also be Chairman, President and Chief Executive Officer
         of U.S. Bank, N.A. and shall serve on its Board of Directors. In
         addition to the above, the Executive shall be elected Chairman of the
         Board of Directors of the Company effective upon the earlier of the
         retirement of the current Chairman or December 31, 2002.
 
                           (ii) During the Employment Period, and excluding any
         periods of vacation and sick leave to which the Executive is entitled,
         the Executive agrees to devote full attention and time during normal
         business hours to the business and affairs of the Company and to use
         the Executive's reasonable best efforts to perform faithfully and
         efficiently such responsibilities. During the Employment Period it
         shall not be a violation of this Agreement for the Executive to (A)
         serve on corporate, civic or charitable boards or committees, (B)
         deliver lectures, fulfill speaking engagements or teach at educational
         institutions and (C) manage personal investments, so long as such
         activities do not significantly interfere with the performance of the
         Executive's responsibilities as an employee of the Company in
         accordance with this Agreement. It is expressly understood
 
 
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         and agreed that to the extent that any such activities have been
         conducted by the Executive prior to the Effective Date, the continued
         conduct of such activities (or the conduct of activities similar in
         nature and scope thereto) subsequent to the Effective Date shall not
         thereafter be deemed to interfere with the performance of the
         Executive's responsibilities to the Company.
 
                  (b) Compensation. (i) Base Salary. During the Employment
         Period, the Executive shall receive an annual base salary ("Annual Base
         Salary") of $975,000 until adjusted following any review of the Annual
         Base Salary as hereinafter provided. The Annual Base Salary shall be
         paid in equal semi-monthly installments. During the Employment Period,
         the Annual Base Salary shall be reviewed by the Compensation Committee
         of the Company's Board of Directors (the "Committee") at least every 12
         months. Any increase in Annual Base Salary shall not serve to limit or
         reduce any other obligation to the Executive under this Agreement.
         Annual Base Salary shall not be reduced below $975,000 or after any
         such increase, and the term Annual Base Salary as utilized in this
         Agreement shall refer to Annual Base Salary as so increased.
 
                           (ii) Annual Bonus. In addition to Annual Base Salary,
         the Executive shall be awarded, for each fiscal year ending during the
         Employment Period, an annual bonus (the "Annual Bonus") pursuant to the
         U.S. Bancorp Executive Incentive Plan (or successor to such plan), pro
         rated in the case of a bonus for any year during which the Executive
         was employed for less than 12 months; provided, however, after the
         Effective Date, the Annual Bonus shall be no less than 175% of the
         Executive's Annual Base Salary ("Minimum Bonus"). Each such Annual
         Bonus shall be paid no later than the end of the third month of the
         fiscal year next following the fiscal year for which the Annual Bonus
         is awarded, unless the Executive shall elect to defer the receipt of
         such Annual Bonus. For each fiscal year during the Employment Period,
         the Executive's target bonus opportunity for achieving target
         performance levels with respect to corporate and individual objectives
         established by the Committee under the Company's then-applicable annual
         incentive plan shall be at least 175% of his then-current Annual Base
         Salary. During the Employment Period, the target Annual Bonus levels
         shall be reviewed at least every 12 months. Any increase in such level
         shall not serve to limit or reduce any other obligation to the
         Executive under this Agreement, and the target Annual Bonus levels
         shall not be lowered after any such increase and shall not be less than
         175% of the Executive's Annual Base Salary.
 
                           (iii) Restricted Stock Units. On or before January 2,
         2002, the Company shall grant the Executive an award of restricted
         stock units pursuant to the U.S. Bancorp 2001 Stock Incentive Plan
         ("Stock Plan") corresponding to such number of shares of common stock
         of the Company (the "Restricted Stock Units") as equals the quotient of
         (x) $5,600,000 divided by (y) the average New York Stock Exchange
         closing price of common stock of the Company during the sixty (60)
         trading day period ending on the day prior to such award date. To the
         extent that dividends are paid on common stock of the Company after the
         effective date of this Agreement (as first set forth above) and prior
         to the Distribution Date, the Executive shall be entitled to receive
         additional Restricted Stock Units on each dividend payment date of the
         Company (including any dividend declared prior to the Distribution Date
         and payable after such date, which shall be deemed paid on the
         Distribution Date) having a fair market value (based on the
 
 
 
 
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         closing price of the Company's common stock on such payment date) equal
         to the amount of dividends paid on common stock of the Company
         represented by the Restricted Stock Units, which additional Restricted
         Stock Units shall vest on the same basis as the award of Restricted
         Stock Units above. Such award shall vest on December 31, 2006, provided
         that the Executive is still employed by the Company on such date, and
         once vested shall be distributable in common stock of the Company on
         January 15 (the "Distribution Date") of the calendar year following the
         calendar year in which the Executive's employment with the Company and
         all affiliates shall terminate. The foregoing provisions of this
         Section 4(b)(iii) to the contrary notwithstanding, the Executive shall
         be allowed to elect, in writing, delivered to the Committee no later
         than the October 1 immediately preceding the Distribution Date, to
         surrender all or fewer than all of the Restricted Stock Units, if
         vested, effective on the Distribution Date in exchange for an
         additional benefit under the NQRP (as defined in Section 4(b)(v) below)
         commencing at age 62 (or earlier on an actuarially reduced basis to the
         extent so provided under the NQRP). The present value of such
         additional benefit on the Distribution Date shall be equal to the
         greater of (1) the product of (A) the number of Restricted Stock Units
         surrendered, multiplied by (B) the average closing price of the
         Company's common stock over the thirty (30) trading day period
         immediately preceding the Distribution Date or (2) such product
         determined by substituting the average closing price of the Company's
         common stock over the thirty (30) trading day period immediately
         preceding such October 1 (such greater product is the "Conversion
         Value"). The Conversion Value shall be converted to the normal form of
         annuity under the NQRP, using actuarial assumptions based on the FAS 87
         interest rate and mortality assumptions in effect on such October 1,
         and the annuity so converted from the Conversion Value shall be added
         to any benefit payable to the Executive under the NQRP (as further
         provided at Section 4(b)(v) below) at retirement.
 
                           (iv) Long-Term Incentive Plans. The Executive shall
         be eligible to participate throughout the Employment Period in such
         long-term incentive plans and programs of the Company ("Long Term
         Incentive Programs") as may be in effect from time to time. The
         Executive's level of incentive opportunity in such Long Term Incentive
         Programs shall be established by the Committee annually and shall be at
         a level and on terms and conditions consistent with participation by
         other peer executives of the Company.
 
                           (v) Incentive, Savings and Retirement Plans.
 
                                    A. During the Employment Period, the
         Executive shall be eligible to participate in all incentive, savings
         and retirement plans, practices, policies and programs applicable
         generally to other peer executives of the Company and its affiliated
         companies. The Executive shall participate in, and shall be fully
         vested in his benefit under the Firstar Corporation Non-Qualified
         Retirement Plan (or successor to such plan, the "NQRP") under which the
         Executive shall be given service credit for his service with Firstar
         Corporation, BankAmerica Corporation, Security Pacific Corporation and
         Wells Fargo N.A. (together, the "Prior Employers"), provided that the
         Company's obligation under the NQRP shall be offset by all other
         pension benefits of the Company to which the Executive may be or may
         become entitled (other than the additional benefit
 
 
 
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         provided at Section 4(b)(iii) above) and all pension benefits to which
         the Executive is entitled from the Prior Employers (including, but not
         limited to, Firstar Corporation's noncontributory defined benefit
         pension plan); provided further that after the Effective Date in no
         event shall such plans, practices, policies and programs provide the
         Executive with incentive opportunities (measured with respect to both
         regular and special incentive opportunities, to the extent, if any,
         that such distinction is applicable), savings opportunities and
         retirement benefit opportunities, in each case, less favorable, in the
         aggregate, than the most favorable of those provided by the Company and
         its affiliated companies for the Executive under such plans, practices,
         policies and programs as in effect at any time during the 120-day
         period immediately preceding the Effective Date or, if more favorable
         to the Executive, those provided generally at any time after the
         Effective Date to other peer executives of the Company and its
         affiliated companies, after taking into account the difference in age
         between the Executive and the peer executives.
 
                                    B. The provisions of the NQRP to the
         contrary notwithstanding, the Executive's benefit under the NQRP shall
         take into account the following:
 
                                             a. The formula for determining the
                  Executive's supplemental benefit under Appendix B-3 of the
                  NQRP shall be modified by adding one-twelfth of the Grant Date
                  Value to each month of the calendar year immediately preceding
                  the Distribution Date for the purpose of determining
                  Executive's Monthly Earnings thereunder, provided that the
                  Executive remains continuously employed by the Company through
                  December 31, 2006 unless the termination of the Executive's
                  employment prior to December 31, 2006 is by the Company
                  without Cause or due to the Executive's Disability or is by
                  the Executive for Good Reason or due to his death. The "Grant
                  Date Value" shall be $5,600,000;
 
                                             b. For purposes of determining the
                  Executive's supplemental pension benefit under the NQRP, the
                  amount of the Annual Bonus used in computing his Final Average
                  Monthly Earnings under such plan shall be the greater of (i)
                  the average during the applicable five year period of 175% of
                  the Executive's Annual Base Salary, or (ii) the average Annual
                  Bonus actually earned by the Executive during the applicable
                  five year period; provided that, if the Executive shall
                  terminate employment with the Company prior to December 31,
                  2006 for any reason, other than (1) a termination by the
                  Company without Cause, (2) due to his Disability, (3) a
                  termination by the Executive for Good Reason or (4) due to his
                  death, then the amount determined under clause (i) shall be
                  the average during the applicable five year period of 175% of
                  the Executive's Annual Base Salary per year for the calendar
                  years commencing 2002 through the date of such termination and
                  100% of the Executive's Annual Base Salary per year for
                  calendar years prior to 2002; and
 
 
 
 
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                                            c. In the event that the Executive
                  receives severance benefits pursuant to Section 6(a)(i)(C),
                  the Executive shall not be entitled to commence his receipt of
                  any supplemental pension benefit hereunder until after the
                  expiration of the Severance Period (as defined in Section
                  6(a)(i)(C)) and determined without regard for any payment of
                  such severance in a lump sum; provided, that if such Severance
                  Period shall expire prior to the date that the Executive
                  attains age 62, then, the third sentence of Section 4(b)(iii)
                  to the contrary notwithstanding, such supplemental pension
                  benefit may begin immediately following the last day of such
                  Severance Period without the actuarial reduction otherwise
                  applicable under the NQRP for the commencement of such benefit
                  prior to age 62.
 
                  (vi) Welfare Benefit Plans. During the Employment Period, the
         Executive and/or the Executive's family, as the case may be, shall be
         eligible for participation in and shall receive all benefits under
         welfare benefit plans, practices, policies and programs provided by the
         Company and its affiliated companies including, without limitation,
         medical, prescription, dental, disability, salary continuance, employee
         life, group life, accidental death and travel accident insurance plans
         and programs) to the extent applicable generally to other peer
         executives of the Company and its affiliated companies, provided that
         after the Effective Date in no event shall such plans, practices,
         policies and programs provide the Executive with benefits which are
         less favorable, in the aggregate, than the most favorable of such
         plans, practices, policies and programs in effect for the Executive at
         any time during the 120-day period immediately preceding the Effective
         Date or, if more favorable to the Executive, those provided generally
         at any time after the Effective Date to other peer executives of the
         Company and its affiliated companies. For purposes of determining
         eligibility for retiree medical benefits provided by the Company, the
         Executive shall be treated as though he is at least age 55 and has at
         least 10 years of service with the Company.
 
                  (vii) Expenses. During the Employment Period, the Executive
         shall be entitled to receive prompt reimbursement for all reasonable
         business expenses incurred by the Executive.
 
                  (viii) Fringe Benefits. During the Employment Period, the
         Executive shall be entitled to fringe benefits, including, without
         limitation, tax and financial planning services, payment of club dues,
         and a monthly car allowance of $1,000, net to the Executive after
         giving effect to (x) all income taxes payable by Executive that are
         attributable to such allowance, and (y) any benefits that result from
         the deductibility by the Executive of any such taxes.
 
                  (ix) Vacation. During the Employment Period, the Executive
         shall be entitled to four weeks of paid vacation annually.
 
         5. Termination of Employment.
 
         (a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company
 
 
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determines in good faith that the Disability of the Executive has occurred
during the Employment Period (pursuant to the definition of Disability set forth
below), it may give to the Executive written notice in accordance with Section
12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.
 
                  (b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
 
                           (i) the willful and continued failure of the
         Executive to perform substantially the Executive's duties with the
         Company or one of its affiliates (other than any such failure resulting
         from incapacity due to physical or mental illness), after a written
         demand for substantial performance is delivered to the Executive by the
         Board which specifically identifies the manner in which the Board
         believes that the Executive has not substantially performed the
         Executive's duties, or
 
                           (ii) the willful engaging by the Executive in illegal
         conduct or gross misconduct which is materially and demonstrably
         injurious to the Company.
 
         For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of a majority of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof in
detail.
 
                  (c) Good Reason. The Executive's employment may be terminated
by the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
 
                           (i) the assignment to the Executive of any duties
         inconsistent with the Executive's position (including status, offices,
         titles and reporting requirements), authority, duties or
         responsibilities as contemplated by Section 4(a) of this Agreement, or
         any other action by the Company which results in a diminution in such
         position,
 
 
 
 
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         authority, duties or responsibilities; provided, however, that (subject
         to the election of the Executive as Chairman as provided at Section
         4(a)(i) hereof) any change in the Executive's position (including
         status, duties and titles), authority, duties or responsibilities, in
         accordance with normal succession planning by the Company's Board of
         Directors shall not constitute Good Reason if made with the Executive's
         consent;
 
                           (ii) any failure by the Company to comply with any of
         the provisions of Section 4(b) of this Agreement;
 
                           (iii) the Company's requiring the Executive to be
         based at any office or location after the Effective Date other than
         where the Executive was located immediately prior to the Effective Date
         other than in connection with a change of the Company's headquarters if
         the Executive is relocated to such headquarters, or, after the
         Effective Date, the Company's requiring the Executive to travel on
         Company business to a substantially greater extent than required
         immediately prior to the Effective Date;
 
                           (iv) any purported termination by the Company of the
         Executive's employment otherwise than as expressly permitted by this
         Agreement; or
 
                           (v) any failure by the Company to comply with and
         satisfy Section 11(c) of this Agreement.
 
         Notwithstanding the above, "Good Reason" shall exclude an isolated,
insubstantial and inadvertent action or failure to act not taken or occurring in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive.
 
         For purposes of this Section 5(c), any good faith determination of
"Good Reason" made by the Executive shall be conclusive.
 
                  (d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
 
                  (e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or
 
 
 
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Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
 
         6. Obligations of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Death or Disability. If, during the Employment Period or on or
after the Effective Date, the Company shall terminate the Executive's employment
other than for Cause or Disability or the Executive shall terminate employment
for Good Reason:
 
                  (i) the Company shall pay to the Executive in a lump sum in
         cash within 30 days after the Date of Termination the aggregate of the
         following amounts:
 
                           A. the sum of (1) the Executive's Annual Base Salary
                  through the Date of Termination to the extent not theretofore
                  paid, (2) the product of (x) the higher of (I) the Minimum
                  Bonus and (II) the Annual Bonus paid or payable, including any
                  bonus or portion thereof which has been earned but deferred
                  (and annualized for any fiscal year consisting of less than
                  twelve full months or during which the Executive was employed
                  for less than twelve full months), for the most recently
                  completed fiscal year during the Employment Period, if any
                  (such higher amount being referred to as the "Highest Annual
                  Bonus") and (y) a fraction, the numerator of which is the
                  number of days in the current fiscal year through the Date of
                  Termination, and the denominator of which is 365 and (3) any
                  compensation previously deferred by the Executive (together
                  with any accrued interest or earnings thereon) and any accrued
                  vacation pay, in each case to the extent not theretofore paid
                  (the sum of the amounts described in clauses (1), (2), and (3)
                  shall be hereinafter referred to as the "Accrued
                  Obligations");
 
                           B. if the Date of Termination is on or after the
                  Effective Date, an amount equal to the difference between (a)
                  the actuarial equivalent of the benefit (utilizing actuarial
                  assumptions no less favorable to the Executive than those in
                  effect under the Company's qualified defined benefit
                  retirement plan (the "Retirement Plan") immediately prior to
                  the Effective Date) under the Retirement Plan and NQRP
                  combined which the Executive would receive if the Executive's
                  employment continued for three years after the Date of
                  Termination assuming for this purpose that all accrued
                  benefits are fully vested, and, assuming that the Executive's
                  compensation in each of the three years is that required by
                  Section 4(b)(i) and Section 4(b)(ii), and (b) the actuarial
                  equivalent of the Executive's actual benefit (paid or
                  payable), if any, under the Retirement Plan and the NQRP
                  combined as of the Date of Termination; and
 
                           C. an amount equal to the product of (a) 1/12,
                  multiplied by (b) the sum of (1) the Executive's Annual Base
                  Salary and (2) the Highest Annual Bonus, multiplied by (c) the
                  number of months remaining in the Employment Period (including
                  fractions thereof) but not more than thirty-six (36) months
                  ("Severance Period");
 
 
 
 
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                           (ii) all stock options, restricted stock and other
         stock-based compensation (including, without limitation, the Restricted
         Stock Units) shall become immediately exercisable or vested, as the
         case may be;
 
                           (iii) for the number of months (including fractions
         thereof) remaining in the Employment Period, after the Executive's Date
         of Termination, or such longer period as may be provided by the terms
         of the appropriate plan, program, practice or policy, the Company shall
         continue benefits to the Executive and/or the Executive's family at
         least equal to those which would have been provided to them in
         accordance with the plans, programs, practices and policies described
         in Section 4(b)(vi) of this Agreement if the Executive's employment had
         not been terminated or, if more favorable to the Executive, as in
         effect generally at any time thereafter with respect to other peer
         executives of the Company and its affiliated companies and their
         families; provided, however, that if the Executive becomes reemployed
         with another employer and is eligible to receive medical or other
         welfare benefits under another employer provided plan, the medical and
         other welfare benefits described herein shall be secondary to those
         provided under such other plan during such applicable period of
         eligibility. For purposes of determining eligibility (but not the time
         of commencement of benefits) of the Executive for retiree benefits
         pursuant to such plans, practices, programs and policies, the Executive
         shall be considered to have remained employed until the last day of the
         Employment Period and to have retired on the last day of the Employment
         Period;
 
                           (iv) the Company shall, at its sole expense as
         incurred, provide the Executive with outplacement services the scope
         and provider of which shall be selected by the Executive in his sole
         discretion; and
 
                           (v) to the extent not theretofore paid or provided,
         the Company shall timely pay or provide to the Executive any other
         amounts or benefits required to be paid or provided or which the
         Executive is entitled to receive under any plan, program, policy or
         practice or contract or agreement of the Company and its affiliated
         companies (such other amounts and benefits shall be hereinafter
         referred to as the "Other Benefits").
 
                  (b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination. In
addition, the Restricted Stock Units shall become immediately vested and the
Executive's beneficiary under the NQRP shall have all rights of Executive to
surrender Restricted Stock Units for an additional benefit under the NQRP as set
forth at Section 4(b)(iii) hereof; provided, the thirtieth (30th) day after
Executive's death shall be substituted for "October 1" thereunder and the
"Distribution Date" shall be the ninetieth (90th) day after Executive's death.
With respect to the provision of Other Benefits after the Effective Date, the
term Other Benefits as utilized in this Section 6(b) shall include, without
limitation, and the Executive's estate and/or beneficiaries shall be entitled to
receive, benefits at least equal to the most favorable benefits provided by the
Company and affiliated companies to the estates and beneficiaries of peer
executives of the Company and such affiliated companies under such plans,
programs, practices and policies relating to death benefits, if any, as in
effect
 
                                       10
 
 
<PAGE>
 
with respect to other peer executives and their beneficiaries at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive's estate and/or the Executive's beneficiaries, as in
effect on the date of the Executive's death with respect to other peer
executives of the Company and its affiliated companies and their beneficiaries.
 
                  (c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. In addition, the Restricted
Stock Units shall become immediately vested. On the Disability Effective Date,
the Executive shall be deemed to have retired (as a Normal Retirement if
occurring on or after his Normal Retirement Date or as an Early Retirement if
occurring on or after his Early Retirement Date and prior to his Normal
Retirement Date, as the case may be (as such terms apply under the NQRP)) for
all purposes under the NQRP and the provision of any additional supplemental
retirement benefits under this Agreement; provided, (x) such benefits, other
than any additional benefits set forth at Section 4(b)(iii) hereof, shall be
reduced by any benefit payable to Executive from workers compensation, any
long-term disability plan sponsored by the Company and any other disability
benefit provided to Executive under this Agreement, and (y) if the Executive
recovers from his Disability prior to his Normal Retirement Date all such
benefits under the NQRP and under this Agreement, other than any additional
benefits set forth at Section 4(b)(iii) hereof, shall cease and shall thereafter
recommence in accordance with the applicable provisions of the NQRP (including,
without limitation, recommencement of such benefits upon Executive's early
retirement thereunder), except that the amount of such benefit shall be the
greater of the amount payable to Executive on the Disability Effective Date
under such form of benefit as may be elected by the Executive on the Disability
Effective Date (without regard for any reduction hereunder for workers
compensation and disability benefits) or the amount payable under such form of
benefit at such subsequent retirement date. With respect to the provision of
Other Benefits after the Effective Date, the term Other Benefits as utilized in
this Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and its
affiliated companies to disabled executives and/or their families in accordance
with such plans, programs, practices and policies relating to disability, if
any, as in effect generally with respect to other peer executives and their
families at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other peer
executives of the Company and its affiliated companies and their families.
 
                  (d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) his Annual Base Salary through
the Date of Termination, (y) the amount of any compensation previously deferred
by the Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive
 
 
                                       11
 
<PAGE>
 
in a lump sum in cash within 30 days of the Date of Termination. Upon a
termination of the Executive's employment for Cause by the Company or by the
Executive without Good Reason, the Executive shall forfeit all stock options,
Restricted Stock Units, and other stock-based compensation that are not vested
on the Date of Termination.
 
         7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify nor shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
 
         8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"); provided that the Company shall have no such
obligation if it is determined by a court that the Company was not in breach of
the Agreement and that the Executive's claims were not made in good faith.
 
         9. Certain Additional Payments by the Company.
 
 
                  (a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes and any benefits that result from the deductibility by
the Executive of such taxes (including, in each case, any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect
 
 
                                       12
 
<PAGE>
 
thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
 
                  (b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by KPMG Peat Marwick or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of the
receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.
 
                  (c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
 
                           (i) give the Company any information reasonably
         requested by the Company relating to such claim,
 
                           (ii) take such action in connection with contesting
         such claim as the Company shall reasonably request in writing from time
         to time, including, without limitation, accepting legal representation
         with respect to such claim by an attorney reasonably selected by the
         Company,
 
                           (iii) cooperate with the Company in good faith in
         order effectively to contest such claim, and
 
 
 
                                       13
<PAGE>
 
                           (iv) permit the Company to participate in any
         proceedings relating to such claim; provided, however, that the Company
         shall bear and pay directly all costs and expenses (including
         additional interest and penalties) incurred in connection with such
         contest and shall indemnify and hold the Executive harmless, on an
         after-tax basis, for any Excise Tax or income tax (including interest
         and penalties with respect thereto) imposed as a result of such
         representation and payment of costs and expenses. Without limitation on
         the foregoing provisions of this Section 9(c), the Company shall
         control all proceedings taken in connection with such contest and, at
         its sole option, may pursue or forgo any and all administrative
         appeals, proceedings, hearings and conferences with the taxing
         authority in respect of such claim and may, at its sole option, either
         direct the Executive to pay the tax claimed and sue for a refund or
         contest the claim in any permissible manner, and the Executive agrees
         to prosecute such contest to a determination before any administrative
         tribunal, in a court of initial jurisdiction and in one or more
         appellate courts, as the Company shall determine; provided, however,
         that if the Company directs the Executive to pay such claim and sue for
         a refund, the Company shall advance the amount of such payment to the
         Executive, on an interest-free basis and shall indemnify and hold the
         Executive harmless, on an after-tax basis from any Excise Tax or income
         tax (including interest or penalties with respect thereto) imposed with
         respect to such advance or with respect to any imputed income with
         respect to such advance; and further provided that any extension of the
         statute of limitations relating to payment of taxes for the taxable
         year of the Executive with respect to which such contested amount is
         claimed to be due is limited solely to such contested amount.
         Furthermore, the Company's control of the contest shall be limited to
         issues with respect to which a Gross-Up Payment would be payable
         hereunder and the Executive shall be entitled to settle or contest, as
         the case may be, any other issue raised by the Internal Revenue Service
         or any other taxing authority.
 
                  (d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(a) or 9(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of Section 9(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 9(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
 
         10. Confidential Information; Covenant Not to Compete.
 
                  (a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without
 
 
                                       14
 
 
<PAGE>
 
the prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such information, knowledge or data
to anyone other than the Company and those designated by it. Except as provided
at Section 10(c), in no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
 
                  (b) Covenant Not to Compete.
 
                           A. Executive agrees that during the Employment Period
                  and for a period of three (3) years following his termination
                  of employment with the Company for any reason, he will not in
                  any way engage in conduct which is detrimental to the Company
                  or engage in, represent, furnish consulting services to, be
                  employed by, or have any interest in any "Financial Services
                  Company" (as hereinafter defined) within the United States;
                  provided, the Executive shall be permitted to continue to
                  serve as a member of the boards of directors of The Midland
                  Company and Ohio National Life Insurance Company. Further,
                  Executive shall not during the Employment Period and for a
                  period of three (3) years following his termination of
                  employment with the Company for any reason (1) induce or
                  attempt to induce any person or entity which is a customer of
                  the Company or any of its affiliates as of the date of
                  termination of Executive's employment to cease or reduce doing
                  business with the Company or any of its affiliates, or (2)
                  solicit or endeavor to cause any employee of the Company or
                  its affiliates to leave the employ of the Company or any of
                  its affiliates. Notwithstanding the foregoing, the Executive
                  shall not be prevented from owning up to three percent (3%) of
                  the outstanding stock of any publicly traded company which is
                  a Financial Services Company.
 
                           B. As used herein, the term "Financial Services
                  Company" means any national or state chartered bank; any bank
                  holding company; any other institution that engages as its
                  principal activity in taking deposits or making loans; any
                  entity that engages in commercial or consumer secured and
                  unsecured lending, transaction processing, insurance,
                  investment services, security brokerage, or trust services; or
                  any affiliates of any such institutions.
 
                           C. Executive agrees that this covenant is reasonable
                  with respect to its duration, geographic area and scope, and
                  acknowledges that compliance with Section 10(b) is necessary
                  to protect the business and goodwill of the Company.
 
                  (c) Consequences of Violation. In the event that the Executive
violates either Section 10(a) or (b) above, the Executive agrees that he shall:
 
                           (i) forfeit all vested but undistributed Restricted
         Stock Units;
 
                           (ii) assign and tender to the Company, free and clear
         of all liens and encumbrances, that number of shares of common stock of
         the Company then owned directly or beneficially by the Executive equal
         to the number of such shares distributed to the Executive pursuant to
         the award of Restricted Stock Units;
 
 
 
 
 
                                       15
 
<PAGE>
 
                           (iii) pay cash to the Company an amount equal to the
         gross proceeds realized by the Executive upon the sale through the New
         York Stock Exchange, or if sold or otherwise disposed in any other
         manner (including, without limitation, a disposition without receipt of
         consideration such as by gift) the value (such value to be equal to the
         product of such number of shares multiplied by the average of the
         highest and lowest sale prices of the Company's common stock on the day
         of such sale or disposition (or if not traded on such day then the
         immediately preceding trading day)), of the difference between (A) all
         shares of common stock of the Company directly or beneficially owned by
         the Executive not to exceed the number of shares distributed to the
         Executive pursuant to the award of Restricted Stock Units, minus (B)
         the number of shares tendered to the Company pursuant to Section
         10(c)(ii), such sale or other disposition occurring during the one-year
         period immediately prior to the occurrence of the Executive's conduct
         which constitutes such violation; and
 
                           (iv) forfeit any unpaid enhanced supplemental
         retirement benefits provided to the Executive and shall pay cash to the
         Company in an amount equal to the sum of the supplemental retirement
         benefits paid to the Executive relating to the enhancements, in either
         or both cases:
 
                                    A. pursuant to the surrender of Restricted
                  Stock Units in consideration for an additional benefit under
                  the NQRP under Section 4(b)(iii), and
 
                                    B. under Section 4(b)(v)(B) of this
                  Agreement.
 
         All payments, assignments and tenders provided under this Section 10(c)
         shall be paid by the Executive to the Company within 60 days following
         notice of such violation from the Company.
 
         11. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
 
                  (b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
 
                  (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
 
         12. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no
 
                                       16
 
 
<PAGE>
 
force or effect. This Agreement may not be amended or modified otherwise than by
a written agreement executed by the parties hereto or their respective
successors and legal representatives.
 
                  (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party, by registered or
certified mail, return receipt requested, postage prepaid, or by reputable
overnight courier, addressed as follows:
 
         If to the Executive:
 
                  Jerry A. Grundhofer
                  c/o Wachtell, Lipton, Rosen & Katz
                  51 W. 52 Street
                  New York, New York  10019
                  Attention:  Adam D. Chinn, Esq.
 
         If to the Company:
 
                  U.S. Bancorp
                  601 Second Avenue South
                  Minneapolis, Minnesota  55402-4302
                  Attention:  Director-Human Resources
 
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
 
                  (c) If any provision of this Agreement conflicts with any
other agreement, policy, plan, practice or other Company document, the
provisions of this Agreement will control. This Agreement supersedes any prior
agreement between the Executive and the Company (or its predecessor) with
respect to the subject matter contained herein and may be amended only by a
writing signed by the Executive and the Company.
 
                  (d) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability off any other
provision of this Agreement.
 
                  (e) The Company may withhold from any amounts payable under
this Agreement such federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
 
                  (f) The Executive's or the Company's failure to insist upon
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this
Agreement, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
 
 
 
                                       17
 
<PAGE>
 
 
 
         13. No Prohibited Payments. Notwithstanding anything in this Agreement
to the contrary, the Company shall not make any payment to the Executive which,
according to the opinion of the Company's outside counsel, would violate Section
2523(k) of the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer
Recovery Act of 1990 (codified at 12 U.S.C. 1828(k)), or any rules or
regulations promulgated thereunder.
 
         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
 
 
 
                                      JERRY A. GRUNDHOFER
 
                                      ---------------------------------------
 
 
                                      Date:
                                           ----------------------------------
 
 
 
 
 
                                      U.S. BANCORP
 
                                      Date:
                                           ----------------------------------
                                      By:
                                         ------------------------------------
                                           Thomas E. Petry
                                           Chairman, Compensation Committee
 
                                      Date:
                                           ----------------------------------
 
                                      By:
                                         ------------------------------------
                                           Stephen E. Smith
                                           Executive Vice President
                                            Human Resources
 
                                      Date:
                                           ----------------------------------
 
 
 
 
 
                                       18
 
 
 
Back to Top
 
 
 
FORM OF CHANGE IN CONTROL AGREEMENT                                                                  
 
 
 
                          EXECUTIVE SEVERANCE AGREEMENT
 
 
This Executive Severance Agreement (the "Agreement"), made as of the ___ day of
_______,200_, between U.S. Bancorp , a Delaware corporation ("USB") and its
Subsidiaries (individually and collectively the "Company"), and _________ (the
"Executive").
 
 
                                   WITNESSETH:
 
 
WHEREAS, the Company considers the recruitment and maintenance of sound and
vital management to be essential to protecting and enhancing its best interests
and those of its shareholders; and
 
WHEREAS, the Company recognizes that it is in an industry where there is a
strong potential for a change in control and that the potential for a change in
control may make it difficult to hire and retain strong management personnel;
and
 
WHEREAS, the Company recognizes that the possibility of a change in control of
USB may exist and that, in the event negotiations are commenced to bring about
such a change in control, uncertainty and questions may arise among management
that could result in the distraction or departure of management personnel to the
detriment of the Company and the shareholders; and
 
WHEREAS, the Company has determined that appropriate steps should be taken to
reinforce and encourage the Executive's continued attention and dedication as an
executive officer to his or her assigned duties without distraction in the face
of potentially disruptive circumstances arising from the possibility of a change
in control of USB;
 
NOW THEREFORE, the Company and the Executive agree as follows:
 
         1. Definitions
 
The following words and terms used in this Agreement shall have the following
meanings:
 
         1.1 "Change in Control." For the purpose of this Agreement, a "Change
         in Control" shall mean:
 
         (a) The acquisition by any Person (as defined in Sections 13(d)(3) and
         14(d)2 of the Exchange Act) of beneficial ownership (within the meaning
         of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of
         either (I) the then outstanding shares of Common Stock (the
         "Outstanding Company Common Stock") or (II) the combined voting power
         of the then outstanding voting securities of the Company entitled to
         vote generally in the election of directors (the "Outstanding Company
         Voting Securities");
 
 
<PAGE>
 
         provided, however, that for purposes of this subsection (a), the
         following acquisitions shall not constitute a Change in Control: (1)
         any acquisition directly from the Company, (2) any acquisition by the
         Company, (3) any acquisition by a subsidiary of the Company or any
         employee benefit plan (or related trust) sponsored or maintained by the
         Company or a subsidiary of the Company (a "Company Entity") or (4) any
         acquisition by any corporation pursuant to a transaction which complies
         with clauses (1), (2) or (3) of this subsection (a); or
 
         (b) Individuals who, as of this date, constitute the Company's Board of
         Directors (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board of Directors (except as a result of the
         death, retirement or disability of one or more members of the Incumbent
         Board); provided, however, that any individual becoming a director
         subsequent to the date of this Agreement whose election, or nomination
         for election by the Company's shareholders, was approved by a vote of
         at least a majority of the directors then comprising the Incumbent
         Board shall be considered as though such individual were a member of
         the Incumbent Board, but excluding, for this purpose, (I) any such
         individual whose initial assumption of office occurs as a result of an
         actual or threatened election contest with respect to the election or
         removal of directors or other actual or threatened solicitation of
         proxies or consents by or on behalf of a Person other than the
         Incumbent Board, (II) any director designated by or on behalf of a
         Person who has entered into an agreement with the Company (or which is
         contemplating entering into an agreement) to effect a Business
         Combination (as defined in Section 1.1 subsection (c)) with one or more
         entities that are not Company Entities or (III) any director who 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 Business Combination; or
 
         (c) Consummation of a reorganization, merger or consolidation or sale
         or other disposition of all or substantially all of the assets of the
         Company (a "Business Combination"), in each case, unless, following
         such Business Combination, (I) all or substantially all of the
         individuals and entities who were the beneficial owners, respectively,
         of the Outstanding Company Common Stock and Outstanding Company Voting
         Securities immediately prior to such Business Combination beneficially
         own, directly or indirectly, more than 50% of, respectively, the then
         outstanding shares of common stock or the combined voting power of the
         then outstanding voting securities entitled to vote generally in the
         election of directors, as the case may be, of the corporation resulting
         from such Business Combination (including, without limitation, a
         corporation which as a result of such transaction owns the Company or
         all or substantially all of the Company's assets either directly or
         through one or more subsidiaries) in substantially the same proportions
         as their ownership, immediately prior to such Business Combination of
         the Outstanding Company Common Stock and Outstanding Company Voting
         Securities, as the case may be, (II) no Person (excluding any Company
         Entity or such corporation resulting from such Business Combination)
         beneficially owns, directly or indirectly, 35% or more of,
         respectively, the then outstanding shares of common stock of the
         corporation resulting from such Business Combination or the combined
         voting power of the then outstanding voting securities of such
         corporation except to the extent
 
 
                                      -2-
<PAGE>
 
         that such ownership existed prior to the Business Combination and (III)
         at least a majority of the members of the board of directors of the
         corporation resulting from such Business Combination were members of
         the Incumbent Board at the time of the execution of the initial
         agreement, or of the action of the Board of Directors, providing for
         such Business Combination; or
 
         (d) Approval by the shareholders of the Company of a complete
         liquidation or dissolution of the Company.
 
         1.2 "Cause" means conviction for the commission of a felony or removal
         from office by order of the Comptroller of the Currency, Federal
         Reserve Board, or other appropriate agency.
 
         1.3 "Date of Termination" means the date the Executive's employment is
         terminated under this Agreement whether by the Company or by the
         Executive.
 
         1.4 "Disability" means leaving active employment and qualifying for and
         receiving disability benefits under the Company's long-term disability
         programs as in effect from time to time.
 
         1.5 "Effective Date" means the first date after the date of this
         Agreement on which a Change in Control occurs.
 
         1.6 "Employment Agreement" means an employment agreement, if any,
         between the Company and the Executive.
 
         1.7 "Good Reason" means:
 
                  (a) A reduction by the Company in the Executive's base salary
                  as in effect immediately prior to the Change in Control or as
                  the same may be increased from time-to-time following the
                  Change in Control (unless such reduction is part of an
                  across-the-board uniformly applied reduction affecting all
                  senior executives of the Company); or
 
                  (b) A significant diminution in the Executive's position,
                  authority, duties or responsibilities as in effect immediately
                  prior to the Change of Control (excluding an isolated,
                  insubstantial or inadvertent action not taken in bad faith
                  that is remedied promptly by the Company after receiving
                  notice); provided, however, that a change of the individual to
                  whom the executive reports, in and of itself, would not
                  constitute diminution; and further provided, anything in this
                  Agreement to the contrary notwithstanding, if the Company's
                  Chief Executive Officer ("CEO") immediately prior to the
                  Change in Control remains CEO of the Company during the
                  Protected Period following the Change in Control, and if 50%
                  or more of the Company's Board of Directors during the
                  Protected Period following the Change in Control were members
                  of the Board of Directors
 
 
                                      -3-
 
<PAGE>
 
                  immediately prior to the Change in Control, the Executive
                  shall not be able to terminate employment for Good Reason
                  based solely on the events described under this Section 1.7(b)
                  until at least one (1) year following the Change in Control
                  (although at such time a termination of employment by the
                  Executive for Good Reason under this Section 1.7(b) may be
                  based on events that occurred during the first year of the
                  Protected Period and any such events shall not be deemed to
                  have been agreed to or waived by the Executive); or
 
                  (c) A failure by the Company (I) to continue any cash bonus or
                  other incentive compensation plans in substantially the same
                  form and with the same opportunity levels as in effect
                  immediately prior to the Change in Control, or (II) to
                  continue the Executive as a participant in such plans on at
                  least the same basis as the Executive participated in
                  accordance with the plans immediately prior to the Change in
                  Control; or
 
                  (d) A requirement by the Company that the Executive relocate
                  from his/her personal place of residence immediately prior to
                  the Change in Control or, if the Executive is not required to
                  relocate, a change of the Executive's principal work location
                  from that immediately prior to the Change in Control which is
                  50 or more miles further away from his/her personal place of
                  residence (other than if the Company's CEO immediately prior
                  to the Change in Control remains CEO of the Company during the
                  Protected Period following the Change in Control, and if 50%
                  or more of the Company's Board of Directors during the
                  Protected Period following the Change in Control were members
                  of the Board of Directors immediately prior to the Change in
                  Control); or
 
                  (e) A significant reduction in the Executive's aggregate level
                  of coverage under the Company's welfare, retirement and other
                  employee benefit plans, as in effect immediately prior to the
                  Change in Control; or the Company's failure to provide the
                  Executive with the number of paid vacation days annually to
                  which he/she was entitled immediately prior to the Change in
                  Control; or
 
                  (f) An agreement between the Board of Directors of USB and the
                  Executive that employment should be terminated.
 
         For purposes of this Section 1.7, a reasonable and good faith
         determination of "Good Reason" made by the Executive shall be
         conclusive.
 
         1.8 "Protected Period" means the twenty-four (24) month period
         immediately following each and every Change in Control.
 
         1.9 "Termination Benefits" means those benefits described in Section 2
         of the Agreement.
 
         1.10 "Subsidiaries" means any and all companies at least fifty percent
         (50%) owned, directly or indirectly, by USB.
 
 
 
                                      -4-
<PAGE>
 
2. Benefits Upon Termination of Employment.
 
         2.1 General. If, during the Protected Period following each Change in
         Control, the Executive's employment is terminated either (i) by the
         Company (other than for Cause or Disability), or (ii) by the Executive
         for Good Reason, then the Executive (or his estate or personal
         representative), shall be entitled to the Termination Benefits provided
         in this Section 2.
 
         2.2 Base Salary and Bonus Through Date of Termination. The Company
         shall promptly pay the Executive his or her full base salary through
         the Date of Termination at the rate in effect at the time notice of
         termination is given. In addition, the Company shall promptly pay the
         amount of any bonus or incentive for the year in which the Date of
         Termination occurs (based on the target bonus for the Executive for the
         year) prorated to the Date of Termination (without application of any
         denial provisions based on unsatisfactory personal performance or any
         other reason). The Company shall also pay the Executive for any
         vacation earned but not taken with such payment being equal to the
         Executive's calculated daily base salary rate times the applicable days
         of such vacation.
 
         2.3 Severance Payment. The Company shall pay the Executive a severance
         payment equal to three (3) times the sum of: (a) the Executive's
         highest base salary, on an annualized basis, established by the Company
         during the last five years plus (b) the highest bonus earned by the
         Executive, with respect to any single year, over the last five (5)
         years. The severance payment shall be made in a lump-sum within thirty
         (30) days of the Date of Termination.
 
         2.4 Termination Which Does Not Require Payment Of Termination Benefits.
         No Termination Benefits need to be provided by the Company to the
         Executive under this Section 2 if the Executive's employment is
         terminated:
 
                           (a) By the Executive for any reason other than for
                           Good Reason;
 
                           (b) By the Company for Cause or Disability; or
 
                           (c) By death.
 
 
3. New Employment; Reduction of Termination Benefits.
 
The Termination Benefits provided under Section 2 shall not be treated as
damages, but rather shall be treated as severance compensation to which the
Executive is entitled. The Executive shall not be required to mitigate the
amount of any Termination Benefit provided under Section 2 by seeking other
employment or otherwise.
 
 
 
                                      -5-
<PAGE>
 
4. Certain Additional Payments by the Company.
 
         (a) Anything in this Agreement to the contrary notwithstanding, in the
         event it shall be determined that any payment or distribution by the
         Company to or for the benefit of the Executive (whether paid or payable
         or distributed or distributable pursuant to the terms of this Agreement
         or otherwise, but determined without regard to any additional payments
         required under this Section 4) (a "Payment") would be subject to the
         excise tax imposed by Section 4999 of the Internal Revenue Code of
         1986, as amended (the "Code"), or any interest or penalties are
         incurred by the Executive 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 the Executive shall be entitled
         to receive an additional payment (a "Gross-Up Payment") in an amount
         such that after payment by the Executive of all taxes and any benefits
         that result from the deductibility by the Executive of such taxes
         (including, in each case, any interest or penalties imposed with
         respect to such taxes), including, without limitation, any income taxes
         (and any interest and penalties imposed on them) and Excise Tax imposed
         upon the Gross-Up Payment, the Executive retains an amount of the
         Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
 
         (b) Subject to the provisions of Section 4(c), all determinations
         required to be made under this Section 4, including whether and when a
         Gross-Up Payment is required and the amount of such Gross-Up Payment
         and the assumptions to be utilized in arriving at such determination,
         shall be made by the Company's independent accounting firm or such
         other certified nationally recognized public accounting firm as may be
         designated by the Company (the "Accounting Firm") which shall provide
         detailed supporting calculations both to the Company and the Executive
         within 15 business days of the receipt of notice from the Executive
         that there has been a Payment, or such earlier time as is requested by
         the Company. All fees and expenses of the Accounting Firm shall be
         borne solely by the Company. Any Gross-Up Payment, as determined
         pursuant to this Section 4, shall be paid by the Company to or for the
         benefit of the Executive within five days of the receipt of the
         Accounting Firm's determination. Any determination by the Accounting
         Firm shall be binding upon the Company and the Executive.
         Notwithstanding any other provision of this Section 4, the Company may
         withhold and pay over to the Internal Revenue Service, for the benefit
         of the Executive, all or any portion of the Gross-Up Payment that it
         determines in good faith it is required to withhold. Executive consents
         to such withholding. As a result of the uncertainty in the application
         of Section 4999 of the Code at the time of the initial determination by
         the Accounting Firm hereunder, it is possible that Gross-Up Payments
         which will not have been made by the Company should have been made
         ("Underpayment"), consistent with the calculations required to be made.
         In the event that the Company exhausts its remedies pursuant to Section
         4(c) and the Executive is required to make a payment of any Excise Tax,
         the Accounting Firm shall determine the amount of the Underpayment that
         has occurred and any such Underpayment shall be promptly paid by the
         Company to or for the benefit of the Executive.
 
 
 
                                      -6-
<PAGE>
 
         (c) The Executive shall notify the Company in writing of any claim by
         the Internal Revenue Service that, if successful, would require the
         payment by the Company of the Gross-Up Payment. Such notification shall
         be given as soon as practicable but no later than ten business days
         after the Executive is informed in writing of such claim and shall
         apprise the Company of the nature of such claim and the date on which
         such claim is requested to be paid. The Executive shall not pay such
         claim prior to the expiration of the 30-day period following the date
         on which it gives such notice to the Company (or such shorter period
         ending on the date that any payment of taxes with respect to such claim
         is due). If the Company notifies the Executive in writing prior to the
         expiration of such period that it desires to contest such claim, the
         Executive shall:
 
                  (i) give the Company any information reasonably requested by
                  the Company relating to such claim,
 
                  (ii) take such action in connection with contesting such claim
                  as the Company shall reasonably request in writing from time
                  to time, including, without limitation, accepting legal
                  representation with respect to such claim by an attorney
                  reasonably selected by the Company,
 
                  (iii) cooperate with the Company in good faith in order
                  effectively to contest such claim, and
 
                  (iv) permit the Company to participate in any proceedings
                  relating to such claim;
 
         provided, however, that the Company shall bear and pay directly all
         costs and expenses (including additional interest and penalties)
         incurred in connection with such contest and shall indemnify and hold
         the Executive harmless, on an after-tax basis, for any Excise Tax or
         income tax (including interest and penalties with respect thereto)
         imposed as a result of such representation and payment of costs and
         expenses. Without limitation on the foregoing provisions of this
         Section 4(c), the Company shall control all proceedings taken in
         connection with such contest and, at its sole option, may pursue or
         forgo any and all administrative appeals, proceedings, hearings and
         conferences with the taxing authority in respect of such claim and may,
         at its sole option, either direct the Executive to pay the tax claimed
         and sue for a refund or contest the claim in any permissible manner,
         and the Executive agrees to prosecute such contest to a determination
         before administrative tribunal, in a court of initial jurisdiction and
         in one or more appellate courts, as the Company shall determine;
         provided, however, that if the Company directs the Executive to pay
         such claim and sue for a refund, the Company shall advance the amount
         of such payment to the Executive, on an interest-free basis and shall
         indemnify and hold the Executive harmless, on an after-tax basis, from
         any Excise Tax or income tax (including interest or penalties with
         respect thereto) imposed with respect to such advance or with respect
         to any imputed income with respect to such advance; and further
         provided that any extension of the statute of limitations relating to
         payment of taxes for the taxable year of the Executive with respect to
         which such contested amount is claimed to be due is limited solely to
         such contested amount. Furthermore, the Company's control
 
 
 
                                      -7-
<PAGE>
 
         of the contest shall be limited to issues with respect to which a
         Gross-Up Payment would be payable hereunder and the Executive shall be
         entitled to settle or contest, as the case may be, any other issue
         raised by the Internal Revenue Service or any other taxing authority.
 
         (d) If, after the receipt by the Executive of an amount advanced by the
         Company pursuant to Section 4(a) or 4(c), the Executive becomes
         entitled to receive any refund with respect to such claim, the
         Executive shall (subject to the Company's complying with the
         requirements of Section 4(c)) promptly pay to the Company the amount of
         such refund (together with any interest paid or credited thereon after
         taxes applicable thereto). If, after the receipt by the Executive of an
         amount advanced by the Company pursuant to Section 4(c), a
         determination is made that the Executive shall not be entitled to any
         refund with respect to such claim and the Company does not notify the
         Executive in writing of its intent to contest such denial of refund
         prior to the expiration of 30 days after such determination, then such
         advance shall be forgiven and shall not be required to be repaid and
         the amount of such advance shall offset the amount of Gross-Up Payment
         required to be paid.
 
 
5. Notice of Termination.
 
Any purported termination by the Company of the Executive's employment for Cause
or Disability or by the Executive for Good Reason shall be communicated by
notice of termination to the other party. A notice of termination shall include
the specific reason for termination relied upon and shall set forth in
reasonable detail, the facts and circumstances claimed to provide a basis for
termination of employment.
 
Any dispute by a party hereto regarding a notice of termination delivered to
such party must be conveyed to the other party within thirty (30) days after the
notice of termination is given. If the particulars of the dispute are not
conveyed within the thirty (30) day period, then the disputing party's claims
regarding the termination shall be deemed forever waived.
 
 
6. Successor; Binding Agreement.
 
USB will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of USB expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it if no such succession had taken place (the assumption shall be by agreement
in form and substance satisfactory to the Executive). Failure of USB to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive, at his election, to
Termination Benefits from the Company in the same amount and on the same terms
as the Executive would be entitled to if he terminated his employment for Good
Reason, except that for purposes of implementing the foregoing, the date on
which any such election becomes effective shall be deemed the Date of
Termination. As used
 
 
                                      -8-
<PAGE>
 
in this Agreement, "Company" shall mean the Company and any successor to its
business and/or assets as described above or which otherwise becomes bound by
all the terms and provision of this Agreement by operation of law.
 
In addition, as used in this Agreement, "USB" shall mean USB and any successor
to its business and/or assets as described above or which otherwise becomes
bound by all the terms and provision of this Agreement by operation of law.
 
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his designee or, if there is no
such designee, to his estate.
 
7. Miscellaneous.
 
         7.1 Notice. All notices, elections, waivers and all other
         communications provided for in this Agreement shall be in writing and
         shall be deemed to have been duly given when delivered or mailed by
         United States certified mail, return receipt requested, postage
         prepaid, to such address as either party may have furnished to the
         other in writing in accordance herewith, except that notices of change
         of address shall be effective only upon receipt.
 
         7.2 No Waiver. No provision of this Agreement may be modified, waived
         or discharged unless such waiver, modification or discharge is agreed
         to in writing signed by the Executive and the Chief Executive Officer
         of the Company. No waiver by either party at any time of any breach by
         the other party of, or compliance with, any condition or provision of
         this Agreement to be performed by such other party shall be deemed a
         waiver of similar or dissimilar provisions or conditions at the same or
         at any prior or subsequent time. No agreements or representations, oral
         or otherwise, express or implied, with respect to the subject matter
         hereof have been made by either party which are not set forth expressly
         in this Agreement.
 
         7.3 Indemnification. If litigation shall be brought to enforce or
         interpret any provision in this Agreement, the Company agrees to
         indemnify the Executive for his attorney's fees and disbursement
         incurred in such litigation, and agrees to pay prejudgment interest on
         any money judgment obtained by the Executive, calculated at the prime
         interest rate announced as such by the Wall Street Journal from
         time-to-time, from the earliest date that payment(s) to him should have
         been made under this Agreement. If the Wall Street Journal announces
         two or more rates as the prime rate, then the highest rate shall be
         used.
 
         7.4 Payment Obligations Absolute. The Company's obligation to pay the
         Executive the compensation and to make the arrangements provided shall
         be absolute and unconditional and shall not be affected by any
         circumstances, including, without limitation, any set-off,
 
 
                                      -9-
<PAGE>
 
         counterclaim, recoupment, defense or other right which the Company may
         have against the Executive or any third party. All amounts payable by
         the Company shall be paid without notice or demand. Each and every
         payment made by the Company shall be final and the Company will not
         seek, nor permit its subsidiaries, affiliates, successors or assigns to
         seek, to recover all or any part of such payment for any reason.
 
         7.5 Term of Agreement. The term of this Agreement shall continue for an
         initial period of three (3) years from the date of this Agreement. On
         each anniversary of this Agreement, the term shall be extended for an
         additional year unless prior to an anniversary date USB's Board of
         Directors cause a notice of nonrenewal to be sent to the Executive. Any
         Termination Benefits due pursuant to this Agreement shall continue to
         be an obligation of the Company and enforceable by the Executive until
         paid in full.
 
         7.6 Controlling Law. This Agreement shall be governed by and construed
         in accordance with the laws of the State of Minnesota.
 
         7.7 Interpretation of Agreement. In the event of any ambiguity,
         vagueness or other matter involving the interpretation or meaning of
         this Agreement, this Agreement shall be construed liberally so as to
         provide to the Executive the full benefits described in this Agreement.
 
         7.8 Severability. Each section, subsection or paragraph of this
         Agreement shall be deemed severable and if for any reason any portion
         of this Agreement is unenforceable, invalid or contrary to any existing
         or future law, such unenforceability or invalidity shall not affect the
         applicability or validity of any other portion of this Agreement.
 
         7.9 U.S. Dollars. All payments required to be made under this Agreement
         shall be made in United States Dollars.
 
         7.10 Employment Agreement. Any benefits provided to the Executive under
         this Agreement will, unless specifically stated otherwise in this
         Agreement, be in addition to and not in lieu of any benefits that may
         be provided the Executive under an Employment Agreement, if any, with
         the Company.
 
         Nothing in this Agreement is to be deemed to give the Company the right
         to take any action or engage in any omission with respect to the
         Executive at any time when any such action or omission is not
         permissible and proper under any Employment Agreement if then in force.
         Similarly, except as provided otherwise in this Agreement, nothing in
         this Agreement is to be deemed to give the Executive the right to take
         any action or engage in any omission with respect to the Company at any
         time when any such act or omission is not permissible and proper under
         any Employment Agreement if then in force.
 
         This Agreement shall continue in force so long as the Executive remains
         employed by the Company and shall not be affected by any termination of
         any Employment Agreement.
 
 
 
 
                                      -10-
<PAGE>
 
         7.11 Title and Captions. All section, subsection or paragraph titles or
captions contained in this Agreement are for convenience only and shall not be
deemed part of the text of this Agreement.
 
 
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
 
U.S. BANCORP, on
behalf of itself and each Subsidiary
 
 
 
_________________________________________
Stephen E. Smith
Executive Vice President - Human Resources
 
EXECUTIVE:
 
_________________________________________
Name
 
 
 
 
 
_________________________________________
Attest: By:
 
 
 
 
 
 
 
 
 
                                      -11-
 
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