U.S. BANCORP INCENTIVE CASH BONUS AND RETENTION PLAN

Transcription

1 U.S. BANCORP INCENTIVE CASH BONUS AND RETENTION PLAN Section 1. Purpose; Adoption. (a) Purpose. The purpose of the U.S. Bancorp Incentive Cash Bonus and Retention Plan (the Plan ) is to reward the meritorious service of employees, management personnel and other personnel of U.S. Bancorp (the Company ), to aid in the retention of such personnel, and to provide such personnel incentives to continue to put forth maximum efforts for the success of the Company s business. (b) Adoption. The Board of Directors of the Company adopted the Plan upon recommendation by the Compensation Committee on November 18, Section 2. Definitions. As used in the Plan, the following terms shall have the meanings set forth below: (a) Affiliate shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, as determined by the Committee. (b) Cash Bonus Award or Award shall mean any cash bonus awarded under the Plan and pursuant to a related Cash Bonus Award Agreement as provided for herein. (c) Cash Bonus Award Agreement shall mean any written agreement, contract or other instrument or document evidencing any Cash Bonus Award granted under the Plan. (d) Change in Control shall mean any of the following occurring after the date of adoption of the Plan as set forth in Section 1(b) above: (i) The acquisition by any Person of beneficial ownership (within the meaning of Rule 13d -3 promulgated under the Securities Exchange Act of 1934) of 35% or more of either (1) the then outstanding shares of Common Stock of the Company (the Outstanding Company Common Stock ) or (2) 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 clause (i), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) 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 (D) any acquisition by any corporation pursuant to a transaction which complies with clause (A), (B) or (C) of this clause (i); or (ii) Individuals who, as of the date of this Agreement, constitute the Company s Board of Directors (the Incumbent Board ) cease for any reason to constitute at least a majority of the Board (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, (1) 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, (2) any director designated by or on behalf of a Person who has entered into an agreement with the Company (or who is contemplating entering into an agreement) to effect a Business Combination (as defined in Section 2(d)(iii) hereof) with one or more entities that are not Company Entities or (3) any director who serves in connection with the act of the Board

2 of Directors of increasing the number of directors and filling vacancies in connection with, or in contemplation of, any such Business Combination; or (iii) 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, (1) 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, (2) 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 that such ownership existed prior to the Business Combination and (3) 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 (iv) the Company. Approval by the shareholders of the Company of a complete liquidation or dissolution of (e) Code shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder. (f) Committee shall mean the Compensation Committee of the Board of Directors of the Company. (g) Eligible Person shall mean any employee of the Company or any Affiliate in salary grades 14, 15, or 16 (or the corresponding pay grade of any revised salary administration program), and any other employee of the Company or any Affiliate whom the Committee determines to be an Eligible Person. (i) Participant shall mean an Eligible Person designated by the Committee to receive a Cash Bonus Award under the Plan and who is the recipient of such an Award. (j) Act of (k) Agreement. Section 3. Person shall be defined as defined in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Qualifying Termination shall have the meaning ascribed to such term in any Cash Bonus Award Section 3. Administration. (a) Power and Authority of the Committee. The Plan shall be administered by the Committee. Subject to the terms of the Plan and applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the amount of any Awards to be granted to each Participant under the Plan; (iii) determine the terms and conditions of any Cash Bonus Award or Cash Bonus Award Agreement; including, without limitation, vesting schedules; (iv) amend the terms and conditions of any Cash Bonus Award or Cash Bonus Award Agreement and accelerate the vesting of any such Award; provided, however, that any such acceleration of vesting shall be limited to accelerations relating to a Change in Control, a Qualifying Termination, death or disability; (v) construe, interpret and administer the Plan and any instrument or agreement relating to, or Award 2

3 made under, the Plan; (vi) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (vii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award and any employee of the Company or any Affiliate. (b) Delegation. The Committee may delegate its powers and duties under the Plan to one or more officers of the Company or of any Affiliate, or a committee of such officers, subject to such terms and limitations as the Committee shall determine, provided, however, the Committee may delegate its authority to amend the Plan as provided in section 9 hereof only with respect to: (i) amendments intended to conform the Plan to the requirements of applicable law; and (ii) amendments that do not materially affect rights and benefits of Participants or of the Company and do not materially increase the cost of the Plan to the Company. Section 4. (a) Eligibility and Participation. Eligibility. Any Eligible Person shall be eligible to be designated a Participant. (b) Participation. In order to become a Participant, an Eligible Person must be selected by the Committee. No Eligible Person, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards under the Plan. The provisions of the Cash Bonus Awards need not be the same with respect to any recipient of a Cash Bonus Award (the Participant) or with respect to different Participants. The Committee s decision to approve a Cash Bonus Award to an employee in any year shall not require the Committee to approve a similar Cash Bonus Award, or any Cash Bonus Award at all, to that employee or any other employee or person at any future date. The Company and the Committee shall not have any obligation for uniformity of treatment of any person, including, but not limited to, Participants and their legal representatives and beneficiaries and employees of the Company or of any Affiliate of the Company. (c) Cash Bonus Award Agreement. Any Participant, shall, as a condition of participation, agree to the terms and conditions of the Cash Bonus Award Agreement. A separate Cash Bonus Award Agreement will be entered into between the Company and each Participant for each Cash Bonus Award. (d) Employment. In the absence of any specific agreement to the contrary, no Cash Bonus Award to a Participant under the Plan shall affect any right of the Company, or of any Affiliate of the Company, to terminate, with or without cause, the Participant s employment with the Company or any Affiliate at any time. Neither the establishment of the Plan, nor the granting of any Cash Bonus Award hereunder, shall give any Participant (i) any rights to remain employed by the Company or any Affiliate; (ii) any benefits not specifically provided for herein or in any Cash Bonus Award granted hereunder; or (iii) any rights to prevent the Comp any or any Affiliate from modifying, amending or terminating any of its other benefit plans of any nature whatsoever. Section 5. Cash Bonus Awards (a) General. The Committee shall determine the amount to be paid pursuant to each Cash Bonus Award, the time or times when Cash Bonus Awards will be made, and all other terms and conditions of each Cash Bonus Award. Each Cash Bonus Award shall be subject to the terms and conditions of the Plan and the applicable Cash Bonus Award Agreement. Generally, Cash Bonus Awards will be awarded to Participants no more frequently than annually. Cash Bonus Awards may be granted singly or in combination, or in addition to, in tandem with or in substitution for any grants or rights under any other employee or compensation plan of the Company or of any Affiliate. All or part of a Cash Bonus Award may be subject to conditions and forfeiture provisions established by the Committee and set forth in the Cash Bonus Award Agreement, which may include, but are not limited to, continuous service with the Company or an Affiliate. 3

4 (b) Payment of Cash Bonus Awards. Payment of any amounts pursuant to Cash Bonus Awards shall be made solely in cash, at such times, with such restrictions and conditions as the Committee, in its sole discretion, may determine at the time of grant of the Cash Bonus Awards and as provided in the Cash Bonus Award Agreement. In the absence of any provision in the Cash Bonus Award Agreement to the contrary, the portion of any Cash Bonus Award that has vested will be paid to the Participant, or in the event of Participant s death, to the Participant s beneficiary, within 45 days of the date such vested amount becomes vested. (c) Amendment to Awards. The Committee may amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, in its sole discretion, if the Committee determines that such action is appropriate and equitable. Section 6. Termination of Employment Each Bonus Award Agreement shall include provisions governing the disposition of the Cash Bonus Award in the event of the retirement, disability, death or other termination of a Participant s employment with the Company or an Affiliate. Section 7. Nontransferability Except as otherwise determined by the Committee or set forth in the applicable Cash Bonus Award Agreement, no right under any Cash Bonus Award shall be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of. Section 8. Taxes In order to comply with all applicable federal or state income, social security, payroll, withholding or other tax laws or regulations, the Company may take such action, and may require a Participant to take such action, as it deems appropriate to ensure that all applicable federal or state income, social security, payroll, withholding or other taxes, which are the sole and absolute responsibility of the Participant, are withheld or collected from such Participant. Section 9. Amendment and Termination (a) Term of Plan. Unless the Plan shall have been discontinued or terminated as provided in Section 9(b) hereof sooner, the Plan will terminate on the date which is the tenth anniversary of the Effective Date set forth in Section 11 hereof. (b) Amendments to and Termination of Plan. Except to the extent prohibited by applicable law and unless otherwise expressly provided in the Plan or a Cash Bonus Award Agreement, the Committee may amend, alter, suspend, discontinue or terminate the Plan. (c) Correction of Defects, Omissions and Inconsistencies. Except to the extent prohibited by applicable law and unless otherwise expressly provided in the Plan or a Cash Bonus Award Agreement, the Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan, any Cash Bonus Award or any Cash Bonus Award Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect. Section 10. General Provisions. (a) Award Agreements. No Participant will have rights under an Award granted to such Participant unless and until a Cash Bonus Award Agreement shall have been duly executed on behalf of the Company. (b) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. 4

5 (c) Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Minnesota. (d) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect. (e) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate. (f) Nature of Payments. Any and all cash payments pursuant to any Cash Bonus Award granted hereunder shall constitute special incentive payments to the Participant, and such payments shall not be taken into account in computing the amount of the Participant s salary or compensation for purposes of determining any pension, retirement, death or other benefits under (i) any pension, retirement, profit sharing, bonus, life insurance or other employee benefit plan of the Company or any Affiliate or (ii) any agreement between the Company (or any Affiliate) and the Participant, except to the extent that such plan or agreement expressly provides to the contrary. (g) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Section 11. Effective Date of the Plan. The Plan shall be effective as of January 1, \1 2/6/ :19 PM 5