<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
U.S. Bancorp
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
U.S. BANCORP LOGO
111 Southwest Fifth Avenue
Portland, Oregon 97204
DEAR SHAREHOLDERS:
Enclosed with this letter is the formal notice of the annual meeting of
shareholders of U. S. Bancorp to be held Tuesday, April 15, 1997, at 1:30 p.m.,
Pacific Time.
At the meeting, the shareholders will be asked to elect directors, amend
the Restated Articles of Incorporation relating to the authorized capital stock,
and to approve the 1997 Amended and Restated Non-Employee Director Stock
Incentive and Deferral Plan, the 1997 Employee Stock Purchase Plan, and the
selection of independent auditors. In addition, the executive officers of U. S.
Bancorp will report on the operations of U. S. Bancorp and will be available to
respond to questions from shareholders.
I hope you will be able to attend the meeting, and if you do so, you may
vote in person even if you have previously mailed in your Proxy form. Your
interest and continued support are indeed appreciated.
Sincerely yours,
GERRY B. CAMERON
Chairman of the Board, Chief Executive
Officer, and President
March 13, 1997
<PAGE> 3
U. S. BANCORP
111 SOUTHWEST FIFTH AVENUE
PORTLAND, OREGON 97204
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 15, 1997
TO THE SHAREHOLDERS:
The annual meeting of shareholders of U. S. BANCORP will be held on
Tuesday, April 15, 1997, at 1:30 p.m., Pacific Time, in the Ballroom at the
Multnomah Athletic Club, 1849 S.W. Salmon, Portland, Oregon for the following
purposes:
1. Electing directors for the ensuing year.
2. Amending Article III of the Restated Articles of Incorporation to
increase U. S. Bancorp's authorized common stock from 250,000,000
shares to 400,000,000 shares as set forth in Appendix A to the
attached Proxy Statement.
3. Approving the 1997 Amended and Restated Non-Employee Director Stock
Incentive and Deferral Plan.
4. Approving the 1997 Employee Stock Purchase Plan.
5. Approving the selection of independent auditors for U. S. Bancorp.
6. Transacting such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on February 7, 1997,
are entitled to vote at the meeting.
By order of the Board of Directors
DWIGHT V. BOARD
Secretary
March 13, 1997
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE --
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE
MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
<PAGE> 4
U. S. BANCORP
111 SOUTHWEST FIFTH AVENUE
PORTLAND, OREGON 97204
PROXY STATEMENT
SOLICITATION, VOTING AND REVOCABILITY OF PROXY
The enclosed Proxy is solicited on behalf of the Board of Directors of U.
S. Bancorp, an Oregon corporation, for use at the annual meeting of shareholders
to be held at 1:30 p.m. on Tuesday, April 15, 1997. The Proxy and Proxy
Statement were mailed to shareholders on or about March 13, 1997.
U. S. Bancorp will pay all soliciting costs that it incurs in connection
with the annual meeting, including the cost of preparing and mailing the Proxy,
Proxy Statement, 1996 Annual Report to Shareholders, Annual Report on Form 10-K
for 1996, and any other materials furnished to the shareholders by U. S.
Bancorp. Proxies will be solicited by use of the mails, and officers and other
employees of U. S. Bancorp may also solicit Proxies by telephone or personal
contact. Employees of U. S. Bancorp who may be engaged in the solicitation of
Proxies will not receive additional compensation for such services. U. S.
Bancorp has also retained Beacon Hill Partners, Inc. to assist in the
solicitation of Proxies, primarily from beneficial owners whose stock is held in
the name of brokers, banks and other nominees, at an estimated fee of $5,000
plus reimbursement of expenses.
When a Proxy in the enclosed form is properly executed and returned, the
shares represented thereby will be voted at the annual meeting in accordance
with the instructions specified in the spaces provided on the form. If no
instructions are specified, the shares will be voted (1) FOR the election of
directors named in the Proxy; (2) FOR amendment of Article III of the Restated
Articles of Incorporation; (3) FOR approval of the 1997 Amended and Restated
Non-Employee Stock Incentive and Deferral Plan; (4) FOR approval of the 1997
Employee Stock Purchase Plan; and (5) FOR approval of the selection of
independent auditors. Shareholders may expressly abstain from voting on
proposals (2), (3), (4) and (5) by so indicating on the Proxy. Abstentions with
respect to either proposal (2), (3) or (4) will have the same effect as a vote
against the proposal. An abstention on the proposal for approval of selection of
auditors will have no effect on the required vote for the proposal. Shares
represented by duly executed and returned proxies of brokers or other nominees
which are expressly not voted on any matter to be presented at the annual
meeting will have no effect on the required vote on the matter.
Any person giving a Proxy in the form accompanying this Proxy Statement has
the power to revoke it at any time before its exercise. The Proxy may be revoked
by filing with the Secretary of U. S. Bancorp written notice of revocation or a
duly executed Proxy bearing a later date. The Proxy may also be revoked by
affirmatively electing to vote in person while in attendance at the meeting.
However, a shareholder who attends the meeting need not revoke the shareholder's
Proxy and vote in person unless the shareholder wishes to do so. Written
revocations or Proxies bearing a later date should be sent to First Chicago
Trust Company of New York, Attention: Inspectors of Election, P.0. Box 8640,
Edison, New Jersey 08818-9142.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The only outstanding voting security of U. S. Bancorp is its $5 Par Value
Common Stock ("Common Stock"). The record date for determining shareholders
entitled to vote at the annual meeting is February 7, 1997, on which date there
were 147,934,549 shares of Common Stock outstanding and entitled to one vote per
share. A majority of the shares entitled to vote, represented in person or by
proxy, will constitute a quorum at the meeting. All references to shares of
Common Stock and per share prices thereof in this Proxy Statement have been
adjusted where appropriate to reflect stock splits and stock dividends. U. S.
Bancorp also has outstanding 6,000,000 shares of 8 1/8% Cumulative Preferred
Stock, Series A (the "Preferred Stock"), which are not entitled to vote at the
annual meeting.
1
<PAGE> 5
The following persons are known by U. S. Bancorp to beneficially own more
than 5% of the outstanding shares of Common Stock as of February 7, 1997:
<TABLE>
<CAPTION>
AMOUNT APPROXIMATE
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED CLASS
---------------------------------------------- ------------ -----------
<S> <C> <C>
Trust Group (1)............................... 16,156,603 10.9%
United States National Bank of Oregon
P. O. Box 3168
Portland, Oregon 97208-9933
Joshua Green III (2).......................... 8,399,460 5.7%
1425 Fourth Avenue
Seattle, Washington 98101
</TABLE>
- ---------------
(1) The Trust Group of United States National Bank of Oregon ("U.S. Bank of
Oregon"), a wholly owned subsidiary of U. S. Bancorp, held the indicated
shares as of February 7, 1997, in fiduciary capacities for various
beneficiaries, including participants in the U. S. Bancorp Employee
Investment Plan. The Trust Group has sole voting power as to 846,229 shares,
shared voting power as to 1,314,265 shares, sole investment power as to
14,390,544 shares, and shared investment power as to 1,676,034 shares.
(2) Includes 125,302 shares owned by Mr. Green; 6,059 shares owned by Mr.
Green's wife; 2,180,316 shares held by Joshua Green Corporation, of which
Mr. Green is chairman and chief executive officer; 5,089,171 shares held by
a limited partnership of which Joshua Green Corporation is the general
partner; 575,181 shares held by various estates, trusts, and custodianships
as to which Mr. Green has shared voting power and in which various family
members of Mr. Green are beneficiaries; 391,231 shares held by a charitable
foundation of which Mr. Green is president; and 32,200 shares subject to
stock options that are currently exercisable or will become exercisable on
or before April 7, 1997. Mr. Green owns 59% of the voting common stock of
Joshua Green Corporation and has sole voting power over another 20% of such
stock; accordingly, the other shareholders and directors of Joshua Green
Corporation are not deemed to have shared voting and dispositive power over
the shares of Common Stock beneficially owned by Joshua Green Corporation by
reason of their capacities as such.
2
<PAGE> 6
The following table gives, as of February 7, 1997, certain information
concerning the beneficial ownership of Common Stock by each of U. S. Bancorp's
directors, by the U. S. Bancorp executive officers named in the Summary
Compensation Table below and by U. S. Bancorp's present directors and all of its
executive officers as a group. Unless otherwise indicated, all shares listed as
beneficially owned are held with sole voting and investment power. No shares of
Preferred Stock are beneficially owned by the indicated persons or group.
<TABLE>
<CAPTION>
AMOUNT APPROXIMATE
BENEFICIALLY PERCENT OF
NAME OWNED CLASS
------------------------------------------ ------------ -----------
<S> <C> <C>
Harry L. Bettis........................... 2,973,947(4)(6) 2.0%
Gerry B. Cameron.......................... 364,886(1)(2)(3) *
Carolyn Silva Chambers.................... 5,600(4) *
Franklin G. Drake......................... 46,531(4) *
Robert L. Dryden.......................... 14,606(4) *
Gary T. Duim.............................. 98,474(1)(2)(3) *
John B. Fery.............................. 22,574(4) *
Joshua Green III.......................... 8,399,460(4)(5) 5.7%
Arland D. Hatfield........................ 119,006(1)(2)(3) *
Daniel R. Nelson.......................... 393,930(2) *
Allen T. Noble............................ 8,871(4) *
Paul A. Redmond........................... 13,228(4) *
N. Stewart Rogers......................... 25,128(4)
Robert D. Sznewajs........................ 89,639(1)(2)(3) *
Benjamin R. Whiteley...................... 15,808(4) *
All directors and executive officers as a
group (23 persons)...................... 12,796,231(1)(2)(3)(4) 8.6%
</TABLE>
- ---------------
* Excluded because percentage beneficially owned is less than 1% of the Common
Stock.
(1) Includes shares underlying Restricted Stock Units ("RSUs") issued pursuant
to U. S. Bancorp's 1993 Stock Incentive Plan as well as dividend equivalent
RSUs, if elected by the grantee. Unvested RSUs are forfeited on termination
of employment, other than for retirement, disability or death, while
dividend equivalent RSUs, if elected, are not forfeited under any
termination circumstances. The officers cannot use the RSUs or transfer them
until they are converted into common shares. Grantees may elect dividend
equivalents paid on the RSUs in either cash or dividend equivalent RSUs.
RSUs vest in 20% increments over five years and dividend equivalent RSUs
vest either (1) in increments of 20% over five years or (2) in a lump sum
after five years (at the election of the grantee). The number of RSUs held
by each named executive officer as of February 7, 1997 are as follows:
<TABLE>
<CAPTION>
RESTRICTED
NAME STOCK UNITS
-------------------------------------------------------------- -----------
<S> <C>
Gerry B. Cameron.............................................. 19,800
Robert D. Sznewajs............................................ 8,767
Gary T. Duim.................................................. 6,000
Arland D. Hatfield............................................ 6,188
All executive officers as a group............................. 65,751
</TABLE>
(2) Includes shares subject to employee stock options that are currently
exercisable or will become exercisable on or before April 7, 1997, as
follows: Mr. Cameron, 238,447 shares; Mr. Nelson, 339,547 shares; Mr.
Sznewajs, 65,076 shares; Mr. Duim 80,206 shares; Mr. Hatfield, 86,006
shares; and all executive officers of U. S. Bancorp as a group 1,257,991
shares.
(3) Includes the indicated number of shares allocated to the accounts of
participants under the U. S. Bancorp Employee Investment Plan as follows:
Mr. Cameron, 30,389 shares; Mr. Sznewajs, 10,526 shares; Mr. Duim, 6,268
shares; Mr. Hatfield, 13,523 shares; and all executive officers of U. S.
Bancorp as a group, 96,169 shares. Participants in the plan may direct the
voting of the shares allocated to their accounts.
(4) Includes shares subject to stock options held by non-employee directors of
U. S. Bancorp that are currently exercisable or will become exercisable on
or before April 7, 1997, as follows: Mr. Bettis, 2,000 shares; Ms. Chambers,
5,500 shares; Mr. Drake, 21,234 shares; Mr. Dryden, 13,856 shares; Mr. Fery,
2,000 shares; Mr. Green, 32,200 shares; Mr. Noble, 2,000 shares; Mr.
Redmond, 11,989 shares; Mr. Rogers, 16,490 shares; Mr. Whiteley, 9,308
shares; and all present non-employee directors as a group, 116,577 shares.
(5) See note 2 to the preceding table for additional information regarding Mr.
Green's share ownership.
(6) Include 3,888 shares subject to restrictions on transferability as to which
Mr. Bettis has voting power.
3
<PAGE> 7
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934 ("Section 16") requires
that reports of beneficial ownership of Common Stock and Preferred Stock and
changes in such ownership be filed with the Securities and Exchange Commission
(the "SEC") by Section 16 "reporting persons," including directors, certain
officers, holders of more than 10% of the outstanding Common Stock or Preferred
Stock, and certain trusts of which reporting persons are trustees. U. S. Bancorp
is required to disclose in the Proxy Statement each reporting person whom it
knows to have failed to file any required reports under Section 16 on a timely
basis. Based solely upon a review of copies of Section 16 reports furnished to
U. S. Bancorp and written statements confirming that no other reports were
required, to U. S. Bancorp's knowledge, all Section 16 reporting requirements
applicable to known reporting persons, except for one Form 4 report which was
filed one day late by Mr. Green, were complied with during 1996.
PROPOSAL 1: ELECTION OF DIRECTORS
The directors of U. S. Bancorp are elected at the annual meeting of
shareholders in April to serve for one year. The Board of Directors has set the
number of positions on the Board at eleven. The names of U. S. Bancorp's
nominees for director are given below together with certain information about
each of them, including their ages, their business experience during the past
five years, directorships in other corporations, and periods of service as a
director of U. S. Bancorp. There are no family relationships among the
directors. All the nominees are currently directors of U. S. Bancorp and of U.
S. Bancorp's major bank subsidiaries.
If for some unforeseen reason one or more of the nominees is not available
as a candidate for director, the number of directors constituting the Board of
Directors may be reduced prior to the annual meeting, or the Proxies may be
voted for such other candidate or candidates as may be nominated by the Board.
U. S. Bancorp's Bylaws provide that nominations for election to the Board
of Directors may be made by the Board or by any holder of record of U. S.
Bancorp securities entitled to vote for the election of directors. Nominations
other than those made by or on behalf of the Board must be made in writing and
delivered or mailed to the Chairman of the Board not less than 25 days and not
more than 60 days prior to the shareholders meeting at which directors are to be
elected. The shareholder should specify the name of each proposed nominee and
should set forth information as to the nominee's qualifications for membership
on the Board of Directors. The Bylaws provide for a shorter deadline if less
than 30 days' notice of the meeting is given to shareholders.
NOMINEES FOR DIRECTOR
Harry L. Bettis, age 62, has been a director since December 1995. He was a
director of West One Bancorp from 1971 until 1995. For more than five years, Mr.
Bettis has been a rancher in Payette, Idaho.
Gerry B. Cameron, age 58, has been Chief Executive Officer and a director
of since January 1994 and Chairman of the Board since April 1994. He was also
President from April 1994 until December 1995 and was reelected President in
February 1997. Mr. Cameron was Vice Chairman of U. S. Bancorp from January 1993
through April 1994. He was Executive Vice President of United States National
Bank of Oregon ("U.S. Bank of Oregon") from March 1979 until July 1993. Mr.
Cameron was elected a director of U.S. Bank of Oregon in January 1993 and was
elected Chairman of the Board in July 1993. He was President and Chief Executive
Officer of U.S. Bank of Washington, National Association ("U.S. Bank of
Washington"), until January 1993. Mr. Cameron is a member of the Executive
Management Committee composed of eleven senior U. S. Bancorp executive officers.
Carolyn Silva Chambers, age 65, has been a director since 1995. Ms.
Chambers was a director of U.S. Bank of Oregon from 1993 until April 1995. Ms.
Chambers was President and Chief Executive Officer of Chambers Communications
Corp., a broadcast and television company, from 1983 to 1995; she is currently
Chairman and Chief Executive Officer. Ms. Chambers has been President and Chief
Executive Officer of Chambers Construction Company, a construction firm, since
1986. Both Chambers Communications and Chambers Construction are based in
Eugene, Oregon. Ms. Chambers is also a director of Portland General Corporation.
4
<PAGE> 8
Franklin G. Drake, age 68, has been a director since 1969. Mr. Drake is
Chairman of the Board, retired, of Donald M. Drake Company, a construction firm
headquartered in Portland, Oregon. He is Chairman and Chief Executive Officer of
Drake Management. He was previously President and Chief Executive Officer of
Donald M. Drake Company for more than five years until July 1993.
Robert L. Dryden, age 63, has been a director since 1995. From 1991 until
April 1995, Mr. Dryden was a director of U.S. Bank of Washington. Mr. Dryden
serves as Executive Vice President, Airplane Production, of The Boeing Company
(Commercial Airplane Group), in Seattle, Washington, and has held this position
since 1990. Mr. Dryden is also a director of Puget Sound Energy, Inc..
John B. Fery, age 66, has been a director since December 1995. He was a
director of West One Bancorp from 1976 until 1995. Mr. Fery is retired Chairman
and Chief Executive Officer of Boise Cascade Corporation, a paper and forest
products company headquartered in Boise, Idaho. He served as Chief Executive
Officer from 1972 through July 1994, and retired as Chairman in July 1995. Mr.
Fery also serves as a director of Albertson's Inc., The Boeing Company, and
Hewlett-Packard Company.
Joshua Green III, age 60, has been a director since 1987. Mr. Green is
Chairman of the Board and Chief Executive Officer of Joshua Green Corporation, a
family investment firm and Chairman of its wholly-owned subsidiary, Sage
Manufacturing Corporation. He also served as Chairman of the Board and a
director of U.S. Bank of Washington from February 1988 until January 1997. Mr.
Green was also Vice Chairman of U. S. Bancorp from December 1987 until January
1993. Mr. Green is also a director of Safeco Corporation.
Allen T. Noble, age 68, has been a director since December 1995. Mr. Noble
is President of Farm Development Corporation, a corporate agricultural
management company based in Boise, Idaho, Allen Noble Farms, Inc., A-D Cattle
Company, Campbell Tractor Company comprised of four John Deere dealerships in
Treasure Valley, Idaho, ALVAC a Life Flight Helicopter Company, and Noble Linear
Irrigation Company. Mr. Noble served as a director of West One Bancorp from 1975
until 1983 and from 1984 until 1995.
Paul A. Redmond, age 60, has been a director since 1994. From 1992 to 1994,
Mr. Redmond was a director of U.S. Bank of Washington. Since 1985, he has been
Chairman of the Board and Chief Executive Officer of The Washington Water Power
Company, an electric and gas utility with headquarters in Spokane, Washington.
Mr. Redmond is also a director of Itron, Inc.
N. Stewart Rogers, age 67, has been a director since 1988. Mr. Rogers is
Chairman of the Board and a director of Penwest, Ltd. He is also a director of
Fluke Corp. and of VWR Scientific Products Corp. Mr. Rogers was Senior Vice
President of Univar Corporation, a distributor of chemicals, until his
retirement in December 1991.
Benjamin R. Whiteley, age 67, has been a director since 1994. Mr. Whiteley
was a director of U.S. Bank of Oregon from 1988 through April 1994 and of U. S.
Bancorp from 1986 through 1988. Mr. Whiteley has been Chairman of the Board of
Standard Insurance Company, a life insurance company, since August 1994. From
January 1993 until August 1994, he served as Chairman and Chief Executive
Officer of Standard Insurance Company, and, prior to that, as President and
Chief Executive Officer for more than five years. Mr. Whiteley is also a
director of Northwest Natural Gas Company, Willamette Industries, Inc., and The
Greenbrier Companies, Inc.
5
<PAGE> 9
BOARD OF DIRECTORS AND BOARD COMMITTEES
BOARD COMMITTEES
The U. S. Bancorp Board of Directors has a standing Audit Committee, which
recommends to the Board the accounting firm to be selected as independent
auditors and reviews matters relating to public disclosure, corporate practices,
regulatory and financial reporting, accounting procedures and policies,
financial and accounting controls, and transactions involving potential
conflicts of interest. The Audit Committee receives and evaluates on behalf of
the Board reports of reviews by the Board of Governors of the Federal Reserve
System, which is the federal supervisory agency for bank holding companies, and
the Office of the Comptroller of the Currency, which is the primary supervisory
agency for U. S. Bancorp's national bank subsidiaries. Reports of examinations
by supervisory agencies for other U. S. Bancorp subsidiaries, including the
Federal Deposit Insurance Corporation (the "FDIC"), and various state agencies,
are also received by the Audit Committee.
The Audit Committee also reviews the planned scope and results of audits,
the annual reports to the SEC and to the shareholders and the Proxy Statement
and makes recommendations regarding approval to the Board of Directors. The
Audit Committee also performs for U. S. Bancorp's bank subsidiaries certain
audit functions required under FDIC regulations.
Current members of the Audit Committee are Messrs. Whiteley (chairperson),
Drake, Dryden, Redmond, and Ms. Chambers. The Audit Committee held six meetings
in 1996.
The Board of Directors also has a standing Compensation Committee composed
of five non-employee directors, Messrs. Rogers (chairperson), Bettis, Dryden,
Fery, and Redmond. The Compensation Committee reviews and makes recommendations
to the Board of Directors from time to time regarding compensation of U. S.
Bancorp's officers and nonemployee directors. The Compensation Committee
administers U. S. Bancorp's stock-based compensation plans and incentive plans
and makes decisions regarding the grant of stock options and other awards to
officers and employees thereunder. The Compensation Committee met six times in
1996.
The Board of Directors has a standing Executive Committee composed of five
directors, Messrs. Cameron (chairperson), Bettis, Drake, Green, and Nelson. The
Executive Committee will hold meetings at the call of the Chairman of the Board
and may exercise authority as specifically delegated by the Board of Directors
during intervals between board meetings. The Executive Committee also recommends
nominees for election to the Board of Directors and reviews nominations by
shareholders. The Executive Committee met two times in 1996.
MEETINGS
The Board of Directors held ten meetings during 1996. Each director
attended at least 75% of the total number of meetings of the Board and meetings
held by all committees of the Board on which the director served during 1996.
6
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below shows the compensation awarded or paid to, or earned by, U.
S. Bancorp's chief executive officer and each of its four other most highly
compensated executive officers (the "named executive officers") during each of
the years in the three-year period ended December 31, 1996.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION NUMBER OF
------------------------------------- RESTRICTED SECURITIES LONG-TERM ALL
OTHER ANNUAL STOCK UNDERLYING INCENTIVE OTHER
NAME AND PRINCIPAL SALARY BONUS(4) COMPENSATION(5) UNITS(6) OPTIONS PAYOUTS(7) COMPENSATION(8)
POSITION(1) YEAR ($) ($) ($) ($) (#) ($) ($)
- --------------------------- ---- -------- -------- --------------- ---------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerry B. Cameron........... 1996 $800,000 $846,640 $628,650 89,700 $780,452 $97,943
Chairman of the Board, 1995 700,000 630,000 $53,622 - 116,250 - 50,970
Chief Executive Officer,
and 1994 508,750 250,000 - 58,252 - 28,241
President
Daniel R. Nelson(2)........ 1996 525,000 464,100 - 47,700 - -
President and 1995 - - - 29,610 - -
Chief Operating Officer 1994 - - - - - -
Robert D. Sznewajs(3)...... 1996 425,000 375,700 269,875 30,900 273,384 29,610
Vice Chairman 1995 375,000 271,575 - 36,989 - 8,344
1994 233,750 175,000 - 20,408 - 23,940
Gary T. Duim............... 1996.. 280,000 280,000 190,500 17,000 234,131 31,288
Executive Vice President 1995 250,000 181,134 - 21,138 - 18,534
1994 200,000 97,084 - 19,417 - 8,717
Arland D. Hatfield......... 1996 280,000 278,563 190,500 17,000 234,131 31,828
Executive Vice President 1995 250,000 190,993 - 21,138 - 18,066
1994 210,000 88,310 - 19,417 - 11,710
</TABLE>
- ---------------
(1) Includes principal capacities in which each officer served during 1996.
(2) Mr. Nelson became an employee of U. S. Bancorp effective December 26, 1995
and retired from U. S. Bancorp effective January 1, 1997.
(3) Mr. Sznewajs became a U. S. Bancorp employee in April 1994.
(4) Represents amounts paid or accrued under the U. S. Bancorp Executive Annual
Incentive Plan.
(5) Represents the aggregate incremental cost to U. S. Bancorp of providing
various perquisites and personal benefits to Mr. Cameron in 1995, including
a one-time, automobile-related benefit of $41,250 in association with the
elimination of executive automobiles. Amounts which total the lesser of
$50,000 or 10% of the total annual salary and bonus for a given named
executive officer have been omitted pursuant to SEC disclosure rules.
(6) The amount reported for each officer for 1996 is the value of the RSUs on
February 14, 1996. In accordance with SEC proxy rules, the value of those
RSUs is shown here using the low market price of Common Stock on February
14, 1996, which was $31.75. RSUs earn dividends, which are payable in cash
or reinvested in RSUs each quarter, at the option of the officer. The
following table shows (a) the total number RSUs credited to each of the
named executive officers as of February 14, 1996, and (b) the value of those
RSUs, based on the low market price of Common Stock on December 31, 1996.
<TABLE>
<CAPTION>
RESTRICTED STOCK VALUE AT 12/31/96
UNITS ($)
---------------- -----------------
<S> <C> <C>
Gerry B. Cameron.................... 19,800 888,525
Robert D. Sznewajs.................. 8,500 381,438
Gary T. Duim........................ 6,000 269,250
Arland D. Hatfield.................. 6,000 269,250
</TABLE>
(7) Represents amounts paid or accrued under the U. S. Bancorp Performance Share
Plan for the three-year period ended December 31, 1996.
(8) Represents amounts that 1) were contributed by U. S. Bancorp under the U. S.
Bancorp Employee Investment Plan, a qualified plan under Section 401(k) of
the Internal Revenue Code (the "Code"), as a pro-rata
7
<PAGE> 11
matching contribution and invested in Common Stock; or 2) that would have
been allocated to each officer's matching contribution account under the
Employee Investment Plan had compensation subject to the plan included
deferred compensation and had Code limits not been applicable, but instead
were credited under the U. S. Bancorp Supplemental Benefits Plan; or 3) that
equal the value in cash or RSUs of dividend equivalents earned on RSUs.
STOCK-BASED COMPENSATION
The following table provides information regarding options to purchase
Common Stock granted to the named executive officers pursuant to the U. S.
Bancorp 1993 Stock Incentive Plan during 1996.
OPTION GRANTS IN LAST FISCAL YEAR(1)
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($/SHARE) DATE(2) VALUE($)(3)
- ---------------------------------- --------- ------------ --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Gerry B. Cameron.................. 89,700 7.5% $ 32.75 3/20/2006 $ 592,917
Daniel R. Nelson.................. 47,700 4.0% 32.75 1/01/2002 315,297
Robert D. Sznewajs................ 30,900 2.6% 32.75 3/20/2006 204,249
Gary T. Duim...................... 17,000.. 1.4% 32.75 3/20/2006 112,370
</TABLE>
- ---------------
(1) No stock appreciation rights ("SARs") were granted to the named executive
officers during 1996. All options were granted for the number of shares
indicated at exercise prices equal to the fair market value of the Common
Stock on the date of grant. All options are immediately and fully vested
with provisions for forfeiture or reimbursement of a percentage of shares if
termination of employment other than retirement, disability, or death occurs
within three years of grant date.
(2) Mr. Nelson retired effective January 1, 1997. His option, therefore, expires
in five years at January 1, 2002.
(3) The values shown have been calculated based on the Black-Scholes option
pricing model and do not reflect the effect of restrictions on
transferability. The values indicated were calculated based on the following
assumptions: (i) expectations regarding volatility were based on quarterly
stock price data during the three-year period ended December 31, 1996; (ii)
the risk-free rate of return was assumed to be 6.20% for options and 7.08%
for time lapse vesting; (iii) the time of exercise was assumed to be five
years after the date of grant; and (iv) the dividend yield was assumed to be
3.60% (the annual dividend rate divided by the stock price on the grant
date). The values which may ultimately be realized by the holders of the
reported options will depend on the market value of the Common Stock during
the periods during which the options are exercisable, which may vary
significantly from the assumptions underlying the Black-Scholes model.
8
<PAGE> 12
Information regarding exercises of stock options during 1996, and
unexercised options held as of December 31, 1996, by the named executive
officers is summarized in the table below.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING OPTIONS OPTIONS AT YEAR-END($)(3)
OPTIONS VALUE TOTAL --------------------------- ---------------------------
NAME EXERCISED REALIZED($)(2) OPTIONS EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ --------- -------------- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerry B. Cameron.............. 4,250 $ 19,125 309,952 178,291 131,661 $2,782,735 $ 2,540,010
Daniel R. Nelson.............. 0 0 47,700 47,700 0 578,363 0
Daniel R. Nelson.............. 22,052(4) 677,335 291,847 291,847 0 9,248,051 0
Robert D. Sznewajs............ 0 0 88,297 44,999 43,298 652,933 854,205
Gary T. Duim.................. 3,000 53,751 95,415 64,855 30,560 1,226,052 588,459
Arland D. Hatfield............ 2,900 44,541 101,215 70,655 30,560 1,411,333 588,459
</TABLE>
- ---------------
(1) No SARs were exercised during 1996 and no named executive officer held any
SARs at December 31, 1996.
(2) Represents the amount by which the fair market value or sale price of the
shares of Common Stock underlying employee stock options at the date of
exercise exceeded the exercise price.
(3) Value is calculated based on the amount by which the low sale price of the
Common Stock, $44.875 as reported in The Wall Street Journal for the last
trading day in 1996, exceeds the per share exercise price of unexercised
options. All options reflected in the table were granted at an exercise
price equal to the fair market value of a share of Common Stock on the date
of grant.
(4) Represents options granted to Mr. Nelson by West One Bancorp. Under West One
Bancorp's plan provisions, value is calculated based upon the average of
high and low sale price of the Common Stock, which was $45.875 for the last
trading day in 1996.
The following table sets forth information regarding performance cash
awards to the named executive officers pursuant to the U. S. Bancorp Performance
Cash Award Plan during 1996.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE
TARGET % OF OR OTHER ESTIMATED FUTURE PAYOUTS UNDER NON-STOCK
3-YEAR AVERAGE PERIOD UNTIL PRICE BASED PLANS(2)
OF MATURATION -----------------------------------------
NAME BASE SALARY(1) OR PAYOUT THRESHOLD(%) TARGET(%) MAXIMUM(%)
- ----------------------------- -------------- ------------ ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Gerry B. Cameron............. 150% 3 years 0 185 370
Daniel R. Nelson............. 150% 3 years 0 150 300
Robert D. Sznewajs........... 120% 3 years 0 120 240
Gary T. Duim................. 100% 3 years 0 100 200
Arland D. Hatfield........... 100% 3 years 0 100 200
</TABLE>
- ---------------
(1) Represents target awards of cash under U. S. Bancorp's Performance Cash
Plan. Opportunity for payout underlying the award represents anticipation of
three years' value to be paid out in three year's time. It is not intended
that similar awards will be made in 1997-98.
(2) Following the three-year period ending December 1998, awards will be settled
pursuant to a performance matrix calculated pursuant to a formula based on a
comparison of U. S. Bancorp's net income growth and return on equity over
three years with that of comparably capitalized regional banks included in
the S&P Major Regional Banks Index.
RETIREMENT PLANS
U. S. Bancorp maintains two retirement plans, the U. S. Bancorp Retirement
Plan (the "U.S. Retirement Plan"), which covers eligible employees and officers
of U. S. Bancorp and its participating subsidiaries, and the West One Retirement
Plan (the "W. O. Retirement Plan") which covers certain U. S. Bancorp employees
who formerly were employees of West One Bancorp (collectively, the "Retirement
Plans") .
9
<PAGE> 13
The U.S. Retirement Plan and the W. O. Retirement Plan provide for payment
of monthly pension benefits based upon an employee's years of service and
compensation level. Pursuant to either the U. S. Bancorp Supplemental Benefits
Plan (the "U.S. Supplemental Plan") or the West One Supplemental Executive
Retirement Plan (the "W. O. SERP"), designated key employees, including U. S.
Bancorp executive officers, will receive retirement benefits in addition to
those payable under the Retirement Plans (collectively, the "Supplemental
Plans").
The following tables show the estimated annual benefits payable under the
U.S. Retirement Plan and the W. O. Retirement Plan, respectively, (including
amounts payable pursuant to applicable provisions of the U.S. Supplemental Plan
and W. O. SERP) for participants with various years of benefit service and
specified levels of compensation (based on the average during the five
consecutive calendar years out of the last ten years for which compensation was
highest ("Highest Average Compensation")).
U.S. RETIREMENT PLAN PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
COMPENSATION ------------------------------------------------------------
LEVEL 15 20 25 30 35
---------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000.................... $ 30,100 $ 40,200 $ 50,200 $ 53,300 $ 56,500
150,000.................... 36,500 48,700 60,800 64,600 68,300
175,000.................... 42,900 57,200 71,500 75,800 80,200
200,000.................... 49,200 65,700 82,100 87,100 92,100
225,000.................... 55,600 74,200 92,700 98,300 104,000
250,000.................... 62,000 82,700 103,300 109,600 115,800
300,000.................... 74,700 99,700 124,600 132,100 139,600
350,000.................... 87,500 116,700 145,800 154,600 163,300
400,000.................... 100,200 133,700 167,100 177,100 187,100
450,000.................... 113,000 150,700 188,300 199,600 210,800
500,000.................... 125,700 167,700 209,600 222,100 234,600
550,000.................... 138,500 184,700 230,800 244,600 258,300
600,000.................... 151,200 201,700 252,100 267,100 282,100
650,000.................... 164,000 218,700 273,300 289,600 305,800
700,000.................... 176,700 235,700 294,600 312,100 329,600
750,000.................... 189,500 252,700 315,800 334,600 353,300
800,000.................... 202,200 269,700 337,100 357,100 377,100
850,000.................... 215,000 286,700 358,300 379,600 400,800
</TABLE>
10
<PAGE> 14
W. O. RETIREMENT PLAN PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
COMPENSATION ------------------------------------------------------------
LEVEL 15 20 25 30 35
---------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000.................... $ 34,000 $ 50,000 $ 66,000 $ 66,000 $ 74,000
150,000.................... 44,000 63,000 83,000 83,000 91,000
175,000.................... 53,000 76,000 99,000 99,000 107,000
200,000.................... 63,000 89,000 115,000 115,000 123,000
250,000.................... 83,000 115,000 148,000 148,000 156,000
300,000.................... 102,000 141,000 180,000 180,000 189,000
350,000.................... 122,000 167,000 213,000 213,000 222,000
400,000.................... 141,000 193,000 245,000 245,000 254,000
450,000.................... 161,000 219,000 278,000 278,000 287,000
500,000.................... 180,000 245,000 310,000 310,000 320,000
550,000.................... 200,000 271,000 343,000 343,000 353,000
600,000.................... 219,000 297,000 375,000 375,000 385,000
700,000.................... 258,000 349,000 440,000 440,000 451,000
</TABLE>
Compensation, for purposes of determining retirement benefits payable under
the Retirement Plans, generally consists of a participant's nondeferred
compensation up to a maximum annual limit imposed by the Internal Revenue Code
and excludes amounts paid in excess of limits on variable items such as
commissions, long-term incentive compensation, and severance pay. Code limits
are disregarded, and deferred compensation is included in determining retirement
benefits payable under the combined provisions of the Retirement Plans and the
Supplemental Plans.
Retirement benefits in the tables above are expressed in terms of single
life annuities and are not subject to reduction for Social Security benefits.
Benefits may be reduced from the amounts shown in the tables if the participant
retires early (before age 65) or if the participant elects to have benefits paid
as a joint and survivor annuity.
Certain executive officers have been awarded an enhanced retirement benefit
under the U.S. Supplemental Plan. With respect to Mr. Cameron, this benefit will
result in his receiving payments upon retirement pursuant to the U.S. Retirement
Plan, primary Social Security benefits, and the U.S. Supplemental Plan equal in
the aggregate to 55% of his Highest Average Compensation and, in addition, in
his being exempted from the provisions of the U.S. Supplemental Plan providing
for a percentage reduction (normally 7%) in benefits for retirement after age 55
but before age 62 ("Reduction Percentage"), if (i) he continues to be chief
executive officer of U. S. Bancorp through at least December 31, 1998, or (ii)
his employment as chief executive officer terminates following a change in
control of U. S. Bancorp. If Mr. Cameron were to retire after December 31, 1998,
with his Highest Average Compensation unchanged from the average at December 31,
1996, his annual retirement benefit, assuming a single life annuity and
reduction for estimated Social Security benefits, would be $485,316.
Retirement benefits for Mr. Nelson were calculated on his years of benefit
service upon retirement. His benefits equal a fraction (65% multiplied by his
years of benefit service, divided by 25) multiplied by his Highest Average
Compensation. His benefits were reduced for retirement prior to age 65. Mr.
Nelson retired from U. S. Bancorp effective January 1, 1997, at which time he
had a total of 12.75 years of credited benefit service. His annual retirement
benefit at this time, assuming single life annuity, reductions for estimated
Social Security benefits and for employer contributions to the Employee
Investment Plan and deferred compensation account, and reduction for early
retirement, is $192,267.
The enhanced retirement benefit for Messrs. Sznewajs and Duim will depend
on their years of benefit service upon retirement. Their enhanced retirement
benefits will equal a fraction (2.75% multiplied years of benefit service, up to
a maximum of 55%) multiplied by their respective Highest Average Compensation.
For this purpose, Mr. Sznewajs has been credited with 11 years of benefit
service for service with a prior employer and, as of December 31, 1996, had a
total of 13.735 years of benefit service credited to his account, and Mr. Duim,
as of the same date, had a total of 8.929 years of benefit service credited to
his account. Mr. Sznewajs and Mr. Duim
11
<PAGE> 15
are each fully vested in their respective enhanced retirement benefits. Mr.
Sznewajs will also be entitled to a Reduction Percentage of 3% (applicable to
retirement before age 62) if his employment is terminated by U. S. Bancorp prior
to December 31, 2002. If Mr. Sznewajs were to retire at age 62 with Highest
Average Compensation unchanged from December 31, 1996, his annual retirement
benefits, assuming single life annuity, reduction for estimated Social Security
benefits, and benefits from previous employers, would be $340,140. If Mr. Duim
were to retire at age 62 with Highest Average Compensation unchanged from
December 31, 1996, his annual retirement benefits, with the same assumption as
for Mr. Sznewajs, would be $177,780.
If Mr. Hatfield's employment with U. S. Bancorp is terminated, he will be
entitled to credit for 25 years of benefit service and to receive benefits under
the U.S. Retirement Plan that are not subject to a Reduction Percentage. At
December 31, 1996, Mr. Hatfield had 18.6 credited years of benefit service and a
compensation level of $350,952 per year for purposes of calculating retirement
benefits under the U.S. Retirement Plan Pension Plan Table above.
For purposes of U. S. Bancorp's compensation plans, including the
Supplemental Plans, and, with certain exceptions, employment agreements with its
executive officers, a change in control includes (i) the acquisition (other than
directly from U. S. Bancorp) by a person or group (other than U. S. Bancorp or
any employee benefit plan or corporation controlled by U. S. Bancorp) of 20% or
more of the combined voting power of U. S. Bancorp's voting securities, (ii)
with certain exceptions, the existing directors' ceasing to constitute a
majority of the Board of Directors, (iii) consummation of a reorganization,
merger, or sale or other disposition of all or substantially all of the assets
of U. S. Bancorp (a "Business Combination"), unless substantially all of the
beneficial owners of U. S. Bancorp's voting securities immediately prior to such
Business Combination beneficially own more than 50% of the outstanding common
stock and combined voting power of the corporation resulting from such Business
Combination, in substantially the same proportions as their ownership
immediately prior to such Business Combination, and certain other conditions are
met, and (iv) approval by the shareholders of a complete liquidation or
dissolution of U. S. Bancorp.
EXECUTIVE AGREEMENTS
At March 1, 1997, U. S. Bancorp was a party to agreements (the "Employment
Agreements") with 11 of its executive officers, including each of the named
executive officers, other than Mr. Nelson, providing for severance compensation
in the event of termination of employment following a change in control of U. S.
Bancorp. Each Employment Agreement has a term ending February 20, 2000 (December
31, 2002 in the case of Mr. Sznewajs), subject to automatic extension annually
thereafter. Also, if a change in control of U. S. Bancorp occurs during the term
of the Employment Agreements, the term will be extended automatically for three
additional calendar years beyond the year in which the change in control occurs.
Pursuant to the Employment Agreements, each executive has agreed to remain as a
U. S. Bancorp employee throughout any tender or exchange offer for U. S.
Bancorp's voting securities unless a change in control of U. S. Bancorp occurs
or the executive's compensation is reduced.
The Employment Agreements further provide that if, within three years
following the occurrence of a change in control, an executive's employment with
U. S. Bancorp is terminated by U. S. Bancorp without cause or by the executive
for good reason (as defined), the executive will be entitled to receive (i) his
or her full base salary through the date of termination at the rate in effect on
the date the change in control occurred, plus (ii) an amount equal to three
times the sum of (x) his or her annual base salary at such rate plus (y) his or
her highest annual bonus paid during the three calendar years ending prior to
the year in which the change in control occurred. Special payment provisions
apply in the event of the executive's death or disability.
The Employment Agreements also provide for reimbursement of legal fees and
expenses and reasonable amounts for outplacement services and for the
continuation of health, disability and life insurance benefits for three years
following termination of employment voluntarily for good reason or involuntarily
without cause. The amounts payable under a Employment Agreement will be reduced
to the extent that the executive receives payment under U. S. Bancorp's
Severance Benefits Plan and to the extent that the executive receives salary
continuation and incentive compensation benefits under another employment
agreement. The Employment Agreements also provide for reimbursement for any
excise tax imposed on benefits that constitute excess parachute payments plus
any related federal, state and local income taxes.
12
<PAGE> 16
U. S. Bancorp has also entered into an agreement with Mr. Sznewajs
providing for compensation in the event his employment with U. S. Bancorp is
terminated under specified circumstances prior to the earlier of December 31,
2002, and the date, if any, on which he becomes chief executive officer of U. S.
Bancorp. Upon termination of Mr. Sznewajs' employment by U. S. Bancorp during
the term of the agreement (the "Term") without cause (as defined) or by Mr.
Sznewajs with good reason (as defined), he will be entitled to his full base
salary through termination, together with (i) an amount equal to three times the
sum of (A) his annual base salary plus (B) his average annual incentive
compensation paid or accrued during the last two fiscal years, and (ii)
continued benefits under U. S. Bancorp's welfare benefit plans for three years
following termination. If Mr. Sznewajs becomes disabled during the Term, he will
continue to receive his salary and benefits until the earlier of the expiration
of the Term and 180 days after he became disabled.
West One Bancorp entered into an employment agreement with Mr. Nelson prior
to its merger with U. S. Bancorp, which agreement has expired as of January 1,
1997 as a result of Mr. Nelson's retirement. The agreement provided that West
One Bancorp and subsequently U. S. Bancorp would continue to employ Mr. Nelson
at least until the earlier of January 15, 1999, or the date on which he became
Chief Executive Officer of U. S. Bancorp. If Mr. Nelson's employment were
terminated by U. S. Bancorp without cause or by him for good reason (as
defined), Mr. Nelson would have been entitled to receive (i) his full base
salary through the date of termination at the rate in effect on the date the
termination occurred, plus (ii) a prorated portion of his highest incentive
compensation during the three fiscal years prior to the merger (the "Recent
Annual Bonus"), plus (iii) an amount equal to three times the sum of (x) his
annual base salary at such rate plus (y) the Recent Annual Bonus, plus (iv) an
amount equal to the actuarial equivalent of the total retirement benefit for
three additional years of service. The agreement also provided for reimbursement
of legal and accountant fees and expenses and reasonable amounts for
outplacement services and for the continuation of health, disability, and life
insurance benefits for three years following termination voluntarily with good
reason or involuntarily without cause. The agreement provided for reimbursement
of any excise tax imposed on benefits that constitute excess parachute payments
plus any related federal, state, and local income taxes.
DIRECTORS' COMPENSATION
Annual and Meeting Fees. Directors, other than officer-directors, receive
an annual retainer of $25,000, as well as $1,200 for each Board meeting and
$1,000 for each committee meeting attended. In addition, the chairs of the Audit
Committee and the Compensation Committee receive an annual retainer of $5,000
and $3,500, respectively.
Non-Employee Director Stock Options. U. S. Bancorp has also adopted a
series of stock option plans for nonemployee directors (the "Director Plans") to
encourage increased ownership of Common Stock by non-employee directors and to
provide enhanced incentives for such directors to exert their best efforts on U.
S. Bancorp's behalf. The Board of Directors has also approved the 1997 Amended
and Restated Non-Employee Director Stock Incentive and Deferral Plan (the
"Restated Plan") and submitted the Restated Plan to shareholders for approval.
See "Proposal 3: Approval of 1997 Amended and Restated Non-Employee Director
Stock Incentive and Deferral Plan." If approved by shareholders, the Restated
Plan will supersede the Director Plans, providing for additional choices for
stock compensation of non-employee directors.
The Director Plans currently provide for the grant of an Initial Option to
purchase 4,000 shares of Common Stock when a person first becomes a non-employee
director of U. S. Bancorp (or was serving as a non-employee director on October
18, 1990) and of an Annual Option to purchase 2,000 shares of Common Stock to
each person who is re-elected to serve as a non-employee director as of each
annual shareholders meeting. Initial Options and Annual Options are granted at
an exercise price equal to fair market value of the Common Stock on the date of
grant.
Each non-employee director is permitted to elect to receive a grant of
deferred compensation options in lieu of all or a portion of the retainer and
meeting fees otherwise payable for service on the Board of Directors. The
exercise price of a deferred compensation option is calculated so that the value
of the option (that is, the excess of
13
<PAGE> 17
the total market value of the shares subject to the option over the aggregate
exercise price) on the date of grant equals the amount of director's fees
foregone.
Pursuant to the foregoing provisions, in 1996, each of U. S. Bancorp's
non-employee directors were granted an Annual Option to purchase 2,000 shares at
an exercise price of $33.375 per share.
Initial Options and Annual Options currently become exercisable as follows:
none during the first year following the date of grant; up to 50% during the
second year; up to 80% during the third year; and 100% thereafter. Deferred
compensation options become fully exercisable six months after the date of
grant. An option generally will become exercisable in full notwithstanding the
above vesting schedules in the event of the director's death, disability or
retirement from the Board of Directors or upon the occurrence of a change in
control of U. S. Bancorp.
Payment of the exercise price of all options granted under the Director
Plans may be in cash, in shares of Common Stock already owned by the director,
or in a combination of cash and shares. The term of each option shall be
unlimited unless terminated earlier pursuant to the applicable Director Plan. If
an appointee ceases to be a director, the term of his or her option will expire
after five years in the case of retirement, after one year in the case of death
or disability, and after three months upon ceasing to be a director for any
other reason (except that no deferred compensation option will expire less than
seven months after the date of grant).
For a description of the provisions of the Director Plans as amended, if
approved by the shareholders, see "Proposal 3: Approval of 1997 Amended and
Restated Non-Employee Director Stock Incentive and Deferral Plan."
Health Insurance Reimbursement. A portion of the cost of premiums incurred
by a non-employee director of U. S. Bancorp for health care insurance coverage
of such director and his or her dependents will be subsidized or reimbursed by
U. S. Bancorp upon the director's request, provided that no portion of such
premiums are subsidized by any other employer. Reimbursement is subject to the
same conditions and limits as are applicable to active employees. Two
nonemployee directors received health care subsidies and tax offsets during
1996.
14
<PAGE> 18
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
OBJECTIVES OF U. S. BANCORP'S COMPENSATION PROGRAM
The Compensation Committee (the "Committee") of the U. S. Bancorp Board of
Directors reviews and approves guiding principles for U. S. Bancorp's executive
compensation program, as well as administering certain specific elements of the
program. The Committee is composed of five outside directors. See "Board of
Directors and Board Committees." Members of the Committee are not eligible to
participate in any U. S. Bancorp compensation plans other than the Director
Plans, a deferred compensation plan for non-employee directors, and health care
benefits options.
U. S. Bancorp has adopted, with the Committee's approval, a compensation
program that includes a broad mix of salary, incentive compensation, and
retirement and health and welfare benefits. It seeks to provide all its
employees, including executives, with appropriate incentives for current
performance as well as for achieving the long-term objectives of the corporation
by tying compensation to the performance of U. S. Bancorp. It also seeks to
align executive interests with those of the shareholders. To this end, annual
cash bonuses and long-term awards are granted based on performance factors.
Additionally, the Committee has strongly encouraged direct stock ownership at
significant levels by executives. Through its compensation program, U. S.
Bancorp also strives to attract and retain the individuals essential to a
successful organization.
U. S. Bancorp has taken steps to mitigate the negative impact of Section
162(m) of the Internal Revenue Code on executive compensation. Section 162(m)
limits the deductibility of compensation paid to covered employees to $1,000,000
plus qualifying performance based compensation and other qualifying
compensation. With the exception of Awards of restricted stock unit awards,
elements of annual compensation and long term incentive compensation qualify for
exemption from the limit because they are awarded pursuant to shareholder-
approved, performance-driven plans.
The following report describes generally U. S. Bancorp's compensation and
employee benefit programs as they apply to executive officers, including Messrs.
Sznewajs, Duim and Hatfield, and the actions of the Committee and the Board of
Directors with respect to 1996 compensation paid to Gerry B. Cameron, U. S.
Bancorp's chief executive officer during 1996.
EMPLOYEE BENEFITS
Eligible U. S. Bancorp employees, including its executive officers, may
participate in its health and welfare benefits program, which includes medical,
dental, life, and disability insurance, and a cafeteria plan. Subject to
eligibility requirements, U. S. Bancorp employees also participate in its
Retirement Plan, a qualified defined benefit pension plan. They may also choose
to participate in its Employee Investment Plan, a salary deferral plan qualified
under Code Section 401(k). Under the U. S. Bancorp Supplemental Benefits Plan,
executive officers and other key employees may be designated to receive certain
additional benefits which are not provided by the Retirement Plan and Employee
Investment Plan. Additionally, upon recommendation of the Committee, the Board
of Directors has approved the submission of an employee stock purchase plan for
shareholder approval. See "Proposal 4: Approval of 1997 Employee Stock Purchase
Plan."
DECISIONS REGARDING CASH COMPENSATION
Decisions regarding salary and cash incentive compensation to be paid to
Mr. Cameron were made by the Board of Directors pursuant to the recommendations
of the Committee. Decisions regarding cash compensation paid to executive
officers (other than Mr. Cameron) who were members of the Executive Management
Committee (a committee of eleven of U. S. Bancorp's top executive officers,
including Messrs. Sznewajs, Duim, and Hatfield) were made by the Committee in
November 1995 following review of recommendations by Mr. Cameron. The Executive
Management Committee or individual Executive Management Committee members have
been delegated authority to make decisions regarding cash compensation to be
paid to other executive officers. Compensation to be paid to certain U. S.
Bancorp executive officers who are also employees of one of U. S. Bancorp's
subsidiaries is subject to approval by the respective boards of directors of
such subsidiaries.
15
<PAGE> 19
Periodically, U. S. Bancorp engages outside consultants to survey and
report on executive compensation paid by a group of S&P Major Regional Banks
with total assets and net earnings at levels comparable to those of U. S.
Bancorp to assist in its review and conclusions regarding executive
compensation. The comparison group includes the bank holding companies in the
S&P Major Regional Banks Index appearing under "Stock Performance Graph" below
except for two companies for which data was not available.
Approval of 1996 Salary Levels. In November 1995, the Committee reviewed
market analyses of base salaries and total compensation paid by the comparison
group referred to above. Following that review, the Committee recommended, and
the Board of Directors approved, an increase in Mr. Cameron's salary level for
1996 to $800,000 from $700,000 in 1995. The 1996 salary level fell in between
the 25th and 50th percentiles of bank holding companies in the market survey. In
establishing Mr. Cameron's salary, the Committee considered the success of U. S.
Bancorp's expense reduction program (known as "Focus 59%") and the merger of U.
S. Bancorp and West One Bancorp, the largest merger in U. S. Bancorp's history.
Additional factors considered were the effect of salary compression at the top
levels of U. S. Bancorp's management and U. S. Bancorp's ability both to compete
for new executives and retain executives currently in U. S. Bancorp's employ.
The Committee also reviewed U. S. Bancorp's average total shareholder return,
return on assets, and return on common equity as compared to the S&P Major
Regional Banks Index. Salary levels for 1996 for members of the Executive
Management Committee were approved by the Board of Directors pursuant to
recommendations by Mr. Cameron, as affirmed by the Committee, and were based on
similar factors as those considered in establishing Mr. Cameron's salary.
Annual Cash Incentive Compensation. The Executive Annual Incentive Plan
(the "Executive Plan") covers members of the Executive Management Committee
(including Mr. Cameron) and is administered by the Committee. The Management
Annual Incentive Plan (the "Management Plan") covers selected management
executives who are not Executive Management Committee members and is
administered by the Executive Management Committee. The Executive Plan and the
Management Plan are collectively referred to as the "Annual Plans."
The Annual Plans are designed to reward participants for the achievement of
objective, measurable performance goals established to support U. S. Bancorp's
strategic plan. The Annual Plans contemplate the establishment each year of
target awards, performance components and related success factors and relative
weights, performance goals and additional modifier goals within each component,
and performance percentages for each component. Performance components may
relate to performance by U. S. Bancorp and its subsidiaries as a whole or by a
principal operating group, business unit, support unit, or project shared by two
or more operating groups or units. For each performance component, based on the
level of achievement for the related success factors, a performance percentage
is determined ranging from 0% for performance below a specified threshold level,
to a minimum value of not less than 50% for performance equal to the threshold
level, to 100% for performance equal to a specified target level, to a maximum
value for 1996 not to exceed 200%.
The corporate performance targets established for 1996 under the Annual
Plans by the Board of Directors following the Committee's recommendation were
based on budgeted performance criteria as follows: core operating expenses for
the full year and fourth quarter, core operating income, and core earnings per
share. In February 1997, the Committee determined that the level of attainment
of the corporate performance targets corresponded to a 176.8% payout for target
awards under the Annual Plans.
The 1996 target award established under the Executive Plan for Mr. Cameron
by the Board of Directors in November 1995 pursuant to the Committee's
recommendation was set at 60% of his 1996 base salary. An actual award of 106%
of base salary was approved in February 1997 in light of Mr. Cameron's
contribution to the level of attainment of U. S. Bancorp's corporate performance
targets.
With respect to other Executive Management Committee members, the Committee
established target awards under the Executive Plan in March 1996 ranging from
35% to 50% of their 1996 base salaries. In February 1997, the Committee
approved, with Board concurrence, Mr. Cameron's determination of levels of
achievement of the performance components assigned to other Executive Management
Committee members pursuant to authority delegated to Mr. Cameron, resulting in
awards for 1996 ranging from 57% to 100% of 1996 base salaries.
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Additional cash incentive awards are granted under the Performance Cash
Award Plan. In March 1996, the Committee approved awards under the Performance
Cash Award Plan to members of the Executive Management Committee. The
performance cash awards provide long term incentive cash payouts to be
calculated pursuant to a formula based on a comparison of U. S. Bancorp's net
income growth and return on equity over three years with that of comparably
capitalized S&P Major Regional Banks. The awards are intended to provide a cash
opportunity portion for long term incentive compensation payable upon
achievement of preset strategic objectives.
DECISIONS REGARDING STOCK-BASED INCENTIVE COMPENSATION
In March 1996, Mr. Cameron presented recommendations to the Committee with
respect to stock-based awards to members of the Executive Management Committee
under the U. S. Bancorp 1993 Stock Incentive Plan. After consideration of Mr.
Cameron's recommendations, the Committee granted awards to each executive
comprised of a combination of incentive and nonqualified stock options. In
February 1997, Mr. Cameron presented recommendations to the Committee for
additional options to the members of the Executive Management Committee under
the U. S. Bancorp 1993 Stock Incentive Plan, and upon consideration of these
recommendations, the Committee granted awards of incentive and nonqualified
stock options to each member.
The award of stock options encourages executive retention and motivates top
executives to create additional equity value for shareholders by tying
compensation to stock value. The size of individual grants, including grants to
Mr. Cameron, were based upon a comparison to similar grants by peer institutions
reflected in the market survey referred to above and the anticipated effect of
the awards on U. S. Bancorp's ability to retain current executives and attract
new talent. See "Executive Compensation -- Stock-Based Compensation."
COMPENSATION COMMITTEE MEMBERS
N. Stewart Rogers, Chairman
Harry L. Bettis
Robert L. Dryden
John B. Fery
Paul A. Redmond
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STOCK PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns
for the five-year period ended December 31, 1996, for the Common Stock, for the
Standard & Poor's 500 composite stock index (the "S&P 500"), and for the S&P
Major Regional Banks Index, in each case assuming investment of $100 at the
close of business on the last trading day prior to January 1, 1992, and
reinvestment of dividends.
<TABLE>
<CAPTION>
Measurement Period BANKS (MAJOR
(Fiscal Year Covered) U S BANCORP REGIONAL)-500 S&P 500 INDEX
<S> <C> <C> <C>
Dec91 100 100 100
Dec92 121.73 127.34 107.62
Dec93 119.27 135.00 118.46
Dec94 112.11 127.78 120.03
Dec95 173.07 201.20 165.13
Dec96 238.49 274.92 203.05
</TABLE>
TRANSACTIONS WITH U. S. BANCORP
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Harry L. Bettis, Carolyn Silva Chambers, Franklin G. Drake, Robert L.
Dryden, John B. Fery, Allen T. Noble, Paul A. Redmond, and N. Stewart Rogers
were members of the Compensation Committee during 1996.
During 1996, certain directors (including each member of the Compensation
Committee) and executive officers of U. S. Bancorp, their associates, and
members of their immediate families were customers of U. S. Bancorp and its
subsidiary banks. It is expected that directors, executive officers, their
associates, and members of their immediate families will continue to be
customers of U. S. Bancorp and its subsidiary banks in the future. Generally,
transactions between U. S. Bancorp or its subsidiary banks and executive
officers and directors of U. S. Bancorp, their associates and family members are
made in the ordinary course of business on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features. Loans to
certain executive officers that were made on terms other than those summarized
above are described below under "Other Transactions."
OTHER TRANSACTIONS
In connection with the relocation in 1989 of executive officer Phyllis J.
Campbell to Seattle, Washington, U. S. Bancorp made a real estate loan to
finance her purchase of a residence. The loan was made on the same terms as
loans made to other U. S. Bancorp employees except the interest rate per annum
was fixed at 7-1/4% for
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Ms. Campbell. Such interest rate would increase to 10-1/4% in the event of
termination of her employment with U. S. Bancorp. The highest outstanding
balance on Ms. Campbell's loan during 1996 and the balance at December 31, 1996,
respectively, were $225,168 and $206,952.
Eugene Bank Tower Associates Limited Partnership, a Washington limited
partnership ("Eugene Tower Associates"), owns and leases the U.S. Bank Center in
Eugene, Oregon. Ms. Chambers has an interest in a company which is a general
partner in Eugene Tower Associates. U.S. Bank of Oregon made lease payments for
space in the U.S. Bank Center totaling approximately of $830,000 during 1996.
In connection with the Merger Agreement relating to the acquisition of
Peoples Ban Corporation ("Peoples") in 1987, U. S. Bancorp entered into a
shareholder agreement with certain holders of the common stock of Peoples
pursuant to which such holders agreed to vote in favor of the merger of Peoples
with a U. S. Bancorp subsidiary. Pursuant to this agreement, U. S. Bancorp has
agreed to afford such holders (the holders of approximately 8.4 million shares
of Common Stock listed as beneficially owned by Mr. Green under "Voting
Securities and Principal Shareholders" above) certain registration rights with
respect to such shares of Common Stock (as well as shares issued as a result of
any change in capitalization) (the "Registrable Securities"). U. S. Bancorp is
obligated, under certain circumstances and subject to specified terms and
conditions, to use its best efforts to register for sale under the federal and
state securities laws the Registrable Securities of such holders (and certain
transferees). Such holders may make written requests of U. S. Bancorp, until
December 22, 1997, to effect a registration for sale of at least 1,080,000
shares (as adjusted) of Registrable Securities. Holders of Registrable
Securities are entitled to an aggregate of three such registrations. U. S.
Bancorp has also agreed to permit such holders to include their Registrable
Securities in certain other registrations of Common Stock; under certain
circumstances, any such registration would be counted against the holders' three
registration opportunities. All expenses of such registration, other than
underwriters' discounts and commissions applicable to the holders' Registrable
Securities and fees and disbursements of the holders' counsel, will be paid by
U. S. Bancorp. The agreement also contains certain indemnification provisions.
PROPOSAL 2: AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL STOCK
On February 20, 1997, the Board of Directors by unanimous vote of those
present, adopted resolutions approving and submitting to a vote of the
shareholders an amendment to Article III of U. S. Bancorp's Restated Articles of
Incorporation ("Articles") to increase its authorized Common Stock from
250,000,000 to 400,000,000 shares. The relative rights and limitations of the
Common Stock would remain unchanged under the amendment. The text of Article III
as proposed to be amended is attached hereto as Appendix A.
At February 7, 1997, there were 147,934,549 shares of Common Stock issued
and outstanding; 6,000,000 shares of Preferred Stock have also been issued. In
addition, approximately 11 million shares of Common Stock are reserved for
issuance to U. S. Bancorp's stock option and divided reinvestment plans. Thus,
only approximately 90 million authorized shares of Common Stock are currently
available for other corporate purposes.
The proposed increase in the authorized Common Stock is recommended by the
Board of Directors to ensure the availability for the foreseeable future of an
adequate supply of authorized unissued shares for stock dividends, stock
options, reinvestment of dividends, and other corporate purposes, including
financing the acquisition of banks, bank holding companies or other financial
services businesses, without further shareholder approval. The shareholders last
approved an increase in the authorized Common Stock in 1992 from 150,000,000
shares to 250,000,000 shares.
Management reviews U. S. Bancorp's capital requirements on a continuing
basis and, depending on market conditions and other factors, may recommend that
the Board of Directors authorize the sale of additional shares of Common Stock
or Preferred Stock in a public or private transaction. Also, management is
regularly presented with, and actively explores, proposals for various
acquisition opportunities. During 1996, for example, U. S. Bancorp issued
approximately 10.2 million shares to acquire two bank holding companies. There
are at present, however, no firm plans, arrangements, or understandings relating
to the issuance of any of the additional shares of
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Common Stock or Preferred Stock proposed to be authorized. Such shares would be
available for issuance without further action by the shareholders, unless
required by the Articles or Bylaws of U. S. Bancorp or by applicable law.
The issuance of additional shares of Common Stock may, among other things,
have a dilutive effect on earnings per share and on the equity and voting power
of current shareholders. The Common Stock does not have preemptive rights.
Under applicable Oregon law, the holders of the Common Stock would
generally be entitled to vote upon any proposed amendment to the Articles or
other corporate action, such as a merger, which would affect an exchange or
reclassification of all or a portion of the Common Stock, increase or decrease
the aggregate number of authorized shares of the class, or otherwise affect the
preferences or relative rights of the Common Stock.
The issuance of any of the shares of Common Stock proposed to be
authorized, as well as currently authorized but unissued shares of such stock,
may potentially have antitakeover effect. Any such issuance may make it more
difficult to obtain shareholder approval of actions such as certain business
combinations, removal of management, bylaw changes, or amendment or repeal of
Article IX of the Articles, which requires that, unless minimum price or other
specified requirements are met, a business combination involving U. S. Bancorp
and a related person (as defined) must be approved by holders of at least
two-thirds of U. S. Bancorp's Common Stock excluding shares held by the related
person and its affiliates. However, the increase in authorized shares of Common
Stock has not been proposed for an antitakeover-related purpose and the Board of
Directors and management have no knowledge of any current efforts to obtain
control of U. S. Bancorp or to effect large accumulations of its Common Stock.
RECOMMENDATION BY THE BOARD OF DIRECTORS; VOTE REQUIRED
The Board of Directors recommends that shareholders vote FOR the proposed
amendment to U. S. Bancorp's Restated Articles of Incorporation to increase its
authorized Common Stock. The proposed amendment will be adopted if the votes
cast in favor of the action at the meeting exceed those cast opposing it,
provided a quorum is present.
PROPOSAL 3: APPROVAL OF THE 1997 AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR STOCK INCENTIVE AND DEFERRAL PLAN
DESCRIPTION OF THE RESTATED PLAN
On December 19, 1996, U. S. Bancorp's Board of Directors unanimously
adopted, subject to shareholder approval, amendments to the U. S. Bancorp
Non-Employee Director Stock Option Plans (the "Director Plans") and its
Non-Employee Director Deferred Compensation Plan. The amendments combine these
plans and restate them as the 1997 Amended and Restated Non-Employee Director
Stock Incentive and Deferral Plan (the "Restated Plan"). The Restated Plan
combines the principal features of U. S. Bancorp's existing non-employee
director plans and adds additional deferral options for fees earned by U. S.
Bancorp's non-employee directors.
Only members of the U. S. Bancorp Board of Directors who are not employees
of U. S. Bancorp or any subsidiary (each, an "Eligible Director") may
participate in the Restated Plan. The purposes of the Restated Plan are to
attract and retain the services of experienced and knowledgeable non-employee
directors and to provide an incentive for such directors to increase their
proprietary interest in U. S. Bancorp's long-term success and progress.
A copy of the Restated Plan is attached to this Proxy Statement as Appendix
B and is incorporated herein by reference. The following description of the
Restated Plan is a summary and does not purport to be fully descriptive. See
Appendix B for more detailed information.
Shares Subject to the Restated Plan. The Restated Plan authorizes the
issuance of an additional 400,000 shares of Common Stock for stock option grants
to, and option elections by, Eligible Directors. Of the 125,000
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shares previously authorized under the Director Plans, approximately 40,000
shares currently remain available for issuance under the Restated Plan.
Option Grants. Each Eligible Director, upon his or her first election to
the U. S. Bancorp Board of Directors, will automatically receive a grant of an
option to purchase 4,000 shares of Common Stock. In addition, each Eligible
Director will automatically receive a grant of an option to purchase 2,000
shares of Common Stock immediately following his or her re-election at each
annual meeting of shareholders thereafter for as long as he or she remains an
Eligible Director. Such options will vest in full on the first anniversary of
the date of grant. The term of such options will be unlimited, except that such
options will expire (i) one year following termination on account of death or
disability; (ii) five years following termination on account of retirement; or
(iii) three months following termination for any other reason. The option
exercise price for such options is the fair market value of the shares at the
time the option is granted. For purposes of the Restated Plan, "fair market
value" is the low sale price of the Common Stock as reported by The Nasdaq Stock
Market on the date of the grant. Options are nontransferable other than upon
death or for estate planning purposes.
ELECTIONS WITH RESPECT TO DIRECTORS FEES.
Under the Restated Plan, an Eligible Director may elect from among a
variety of optional methods of payment in lieu of all or any part of the cash
fees due to an Eligible Director for his or her services. The following optional
methods are available under the Restated Plan:
Receipt of Common Stock. The Restated Plan permits an Eligible
Director to elect to receive shares of Common Stock equal in value (as of
the payment date) to the foregone cash payment. The value of shares so
received will be taxable income to the director.
Receipt of Restricted Stock. An Eligible Director may elect to
receive restricted shares of Common Stock equal in value (as of the payment
date), without regard to the restrictions, to the foregone cash payment.
Restricted shares will not vest until the earlier of (i) the 65th birthday
of the director if he or she is not then a member of the Board, (ii)
termination of service as a director after age 65, (iii) a director's 70th
birthday, (iv) a change of control of U. S. Bancorp, or (v) a director's
death or disability. Dividends on restricted shares are, at the election of
the director, added to the restricted stock account. Restricted shares
become taxable when the restrictions lapse.
Receipt of Stock Units. An Eligible Director may elect to receive
stock units equal in number to the number of shares of Common Stock that
could be purchased with the foregone cash payment. Stock units become
payable at a date selected by the director (which must be at least three
years from the date the units were received), and are payable at the time
either in cash or stock. Dividends on the stock equivalent of stock units
are, at the election of the director, added to the stock unit account.
Receipt of stock units is not a taxable event; stock or cash received in
payment for the units is taxed when received.
Receipt of Deferred Stock Options. The Restated Plan permits an
Eligible Director to elect to receive a deferred stock option to purchase
shares of Common Stock equal in number to the foregone cash payment divided
by 60% of the fair market value of one share of Common Stock on the payment
date. Accordingly, if the foregone directors fees are $1,200, and the value
of one share of Common Stock on the payment date is $50, the director will
receive a deferred stock option to purchase 40 shares. The exercise price
for the deferred stock option will be 40% of the current fair market value
of the Common Stock on the date of grant. A director is taxed at the time
of exercise of a deferred stock option, on the spread between the option
exercise price and the fair market value of the Common Stock at that time.
Elective Deferral of Fees. An Eligible Director may elect to defer
receipt of his or her director fees to a date or dates selected by the
director. The deferred amounts will accrue interest based on a hypothetical
investment selected by the director from among a list of investments
approved by the Restated Plan Administrator (as defined below). Deferred
fees are taxable when received.
Directors may select from among the available options at any time up
to December 31 for directors fees with respect to the following calendar
year. For 1997 only, elections made by June 1, 1997 will be effective with
respect to directors fees earned in July through December.
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<PAGE> 25
Mandatory Payment of Fees in Stock. The Restated Plan permits the Board of
Directors to require that all or part of the fees of Eligible Directors be paid
in shares, restricted shares, stock units or deferred stock options.
Administration. The Restated Plan will be administered by a committee
appointed by the U. S. Bancorp Board of Directors (the "Restated Plan
Administrator"). Subject to the terms of the Restated Plan, the Restated Plan
Administrator has the power to construe the provisions of the Restated Plan, to
determine all questions arising thereunder and to adopt and amend such rules and
regulations for the administration of the Restated Plan as it may deem
desirable.
Amendment and Termination. The Board of Directors may amend or terminate
the Restated Plan at any time, provided that no amendment may be made without
the approval of U. S. Bancorp's shareholders that would materially increase the
number of shares that may be issued under the Restated Plan or materially modify
its requirements for eligibility.
Term of Restated Plan. The Restated Plan will continue in effect until it
is terminated by action of the Board of Directors, but such termination will not
affect the terms of any then-outstanding options or awards.
FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS
The following discussion summarizes the material federal income tax
consequences to U. S. Bancorp and the Eligible Directors of the grant and
exercise of options granted under the Restated Plan, under the existing
applicable provisions of the Code and the regulations thereunder.
Under present law and regulations, no income will be recognized by an
optionee upon the grant of an option. Upon the exercise of an option, the
optionee will recognize taxable ordinary income in an amount equal to the excess
of the fair market value of the shares acquired over the option price. Upon a
later sale of those shares, the optionee will have short-term or long-term
capital gain or loss, as the case may be, in an amount equal to the difference
between the amount realized on such sale and the tax basis of the shares sold.
If payment of the option price is made entirely in cash, the tax basis of the
shares will be equal to their fair market value on the date of exercise (but not
less than the option price), and their holding period will begin on the day
after the exercise date.
If the optionee uses already-owned shares to exercise an option in whole or
in part, the transaction will not be considered a taxable disposition of the
already-owned shares. The optionee's tax basis and holding period of the
already-owned shares will be carried over to the equivalent number of shares
received upon exercise. The tax basis of the additional shares received upon
exercise will be the fair market value of the shares on the date of exercise
(but not less than the amount of cash, if any, used in payment), and the holding
period for such additional shares will begin on the day after the exercise date.
In all the foregoing cases, U. S. Bancorp will be entitled to a deduction
at the same time and in the same amount as the optionee recognizes ordinary
income.
RECOMMENDATION BY THE BOARD OF DIRECTORS; VOTE REQUIRED
The Board of Directors recommends that the shareholders vote FOR approval
of the 1997 Amended and Restated Non-Employee Director Stock Incentive and
Deferral Plan. The affirmative vote of the holders of a majority of the shares
of Common Stock present, in person or by proxy, and entitled to vote on the
proposal at the 1997 annual meeting is required for approval.
PROPOSAL 4: APPROVAL OF 1997 EMPLOYEE STOCK PURCHASE PLAN
On December 19, 1996, U. S. Bancorp's Board of Directors unanimously
adopted, subject to shareholder approval, the U. S. Bancorp 1997 Employee Stock
Purchase Plan (the "Purchase Plan"). The Purchase Plan will provide a means for
eligible employees of U. S. Bancorp and its subsidiaries to purchase shares of
Common Stock through payroll deductions. The Board believes that adoption of the
Purchase Plan will promote the interests of U. S. Bancorp and its shareholders
by assisting U. S. Bancorp in attracting, retaining and stimulating the
performance of employees and by aligning employees' interests through their
purchases of Common Stock with the interests of shareholders.
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A copy of the Purchase Plan is attached to this Proxy Statement as Appendix
C and is incorporated herein by reference. The following description of the
Purchase Plan is a summary and does not purport to be a complete description.
See Appendix C for more detailed information.
DESCRIPTION OF THE PURCHASE PLAN
Shares Subject to the Plan. An aggregate of up to 4,000,000 shares of
Common Stock is authorized for issuance under the Purchase Plan, subject to
adjustment from time to time for stock dividends and certain other changes in
capitalization as provided in the Purchase Plan.
Eligibility. The Purchase Plan is an employee benefit program that enables
qualified employees to purchase shares of Common Stock at a discount through
payroll deductions without incurring broker commissions. To participate, an
employee's customary employment must be for more than 20 hours per week but the
"Plan Administrator" may decide to reduce the minimum number of hours necessary
for participation. An employee is not eligible to continue participation in the
Purchase Plan in the event his or her employment is voluntarily or involuntarily
terminated, or if such employee owns or will own, as a result of such
participation, shares possessing 5% or more of the total combined voting power
or value of all classes of stock of U. S. Bancorp or any related corporation. As
of February 7, 1997, approximately 14,000 of U. S. Bancorp's employees would be
eligible to participate in the Purchase Plan, including each of the named
executive officers. Non-employee directors of U. S. Bancorp are not eligible to
participate in the Purchase Plan.
Stock Purchases. The Purchase Plan is divided into offering periods, the
length of which will be as established by the Board of Directors or the
Compensation Committee, subject to the limitations set forth in the Purchase
Plan. During these offering periods, participating employees accumulate funds in
an account used to buy Common Stock through payroll deductions at a rate of not
less than 2% nor more than 10% of such participant's wages during each payroll
period in each purchase period within an offering period. The length of the
purchase period will be as established by the Board of Directors or the
Compensation Committee and may be the same as the offering period, or may be
shorter consecutive periods within the offering period. The Purchase Plan will
initially be implemented with a coextensive offering and purchase period of one
year.
At the end of each purchase period, the market price is determined and the
participating employees' accumulated funds are used to purchase the appropriate
number of shares of Common Stock. No participant may purchase more than $25,000
fair market value of Common Stock for any calendar year under the Purchase Plan.
The purchase price per share of Common Stock under the Purchase Plan will be as
established by the Board of Directors or the Compensation Committee, but may not
be less than the lower of 85% of the per share fair market value of the Common
Stock on either the first day of the offering period or the last day of the
purchase period. The Purchase Plan will initially be implemented with a purchase
price equal to 85% of the lesser of the fair market value of the Common Stock on
the first day of the offering period and the last day of the purchase period.
The closing price of a share of Common Stock on February 7, 1997 was $45.75 as
reported by The Nasdaq Stock Market.
Administration. The Purchase Plan will be administered by U. S. Bancorp's
Human Resources Group except for those items expressly reserved to the Board of
Directors or the Compensation Committee under the Plan (the "Plan
Administrator"). The Plan Administrator is authorized to administer and
interpret the Purchase Plan and to make such rules and regulations as it deems
necessary to administer the Purchase Plan, including reducing eligibility
requirements for participating in an Offering, so long as such interpretation,
administration or application with respect to purchases under the Purchase Plan
corresponds to the requirements of Section 423 of the Internal Revenue Code of
1986, as amended (the "Code").
Amendment and Termination. The Board of Directors has the power to amend,
suspend or terminate the Purchase Plan, provided that the Board may not amend
the Purchase Plan without shareholder approval if such approval is required by
Section 423 of the Code. The Compensation Committee of the Board of Directors
may also amend the Purchase Plan so long as such amendment does not require
shareholder approval.
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Term of the Plan. The Purchase Plan will continue in effect until April
15, 2007, except that such termination shall have no effect on Offering Periods
that started prior to April 16, 2007.
FEDERAL INCOME TAX CONSEQUENCES
U. S. Bancorp intends that the Purchase Plan qualify as an "employee stock
purchase plan" under Section 423 of the Code. Section 423 allows an employer to
grant options to its employees to purchase company stock at a stipulated price
without having the employees realize taxable income at the time the option is
granted or when exercised. The basis of the stock received on exercise of an
option under the Purchase Plan is the exercise price paid for the stock. The
Code imposes a holding period for favorable tax treatment upon disposition of
Common Stock acquired under the Purchase Plan equal to the later of two years
after the grant date or one year after the purchase date. When the Common Stock
is sold after this holding period, the employee will realize ordinary income up
to the amount of any discount (up to a maximum of 15%) from the fair market
value of Common Stock as of the grant date. Any further gain is taxed at capital
gain rates. If the stock is sold before the holding period expires, the employee
will realize ordinary income to the extent of the difference between the price
actually paid for the stock and the fair market value of the stock at the
purchase date, regardless of the price at which the stock is sold. If the sale
price is less than the fair market value of the stock on the purchase date, the
employee will realize a capital loss equal to such difference.
U. S. Bancorp may not take a deduction for the difference between the fair
market value of the Common Stock and the purchase price paid for the Common
Stock by the employee unless the employee disposes of the stock before the
statutory holding periods expire.
RECOMMENDATION BY THE BOARD OF DIRECTORS; VOTE REQUIRED
The Board recommends that the shareholders vote FOR approval of the
adoption of the U. S. Bancorp 1997 Employee Stock Purchase Plan. The affirmative
vote of the holders of a majority of the shares of Common Stock present, in
person or by proxy, and entitled to vote on the proposal at the 1997 annual
meeting is required for approval.
PROPOSAL 5: SELECTION OF AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as independent
auditors for the current year. Deloitte & Touche LLP has examined the financial
statements of U. S. Bancorp since January 1, 1969. It is expected that
representatives of Deloitte & Touche LLP will be present at the shareholders
meeting, will have the opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions.
RECOMMENDATION BY THE BOARD OF DIRECTORS; VOTE REQUIRED
Although the selection of auditors is not required to be submitted to a
vote of the shareholders, the Board has decided to ask the shareholders to
approve the selection and recommends that the shareholders vote FOR approval. If
a majority of the shares of Common Stock represented at the annual meeting does
not vote to approve the selection, the Board will reconsider the selection.
SHAREHOLDER PROPOSALS
Shareholder proposals submitted for inclusion in the 1998 proxy materials
and consideration at the 1998 annual meeting must be received on or before
November 13, 1997. Proposals should be sent to U. S. Bancorp, Attention:
Corporate Secretary Division, P.O. Box 2200, Portland, Oregon 97208-2200.
24
<PAGE> 28
OTHER BUSINESS
While the accompanying Notice of Annual Meeting of Shareholders provides
for transaction of such other business as may properly come before the meeting,
U. S. Bancorp has no knowledge of any matters to be presented at the meeting
other than those listed as Items 1 through 5 in the Notice. However, the
enclosed Proxy gives discretionary authority in the event that any other matters
should be presented. U. S. Bancorp's Bylaws permit business to be brought before
the annual meeting by a shareholder of record, provided that the shareholder has
given written notice to U. S. Bancorp of his or her intention to present such
business at the meeting, including a brief description of such business, in the
time and manner specified for shareholder director nominations discussed above
under "Proposal 1: Election of Directors."
By order of the Board of Directors
DWIGHT V. BOARD
Secretary
March 13, 1997
25
<PAGE> 29
APPENDIX A
PROPOSED AMENDMENT OF U. S. BANCORP'S
RESTATED ARTICLES OF INCORPORATION
RESOLVED that Paragraph A of Article III of the Restated Articles of
Incorporation of U. S. Bancorp, as heretofore amended, shall be amended to read
in full as follows:
ARTICLE III
A. The aggregate number of shares which the Corporation shall have
authority to issue is 450,000,000 which shall be divided into classes as
follows:
<TABLE>
<CAPTION>
TITLE OF CLASS NO. OF SHARES
---------------------------------------------------------------- -------------
<S> <C>
Preferred Stock, without par value.............................. 50,000,00
Common Stock, par value $5 per share............................ 400,000,000
</TABLE>
A-1
<PAGE> 30
APPENDIX B
U. S. BANCORP
1997 AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR STOCK INCENTIVE AND DEFERRAL PLAN
ARTICLE 1
PURPOSE
The purpose of this 1997 Amended and Restated Non-Employee Director Stock
Incentive and Deferral Plan (the "Plan") is to advance the interests of U. S.
Bancorp ("Bancorp") by encouraging members of Bancorp's Board of Directors (the
"Board") who are not employees of Bancorp or any of its subsidiaries
("Non-Employee Directors") to acquire a proprietary interest in Bancorp, and
provide them the opportunity to defer their compensation. It is anticipated that
the Plan will assist Bancorp in attracting and retaining Non-Employee Directors.
ARTICLE 2
DEFINITIONS
When used in the Plan, the following terms shall have the meaning specified
below.
"Acquiring Person" shall mean any person, or any one or more related
persons, that constitute a "group" for purposes of Section 13(d) and Section
14(b) of the Exchange Act and Rule 13d-5 and Rule 14b-2 thereunder; provided,
that the term Acquiring Person shall not include (i) Bancorp or any of its
Subsidiaries, (ii) any employee benefit plan of Bancorp or any of its
Subsidiaries, (iii) any entity holding voting capital stock of Bancorp for or
pursuant to the terms of any such employee benefit plan, or (iv) any person or
group solely because such person or group has voting power with respect to
capital stock of Bancorp arising from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to the Exchange
Act.
"Annual Meeting Date" shall mean the date of each Annual Meeting of
Directors.
"Annual Meeting of Directors" shall mean the meeting of the Board
immediately following each annual meeting of Bancorp's shareholders.
"Annual Option" shall mean a stock option granted under the Plan on an
Annual Meeting Date pursuant to Section 4.2.
"Change in Control" shall mean:
(1) The acquisition by any Acquiring Person of beneficial of 20
percent or more of the combined voting power of the then outstanding Voting
Securities; provided, however, that for purposes of this paragraph (1) the
following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from Bancorp, (ii) any acquisition by Bancorp, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by Bancorp or any corporation controlled by Bancorp, or (iv)
any acquisition by any corporation pursuant to a transaction that complies
with clauses (i), (ii), and (iii) of paragraph (3) of this definition of
Change in Control; or
(2) During any period of 12 consecutive calendar months, individuals
who at the beginning of such period constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual who becomes a Director during
the period whose election, or nomination for election, by Bancorp's
shareholders was approved by a vote of at least a majority of the directors
then constituting 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 solicitation of proxies or consents by or on behalf of
a Person other than the Board; or
B-1
<PAGE> 31
(3) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of Bancorp
(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 of the Voting Securities outstanding
immediately prior to such Business Combination beneficially own, directly
or indirectly, more than 50 percent 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 Bancorp or all or substantially all of
Bancorp'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 Voting Securities, (ii) no Person
(excluding any employee benefit plan, or related trust, of Bancorp or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly 20 percent 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
(4) Approval by the shareholders of Bancorp of any plan or proposal
for the liquidation or dissolution of Bancorp.
"Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time. Where the context so requires, any reference to a
particular Code section shall be construed to refer to the successor provision
to such Code section.
"Commencement Date" shall mean the date on which a Non-Employee Director
becomes a member of the Board.
"Committee" shall mean the Compensation Committee of the Board or any other
committee appointed by the Board to administer the Plan.
"Deferral Accounts" shall mean the accounts established to hold Directors
Fees deferred pursuant to Section 5.6.
"Directors Fees" shall mean all fees payable to a Non-Employee Director for
service as a member of the Board or of a Subsidiary Board, including Retainers
and fees for attendance at meetings of the Board or of a Subsidiary Board or a
committee of the Board or a Subsidiary Board, and shall also include any fees or
awards paid to a Non-Employee Director for extraordinary service as a member of
the Board. Directors Fees shall not include Initial Options or Annual Options.
"Disability" shall mean permanent and total disability as defined in
Section 22(e)(3) of the Code. "Dividend Date" shall mean any date on which cash
or stock dividends on Shares are payable.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
and in effect from time to time. Where the context so requires, any reference to
a particular section of the Exchange Act, or to any rule promulgated under the
Exchange Act, shall be construed to refer to the successor provisions to such
section or rules.
"Fair Market Value" shall mean the value of one of the Shares on a
particular day, determined without regard to any restrictions, and shall equal:
(1) The low sale price for Shares as reported for that day in The Wall
Street Journal by the National Market System of the National Association of
Securities Dealers Automated Quotation System (Nasdaq); or
(2) If the low sale price is not reported in The Wall Street Journal
for that day, the low sale price quoted by Nasdaq for that day.
B-2
<PAGE> 32
If no low sale price is reported in The Wall Street Journal or quoted by
Nasdaq for that day, the low sale price for Shares as so reported or quoted for
the immediately preceding day on which it was reported or quoted shall be used.
"Grant Date" shall mean the date on which an option is granted.
"Initial Option" shall mean a stock option granted pursuant to Section 4.1.
"Option" shall mean an Annual Option, an Initial Option, or a Deferred
Compensation Option.
"Participant" shall mean a Non-Employee Director who has received a grant
of an award or Option pursuant to the Plan. A person who ceases to be a
Non-Employee Director shall remain a Participant so long as such person has the
right to exercise any Option granted under the Plan or the right to receive any
payment under the Plan.
"Payment Date" shall mean January 5, April 5, July 5, and October 5 of each
year: provided, that if any such day is a Saturday, Sunday or holiday, the
Payment Date shall mean the next succeeding business day.
"Plan Year" shall mean a calendar year.
"Quarterly Fees" shall mean, for each calendar quarter, the total amount of
Directors Fees, including any installment of annual fees, payable to a
Non-Employee Director for that quarter.
"Restricted Shares" shall mean Shares subject to such terms and conditions
as the Committee deems appropriate, including without limitation restrictions on
the sale, assignment, transfer or other disposition of the Restricted Shares.
"Retainer" shall mean annual retainer fees payable to a Non-Employee
Director for service as a member of the Board or a Subsidiary Board.
"Retirement" shall mean a Participant's retirement from the Board by reason
of attaining the maximum age for directors specified in the bylaws of Bancorp,
and shall also include a Participant's departure from the Board as a result of
the dissolution of Bancorp.
"Shares" shall mean the $5.00 par value common stock of Bancorp.
"Stock Unit" shall mean a Stock Unit granted under the Plan in connection
with a Deferral Election by a Non-Employee Director pursuant to Section 5.4.
"Subsidiary" shall mean a subsidiary corporation of Bancorp as defined in
Section 425(f) of the Code.
"Subsidiary Board" shall mean the board of directors of a subsidiary of
Bancorp.
"Voting Securities" shall mean Bancorp's issued and outstanding securities
ordinarily having the right to vote at elections for Bancorp's Board.
Except when otherwise indicated by the context, any masculine or feminine
terminology when used in the Plan shall also include the opposite gender; and
the definition of any term herein in the singular shall also include the plural,
and vice versa.
B-3
<PAGE> 33
ARTICLE 3
ELIGIBILITY
Each Non-Employee Director of Bancorp shall be eligible to participate in
this Plan.
ARTICLE 4
INITIAL OPTIONS AND ANNUAL OPTIONS
4.1 GRANT OF INITIAL OPTIONS
Each person who became a Non-Employee Director on or after October 18, 1990
(and who had not been an employee of Bancorp or a Subsidiary at any time after
October 18, 1989) has been granted an Initial Option to purchase 4,000 Shares.
The Grant Date for each such Initial Option was October 18, 1990 or the date
specified in such Option. Each person who first becomes a Non-Employee Director
after the 1997 Annual Meeting Date (and who has not been an employee of Bancorp
or a Subsidiary at any time within the one year preceding such person's
Commencement Date) shall be granted an Initial Option to purchase 4,000 Shares
effective the Commencement Date. The Grant Date for each such Initial Option is
the Commencement Date.
4.2 GRANT OF ANNUAL OPTIONS
Each person who was a Non-Employee Director at the 1993 Annual Meeting of
Directors has been granted an Annual Option to purchase 2,000 Shares. Commencing
with the 1994 Annual Meeting of Directors, each Non-Employee Director at the
time of such meeting shall be granted, effective as of such Annual Meeting Date,
an Annual Option to purchase 2,000 Shares. The Grant Date for each Annual Option
is the respective Annual Meeting Date, except that for 1993 the Grant Date was
June 17, 1993.
4.3 PRICE AND TIME OF EXERCISE OF INITIAL OPTIONS AND ANNUAL OPTIONS
The exercise price per Share of each Initial Option and Annual Option shall
be equal to the Fair Market Value of one Share as of the respective Grant Date.
Effective April 1, 1997, each Initial Option and Annual Option (other than
Initial Options or Annual Options that have terminated or the time of whose
exercisability has been accelerated in accordance with the Plan) may be
exercised at any time or times commencing on the first anniversary of the Grant
Date thereof.
ARTICLE 5
ELECTIONS IN RESPECT OF DIRECTORS FEES
5.1 ELECTIONS IN LIEU OF CASH PAYMENT OF DIRECTORS FEES
Commencing on July 1, 1997, each Participant shall have the right to elect,
with respect to all or a portion of Directors Fees otherwise payable in cash,
from among the optional methods of payment provided in this Article 5. Elections
shall be subject to the terms and conditions of Article 9 and the other
provisions of this Plan.
All elections made under the Plan prior to July 1, 1997, shall remain in
full force and effect until amended or terminated as provided in Section 9.1.
5.2 ELECTION TO RECEIVE SHARES
Each Participant may elect to receive all or a portion of Directors Fees
otherwise payable in cash in a whole number of Shares equal in number to the
quotient obtained by dividing the foregone cash payment by the Fair Market Value
of one Share on the Payment Date. Such Shares shall be delivered to each such
Participant as soon as practicable after the Payment Date. The value of any
fractional Shares shall be paid to the Participant in cash.
B-4
<PAGE> 34
5.3 ELECTION TO RECEIVE RESTRICTED SHARES
Each Participant may elect to receive all or a portion of Directors Fees
otherwise payable in cash in a whole number of Restricted Shares equal in number
to the quotient obtained by dividing the foregone cash payment by the Fair
Market Value of one Share on the Payment Date. Each Participant receiving
Restricted Shares shall be issued a stock certificate in respect of such Shares,
registered in the name of the Participant, and shall execute a stock power in
blank with respect to the Restricted Shares evidenced by the certificate. The
certificate evidencing such Restricted Shares and the stock power shall be held
in custody by Bancorp until the restrictions on such Restricted Shares shall
have lapsed.
Restricted Shares may provide that a Participant shall vest in such Shares,
on the occurrence of the earliest of the following events, subject to such other
conditions as the Committee may be prescribe: (i) the 65th birthday of the
Participant if at such time the Participant is no longer a Non-Employee
Director, (ii) the date on which the Participant terminates service on the Board
after attaining age 65, (iii) the 70th birthday of the Participant, (iv) a
Change in Control, or the dissolution of Bancorp, or (v) the Participant's death
or Disability.
During the period prior to the lapse of the restrictions and conditions
applicable to the Restricted Shares (the "Restriction Period"), a Participant
may not sell, assign, transfer, pledge, encumber or otherwise dispose of
Restricted Shares. The Committee, in its sole discretion, may provide for the
lapse of restrictions in installments during the Restriction Period. Upon
expiration of the applicable Restriction Period (or lapse of restrictions during
the Restriction Period if the restrictions lapse in installments), the legend on
the Restricted Shares (or such of them as to which the restrictions have lapsed,
if the restrictions lapse in installments) will be removed and the Participant's
stock power will be returned and the Shares (or such of the Shares as to which
all restrictions have lapsed) will no longer be Restricted Shares. The Shares
shall be delivered to the Participant as soon as practicable thereafter.
A Participant shall have, with respect to Restricted Shares held under this
Plan, all of the rights of a shareholder of Bancorp, including the right to vote
the shares and the right to receive cash dividends.
At the election of the Participant, the cash value of any fractional
Restricted Shares and all cash dividends on Restricted Shares shall be
accumulated on the books and records of Bancorp. From time to time but not less
often than annually, as of a Dividend Date or Payment Date, the Committee shall
determine whether the accumulated cash credited to a Participant's account, as
of such Dividend Date or Payment Date, exceeds the Fair Market Value of one or
more Shares. If so, the Committee shall issue additional whole shares of
Restricted Stock to the Participant, equal in number to the accumulated cash
divided by the Fair Market Value of one Share, which shall remain in the custody
of Bancorp until the restrictions thereon shall have lapsed. The accumulated
cash shall be reduced in proportion. The additional shares of Restricted Stock
issued hereunder shall vest in the same manner as other Restricted Shares, and
shall be subject to such other conditions as the Committee may prescribe.
Stock dividends issued with respect to Restricted Shares shall be treated
as additional Restricted Shares and shall be subject to the same conditions and
restrictions as the Restricted Shares with respect to which they were issued.
5.4 ELECTION TO RECEIVE STOCK UNITS
Each Participant may elect to receive all or a portion of Directors Fees
otherwise payable in cash in Stock Units, which shall be credited as of the
Payment Date to a bookkeeping account (a "Stock Unit Account") maintained by
Bancorp. The number of Stock Units credited to such account shall be equal to
the amount of the foregone cash payment divided by the Fair Market Value of one
Share on the Payment Date.
The Deferral Election shall specify the date (the "Deferred Payment Date")
on which the Non-Employee Director elects to receive payment for the Stock
Units; provided, that the Deferred Payment Date with respect to any Deferral
Election must be at least three years after the beginning of the calendar year
during which the Stock Unit was credited to the Participant's Stock Unit
Account. The Deferral Election shall also specify whether payment shall be in
Shares or in cash.
B-5
<PAGE> 35
At the election of the Participant, the cash value of any fractional Stock
Units and all cash dividends payable on such number of Shares as is equal to the
number of Stock Units in the Participant's account shall be credited to such
Participant's Stock Unit Account. From time to time but not less often than
annually, as of a Dividend Date or Payment Date, the Committee shall determine
whether the accumulated cash credited to a Participant's Stock Unit Account, as
of such Dividend Date or Payment Date, exceeds the Fair Market Value of one or
more Shares. If so, the Committee shall credit the Participant's Stock Unit
Account with additional whole Stock Units equal to the accumulated cash divided
by the Fair Market Value of one Share. The amount credited to cash shall be
reduced in proportion. If stock dividends are issued with respect to Shares, the
Committee shall proportionately increase the number of Stock Units in the Stock
Unit Account.
5.5 ELECTION TO RECEIVE DEFERRED COMPENSATION OPTIONS
Each Participant may elect to receive all or a portion of Directors Fees
otherwise payable in cash in an option (a "Deferred Compensation Option") to
purchase a number of Shares equal to the portion of the foregone cash payment
divided by an amount equal to the difference between the Fair Market Value of
one Share on such Payment Date and the exercise price determined under this
Section 5.5 (rounded up to the next number of whole Shares).
The exercise price per Share of each Deferred Compensation Option shall be
equal to the greater of (a) 40 percent of the Fair Market Value of a Share as of
the respective Grant Date (which will be the Payment Date of the Directors Fees
in lieu of which the Deferred Compensation Option was granted) or (b) $5 per
Share. The Committee may establish a different exercise price at its discretion.
Unless a Deferred Compensation Option is terminated or the time of its
exercisability is accelerated in accordance with the Plan, no Deferred
Compensation Option shall be exercisable during the six months beginning on its
Grant Date and shall thereafter be fully exercisable as provided in Article 7.
5.6 ELECTION TO DEFER RECEIPT OF CASH PAYMENT
A Participant may elect to defer receipt of all or any portion of Directors
Fees otherwise payable in cash. Amounts deferred by a Participant under this
Section 5.6 ("Deferred Amounts") shall be credited to a Deferral Account
established and maintained for such Participant on the books of Bancorp.
Deferral Accounts heretofore established under the terms of Deferred
Compensation Plan for Non-Employee Directors of Bancorp have been credited with
interest at the rate in effect under the terms of such plan. Any remaining
balance of Deferral Accounts being paid out to Participants in installments
shall continue to be credited with interest hereunder, until paid in full.
Commencing January 1, 1990, and until changed by the Committee, the rate of
interest per annum shall equal the average annual interest rate on five-year
Treasury Notes for the month of November in the immediately prior calendar year,
as published in the Federal Reserve Statistical Release G.13 (or a corresponding
or successor publication as determined by the Committee) plus 75 basis points.
Effective January 1, 1996, Deferral Accounts (other than Deferral Accounts
that on such date were being paid to Participants in installments) shall be
credited with an amount (the "Growth Factor") from the date credited until the
date of final payment of the balance of the Deferral Account. The Growth Factor
for any period will equal the growth in value which the Deferred Amounts would
have realized during such period, if invested in the Hypothetical Investment or
Hypothetical Investments specified for that period by the Participant.
For purposes of measuring the Growth Factor, a Participant may select one
or a combination of Hypothetical Investments authorized from time to time by, or
at the direction of, the Committee. Such selection, and any changes in
selection, shall be made by the Participant on a form approved by the Committee,
and shall be subject to approval by the Committee in its discretion. Changes in
a Participant's selection of Hypothetical Investments shall become effective as
of the first day of the calendar quarter following receipt by the Committee of
the notice of change. A Participant's selection of Hypothetical Investments
shall be effective for all amounts credited to the Participant's Deferral
Account, including previously Deferred Amounts and the Growth Factor accrued
thereon.
B-6
<PAGE> 36
Hypothetical Investments are solely bookkeeping entries, and Bancorp shall
have no obligation to make actual investments corresponding to Hypothetical
Investments.
ARTICLE 6
MANDATORY PAYMENT OF RETAINER IN SHARES, SHARE
UNITS OR DEFERRED COMPENSATION OPTIONS
Commencing on July 1, 1997, the Board may require that all Non-Employee
Directors be paid all or a portion of their Director Fees in Shares, Restricted
Shares, Share Units or Deferred Compensation Options. Any Shares, Restricted
Shares, Stock Units or Deferred Compensation Options acquired pursuant to any
such requirement shall be subject to all of the terms and conditions of this
Plan applicable thereto.
ARTICLE 7
GENERAL TERMS AND CONDITIONS OF OPTIONS
7.1 TYPE OF OPTION; TERM
Options granted under the Plan shall be nonqualified options which are not
intended to qualify as incentive stock options under Section 422 of the Internal
Revenue Code. Options granted under Article 4 of the Plan will supplement other
compensation for Non-Employee Directors. The term of each Initial Option, each
Annual Option and each Deferred Compensation Option shall be unlimited unless
terminated earlier in accordance with the Plan.
7.2 CONTINUATION AS DIRECTOR
If a Participant ceases to be a member of the Board for any reason, the
right to exercise each Initial Option, Annual Option and Deferred Compensation
Option shall expire at the end of the following periods:
<TABLE>
<CAPTION>
AFTER TERMINATION
ON ACCOUNT OF: PERIOD
------------------ --------
<S> <C>
death..................................... 1 year
Retirement................................ 5 years
Disability................................ 1 year
any other reason.......................... 3 months
</TABLE>
7.3 ACCELERATION OF EXERCISABILITY
Notwithstanding the schedule provided in Section 4.3 for Initial and Annual
Options and in Section 5.5 for Deferred Compensation Options, each Initial
Option, Annual Option and Deferred Compensation Option shall become fully
exercisable upon the occurrence of either:
(a) The Participant's death or withdrawal from the Board by reason of
Disability or Retirement; or
(b) A Change in Control or the dissolution of Bancorp.
7.4 ASSIGNABILITY
Each Option shall be nontransferable other than by will or by the laws of
descent and distribution and shall be exercisable, during the life of a
Participant, only by the Participant or, in the event the Participant becomes
legally incompetent, by the Participant's guardian or legal representative, or
by a permitted transferee as set forth below. Notwithstanding the foregoing,
each Option may be transferred, without payment of consideration, to (i) a
spouse or other immediate family member or (ii) any trust, partnership or other
entity in which the Participant or the Participant's spouse or other immediate
family member has a substantial beneficial interest; provided,
B-7
<PAGE> 37
however, that any Option so transferred shall be subject to all the same terms
and conditions contained in the instrument evidencing the Option.
7.5 OPTION AGREEMENT
Each Option shall be evidenced by an Option Agreement in a form approved by
the Committee.
7.6 METHOD OF EXERCISE; PAYMENT
Each Option may be exercised by delivery of written notice to Bancorp
stating the number of Shares, form of payment, and proposed date of closing.
The purchase price for the Shares purchased upon exercise of an Option
shall be paid in full at or before closing by one or a combination of the
following:
(a) Payment in cash; or
(b) Tendering (either actually or, if and so long as the Shares are
registered under Section 12(b) or 12(g) of the Exchange Act, by
attestation) Shares already owned by the Participant for at least six
months (or any shorter period necessary to avoid a charge to the Company's
earnings for financial reporting purposes) having a Fair Market Value on
the day prior to the exercise date equal to the aggregate Option exercise
price.
7.7 PREVIOUSLY ACQUIRED SHARES
Delivery of previously acquired Shares in full or partial payment for the
exercise of an Option shall be subject to the following conditions:
(a) The Shares tendered shall be in good delivery form;
(b) The Fair Market Value of the Shares tendered, together with the
amount of cash, if any, tendered shall equal or exceed the exercise price
of the Option;
(c) Any Shares remaining after satisfying the payment for the Option
shall be reissued in the same manner as the Shares tendered; and
(d) No fractional Shares will be issued and cash will not be paid to
the Optionee for any fractional Share value not used to satisfy the Option
purchase price.
7.8 OTHER DOCUMENTS
The Participant shall furnish the Committee before closing such other
documents or representations as the Committee may require to assure compliance
with applicable laws and regulations.
ARTICLE 8
SHARES SUBJECT TO THE PLAN
The stock authorized to be issued under this Plan shall be Shares, which
may either be authorized and unissued Shares or reacquired Shares. The total
number of Shares which may be issued pursuant to this 1997 Amendment and
Restatement shall not exceed five hundred and twenty-five thousand (525,000)
Shares, or such greater number of Shares as is determined pursuant to an
adjustment under this Article 8. In the event any outstanding Options granted
under the Plan are canceled or expire for any reason, the Shares covered by such
Options shall again become available for issuance under the Plan.
In the event of a recapitalization, stock split, reverse stock split, stock
dividend, combination or exchange of Shares, merger, consolidation,
reorganization or liquidation, or any other change in the corporate structure or
Shares of Bancorp, the Board may make such proportionate adjustments in the
number and kind of shares for which Options may be granted under the Plan and,
with respect to outstanding Options granted under the Plan, in
B-8
<PAGE> 38
the number and kind of shares covered thereby and in the exercise price, as the
Board in its sole discretion may deem appropriate to give effect to such change
in capitalization.
ARTICLE 9
GENERAL TERMS AND CONDITIONS OF ELECTIONS
9.1 ELECTIONS; AMENDMENTS; TERMINATIONS
An election under Article 5 shall be made by filing an election with the
Committee on a form provided by the Committee. An election filed before December
31 is effective with respect to Directors Fees earned during the next succeeding
calendar year and subsequent calendar years, until the election is amended or
terminated. A person becoming a Non-Employee Director during a year may file an
election to participate within 30 days after becoming a Non-Employee Director,
and such election shall be effective with respect to Directors Fees earned
during the remainder of the calendar year and in subsequent calendar years until
the election is amended or terminated.
Elections (and amendments to existing elections) received by the Committee
on or prior to June 1, 1997, shall be effective as to Directors Fees payable
with respect to services as a Non-Employee Director after July 1, 1997.
An election may be amended by filing a notice of amendment with the
Committee on a form provided by the Committee. An amendment is effective with
respect to Directors Fees earned during the next succeeding calendar year and
subsequent calendar years, until the amendment is further amended or the
election to participate is terminated.
An election may be terminated by filing a notice of termination with the
Committee on a form provided by the Committee. A notice of termination is
effective with respect to Directors Fees earned during the next succeeding
calendar year and subsequent calendar years. Directors Fees with respect to
which an election, or an amended election, has been in effect prior to the
effective date of the termination will continue to be held subject to the
provisions of this Plan and the terms of such election or amended election.
A Non-Employee Director, having terminated an election under this Plan, may
elect to resume participation by making an election pursuant to the first
paragraph of this Section 9.1.
9.2 UNFUNDED PLAN
All amounts and accounts held by Bancorp under the Plan are unfunded
obligations of Bancorp. The rights of a Participant with respect to any such
amounts and accounts are no greater than the rights of any unsecured general
creditor of Bancorp. Notwithstanding the foregoing, Bancorp may deposit funds
from time to time in the U. S. Bancorp Deferred Compensation Trust for the
purpose of paying benefits hereunder from the assets thereof.
9.3 NONASSIGNABILITY
Except as provided in Section 7.4, a Participant's rights under this Plan,
including without limitation the right to receive any distribution from Bancorp
hereunder, may not be anticipated, assigned, pledged or in any other manner
assigned, and shall not be subject to levy, attachment, garnishment or other
process by or on behalf of any creditor of the Participant.
9.4 PAYMENT
(a) A Participant, at the time of electing to participate in deferrals
under Section 5.6, may elect the method of payment of the Deferral Account.
Elections shall be filed with the Committee on a form approved by the Committee.
If a Participant fails to file an election with the Committee, the Deferral
Account will be paid as provided in clause (b)(i) of this Section 9.4.
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(b) A Participant may elect one of the following methods of payment:
(i) A lump sum payment in cash to be made within 30 days following the
end of the calendar year during which the Participant ceases to be a
Non-Employee Director (the "Final Year"), or
(ii) Payment in up to ten annual installments, with the first
installment to be made within 30 days following the end of the Final Year.
The first installment shall equal the product of the balance of the
Participant's Deferral Account as of the end of the Final Year multiplied
by a fraction in which the numerator equals one and the denominator equals
the number of installment payments elected by the Participant. The second
and any subsequent installments shall equal the product of the balance of
the Participant's Deferral Account as of the end of the prior year
multiplied by a fraction in which the numerator equals one and the
denominator equals the remaining number of installment payments. The final
installment shall equal the remaining balance of the Deferral Account. The
Deferral Account will continue to be credited with Growth Factor earnings
during the payout period, and the Participant may make or modify selections
of Hypothetical Investments during such period.
(c) An election of the method of payment filed on or before December 31 is
effective for Directors Fees deferred under Section 5.6 during the succeeding
calendar year and subsequent calendar years until the election is amended. A
person becoming a Non-Employee Director during a year may file an election of
method of payment within 30 days after becoming a Non-Employee Director, and
such election shall be effective for Directors Fees deferred under Section 5.6
during the remainder of the calendar year and in subsequent calendar years until
the election is amended.
(d) An election of the method of payment may be amended by filing a notice
of amendment with the Committee on a form approved by the Committee. A notice of
amendment filed on or before December 31 is effective with respect to Directors
Fees deferred during the succeeding calendar year and subsequent calendar years
until the election is further amended.
9.5 ACCELERATION OF PAYMENT
If a Participant ceases to be a Non-Employee Director, and becomes a
proprietor, officer, director, partner, or employee of, or is otherwise
associated with, any business that is in competition with Bancorp or any of its
affiliates, the Participant's entire Deferral Account and the Fair Market Value
of any Stock Units held under the Plan shall be immediately paid to the
Participant in cash.
9.6 DEATH BENEFIT
Upon the death of a Participant, the unpaid balance of the Participant's
Deferral Account and (based upon the Participant's Deferral Election under
Section 5.4) either the cash value of, or the number of Shares that is equal to,
the Fair Market Value as of the date of death of any Stock Units in the
Participant's account shall be paid or delivered to the beneficiary or
beneficiaries selected by the Participant in writing, on a form approved by the
Committee. If no beneficiary has been selected, amounts due hereundershall be
paid to the Participant's surviving spouse, if any, or if there is no surviving
spouse, to the Participant's estate.
ARTICLE 10
ADMINISTRATION
10.1 GENERAL
The Plan shall be administered by the Committee, which shall have full
power and authority, subject to the provisions of the Plan, to supervise
administration of the Plan and to interpret the provisions of the Plan and of
any award or Options granted hereunder. Any decision by the Committee shall be
final and binding on all parties. No member of the Committee shall be liable for
any determination made, or any decision or action taken with respect to the Plan
or any award or Options under the Plan. The Committee may delegate any of its
responsibilities to one or more agents, including employees of Bancorp, and may
retain advisors to advise it. No
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Non-Employee Director shall participate in the decision of any question relating
to an award granted under the Plan exclusively to that Non-Employee Director.
10.2 RULES AND INTERPRETATION
The Committee shall be vested with full authority to make such rules and
regulations as it deems necessary to administer the Plan and to interpret and
administer the provisions of the Plan in a uniform manner. Any determination,
decision or action of the Committee in connection with the construction,
interpretation, administration, or application of the Plan shall be final,
conclusive, and binding on all parties.
10.3 RECORDS
The Committee shall have overall responsibility for keeping records and
providing necessary communications to Participants. The records of the Committee
with respect to the Plan shall be conclusive and binding on all Participants and
all persons or entities claiming through or under them.
10.4 EXPENSES
The cost of making awards and settling Initial Options and Annual Options
pursuant to this Plan, and the expenses of administering the Plan, shall be
borne by Bancorp.
ARTICLE 11
MISCELLANEOUS
11.1 CONDITION PRECEDENT
The adoption of the Plan, and the grant of Options under the Plan, was
conditioned upon the approval of the Plan by an affirmative vote of the holders
of a majority of the voting stock of Bancorp present or represented and entitled
to vote thereon at the 1991 annual meeting of Bancorp shareholders. The Second
Amendment and Restatement, and the grant of Annual Options under the Plan, was
conditioned upon similar approval by Bancorp shareholders at the 1994 Annual
Meeting. The 1997 Amendment and Restatement, and the grant of Options under the
Plan, are conditioned upon similar approval by Bancorp shareholders at the 1997
Annual Meeting.
11.2 TERMINATION AND AMENDMENT OF THE PLAN
The Board may terminate or amend the Plan at any time, provided, that
(except to the extent that the Participants shall have given their written
consent thereto) no such termination or amendment shall affect any outstanding
Options previously granted under the Plan or the accrued rights of any
Participant under the Plan with respect to elections previously made by such
Participant under Article 5. The Board may not, without approval of the
shareholders of Bancorp:
(a) Materially increase the number of Shares which may be issued under
the Plan (other than by means of an adjustment described in Article 8); or
(b) Materially modify the requirements as to eligibility for
participation in the Plan.
Notwithstanding the foregoing, if required to qualify the Plan as a formula
plan for purposes of Rule 16b-3 under Section 16 of the Exchange Act, the Plan
shall not be amended more than once every six months to change the amount,
price, timing or exercisability of the awards other than amendments to comport
with changes in the Code or the rules and regulations promulgated thereunder.
11.3 BOARD MEMBERSHIP
Nothing in the Plan or in any award granted pursuant to the Plan shall
confer upon any Participant any right to continue as a director of Bancorp or
interfere in any way with the right of the shareholders of Bancorp to remove a
director from the Board at any time.
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11.4 TAX REIMBURSEMENT
Bancorp shall have the right, in connection with the exercise of an Option
or any payment under the Plan, to require the Participant to pay to Bancorp an
amount sufficient to provide for any withholding tax liability, including any
liability for self-employment and social security taxes, imposed with respect to
such exercise or payment.
11.5 SECURITIES LAWS
Bancorp shall not be required to distribute any Shares pursuant to an award
until it shall have taken any action required to comply with the provisions of
the Securities Act of 1933 or any other then applicable securities laws.
11.6 APPLICABLE LAW
To the extent that federal laws (such as the Code and the federal
securities laws) do not control, the Plan shall be governed and construed in all
respects in accordance with Oregon law.
Bancorp adopted the U. S. Bancorp 1990 Non-Employee Director Stock Option
Plan (the "1990 Plan") effective October 18, 1990. The 1990 Plan was amended and
restated effective February 21, 1991; a First Amendment to the 1990 Plan, as
restated, was adopted effective September 1, 1991; and a Second Amendment was
adopted effective April 12, 1993. The 1990 Plan was further amended and restated
in the form of the Second Amendment and Restatement effective June 17, 1993. The
1990 Plan is further amended and restated in the form of this 1997 Amendment and
Restatement effective July 1, 1997 and is redesignated the "U. S. Bancorp Non-
Employee Director Stock Incentive and Deferral Plan."
This 1997 Amendment and Restatement was executed and approved on behalf of
Bancorp as of February 20, 1997, subject to Section 11.1 hereof.
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APPENDIX C
U. S. BANCORP
1997 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purposes of the U. S. Bancorp 1997 Employee Stock Purchase Plan (the
"Plan") are to (a) assist qualified employees of U. S. Bancorp, an Oregon
corporation (the "Company"), and of its subsidiary corporations in acquiring a
stock ownership interest in the Company pursuant to a plan that is intended to
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), and (b) help qualified employees
provide for their future security and encourage them to remain in the employ of
the Company and its subsidiary corporations. Only employees of the Company and
of its subsidiaries are eligible to participate in the Plan, and participation
is voluntary.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set forth
below.
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or authorized to be closed in Portland,
Oregon.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE"means the Company's Compensation Committee or another committee
appointed by the Board and given authority by the Board to administer the Plan.
"COMPANY" means U. S. Bancorp, an Oregon corporation.
"ELIGIBLE COMPENSATION" means an Eligible Employee's "wages" as defined in
Code Section 3401(a) and all other payments of compensation to the Eligible
Employee by the Company (in the course of the Company's trade or business) for
which the Company is required to furnish the Eligible Employee a written
statement under Code Sections 6041(d), 6051(a)(3) and 6052, determined without
regard to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed. Eligible Compensation shall include any elective deferrals
within the meaning of Code Section 402(g)(3) to the U. S. Bancorp Employee
Investment Plan and any salary reduction contributions to the U. S. Bancorp
U-Select Plan or any other cafeteria plan described in Code Section 125.
Eligible Compensation shall not include reimbursements and other expense
allowances, fringe benefits (cash and non-cash), moving expenses, deferred
compensation, welfare benefits, amounts realized from the exercise of a
non-qualified stock option, or when restricted stock held by an employee either
becomes freely transferable or is no longer subject to a substantial risk of
forfeiture, amounts realized from the sale, exchange or other disposition of
stock acquired under an incentive stock option, incentive pay which relates to a
period of more than one year (including, but not limited to, amounts paid under
the U. S. Bancorp Performance Cash Plan or the U. S. Bancorp 1993 Stock
Incentive Plan and any non-cash compensation.
"ELIGIBLE EMPLOYEE" means any employee of the Company (or any Parent
Corporation or Subsidiary Corporation who is in the employ of the Company (or
any Parent Corporation or Subsidiary) on one or more Offering Dates and who
meets the following criteria:
(a) the employee does not, immediately after the Option is granted,
own stock (as defined by the Code) possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or of
a Parent Corporation or Subsidiary Corporation of the Company; and
(b) the employee's customary employment is for more than 20 hours per
week; provided, however, that the Plan Administrator, in its sole
discretion, may reduce this minimum hourly requirement.
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"OFFERING" has the meaning set forth in Section 5.1.
"OFFERING DATE" means the first day of an Offering.
"OFFERING PERIOD" has the meaning set forth in Section 5.1.
"OPTION" means an option granted under the Plan to an Eligible Employee to
purchase shares of Stock. "Parent Corporation" means any corporation, other than
the Company, in an unbroken chain of corporations ending with the Company if, at
the time of the granting of the Option, each of the corporations, other than the
Company, owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means any Eligible Employee who has elected to participate in
an Offering in accordance with the procedures set forth in Section 6.1 and who
has not withdrawn from the Offering or whose participation in the Offering is
not terminated.
"PLAN" means the U. S. Bancorp 1997 Employee Stock Purchase Plan.
"PLAN ADMINISTRATOR" has the meaning set forth in Section 3.1.
"PURCHASE DATE"means the last day of each Purchase Period.
"PURCHASE PERIOD"has the meaning set forth in Section 5.2.
"PURCHASE PRICE" has the meaning set forth in Section 8.
"STOCK" means the common stock, $5.00 par value per share, of the Company.
"SUBSCRIPTION DATE" has the meaning set forth in Section 6.1.
"SUBSIDIARY CORPORATION" means any corporation, other than the Company, in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Company's Human Resources Group or
any other Company group or executive officer designated by the Board or the
Committee, except for those items expressly reserved to the Board or the
Committee under the Plan. Any decisions made by the Board, the Committee or the
Plan Administrator shall be applicable equally to all Eligible Employees.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Subject to the provisions of the Plan, the Plan Administrator shall have
exclusive authority, in its discretion, to determine all matters relating to
Options granted under the Plan, including all terms, conditions, restrictions
and limitations of Options; provided, however, that all Participants granted
Options pursuant to the Plan shall have the same rights and privileges within
the meaning of the Code. The Plan Administrator shall also have exclusive
authority to interpret the Plan and may from time to time adopt, and change,
rules and regulations of general application for the Plan's administration. The
Plan Administrator's interpretation of the Plan and its rules and regulations,
and all actions taken and determinations made by the Plan Administrator pursuant
to the Plan, unless revised by the Board or the Committee, shall be conclusive
and binding on all parties involved or affected. The Plan Administrator may
delegate administrative duties to such of the Company's other officers or
employees as the Plan Administrator so determines.
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in Section 19, a
maximum of 4,000,000 shares of Stock may be sold under the Plan. Shares sold
under the Plan shall be drawn from authorized and unissued shares or
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shall be shares acquired by the Company. Any shares of Stock that have been made
subject to an Option that cease to be subject to the Option (other than by
reason of exercise of the Option), including, without limitation, in connection
with the cancellation or termination of the Option, shall again be available for
sale in connection with future grants of Options under the Plan.
SECTION 5. OFFERING DATES
5.1 OFFERING PERIODS
The Plan shall be implemented by a series of Offerings (each, an
"Offering"). Offerings shall commence on such dates as are established by the
Plan Administrator. Each Offering Period shall be for a one-year period.
Notwithstanding the foregoing, the Board or the Committee may establish (a) a
different term for one or more Offerings and (b) different commencing and ending
dates for such Offerings; provided, however, that an Offering Period (the
"Offering Period") may not exceed five years; and provided further that if the
Purchase Price may be less than 85% of the fair market value of the Stock on the
Purchase Date, the Offering Period may not exceed 27 months. Unless the Plan
Administrator decides otherwise in its sole discretion, an employee who becomes
eligible to participate in the Plan after an Offering Period has commenced shall
not be eligible to participate in such Offering but may participate in any
subsequent Offering, provided that such employee is still an Eligible Employee
as of the commencement of any such subsequent Offering. Unless the Plan
Administrator otherwise decides in its sole discretion, Eligible Employees may
not participate in more than one Offering at a time. In the event the first or
the last day of an Offering Period is not a regular Business Day, then the first
day of the Offering Period shall be deemed to be the next regular Business Day
and the last day of the Offering Period shall be deemed to be the last preceding
regular Business Day.
5.2 PURCHASE PERIODS
Each Offering Period shall consist of one or more consecutive Purchase
Periods (each, a "Purchase Period"). Except as otherwise set forth below,
Purchase Periods shall be coterminous with the Offering Period. Notwithstanding
the foregoing, the Board or the Committee may establish (a) different terms for
one or more Purchase Periods within an Offering Period and (b) different
commencing dates and Purchase Dates for any such Purchase Period. The last day
of each Purchase Period shall be the Purchase Date for such Purchase Period. In
the event the first or last day of a Purchase Period is not a regular Business
Day, then the first day of the Purchase Period shall be deemed to be the next
regular Business Day and the last day of the Purchase Period shall be deemed to
be the last preceding regular Business Day.
SECTION 6. PARTICIPATION IN THE PLAN
6.1 INITIAL PARTICIPATION
An Eligible Employee shall become a Participant on the first Offering Date
after satisfying the eligibility requirements and providing to the Plan
Administrator a subscription in the form and manner prescribed by the Plan
Administrator by the date established by the Plan Administrator (the
"Subscription Date"):
(a) indicating the Eligible Employee's election to participate in the
Plan;
(b) authorizing payroll deductions and stating the amount to be
deducted from the Participant's pay; and
(c) authorizing the purchase of Stock for the Participant in each
Purchase Period.
An Eligible Employee who does not provide such a subscription to the Plan
Administrator on or before the Subscription Date shall not participate in the
Plan for that Offering Period or for any subsequent Offering Period, unless such
Eligible Employee subsequently enrolls in the Plan by providing such a
subscription to the Plan Administrator by the Subscription Date for such
subsequent Offering Period. The Plan Administrator may, from time to time,
change the Subscription Date as deemed advisable by the Plan Administrator in
its sole discretion for the proper administration of the Plan.
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6.2 CONTINUED PARTICIPATION
Unless provided otherwise by the Plan Administrator, a Participant shall
participate in the next Offering Period only if the Participant provides a
subscription to the Plan Administrator as provided in Section 6.1 by the
Subscription Date for such next Offering Period. Similarly, if a Participant
withdraws from an Offering pursuant to Section 11.1, the Participant is required
to provide a subscription for the next subsequent Offering in order to continue
participation in the Plan.
SECTION 7. LIMITATIONS ON RIGHT TO PURCHASE SHARES
7.1 $25,000 LIMITATION
No Participant shall be entitled to purchase Stock under the Plan (or any
other employee stock purchase plan that is intended to meet the requirements of
Code Section 423 sponsored by the Company, a Parent Corporation or a Subsidiary
Corporation) at a rate that exceeds $25,000 in fair market value, determined as
of the Offering Date for each Offering Period (or such other limit as may be
imposed by the Code), for each calendar year in which a Participant participates
in the Plan (or any other employee stock purchase plan described in this Section
7.1).
7.2 PRO RATA ALLOCATION
In the event the number of shares of Stock that might be purchased by all
Participants in the Plan exceeds the number of shares of Stock available in the
Plan, the Plan Administrator shall make a pro rata allocation of the remaining
shares of Stock in as uniform a manner as shall be practicable and as the Plan
Administrator shall determine to be equitable. Fractional shares may be issued
under the Plan only to the extent permitted by the Board or the Committee.
SECTION 8. PURCHASE PRICE
The purchase price (the "Purchase Price") at which Stock may be acquired in
an Offering pursuant to the exercise of all or any portion of an Option granted
under the Plan shall be 85% of the lesser of (a) the fair market value of the
Stock on the Offering Date of such Offering and (b) the fair market value of the
Stock on the Purchase Date. Notwithstanding the foregoing, the Board or the
Committee may establish a different Purchase Price for any future Offering,
which shall not be less than 85% of the lesser of (a) the fair market value of
the Stock on the Offering Date of such Offering and (b) the fair market value of
the Stock on the Purchase Date. The fair market value of the Stock on the
Offering Date or on the Purchase Date shall be the low per share trading prices
for the Stock as reported for such day by the Nasdaq National Market in The Wall
Street Journal or in such other source as the Plan Administrator deems reliable.
If no sales of the Stock were made on the Nasdaq National Market on the
transaction date, fair market value shall mean the low per share trading price
for the Stock as reported for the next preceding day on which sales of the Stock
were made on the Nasdaq National Market.
SECTION 9. PAYMENT OF PURCHASE PRICE
9.1 GENERAL RULES
Stock that is acquired pursuant to the exercise of all or any portion of an
Option may be paid for only by means of payroll deductions from the
Participant's Eligible Compensation unless the Plan Administrator in its sole
discretion establishes other methods for payment of the Purchase Price and
except as provided in Section 9.11 for leaves of absence. Except as set forth in
this Section 9, the amount of compensation to be withheld from a Participant's
Eligible Compensation during each pay period shall be determined by the
Participant's subscription.
9.2 PERCENT WITHHELD
The amount of payroll withholding with respect to the Plan for any
Participant during any pay period shall be at least 2% of the Participant's
Eligible Compensation for such pay period, but shall not exceed 10% of the
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Participant's Eligible Compensation for such pay period. Amounts shall be
withheld only in whole percentages or increments of $10.
9.3 CHANGE NOTICES
During an Offering Period a Participant may elect to increase or decrease
the amount withheld from his or her compensation by providing an amended
subscription to the Plan Administrator. The change in rate shall be effective as
of the date established for an Offering Period by the Plan Administrator.
9.4 PAYROLL DEDUCTIONS
Payroll deductions shall commence on the first payday following the
Offering Date and shall continue through the last payday of the Offering Period
unless sooner altered or terminated as provided in the Plan.
9.5 PARTICIPANT ACCOUNTS
Individual accounts shall be maintained for each Participant for memorandum
purposes only. All payroll deductions from a Participant's compensation shall be
credited to such account, but shall be deposited with the general funds of the
Company. All payroll deductions received or held by the Company may be used by
the Company for any corporate purpose. No interest shall be paid on payroll
deductions received or held by the Company.
9.6 ACQUISITION OF STOCK
On each Purchase Date of an Offering Period, each Participant shall
automatically acquire, pursuant to the exercise of the Participant's Option, the
number of shares of Stock arrived at by dividing the total amount of the
Participant's accumulated payroll deductions for the Purchase Period by the
Purchase Price; provided, however, that in no event shall the number of shares
of Stock purchased by the Participant exceed the number of shares of Stock
subject to the Participant's Option. Fractional shares may be issued under the
Plan unless determined otherwise by the Board or the Committee.
9.7 EXCESS CASH BALANCES
Any cash balance remaining in the Participant's account under the Plan
after a purchase of Stock at the end of a Purchase Period which is an amount
less than the amount necessary to purchase a whole share of Stock (if the Board
or the Committee has determined that fractional shares may not be issued), shall
be maintained in the Participant's account and carried over to the next Purchase
Period or Offering Period if the Participant continues to participate in the
Plan. If the Participant does not continue to participate, such amounts shall be
refunded to the Participant as soon as practicable after the Purchase Date
without the payment of any interest.
9.8 WITHHOLDING OBLIGATIONS
At the time the Stock is disposed of, the Participant shall make adequate
provision for federal and state withholding obligations of the Company, if any,
that arise upon disposition of the Stock. The Company may, but shall not be
obligated to, withhold from the Participant's compensation the amount necessary
to meet such withholding obligations.
9.9 TERMINATION OF PARTICIPATION
No Stock shall be purchased on behalf of a Participant under the Plan if
his or her participation in the Offering or the Plan has terminated prior to
such Purchase Date.
9.10 PROCEDURAL MATTERS
The Plan Administrator may, from time to time, establish (a) limitations on
the frequency and/or number of changes in the amount withheld during an
Offering, (b) an exchange ratio applicable to amounts withheld in a currency
other than U.S. dollars, (c) payroll withholding in excess of the amount
designated by a Participant in
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order to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, and (d) such other limitations or procedures as
deemed advisable by the Plan Administrator in its, his or her sole discretion
that are consistent with the Plan and in accordance with the requirements of
Code Section 423.
9.11 LEAVES OF ABSENCE
During leaves of absence approved by the Company and meeting the
requirements of the applicable Treasury Regulations, a Participant may continue
participation in the Plan by delivering cash payments to the Plan Administrator
on the Participant's normal paydays equal to the amount of his or her payroll
deduction under the Plan had the Participant not taken a leave of absence.
SECTION 10. STOCK PURCHASED UNDER THE PLAN
Each Participant agrees by entering the Plan, promptly to give the Company
notice of any Stock acquired in an Offering that is disposed of within the later
of (a) two years after the Offering Date of such Offering and (b) one year after
the Purchase Date for such Stock, showing the number of such shares disposed of
and the Offering Date and Purchase Date for such Stock.
SECTION 11. VOLUNTARY WITHDRAWAL
11.1 WITHDRAWAL FROM AN OFFERING
A Participant may withdraw from an Offering by providing to the Plan
Administrator a notice of withdrawal in the form and manner required by the Plan
Administrator for such purpose. Such withdrawal must be elected within the time
period established for an Offering Period by the Plan Administrator. If a
Participant withdraws after the Purchase Date for a Purchase Period of an
Offering, the withdrawal shall not affect Stock acquired by the Participant in
that Purchase Period and any earlier Purchase Periods. A Participant is
prohibited from again participating in the same Offering at any time upon
withdrawal from such Offering. The Participant may participate in subsequent
Offerings under the Plan by again satisfying the requirements for participation
in an Offering. For future Offering Periods, the Plan Administrator may change
the notice period for withdrawal as deemed advisable by the Plan Administrator
in its sole discretion for proper administration of the Plan.
11.2 WITHDRAWAL FROM THE PLAN
A Participant may withdraw from the Plan by providing a notice of
withdrawal in the form and manner required by the Plan Administrator for such
purpose. Such notice must be provided to the Plan Administrator within the time
period established for an Offering Period by the Plan Administrator. If a
Participant withdraws after the Purchase Date for a Purchase Period of an
Offering, the withdrawal shall not affect Stock acquired by the Participant in
that Purchase Period and any earlier Purchase Periods. In the event a
Participant voluntarily elects to withdraw from the Plan, the withdrawing
Participant may not resume participation in the Plan during the same Offering
Period, but may participate in any subsequent Offering under the Plan by again
satisfying the requirements for participation in an Offering.
11.3 RETURN OF PAYROLL DEDUCTIONS
Upon withdrawal from an Offering pursuant to Section 11.1 or from the Plan
pursuant to Section 11.2, the withdrawing Participant's accumulated payroll
deductions that have not been applied to the purchase of Stock shall be returned
as soon as practical after the withdrawal, without the payment of any interest,
to the Participant, and the Participant's interest in the Offering shall
terminate. Such accumulated payroll deductions may not be applied to any other
Offering under the Plan.
SECTION 12. TERMINATION OF EMPLOYMENT
Termination of a Participant's employment with the Company for any reason,
including retirement or death, or the failure of a Participant to remain an
Eligible Employee, shall immediately terminate the Participant's participation
in the Plan. Unless the Plan Administrator decides otherwise in its sole
discretion any accumulated
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payroll deductions credited to the Participant's account since the last Purchase
Date shall, as soon as practical, be returned to the Participant or, in the case
of a Participant's death, to the Participant's legal representative, and all the
Participant's rights under the Plan shall terminate. Interest shall not be paid
on sums returned to a Participant pursuant to this Section 12.
SECTION 13. RESTRICTIONS UPON ASSIGNMENT
An Option granted under the Plan shall not be transferable otherwise than
by will or by the applicable laws of descent and distribution, and shall be
exercisable during the Participant's lifetime only by the Participant. The Plan
Administrator will not recognize, and shall be under no duty to recognize, any
assignment or purported assignment by a Participant, other than by will or by
the applicable laws of descent and distribution, of the Participant's interest
in the Plan, of his or her Option or of any rights under his or her Option.
SECTION 14. NO RIGHTS OF SHAREHOLDER UNTIL SHARES ISSUED
With respect to shares of Stock subject to an Option, a Participant shall
not be deemed to be a shareholder of the Company, and he or she shall not have
any of the rights or privileges of a shareholder. A Participant shall have the
rights and privileges of a shareholder of the Company when, but not until, the
shares have been issued following exercise of the Participant's Option.
SECTION 15. AMENDMENT OF THE PLAN
The Board or the Committee may amend the Plan in such respects as it shall
deem advisable; provided, however, that to the extent required for compliance
with Code Section 423 or any applicable law or regulation, shareholder approval
will be required for any amendment that will (a) increase the total number of
shares as to which Options may be granted under the Plan, (b) modify the class
of employees eligible to receive Options, or (c) otherwise require shareholder
approval under any applicable law or regulation.
SECTION 16. TERMINATION OF THE PLAN
The Board may suspend or terminate the Plan at any time. Unless the Plan
shall theretofore have been terminated by the Board, the Plan shall terminate
on, and no Offering Periods shall be commenced after, April 15, 2007, except
that such termination shall have no effect on Offering Periods that started
prior to April 16, 2007. No Options shall be granted during any period of
suspension of the Plan.
SECTION 17. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person (including any
Eligible Employee or Participant) the right to remain in the employ of the
Company or a Parent Corporation or Subsidiary Corporation or to affect the right
of the Company and the Parent Corporations and Subsidiary Corporations to
terminate the employment of any person (including any Eligible Employee or
Participant) at any time with or without cause or notice.
SECTION 18. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Parent Corporation or
Subsidiary Corporation. Nothing in the Plan shall be construed to limit the
right of the Company, any Parent Corporation or any Subsidiary Corporation to
(a) establish any other forms of incentives or compensation for employees of the
Company, any Parent Corporation or any Subsidiary Corporation or (b) grant or
assume options otherwise than under the Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition, by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
C-7
<PAGE> 49
SECTION 19. ADJUSTMENTS
19.1 ADJUSTMENTS OF SHARES
Subject to any required action by the shareholders of the Company, the
number of shares of Stock covered by each Option under the Plan which has not
yet been exercised and the number of shares of Stock which have been authorized
for issuance under the Plan but have not yet been placed under Option
(collectively, the "Reserves"), as well as the price per share of Stock covered
by each Option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Stock, or any other increase or
decrease in the number of shares of Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board or
the Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Stock subject to an Option.
19.2 CORPORATE TRANSACTIONS
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board or the Committee. In the
event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
Option under the Plan shall be assumed or an equivalent Option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board or the Committee determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
to shorten the Offering Period then in progress by setting a new Purchase Date
(the "New Purchase Date"). If the Board or the Committee shortens the Offering
Period then in progress in lieu of assumption or substitution in the event of a
merger or sale of assets, the Plan Administrator shall notify each Participant
in writing, at least fifteen (15) days prior to the New Purchase Date, that the
Purchase Date for his or her Option has been changed to the New Purchase Date
and that his or her Option will be exercised automatically on the New Purchase
Date, unless prior to such date he or she has withdrawn from the Offering
Period. For purposes of this paragraph, an Option granted under the Plan shall
be deemed to be assumed if, following the sale of assets or merger, the Option
confers the right to purchase, for each share of Stock subject to the Option
immediately prior to the sale of assets or merger, the consideration (whether
stock, cash or other securities or property) received in the sale of assets or
merger by holders of Stock for each share of Stock held on the effective date of
the transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Stock); provided, however, that if such consideration received in the
sale of assets or merger was not solely Stock of the successor corporation or
its parent (as defined in Section 424(e) of the Code), the Board or the
Committee may, with the consent of the successor corporation and the
Participant, provide for the consideration to be received upon exercise of the
Option to be solely Stock of the successor corporation or its parent equal in
fair market value to the per share consideration received by holders of Stock
and the sale of assets or merger.
The Board or the Committee may, if it so determines in the exercise of its
sole discretion, also make provision for adjusting the Reserves, as well as the
price per share of Stock covered by each outstanding Option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Stock,
and in the event of the Company being consolidated with or merged into any other
corporation.
19.3 LIMITATIONS
The grant of Options will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
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<PAGE> 50
SECTION 20. REGISTRATION
The Company shall be under no obligation to any Participant to register for
offering or resale under the Securities Act of 1933, as amended, or register or
qualify under state securities laws, any shares of Stock. The Company may issue
certificates for shares with such legends and subject to such restrictions on
transfer and stop-transfer instructions as counsel for the Company deems
necessary or desirable for compliance by the Company with federal and state
securities laws.
SECTION 21. EFFECTIVE DATE
The Plan's effective date is the date on which it is approved by the
Company's shareholders.
C-9
<PAGE> 51
U. S. BANCORP
ANNUAL MEETING APRIL 15, 1997
DIRECTIVE to the Trustee Solicited on Behalf of the Board of Directors from
Participants in the U. S. Bancorp Employee Investment Plan.
The undersigned participant in the U. S. Bancorp Employee Investment Plan
("Plan") hereby directs the Trustee to vote all shares held for the
participant's account under the Plan at the annual meeting of shareholders of
U. S. Bancorp on April 15, 1997, and any adjournments thereof with respect to
the following:
PROPOSAL 1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary
below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
INSTRUCTIONS: To withhold your vote for any individual nominee,
strike a line through the nominee's name in the list below.
H. Bettis, G. Cameron, C. Chambers, F. Drake, R. Dryden,
J. Fery, J. Green, A. Noble, P. Redmond, N. Rogers, B. Whiteley
PROPOSAL 2. PROPOSAL TO AMEND ARTICLE III OF THE RESTATED ARTICLES OF
INCORPORATION
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 3. PROPOSAL TO APPROVE THE 1997 AMENDED AND RESTATED NON-EMPLOYEE
DIRECTOR STOCK INCENTIVE AND DEFERRAL PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 4. PROPOSAL TO APPROVE THE 1997 EMPLOYEE STOCK PURCHASE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 5. PROPOSAL TO APPROVE SELECTION OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS FOR U.S. BANCORP.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In its direction, the Trustee is authorized to vote upon such other business as
may properly come before this meeting.
This directive when properly executed will be voted in the manner directed
herein by the undersigned participant. If no direction is made, this directive
will be voted FOR Proposals 1, 2, 3, 4 and 5.
Dated:__________________, 1997
Total Number PLEASE MARK, SIGN, DATE,
of Shares: AND RETURN THE DIRECTIVE ________________________________
BY APRIL 8, 1997, USING Signature of Participant
THE ENCLOSED ENVELOPE (Please sign exactly as
name appears below)
Employee #
<PAGE> 52
P R O X Y
U. S. BANCORP
ANNUAL MEETING, APRIL 15, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John B. Fery, Paul A. Redmond, and N. Stewart
Rogers, and each of them, Proxies with power of substitution to vote on behalf
of the undersigned all shares which the undersigned may be entitled to vote at
the annual meeting of shareholders of U. S. Bancorp on April 15, 1997, and any
adjournments thereof, with all powers that the undersigned would possess if
personally present. A majority of the Proxies or substitutes present at the
meeting may exercise all powers granted hereby.
1. Nominees for Election of Directors:
H. Bettis J. Green
G. Cameron A. Noble
C. Chambers P. Redmond
F. Drake N. Rogers
R. Dryden B. Whiteley
J. Fery
Change of Address
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
(If you have a change of address, please indicate above.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES ON
THE REVERSE SIDE. YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. YOUR SHARES CANNOT BE VOTED UNLESS
YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 53
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. 9318
1. ELECTION OF DIRECTORS
FOR WITHHELD
/ / / /
WITHHELD
AS TO ALL
NOMINEES
For all nominees except for the following:
___________________________________________
2. PROPOSAL TO AMEND ARTICLE III OF THE RESTATED ARTICLES OF INCORPORATION
FOR AGAINST ABSTAIN
/ / / / / /
3. PROPOSAL TO APPROVE THE 1997 AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR STOCK
INCENTIVE AND DEFERRAL PLAN
FOR AGAINST ABSTAIN
/ / / / / /
4. PROPOSAL TO APPROVE THE 1997 EMPLOYEE STOCK PURCHASE PLAN
FOR AGAINST ABSTAIN
/ / / / / /
5. PROPOSAL TO APPROVE THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS FOR U. S. BANCORP
FOR AGAINST ABSTAIN
/ / / / / /
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting. This proxy when properly executed will
be voted in the manner directed herein by the undersigned shareholder. If no
direction is made, this proxy will be voted FOR proposals 1, 2, 3, 4, and 5.
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership, please sign in
partnership name by authorized person. PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
________________________________________________________________________________
SIGNATURE DATE
________________________________________________________________________________
SIGNATURE DATE
<PAGE> 54
USBancorp logo
111 Southwest Fifth Avenue
Portland, Oregon 97204
TO PARTICIPANTS IN THE U. S. BANCORP
EMPLOYEE INVESTMENT PLAN
Each Participant in the Investment Plan may direct the Trustee on voting
the full shares of common stock of U. S. Bancorp credited to his or her account.
Enclosed is a copy of the Notice of Annual Meeting and Proxy Statement dated
March 13, 1997, of U. S. Bancorp and a form on which you may direct the voting
of shares of U. S. Bancorp common stock credited to your account.
The voting directive form should be completed and sent to PL-6, Trust
Operations Administration, Attn: Barbara Schocko, Vice President. In order to
allow time for processing and tallying, voting directives must be received by
the Trust Group by 5 p.m. on April 8, 1997.
These instructions do NOT apply to any stock of U. S. Bancorp that you may
own apart from the Investment Plan. You should receive proxy materials relating
to any such shares under separate cover; follow the usual procedures applicable
to personally owned stock in voting such shares.
