UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 16, 2012
U.S. BANCORP |
(Exact name of registrant as specified in its charter)
Delaware | 1-6880 | 41-0255900 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
800 Nicollet Mall Minneapolis, Minnesota 55402 |
(Address of principal executive offices, including zip code)
Registrants telephone number, including area code: (651) 466-3000
Not Applicable |
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 16, 2012, the Compensation and Human Resources Committee of the Board of Directors of U.S. Bancorp adopted a new form of performance restricted stock unit award agreement and a new form of non-qualified stock option agreement that will be used for future grants to executive officers of performance restricted stock units and non-qualified stock options, respectively. These award agreements include new provisions providing that all or part of an executive officers unvested equity award may be cancelled if the executive officer demonstrated an inadequate sensitivity to the inherent risks of his or her business line or functional area which results in, or is reasonably likely to result in, a material adverse impact (whether financial or reputational) on U.S. Bancorp or the relevant business line or functional area. The new agreements also include certain other technical changes to the award agreements previously used.
All awards of performance restricted stock units and non-qualified stock options are made pursuant to the shareholder-approved U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan, which was filed with the Securities and Exchange Commission as Exhibit 10.1 to the Companys Current Report on Form 8-K filed on April 20, 2010. The new forms of performance restricted stock unit award agreement and non-qualified stock option agreement are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference. The description in this Current Report on Form 8-K of the new forms of agreement is qualified in its entirety by reference to the attached exhibits.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 | Form of Performance Restricted Stock Unit Award Agreement for Executive Officers (as approved January 16, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan | |
10.2 | Form of Non-Qualified Stock Option Agreement for Executive Officers (as approved January 16, 2012) under U.S. Bancorp Amended and Restated 2007 Stock Incentive Plan |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
U.S. BANCORP | ||
By: |
/s/ Lee R. Mitau | |
Lee R. Mitau Executive Vice President, General Counsel and Corporate Secretary |
Date: January 18, 2012
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Exhibit 10.1
NOTE: This Performance Restricted Stock Unit Award Agreement is applicable to performance restricted stock unit awards made to members of the Managing Committee (Participants) of U.S. Bancorp (the Company) on and after January 1, 2012. These performance restricted stock unit awards have the terms and conditions set forth in (a) each Participants award summary (the Award Summary), which can be accessed on the Morgan Stanley Smith Barney Benefit Access Website at www.benefitaccess.com (or the website of any other stock plan administrator selected by the Company in the future), and (b) the form of Exhibit A hereto (which will be completed to include all information called for therein) (the Completed Exhibit A) provided to such Participant as soon as administratively feasible following the date on which the award is made. The Award Summary may be viewed at any time on this Website, and the Award Summary may also be printed out. In addition to the individual terms and conditions set forth in the Award Summary and the Completed Exhibit A, each performance restricted stock unit award will have the terms and conditions set forth in the form of Performance Restricted Stock Unit Award Agreement below. As a condition of each performance restricted stock unit award, Participant accepts the terms and conditions of the Performance Restricted Stock Unit Award Agreement, the Award Summary and the Completed Exhibit A.
U.S. BANCORP PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS AGREEMENT, together with the Award Summary and the Completed Exhibit A which are incorporated herein by reference (collectively, the Agreement), sets forth the terms and conditions of a performance restricted stock unit award representing the right to receive shares of common stock of the Company, par value $0.01 per share (the Common Stock). The Agreement is issued pursuant to the Companys Amended and Restated 2007 Stock Incentive Plan, which was approved by shareholders on April 20, 2010 (the Plan) and is subject to its terms. Capitalized terms that are not defined in the Agreement shall have the meaning ascribed to such terms in the Plan.
The Company and Participant agree as follows:
1. | Award |
Subject to the terms and conditions of the Plan and the Agreement, the Company grants to Participant a performance restricted stock unit award entitling Participant to the number of performance restricted stock units (the Units) equal to the Target Award Number set forth in Participants Award Summary (such number of units, the Target Award Number). The Target Award Number shall be adjusted upward or downward as provided in the Completed Exhibit A. The number of Units that Participant will receive under this Agreement, after giving effect to such adjustment, is referred to herein as the Final Award Number. Each Unit represents the right to receive one share of Common Stock, subject to the vesting requirements and distribution provisions of this Agreement and the terms of the Plan. The shares of Common Stock distributable to Participant with respect to the Units granted hereunder are referred to as the Shares. Participants Award Summary sets forth the date of grant of this award (the Grant Date). The Completed Exhibit A sets forth (a) the performance period over which the Final Award Number will be determined (the Performance Period), and (b) the date on which the Final Award Number will be determined (the Determination Date).
2. | Vesting; Forfeiture |
(a) Time Based Vesting Conditions. Subject to the terms and conditions of the Agreement, the Units shall vest in installments on the dates set forth in the Participants Award Summary (each such date, a Scheduled Vesting Date), if the Participant remains continuously employed by the Company or an Affiliate of the Company until any such Scheduled Vesting Date. Except as otherwise provided in the Agreement, if Participant ceases to be an employee of the Company or any Affiliate prior to vesting of any Units in accordance with the Award Summary, all of Participants unvested Units shall be immediately and irrevocably forfeited.
(b) Continued Vesting Upon Separation From Service Due to Retirement or Disability. If Participant has a Separation From Service (as defined in Section 11) with the Company or any Affiliate by reason of Disability (as defined in Section 11) or Retirement (as defined in Section 11), the Units shall not be forfeited, but shall continue to vest on the Scheduled Vesting Dates in accordance with Participants Award Summary and subject to the terms of the Agreement, including Section 2(f) hereof, as though such Separation From Service had never occurred, so long as the Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant.
(c) Acceleration of Vesting Upon Death. If Participant ceases to be an employee by reason of death, or if Participant dies after a Separation From Service with the Company or an Affiliate due to Disability or Retirement but prior to any Scheduled Vesting Date, then the Units will become vested in accordance with this Section 2(c). If such death occurs prior to the last day of the Performance Period, a number of Units equal to the Target Award Number will vest upon Participants death. If the death occurs on or after the last day of the Performance Period, then a number of Units equal to the Final Award Number will vest upon Participants death. Notwithstanding the foregoing, such accelerated vesting shall occur only if the Participant has at all times since the Grant Date complied with the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant.
(d) Acceleration of Vesting Upon Qualifying Termination. Notwithstanding the vesting provisions contained in Sections 2(a) through (c) above, but subject to the other terms and conditions of this Agreement, if Participant has been continuously employed by the Company or any Affiliate of the Company until the date of a Qualifying Termination (as defined in Section 11), then immediately upon such Qualifying Termination, Participant shall be vested in the number of Units determined in accordance with this Section 2(d). If the Qualifying Termination occurs prior to the last day of the Performance Period, a number of Units equal to the Target Award Number will vest upon such Qualifying Termination. If the Qualifying Termination occurs on or after the last day of the Performance Period, a number of Units equal to the Final Award Number will vest upon such Qualifying Termination.
(e) Forfeiture on Termination of Employment for Cause and on Breach of Confidentiality Agreement. If Participant violates the terms of any confidentiality and non-solicitation agreement between the Company or an Affiliate and the Participant, all of Participants unvested Units shall be immediately and irrevocably forfeited. If Participants employment with the Company is terminated for Cause (as defined in Section 11), all of Participants unvested Units shall be immediately and irrevocably forfeited. Upon forfeiture, Participant shall have no rights relating to the forfeited Units (including, without limitation, any rights to receive a distribution of Shares with respect to the Units and the right to receive dividend equivalents).
(f) Special Vesting Condition.
(A) Vesting condition. Notwithstanding the provisions of Participants Award Summary and Section 2(a) hereof, if it shall be determined at any time subsequent to the Grant Date that Participant has, during the year in which the Grant Date occurs (the Grant Year), (i) failed to comply with Company policies and procedures, including the Code of Ethics and Business Conduct, (ii) violated any law or regulation, (iii) engaged in negligent or willful misconduct, or (iv) engaged in activity resulting in a significant or material Sarbanes-Oxley control deficiency, and such failure, violation, misconduct or activity (1) demonstrates an inadequate sensitivity to the inherent risks of Participants business line or functional area, and (2) results in, or is reasonably likely to result in, a material adverse impact (whether financial or reputational) on the Company or Participants business line or functional area, all or part of the Units that have not yet become vested at the time of such determination may be cancelled and, if so cancelled, such Units will not become vested on the Scheduled Vesting Date. Inadequate sensitivity to risk is demonstrated by imprudent activities that subject the Company to risk outcomes in future periods, including risks that may not be apparent at the time the activities are undertaken. The manner in which such determination is made, and the extent of any such cancellation of the unvested Units, shall be in accordance with the provisions of Section 2(f)(B) below.
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(B) Procedures. Prior to each anniversary of the Grant Date (until the all of the Units have become vested, or have otherwise been cancelled or forfeited), Participants manager shall take the following steps: (i) the manager will determine whether any of the events described in clauses (i) through (iv) in paragraph A immediately above have occurred; (ii) in the event one or more such events have occurred, the manager will determine whether such event has the effect described in subclause (2) in paragraph (A) immediately above; and (iii) if the manager has determined that such event has the effect described in subclause (2) in paragraph (A) immediately above, the manager will further determine whether Participants actions were of the nature described in subclause (1) of paragraph (A) immediately above. In making this latter determination, the manager will look to all relevant factors, including Participants position and authority, and Participants performance against company and business line policies (for example, credit, market and operational risk policies, as applicable), the Companys Code of Ethics and Business Conduct, and applicable regulatory, legal and compliance guidelines and audit findings. In making such determination, the manager will use a written risk scorecard, in the form developed for this purpose and as revised from time to time. In the event the manager determines that the conditions in clauses (i),(ii) and (iii) of this paragraph (B) exist, the manager shall then determine the number, if any, of any unvested Units that is recommended to become ineligible to become vested and to be cancelled. If the manager recommends cancellation of any of the unvested Units, the recommendation will be reviewed by the Incentive Review Committee. Any determination of the Incentive Review Committee shall be deemed conclusive and final and not subject to review or challenge by Participant. If the Incentive Review Committee determines that any unvested Units will be ineligible to become vested, and that such Units shall be cancelled, Participant will no longer have any rights relating to the Units, including, without limitation, the right to receive Shares and cash dividend equivalents. The Scheduled Vesting Date (as set forth in the Award Summary) in the year of such determination will be postponed, if necessary, until the conclusion of these procedures, provided however, that such procedures will in all cases be concluded before November 30th of the calendar year in which such Scheduled Vesting Date occurs and in no event will a Scheduled Vesting Date be postponed beyond such November 30th. In no event will the payment (distribution of Shares) with respect to a Unit that becomes payable on a Schedule Vesting Date be postponed beyond December 31st of the calendar year in which the Scheduled Payment Date set forth on the Award Summary occurs.
3. | Distribution of Shares with Respect to Units |
Subject to the restrictions in this Section 3, following the vesting of Units and following the payment of any applicable withholding taxes pursuant to Section 8 of this Agreement, the Company shall cause to be issued and delivered to Participant a certificate or certificates evidencing Shares registered in the name of Participant or in the name of Participants legal representatives, beneficiaries or heirs, as the case may be, as follows:
(a) Scheduled Vesting Date Distributions. As soon as administratively feasible following each Scheduled Vesting Date (but in no event later than December 31st of the year in which such Scheduled Vesting Date occurs), all Shares issuable pursuant to Units that become vested as of such Scheduled Vesting Date (and with respect to which Shares have not been distributed previously) shall be distributed to Participant, or in the event of Participants death, to the representatives of Participant or to any Person to whom the Units have been transferred by will or the applicable laws of descent and distribution.
(b) Qualifying Termination Distributions. As soon as administratively feasible following a Separation From Service in connection with a Qualifying Termination (but in no event later than 60 days following such Separation From Service), all Shares issuable pursuant to Units that become vested as a result of such Qualifying Termination (and with respect to which Shares have not been distributed previously) shall be distributed to Participant. Notwithstanding the foregoing, any Shares issuable to a Specified Employee (as defined in Section 11) as a result of a Separation From Service in connection with a Qualifying Termination will not be delivered to such Specified Employee until the date that is six months and one day after the date of the Separation From Service.
(c) Distributions Following Retirement or Disability. If a Participant has a Separation From Service with the Company or its Affiliates due to Retirement or Disability (so long as such Separation From Service is not in connection with a Qualifying Termination), the distribution of Shares with respect to Units will not be accelerated, and Shares will be distributed as soon as administratively feasible following the applicable Scheduled Vesting Dates (but in no event later than December 31st of the year in which such Scheduled Vesting Date occurs).
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(d) Distributions Following Death. As soon as administratively feasible following the death of a Participant (but in no event later than 90 days following such death) all Shares issuable pursuant to Units that become vested pursuant to Section 2(c) (and with respect to which Shares have not been distributed previously) shall be distributed to Participant.
In the event that the number of Shares distributable pursuant to this Section 3 is a number that is not a whole number, then the number of Shares distributed shall be rounded down to the nearest whole number.
4. | Rights as Shareholder; Dividend Equivalents |
Prior to the distribution of Shares with respect to Units pursuant to Section 3, Participant shall not have ownership or rights of ownership of any Shares underlying the Units; provided, however, that cash dividend equivalents shall accrue on the Shares underlying the Units, whether such Units are vested or unvested, if cash dividends are declared by the Companys Board of Directors on the Common Stock on or after the Grant Date. Participant shall be entitled to dividend equivalents with respect to a number of Units equal to the Final Award Number. Such dividend equivalents will be in an amount of cash per Unit equal to the cash dividend paid with respect to a share of outstanding Common Stock. The dividend equivalents shall be treated as earnings on, and as a separate amount from, the Units for purposes of Section 409A of the Code. Dividend equivalents accrued prior to the Determination Date will be paid to Participant as soon as administratively feasible after the Determination Date (but in no event later than 30 days following the Determination Date). After the Determination Date, dividend equivalents will be paid to Participant with respect to unvested Shares on the same payment dates as dividends to holders of the Common Stock are paid; provided, however, that, in all events, any dividend equivalents paid in accordance with this sentence shall be paid in the calendar year in which the dividends are declared, or, if later, on or before the date that is two and one-half months after the date on which such dividends are declared. Dividend equivalents paid with respect to dividends declared before the delivery of the Shares underlying the Units will be treated as compensation income for tax purposes and will be subject to income and payroll tax withholding by the Company.
5. | Restriction on Transfer |
Except for transfers by will or the applicable laws of descent and distribution, the Units cannot be sold, assigned, transferred, gifted, pledged, or in any manner encumbered, alienated, attached or disposed of, and any purported sale, assignment, transfer, gift, pledge, alienation, attachment or encumbrance shall be void and unenforceable against the Company. No such attempt to transfer the Units, whether voluntary or involuntary, by operation of law or otherwise, shall vest the purported transferee with any interest or right in or with respect to the Units or the Shares issuable with respect to the Units.
6. | Securities Law Compliance |
The delivery of all or any of the Shares in accordance with this Award shall be effective only at such time that the issuance of such Shares will not violate any state or federal securities or other laws. The Company is under no obligation to effect any registration of the Shares under the Securities Act of 1933 or to effect any state registration or qualification of the Shares. The Company may, in its sole discretion, delay the delivery of the Shares or place restrictive legends on such Shares in order to ensure that the issuance of any Shares will be in compliance with federal or state securities laws and the rules of the New York Stock Exchange or any other exchange upon which the Companys Common Stock is traded.
7. | Distributions and Adjustments |
The Award shall be subject to adjustment, in accordance with Section 4(c) of the Plan, in the event that any distribution, recapitalization, reorganization, merger or other event covered by Section 4(c) of the Plan shall occur.
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8. | Income Tax Withholding |
In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant. Participant may satisfy any applicable tax withholding obligations arising from the receipt of Shares, or lapse of restrictions relating to the Units, by check payable to the Company. In addition, Participant may, at Participants election, satisfy the minimum statutory withholding obligations that arise at the time of delivery of Shares by electing to have the Company withhold a portion of the Shares otherwise to be delivered with a Fair Market Value (as such term is defined in the Plan) equal to the amount necessary to satisfy such obligations. The election must be made on or before the date that the amount of tax to be withheld is determined.
9. | Miscellaneous |
(a) This Agreement is issued pursuant to the Plan and is subject to its terms. The Plan is available for inspection during business hours at the principal office of the Company. In addition, the Plan may be viewed on the U.S. Bancorp Intranet Website in the Human Resources, Compensation section of such website.
(b) This Agreement shall not confer on Participant any right with respect to continuance of employment with the Company or any Affiliate, nor will it interfere in any way with the right of the Company or any Affiliate to terminate such employment at any time.
(c) Participant acknowledges that the grant, vesting or any payment with respect to this Award, and the sale or other taxable disposition of the Shares issued with respect to the Units hereunder may have tax consequences pursuant to the Code or under local, state or international tax laws. Participant acknowledges that Participant is relying solely and exclusively on Participants own professional tax and investment advisors with respect to any and all such matters (and is not relying, in any manner, on the Company or any of its employees or representatives). Participant understands and agrees that any and all tax consequences resulting from the Award and its grant, vesting or any payment with respect thereto, and the sale or other taxable disposition of the Shares acquired pursuant to the Award, is solely and exclusively the responsibility of Participant without any expectation or understanding that the Company or any of its employees or representatives will pay or reimburse Participant for such taxes or other items.
(d) It is intended that the Plan and the Agreement shall comply with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder and the provisions of this Agreement shall be construed and administered accordingly.
10. | Venue |
Any claim or action brought with respect to this Award shall be brought in a federal or state court located in Minneapolis, Minnesota.
11. | Definitions |
For purposes of this Agreement, the following terms shall have the definitions as set forth below:
(a) Announcement Date shall mean the date of the public announcement of the transaction, event or course of action that results in a Change in Control.
(b) Cause shall mean:
(A) the continued failure by Participant to substantially perform Participants duties with the Company or any Affiliate (other than any such failure resulting from Participants Disability, as defined in Section 11(d), after a demand for substantial performance is delivered to Participant that specifically identifies the manner in which the Company believes that Participant has not substantially performed Participants duties, and Participant has failed to resume substantial performance of Participants duties on a continuous basis;
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(B) gross and willful misconduct during the course of employment (regardless of whether the misconduct occurs on the Companys premises), including, without limitation, theft, assault, battery, malicious destruction of property, arson, sabotage, embezzlement, harassment, acts or omissions which violate the Companys rules or policies (such as breaches of confidentiality), or other conduct which demonstrates a willful or reckless disregard of the interests of the Company or its Affiliates; or
(C) Participants conviction of a crime (including, without limitation, a misdemeanor offense) which impairs Participants ability substantially to perform Participants duties with the Company.
(c) Change in Control shall mean any of the following events occurring after the date of this Agreement, but only if such event also constitutes a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code:
(A) The acquisition by any Person (as defined in Section 11(f))of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (1) the then outstanding shares of Common Stock (the Outstanding Company Common Stock) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided, however, that, for purposes of this clause (A), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by a subsidiary of the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or a subsidiary of the Company (a Company Entity) or (iv) any acquisition by any corporation pursuant to a transaction which complies with clause (i), (ii) or (iii) of this clause (A); or
(B) Individuals who, as of the Grant Date, constitute the Companys Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board of Directors (except as a result of the death, retirement or disability of one or more members of the Incumbent Board); provided, however, that any individual becoming a director subsequent to the date of this Agreement whose election, or nomination for election by the Companys shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, (1) any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board, (2) any director designated by or on behalf of a Person who has entered into an agreement with the Company (or which is contemplating entering into an agreement) to effect a Business Combination (as defined in paragraph (C) of this Section 11(c)) with one or more entities that are not Company Entities or (3) any director who serves in connection with the act of the Board of Directors of increasing the number of directors and filling vacancies in connection with, or in contemplation of, any such Business Combination; or
(C) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a Business Combination), in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any Company Entity or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of
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common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination; or
(D) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
(d) Disability means leaving active employment and qualifying for and receiving disability benefits under the Companys long-term disability programs as in effect from time to time.
(e) Notice of Termination means a written notice which sets forth the date of termination of Participants employment.
(f) Person means person as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
(g) Qualifying Termination means:
(A) Participants Separation From Service with the Company and its Affiliates as a result of the Companys termination of Participants employment for any reason other than Cause within 12 months following a Change in Control; provided, however, that any such Separation From Service shall not be a Qualifying Termination if Participant has been notified in writing more than 30 days prior to the Announcement Date that Participants employment with the Company is not expected to continue for more than 12 months following the date of such notification, but only if Participants employment with the Company is terminated (and employee experiences a Separation From Service) within such 12 month period; and provided further, however, that any such Separation From Service shall not be a Qualifying Termination if Participant has announced in writing, prior to the date the Company provides Notice of Termination to Participant, the intention to terminate employment, subject to the condition that any such termination by the Company prior to Participants stated termination date shall be deemed to be termination by Participant on such stated date unless termination by the Company is for Participants gross and willful misconduct;
(B) Participants Separation From Service with the Company and its Affiliates as a result of Disability within 12 months following a Change in Control; or
(C) Participants Separation From Service with the Company and its Affiliates (other than as a result of Participants termination of employment by the Company for Cause) within 12 months following a Change in Control, if, at the time of the Change in Control, such Participant is age 59 1/2 or older and has had 10 or more years of employment with the Company or its Affiliates following such Participants most recent date of hire by the Company or its Affiliates.
(h) Retirement means termination of employment (other than for gross and willful misconduct) by a Participant who is age 59 1/2 or older and has had 10 or more years of employment with the Company or its Affiliates following such Participants most recent date of hire by the Company or its Affiliates.
(i) Separation From Service means a Participants separation from service with the Company and its affiliates, as determined under Treasury Regulation section 1.409A-1(h)(1), provided, that the term affiliate shall mean a business entity which is affiliated in ownership with the Company and that is treated as a single employer under the rules of section 414(b) and (c) of the Code (applying the eighty percent common ownership standard).
(j) Specified Employee shall mean any Participant who is a specified employee for purposes of section 1.409A-1(i) of the U.S. Treasury Regulations, determined in accordance with the rules set forth in the separate document entitled U.S. Bank Specified Employee Determination.
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EXHIBIT A
TO
PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT
This Exhibit A to the Performance Restricted Stock Unit Award Agreement sets forth the manner in which the Final Award Number will be determined for each Participant.
Definitions
Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan, the Performance Restricted Stock Unit Award Agreement and Participants Award Summary. The following terms used in the text of this Exhibit A and in the ROE Performance Matrix shall have the meanings set forth below:
Company ROE Maximum means %.
Company ROE Minimum means %.
Company ROE Result means the ROE achieved by the Company during the Performance Period.
Company ROE Target means %.
Determination Date means the date on which the Final Award Number is determined, which date shall not be later than 45 days after the last day of the Performance Period.
Final Award Number means the Final Award Number determined in accordance with this Exhibit A.
Peer Group Companies means the following companies: .
Peer Group ROE Ranking Maximum means the percentile.
Peer Group ROE Ranking Minimum means the percentile.
Peer Group ROE Ranking Target means the percentile.
Peer Group ROE means the ROE achieved by the Peer Group Companies during the Performance Period.
Peer Group ROE Ranking means the percentile rank of the Company ROE Result relative to Peer Group ROE.
Performance Period means the year ending December 31, .
ROE means (a) net income applicable to the common shareholders of a company during the Performance Period, divided by (b) that companys average common shareholders equity during the Performance Period.
ROE Performance Matrix means the ROE Performance Matrix set forth in this Exhibit A.
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Target Award Number means the Target Award Number set forth in a Participants Award Summary.
Target Award Number Percentage means the Target Award Number Percentage determined in accordance with the ROE Performance Matrix and the related rules set forth in this Exhibit A.
Determination of Final Award Number
Each Participant has been granted a number of Units equal to the Target Award Number. The Target Award Number will be adjusted upward or downward depending on (a) whether the Company ROE Result is greater or less than the Company ROE Target, and (b) the Peer Group ROE Ranking. The Final Award Number for each Participant will be determined by multiplying (i) the Target Award Number Percentage by (ii) the Target Award Number. The Target Award Number Percentage will be determined in accordance with the following ROE Performance Matrix and the related rules below:
ROE PERFORMANCE MATRIX
Target Award Number Percentage | ||||||||
Company ROE Maximum or more | ___% | ___% | ___% | |||||
Company ROE Result |
Company ROE Target |
___% | ___% | ___% | ||||
(Vertical Axis) | Company ROE Minimum or less | ___% | ___% | ___% | ||||
Peer Group ROE Ranking Minimum or below |
Peer Group ROE Ranking Target |
Peer Group ROE Ranking Maximum or above | ||||||
Peer Group ROE Ranking (Horizontal Axis) |
In determining the Target Award Number Percentage in accordance with the ROE Performance Matrix, the following rules will apply:
| If the Company ROE Result is greater than the Company ROE Minimum and less than the Company ROE Target, the Target Award Number Percentage on the vertical axis will be determined by interpolation of the Company ROE Result between the Company ROE Minimum and the Company ROE Target. |
| If the Company ROE Result is greater than the Company ROE Target and less than the Company ROE Maximum, the Target Award Number Percentage on the vertical axis will be determined by interpolation of the Company ROE Result between the Company ROE Target and the Company ROE Maximum. |
| If the Peer Group ROE Ranking is greater than the Peer Group ROE Ranking Minimum and less than the Peer Group ROE Ranking Target, the Target Award Number Percentage on the horizontal axis will be determined by interpolation of the Peer Group ROE Ranking between the Peer Group ROE Minimum and the Peer Group ROE Target. |
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| If the Peer Group ROE Ranking is greater than the Peer ROE Group Ranking Target and less than the Peer Group ROE Ranking Maximum, the Target Award Number Percentage on the horizontal axis will be determined by interpolation of the Peer Group ROE Ranking between the Peer Group ROE Target and the Peer Group ROE Maximum. |
| After the Target Award Number Percentage on each of the vertical axis and horizontal axis has been determined, the actual Target Award Number Percentage will be determined by interpolation of the data points (i.e., the percentages) set forth in the ROE Performance Matrix. |
| In no event shall the Target Award Number Percentage be less than 25.0%. |
| In no event shall the Target Award Number Percentage be greater than 150.0%. |
The Final Award Number for each Participant shall be determined by the Committee on the Determination Date. The Award Summary of each Participant shall be amended to reflect the Final Award Number as soon as administratively feasible after the Final Award Number for such Participant is determined.
Committee Determinations
The Committee shall make all determinations necessary to arrive at the Final Award Number for each Participant. The Committee shall determine the Company ROE Result by reference to the Companys audited financial statements as of and for the year ending on the last day of the Performance Period. The Committee shall determine the Peer Group ROE Ranking by reference to publicly available financial information regarding the Peer Companies. Any determination by the Committee pursuant to this Exhibit A will be binding upon each Participant and the Company.
No Fractional Units
In the event the Final Award Number is a number of Units that is not a whole number, then the Final Award Number shall be rounded down to the nearest whole number.
2012 MC Performance RSU Award Agreement
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Exhibit 10.2
NOTE: Stock options granted to members of the Managing Committee (Optionees) of U.S. Bancorp (the Company) on and after January 1, 2012 will have the terms and conditions set forth in each Optionees grant summary (the Grant Summary), which can be accessed on the Morgan Stanley Smith Barney Benefit Access Website at www.benefitaccess.com (or the website of any other stock plan administrator selected by the Company in the future). The Grant Summary may be viewed at any time on this Website, and the Grant Summary may also be printed out. In addition to the individual terms and conditions set forth in the Grant Summary, each stock option will have the terms and conditions set forth in the form of Non-Qualified Stock Option Agreement below. As a condition to each stock option grant, Optionee accepts the terms and conditions of the Grant Summary and the Non-Qualified Stock Option Agreement.
U.S. BANCORP
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT sets forth the terms and conditions of a stock option for the purchase of Common Stock, par value $0.01 per share (Common Stock), of the Company granted to each Optionee by the Company pursuant to its Amended and Restated 2007 Stock Incentive Plan, which was approved by shareholders on April 20, 2010 (the Plan).
The Company and Optionee agree as follows:
1. | Grant of Option |
Subject to the terms and conditions of this Agreement, the Company grants Optionee the right and option (the Option) to purchase all or any part of an aggregate of the number of shares of Common Stock set forth in Optionees Grant Summary at the exercise price per share set forth in the Grant Summary. The date of grant of the Option (the Grant Date) and the expiration date of the Option (the Expiration Date) are also set forth in Optionees Grant Summary. The Option is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2. | Vesting of Exercise Rights; Expiration Date |
(a) Subject to the terms and conditions of this Agreement, the Option may be exercised by Optionee as set forth in Optionees Grant Summary. The Option shall terminate at the close of business on the Expiration Date, or on such earlier date as provided in this Agreement.
(b) Notwithstanding the vesting provision contained in Section 2(a) above, but subject to the other terms and conditions of this Agreement, the Option may be exercised in full immediately upon a Qualifying Termination (as defined below). For purposes of this Agreement, the following terms shall have the following definitions:
(i) | Affiliate shall be defined as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). |
(ii) | Announcement Date shall mean the date of the public announcement of the transaction, event or course of action that results in a Change in Control. |
(iii) | Cause shall mean (A) the continued failure by Optionee to substantially perform Optionees duties with the Company or any Affiliate (other than any such failure |
resulting from Optionees Disability (as defined in Section 4(c)), after a demand for substantial performance is delivered to Optionee that specifically identifies the manner in which the Company believes that Optionee has not substantially performed Optionees duties, and Optionee has failed to resume substantial performance of Optionees duties on a continuous basis, (B) gross and willful misconduct during the course of employment (regardless of whether the misconduct occurs on the Companys premises), including, without limitation, theft, assault, battery, malicious destruction of property, arson, sabotage, embezzlement, harassment, acts or omissions which violate the Companys rules or policies (such as breaches of confidentiality), or other conduct which demonstrates a willful or reckless disregard of the interests of the Company or its Affiliates or (C) Optionees conviction of a crime (including, without limitation, a misdemeanor offense) which impairs Optionees ability substantially to perform Optionees duties with the Company. |
(iv) | Change in Control shall mean any of the following occurring after the date of this Agreement: |
(A) | The acquisition by any Person (as defined in Section 2(b)(vi)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (1) the then outstanding shares of Common Stock (the Outstanding Company Common Stock) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided, however, that, for purposes of this clause (A), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by a subsidiary of the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or a subsidiary of the Company (a Company Entity) or (iv) any acquisition by any corporation pursuant to a transaction which complies with clause (i), (ii) or (iii) of this clause (A); or |
(B) | Individuals who, as of the Grant Date, constitute the Companys Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board of Directors (except as a result of the death, retirement or disability of one or more members of the Incumbent Board); provided, however, that any individual becoming a director subsequent to the date of this Agreement whose election, or nomination for election by the Companys shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, (1) any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board, (2) any director designated by or on behalf of a Person who has entered into an agreement with the Company (or which is contemplating entering into an agreement) to effect a Business Combination (as defined in Section 2(b)(iv)(C)) with one or more entities that are not Company Entities or (3) any director who serves in connection with the act of the Board of Directors of increasing the number of directors and filling vacancies in connection with, or in contemplation of, any such Business Combination; or |
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(C) | Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a Business Combination), in each case, unless, following such Business Combination, (1) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock or the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any Company Entity or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (3) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination; or |
(D) | Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. |
(v) | Notice of Termination shall mean a written notice which sets forth the date of termination of Optionees employment. |
(vi) | Person shall be defined as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act. |
(vii) | Qualifying Termination shall mean a termination of Optionees employment with the Company or its Affiliates by the Company for any reason other than Cause within 12 months following a Change in Control; provided, however, that any such termination shall not be a Qualifying Termination if Optionee has been notified in writing more than 30 days prior to the Announcement Date that Optionees employment with the Company is not expected to continue for more than 12 months following the date of such notification; provided that such exclusion from Qualifying Termination shall only apply if Optionees employment with the Company is terminated within such 12 month period; and provided, further, that any such termination shall not be a Qualifying Termination if Optionee has announced in writing, prior to the date the Company provides Notice of Termination to Optionee, the intention to terminate employment, subject to the condition that any such termination by the Company prior to Optionees stated termination date shall be deemed to be termination by Optionee on such stated date unless termination by the Company is for Optionees gross and willful misconduct. |
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3. | Special Vesting Condition |
(a) | Vesting condition. Notwithstanding the provisions of the Optionees Grant Summary, if it shall be determined at any time subsequent to the Grant Date that the Optionee has, during the year in which the Grant Date occurs (the Grant Year), (i) failed to comply with Company policies and procedures, including the Code of Ethics and Business Conduct, (ii) violated any law or regulation, (iii) engaged in negligent or willful misconduct, or (iv) engaged in activity resulting in a significant or material Sarbanes-Oxley control deficiency, and such failure, violation, misconduct or activity (A) demonstrates an inadequate sensitivity to the inherent risks of the Optionees business line or functional area, and (B) results in, or is reasonably likely to result in, a material adverse impact (whether financial or reputational) on the Company or the Optionees business line or functional area, all or part of any unvested portion of the Option at the time of such determination may not vest on the dates indicated in the Grant Summary and may no longer be exercisable. Inadequate sensitivity to risk is demonstrated by imprudent activities that subject the Company to risk outcomes in future periods, including risks that may not be apparent at the time the activities are undertaken. The manner in which such determination is made, and the extent of any such cancellation of the unvested portion of the Option, shall be in accordance with the provisions of Section 3(b) below. |
(b) | Procedures. Prior to each anniversary of the Grant Date (until the Option is fully vested, or has otherwise been wholly terminated), the Optionees manager shall take the following steps: (i) the manager will determine whether any of the events described in clauses (i) through (iv) in paragraph (a) above have occurred; (ii) in the event one or more such events have occurred, the manager will determine whether such event has the effect described in subclause (B) in paragraph (a) above; and (iii) if the manager has determined that such event has the effect described in subclause (B) in paragraph (a) above, the manager will further determine whether the Optionees actions were of the nature described in subclause (A) of paragraph (a) above. In making this latter determination, the manager will look to all relevant factors, including the Optionees position and authority, and the Optionees performance against company and business line policies (for example, credit, market and operational risk policies, as applicable) the Companys Code of Ethics and Business Conduct, and applicable regulatory, legal and compliance guidelines and audit findings. In making such determination, the manager will use a written risk scorecard, in the form developed for this purpose and as revised from time to time. In the event the manager determines that all of the conditions in clauses (b)(i),(ii) and(iii) of this subsection 3(b) exist, the manager shall then determine the amount, if any, of any unvested portion of the Option that is recommended to be cancelled. If the manager recommends cancellation of any part of any unvested portion of the Option, the recommendation will be reviewed by the Incentive Review Committee. Any determination of the Incentive Review Committee shall be deemed conclusive and final and not subject to review or challenge by the Optionee. The normal vesting date in the year of such determination (as set forth in the Grant Summary) shall be suspended until the conclusion of these procedures. |
4. | Effect of Termination of Employment |
(a) | The Option shall terminate and may no longer be exercised if Optionee ceases to be employed by the Company or any Affiliate, except that: |
(i) | If Optionees employment shall be terminated for any reason other than Cause, death, Disability, Retirement (as defined in Section 4(c)) or Early Retirement (as defined in |
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Section 4(c)), Optionee may at any time within a period of 90 days after such termination, but not after the Expiration Date of the Option, exercise the option to the extent that Option was exercisable by Optionee on the date of the termination of employment. |
(ii) | If Optionees employment shall be terminated by reason of Cause, the Option shall be terminated as of the date of the misconduct. |
(iii) | If Optionee shall die while in the employ of the Company or any Affiliate or within 90 days after termination of employment for any reason other than Cause, then so long as Optionee has complied with the terms of any confidentiality and nonsolicitation agreement between the Company and Optionee (a Confidentiality and Nonsolicitation Agreement), the vesting of the Option will accelerate upon the death of Optionee and the Option will be fully exercisable in whole or in part, notwithstanding the vesting provisions contained in Section 2(a) or Section 2(b), at any time up to the last day of the three year period commencing on the date of Optionees death (or, if earlier, the Expiration Date of the Option). In such cases, the Option may be exercised by the personal representatives or administrators of Optionee or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution. |
(iv) | If Optionees employment shall be terminated by reason of Disability, Optionee may exercise the Option in accordance with its terms (including, without limitation, Section 3 hereof) as though such termination had never occurred, so long as Optionee has complied with the terms of any Confidentiality and Nonsolicitation Agreement. If Optionee shall die following a termination of employment by reason of Disability (but prior to the Expiration Date of the Option) and if Optionee has not violated the terms of any Confidentiality and Nonsolicitation Agreement, the vesting of the Option will accelerate upon the death of Optionee and the Option will be fully exercisable in whole or in part by the personal representatives or administrators of Optionee, or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution, at any time up to the last day of the three year period commencing on the date of Optionees death (or, if earlier, the Expiration Date of the Option). |
(v) | If Optionees employment shall be terminated by reason of Retirement, the Optionee may exercise the Option in accordance with its terms (including, without limitation, Section 3 hereof) as though such termination had never occurred, so long as Optionee has complied with the terms of any Confidentiality and Nonsolicitation Agreement. If Optionee shall die following a termination of employment by reason of Retirement (but prior to the Expiration Date of the Option) and if Optionee has not violated the terms of any Confidentiality and Nonsolicitation Agreement, the vesting of the Option will accelerate upon the death of Optionee and the Option will be fully exercisable in whole or in part by the personal representatives or administrators of Optionee, or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution, at any time up to the last day of the three year period commencing on the date of Optionees death (or, if earlier, the Expiration Date of the Option). |
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(vi) | If Optionees employment shall be terminated by reason of Early Retirement, Optionee may at any time within a three year period after such termination, but not after the Expiration Date of the Option, exercise the Option to the extent that it was exercisable by Optionee on the date of the termination of employment, so long as Optionee has complied with the terms of any Confidentiality and Nonsolicitation Agreement. If Optionee shall die following a termination of employment by reason of Early Retirement (but prior to the Expiration Date of the Option) and if Optionee has not violated the terms of any Confidentiality and Nonsolicitation Agreement, the Option may be exercised to the extent it was exercisable by Optionee on the date of termination of employment, by the personal representatives or administrators of Optionee, or by any Person or Persons to whom the Option has been transferred by will or the applicable laws of descent and distribution, at any time up until the earlier of (A) the last day of the three year period commencing on the date of Optionees termination of employment and (B) the Expiration Date of the Option. |
(vii) | Notwithstanding anything apparently to the contrary in Section 4(a), if Optionee violates the terms of any Confidentiality and Nonsolicitation Agreement, the Option shall terminate and may no longer be exercised by Optionee (or by representatives or successors of Optionee) upon the occurrence of any such violation. |
(b) | Notwithstanding the provisions contained in Section 4(a), but subject to the other terms and conditions of this Agreement, in the event that Optionees employment is terminated pursuant to a Qualifying Termination, Optionee shall have the right to exercise the Option in whole or in part at any time within a one year period after such termination of employment; provided that no provision of this paragraph shall shorten the period in which the Option may be exercised in the event of death, Disability, Retirement or Early Retirement; and, provided further, that no Option shall be exercisable after the expiration of the term of the Option. |
(c) | For purposes of this Agreement, (A) Retirement means termination of employment (other than for gross and willful misconduct) by a Person who is age 59 1/2 or older and has had 10 or more years of employment with the Company or its Affiliates following such Persons most recent date of hire by the Company or its Affiliates, (B) Early Retirement means termination of employment (other than for gross and willful misconduct) by a Person who is age 55 or older and has had 10 or more years of employment with the Company or its Affiliates following such Persons most recent date of hire by the Company or its Affiliates and (C) Disability means leaving active employment and qualifying for and receiving disability benefits under the Companys long-term disability programs as in effect from time to time. |
5. | Securities Law Compliance |
The exercise of all or any portion of this Option shall only be effective at such time that the sale of Common Stock issued pursuant to such exercise will not violate any state or federal securities or other laws. The Company is under no obligation to effect any registration of the stock subject to the Option under the Securities Act of 1933 or to effect any state registration or qualification of such Common Stock. The Company may, in its sole discretion, defer the effectiveness of any full or partial exercise of the Option in order to ensure that the issuance of stock upon exercise will be in compliance with federal or state securities laws and the rules of the New York Stock Exchange or any other exchange upon which the Companys Common Stock is traded.
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6. | Method of Exercise of Option |
Subject to the foregoing, the Option may be exercised in whole or part from time to time by serving written notice of exercise on the Company at its principal executive offices, to the attention of the Companys Executive Compensation Department or to its properly designated agent serving from time to time. The notice shall state the number of shares as to which the Option is being exercised and be accompanied by payment of the purchase price. Optionee may, at Optionees election, pay the purchase price (a) by check payable to the Company, (b) in previously owned shares of the Companys Common Stock or (c) in any combination of the two, in each case having a Fair Market Value (as defined in the Plan) on the exercise date equal to the applicable exercise price. Optionee may, at Optionees election, exercise the Option, in whole or in part, by providing the Company with an attestation that such previously owned shares of the Companys Common Stock are owned by Optionee, in which case the number of previously owned shares having a Fair Market Value equal to the exercise price (or appropriate portion of the exercise price) will be withheld from the number of shares issued to Optionee pursuant to the exercise of the Option. Previously owned shares used as provided in the two immediately preceding sentences must have been owned by Optionee for a minimum of six months prior to the date of exercise of the Option for this method of payment to apply.
7. | Income Tax Withholding |
To provide the Company with the opportunity to claim the benefit of any income tax deduction which may be available to it upon the exercise of the Option, and to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Optionee, are withheld or collected from Optionee. The Optionee may, at Optionees election, satisfy applicable tax withholding obligations by (i) electing to have the Company withhold a portion of the shares of Common Stock otherwise to be delivered upon exercise of such Option having a Fair Market Value equal to the amount of such taxes or (ii) delivering to the Company shares of Common Stock other than the shares issuable upon exercise of such Option having a Fair Market Value equal to the amount of such taxes. The election must be made on or before the date that the amount of tax to be withheld is determined.
8. | Miscellaneous |
(a) | This Agreement shall not give Optionee any right with respect to continuance of employment with the Company or any Affiliate, nor will it interfere in any way with the right of the Company or any Affiliate to terminate such employment at any time. In addition, the Company or any Affiliate may at any time dismiss Optionee from employment, free from any liability or claim under the Plan. The holder of the Option will not be deemed to be the holder of any shares subject to the Option unless and until the Option has been exercised and the purchase price of the shares purchased has been paid. |
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(b) | Except pursuant to terms approved by the Committee, the Option may not be transferred, except by will or the laws of descent and distribution to the extent provided in Section 4, and during Optionees lifetime the Option is exercisable only by Optionee (or by Optionees guardian or legal representative in the case of Disability). |
(c) | In the event that any dividend or other distribution (whether in the form of cash, shares of Common Stock, or other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company or other similar corporate transaction or event affecting the stock subject to the Option would be reasonably likely to result in the diminution or enlargement of any of the benefits or potential benefits intended to be made available under the Option (including, without limitation, the benefits or potential benefits of provisions relating to the term, vesting or exercisability of the Option, and any change in control provision), the Committee shall, in order to prevent such diminution or enlargement of any such benefits or potential benefits, adjust any or all of (i) the number and type of shares (or other securities or other property) subject to the Option and (ii) the exercise price with respect to the Option; provided, however, that the number of shares covered by the Option shall always be a whole number. Without limiting the foregoing, if any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of the Companys assets to another corporation, shall be effected in such a way that holders of the Companys Common Stock shall be entitled to receive stock, securities, cash or other assets with respect to or in exchange for such shares, Optionee shall have the right to purchase and receive upon the basis and upon the terms and conditions specified in this Agreement and in lieu of the shares of the Common Stock of the Company immediately available for purchase and receivable upon the exercise of the Option, with appropriate adjustments to prevent diminution or enlargement of benefits or potential benefits intended to be made available under the Option, such shares of stock, other securities, cash or other assets as would have been issued or delivered to Optionee if Optionee had exercised the Option and had received such shares of Common Stock prior to such reorganization, reclassification, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale unless prior to the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument the obligation to deliver to Optionee such shares of stock, securities, cash or other assets as, in accordance with the foregoing provisions, Optionee may be entitled to purchase or receive. |
(d) | The Company shall at all times during the term of the Option reserve and keep available such number of shares of the Companys Common Stock as will be sufficient to satisfy the requirements of this Agreement. |
(e) | The Option is issued pursuant to the Plan and is subject to its terms. The Plan is available for inspection during business hours at the principal office of the Company. In addition, the Plan may be viewed on the U.S. Bancorp Intranet Website in the Human Resources, Compensation section of such website. |
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9. | Venue |
Any claim or action brought with respect to this Award shall be brought in a federal or sate court located in Minneapolis, Minnesota.
Form of Non-Qualified Stock Option Agreement for MC members.
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