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                                  U.S. BANCORP
                            1999 STOCK INCENTIVE PLAN
                     (As Amended through February 16, 2000)


SECTION 1.  PURPOSE; EFFECT ON PRIOR PLANS.

                  (a) PURPOSE. The purpose of the U.S. Bancorp 1999 Stock
Incentive Plan (the "Plan") is to aid in attracting and retaining employees,
management personnel and other personnel and members of the Board of
Directors who are not also employees ("Non-Employee Directors") of U.S.
Bancorp (the "Company") capable of assuring the future success of the
Company, to offer such personnel and Non-Employee Directors incentives to put
forth maximum efforts for the success of the Company's business and to afford
such personnel and Non-Employee Directors an opportunity to acquire a
proprietary interest in the Company.

                  (b) EFFECT ON PRIOR PLANS. The Company hereby adopts the
Plan, subject to approval by the stockholders of the Company. As so
established and approved, the Plan shall be known as the 1999 Stock Incentive
Plan. On the effective date of the Plan determined in accordance with Section
10 of the Plan, for purposes of administration and share accounting pursuant
to Sections 3 and 4 of the Plan, the following plans of the Company shall be
considered to be incorporated in the Plan: the U.S. Bancorp 1997 Stock
Incentive Plan, as amended (including all plans incorporated therein), and
the Piper Jaffray Companies Inc. 1993 Omnibus Stock Plan (as assumed by the
Company), as amended (together, the "Prior Plans"). All outstanding options,
restricted stock and other awards issued under the Prior Plans shall remain
subject to the terms and conditions of the plans under which they were
issued, but shares of stock relating to outstanding options, restricted stock
or other awards issued under the Prior Plans are considered shares of stock
subject to the Plan under Section 4 of the Plan.

SECTION 2.  DEFINITIONS.

                  As used in the Plan, the following terms shall have the
meanings set forth below:

                  (a) "Affiliate" shall mean (i) any entity that, directly or
indirectly through one or more intermediaries, is controlled by the Company
and (ii) any entity in which the Company has a significant equity interest,
as determined by the Committee.

                  (b) "Award" shall mean any Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance Award or other
Stock-Based Award granted under the Plan.


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                  (c) "Award Agreement" shall mean any written agreement,
contract or other instrument or document evidencing any Award granted under
the Plan.

                  (d) "Change in Control" shall have the meaning ascribed to
such term in any Award Agreement, and shall include phrases of similar
meaning such as, by way of example but not limitation, "Full Change in
Control" and "Partial Change in Control."

                  (e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any regulations promulgated thereunder.

                  (f) "Committee" shall mean a committee of the Board of
Directors of the Company designated by such Board to administer the Plan and
composed of not less than two directors.

                  (g) "Eligible Person" shall mean any employee, officer,
director (including any Non-Employee Director), consultant or independent
contractor providing services to the Company or any Affiliate who the
Committee determines to be an Eligible Person.

                  (h) "Fair Market Value" shall mean, with respect to any
property (including, without limitation, any Shares or other securities), the
fair market value of such property determined by such methods or procedures
as shall be established from time to time by the Committee. Notwithstanding
the foregoing, for purposes of the Plan, the Fair Market Value of Shares on a
given date shall be the closing price of the Shares as reported on the New
York Stock Exchange on such date, if the Shares are then traded on the New
York Stock Exchange.

                  (i) "Incentive Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is intended to meet the requirements of
Section 422 of the Code or any successor provision.

                  (j) "Non-Qualified Stock Option" shall mean an option
granted under Section 6(a) of the Plan, or Section 6(g) of the Plan in the
case of automatic grants to Non-Employee Directors, that is not intended to
be an Incentive Stock Option.

                  (k) "Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.

                  (l) "Other Stock-Based Award" shall mean any right granted
under Section 6(e) of the Plan.


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                  (m) "Participant" shall mean an Eligible Person designated
to be granted an Award under the Plan.

                  (n) "Performance Award" shall mean any right granted under
Section 6(d) of the Plan.

                  (o) "Person" shall mean any individual, corporation,
partnership, association or trust.

                  (p) "Qualifying Termination" shall mean a termination of
employment under circumstances that, in the judgment of the Committee,
warrant acceleration of the exercisability of Options or the lapse of
restrictions relating to Restricted Stock or Restricted Stock Units. A
Qualifying Termination may apply to large-scale terminations of employment
involving the disposition or divestiture of businesses or legal entities or
similar circumstances.

                  (q) "Restricted Stock" shall mean any Share granted under
Section 6(c) of the Plan.

                  (r) "Restricted Stock Unit" shall mean any unit granted
under Section 6(c) of the Plan evidencing the right to receive a Share (or a
cash payment equal to the Fair Market Value of a Share) at some future date.

                  (s) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934.

                  (t) "Shares" shall mean shares of Common Stock, $1.25 par
value, of the Company or such other securities or property as may become
subject to Awards pursuant to an adjustment made under Section 7(c) of the
Plan.

                  (u) "Stock Appreciation Right" shall mean any right granted
under Section 6(b) of the Plan.

SECTION 3.  ADMINISTRATION.

                  The Plan shall be administered by the Committee. Subject to
the terms of the Plan and applicable law, the Committee shall have full power
and authority to: (i) designate Participants; (ii) determine the type or
types of Awards to be granted to each Participant under the Plan; (iii)
determine the number of Shares to be covered by (or with respect to which
payments, rights or other matters are to be calculated in connection with)
each Award; (iv) determine the terms and conditions of any Award or Award
Agreement; (v) amend the terms and conditions of any Award or Award Agreement
and accelerate the


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exercisability of Options or the lapse of restrictions relating to Restricted
Stock or Restricted Stock Units; PROVIDED, HOWEVER, that any such
acceleration of exercisability or lapse of restrictions shall be limited to
accelerations relating to a Change in Control, a Qualifying Termination,
death, disability or any circumstances set forth in an Award Agreement in
effect on the effective date of the Plan determined in accordance with
Section 10 of the Plan; (vi) determine whether, to what extent and under what
circumstances Awards may be exercised in cash, Shares, other securities,
other Awards or other property, or canceled, forfeited or suspended; (vii)
determine whether, to what extent and under what circumstances cash, Shares,
other securities, other Awards, other property and other amounts payable with
respect to an Award under the Plan shall be deferred either automatically or
at the election of the holder thereof or the Committee; (viii) interpret and
administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan; (ix) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; and (x) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations and other decisions under
or with respect to the Plan or any Award shall be within the sole discretion
of the Committee, may be made at any time and shall be final, conclusive and
binding upon any Participant, any holder or beneficiary of any Award and any
employee of the Company or any Affiliate.

SECTION 4.  SHARES AVAILABLE FOR AWARDS.

                  (a) SHARES AVAILABLE. Subject to adjustment as provided in
Section 7(c), the total number of Shares available for granting Awards under
the Plan shall be 92,891,502 (47,891,502 of which were previously authorized
and subject to outstanding Awards under the Prior Plans or authorized and
available for grant under the U.S. Bancorp 1997 Stock Incentive Plan, as
amended (including all plans incorporated therein), and 45,000,000 of which
will be authorized upon stockholder approval of the Plan); PROVIDED, HOWEVER,
that the total number of Shares authorized under the Plan shall be deemed to
be reduced automatically, as of the effective date of the Plan determined in
accordance with Section 10 of the Plan, by that number of Shares that were
subject to outstanding awards under the Prior Plans, as of January 31, 1999,
that are no longer subject to outstanding awards as of the effective date of
the Plan determined in accordance with Section 10 of the Plan. Not more than
7,000,000 of such Shares, subject to adjustment as provided in Section 7(c)
of the Plan, will be available for granting additional Awards of Restricted
Stock following the effective date of the Plan determined in accordance with
Section 10 of the Plan; PROVIDED, HOWEVER, that any Shares covered by an
Award of Restricted Stock that are forfeited shall again be available for
purposes of the limitation on grants of additional Awards of Restricted
Stock. If any Shares covered by an Award or to which an Award relates are not
purchased or are forfeited, or if an


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Award otherwise terminates without delivery of any Shares, then the number of
Shares counted against the aggregate number of Shares available under the
Plan with respect to such Award, to the extent of any such forfeiture or
termination, shall again be available for granting Awards under the Plan. In
addition, if any Shares are used by a Participant as full or partial payment
to the Company of the purchase price relating to an Award, whether by actual
delivery or attestation, or in connection with satisfaction of tax
obligations relating to an Award, whether by actual delivery, attestation or
having shares withheld from the Award, only the number of Shares issued net
of the Shares tendered or withheld shall be deemed delivered for purposes of
determining the maximum number of Shares available for granting of Awards
under the Plan. For purposes of the previous two sentences, the term "Award"
shall explicitly include any awards outstanding under the Prior Plans as of
the effective date of the Plan determined in accordance with Section 10 of
the Plan.

                  (b) ACCOUNTING FOR AWARDS. For purposes of this Section 4,
if an Award entitles the holder thereof to receive or purchase Shares, the
number of Shares covered by such Award or to which such Award relates shall
be counted on the date of grant of such Award against the aggregate number of
Shares available for granting Awards under the Plan. Such Shares may again
become available for granting Awards under the Plan pursuant to the
provisions of Section 4(a) of the Plan, subject to the limitations set forth
in Section 4(c) of the Plan.

                  (c) INCENTIVE STOCK OPTIONS. Notwithstanding the foregoing,
the number of Shares available for granting Incentive Stock Options under the
Plan, on and after the effective date of the Plan determined in accordance
with Section 10 of the Plan, shall not exceed 45,000,000, subject to
adjustment as provided in Section 7(c) of the Plan and Section 422 or 424 of
the Code or any successor provisions.

                  (d) AWARD LIMITATIONS UNDER THE PLAN. No Eligible Person
may be granted any Award or Awards, the value of which Awards are based
solely on an increase in the value of the Shares after the date of grant of
such Awards, for more than 5,000,000 Shares (subject to adjustment as
provided in Section 7(c) of the Plan), in the aggregate, in any calendar year
beginning with the year commencing January 1, 1999. The foregoing limitation
specifically includes the grant of any "performance-based" Awards within the
meaning of Section 162(m) of the Code.

SECTION 5.  ELIGIBILITY.

                  Any Eligible Person, including any Eligible Person who is
an officer or director of the Company or any Affiliate, shall be eligible to
be designated a Participant; PROVIDED, HOWEVER, that an Incentive Stock
Option may only be granted to full or part-time employees (which term as used
herein includes, without limitation, officers and


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directors who are also employees) and an Incentive Stock Option shall not be
granted to an employee of an Affiliate unless such Affiliate is also a
"subsidiary corporation" of the Company within the meaning of Section 424(f)
of the Code or any successor provision.

SECTION 6.  AWARDS.

                  (a) OPTIONS. The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions and with such
additional terms and conditions not inconsistent with the provisions of the
Plan as the Committee shall determine:

                  (i) EXERCISE PRICE. The purchase price per Share purchasable
         under an Option shall be determined by the Committee; PROVIDED,
         HOWEVER, that such purchase price shall not be less than 100% of the
         Fair Market Value of a Share on the date of grant of such Option.

                  (ii) OPTION TERM. The term of each Option shall be fixed by
         the Committee.

                  (iii) TIME AND METHOD OF EXERCISE. The Committee shall
         determine the time or times at which an Option may be exercised in
         whole or in part and the method or methods by which, and the form or
         forms (including, without limitation, cash, Shares, other securities,
         other Awards or other property, or any combination thereof, having a
         Fair Market Value on the exercise date equal to the relevant exercise
         price) in which, payment of the exercise price with respect thereto may
         be made or deemed to have been made.

                  (iv) RELOAD OPTIONS. The Committee may grant "reload" options,
         separately or together with another Option, pursuant to which, subject
         to the terms and conditions established by the Committee and any
         applicable requirements of Rule 16b-3 or any other applicable law, the
         Participant would be granted a new Option when the payment of the
         exercise price of a previously granted option is made by the delivery
         of shares of the Company's Common Stock owned by the Participant
         pursuant to Section 6(a)(iii) hereof or the relevant provisions of
         another plan of the Company, and/or when shares of the Company's Common
         Stock are tendered or forfeited as payment of the amount to be withheld
         under applicable tax laws in connection with the exercise of an option,
         which new Option would be an option to purchase the number of Shares
         not exceeding the sum of (A) the number of shares of the Company's
         Common Stock provided as consideration upon the exercise of the
         previously granted option to which such "reload" option relates and (B)
         the number of shares of the Company's Common Stock tendered or
         forfeited as payment of the amount to be withheld under


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         applicable tax laws in connection with the exercise of the option to
         which such "reload" option relates. "Reload" options may be granted
         with respect to options granted under this Plan or any other stock
         option plan of the Company or any of its affiliates (which shall
         explicitly include plans assumed by the Company in connection with
         mergers and the like). Such "reload" options shall have a per share
         exercise price equal to the Fair Market Value as of the date of grant
         of the new Option. Any such reload options shall be subject to
         availability of sufficient shares for grant under the Plan.

                  (b) STOCK APPRECIATION RIGHTS. The Committee is hereby
authorized to grant Stock Appreciation Rights to Participants subject to the
terms of the Plan and any applicable Award Agreement. A Stock Appreciation
Right granted under the Plan shall confer on the holder thereof a right to
receive upon exercise thereof the excess of (i) the Fair Market Value of one
Share on the date of exercise (or, if the Committee shall so determine, at
any time during a specified period before or after the date of exercise) over
(ii) the grant price of the Stock Appreciation Right as specified by the
Committee, which price shall not be less than 100% of the Fair Market Value
of one Share on the date of grant of the Stock Appreciation Right. Subject to
the terms of the Plan and any applicable Award Agreement, the grant price,
term, methods of exercise, dates of exercise, methods of settlement and any
other terms and conditions of any Stock Appreciation Right shall be as
determined by the Committee. The Committee may impose such conditions or
restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.

                  (c) RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The
Committee is hereby authorized to grant Awards of Restricted Stock and
Restricted Stock Units to Participants with the following terms and
conditions and with such additional terms and conditions not inconsistent
with the provisions of the Plan as the Committee shall determine:

                  (i) RESTRICTIONS. Shares of Restricted Stock and Restricted
         Stock Units shall be subject to such restrictions as the Committee may
         impose (including, without limitation, any limitation on the right to
         vote a Share of Restricted Stock or the right to receive any dividend
         or other right or property with respect thereto), which restrictions
         may lapse separately or in combination at such time or times, in such
         installments or otherwise as the Committee may deem appropriate. Except
         as otherwise provided herein, Awards of Restricted Stock and Restricted
         Stock Units shall contain restrictions that lapse no sooner than three
         years following the date of grant or, in the case of Awards with
         performance-based vesting provisions, no sooner than one year following
         the date of grant; PROVIDED, HOWEVER, that restrictions may lapse
         sooner than such dates as to portions of such Awards so long as
         restrictions as to the total number of Shares covered by such Awards do
         not lapse sooner than such dates; and PROVIDED, FURTHER, that such
         limitations shall


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         not apply to Awards granted to new employees as part of initial terms
         of employment, Awards granted to new or existing employees in
         connection with the acquisition of businesses or assets by the Company,
         or to Awards in effect on the effective date of the Plan determined in
         accordance with Section 10 of the Plan.

                  (ii) STOCK CERTIFICATES. Any Restricted Stock granted under
         the Plan shall be evidenced by issuance of a stock certificate or
         certificates, which certificate or certificates shall be held by the
         Company. Such certificate or certificates shall be registered in the
         name of the Participant and shall bear an appropriate legend referring
         to the restrictions applicable to such Restricted Stock. In the case of
         Restricted Stock Units, no Shares shall be issued at the time such
         Awards are granted.

                  (iii) FORFEITURE; DELIVERY OF SHARES. Except as otherwise
         determined by the Committee, upon termination of employment (as
         determined under criteria established by the Committee) during the
         applicable restriction period, all Shares of Restricted Stock and all
         Restricted Stock Units at such time subject to restriction shall be
         forfeited and reacquired by the Company; PROVIDED, HOWEVER, that the
         Committee may, when it finds that a waiver would be in the best
         interest of the Company, including, without limitation, in connection
         with Changes in Control, Qualifying Terminations, death or disability,
         waive in whole or in part any or all remaining restrictions with
         respect to Shares of Restricted Stock or Restricted Stock Units. Shares
         representing Restricted Stock that is no longer subject to restrictions
         shall be delivered to the holder thereof promptly after the applicable
         restrictions lapse or are waived. Upon the lapse or waiver of
         restrictions and the restricted period relating to Restricted Stock
         Units evidencing the right to receive Shares, such Shares shall be
         issued and delivered to the holders of the Restricted Stock Units.

                  (d) PERFORMANCE AWARDS. The Committee is hereby authorized
to grant Performance Awards to Participants subject to the terms of the Plan
and any applicable Award Agreement. A Performance Award granted under the
Plan (i) may be denominated or payable in cash, Shares (including, without
limitation, Restricted Stock), other securities, other Awards or other
property and (ii) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee shall establish. Subject to
the terms of the Plan and any applicable Award Agreement, the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted and the
amount of any payment or transfer to be made pursuant to any Performance
Award shall be determined by the Committee.


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                  (e) OTHER STOCK-BASED AWARDS. The Committee is hereby
authorized to grant to Participants such other Awards that are denominated or
payable in, valued in whole or in part by reference to, or otherwise based on
or related to, Shares (including, without limitation, securities convertible
into Shares), as are deemed by the Committee to be consistent with the
purpose of the Plan; PROVIDED, HOWEVER, that such grants must comply with
applicable law. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the terms and conditions of such
Awards. Shares or other securities delivered pursuant to a purchase right
granted under this Section 6(e) shall be purchased for such consideration,
which may be paid by such method or methods and in such form or forms
(including without limitation, cash, Shares, other securities, other Awards
or other property or any combination thereof), as the Committee shall
determine, the value of which consideration, as established by the Committee,
shall not be less than 100% of the Fair Market Value of such Shares or other
securities as of the date such purchase right is granted.

                  (f) GENERAL. Except as otherwise specified with respect to
Awards to Non-Employee Directors pursuant to Section 6(g) of the Plan:

                  (i) NO CASH CONSIDERATION FOR AWARDS. Awards shall be granted
         for no cash consideration or for such minimal cash consideration as may
         be required by applicable law.

                  (ii) AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER. Awards may,
         in the discretion of the Committee, be granted either alone or in
         addition to, in tandem with or in substitution for any other Award or
         any award granted under any plan of the Company or any Affiliate other
         than the Plan. Awards granted in addition to or in tandem with other
         Awards or in addition to or in tandem with awards granted under any
         such other plan of the Company or any Affiliate may be granted either
         at the same time as or at a different time from the grant of such other
         Awards or awards.

                  (iii) FORMS OF PAYMENT UNDER AWARDS. Subject to the terms of
         the Plan and of any applicable Award Agreement, payments or transfers
         to be made by the Company or an Affiliate upon the grant, exercise or
         payment of an Award may be made in such form or forms as the Committee
         shall determine (including, without limitation, cash, Shares, other
         securities, other Awards or other property or any combination thereof),
         and may be made in a single payment or transfer, in installments or on
         a deferred basis, in each case in accordance with rules and procedures
         established by the Committee. Such rules and procedures may include,
         without limitation, provisions for the payment or crediting of
         reasonable interest on installment or deferred payments.


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                  (iv) LIMITS ON TRANSFER OF AWARDS. No Award and no right under
         any such Award shall be transferable by a Participant otherwise than by
         will or by the laws of descent and distribution; PROVIDED, HOWEVER,
         that, if so determined by the Committee, a Participant may, in the
         manner established by the Committee, designate a beneficiary or
         beneficiaries to exercise the rights of the Participant and receive any
         property distributable with respect to any Award upon the death of the
         Participant; and PROVIDED, FURTHER, except in the case of an Incentive
         Stock Option, Awards may be transferable as specifically provided in
         any applicable Award Agreement or amendment thereto pursuant to terms
         determined by the Committee. Except as otherwise provided in any
         applicable Award Agreement or amendment thereto (other than an Award
         Agreement relating to an Incentive Stock Option), pursuant to terms
         determined by the Committee, each Award or right under any Award shall
         be exercisable during the Participant's lifetime only by the
         Participant or, if permissible under applicable law, by the
         Participant's guardian or legal representative. Except as otherwise
         provided in any applicable Award Agreement or amendment thereto (other
         than an Award Agreement relating to an Incentive Stock Option), no
         Award or right under any such Award may be pledged, alienated, attached
         or otherwise encumbered, and any purported pledge, alienation,
         attachment or encumbrance thereof shall be void and unenforceable
         against the Company or any Affiliate.

                  (v) TERM OF AWARDS. The term of each Award shall be for such
         period as may be determined by the Committee.

                  (vi) RESTRICTIONS; SECURITIES EXCHANGE LISTING. All
         certificates for Shares or other securities delivered under the Plan
         pursuant to any Award or the exercise thereof shall be subject to such
         stop transfer orders and other restrictions as the Committee may deem
         advisable under the Plan or the rules, regulations and other
         requirements of the Securities and Exchange Commission and any
         applicable federal or state securities laws, and the Committee may
         cause a legend or legends to be placed on any such certificates to make
         appropriate reference to such restrictions. If the Shares or other
         securities are traded on a securities exchange, the Company shall not
         be required to deliver any Shares or other securities covered by an
         Award unless and until such Shares or other securities have been
         admitted for trading on such securities exchange.

                  (g) NON-QUALIFIED STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS.
The Committee shall issue Non-Qualified Stock Options to Non-Employee
Directors in accordance with this Section 6(g).

                  Each Non-Employee Director first elected or appointed to
the Company's Board of Directors following the effective date of the Plan
determined in accordance with


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Section 10 of the Plan and during the term of the Plan shall be granted, as of
the date of such Director's first election or appointment to the Board of
Directors, a Non-Qualified Stock Option to purchase 7,500 Shares (subject to
adjustment pursuant to Section 7(c) of the Plan). Each Non-Employee Director
shall be granted during the term of the Plan, as of the date of each Annual
Meeting of Stockholders of the Company commencing with the 1999 Annual Meeting
of Stockholders of the Company, if such Director's term of office continues
after such date, a Non-Qualified Stock Option to purchase 5,100 Shares (subject
to adjustment pursuant to Section 7(c) of the Plan).

                  Each Non-Qualified Stock Option granted to a Non-Employee
Director pursuant to this Section 6(g) shall be exercisable in full as of the
date of grant, shall have an exercise price equal to the Fair Market Value of a
Share on the date of grant and shall expire on the tenth anniversary of the date
of grant, except as provided below. Each Option granted pursuant to this Section
6(g) may be transferable pursuant to terms established by the Committee
consistent with Section 6(f)(iv) of the Plan.

                  Except as hereinafter provided, each Option granted pursuant
to this Section 6(g) (including those Options granted pursuant to Section 6(h)
of the First Bank System, Inc. 1991 Stock Incentive Plan as provided therein,
under Section 6(g) of the First Bank System, Inc. 1996 Stock Incentive Plan as
provided therein and under Section 6(g) of the U.S. Bancorp 1997 Stock Incentive
Plan as provided therein) shall be deemed to include a provision entitling the
optionee to a further Non-Qualified Stock Option (a "Non-Employee Director
Reload Option") in the event the optionee exercises such an Option, in whole or
in part, by surrendering other Shares in accordance with this Section 6(g)
(including any predecessor provision under the First Bank System, Inc. 1991
Stock Incentive Plan, the First Bank System, Inc. 1996 Stock Incentive Plan or
the U.S. Bancorp 1997 Stock Incentive Plan) and the terms of the Option and/or
when shares of the Company's Common Stock are delivered or withheld as payment
of an amount representing tax obligations in connection with the exercise of an
option. Any such Non- Employee Director Reload Option (i) shall be for a number
of Shares equal to the sum of (x) the number of Shares surrendered as part or
all of the exercise price of the Option to which it relates plus (y) the number
of Shares, if any, delivered or withheld as payment of an amount representing
tax obligations in connection with the exercise of the Option to which it
relates; (ii) shall have an expiration date which is the same as the expiration
date of the Option to which it relates; (iii) shall have an exercise price equal
to the Fair Market Value of a Share on the date of exercise of the Option to
which it relates; and (iv) shall be exercisable in full as of the date of grant.
A Non-Employee Director Reload Option may be reloaded under the same terms,
provided that the original Option to which such series of Non-Employee Director
Reload Options relates may be reloaded a maximum of three times. Non-Employee
Director Reload Options shall only be granted to a Director during such
Director's term as a Non-Employee Director. Any such Non-Employee Director
Reload Option shall be subject to availability of sufficient shares for grant
under the Plan.

                                      -11-


<PAGE>



Shares surrendered as part or all of the exercise price of the Option to which
it relates that have been owned by the optionee less than six months will not be
counted for purposes of determining the number of Shares that may be purchased
pursuant to a Non-Employee Director Reload Option.

                  All grants of Non-Qualified Stock Options pursuant to this
Section 6(g) shall be automatic and non-discretionary and shall be made strictly
in accordance with the foregoing terms and the following additional provisions:

                  (i) Non-Qualified Stock Options granted to a Non-Employee
         Director hereunder shall terminate and may no longer be exercised if
         such Director ceases to be a Non-Employee Director of the Company,
         except that:

                           (A) If such Director's term shall be terminated for
                  any reason other than gross and willful misconduct, death,
                  disability, or retirement, such Director may at any time
                  within a period of three months after such termination, but
                  not after the termination date of the Option, exercise the
                  Option.

                           (B) If such Director's term shall be terminated by
                  reason of gross and willful misconduct during the course of
                  the term, including but not limited to, wrongful appropriation
                  of funds of the Company or the commission of a gross
                  misdemeanor or felony, the Option shall be terminated as of
                  the date of the misconduct.

                           (C) If such Director's term shall be terminated by
                  reason of disability or retirement, such Director may exercise
                  the Option in accordance with the terms thereof as though such
                  termination had never occurred. If such Director shall die
                  following any such termination, the Option may be exercised in
                  accordance with its terms by the personal representatives or
                  administrators of such Director or by any person or persons to
                  whom the Option has been transferred by will or the applicable
                  laws of descent and distribution.

                           (D) If such Director shall die while a Director of
                  the Company or within three months after termination of such
                  Director's term for any reason other than disability or
                  retirement or gross and willful misconduct, the Option may be
                  exercised in accordance with its terms by the personal
                  representatives or administrators of such Director or by any
                  person or persons to whom the Option has been transferred by
                  will or the applicable laws of descent and distribution.


                                      -12-


<PAGE>



                  (ii) Non-Qualified Stock Options granted to Non-Employee
         Directors may be exercised in whole or in part from time to time by
         serving written notice of exercise on the Company at its principal
         executive offices, to the attention of the Company's Secretary. 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. A
         Non-Employee Director may, at such Director's election, pay the
         purchase price by check payable to the Company, by promissory note, or
         in shares of the Company's Common Stock, or in any combination thereof
         having a Fair Market Value on the exercise date equal to the applicable
         exercise price. If payment or partial payment is made by promissory
         note, such note shall be a full recourse note and shall (A) be secured
         by the Shares to be delivered upon exercise of such Option, (B) be
         limited in principal amount to the maximum amount permitted under
         applicable laws, rules and regulations, (C) be for a term of six years
         and (D) bear interest at the applicable federal rate (as determined in
         accordance with Section 1274(d) of the Code), compounded semi-annually.

                  (iii) In order for a Non-Employee Director to satisfy
         obligations under tax laws in connection with an Option granted
         pursuant to this Section 6(g) (including any predecessor provision
         under the First Bank System, Inc. 1991 Stock Incentive Plan, the First
         Bank System, Inc. 1996 Stock Incentive Plan and the U.S. Bancorp 1997
         Stock Incentive Plan), such Director may (A) elect to have the Company
         withhold a portion of the Shares otherwise to be delivered upon
         exercise of such Option with a Fair Market Value equal to the amount of
         such taxes (an "Election") or (B) deliver to the Company Shares other
         than Shares issuable upon exercise of such Option with a Fair Market
         Value equal to the amount of such taxes. An Election, if any, must be
         made on or before the date that the amount of tax to be withheld is
         determined.

SECTION 7.  AMENDMENT AND TERMINATION; ADJUSTMENTS.

                  Except to the extent prohibited by applicable law and unless
otherwise expressly provided in an Award Agreement or in the Plan:

                  (a) AMENDMENTS TO THE PLAN. The Board of Directors of the
Company may amend, alter, suspend, discontinue or terminate the Plan at any time
and from time to time; PROVIDED, HOWEVER, that, notwithstanding any other
provision of the Plan or any Award Agreement, without the approval of the
stockholders of the Company, no such amendment, alteration, suspension,
discontinuation or termination shall be made that, absent such approval:


                                      -13-


<PAGE>



                  (i) would violate the rules or regulations of the New
         York Stock Exchange, any other securities exchange or the
         National Association of Securities Dealers, Inc. that are
         applicable to the Company; or

                  (ii) would cause the Company to be unable, under the
         Code, to grant Incentive Stock Options under the Plan.

                  (b) AMENDMENTS TO AWARDS. Except as otherwise explicitly
provided herein, the Committee may waive any conditions of or rights of the
Company under any outstanding Award, prospectively or retroactively. The
Committee may not amend, alter, suspend, discontinue or terminate any
outstanding Award, prospectively or retroactively, without the consent of the
Participant or holder or beneficiary thereof, except as otherwise herein
provided. Except as provided in Section 7(c) hereof, no Option may be amended to
reduce its initial exercise price and no Option shall be canceled and replaced
with an Option or Options having a lower exercise price without the approval of
the stockholders of the Company.

                  (c) ADJUSTMENTS. In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or exchange
of Shares or other securities of the Company or other similar corporate
transaction or event affecting the Shares 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 Plan or under an Award (including,
without limitation, the benefits or potential benefits of provisions relating to
the term, vesting or exercisability of any Option, the availability of any
tandem stock appreciation rights or "reload" option rights, if any, contained in
any Option Award, and any "change in control" or similar provisions of any
Award), the Committee shall, in such manner as it shall deem equitable or
appropriate 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) which thereafter may be made the
subject of Awards, (ii) the number and type of Shares (or other securities or
other property) subject to outstanding Awards and (iii) the purchase or exercise
price with respect to any Award; PROVIDED, HOWEVER, that the number of Shares
covered by any Award or to which such Award relates shall always be a whole
number.

                  (d) CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.


                                      -14-


<PAGE>



SECTION 8.  INCOME TAX WITHHOLDING.

                  In order to comply with all applicable federal, state or local
income tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal, state or local payroll,
withholding, income or other taxes, which are the sole and absolute
responsibility of a Participant, are withheld or collected from such
Participant. In order to assist a Participant in paying all federal and state
taxes to be withheld or collected upon exercise or receipt of (or the lapse of
restrictions relating to) an Award, the Committee, in its discretion and subject
to such additional terms and conditions as it may adopt, may permit the
Participant to satisfy such tax obligation by (i) electing to have the Company
withhold a portion of the Shares otherwise to be delivered upon exercise or
receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes (but only to the extent of the
minimum amount required to be withheld under applicable laws or regulations) or
(ii) delivering to the Company Shares other than Shares issuable upon exercise
or receipt of (or the lapse of restrictions relating to) such Award with a Fair
Market Value equal to the amount of such taxes (but only to the extent of the
minimum amount required to be withheld under applicable laws or regulations).
The election, if any, must be made on or before the date that the amount of tax
to be withheld is determined.

SECTION 9.  GENERAL PROVISIONS.

                  (a) NO RIGHTS TO AWARDS. Except as otherwise provided in
Section 6(g) of the Plan, no Eligible Person, Participant or other Person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and conditions of
Awards need not be the same with respect to different Participants.

                  (b) DELEGATION. The Committee may delegate to one or more
officers of the Company or any Affiliate or a committee of such officers, but
only to the extent such officer or officers are also members of the Board of
Directors of the Company, the authority, subject to such terms and limitations
as the Committee shall determine, to grant Awards to Eligible Persons who are
not officers or directors of the Company for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended.

                  (c) AWARD AGREEMENTS. No Participant will have rights under an
Award granted to such Participant unless and until an Award Agreement shall have
been duly executed on behalf of the Company.

                  (d) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in


                                      -15-


<PAGE>



effect other or additional compensation arrangements, and such arrangements may
be either generally applicable or applicable only in specific cases.

                  (e) NO RIGHT TO EMPLOYMENT, ETC. The grant of an Award shall
not be construed as giving a Participant the right to be retained in the employ,
or as giving a Non-Employee Director the right to continue as a Director, of the
Company or any Affiliate. In addition, the Company or an Affiliate may at any
time dismiss a Participant from employment, or terminate the term of a
Non-Employee Director, free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan or in any Award Agreement.

                  (f) GOVERNING LAW. The validity, construction and effect of
the Plan and any rules and regulations relating to the Plan shall be determined
in accordance with the laws of the State of Minnesota.

                  (g) SEVERABILITY. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the purpose
or intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction or Award, and the remainder of the Plan or any such Award shall
remain in full force and effect.

                  (h) NO TRUST OR FUND CREATED. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.

                  (i) NO FRACTIONAL SHARES. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash shall be paid in lieu of any fractional Shares or whether
such fractional Shares or any rights thereto shall be canceled, terminated or
otherwise eliminated.

                  (j) HEADINGS. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.

                  (k) SECTION 16 COMPLIANCE. The Plan is intended to comply in
all respects with Rule 16b-3 or any successor provision, as in effect from time
to time and in all

                                      -16-
<PAGE>


events the Plan shall be construed in accordance with the requirements of
Rule 16b-3. If any Plan provision does not comply with Rule 16b-3 as
hereafter amended or interpreted, the provision shall be deemed inoperative.
The Board of Directors, in its absolute discretion, may bifurcate the Plan so
as to restrict, limit or condition the use of any provision of the Plan with
respect to persons who are officers or directors subject to Section 16 of the
Securities and Exchange Act of 1934, as amended, without so restricting,
limiting or conditioning the Plan with respect to other Participants.

SECTION 10.  EFFECTIVE DATE OF THE PLAN.

                  The Plan shall be effective as of the date of approval by the
stockholders of the Company in accordance with applicable law.

SECTION 11.  TERM OF THE PLAN.

                  New Awards shall only be granted under the Plan during a
10-year period beginning on the effective date of the Plan. However, unless
otherwise expressly provided in the Plan or in an applicable Award Agreement,
any Award theretofore granted may extend beyond the end of such 10-year period,
and the authority of the Committee provided for hereunder with respect to the
Plan and any Awards, and the authority of the Board of Directors of the Company
to amend the Plan, shall extend beyond the end of such period.



                                      -17-