EXHIBIT 10.4

                          BREMER FINANCIAL CORPORATION

                1998 EXECUTIVE ANNUAL INCENTIVE COMPENSATION PLAN

                President and CEO of Bremer Financial Corporation

Contained herein is a detailed outline of the Executive Annual Incentive
Compensation Plan which has been designed for the President and CEO of Bremer
Financial Corporation ("CEO").

A.       Purpose

         1)       To provide an annual incentive award to the CEO for the
                  achievement of Bremer Financial Corporation's goals and
                  objectives.

         2)       To focus attention on those activities which will positively
                  affect the Corporation's financial well-being.

B.       Eligibility

         1)       The CEO of Bremer Financial Corporation is the participant in
                  this plan.

C.       Plan Year

         1)       The Executive Annual Incentive Compensation program will begin
                  on January 1 and will end on December 31.

D.       Payment of Award

         1)       At year end, formal reviews will be conducted by the Chairman
                  of the Board Directors of Bremer Financial Corporation
                  ("Chairman") to determine and measure performance. Upon
                  completion of the measurement of the participant's goals and
                  objectives, an award will be approved.

         2)       Award payments will be made in the first quarter, following
                  the end of defined incentive plan year.

E.       Potential Awards

         1)       The maximum potential award, stated as a percentage of base
                  salary, will be 60%.

F.       Performance Measures and Determination of Award

         1)       100% of the incentive award will be based upon Corporate RORE.
                  The following table will be utilized to determine the actual
                  percentage of salary to be granted. When performance falls
                  between the RORE percentages shown, interpolation will be
                  utilized to determine the actual percentage of salary to be
                  awarded.

                      Corporate RORE                           Percentage Award
                      --------------                           ----------------

                         Below 13.00                                 0.00%

                         13.00              THRESHOLD               20.00%

                         13.76              2/3 OF MAXIMUM          40.00%

                         14.20              PLAN                    50.35%

                         14.61 and over     MAXIMUM                 60.00%


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G.       Administration

         1)       The plan shall be subject to the approval of the Board of
                  Directors of Bremer Financial Corporation ("Board") which
                  shall have sole authority to establish the terms and
                  conditions under which the plan will be administered.

         2)       The Executive Incentive Compensation Plan and awards are not
                  transferable or assignable.

         3)       Award may be deferred.

H.       Administrative Procedures

         1)       Additions to Plan -- Eligible individuals will be added to the
                  plan at any time upon the approval of the Board. However, the
                  size of their awards will be prorated by the number of months
                  they were eligible to receive an award. An example would be:

                  - Employee "A" is added to plan in mid-year so s/he has six
                       (6) months of eligible service.
                  - Calculated incentive award is $15,000
                  - $15,000 X 6/12 = $7,500

         2)       Terminations -- If the eligible participant terminates during
                  the plan year, the incentive award will be handled as follows:

                  - Voluntary resignation -- no incentive award.
                  - Involuntary termination for cause -- no incentive award.
                  - Involuntary  termination  without cause -- incentive award
                       prorated by number of months service during current
                       incentive plan year, based on approval of the Chairman.
                  - Retirement/disability  --  incentive award prorated by
                       number of months of service during current incentive plan
                       year.

         3)       Change in Position -- If the eligible participant has a change
                  in position during a plan year, the incentive award will be
                  calculated under both plan award levels and prorated by the
                  months of service at each level.

         4)       Interpolation -- When actual performance falls between cells
                  on the appropriate element, the individual completing the
                  formula should interpolate to the actual percentage to be
                  awarded.

         5)       Performance -- If a participant's performance rating for the
                  plan year is less than fully competent, the Chairman has the
                  authority to reduce partially or totally the incentive payout
                  that would normally be due the participant.

         6)       Exceptions -- Upon occasion, there may be specific reasons for
                  exceptions to the incentive compensation program for events
                  beyond the control of the participant in the plan. The
                  Chairman has the authority to determine and approve all such
                  exceptions.

I.       Amendment and termination

         1)       The Board may at any time amend the plan for the purposes of
                  satisfying the requirements of any changes in applicable laws
                  or for any purpose which may be permitted by law. The Board
                  may also terminate the plan at any time. No such amendment or
                  termination shall, however, adversely affect the rights of any
                  participant (without his/her prior consent) to any award
                  previously approved.


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                    CALCULATION OF EXECUTIVE INCENTIVE AWARD

                                 Plan Year 1998



______________________________      TITLE: President and CEO of
NAME                                       Bremer Financial Corporation


                                                            Percentage of Salary
                                                               To Be Awarded
                                                               -------------
F-1 - Corporate RORE
--------------------

         Corporate RORE             _______%                   ______________%





Total Award Earned as % of Salary                              ______________%
   (F-1)

X 1998 Salary                                                  $______________

= 1998 INCENTIVE AWARD                                         $______________





Approved:


--------------------------         ---------------------------------------------
DATE                               Chairman of the Board of Directors
                                   of Bremer Financial Corporation


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