EXHIBIT 10.4

                          BREMER FINANCIAL CORPORATION

                1997 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.

A.       Purpose

         1)       To provide an annual incentive award to the President of
                  Bremer Financial Corporation 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 President and 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 Board of
                  Directors of Bremer Financial Corporation 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 12.70                                         0.00%

                12.70                    THRESHOLD                  20.00%

                13.30                    2/3 OF MAXIMUM             40.00%

                13.71                    PLAN                       46.94%

                14.50 and over           MAXIMUM                    60.00%

G.       Administration

         1)       The plan shall be subject to the approval of the Board of
                  Directors of Bremer Financial Corporation 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 of Directors
                  of Bremer Financial Corporation. 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

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*        Corporate RORE will be calculated by reducing corporate net income by
         the after-tax effect of 50% of the restructuring charges recorded by
         the Company in 1994. No adjustments should be made to equity as a
         result of the restructuring adjustment.

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

                  - Voluntary resignations -- no incentive award.
                  - Involuntary terminations 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 Board of Directors
                    of BFC.
                  - 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 Board of Directors
                  of Bremer Financial Corporation 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 Board
                  of Directors of Bremer Financial Corporation has the authority
                  to determine and approve all such exceptions.

I.       Amendment and termination

         1)       The Board of Directors of Bremer Financial Corporation 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 of Directors
                  of Bremer Financial Corporation 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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NAME

                 CALCULATION OF PRESIDENT OF BFC INCENTIVE AWARD

                                 Plan Year 1997

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

         Corporate RORE                             %                       %
                                            --------               ---------


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

X 1997 Salary                                                      $
                                                                    ---------

= 1997 INCENTIVE AWARD                                             $
                                                                    ---------





Approved:


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DATE                          Board of Directors of Bremer Financial Corporation