<PAGE>   1



                    SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release ("Agreement") is between Philip G.
Heasley ("you") and U.S. Bancorp. The following facts are important to the
creation of this Agreement:

A.   You are an employee of U.S. Bancorp.

B.   Your employment with U.S. Bancorp or its affiliates is terminating.

C.   You agree to provide U.S. Bancorp with a release of all claims you may have
     against U.S. Bancorp or its affiliates, and U.S. Bancorp agrees to provide
     you with consideration in return for your release and other commitments in
     this Agreement.

You and U.S. Bancorp agree to the following:

1.   Your active employment with U.S. Bancorp and its affiliates is terminating
effective April 30, 2001 or upon your earlier commencement of any new employment
prior to April 30, 2001 ("Termination Date"). You agree to inform Rob Sayre
immediately upon accepting any new employment prior to April 30, 2001. You
acknowledge that you have relinquished your titles of President and Chief
Operating Officer. You agree to return all property of U.S. Bancorp and its
affiliates to U.S. Bancorp on your Termination Date.

2.   From the date of execution of this Agreement until November 30, 2000 or
until your Termination Date, whichever occurs first, you will remain employed by
U.S. Bancorp at your current annual salary. During this period, you agree to use
your best efforts to be available at U.S Bancorp's request to consult with and
assist other employees of U.S. Bancorp in the transition of your previous
assignments and responsibilities as well as to consult on such other matters as
U.S. Bancorp should reasonably request. You also agree to serve as Chairman of
the Board of VISA U.S.A. as the U.S. Bank representative. U.S. Bancorp will
provide you the use of your office and secretarial support until November 30,
2000, contingent on a continuing amicable relationship and the observance of
your obligations under this Agreement, including the confidentiality and
non-disparagement provisions set forth below in paragraph 4.

3.   If you have not accepted any new employment prior to November 30, 2000, you
will remain employed by U.S. Bancorp until your Termination Date at a monthly
salary of $10,000, less applicable tax withholding. During this period, you
agree to continue to serve as Chairman of the Board of VISA U.S.A. as the U.S.
Bank representative.

4.   You agree to keep confidential all secret or confidential information
concerning U.S. Bancorp or its affiliates obtained during your employment with
U.S. Bancorp unless U.S. Bancorp consents to disclosure in writing. You agree
that you will not use such information for your own benefit or for the benefit
of any other person or entity, and that you will not disclose such information
to any person or entity for any reason. You agree that you will not do or say
anything at any time to disparage the character, integrity or business of U.S.
Bancorp or any of its affiliates or their respective directors, officers and
employees. U.S. Bancorp agrees that it will


                                       1


<PAGE>   2


make a good faith effort to ensure that its employees having personal knowledge
of the circumstances surrounding your employment separation do not do or say
anything to disparage your character, integrity, or business reputation. This
paragraph does not apply to any statements or disclosures made during the course
of legal proceedings or by U.S. Bancorp to its outside auditors, or in response
to a court order, subpoena, inquiry by a government agency or otherwise as
required by laws or regulations.

5.   You release the following persons and entities from any and all legal
claims, known or unknown, that you may have against them as of the date you sign
this Agreement:

     o    U.S. Bancorp;

     o    All affiliates of U.S. Bancorp;

     o    All officers, directors, employees, agents, assigns, insurers,
          representatives, counsel, administrators, successors and shareholders
          of U.S. Bancorp; and

     o    All employee benefit plans sponsored by U.S. Bancorp (including all
          severance pay programs), and the trusts, trustees, officers and agents
          of such plans.

You understand that by releasing all of your legal claims against the persons
and entities listed above, you are releasing all of your rights to bring any
legal claims against them, including any claims based upon any of the following:

     o    Federal, state or local employment, employee benefits, or
          discrimination laws, regulations or requirements, including Title VII
          of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e et seq., the
          Minnesota Human Rights Act, Minn. Stat. Section 363.01 et seq., the
          Older Workers Benefit Protection Act and the Age Discrimination in
          Employment Act, 29 U.S.C. Section 621 et seq., the Americans with
          Disabilities Act, 42 U.S.C. Section 12101 et seq., and the Employee
          Retirement Income Security Act of 1974, 29 U.S.C. Section 1001 et
          seq.;

     o    Any other statute, ordinance, or regulation;

     o    Any contract or quasi-contract;

     o    Any tort; or

     o    Any other legal theory.

You understand that your release of all legal claims includes all claims related
to your employment or employee benefits with U.S. Bancorp or its affiliates,
including your hiring, the conditions and terms of your employment and the
termination of your employment. In connection with such release, you acknowledge
and agree that the terms of this Agreement constitute a complete waiver and/or
constitute satisfaction of any and all obligations of U.S. Bancorp or its
affiliates in connection with any of such terms of employment including, without
limitation, any obligations of U.S. Bancorp pursuant to your Employment
Agreement, dated July 24, 1997, and your letter agreement, dated February 8,
2000 (providing for certain severance benefits in the event your employment is
terminated subsequent to a change in control), or any other severance
arrangements or employment termination benefit arrangements.


                                       2



<PAGE>   3



Your release does not affect any rights you may have under the U.S. Bancorp
401(k) Savings Plan, the U.S. Bancorp Cash Balance Pension Plan, or any other
tax-qualified or non-qualified retirement plan in which you may have a vested,
unpaid, accrued benefit. In addition, your release does not affect any rights
you may have under the terms of U.S. Bancorp's Health Care Plan, Dental Care
Plan, Life Insurance Plan, AD&D Plan and Employee Stock Purchase Plan or other
employee benefit plans with regard to benefits in the ordinary course (excluding
all severance and change in control plans, programs and agreements and other
plans specifically dealt with in this Agreement) to the extent you are a
participant in such plans. Further, your release does not affect any obligation
of U.S. Bancorp or its affiliates to provide indemnification to you as an
employee, officer and director of U.S. Bancorp or its affiliates pursuant to the
terms of the respective charter documents of such entities or other written
indemnification agreements.

6.   In return for your release and other commitments in this Agreement, you
will be provided with the pay and benefits provided for in this Agreement and
you agree that such pay and benefits shall consist solely of the following:

     (a) Cash Payments. You will receive a lump sum payment in the amount of
     $5,019,235, less applicable tax withholding, on November 30, 2000.
     Additionally, within sixty days following your Termination Date, you will
     receive a lump sum payment in the amount of $3,522,084, less applicable tax
     withholding, in full satisfaction of any benefits relating to U.S.
     Bancorp's Nonqualified Supplemental Executive Retirement Plan and U.S.
     Bancorp's Defined Benefit Excess Plan; such amount, however, will be
     reduced by any amount payable from the U.S. Bancorp Cash Balance Pension
     Plan. You will be paid for unused, accrued vacation within two (2) pay
     periods following your Termination Date. If U.S. Bancorp does not make any
     payment referred to in this paragraph on or before the due date, U.S.
     Bancorp will pay interest on the unpaid amount from the date due at the
     applicable federal rate provided for in Section 7872(f)(2)(A) of the IRS
     Code.

     (b) Health and Dental Insurance Benefits For Thirty-Six Months. Following
     your Termination Date, pursuant to COBRA, you may elect to continue your
     current health and dental insurance benefits (COBRA rights are more fully
     described in the U-Select Benefits Handbook). If you elect to continue any
     such benefit(s), you will be entitled to continue such benefit(s) at the
     active employee rate for eighteen months following your Termination Date.
     If you are not eligible to receive other health and dental insurance
     benefit(s) from another employer at the conclusion of the eighteen-month
     period, you will be entitled to continue such benefit(s) at the active
     employee rate for an additional eighteen months or until you become
     eligible for such benefit(s) through your new employer.

     (c) Health Insurance Benefits After Thirty-Six Months. You agree to make a
     good faith effort to negotiate to receive lifetime health benefits from
     your new employer and, if necessary, any subsequent employer(s). If your
     new employer or any subsequent employer(s) are Fortune 1000 companies or
     their affiliates, any eligibility to receive health insurance benefits from
     U.S. Bancorp under this paragraph will cease immediately upon commencement
     of any such employment. If your new employer and any subsequent employer(s)
     are not Fortune 1000 companies or their affiliates, and you are unable in
     good


                                       3


<PAGE>   4

     faith to negotiate to receive lifetime health benefits, U.S. Bancorp will
     provide lifetime health insurance benefits to you and your current spouse
     pursuant to U.S. Bancorp's Retiree Health Care Program as that program may
     be amended from time to time; such benefits will be secondary to any
     benefits you could elect to receive from your future employer(s).

You will not be eligible for any future stock awards (except for reload stock
options prior to your Termination Date) or any bonus or incentive payments
except as set forth in this Agreement. Following your Termination Date, you will
not be entitled to vacation accrual or group disability insurance, and you will
not be permitted to contribute to the U.S. Bancorp 401(k) Savings Plan. In
addition, you will receive no additional pay or service credits under the U.S.
Bancorp Cash Balance Pension Plan for payments made after your Termination Date
(investment credits will be posted to your account in accordance with the terms
of the Plan). Your executive disability insurance will end on your Termination
Date, although you may continue coverage (limited to $200,000) with the vendor
at your own expense after your Termination Date. Your stock options and
restricted stock will be governed by the terms of the applicable agreements.
Pursuant to the applicable agreements, your stock options and restricted stock
will continue to vest while you remain on U.S. Bancorp's payroll, and any
exercise of vested stock options must be completed no later than 90 days after
your Termination Date.

7.   U.S. Bancorp agrees to provide you the opportunity to sell shares of U.S.
Bancorp stock back to U.S. Bancorp under its stock repurchase program then in
effect, subject to the timing requirements and normal pricing practices of U.S.
Bancorp's Treasury group and all applicable legal requirements.

8.   U.S. Bancorp agrees to waive the non-competition provision set forth in
paragraph 9(b) of your Employment Agreement, dated July 24, 1997, and any other
similar provision under any other agreement.

9.   U.S. Bancorp releases any and all legal claims it may have against you as
of the date it signs this Agreement. This release includes all claims related to
your employment and employee benefits with U.S. Bancorp or its affiliates or
subsidiaries, including your hiring, the conditions and terms of your employment
and your termination, under any federal, state or local employment, employee
benefits and discrimination laws, regulations and requirements, or any contract,
quasi-contract or tort.

10.  You acknowledge that U.S. Bancorp will disclose the compensation paid to
you in connection with your termination of employment as required under the
federal proxy rules and will file a copy of this Agreement as a material
contract exhibit to a periodic financial report as required under the Securities
Exchange Act of 1934.

11.  You agree to repay your stock option loans in full no later than 90 days
after your Termination Date.


                                       4



<PAGE>   5



12.   Prior to your Termination Date, you agree that you will not directly or
indirectly solicit, hire or induce (or attempt to solicit, hire or induce) any
employees of U.S. Bancorp or any of its affiliates to leave their employment.

13.   You agree to keep the terms of this Agreement strictly confidential until
such time that the Agreement is required to be disclosed in accordance with SEC
requirements, except that you may tell your present or future attorneys,
accountants, tax advisors, financial advisors, and immediate family, who must be
advised to hold the information strictly confidential.

14.   You have read this Agreement and voluntarily agree to the terms of this
Agreement. You are hereby advised to consult with an attorney before you sign
this Agreement. You have been given at least twenty-one (21) days to consider
this Agreement and decide whether to sign it. You agree that if you asked that
this Agreement be changed in some way, both the time before and the time after
you requested the change count as parts of the 21-day period. You may revoke
this Agreement up to fifteen (15) days after you sign it by either
hand-delivering written notice to U.S. Bancorp or by sending written notice
postmarked within the 15-day period and addressed as follows:

         Robert H. Sayre
         Executive Vice President of Human Resources
         U.S. Bancorp
         601 Second Avenue South
         Minneapolis, MN 55402

If you revoke this Agreement, this Agreement will be null and void.

15.   In the event that you die before receipt of the pay and benefits described
in paragraphs 6(a), 6(b) and 6(c), your designated beneficiaries as provided for
in your Last Will and Testament will receive any remaining amounts due pursuant
to paragraph 6(a), your dependents will be eligible for continued coverage of
the benefits described in 6(b), and your current spouse will be eligible for
continued coverage of the benefits described in 6(c); provided, that all of the
terms and conditions of this Agreement shall be deemed to apply to such
beneficiaries to the same extent that such terms and conditions apply to you.

16.   You may not without U.S. Bancorp's written consent assign to anyone any of
your rights or obligations under this Agreement.

17.   This Agreement does not mean and cannot be interpreted to mean that U.S.
Bancorp or any of its affiliates acted wrongfully toward you or anyone else.

18.   This Agreement contains the entire agreement between you and U.S. Bancorp
pertaining to your employment with U.S. Bancorp or any of its affiliates and the
termination of your employment with U.S. Bancorp. Any modification or addition
to this Agreement must be in writing and signed by both you and U.S. Bancorp.


                                       5


<PAGE>   6



19.   If a court decides that any part of this Agreement is invalid or cannot be
enforced, such part will be deleted or, if possible, modified so that it is
enforceable, and the other parts of this Agreement will remain in effect.

20.   This Agreement will be governed by the laws of the State of Minnesota.

21.   U.S. Bancorp agrees to pay your reasonable attorney's fees incurred in
connection with the negotiation of this Agreement.

22.   U.S. Bancorp will maintain a directors' and officers' liability insurance
policy or policies covering you for a six-year period following your Termination
Date for activities you were involved in through your Termination Date to the
same extent that such policy or policies remain in effect and cover officers of
U.S. Bancorp or its affiliates in their capacities as officers. You agree to
utilize any other coverage that may be applicable through your role as Chairman
of the Board of VISA U.S.A.

23.   U.S. Bancorp will pay to you any legal fees and expenses incurred by you
as a result of successful litigation against U.S. Bancorp for nonpayment of any
benefit set forth in paragraph 6 of this Agreement.

By signing below, you and U.S. Bancorp agree to be bound by the terms of this
Agreement.


Oct. 6, 2000                        /s/ PHILIP G. HEASLEY
------------------------------      --------------------------------------------
Date                                Philip G. Heasley

                                    U.S. BANCORP


Sept. 26, 2000                      By /s/ ROBERT H. SAYRE
-----------------------------          -----------------------------------------
Date                                   Robert H. Sayre
                                       Executive Vice President, Human Resources





                                       6