EMPLOYMENT AGREEMENT





                  AGREEMENT by and between Firstar Corporation, a Wisconsin

corporation (the "Company") and John F. Grundhofer (the "Executive") dated as of

the 3rd day of October, 2000.



                  The Company has determined that it is in the best interests of

the Company and its shareholders to assure that U.S. Bancorp, a Delaware

corporation ("USB") will have the continued dedication of the Executive pending

the merger of the Company and USB (the "Merger") pursuant to the Agreement and

Plan of Merger dated as of October 3, 2000 and to provide the surviving

corporation after the Merger with continuity of management. Therefore, in order

to accomplish these objectives, the Board of Directors of the Company (the

"Board") has caused the Company to enter into this Agreement.



                  NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:



                  1. Effective Date. The "Effective Date" shall mean the

effective date of the Merger.



                  2. Employment Period. The Company hereby agrees to employ the

Executive, and the Executive hereby agrees to enter into the employ of the

Company subject to the terms and conditions of this Agreement, for the period

commencing on the Effective Date and ending on December 31, 2002 (the

"Employment Period").



                  3. Terms of Employment. (a) Position and Duties. (i) (A)

During the Employment Period, the Executive shall serve as Chairman of the

Company and Co-Chairman of the Executive Committee of the Board with such

authority, duties and responsibilities as are commensurate with such position

and as may be consistent with such position and (B) the Executive's services

shall be performed in Minneapolis, Minnesota. The Executive shall serve on the

Board until the first annual stockholders' meeting following his 65th birthday.



                  (ii) During the Employment Period, and excluding any periods

of vacation and sick leave to which the Executive is entitled, the Executive

agrees to devote substantially all of his attention and time during normal

business hours to the business and affairs of the Company and, to the extent

necessary to discharge the responsibilities assigned to the Executive hereunder,

to use the Executive's reasonable best efforts to perform faithfully and

efficiently such responsibilities. During the Employment Period it shall not be

a violation of this Agreement for the Executive to (A) serve on corporate, civic

or charitable boards or committees, (B) deliver lectures, fulfill speaking

engagements or teach at educational institutions and (C) manage personal

investments, so long as such activities do not significantly interfere with the

performance of the Executive's responsibilities as an employee of the Company in

accordance with this Agreement. It is expressly understood and agreed that to

the extent that any such activities have been conducted by the Executive prior

to the Effective Date, the continued conduct of such activities (or the conduct

of activities similar in nature and scope thereto)









<PAGE>



subsequent to the Effective Date shall not thereafter be deemed to interfere

with the performance of the Executive's responsibilities to the Company.



                  (b) Compensation. (i) Base Salary. During the Employment

Period, the Executive shall receive an annual base salary ("Annual Base Salary")

of no less than the annual base salary of the Chief Executive Officer of the

Company but in no event less than his current annual base salary. During the

Employment Period, the Annual Base Salary shall be reviewed no more than 12

months after the last salary increase awarded to the Executive prior to the

Effective Date and thereafter at least annually. Any increase in Annual Base

Salary shall not serve to limit or reduce any other obligation to the Executive

under this Agreement. Annual Base Salary shall not be reduced after any such

increase and the term Annual Base Salary as utilized in this Agreement shall

refer to Annual Base Salary as so increased. As used in this Agreement, the

terms "affiliated companies" and "affiliate" shall include any company

controlled by, controlling or under common control with the Company.



                           (ii) Annual Bonus. During the Employment Period, the

Executive shall receive an annual cash bonus ("Annual Bonus") in an amount such

that the sum of his Annual Base Salary and the Annual Bonus is equal to the sum

of the annual base salary and annual bonus of the Chief Executive Officer of the

Company with respect to the year in question, pro rated in the case of any

partial years during the Employment Period.

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