Exhibit 10.9
 
EMPLOYMENT AGREEMENT

AGREEMENT dated this 1st day of July 2006 between CFS Bancorp, Inc. (the
"Corporation"), an Indiana corporation, and Thomas L. Darovic (the "Executive").

WITNESSETH

WHEREAS, the Executive is presently an officer of the Corporation and Citizens
Financial Bank (the "Bank") (together, the "Employers");

WHEREAS, the Employers desire to be ensured of the Executive's continued active
participation in the business of the Employers;

WHEREAS, the Corporation and the Bank desire to enter into separate agreements
with the Executive with respect to his employment by each of the Employers; and

WHEREAS, in order to induce the Executive to remain in the employ of the
Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Corporation in the event that his
employment with the Corporation is terminated under specified circumstances;

NOW THEREFORE, in consideration of the mutual agreements herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1)  
Definitions.  

The following words and terms shall have the meanings set forth below for the
purposes of this Agreement:

a)  
Average Annual Compensation. The Executive's "Average Annual Compensation" for
purposes of this Agreement shall be deemed to mean the average Base Salary, cash
bonuses and amounts allocated to the Executive under any qualified employee
benefit plans of the Employers for the preceding three years.

b)  
Base Salary. "Base Salary" shall have the meaning set forth in Section 4(a)
hereof.

c)  
Cause. Termination of the Executive's employment for "Cause" shall mean
termination because of personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-desist order or
material breach of any provision of this Agreement.

 

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d)  
Change in Control. “Change in Control” means the occurrence of any of the
following: (i) an event that would be required to be reported in response to
Item 5.01 of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
the Securities and Exchange Act of 1934 Act, as amended (1934 Act), or any
successor thereto, whether or not any class of securities of the Corporation is
registered under the 1934 Act; (ii) any “person” is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the combined voting
power of the Corporation’s then outstanding securities; or (iii) during any
period of thirty-six consecutive months, individuals who at the beginning of
such period constitute the Board of Directors of the Corporation cease for any
reason to constitute at least a majority thereof unless the election, or the
nomination for election by stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.

i)  
For purposes of the definition of “Change in Control,” a Person or group of
Persons does not include the CFS Bancorp, Inc. Employee Stock Ownership Plan
Trust which forms a part of the CFS Bancorp, Inc. Employee Stock Ownership Plan
(the “ESOP”), or any other employee benefit plan, subsidiary or affiliate of the
Corporation, and the outstanding shares of common stock of the Corporation, on a
fully diluted basis, include all shares owned by the ESOP, whether allocated or
unallocated to the accounts of participants, thereunder.

ii)  
For purposes of the definition of “Change in Control,” the term “Person” means
any natural person, proprietorship, partnership, corporation, limited liability
company, organization, firm, business, joint venture, association, trust or
other entity and any government agency, body or authority.

e)  
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

f)  
Date of Termination. "Date of Termination" shall mean (i) if the Executive's
employment is terminated for Cause or for Disability, the date specified in the
Notice of Termination, and (ii) if the Executive's employment is terminated for
any other reason, the date on which a Notice of Termination is given or as
specified in such Notice.

g)  
Disability. Termination by the Corporation of the Executive's employment based
on "Disability" shall mean termination because of any physical or mental
impairment which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.

h)  
Good Reason. Termination by the Executive of the Executive's employment for
"Good Reason" shall mean termination by the Executive within twelve months
following a Change in Control of the Corporation based on:

 
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(i)  
Without the Executive's express written consent, the failure to elect or to
re-elect or to appoint or to re-appoint the Executive to the offices of
Executive Vice President of Retail Banking for the Bank or a material adverse
change made by the Employers in the Executive's functions, duties or
responsibilities as an Executive Vice President of the Bank;

(ii)  
Without the Executive's express written consent, a reduction by either of the
Employers in the Executive's Base Salary as the same may be increased from time
to time or, except to the extent permitted by Section 4(b) hereof, a reduction
in the package of fringe benefits provided to the Executive, taken as a whole;

(iii)  
The principal executive office of either of the Employers is relocated more than
ten miles from Munster, Indiana or, without the Executive's express written
consent, either of the Employers require the Executive to be based anywhere
other than an area in which the Employers' principal executive office is
located, except for required travel on business of the Employers to an extent
substantially consistent with the Executive's present business travel
obligations;

(iv)  
Any purported termination of the Executive's employment for Disability or
Retirement which is not effected pursuant to a Notice of Termination satisfying
the requirements of paragraph (k) below; or

(v)  
The failure by the Corporation to obtain the assumption of and agreement to
perform this Agreement by any successor.

i)  
IRS. "IRS" shall mean the Internal Revenue Service.

j)  
Key Employee. "Key Employee" means an employee who is:

i) An officer of the Corporation having annual compensation greater than
$140,000;
ii) A five-percent owner of the Corporation; or
iii) A one-percent owner of the Corporation having an annual compensation
greater than $150,000.

For purposes of determining who is an officer for purposes of Section 1(j)(i),
no more than 50 employees (or, if lesser, the greater of three or 10 percent of
the employees) shall be treated as officers, and those categories of employees
listed in Code Section 414(q)(5) shall be excluded. The $140,000 amount shall be
adjusted at the same time and in the same manner as under Code Section 415(d),
except that the base period shall be the calendar quarter beginning July 1,
2001, and any increase under this sentence which is not a multiple of $5,000
shall be rounded to the next lower multiple of $5,000.

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k)  
Notice of Termination. Any purported termination of the Executive's employment
by the Corporation for any reason, including without limitation for Cause,
Disability or Retirement, or by the Executive for any reason, including without
limitation for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a dated notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated,
(iii) specifies a Date of Termination, which shall be not less than 30 nor more
than 90 days after such Notice of Termination is given, except in the case of
the Corporation's termination of the Executive's employment for Cause, which
shall be effective immediately; and (iv) is given in the manner specified in
Section 11 hereof.

l)  
Retirement. "Retirement" shall mean voluntary termination by the Executive after
the Executive attains the age 55, with at least five years of active service.

m)  
Separation from Service. "Separation from Service" means the date on which the
Executive dies, retires or otherwise experiences a Termination of Employment
with the Corporation. Provided, however, a Separation from Service does not
occur if the Executive is on military leave, sick leave, or other bona fide
leave of absence (such as temporary employment by the government) if the period
of such leave does not exceed six months, or if the leave is for a longer
period, so long as the individual’s right to reemployment with the Corporation
is provided either by statute or by contract. If the period of leave exceeds six
months and the Executive’s right to reemployment is not provided either by
statute or contract, there shall be a Separation from Service on the first date
immediately following such six-month period. Executive shall incur a
"Termination of Employment" when a termination of employment is incurred under
Proposed Treasury Regulation 1.409A-1(h)(ii) or any final version of such
Proposed Regulation.

n)  
Specified Employee. “Specified Employee” means an employee who is a “Key
Employee” if the Corporation’s stock is publicly traded on an established
securities market. An employee shall be a Specified Employee for the
twelve-month period beginning on the April 1st following any calendar year in
which the employee is a Key Employee.

2)  
Term of Employment.

a)  
The Corporation hereby employs the Executive as a Vice President, and the
Executive hereby accepts said employment and agrees to render such services to
the Corporation on the terms and conditions set forth in this Agreement. The
term of this Agreement shall be a period of twelve months commencing as of the
date hereof (the "Commencement Date"), subject to earlier termination as
provided herein. Beginning on the day following the Commencement Date, and on
each day thereafter, the term of this Agreement shall be extended for a period
of one day in addition to the then-remaining term, provided that the Corporation
has not given notice to the Executive in writing at least 60 days prior to such

 
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day that the term of this Agreement shall not be extended further. Reference
herein to the term of this Agreement shall refer to both such initial term and
such extended terms. The Board of Directors of the Corporation shall review on a
periodic basis (and no less frequently than annually) whether to permit further
extensions of the term of this Agreement. As part of such review, the Board of
Directors shall consider all relevant factors, including the Executive's
performance hereunder, and shall either expressly approve further extensions of
the time of this Agreement or decide to provide notice to the contrary.

 

b)  
During the term of this Agreement, the Executive shall perform such executive
services for the Corporation as may be consistent with his titles and from time
to time assigned to him by the Corporation's Board of Directors. The Executive
further agrees to serve without additional compensation as an officer and
director of any of the Corporation's subsidiaries and agrees that any amounts
received from such corporation may be offset against the amounts due hereunder.
In addition, it is agreed that the Corporation may assign the Executive to one
of its subsidiaries for payroll purposes.

3)  
 Loyalty, Confidentiality and Non-Competition

a)  
The Executive shall devote his or her full time and best efforts to the
performance of his employment under this Agreement. During the term of this
Agreement, the Executive shall not, at any time or place, either directly or
indirectly engage in any business or activity in competition with the business
affairs or interests of the Corporation or be a director, officer or consultant
to any bank, savings and loan association, credit union, thrift, savings bank,
or similar institution in the Chicago CMSA.

b)  
For a period of one year from the date of voluntary termination, or termination
for Cause, the Executive shall not, at any time or place, either directly or
indirectly engage in any business or activity in competition with the business
affairs or interests of the Corporation or be a director, officer or consultant
to any bank, savings and loan association, credit union, thrift, savings bank,
or similar institution in the Chicago CMSA.

c)  
For purposes of this Agreement, directly or indirectly engaging in any business
activity in competition with the business or affairs of the Corporation
includes, but is not limited to, serving or acting as an owner, partner, agent,
beneficiary, or employee of any person, firm or corporate entity so engaged;
except that nothing herein contained shall be deemed to prevent or limit the
right of Executive to invest any of his surplus funds in the capital stock or
other securities of any corporation whose stock or securities are publicly owned
or are regularly traded on any public exchange, nor shall anything herein
contained be deemed to prevent Executive from investing or limit Executive's
right to invest his surplus funds in real estate.

d)  
All information relating to business of the Employers including, but not limited
to, that business obtained or serviced by Executive and all customer listings,
contact lists,

 
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expiration cards, asset reports, instruments, documents, papers and other
material used in connection with such business, shall be the exclusive property
of the Employers. Executive shall keep all such information and material
confidential; none of it shall be copied, reproduced or duplicated without the
express written permission of the Employers, and Executive shall return all
material containing such information to the Employers upon their request or upon
termination of employment. Executive also agrees that he or she shall not
utilize the confidential information or trade secrets of the Employers, either
directly or indirectly, for any purposes except performance of the Executive's
responsibilities and in furtherance of the Employers’ business, unless otherwise
expressly authorized by the Employers in writing in advance.

e)  
Executive agrees that, during his employment, and for a period of one year
following the date of his involuntary termination of employment for Cause, or
his voluntary termination without Good Reason, the Executive:

i)  
shall not solicit any of the Employers’ past or current customers or clients for
the benefit of anyone other than the Employers or their affiliates;

ii)  
shall not divulge the names of any of the Employers’ past or then current
customers to any other person, corporation or entity;

iii)  
shall not divulge to anyone, except the Employers or their representatives, any
information regarding their management strategies, marketing information or
goals, policies and/or other information regarding the affairs of the Employer,
all of which Executive is hereby obligated to keep secret, however and whenever
such information comes to his or her attention; and

iv)  
shall not, either directly or indirectly, induce or solicit any person to leave
the employ of the Employers.

4)  
Compensation and Benefits.

a)  
The Employers shall compensate and pay the Executive for his services during the
term of this Agreement at a minimum base salary of $171,000 per year ("Base
Salary"), which may be increased from time to time in such amounts as may be
determined by the Boards of Directors of the Employers and may not be decreased
without the Executive's express written consent. In addition to his Base Salary,
the Executive shall be entitled to receive during the term of this Agreement
such bonus payments as may be determined by the Boards of Directors of the
Employers.

b)  
During the term of this Agreement, the Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, profit sharing, stock option, employee stock ownership, or other
plans, benefits and privileges given to employees and executives of the
Employers, to the extent commensurate with his then duties and responsibilities,
as fixed by the Boards of Directors of the Employers. The Corporation shall not
make any changes in such plans, benefits or privileges which would adversely
affect the Executive's rights or benefits thereunder, unless such change occurs

 
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pursuant to a program applicable to all executive officers of the Corporation
and does not result in a proportionately greater adverse change in the rights of
or benefits to the Executive as compared with any other executive officer of the
Corporation. Nothing paid to the Executive under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the salary payable to the Executive pursuant to Section 4(a) hereof.

c)  
During the term of this Agreement, the Executive shall be entitled to paid
annual vacation in accordance with the policies as established from time to time
by the Boards of Directors of the Employers. The Executive shall not be entitled
to receive any additional compensation from the Employers for failure to take a
vacation, nor shall the Executive be able to accumulate unused vacation time
from one year to the next, except to the extent authorized by the Boards of
Directors of the Employers.

d)  
In the event the Executive's employment is terminated due to Disability or
Retirement, and provided the Employee is not otherwise employed in a position
providing substantially similar benefits, the Employer will continue, at its
cost and for the remaining term of this Agreement, life and medical insurance
coverage for the Executive and his spouse at substantially similar levels of
coverage and benefits as the Employers provide at such time for its then
existing senior executives.

e)  
The Executive's compensation, benefits and expenses shall be paid by the
Corporation and the Bank in the same proportion as the time and services
actually expended by the Executive on behalf of each respective Employer. 

f)  
During the term of the Agreement, the Employers shall provide suitable office
space, desk, chairs, filing cabinets, telephones and other usual and customary
office furniture, fixtures and equipment adequate for the efficient performance
of the duties assigned to the Executive.

g)  
During the term of this Agreement, the Employers shall provide to the Executive,
at the Employer's cost, all perquisites which other senior executives of the
Company are otherwise generally entitled to receive.

h)  
During the term of this Agreement, the Bank shall provide to Executive the use
of an automobile with an average annual lease cost not to exceed $10,000 per
year. The Bank agrees to replace the automobile with a new one at Executive's
request no more often than once every three years. The Bank shall pay all
automobile operating expenses incurred by Executive in the performance of
Executive's duties. The Bank shall procure and maintain in force an automobile
liability policy for the automobile with coverage, including Executive, in the
minimum amount of $1,000,000 combined single limit on bodily injury and property
damage.

 
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5)  
Expenses. The Employers shall reimburse the Executive or otherwise provide for
or pay for all reasonable expenses incurred by the Executive in furtherance of
or in connection with the business of the Employers, including, but not by way
of limitation, automobile expenses and other traveling expenses, and all
reasonable entertainment expenses (whether incurred at the Executive's
residence, while traveling or otherwise), subject to such reasonable
documentation and other limitations as may be established by the Boards of
Directors of the Employers. If such expenses are paid in the first instance by
the Executive, the Employers shall reimburse the Executive therefor.

6)  
Termination.

a)  
The Corporation shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and the Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.

b)  
In the event that (i) the Executive's employment is terminated by the
Corporation for Cause or (ii) the Executive terminates his employment hereunder
other than for Disability, Retirement, death or Good Reason, the Executive shall
have no right pursuant to this Agreement to compensation or other benefits for
any period after the applicable Date of Termination.

c)  
In the event that the Executive's employment is terminated as a result of
Disability, Retirement or the Executive's death during the term of this
Agreement, the Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination, except as provided for in Section 4(d) hereof.

d)  
In the event that (i) the Executive's employment is terminated by the
Corporation for other than Cause, Disability, Retirement or the Executive's
death or (ii) such employment is terminated by the Executive (a) due to a
material breach of this Agreement by the Corporation, which breach has not been
cured within fifteen days after a written notice of non-compliance has been
given by the Executive to the Employers, or (b) for Good Reason, then the
Corporation shall:

i)  
pay to the Executive, a cash severance amount equal to the Executive’s Average
Annual Compensation paid by the Corporation, in two equal installments, with the
first installment to be paid on the first business day of the month following
the Executive’s Date of Termination and the second installment to be paid no
later than January 15th of the calendar year following the year in which the
first installment was paid; and

 
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ii)  
maintain and provide for a period ending at the earlier of (i) the expiration of
the remaining term of employment pursuant hereto prior to the Notice of
Termination or (ii) the date of the Executive's full-time employment by another
employer (provided that the Executive is entitled under the terms of such
employment to benefits substantially similar to those described in this
subparagraph, at no cost to the Executive, the Executive's continued
participation in all group insurance, life insurance, health and accident
insurance, disability insurance and other employee benefit plans, programs and
arrangements offered by the Corporation in which the Executive was entitled to
participate immediately prior to the Date of Termination (excluding (x) stock
option and restricted stock plans of the Employers, (y) bonuses and other items
of cash compensation included in Average Annual Compensation, and (z) other
benefits, or portions thereof, included in Average Annual Compensation),
provided that in the event that the Executive's participation in any plan,
program or arrangement as provided in this subparagraph is barred, or during
such period any such plan, program or arrangement is discontinued or the
benefits thereunder are materially reduced, the Corporation shall arrange to
provide the Executive with benefits substantially similar to those which the
Executive was entitled to receive under such plans, programs and arrangements
immediately prior to the Date of Termination.

 

e)  
If at the time of the Executive’s Separation from Service, for any reason other
than death, the Executive meets the definition of a Specified Employee, payment
of all amounts under subsections 6(d)(i), 6(d)(ii) and 7(a) shall be suspended
for six months following the Executive’s Separation from Service. In such event,
the first installment shall be paid on the first day following the end of the
six-month suspension period. The second installment shall be paid no later than
January 15th of the calendar year following the year in which the first
installment was paid. If the Executive incurs a Separation from Service due to
death, regardless of whether the Executive meets the definition of a Specified
Employee, payment of his benefit shall not be suspended. Provided, however, that
the six-month suspension period shall not apply to the provision of any group
insurance, life insurance, health and accident insurance or disability insurance
under subsection 6(d)(ii).

 

7)  
Payment of Additional Benefits under Certain Circumstances.

a)  
If the payments and benefits pursuant to Section 6 hereof, either alone or
together with other payments and benefits which the Executive has the right to
receive from the Employers (including, without limitation, the payments and
benefits which the Executive would have the right to receive from the Bank
pursuant to Section 6 of the Agreement between the Bank and the Executive dated
this even date ("Bank Agreement"), before giving effect to any reduction in such
amounts pursuant to Section 7 of the Bank Agreement), would constitute a
"parachute payment" as defined in Section 280G(b)(2) of the Code (the "Initial
Parachute Payment," which includes the amounts paid pursuant to clause (i)
below), then the Corporation shall pay to the Executive, a cash amount in
two equal installments, with the first installment to be paid on the first
business day of the month following the Date of

 
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Termination and the second installment to be paid no later than January 15th of
the calendar year following the year in which the first installment was paid.
The cash amount shall be equal to the sum of the following:

 

i)  
the amount by which the payments and benefits that would have otherwise been
paid by the Bank to the Executive pursuant to Section 6 of the Bank Agreement
are reduced by the provisions of Section 7 of the Bank Agreement;

ii)  
twenty percent (or such other percentage equal to the tax rate imposed by
Section 4999 of the Code) of the amount by which the Initial Parachute Payment
exceeds the Executive's "base amount" from the Employers, as defined in
Section 280G(b)(3) of the Code, with the difference between the Initial
Parachute Payment and the Executive's base amount being hereinafter referred to
as the "Initial Excess Parachute Payment";

iii)  
such additional amount (tax allowance) as may be necessary to compensate the
Executive for the payment by the Executive of state and federal income and
excise taxes on the payment provided under clause (ii) above and on any payments
under this clause (iii). In computing such tax allowance, the payment to be made
under clause (ii) above shall be multiplied by the "gross up percentage"
("GUP"). The GUP shall be determined as follows:

GUP = Tax Rate / 1 - Tax Rate
 

iv)  
Tax Rate

The Tax Rate for purposes of computing the GUP shall be the highest marginal
federal and state income and employment-related tax rate, including any
applicable excise tax rate, applicable to the Executive in the year in which the
payment under clause (ii) above is made.

v)  
Notwithstanding the foregoing, if it shall subsequently be determined in a final
judicial determination or a final administrative settlement to which the
Executive is a party that the actual excess parachute payment as defined in
Section 280G(b)(1) of the Code is different from the Initial Excess Parachute
Payment (such different amount being hereafter referred to as the "Determinative
Excess Parachute Payment"), then the Corporation's independent tax counsel or
accountants shall determine the amount (the "Adjustment Amount") which either
the Executive must pay to the Corporation or the Corporation must pay to the
Executive in order to put the Executive (or the Corporation, as the case may be)
in the same position the Executive (or the Corporation, as the case may be)
would have been if the Initial Excess Parachute Payment had been equal to the
Determinative Excess Parachute Payment. In determining the Adjustment Amount,
the independent tax counsel or accountants shall take into account any and all
taxes (including any penalties and interest) paid by or for the Executive or
refunded to the Executive or for the Executive's benefit. As soon as practicable
after the Adjustment

 
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Amount has been so determined, the Corporation shall pay the Adjustment Amount
to the Executive or the Executive shall repay the Adjustment Amount to the
Corporation, as the case may be.

 

b)  
In each calendar year that the Executive receives payments of benefits under
this Section 7, the Executive shall report on his state and federal income tax
returns such information as is consistent with the determination made by the
independent tax counsel or accountants of the Corporation as described above.
The Corporation shall indemnify and hold the Executive harmless from any and all
losses, costs and expenses (including without limitation, reasonable attorneys'
fees, interest, fines and penalties) which the Executive incurs as a result of
so reporting such information. The Executive shall promptly notify the Company
in writing whenever the Executive receives notice of the institution of a
judicial or administrative proceeding, formal or informal, in which the federal
tax treatment under Section 4999 of the Code of any amount paid or payable under
this Section 7 is being reviewed or is in dispute. The Corporation shall assume
control, at its expense, over all legal and accounting matters pertaining to
such federal tax treatment (except to the extent necessary or appropriate for
the Executive to resolve any such proceeding with respect to any matter
unrelated to amounts paid or payable pursuant to this Section) and the Executive
shall cooperate fully with the Corporation in any such proceeding. The Executive
shall not enter into any compromise or settlement or otherwise prejudice any
rights the Corporation may have in connection therewith without the prior
consent of the Corporation.

8)  
Mitigation; Exclusivity of Benefits.

a)  
The Executive shall not be required to mitigate the amount of any benefits
hereunder by seeking other employment or otherwise, nor shall the amount of any
such benefits be reduced by any compensation earned by the Executive as a result
of employment by another employer after the Date of Termination or otherwise.

b)  
The specific arrangements referred to herein are not intended to exclude any
other benefits which may be available to the Executive upon a termination of
employment with the Employers pursuant to employee benefit plans of the
Employers or otherwise.

9)  
Withholding. All payments required to be made by the Corporation hereunder to
the Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Corporation may reasonably
determine should be withheld pursuant to any applicable law or regulation.

10)  
Assignability. The Corporation may assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Corporation may hereafter merge or
consolidate or to which the Corporation may transfer all or substantially all of
its assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the
Corporation hereunder as fully as if it had been originally made a party hereto,
but may not otherwise assign this

 
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Agreement or its rights and obligations hereunder. The Executive may not assign
or transfer this Agreement or any rights or obligations hereunder.

 

11)  
Notice. For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below:

a)  
To the Corporation:    Corporate Secretary

                      CFS Bancorp, Inc.
                      707 Ridge Road
                      Munster, Indiana 46321

b)  
To the Bank:        Corporate Secretary

                      Citizens Financial Bank
                      707 Ridge Road
                      Munster, Indiana 46321
 

b)  
To the Executive:        Thomas L. Darovic

                      [Address Redacted]
 

12)  
Amendment; Waiver. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and such officer or officers as may be specifically
designated by the Board of Directors of the Corporation to sign on its behalf.
No waiver by any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

13)  
Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the United States where
applicable and otherwise by the substantive laws of the State of Indiana.

14)  
Nature of Obligations. Nothing contained herein shall create or require the
Corporation to create a trust of any kind to fund any benefits which may be
payable hereunder, and to the extent that the Executive acquires a right to
receive benefits from the Corporation hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Corporation.

15)  
Headings. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

 
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16)  
Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.

17)  
Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

18)  
Regulatory Prohibition. Notwithstanding any other provision of this Agreement to
the contrary, any payments made to the Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with Section
18(k) of the Federal Deposit Insurance Act (12 U.S.C. §1828(k)) and the
regulations promulgated thereunder, including 12 C.F.R. Part 359. In the event
of the Executive's termination of employment with the Bank for Cause, all
employment relationships and managerial duties with the Bank shall immediately
cease regardless of whether the Executive remains in the employ of the
Corporation following such termination. Furthermore, following such termination
for Cause, the Executive shall not, directly or indirectly, influence or
participate in the affairs or the operations of the Bank.

19)  
Payment of Costs and Legal Fees and Reinstatement of Benefits. In the event any
dispute or controversy arising under or in connection with the Executive's
termination is resolved in favor of the Executive, whether by judgment,
arbitration or settlement, the Executive shall be entitled to the payment of
(a) all legal fees incurred by the Executive in resolving such dispute or
controversy, and (b) any back-pay, including Base Salary, bonuses and any other
cash compensation, fringe benefits and any compensation and benefits due to the
Executive under this Agreement.

20)  
Indemnification. The Corporation shall provide the Executive (including his
heirs, executors and administrators) with coverage under a standard directors'
and officers' liability insurance policy at its expense, or in lieu thereof,
shall indemnify the Executive (and his heirs, executors and administrators) to
the fullest extent permitted under Indiana law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of the Corporation (whether or not he continues to be
a director or officer at the time of incurring such expenses or liabilities).
Such expenses and liabilities shall include, but shall not be limited to,
judgments, court costs and attorneys' fees and the cost of reasonable
settlements.

21)  
Entire Agreement. This Agreement embodies the entire agreement between the
Corporation and the Executive with respect to the matters agreed to herein. All
prior agreements between the Corporation and the Executive with respect to the
matters agreed to herein are hereby superseded and shall have no force or
effect. Notwithstanding the foregoing, nothing contained in this Agreement shall
affect the agreement of even date being entered into between the Bank and the
Executive.

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.

 
Attest:                         CFS BANCORP, INC.
 
 
/s/ Monica F. Sullivan               By: /s/ Brian L.Goins      
 
 
                           EXECUTIVE

                      /s/ Thomas L. Darovic    
                            Thomas L. Darovic

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