Exhibit 10.6
 
EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (the “Agreement”) dated this 23rd day of December,
2009 is made and entered into by and between CFS BANCORP, INC. (the “Company”),
an Indiana corporation, CITIZENS FINANCIAL BANK (the “Bank”), a
federally-chartered savings association, and CHARLES V. COLE (the “Executive”),
a resident of the State of Illinois,
 
WITNESSETH:
 
WHEREAS, the Executive is presently employed as the Executive Vice President and
Chief Financial Officer of the Company and the Bank (together, the “Employers”);
 
WHEREAS, the Employers desire to be ensured of the Executive’s continued active
participation in the business and senior management of the Employers, and the
Executive desires to continue to actively participate in the business and senior
management of the Employers; and
 
WHEREAS, the Company and the Executive and the Bank and the Executive are
currently parties to existing separate employment agreements, and the Company,
the Bank and the Executive desire to terminate such other agreements and specify
in this Agreement the employment arrangement between the Company, the Bank and
the Executive as well as certain restrictions, covenants, agreements and
severance payments of the Company, the Bank and/or the Executive.
 
NOW THEREFORE, in consideration of the foregoing recitals, the mutual agreements
herein contained, the continued employment of the Executive by the Company and
the Bank 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”
shall mean the average of the Base Salary, non-equity incentive plan bonuses,
vested amounts allocated to the Executive under the ESOP, the Company’s vested
matching contributions made to the Executive’s account under the Company’s
401(k) plan and vested awards of restricted common stock for the three (3)
complete fiscal years preceding the Executive’s Date of Termination; provided,
however, that if the Executive has been employed by the Employers for less than
three (3) fiscal years, then the Average Annual Compensation shall instead be
calculated based upon the number of complete fiscal years that the Executive has
been employed by the Employers.

 
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” means termination
by the Company or the Bank because of any of the following by the Executive:

 
 
i)
any incompetence or intentional failure by the Executive in performing his
services or carrying out his duties and responsibilities under this Agreement;
or

 
 
ii)
any dishonesty, fraud, theft or embezzlement by the Executive; or

 

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iii)
any breach of fiduciary duty or willful misconduct involving personal profit by
the Executive; or

 
 
iv)
any willful or knowing violation by the Executive of any law, statute, rule,
regulation or government requirement (other than traffic violations or similar
offenses) or any final cease and desist order involving the Executive; or

 
 
v)
any material and intentional noncompliance by the Executive with any provision
of any employee handbook, code of conduct or ethics, corporate governance
guidelines or any rule, policy or procedure of either of the Employers as are
currently in effect or as may hereafter be in effect from time to time; or

 
 
vi)
any material breach by the Executive of any provision of this Agreement.

 
d)  
Change in Control.  “Change in Control” means the occurrence subsequent to the
date of this Agreement of any of the following relating to the Company or the
Bank: (i) an acquisition of control of the Company or the Bank within the
meaning of the Home Owners’ Loan Act of 1933 and 12 C.F. R. 574, as amended;
(ii) 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 statute, whether or not any class of securities of the Company is
registered under the 1934 Act; (iii) any Person or group of Persons is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of either the Company or the Bank
representing 25% or more of the combined voting power of the Company’s or the
Bank’s then outstanding securities; or (iv) during any period of thirty-six
consecutive months, individuals who at the beginning of such period constitute
the Board of Directors of the Company or the Bank cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election, 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
such period and, in such case, each new director so approved will be considered
for purposes of this section to have been a director at the beginning of such
period.

 
 
 
For purposes of the definition of “Change in Control,” (A) 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”), any other employee benefit plan of the Company or the Bank, or any
subsidiary or affiliate of the Company or the Bank, and (B) the outstanding
securities of the Company shall include all shares of common stock owned by the
ESOP, whether allocated or unallocated to the accounts of participants
thereunder.

 
e)  
Code. “Code” means the Internal Revenue Code of 1986, as amended.

 
f)  
Date of Termination.  “Date of Termination” shall mean (i) the Executive’s last
day of employment with either of the Employers as specified in a Notice of
Termination, (except in the case of death), and (ii) if the Executive dies
during his employment hereunder, the date of his death.

 
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g)  
Disability.  Termination by either of the Employers of the Executive’s
employment based on “Disability” shall mean termination because of any physical
or mental impairment, incapacity or condition of the Executive such that the
Executive is substantially limited, with or without accommodation, in being able
to perform the essential functions of his duties and responsibilities under this
Agreement (as reasonably determined by either of the Employers) for at least
sixty (60) days (whether consecutive or non-consecutive days) during any twelve
(12) month period.  A Disability may, but is not required to, be evidenced by a
signed, written opinion of an independent, qualified medical doctor selected by
the Board of Directors, the Chief Executive Officer or the Chief Operating
Officer of either of the Employers and paid for by either of the Employers.  The
Executive hereby agrees to make himself promptly available for examination by
such medical doctor upon reasonable request by the Board of Directors, the Chief
Executive Officer or the Chief Operating Officer of either of the Employers and
consents to provide promptly the results of such examination and any diagnosis
to both of the Employers.  Nothing in this Section is intended to be in
violation of the Americans with Disabilities Act.

 
h)  
Executive Officers.  “Executive Officers” shall mean those employees of the Bank
who hold the title of Senior Vice President or above.

 

i)  
Good Reason.  Termination by the Executive of the Executive’s employment for
“Good Reason” shall mean termination by the Executive concurrently with, or
within two (2) years immediately following, a Change in Control of the Company
or the Bank based on the occurrence of any of the following:

 
 
(i)
a material reduction by either of the Employers, without the Executive’s written
consent, in the Executive’s duties, responsibilities or authority at the Bank
concurrently with, or during the two (2) year period immediately following, a
Change in Control as compared to that in effect on the day immediately preceding
the Change in Control; provided, however, that a temporary reduction in the
Executive’s duties, responsibilities or authority during any period that the
Executive is on vacation, using paid time off or on leave of absence in
accordance with the policies and procedures of  the Employers shall not
constitute a diminution of his duties, responsibilities and authority; and
provided further, however, that layoffs or terminations following a Change in
Control of employees who directly report to the Executive shall not constitute a
diminution of his duties, responsibilities and authority; or

 
 
(ii)
a material diminution by the either of the Employers, without the Executive’s
written consent, in the Executive’s job titles of President and Chief Operating
Officer concurrently with, or during the two (2) year period immediately
following, a Change in Control; or

 
 
(iii)
a material reduction by either of the Employers, without the Executive’s written
consent, in any of the components (actual or projected) included in his Average
Annual Compensation concurrently with, or during the two (2) year period
immediately following, a Change in Control as compared to the components of his
Average Annual Compensation in the fiscal year immediately preceding the Change
in Control; provided, however, that any reduction by the Employers in any such
components following a Change in Control shall not constitute Good Reason so
long as a majority of all Executive Officers shall also receive a reduction in
the same components of

 
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Average Annual Compensation as part of across-the-board compensation reductions
at the Bank and, further, so long as the percentage reduction in any of the
Executive’s components of Average Annual Compensation shall not be greater than
the average of the percentage reductions in the same components for all other
Executive Officers as a group;

 
 
(iv)
a requirement by either of the Employers, without the Executive’s written
consent, that the Executive perform his principal job duties and
responsibilities concurrently with, or during the two (2) year period
immediately following, a Change in Control at a location that is more than
thirty (30) miles from the location at which the Executive performs his
principal job duties and responsibilities on the day immediately preceding the
Change in Control; or

 
 
(v)
any failure by either of the Employers to obtain the express written assumption
of this Agreement, and the obligations hereunder, by the successors to the
Company and the Bank concurrently with a Change in Control.

 
 
The Executive must notify the Employers in writing within sixty (60) days of the
initial existence of the circumstances giving rise to a termination of the
Executive’s employment hereunder for Good Reason.  The applicable Employer shall
then have thirty (30) days following the effectiveness of such notice during
which it may cure such circumstances and, if so cured, shall not be required to
make any severance payments pursuant to Section 6(d) hereof.

 
j)  
IRS. “IRS” means the Internal Revenue Service.

 
k)  
Key Employee.  “Key Employee” means an employee who is:

 
 
i)      An officer of the Company or the Bank having annual compensation greater
than $150,000; or

 
ii)     A beneficial owner of 5% or more of the outstanding securities of the
Company; or

 
iii)    A beneficial owner of 1% or more of the outstanding securities of the
Company and who has an annual compensation from the Company greater than
$150,000.

 
For purposes of determining who is an officer for purposes of this paragraph
(j), no more than 50 employees (or, if lesser, the greater of three or 10% of
the employees) shall be treated as officers, and those categories of employees
listed in Code Section 414(q)(5) shall be excluded.  The $150,000 amount in
paragraph (k) 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.
 
l)  
Notice of Termination.  Any purported termination of the Executive’s employment
by the either or both of the Employers for any reason, including without
limitation with or without Cause or upon the occurrence of a Disability, or by
the Executive for any reason, including without limitation with or without Good
Reason or upon Retirement, shall be communicated by written “Notice of
Termination” to the other parties 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

 
 
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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 ninety 90 days after such Notice of
Termination is given, except in the case of the Company’s or the Bank’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.

 
m)  
Retirement.  “Retirement” means voluntary termination of employment with the
Company and Bank by the Executive after he has attained age 55 and completed at
least five full years of active service with the Company or Bank.

 
n)  
Separation from Service.  “Separation from Service” means the date of the
Executive’s death or Retirement or the date on which the Executive otherwise
experiences a Termination of Employment (as defined below) from the Company or
the Bank; 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
approved by the Employers if the period of such leave does not exceed six months
or, if the leave is for a longer period, so long as the Executive’s right to
reemployment with the Company or the Bank is provided either by statute or by
contract.  For purposes of this paragraph (n), a leave of absence constitutes a
bona fide leave of absence by the Employers only if there is a reasonable
expectation that the Executive will return to perform services for the Company
or the Bank.  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.  Notwithstanding the foregoing, where a leave of absence is
due to a Disability that can be expected to result in death or can be expected
to last for a continuous period of not less than six months and where such
impairment causes the Executive to be unable to render the services or carry out
the duties and responsibilities set forth in this Agreement, then a 29-month
period of absence may be substituted for such six-month period.  For purposes of
this paragraph (n), the Executive shall be considered to have incurred a
“Termination of Employment” when he incurs a termination of employment under any
of the circumstances described in Treasury Regulation 1.409A-1(h)(ii).

 
o)  
Specified Employee.  “Specified Employee” means an employee who is a “Key
Employee” if the Company’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 1 following any calendar year in which the employee is a
Key Employee.

 
p)  
Person.  “Person” shall mean 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.

 

 
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2)  
Duties and Responsibilities; Term of Employment.

 
a) 
The Company and the Bank each hereby employs the Executive as its Executive Vice
President and Chief Financial Officer, and the Executive hereby accepts such
employment and agrees to render such services to, and carry out such duties and
responsibilities for, the Employers, on the terms and conditions set forth in
this Agreement.  During the term of this Agreement, the Executive shall render
such executive services and carry out such duties and responsibilities
consistent with his titles and as may be set forth from time to time in the
By-Laws of the Company and the Bank and/or as may be assigned to him from time
to time by the Board of Directors, the Chief Executive Officer or the Chief
Operating Officer of the Employers.  The Executive shall devote all of his
working time, attention, energies and skills to his duties and responsibilities
under this Agreement and to the furtherance of the business and interests of the
Employers and their subsidiaries or affiliates; provided, however, that the
Executive shall be permitted to manage his own personal investments so long as
such investment activities do not affect the Executive’s performance of his
duties and responsibilities under this Agreement and do not adversely affect the
reputation of either of the Employers; and provided further, however, that the
Executive shall be permitted to engage in civic and charitable activities and to
serve on boards of directors of other for-profit and non-profit entities so long
as such civic and charitable activities and board positions do not affect the
Executive’s performance of his duties and responsibilities under this Agreement,
do not adversely affect the reputation of the Employers and have been approved
in advance by the Board of Directors (or a committee thereof), the Chief
Executive Officer or the Chief Operating Officer of either the Company or the
Bank.

 
b) 
The initial term of this Agreement shall be a period of eighteen (18) months
commencing as of the date hereof (the “Commencement Date”), subject to earlier
termination as provided herein.  Within sixty (60) days prior to the first
anniversary of the date of this Agreement and within sixty (60) days prior to
each subsequent one year anniversary thereafter, the Boards of Directors of the
Employers shall review this Agreement and determine whether the term of this
Agreement shall be extended for a period of twelve (12) months in addition to
the then-remaining term, provided that the Employers have not given notice to
the Executive in writing of either the earlier termination of his employment or
the Board’s determination not to extend this Agreement.  The Boards of Directors
of the Employers shall promptly notify the Executive in writing as to whether it
has determined to extend further the term of this Agreement. If the Boards of
Directors of the Employers determine not to extend the term of this Agreement,
then this Agreement shall terminate and be of no further force or effect (except
as expressly provided herein) upon the expiration of the then-remaining term and
no additional review of this Agreement by the Boards of Directors shall be
required.  Reference herein to the term of this Agreement shall refer to both
such initial term and any extended terms.  As part of the review by the Boards
of Directors of the Employers on at least an annual basis whether to permit
extensions of the term of this Agreement, the Board shall consider all relevant
factors, including without limitation the Executive’s performance hereunder and
the input of the Chief Executive Officer or the Chief Operating Officer and the
Compensation Committee of the Employers, and shall determine whether to provide
notice to the Executive that the term of this Agreement shall not be further
extended.

 
The Executive further agrees to serve without additional compensation as an
officer and/or director of any of the Company’s or the Bank’s subsidiaries or
affiliates, as may determined
 
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by the Boards of Directors of the Employers.  In addition, it is agreed that the
Executive may be assigned to any of the subsidiaries of the Company for payroll
purposes.
 
3)  
Loyalty, Confidentiality and Non-Competition.

 
a) 
The Executive shall devote his full time and attention and his best efforts to
the performance of his duties and responsibilities under this Agreement.  During
the term of this Agreement, the Executive shall not, at any time or place and
wherever located, directly or indirectly engage in any business or activity in
competition with the business, affairs or interests of the Employers or any of
their subsidiaries or affiliates.

 
b) 
During his employment and for a period of eighteen (18) months following the
Date of Termination relating to a termination by the Employers of the
Executive’s employment hereunder for Cause or a Disability or a termination by
the Executive of his employment hereunder upon Retirement or without Good
Reason, the Executive shall not, at any time, directly or indirectly engage in
any business or activity in competition with the business, affairs or interests
of the Employers or any of their subsidiaries or affiliates within a thirty (30)
mile radius from any present or future office of either of the Employers or any
of their subsidiaries or affiliates.

 
c) 
For purposes of this Agreement, directly or indirectly engaging in any business
or activity in competition with the business, affairs or interests of the
Employers or any of their subsidiaries or affiliates includes, but is not
limited to, serving or acting as an owner, investor, partner, member, agent,
beneficiary, employee, officer, director, consultant, advisor or independent
contractor of or to any bank holding company, savings and loan holding company,
bank, savings and loan association, credit union, thrift, savings bank,
financial services provider or similar entity or any Person engaged in any
banking, lending, wealth management, private banking, financial services or any
other business, operation or activity in which either of the Employers or any of
their subsidiaries or affiliates is engaged or is actively developing or
pursuing on the Date of Termination or has engaged or actively developed or
pursued at any time during the one (1) year period preceding the Date of
Termination; except that nothing herein contained shall be deemed to prevent or
limit the right of the Executive to invest any of his funds in the capital stock
or other securities of any such Person whose stock or securities are publicly
owned or are regularly traded on any national securities exchange so long as the
Executive is not the beneficial owner of more than 1% of the outstanding capital
stock or securities of such Person, nor shall anything herein contained be
deemed to prevent or limit the right of the Executive to invest any of his funds
in real estate.

 
d) 
All information relating to any business of the Employers or any of their
subsidiaries or affiliates including, but not limited to, all business obtained
or serviced by the Executive and all customer lists, customer information,
contact lists, asset, liability, loan, deposit and investment information,
financial records or information, instruments, documents, papers, and other
material used in connection with, and all trade secrets, estimates, projections,
goals, strategies, techniques relating to, such business, shall be the exclusive
property of the Employers or one of their subsidiaries or affiliates, as
applicable.  The Executive shall maintain the confidentiality of all such
information and material that is confidential, proprietary or not publicly
available (other than through a breach of this Agreement by the Executive or any
other impermissible disclosure); none of it shall be copied, reproduced,

 
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duplicated, disclosed, taken or used without the express written permission of
the Board of Directors, the Chief Executive Officer or the Chief Operating
Officer of the Employers (other than in connection with the performance of the
Executive’s services hereunder), and the Executive shall return all such
information and materials to the Employers upon their request or upon
termination of employment.  The Executive also agrees that he shall not utilize
such information or materials, either directly or indirectly, for any purposes
except rendering his services and carrying out his duties and responsibilities
hereunder and in furtherance of the Employers’ business, unless otherwise
expressly authorized in writing in advance by the Board of Directors, the Chief
Executive Officer or the Chief Operating Officer of the Employers.

 
e) 
The Executive agrees that, during his employment, and for a period of eighteen
(18) months  following the Date of Termination (whether the Executive’s
employment hereunder is terminated by the Employers or by the Executive and
whether for any reason or for no reason), the Executive:

 

 
i)    
shall not solicit in any manner, seek to obtain, service or accept any business
or relationship from any of the Employers’ customers or clients for the benefit
of anyone other than the Employers or their subsidiaries or affiliates;

 

 
ii)    
shall not divulge the names of any of the Employers’ customers or clients to any
other Person;

 

 
iii)  
shall not contact, or conduct, authorize or approve any advertisement or
communication to, any of the Employers’ customers or clients (A) for purposes of
announcing his employment or affiliation with another Person, or (B) in
connection with directly or indirectly engaging in any business or activity in
competition with the business, affairs or interests of the Employers or any of
their subsidiaries or affiliates; and

 

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

 
For purposes of this Agreement the term “Employers’ customers or clients”
(whether through a deposit, loan, trust, cash management, wealth management,
private banking, investment, brokerage, insurance or other relationship) as used
in this Section shall mean (A) during the Executive’s employment, all customers
or clients of either of the Employers or any of their subsidiaries or
affiliates, and (B) during the period of eighteen (18) months following the Date
of Termination, (I) all customers or clients of either of the Employers or any
of their subsidiaries or affiliates as of the Date of Termination, (II) all
Persons who were customers or clients of either of the Employers or any of their
subsidiaries or affiliates within the twelve month period prior to the Date of
Termination, and (III) all Persons who were being actively pursued to become
customers or clients of either of the Employers or any of their subsidiaries or
affiliates within the twelve month period prior to the Date of Termination.
 
f) 
The provisions of this Section 3 shall be construed independent of any other
provision of this Agreement and shall survive any termination of this
Agreement.  The existence of any claim or cause of action of the Executive
against either of the Employers, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by either of the
Employers of this Section 3.

 
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g) 
The restrictions and covenants contained in this Section shall be deemed not to
run during all periods of noncompliance, the intention of the parties hereto
being to have such restrictions and covenants apply during the full periods
specified herein.  The Employers and the Executive understand, acknowledge and
agree that the restrictions and covenants contained in this Section 3 are
reasonable in view of the Executive’s positions at the Employers and their
subsidiaries and affiliates, the competitive and confidential nature of the
information of which the Executive has or will have knowledge and the
competitive nature of the business in which the Employers and their subsidiaries
and affiliates are or may be engaged.

 
4)  
Compensation and Benefits.

 
a) 
For all of his services rendered during the term of this Agreement to the
Employers and their subsidiaries and affiliates, the Executive shall be paid an
aggregate minimum base salary of $192,500 per year (“Base Salary”), which may be
increased from time to time in such amounts as may be determined by the Board of
Directors (or a committee thereof) of the Employers, with the input of the Chief
Executive Officer of the Employers, and may not be decreased without the
Executive’s express written consent; provided, however, that notwithstanding the
foregoing or anything in this Agreement to the contrary, the Executive
understands, acknowledges and agrees that the Employers may from time to time
(in their sole discretion and without such action requiring the prior consent of
the Executive or constituting a breach of this Agreement by the Employers)
reduce the Base Salary, but only so long as a majority of all Executive Officers
shall also receive a reduction in their respective annual base salaries as part
of across-the-board salary reductions at the Bank and, further, so long as the
percentage reduction in the Executive’s Base Salary shall not be greater than
the average of the percentage reductions in the annual base salaries of all
other Executive Officers as a group.  In addition to his Base Salary, the
Executive shall be entitled to receive during the term of this Agreement such
bonus payments and incentive compensation awards as may be determined by the
Board of Directors (or a committee thereof) of either of the Employers.

 
b) 
During the term of this Agreement, the Executive shall be entitled to
participate in and receive the benefits of any group health, medical, disability
and life insurance plans or policies and any pension, retirement, profit
sharing, equity based compensation, incentive compensation, employee stock
ownership and other similar plans made available to employees and Executive
Officers, to the extent commensurate with his position with the Employers, in
accordance with the terms of the applicable plans (including, but not limited
to, the cost to and eligibility of the Executive associated with participation
in such plans) and as fixed by the Boards of Directors of the Employers or a
committee thereof.  The Company shall not make any changes in such plans which
would adversely affect the Executive’s rights or benefits thereunder, unless
such change is applicable to all Executive Officers and does not result in a
proportionately greater adverse change in the rights of or benefits to the
Executive as compared with the other Executive Officers.  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 Executive’s Base
Salary.  Notwithstanding the foregoing or anything in this Agreement to the
contrary, the Executive understands, acknowledges and agrees that the Employers
may from time to time, in their sole discretion, amend, modify, replace, freeze,
suspend or terminate any or all of the group health, medical, disability and
life insurance plans or policies and any or all pension, retirement, profit
sharing, equity based compensation, incentive compensation, employee stock
ownership, perquisite or other plans, benefits and privileges given to employees
and Executive Officers, as well as any other rules, policies or procedures
applicable to Executive Officers,

 
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but only so long as any such actions apply to all such Executive Officers
(unless otherwise required by applicable law) and do not result in a
proportionately greater adverse change in the rights of or benefits to the
Executive as compared with the other Executive Officers.

 
c) 
During the term of this Agreement, the Executive shall be entitled to paid time
off for vacation and other matters 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 Board of Directors (or a committee thereof), the Chief
Executive Officer or the Chief Operating Officer of the applicable Employer.

 
d) 
In the event the Executive’s employment is terminated due to Disability,
Retirement or death, and provided the Executive is not otherwise receiving
substantially similar benefits from the Social Security Administration or
another employer, Person or otherwise, the Employers shall provide, at their
cost and for the remaining term of this Agreement, either coverage under the
Employer’s existing life, health and medical insurance plans or policies for the
Executive (other than in the case of death) and his spouse and legal dependents
or under an arrangement provided through the Employer for such benefits, in
either case at substantially similar levels and terms of coverage and benefits
as the Employers provide at such time for their then existing Executive
Officers.

 
e) 
The Executive’s Base Salary, compensation, benefits and business expenses shall
be paid by and allocated between the Company 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 this Agreement, the Employers shall provide office space and
administrative support suitable to the Executive’s position and in accordance
with the policies of the Employers in effect from time to time.

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

 
h) 
During the term of this Agreement, the Employers shall provide to the Executive,
at the Employer’s cost, all perquisites which all other Executive Officers are
generally entitled to receive; provided, however, that the Executive understands
and agrees that the Chief Executive Officer of the Company may receive
perquisites that are different from those provided to the Executive or other
Executive Officers.

 
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, travel expenses and all reasonable

 
10

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entertainment expenses (whether incurred at the Executive’s residence, while
traveling or otherwise), subject to such reasonable documentation and other
limitations and requirements as may be established by law or 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.  Any such
reimbursement of expenses provided in this Section 5 shall be made no later than
December 31st of the year following the year in which the expense was incurred.

 
6)  
Termination.

 
a) 
The Employers 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 with or without Cause or upon a
Disability.  In addition, the Employers may elect not to extend the term of this
Agreement upon providing the Executive with written notice in accordance with
Section 2(b).  The Executive shall have the right at any time, upon prior Notice
of Termination, to terminate his employment hereunder for any reason, including
without limitation with or without Good Reason or upon Retirement.

 
b) 
In the event that (i) the Executive’s employment hereunder is terminated by the
Employers for Cause or upon the election of the Employers not to extend the term
of this Agreement, or (ii) the Executive terminates his employment hereunder
without Good Reason, the Executive shall in each such case have no right
pursuant to this Agreement to any severance payments, compensation, insurance or
other benefits (except pursuant to COBRA) for any period after the applicable
Date of Termination.

 
c) 
In the event that the Executive’s employment hereunder is terminated as a result
of a Disability, Retirement or the Executive’s death during the term of this
Agreement, the Executive (and his spouse and legal dependents in the case of
death) shall have no right pursuant to this Agreement to severance payments,
compensation, insurance or other benefits (except pursuant to COBRA) 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 hereunder is terminated by the
Employers without Cause or (ii) the Executive’s employment hereunder is
terminated by the Executive (A) due to a material breach of this Agreement by
either of the Employers, which breach has not been cured within thirty (30) days
after a written notice of non-compliance has been given by the Executive to the
Employers, or (B) for Good Reason, which has not been cured in accordance with
Section 1(i) hereof, then the Employers shall so long as the Executive does not
breach this Agreement following the Date of Termination:

 
i)   
Subject to the limitations in Code Section 409A and the rules and regulations
thereunder and the other provisions of this Agreement, pay (in such proportion
as the Employers shall determine) to the Executive an aggregate cash severance
amount equal to one and one-half (1½) times the Executive’s Average Annual
Compensation in two (2) equal installments (without interest), 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 on the
first anniversary of the Date of Termination; and

 
   ii)  
Maintain and provide, at the sole cost and expense of the Employers, for a
period ending at the earlier of (A) the expiration of the remaining term of
employment pursuant hereto prior

 
11

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to the Notice of Termination or (B) the date of the Executive’s employment by or
affiliation with another employer, consultant or Person (provided that the
Executive is entitled under the terms of such employment or affiliation to
benefits substantially similar to those described in this subparagraph, at the
same or lesser cost to the Executive as under the applicable Employer’s plans,
programs and arrangements on the Date of Termination), the Executive’s continued
participation in all group life insurance, health, medical and accident
insurance, disability insurance and other welfare benefit plans, programs and
arrangements offered by the applicable Employer in which the Executive was
entitled to participate immediately prior to the Date of Termination (but
excluding (y) incentive compensation, pension or other retirement, profit
sharing, equity based compensation, incentive compensation, employee stock
ownership and other similar benefits, plans, programs or arrangements of the
applicable Employer, and (z) perquisites and any vehicle provided by the
applicable Employer), provided that in the event that the Executive’s
participation in any such plan, program or arrangement of the Employers
following his Date of Termination 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 Employers 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 Sections 6(d)(i) and 6(d)(ii) 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, 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 Section 6(d)(ii).

 
f) 
Upon any termination of the Executive’s employment hereunder, the Executive
covenants and agrees (i) to return to the Employers on his Date of Termination,
at the Bank’s headquarters, all confidential information or materials that are
still in the Executive’s possession or control on his Date of Termination or the
location of which the Executive knows (including, but not limited to, any
confidential information and materials contained on the Executive’s personal
digital assistant, BlackBerry, mobile telephone or personal or home computer),
and (ii) to return to the Employers on his Date of Termination, at the Bank’s
headquarters, all vehicles, equipment, computers, personal digital assistants,
BlackBerrys, mobile telephones, credit cards, keys, access cards, passwords and
other property owned or provided by the Company or the Bank that are still in
the Executive’s possession or control on his Date of Termination or the location
of which the Executive knows, and to cease using any of the foregoing on and
after his Date of Termination.

 
g) 
The Executive shall not be entitled to receive any severance payment under this
Agreement unless he shall have executed (and not subsequently rescinded or
revoked) a release substantially similar to the release attached to this
Agreement as Exhibit A.  In addition, if the Executive breaches any provision of
this Agreement following his Date of Termination, then the obligation of the
Employers to make any severance payments or provide any benefits to

 
12

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the Executive (or, if applicable, his spouse or legal dependents) under this
Agreement shall terminate immediately without reinstatement of any obligation of
the Employers to pay or provide benefits, or to resume paying or providing
benefits following any cure, to the Executive hereunder.  Notwithstanding any
such termination of the Employers’ obligation to pay or provide benefits, (i)
the covenants and agreements set forth in Sections 3 and 24 hereof shall
continue in full force and effect and be binding upon the Executive, and (ii)
the Employers shall be entitled to the remedies specified in Section 26 hereof,
among others.

 
h) 
The Executive understands and agrees that the severance payment provided under
this Agreement is in lieu of any severance benefits that may otherwise be
payable to the Executive under any severance pay policies or practices of the
Company or the Bank, and the Executive hereby waives, and shall not be entitled
to, any payments or benefits under any such severance pay policies or practices.

 
7)  
Reduction of Payments Under Certain Circumstances.  Notwithstanding any other
provision of this Agreement, in the event any payment or amount of money or
other benefit received or to be received by the Executive in connection with a
Change in Control or the termination of the Executive’s employment (all such
payments and benefits, including any severance payments and benefits, being
hereinafter called “Total Payments”) would not be deductible for federal income
tax purposes (in whole or part) by either or both of the Employers, a subsidiary
or affiliate of the Employers or a Person making such payment or providing such
benefit, due to the application of Code Section 280G, then the Total Payments
shall be reduced to the highest amount that avoids the application of Code
Section 280G; provided, however, that such reduction shall only be imposed if
the Executive would receive, on an after-tax basis, a greater amount of Total
Payments than he would have received had the reduction not been imposed.  In
calculating the Total Payments to be received by the Executive, all applicable
federal, state and local employment taxes, income taxes and the excise tax
imposed by Code Section 4999 (all computed at the highest applicable marginal
tax rates) shall be taken into account.  Any reduction in the Total Payments
required by this Section 7 shall first come from any cash severance payments (if
necessary, by reducing such payments to zero), and all other forms of severance
benefits shall thereafter be reduced (if necessary, to zero); provided, however,
that the Executive may elect to have any noncash severance payments reduced (or
eliminated) prior to any reduction in cash severance payments.

 
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 so
long as the Executive has not breached this Agreement.  In the event of any
breach of this Agreement by the Executive following the Date of Termination, the
Executive shall immediately repay to the Employers all severance payments paid
to him under Section 6, plus interest at the rate of 10% per annum from the date
of such breach until all such severance payments and other amounts have been
repaid in full to the Company, plus the Company’s reasonable attorneys fees and
expenses in collecting such amounts.

 
13

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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 Employers hereunder to the
Executive shall be subject to the withholding of such amounts, if any, relating
to taxes and other payroll deductions as the Employers may reasonably determine
should be withheld pursuant to any applicable law or regulation.

 
10) 
Assignability.  The Employers may, without the consent of the Executive, assign
this Agreement and their rights and obligations hereunder in whole, but not in
part, to (a) any corporation, bank or other Person in connection with any Change
in Control if in any such case such corporation, bank or other Person shall by
operation of law or expressly in writing assume all obligations of the Employers
hereunder as fully as if it had been originally made a party hereto, or (b) any
subsidiary or affiliate of the Employers; but may not otherwise assign this
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, noticees and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given if (i) delivered by hand; (ii) sent by certified
United States Mail, return receipt requested, first class postage pre-paid;
(iii) sent by overnight delivery service; or (iv) sent by facsimile transmission
if such fax is confirmed immediately thereafter by also mailing a copy of such
notice or other communication by regular (not certified or registered) United
States Mail, first class postage pre-paid, as follow:

 

 
a) 
To the Company:            CFS Bancorp, Inc.

      Attention: Chairman of the Board
707 Ridge Road
Munster, Indiana  46321
Facsimile: (219) 836-2950
 
b) 
To the Bank:                   Citizens Financial Bank

      Attention: Chairman of the Board
707 Ridge Road
Munster, Indiana  46321
Facsimile: (219) 836-2950
 

 
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c) 
To the Executive:            Charles V. Cole

(at the address of the Executive reflected on the Company’s employment records)
Facsimile: (219) 836-2950
        
 
or to such other address or facsimile number as any party hereto may have
furnished to the other parties in writing in accordance herewith.  The Executive
shall promptly provide any changes to his address, telephone number and
facsimile number to the Employers.

     
  
All such notices and other communications shall be effective (i) if delivered by
hand, when delivered; (ii) if sent by mail in the manner provided herein, two
business days after deposit with the United States Postal Service; (iii) if sent
by overnight delivery service, on the next business day after deposit with such
service; or (iv) if sent by facsimile transmission, on the date indicated on the
fax confirmation page if such fax also is confirmed by regular (not certified or
registered) United States mail.

 
12) 
Amendment; Waiver.  No provisions of this Agreement may be amended, modified,
waived or discharged unless such amendment, modification, waiver or discharge is
agreed to in writing and signed by the Executive and such officer or officers as
may be specifically designated by the Boards of Directors of the Employers to
sign on their 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.  The failure or delay of either party at any time to insist
upon the strict performance of any provision of this Agreement or to enforce its
or his rights or remedies under this Agreement shall not be construed as a
waiver or relinquishment of the right to insist upon strict performance of such
provision, or to pursue any of its rights or remedies for any breach hereof, at
a future time.

 
13) 
Governing Law; Venue.  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.  Any claim, demand or action relating to this Agreement shall be
brought only in a state court located in Lake County, Indiana.  In connection
with the foregoing, the parties hereto irrevocably consent to the jurisdiction
and venue of such court and expressly waive any claims, defenses or objections
of lack of jurisdiction of or proper or preferred venue by such court.

 
14) 
Nature of Obligations.  Nothing contained herein shall create or require the
Employers 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 Employers hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Employers.

 
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.

 
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; provided, however, if
any provision of Sections 3(b), 3(c), 3(d) and 3(e) of this Agreement shall be
determined by a court of competent jurisdiction to be unenforceable because of
the provision’s scope, duration, geographic restriction or other factor, then
such provision shall

 
15

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be considered divisible and the court making such determination shall have the
power to reduce or limit (but not increase or make greater) such scope,
duration, geographic restriction or other factor or to reform (but not increase
or make greater) such provision to make it enforceable to the maximum extent
permitted by law, and such provision shall then be enforceable against the
appropriate party hereto in its reformed, reduced or limited form.

 
  
The provisions of Section 1, Section 3, other than Section 3(a), and Sections
7-26, inclusive, shall survive any termination during the term of this Agreement
of the Executive's employement with the Employers.

 
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 agreement.

 
18)  
Regulatory Prohibition.  Notwithstanding any other provision of this Agreement
to the contrary, the following provisions shall be applicable only to the Bank
and the Executive and only to the extent that they are required to be included
in agreements relating to employment agreements between a savings association
and its employees pursuant to applicable law or regulation, and shall be
controlling in the event of a conflict with any other provision of this
Agreement, including without limitation Section 6 hereof.  In addition, 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 and the Executive shall not, directly or indirectly, influence or
participate in the affairs or the operations of the Bank.

 
 (a)
Any payments made by the Bank 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;

 
 (b)
If the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs pursuant to notice served
under Section 8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act
(“FDIA”) (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), the Bank’s obligations under
this Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings.  If the charges in the notice are dismissed, the Bank
may, in its discretion (i) pay the Executive all or part of the compensation
withheld while its obligations under this Agreement were suspended, and (ii)
reinstate (in whole or in part) any of its obligations which were suspended;

 
 (c)
If the Executive is removed from office and/or permanently prohibited from
participating in the conduct of the Bank’s affairs by an order issued under
Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. §§1818(e)(4) and
(g)(1)), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the Executive and the Bank
as of the date of termination shall not be affected;

 
 (d)
If the Bank is in default, as defined in Section 3(x)(1) of the FDIA (12 U.S.C.
§1813(x)(1)), all obligations under this Agreement shall terminate as of the
date of default, but vested rights of the Executive and the Bank as of the date
of termination shall not be affected; and

 
 (e)
All obligations under this Agreement shall be terminated pursuant to 12 C.F.R.
§563.39(b)(5) (except to the extent that it is determined that continuation of
the Agreement for the continued

 
16

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operation of the Bank is necessary) (i) by the Director of the Office of Thrift
Supervision (“OTS”), or his/her designee, at the time the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) of the FDIA
(12 U.S.C. §1823(c)), or (ii) by the Director of the OTS, or his/her designee,
at the time the Director, or his/her designee, approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Director of the OTS to be in an unsafe or unsound
condition.  Notwithstanding the foregoing, vested rights of the Executive and
the Bank as of the date of termination shall not be affected.

 
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 reasonable attorneys 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, employee benefits and any compensation and benefits
due but not otherwise paid to the Executive under this Agreement.

 
20)  
Indemnification.  The Company and/or the Bank 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) in accordance with and 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 Company
and/or the Bank (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
reasonable attorneys’ fees and the cost of reasonable settlements.

 
21)  
Entire Agreement.  This Agreement embodies the entire agreement between and
among the Company, the Bank and the Executive with respect to the matters agreed
to herein.  Effective as of the date hereof, all prior agreements between the
Company and the Executive with respect to the matters agreed to herein
(including, but not limited to, the Employment Agreement dated May 1, 2008
between the Company and the Executive and the Employment Agreement dated May 1,
2008 between the Bank and the Executive) shall have no force or effect, are
hereby terminated and are hereby superseded by this Agreement.

 
22)  
Construction.  This Agreement shall be deemed to have been drafted by all of the
parties hereto.  This Agreement shall be construed in accordance with the fair
meaning of its provisions and its language shall not be strictly construed
against, nor shall ambiguities be resolved against, any party.  The Executive
understands and agrees that he has not received any advice, counsel or
recommendation from any director, officer or employee of, or any attorney or
representative for, the Company or the Bank.

 
23)  
Recitals.  The recitals or “Whereas” clauses contained on page 1 of this
Agreement are expressly incorporated into and made a part of this Agreement.

 
24)  
Non-disparagement.  During the Executive’s employment with the Company and
following any termination of the Executive’s employment with the Employers, the
Executive shall not publicly disparage or make or publish any negative
statements or comments about either of the Employers

 
17

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or their subsidiaries or affiliates or any of their respective businesses,
products, services, directors, officers or employees.  During the Executive’s
employment with the Employers and following any termination of the Executive’s
employment with the Employers, and subject to applicable law, no executive
officer of the Employers or member of the Board of Directors or either Employer
shall publicly disparage or make or publish any negative statements or comments
about the Executive.

 
25)  
Cooperation.  For a period of five years following any termination of the
Executive’s employment with the Employers and upon the request of the Employers
or any of their subsidiaries or affiliates, the Executive shall reasonably
cooperate, assist and make himself available (for testimony or otherwise) at
appropriate times and places as reasonably determined by the Employers or any of
their subsidiaries or affiliates in connection with any claim, counterclaim,
demand, action, suit, proceeding, discovery, examination, investigation or
litigation by, against or affecting either of the Employers or any of their
subsidiaries or affiliates.  In connection with the foregoing, the Company or
the Bank (but not both) shall pay the Executive a fee of $1,000 for each day
that the Employers or any of their subsidiaries or affiliates requests the
Executive to cooperate, assist or make himself available, and shall also
reimburse the Executive for his reasonable out-of-pocket travel expenses that
are approved in advance by Chief Executive Officer or the Chief Operating
Officer of either the Company or the Bank; provided, however, that the Employers
shall not pay such daily fee or reimburse for such expenses in connection with
any claim, counterclaim, demand, action, suit or proceeding relating to this
Agreement.

 
26)  
Certain Remedies.  The Executive agrees that the Employers will suffer
irreparable damage and injury and will not have an adequate remedy at law in the
event of any actual, threatened or attempted breach by the Executive of any
provision of Section 3 or 24.  Accordingly, in the event of a breach or a
threatened or attempted breach by the Executive of any provision of Section 3 or
24, in addition to all other remedies to which the Employers are entitled at
law, in equity or otherwise, the Employers shall be entitled to a temporary
restraining order, a preliminary or permanent injunction and/or a decree of
specific performance of any provision of Section 3 or 24.  The parties agree
that a bond posted by either of the Employers in the amount of One Thousand
Dollars ($1,000) shall be adequate and appropriate in connection with such
restraining order or injunction and that actual damages need not be proved by
the Employers prior to being entitled to obtain such restraining order,
injunction or specific performance.  The foregoing remedies shall not be deemed
to be the exclusive rights or remedies of the Employers for any breach of or
noncompliance with this Agreement by the Executive but shall be in addition to
all other rights and remedies available to the Employers at law, in equity or
otherwise.

 
 
 
[SIGNATURE PAGE FOLLOWS THIS PAGE]
 

 
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IN WITNESS WHEREOF, this Agreement has been entered into, executed and delivered
as of the date first above written.
 
 
 /s/ Charles V. Cole_______  __________
   Charles V. Cole
 
Attest:                                                                   CFS
BANCORP, INC.
 
By:_/s/ Monica F. Sullivan_____________            By:_/s/ Thomas F. Prisby
______________
     Monica F. Sullivan                                                  Thomas
F. Prisby
     Vice President and Secretary                                  Chairman of
the Board
 
 
Attest:                                                                   CITIZENS
FINANCIAL BANK
 
By:_/s/ Monica F. Sullivan_____________            By:_/s/ Thomas F.
Prisby_______________
     Monica F. Sullivan                                                  Thomas
F. Prisby
     Vice President and Secretary                                  Chairman of
the Board
 
 
 
 
 
 
 
 
 
 
 
 
 
KD_2403827_2.DOC

 
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EXHIBIT A
 
Release of Claims
 
1.           In consideration of the execution by CFS Bancorp, Inc. (the
“Company”) and Citizens Financial Bank (the “Bank”) of that certain Employment
Agreement (the “Agreement”) dated December _____, 2009 by and among the Company,
the Bank and the undersigned, Charles V. Cole (the “Executive”), and for other
good and valuable consideration, the Executive hereby irrevocably,
unconditionally, and forever releases, waives, discharges and covenants not to
sue or make any claim against the Company, the Bank, each of their subsidiaries
and affiliates, the Company’s and the Bank’s respective predecessors and
successors, their respective former, present and/or future shareholders,
members, owners, directors, officers, employees, managers, fiduciaries,
administrators, insurers, attorneys, representatives and agents, and all persons
acting by, through, under or in concert with any of them (collectively, the
“Released Parties”) for or from any and all complaints, claims, demands,
liabilities, obligations, actions, rights of actions and proceedings of any
nature whatsoever (including, but not limited to, claims for damages, attorneys
fees, interest and costs), whether administrative or judicial, known or unknown,
suspected or unsuspected, matured or unmatured, or otherwise, that exist as of
(or existed prior to) the date that the Executive signs this Release.  Without
limiting the generality of the foregoing, the Executive understands and agrees
that this Release includes and constitutes a complete waiver and release by the
Executive in all capacities (including, but not limited to, as a shareholder,
officer, employee, individual or otherwise), and by his heirs, executors,
administrators, representatives, and assigns, of any and all possible claims
against each of the Released Parties based upon, arising out of or in any manner
related to any salary, commission, bonuses (discretionary or otherwise) and
other compensation from the Company, the Bank or any of their subsidiaries or
affiliates; any plan, policy, program or promise of compensation from any of the
Released Parties; any award of stock options, restricted stock or other
equity-based or incentive compensation from the Company or the Bank; the
Executive’s employment with or termination of employment by the Company and/or
the Bank; wrongful termination or discharge; breach of contract; breach of good
faith or fair dealing; infliction of emotional distress; and discrimination
based on age, race, sex, religion, national origin, disability, veterans status,
sexual orientation, gender identity, or any other claim of employment
discrimination, including, but not limited to, claims arising under the
following laws and amendments thereto, if any:  the Civil Rights Act of 1866 (42
U.S.C. § 1981), Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Age Discrimination in Employment Act of 1967, the Federal
Rehabilitation Act of 1973, the Family and Medical Leave Act, the Fair Labor
Standards Act, the Older Workers Benefit Protection Act, the Employee Retirement
Income Security Act of 1974; any other federal or state employment law; any
federal or state wage and hour laws, and all other similar federal, state or
local laws, statutes, rules or regulations; and, in addition, all other tort or
contract claims and other theories of recovery.  Notwithstanding the foregoing,
this Release does not affect, release or waive any of the Executive’s claims for
severance payments under the Agreement or claims for benefits or payments under
any employee benefit plan of the Company or the Bank in accordance with the
provisions of any such plan.
 
2.           This Release shall be construed as broadly and comprehensively as
applicable law permits; provided, however, that this Release shall not be
construed as releasing or waiving any right that, as a matter of law, cannot be
released or waived, including but not limited to any right to file a charge or
participate in an investigation or proceeding conducted by the U.S. Equal
Employment Opportunity Commission.  Notwithstanding the foregoing, the Executive
waives any right to recover monetary remedies in his own behalf in any such
investigation or proceeding.
 
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3.           The Executive acknowledges that the Company and the Bank have
advised him to consult with an attorney of the Executive’s own choice prior to
signing this Release and that he has had ample time and adequate opportunity to
discuss thoroughly all aspects of this Release with his attorney.
 
4.           In the event the Executive is forty (40) years of age or older, the
Executive acknowledges that the Company and the Bank have advised him that he
has a period of twenty-one (21) days to review and consider this Release.  The
Executive understands that he may use as much or all of the twenty-one (21) day
period as the Executive desires prior to signing this Release.  Upon execution
of this Release, the Executive waives any remaining portion of the twenty-one
(21) day review period.
 
5.           In the event the Executive is forty (40) years of age or older, the
Executive acknowledges that the Company and the Bank have advised him that he
may revoke this Release within seven (7) days after signing it.
 
ANY SUCH REVOCATION MUST BE IN WRITING AND RECEIVED BY THE COMPANY AND THE BANK
AT THE FOLLOWING ADDRESS NOT LATER THAN 5:00 P.M. (MUNSTER, INDIANA TIME) ON THE
SEVENTH (7TH) DAY FOLLOWING THE DATE OF EXECUTION OF THIS RELEASE:
 
CFS Bancorp, Inc. and Citizens Financial Bank
Attn:  Chief Executive Officer
707 Ridge Road
Munster, Indiana 46321
 
6.           All provisions of this Release are severable from one another.  In
case any one or more of the provisions (or any portion thereof) contained in
this Release shall, for any reason, be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision of this Release, but this Release shall be
construed as if such invalid, illegal, or unenforceable provision or provisions
(or portion thereof) had never been contained herein.  This Release shall be
governed by and construed in accordance with the laws of the State of Indiana,
without reference to any choice of law provisions, principles, or rules thereof
(whether of the State of Indiana or any other jurisdiction) that would cause the
application of any laws of any jurisdiction other than the State of
Indiana.  This Release may not be assigned, terminated or amended without the
prior written consent of the Company and the Bank (by their respective Chief
Executive Officers).  This Release may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same document.
 
 
IN WITNESS WHEREOF, the undersigned has executed this Release of Claims as of
the date indicated below.
 
 
____________________________________
 Charles V. Cole
 
____________________________________
 (Date)
 
 
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