EMPLOYMENT AGREEMENT
                              --------------------





     This  Agreement,  made this 1st day of January, 1999, by and between Castle
BancGroup,  Inc., a Delaware corporation (the "Company"), and Dewey R. Yaeger of
DeKalb,  Illinois  ("Employee").

                                   WITNESSETH:

     WHEREAS, the Company desires to employ Employee, and Employee desires to be
employed  by  the  Company,  upon  the  terms  and  conditions set forth herein,

     NOW,  THEREFORE,  in  consideration  of  the  premises and mutual covenants
herein  contained,  it  is  agreed  as  follows:

     1.     Employment.  The  Company  hereby  employs Employee as its President
            ----------
and  Chief Operating Officer, and Employee hereby accepts such employment by the
Company,  upon  the terms and conditions herein set forth.  The primary place of
employment  shall  be at the Company's principal offices in DeKalb, Illinois, or
at  such  other  location  as  the  Company  may  designate.

     2.     Term.  The  term  of  this Agreement shall commence as of January 1,
            ----
1999,  and  shall  expire  on  December  31,  2000,  unless sooner terminated as
hereinafter set forth.  After expiration of the initial term, and subject to the
termination  provisions  hereinafter  contained,  the  Agreement  will  be
automatically renewed, on the terms and conditions set forth herein, bi-annually
for  a 24 month term as of January 1, 2001 and January 1 of each second calendar
year  thereafter;  provided  neither party has given written notice to the other
party  of  its  or his intent not to renew at least 90 days prior to the renewal
date.

     3.     Duties.  Employee  will,  during  the  term  hereof:
            ------


<PAGE>
     (a)  faithfully  and diligently do and perform all such acts and duties and
          furnish such services in his capacity as President and Chief Operating
          Officer of the Company, or in a similar senior executive position with
          the Company,  as the Board of Directors or the Chief Executive Officer
          of the  Company  shall  direct,  and do and  perform  all  acts in the
          ordinary  course of the  Company's  business  (with such limits as the
          Board of Directors or the Chief  Executive  Officer of the Company may
          prescribe) necessary and conducive to the Company's best interests;

     (b)  devote his full time, energy, and skill to the business of the Company
          and to the  promotion  of the  Company's  best  interests,  except for
          vacations and absences made necessary because of illness; and

     (c)  be subject to the  Company's  retirement  policy  from time to time in
          effect for officers and directors,  and to all other Company  policies
          related to employee conduct and performance.

     4.     Compensation.  (a)  The  Company  shall  pay  to  Employee  for  all
            ------------
services  to  be  performed  by  Employee  during  the  term  of this Agreement:

          (i) a Base  Salary  at the rate of  $165,000  per  annum,  payable  in
     periodic  payments in  accordance  with the  Company's  practices for other
     executive,  managerial, and supervisory employees, as such practices may be
     determined  from time to time. The Board of Directors will review such Base
     Salary annually and, in its discretion,  may grant increases  thereof based
     upon Employee's performance; and

          (ii) any additional or special compensation,  such as incentive pay or
     bonuses,  based upon Employee's  performance,  as the Board of Directors of
     the Company in its or his discretion, may from time to time determine.

All  such  payments  will be subject to such deductions as may be required to be
made  pursuant  to law, government regulation or order, or by agreement with, or
consent  of,  Employee.

     (b)     In  addition  to  the  compensation  payments  set forth above, the
Company  agrees  that  during  the  term  of  this  Agreement:


<PAGE>
          (i) Employee shall be entitled to reimbursement by the Company for all
     reasonable expenses actually and necessarily  incurred by him on its behalf
     in the  course  of his  employment  hereunder,  for  which he shall  submit
     vouchers in a form  satisfactory  to the Company and which are  approved by
     the Company in its sole discretion;

(ii)     the  Company  will  reimburse  Employee for membership dues and special
assessments  at  a  country  club  in  the  DeKalb,  Illinois area chosen by the
Company.

     5.     Benefits.  Employee  shall  be  entitled to participate in such life
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insurance,  medical,  dental  and  disability  plans  ("Welfare Plans") and such
pension.  savings, profit sharing  and retirement plans ("Retirement Plans") and
stock  option  plans  as may be adopted from time to time by the Company for the
benefit  of  its  employees.  Employee  also  shall  be  entitled  to 4 weeks of
vacation  with pay during each consecutive 12-month period commencing on January
1,  1999,  and  each  January  1  thereafter  during  the term of his employment
hereunder,  to  be  taken  at such times and in such periods as Employee and the
Company  shall  mutually  determine  and  provided  that  no vacation time shall
interfere  with  the  duties  required  to  be  rendered  by Employee hereunder.

     6.      Disability.  In the event that Employee is permanently disabled so
             ----------
as to be unable to fully perform his services hereunder,  Employee's  obligation
to perform such  services  will  terminate  and the Company may  terminate  this
Agreement  upon ten  days'  written  notice  to  Employee.  In the event of such
termination (a) Employee's  Base Salary as defined in  subparagraph  4(a) hereof
shall continue  during the then remaining term of the Agreement,  reduced by any
payments received by Employee during such term under a long-term disability plan
or policy  maintained  by the Company;  and (b) Employee will not be entitled to
the benefits  described in subparagraph  7(e) below. The Company shall have sole
discretion,  based on competent medical advice, to determine whether Employee is
and continues to be permanently disabled for purposes of this paragraph.

     7.     Termination.  (a)  The  Board  of  Directors  of  the  Company  may
            -----------
terminate  the  employment  of  Employee  with the Company at any time for "Good
Cause".  For purposes of the preceding sentence, "Good Cause" shall be deemed to
exist  if,  and  only  if:


<PAGE>
          (i)  Employee  shall  engage,  during  the  performance  of his duties
               hereunder,   in  acts  or  omissions   constituting   dishonesty,
               intentional   breach  of  fiduciary   obligation  or  intentional
               wrongdoing or malfeasance;

          (ii) Employee  shall be  convicted of a criminal  violation  involving
               fraud or dishonesty;

          (iii)Employee  shall  materially  breach the Agreement  (other than by
               engaging in acts or omissions  enumerated in clauses (i) and (ii)
               above or (iv) below), and such breach by its nature, is incapable
               of being cured,  or such breach remains  uncured for more than 30
               days  following  receipt by Employee  of written  notice from the
               Company  specifying  the nature of the breach and  demanding  the
               cure thereof.  The Company,  in its  discretion,  may suspend all
               payments to Employee  pursuant to paragraph 4 above,  during such
               30 day  period.  Any  such  suspended  payments  shall be paid to
               Employee as soon as possible  after the end of such 30 day period
               if such  breach  is, in the  judgment  of the  Company,  cured by
               Employee  during such 30 day period.  For purposes of this clause
               (iii),  inattention by Employee to his duties under the Agreement
               shall be deemed a breach capable of cure;

          (iv) Employee  performs  or fails to perform  any act,  which,  in the
               judgment of the Board of Directors  of the  Company,  if known to
               the  customers,  clients,  stockholders  or any regulators of the
               Company, or any of its affiliates, would materially and adversely
               impact on the business of the Company, or such affiliates; or

          (v)  Employee  performs  or fails to perform  any act that  causes any
               regulatory body with jurisdiction over the Company, or any of its
               affiliates  to demand,  request,  or recommend  that  Employee be
               suspended or removed from any position in which  Employee  serves
               with the Company or any of its  affiliates  or to initiate  other
               enforcement   actions   against  the  Company,   or  any  of  its
               affiliates.


<PAGE>
     Without  limiting  the generality of the foregoing, the following shall not
constitute  Good  Cause for the termination of the employment of Employee or the
modification  or  diminution  of  any  of  his  authority  hereunder:

          (i)  any  personal or policy  disagreement  between  Employee  and the
               Company,  or Employee and any member of the Board of Directors of
               the Company; or

          (ii) any  action  taken by  Employee  in  connection  with his  duties
               hereunder  if  Employee  acted in good  faith  and in a manner he
               reasonably  believed  to be in,  and not  opposed  to,  the  best
               interest of the Company  and had no  reasonable  cause to believe
               his conduct was unlawful.

     (b)  Employee  shall  have  the right  at  any  time during the term of the
Agreement to terminate his employment with the Company for "Good Reason".  "Good
Reason"  shall be deemed to exist if Employee terminates his employment because,
without  his express written consent, (A) the Company materially breaches any of
the  terms  of  the  Agreement,  (B)  Employee  is  assigned  duties  materially
inconsistent  with  his  present  position, duties, responsibilities, and status
with  the  Company  at  the  time  of  termination,  (C)  Employee's  duties and
responsibilities  are  substantially  reduced,  or  (D)  Employee's  "Total
Compensation"  is  substantially reduced.  For purposes of this subparagraph (b)
Total  Compensation  shall  include  Employee's  Base  Salary  set  forth  in
subparagraph  4(a)(i)  above,  cash  bonuses  or cash awards payable to Employee
under  any  programs or plans maintained by the Company, contributions under any
Retirement  Plan  maintained  by  the Company, stock options granted to Employee
pursuant  to  a stock option plan maintained by the Company, paid vacation time,
and  benefits  under  Welfare  Plans as may be approved from time to time by the
Company  for  the benefit of its employees.  A reason set forth in the preceding
sentences  shall constitute Good Reason only if it remains uncured for more than
30  days  following  receipt  by  the  Company  of  written notice from Employee
specifying  the  nature  of  the  reason  and  demanding  the  cure  thereof.


<PAGE>
     (c)  Employee  shall  have the  right at any  time  during  the term of the
Agreement to terminate his employment  with the Company without Good Reason upon
giving thirty (30) days written notice of said termination to the Company.

     (d) The employment of Employee hereunder shall terminate upon the effective
date of a Change in Control.  A "Change in Control"  shall be deemed to occur on
the earliest of:

          (i)  The  acquisition  by an entity,  person,  or group of  beneficial
               ownership,  as that  term is  defined  in Rule  13d-3  under  the
               Securities Exchange Act of 1934, (other than members of the Board
               of Directors of the Company or a subsidiary of the Company,  or a
               tax  qualified  retirement  plan  maintained  by the Company or a
               subsidiary  of the  Company)  of  more  than  30  percent  of the
               outstanding capital stock of the Company entitled to vote for the
               election of directors ("Voting Stock");

          (ii) The commencement by any entity,  person, or group (other than the
               Company or a  subsidiary  of the Company) of a tender offer or an
               exchange offer for more than 30 percent of the outstanding Voting
               Stock of the Company;

          (iii)Notwithstanding  the  foregoing,  sections  7(d)(i) and  7(d)(ii)
               shall not apply to any acquisition,  tender offer, exchange offer
               or other  transaction that is recommended by the Company's senior
               management and approved by the Company's board of directors.

          (iv) The effective  time of a merger or  consolidation  of the Company
               with one or more  other  corporations  as a result  of which  the
               holders  of  the   outstanding   Voting   Stock  of  the  Company
               immediately prior to such merger or consolidation  hold less than
               51 percent  of the Voting  Stock of the  surviving  or  resulting
               corporation;

          (v)  The election to the Board of  Directors  of the Company,  without
               the   recommendation  or  approval  of  the  incumbent  Board  of
               Directors of the Company, of the lesser of (I) three directors or
               (II) directors constituting a majority of the number of directors
               of the Company then in office; or


<PAGE>
          (vi) The sale by the  Company of a majority  of the Voting  Stock,  or
               substantially all of the property of the Company, to an entity of
               which the Company owns less than 51 percent of the Voting Stock.

     (e)     The  following  provisions will apply (A) during the initial or any
renewal term of the Agreement (1) if the employment of Employee with the Company
is  terminated  by  the  Company  for  any  reason other than Good Cause, (2) if
Employee  terminates his employment for Good Reason, or (3) if the employment of
Employee  terminates following a "Change in Control" and Employee is not, within
90  days following the Change in Control, offered a contract for employment in a
position  comparable  in  compensation, location, duties and responsibilities to
those  then  applicable  under the Agreement, by the successor in control of the
Company,  or  by  another  employer,  or  (B)  if  the Company gives a notice of
nonrenewal  to Employee, pursuant to paragraph 2 above, and within 90 days after
the  date  of  expiration  of  the term of this Agreement, (1) the employment of
Employee with the Company is terminated by the Company for any reason other than
Good  Cause,  or  (2)  Employee  terminates  his  employment  for  Good  Reason.

     (i)  An amount equal to $600,000 shall be payable to Employee either (1) in
          a lump sum as soon as practicable following the date of termination of
          employment,  or (2) in annual installments over a period not to exceed
          five  years,  commencing  as soon as  practicable  after  the  date of
          termination  of  employment,  as shall  be  selected  by the  Board of
          Directors  in its  sole  and  uncontrolled  discretion.  In the  event
          payments are made in  installments,  each  installment  shall  include
          interest  on the then  unpaid  balance  at a rate equal to the rate on
          five year United States Treasury Notes in effect on the date each such
          installment is paid.  Payments to Employee pursuant to this clause (i)
          shall be in lieu of any  payment or benefit  that might  otherwise  be
          payable under any severance plan or policy maintained by the Company.


<PAGE>
     (ii) Employee  shall receive any and all benefits  accrued under any of the
          Retirement Plans, to the date of his termination, the amount, form and
          time of payment of such benefits to be determined by the terms of such
          Plans.

     (iii)If, upon termination of his employment  pursuant to subparagraph  (b),
          (d) or (e),  Employee  holds any options  with respect to stock of the
          Company that are not then  exercisable,  the Company will pay Employee
          an  amount  by which  the  aggregate  fair  market  value of the stock
          purchasable  upon  exercise  of such  options  exceeds  the  aggregate
          exercise price.


<PAGE>
     (iv) During the period  equal to the  greater of (a) 24 months,  or (b) the
          remainder of the initial term of the Agreement pursuant to paragraph 2
          (the "Severance Period"), Employee and his dependents will continue to
          be covered by all Welfare Plans made available by the Company in which
          he or his dependents were participating  immediately prior to the date
          of  his  termination  as if he  continued  to be an  employee  of  the
          Company,  provided that, if  participation  in any one or more of such
          Plans is not  possible  under  the terms  thereof,  the  Company  will
          provide substantially identical benefits. If, however Employee obtains
          employment  with another  employer during the Severance  Period,  such
          coverage  shall be  provided  only to the  extent  that  the  coverage
          exceeds the coverage of any  substantially  similar plans  provided by
          his new employer.  Coverage under this clause (iv) shall be applied in
          satisfaction  of the  obligations of the Company to provide  continued
          group health coverage under Section 4980B of the Internal Revenue Code
          of 1986, as amended,  and Sections 601-609 of the Employee  Retirement
          Income Security Act of 1974, as amended.

     (v)  No payments or benefits  payable to or with respect to Employee during
          the  Severance  Period  pursuant  to this  subparagraph  (e)  shall be
          reduced  by  any  amount  Employee  or  his   dependents,   spouse  or
          beneficiary may earn or receive from employment with another  employer
          or from any other  source,  except as  expressly  provided in the last
          sentence of subparagraph (iv) of this paragraph (e).


<PAGE>
     (vi) Upon the death of Employee all amounts  payable  hereunder to Employee
          pursuant  to this  subparagraph  (e)  shall  be paid to his  heirs  or
          personal representatives.

     (f)     If the employment of Employee with the Company is terminated by the
Company  for  Good  Cause,  or  by the voluntary action of Employee without Good
Reason,  other  than  due to a Change in Control, Employee's Base Salary (at the
rate most recently determined) and a bonus (a pro rata portion of the bonus paid
for  the most recent calendar year) shall be paid to him through the date of his
termination,  and the Company shall have no further obligation to Employee under
the  Agreement.  Such  termination  shall  have  no effect upon Employee's other
rights,  including  but  not  limited  to  rights  under  the  Welfare Plans and
Retirement  Plans  referred  to  in  paragraph  5  above.

8.    Death.  If  Employee  dies  during  the  term  of  the  Agreement:
      -----

     (a)  The Company agrees to pay to Employee's spouse, or if not then living,
          to his lawful descendants per stirpes,  or if none are then living, to
                                    --- -------
          the  personal  representative  of his estate,  or if no such estate is
          opened within three months following the date of death of Employee, to
          the trustee of a trust  established by Employee  pursuant to the terms
          of his last will and testament or during his  lifetime,  in a lump sum
          within 30 days after the date of death  (unless the  recipient and the
          Company  materially  agree in writing that such payments shall be made
          in some other  manner),  an amount equal to the aggregate  Base Salary
          that would have been paid to Employee during the remaining term of the
          Agreement.  The Company,  in its  discretion,  shall have the right to
          purchase a policy or policies of insurance on the life of Employee for
          the purpose of providing funds to pay benefits pursuant to this clause
          (a). The Company  shall at all times be the owner and  beneficiary  of
          such policy or policies and such  policies and the proceeds  therefrom
          shall at all  times be  subject  to the  claims  of  creditors  of the
          Company; and


<PAGE>
     (b)  During the twelve month period  commencing  on the date of  Employee's
          death,  the  spouse and  dependents  of  Employee  shall  continue  to
          participate  under all Welfare Plans made  available by the Company in
          which  Employee  or  his  spouse  and  dependents  were  participating
          immediately  prior  to  the  date  of his  death;  provided  that,  if
          participation  in any one or more of such Plans is not possible  under
          the terms thereof,  the Company will provide  substantially  identical
          benefits.

Any  death  benefits payable under this paragraph 8 are in addition to any other
benefits  due  to  Employee  or his beneficiaries, spouse or dependents from the
Company  including,  but not limited to, payments under any of the Welfare Plans
and  Retirement  Plans.

     9.     Restrictive  Covenant.  During  the term of the Agreement, and for a
            ----------------------
period  of two years following the termination of Employee's employment with the
Company  for  any  reason, including termination occasioned by the expiration of
the  terms  of  the  Agreement,  Employee  shall  not,


<PAGE>
     (a)  within a sixty  (60) mile  radius of DeKalb,  Illinois,  engage in, or
          work for,  or own,  manage,  operate,  control or  participate  in the
          ownership,  management, operation or control of, or be connected with,
          or have any financial interest in, any individual,  partnership, firm,
          corporation or institution  engaged in the same or similar  activities
          to those now or hereafter carried on by the Company;

     (b)  directly or indirectly  interfere with the relationship of the Company
          and any of its employees, agents or representatives;

     (c)  directly  or  indirectly  divert or attempt to divert from the Company
          any business in which the Company has been actively engaged during the
          term hereof,  nor interfere with the relationships of the Company with
          its dealers, distributors, sources of supply or customers; and


<PAGE>
     (d)  contact any customers of the Company.

     Any  breach  of  this  restrictive  covenant by Employee will result in the
forfeiture  by  Employee and all other persons of any and all rights to benefits
under  the Agreement that are unpaid at the time of breach and in such event the
Company  shall  have  no  further obligation to pay any amounts related thereto.


<PAGE>
     10.     Nondisclosure  of  Confidential Information.  Employee acknowledges
             --------------------------------------------
that  the  Company  may  disclose  certain  confidential information to Employee
during  the term of the Agreement to enable him to perform his duties hereunder.
Employee hereby covenants and agrees that he will not, without the prior written
consent  of  the  Company,  during  the  term  of  the  Agreement or at any time
thereafter,  disclose or permit to be disclosed to any third party by any method
whatsoever  any of the confidential information of the Company.  For purposes of
the  Agreement, "confidential information" shall include, but not be limited to,
any  and  all  records,  notes,  memoranda,  data,  ideas,  processes,  methods,
techniques,  systems,  formulas,  patents,  models,  devices, programs, computer
software,  writings,  research,  personnel  information,  customer  information,
financial information, plans, or any other information of whatever nature in the
possession  or  control of the Company which has not been published or disclosed
to the general public, or which gives to the Company an opportunity to obtain an
advantage  over  competitors  who  do  not  know of or use it.  Employee further
agrees  that  if  his employment hereunder is terminated for any reason, he will
leave  with  the  Company  and  will not take originals or copies of any and all
records,  papers,  programs,  computer  software and documents and all matter of
whatever  nature  which bears secret or confidential information of the Company.

     The  foregoing  paragraph  shall  not be  applicable  if and to the  extent
Employee is required to testify in a judicial or regulatory  proceeding pursuant
to an order of a judge or administrative law judge issued after Employee and his
legal counsel urge that the aforementioned confidentiality be preserved.


<PAGE>
     Employee  agrees  promptly to reduce to writing and to disclose and assign,
and hereby does assign, to the Company,  its parent,  subsidiaries,  successors,
assigns and nominees, all inventions, discoveries,  improvements,  copyrightable
material, trademarks, programs, computer software and ideas concerning the same,
capable of use in connection  with the business of the Company,  which  Employee
may make or conceive, either solely or jointly with others, during the period of
his employment by the Company, its parent, subsidiaries or successors.

     Employee  agrees,  without  charge  to the  Company  and  at the  Company's
expense,  to execute,  acknowledge  and deliver to the Company all such  papers,
including  applications  for patents,  applications  for copyright and trademark
registrations, and assignments thereof, as may be necessary, and at all times to
assist the Company, its parent, subsidiaries,  successors,  assigns and nominees
in every  proper way to patent or register  said  programs,  computer  software,
ideas,  inventions,   discoveries,   improvements,   copyrightable  material  or
trademarks  in any and all  countries  and to vest title thereto in the Company,
its parent, subsidiaries, successors, assigns or nominees.

     Employee  will  promptly report to the Company all discoveries, inventions,
or improvements of whatsoever nature conceived or made by him at any time he was
employed  by  the  Company,  its  parent,  subsidiaries or successors.  All such
discoveries,  inventions and improvements which are applicable in any way to the
Company's  business  shall  be  the  sole and exclusive property of the Company.

The  covenants  set  forth  in  this paragraph which are made by Employee are in
consideration  of  the  employment,  or  continuing  employment  of,  and  the
compensation  paid  to,  Employee  during  his  employment  by the Company.  The
foregoing  covenants  will not prohibit Employee from disclosing confidential or
other  information  to other employees of the Company or to third parties to the
extent  that such disclosure is necessary to the performance of his duties under
the  Agreement.


<PAGE>
     Any breach of this covenant of nondisclosure  will result in the forfeiture
by Employee  and all other  persons of any and all rights to benefits  under the
Agreement  that are unpaid at the time of breach  and in such event the  Company
shall have no further obligation to pay any amounts related thereto.

     11.   Additional Remedies. Employee recognizes that irreparable injury will
          ---------------------
result  to  the  Company  and to its business and properties in the event of any
breach  by  Employee  of  any  of  the  provisions of paragraphs 9 and 10 of the
Agreement  or  either  of  them,  and  that  Employee's  continued employment is
predicated on the commitments undertaken by him pursuant to said paragraphs.  In
the  event of any breach of any of Employee's commitments pursuant to paragraphs
9  and  10  or either of them, the Company shall be entitled, in addition to any
other  remedies  and  damages  available,  to  injunctive relief to restrain the
violation of such commitments by Employee or by any person or persons acting for
or  with  Employee  in  any  capacity  whatsoever.

     12.   Nonassignment. The Agreement is personal to Employee and shall not be
           --------------
assigned  by him.  Employee shall not hypothecate, delegate, encumber, alienate,
transfer  or  otherwise dispose of his rights and duties hereunder.  The Company
may  assign the Agreement without Employee's consent to any other entity who, in
connection  with  such  assignment,  acquires  all  or  substantially all of the
Company's  assets  or  into or with which the Company is merged or consolidated.

     13.     Waiver.  The  waiver  by the Company of a breach by Employee of any
             ------
provision  of the Agreement shall not be construed as a waiver of any subsequent
breach  by  Employee.

     14.     Severability. If any clause, phrase, provision or portion of the
             -------------
Agreement  or  the  application  thereof  to any person or circumstance shall be
invalid  or  unenforceable under any applicable law, such event shall not affect
or  render invalid or unenforceable the remainder of the Agreement and shall not
affect  the  application  of  any  clause, provision, or portion hereof to other
persons  or  circumstances.


<PAGE>
     15.     Benefit. The provisions of the Agreement shall inure to the
             --------

benefit of the Company,  its successors  and assigns,  and shall be binding upon
the  Company  and  Employee,  its and his heirs,  personal  representatives  and
successors,  including without  limitation  Employee's estate and the executors,
administrators, or trustees of such estate.

     16.     Relevant Law. The Agreement shall be construed and enforced
             --------------
in accordance with the laws of the State of Illinois.

     17.     Notices. All notices, requests, demands and other communications in
             --------
connection  with  the  Agreement shall be made in writing and shall be deemed to
have  been given when delivered by hand or 48 hours after mailing at any general
or  branch  United  States Post Office, by registered or certified mail, postage
prepaid,  addressed  as  follows,  or  to  such other address as shall have been
designated  in  writing  by  the  addressee:

          (a)  If to the Company:

               Castle  BancGroup,  Inc.
               121  W.  Lincoln  Highway
               DeKalb,  Illinois  60115

               Attn:  Chief  Executive  Officer

          (b)  If  to  Employee:


<PAGE>
     18.     Entire  Agreement.  The  Agreement  sets  forth  the  entire
             ------------------
understanding  of the parties and supersedes all prior agreements, arrangements,
and  communications,  whether  oral or written, pertaining to the subject matter
hereof;  and  the  Agreement  shall not be modified or amended except by written
agreement  of  the  Company  and  Employee.

IN  WITNESS  WHEREOF, the parties hereto have executed the Agreement on the date
first  set  forth  above.


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                            CASTLE  BANCGROUP,  INC.



                            By:  /s/  John  W.  Castle
                            ---------------------
                                 Chairman  and  Chief  Executive  Officer




                                /s/  Dewey  R.  Yaeger
                            ----------------------
                                President  and  Chief  Operating  Officer


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