cfsbancorpexhibit10_2123107.htm


    Exhibit
      10.2

     

     

     

    AGREEMENT

     

    This
      Agreement is entered into by and between Citizens Financial Bank and CFS
      Bancorp, Inc., both located at 707 Ridge Road, Munster, Indiana (collectively,
      “Employer”) and Thomas L. Darovic ("Employee").

     

    WHEREAS,
      the parties previously entered into those certain employment agreements dated
      July 1, 2006 (collectively, the “Employment
      Agreements”);

     

    WHEREAS,
      the Employer, by notice given to Employee prior to the date hereof in accordance
      with the terms of Employment Agreements, has determined to terminate Employee’s
      employment with Employer for reasons other than for Cause (and not due to
      Disability); and

     

    WHEREAS,
      the parties desire to enter into this Agreement regarding the termination of
      his
      employment with the Employer.

     

    NOW,
      THEREFORE, in consideration of the mutual promises, the receipt and adequacy
      of
      which are acknowledged, the parties agree as follows:

     

    1.  Termination
      of Employment.  Employee’s last day of employment with Employer
      shall be January 31, 2008 (“Termination Date”), which is more than 30 days
      following the date notice was given to Employee.  Employee hereby
      resigns from all offices, directorships and trusteeships effective the
      termination of his employment and acknowledges that, in connection
      therewith.

     

    2.  Separation
      Payments and Benefits.  Upon Employee’s execution and delivery
      to Employer of a general release of all claims against Employer and others
      on or
      within 15 days after the Termination Date, in the form set forth as Exhibit
      A
      hereto, which general release is not revoked, Employee shall be entitled to
      the
      following payments and benefits:

     

    A. Pay
      Employee an aggregate cash sum of $196,449, which shall be payable one-half
      on
      the first regular payroll date day following the effective date of the general
      release and the second one-half on the first regular payroll date in January,
      2009.

     

    B. Maintain
      and provide to Employee, at no cost to Employee, until the first anniversary
      of
      the Termination Date participation in the following employee benefit plans
      in
      which he participated on the Termination Date: health and dental benefits on
      the
      same terms as active employees as in effect on the Termination Date; provided,
      (i) such health and dental benefits shall be concurrent with Employee’s
      continuation rights under the Consolidated Omnibus Reconciliation Act of 1985,
      as amended (“COBRA”); (ii) if Employer during such one-year period shall
      terminate or materially reduce any such health and dental benefits offered
      to
      active employees, Employer shall arrange to provide Employee substantially
      similar benefits for the unexpired portion of the one-year period as provided
      prior to such termination or material reduction; and (iii) clause (ii)
      notwithstanding, Employer shall discontinue such benefits to Employee during
      the
      one-year benefit period to the extent that Employee is entitled to substantially
      similar benefits in connection with full-time employment with a subsequent
      employer or otherwise.

     

    C. On
      the
      date of the first installment payment under paragraph 2(A) hereof, Employer
      shall pay to Employee a cash lump sum of $6,316.  This amount is paid
      to Employee in lieu of continuing benefits for one year following the
      Termination Date, and which amount

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    represents
      the premium required to continue group life insurance and group long-term
      disability insurance benefits for such period, because Employer
      is prohibited from providing such benefits on a post-employment basis under
      the terms of the Employer’s applicable benefit plans and underlying group
      insurance contracts.  Employer shall assist and cooperate with
      Employee in obtaining a conversion and assignment of such life insurance and
      long-term disability insurance contracts to Employee from the
      insurer.

     

    D. On
      the
      date of the first installment payment under paragraph 2(A) hereof, Employer
      shall pay to Employee a cash lump sum of $12,500, which but for this Agreement
      would not be payable to Employee.  Employee acknowledges that he will
      forfeit all unvested restricted stock and other unvested long-term incentives
      on
      the Termination Date, and all vested stock options will be exercisable following
      the Termination Date, as provided under the terms of the applicable incentive
      plans and award agreements thereunder.

     

    E. Notwithstanding
      Employee’s termination of employment prior to the date 2007 annual bonuses are
      payable, Employee shall be entitled to receive a bonus for fiscal year 2007
      to
      the extent earned based on performance and otherwise payable in accordance
      with
      the terms of the executive annual incentive plan which (but for this Agreement
      otherwise would not be payable to Employee) shall be payable when bonuses are
      payable to senior executives of Employer.

     

    F. The
      payments and benefits provided to Employee under this paragraph 2 shall be
      subject to standard tax withholding and other applicable
      deductions.

     

    3.  Return
      of Property.  Employee covenants that he has returned all of
      Employer’s property, which he has in his possession,  including, but
      not limited to, all customer lists, be they electronic and/or hard copies,
      the
      Employer-owned automobile, and any other Employer-owned computer equipment,
      cell
      phone, wireless e-mail equipment and other Employer-owned equipment in his
      possession or control.

     

    4.  No
      Admission of Wrongdoing.  Employee agrees neither this
      Agreement nor the furnishing of the consideration for the release under
      paragraph 3 shall be deemed or construed at any time for any purpose as an
      admission by Employer of any liability or unlawful conduct of any
      kind.

     

    5.  Confidentiality;
      Trade Secrets; Nonsolicitation.

     

    A. Employee
      acknowledges the continuing applicability of his covenant under Section 3(d)
      of
      each Employment Agreement and further agrees to maintain as confidential any
      and
      all information or knowledge concerning Employer’s business and its customers
      that is not generally known in the banking industry. Employee also agrees to
      keep the existence of and the terms and conditions of this Agreement
      confidential, and that Employee as well as Employee’s heirs, executors,
      administrators and agents, will not directly or indirectly disclose them to
      any
      person, firm or entity.

     

    B. Section
      3(e)(iv) of the Employment Agreement shall apply as if Employee’s employment
      voluntarily terminated without Good Reason; provided, Section 3(e)(iv) of the
      Employment Agreement is deemed amended to also include a restriction that
      Employee not directly or indirectly hire any person who is in the employ of
      the
      Employer on the date hereof.

     

    6.  No
      Disparagement.  Employee agrees not to engage in any direct or
      indirect conduct or communications, written or oral, which may in any way be
      deemed to be disparaging of Employer.

     

    7.  Remedies.  In
      addition to all remedies available to Employer hereunder and under the
      Employment Agreement, which are reserved hereby, Employee shall forfeit all
      unpaid amounts and 

    
      
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    benefits
      provided under paragraph 2 if he shall breach either covenant set forth in
      paragraphs 3, 5 or 6 hereof. 
       

    

    8.  Amendment.  This
      Agreement may not be modified, altered or changed except upon express written
      consent of both parties wherein specific reference is made to this
      Agreement.

     

    9.  Entire
      Agreement.  This Agreement sets forth the entire agreement
      between the parties hereto and fully supersedes any prior agreements or
      understandings between the parties including, without limitation, the Employment
      Agreements.  Employee acknowledges Employee has not relied on any
      representations, promises, or agreements of any kind made to Employee in
      connection with Employee’s decision to enter this Agreement.

     

    10.  Binding
      Agreement.  This Agreement shall be binding on all of the
      parties and their respective successors, heirs, legal representatives and
      assigns (without regard for its conflict of laws
      principles).

     

    11.  Governing
      Law.  This Agreement shall be construed in accordance with the
      laws of the State of Indiana.

     

    IN
      WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this
      Agreement as of the later date set forth below:

     

    CFS
      BANCORP, INC.

     

    BY: /s/ Thomas
      F.
      Prisby                              


          
      Thomas F. Prisby

     

     

     

    CITIZENS
      FINANCIAL BANK, Employer

     

    BY: /s/
      Thomas F.
      Prisby                                

          
      Thomas F. Prisby

     

    DATE: December
      18, 2007                            

     

     

     

    HAVING
      ELECTED TO EXECUTE THIS AGREEMENT, TO RECEIVE THE SUMS AND BENEFITS SET FORTH
      HEREIN, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS
      INTO
      THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EMPLOYEE HAS
      OR
      MIGHT HAVE AGAINST EMPLOYER.  EMPLOYEE HAS READ THIS AGREEMENT AND
      UNDERSTANDS THAT ITS TERMS ARE LEGALLY ENFORCEABLE.  EMPLOYEE HAS HAD
      THE OPPORTUNITY TO NEGOTIATE WITH EMPLOYER REGARDING THIS AGREEMENT, AND HAS
      HAD
      THE OPPORTUNITY TO CONFER WITH AN ATTORNEY FOR ASSISTANCE AND
      ADVICE.  EMPLOYEE HAS ENTERED INTO THIS AGREEMENT KNOWINGLY AND
      VOLUNTARILY.

     

    
     
/s/
Thomas
      L. Darovic            

    Thomas
      L. Darovic

     

    DATE: December
      31,
      2007                       

     

     

    
      
        
        

      

      
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    EXHIBIT
      A1

     

    GENERAL
      RELEASE OF ALL CLAIMS

     

    This
      General Release of All Claims (“Release”) is made in consideration of severance
      payments and other benefits provided to the undersigned employee (“Employee”)
      under that certain Agreement with Citizens Financial Bank and CFS Bancorp,
      Inc.
      (collectively and each separately, “Employer”), dated December 31, 2007
      (“Agreement”).  All capitalized terms not defined herein have the
      meaning set forth in the Agreement.

     

    (A) For
      and
      in consideration for the payments and benefits provided under paragraph 2
      of the Agreement, Employee, on his own behalf and on behalf of his heirs,
      executors, administrators, successors and assigns (collectively, the “Releasing
      Parties”), knowingly and voluntarily releases and forever discharges Employer
      and Employer’s affiliates, subsidiaries, divisions, successors and assigns in
      such capacity, and the current, future and former employees, officers,
      directors, trustees. attorneys and agents (collectively, the “Released
      Parties”), from any and all claims, causes of action, demands, fees and
      liabilities of any kind whatsoever, whether known or unknown, against the
      Released Parties, the Releasing Parties has, has ever had or may have as of
      the
      date of execution of this Agreement, including, but not limited to, any alleged
      violation of the National Labor Relations Act, as amended; Title VII of the
      Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991;
      Sections 1981 through 1988 of Title 42 of the United States Code, as
      amended; the Employee Retirement Income Security Act of 1974, as amended; the
      Immigration Reform and Control Act, as amended; the Americans with Disabilities
      Act of 1990, as amended; the Age Discrimination in Employment Act of 1967,
      as
      amended; the Older Workers Benefit Protection Act of 1990; the Worker Adjustment
      and Retraining Notification Act, as amended; the Occupational Safety and Health
      Act, as amended; the Family and Medical Leave Act of 1993; Illinois Human Rights
      Act; any other federal, state or local civil or human rights laws or any other
      local, state or federal law, regulation or ordinance; any public policy,
      contract, tort, and common law; and any allegation for costs, fees, or other
      expenses including attorneys’ fees incurred in these
      matters.

     

    (B) Notwithstanding
      anything herein to the contrary, the sole matters to which the above release
      of
      claims does not apply are Employee’s rights of indemnification and
      directors and officers liability insurance coverage to which Employee was
      entitled immediately prior to the Termination Date with regard to Employee’s
      service as an officer and director of Employer and Employee’s rights under
      any tax-qualified pension and claims for accrued vested benefits under any
      other
      employee benefit plan, policy or arrangement maintained by Employer or under
      COBRA.

     

    (C) The
      Releasing Parties waive the Releasing Parties’ right to file any charge or
      complaint against the Released Parties arising out of Employee’s employment with
      or separation from Employer before any federal, state or local court or any
      state or local administrative agency, except where such waivers are prohibited
      by law.  The release under this Release shall not prevent the
      Releasing Parties from filing a charge with the Equal Employment Opportunity
      Commission, any other federal government agency, and/or any government agency
      concerning claims of discrimination, although the Releasing Parties waive the
      Employee’s right to recover any damages or other relief in any claim or suit
      brought by or through the Equal Employment Opportunity Commission or any other
      state or local agency on behalf of the Releasing Parties under the Age
      Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964
      as
      amended, the Americans with Disabilities Act, or any other federal or state
      discrimination law, except where such waivers are prohibited by
      law.

     

    (D) Employee
      affirms he has not filed, has not caused to be filed, and is not presently
      a
      party to, any claim, complaint, or action against any of the Released Parties
      in
      any forum or form. Employee 

    ______________________________

    
      1 This
        Release will be executed between January 31 and February 15,
        2008.

    

     

     

    
      
        
        

      

      
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    further
      affirms that he has been paid and/or has received all compensation, wages,
      bonuses, commissions, and/or benefits to which Employee may be entitled and
      no
      other compensation, wages, bonuses, commissions and/or benefits are due to
      Employee, except as provided in paragraph 2 of the
      Agreement.  Employee also affirms he has no known workplace injury.

       

      (E) Employee
        has been advised that he had up to twenty-one (21) calendar days, from the
        date on which the Agreement was first tendered to Employee, to review the
        Agreement, which included this Release as a Exhibit A thereto, and has been
        advised in writing to consult with an attorney prior to execution of the
        Agreement and this Release.  Employee agrees any
        modifications, material or otherwise, made to the Agreement prior to or after
        its execution do not restart or affect in any manner the original twenty-one
        (21) calendar day consideration period.

    

     

    (F) Employee
      may revoke this Release for a period of seven (7) calendar days following
      the day Employee executes and delivers this Release to Employer.  Any
      revocation within this period shall be submitted, in writing, to Employer and
      state, “I hereby revoke my acceptance of our Agreement.”  The
      revocation shall be personally delivered to Employer’s Chief Executive Officer,
      or his designee, or mailed to Employer, Attention to such individual, addressed
      to Employer’s headquarters offices, postage prepaid, and postmarked within seven
      (7) calendar days of execution of this Agreement.  This Release
      and all payments and benefits to which Employee shall become entitled under
      paragraph 2 of the Agreement shall become effective and enforceable on the
      first
      (1st) day following the expiration of the seven (7)-day revocation period in
      which this Release is not revoked.  If the last day of the revocation
      period is a Saturday, Sunday, or legal holiday in Indiana, then the seven
      (7)-day revocation period shall not expire until the next following day which
      is
      not a Saturday, Sunday, or legal holiday.

     

    (G) This
      Release shall be governed by the internal laws (and not the choice of laws)
      of
      the State of Indiana, except for the application of pre-emptive Federal
      law.

     

    PLEASE
      READ THIS AGREEMENT CAREFULLY.  IT CONTAINS A RELEASE OF ALL KNOWN AND
      UNKNOWN CLAIMS.

     

     

     

     

     

    Date:
      ______________,
      2008                                     ____________________________________

    Thomas
      L.
      Darovic

     

    

      

    

     
      

        
          
            
            

          

          
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