exhibit10-6_122309.htm


    
      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

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              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.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              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

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
            	
            	
              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

            


    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
                

            	
              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.

            


    

     


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    
      	
              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 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    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,

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	
                

            	
              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.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	
              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,

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	
                

            	
              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

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              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 (11⁄2) 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

        
          

        

      

      
        
        

      

    

    
      	
                

            	
              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

        
          

        

      

      
        
        

      

    

    
      	
                

            	
              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

        
          

        

      

      
        
        

      

    

    
      	
              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

     


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    
      	
              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

        
          

        

      

      
        
        

      

    

    
      	
                

            	
              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

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              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

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              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


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


    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.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    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)

       

    

     

    
      
        
        

      

      
        A-2