Document:

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                                                                   EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is hereby made this 1st day of January 2004 by and
between CFS Bancorp, Inc. (the "Corporation"), a Delaware corporation, and
Charles V. Cole (the "Executive").

                                   WITNESSETH

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

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

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

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

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

1)       DEFINITIONS.

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

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

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

         c)       Change in Control. "Change in Control" means the announcement
                  or occurrence of any of the following: (i) an event that would
                  be required to be reported in response to Item 1(a) of Form
                  8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
                  the Securities and Exchange Act of 1934 Act, as amended (1934
                  Act), or any successor thereto, whether or not any class of
                  securities of the Corporation is registered under the 1934
                  Act; (ii) any "person" is or becomes the "beneficial owner"
                  (as defined in Rule 13d-3 under the 1934 Act), directly or
                  indirectly, of securities of the Corporation representing

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                  20% or more of the combined voting power of the Corporation's
                  then outstanding securities; or (iii) during any period of
                  thirty-six consecutive months, individuals who at the
                  beginning of such period constitute the Board of Directors of
                  the Corporation cease for any reason to constitute at least a
                  majority thereof unless the election, or the nomination for
                  election by stockholders, of each new director was approved by
                  a vote of at least two-thirds of the directors then still in
                  office who were directors at the beginning of the period.

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

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

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

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

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

         g)       Good Reason. Termination by the Executive of the Executive's
                  employment for "Good Reason" shall mean termination by the
                  Executive within twelve (12) months following a Change in
                  Control of the Corporation based on:

                           (i)      Without the Executive's express written
                                    consent, the failure to elect or to re-elect
                                    or to appoint or to re-appoint the Executive
                                    to the offices of Executive Vice President,
                                    Treasurer and Chief Financial Officer of the
                                    Employers or a material adverse change made
                                    by the Employers in the Executive's
                                    functions, duties or responsibilities as
                                    Executive Vice President, Treasurer and
                                    Chief Financial Officer of the Employers;

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

                           (iii)    The principal executive office of either of
                                    the Employers is relocated outside of the
                                    Chicago Consolidated Metropolitan
                                    Statistical Area (CCMSA) as defined by the
                                    United States Census Bureau or, without the
                                    Executive's express written consent, either
                                    of the Employers require the Executive to be
                                    based anywhere other than an area in which
                                    the Employers' principal executive office is
                                    located, except for required travel on
                                    business of the Employers to an extent
                                    substantially consistent with the
                                    Executive's present business travel
                                    obligations;

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

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

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

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

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

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2)       TERM OF EMPLOYMENT.

         a)       The Corporation hereby employs the Executive as Executive as
                  Executive Vice President and Chief Financial Officer, and the
                  Executive hereby accepts said employment and agrees to render
                  such services to the Corporation on the terms and conditions
                  set forth in this Agreement. The term of this Agreement shall
                  be a period of one (1) year commencing as of the date hereof
                  (the "Commencement Date"), subject to earlier termination as
                  provided herein. Beginning on the day following the
                  Commencement Date, and on each day thereafter, the term of
                  this Agreement shall be extended for a period of one day in
                  addition to the then-remaining term, provided that the
                  Corporation has not given notice to the Executive in writing
                  at least 60 days prior to such day that the term of this
                  Agreement shall not be extended further. Reference herein to
                  the term of this Agreement shall refer to both such initial
                  term and such extended terms. The Board of Directors of the
                  Corporation shall review on this Agreement annually to
                  determine whether to extend the term of this Agreement. As
                  part of such review, the Board of Directors shall consider all
                  relevant factors, including the Executive's performance
                  hereunder, and shall either expressly approve further
                  extensions of the time of this Agreement or decide to provide
                  notice to the contrary.

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

3)       LOYALTY AND CONFIDENTIALITY.

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

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

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                  deemed to prevent Executive from investing or limit
                  Executive's right to invest his surplus funds in real estate.

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

         d)       Executive agrees that, during his employment and following the
                  date of his involuntary termination of employment for Cause,
                  or his voluntary termination without Good Reason, the
                  Executive:

                  i)       will not, for three (3) years after his employment
                           ends, solicit any of the Employers' past or current
                           customers or clients for the benefit of anyone other
                           than the Employers or their affiliates;

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

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

                  iv)      will not, for three (3) years after his employment
                           ends, either directly or indirectly, induce or
                           solicit any person to leave the employ of the
                           Employers.

4)       COMPENSATION AND BENEFITS.

         a)       The Employers shall compensate and pay the Executive for his
                  services during the term of this Agreement at a minimum base
                  salary of $145,000 per year ("Base Salary"), which may be
                  increased from time to time in such amounts as may be
                  determined by the Boards of Directors of the Employers and may
                  not be decreased without the Executive's express written
                  consent. In addition to his Base Salary, the Executive shall
                  be entitled to receive during the term of this Agreement such
                  bonus payments as may be determined by the Boards of Directors
                  of the Employers, in their sole discretion.

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         b)       While actively employed by the Employer, the Executive shall
                  be entitled to participate in and receive the benefits of any
                  pension or other retirement benefit plan, profit sharing,
                  stock option, employee stock ownership, or other plans,
                  benefits and privileges given to employees and executives of
                  the Employers, to the extent commensurate with his then duties
                  and responsibilities, as fixed by the Boards of Directors of
                  the Employers. The Corporation shall not make any changes in
                  such plans, benefits or privileges which would adversely
                  affect the Executive's rights or benefits thereunder, unless
                  such change occurs pursuant to a program applicable to all
                  executive officers of the Corporation and does not result in a
                  proportionately greater adverse change in the rights of or
                  benefits to the Executive as compared with any other executive
                  officer of the Corporation. Nothing paid to the Executive
                  under any plan or arrangement presently in effect or made
                  available in the future shall be deemed to be in lieu of the
                  salary payable to the Executive pursuant to Section 4(a)
                  hereof.

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

         d)       In the event the Executive's employment is terminated due to
                  Disability or Retirement, the Employers shall provide
                  continued life, medical and disability coverage substantially
                  identical to the coverage maintained by the Employers for the
                  Executive immediately prior to his termination. Such coverage
                  shall cease upon the expiration of the remaining term of this
                  Agreement in the event of retirement and in three (3) years in
                  the event of Disability.

         e)       In the event of the Executive's death during the term of this
                  Agreement, the Employers shall provide to the Executive's
                  spouse and children continued medical coverage substantially
                  identical to the coverage maintained by the Employers for the
                  Executive immediately prior to his death for a period of not
                  less than three (3) years.

         f)       Notwithstanding anything to the contrary in sub-sections (d)
                  and (e) of this Section 4, in no event will the Executive, his
                  spouse or family be entitled to continued medical benefits
                  from the Employers if medical benefits if said individual is
                  eligible to receive medical benefits from an alternative
                  source or from another employer or if said spouse and children
                  would no longer be eligible for coverage if the Executive were
                  still employed.

         g)       The Executive's compensation, benefits and expenses shall be
                  paid by the Corporation and the Bank in the same proportion as
                  the time and services actually expended by the Executive on
                  behalf of each respective Employer. Any amounts received from
                  the Bank may be offset against the amounts due hereunder.

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

         i)       During the term of this Agreement, the Employers shall provide
                  to the Executive, at the Employer's cost, all perquisites
                  which other senior executives of the Company are generally
                  entitled to receive, including the payment of his or her
                  annual dues at a health and fitness center mutually acceptable
                  to the Executive and the Employer.

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

6)       TERMINATION.

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

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

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

         d)       In the event that (i) the Executive's employment is terminated
                  by the Corporation for other than Cause, Disability,
                  Retirement or the Executive's death or (ii) such employment is
                  terminated by the Executive (a) due to a material breach of
                  this Agreement by the Corporation, which breach has not been
                  cured within fifteen (15) days after a written notice

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                  of non-compliance has been given by the Executive to the
                  Employers, or (b) for Good Reason, then the Corporation shall:

                  i)       pay to the Executive, in either twenty-six (26) equal
                           bi-weekly installments beginning with the first
                           business day of the month following the Date of
                           Termination or in a lump sum within five business
                           days of the Date of Termination (at the Executive's
                           election), a cash severance amount equal 125% of the
                           Executive's Base Salary if the termination occurs
                           during the first year of this agreement; thereafter,
                           the cash severance amount shall be equal to 100% of
                           the Executive's salary and cash bonuses earned during
                           the previous calendar year (regardless of when paid),
                           and

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

7)       MITIGATION; EXCLUSIVITY OF BENEFITS.

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

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

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

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

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

         a) To the Corporation:         Corporate Secretary
                                        CFS Bancorp, Inc.
                                        707 Ridge Road
                                        Munster, Indiana 46321

         b) To the Bank:                Corporate Secretary
                                        Citizens Financial Services, FSB
                                        707 Ridge Road
                                        Munster, Indiana 46321

         c) To the Executive:           Charles V. Cole
                                        19518 S. Skye Drive
                                        Frankfort, IL 60423

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

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

13)      NATURE OF OBLIGATIONS. Nothing contained herein shall create or require
         the Corporation to create a trust of any kind to fund any benefits
         which may be payable hereunder, and to the

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         extent that the Executive acquires a right to receive benefits from the
         Corporation hereunder, such right shall be no greater than the right of
         any unsecured general creditor of the Corporation.

14)      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.

15)      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.

16)      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 will constitute one and the same instrument.

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

18)      PAYMENT OF COSTS AND LEGAL FEES AND REINSTATEMENT OF BENEFITS. In the
         event any dispute or controversy arising under or in connection with
         the Executive's termination is resolved in favor of the Executive,
         whether by judgment, arbitration or settlement, the Executive shall be
         entitled to the payment of (a) all legal fees incurred by the Executive
         in resolving such dispute or controversy, and (2) any back-pay,
         including Base Salary, bonuses and any other cash compensation, fringe
         benefits and any compensation and benefits due to the Executive under
         this Agreement.

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

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

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

Attest:                                       CFS BANCORP, INC.

/s/ Monica F. Sullivan                        By: /s/ Thomas F. Prisby
----------------------                           ----------------------------
                                              EXECUTIVE

                                              /s/ Charles V. Cole
                                              ------------------------------
                                              Charles V. Cole

                                       11<PAGE>

                                                                   EXHIBIT 10.13

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is hereby made this 1st day of January 2004 by and
between CFS Bancorp, Inc. (the "Corporation"), a Delaware corporation, and
Thomas L. Darovic (the "Executive").

                                   WITNESSETH

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

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

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

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

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

1)       DEFINITIONS.

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

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

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

         c)       Change in Control. "Change in Control" means the announcement
                  or occurrence of any of the following: (i) an event that would
                  be required to be reported in response to Item 1(a) of Form
                  8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant to
                  the Securities and Exchange Act of 1934 Act, as amended (1934
                  Act), or any successor thereto, whether or not any class of
                  securities of the Corporation is registered under the 1934
                  Act; (ii) any "person" is or becomes the "beneficial owner"
                  (as defined in Rule 13d-

                                       1
<PAGE>

                  3 under the 1934 Act), directly or indirectly, of securities
                  of the Corporation representing 20% or more of the combined
                  voting power of the Corporation's then outstanding securities;
                  or (iii) during any period of thirty-six consecutive months,
                  individuals who at the beginning of such period constitute the
                  Board of Directors of the Corporation cease for any reason to
                  constitute at least a majority thereof unless the election, or
                  the nomination for election by stockholders, of each new
                  director was approved by a vote of at least two-thirds of the
                  directors then still in office who were directors at the
                  beginning of the period.

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

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

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

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

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

         g)       Good Reason. Termination by the Executive of the Executive's
                  employment for "Good Reason" shall mean termination by the
                  Executive within twelve (12) months following a Change in
                  Control of the Corporation based on:

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

                                       2
<PAGE>

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

                           (iii)    The principal executive office of either of
                                    the Employers is relocated outside of the
                                    Chicago Consolidated Metropolitan
                                    Statistical Area (CCMSA) as defined by the
                                    United States Census Bureau or, without the
                                    Executive's express written consent, either
                                    of the Employers require the Executive to be
                                    based anywhere other than an area in which
                                    the Employers' principal executive office is
                                    located, except for required travel on
                                    business of the Employers to an extent
                                    substantially consistent with the
                                    Executive's present business travel
                                    obligations;

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

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

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

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

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

                                       3
<PAGE>

2)       TERM OF EMPLOYMENT.

         a)       The Corporation hereby employs the Executive as Executive as
                  Executive Vice President, and the Executive hereby accepts
                  said employment and agrees to render such services to the
                  Corporation on the terms and conditions set forth in this
                  Agreement. The term of this Agreement shall be a period of one
                  (1) year commencing as of the date hereof (the "Commencement
                  Date"), subject to earlier termination as provided herein.
                  Beginning on the day following the Commencement Date, and on
                  each day thereafter, the term of this Agreement shall be
                  extended for a period of one day in addition to the
                  then-remaining term, provided that the Corporation has not
                  given notice to the Executive in writing at least 60 days
                  prior to such day that the term of this Agreement shall not be
                  extended further. Reference herein to the term of this
                  Agreement shall refer to both such initial term and such
                  extended terms. The Board of Directors of the Corporation
                  shall review on this Agreement annually to determine whether
                  to extend the term of this Agreement. As part of such review,
                  the Board of Directors shall consider all relevant factors,
                  including the Executive's performance hereunder, and shall
                  either expressly approve further extensions of the time of
                  this Agreement or decide to provide notice to the contrary.

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

3)       LOYALTY AND CONFIDENTIALITY.

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

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

                                       4
<PAGE>

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

         d)       Executive agrees that, during his employment and following the
                  date of his involuntary termination of employment for Cause,
                  or his voluntary termination without Good Reason, the
                  Executive:

                  i)       will not, for three (3) years after his employment
                           ends, solicit any of the Employers' past or current
                           customers or clients for the benefit of anyone other
                           than the Employers or their affiliates;

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

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

                  iv)      will not, for three (3) years after his employment
                           ends, either directly or indirectly, induce or
                           solicit any person to leave the employ of the
                           Employers.

4)       COMPENSATION AND BENEFITS.

         a)       The Employers shall compensate and pay the Executive for his
                  services during the term of this Agreement at a minimum base
                  salary of $119,600 per year ("Base Salary"), which may be
                  increased from time to time in such amounts as may be
                  determined by the Boards of Directors of the Employers and may
                  not be decreased without the Executive's express written
                  consent. In addition to his Base Salary, the Executive shall
                  be entitled to receive during the term of this Agreement such
                  bonus payments as may be determined by the Boards of Directors
                  of the Employers, in their sole discretion.

         b)       While actively employed by the Employer, the Executive shall
                  be entitled to participate in and receive the benefits of any
                  pension or other retirement benefit plan, profit sharing,
                  stock option, employee stock ownership, or other plans,
                  benefits and privileges given to

                                       5
<PAGE>

                  employees and executives of the Employers, to the extent
                  commensurate with his then duties and responsibilities, as
                  fixed by the Boards of Directors of the Employers. The
                  Corporation shall not make any changes in such plans, benefits
                  or privileges which would adversely affect the Executive's
                  rights or benefits thereunder, unless such change occurs
                  pursuant to a program applicable to all executive officers of
                  the Corporation and does not result in a proportionately
                  greater adverse change in the rights of or benefits to the
                  Executive as compared with any other executive officer of the
                  Corporation. Nothing paid to the Executive under any plan or
                  arrangement presently in effect or made available in the
                  future shall be deemed to be in lieu of the salary payable to
                  the Executive pursuant to Section 4(a) hereof.

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

         d)       In the event the Executive's employment is terminated due to
                  Disability or Retirement, the Employers shall provide
                  continued life, medical, and disability coverage substantially
                  identical to the coverage maintained by the Employers for the
                  Executive immediately prior to his termination. Such coverage
                  shall cease upon the expiration of the remaining term of this
                  Agreement in the event of retirement and in three (3) years in
                  the event of Disability.

         e)       In the event of the Executive's death during the term of this
                  Agreement, the Employers shall provide to the Executive's
                  spouse and children continued medical coverage substantially
                  identical to the coverage maintained by the Employers for the
                  Executive immediately prior to his death for a period of not
                  less than three (3) years.

         f)       Notwithstanding anything to the contrary in sub-sections (d)
                  and (e) of this Section 4, in no event will the Executive, his
                  spouse or family be entitled to continued medical benefits
                  from the Employers if medical benefits if said individual is
                  eligible to receive medical benefits from an alternative
                  source or from another employer or if said spouse and children
                  would no longer be eligible for coverage if the Executive were
                  still employed.

         g)       The Executive's compensation, benefits and expenses shall be
                  paid by the Corporation and the Bank in the same proportion as
                  the time and services actually expended by the Executive on
                  behalf of each respective Employer. Any amounts received from
                  the Bank may be offset against the amounts due hereunder.

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

                                       6
<PAGE>

         i)       During the term of this Agreement, the Employers shall provide
                  to the Executive, at the Employer's cost, all perquisites
                  which other senior executives of the Company are generally
                  entitled to receive, including the payment of his or her
                  annual dues at a health and fitness center mutually acceptable
                  to the Executive and the Employer.

         j)       During the term of this Agreement, the Employers will provide
                  to Executive the use of an automobile. Employers will pay all
                  automobile operating expenses incurred by Executive in the
                  performance of Executive's duties. The Employers will procure
                  and maintain in force an automobile liability policy for the
                  automobile with coverage in the minimum amount of $1,000,000
                  combined single limit on bodily injury and property damage.

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

6)       TERMINATION.

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

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

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

         d)       In the event that (i) the Executive's employment is terminated
                  by the Corporation for other than Cause, Disability,
                  Retirement or the Executive's death or (ii) such employment is
                  terminated by the Executive (a) due to a material breach of
                  this Agreement by the

                                       7
<PAGE>

                  Corporation, which breach has not been cured within fifteen
                  (15) days after a written notice of non-compliance has been
                  given by the Executive to the Employers, or (b) for Good
                  Reason, then the Corporation shall:

                  i)       pay to the Executive, in either twenty-six (26) equal
                           bi-weekly installments beginning with the first
                           business day of the month following the Date of
                           Termination or in a lump sum within five business
                           days of the Date of Termination (at the Executive's
                           election), a cash severance amount equal to the
                           Executive's salary and cash bonuses earned during the
                           previous calendar year (regardless of when paid), and

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

7)       MITIGATION; EXCLUSIVITY OF BENEFITS.

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

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

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

                                       8
<PAGE>

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

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

         a) To the Corporation:     Corporate Secretary
                                    CFS Bancorp, Inc.
                                    707 Ridge Road
                                    Munster, Indiana 46321

         b) To the Bank:            Corporate Secretary
                                    Citizens Financial Services, FSB
                                    707 Ridge Road
                                    Munster, Indiana 46321

         c) To the Executive:       Thomas L. Darovic
                                    13733 Natchez Trail
                                    Orland Park, IL 60467

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

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

13)      NATURE OF OBLIGATIONS. Nothing contained herein shall create or require
         the Corporation to create a trust of any kind to fund any benefits
         which may be payable hereunder, and to the extent that the Executive
         acquires a right to receive benefits from the Corporation hereunder,

                                       9
<PAGE>

         such right shall be no greater than the right of any unsecured general
         creditor of the Corporation.

14)      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.

15)      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.

16)      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 will constitute one and the same instrument.

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

18)      PAYMENT OF COSTS AND LEGAL FEES AND REINSTATEMENT OF BENEFITS. In the
         event any dispute or controversy arising under or in connection with
         the Executive's termination is resolved in favor of the Executive,
         whether by judgment, arbitration or settlement, the Executive shall be
         entitled to the payment of (a) all legal fees incurred by the Executive
         in resolving such dispute or controversy, and (2) any back-pay,
         including Base Salary, bonuses and any other cash compensation, fringe
         benefits and any compensation and benefits due to the Executive under
         this Agreement.

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

                                       10
<PAGE>

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

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

ATTEST:                                            CFS BANCORP, INC.

/s/ Monica F. Sullivan                          By: /s/ Thomas F. Prisby
----------------------                             ----------------------------

                                                   EXECUTIVE

                                                   /s/ Thomas L. Darovic
                                                   ----------------------------
                                                   Thomas L. Darovic

                                       11

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