Document:

Exhibit 10

Exhibit 10.1 

BINDING LETTER OF INTENT 

LETTER OF INTENT

ELSIE and LC SOUTH PROJECT,

MINERAL COUNTY, NEVADA

Timberline Resources (TBLC), an Idaho corporation, its successors and assigns enters a Lease and Option to Purchase Agreement with Susan K. and Larry L. McIntosh, both Nevada residents, husband and wife. and legal owners (Owner) of  the Elsie and LC South  twenty-two (22) unpatented mining claims located in Mineral County, Nevada. Said claims (Property) are located in Sections 8, 9, 20, 21, 28, & 29, T5N, R36E.

The following outlines the terms and intent of the parties and will serve as the basis for the definitive and formal “Mining Lease and Option to Purchase Agreement”:

·

Lease and Option – Owner leases the Property to TBLC for the purpose of mineral exploration. TBLC must exercise its Option to Purchase upon making a Production Decision, giving written notice to Owner, and submitting Purchase Payment to Owner of US$500,000. Upon such conveyance TBLC will be the sole owner of said Property subject to the Production Royalty reserved by the Owner;

·

Term – The initial term of this Agreement shall commence on the Effective Date and shall expire twenty (20) years thereafter, unless terminated, canceled, or extended. Such extensions may be renewed in five (5) year increments so long as TBLC has met all its obligations under the definitive Agreement and has maintained the Property in good standing;  

·

Payments – TBLC shall pay to the owner the following Minimum Advance Cash Royalty amounts according to the following schedule:

On execution and Effective Date (1July2006)               US$20,000

1July2007                                                                            $25,000

1July2008                                                                            $30,000

Annual increase of US$5,000 until,

1July2012, and each subsequent year until Production        $50,000     

   Decision.

Cash payments will not be credited against the Option to Purchase price of US$500,000. Such Advance Cash Royalty amounts shall be credited cumulatively in favor of TBLC against future Production Royalty.

·

Production Royalty – TBLC shall pay Production Royalty based on Net Smelter Returns at the rate of two (2%) per cent. Such Production Royalty may be bought down at notification to the Owner by TBLC  per the following:

                 1% for US$1,000,000,

                 

·

Claim Maintenance – TBLC shall perform for the benefit of the Property all applicable assessment work requirements of all applicable federal, state, and local laws, regulations, and ordinances and shall be responsible for proper recordation, filing, and payment of necessary fees with the appropriate federal, state, and local agencies.

·

Termination – TBLC may terminate this Agreement at any time so long as it gives Owner written notification of sixty (60) days, and all of TBLC obligations, as set forth in this Agreement, have been met. Owner may terminate this Agreement by giving  sixty (60) day written notice of any default of TBLC as outlined in this Agreement. If such default is not remedied by TBLC within such sixty (60) day period, said agreement shall be terminated.

·

Signing Bonus – TBLC shall grant 25,000 share options to purchase to Owner as a signing bonus. Such share options shall be priced at US$1.00 per share.

Paul E. Dircksen

Susan K.McIntosh

VP Exploration

Larry L. Mc Intosh

Timberline Resources Corporation

1955 Stephen Ct.

1100 East Lakeshore Dr. #301

Gardnerville,NV 89410 

Coeur D’ Alene, ID 83814CFS Bancorp Inc Form 8-K Exhibit 10.1

    Exhibit
      10.1

    
 

    EMPLOYMENT
      AGREEMENT

    

    

    AGREEMENT
      dated this 1st day of July 2006 between Citizens Financial Bank (the "Bank"),
      a
      federally chartered savings bank, and Thomas F. Prisby (the
      "Executive").

     

    WITNESSETH

    

    WHEREAS,
      the Executive is presently an officer of CFS Bancorp, Inc. (the "Corporation")
      and 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 Bank in the event that his employment with the Bank
      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)
               	
              Average
                Annual Compensation. The
                Executive's "Average Annual Compensation" for purposes of this Agreement
                shall be deemed to mean the average Base Salary, cash bonuses and
                amounts
                allocated to the Executive under any qualified employee benefit plans
                of
                the Employers for the preceding three
                years.

            

    

     

    
      	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" 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.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
           

          
            
            

          

        

      

    

    
      	d)    	
              Change
                in Control. “Change
                in Control” means the occurrence of any of the following: (i) 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 1934
                Securities and Exchange Act of 1934, 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 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.

            

    

     

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

            

    

     

    
      	f)
                	
              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.

            

    

     

    
      	g)  	
              Disability.
                Termination by the Bank 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.

            

    

     

    
      	h)  	
              Good
                Reason. Termination
                by the Executive of the Executive's employment for "Good Reason"
                shall
                mean termination by the Executive within two years following a Change
                in
                Control of the Corporation based
                on:

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	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
                Chief Executive Officer of the Employers or a material adverse change
                made
                by the Employers in the Executive's functions, duties or responsibilities
                as Chief Executive Officer of the
                Employers;

            

    

     

    
      	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
                more
                than ten miles from Munster, Indiana 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 (k) below;
                or

            

    

     

    
      	vi)  	
              The
                failure by the Bank to obtain the assumption of and agreement to
                perform
                this Agreement by any successor.

            

    

     

    
      	i)  	
              IRS.“IRS”
                shall mean the Internal Revenue
                Service.

            

    

     

    
      	j) 	
              Key
                Employee.
                "Key
                Employee"
                means an employee who is:

            

    

     

    
      	i)  	
              An
                officer of the Corporation having annual compensation greater than
                $140,000;

            

    

     

    
      	ii)  	
              A
                five-percent owner of the Corporation;
                or

            

    

     

    
      	iii)  	
              A
                one-percent owner of the Corporation having an annual compensation
                greater
                than $150,000.

            

    

     

    For
      purposes of determining who is an officer for purposes of Section 1(j)(i),
      no
      more than 50 employees (or, if lesser, the greater of three or 10 percent of
      the
      employees) shall be treated as officers, and those categories of employees
      listed in Code Section 414(q)(5) shall be excluded. The
      $140,000 amount 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.

     

    
      	k)
               	
              Notice
                of Termination.
                Any purported termination of the Executive's employment by the Bank
                for
                any reason, including without limitation for Cause, Disability or
                Retirement, or 

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	 	
              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 Executive's employment under the provision so
                indicated, (iii) specifies a Date of Termination, which shall be
                not less
                than 30 nor more than 90 days after such Notice of Termination is
                given,
                except in the case of the Bank's termination of Executive's employment
                for
                Cause, which shall be effective immediately; and (iv) is given in
                the
                manner specified in Section 11
                hereof.

            

    

     

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

            

    

     

    
      	m)  	
              Separation
                from Service.
                "Separation
                from Service"
                means the date on which the Executive dies, retires or otherwise
                experiences a Termination of Employment with the Corporation. 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 (such
                as
                temporary employment by the government) if the period of such leave
                does
                not exceed six months, or if the leave is for a longer period, so
                long as
                the individual’s right to reemployment with the Corporation is provided
                either by statute or by contract. 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. Executive shall
                incur a
                "Termination
                of Employment"
                when a termination of employment is incurred under Proposed Treasury
                Regulation 1.409A-1(h)(ii) or any final version of such Proposed
                Regulation.

            

    

     

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

            

    

     

    
      	2)  	
              Term
                of Employment.

            

    

     

    
      	a)  	
              The
                Bank hereby employs the Executive as its Chief Executive Officer,
                and the
                Executive hereby accepts said employment and agrees to render such
                services to the Bank on the terms and conditions set forth in this
                Agreement. The term of this Agreement shall be a period of three
                years
                commencing as of the date hereof (the "Commencement Date"), subject
                to
                earlier termination as provided herein. Reference herein to the term
                of
                this Agreement shall refer to both such initial term and any extended
                terms. The Board of Directors of the Bank shall review on a periodic
                basis
                (and no less frequently than annually) whether to permit further
                extensions of the term of this Agreement. As part of such review,
                the
                Board of Directors shall consider all relevant factors, including
                the

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	 	
              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 Bank as may be consistent with his titles and from
                time
                to time assigned to him by the Bank’s Board of Directors.
                The Executive further agrees to serve without additional compensation
                as
                an officer and director of any of the Bank'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 Bank may
                assign
                the Executive to one of its subsidiaries for payroll
                purposes.

            

    

     

    
      	3)  	
              Loyalty,
                Confidentiality and
                Non-Competition

            

    

     

    
      	a)  	
              The
                Executive shall devote his or her full time and best efforts to the
                performance of his or her 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 Employers or be a director,
                officer or consultant to any bank, savings and loan association,
                credit
                union, thrift, savings bank, or similar institution in the Chicago
                CMSA.

            

    

     

    
      	b)  	
              For
                a period of three years from the date of voluntary termination, or
                termination for Cause, 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 Employers
                or be
                a director, officer or consultant to any bank, savings and loan
                association, credit union, thrift, savings bank, or similar institution
                in
                the Chicago CMSA. 

            

    

     

    
      	c)  	
              For
                purposes of this Agreement, directly or indirectly engaging in any
                business activity in competition with the business or affairs of
                the
                Employers 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
                employee from investing or limit employee's right to invest his surplus
                funds in real estate. 

            

    

     

    
      	d)  	
              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
                shall be copied, reproduced or duplicated without the express written
                permission of the Employers, and Executive shall return all material
                containing such information to

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	  	
              Employers
                upon their request or upon termination of employment. Executive also
                agrees that he or she shall 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 Employers in writing in advance.

            

    

     

    
      	e)  	
              Executive
                agrees that, during his employment, and for a period of three years
                following the date of his involuntary termination of employment for
                Cause,
                or his voluntary termination without Good Reason, the
                Executive:

            

    

     

    
      	i)  	
              shall
                not solicit any of the Employers’ past or current customers or clients for
                the benefit of anyone other than Employers or their
                affiliates;

            

    

     

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

            

    

     

    
      	iii)  	
              shall
                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
                Employers, all of which Executive is hereby obligated to keep secret,
                however and whenever such information comes to his or her attention;
                and

            

    

     

    
      	iv)  	
              shall
                not, 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 $370,240 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.

            

    

     

    
      	b)  	
              During
                the term of this Agreement, 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 Bank 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 Bank and does not result in a
                proportionately greater adverse change in the rights of or benefits
                to the
                Executive as 

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	  	
              compared
                with any other executive officer of the Bank. 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, at its cost, all existing
                life
                and medical insurance coverage for the Executive and his spouse for
                a
                period until they both become eligible for Medicare coverage. Thereafter,
                the Executive may continue, at his cost, the health insurance coverage
                as
                an eligible retired employee under the Employer’s health and medical
                benefit plans. 

            

    

     

    
      	e)  	
              In
                the event of the Executive's death during the term of this Agreement
                or
                following his termination due to Disability or Retirement, the Employers
                shall provide to the Executive's spouse continued medical health
                benefits
                substantially identical to the coverage maintained by the Employers
                for
                the Executive immediately prior to his death until such time as his
                spouse
                becomes eligible for Medicare
                coverage.

            

    

     

    
      	f)  	
              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.

            

    

     

    
      	g)  	
              During
                the term of this Agreement, the Employers shall provide to the Executive,
                at the Employers’ cost, all perquisites which other senior executives of
                the Employers are generally entitled to receive, including the payment
                of
                his annual dues at his Country
                Club.

            

    

     

    
      	h)  	
              During
                the term of the Agreement, the Employers shall 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 Executive the use of an automobile of 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. Corporation shall
                pay all
                automobile operating expenses incurred by Executive in the performance
                of
                Executive's 

            

    

     

    
      
        
        

      

      
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              duties.
                Corporation shall procure and maintain in force an automobile liability
                policy for the automobile with coverage, including Executive, 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
                Bank 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
                Bank
                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
                Bank
                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 Bank, which breach has not been cured
                within fifteen days after a written notice of non-compliance has
                been
                given by the Executive to the Employers, or (b) for Good Reason,
                then the
                Bank shall, subject to the provisions of Section 7 hereof, if
                applicable:

            

    

     

    
      	i)  	
              pay
                to the Executive, a cash severance amount equal to three times that
                portion of the Executive's Average Annual Compensation paid by the
                Bank,
                in two equal installments, 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 no later than January
                15th
                of
                the calendar year following the year in which the first installment
                was
                paid; and

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	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, 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 Bank 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 included in Average Annual
                Compensation and (z) other benefits, or portions thereof, included in
                Average Annual Compensation), 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 Bank 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 subsections 6(d)(i) and (ii)
                and
                7(a) 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, payment of his benefit shall not be suspended. Provided,
                however, that 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 subsection
                6(d)(ii).

            

    

    
       

      7) 
        Limitation of Benefits under Certain Circumstances.  If
        the
        payments and benefits pursuant to Section 6 hereof, either alone or together
        with other payments and benefits which the Executive has the right to receive
        from the Bank, would constitute a "parachute payment" under Section 280G
        of the
        Code, the payments and benefits payable by the Bank pursuant to Section 6
        hereof
        shall be reduced, in the manner determined by the Executive, by the amount,
        if
        any, which is the minimum necessary to result in no portion of the payments
        and
        benefits payable by the Bank under Section 6 being non-deductible to the
        Bank
        pursuant to Section 280G of the Code and subject to the excise tax imposed
        under
        Section 4999 of the Code. The parties hereto agree that the present value
        of the
        payments and benefits payable pursuant to this Agreement to the Executive
        upon
        termination shall be limited to three times the Executive's Average Annual
        Compensation. The determination of any reduction in the payments and benefits
        to
        be made pursuant to Section 6 shall be based upon the opinion of independent
        counsel selected by the 

       

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              Bank's
                independent public accountants and paid by the Bank. Such counsel
                shall be
                reasonably acceptable to the Bank and the Executive; shall promptly
                prepare the foregoing opinion, but in no event later than thirty
                days from
                the Date of Termination; and may use such actuaries as such counsel
                deems
                necessary or advisable for the purpose. Nothing contained herein
                shall
                result in a reduction of any payments or benefits to which the Executive
                may be entitled upon termination of employment under any circumstances
                other than as specified in this Section 7, or a reduction in the
                payments
                and benefits specified in Section 6 below
                zero.

            

    

     

    
      	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.

            

    

     

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

     

    10) 
      Assignability.  The Bank 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 Bank may hereafter merge or
      consolidate or to which the Bank 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 Bank
      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.

     

    11) 
      Notice.  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
                Bank:                           
                Corporate Secretary

            

    

                            Citizens
      Financial Bank

                            707
      Ridge
      Road

                            Munster,
      Indiana
      46321

    

    
      	b)  	
              To
                the Corporation:         Corporate
                Secretary

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

                            CFS
      Bancorp,
      Inc.

                            707
      Ridge
      Road

                            Munster,
      Indiana
      46321

    

    
      	c)  	
              To
                the Executive:         
                Thomas
                F. Prisby

            

    

                            [Address
      Redacted]

     

     

    12) 
      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
      Bank 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.

     

    13) 
      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.

     

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

     

    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.

     

    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 instrument.

     

    18) 
      Regulatory Actions.  The following provisions shall be
      applicable to the parties to the extent that they are required to be included
      in
      employment agreements between a savings association and its employees pursuant
      to Section 563.39(b) of the Regulations Applicable to All Savings Associations,
      12 C.F.R. §563.39(b), or any successor thereto, and shall be controlling in the
      event of a conflict with any other provision of this Agreement, including
      without limitation Section 6 hereof.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	a)  	
              If
                the Executive is suspended from office and/or temporarily prohibited
                from
                participating in the conduct of the Employers' 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
                Employers' 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 Employers may, in their 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.

            

    

     

    
      	b)  	
              If
                the Executive is removed from office and/or permanently prohibited
                from
                participating in the conduct of the Employers' 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 Employers under this
                Agreement shall terminate as of the effective date of the order,
                but
                vested rights of the Executive and the Employers as of the date of
                termination shall not be affected.

            

    

     

    
      	c)  	
              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
                Employers as of the date of termination shall not be
                affected.

            

    

     

    
      	d)  	
              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 operation of the
                Employers
                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 ("FDIC") 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, but vested rights of the Executive and the
                Employers
                as of the date of termination shall not be
                affected.

            

    

     

    19) 
      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. §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 shall not, directly or indirectly,
      influence or participate in the affairs or the operations of the
      Bank.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    20) 
      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.

     

    21) 
      Entire Agreement.  This Agreement embodies the entire
      agreement between the Bank and the Executive with respect to the matters agreed
      to herein. All prior agreements between the Bank 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 Corporation
      and
      the Executive.

     

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

     

     

     

     

     

    Attest:                         CITIZENS
      FINANCIAL BANK

    

    

     

    /s/
      Monica F. Sullivan               By:
      /s/
      Brian L.Goins      

     

     

                               EXECUTIVE

    

    

    

                          /s/
      Thomas F.
      Prisby       

                                Thomas
      F.
      Prisby

     

     

    
      
        
        

      

      
        13

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