CFS Bancorp Inc Form 8-K 07/07/06

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Tgm47V7VmrOnSwl69pvqWHc5c7xtaLbQFS0z0xSl9sPq5En7CN2d5EKIWUMT2/DU 2pndey6SwOGyWa6CQI3JPw== 0001058438-06-000068.txt : 20060707 0001058438-06-000068.hdr.sgml : 20060707 20060707150258 ACCESSION NUMBER: 0001058438-06-000068 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20060701 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060707 DATE AS OF CHANGE: 20060707 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CFS BANCORP INC CENTRAL INDEX KEY: 0001058438 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 332042093 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24611 FILM NUMBER: 06951038 BUSINESS ADDRESS: STREET 1: 707 RIDGE ROAD CITY: MUNSTER STATE: IN ZIP: 46321 BUSINESS PHONE: 2198365500 MAIL ADDRESS: STREET 1: 707 RIDGE ROAD CITY: MUNSTER STATE: IN ZIP: 46321 8-K 1 cfsbancorpform8k070706.htm CFS BANCORP INC FORM 8-K 07/07/06 CFS Bancorp Inc Form 8-K 07/07/06

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) July 1, 2006

CFS BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)

INDIANA
(State or Other Jurisdiction of Incorporation)

000-24611	35-2042093
(Commission File Number)	(IRS Employer Identification No.)

707 Ridge Road, Munster, Indiana	46321
(Address of Principal Executive Offices)	(Zip Code)

(219) 836-5500
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 Entry into a Material Definitive Agreement

In connection with the obligation to conform existing employment agreements with regulations promulgated pursuant to Internal Revenue Code Section 409A, on July 1, 2006, CFS Bancorp, Inc., hereinafter referred to as the “Company,” and Citizens Financial Bank, hereinafter referred to as the “Bank,” which Company and Bank are collectively referred to hereafter as the “Employers,” entered into new employment agreements with each of Messrs. Thomas F. Prisby, Charles V. Cole, and Thomas L.. Darovic, who are collectively referred to hereafter as the “Executives”. These agreements superseded existing employment agreements between the Executives and the Employers.

Under the new agreements, the Employers agreed to employ Mr. Prisby, Mr. Cole and Mr. Darovic for a term of 36, 18, and 12 months, respectively, each in their current respective positions. Under the agreements, Mr. Prisby, Mr. Cole and Mr. Darovic remained at their current base salary levels of $370,240, $177,000 and $171,000, respectively.

The employment agreements are reviewed annually by the Employers’ respective Boards of Directors. The term of each Executive’s employment agreement with the Company is extended daily for a successive additional one-day period unless the Company provides notice not less than 60 days prior to such date of its intention not to extend the employment term. The term of each Executive’s existing agreement with the Bank may be periodically extended by the Bank for no more than one additional year.

Each of the employment agreements is terminable with or without cause by the Employers. The Executives have no right to compensation or other benefits pursuant to the employment agreements for any period after voluntary termination or termination by the Employers for cause, disability, retirement, or death. In the event that (i) the Executive terminates his employment because of failure to comply with any material provision of the employment agreement by the Employers or the Employers change the Executive’s title or duties or (ii) the employment agreement is terminated by the Employers other than for cause, disability, retirement, or death or by the Executive as a result of certain adverse actions which are taken with respect to the Executive’s employment following a Change in Control of the Company, as defined therein, the Executive will be entitled to a cash severance amount.

In the case of Mr. Prisby, the cash severance amount would be equal to 300% of his Average Annual Compensation, as defined therein. In the case of Mr. Cole, the cash severance amount would be equal to 150% of his Average Annual Compensation, as defined therein. In the case of Mr. Darovic, the cash severance amount would be equal to 100% of his Average Annual Compensation, as defined therein.

The Executives’ agreements with the Company also provide that in the event that any of the payments to be made thereunder or otherwise upon termination of employment are deemed to constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Code”), and such payments will cause the Executive to incur an excise tax under the Code, the Company shall pay the Executive an amount such that after the payment of all federal, state, and local income taxes and any additional excise tax, the

Executive will be fully reimbursed for the amount of such excise tax.

A “Change in Control” is defined in the employment agreements to include any change in control of the Company required to be reported under the federal securities laws, as well as (i) the acquisition by any person of 20% or more of the Company’s outstanding voting securities and (ii) a change in a majority of the directors of the Company during any three-year period without the approval of at least two-thirds of the persons who were directors of the Company at the beginning of such period.

An Executive's "Average Annual Compensation" is defined in the employment Agreements to mean the average Base Salary, cash bonuses and amounts allocated to the Executive under any qualified employee benefit plans of the Employers.

Although the above-described employment agreements could increase the cost of any acquisition of control of the Company, management of the Company does not believe that the terms thereof would have a significant anti-takeover effect. The Employers may determine to enter into similar employment agreements with other officers of the Employers in the future.

For additional information, reference is made to the employment agreements included as Exhibits 10.1, 10.2, 10.6, 10.7, 10.8 and 10.9 hereto and which are incorporated herein by reference thereto.

ITEM 9.01 Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

The following exhibits are filed herewith.

Exhibit Number Description

	10.1		Employment Agreement entered into between Citizens Financial Bank and Thomas F. Prisby
	10.2		Employment Agreement entered into between CFS Bancorp, Inc. and Thomas F. Prisby
	10.6		Employment Agreement entered into between Citizens Financial Bank and Charles V. Cole
	10.7		Employment Agreement entered into between Citizens Financial Bank and Thomas L. Darovic
	10.8		Employment Agreement entered into between CFS Bancorp, Inc. and Charles V. Cole
	10.9		Employment Agreement entered into between CFS Bancorp, Inc. and Thomas L. Darovic

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

		CFS BANCORP, INC.



Date: July 7, 2006	By:	/s/ Brian L. Goins
		Brian L. Goins
		Senior Vice President - Corporate Counsel

EX-10.1 2 exhibit10_1.htm CFS BANCORP INC FORM 8-K EXHIBIT 10.1 CFS 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.

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.

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.

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.

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.

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:

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

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.

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.

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 1^st following any calendar year in which the employee is a Key Employee.

2)	Term of Employment.

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

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.

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

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.

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.

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.

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

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.

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.

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

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.

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.

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.

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.

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

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.

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.

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.

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.

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:

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 15^th of the calendar year following the year in which the first installment was 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, 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.

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 15^th 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).

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.

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

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.

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.

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.

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.

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

EX-10.2 3 exhibit10_2.htm CFS BANCORP INC FORM 8-K EXHIBIT 10.2 CFS Bancorp Inc Form 8-K Exhibit 10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

AGREEMENT dated this 1^st day of July 2006 between CFS Bancorp, Inc. (the "Corporation"), an Indiana corporation, and Thomas F. Prisby (the "Executive").

WITNESSETH

WHEREAS, the Executive is presently an officer of the Corporation and Citizens Financial Bank (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)	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.

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 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 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.

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.

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.

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:

(i)

(ii)

(iii)

(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

(v)	The failure by the Corporation 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.

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 30 nor more than 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.

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.

2)	Term of Employment.

The Corporation hereby employs the Executive as its Chief Executive 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 three years 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 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 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.

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, Confidentiality and Non-Competition

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 Chicago CMSA.

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 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 Chicago CMSA.

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.

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 the 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 the 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 the 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 Employer, 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.

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 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.

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 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.

h)	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 annual dues at his Country Club.

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 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.

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.

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.

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.

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 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, a cash severance amount equal to three times that portion of the Executive’s Average Annual Compensation paid by the Corporation, in two equal

i)	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 15^th of the calendar year following the year in which the first installment was 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, 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 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 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.

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), 6(d)(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 15^th 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)	Payment of Additional Benefits under Certain Circumstances.

reduction in such amounts pursuant to Section 7 of the Bank Agreement), would constitute a "parachute payment" as defined in Section 280G(b)(2) of the Code (the "Initial Parachute Payment," which includes the amounts paid pursuant to clause (i) below), then the Corporation shall pay to the Executive, a cash amount in two equal installments, with the first installment to be paid on the first business day of the month following the Date of Termination and the second installment to be paid no later than January 15^th of the calendar year following the year in which the first installment was paid. The cash amount shall be equal to the sum of the following:

i)	the amount by which the payments and benefits that would have otherwise been paid by the Bank to the Executive pursuant to Section 6 of the Bank Agreement are reduced by the provisions of Section 7 of the Bank Agreement;

ii)

twenty percent (or such other percentage equal to the tax rate imposed by Section 4999 of the Code) of the amount by which the Initial Parachute Payment exceeds the Executive's "base amount" from the Employers, as defined in Section 280G(b)(3) of the Code, with the difference between the Initial Parachute Payment and the Executive's base amount being hereinafter referred to as the "Initial Excess Parachute Payment";

iii)

such additional amount (tax allowance) as may be necessary to compensate the Executive for the payment by the Executive of state and federal income and excise taxes on the payment provided under clause (ii) above and on any payments under this clause (iii). In computing such tax allowance, the payment to be made under clause (ii) above shall be multiplied by the "gross up percentage" ("GUP"). The GUP shall be determined as follows:

GUP = Tax Rate / 1 - Tax Rate

iv)

Tax Rate

The Tax Rate for purposes of computing the GUP shall be the highest marginal federal and state income and employment-related tax rate, including any applicable excise tax rate, applicable to the Executive in the year in which the payment under clause (ii) above is made.

may be) would have been if the Initial Excess Parachute Payment had been equal to the Determinative Excess Parachute Payment. In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive's benefit. As soon as practicable after the Adjustment Amount has been so determined, the Corporation shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the Corporation, as the case may be.

In each calendar year that the Executive receives payments of benefits under this Section 7, the Executive shall report on his state and federal income tax returns such information as is consistent with the determination made by the independent tax counsel or accountants of the Corporation as described above. The Corporation shall indemnify and hold the Executive harmless from any and all losses, costs and expenses (including without limitation, reasonable attorneys' fees, interest, fines and penalties) which the Executive incurs as a result of so reporting such information. The Executive shall promptly notify the Company in writing whenever the Executive receives notice of the institution of a judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Section 7 is being reviewed or is in dispute. The Corporation shall assume control, at its expense, over all legal and accounting matters pertaining to such federal tax treatment (except to the extent necessary or appropriate for the Executive to resolve any such proceeding with respect to any matter unrelated to amounts paid or payable pursuant to this Section) and the Executive shall cooperate fully with the Corporation in any such proceeding. The Executive shall not enter into any compromise or settlement or otherwise prejudice any rights the Corporation may have in connection therewith without the prior consent of the Corporation.

8)	Mitigation; Exclusivity of Benefits.

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.

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.

10)

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.

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 Corporation: Corporate Secretary

CFS Bancorp, Inc.

707 Ridge Road

Munster, Indiana 46321

b)	To the Bank: Corporate Secretary

Citizens Financial Bank

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 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.

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 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,

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

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 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.

19)

Payment of Costs and Legal Fees and Reinstatement of Benefits. In the event any dispute or controversy arising under or in connection with the Executive's termination is resolved in favor of the Executive, whether by judgment, arbitration or settlement, the Executive shall be entitled to the payment of (a) all legal fees incurred by the Executive in resolving such dispute or controversy, and (b) any back-pay, including Base Salary, bonuses and any other cash compensation, fringe benefits and any compensation and benefits due to the Executive under this Agreement.

20)

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 Indiana law against all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having been a director or officer of the 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.

21)

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. Nothwithstanding 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/ Brian L.Goins

EXECUTIVE

/s/ Thomas F. Prisby

Thomas F. Prisby

EX-10.6 4 exhibit10_6.htm CFS BANCORP INC FORM 8-K EXHIBIT 10.6 CFS Bancorp Inc Form 8-K Exhibit 10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT

AGREEMENT dated this 1^st day of July 2006 between Citizens Financial Bank (the "Bank"), a federally chartered savings bank, and Charles V. Cole (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

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.

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.

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

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

ii)

iii)

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

v)	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.

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

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.

2)	Term of Employment.

The Bank hereby employs the Executive as its Chief Financial 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 eighteen months 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

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.

3)	Loyalty, Confidentiality and Non-Competition

For a period of 18 months 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.

e)	Executive agrees that, during his employment, and for a period of 18 months 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)

iv)	shall not, either directly or indirectly, induce or solicit any person to leave the employ of the Employers.

4)	Compensation and Benefits.

The Employers shall compensate and pay the Executive for his services during the term of this Agreement at a minimum base salary of $177,000 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 the event the Executive's employment is terminated due to Disability or Retirement, and provided the Employee is not otherwise employed in a position providing substantially similar benefits, the Employer will continue, at its cost and for the remaining term of this Agreement, life and medical insurance coverage for the Executive and his spouse at substantially similar levels of coverage and benefits as the Employers provide at such time for its then existing senior executives.

e)	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.

f)	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.

g)	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 otherwise generally entitled to receive.

6)	Termination.

pay to the Executive, a cash severance amount equal to 150% of 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 15^th of the calendar year following the year in which the first installment was 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, 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 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.

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 (3) 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 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 (30) 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.

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.

a)	To the Bank: Corporate Secretary

Citizens Financial Bank

707 Ridge Road

Munster, Indiana 46321

b)	To the Corporation: Corporate Secretary

CFS Bancorp, Inc.

707 Ridge Road

Munster, Indiana 46321

c)	To the Executive: Charles V. Cole

[Address Redacted]

12) Ammendment; 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.

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.

19) Regulartory 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.

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/ Charles V. Cole

Charles V. Cole

EX-10.7 5 exhibit10_7.htm CFS BANCORP INC FORM 8-K EXHIBIT 10.7 CFS Bancorp Inc Form 8-K Exhibit 10.7

Exhibit 10.7

EMPLOYMENT AGREEMENT

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

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.

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.

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

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 of Retail Banking for the Bank or a material adverse change made by the Employers in the Executive's functions, duties or responsibilities as an Executive Vice President of the Bank;

ii)

iii)

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.

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 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.

2)	Term of Employment.

The Bank hereby employs the Executive as its Executive Vice President of Retail Banking, 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 twelve months 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 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.

3)	Loyalty, Confidentiality and Non-Competition

The Executive shall devote his 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 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.

For a period of one year 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.

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

iv)	shall not, either directly or indirectly, induce or solicit any person to leave the employ of the Employers.

4)	Compensation and Benefits.

The Employers shall compensate and pay the Executive for his services during the term of this Agreement at a minimum base salary of $171,000 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.

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 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.

e)	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.

f)	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.

g)	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 otherwise generally entitled to receive.

During the term of this Agreement, the Bank shall provide to Executive the use of an automobile with an average annual lease cost not to exceed $10,000 per year. The Bank agrees to replace the automobile with a new one at Executive's request no more often than once every three years. The Bank shall pay all automobile operating expenses incurred by Executive in the performance of Executive's duties. The Bank 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.

6)	Termination.

pay to the Executive, a cash severance amount equal to 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 15^th of the calendar year following the year in which the first installment was paid; and

ii)

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 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.

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 (3) 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 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 (30) 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.

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)

a)	To the Bank: Corporate Secretary

Citizens Financial Bank

707 Ridge Road

Munster, Indiana 46321

b)	To the Corporation: Corporate Secretary

CFS Bancorp, Inc.

707 Ridge Road

Munster, Indiana 46321

To the Executive: Thomas L. Darovic

[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)

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)

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.

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.

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.

19)

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 L. Darovic

Thomas L. Darovic

EX-10.8 6 exhibit10_8.htm CFS BANCORP INC FORM 8-K EXHIBIT 10.8 CFS Bancorp Inc Form 8-K Exhibit 10.8

Exhibit 10.8

EMPLOYMENT AGREEMENT

AGREEMENT dated this 1st day of July 2006 between CFS Bancorp, Inc. (the "Corporation"), an Indiana corporation, and Charles V. Cole (the "Executive").

WITNESSETH

WHEREAS, the Executive is presently an officer of the Corporation and Citizens Financial Bank (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)	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.

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.

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

(i)

(ii)

(iii)

(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

(v)	The failure by the Corporation 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.

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.

2)	Term of Employment.

The Corporation hereby employs the Executive as 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 18 months 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

3)	Loyalty, Confidentiality and Non-Competition

For a period of 18 months 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 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 Chicago CMSA.

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,

e)	Executive agrees that, during his employment, and for a period of 18 months 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 the 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 Employer, 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.

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 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

e)	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.

f)	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.

g)	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 otherwise generally entitled to receive.

6)	Termination.

pay to the Executive, a cash severance amount equal to 150% of that portion of the Executive’s Average Annual Compensation paid by the Corporation, 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 15^th of the calendar year following the year in which the first installment was 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, 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 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 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.

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), 6(d)(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 15^th 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)	Payment of Additional 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 Employers (including, without limitation, the payments and benefits which the Executive would have the right to receive from the Bank pursuant to Section 6 of the Agreement between the Bank and the Executive dated this even date ("Bank Agreement"), before giving effect to any reduction in such amounts pursuant to Section 7 of the Bank Agreement), would constitute a "parachute payment" as defined in Section 280G(b)(2) of the Code (the "Initial Parachute Payment," which includes the amounts paid pursuant to clause (i) below), then the Corporation shall pay to the Executive, a cash amount in two equal installments, with the first installment to be paid on the first business day of the month following the Date of

Termination and the second installment to be paid no later than January 15^th of the calendar year following the year in which the first installment was paid. The cash amount shall be equal to the sum of the following:

i)	the amount by which the payments and benefits that would have otherwise been paid by the Bank to the Executive pursuant to Section 6 of the Bank Agreement are reduced by the provisions of Section 7 of the Bank Agreement;

ii)

iii)

GUP = Tax Rate / 1 - Tax Rate

iv)

Tax Rate

Notwithstanding the foregoing, if it shall subsequently be determined in a final judicial determination or a final administrative settlement to which the Executive is a party that the actual excess parachute payment as defined in Section 280G(b)(1) of the Code is different from the Initial Excess Parachute Payment (such different amount being hereafter referred to as the "Determinative Excess Parachute Payment"), then the Corporation's independent tax counsel or accountants shall determine the amount (the "Adjustment Amount") which either the Executive must pay to the Corporation or the Corporation must pay to the Executive in order to put the Executive (or the Corporation, as the case may be) in the same position the Executive (or the Corporation, as the case may be) would have been if the Initial Excess Parachute Payment had been equal to the Determinative Excess Parachute Payment. In determining the Adjustment Amount, the independent tax counsel or accountants shall take into account any and all taxes (including any penalties and interest) paid by or for the Executive or refunded to the Executive or for the Executive's benefit. As soon as practicable after the Adjustment

Amount has been so determined, the Corporation shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the Corporation, as the case may be.

8)	Mitigation; Exclusivity of Benefits.

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.

10)

Agreement or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

11)

a)	To the Corporation: Corporate Secretary

CFS Bancorp, Inc.

707 Ridge Road

Munster, Indiana 46321

b)	To the Bank: Corporate Secretary

Citizens Financial Bank

707 Ridge Road

Munster, Indiana 46321

c)	To the Executive: Charles V. Cole

[Address Redacted]

12)

13)

14)

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)

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)

19)

20)

21)

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/ Brian L.Goins

EXECUTIVE

/s/ Charles V. Cole

Charles V. Cole

EX-10.9 7 exhibit10_9.htm CFS BANCORP INC FORM 8-K EXHIBIT 10_9 CFS Bancorp Inc Form 8-K Exhibit 10_9

Exhibit 10.9

EMPLOYMENT AGREEMENT

AGREEMENT dated this 1st day of July 2006 between CFS Bancorp, Inc. (the "Corporation"), an Indiana corporation, and Thomas L. Darovic (the "Executive").

WITNESSETH

WHEREAS, the Executive is presently an officer of the Corporation and Citizens Financial Bank (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)	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.

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.

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

(i)

(ii)

(iii)

(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

(v)	The failure by the Corporation 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.

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.

2)	Term of Employment.

The Corporation hereby employs the Executive as a 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 twelve months 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 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 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.

3)	Loyalty, Confidentiality and Non-Competition

For a period of one year 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 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 Chicago CMSA.

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,

e)	Executive agrees that, during his employment, and for a period of one year 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 the 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 Employer, 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.

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 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

e)	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.

f)	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.

g)	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 otherwise generally entitled to receive.

6)	Termination.

pay to the Executive, a cash severance amount equal to the Executive’s Average Annual Compensation paid by the Corporation, 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 15^th of the calendar year following the year in which the first installment was 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, 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 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 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.

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), 6(d)(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 15^th 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)	Payment of Additional Benefits under Certain Circumstances.

i)	the amount by which the payments and benefits that would have otherwise been paid by the Bank to the Executive pursuant to Section 6 of the Bank Agreement are reduced by the provisions of Section 7 of the Bank Agreement;

ii)

iii)

GUP = Tax Rate / 1 - Tax Rate

iv)

Tax Rate

Amount has been so determined, the Corporation shall pay the Adjustment Amount to the Executive or the Executive shall repay the Adjustment Amount to the Corporation, as the case may be.

8)	Mitigation; Exclusivity of Benefits.

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.

10)

Agreement or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

11)

a)	To the Corporation: Corporate Secretary

CFS Bancorp, Inc.

707 Ridge Road

Munster, Indiana 46321

b)	To the Bank: Corporate Secretary

Citizens Financial Bank

707 Ridge Road

Munster, Indiana 46321

b)	To the Executive: Thomas L. Darovic

[Address Redacted]

12)

13)

14)

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)

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)

19)

20)

21)

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/ Brian L.Goins

EXECUTIVE

/s/ Thomas L. Darovic

Thomas L. Darovic

-----END PRIVACY-ENHANCED MESSAGE-----