EMPLOYMENT AGREEMENT

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      THIS  AGREEMENT  is  entered  into  this  22nd day of  October,  2005 (the

"Effective  Date") by and between A. J. Smith Federal Savings Bank (the "Bank"),

a corporation organized under the laws of the State of Illinois, with its office

at  14757  S.  Cicero  Avenue,  Midlothian,  Illinois,  and Lyn G.  Rupich  (the

"Employee").  Any reference to the "Company"  herein shall refer to AJS Bancorp,

Inc., the holding company of the Bank.



      WHEREAS,  the Employee is currently  employed as the President of the Bank

and the Company; and



      WHEREAS, the Board of Directors of the Bank and the Employee believe it is

in the best  interests of the Bank to enter into and  employment  agreement (the

"Agreement")  in order to reinforce  and reward the Employee for her service and

dedication to the continued success of the Bank; and



      WHEREAS,  the parties hereto desire by this writing to set forth the terms

of the continuing employment relationship of the Bank and the Employee.



      NOW, THEREFORE, it is AGREED as follows:



      1. Employment.  During the term of her employment hereunder,  the Employee

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shall serve as the  President/Chief  Operating Officer of the Bank. The Employee

shall render such  administrative  and  management  services for the Bank as are

currently  rendered and as are  customarily  performed by persons  situated in a

similar executive capacity. The Employee shall also promote, by entertainment or

otherwise,  as and to the extent permitted by law, the business of the Bank. The

Employee's other duties shall be such as the Board of Directors (the "Board") of

the Bank may from time to time reasonably direct,  including normal duties as an

officer of the Bank.



      2. Base Compensation.  The Bank agrees to pay the Employee during the term

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of this  Agreement a salary at the rate of one hundred thirty  thousand  dollars

and 00/100  Dollars  ($130,000) per annum (the "Base  Salary").  The Board shall

review, not less often than annually,  the rate of the Employee's salary, and in

its sole  discretion  may decide to increase (but not decrease) her Base Salary.

Any such  increase  in the Base  Salary  shall  become  the Base  Salary for all

purposes under this Agreement. Such Base Salary shall be payable in cash no less

frequently than monthly (the monthly amount shall be referred to as the "monthly

Base Salary") or in accordance with the normal payroll practices of the Bank, as

such may be changed from time to time. The Employee shall share in normal salary

increases  at a rate not less,  but may be more,  than the  higher of the senior

management  employees  average  percentage  increases  or  the  average  of  all

employees  percentage  increases  afforded to all employees of the Bank. In both

cases  indicated  above,  the averages are exclusive of the percentage  increase

afforded  to the CEO.  Notwithstanding  the  foregoing,  following  a Change  in

Control (as  defined in Section  10(a)(3)  of this  Agreement),  the Board shall

continue to annually  review the rate of the Employee's  Base Salary,  and shall

increase  said rate of Base  Salary by a  percentage  which is not less than the



<PAGE>



average  annual  percentage  increase in Base Salary that the Employee  received

over the three calendar years immediately preceding the year in which the Change

in Control occurs.



      3. Discretionary  Bonuses.  The Employee shall participate in an equitable

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manner with all other senior  management  employees of the Bank in discretionary

bonuses  that  the  Board  may  award  from  time to time to the  Bank's  senior

management employees. No other compensation provided for in this Agreement shall

be  deemed  a  substitute  for  the  Employee's  right  to  participate  in such

discretionary  bonuses.  If such  discretionary  bonuses  are  awarded to senior

management,  Employee's  bonus shall not be less than 10% of the Employee's then

current base salary. In addition,  if such  discretionary  bonuses are no longer

awarded  to the  senior  management,  but  pre-written,  incentive  bonuses  are

afforded  to any senior  management,  then such  incentive  bonus  shall also be

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