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EXHIBITS




EXHIBIT 10.1




MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.

2006 STOCK INCENTIVE PLAN




Article 1. Establishment and Purpose




     1.1 Establishment. Merchants and Manufacturers Bancorporation, Inc., a Wisconsin
corporation (the “Company”), hereby establishes a stock incentive plan for employees and others
providing services to the Company, as described herein, which shall be known as the Merchants and
Manufacturers Bancorporation, Inc. 2006 Stock Incentive Plan (the “Plan”). It is intended that
certain of the options issued pursuant to the Plan to employees of the Company may constitute
incentive stock options within the meaning of section 422 of the Internal Revenue Code, and that
other options issued pursuant to the Plan shall constitute nonstatutory options. The Board shall
determine which options are to be incentive stock options and which are to be nonstatutory options
and shall enter into option agreements with recipients accordingly.



     1.2 Purpose. The purpose of the Plan is to provide a means for the Company to attract
and retain competent personnel and to provide to participating directors, officers and other key
employees long term incentives for high levels of performance by providing them with a means to
acquire a proprietary interest in the Company’s success.



Article II. Definitions




     2.1 Definitions. For purposes of this Plan, the following terms shall be
defined follows:




	 	(a)	 	“Award” means any Restricted Stock, Incentive Stock Option or
Nonstatutory Option awarded to a Grantee pursuant to this Plan.
	 
	 	(b)	 	“Board” means the Board of Directors of the Company.
	 
	 	(c)	 	“Cause” means the definition of Cause in Grantee’s written employment
agreement, if any, with the Company. If no such employment agreement or definition in
such agreement exists, Cause means (i) breach by a Grantee of any covenant not to
compete or confidentiality agreement with the Company, (ii) failure by a Grantee to
substantially perform his duties to the reasonable satisfaction of the Board, (iii)
serious misconduct by a Grantee which is demonstrably and substantially injurious to
the Company, (iv) fraud or dishonesty by a Grantee with respect to the Company, (v)
material misrepresentation by a Grantee to a shareholder or director of the Company or
(vi) acts of negligence by a Grantee in performance of the Grantee’s duties that are
substantially injurious to the Company. The Board, by majority vote, shall make the
determination of whether Cause exists.
	 
	 	(d)	 	“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor thereto.
	 
	 	(e)	 	“Commission” means the Securities and Exchange Commission or any successor
agency.
	 
	 	(f)	 	“Committee” means the Committee provided for by Article IV hereof, which may be
created at the discretion of the Board.
	 
	 	(g)	 	“Company” means Merchants and Manufacturers Bancorporation, Inc., a Wisconsin
corporation.
	 
	 	(h)	 	“Consultant” means any person or entity, including an officer or director of
the Company who provides services (other than as an Employee) to the Company and
includes a Qualified Director, as defined below.




 









 












	 	(i)	 	“Date of Exercise” means the date the Company receives notice, by a Grantee, of
the exercise of an Option pursuant to section 8.9 of this Plan. Such notice shall
indicate the number of shares of Stock the Grantee intends to purchase upon exercise of
an Option.
	 
	 	(j)	 	“Employee” means any person, including an officer or director of the Company,
who is employed by the Company or any subsidiary of the Company (as defined in section
424(f) of the Code).
	 
	 	(k)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor thereto.
	 
	 	(l)	 	“Fair Market Value” means the fair market value of Stock upon which an Option
is granted under this Plan, as determined by the Board. If the Stock is traded on an
over-the-counter securities market or national securities exchange, “Fair Market Value”
shall mean the closing sales price of the Stock reported on such over-the-counter
market or such national securities exchange on the applicable date or, if no sales of
Stock have been reported for that date, on the next preceding date for which sales
where reported.
	 
	 	(m)	 	“Grantee” means an Employee or Consultant holding an Award under the Plan.
	 
	 	(n)	 	“Incentive Stock Option” means an Option granted under this Plan which is
intended to qualify as an “incentive stock option” within the meaning of section 422 of
the Code.
	 
	 	(o)	 	“IRS” means the Internal Revenue Service, or any successor agency.
	 
	 	(p)	 	“Nonstatutory Option” means an Option granted under this Plan which is not
intended to qualify as an incentive stock option within the meaning of section 422 of
the Code. Nonstatutory Options may be granted at such times and subject to such
restrictions as the Board shall determine without conforming to the statutory rules of
section 422 of the Code applicable to incentive stock options.
	 
	 	(q)	 	“Option” means the right, granted under Article VIII of this Plan, to purchase
Stock of the Company at the option price for a specified period of time. For purposes
of this Plan, an Option may be an Incentive Stock Option or a Nonstatutory Option.
	 
	 	(r)	 	“Parent Corporation” shall have the meaning set forth in section 424(e) of the
Code with the Company being treated as the employer corporation for purposes of this
definition.
	 
	 	(s)	 	“Restricted Stock” means an award of Stock granted under Article IX of this
Plan.
	 
	 	(t)	 	“Qualified Director” means a director who is both (a) a “Non-Employee Director”
as defined in Rule 16b-3(b)(3)(i), as promulgated by the Commission under the Exchange
Act, or any successor definition adopted by the Commission, and (b) an “Outside
Director” as defined by section 162(m) of the Code and the regulations promulgated
thereunder, or any successor definition adopted by the IRS.
	 
	 	(u)	 	“Rule 16b-3” means Rule 16b-3, as promulgated by the Commission under section
16(b) of the Exchange Act, as amended from time to time.
	 
	 	(v)	 	“Significant Stockholder” means an individual who, within the meaning of
section 422(b)(6) of the Code, owns stock possessing more than ten percent of the total
combined voting power of all
classes of stock of the Company. In determining whether an individual is a
Significant Stockholder, an individual shall be treated as owning stock owned by
certain relatives of the individual and certain stock owned by corporations in which
the individual is a partner, and estates or trusts of which the individual is a
beneficiary, all as provided in section 424(d) of the Code.




 









 












	 	(w)	 	“Stock” means the Common Stock, par value $1.00 per share, of the Company.





     2.2 Gender and Number. Except when otherwise indicated by the context, any masculine
terminology when used in this Plan also shall include the feminine gender and the definition of any
term herein in the singular shall also include the plural.



Article III. Eligibility and Participation




     3.1 Eligibility and Participation. All Employees are eligible to participate in this
Plan and receive Awards of Restricted Stock, Incentive Stock Options and/or Nonstatutory Options.
All Consultants are eligible to participate in this Plan and receive Awards of Restricted Stock
and/or Nonstatutory Options hereunder. Grantees shall be selected by the Board from among those
Employees and Consultants who, in the opinion of the Board, are in a position to contribute
materially to the Company’s continued growth and development and to its long-term financial
success.



Article IV. Administration




     4.1 Administration. The Board shall be responsible for administering the Plan.



     The Board is authorized to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances deemed necessary or
advisable to protect the interests of the Company, and to make all other determinations necessary
or advisable for the administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations or other actions made or taken by the
Board pursuant to the provisions of this Plan shall be final and binding and conclusive for all
purposes and upon all persons.



     At the discretion of the Board, this Plan may be administered by a Committee which shall be a
compensation committee of the Board, consisting solely of two or more Qualified Directors. The
members of such Committee may be directors who are eligible to receive Awards under this Plan, but
Awards may be granted to such members only by action of the full Board and not by action of the
Committee. Such Committee shall have full power and authority, subject to the limitations of the
Plan and any limitations imposed by the Board, to construe, interpret and administer this Plan, to
make determinations which shall be final, conclusive and binding upon all persons, including,
without limitation, the Company, the shareholders, the directors and any persons having any
interests in any Options which may be granted under this Plan and, by resolution providing for the
creation and issuance of any such Award, to select the Employees and Consultants to whom Awards may
from time to time be granted, to determine what form of Awards are to be granted under this Plan,
and to determine the terms and conditions of any Award granted under this Plan (including, but not
limited to, the number of shares, the share price, any restriction or limitation and any vesting
acceleration or forfeiture waiver regarding any Award), which terms and conditions shall, in every
case, be set forth or incorporated by reference in the instrument or instruments evidencing such
Award, and shall be consistent with the provisions of the Plan.



     The Board may from time to time remove members from, or add members to, the Committee. The
Board may terminate the Committee at any time. Vacancies on the Committee, howsoever caused, shall
be filled by the Board. The Committee shall select one of its members as Chairman, and shall hold
meetings at such times and places as the Chairman may determine. A majority of the Committee at
which a quorum is present, or acts reduced to or approved in writing by all of the members of the
Committee, shall be the valid acts of the Committee. A quorum shall consist of two-thirds of the
members of the Committee.



     Where the Committee has been created by the Board, references herein to actions to be taken by
the Board shall be deemed to refer to the Committee as well, except where limited by this Plan or
by the Board.



     The Board shall have all of the enumerated powers of the Committee but shall not be limited to
such powers. No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award granted under it.



 









 





     4.2 Special Provisions for Grants to Officers or Directors. Rule 16b-3 provides that
the grant of a stock option or restricted stock to a director or officer of a company subject to
the Exchange Act will be exempt from the provisions of section 16(b) of the Exchange Act if the
conditions set forth in Rule 16b-3 are satisfied. Unless otherwise specified by the Board, grants
of Awards hereunder to individuals who are officers or directors of the Company for purposes of
section 16(b) of the Exchange Act shall be made in a manner that satisfies the conditions of Rule
16b-3.



Article V. Stock Subject to the Plan




     5.1 Number. The total number of shares of Stock hereby made available and reserved
for issuance under the Plan shall be 210,000. The aggregate number of shares of Stock available
under this Plan shall be subject to adjustment as provided in section 5.3. The total number of
shares of Stock may be authorized but unissued shares of Stock, or shares acquired by purchase as
directed by the Board from time to time in its discretion, to be used for issuance pursuant to
Awards granted hereunder.



     5.2 Unused Stock. If an Option shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares of Stock subject thereto shall (unless the
Plan shall have terminated) become available for other Awards under the Plan. If any shares of
Stock that are subject to any Award of Restricted Stock are forfeited, such shares of Stock shall
(unless the Plan shall have terminated) become available for other Awards under the Plan.



     5.3 Adjustment in Capitalization. In the event of any change in the outstanding
shares of Stock by reason of a stock dividend or split, recapitalization, reclassification or other
similar corporate change, the aggregate number of shares of Stock set forth in section 5.1 shall be
appropriately adjusted by the Board, whose determination shall be conclusive; provided, however,
that fractional shares shall be rounded to the nearest whole share. In any such case, the number
and kind of shares that are subject to any Option (including any Option outstanding after
termination of employment) and the Option price per share shall be proportionately and
appropriately adjusted without any change in the aggregate Option price to be paid therefor upon
exercise of the Option.



Article VI. Limitations




     6.1 Incentive Stock Options. In the cases of Incentive Stock Options, the total Fair
Market Value (determined at the date of grant) of shares of Stock with respect to which Incentive
Stock Options are exercisable for the first time by the Grantee during any calendar year under all
plans of the Company under which incentive stock options may be granted (and all such plans of any
Parent Corporation and any subsidiary corporations of the Company) shall not exceed $100,000.
(Hereinafter, this requirement is sometimes referred to as the “$100,000 Limitation.”) Nothing in
this section shall be deemed to prevent the grant of Options permitting exercise in excess of the
maximums established hereby where such excess amount is treated as a Nonstatutory Option.



     6.2 Section 162(m) Limitations. The following limitations shall apply to grants of
Awards under this Plan:




	 	(a)	 	No individual Grantee shall be granted, in any fiscal year of the Company,
Awards with respect to more than 100,000 shares of Stock in total.
	 
	 	(b)	 	In connection with his or her initial service, a Grantee may be granted Awards
with respect to up to an additional 50,000 shares of Stock which shall not count
against the limit set forth in section 6.2(a) above.
	 
	 	(c)	 	The foregoing limitations shall be adjusted proportionately in connection with
any change in the Company’s capitalization as described in section 5.3
	 
	 	(d)	 	If an Award is cancelled in the same fiscal year of the Company in which it was
granted (other than in connection with a transaction described in Article XIII), the
cancelled Award will be counted against the limits set forth in sections 6.2(a) and (b)
above. For this purpose, if the exercise price 










 









 











     
of an Option is reduced, the
transaction will be treated as a cancellation of the Option and the grant of a new
Option.




Article VII. Duration of the Plan




     7.1 Duration of the Plan. The Plan shall be in effect until May 16, 2016 Any Awards
outstanding at the end of such period shall remain in effect in accordance with their terms.



Article VIII. Terms of Stock Options




     8.1 Grant of Options. Subject to section 5.1 and Article VI, Options may be granted
to Employees or Consultants at any time and from time to time as determined by the Board; provided,
however, that Consultants may receive only Nonstatutory Options and may not receive Incentive Stock
Options. The Board shall have complete discretion in determining the number of Options granted to
each Grantee. In making such determinations, the Board may take into account the nature of
services rendered by such Employee or Consultant, their present and potential contributions to the
Company, and such other factors as the Board in its discretion shall deem relevant. The Board
shall also determine whether an Option is to be an Incentive Stock Option or a Nonstatutory Option.



     8.2 No Tandem Options. Where an Option granted under this Plan is intended to be an
Incentive Stock Option, the Option shall not contain terms pursuant to which the exercise of the
Option would affect the Grantee’s right to exercise another Option, or vice versa, such that the
Option intended to be an Incentive Stock Option would be deemed a tandem stock option within the
meaning of the regulations under section 422 of the Code.



     8.3 Option Agreement; Terms and Conditions to Apply Unless Otherwise Specified. As
determined by the Board on the date of grant, each Option shall be evidenced by an Option agreement
(the “Option Agreement”) that includes the nontransferability provisions required by section 11.2
hereof and specifies: whether the Option is an Incentive Stock Option or a Nonstatutory Option;
the Option price; the duration of the Option; the number of shares of Stock to which the Option
applies; any vesting or exercisability restrictions which the Board may impose; in the case of an
Incentive Stock Option, a provision implementing the $100,000 Limitation; and any other terms and
conditions as shall be determined by the Board at the time of grant of the Option.



     All Option Agreements shall incorporate the provisions of this Plan by reference, with certain
provisions to apply depending upon whether the Option Agreement applies to an Incentive Stock
Option or to a Nonstatutory Option.



     8.4 Option Price. No Option granted pursuant to this Plan shall have an Option price
that is less than the Fair Market Value of the Stock on the date the Option is granted. Incentive
Stock Options granted to Significant Stockholders shall have an Option price of not less than 110
percent of the Fair Market Value of the Stock on the date of grant.



     8.5 Term of Options. Each Option shall expire at such time as the Board shall
determine when it is granted, provided, however, that no Option shall be exerciseable later than
the tenth anniversary date of its grant.



     8.6 Exercise of Options. Options granted under this Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Board shall in each instance
approve, which need not be the same for all Grantees.



     8.7 Payment. Payment for all shares of Stock shall be made at the time that an
Option, or any part thereof, is exercised, and no shares shall be issued until full payment
therefor has been made. Such payment may be made in cash, outstanding shares of Stock, in
combinations thereof, or any other method of payment approved by the Board; provided, however, that
(i) the deposit of any withholding tax shall be made in accordance with applicable law and (ii)
that such shares of Stock used to pay the exercise price have been held by the Participant for at
least six months prior to the exercise date. If shares of Stock are being used in part or full
payment for the shares to be acquired upon exercise of the Option, such shares shall be valued for
the purpose of such exchange as of the date of



 









 





exercise of the Option at the Fair Market Value of
the shares. Any certificates evidencing shares of Stock used to pay the purchase price shall be
accompanied by stock powers duly endorsed in blank by the registered holder of the certificate
(with signatures thereon guaranteed). In the event the certificates tendered by the holder in such
payment cover more shares than are required for such payment, the certificate shall also be
accompanied by instructions from the holder to the Company’s transfer agent with regard to the
disposition of the balance of the shares covered thereby.



     8.8 Prohibition on Repricing. Except for adjustments pursuant to section 5.3 and
Article XIII, the per share Option price for any Option granted pursuant to this Plan may not be
decreased after the date of grant nor may an outstanding Option be surrendered to the Company as
consideration for the grant of a new Option with a lower Option price without the approval of the
Company’s shareholders.



     8.9 Written Notice. A Grantee wishing to exercise an Option shall give written notice
to the Company, in the form and manner prescribed by the Board. Full payment for the Options
exercised, as provided in section 8.7 above, must accompany the written notice.



     8.10 Issuance of Stock Certificate. As soon as practicable after the receipt of
written notice and payment, the Company shall deliver to the Grantee or to a nominee of the Grantee
a certificate or certificates for the requisite number of shares of Stock.



     8.11 Privileges of a Shareholder. A Grantee or any other person entitled to exercise
an Option under this Plan shall not have shareholder privileges with respect to any Stock covered
by the Option until the date of issuance of a stock certificate for such Stock.



     8.12 Termination of Employment or Services. Except as otherwise expressly specified
by the Board, all Options granted under this Plan shall be subject to the following termination
provisions.



     (a) Death. If a Grantee’s employment in the case of an Employee, or provision of
services as a Consultant in the case of a Consultant, terminates by reason of death, the Option may
thereafter be exercised at any time prior to the expiration date of the Option or within 12 months
after the date of such death, whichever period is the shorter, by the person or persons entitled to
do so under the Grantee’s will or, if the Grantee shall fail to make a testamentary disposition of
an Option or shall die intestate, the Grantee’s legal representative or representatives. The
Option shall be exercisable only to the extent that such Option was exercisable as of the date of
death.



     (b) Termination Other Than for Cause or Due to Death. In the event of a Grantee’s
termination of employment in the case of an Employee, or termination of the provision of services
as a Consultant in the case of a Consultant, other than for Cause or by reason of death, the
Grantee may exercise such portion of his Option as was exercisable by him at the date of such
termination (the “Termination Date”) at any time within three months of the Termination Date;
provided, however, that where the Grantee is an Employee, and is terminated due to disability
within the meaning of Code section 422, he may exercise such portion of his Option as was
exercisable by him on
his Termination Date within one year of his Termination Date. In any event, the Option cannot be
exercised after the expiration of the original term of the Option. Options not exercised within
the applicable period specified above shall terminate.



          In the case of an Employee, a change of duties or position within the Company, if any, shall
not be considered a termination of employment for purposes of this Plan. The Option Agreements may
contain such provisions as the Board shall approve with respect to the effect of approved leaves of
absence upon termination of employment.




     (c) Termination for Cause. In the event of a Grantee’s termination of employment in
the case of an Employee, or termination of the provision of services as a Consultant in the case of
a Consultant, which termination is by the Company for Cause, any Option or Options held by him
under the Plan, to the extent not exercised before such termination, shall forthwith terminate.



 









 





Article IX. Restricted Stock




     9.1 Grant of Restricted Stock. Subject to section 5.1 and Article VI, shares of
Restricted Stock may be granted to Employees or Consultants at any time and from time to time as
determined by the Board. The Board shall have complete discretion in determining the number of
shares of Restricted Stock granted to each Grantee, the time or times within which such Awards may
be subject to forfeiture and any other terms and conditions of the Awards, in addition to those
contained in section 9.3. The Board may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors or criteria as the Board shall
determine. The provisions of Restricted Stock awards need not be the same with respect to each
recipient. In making such determinations, the Board may take into account the nature of services
rendered by such Employee or Consultant, their present and potential contributions to the Company,
and such other factors as the Board in its discretion shall deem relevant.



     9.2 Awards and Certificates. Each Grantee receiving an Award of Restricted Stock
shall be issued a certificate in respect of such shares of Restricted Stock. Such certificate
shall be registered in the name of such Grantee and shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such award, substantially in the following
form:



          “The transferability of this certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture) of the Merchants and Manufacturers
Bancorporation, Inc. 2006 Stock Incentive Plan and a Restricted Stock Agreement. Copies of such
Plan and Agreement are on file at the offices of Merchants and Manufacturers Bancorporation, Inc.,
5445 South Westridge Drive, New Berlin, Wisconsin 53151.”




          The Board may require that the certificates evidencing such shares be held in custody by the
Company until the restrictions thereon shall have lapsed and that, as a condition of any Award of
Restricted Stock, the Grantee shall have delivered a stock power, endorsed in blank, relating to
the Stock covered by such award.




     9.3 Terms and Conditions. Shares of Restricted Stock shall be subject to the
following terms and conditions:



     (a) Subject to the provisions of the Plan and the Restricted Stock Agreement referred to in
section 9.3(f), during a period set by the Board, commencing with the date of such award (the
“Restriction Period”), the Grantee shall not be permitted to sell, assign, transfer, pledge or
otherwise encumber shares of Restricted Stock. Within these limits, the Board may provide for the
lapse of such restrictions in installments and may accelerate or waive such restrictions, in whole
or in part, based on service, performance and such other factors or criteria as the Board may
determine.



     (b) Except as provided in this section and section 9.3(a), the Grantee shall have, with
respect to the shares of Restricted Stock, all of the rights of a shareholder of the Company,
including the right to vote the shares and the right to receive any cash dividends. Unless
otherwise determined by the Board, cash dividends shall be
automatically deferred and reinvested in additional Restricted Stock and dividends payable in Stock
shall be paid in the form of Restricted Stock.



     (c) Except to the extent otherwise provided in the applicable Restricted Stock Agreement and
sections 9.3(a) and (d), upon termination of a Grantee’s employment for any reason during the
Restriction Period, all shares still subject to restriction shall be forfeited by the Grantee.



     (d) In the event of hardship or other special circumstances of a Grantee whose employment is
involuntarily terminated (other than for Cause), the Board may waive in whole or in part any or all
remaining restrictions with respect to such Grantee’s shares of Restricted Stock.



     (e) If and when the Restriction Period expires without a prior forfeiture of the Restricted
Stock subject to such Restriction Period, unlegended certificates for such shares shall be
delivered to the Grantee.



 









 





     (f) As determined by the Board on the date of grant, each Award of Restricted Stock shall be
evidenced by a written agreement in a form to be established by the Board (the “Restricted Stock
Agreement”) that specifies: the duration of the Restriction Period; the number of shares of
Restricted Stock granted; any vesting or other restrictions which the Board may impose, and any
other terms and conditions as shall be determined by the Board at the time of grant of the
Restricted Stock. All Restricted Stock Agreements shall incorporate the provisions of this Plan by
reference.



Article X. Change of Control Provisions




     10.1 Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change of Control (as defined in section 10.2), the Board may, in its
sole and absolute discretion (or, if required pursuant to any Grantee’s written employment
agreement, the Board shall for such Grantee), cause any Options outstanding as of the date such
Change in Control is determined to have occurred and not then exercisable and vested to become
fully exercisable and vested to the full extent of the original grant or cause all restrictions
applicable to any Restricted Stock to lapse and such Restricted Stock to become free of all
restrictions and fully vested to the full extent of the original grant.



     10.2 Definition of Change of Control. For purposes of the Plan, a “Change of Control”
shall mean, as to any Grantee, the definition of Change of Control in such Grantee’s written
employment agreement or, if no such Employment Agreement or definition in such agreement exists,
Change of Control shall mean the happening of any of the following events:



     (a) the acquisition by any individual, entity or group (within the meaning of section 13(d)(3)
or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 30% or more of either (i) the then outstanding shares
of common stock of the Company (the “Outstanding Common Stock”) or (ii) the combined voting power
of the then outstanding voting securities of the Company entitled to vote generally in the election
of directors (the “Outstanding Voting Securities”); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of section 10.2(c); or



     (b) individuals who, as of May 16, 2006, constitute the Board of Directors of the Company (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors
of the Company; provided, however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors of the Company; or



     (c) approval by the shareholders of the Company of a reorganization, merger or consolidation
(a “Business Combination”), in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without limitation, a corporation
which as a result of such transaction owns the Company through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns, directly or indirectly,
30% or more of, respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the then outstanding
voting securities of



 









 





such corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent Board at the
time of the approval of the initial agreement, or of the action of the Board of Directors of the
Company, providing for such Business Combination; or



     (d) approval by the shareholders of the Company of (i) a complete liquidation or dissolution
of the Company or (ii) the sale or other disposition of all or substantially all of the assets of
the Company, other than to a corporation, with respect to which following such sale or other
disposition, [a] more than 60% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities
immediately prior to such sale or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the Outstanding Common Stock and
Outstanding Voting Securities, as the case may be, [b] less than 30% of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by any Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation), except to the extent that such
Person owned 30% or more of the Outstanding Common Stock or Outstanding Voting Securities prior to
the sale or disposition, and [c] at least a majority of the members of the board of directors of
such corporation were members of the Incumbent Board at the time of the approval of the initial
agreement, or of the action of the Board of Directors of the Company, providing for such sale or
other disposition of assets of the Company or were elected, appointed or nominated by the Board of
Directors of the Company.



Article XI. Rights of Grantees




     11.1 Service. Nothing in this Plan shall interfere with or limit in any way the right
of the Company to terminate any Employee’s employment, or any Consultant’s services, at any time,
nor confer upon any Employee any right to continue in the employ of the Company, or upon any
Consultant any right to continue to provide services to the Company.



     11.2 Nontransferability. Options granted under this Plan shall be nontransferable by
the Grantee, other than by will or the laws of descent and distribution, and shall be exercisable
during the Grantee’s lifetime only by the Grantee.



Article XII. Amendment, Modification

and Termination of the Plan




     12.1 Amendment, Modification, and Termination of the Plan.
The Board may at any time terminate and from time to time may amend or modify the Plan. The
Company shall obtain the approval of the shareholders to any amendment to this Plan to the extent
necessary to comply with any applicable laws or the rules of any stock exchange or quotation system
on which the Stock is listed or quoted. No amendment, modification or termination of the Plan
shall in any manner adversely affect any outstanding Award under the Plan without the consent of
the Grantee holding the Award. No amendment, modification or termination of the Plan shall in any
manner adversely affect any outstanding Option under the Plan without the consent of the Optionee
holding the Option.



Article XIII. Acquisition, Merger and Liquidation




     13.1 Acquisition. Notwithstanding anything herein to the contrary, in the event that
an Acquisition (as defined below) occurs with respect to the Company, the Company shall have the
option, but not the obligation, to cancel Options outstanding as of the effective date of the
Acquisition, whether or not such Options are then exercisable, in return for payment to the
Grantees for each Option of an amount equal to a reasonable, good faith estimate of an amount
(hereinafter the “Spread”) equal to the difference between the net amount per share payable in the
Acquisition, or as a result of the Acquisition, less the exercise price per share of the Option.
In estimating the



 









 





Spread, appropriate adjustments to give effect to the existence of the options
shall be made, such as deeming the Options to have been exercised, with the Company receiving the
exercise price payable thereunder, and treating the shares receivable upon exercise of the Options
as being outstanding in determining the net amount per share. For purposes of this section, an
“Acquisition” shall mean any transaction in which substantially all of the Company’s assets are
acquired or in which a controlling amount of the Company’s outstanding shares are acquired, in each
case by a single person or entity or an affiliated group of persons and/or entities. For purposes
of this section, a controlling amount shall mean more than 50% of the issued and outstanding shares
of stock of the Company. The Company shall have such an option regardless of how the Acquisition
is effectuated, whether by direct purchase, through a merger or similar corporate transaction, or
otherwise. In cases where the Acquisition consists of the acquisition of assets of the Company,
the net amount per share shall be calculated on the basis of the net amount receivable with respect
to shares upon a distribution and liquidation by the Company after giving effect to expenses and
charges, including but not limited to taxes, payable by the Company before the liquidation can be
completed.



     Where the Company does not exercise its option under this section 13.1, the remaining
provisions of this Article XIII shall apply, to the extent applicable.



     13.2 Merger or Consolidation. Subject to section 13.1 and to any required action by
the shareholders, if the Company shall be the surviving corporation in any merger or consolidation,
any Option granted hereunder shall pertain to and apply to the securities to which a holder of the
number of shares of Stock subject to the Option would have been entitled in such merger or
consolidation.



     13.3 Other Transactions. Subject to section 13.1, dissolution or a liquidation of the
Company or a merger and consolidation in which the Company is not the surviving corporation shall
cause every Option outstanding hereunder to terminate as of the effective date of the dissolution,
liquidation, merger or consolidation. However, the Grantee either (i) shall be offered a firm
commitment whereby the resulting or surviving corporation in a merger or consolidation will tender
to the Grantee an option (the “Substitute Option”) to purchase its shares on terms and conditions
both as to the number of shares and otherwise, which will substantially preserve to the Grantee the
rights and benefits of the Option outstanding hereunder granted by the Company, or (ii) shall have
the right immediately prior to such dissolution, liquidation, merger, or consolidation to exercise
any unexercised Options whether or not then exercisable, subject to the provisions of this Plan.
The Board shall have absolute and uncontrolled discretion to determine whether the Grantee has been
offered a firm commitment and whether the tendered Substitute Option will substantially preserve to
the Grantee the rights and benefits of the Option
outstanding hereunder. In any event, any Substitute Option for an Incentive Stock Option shall
comply with the requirements of the Code.



Article XIV. Securities Registration




     14.1 Securities Registration. In the event that the Company shall deem it necessary
or desirable to register under the Securities Act of 1933, as amended, or any other applicable
statute, any Awards or any Stock with respect to which an Award may be or shall have been granted
or exercised, or to qualify any such Awards or Stock under the Securities Act of 1933, as amended,
or any other statute, then the Grantee shall cooperate with the Company and take such action as is
necessary to permit registration or qualification of such Awards or Stock.



     Unless the Company has determined that the following representation is unnecessary, each
person exercising an Option or receiving an Award of Restricted Stock under the Plan may be
required by the Company, as a condition to the issuance of the shares pursuant to exercise of the
Option or Award, to make a representation in writing (a) that he is acquiring such shares for his
own account for investment and not with a view to, or for sale in connection with, the distribution
of any part thereof, and (b) that before any transfer in connection with the resale of such shares,
he will obtain the written opinion of counsel to the Company, or other counsel acceptable to the
Company, that such shares may be transferred. The Company may also require that the certificates
representing such shares contain legends reflecting the foregoing.



 









 





Article XV. Tax Withholding




     15.1 Tax Withholding. Whenever shares of Stock are to be issued in satisfaction of
Options exercised under this Plan or pursuant to an Award of Restricted Stock, the Company shall
have the power to require the recipient of the Stock to remit to the Company an amount sufficient
to satisfy federal, state and local withholding tax requirements. Unless otherwise determined by
the Board, withholding obligations may be settled with Stock, including Stock that is part of the
award that gives rise to the withholding requirement. The obligations of the Company under the
Plan shall be conditioned on such payment or arrangements, and the Company, its subsidiaries and
affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the participant.



Article XVI. Indemnification




     16.1 Indemnification. To the extent permitted by law, each person who is or shall
have been a member of the Board shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him
in connection with or resulting from any claim, action, suit, or proceeding to which he may be a
party or in which he may be involved by reason of any action taken or the failure to take any
action under the Plan and against and from any and all amounts paid by him in settlement thereof,
with the Company’s approval, or paid by him in satisfaction of judgment in any such action, suit or
proceeding against him, provided he shall give the Company an opportunity, at its own expense, to
handle and defend it on his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled under the
Company’s articles of incorporation or bylaws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.



Article XVII. Requirements of Law




     17.1 Requirements of Law. The granting of Awards and the issuance of shares of Stock
shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.



     17.2 Governing Law. The Plan and all agreements hereunder shall be construed in
accordance with and governed by the laws of the state of Wisconsin.



Article XVIII. Compliance with Code




     18.1 Compliance with Code. Incentive Stock Options granted hereunder are intended to
qualify as “incentive stock options” under Code section 422. If any provision of this Plan is
susceptible to more than one interpretation, such interpretation shall be given thereto as is
consistent with Incentive Stock Options granted under this Plan being treated as incentive stock
options under the Code. Awards granted hereunder to any person who is a “covered employee” under
Code section 162(m) at any time when the Company is subject to Code section 162(m) are intended to
qualify as performance-based compensation within the meaning of Code section 162(m)(4)(C). If any
provision of this Plan is susceptible to more than one interpretation, such interpretation shall be
given thereto as is consistent with Awards granted under this Plan to such “covered employees”
being treated as performance-based compensation under Code section 162(m).