EXHIBIT 10.1


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                            WAUWATOSA HOLDINGS, INC.
                           2006 EQUITY INCENTIVE PLAN

                                     FORM OF
                             STOCK OPTION AGREEMENT
                                   (EMPLOYEE)

     A. STOCK OPTIONS  ("Options") for a total of ____________  shares of Common
Stock,  par value $0.01 per share, of Wauwatosa  Holdings,  Inc. (the "Company")
are hereby granted to _______________  (the  "Participant").  Stock Appreciation
Rights with respect to a total of  _____________  shares are also granted to the
Participant  and relate to the  Options  granted  hereunder.  Participant  is an
employee of the Company, Wauwatosa Savings Bank (the "Bank"), or an affiliate of
the  Company  or the  Bank.  The  grant  and  terms  of the  Options  and  Stock
Appreciation  Rights shall be subject in all respects to the Wauwatosa Holdings,
Inc. 2006 Equity  Incentive  Plan (the  "Plan").  The terms of this Stock Option
Agreement are subject to the terms and conditions of the Plan.

     B. The Option  exercise  price of the Common Stock is $________  per share,
the  Fair  Market  Value  (as  defined  in the  Plan)  of the  Common  Stock  on
__________, 2007, the date of grant.

     C. The Options granted hereunder shall vest in five (5) approximately equal
annual installments, with the first installment vesting and becoming exercisable
on the first  anniversary  of the date of grant,  or on __________ __, 2008, and
succeeding  installments on each anniversary  thereafter through ___________ __,
2012. To the extent that the Options awarded are not evenly  divisible by "five"
(5), then the Options in excess of those evenly divisible by 5 shall vest at the
rate of one per  year,  commencing  with the  initial  installment  vesting  and
continuing until each such Option is fully vested. For example,  an award of 103
Options  would vest at the rate of 21  Options  on the  first,  second and third
anniversaries  of the date of  grant,  and at the rate of 20 on the  fourth  and
fifth  anniversaries of the date of grant. The Options granted  hereunder may be
exercised  for up to  ten  (10)  years  from  the  date  of  grant,  subject  to
sub-paragraph E below.

     D. All Options granted to Participant shall be deemed to be Incentive Stock
Options to the maximum  extent  permitted  under the  Internal  Revenue Code and
regulations.

     E. If you terminate employment for any reason other than death, disability,
following a Change in Control  (as  defined in the Plan) or for cause,  unvested
Options will be forfeited and vested Options will be exercisable for a period of
up to three (3) months following  termination.  If you terminate employment with
the Bank or the  Company  due to  death,  disability  or  following  a Change in
Control,  your Options,  whether or not  exercisable  at such time,  will become
exercisable by you (or your legal  representative  or  beneficiary)  for one (1)
year following termination;  provided,  however,  except in the case of death or
disability,  such Options shall not be eligible for treatment as Incentive Stock
Options  in the event  such  Option is  exercised  more  than  three (3)  months
following  termination.  In order to obtain Incentive Stock Option treatment for
an Option  exercised by the heirs or devisees of the  Participant,  the death of
the  Participant  must have occurred  while the  Participant  is employed by the
Company  or an  affiliate,  or  within  three (3)  months  of the  Participant's
termination of employment. In no event will the period of exercise extend beyond
the expiration of the Option term. If you are terminated for cause, Options will
be  exercisable  only as to those Options in which you are vested at the time of
such termination and must be exercised by the date you cease to perform services
for the Company.  All rights under this Agreement shall expire after the date of
your termination of employment for cause.

     F. Stock  Appreciation  Rights  ("SARs") are hereby granted with respect to
all  Options  granted  hereunder.  SARs are  granted in tandem  with the Options

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granted  hereunder  and the exercise of one will cause the  cancellation  of the
other. If the Participant  exercises SARs, the Participant  will not be required
to pay the exercise  price of the related Option and will be entitled to receive
Common Stock of the Company  equal in value to the  difference  between the Fair
Market Value of the Common Stock on the date of exercise and the exercise  price
of the related Options (which will be cancelled).


     Example:  Participant  receives 1,000 Options and related SARs. The Options
     have an exercise  price of $12.  When the Company  Stock is trading at $18,
     the Participant  exercises 300 SARs.  Because the Participant has exercised
     SARs,  the  Participant  does  not  have to pay  the  exercise  price.  The
     Participant receives 100 shares of the Company stock.

         $18  Common Stock
       - $12  exercise price
         $ 6  SAR value
       x 300  SARs exercised
        $1,800/18  Common Stock = 100 shares

     G.  Options may not be  exercised if the issuance of shares of Common Stock
of the Company upon such exercise would constitute a violation of any applicable
federal or state securities or other law or regulation.  The  Participant,  as a
condition  to exercise of the Options,  shall  represent to the Company that the
shares of Common Stock of the Company that he acquires pursuant to such exercise
are being  acquired by such  Participant  for  investment and not with a present
view to  distribution  or resale,  unless counsel for the Company is then of the
opinion that such a  representation  is not required under the Securities Act of
1933 or any  other  applicable  law,  regulation,  or  rule of any  governmental
agency.

     H. All Options  granted to the  Participant as Incentive  Stock Options may
not be transferred in any manner  otherwise than by will or the laws of descent,
and  may be  exercised  during  the  lifetime  of the  Participant  only by such
Participant  or  the   Participant's   duly   appointed   guardian  or  personal
representative.

     I. A copy of the Plan has been provided to the Participant. The Participant
is not required to exercise the Options as to any particular number or shares at
one  time,  but the  Options  must  be  exercised,  if at all and to the  extent
exercised, by no later than ten years from the date of grant. The Options may be
exercised during such term only in accordance with the terms of the Plan. In the
event of any inconsistency between this Agreement and the Plan, the terms of the
Plan will control.

     J. All exercises of the Options must be made by executing and returning the
Notice of  Exercise  of Stock  Options  attached  hereto as  Exhibit A, and upon
receipt of any shares of Common  Stock upon the  exercise  of any  Options,  the
recipient shall complete and return to the Company the Acknowledgment of Receipt
of Stock Option Shares  attached  hereto as Exhibit B. All exercises of the SARs
must be made by  executing  and  returning  the  Notice  of  Exercise  of  Stock
Appreciation Rights attached hereto as Exhibit C, and upon receipt of any shares
of Common Stock upon the exercise of any SARs, the recipient  shall complete and
return to the Company the  Acknowledgment  of Receipt of Shares of Common  Stock
attached hereto as Exhibit D.

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     K.  This  Agreement  shall  not be  deemed  to  constitute  a  contract  of
employment  between the parties hereto,  nor shall any provision hereof restrict
the right of the Company or the Bank to discharge  the  Participant  or restrict
the right of the Participant to terminate his employment.

     L.  The  Participant  acknowledges  receipt  of a  copy  of  the  Wauwatosa
Holdings,  Inc. 2006 Equity  Incentive Plan and  represents  that he is familiar
with the terms and provisions  thereof.  Participant  hereby accepts the Options
subject to all the terms and  provisions of such Plan.  The  Participant  hereby
agrees  to  accept  as  binding,   conclusive,   and  final  all  decisions  and
interpretations  of the Committee  established to administer  such Plan upon any
questions arising under such Plan.

Date:
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ATTEST:                                     WAUWATOSA HOLDINGS, INC.


_____________________________                _______________________________


WITNESS:                                             PARTICIPANT


_____________________________                _______________________________


 This Stock Option Agreement must be executed in duplicate originals, with one
 original retained by the Company and one original retained by the Participant.