Exhibit 10.1






Exhibit 10.1


Section 2: EX-10.1 (ANNUAL
INCENTIVE BONUS PLAN)





Annual Incentive Bonus Program


Performance
Criteria


The
following performance criteria will be used as measurements in the Annual
Incentive Bonus Program. First Business Financial Services, Inc. (the
“Company”), First Business Bank, First Business Bank Milwaukee, and
First Business Bank Northeast will use the following three performance criteria:


• Return on
Assets 

• Core Earnings 

• Core Deposits/Total Deposits


First Business Capital Corp. and First Business Equipment Finance
will use the following two performance criteria:


• Return on
Assets 

• Core Earnings


First Business Trust & Investments will use the following
three criteria:


• Core Earnings


• New Assets under Management from existing clients 

• New
Assets under Management from new clients


The
performance criteria used by the Company and each subsidiary entity
(“entity”) will be equally weighted in determining overall
performance.


Targeted Base
Salary Percentage


The targeted base
salary percentage for bonus payment at three possible achievement levels
(Threshold, Target and Superior) for each employment level within the Company
shall be determined by the Company Board, acting upon the recommendation of the
Compensation Committee. If targeted percentages for any employment level shall
be based on a range, then the percentage for each participating individual
within such level shall be determined by the Compensation Committee or
management, as appropriate. The targeted base salary percentages for each
participating individual shall be promptly communicated to such individual.


 


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Mix of the
Payout



	 	 	 	 	 	 	 	 	 
	 	 	Company	 	Entity
	
Company Employees

	 	 	100	%	 	 	n/a	 
	
Entity Employees

	 	 	25	%	 	 	75	%





Safeguard


After-tax Income must
exceed the aggregate bonus payment by $1,000,000 or more.


Clawback


The Company will
recover any excess bonus paid to any current or former executive officer if
payment is based upon materially inaccurate financial statements.


Eligibility


Employees must work a minimum of 30
hours per week to qualify for the bonus program.


Employees must be hired by October 1 of any year the plan is in
effect to be eligible for the Bonus Program. All employees must be employed on
the date of payout to receive their bonus.


If an employee is
promoted before October 1 of any year the plan is in effect, then that employee
will be eligible for the bonus percentage that is commensurate with their new
position for that year.


If an employee
transfers between entities or between the Company and an entity on or after
July 1 of any year the plan is in effect, then that employee’s bonus will
be calculated based on the performance of the entity or the Company that they
were employed in prior to the transfer.


The entity President
and the Company CEO may approve redistribution of bonus dollars to eligible
participants within the entity or the Company as circumstances and individual
performance warrant. Section 16 Officers are not eligible for any
redistributed bonus dollars under this provision; however, bonus dollars may be
adjusted downward as individual performance warrants.


Approved:
January 24, 2011


 


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