Exhibit 10.11(b)


 


BANK MUTUAL CORPORATION


(BKMU)


 


MANAGEMENT INCENTIVE COMPENSATION 


PLAN


 



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BANK MUTUAL CORPORATION


 


Management Incentive Compensation Plan (MIP)


 


This document describes the annual Management Incentive Compensation
Plan (the Plan) of BANK MUTUAL CORPORATION (“BKMU”).


 


PURPOSE


 


Incentive compensation is an essential element of total annual cash
compensation. The Plan is designed to direct the efforts of those whose duties, responsibilities, and decisions have a significant
impact on the achievement of BKMU’s basic business objectives by initiating actions, rather than merely responding to external
conditions. Specific objectives of the Plan are to:


 


		·	Contribute toward achieving short-term performance goals;



 


		·	Recognize and reward superior individual performance;



 


		·	Assure corporate financial gain before incentive payments are earned;



 


		·	Provide compensation which is competitive with the market place; and



 


		·	Restrict participation to key officers.



 


PLAN DESCRIPTION


 


To meet the above objectives, the Plan provides incentive reward
opportunities in return for outstanding performance. The Plan is a “look forward” plan which generates incentive funds
based on actual operating results measured against predetermined performance goals.


 


The Plan is integrally related to the BKMU’s salary program
in that the incentive award opportunities are measured as a designated percent of each Participant’s Base Salary. The combination
of Base Salary and Target Incentive Award is designed to provide the Participant with total annual cash compensation that is consistent
with each Participant’s respective position and individual performance.


 



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Under the Plan, two factors determine the amount of incentive awards
each Participant will receive:


 


		·	BKMU’s corporate performance measured against predetermined financial goals, and



 


		·	Each Participant’s individual performance measured against predetermined individual goals.



 


PLAN ADMINISTRATION


 


The Bank Mutual Corporation Compensation Committee (the Committee)
has final authority for Plan provisions and has the responsibility for supervising the administration of the Plan.


 


ELIGIBILITY


 


Eligible positions are those whose decisions have a material and
direct impact on annual operating results. Eligibility for participation does not necessarily mean participation every year. Participants
will be designated annually by the Committee. This designation will take place prior to the beginning of BKMU’s fiscal year,
except that if an officer is hired or promoted during the program year, it is up to the discretion of the Committee to determine
if that person is included in the Plan and to what extent of the annual Base Salary.


 


SIZE OF AWARDS


 


Target Incentive Awards should be consistent with the competitive
labor market and should reflect the responsibility levels of the Participants. The Participants are grouped into tiers to reflect
the various responsibility levels of the Participants, and a target incentive percentage of Base Salary is established for each
tier. The incentive percentages for the responsibility tiers are shown below:


 



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	Incentive Award Opportunities
	(As a % of Salary)
	Responsibility 
Tier	 	Threshold	 	 	Target	 	 	Maximum	 
	 	 	 	 	 	 	 	 	 	 
	Tier I	 	 	14.0	%	 	 	20.0	%	 	 	40.0	%
	Tier II	 	 	12.6	%	 	 	18.0	%	 	 	36.0	%
	Tier III	 	 	10.5	%	 	 	15.0	%	 	 	30.0	%
	Tier IV	 	 	7.0	%	 	 	10.0	%	 	 	20.0	%



 


Target Incentive Awards represent incentive funds that will be earned
for each position if BKMU and the Participant achieved the predetermined goals. Participants’ base salaries are multiplied
by their respective target incentive percentage to determine their target incentive award. Actual incentive awards may be higher
or lower than target levels, depending on actual operating results compared to predetermined goals.


 


INCENTIVE MIX


 


A portion of each Participant’s incentive opportunities is
based on corporate performance and a portion of individual performance. The following table shows the distribution of awards based
on corporate performance and awards based on individual performance.


 


Performance Mix


 


	Tier	 	Corporate	 	 	Individual	 
	 	 	 	 	 	 	 
	I	 	 	100	%	 	 	—	 
	II	 	 	50	%	 	 	50	%
	III	 	 	50	%	 	 	50	%
	IV	 	 	50	%	 	 	50	%



 


The individual portion of the Target Incentive Award will be based
on the measured performance of each Participant, based on the results of the goals performance appraisal process.


 



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INCENTIVE POOL


 


The size of the incentive pool will be based on BKMU’s operating
success relative to goal. The Plan requires establishing annual performance goals and measures actual operating results relative
to the established goals to generate the incentive awards.


 


Goal Setting


 


Annual performance goals will be established at the beginning of
each year. The CEO will make such recommendations to the Committee for subsequent approval. If mutually agreed upon performance
goals cannot be reached, the Committee has final authority to set the performance goals. The performance criteria will be communicated
in Appendix A to the Plan for that year.


 


Incentive Matrix


 


Each year, an incentive compensation matrix is prepared that relates
the performance criteria to the factor applied to the Target Incentive Award (the Factor). In the matrix, the performance criteria
are expressed as a percentage of the predetermined performance goals.


 


At the beginning of each year, the CEO will recommend an incentive
compensation matrix to the Committee for their approval. The matrix approved by the Committee shall become Appendix A to the Plan
for that year.


 


Performance Threshold


 


To protect ownership interests, there will be a threshold performance
level below which no Incentive Awards will be earned.


 


Maximum


 


The maximum incentive award that can be funded shall be no more
than two times the Target Incentive Award to protect against windfall profits and poor planning. The maximum Factor that may be
used in the incentive matrix is two times.


 



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CORPORATE INCENTIVES


 


If BKMU achieves or exceeds the predetermined performance goals,
the incentive pool is generated. The corporate portion of the incentive pool is automatically earned by Participants.


 


INDIVIDUAL INCENTIVES


 


If an incentive pool is generated by BKMU performance, the individual
portion for each Participant is based on measured individual performance.


 


Individual incentive awards will be based on measured performance
of each Participant, as reflected in BKMU’s performance evaluation process.


 


FORM AND TIMING


 


Distribution of the earned Incentive awards shall be paid in cash
to the Participants in one installment within thirty (30) days following the close of BKMU’s fiscal year for which the incentive
was computed. To the extent that it is not possible to compute the incentive within thirty (30) days following the close of BKMU’s
fiscal year, an estimated payment may be made with proper adjustment as soon as practical.


 


In the case of death of a Participant, between the end of the fiscal
year and the following 30 days, the total incentive earned shall be paid to the beneficiary designated in writing by the Participant.
In case of a failure of the Participant to designate a beneficiary, payment will be made to the Participant’s estate.


 


TERMINATION


 


Upon voluntary termination or involuntary termination during the
year, all accrued benefits of the Participant are lost. In the case of retirement, death, or permanent disability during the Plan
year, incentive awards will be paid at the end of the year, on a pro-rata basis.


 



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If the Participant takes a leave of absence or a disability leave
during the year, they will not accrue any benefits for the time they are absent (adjusted to the nearest half-month).


 


AMENDMENT


 


The Committee can change, amend, or terminate the Plan at any time,
except that no such action will adversely affect any accrued incentive awards that are earned up until the time of the amendment.


 


NO EMPLOYMENT AGREEMENT INTENDED  


 


This Agreement does not confer upon Participants any right to continuation
of employment in any capacity by BKMU and does not constitute an employment agreement of any kind.


 


DEFINITIONS


 


		1.	Base Salary shall mean the total W-2 cash wages (excluding any awards paid under the Plan for the prior year) earned
by each Participant during the calendar year of the Plan. Disability payments are excluded for the purpose of this definition.



 


		2.	Corporate Incentive Award shall mean the amount that is actually accrued for and paid to each Participant based on BKMU’s
performance.



 


		3.	Individual Incentive Award shall mean the amount that is actually accrued for and paid to each Participant based on
each Participant’s individual performance.



 


		4.	Earnings per Share-diluted (EPS) shall mean net income after taxes, before dividends, for the year, divided by the weighted-average
number of common shares outstanding for the period. Non-vested MRP and stock option shares are considered dilutive potential common
shares and are included in the weighted-average number of shares outstanding for diluted EPS.



 


		5.	Target Incentive Award shall mean the amount that would be earned if BKMU and the individual achieved predetermined
performance goals.



 



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