Document:

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                                                                   EXHIBIT 10.32

[ACL LOGO]                                         American Commercial Lines LLC

                          2005 ANNUAL INCENTIVE PLAN --
                            A GUIDE TO THE 2005 PLAN

                          American Commercial Lines LLC

                                    July 2005

<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

Message From The CEO

Congratulations! Since we have come out of bankruptcy, the Company is performing
better than expected. If we continue the pace of our improving financial results
for the remainder of this year, we expect a payout of the Annual Incentive Plan
(AIP) for the first time in many years. I am counting on each of you to help all
of us meet this objective.

I want to share some of the guiding principles that drove the design of the 2005
AIP. These are not merely "compensation" philosophies, but they are philosophies
that define how we will run the Company. These principles are:

-     We are One Company. Only total company results matter to our shareholders
      and creditors. Teamwork and resource sharing are valued.

-     Each one of us needs to contribute in a significant way.

-     We will share in the Company's successes -- the greater the success, the
      greater the rewards.

-     Success will be measured by financial performance, but not at the expense
      of key strategic, operational, and people measures.

-     We are a company in transition and we will make significant improvements.

The following pages of this document further describe the key elements of the
2005 AIP. We have tried to anticipate many of the questions you may have.
However, for any remaining questions, please contact Vicky Longest at x2580.

Finally, I would like to remind you of our Core Values which will serve as the
foundation for the way in which we will conduct business.

            -     Safety -- People, Property and Equipment (PP&E), never
                  compromise.

            -     Customer Focus -- premium service, on time.

            -     Integrity -- do the right thing.

            -     Innovate -- lead in transportation practices and manufacturing
                  technologies.

            -     Value Creation -- for employees, customers, suppliers, lenders
                  and stockholders.

I will continue to share these values with you on a regular basis and I hope you
will incorporate them into your daily work tasks as they are a very important
part of our journey to success.

/s/ Mark R. Holden

Mark R. Holden
President & CEO
American Commercial Lines, Inc.

<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

CONTENTS

<TABLE>
<S>                                                                       <C>
2005 PERFORMANCE GOALS
   Financial Measures Defined                                             1
   Business Objectives                                                    1
   Weighting of Measures and Performance Goals for 2005                   2

2005 AWARD OPPORTUNITIES
   Target Award Opportunities                                             3
   Minimum, Expected, and Superior Award Opportunities                    3
   How Awards Will Be Calculated                                          3

PLAN ADMINISTRATION
   Eligibility Criteria                                                   4
   Promotions                                                             4
   Timing of Payments                                                     4
   Business Objectives                                                    5
</TABLE>

NOTE: The bonus information and program detailed above is not a contract, and is
not intended to create any contractual obligations on the part of ACL or it
subsidiaries. The Company explicitly reserves the right to modify the details of
the bonus program at any time, with or without notice, at the Company's sole
discretion.

<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

                                                          2005 PERFORMANCE GOALS

<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

2005 PERFORMANCE GOALS

For 2005, we will be measuring three financial goals as well as Business
Objectives.

FINANCIAL MEASURES DEFINED

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA)

EBITDA is a commonly used measure of cash flow from operations. Cash flow is
critical to our company in order for us to meet our debt covenants, make capital
investments, pay the interest on our debt, and begin to pay down our debt.
Depreciation and amortization are expenses of the business that relate to past
investments (i.e., the purchase of barges). Therefore, to determine how much
cash is available, we add these expenses back to our operating earnings.

FREE CASH FLOW (FCF)

The definition of FCF is EBITDA less capital expenditures, principal payments,
interest, and taxes

EARNINGS PER SHARE (EPS)

The definition of EPS is net income divided by the number of shares outstanding.
EPS is the most common way that public companies are measured. While ACL's
shares are not currently listed on a stock exchange, we want to instill the same
disciplines and expectations for performance to which public companies are held.

BUSINESS OBJECTIVES

A portion of the incentive opportunity will be determined by performance on key
measures of strategic, operational, or people measures. For incentive award
purposes, these measures will be business related (e.g., safety), not related to
personal development (e.g., attended a seminar). For 2005, given where we are in
the year, we will not attempt to set "personal" business objectives. Instead, we
will establish a list of business objectives of which each department will be
assigned the three that they can most impact.

                                        1
<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

WEIGHTING OF MEASURES AND PERFORMANCE GOALS FOR 2005

The performance goals for 2005 are based on the 2005 business plan established
during the bankruptcy process. The CEO and senior vice presidents will be held
to a higher standard, which is 10 percent higher than the 2005 plan. The higher
standard reflects the Board of Directors and CEO's expectations for performance
and accountability of the leadership team.

For 2005, the weighting of the goals are:

-     EBITDA: 30%

-     Free Cash Flow: 30%

-     EPS: 20%

-     Business Objectives: 20%

We can still earn some incentive if we are close to but fall short of our goals.
Also, we will earn higher incentives if we exceed our goals. Three performance
levels have been established for each goal, with a corresponding percentage of
the target award opportunity.

-     Expected performance pays 100% of target award opportunity.

-     Minimum performance pays 50% of the target award opportunity.

-     Superior performance pays 150% of the target award opportunity.

If actual performance falls between any of the defined levels, the award
opportunities will be calculated proportionately. The following table presents
the 2005 goals and weighting of each measure.

2005 ANNUAL INCENTIVE PLAN GOALS

<TABLE>
<CAPTION>
                                                         PERFORMANCE LEVELS
                                              --------------------------------------------
WEIGHTING      MEASURE           GROUP        MINIMUM-50%   EXPECTED-100%    SUPERIOR-150%
---------   --------------   --------------   -----------   -------------    -------------
<S>         <C>              <C>              <C>           <C>              <C>
   30%      EBITDA ($000s)   Sr. Executives     $90,404        $99,444          $109,389
                               All Other        $81,364        $90,404          $ 99,444

   30%      Free Cash Flow   Sr. Executives     $20,659        $22,725          $ 24,997
               ($000s)         All Other        $18,593        $20,659          $ 22,725

   20%           EPS         Sr. Executives     $  1.38        $  1.52          $   1.67
                               All Other        $  1.24        $  1.38          $   1.52
</TABLE>

<TABLE>
<CAPTION>
WEIGHTING      MEASURE       GROUP   MEETS    EXCEEDS      FAR EXCEEDS
---------   -------------    -----   -----    -------      -----------
<S>         <C>              <C>     <C>      <C>          <C>
                 Bus
  20%       Objectives(1)     All     100%      110%          125%
</TABLE>

(1) There will be no award for business objectives if the goals are not met

                                        2
<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

                                                        2005 AWARD OPPORTUNITIES

<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

2005 AWARD OPPORTUNITIES

TARGET AWARD OPPORTUNITY

Each position has a target award opportunity stated as a percent of base salary.
Your target award opportunity for 2005 will be communicated to you by your
manager. The target award opportunity is earned when we have achieved exactly
100 percent of the financial and business goals.

MINIMUM, GOAL, AND SUPERIOR AWARD OPPORTUNITIES For each goal, three levels of
performance have been defined:

-     MINIMUM PERFORMANCE: Performance below threshold does not earn an award.
      If performance is equal to the minimum level, you will earn 50 percent of
      your target award opportunity.

-     GOAL PERFORMANCE: This is the level we promise to our investors each year.
      At goal performance, 100 percent of your target award opportunity is
      earned.

-     SUPERIOR PERFORMANCE: As performance exceeds the expected level, you can
      earn more than 100 percent of your target award opportunity. At the
      superior performance level, 150 percent of your expected award opportunity
      is earned. Awards cannot exceed 150 percent of the expected award
      opportunity.

If performance falls between levels, the award opportunity will be determined
proportionately. For example, when performance falls half way between the
expected and superior levels, 125 percent of your target award opportunity is
earned.

HOW AWARDS WILL BE CALCULATED

The awards will be calculated based on the following formula:

      ACTUAL BASE SALARY EARNINGS X TARGET AWARD OPPORTUNITY X OVERALL
      PERFORMANCE SCORE

Actual base salary earnings are the base compensation earned from January 1
through December 31. The overall performance score is the scores for each of the
three financial goals and the business objectives multiplied by their weighting
and added together.

To ensure that all participants are calculating awards in the same manner, we
are developing a worksheet with the calculations built in. All you need to do to
estimate your award through the year is to supply your base salary earnings,
expected award opportunities, and estimates of performance on each of the goals.

                                        3
<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

                                                             PLAN ADMINISTRATION

<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

PLAN ADMINISTRATION

ELIGIBILITY CRITERIA

-     Full-time salaried land based employees

-     Full-time non-represented shore side hourly employees

-     Full-time non-represented fleet vessel hourly employees in Cairo & Lemont

-     Hire date no later than September 30th

-     Employed by ACL or one of its subsidiaries at time the incentive awards
      are paid

-     Rated at a satisfactory level or higher

PROMOTIONS

An employee promoted to a position with a higher target award opportunity will
have the award calculated on their target award opportunity as of 12/31/05.

TIMING OF PAYMENT

Earned incentive awards will be paid as soon as is practical after the end of
the year. Audited results will need to be available for the financial measures.

                                        4
<PAGE>

[ACL LOGO]                                         American Commercial Lines LLC

BUSINESS OBJECTIVES (TOTAL OF 20 PERCENT)

We have identified three business objective goals for 2005 which are listed
below:

1.    SAFETY (10% weighting). Safety will be measured by incident rate:

                               #of Inquiries X 2,000
                           --------------------------
                           #of Employee Hours Worked

      It is critical that we provide a safe environment for all employees.
      Therefore, on this measure, either the "Meets" standard is achieved or
      there will be no incentive earned for this objective.

<TABLE>
<CAPTION>
      LOCATION                       MEETS
----------------------               -----
<S>                                  <C>
ACL Headquarters                      0.0
Jeff boat                             6.3
Venezuela                             0.1

Shop Barge & Terminals                2.2

Fleet Vessels                         3.9
Fleet Land Based                      4.2
</TABLE>

2.    SELLING, GENERAL, & ADMINISTRATIVE (SG&A) (5% weighting). This expense
      category is disclosed in the Company financial statements and will be
      measured as a percent of total revenue. It represents our need to be more
      efficient and to improve our profit margins. The calculation will be net
      of any unusual and non-reoccurring charges, i.e., bankruptcy, stock
      expensing, etc. The targets are:

<TABLE>
<S>                       <C>
Meets                     5.9%
Exceeds                   5.8%
Far Exceeds               5.7%
</TABLE>

3.    WORKING CAPITAL (5% weighting). By managing our working capital, we
      generate cash to help pay down debt and pay for investments. Working
      capital is measured in the following manner:

              (Accounts Receivable + Inventory) - Accounts Payable
              ----------------------------------------------------
                                    Revenue

<TABLE>
<S>                      <C>
Meets                    10.8%
Exceeds                  10.7%
Far Exceeds              10.5%
</TABLE>

                                        5exv10w3

 

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of this ___day
of ___2005, by and between Wauwatosa Savings Bank, a Wisconsin chartered savings bank
(hereinafter referred to as “Employer”), which may become a subsidiary of Wauwatosa Holdings, Inc.
(the “Company”) if a Plan of Reorganization from mutual savings bank to mutual holding company
adopted by the Employer’s Board of Directors on May 17, 2005, is approved by Employer’s members and
applicable regulatory authorities, and Donald J. Stephens (hereinafter referred to as “Executive”).

     WHEREAS, Executive, has been employed by and has served as President and Chief Executive
Officer of Employer for many years and has extensive knowledge of and experience in the banking
industry; and

     WHEREAS, the Executive possesses an intimate knowledge of the business and affairs of
Employer, including its policies, markets and financial and human resources; and

     WHEREAS, the Board of Directors of Employer believes that it is in the best interests of the
Employer and that the Employer would substantially benefit from the continued employment of
Executive as an executive member of its management team in the position of President and Chief
Executive Officer, and Employer desires to retain Executive in such position, and Executive desires
to retain such position; and

     WHEREAS, Executive and Employer have agreed that it is in their mutual best interest to enter
into this Agreement pursuant to the terms and conditions described herein.

     NOW, THEREFORE, for good and valuable consideration which is hereby acknowledged by Executive
and Employer, including, without limitation, the promises and covenants described herein, the
parties hereto hereby agree as follows:

ARTICLE I

EMPLOYMENT

1.1 Term of Employment.

     Employer shall employ Executive for an initial period of three (3) years commencing on
___ ___, 2005 (the “Effective Date”); provided, however, on each annual anniversary of
the Effective Date, the term of employment hereunder may be extended by adding one additional year
to the remaining term of this Agreement so that said term is annually restored to a full three-year
term upon agreement of Executive and by affirmative action taken by Employer’s Board of Directors
not less than sixty (60) days prior to such annual anniversary of the Effective Date. Executive’s
employment under this Agreement may otherwise be terminated only as contemplated by Sections 2.1,
2.2, 2.3, 2.4, 2.5 and 2.6 of this Agreement.

 

 

1.2 Duties of Executive.

     Executive is hereby employed full-time to hold the office of President and Chief Executive
Officer and to perform such executive duties as are normally performed by persons serving in
similar capacities at similar institutions together with such other duties and responsibilities as
may be appropriate to Executive’s position and as may be from time to time be determined by
Employer’s Board of Directors to be necessary to its operations and in accordance with its bylaws.
Employer agrees that it will not reduce Executive’s current job title, status and responsibilities
without Executive’s consent. Executive hereby accepts such employment and undertakes to use his
best efforts to discharge his duties and responsibilities. Unless Executive’s employment is
earlier terminated pursuant to the terms of this Agreement, during the term of this Agreement,
Executive shall devote substantially his full business time to the discharge of his duties and
responsibilities under this Agreement, except for vacations in accordance with Section 1.5(b) of
this Agreement. This provision shall not prevent Executive from devoting a reasonable amount of
time during normal business hours to serving as a director, trustee or member of any charitable,
community, trade or financial industry board, committee or organization.

1.3 Base and Incentive Compensation.

     During the term of this Agreement, Executive shall be entitled to an initial annual base
salary of $500,000 per year. Executive’s annual salary will be reviewed annually in January of
each year by the Board of Directors of Employer on the basis of his performance to such date and
the progress of Employer and shall be adjusted as of such date if so determined by the Board in its
absolute discretion. Executive shall also be entitled to receive incentive compensation which
compensation shall be calculated in accordance with the provisions of Employer’s management
incentive bonus plan, or other similar plans as in effect from time to time. Executive’s base
salary shall be payable periodically according to the normal practice of Employer and his incentive
compensation shall be payable as earned in accordance with the provisions of Employer’s management
incentive bonus plan, or other similar plans.

1.4 Expense Reimbursement.

     Executive shall be entitled to reimbursement of business expenses reasonably incurred in
connection with his employment, and expenses incurred by his spouse when accompanying Executive on
business trips upon presentation of adequate documentation and to the extent then permitted by
Employer’s general practices and policies for reimbursement of such expenses.

1.5 Benefits.

     The Executive shall be entitled to the following benefits:

     (a) Executive shall be entitled, at the expense of Employer, to: (i) a membership or
appropriate affiliation with a service club and reimbursement for membership dues, minimum monthly
assessments and other business related expenses in a social or Country Club and (ii) the full-time
use of an Employer-owned or leased automobile, and with the full time use of a cellular

- 2 -

 

telephone, and reasonable associated expenses. Executive shall, in accordance with applicable law
and regulation, have access to mortgage and consumer financing from Employer. Executive shall also
be provided with such educational assistance as is reasonably related to the performance of his
duties hereunder.

     (b) Executive shall be entitled to an annual, sick leave and other time off in accordance with
Employer’s policies in effect from time to time. The Executive shall be entitled to nine weeks of
vacation per calendar year; however, the Executive shall not take a vacation of more than three
consecutive weeks and shall not take another vacation of more than two consecutive weeks for a
minimum period of two weeks following any three-week vacation period.

     (c) Executive shall be entitled to participate in all of Employer’s insurance (including
medical and dental), deferred compensation plans, retirement plans, pension plans, profit sharing
plans, excess benefit plans, 401(k) plans or other similar plans if, and as, in effect from time to
time in accordance with and to the extent qualified under the provisions of such plans.
Executive’s participation in, and entitlement to benefits under, any such plans including, but not
limited to, the Supplemental Retirement Benefit Plan between Employer and Executive dated July 13,
1999 (“Supplemental Plan”) on or prior to the date of this Agreement shall be continued in
accordance with the provisions of such plans. Executive shall also participate in any Employer
sponsored Employee Stock Option Plan, Stock Recognition and Retention Plan, Executive Stock Option
Plan, Stock Bonus Plan, Supplemental Employee Retirement Plan, Excess Benefit Plan, including the
Supplemental Plan, or any other similar plan adopted by Employer from time to time.

     (d) Executive shall be entitled to participate, at Employer’s expense, in any short-term and
long-term disability plans.

     (e) In addition to the foregoing benefits, Executive shall also be entitled to participate, as
determined by Employer’s Board of Directors, in such other employee benefit plans or programs as
are offered to or provided for other executives of Employer from time to time.

1.6 Directors and Officers Insurance.

     Employer shall use its best efforts to provide Executive during the initial or any extended
term of this Agreement with insurance coverage against business liability to the extent that such
coverage is reasonably available for officers and directors of financial institutions of comparable
size.

1.7 Indemnity by Employer.

     For valuable consideration, and as a material inducement to Executive to enter into this
Agreement, Employer shall take whatever actions are necessary to provide indemnification of
Executive by Employer for business liability, including without limitation, liability as a director

- 3 -

 

and officer to all interested parties, to the fullest extent it can be made available under
applicable law.

ARTICLE II

TERMINATION OF EMPLOYMENT

2.1 Termination at Expiration of the Term of this Agreement.

     At the termination of employment by reason of the expiration of the original or any extended
term of this Agreement pursuant to an election by either Employer or Executive under Section 1.1,
Executive shall be entitled to receive (i) Executive’s theretofore unpaid base salary and incentive
compensation for the period of employment, (ii) compensation for accrued but unused vacation time,
and (iii) title to Executive’s Employer-owned or leased automobile then being used by Executive.
Executive shall be owed and Employer shall be obligated to pay to Executive the aggregate amount
provided in clauses (i) and (ii) above (other than incentive compensation which shall be payable
when earned as provided in Section 1.3 hereof) and deliver the automobile title, within fifteen
(15) days after the termination of Executive pursuant to this Section 2.1, and until such amounts
are paid in full to Executive. Executive and his spouse and dependents will be entitled to further
medical coverage, at his and/or their expense, to the extent then required by the Consolidated
Omnibus Reconciliation Act of 1985 (“COBRA”).

2.2 Termination for Death or Retirement.

     If Executive’s employment is terminated by reason of Executive’s retirement or death then
Executive, or Executive’s personal representative, as the case may be, shall be entitled to receive
(a) Executive’s theretofore unpaid base salary and incentive compensation for the period of
employment, prorated to the end of the calendar month in which such termination occurs, and (b)
compensation for accrued but unused vacation time, and (c) title to Executive’s Employer-owned or
leased automobile then being used by Executive. Employer shall pay the amounts due and deliver the
automobile title under this Section 2.2 to Executive or Executive’s personal representative within
thirty (30) days of Executive’s retirement or death, as the case may be. Executive’s spouse and
dependent children shall continue to be entitled, at their expense in the case of death and at the
expense of Executive in the case of retirement, to further medical coverage to the extent required
by COBRA. The term “retirement” for purposes of this Agreement shall mean the effective date of
the Executive’s retirement, after the Executive reaches 62 years of age, as set forth in the
Executive’s notice to Employer that he is retiring.

2.3 Termination for Disability.

     If Executive becomes Totally and Permanently Disabled during the term of this Agreement,
Executive’s employment may be terminated by the Employer at any time during the continuance of such
disability. The Executive is Totally and Permanently Disabled if he is unable to perform each of
the material duties of his employment under this Agreement, by reason of any disability, illness,
accident or condition, for a period of more than six consecutive months during any twelve-month
period, which is expected to continue for more than one year as

- 4 -

 

certified by a medical doctor of Executive’s own choosing and concurred in by a doctor of
Employer’s choosing.

     Upon termination as described in this Section 2.3, Executive shall be entitled to receive (a)
Executive’s theretofore unpaid base salary and incentive compensation for the period of employment,
prorated to the end of the calendar month in which such termination occurs, (b) compensation for
accrued but unused vacation time, and (c) title to Executive’s Employer-owned or leased automobile
then being used by Executive. Executive shall be owed and the Employer shall be obligated to pay
to Executive the aggregate amount provided in clauses (a) and (b) above (other than incentive
compensation which shall be payable when earned as provided in Section 1.3 hereof) and deliver the
automobile title within fifteen (15) days after the termination of Executive pursuant to this
Section 2.3, and until such amounts are paid in full to Executive. In addition, at Employer’s
cost, employer shall continue to provide Executive with the following benefits, consistent with the
terms and conditions set forth in Section 1.5 hereof: (i) life insurance and medical, dental and
optical insurance, to the extent the same can be provided under the arrangements in effect at the
time of termination, and (ii) any other benefits to which the Executive is entitled by law or the
specific terms of Employer’s policies in effect at the time of his termination of employment.
Benefits will be continued pursuant to this Section 2.3 for a period of twelve (12) months from the
date of termination of employment, unless Executive becomes employed by another company and becomes
eligible for employment benefits substantially similar to those which would otherwise be provided
under this Section. Notwithstanding the foregoing, Executive and his spouse and dependent children
shall continue to be entitled, at his expense, to further medical coverage to the extent required
by COBRA which shall, in this case, be deemed to commence upon the expiration of the twelve month
period set forth in the preceding sentence. Employer shall use its best efforts to obtain and
maintain insurance coverage to provide for the Full Disability Benefits, which insurance coverage
may include insured benefits under the Employer’s short-term and long-term disability plans for
executives (all such insurance referred to hereafter as “Disability Insurance”).

2.4 Voluntary Termination by Executive or Termination by Employer for Cause.

     Employer may terminate Executive’s employment hereunder for cause (as such term is defined
below). If Executive’s employment is voluntarily terminated by Executive prior to age 62 or is
terminated by Employer for cause, Executive shall be entitled to receive (a) Executive’s
theretofore unpaid base salary and incentive compensation for the period of employment, prorated to
the date of termination, and (b) compensation for accrued but unused vacation time, but shall not
be entitled to any compensation or employment benefits pursuant to this Agreement for any period
after the date of termination, or the continuation of any benefits except as may be required by
law, including, at his own expense, COBRA. If Executive’s employment is voluntarily terminated
under this Section 2.4 by Executive, Executive shall also receive from Employer title to
Executive’s Employer-owned or leased automobile then being used by Executive. Executive shall be
owed and the Employer shall be obligated to pay to Executive the aggregate amount provided in
clauses (a) and (b) above (other than incentive compensation which shall be payable when earned as
provided in Section 1.3 hereof) and deliver the automobile title, if applicable, within fifteen
(15) days after the termination of Executive pursuant to this Section 2.3, and until such amounts
are paid in full to Executive.

- 5 -

 

     Termination by Employer for cause shall mean termination because of the Executive’s Personal
Dishonesty (as hereinafter defined), Incompetence (as hereinafter defined), Willful Misconduct (as
hereinafter defined), breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or willful violation by Executive of any final cease-and-desist
order, or material breach of any provision of this Agreement; provided, however, in the event
Employer determines that Executive has intentionally failed to perform his stated duties or
materially breached this Agreement, Employer may not terminate Executive for cause unless Employer
has notified Executive of such failure or breach, Executive has been given a reasonable period of
time to cure such failure or breach, and in the opinion of Employer, Executive has not cured such
failure or breach. For the purpose of this Agreement: (i) “Incompetence” means Executive’s
demonstrated lack of ability to perform the duties assigned to him which lack of ability directly
causes (or the Board of Directors determines is reasonably likely to cause) material injury to
Employer; (ii) ”Personal Dishonesty” means conduct on the part of Executive which evinces a want of
integrity or an intentional breach of trust and which directly causes (or the Board of Directors
determines is reasonably likely to cause) material injury to Employer; and (iii) “Willful
Misconduct” means conduct on the part of Executive which evinces a deliberate disregard of the
interest of Employer and which causes (or the Board of Directors determines is reasonably likely to
cause) direct material injury to Employer.

2.5 Termination by Employer Without Cause or Termination by Executive for Cause.

     (a) In the event Employer reduces Executive’s base compensation, responsibilities or duties
without Executive’s consent or otherwise breaches this Agreement, Executive may elect to terminate
this Agreement for cause. In the event Employer terminates Executive other than under Section 2.2
(death/retirement), Section 2.3 (disability) or Section 2.4 (voluntary termination by Executive or
termination by Employer for cause) or Executive elects to terminate his employment hereunder for
cause, then in either such event Executive shall receive (i) an amount equal to one hundred percent
(100%) of his annual base salary at the time of termination, (ii) Executive’s theretofore unpaid
base salary and incentive compensation, prorated to the end of the calendar month in which such
termination occurs, (iii) compensation for accrued but unused vacation time, and (iv) title to
Executive’s Employer-owned or leased automobile then being used by Executive. Executive shall be
owed, and Employer shall be obligated to pay to Executive, the entire amount provided in clauses
(i), (ii) and (iii) above (other than incentive compensation which shall be payable within the
period of time provided in Section 1.3) and deliver the automobile title within fifteen (15) days
after the termination of Executive pursuant to this Section 2.5, and until such amount is paid in
full to Executive, interest shall accrue on said amount as of the date first due at the rate of
eighteen percent (18%) per annum, compounded daily.

     (b) Furthermore, if Executive’s employment is terminated pursuant to this Section 2.5, at
Employer’s cost, Employer shall continue to provide Executive with the following benefits,
consistent with the terms and conditions set forth in Section 1.5 hereof: (i) life insurance and
medical, dental and optical insurance, to the extent the same can be provided

- 6 -

 

under the arrangements in effect at the time of termination, (ii) any other benefits to which
Executive is entitled by law or the specific terms of Employer’s policies in effect at the time of
his termination of employment, (iii) title to Executive’s Employer-owned or leased automobile then
being used by Executive, and (iv) reimbursement for membership dues and minimum monthly assessments
in a social or Country Club. Benefits will be continued pursuant to this Section 2.5 for a period
of twelve (12) months from the end of the then current term of employment under Section 1.1
(provided that such benefits shall not be continued for more than 36 months after the date of
termination), unless Executive becomes employed by another company and is eligible for employment
benefits substantially similar to those which would otherwise be provided under this Section.
Notwithstanding the foregoing, Executive and his spouse and dependent children will be entitled, at
the expense of Employer, to further medical coverage to the extent required by COBRA which shall,
in this case, be deemed to commence upon expiration of the twelve (12) month period set forth in
the preceding sentence. Employer shall deliver title to the automobile to the Executive within
fifteen (15) days of Executive’s termination of employment.

     (c) If Employer terminates Executive pursuant to this Section 2.5, the Executive shall also be
entitled to receive an additional benefit. Such benefit shall be a single sum cash payment in an
amount equal to the product of the Employer’s annual aggregate contribution, for the benefit of the
Executive in the year preceding termination, to all qualified retirement plans in which the
Executive participated multiplied by the number of years in the initial term of employment under
Section 1.1. Such benefit shall be in addition to any benefit payable from any qualified or
nonqualified plans or programs maintained by the Employer at the time of termination.

2.6 Termination by Executive Due to Change in Control.

     (a) Following a Change in Control (as hereinafter defined), Executive may, by giving notice to
Employer, immediately terminate his employment under this Agreement upon the occurrence of any of
the following:

          (i) any reduction in Executive’s base or incentive compensation, or employee benefits
described in Section 1.4, 1.5, 1.6 and 1.7 and provided to Executive immediately preceding a Change
in Control (other than changes in benefits required by law and applicable to all employees
generally), or any assignment to any position, responsibilities or duties that are less significant
than his position, duties and responsibilities as of the time immediately preceding a Change in
Control;

          (ii) a transfer of Executive by Employer requiring Executive to have his principal location of
work more than twenty-five (25) miles from Employer’s present principal office; or

          (iii) a requirement by Employer that Executive travel materially more than that amount of time
which has historically been required by Employer such that Executive is required to be away from
his place of residence for more than three weekends in a calendar year or for four or more
weeknights per week during any three weeks in a calendar year.

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     If Executive terminates this Agreement pursuant to this Section 2.6, Executive shall have the
right to receive payments and benefits under Section 2.5 as if a termination by Employer without
cause had occurred. In addition, Executive shall be entitled to the title to Executive’s
Employer-owned or leased automobile then being used by Executive, membership in a service club and
reimbursement for membership dues, special assessments, minimum monthly assessments and other
business related expenses in a social or Country Club for a period of twelve (12) months from the
end of the then current term of employment under Section 1.1, subject to the same limitations
expressed with reference to other benefits under Section 2.5. Employer shall deliver title to the
automobile to the Executive within fifteen (15) days of Executive’s termination of employment.

     (b) For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if
(i) any “person” (as such term is used in Section 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934) becomes the beneficial owner, directly or indirectly, of securities of the Bank or the
Company in a transaction or transactions subject to the notice provisions of the Change in Bank
Control Act of 1978, as amended from time to time, or approval under the Bank Holding Company Act
of 1956, as amended from time to time; (ii) someone other than the Company becomes owner of more
than 25% of the voting securities of the Bank; (iii) during any period of two (2) consecutive
years, the individuals, who at the beginning of any such period constituted the directors of the
Bank or the Company, cease for any reason to constitute at least a majority thereof; or (iv) the
occurrence of any of the following events:

          (A) There is a Successor (as hereinafter defined) of or to Employer or the Company; or

          (B) The filing by the Employer or the Company of a report or proxy statement with the Federal
Deposit Insurance Corporation (“FDIC”) or the Securities and Exchange Commission disclosing in
response to Item 5.01 of Form 8-K, promulgated pursuant to the Securities Exchange Act of 1934, as
amended (“Exchange Act”), or Item 6(e) of Schedule 14A promulgated thereunder, or successor Items,
that a Change in Control of the Employer or the Company has or may have occurred pursuant to any
contract or transaction.

2.7 Successors and Binding Agreements.

     (a) This Agreement shall be binding upon and inure to the benefit of Employer and any
Successor of or to Employer, but shall not otherwise be assignable or delegatable by Employer.
“Successor” shall mean any successor in interest, including, without limitation, any entity,
individual or group of persons acquiring directly or indirectly all or substantially all of the
business or assets of Employer whether by sale, merger, consolidation, reorganization or otherwise.

     (b) This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees and legatee.

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     (c) Employer shall require any Successor to agree (by agreement in form and substance
satisfactory to Executive) within thirty (30) days after becoming a Successor to perform this
Agreement to the same extent as the original parties would be required if no succession had
occurred.

     (d) This Agreement is personal in nature and neither of the parties shall, without the consent
of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder
except as expressly provided in this Section 2.7.

2.8 Limitations on Termination Compensation.

     (a) In the event that the severance benefits payable to the Executive under Sections 2.5, or
2.6 (“Severance Benefits”), or any other payments or benefits received or to be received by the
Executive from the Employer (whether payable pursuant to the terms of this Agreement, any other
plan, agreement or arrangement with the Employer) or any corporation (“Affiliate”) affiliated with
the Employer within the meaning of Section 1504 of the Internal Revenue Code of 1986, as amended
(the “Code”), in the opinion of tax counsel selected by the Employer’s independent auditors and
acceptable to the Executive, constitute “parachute payments” within the meaning of Section
280G(b)(2) of the Code, and the present value of such “parachute payments” equals or exceeds three
(3) times the average of the annual compensation payable to the Executive by the Employer (or an
Affiliate) and includible in the Executive’s gross income for federal income tax purposes for the
five (5) calendar years preceding the year in which a change in ownership or control of the
Employer occurred (“Base Amount”), such Severance Benefits shall be reduced to an amount the
present value of which (when combined with the present value of any other payments or benefits
otherwise received or to be received by the Executive from the Employer (or an Affiliate) that are
deemed “parachute payments”) is equal to 2.99 times the Base Amount, notwithstanding any other
provision to the contrary in this Agreement. The Severance Benefits shall not be reduced if (A)
the Executive shall have effectively waived his receipt or enjoyment of any such payment or benefit
which triggered the applicability of this Section 2.8, or (B) in the opinion of tax counsel, the
Severance Benefits (in its full amount or as partially reduced, as the case may be) plus all other
payments or benefits which constitute “parachute payments” within the meaning of Section 280G(b)(2)
of the Code are reasonable compensation for services actually rendered, within the meaning of
Section 280G(b)(4) of the Code, and such payments are deductible by the Employer. The Base Amount
shall include every type and form of compensation includible in the Executive’s gross income in
respect of his employment by the Employer (or an Affiliate), except to the extent otherwise
provided in temporary or final regulations promulgated under Section 280G(b) of the Code. For
purposes of this Section 2.8, a “change in ownership or control” shall have the meaning set forth
in Section 280G(b) of the Code and any temporary or final regulations promulgated thereunder. The
present value of any non-cash benefit or any deferred cash payment shall be determined by the
Employer’s independent auditors in accordance with the principles of Sections 280G(b)(3) and (4) of
the Code.

     (b) The Executive shall have the right to request that the Employer obtain a ruling from the
Internal Revenue Service (“Service”) as to whether any or all payments or benefits determined by
such tax counsel are, in the view of the Service, “parachute payments” under

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Section 280G. If a ruling is sought pursuant to the Executive’s request, no Severance Benefits
payable under this Agreement shall be made to the Executive until after fifteen (15) days from the
date of such ruling. For purposes of this Section 2.8(b), the Executive and the Employer agree to
be bound by the Service’s ruling as to whether payments constitute “parachute payments” under
Section 280G. If the Service declines, for any reason, to provide the ruling requested, the tax
counsel’s opinion provided in Subsection 2.8(a) with respect to what payments or benefits
constitute “parachute payments” shall control, and the period during which the Severance Benefits
may be deferred shall be extended to a date fifteen (15) days from the date of the Service’s notice
indicating that no ruling would be forthcoming.

     (c) In the event that Section 280G, or any successor statute, is repealed, this Section 2.8
shall cease to be effective on the effective date of such repeal. The parties to this Agreement
recognize that final regulations under Section 280G of the Code may affect the amounts that may be
paid under this Agreement and agree that, upon issuance of such final regulations, this Agreement
may be modified as in good faith deemed necessary in light of the provisions of such regulations to
achieve the purposes of this Agreement, and that consent to such modifications shall not be
unreasonably withheld.

     (d) Any payments made to the Executive pursuant to this Agreement, or otherwise, are subject
to and conditioned upon their compliance with section 18(k) of the Federal Deposit Insurance Act
(12 USC § 1828(k)) and any regulations promulgated thereunder.

ARTICLE III

NONCOMPETITION

3.1 Noncompetition.

     (a) While the Executive is employed by the Employer and during the Post-Employment
Noncompetition Period (as defined below), Executive will not directly or indirectly on his own
behalf, or as a representative, agent, owner, employee, consultant, trustee, beneficiary,
distributor, partner, co-venturer, investor, officer, director, stockholder, creditor or in any
other capacity:

          (i) own, operate, manage, join, finance, control, participate in ownership, management,
operation or control of, or be paid or employed by or acquire any securities of, or otherwise
become associated with or provide assistance to any Significant Competitor of the Employer. For
purposes of this Agreement, the term Significant Competitor means any financial institution
including, but not limited to, any commercial bank, savings bank, savings and loan association,
credit union, or mortgage banking corporation which, at the time of termination of Executive’s
employment with the Employer, or during the period of this covenant not to compete, has a home,
branch or other office in the Dodge, Jefferson, Milwaukee, Walworth, Washington, or Waukesha
County, Wisconsin, the Milwaukee Metropolitan Area or has originated within any of said counties
$10,000,000 or more in residential mortgage loans during any continual twelve (12) month period
within twenty-four (24) months prior to Executive’s termination and inclusive of the period covered
by this covenant.

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          (ii) divert or attempt to divert any business from the Employer or engage in any act likely to
cause any present or future customer or supplier of the Employer to discontinue or curtail its
business with the Employer or to do business with another entity, firm, business, activity or
enterprise directly or indirectly competitive with the Employer;

          (iii) contact, sell or solicit to sell, or attempt to contact, sell or solicit to sell
products or services competitive with those of the Employer to any present or future customer of
the Employer with which Executive has had contact while performing services hereunder for the
Employer; or

          (iv) solicit, cause or seek to cause any employee of the Employer to terminate, curtail or
otherwise modify his or her employment relationship with the Employer for the purpose of entering
into an employment or other relationship with Executive or with any entity, firm, business,
activity or enterprise with which Executive is directly or indirectly affiliated.

     For purposes of this Agreement, the Post-Employment Noncompetition Period shall be the greater
of one year or the period for which Executive has received post-employment compensation under
Article II (i.e., one year for a termination under Section 2.5 or Section 2.6); provided that the
Post-Employment Noncompetition Period shall not exceed two years.

     (b) Notwithstanding the provisions of Section 3.1(a) hereof, Executive may:

          (i) acquire securities of any entity the securities of which are publicly traded, provided
that the value of the securities of such entity held directly or indirectly by Executive
immediately following such acquisition is less than 5% of the total value of the then outstanding
class or type of securities acquired; and

          (ii) perform services for a business which is similar to or competitive with the Employer if
such company is also engaged in another business which is not similar to or competitive with the
Employer and Executive’s services are restricted to such other business to the reasonable
satisfaction of the Employer provided the Employer approves in writing of such services, which
approval shall not be unreasonably withheld.

     (c) Executive acknowledges and agrees that the restrictions set forth in this Section 3.1 are
founded on valuable consideration and are reasonable in duration and geographic area in view of the
circumstances under which this Agreement is executed and that such restrictions are necessary to
protect the legitimate interests of the Employer. In the event that any provision of this Section
3.1 is determined to be invalid by any court of competent jurisdiction, the provisions of this
Section 3.1 shall be deemed to have been amended and the parties will execute any documents and
take whatever action is necessary to evidence such amendment, so as to eliminate or modify any such
invalid provision and to carry out the intent of this Section 3.1 so to render the terms of this
Section 3.1 enforceable in all respects as so modified.

     (d) Executive acknowledges and agrees that irreparable injury will result to the Employer in
the event Executive breaches any covenant contained in this Section 3.1 and that the

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remedy at law for such breach will be inadequate. Therefore, if Executive engages in any act in
violation of the provisions of this Section 3.1, the Employer shall be entitled, in addition to
such other remedies and damages as may be available to it by law or under this Agreement, to
injunctive or other equitable relief to enforce the provisions of this Section 3.1.

3.2 Confidential Information.

     Executive acknowledges that through the services to be performed for the Employer, he will
obtain confidential information regarding the Employer’s business affairs, including such matters
as computer programs, research, customer lists, customer development, planning, purchasing,
finance, marketing, customer relations, and other information of a similar nature not available to
the public which is developed at great expense and provide the Employer with a substantial
competitive advantage in conducting its business. This information may be oral or written and may
be that which Executive originates as well as that which otherwise comes into his possession or
knowledge. Confidential information shall be defined to exclude information which is or becomes
public knowledge through no fault of Executive, or which was known to Executive before the start of
his earliest relationship with the Employer, or which is otherwise not subject to protection under
applicable law. Executive agrees to retain all confidential information in confidence; not to use,
or disclose to third parties, any such confidential information for as long as it retains its
economic value to the Employer. Executive agrees that he will treat all matters relating to the
business activities of the Employer as confidential and will not divulge or disclose any
information gained in connection with his employment by the Employer to any other person, firm, or
corporation except upon the written request or instruction of the Employer or in the normal course
of his duties as an employee of the Employer. Executive agrees not to use or disclose, for purpose
of marketing or otherwise, any of the customer information he receives while working at the
Employer (including, but no limited to, customers’ identity and financial status and holdings) in
competition with the Employer either on his own behalf, or as a representative, agent, employee,
officer, director, trustee, stockholder, or creditor of, or partner, join venturer, or investor
with or in, any other person or entity in competition with the Employer, and Executive further
agrees not to inform any such customer with whom he comes into contact after termination of
Executive’s employment with the Employer that he is aware of the person’s status as a customer of
Employer. This paragraph is intended to protect confidential information and customer
relationships, both during and after the period of Executive’s employment with the Employer, not
Executive’s right to seek and obtain employment in competition with the Employer after termination
of Executive’s employment with the Employer.

3.3 Common Law of Torts and Trade Secrets.

     The parties agree that nothing in this Agreement shall be construed to limit or negate the
common law of torts or trade secrets where it provides the Employer with broader protection than
that provided herein.

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3.4 Return of the Company’s Materials.

     Upon termination, Employee shall immediately return to the Employer all files, credit cards,
keys, instruments, equipment, and other materials owned or provided by the Company.

ARTICLE IV

GENERAL PROVISIONS

4.1 Entire Agreement.

     This Agreement supersedes any other agreements, oral or written, between the parties with
respect to the employment of Executive by Employer and contains all of the agreements and
understandings between the parties with respect to such employment, provided however, that this
Agreement shall not supersede or affect the terms of any employee benefit arrangement in existence
on the date of this Agreement and in which the Executive is participating on that date, including,
but not limited to the Supplemental Plan, all pension, retirement, deferred compensation, 401(k),
excess benefit or other similar plans. Any waiver or modification of any term of this Agreement
shall be effective only if it is signed in writing by both parties.

4.2 Withholding of Taxes.

     Employer may withhold from any amounts payable under this Agreement all federal, state, city
or other taxes as shall be required pursuant to any law or government regulation or ruling.

4.3 Notices.

     Any notice to be given hereunder by either party to the other may be made by personal delivery
in writing or by mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing below, but each party
may change his or its address by written notice in accordance with this paragraph. Notices
delivered personally shall be deemed communicated as of actual receipt; mailed notices shall be
deemed communicated five (5) days after the date of mailing.

If to Employer, addressed to:

If to Executive, addressed to:

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4.4 Governing Law.

     This Agreement shall be construed in accordance with and governed by the laws of the State of
Wisconsin and, to the extent applicable, of the United States.

4.5 Incapacity.

     If Employer shall reasonably and in good faith find that any person to whom any payment is
payable under this Agreement is unable to care for his or her affairs because of illness or
accident, or is a minor, any payment due (unless a prior claim therefore shall have been made by a
duly appointed guardian, committee, or other legal representative) may be paid to the spouse, a
child, a parent, or a brother or sister, or to any person reasonably and in good faith deemed by
Employer to have incurred expense for such person otherwise entitled to payment in such manner and
proportions as Employer may determine in its sole discretion. Any such payment shall be a complete
discharge of the liabilities of Employer to make such payment to Executive.

4.6 Waivers.

     The waiver by any party of any breach, default, misrepresentation or breach of warranty or
covenant in this Agreement, whether intentional or not, shall be in writing and shall not be deemed
to extend to any prior or subsequent breach, default, misrepresentation or breach of warranty or
covenant herein and shall not affect in any way any rights arising by virtue of any such prior or
subsequent occurrence.

4.7 Severability.

     In case any one or more of the provisions contained in this Agreement should be invalid,
illegal, or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained in this Agreement shall not in any way be affected or impaired
thereby.

4.8 Remedies Cumulative.

     Remedies under this Agreement of any party hereto are in addition to any remedy or remedies to
which such party is entitled or may become entitled at law or in equity.

4.9 Counterparts.

     This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.

4.10 Headings.

     The headings in this Agreement are for convenience of reference only, and under no
circumstances should they be construed as being a substantive part of this Agreement nor shall they
limit or otherwise affect the meaning thereof.

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4.11 Additional Documents

     Each of the parties hereto, without further consideration, agrees to execute and deliver such
additional documents and to take such other actions reasonably necessary to more effectively
consummate the purposes of this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year
first above written.

	 	 	 	 	 	 	 
	 	 	WAUWATOSA SAVINGS BANK	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	
By:	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
Attest:	 	 	 	 
	 	 	 	 	
	 	 
	 	 	EXECUTIVE:
 
 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 

- 15 -

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