Document:

Exhibit 10.1

Exhibit 10.1

XERIUM TECHNOLOGIES, INC.
2014-2016 LONG TERM INCENTIVE PLAN
This Xerium Technologies, Inc. 2014-2016 Executive Long Term Incentive Plan (the “Executive LTIP”) contains rules supplemental to those set forth in the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “EIP”).  The Executive LTIP provides for the grant of incentive award opportunities (each, an “Award”) under and subject to the terms of the EIP, which is incorporated herein by reference.  In the event of any inconsistency between the Executive LTIP and applicable provisions of the EIP, the EIP shall control.  Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the EIP.
1.Administration; Eligibility.  The Executive LTIP shall be administered by the Committee as described in the EIP.  The Committee may in its discretion consult with outside advisors or internal Company resources for purposes of making any determinations in connection with its administration of the Program.  Eligibility to participate in the Executive LTIP shall be limited to executive officers who are selected by the Committee to participate in the Executive LTIP from among those individuals who are eligible to participate in the EIP.  Each selected individual who signs and returns an agreement (Award Agreement) in substantially the form of Exhibit A shall be a participant (“Participant”) in this Executive LTIP.  Participation in any Award shall not entitle a Participant to share in any future Awards or in any other future awards of the Company or its subsidiaries.

2.Determination of Number of Shares.  The number of shares of Common Stock covered by an Award (the “LTIP Shares”) shall be as determined by the Committee and set forth in Schedule 1 to the Award Agreement.
    
3.Determination of Time-Based Versus Performance-Based LTIP Shares.  Participants will receive thirty-five percent (35%) of their LTIP Shares in the form of time-based Restricted Stock Units as described in Section 4 below (“Time-Based RSUs”) and have the remainder of their LTIP Shares (sixty-five percent (65%)) credited to them as performance-based stock units (“Performance Stock Units”) as described in Section 5 below, to be earned and vested subject to satisfaction of certain performance conditions.  The performance period is the three-year period comprising a three year period beginning on the date of each Participant’s grant and ending on the third (3rd) anniversary of such grant date.

4.General Terms of Time-Based RSUs.  Any LTIP Shares that are to be conveyed in the form of Time-Based RSUs will be granted as of the date set forth in Schedule 1 to the Award Agreement.  The Award Agreement provides that the RSUs shall vest on the third (3rd) anniversary of such grant date and settle in shares of Common Stock as soon as administratively possible after the third (3rd) anniversary of such grant date, but in all events before the 15th day of the third month following December 31 following the third (3rd) anniversary of such grant date.

5.General Terms of Performance Stock Units.  The determination of the number of shares of Common Stock to be delivered at the end of the three-year performance period with respect to the Performance Stock Units (the “Performance Shares”) shall be made in accordance with the provisions of the Award Agreement.  The Award Agreement provides that the Performance Stock Units will vest based on achievement of certain performance goals described in Schedule 2.  Vested Performance Shares will be delivered in shares of Common Stock as soon as administratively possible after the third (3rd) anniversary of such grant date, but in all events before the 15th day of the third month following December 31 following the third (3rd) anniversary of such grant date.

6.Forfeiture Upon Termination of Employment.  Except as provided in the Award Agreement with respect to a Change of Control, death or Disability or a termination of employment by the Company without Cause or by the Participant with Good Reason (as “Disability”, “Cause” and “Good Reason” are defined in the Award Agreement), notwithstanding vesting under Section 4 or Section 5, no Time-Based RSUs or Performance Shares shall be payable to or in respect of a Participant unless the Participant is employed by the Company or a subsidiary on the third (3rd) anniversary of such grant date.

7.Tax Withholding.  The minimum tax withholding amount with respect to any payments being made in Common Stock may be satisfied by means of share withholding at the time the Award is settled as provided in the Award Agreement.

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8.Intent to be Exempt from Section 162(m).  The portion of the Award paid in Time-Based RSUs is not intended to qualify for the performance-based compensation exception under Section 162(m) of the Code.  The portion of the Award paid in Performance Shares is intended to qualify to the extent possible for the performance-based compensation exception under Section 162(m) of the Code.

9.Nature of Awards.  Awards hereunder are intended as Stock Unit Awards pursuant to the EIP.  The Executive LTIP is unfunded.

10.Availability of Stock.  If, when Time-Based RSUs or Performance Shares become payable, the number of shares of Common Stock needed exceeds the number of shares then available under the EIP, or exceeds any limit established by the Board on the number of shares delivered in the same fiscal year, the Company will pay out the value of any share that was not delivered in cash on the date otherwise scheduled for delivery of shares and determine its value by using the per-share closing price of the Common Stock on the date immediately preceding the date the shares would have been delivered had there been a sufficient number available.  Any substitution of cash for shares in such event shall be applied pro rata to all Participants entitled to a distribution by reason of the same event.

11.Clawback.  If a Participant receives an Award payout under the Executive LTIP based on financial statements that are subsequently required to be restated in a way that would decrease the number of Shares to which the Participant was entitled, the Participant will refund to the Company the difference between what the Participant received and what the Participant should have received; provided that (i) the value of any difference to be refunded will be determined net of withholding and (ii) no refund will be required for Shares delivered more than three years prior to the date on which the Company is required to prepare the applicable restatement. The value of any difference to be refunded will be determined in a manner consistent with regulations the Securities and Exchange Commission may adopt pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

12.Amendment.  The Committee may amend the Executive LTIP at any time and from time to time, and may terminate the Executive LTIP, in each case subject only to such limitations, if any, as the EIP may impose.

13.409A.  This Executive LTIP and the Time-Based RSUs and Performance Stock Units granted thereunder shall be construed and administered consistent with the intent that they at all times be in compliance with or exempt from the requirements of Section 409A of the Code and the regulations promulgated thereunder.

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EXHIBIT A
XERIUM TECHNOLOGIES, INC.
LTIP SHARE AGREEMENT
(2014-2016 Executive LTIP)
Pursuant to the terms of the Xerium Technologies, Inc. Long Term Incentive Plan effective for fiscal years 2014 through 2016 (the “2014-2016 Executive LTIP”) and the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “Plan”), Xerium Technologies, Inc. (the “Company”) hereby grants to (the “Employee”) the LTIP Shares described below.
1.    The LTIP Share Award.  The LTIP Share Award is subject to the terms and conditions of this LTIP Share Agreement, the 2014-2016 Executive LTIP and the Plan.  The Company hereby grants LTIP Shares to the Employee, the number of LTIP Shares specified on Schedule 1, as of the date specified on Schedule 1, subject to the terms and conditions of this Agreement and the Plan (the “Award”).  An Award shall be paid hereunder, only to the extent that the Employee has a nonforfeitable right to such portion of the Award, as provided in this Agreement.  The Employee’s rights to the LTIP Shares are subject to the restrictions described in this Agreement and the Plan in addition to such other restrictions, if any, as may be imposed by law.
2.    Definitions.  The following definitions will apply for purposes of this Agreement.  Capitalized terms not defined in the Agreement are used as defined in the Plan.
(a)    “Agreement” means this LTIP Share Agreement granted by the Company and agreed to by the Employee.
(b)    “Cause” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof).  
(c)    “Change of Control” shall mean any of the following which takes place after the Grant Date: (i) any Person or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”), other than the Company or any of its subsidiaries  or any trustee or  other  fiduciary holding securities  under an employee benefit plan of the Company or one of its subsidiaries, becomes a beneficial owner, directly or indirectly, in one or a series of transactions, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for the election of directors of the Company; (ii) any merger or consolidation involving the Company or any sale or other disposition of all or substantially all of the assets of the Company, or any combination of the foregoing, occurs and the beneficial owners of the Company’s voting securities outstanding immediately prior to such consolidation, merger, sale or other disposition do not, immediately following the consummation of such consolidation, merger, sale or other disposition, hold beneficial ownership, directly or indirectly, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for election of directors of the surviving or resulting corporation in the case of any merger or consolidation or of the acquiring Person or Persons in the case of any sale or other disposition; or (iii) within twelve (12) months after a tender offer or exchange offer for voting securities of the Company (other than by the Company or any of its subsidiaries), individuals who are Continuing Directors shall cease to constitute a majority of the Board.  For the purpose of this definition, the term “beneficial owner” (and correlative terms, including “beneficial ownership”) shall have the meaning set forth in Rule 13d-3 under the Act. provided in each such case such event is also a “change in control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5)(1) (or similar applicable regulation under Section 409A of the Code).
(d)    “Change of Control Termination” means a termination of the Employee’s employment with the Company or a member of the Company Group that occurs within three (3) months prior to a Change of Control as a result of (x) termination by a member of the Company Group without Cause or (y) a Good Reason Termination.
(e)    “Common Stock” means the common stock of the Company, $0.01 par value.
(f)    “Company Group” means the Company together with its Affiliates.

(g)    “Disability” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof).  
(h)    “Fair Market Value” means, on the applicable date, or if the applicable date is not a date on which the NYSE is open the next preceding date on which the NYSE was open, the last sale price with respect to such Common Stock reported on the NYSE or, if on any such date such Common Stock is not quoted by NYSE, the average of the closing bid and asked prices with respect to such Common Stock, as furnished by a professional market maker making a market in such Common Stock selected by the Committee in good faith; or, if no such market maker is available, the fair market value of such Common Stock as of such day as determined in good faith by the Committee.
(i)    “Good Reason Termination” shall mean a termination of employment by the Employee with “Good Reason,” as such term is defined in the written employment agreement between the Company and the Employee (as in effect on the date hereof), where the Employee provides notice of the Good Reason event within 90 days of its occurrence and provides the Company at least 30 days to cure such matter.  
(j)    “Grant Date” means the date specified on Schedule 1.
(k)    “NYSE” means the New York Stock Exchange.
(l)    “Person” means any individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, or other entity or group, and “Affiliated Person” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or is under common control with such Person.
(m)    “Pro Rata Portion” shall mean the product of (x) a fraction, the numerator of which is, as of the time of measurement, the number of months (rounded down to the nearest whole number) occurring since the Grant Date and the denominator of which is 36 and (y) 100% of the LTIP Shares not previously Vested.
(n)    “Vested” means that portion of the Award to which the Employee has a nonforfeitable right.
3.    Vesting.  Subject to Sections 5 and 6 below:
(a)    Time-Based RSUs shall become Vested on the third (3rd) anniversary of the Grant Date.
(b)    Performance Shares shall become Vested in accordance with the criteria set out in Schedule 2.  
(c)    Notwithstanding subsections (a) and (b), except as provided in Sections 5 and 6, all LTIP Shares shall be forfeited if Employee’s employment terminates for any reason whatsoever before the third (3rd) anniversary of the Grant Date.
4.    Payment of Award.  Subject to Sections 5 and 6 below, as soon as practicable after the third (3rd) anniversary of the Grant Date, and in all events before the 15th day of the third month following December 31 following the third (3rd) anniversary of the Grant Date, the Company shall issue to the Employee that number of shares of Common Stock as equals that number of LTIP Shares which have become Vested.
5.    Change of Control.  In the event of a Change of Control, then all Time-Based RSUs and Performance Shares shall become fully and immediately Vested as though 100% of the target performance goals were achieved, as described in Schedule 2 and if Employee incurred a Change of Control Termination all Time-Based RSUs and Performance Shares otherwise forfeited upon such termination shall become fully and immediately Vested, and shall be distributed in shares and to the extent practicable shall be distributed immediately preceding the effective time of the Change of Control transaction with respect to LTIP Shares that become Vested in connection with a Change of Control.

6.    Termination of Employment.
(a)    Resignation or Termination by the Company.  If the Employee ceases to be employed by the Company Group as a result of resignation, dismissal or any other reason, then the portion of the Award that has not previously Vested shall be forfeited automatically; provided that in the event of a termination of Employee’s employment by a member of the Company Group without Cause, as a result of death or Disability or a Good Reason Termination, a portion of the LTIP Shares (both Time-Based RSUs and Performance Shares) equal to the Pro Rata Portion of the LTIP Shares as of the time of termination shall Vest immediately prior to such termination and be distributed as soon as practicable thereafter, and in all events before the 15th day of the third month following the end of the calendar year in which such LTIP Shares became Vested. 
(b)    Meaning of termination of employment.  If the Company or a member of the Company Group provides Employee a written notice of termination of employment but the termination of employment is not effective for a period of more than thirty (30) days due to applicable law or contractual arrangements between a member of the Company Group and the Employee, for the purposes of this Award, including without limitation Section 6(a) hereof, the Employee’s employment shall be deemed terminated and the Employee shall be deemed ceased to be employed by the Company Group on the date that is thirty (30) days from the date of such notice instead of the actual date of termination.
7.    Dividends.  No dividend equivalents shall be paid on LTIP Shares (either Time-Based RSUs or Performance Shares).  
8.    Clawback.  If the Employee receives an Award payout under the Executive LTIP based on financial statements that are subsequently required to be restated in a way that, in the reasonable determination of the Committee, would decrease the number of Shares to which the Employee was entitled, the Employee will refund to the Company the difference between what the Employee received and what the Employee should have received; provided that (i) the value of any difference to be refunded will be determined net of withholding and (ii) no refund will be required for Shares delivered more than three years prior to the date on which the Company is required to prepare the applicable restatement. The value of any difference to be refunded will be determined in the reasonable discretion of the Committee in a manner consistent with regulations the Securities and Exchange Commission may adopt pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
9.    Miscellaneous.
(a)    Adjustments Based on Certain Changes in the Common Stock.  In the event of any stock split, reverse stock split, stock dividend, recapitalization or similar change affecting the Common Stock, the Award shall be equitably adjusted.
(b)    No Voting Rights.  The Award shall not be interpreted to bestow upon the Employee any equity interest or ownership in the Company or any Affiliate prior to the date that Common Stock is distributed in settlement of an LTIP Award, and then only with respect to the shares of Common Stock issued on such Date.
(c)    No Assignment.  No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.
(d)    Withholding.  The Employee is responsible for payment of any taxes required by law to be withheld by the Company with respect to an Award.  To facilitate that payment, the Company will, to the extent permitted by law, retain from the number of shares of Common Stock issued to the Employee in settlement of an LTIP Award that number of shares necessary for payment of the minimum tax withholding amount, valued at their Fair Market Value on the business day most immediately preceding the date of retention.  To the extent the Company’s withholding obligation cannot be satisfied by means of share withholding, the Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind due to the Employee.
(e)    Employment Rights.  This Agreement shall not create any right of the Employee to continued employment with the Company or its Affiliates or limit the right of Company or its Affiliates to terminate the Employee’s employment at any time and shall not create any right of the Employee to employment with the Company or any of its Affiliates.  Except to the extent required by applicable law that cannot be waived, the loss of the Award shall not constitute an element of damages in the event of termination of the Employee’s employment even if the termination is determined to be in violation of an obligation of the Company or its Affiliates to the Employee by contract or otherwise.
(f)    Unfunded Status.  The obligations of the Company hereunder shall be contractual only.  The Employee shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Employee or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company or any Affiliate.
(g)    Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.
(h)    Governing Law.  This Agreement and all actions arising in whole or in part under or in connection herewith, will be governed by and construed in accordance with the domestic substantive laws of the State   of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.
(i)    Conflicts. To the extent there are any conflicts between provisions this Agreement and any applicable employment agreement entered into between Employee and the Company or its subsidiaries, the provisions of such employment agreement shall govern and nothing in this Agreement shall in any way amend, supersede or otherwise change any provisions or rights contained in such employment agreement.
(j)    409A.  The Award shall be construed and administered consistent with the intent that it be at all times in compliance with, or exempt from, the requirements of Section 409A of the Internal Revenue Code and the regulations thereunder.
(k)    Section 162(m).  The Award shall be construed and administered consistent with the intent that it qualify to the maximum extent possible as qualifying performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code and the regulations thereunder.
(l)    Amendment.  This Agreement may be amended only by mutual written agreement of the parties.
IN WITNESS WHEREOF, Xerium Technologies, Inc. has executed this LTIP Share Agreement as of the date first written above.
Xerium Technologies, Inc.
By:    ______________________    
Name:      Harold Bevis
Title:      President and CEO
Acknowledged and agreed:
Employee
By:    ___________________    
Name:    

A-1

Schedule 1
Grant Date: May 8, 2014        
Number of LTIP Shares:     
Allocation of LTIP Shares Granted:

	
		
	Number of Time-Based RSUs
	Number of Performance Shares

	 
	 

    

S-1

Schedule 2

		
	•
	Vesting of Performance Shares shall occur in two (2) ways: 50% of the Employee’s Performance Shares shall vest based on the Company’s three-year cumulative Adjusted EBITDA goal (“Adjusted EBTIDA Performance Shares”) and 50% of the Employee’s Performance Shares shall vest based upon a Relative Total Shareholder Return (“TSR”) against companies in the Selected Index (“TSR Performance Shares”):

		
	•
	Performance Metrics

 
		
	•
	Cumulative Adjusted EBITDA:

		
	•
	Cumulative Adjusted EBITDA Target: The Cumulative Adjusted EBITDA target for the 2014-2016 performance period shall be such amount as is set by the Compensation Committee after review of the three-year business plan (“Target”).

		
	•
	Cumulative Adjusted EBITDA Payout:  The Adjusted EBITDA Performance Shares that may vest will range from 0% to 100% of the Employee’s total Adjusted EBITDA Performance Shares. Upon attainment of Cumulative Adjusted EBIDTA equal to 80% or less of the Target, none of the Adjusted EBITDA Performance Shares will vest. Upon attainment of more than 80% of the Target, the Adjusted EBITDA Performance Shares will begin vesting on a straight-line basis from 0% at 80% of Target to 100% at 100% of Target, up to a maximum payout of 100% of the Adjusted EBITDA Performance Shares.

The following table sets forth the performance requirements and respective payout amounts.

	
			
	Table of Adjusted EBITDA Performance Payout

	 
	 
	 

	Adjusted EBITDA Achievement
	 
	Payout %

	 
	 
	 

	100.0%
	 
	100.0%

	99.0%
	 
	95.0%

	98.0%
	 
	90.0%

	97.0%
	 
	85.0%

	96.0%
	 
	80.0%

	95.0%
	 
	75.0%

	94.0%
	 
	70.0%

	93.0%
	 
	65.0%

	92.0%
	 
	60.0%

	91.0%
	 
	55.0%

	90.0%
	 
	50.0%

	89.0%
	 
	45.0%

	88.0%
	 
	40.0%

	87.0%
	 
	35.0%

	86.0%
	 
	30.0%

	85.0%
	 
	25.0%

	84.0%
	 
	20.0%

	83.0%
	 
	15.0%

	82.0%
	 
	10.0%

	81.0%
	 
	5.0%

	80.0%
	 
	0.0%

S-2

		
	•
	TSR 

		
	•
	TSR Definition: TSR is a comparison over time of the stock performance of the Company to the stock performance of companies in the Selected Index.  Stock performance for the Company is the change in share price of the Company plus any dividends. The final TSR determination will be measured based on 30-day average stock prices at the Grant Date to the third (3rd) anniversary of the Grant Date.

		
	•
	Selected Index:  The Selected Index is the S&P Global Small Cap Index.  The companies in the Selected Index are those listed on the index on the third (3rd) anniversary of the Grant Date.  

		
	•
	TSR Target: The Company TSR Target performance for the three-year performance period is TSR that exceeds the 55th percentile TSR of companies in the Selected Index.   

		
	•
	TSR Payout: The TSR Performance Shares that may vest will range from 0% to 100% of the Employee’s total TSR Performance Shares. The following table sets forth the performance requirements and the respective payout amounts based on the Company’s TSR relative to the TSR percentiles of companies in the Selected Index:

	
			
	Table of TSR Payout At Target and Below

	 
	 
	 

	XRM TSR as a Percentile 
of Index Companies
	 
	Payout %

	 
	 
	 

	55.0%
	 
	100.0%

	53.0%
	 
	95.0%

	51.0%
	 
	90.0%

	49.0%
	 
	85.0%

	47.0%
	 
	80.0%

	45.0%
	 
	75.0%

	43.0%
	 
	70.0%

	41.0%
	 
	65.0%

	39.0%
	 
	60.0%

	37.0%
	 
	55.0%

	35.0%
	 
	50.0%

	Less than 35.0%
	 
	0.0%

S-3Exhibit 10.2(a)

 

BANK MUTUAL CORPORATION

 

INCENTIVE STOCK OPTION AGREEMENT

 

Option granted the _____ day of _______________________,
20___ (the “Date of Grant”), by BANK MUTUAL CORPORATION, a Wisconsin corporation (hereinafter called “Bank Mutual”),
to ________________________________ (hereinafter called the “Optionee”).

 

WITNESSETH:

 

WHEREAS, the Board of Directors of Bank
Mutual adopted the Bank Mutual Corporation 2014 Incentive Compensation Plan (the “Plan”) on February 3, 2014, subject
to stockholder approval which was obtained May 5, 2014;

 

NOW, THEREFORE, it is agreed as follows:

 

1.          Number
of Shares Optioned; Option Price.  Bank Mutual grants to Optionee the right and option to purchase, on the terms
and conditions hereof, all or any part of an aggregate of __________ shares of Bank Mutual’s common stock, at the purchase
price of $________________ (___________________ and ___/100 Dollars) per share (the "Option").

 

2.          Vesting
of Options.  This Option shall be exercisable for any amount of shares up to the maximum percentage of shares covered
hereunder as follows:

 

	Number of Completed	 	Maximum Percentage
	Years of Continuous	 	of Shares Becoming
	Employment After the	 	Exercisable Under
	Date of Grant of Option	 	the Option
	 	 	 
	Less than 1 year	 	Zero
	At least 1 but less than 2	 	20%
	At least 2 but less than 3	 	40%
	At least 3 but less than 4	 	60%
	At least 4 but less than 5	 	80%
	At least 5 Years	 	100%

 

except and to the extent otherwise provided in paragraphs 9
and 10 hereof, or in the event of a Change in Control (as defined in the Plan). In the event of a Change in Control, this option
shall become immediately exercisable. No fractional shares shall be issuable on exercise of this Option and if the application
of the maximum percentage set forth above would result in a fractional share, the number of shares exercisable shall be rounded
up to the next full share.

 

3.          Deferral
of Exercise.  Although Bank Mutual intends to exert its best efforts so that the shares purchasable upon the exercise
of this Option will be registered under, or exempt from the registration requirements of the federal Securities Act of 1933 and
any applicable state securities law at the time the Option first becomes exercisable, if the exercise of this Option or any part
of it would otherwise result in the violation by Bank Mutual of any provision of the Act or of any state securities law, Bank Mutual
may require that such exercise be deferred until Bank Mutual has taken appropriate action to avoid any such violation.

 

    	 

    	 

    

 

4.          Term
of Option and Conditions of Exercise of Option During Employee’s Lifetime.  During the Optionee’s lifetime
this Option may be exercised only by him/her. All rights to exercise this Option shall expire ten years from the date this Option
is granted. Except as provided in paragraphs 9 and 10, this Option may not be exercised unless Optionee is, at the date of the
exercise, in the employ of Bank Mutual or a Subsidiary and shall have been continuously so employed since the date hereof. Notwithstanding
any other provision herein, if at the time this option is granted, Optionee owns (directly or under the attribution rules of Section
425(d) of the Code) stock possessing more than 10% of the total combined voting power of Bank Mutual (or any parent or subsidiary)
this option shall not be exercisable after the expiration of five years from the date of grant hereof.

 

5.          Nontransferability.  This
Option shall not be transferable by the Optionee except by will or the laws of descent and distribution and shall be exercisable
during Optionee’s lifetime only by Optionee or by his/her guardian or legal representative. The Option herein granted and
the rights and privileges pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way, whether by
operation of law or otherwise, and shall not be subject to execution, attachment or similar process.

 

6.          Method
of Exercising Option.  This Option shall be exercised by Optionee delivering a written notice specifying the number
of shares the Optionee desires to purchase to the committee designated by the Board of Directors of Bank Mutual (the “Committee”),
which shall initially be the Compensation Committee of the Board, at its principal business office, on any business day, and by
paying Bank Mutual in full the option price of the shares being acquired at the time.

 

7.          Manner
of Payment.  The option price shall be payable on exercise of this Option or any part of this Option and may be paid
in full in cash or, in the discretion of the Committee, in shares of stock of Bank Mutual, valued at their Fair Market Value determined
as of the date of exercise of the Option, or, in a combination of cash and shares of Bank Mutual’s stock.

 

8.          Delivery
of Shares; Rights as Shareholder.  As soon as practicable after Optionee has exercised the Option and paid the exercise
price, Bank Mutual shall issue to Optionee the number of shares of Bank Mutual stock covered by the option exercise. Optionee shall
not be deemed the holder of any shares covered by this Option until such shares are issued to him/her.

 

9.          Death
or Disability of Employee.  In the event that the employment of Optionee shall cease because of death or as a result
of disability (as defined in Section 105(d)(4) of the Internal Revenue Code) this Option, whether or not otherwise exercisable
at the time of such termination, shall be exercisable at any time within one year after such termination of employment, in the
case of Optionee’s death, by the estate of Optionee or by a person who acquired the right to exercise this Option by bequest
or inheritance from Optionee or, in the case of disability, by Optionee subject to the condition that this Option shall not be
exercisable after the expiration of ten years from the date it is granted. This Option or any portion of this Option not so exercised
shall terminate.

 

10.         Other
Termination.  If the employment of Optionee is terminated for any reason other than death or disability as defined
in paragraph 9, but is not terminated for cause, this Option to the extent that it is otherwise exercisable on the date of such
termination shall be exercisable at any time within one year thereafter (provided that if the Option is exercised more than three
months after the Optionee’s termination of employment the Option will not be eligible for tax treatment as an ISO and instead
will be treated as an NSO), but not later than the date on which this Option would otherwise expire. This Option or any portion
of this Option not so exercised shall terminate. However, notwithstanding any other provisions hereof, if the employment of Optionee
is terminated for cause, as determined by the Committee, this Option shall be deemed terminated and not exercisable by such Optionee.

 

    	 

    	 

    

 

11.         Changes
in Stock.  In the event of any recapitalization, stock split or reverse split, stock dividend, merger in which Bank
Mutual is the surviving corporation, combination or exchange of shares or other capital change affecting the common stock of Bank
Mutual, the Committee shall make, subject to the approval of the Board of Directors of Bank Mutual, equitable and appropriate changes
in the aggregate number and kind of shares subject to this Option, to prevent substantial dilution or enlargement of the rights
granted to or available for Optionee; provided, however, that no changes shall be made which would cause this Option to fail to
continue to qualify as an ISO within the meaning of Section 422 of the Internal Revenue Code, as amended from time to time.

 

12.         No
Employment Agreement Intended.  This Agreement does not confer upon Optionee any right to continuation of employment
in any capacity by Bank Mutual or a Subsidiary and does not constitute an employment agreement of any kind.

 

MISCELLANEOUS

 

13.         Notices.  Any
notice to be given to the Committee under the terms of this Agreement shall be addressed to Bank Mutual, in care of its Secretary
at 4949 West Brown Deer Road, Milwaukee, Wisconsin 53223. Any notice to be given to Optionee may be addressed to Optionee at his/her
address as it appears on Bank Mutual’s records, or at such other address as either party may hereafter designate in writing
to the other. Any such notice shall be deemed to have been duly given if and when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, certified and deposited, postage prepaid, in a post office or branch post office regularly maintained by
the United States Government.

 

14.         Provisions
of Plan Controlling.  This Option is subject in all respects to the provisions of the Plan. In the event of any conflict
between any provision of this Option and the provisions of the Plan, the provisions of the Plan shall control. Terms defined in
the Plan where used herein shall have the meanings as so defined. Optionee hereby acknowledges receipt of a copy of the Plan.

 

15.         Successors.  This
Agreement shall be binding upon and inure to the benefit of any successor or successors of Bank Mutual.

 

16.         Government
and Other Regulations.  The obligation of Bank Mutual to sell and deliver shares of stock under this Plan shall be
subject to all applicable laws, rules and regulations and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or desirable by the Board of Directors of Bank Mutual, including (without limitation) the satisfaction of all
applicable federal, state and local tax withholding requirements. Bank Mutual shall determine the amount of any required tax withholding.
The Optionee may pay the required withholding in cash or, in the discretion of the Committee, in shares of Bank Mutual stock, valued
at its Fair Market Value as of the date the withholding obligation arises, or in a combination thereof.

 

    	 

    	 

    

 

17.         Wisconsin
Contract.  This Option has been granted in Wisconsin and shall be construed under the laws of that State.

 

18.         ISO
Limitation. In accordance with Internal Revenue Code rules, the aggregate Fair Market Value (determined as of the date of grant)
of shares with respect to which ISOs are exercisable for the first time during any calendar year (under the Plan or under any other
incentive stock option plan of the Company or Subsidiary of the Company) may not exceed $100,000. If the Fair Market Value of shares
on the date of grant with respect to which ISOs are exercisable for the first time during any calendar year exceeds $100,000, then
the options for the first $100,000 of shares to become exercisable in such calendar year will be ISOs and the options for the amount
in excess of $100,000 that become exercisable in that calendar year will be treated as NSOs.

 

IN WITNESS WHEREOF, Bank Mutual has caused
these presents to be executed in its behalf by its Chairman of the Board or President and attested by its Secretary or one of its
Assistant Secretaries, and Optionee has hereunto set his or her hand and seal, all of the day and year first above written, which
is the date of the granting of the option evidenced hereby.

 

	 	BANK MUTUAL CORPORATION
	 	 	 
	 	By:	 
	 	 	 
	 	Title:	 

 

ATTEST:

 

	 	 
	Secretary	 

 

	 	 
	 	Optionee

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