Document:

exv10w1

 

Exhibit 10.1

2005 Bonus Plan

     On March 16, 2005, the Compensation and Nominating Committee of the Registrant’s Board of
Directors adopted fiscal 2005 bonus and profit sharing arrangements for the Registrant’s employees,
including its executive officers. These arrangements are not contained in a formal written plan,
but a summary of the manner in which bonus and profit sharing benefits will be determined for
fiscal 2005 is set forth below and in Exhibit 10.1 attached hereto (the “2005 Bonus Plan”). The
2005 Bonus Plan consists of a profit sharing component (the “Profit Sharing Component”) in which
substantially all of the Registrant’s employees, with certain exceptions, are eligible to
participate and a management bonus program component (the “Management Bonus Component”), in which
only executive officers, director level employees and other managers are eligible to participate.

Funding of the 2005 Bonus Plan

     Funding for the 2005 Bonus Plan is dependent upon the Registrant’s achievement of a targeted
operating income amount, excluding funds to be set aside for inclusion in the 2005 Bonus Pool (the
“Targeted Operating Income”). If the Registrant achieves the Targeted Operating Income, between
thirteen percent (13%) and fifteen percent (15%) of the Targeted Operating Income will be set aside
to fund the 2005 Bonus Plan. In the event that the Registrant’s operating income, excluding funds
set aside for inclusion in the 2005 Bonus Plan exceeds the Targeted Operating Income by
approximately 110% or more, an additional twenty percent (20%) of all incremental operating income
above approximately 110% of the Targeted Operating Income amount will be set aside for inclusion in
the 2005 Bonus Plan.

     Upon achievement of Targeted Operating Income, 100% of the 2005 Bonus Pool would be allocated
to the Profit Sharing Component and 0% to the Management Bonus Component. At 110% over the Targeted
Operating Income, approximately 85% of the 2005 Bonus Pool would be allocated to the Profit Sharing
Component and about 15% to the Management Bonus Component. At 120% over the Targeted Operating
Income, about seventy-seven percent (77%) of the 2005 Bonus Pool would be allocated to the Profit
Sharing Component and twenty-three percent (23%) to the Management Bonus Component.

Profit Sharing Component

     The Profit Sharing Component of the 2005 Bonus Plan provides for the payment of profit sharing
benefits twice during the fiscal year, once based upon meeting or exceeding the Registrant’s six
month Targeted Operating Income and a second time based upon meeting or exceeding the Registrant’s
full fiscal year Targeted Operating Income. All employees, other than the Registrant’s
commission-based sales representatives and certain managers of the Registrant’s sales force are
eligible to participate in the Profit Sharing Component of the 2005 Bonus Plan. Ninety percent
(90%) of all payments made pursuant to the Profit Sharing Component of the 2005 Bonus Plan, if any,
will be determined by multiplying eligible employee’s base salary by a fixed percentage, which will
be determined by the Registrant’s Compensation and Nominating Committee and which will be the same
for all eligible employees. The remaining ten percent (10%) of the funds set aside for inclusion
in the Profit Sharing Component of the 2005 Bonus Plan may be paid-out at the discretion of the
Registrant’s Compensation and Nominating Committee, if at all, to all employees. Notwithstanding
the foregoing, commission-based sales representatives and certain managers of the Registrant’s
sales force are eligible to participate in the Profit Sharing Component of the 2005 Bonus Plan only
if the Registrant’s revenues exceed the budgeted revenue projections by ten percent (10%) or more.

 

 

Management Bonus Component

     The Management Bonus Component of the 2005 Bonus Plan provides for the payment of cash bonuses
to the Registrant’s management team in the event that the Registrant exceeds the Targeted Operating
Income by approximately 10% and is available to approximately forty (40) individuals including the
Registrant’s executive officers, director level employees and other managers, other than
commission-based sales representatives and certain managers of the Registrant’s sales force.
Management bonus payout will be based on meeting or exceeding established milestones and/or based
on demonstrating exceptional performance.Exhibit 4.2  

AMENDMENT TO RIGHTS
AGREEMENT 

        This
Amendment to Rights Agreement, effective as of the 17th day of October, 2002, is made and
entered into by and among U.S. Bank National Association (“U.S. Bank”), State
Financial Services Corporation, a Wisconsin corporation (the “Company”), and
American Stock Transfer & Trust Company, a New York banking corporation
(“AST”). 

WITNESSETH 

        WHEREAS,
the Company and U.S. Bank (as successor to Firstar Bank, N.A.) are parties to that certain
Rights Agreement, dated as of July 27, 1998, a copy of which is attached hereto as
Exhibit A (the “Rights Agreement”), pursuant to which U.S. Bank undertook
the duties and obligations of the Rights Agent (as defined in the Rights Agreement) under
the terms and conditions of the Rights Agreement; 

        WHEREAS,
U.S. Bank has notified the Company that it will resign as such Rights Agent; 

        WHEREAS, pursuant
to Section 21 of the Rights Agreement, the Company agrees to discharge U.S. Bank from its
duties as Rights Agent under the Rights Agreement; 

        WHEREAS,
the Company desires to appoint AST as a successor Rights Agent under the Rights Agreement,
and AST desires to undertake and perform the duties and obligations of the Rights Agent
under the terms and conditions of the Rights Agreement; 

        WHEREAS,
the Company has directed U.S. Bank to amend Section 21 of the Rights Agreement as
necessary to allow the Company to appoint AST as a successor Rights Agent under the Rights
Agreement. 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties agree as
follows: 

        1.      Amendment
of Section 21 of Rights Agreement. Section 21 of the Rights           Agreement is
hereby amended and restated in its entirety to read as follows:  

	 	        “Section
21.   Change of Rights Agent. The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement upon 30 days’ notice
in writing mailed to the Company and to each transfer agent of the Common Shares by
registered or certified mail and, if separate Right Certificates have been issued as of
the date of such notice as contemplated by Section 3 hereof, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the Common
Shares by registered or certified mail, and, if separate Right Certificates have been
issued as of the date of such notice as contemplated by Section 3 hereof, to the holders
of the Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such appointment within
a period of 30 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of New York or the State of Wisconsin (or of any other
state of the United States so long as such corporation is authorized to do business in
the State of New York or the State of Wisconsin), in good standing, having an office or
agency in the State of Wisconsin or the State of New York, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $10 million, or (b) an
Affiliate of a corporation described in clause (a) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares, and, if
separate Right Certificates have been issued as of such effective date as contemplated by
Section 3 hereof, mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 21, however,
or any defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as the case
may be.” 
	 

        2.      Appointment.
The Company hereby appoints AST as a successor Rights Agent           under the terms and
conditions of the Rights Agreement, as amended pursuant to           Section 1 above (as
so amended, the “Amended Rights Agreement”).  

        3.      Assumption.
AST hereby accepts the appointment as agent for the Company           and the holders of
Rights under the Amended Rights Agreement, and AST hereby           assumes and agrees to
perform all of the duties and obligations of the Rights           Agent under the terms
and conditions of the Amended Rights Agreement.  

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        4.      Notice.
U.S. Bank hereby acknowledges that this instrument constitutes           notice to U.S.
Bank, as the Company’s transfer agent, pursuant to Section           21 of the
Amended Rights Agreement that the Company has appointed AST as the           successor
Rights Agent to U.S. Bank under the Amended Rights Agreement and           that U.S.
Bank is hereby discharged as such Rights Agent.  

        5.      No
Further Amendment. Except as provided in Section 1 above, the terms           and
conditions of the Amended Rights Agreement shall be unaffected by this
          instrument and shall remain in full force and effect. The Company and AST each
          acknowledge that pursuant to Section 28 of the Amended Rights Agreement the
          respective covenants and provisions of the Amended Rights Agreement by or for
          the benefit of the Company or the Rights Agent shall bind and inure to the
          benefit of their respective successors and assigns thereunder.  

        6.      Governing
Law. This instrument shall be deemed to be a contract made           under the laws
of the State of Wisconsin and for all purposes shall be governed           by and
construed in accordance with the laws of such State applicable to           contracts to
be made and performed entirely within such State.  

        7.      Counterparts.
This instrument may be executed in any number of           counterparts, and each of such
counterparts shall for all purposes be deemed to           be an original, and all such
counterparts shall together constitute but one and           the same instrument.  

        IN
WITNESS WHEREOF, the parties hereto have executed this instrument, effective as of the
date recited above. 

		STATE FINANCIAL SERVICES CORPORATION

		By:   	/s/   

		U.S. BANK NATIONAL ASSOCIATION

		By:   	/s/   

		AMERICAN STOCK TRANSFER & TRUST COMPANY

		By:   	/s/   

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