Form of Option Agreement-bank Mutual Corp. 2004 Director Stock Option Agreement

Exhibit 10.1(b)


BANK MUTUAL CORPORATION

DIRECTOR STOCK OPTION AGREEMENT


Option granted the 3 rd day of May, 2004(the " Date of Grant" ), by BANK MUTUAL CORPORATION, a Wisconsin corporation (hereinafter called " Bank Mutual" ), to Director (hereinafter called the " Optionee" ).

WITNESSETH:

WHEREAS, the Board of Directors of Bank Mutual adopted the Bank Mutual Corporation 2004 Stock Incentive Plan (the " Plan" ) on February 2, 2004, subject to stockholder approval which was obtained May 3, 2004;


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 $10.673 (Ten and 67.3/100 Dollars) per share.


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

Years of Continuous

Service After the

Date of Grant of Option Maximum Percentage
of Shares Becoming
Exercisable Under
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 10 and 11 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 Optionee' 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 10 and 11, this Option may not be exercised unless Optionee is, at the date of the exercise, in the service of Bank Mutual or a Subsidiary and shall have been continuously so serving as a director since the date 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, attachm ...