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EXHIBIT 10.2
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MONADNOCK COMMUNITY BANCORP, INC.
2005 RECOGNITION AND RETENTION PLAN
1.
ESTABLISHMENT OF THE PLAN; CREATION OF SEPARATE TRUST
(a)
Monadnock Community Bancorp, Inc. (the "Company") hereby
establishes the Monadnock Community
Bancorp, Inc. 2005 Recognition and Retention
Plan (the "Plan") upon the terms and
conditions hereinafter stated in the Plan.
(b)
A separate trust or trusts may be established to purchase
shares
of the Common Stock that will be awarded
hereunder (the "Trust"). If a trust is
established and a Recipient hereunder fails
to satisfy the conditions of the
Plan and forfeits all or any portion of the
Common Stock awarded to him/her,
such forfeited shares will be returned to
said Trust. If no trust is
established, forfeited shares shall be
cancelled or held in treasury as
determined by the Committee.
2. PURPOSE OF
THE PLAN
The purpose of the Plan is to advance the interests of
Monadnock
Community Bank (the "Bank") and the Company
and the Company's stockholders by
providing Key Employees and Outside
Directors of the Company and its Affiliates,
including the Bank, upon whose judgment,
initiative and efforts the successful
conduct of the business of the Company and
its Affiliates largely depends, with
compensation for their contributions to the
Company and its Affiliates and an
additional incentive to perform in a
superior manner, as well as to attract
people of experience and ability.
3.
DEFINITIONS
The following words and phrases, when used in this Plan with an
initial
capital letter, unless the context clearly
indicates otherwise, shall have the
meanings set forth below. Wherever
appropriate, the masculine pronoun shall
include the feminine pronoun and the
singular shall include the plural:
"AFFILIATE" means any "parent corporation" or "subsidiary
corporation"
of the Company or the Bank, as such terms
are defined in Section 424(e) and (f),
respectively, of the Code, or a successor
to a parent corporation or subsidiary
corporation.
"AWARD" means the grant by the Committee of Restricted Stock,
as
provided in the Plan.
"BANK" means Monadnock Community Bank, or a successor
corporation.
"BENEFICIARY" means the person or persons designated by a Recipient
to
receive any benefits payable under the Plan
in the event of such Recipient's
death. Such person or persons shall be
designated in writing on forms provided
for this purpose by the Committee and may
be changed from time to time by
similar written notice to the Committee. In
the absence of a written
designation, the Beneficiary shall be the
Recipient's surviving spouse, if any,
or if none, his estate.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of
the
Company, unless otherwise noted.
"CAUSE" means personal dishonesty, willful misconduct, any breach
of
fiduciary duty involving personal profit,
intentional failure to perform stated
duties, or the willful violation of any
law, rule or
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regulation (other than traffic violations
or similar offenses) or a final
cease-and-desist order, any of which
results in a material loss to the Company
or an Affiliate.
"CHANGE IN CONTROL" of the Bank or the Company means a change in
control
of a nature that: (i) would be required to
be reported in response to Item 5.01
of the current report on Form 8-K, as in
effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act");
or (ii) results in a Change in Control of
the Bank or the Company within the
meaning of the Home Owners' Loan Act, as
amended ("HOLA"), and applicable rules
and regulations promulgated thereunder, as
in effect at the time of the Change
in Control; or (iii) without limitation
such a Change in Control shall be deemed
to have occurred at such time as (a) any
"person" (as the term is used in
Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or
indirectly, of securities of the Company
representing 25% or more of the
combined voting power of Company's
outstanding securities except for any
securities purchased by the Company's
employee stock ownership plan or trust; or
(b) individuals who constitute the Board on
the date hereof (the "Incumbent
Board") cease for any reason to constitute
at least a majority thereof, PROVIDED
that any person becoming a director
subsequent to the date hereof whose election
was approved by a vote of at least
three-quarters of the directors comprising
the Incumbent Board, or whose nomination
for election by the Company's
stockholders was approved by the same
Nominating Committee serving under an
Incumbent Board, shall be, for purposes of
this clause (b), considered as though
he/she were a member of the Incumbent
Board; or (c) a plan of reorganization,
merger, consolidation, sale of all or
substantially all the assets of the Bank
or the Company or similar transaction
occurs in which the Bank or Company is not
the surviving institution; or (d) a proxy
statement soliciting proxies from
stockholders of the Company, by someone
other than the current management of the
Company, seeking stockholder approval of a
plan of reorganization, merger or
consolidation of the Company or similar
transaction with one or more
corporations as a result of which the
outstanding shares of the class of
securities then subject to the Plan are to
be exchanged for or converted into
cash or property or securities not issued
by the Company; or (e) a tender offer
is made for 25% or more of the voting
securities of the Company and the
stockholders owning beneficially or of
record 25% or more of the outstanding
securities of the Company have tendered or
offered to sell their shares pursuant
to such tender offer and such tendered
shares have been accepted by the tender
offeror.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee of the Board of the Company
consisting
of either (i) at least two Non-Employee
Directors of the Company, or (ii) the
entire Board of the Company.
"COMMON STOCK" means shares of the common stock of the Company,
par
value $.01 per share.
"COMPANY" means Monadnock Community Bancorp, Inc., the stock
holding
company of the Bank, or a successor
corporation.
"CONTINUOUS SERVICE" means employment as a Key Employee and/or
service
as an Outside Director without any
interruption or termination of such
employment and/or service. Continuous
Service shall also mean a continuation as
a member of the Board of Directors
following a cessation of employment as a Key
Employee or continuation of service as a
Director Emeritus following termination
of service as a Director. In the case of a
Key Employee, employment shall not be
considered interrupted in the case of sick
leave, military leave or any other
leave of absence approved by the Bank or in
the case of transfers between
payroll locations of the Bank or between
the Bank, its parent, its subsidiaries
or its successor.
"DIRECTOR" means a member of the Board.
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"DIRECTOR EMERITUS" means a former member of the Board who has
been
appointed by the Board to a Director
Emeritus position.
"DISABILITY" means the permanent and total inability by reason of
mental
or physical infirmity, or both, of an
employee to perform the work customarily
assigned to him/her, or of a Director or
Outside Director to serve as such.
Additionally, in the case of an employee, a
medical doctor selected or approved
by the Board must advise the Committee that
it is either not possible to
determine when such Disability will
terminate or that it appears probable that
such Disability will be permanent during
the remainder of such employee's
lifetime.
"EFFECTIVE DATE" means the date of, or a date determined by the
Board
following, approval of the Plan by the
Company's stockholders.
"KEY EMPLOYEE" means any person who is currently employed by the
Company
or an Affiliate who is chosen by the
Committee to participate in the Plan.
"NON-EMPLOYEE DIRECTOR" means, for purposes of the Plan, a Director
who
(a) is not employed by the Company or an
Affiliate; (b) does not receive
compensation directly or indirectly as a
consultant (or in any other capacity
than as a Director) greater than $60,000;
(c) does not have an interest in a
transaction requiring disclosure under Item
404(a) of Regulation S-B; or (d) is
not engaged in a business relationship for
which disclosure would be required
pursuant to Item 404(b) of Regulation
S-B.
"OTS" means the Office of Thrift Supervision.
"OUTSIDE DIRECTOR" means a Director of the Company or an Affiliate
who
is not an employee of the Company or an
Affiliate.
"RECIPIENT" means a Key Employee or Outside Director of the Company
or
its Affiliates who receives or has received
an Award under the Plan.
"RESTRICTED PERIOD" means the period of time selected by the
Committee
for the purpose of determining when
restrictions are in effect under Section 6
with respect to Restricted Stock awarded
under the Plan.
"RESTRICTED STOCK" means shares of Common Stock that have been
contingently awarded to a Recipient by the
Committee subject to the restrictions
referred to in Section 6, so long as such
restrictions are in effect.
4.
ADMINISTRATION OF THE PLAN
(a)
ROLE OF THE COMMITTEE. The Plan shall be administered by the
Committee. The interpretation and
construction by the Committee of any
provisions of the Plan or of any Award
granted hereunder shall be final and
binding. The Committee shall act by vote or
written consent of a majority of its
members. Subject to the express provisions
and limitations of the Plan and
subject to OTS regulations and policy, the
Committee may adopt such rules and
procedures as it deems appropriate for the
conduct of its affairs. The Committee
shall report its actions and decisions with
respect to the Plan to the Board at
appropriate times, but in no event less
than one time per calendar year.
(b)
ROLE OF THE BOARD. The members of the Committee shall be
appointed or approved by, and will serve at
the pleasure of, the Board of
Directors of the Company. The Board may in
its discretion from time to time
remove members from, or add members to, the
Committee. The Board shall have all
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of the powers allocated to it in the Plan,
may take any action under or with
respect to the Plan that the Committee is
authorized to take, and may reverse or
override any action taken or decision made
by the Committee under or with
respect to the Plan, PROVIDED, HOWEVER,
that except as provided in Section 6(b),
the Board may not revoke any Award except
in the event of revocation for Cause.
(c)
PLAN ADMINISTRATION RESTRICTIONS. All transactions involving a
grant, award or other acquisitions from the
Company shall:
(i)
be approved by the Company's full Board or by the
Committee;
(ii) be
approved, or ratified, in compliance with Section
