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EXHIBIT 10.1
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MONADNOCK COMMUNITY BANCORP, INC.
2005 STOCK OPTION PLAN
1.
PURPOSE
The purpose of the Monadnock Community Bancorp, Inc. 2005 Stock
Option
Plan (the "Plan") is to advance the
interests of Monadnock Community Bancorp,
Inc. (the "Company") and its stockholders
by providing Key Employees and Outside
Directors of the Company and its
Affiliates, including Monadnock Community Bank
(the "Bank"), upon whose judgment,
initiative and efforts the successful conduct
of the business of the Company and its
Affiliates largely depends, with an
additional incentive to perform in a
superior manner as well as to attract
people of experience and ability.
2.
Definitions
"AFFILIATE" means any "parent corporation" or "subsidiary
corporation"
of the Company or the Bank, as such terms
are defined in Section 424(e) or
424(f), respectively, of the Code, or a
successor to a parent corporation or
subsidiary corporation.
"AWARD" means an Award of Non-Statutory Stock Options, Incentive
Stock
Options, or Limited Rights granted under
the provisions of the Plan.
"BANK" means Monadnock Community Bank, or a successor
corporation.
"BENEFICIARY" means the person or persons designated by a
Participant to
receive any benefits payable under the Plan
in the event of such Participant'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
Participant's surviving spouse, if
any, or if none, his/her estate.
"BOARD" or "BOARD OF DIRECTORS" means the board of directors of
the
Company, unless otherwise noted herein.
"CAUSE" means personal dishonesty, incompetence, 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 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
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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 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
approved leave of absence or in the case of
transfers between payroll locations
of the Company, its subsidiaries or its
successor.
"DATE OF GRANT" means the actual date on which an Award is granted
by
the Committee.
"DIRECTOR" means a member of the Board.
"DIRECTOR EMERITUS" means a former member of the Board who has
been
appointed to a Director Emeritus
position.
"DISABILITY" means the inability to engage in any substantial
gainful
activity by reason of any medically
determinable mental or physical impairment
which can be expected to result in death or
which lasted or can be expected to
last for a continuous period of not less
than 12 months. An individual shall not
be considered to be permanently and totally
disabled unless he furnishes proof
of the existence thereof in such form and
manner, and at such times, as the
Secretary of the Treasury may require, in
accordance with Section 22(e)(3) of
the Code.
"EFFECTIVE DATE" means the date of, or a date determined by the
Board of
Directors following, approval of the Plan
by the Company's stockholders.
"FAIR MARKET VALUE" means, when used in connection with the Common
Stock
on a certain date, the mean between the
highest and lowest quoted selling prices
of the Common Stock as reported on the
Nasdaq stock market (or over-the-counter
market) on such date, or if the Common
Stock was not traded on such date, then
on the day prior to such date or on the
next preceding day on which the Common
Stock was traded; PROVIDED, HOWEVER, that
if the Common Stock is not reported on
the Nasdaq
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stock market (or over the counter market),
Fair Market Value shall mean the
average sale price of all shares of Common
Stock sold during the 30-day period
immediately preceding the date on which
such stock option was granted, and if no
shares of stock have been sold within such
30-day period, the average sale price
of the last three sales of Common Stock
sold during the 90-day period
immediately preceding the date on which
such stock option was granted. In the
event Fair Market Value cannot be
determined in the manner described above, then
Fair Market Value shall be determined by
the Committee. The Committee is
authorized, but is not required, to obtain
an independent appraisal to determine
the Fair Market Value of the Common
Stock.
"INCENTIVE STOCK OPTION" means an Option granted by the Committee
to a
Key Employee, which Option is designated as
an Incentive Stock Option pursuant
to Section 9.
"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.
"LIMITED RIGHT" means the right to receive a number of shares of
Common
Stock based upon the terms set forth in
Section 10.
"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.
"NON-STATUTORY STOCK OPTION" means an Option granted by the
Committee to
(i) an Outside Director or (ii) any other
Participant and such Option is either
(a) not designated by the Committee as an
Incentive Stock Option, or (b) fails
to satisfy the requirements of an Incentive
Stock Option as set forth in Section
422 of the Code and the regulations
thereunder.
"OTS" means the Office of Thrift Supervision.
"OPTION" means an Award granted under Section 8 or Section 9
"OUTSIDE DIRECTOR" means a Director of the Company or an Affiliate
who
is not an employee of the Company or an
Affiliate.
"PARTICIPANT" means a Key Employee or Outside Director of the
Company or
its Affiliates who receives or has received
an Award under the Plan.
"RIGHT" means a Limited Right.
"TERMINATION FOR CAUSE" means the termination of employment or
termination of service on the Board caused
by the individual's 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 regulation (other than
traffic violations or similar
offenses), or a final cease and desist
order, any of which results in material
loss to the Company or one of its
Affiliates.
3.
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 Option
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
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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
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.
(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 14
of the Exchange Act, by either: the affirmative vote of
the holders of a majority of the shares present, or
represented and entitled to vote at a meeting duly held
in accordance with the laws under which the Company is
incorporated; or the written consent of the holders of a
majority of the securities of the issuer entitled to
vote, provided that such ratification occurs no later
than the date of the next annual meeting of
stockholders; or
(iii) result in
the acquisition of Common Stock that is held
by the Recipient for a period of six months following
the date of such acquisition.
(d) LIMITATION ON
LIABILITY. No member of the Board or the Committee
shall be liable for any determination made
in good faith with respect to the
Plan or any Awards granted under it. If a
member of the Board or the Committee
is a party or is threatened to be made a
party to any threatened, pending or
completed action, suit or proceeding,
whether civil, criminal, administrative or
investigative, by reason of anything done
or not done by him in such capacity
under or with respect to the Plan, the Bank
or the Company shall indemnify such
member against expense (including
attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably
incurred by him in connection with
such action, suit or proceeding if he/she
acted in good faith and in a manner
he/she reasonably believed to be in the
best interests of the Bank and the
Company and, with respect to any criminal
action or proceeding, had no
reasonable cause to believe his/her conduct
was unlawful.
Notwithstanding anything herein to the contrary, and subject to
any
adjustment that may be made pursuant to
Section 176 hereof, once an Option has
been awarded at Fair Market Value, the
Committee shall not have authority to
reprice such Option so that the exercise
price of the Option shall be less than
the exercise price on the Date of
Grant.
4. TYPES OF
AWARDS
Awards under the Plan may be granted in any one or a combination
of: (a)
Incentive Stock Options; (b) Non-Statutory
Stock Options, and (c) Limited
Rights.
5. STOCK
SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 16 the maximum number
of
shares reserved for issuance under the Plan
is 46,041 shares. Shares issued
under the Plan may be issued by the Company
from authorized but unissued shares,
treasury shares, or acquired by the Company
in open market
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purchases. The maximum number of Options
that may be awarded to a Key Employee
is 11,510 shares. The maximum aggregate
number of shares of Common Stock that
may be issued pursuant to the exercise of
Incentive Stock Options is 46,041
shares. For these purposes, only the net
number of shares issued pursuant to the
exercise of an Incentive Stock Option are
counted against the maximum number of
shares.
To the extent that Options or Rights granted under the Plan are
exercised, the shares covered will be
unavailable for future grants under the
Plan; to the extent that Options together
with any related Rights granted under
the Plan terminate, expire or are forfeited
without having been exercised, new
Awards may be made with respect to these
shares.
Any shares that are issued by the Company, and any Awards that
are
granted by, or become obligations of, the
Company, through the assumption by the
Company or an affiliate thereof, or in
substitution for, outstanding Awards
previously granted by an acquired company,
shall not be counted against the
shares available for issuance under the
Plan.
6.
ELIGIBILITY
Key Employees of the Company and its Affiliates shall be eligible
to
receive Incentive Stock Options,
Non-Statutory Stock Options, and Limited Rights
under the Plan. Outside Directors shall be
eligible to receive Non-Statutory
Stock Options under the Plan.
7. GENERAL
TERMS AND CONDITIONS OF OPTIONS AND RIGHTS
(a)
The Committee shall have full and complete authority and
discretion, subject to OTS regulations and
policy and except as expressly
limited by the Plan, to grant Options
and/or Rights and to provide the terms and
conditions (which need not be identical
among Participants) thereof. In
particular, the Committee shall prescribe
the following terms and conditions:
(i) the Exercise Price of any Option or
Right, which shall not be less than the
Fair Market Value per share on the Date of
Grant, (ii) the number of shares of
Common Stock subject to, and the expiration
date of, any Option or Right, which
expiration date shall not exceed ten years
from the Date of Grant, (iii) the
manner, time and rate (cumulative or
otherwise) of exercise of such Option or
Right, and (iv) the restrictions, if any,
to be placed upon such Option or Right
or upon shares of Common Stock which may be
issued upon exercise of such Option
or Right.
(b)
The following provisions shall apply to all Awards made under
this Plan: no individual officer shall be
granted Awards with respect to more
than 25% of the total shares (or 11,510
shares) subject to the Plan; no Outside
Director shall be granted Awards with
respect to more than 5% of the total
shares of Common Stock subject to the Plan;
all Outside Directors in the
aggregate may not be granted Awards with
respect to more than 30% of the total
shares of Common Stock subject to the Plan;
no Awards shall begin vesting
earlier than one year from the date the
Plan is approved by stockholders of the
Company; and no Awards shall vest at a rate
in excess of 20% per year beginning
one year from the Date of Grant.
(c)
Notwithstanding any provision of this Plan to the contrary, all
executive officers or directors must
exercise or forfeit their Awards in the
event that the Bank becomes
