Document:

<PAGE>

                                  EXHIBIT 10.1

<PAGE>

                        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

                                       1
<PAGE>

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

                                       2
<PAGE>

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

                                       3
<PAGE>

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

                                       4
<PAGE>

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 critically undercapitalized (as defined in 12 C.F.R.
ss.565.4), becomes subject to enforcement action by the OTS, or receives a
capital direction from the OTS pursuant to 12 C.F.R. ss.565.7.

        (d)     The Company, or its designee, shall timely furnish to
individuals in the Plan following the individual's exercise of an Incentive
Stock Option a written information statement containing the information set
forth in Treasury Regulation Section 1.6039-1(a).

                                       5
<PAGE>

8.      NON-STATUTORY STOCK OPTIONS

        The Committee may, from time to time, grant Non-Statutory Stock Options
to eligible Key Employees and Outside Directors. Non-Statutory Stock Options
granted under the Plan, including Non-Statutory Stock Options granted in
exchange for and upon surrender of previously granted Awards, are subject to the
terms and conditions set forth in this Section.

        (a)     OPTION AGREEMENT. Each Option shall be evidenced by a written
option agreement between the Company and the Participant specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are not inconsistent with the
terms of the Plan.

        (b)     PRICE. The purchase price per share of Common Stock deliverable
upon the exercise of each Non-Statutory Stock Option shall be the Fair Market
Value of the Common Stock of the Company on the Date of Grant. Shares may be
purchased only upon full payment of the purchase price in one or more of the
manners set forth in Section 12 hereof, as determined by the Committee.

        (c)     VESTING. Subject to Section 7(b) hereof, a Non-Statutory Stock
Option granted under the Plan shall vest in a Participant at the rate or rates
determined by the Committee. No Options shall become vested in a Participant
unless the Participant maintains Continuous Service until the vesting date of
such Option, except as set forth herein. The Committee may, subject to OTS
regulations and policy, accelerate the time at which any Non-Statutory Stock
Option may be exercised in whole or in part.

        (d)     EXERCISE OF OPTIONS. A vested Option may be exercised from time
to time, in whole or in part, by delivering a written notice of exercise to the
President or Chief Executive Officer of the Company, or his/her designee. Such
notice shall be irrevocable and must be accompanied by full payment of the
purchase price in cash or shares of Common Stock at the Fair Market Value of
such shares, determined on the exercise date in the manner described in Section
2 hereof. If previously acquired shares of Common Stock are tendered in payment
of all or part of the exercise price, the value of such shares shall be
determined as of the date of such exercise.

        (e)     AMOUNT OF AWARDS. Subject to Section 7(b) hereof, Non-Statutory
Stock Options may be granted to any Key Employee or Outside Director in such
amounts as determined by the Committee. In granting Non-Statutory Stock Options,
the Committee shall consider such factors as it deems relevant, which factors
may include, among others, the position and responsibility of the Key Employee
or Outside Director, the length and value of his/her service to the Bank, the
Company or the Affiliate, the compensation paid to the Key Employee or Outside
Director, and the Committee's evaluation of the performance of the Bank, the
Company or the Affiliate, according to measurements that may include, among
others, key financial ratios, level of classified assets and independent audit
findings.

        (f)     TERM OF OPTIONS. Unless the Committee determines otherwise, the
term during which Non-Statutory Stock Options may be exercised shall not exceed
ten years from the Date of Grant. In no event shall a Non-Statutory Stock Option
be exercisable in whole or in part more than ten years from the Date of Grant.

        (g)     TERMINATION OF CONTINUOUS SERVICE. Upon the termination of a Key
Employee's or Outside Director's Continuous Service, for any reason other than
death, Disability, Termination for Cause, termination following a Change in
Control (other than for Cause following a Change in Control), the Participant's
Non-Statutory Stock Options shall be exercisable only as to those shares that
were vested on the date of termination and only for one year following
termination. In the event of Termination for Cause, all rights under a
Participant's Non-Statutory Stock Options shall expire upon termination. In the
event of the Participant's termination of Continuous Service due to death,
Disability, or following a Change in Control, all Non-Statutory Stock Options
held by the Participant, whether or not vested at such

                                       6
<PAGE>

time, shall vest and become exercisable by the Participant or his/her legal
representative or beneficiaries for one year following the date of such
termination, death or cessation of employment or service, PROVIDED that in no
event shall the period extend beyond the expiration of the Non-Statutory Stock
Option term.

        (h)     TRANSFERABILITY. In the discretion of the Board, all or any
Non-Statutory Stock Option granted hereunder may be transferable by the
Participant once the Option has vested in the Participant, provided, however,
that the Board may limit the transferability of such Option or Options to a
designated class or classes of persons.

9.      INCENTIVE STOCK OPTIONS

        The Committee may, from time to time, grant Incentive Stock Options to
Key Employees. Incentive Stock Options granted pursuant to the Plan shall be
subject to the following terms and conditions:

        (a)     OPTION AGREEMENT. Each Option shall be evidenced by a written
option agreement between the Company and the Key Employee specifying the number
of shares of Common Stock that may be acquired through its exercise and
containing such other terms and conditions that are consistent with the terms of
the Plan.

        (b)     PRICE. Subject to Section 16 hereof and Section 422 of the Code,
the purchase price per share of Common Stock deliverable upon the exercise of
each Incentive Stock Option shall be not less than 100% of the Fair Market Value
of the Company's Common Stock on the date the Incentive Stock Option is granted.
However, if a Key Employee owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its Affiliates
(or under Section 424(d) of the Code is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company or its Affiliates by reason of the ownership of such classes of stock,
directly or indirectly, by or for any brother, sister, spouse, ancestor or
lineal descendent of such Key Employee, or by or for any corporation,
partnership, estate or trust of which such Key Employee is a stockholder,
partner or Beneficiary), the purchase price per share of Common Stock
deliverable upon the exercise of each Incentive Stock Option shall not be less
than 110% of the Fair Market Value of the Company's Common Stock on the date the
Incentive Stock Option is granted. Shares may be purchased only upon payment of
the full purchase price. Payment of the purchase price may be made, in whole or
in part, through the surrender of shares of the Common Stock of the Company at
the Fair Market Value of such shares determined on the exercise date.

        (c)     VESTING. Subject to Section 7(b) hereof, Incentive Stock Options
awarded to Key Employees shall vest at the rate or rates determined by the
Committee. No Incentive Stock Option shall become vested in a Participant unless
the Participant maintains Continuous Service until the vesting date of such
Option, except as set forth herein.

        (d)     EXERCISE OF OPTIONS. Vested Options may be exercised from time
to time, in whole or in part, by delivering a written notice of exercise to the
President or Chief Executive Officer of the Company, or his/her designee. Such
notice is irrevocable and must be accompanied by full payment of the exercise
price in cash or shares of Common Stock at the Fair Market Value of such shares
determined on the exercise date.

        The Options comprising each installment may be exercised in whole or in
part at any time after such installment becomes vested, PROVIDED that the amount
able to be first exercised in a given year is consistent with the terms of
Section 422 of the Code. To the extent required by Section 422 of the Code, the
aggregate Fair Market Value (determined at the time the Option is granted) of
the Common Stock for

                                       7
<PAGE>

which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under all plans of the Company and its
Affiliates) shall not exceed $100,000.

        The Committee may, in its sole discretion and subject to OTS regulations
and policy, accelerate the time at which any Incentive Stock Option may be
exercised in whole or in part, PROVIDED that it is consistent with the terms of
Section 422 of the Code. Notwithstanding the above, in the event of a Change in
Control of the Company, all Incentive Stock Options that have been awarded shall
become immediately exercisable, PROVIDED, HOWEVER, that if the aggregate Fair
Market Value (determined at the time the Option is granted) of Common Stock for
which Options are exercisable as a result of a Change in Control, together with
the aggregate Fair Market Value (determined at the time the Option is granted)
of all other Common Stock for which Incentive Stock Options become exercisable
during such year, exceeds $100,000, then the first $100,000 of Incentive Stock
Options (determined as of the Date of Grant) shall be exercisable as Incentive
Stock Options and any excess shall be exercisable as Non-Statutory Stock Options
(but shall remain subject to the provisions of this Section to the extent
permitted).

        (e)     AMOUNTS OF AWARDS. Subject to Section 7(b) hereof, Incentive
Stock Options may be granted to any eligible Key Employee in such amounts as
determined by the Committee; PROVIDED that the amount granted is consistent with
the terms of Section 422 of the Code. In granting Incentive Stock Options, the
Committee shall consider such factors as it deems relevant, which factors may
include, among others, the position and responsibilities of the Key Employee,
the length and value of his/her service to the Bank, the Company, or the
Affiliate, the compensation paid to the Key Employee and the Committee's
evaluation of the performance of the Bank, the Company, or the Affiliate,
according to measurements that may include, among others, key financial ratios,
levels of classified assets, and independent audit findings. The provisions of
this subsection (e) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder.

        (f)     TERMS OF OPTIONS. The term during which each Incentive Stock
Option may be exercised shall be determined by the Committee, provided, however,
in no event shall an Incentive Stock Option be exercisable in whole or in part
more than 10 years from the Date of Grant. If any Key Employee, at the time an
Incentive Stock Option is granted to him, owns stock representing more than 10%
of the total combined voting power of all classes of stock of the Company or its
Affiliate (or, under Section 424(d) of the Code, is deemed to own stock
representing more than 10% of the total combined voting power of all classes of
stock, by reason of the ownership of such classes of stock, directly or
indirectly, by or for any brother, sister, spouse, ancestor or lineal descendent
of such Key Employee, or by or for any corporation, partnership, estate or trust
of which such Key Employee is a stockholder, partner or Beneficiary), the
Incentive Stock Option granted to him shall not be exercisable after the
expiration of five years from the Date of Grant.

        (g)     TERMINATION OF CONTINUOUS SERVICE. Upon the termination of a Key
Employee's Continuous Service for any reason other than death, Disability,
Termination for Cause or termination following a Change in Control (other than
for Cause following a Change in Control) the Key Employee's Incentive Stock
Options shall be exercisable only as to those shares that were vested by such
Key Employee at the date of termination for a period of three months following
termination. Upon termination of a Key Employee's Continuous Service due to
death or Disability or following a Change in Control, all Incentive Options held
by a Key Employee, whether or not vested at such time, shall vest and become
exercisable by the Participant or his/her legal representative or beneficiaries
for one year following the date of such termination, death or cessation of
Continuous Service, PROVIDED that in no event shall the period extend beyond the
expiration of the Stock Option term, and PROVIDED, FURTHER, that, except in the
event of death or Disability, such Option shall not be eligible for treatment as
an Incentive Stock Option in the event such Option is exercised more than three
months following termination. In the event of Termination for Cause, all rights
under the Incentive Stock Options shall expire upon termination.

                                       8
<PAGE>

        In order to obtain Incentive Stock Option treatment for Options
exercised by heirs or devisees of an Optionee, the Optionee's death must have
occurred while employed or within three months of termination of Continuous
Service.

        (h)     TRANSFERABILITY. No Incentive Stock Option granted under the
Plan is transferable except by will or the laws of descent and distribution and
is exercisable during his/her lifetime only by the Key Employee to which it is
granted.

        (i)     COMPLIANCE WITH CODE. The options granted under this Section are
intended to qualify as Incentive Stock Options within the meaning of Section 422
of the Code, but the Company makes no warranty as to the qualification of any
Option as an Incentive Stock Option within the meaning of Section 422 of the
Code. If an Option granted hereunder fails for whatever reason to comply with
the provisions of Section 422 of the Code, and such failure is not or cannot be
cured, such Option shall be a Non-Statutory Stock Option.

10.     LIMITED RIGHTS

        The Committee may grant a Limited Right simultaneously with the grant of
any Option to any Key Employee of the Bank or the Company, with respect to all
or some of the shares covered by such Option. Limited Rights granted under the
Plan are subject to the following terms and conditions:

        (a)     TERMS OF RIGHTS. In no event shall a Limited Right be
exercisable in whole or in part before the expiration of six months from the
date of grant of the Limited Right. A Limited Right may be exercised only in the
event of a Change in Control of the Company.

        The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, PROVIDED that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.

        Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.

        (b)     PAYMENT. Upon exercise of a Limited Right, the holder shall
promptly receive from the Company a number of shares of Common Stock equal in
value to the difference between the Fair Market Value of the Common Stock on the
Date of Grant of the Limited Right and the Fair Market Value of the Common Stock
on the date the Limited Right is exercised, multiplied by the number of Limited
Rights being exercised. In no event shall a Limited Right be settled other than
in shares of Common Stock.

        (c)     Notwithstanding anything in this paragraph 10 to the contrary,
in no event shall a Limited Right be exercisable in whole or in part if the
Common Stock is not traded on an established securities market.

11.     SURRENDER OF OPTION

        In the event of a Participant's termination of employment or termination
of service as a result of death or Disability, the Participant (or his/her
personal representative(s), heir(s), or devisee(s)) may, in a form acceptable to
the Committee, make application to surrender all or part of the Options held by
such Participant in exchange for a cash payment from the Company of an amount
equal to the difference between the Fair Market Value of the Common Stock on the
date of termination of employment or the date of termination of service on the
Board and the exercise price per share of the Option. Whether the

                                       9
<PAGE>

Company accepts such application or determines to make payment, in whole or
part, is within its absolute and sole discretion, it being expressly understood
that the Company is under no obligation to any Participant whatsoever to make
such payments. In the event that the Company accepts such application and
determines to make payment, such payment shall be in lieu of the exercise of the
underlying Option and such Option shall cease to be exercisable.

12.     ALTERNATE OPTION PAYMENT MECHANISM

        The Committee has sole discretion to determine what form of payment it
will accept for the exercise of an Option. The Committee may indicate acceptable
forms in the agreement with the Participant covering such Options or may reserve
its decision to the time of exercise. No Option is to be considered exercised
until payment in full is accepted by the Committee or its agent.

        (a)     CASH PAYMENT. The exercise price may be paid in cash or by
certified check. To the extent permitted by law, the Committee may permit all or
a portion of the exercise price of an Option to be paid through borrowed funds.

        (b)     CASHLESS EXERCISE. Subject to vesting requirements, if
applicable, a Participant may engage in a "cashless exercise" of the Option.
Upon a cashless exercise, the Participant shall give the Company written notice
of the exercise of the Option together with an order to a registered
broker-dealer or equivalent third party, to sell part or all of the Common Stock
subject to the Option and to deliver enough of the proceeds to the Company to
pay the Option exercise price and any applicable withholding taxes. If the
Participant does not sell the Common Stock subject to the Option through a
registered broker-dealer or equivalent third party, the Participant may give the
Company written notice of the exercise of the Option and the third party
purchaser of the Common Stock subject to the Option shall pay the Option
exercise price plus applicable withholding taxes to the Company.

        (c)     EXCHANGE OF COMMON STOCK. The Committee may permit payment of
the Option exercise price by the tendering (or constructively tendering) of
previously acquired shares of Common Stock. All shares of Common Stock tendered
in payment of the exercise price of an Option shall be valued at the Fair Market
Value of the Common Stock. No tendered shares of Common Stock which were
acquired by the Participant upon the previous exercise of an Option or as awards
under a stock award plan (such as the Company's Recognition and Retention Plan)
shall be accepted for exchange unless the Participant has held such shares
(without restrictions imposed by said plan or award) for at least six months
prior to the exchange.

13.     RIGHTS OF A STOCKHOLDER

        A Participant shall have no rights as a stockholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in the Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate his/her services as an officer, director or employee at
any time.

14.     AGREEMENT WITH PARTICIPANTS

        Each Award of Options and Limited Rights will be evidenced by a written
agreement, executed by the Participant and the Company or its Affiliates that
describes the conditions for receiving the Awards, including the date of Award,
the purchase price, applicable periods, and any other terms and conditions as
may be required by the Board or applicable securities laws.

                                       10
<PAGE>

15.     DESIGNATION OF BENEFICIARY

        A Participant may, with the consent of the Committee, designate a person
or persons to receive, in the event of death, any Option or Limited Rights to
which he/she would then be entitled. Such designation will be made upon forms
supplied by and delivered to the Company and may be revoked in writing. If a
Participant fails effectively to designate a Beneficiary, then his/her estate
will be deemed to be the Beneficiary.

16.     DILUTION AND OTHER ADJUSTMENTS

        In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, pro rata return of capital to all
stockholders, recapitalization, or any merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other similar corporate
change, or other increase or decrease in such shares, without receipt or payment
of consideration by the Company, the Committee will make such adjustments to
previously granted Awards, to prevent dilution or enlargement of the rights of
the Participant, including any or all of the following:

        (a)     adjustments in the aggregate number or kind of shares of Common
Stock that may be awarded under the Plan;

        (b)     adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan; or

        (c)     adjustments in the purchase price of outstanding Incentive
and/or Non-Statutory Stock Options, or any Limited Rights attached to such
Options.

        No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award. With
respect to Incentive Stock Options, no such adjustment shall be made if it would
be deemed a "modification" of the Award under Section 424 of the Code.

17.     EFFECT OF A CHANGE IN CONTROL ON OPTION AWARDS

        In the event of a Change in Control, the Committee and the Board of
Directors will take one or more of the following actions to be effective as of
the date of such Change in Control:

        (a)     provide that such Options shall be assumed, or equivalent
options shall be substituted ("Substitute Options") by the acquiring or
succeeding corporation (or an affiliate thereof), provided that: (1) any such
Substitute Options exchanged for Incentive Stock Options shall meet the
requirements of Section 424(a) of the Code, and (2) the shares of stock issuable
upon the exercise of such Substitute Options shall be registered in accordance
with the Securities Act of 1933, as amended ("1933 Act") or such securities
shall be exempt from such registration in accordance with Sections 3(a)(2) or
3(a)(5) of the 1933 Act, (collectively, "Registered Securities"), or in the
alternative, if the securities issuable upon the exercise of such Substitute
Options shall not constitute Registered Securities, then the Participant will
receive upon consummation of the Change in Control a cash payment for each
Option surrendered equal to the difference between the (1) fair market value of
the consideration to be received for each share of Common Stock in the Change in
Control times the number of shares of Common Stock subject to such surrendered
Options, and (2) the aggregate exercise price of all such surrendered Options;
or

        (b)     in the event of a transaction under the terms of which the
holders of Common Stock will receive upon consummation thereof a cash payment
(the "Merger Price") for each share of Common Stock exchanged in the Change in
Control transaction, make or provide for a cash payment to the Participants
equal to the difference between (1) the Merger Price times the number of shares
of Common

                                       11
<PAGE>

Stock subject to such Options held by each Participant (to the extent then
exercisable at prices not in excess of the Merger Price), and (2) the aggregate
exercise price of all such surrendered Options.

18.     WITHHOLDING

        There may be deducted from each distribution of cash and/or Common Stock
under the Plan the minimum amount of any federal or state taxes, including
payroll taxes, that are applicable to such supplemental taxable income and that
are required by any governmental authority to be withheld. Shares of Common
Stock will be withheld where required from any distribution of Common Stock.

19.     AMENDMENT OF THE PLAN

        The Board may at any time, and from time to time, modify or amend the
Plan in any respect, or modify or amend an Award received by Key Employees
and/or Outside Directors; PROVIDED, HOWEVER, that no such termination,
modification or amendment may affect the rights of a Participant, without
his/her consent, under an outstanding Award.

20.     EFFECTIVE DATE OF PLAN

        The Plan shall become effective upon the date of approval of the Plan by
the Company's stockholders.

21.     TERMINATION OF THE PLAN

        The right to grant Awards under the Plan will terminate upon the earlier
of (i) 10 years after the Effective Date, or (ii) the date on which the exercise
of Options or related rights equaling the maximum number of shares reserved
under the Plan occurs. The Board may suspend or terminate the Plan at any time,
PROVIDED that no such action will, without the consent of a Participant,
adversely affect his/her rights under a previously granted Award.

22.     APPLICABLE LAW

        (a)     This Plan, the Awards, all documents evidencing Awards and all
other related documents shall be governed by, and will be construed and
administered in accordance with the laws of the State of New Hampshire, except
to the extent that federal law shall apply.

        (b)     This Plan is subject to the requirements of 12 C.F.R. Part 575,
including the requirements of section 575.8 and the applicable requirements of
section 563b.500. Notwithstanding any other provision in this Plan, no shares of
Common Stock shall be issued with respect to any Award to the extent that such
issuance would cause Monadnock Mutual Holding Company to fail to qualify as a
mutual holding company under applicable federal regulations.

                                       12<PAGE>

                                  EXHIBIT 10.2
<PAGE>

                        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

                                       1
<PAGE>

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.

                                       2
<PAGE>

        "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

                                       3
<PAGE>

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 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/her 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/her
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 conduct was unlawful.

5.      ELIGIBILITY; AWARDS

        (a)     ELIGIBILITY. Key Employees and Outside Directors are eligible to
receive Awards.

        (b)     AWARDS TO KEY EMPLOYEES AND OUTSIDE DIRECTORS. The Committee may
determine which of the Key Employees and Outside Directors referenced in Section
5(a) will be granted Awards and the number of shares covered by each Award;
PROVIDED, HOWEVER, that in no event shall any Awards be made that will violate
the Bank's Charter and Bylaws, the Company's Charter and Bylaws, or any
applicable federal or state law or regulation. Shares of Restricted Stock that
are awarded by the Committee shall, on the date of the Award, be registered in
the name of the Recipient and transferred to the Recipient, in accordance with
the terms and conditions established under the Plan. The aggregate number of
shares that shall be issued under the Plan is 18,416 shares. Awards issued under
the Plan may be issued by the Company from authorized but unissued shares,
treasury shares or shares acquired by the Company in open market purchases.

        (c)     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 subject to the Plan; no Outside Director shall be
granted Awards of 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

                                       4
<PAGE>

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.

        (d)     In the event Restricted Stock is forfeited for any reason, the
Committee, from time to time, may determine which of the Key Employees and
Outside Directors will be granted additional Awards to be awarded from forfeited
Restricted Stock.

        (e)     In selecting those Key Employees and Outside Directors to whom
Awards will be granted and the amount of Restricted Stock covered by such
Awards, the Committee shall consider such factors as it deems relevant,
including among others, the position and responsibilities of the Key Employees
and Outside Directors, the length and value of their services to the Company and
its Affiliates, the compensation paid to the Key Employees or fees paid to the
Outside Directors, and the Committee may request the written recommendation of
the Chief Executive Officer and other senior executive officers of the Bank, the
Company and its Affiliates or the recommendation of the full Board. All
allocations by the Committee shall be subject to review, and approval or
rejection, by the Board.

        No Restricted Stock shall be vested unless the Recipient maintains
Continuous Service with the Company or an Affiliate until the restrictions
lapse.

        (f)     MANNER OF AWARD. As promptly as practicable after a
determination is made pursuant to Section 5(b) to grant an Award, the Committee
shall notify the Recipient in writing of the grant of the Award, the number of
shares of Restricted Stock covered by the Award, and the terms upon which the
Restricted Stock subject to the Award may be vested. Upon notification of an
Award of Restricted Stock, the Recipient shall execute and return to the Company
a restricted stock agreement (the "Restricted Stock Agreement") setting forth
the terms and conditions under which the Recipient shall earn the Restricted
Stock, together with a stock power or stock powers endorsed in blank.
Thereafter, the Recipient's Restricted Stock and stock power shall be deposited
with an escrow agent specified by the Company ("Escrow Agent") who shall hold
such Restricted Stock under the terms and conditions set forth in the Restricted
Stock Agreement. Each certificate in respect of shares of Restricted Stock
Awarded under the Plan shall be registered in the name of the Recipient.

        (g)     TREATMENT OF FORFEITED SHARES. In the event shares of Restricted
Stock are forfeited by a Recipient, such shares shall be returned to the Company
and shall be held and accounted for pursuant to the terms of the Plan until such
time as the Restricted Stock is re-awarded to another Recipient, in accordance
with the terms of the Plan and the applicable state and federal laws, rules and
regulations.

6.      TERMS AND CONDITIONS OF RESTRICTED STOCK

        The Committee shall have full and complete authority, subject to Section
5(c) and the other limitations of the Plan, to grant awards of Restricted Stock
to Key Employees and Outside Directors and, in addition to the terms and
conditions contained in Sections 6(a) through 6(h), to provide such other terms
and conditions (which need not be identical among Recipients) in respect of such
Awards, and the vesting thereof, as the Committee shall determine.

        (a)     GENERAL RULES. Subject to Section 5(c) hereof, and to OTS
regulations and policy, Restricted Stock shall be vested by a Recipient at the
rate or rates determined by the Committee, provided that such Recipient
maintains Continuous Service. No shares shall vest in any year in which the Bank
is not meeting all of its fully phased-in capital requirements. Subject to any
such other terms and conditions as the Committee shall provide with respect to
Awards, shares of Restricted Stock may not be sold,

                                       5
<PAGE>

assigned, transferred (within the meaning of Code Section 83), pledged or
otherwise encumbered by the Recipient, except as hereinafter provided, during
the Restricted Period.

        (b)     CONTINUOUS SERVICE; FORFEITURE. Except as provided in Section
6(c), if a Recipient ceases to maintain Continuous Service for any reason,
unless the Committee shall otherwise determine, all shares of Restricted Stock
theretofore awarded to such Recipient and which at the time of such termination
of Continuous Service are subject to the restrictions imposed by Section 6(a)
shall upon such termination of Continuous Service be forfeited. Any stock
dividends or declared but unpaid cash dividends attributable to such shares of
Restricted Stock shall also be forfeited.

        (c)     EXCEPTION FOR TERMINATION DUE TO DEATH OR DISABILITY, AND
FOLLOWING A CHANGE IN CONTROL. Notwithstanding the general rule contained in
Section 6(a), Restricted Stock awarded to a Recipient whose Continuous Service
with the Company or an Affiliate terminates due to death, Disability, or
following a Change in Control, shall be deemed earned as of the Recipient's last
day of Continuous Service with the Company or an Affiliate.

        (d)     REVOCATION FOR CAUSE. Notwithstanding anything hereinafter to
the contrary, the Board may by resolution immediately revoke, rescind and
terminate any Award, or portion thereof, previously awarded under the Plan, to
the extent Restricted Stock has not been redelivered by the Escrow Agent to the
Recipient, whether or not yet vested, in the case of a Key Employee whose
employment is terminated by the Company or an Affiliate or an Outside Director
whose service is terminated by the Company or an Affiliate for Cause or who is
discovered after termination of employment or service on the Board to have
engaged in conduct that would have justified termination for Cause.

        (e)     RESTRICTED STOCK LEGEND. Each certificate in respect of shares
of Restricted Stock awarded under the Plan shall be registered in the name of
the Recipient and deposited by the Recipient, together with a stock power
endorsed in blank, with the Escrow Agent, and shall bear the following (or a
similar) legend:

             "The transferability of this certificate and the shares of
         stock represented hereby are subject to the terms and conditions
         (including forfeiture) contained in the Monadnock Community
         Bancorp, Inc. 2005 Recognition and Retention Plan. Copies of
         such Plan are on file in the offices of the Secretary of
         Monadnock Community Bancorp, Inc., Monadnock Community Plaza,
         One Jaffrey Road, Peterborough, New Hampshire 03458."

        (f)     PAYMENT OF DIVIDENDS AND RETURN OF CAPITAL. After an Award has
been granted but before such Award has been vested, the Recipient shall receive
any cash dividends paid with respect to such shares, or shall share in any
pro-rata return of capital to all stockholders with respect to the Common Stock.
Stock dividends declared by the Company and paid on Awards that have not yet
been vested shall be subject to the same restrictions as the Restricted Stock
and the certificate(s) or other instruments representing or evidencing such
shares shall be legended in the manner provided in Section 6(e) and shall be
delivered to the Escrow Agent for distribution to the Recipient when the
Restricted Stock upon which such dividends were paid are vested. Unless the
Recipient has made an election under Section 83(b) of the Code, cash dividends
or other amounts so paid on shares that have not yet been vested by the
Recipient shall be treated as compensation income to the Recipient when paid. If
dividends are paid with respect to shares of Restricted Stock under the Plan
that have been forfeited and returned to the Company or to a trust established
to hold issued and unawarded or forfeited shares, the Committee can determine to
award such dividends to any Recipient or Recipients under the Plan, to any other
employee or director of the Company or the Bank, or can return such dividends to
the Company.

                                       6
<PAGE>

        (g)     VOTING OF RESTRICTED SHARES. After an Award has been granted,
the Recipient as conditional owner of the Restricted Stock shall have the right
to vote such shares.

        (h)     DELIVERY OF VESTED SHARES. At the expiration of the restrictions
imposed by Section 6(a), the Escrow Agent shall redeliver to the Recipient (or
where the relevant provision of Section 6(c) applies in the case of a deceased
Recipient, to his Beneficiary) the certificate(s) and any remaining stock power
deposited with it pursuant to Section 5(f) and the shares represented by such
certificate(s) shall be free of the restrictions referred to in Section 6(a).

7.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

        In the event of any change in the outstanding shares subsequent to the
Effective Date by reason of any reorganization, recapitalization, stock split,
stock dividend, combination or exchange of shares, or any merger, consolidation
or any change in the corporate structure or shares of the Company, without
receipt or payment of consideration by the Company, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan shall be
appropriately adjusted by the Committee, whose determination shall be
conclusive. Any shares of stock or other securities received, as a result of any
of the foregoing, by a Recipient with respect to Restricted Stock shall be
subject to the same restrictions and the certificate(s) or other instruments
representing or evidencing such shares or securities shall be legended and
deposited with the Escrow Agent in the manner provided in Section 6(e).

8.      ASSIGNMENTS AND TRANSFERS

        No Award nor any right or interest of a Recipient under the Plan in any
instrument evidencing any Award under the Plan may be assigned, encumbered or
transferred (within the meaning of Code Section 83) except, in the event of the
death of a Recipient, by will or the laws of descent and distribution until such
Award is vested.

9.      KEY EMPLOYEE RIGHTS UNDER THE PLAN

        No Key Employee shall have a right to be selected as a Recipient nor,
having been so selected, to be selected again as a Recipient and no Key Employee
or other person shall have any claim or right to be granted an Award under the
Plan or under any other incentive or similar plan of the Company or any
Affiliate. Neither the Plan nor any action taken thereunder shall be construed
as giving any Key Employee any right to be retained in the employ of the Company
or any Affiliate.

10.     OUTSIDE DIRECTOR RIGHTS UNDER THE PLAN

        Neither the Plan nor any action taken thereunder shall be construed as
giving any Outside Director any right to be retained in the service of the
Company or any Affiliate.

11.     WITHHOLDING TAX

        Upon the termination of the Restricted Period with respect to any shares
of Restricted Stock (or at any such earlier time that an election is made by the
Recipient under Section 83(b) of the Code, or any successor provision thereto,
to include the value of such shares in taxable income), the Bank or the Company
shall have the right to require the Recipient or other person receiving such
shares to pay the Bank or the Company the minimum amount of any federal or state
taxes, including payroll taxes, that are applicable to such supplemental income
and that the Bank or the Company is required to withhold with respect to such
shares, or, in lieu thereof, to retain or sell without notice, a sufficient
number of shares held by it to cover the amount required to be withheld. The
Bank or the Company shall have the right to

                                       7
<PAGE>

deduct from all dividends paid with respect to shares of Restricted Stock the
amount of any taxes which the Bank or the Company is required to withhold with
respect to such dividend payments.

12.     AMENDMENT OR TERMINATION

        The Board of the Company may amend, suspend or terminate the Plan or any
portion thereof at any time, PROVIDED, HOWEVER, that no such amendment,
suspension or termination shall impair the rights of any Recipient, without his
consent, in any Award theretofore made pursuant to the Plan. Any amendment or
modification of the Plan or an outstanding Award under the Plan, shall be
approved by the Committee, or the full Board of the Company.

13.     GOVERNING LAW

        (a)     This Plan, the Awards, all documents evidencing Awards and all
other related documents shall be governed by, and will be construed and
administered in accordance with the laws of the State of New Hampshire, except
to the extent that federal law shall apply.

        (b)     This Plan is subject to the requirements of 12 C.F.R. Part 575,
including the requirements of section 575.8 and the applicable requirements of
section 563b.500. Notwithstanding any other provision in this Plan, no shares of
Common Stock shall be issued with respect to any Award to the extent that such
issuance would cause Monadnock Mutual Holding Company to fail to qualify as a
mutual holding company under applicable federal regulations.

14.     TERM OF PLAN

        The Plan shall become effective on the date of, or a date determined by
the Board of Directors following, approval of the Plan by the Company's
stockholders. It shall continue in effect until the earlier of (i) ten years
from the Effective Date unless sooner terminated under Section 12 hereof, or
(ii) the date on which all shares of Common Stock available for award hereunder,
have vested in the Recipients of such Awards.

                                       8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]