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                                                                   EXHIBIT 10.14

                              LAWRENCE SAVINGS BANK

                             1986 STOCK OPTION PLAN
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                                                               February 20, 1986

1.   PURPOSE

     This Stock Option Plan (the "Plan") is intended as a performance incentive
for directors, officers and full-time employees of Lawrence Savings Bank (the
"Bank") or its Subsidiaries (as hereinafter defined) to enable the persons to
whom options are granted (the "Optionees") to acquire or increase a proprietary
interest in the success of the Bank. The Bank intends that this purpose will be
effected by the granting of "incentive stock options" ("Incentive Options") as
defined in Section 422A(b) of the Internal Revenue Code of 1954, as amended (the
"Code"), nonqualified stock options ("Nonqualified Options") and stock
appreciation rights under the Plan. The term "Subsidiaries" includes any
corporations in which stock possessing 50 percent or more of the total combined
voting power of all classes of stock is owned directly or indirectly by the
Bank.

2.   OPTIONS TO BE GRANTED AND ADMINISTRATION

     (a)  Options granted under the Plan may be either Incentive Options or
Nonqualified Options.

     (b)  The Plan shall be administered by a committee (the "Option Committee")
of not less than three directors appointed by the Board of Directors of the
Bank. None of the members of the Option Committee shall be an officer or other
full-time employee of the Bank. It is the intention of the Bank that the Plan
shall be administered, in accordance with the provisions of Section 4 hereof, by
"disinterested administrators"

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within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the
"1934 Act"). Prior to the conversion of the Bank to stock form, the Option
Committee shall consist of three Trustees of the Bank who satisfy the
requirements of this paragraph (b) and who shall be selected from among those
Trustees who will serve as initial directors after conversion. The Committee so
selected shall exercise all powers under the Plan and shall continue in office
after conversion until other action is taken by the Board of Directors. Action
by the Option Committee shall require the affirmative vote of a majority of all
its members.

     (c)  Subject to the terms and conditions of the Plan, the Option Committee
shall have the power:

          (i)  To determine from time to time the options to be granted to
     eligible persons under the Plan, to prescribe the terms and provisions
     (which need not be identical) of each option granted under the Plan to such
     persons, and to recommend to the Board of Directors for its approval the
     grant of options;

          (ii) To construe and interpret the Plan and options granted thereunder
     and to establish, amend, and revoke rules and regulations for
     administration of the Plan. In this connection, the Option Committee may
     correct any defect or supply any omission, or reconcile any inconsistency
     in the Plan, or in any option agreement, in the manner and to the extent it
     shall deem necessary or expedient to make the Plan fully effective. All
     decisions and determinations by the Option Committee in the exercise of
     this power shall be final and binding upon the Bank and Optionees; and

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          (iii) Generally, to exercise such powers and to perform such acts as
     are deemed necessary or expedient to promote the best interest of the Bank
     with respect to the Plan.

3.   STOCK

     (a)  The stock subject to the options granted under the Plan shall be
shares of the Bank's authorized but unissued common stock, par value $.10 per
share (the "Common Stock"). The total number of shares that may be issued
pursuant to options or stock appreciation rights granted under the Plan shall
not exceed an aggregate of 431,250(*) shares of Common Stock. Such number
shall be subject to adjustment as provided in Section 8 hereof.

     (b)  Whenever any outstanding option under the Plan expires, is canceled or
is otherwise terminated (other than by exercise), the shares of Common Stock
allocable to the unexercised portion of such option may again be the subject of
options under the Plan, except for options surrendered as provided in Section 7
hereof.

4.   ELIGIBILITY

     (a)  Incentive Options may be granted only to officers and other full-time
employees of the Bank and its Subsidiaries, including members of the Board of
Directors who are also employees of the Bank or its Subsidiaries. Nonqualified
Options may be granted to officers or other full-time employees of the Bank or
its Subsidiaries and to members of the Board of Directors (regardless of whether
they are also employees).

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(*)  Such number equal to 10 percent of the number of shares of Common Stock
to be outstanding upon completion of the Conversion.

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     (b)  No person shall be eligible to receive any option under the Plan, if
at the date of grant such person beneficially owns in excess of ten percent of
the outstanding Common Stock of the Bank.

     (c)  No person shall be eligible to receive Incentive Options under the
Plan and incentive stock options under any other option plan of the Bank (or a
parent or subsidiary as defined in ss.425 of the Code) in any calendar year
covering stock having an aggregate fair market value (determined at the time the
option is granted) in excess of $100,000, plus any unused limit carryover to
such year as defined in ss.422A(c)(4) of the Code. Any option granted in excess
of the foregoing limitations shall be clearly and specifically designated as not
being an Incentive Option.

     (d)  The aggregate number of shares of Common Stock subject to Nonqualified
Options granted to non-employee directors shall at no time exceed 30% of the
aggregate number of shares of Common Stock subject to the Plan; provided that
the aggregate number of shares of Common Stock subject to all Nonqualified
Options granted to any such director shall at no time exceed 2% of the aggregate
number of shares of Common Stock subject to the Plan.

5.   TERMS OF THE OPTION AGREEMENTS

     Each option agreement shall contain such provisions as the Option Committee
shall from time to time deem appropriate. Option agreements need not be
identical, but each option agreement by appropriate language shall include the
substance of all of the following provisions:

     (a)  EXPIRATION. Notwithstanding any other provision of the Plan or of any
option agreement, each option shall expire on the date specified in the option
agreement,

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which date shall not be later than the tenth anniversary of the date on which
the option was granted.

     (b)  MINIMUM SHARES EXERCISABLE. The minimum number of shares with respect
to which an option may be exercised at any one time shall be 100 shares, or such
lesser number as is subject to exercise under the option at the time.

     (c)  EXERCISE.

          (i)  Each option shall be exercisable in such installments (which need
     not be equal) and at such times as designated by the Option Committee. To
     the extent not exercised, installments shall accumulate and be exercisable,
     in whole or in part, at any time after becoming exercisable, but not later
     than the date the option expires.

          (ii) Notwithstanding any other provision of the Plan, no Incentive
     Option (or related stock appreciation right) shall be exercisable by an
     Optionee while there is outstanding (within the meaning of ss.422A(c)(7) of
     the Code) any other Incentive Option to purchase stock of (i) the Bank or
     (ii) a parent, subsidiary or predecessor corporation, which was granted to
     such Optionee prior to the granting of the Incentive Option which such
     Optionee proposes to exercise.

          (iii) In the event of a Change in Control of the Bank (as defined in
     (f) below), all options outstanding as of the date of such Change in
     Control shall become immediately exercisable.

          (iv) Notwithstanding any other provisions of the Plan, no officer or
     director of the Bank shall exercise any option granted hereunder within
     three years from the date of completion of the conversion of the Bank to
     stock form,

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     except with the approval of the Commissioner of Banks of the Commonwealth
     of Massachusetts.

     (d)  PURCHASE PRICE. The purchase price per share of Common Stock under
each option shall be not less than the fair market value of the Common Stock on
the date the option is granted. For the purposes of the Plan the fair market
value of the Common Stock shall be determined by the Option Committee.

     (e)  RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any option unless and until
(i) the option shall have been exercised pursuant to the terms thereof, (ii) the
Bank shall have issued and delivered the shares to the Optionee, and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Bank. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such shares of Common Stock.

     (f)  CHANGE IN CONTROL. For purposes of the Plan, a "Change in Control"
shall be deemed to have occurred in either of the following events: (i) if there
has occurred a change in control which the Bank would be required to report in
response to Item 5(f) of the Form for Proxy Statement (Form F-5) prescribed by
12 CFR Section 335.212 promulgated under the 1934 Act, or, if such regulation is
no longer in effect, any regulations promulgated by the Federal Deposit
Insurance Corporation or the Securities and Exchange Commission pursuant to the
1934 Act which are intended to serve similar purposes or (ii) when any "person"
(as such term is used in Sections 13(d) and 14(d)(2) of the 1934 Act) becomes a
"beneficial owner" (as such term is defined in Rule 13d-3 promulgated under the
1934 Act), directly or indirectly, of securities of the Bank

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representing twenty-five percent (25%) or more of the total number of votes that
may be cast of the election of directors of the Bank, and in the case of either
(i) or (ii) above, the Bank's Board of Directors has not consented to such event
by a two-thirds vote of all of the members of the Board of Directors adopted
prior to such event. In addition, a Change in Control shall be deemed to have
occurred if, as the result of, or in connection with, any tender or exchange
offer, merger or other business combination, sale of assets or contested
election, or any combination of the Bank before such transaction shall cease to
constitute a majority of the Board of Directors of the Bank or of any successor
institution. Notwithstanding the other provisions of this Section, the sale of
the Bank's stock in connection with its conversion from mutual to stock form
shall not constitute a Change in Control.

6.   METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

     (a)  Any option granted under the Plan may be exercised by the Optionee by
delivering to the Option Committee on any business day a written notice
specifying the number of shares of Common Stock the Optionee then desires to
purchase (the "Notice").

     (b)  Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be made either in (i) cash equal to the option price
for the number of shares specified in the Notice (the "Total Option Price"), or
(ii) if authorized by the applicable option agreement, shares of Common Stock of
the Bank having a fair market value, determined as provided in Section 5(d)
hereof, equal to or less than the Total Option Price, plus cash in an amount
equal to the excess, if any, of the Total Option Price over the fair market
value of such shares of Common Stock.

7.   STOCK APPRECIATION RIGHTS

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     (a)  The Option Committee may, but shall not be obligated to, include stock
appreciation rights in any option agreement, on such terms and conditions as it
deems appropriate in each case. Such stock appreciation rights shall permit the
Optionee, at his or her election, to surrender to the Bank the right to exercise
such option (or portion thereof) in consideration for the payment by the Bank of
an amount equal to the excess of the fair market value on the date of such
surrender of the shares of Common Stock subject to such option (or portion
thereof) surrendered over the exercise price of such shares. Such payment may be
made, at the discretion of the Option Committee upon the request of the
Optionee, in shares of Common Stock valued at fair market value thereof on the
date of such surrender or in cash, or any combination thereof.

     (b)  Any election by an Optionee to exercise stock appreciation rights
included in any option agreement shall be made only during the period beginning
on the third business day following the release for publication of quarterly or
annual financial information and ending on the twelfth business day following
such date. This condition shall be deemed to be satisfied when the specified
financial data appears on or in a wire service, financial news service or
newspaper of general circulation or is otherwise first made publicly available.
No stock appreciation right may be exercised within six months from the date of
grant thereof.

     (c)  Any option surrendered as provided in this Section 7 shall be canceled
by the Bank and shall not be subject to further grant.

     (d)  The Option Committee shall be authorized hereunder to make payment to
the Optionee in shares of Common Stock only if Sections 61 and 83 of the Code
apply to the Common Stock transferred to the Optionee.

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8.   ADJUSTMENT UPON CHANGES IN CAPITALIZATION

     (a)  If the shares of the Bank's Common Stock as a whole are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Bank, whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split, combination of
shares, exchange of shares, change in corporate structure or the like, an
appropriate and proportionate adjustment shall be made in the number and kind of
shares subject to the Plan, and in the number, kind, and per share exercise
price of shares subject to unexercised options or portions thereof granted prior
to such change. In the event of any such adjustment in an outstanding option,
the Optionee thereafter shall have the right to purchase the number of shares
under such option at the per share price, as so adjusted, which the Optionee
could purchase at the total purchase price applicable to the option immediately
prior to such adjustment.

     (b)  Adjustments under this Section 8 shall be determined by the Option
Committee and such determinations shall be conclusive. The Option Committee
shall have the discretion and power in any such event to determine and to make
effective provision for acceleration of the time or times at which any option or
portion thereof shall become exercisable. No fractional shares of Common Stock
shall be issued under the Plan on account of any adjustment specified above.

9.   EFFECT ON CERTAIN TRANSACTIONS

     In the case of (i) the dissolution or liquidation of the Bank, (ii) a
reorganization, merger or consolidation in which the Bank is acquired by another
entity (other than a holding company formed by the Bank) or in which the Bank is
not the surviving

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corporation, or (iii) the sale of all or substantially all of the property of
the Bank to the corporation, the Plan and the options issued hereunder shall
terminate, unless provision is made in connection with such transaction for the
assumption of options theretofore granted, or the substitution for such option
of new options of the successor corporation or parent thereof, with appropriate
adjustment as to the number and kind of shares and the per share exercise
prices, as provided in Section 8. In the event of such termination, all
outstanding options shall be exercisable in full for at least 15 days prior to
the date of such termination whether or not otherwise exercisable during such
period.

10.  RELEASE OF FINANCIAL INFORMATION

     A copy of the Bank's annual report to stockholders shall be delivered to
each Optionee at the time such report is distributed to the Bank's stockholders.
Upon request, the Bank shall furnish to each Optionee a copy of its most recent
annual report and each quarterly report and current report filed under the 1934
Act since the end of the Bank's prior fiscal year.

11.  AMENDMENT OF THE PLAN

     The Board of Directors may amend the Plan at any time, and from time to
time, subject to any required regulatory approval and to the limitation that,
except as provided in Sections 8 and 9 hereof, no amendment shall be effective
unless approved by the stockholders of the Bank in accordance with applicable
law and regulations at an annual or special meeting held within twelve months
before or after the date of adoption of such amendment, where such amendment
will:

     (a)  increase the number of shares of Common Stock as to which options may
be granted under the Plan;

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     (b)  change in substance Section 4 hereof relating to eligibility to
participate in the Plan;

     (c)  change the minimum option price; or

     (d)  increase the maximum term of options provided herein.

     Except as provided in Sections 8 and 9 hereof, rights and obligations under
any option granted before any amendment of the Plan shall not be altered or
impaired by such amendment, except with the consent of the Optionee.

12.  NONEXCLUSIVITY OF THE PLAN

     Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Bank for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the Plan,
and such arrangements may be either applicable generally or only in specific
cases.

13.  GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW

     (a)  The obligation of the Bank to sell and deliver shares of Common Stock
with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Option Committee.

     (b)  The Plan shall be governed by Massachusetts law, except to the extent
that such law is preempted by federal law.

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     (c)  The Plan is intended to comply with Rule 16b-3 under the 1934 Act. Any
provision inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.

14.  EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL

     The Plan shall become effective at the time that the public offering price
for stock of the Bank to be sold to the public in connection with the Conversion
is established by Agreement of the Bank with the Underwriters, or, if no public
offering is held, at the time the price for the Common Stock to be issued and
sold in connection with the Conversion is otherwise determined by the Bank,
provided, however, that the Plan shall be subject to (i) the approval of the
Bank's stockholders in accordance with applicable laws and regulations at an
annual or special meeting held within twelve months of such effective date and
(ii) the approval of the Commissioner of Banks of the Commonwealth of
Massachusetts if required by applicable law or regulation. No options granted
under the Plan prior to such regulatory and stockholder approvals may be
exercised until such approvals have been obtained. No option may be granted
under the Plan after the tenth anniversary of the effective date of the Plan.

                                       ***

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                                                                   EXHIBIT 10.15

                              LAWRENCE SAVINGS BANK

                             1997 STOCK OPTION PLAN

1.   PURPOSE

     This Stock Option Plan (the "Plan") is intended as a performance incentive
for directors, officers and full-time employees of Lawrence Savings Bank (the
"Bank") or its Subsidiaries (as hereinafter defined) to enable the persons to
whom options are granted (the "Optionees") to acquire or increase a proprietary
interest in the success of the Bank. The Bank intends that this purpose will be
effected by the granting of "incentive stock options" ("Incentive Options") as
defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), non-qualified stock options ("Nonqualified Options") and stock
appreciation rights under the Plan. The term "Subsidiaries" includes any
corporations in which stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock is owned directly or indirectly by
the Bank.

2.   OPTIONS TO BE GRANTED AND ADMINISTRATION

     (a)  Options granted under the Plan may be either Incentive Options or
Nonqualified Options.

     (b)  The Plan shall be administrated by a committee (the "Option
Committee") of not less than three directors appointed by the Board of Directors
of the Bank. None of the members of the Option committee shall be an officer or
other full-time employee of the Bank. It is the intention of the Bank that the
Plan shall be administered, in accordance with the provisions of Section 4
hereof, in a manner consistent with provisions of and regulations adopted under
Section 16 of the Securities Exchange Act of 1934, as amended (the "1934 Act").
Action by the Option Committee shall require the affirmative vote of a majority
of all its members.

     (c)  Subject to the terms and conditions of the Plan, the Option Committee
shall have the power:

          (i)  To determine from time to time the options to be granted to
     eligible persons under the Plan, to prescribe the terms and provisions
     (which need not be identical) of each option granted under the Plan to such
     persons, and to recommend to the Board of Directors for its approval the
     grant of options;

          (ii) To construe and interpret the Plan and options granted thereunder
     and establish, amend, and revoke rules and regulations for administration
     of the Plan. In this connection, the Option Committee may correct any
     defect, supply any omission or reconcile any inconsistency in the Plan, or
     in any option

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     agreement, in the manner and to the extent it shall deem necessary or
     expedient to make the Plan fully effective. All decisions and
     determinations by the Option Committee in the exercise of this power shall
     be final and binding upon the Bank and Optionees; and

          (iii) Generally, to exercise such powers and to perform such acts as
     are deemed necessary or expedient to promote the best interests of the Bank
     with respect to the Plan.

3.   STOCK

     (a)  The stock subject to the options granted under the Plan shall be
shares of the Bank's authorized but unissued common stock, par value $.10 per
share (the "Common Stock"). The total number of shares that may be issued
pursuant to options or stock appreciation rights granted under the Plan shall
not exceed an aggregate of 427,850 shares of Common Stock. Such number shall be
subject to adjustment as provided in Section 8 hereof.

     (b)  Whenever any outstanding option under the Plan expires, is canceled or
is otherwise terminated (other than by exercise), the shares of Common Stock
allocable to the unexercised portion of such option may again be the subject of
options under the Plan, except for options surrendered as provided in Section 7
hereof.

4.   ELIGIBILITY

     (a)  Incentive Options may be granted only to officers and other full-time
employees of the Bank or its Subsidiaries, including members of the Board of
Directors who are also employees of the Bank or its Subsidiaries. Nonqualified
Options may be granted to officers or other full-time employees of the Bank or
its subsidiaries and to members of the Board of Directors (regardless of whether
they are also employees).

     (b)  No person shall be eligible to receive any option under the Plan if at
the date of grant such person beneficially owns in excess of ten percent of the
outstanding Common Stock of the Bank.

     (c)  No person shall be eligible to receive Incentive Options under the
Plan and incentive stock options under any other option plan of the Bank (or a
parent or subsidiary as respectively defined in Section 424(e) and (f) of the
Code) in an amount exercisable for the first time during any calendar year
covering stock having an aggregate fair market value (determined at the time and
in the order the option is granted), in excess of $100,000, pursuant to Section
422(d) of the Code. Any option granted in excess of the foregoing limitations
shall be clearly and specifically designated as not being an Incentive Option.

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     (d)  The aggregate number of shares of Common Stock subject to Nonqualified
Options granted to non-employee directors shall at no time exceed 20% of the
aggregate number of shares of Common Stock subject to the Plan; provided that
the aggregate number of shares of Common Stock subject to all Nonqualified
Options granted to any such director shall at no time exceed 2% of the aggregate
number of shares of Common Stock subject to the Plan. The aggregate number of
shares of Common Stock subject to Nonqualified Options and Incentive Options
granted to directors who are employees shall at no time exceed 50% of the
aggregate number of shares of Common Stock subject to the Plan; provided that
the aggregate number of shares of Common Stock subject to all Nonqualified
Options and Incentive Options granted to any such director shall at no time
exceed 20% of the aggregate number of shares of Common Stock subject to the
Plan.

5.   TERMS OF THE OPTION AGREEMENTS

     Each option agreement shall contain such provisions as the Option Committee
shall from time to time deem appropriate. Option agreements need not be
identical, but each option agreement by appropriate language shall include the
substance of all of the following provisions:

     (a)  Expiration. Notwithstanding any other provision of the Plan or of any
option agreement, each option shall expire on the date specified in the option
agreement, which date shall not be later than the tenth anniversary of the date
on which the option was granted and, in the case of Incentive Options, the
period specified in Section 422 of the Code, if earlier.

     (b)  Minimum Shares Exercisable. The minimum number of shares with respect
to which an option may be exercised at any one time shall be 100 shares, or such
lesser number as is subject to exercise under the option at the time.

     (c)  Exercise.

          (i)  Each option shall be exercisable in such installments (which need
     not be equal) and at such times as designated by the Option Committee. To
     the extent not exercised, installments shall accumulate and be exercisable,
     in whole or in part, at any time after becoming exercisable, but not later
     than the date the option expires.

          (ii) In the event of a Change in Control of the Bank (as defined below
     in paragraph (f)), all options outstanding as of the date of such Change in
     Control shall become immediately exercisable.

          (iii) Notwithstanding any other provisions of the Plan, no officer or
     director of the Bank shall exercise any option granted hereunder or any
     related

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     stock appreciation right within one year of the date of grant of the option
     or stock appreciation right.

     (d)  Purchase Price. The purchase price per share of Common Stock under
each option shall be not less than the fair market value of the Common Stock on
the date the option is granted. For purposes of the Plan, the fair market value
of the Common Stock shall be determined in good faith by the Option Committee.

     (e)  Rights of Optionees. No optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any option unless and until
(i) the option shall have been exercised pursuant to the terms thereof, (ii) the
Bank shall have issued and delivered the shares to the Optionee, and (iii) the
Optionee's name shall have been entered as a stockholder of record on the books
of the Bank. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such shares of Common Stock.

     (f)  Change in Control. For purposes of the Plan, a "Change in Control"
shall be deemed to have occurred in either of the following events: (i) if there
has occurred a change in control which the Bank would be required to report as
such in the Form for Proxy Statement prescribed by applicable regulations
promulgated under the 1934 Act by the Federal Deposit Insurance Corporation or
the Securities and Exchange Commission or (ii) when any "person" (as such term
is used in Sections 13(d) and 14(d)(2) of the 1934 Act) becomes a "beneficial
owner" (as such term is defined in Rule 13(d)(3) promulgated under the 1934
Act), directly or indirectly, of securities of the Bank representing twenty-five
percent (25%) or more of the total number of votes that may be cast for the
election of directors of the Bank and, in the case of either (i) or (ii) above,
the Bank's Board of Directors has not consented to such event by a two-thirds
vote of all the members of the Board of Directors then in office adopted prior
to such event. In addition, a Change in Control shall be deemed to have occurred
if, as the result of, or in connection with, any tender or exchange offer,
merger or other business combination, sale of assets or contested election, or
any combination of the foregoing transactions, the persons who were directors of
the Bank before such transaction shall cease to constitute a majority of the
Board of Directors of the Bank or of any successor institution. Notwithstanding
the other provisions of this Section, the formation of a holding company at the
direction of the Bank pursuant to the provisions of the Massachusetts General
Laws for the purpose of acquiring all or substantially all of the outstanding
common stock of the Bank and the said acquisition by such a holder company shall
not constitute a Change in Control.

     (g)  Limitation on Change in Control Compensation. An Optionee shall not be
entitled to receive any compensation resulting from a Change in Control which
would, with respect to the Participant, constitute a "parachute payment" for
purposes of Section 280G of the Internal Revenue Code. In the event any
compensation resulting from a Change in Control Action would, with respect to
the Optionee, constitute a "parachute payment," the Optionee shall have the
right to designate compensation resulting from a

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Change in Control which would be reduced or eliminated so that the Optionee will
not receive a "parachute payment."

     (h)  No options or stock appreciation rights shall be transferable by the
Optionee, other than by will or by the laws of descent and distribution. All
options or stock appreciation rights may be exercised during the Optionee's
lifetime only by the Optionee, or by his or her guardian or legal
representative.

6.   METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

     (a)  Any option granted under the Plan may be exercised by the Optionee by
delivering to the Option Committee on any business day a written notice
specifying the number of shares of Common Stock the Optionee then desires to
purchase (the "Notice").

     (b)  Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be made either (i) in cash equal to the option price
for the number of shares specified in the Notice (the "Total Option Price"), or
(ii) if authorized by the applicable option agreement, by actual or constructive
transfer to the Company of nonforfeitable, nonrestricted shares of Common Stock
of the Bank having a fair market value, determined as provided in Section 5(d)
hereof, equal to or less than the Total Option Price, plus cash or certified
check in an amount equal to the excess, if any, of the Total Option Price over
the fair market value of such shares of Common Stock.

7.   STOCK APPRECIATION RIGHTS

     (a)  The Option Committee may, but shall not be so obligated to include
stock appreciation rights in any option agreement, on such terms and conditions
as it deems appropriate in each case. Such stock appreciation rights shall
permit the Optionee, at his or her election, to surrender to the Bank the right
to exercise such option (or portion thereof) in consideration for the payment by
the Bank of an amount equal to the excess of the fair market value on the date
of such surrender of the shares of Common Stock subject to such options (or
portion thereof) surrendered over the exercise price of such shares. Such
payment may be made, at the discretion of the Option Committee upon the request
of the Optionee, in shares of Common Stock valued at the fair market value
thereof on the date of such surrender or in cash, or any combination thereof.

     (b)  Any option surrendered as provided in this Section 7 shall be
cancelled by the Bank and shall not be subject to further grant.

     (c)  The Option Committee shall be authorized hereunder to make payment to
the Optionee in shares of Common Stock only if Sections 61 and 83 of the Code
(pertaining to gross income) apply to the Common Stock transferred to the
Optionee.

8.   ADJUSTMENT UPON CHANGES IN CAPITALIZATION

                                      -5-
<PAGE>   6

     (a)  If the shares of the Bank's Common Stock as a whole are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities of the Bank, whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split, combination of
shares, exchange of shares, change in corporate structure or the like, an
appropriate and proportionate adjustment shall be made in the number and kind of
shares subject to the Plan, and in the number, kind and per share exercise price
of shares subject to unexercised options or portions thereof granted prior to
any such change. In any event of any such adjustment in an outstanding option,
the Optionee thereafter shall have the right to purchase the number of shares
under such option at the per share price, as so adjusted, which the Optionee
could purchase at the total purchase price applicable to the option immediately
prior to such adjustment.

     (b)  Adjustments under this Section 8 shall be determined by the Option
Committee and such determinations shall be conclusive. The Option Committee
shall have the discretion and power in any such event to determine and to make
effective provision for acceleration of the time or times at which any option or
portion thereof shall become exercisable. No fractional shares of Common Stock
shall be issued under the Plan on account of any adjustment specified above.

9.   EFFECT OF CERTAIN TRANSACTIONS

     Except as set forth below, in the case of (i) the dissolution or
liquidation of the Bank, (ii) a reorganization, merger or consolidation in which
the Bank is acquired by another entity (other than a holding company formed at
the direction of the Bank) or in which the Bank is not the surviving
corporation, or (iii) the sale of all or substantially all of the property of
the Bank to another corporation, the Plan and the options issued hereunder shall
terminate on the effective date of such transaction, unless provision is made in
connection with such transaction for the assumption of options theretofore
granted under the Plan, or the substitution for such options of new options of
the successor corporation or parent thereof, with appropriate adjustment as to
the number and kind of shares and the per share exercise prices, as provided in
Section 8. Optionees shall be given at least 15 days prior written notice of
such termination. In the event of such termination, outstanding options shall be
exercisable in full for at least fifteen days prior to the date of such
termination whether or not otherwise exercisable during such period.
Notwithstanding anything to the contrary contained herein, neither the formation
of a holding company at the direction of the Bank pursuant to the provisions of
Chapter 167A of the Massachusetts General Laws for the purpose of acquiring all
or substantially all of the outstanding Common Stock of the Bank nor the said
acquisition of the outstanding Common Stock of the Bank by such a holding
company shall trigger such a termination, and upon the effective date of such
acquisition of the outstanding Common Stock of the Bank by the holding company,
the options issued hereunder shall be considered options to purchase shares of
the holding company.

10.  RELEASE OF FINANCIAL INFORMATION

                                      -6-
<PAGE>   7

     A copy of the Bank's annual report to stockholders shall be delivered to
each Optionee at the time such report is distributed to the Bank's stockholders.
Upon request, the Bank shall furnish to each Optionee a copy of its most recent
annual report and each quarterly report and current report filed under the 1934
Act since the end of the Bank's prior fiscal year.

11.  AMENDMENT OF THE PLAN

     The Board of Directors may amend the Plan at any time, and from time to
time, subject to any required regulatory approval and to the limitation that,
except as provided in Sections 8 and 9 hereof, no amendment shall be effective
unless approved by the stockholders of the Bank in accordance with applicable
laws and regulations at an annual or special meeting held within twelve months
before or after the date of adoption of such amendment, where such amendment
will:

     (a)  increase the number of stock appreciation rights which may be granted
or of shares of Common Stock as to which options may be granted under the Plan;

     (b)  change in substance Section 4 hereof relating to eligibility to
participate in the Plan;

     (c)  change the minimum option price;

     (d)  increase the maximum term of options provided herein; or

     (e)  otherwise materially increase the benefits accruing to participants
under the Plan.

     Except as provided in Section 8 and 9 hereof, rights and obligations under
any option granted before any amendment of the Plan shall not be altered or
impaired by such amendment, except with the consent of the Optionee.

12.  NON-EXCLUSIVITY OF THE PLAN

     Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Bank for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the Plan,
and such arrangement may be either applicable generally or only in specific
cases.

13.  GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW

                                      -7-
<PAGE>   8

     (a)  The obligation of the Bank to sell and deliver shares of Common Stock
with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Option Committee.

     (b)  The Plan shall be governed by Massachusetts law, except to the extent
that such law is preempted by federal law.

     (c)  The Plan is intended to comply with the applicable provisions of the
regulations adopted under Section 16 of the 1934 Act. Any provision inconsistent
with such provisions shall be inoperative and shall not affect the validity of
the Plan.

14.  EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL

     The Plan shall become effective upon adoption by the Board of Directors,
subject to (i) the approval of the Bank's stockholders in accordance with
applicable laws and regulations at an annual or special meting held within
twelve months of approval of the Plan by the Board of Directors; and (ii) the
approval of the Commissioner of Banks of the Commonwealth of Massachusetts if
required by applicable laws or regulations. No options granted under the Plan
prior to such regulatory and stockholder approvals may be exercised until such
approvals have been obtained. No option may be granted under the Plan after the
tenth anniversary of the adoption of the Plan by the Board of Directors.

                                      -8-

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