CENTRAL BANCORP INC /MA/
EXHBIT 10.14 TO FORM 10-K 2003 - CENTRAL BANCORP
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<TYPE>EX-10
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<FILENAME>ex1014fmk2003-1508.txt
<DESCRIPTION>EXHBIT 10.14 TO FORM 10-K 2003 - CENTRAL BANCORP
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                                  CENTRAL BANK
                            SOMERVILLE, MASSACHUSETTS

                                 INCENTIVE PLAN

                                TABLE OF CONTENTS

Introduction and Highlights of                                             Page
Incentive Plan for Fiscal 2004..........................................   1- 2

Incentive Plan

Section I   - Definitions.................................................... 3

Section II  - Participation.................................................. 4

Section III - Activating the Plan............................................ 4

Section lV  - Calculations of Awards......................................... 4

Section V   - Distribution of Awards......................................... 5

Section VI  - Plan Administration............................................ 5

Section VII - Amendment, Modification, Suspension or
                   Termination............................................... 5

Section VIII - Effective Date................................................ 6

Section IX   - Employer Relations with Participants.......................... 6

Section X    - Governing Law................................................. 6

Section XI   - President's Discretion........................................ 6

Fiscal 2004 Performance Goals........................................Appendix A

Distribution of Awards...............................................Appendix B

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                                  CENTRAL BANK
                            SOMERVILLE, MASSACHUSETTS


                         INTRODUCTION AND HIGHLIGHTS OF
                         INCENTIVE PLAN FOR FISCAL 2004

Thomas Warren and Associates has been retained by the Central Bank to develop an
incentive  plan.  It is important  to examine the  benefits  which accrue to the
organization through the operation of the incentive plan.

     o    Provides  Motivation:  The opportunity  for incentive  awards provides
          executives  with  the  impetus  to  "stretch"  for  challenging,   yet
          attainable, goals.

     o    Provides Retention:  by enhancing the bank's competitive  compensation
          posture.

     o    Provides  Management  Team  Building:  by making the  incentive  award
          dependent on the  attainment of bank goals,  a "team  orientation"  is
          fostered among the participant group.

     o    Provides  Competitive  Compensation  Strategy:  The  implementation of
          incentive arrangements is common in the banking industry today.

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                                  CENTRAL BANK
                            SOMERVILLE, MASSACHUSETTS


The  highlights  of the incentive  plan  included in the following  pages are as
follows:

     1.   The recommended plan is competitive  compared with similar sized banks
          and the banking industry in general.

     2.   The Board of Directors controls all aspects of the Plan

     3.   All exempt  employees level IV and higher are  participants,  with the
          exception of the Infinex employees.

     4.   The financial  criteria  necessary for plan operation consists of ROAA
          and individual objectives goals.

     5.   Incentive  distributions  range form 0% of base  salary  (did not meet
          goal) to 30% of base salary (maximum performance of plan).

     6.   Award  distribution  would be made  during the fiscal  2005 for fiscal
          2004 performance.

     7.   The categories of incentive plan participants are as follows:

          Position:                             Range of Bonus Awards:

          CEO                                   0% - 30%

          Senior Vice Presidents                0% - 25%

          Vice Presidents                       0% - 20%

          Middle Management Officers            0% - 15%


                                       2
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                                  CENTRAL BANK

                            SOMERVILLE, MASSACHUSETTS


The Board of Directors of Central Bank has established  this Incentive Plan. The
purpose  of the plan is to meet and  exceed  financial  goals  and to  promote a
superior level of performance  relative to the Bank's  competition in its market
area. Through payment of incentive  compensation beyond base salaries,  the plan
provides reward for meeting and exceeding the bank's  financial goals as well as
recognition of individual achievements for plan participants.

SECTION I - DEFINITIONS

     Various terms used in the plan are defined as follows:

     Base Salary:  the base salary  earned  during the plan year,  excluding any
     bonuses, commissions,  contributions to employee benefit programs, or other
     compensation not designated as salary.

     Board of Directors: The Board of Directors of Central Bank.

     President & CEO: President and CEO of Central Bank.

     Management  Performance  Goals: Those pre-set objectives and goals that are
     required to activate distribution of awards under the plan.

     Compensation  Committee:   The  Compensation  Committee  of  the  Board  of
     Directors of the Bank.

     Plan  Participant:  An  eligible  employee  of the Bank  designated  by the
     President  &  CEO  and   approved  by  the   Compensation   Committee   for
     participation for the Plan year.  Infinex employees will not participate in
     the plan.

     Plan Year: The Bank's fiscal year.


                                       3
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SECTION II - ELIGIBILITY TO PARTICIPATE

To be eligible  for an award under the plan, a plan  participant  must be in the
service of the Bank on  September  30, 2003 and at the close of the fiscal year.
If a bonus plan participant  leaves the employ of the Bank during the plan year,
he/she is not eligible to receive an award.  However, if the active service with
the  Bank of a  participant  in the plan is  terminated  by  death,  disability,
retirement,  or if the  participant  is on an  approved  leave of  absence,  the
President may recommend an award to such a participant  based on the  proportion
of the plan year that  he/she  was in active  service  with the Bank.  Part time
employees will participate in the Plan.


SECTION III - ACTIVATING THE PLAN


The  operation of the plan is  predicated  on  attaining  or exceeding  the ROAA
performance  goal.  The  performance  goal  for the  plan  year is set  forth in
Appendix A.


SECTION IV - CALCULATION OF AWARDS


The Compensation  Committee  designates a rate of distribution for the executive
award. The actual rate of distribution is based upon Bank performance.  The full
Board of Directors will approve the plan and annual amendments.


                                       4
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SECTION V - DISTRIBUTION OF AWARDS

Distribution of awards will be made during the first quarter  following the plan
year after the May Board meeting.  In the event of death,  any approved award as
outlined in Section II for  distribution  will become  payable to the designated
beneficiary of the participant as recorded under the Bank's group life insurance
program, or in the absence of a valid designation, to the participant's estate.


SECTION VI - PLAN ADMINISTRATION


The Compensation  Committee shall, with respect to the plan, have full power and
authority to construe,  interpret and manage,  control and administer this plan,
and to pass and decide upon cases in conformity  with the objectives of the plan
under such rules as the Board of Directors of the Bank may establish.

Any decision made or action taken by the Bank,  the Board of  Directors,  or the
Compensation   Committee   arising   out  of,  or  in   connection   with,   the
administration,  interpretation,  and  effect  of the  plan  shall  be at  their
absolute discretion and will be conclusive and binding on all parties.

No member of the Board of Directors,  Compensation Committee, or employee of the
Bank shall be liable for any act or action  hereunder,  whether of  omission  or
commission,  by a plan participant or employee or by any agent to whom duties in
connection with the administration of the plan have been delegated in accordance
with the provision of the plan.


SECTION VII - AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION


The Bank  reserves  the right,  by and through its Board of  Directors to amend,
modify,  suspend,  reinstate or terminate  all or part of the plan at the end of
any plan year.  The Board of Directors  will give prompt  written notice to each
participant  of  any  amendment,  suspension  or  termination  or  any  material
modification  of the plan.  The plan will be modified  should any unusual  event
occur such as an acquisition and /or sale of branch, etc.


                                       5
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SECTION VIII - EFFECTIVE DATE OF THE PLAN


The initial effective date of the plan shall be April 1, 2001 and the April 1 of
each fiscal year for succeeding plan years.


SECTION IX - EMPLOYER RELATION WITH PARTICIPANTS


Neither  establishment  nor the  maintenance  of the plan shall be  construed as
conferring  any  legal  rights  upon  any   participant  or  any  person  for  a
continuation of employment, nor shall it interfere with the right of an employer
to discharge any  participant or otherwise  deal with him/her  without regard to
the existence of the plan.


SECTION X - GOVERNING LAW


Except to the extent  pre-empted  under federal law, the  provisions of the plan
shall be construed,  administered  and enforced in accordance  with the domestic
internal law of the Commonwealth of Massachusetts.

In the event of relevant changes in the Internal  Revenue Code,  related rulings
and regulations,  or changes imposed by other regulatory  agencies affecting the
continued  appropriateness of the plan and awards made hereunder, the Board may,
at its sole  discretion,  accelerate  or change  the manner of  payments  of any
unpaid awards or amend the provisions of the plan.


SECTION XI - PRESIDENT'S DISCRETION


The  President  and CEO will  review the  amounts  to be  awarded to  individual
participants in the incentive plan. No award will be made to a participant whose
normal performance appraisal does not meet acceptable  standards.  The President
may  recommend to the Board of Directors an  adjustment  to a bonus award for an
individual if his/her  performance  warrants.  Board of Directors may adjust the
President and CEO bonus award.

                                       6

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