NEW ENGLAND BANCSHARES, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (the “Agreement”) by and between
New England Bancshares, Inc., a Maryland corporation (the “Company”) and David
J. O’Connor (the “Executive”) is made effective as of July 13, 2009. References
to the “Bank” herein shall mean New England Bank, a wholly owned subsidiary of
the Company.

W I T N E S S E T H

WHEREAS, the Company and the Executive are currently parties to an amended and
restated employment agreement originally entered into as of December 28, 2005
and further amended on November 12, 2008 (the “Employment Agreement”);

WHEREAS, Enfield Federal Savings and Loan Association, a former subsidiary of
the Company, has merged into Valley Bank, a subsidiary of the Company, and
pursuant to the merger Valley Bank changed its name to New England Bank; and

WHEREAS, the Company and the Executive desire to amend and restate the
Employment Agreement in order to reflect the new name of the Bank.

NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, the parties hereby agree as follows:

1.            Employment.  Executive is employed as the President and Chief
Executive Officer of the Company.  Executive shall perform all duties and shall
have all powers which are commonly incident to the offices of President and
Chief Executive Officer of the Company or which, consistent with those offices,
are delegated to him by the Board of Directors of the Company.  During the term
of this Agreement, Executive also agrees to serve, if elected, as an officer
and/or director of any subsidiary of the Company and in such capacity carry out
such duties and responsibilities reasonably appropriate to that office.

2.            Location and Facilities.  The Executive will be furnished with the
working facilities and staff customary for executive officers with the title and
duties set forth in Section 1 and as are necessary for him to perform his
duties.  The location of such facilities and staff shall be at the principal
administrative offices of the Company, or at such other site or sites customary
for such offices.

3.            Term.

The period of Executive’s employment under this Agreement shall be deemed to
have commenced as of the date written above and shall continue for a period of
thirty-six (36) full calendar months, provided, however, that all changes
intended to comply with Code Section 409A shall be effective retroactively to
December 28, 2005; and provided further, that no retroactive changes shall
affect the

 
 

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compensation or benefits previously provided to the Executive. The term of this
Agreement shall be extended for one day each day so that a constant thirty-six
(36) calendar month term shall remain in effect, until such time as the Board of
Directors of the Company (the “Board”) or Executive elects not to extend the
term of the Agreement by giving written notice to the other party in accordance
with the terms of this Agreement, in which case the term of this Agreement shall
be fixed and shall end on the third anniversary of the date of such written
notice.

4.           Base Compensation.

 
a.
The Company agrees to pay the Executive during the term of this Agreement a base
salary at the rate of $310,500 per year, payable in accordance with customary
payroll practices.

 
b.
The Board shall review annually the rate of the Executive’s base salary based
upon factors they deem relevant, and may maintain or increase his salary,
provided that no such action shall reduce the rate of salary below the rate in
effect on the Effective Date.

 
c.
In the absence of action by the Board, the Executive shall continue to receive
salary at the annual rate specified on the Effective Date or, if another rate
has been established under the provisions of this Section 4, the rate last
properly established by action of the Board under the provisions of this Section
4.

5.           Bonuses.  The Executive shall be entitled to participate in
discretionary bonuses or other incentive compensation programs that the Company
may award from time to time to senior management employees pursuant to bonus
plans or otherwise.  Any bonuses or other payments made pursuant to this Section
5 shall be paid promptly by the Company and in any event no later than March 15
of the year immediately following the end of the calendar year for which such
amounts were payable.

6.           Benefit Plans.  The Executive shall be entitled to participate in
such life insurance, medical, dental, pension, profit sharing, retirement and
stock-based compensation plans and other programs and arrangements as may be
approved from time to time by the Company and the Company for the benefit of
their employees.

7.           Vacation and Leave.

 
a.
The Executive shall be entitled to vacation and other leave in accordance with
policy for senior executives, or otherwise as approved by the Board.

 
b.
In addition to paid vacation and other leave, the Executive shall be entitled,
without loss of pay, to absent himself voluntarily from the performance of his
employment for such additional periods of time and for such valid and legitimate

 
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reasons as the Board may in its discretion determine.  Further, the Board may
grant to the Executive a leave or leaves of absence, with or without pay, at
such time or times and upon such terms and conditions as the Board in its
discretion may determine.

8.            Expense Payments and Reimbursements.  The Executive shall be
reimbursed for all reasonable out-of-pocket business expenses that he shall
incur in connection with his services under this Agreement upon substantiation
of such expenses in accordance with applicable policies of the Company.  Such
reimbursements shall be paid promptly by the Company and in any event not later
than March 15 of the year immediately following the end of the calendar year in
which the Executive incurred such expense.
 
 
9.            Automobile Allowance.  During the term of this Agreement, the
Executive shall be entitled to an automobile allowance on terms no less
favorable that those in effect immediately prior to the execution of this
Agreement.  Executive shall comply with reasonable reporting and expense
limitations on the use of such automobile as may be established by the Company
or the Bank from time to time, and the Company or the Bank shall annually
include on Executive’s Form W-2 any amount of income attributable to Executive’s
personal use of such automobile.  Payments, if any, made under this Section 9
shall be paid promptly by the Company and in any event not later than March 15
of the year immediately following the end of the calendar year in which the
expense was incurred.

10.           Loyalty and Confidentiality.

 
a.
During the term of this Agreement Executive:  (i) shall devote all his time,
attention, skill, and efforts to the faithful performance of his duties
hereunder; provided, however, that from time to time, Executive may serve on the
boards of directors of, and hold any other offices or positions in, companies or
organizations which will not present any conflict of interest with the Company
or any of their subsidiaries or affiliates, unfavorably affect the performance
of Executive’s duties pursuant to this Agreement, or violate any applicable
statute or regulation and (ii) shall not engage in any business or activity
contrary to the business affairs or interests of the Company.

 
b.
Nothing contained in this Agreement shall prevent or limit Executive’s right to
invest in the capital stock or other securities of any business dissimilar from
that of the Company, or, solely as a passive, minority investor, in any
business.

 
c.
Executive agrees to maintain the confidentiality of any and all information
concerning the operation or financial status of the Company and the Company; the
names or addresses of any of its borrowers, depositors and other customers; any
information concerning or obtained from such customers; and any other
information concerning the Company and the Company to which he may be exposed
during the course of his employment.  The Executive further agrees that,

 
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unless required by law or specifically permitted by the Board in writing, he
will not disclose to any person or entity, either during or subsequent to his
employment, any of the above-mentioned information which is not generally known
to the public, nor shall he employ such information in any way other than for
the benefit of the Company and the Company.

11.           Termination and Termination Pay.  Subject to Section 12 of this
Agreement, Executive’s employment under this Agreement may be terminated in the
following circumstances:

 
a.
Death.  Executive’s employment under this Agreement shall terminate upon his
death during the term of this Agreement, in which event Executive’s estate shall
be entitled to receive the compensation due to the Executive through the last
day of the calendar month in which his death occurred.

 
b.
Retirement.  This Agreement shall be terminated upon Executive’s retirement
under the retirement benefit plan or plans in which he participates pursuant to
Section 6 of this Agreement or otherwise.

 
c.
Disability.

 
i.
The Board or Executive may terminate Executive’s employment after having
determined Executive has a Disability.  For these purposes, the Executive shall
be deemed to have a “Disability” in any case in which it is determined that the
Executive (a) is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death, or last for a continuous period of not less than 12
months; (b) by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last for a continuous
period of not less than 12 months, is receiving income replacement benefits for
a period of not less than three months under an accident and health plan
covering employees of the Bank; or (c) is totally disabled by the Social
Security Administration.

 
ii.
In the event of such Disability, Executive’s obligation to perform services
under this Agreement will terminate.  The Company or the Bank will pay
Executive, as Disability pay, an amount equal to 100% of Executive’s bi-weekly
rate of base salary in effect as of the date of his termination of employment
due to Disability.  Disability payments will be made on a monthly basis and will
commence on the first day of the month following the effective date of
Executive’s termination of employment for Disability and end on the earlier of:
(A) the date he returns to full-time employment at the Company in the same
capacity as he was employed prior to his

 
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termination for Disability; (B) his death; or (C) upon attainment of age
65.  Such payments shall be reduced by the amount of any short- or long-term
disability benefits payable to the Executive under any other disability programs
sponsored by the Company or the Bank.  In addition, during any period of
Executive’s Disability, Executive and his dependents shall, to the greatest
extent possible, continue to be covered under all benefit plans (including,
without limitation, non-taxable medical, dental and life insurance plans) of the
Company or the Bank, in which Executive participated prior to his Disability on
the same terms as if Executive were actively employed by the Company.

 
d.
Termination for Cause.

 
i.
The Board may, by written notice to the Executive in the form and manner
specified in this paragraph, terminate his employment at any time, for
“Cause”.  The Executive shall have no right to receive compensation or other
benefits for any period after termination for Cause.  Termination for “Cause”
shall mean termination because of, in the good faith determination of the Board,
Executive’s:

 
(1)
Personal dishonesty;

 
(2)
Incompetence;

 
(3)
Willful misconduct;

 
(4)
Breach of fiduciary duty involving personal profit;

 
(5)
Intentional failure to perform stated duties;

 
(6)
Willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) that reflects adversely on the reputation of the Company
and the Company, any felony conviction, any violation of law involving moral
turpitude or any violation of a final cease-and-desist order; or

 
(7)
Material breach by Executive of any provision of this Agreement.

 
ii.
Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause by the Company unless there shall have been delivered to
Executive a copy of a resolution duly adopted at a meeting of such Board where
in the good faith opinion of the Board, Executive was guilty of the conduct
described above and specifying the particulars thereof.

 
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e.
Voluntary Termination by Executive.  In addition to his other rights to
terminate under this Agreement, Executive may voluntarily terminate employment
during the term of this Agreement upon at least sixty (60) days prior written
notice to the Boards, in which case Executive shall receive only his
compensation, vested rights and employee benefits up to the date of his
termination.

 
f.
Without Cause or With Good Reason.

 
i.
In addition to termination pursuant to Sections 11(a) through 11(e) the Boards,
may, by written notice to Executive, immediately terminate his employment at any
time for a reason other than Cause (a termination “Without Cause”) and Executive
may, by written notice to the Board, immediately terminate this Agreement at any
time for “Good Reason” as defined below.

 
ii.
Subject to Section 12 of this Agreement, in the event of termination under this
Section 11(f), Executive shall be entitled to receive an amount equal to (i) his
base salary for the remaining term of the Agreement, and (ii) the value of the
benefits he would have received during the remaining term of the Agreement under
any retirement programs (whether tax-qualified or non-qualified) in which
Executive participated prior to his termination (with the amount of the benefits
determined by reference to the benefits received by the Executive or accrued on
his behalf under such programs during the twelve (12) months preceding his
termination), payable as a single cash lump sum distribution within ten (10)
calendar days following such termination.  In addition, the Executive shall
continue to participate in any benefit plans of the Company or Bank that provide
life insurance and non-taxable medical and dental insurance, or similar coverage
upon terms no less favorable than the most favorable terms provided to senior
executives of the Company during such period.  In the event that the Company or
the Bank is unable to provide such coverage by reason of Executive no longer
being an employee, the Company shall pay the Executive the value of such
benefits in a single cash lump sum distribution within ten (10) calendar days
following his termination.

 
iii.
“Good Reason” shall exist if, without Executive’s express written consent, the
Company materially breach any of their respective obligations under this
Agreement.  Without limitation, such a material breach shall be deemed to occur
upon any of the following:

 
(1)
A material reduction in Executive’s responsibilities or authority in connection
with his employment with the Company;

 
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(2)
Assignment to Executive of duties of a non-executive nature or duties for which
he is not reasonably equipped by his skills and experience;

 
(3)
Failure of the Executive to be nominated or re-nominated to the Board

 
(4)
A material reduction in Executive’s salary or benefits contrary to the terms of
this Agreement, or, following a Change in Control as defined in Section 12 of
this Agreement, any reduction in salary or material reduction in benefits below
the amounts to which he was entitled prior to the Change in Control;

 
(5)
Termination of incentive and benefit plans, programs or arrangements, or
reduction of Executive’s participation to such an extent as to materially reduce
their aggregate value below their aggregate value as of the Effective Date;

 
(6)
A requirement that Executive relocate his principal business office or his
principal place of residence outside of the area consisting of a twenty-five
(25) mile radius from the current main office and any branch of the Company, or
the assignment to Executive of duties that would reasonably require such a
relocation; or

 
(7)
Liquidation or dissolution of the Company or the Company, other than
liquidations or dissolutions that are caused by reorganizations that do not
negatively affect the status of the Executive,

 
provided, however, that prior to any termination of employment for Good Reason
(a termination “With Good Reason”), the Executive must first provide written
notice to the Company within ninety (90) days following the initial existence of
the condition, describing the existence of such condition, and the Company shall
thereafter have the right to remedy the condition within thirty (30) days of the
date the Company received the written notice from the Executive.  If the Company
remedies the condition within such thirty (30) day cure period, then no Good
Reason shall be deemed to exist with respect to such condition.  If the Company
does not remedy the condition within such thirty (30) day cure period, then the
Executive may deliver a Notice of Termination for Good Reason at any time within
sixty (60) days following the expiration of such cure period.
 

 
iv.
Notwithstanding the foregoing, a reduction or elimination of the Executive’s
benefits under one or more benefit plans maintained by the Company or the
Company as part of a good faith, overall reduction or

 
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elimination of such plans or plans or benefits thereunder applicably to all
participants in a manner that does not discriminate against Executive (except as
such discrimination may be necessary to comply with law) shall not constitute an
event of Good Reason or a material breach of this Agreement, provided that
benefits of the type or to the general extent as those offered under such plans
prior to such reduction or elimination are not available to other officers of
the Company or any company that controls the Company under a plan or plans in or
under which Executive is not entitled to participate.
 
 
v.
For purposes of this Agreement, any termination of Executive’s employment shall
be construed to require a “Separation from Service” in accordance with Code
Section 409A and the regulations promulgated thereunder, such that the Company
and Executive reasonably anticipate that the level of bona fide services
Executive would perform after termination would permanently decrease to a level
that is less than 50% of the average level of bona fide services performed
(whether as an employee or an independent contractor) over the immediately
preceding thirty-six (36) month period.

 
g.
Continuing Covenant Not to Compete or Interfere with Relationships.  Regardless
of anything herein to the contrary, following a termination by the Company or
Executive pursuant to Section 11(f):

 
i.
Executive’s obligations under Section 10(c) of this Agreement will continue in
effect; and

 
ii.
During the period ending on the first anniversary of such termination, the
Executive shall not serve as an officer, director or employee of any bank
holding company, bank, savings bank, savings and loan holding company, or
mortgage company (any of which, a “Financial Institution”) which Financial
Institution offers products or services competing with those offered by the
Company from any office within fifty (50) miles from the main office or any
branch of the Company and shall not interfere with the relationship of the
Company and the Company and any of its employees, agents, or representatives.

12.           Termination in Connection with a Change in Control.

 
a.
For purposes of this Agreement, a Change in Control means any of the following
events:

 
(i)
Merger:  The Company merges into or consolidates with another corporation, or
merges another corporation into the Company, and as a

 
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result less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by persons who
were stockholders of the Company immediately before the merger or consolidation.

 
(ii)
Acquisition of Significant Share Ownership:  There is filed or required to be
filed a report on Schedule 13D or another form or schedule (other than Schedule
13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of
1934, if the schedule discloses that the filing person or persons acting in
concert has or have become the beneficial owner of 25% or more of a class of the
Company’s voting securities, but this clause (b) shall not apply to beneficial
ownership of Company voting shares held in a fiduciary capacity by an entity of
which the Company directly or indirectly beneficially owns 50% or more of its
outstanding voting securities.

 
(iii)
Change in Board Composition:  During any period of two consecutive years,
individuals who constitute the Company’s Board of Directors at the beginning of
the two-year period cease for any reason to constitute at least a majority of
the Company’s Board of Directors; provided, however, that for purposes of this
clause (iii), each director who is first elected by the board (or first
nominated by the board for election by the stockholders) by a vote of at least
two-thirds (2/3) of the directors who were directors at the beginning of the
two-year period shall be deemed to have also been a director at the beginning of
such period; or

 
(iv)
Sale of Assets:  The Company sells to a third party all or substantially all of
its assets.

Notwithstanding anything in this Agreement to the contrary, in no event shall
reorganization of the Company from the mutual holding company form or
organization to the full stock holding company form of organization (including
the elimination of the mutual holding company) constitute a “Change in Control”
for purposes of this Agreement.

 
b.
Termination.  If within the period ending two (2) years after a Change in
Control, (i) the Company and the Company shall terminate the Executive’s
employment Without Cause, or (ii) Executive voluntarily terminates his
employment With Good Reason, the Company and the Company shall, within ten
calendar days following the termination of Executive’s employment, make a single
lump-sum cash payment to him equal to three (3) times the Executive’s average
Annual Compensation (as defined in this Section 12(b)) over the five (5) most
recently completed calendar years ending with the year immediately preceding the
effective date of the Change in Control.  In determining Executive’s average

 
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Annual Compensation, Annual Compensation shall include base salary and any other
taxable income, including but not limited to amounts related to the granting,
vesting or exercise of restricted stock or stock option awards, commissions,
bonuses (whether paid or accrued for the applicable period), as well as,
retirement benefits, director or committee fees and fringe benefits paid or to
be paid to Executive or paid for Executive’s benefit during any such year,
profit sharing, employee stock ownership plan and other retirement contributions
or benefits, including to any tax-qualified plan or arrangement (whether or not
taxable) made or accrued on behalf of Executive of such year.  The cash payment
made under this Section 12(b) shall be made in lieu of any payment also required
under Section 11(f) of this Agreement because of a termination in such
period.  Executive’s rights under Section 11(f) are not otherwise affected by
this Section 12.  Also, in such event, the Executive shall, for a thirty-six
(36) month period following his termination of employment, receive the value of
the benefits he would have received over such  period under any retirement
programs (whether tax-qualified or nonqualified) in which the Executive
participated prior to his termination (with the amount of the benefits
determined by reference to the benefits received by the Executive or accrued on
his behalf under such programs during the twelve (12) months preceding the
Change in Control), payable as a single cash lump sum distribution within ten
(10) calendar days following such termination.  In addition, the Executive shall
continue to participate in any benefit plans of the Company and the Company that
provide life insurance and non-taxable medical and dental insurance, or similar
coverage upon terms no less favorable than the most favorable terms provided to
senior executives of the Company during such period.  In the event that the
Company and the Company are unable to provide such coverage by reason of the
Executive no longer being an employee, the Company shall pay the Executive the
value of such benefits in a single lump sum within ten (10) calendar days
following his termination.

 
c.
The provisions of Section 12 and Sections 14 through 25, including the defined
terms used is such sections, shall continue in effect until the later of the
expiration of this Agreement or two (2) years following a Change in Control.

13.          Indemnification and Liability Insurance.  Subject to, and limited
by Section 27(b) of this Agreement, the Company shall provide the following:

 
a.
Indemnification.  The Company and the Company agree to indemnify the Executive
(and his heirs, executors, and administrators), and to advance expenses related
thereto, to the fullest extent permitted under applicable law and regulations
against any and all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his having been a director or Executive of the
Company, the Company or any of their subsidiaries (whether or not he continues
to be a

 
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director or Executive at the time of incurring any such expenses or liabilities)
such expenses and liabilities to include, but not be limited to, judgments,
court costs, and attorney’s fees and the cost of reasonable settlements, such
settlements to be approved by the Board, if such action is brought against the
Executive in his capacity as an Executive or director of the Company and the
Company or any of their subsidiaries.  Indemnification for expense shall not
extend to matters for which the Executive has been terminated for
Cause.  Nothing contained herein shall be deemed to provide indemnification
prohibited by applicable law or regulation.  Notwithstanding anything herein to
the contrary, the obligations of this Section 13 shall survive the term of this
Agreement by a period of six (6) years.

 
b.
Insurance.  During the period in which indemnification of the Executive is
required under this Section, the Company and the Company shall provide the
Executive (and his heirs, executors, and administrators) with coverage under a
directors’ and Executives’ liability policy at the expense of the Company and
the Company, at least equivalent to such coverage provided to directors and
senior Executives of the Company and the Company.

14.           Reimbursement of Executive’s Expenses to Enforce this
Agreement.  The Company shall reimburse the Executive for all reasonable
out-of-pocket expenses, including, without limitation, reasonable attorney’s
fees, incurred by the Executive in connection with successful enforcement by the
Executive of the obligations of the Company to the Executive under this
Agreement.  The Company shall make such payments promptly and, in any event, not
later than March 15 of the year immediately following the year in which such
expense was incurred by Executive.  Successful enforcement shall mean the grant
of an award of money or the requirement that the Company take some action
specified by this Agreement:  (i) as a result of court order; or (ii) otherwise
by the Company following an initial failure of the Company to pay such money or
take such action promptly after written demand therefor from the Executive
stating the reason that such money or action was due under this Agreement at or
prior to the time of such demand.

15.           Adjustment of Certain Payments and Benefits.

 
a.
Tax Indemnification.  Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment, benefit or distribution made or provided by the Company or the Bank to
or for the benefit of the Executive (whether made or provided pursuant to the
terms of this Agreement or otherwise) (each referred to herein as a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are
incurred by the Executive with respect to such excise tax (the excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the

 
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“Excise Tax”), the Executive shall be entitled to receive an additional payment
(a “Gross-Up Payment”) in an amount such that, after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.

 
b.
Determination of Gross-Up Payment.  Subject to the provisions of Section 15(c),
all determinations required to be made under this Section 15, including whether
and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by a certified public accounting firm or independent tax counsel reasonably
acceptable to the Company and the Bank as may be designated by the Executive
(the “Consulting Firm”) which shall provide detailed supporting calculations to
the Company, the Bank and the Executive within fifteen (15) business days of the
receipt of notice from the Executive that there has been or will be a Payment,
or such earlier time as is requested by the Company and the Bank.  All fees and
expenses of the Consulting Firm shall be borne solely by the Company and the
Bank.  Any Gross-Up Payment, as determined pursuant to this Section 15, shall be
paid by the Company to the Executive at the same time a cash payment is made
pursuant to Section 12(b) of this Agreement. Any determination by the Consulting
Firm shall be binding upon the Company and the Executive.  As a result of the
uncertainty in the application of Section 4999 of the Code, at the time of the
initial determination by the Consulting Firm hereunder, it is possible that a
Gross-Up Payment will not have been made by the Company and the Bank which
should have been made (an “Underpayment”), consistent with the calculations
required to be made hereunder.  In the event that the Company and the Bank
exhaust their remedies pursuant to Section 15(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Consulting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company or the Bank to or for the
benefit of the Executive.

 
c.
Treatment of Claims.  The Executive shall notify the Company and the Bank in
writing of any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment to be made.  Such notification shall be given as soon
as practicable, but no later than ten business days, after the Executive is
informed in writing of such claim and shall apprise the Company and the Bank of
the nature of such claim and the date on which such claim is requested to be
paid.  The Executive shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which it gives such notice to the
Company and the Bank (or any shorter period ending on the date that payment of
taxes with respect

 
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to such claim is due).  If the Company or the Bank notifies the Executive in
writing prior to the expiration of this period that it desires to contest such
claim, the Executive shall:

 
i.
give the Company and the Bank any information reasonably requested by the
Company and the Bank relating to such claim;

 
ii.
take such action in connection with contesting such claim as the Company and the
Bank shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company and the Bank;

 
iii.
cooperate with the Company and the Bank in good faith in order to effectively
contest such claim; and

 
iv.
permit the Company and the Bank to participate in any proceedings relating to
such claim; provided, however, that the Company and the Bank shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and indemnity and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or related taxes, interest
or penalties imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the foregoing provisions of this Section 15(c),
the Company and the Bank shall control all proceedings taken in connection with
such contest and, at their option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority with respect to such claim and may, at their option, either direct the
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner.  Further, the Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company and the Bank
shall determine; provided, however, that if the Company directs the Executive to
pay such claim and sue for a refund, the Company and the Bank shall advance the
amount of such payment to the Executive, on an interest-free basis (including
interest or penalties with respect thereto).  Furthermore, the Company’s and the
Bank’s control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issues raised by the
Internal Revenue Service or any other taxing authority.

 
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d.
Adjustments to the Gross-Up Payment.  If, after the receipt by the Executive of
an amount advanced by the Company pursuant to Section 15(c), the Executive
becomes entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Company’s compliance with the requirements of Section
15(c)) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after applicable taxes).  If, after the
receipt by the Executive of an amount advanced by the Company pursuant to
Section 15(c), a determination is made that the Executive shall not be entitled
to any refund with respect to such claim and such denial of refund occurs prior
to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of the Gross-Up
Payment required to be paid.

16.           Injunctive Relief.  If there is a breach or threatened breach of
Section 11(g) of this Agreement or the prohibitions upon disclosure contained in
Section 10(c) of this Agreement, the parties agree that there is no adequate
remedy at law for such breach, and that the Company shall be entitled to
injunctive relief restraining the Executive from such breach or threatened
breach, but such relief shall not be the exclusive remedy hereunder for such
breach.  The parties hereto likewise agree that the Executive, without
limitation, shall be entitled to injunctive relief to enforce the obligations of
the Company under this Agreement.

 
17.
Successors and Assigns.

 
a.
This Agreement shall inure to the benefit of and be binding upon any corporate
or other successor of the Company which shall acquire, directly or indirectly,
by merger, consolidation, purchase or otherwise, all or substantially all of the
assets or stock of the Company and the Company.

 
b.
Since the Company is contracting for the unique and personal skills of
Executive, Executive shall be precluded from assigning or delegating his rights
or duties hereunder without first obtaining the written consent of the Company.

18.           No Mitigation.  Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment.

19.           Notices.  All notices, requests, demands and other communications
in connection with this Agreement shall be made in writing and shall be deemed
to have been given when delivered by hand or 48 hours after mailing at any
general or branch United States Post Office, by registered or certified mail,
postage prepaid, addressed to the Company at their principal

 
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business offices and to Executive at his home address as maintained in the
records of the Company.

20.           No Plan Created by this Agreement.  Executive and the Company
expressly declare and agree that this Agreement was negotiated among them and
that no provision or provisions of this Agreement are intended to, or shall be
deemed to, create any plan for purposes of the Employee Retirement Income
Security Act or any other law or regulation, and each party expressly waives any
right to assert the contrary.  Any assertion in any judicial or administrative
filing, hearing, or process that such a plan was so created by this Agreement
shall be deemed a material breach of this Agreement by the party making such an
assertion.

21.           Amendments.  No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.

22.           Applicable Law.  Except to the extent preempted by Federal law,
the laws of the State of Connecticut shall govern this Agreement in all
respects, whether as to its validity, construction, capacity, performance or
otherwise.

23.           Severability.  The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

24.           Headings.  Headings contained herein are for convenience of
reference only.

25.           Entire Agreement.  This Agreement, together with any understanding
or modifications thereof as agreed to in writing by the parties, shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, other than written agreements with respect to specific
plans, programs or arrangements described in Sections 5 and 6.  Upon execution
of this Agreement, the employment agreement entered into between the parties on
June 4, 2002, will become null and void.

26.           Source of Payments.  Notwithstanding any provision in this
Agreement to the contrary, to the extent payments and benefits, as provided for
under this Agreement, are paid or received by Executive under the Employment
Agreement in effect between Executive and the Bank, the payments and benefits
paid by the Bank will be subtracted from any amount or benefit due
simultaneously to Executive under similar provisions of this Agreement.

27.           Required Provision.  In the event any of the foregoing provisions
of this Section 27 are in conflict with the terms of this Agreement, this
Section 27 shall prevail.

 
a.
The Company’s board of directors may terminate Executive’s employment at any
time, but any termination by the Company, other than Termination for Cause,
shall not prejudice Executive’s right to compensation or other benefits under
this Agreement.  Executive shall not have the right to receive compensation or
other

 
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benefits for any period after Termination for Cause as defined in Section 11(d)
hereinabove.

 
b.
Any payments made to employees pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C. §1828(k) and
FDIC regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification
Payments.

 
c.
Notwithstanding anything in this Agreement to the contrary, in the event the
Executive is a Specified Employee (as defined herein), then, solely, to the
extent required to avoid penalties under Code Section 409A, the Executive’s
payments shall be delayed until the first day of the seventh month following the
Executive’s Separation from Service.  A “Specified Employee” shall be
interpreted to comply with Code Section 409A and shall mean a key employee
within the meaning of Code Section 416(i) (without regard to paragraph 5
thereof).

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.

Attest:
 
NEW ENGLAND BANCSHARES, INC.
               
/s/ Nancy L. Grady
 
By:
/s/Thomas O. Barnes
     
Chairman of the Board of Directors
               
Witness:
 
EXECUTIVE
               
/s/ Nancy L. Grady
 
/s/ David J. O’Connor
   
David J. O’Connor
   
President and Chief Executive Officer

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