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                                  TOLLAND BANK

                      DIRECTOR'S DEFERRED COMPENSATION PLAN

         1. Purpose. The purpose of this Directors' Deferred Compensation Plan
("Plan") is twofold. First, the Plan enables directors of Tolland Bank to elect
to receive payment of their annual retainer fees in the form of stock of the
Bank in lieu of cash. Second, the Plan enables directors who elect payment in
the form of stock to elect to defer receipt and taxation of their annual
retainer fees that are payable in such form. To the extent possible, the Plan
shall be construed and administered in a manner consistent with the foregoing
purposes.

         2. Definitions. Where the following words and phrases appear in this
Plan, they shall have the respective meanings set forth below, unless the
context clearly indicates to the contrary:

                  (a)      Bank. Tolland Bank

                  (b)      Beneficiary. The person or persons designated in
                           writing by a Participant to receive the balance
                           credited to the Participant's Deferred Compensation
                           Account upon his death. If no effective Beneficiary
                           designation is on file, the Participant's Beneficiary
                           shall be his estate.

                  (c)      Board. The Board of Directors of the Bank.

                  (d)      Committee.  The Personnel Committee of the Board.

                  (e)      Deferred Compensation Account or Account. The
                           separate bookkeeping account maintained by the
                           controller of the Bank to record each Participant's
                           interest in the Plan, consisting of deferred Retainer
                           Fees and any amounts credited thereon.
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                  (f)      Director. A Director of the Bank.

                  (g)      Participant. Any Director or former Director who has
                           elected to participate in the Plan, or who retains a
                           balance in his Deferred Compensation Account.

                  (h)      Retainer Fee. The retainer payable to a Director with
                           respect to services to be rendered during the year,
                           which retainer is paid on the first business day of
                           the calendar quarter, in advance. A Retainer Fee
                           shall not include any fee or remuneration payable for
                           attending Board or committee meetings, or for any
                           other purpose.

                  (i)      Stock. Common stock of Tolland Bank. In the event of
                           a stock dividend, split-up, combination or
                           reclassification of shares, recapitalization or other
                           similar capital change relating to the Stock, the
                           aggregate number and kind of shares or securities of
                           the Bank and the value of such shares, shall be
                           appropriately adjusted by the Committee (whose
                           determination shall be conclusive and binding upon
                           both the Bank and the participant) so that the
                           proportionate number of shares or securities shall be
                           maintained hereunder as before the occurrence of such
                           event

         3. Eligibility and Participation. Effective January 1, 1997, any
Director whether elected or appointed is eligible to participate in the Plan and
to defer payment of his or her Retainer Fees in accordance with the terms of the
Plan. A Director may commence participation in the Plan at any time by filing a
written election form with the controller.

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         4. Deferral Election. A Director may elect to receive payment of all of
the Director's Retainer Fees in Stock rather than cash; any change in such
election shall be effective only as of the January 1 next following filing of
the election change. In addition, a Director who elects to receive payment in
the form of Stock may elect to defer the payment of Retainer Fees payable to the
Participant in such form after the election has been filed. The Participant may
terminate the election to defer payment under the Plan at any time by delivery
to the controller of the Bank of a written termination notice, but such
termination notice shall be effective only with respect to Retainer Fees payable
after the controller's receipt thereof. Initial elections under the Plan shall
be effective January 1, 1997. Any subsequent election to receive payment in the
form of Stock rather than cash and any election to defer payment of Stock shall
be effective only as of the January 1 next following the delivery of the
election. Any Retainer Fees previously deferred while the election was in effect
shall remain in the Participant's Deferred Compensation Account subject to all
of the terms of the Plan.

         5. Deferred Compensation Accounts. The Controller shall maintain
separate bookkeeping Deferred Compensation Accounts for each Participant to
which all of the Participant's deferred Retainer Fees shall be credited as of
the first business day of a calendar quarter. Any such deferred Retainer Fees
shall be credited as units (including fractional units) of common stock of
Tolland Bank, based on the average of the high and low values of such stock on
the date of crediting. Any such units shall be considered unissued stock, and
the Participant shall have no rights as a shareholder with respect to such units
until distributed as Stock. Cash shall be credited to the Participant's Account
equal to the amount of any cash dividends paid on Bank stock from time to time.
Upon distribution as provided in Section 7, the Deferred Compensation Account
shall be paid in kind as shares of stock, with cash representing dividends paid
since crediting and any fractional share. No interest shall accrue on the
balance in a Participant's Account attributable to cash dividends.

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         6. Unfunded Plan. The Deferred Compensation Accounts provided for
herein are unfunded accounts established solely for internal bookkeeping
purposes, and neither the Participant nor any person claiming by, through or
under the Participant shall acquire any property interest in any specific assets
of the Bank. In the event the Bank segregates any particular assets to provide
the benefits payable under the Plan, said assets shall continue to be part of
the general assets of the Bank and shall remain subject to the claims of its
unsecured general creditors at all times. Nothing contained herein shall require
the Bank to segregate any of its assets for the purpose of providing benefits
hereunder.

         7. Benefit Payments. The balance in a Participant's Account shall be
paid or commence to be paid in a lump sum within sixty (60) days after the
Participant ceases to be a Director for any reason. In the event of the
Participant's death before complete distribution of the Account, any remaining
Account balance shall be paid to the Participant's Beneficiary in a lump sum as
soon as administratively practical after his death.

         8. Committee. The Plan shall be administered by the Committee, whose
determinations of all administrative matters hereunder and interpretations of
terms hereunder shall be final and conclusive on all parties.

         9. Withholding. The Bank shall have the right to withhold from payment
of benefits hereunder or from other amounts payable to a participant such amount
of income, payroll, and other taxes as the Bank determines is appropriate.

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         10. Amendment and Termination. The Plan may be amended at any time and
from time to time, or terminated in whole or in part, by action of the Board;
provided, however, that no such amendment or termination shall divest a
Participant of any amount credited to his Account under the Plan.

         11. Assignment of Benefits. The interest of a Participant in his
Deferred Compensation Account shall not be subject to execution, attachment or
other similar process, and a Participant's interest in his Account may not be
assigned, transferred, pledged or encumbered except by will or by the laws of
descent and distribution. Any attempted assignment, alienation, levy or similar
process shall be null and void.

         12. Applicable Law. The Plan shall be administered, construed and
interpreted in accordance with the laws of the State of Connecticut.

         IN WITNESS WHEREOF, the Bank has caused this Plan to be executed by its
officers thereunto duly authorized this 20th day of December, 1996.


                                                   TOLLAND BANK


                                                   By /s/ Joseph H. Rossi
                                                      -------------------------
                                                Title President & CEO


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