Exhibit 10.4
                                                                   ------------

                              [COMPANY LETTERHEAD]



                                               March 27, 2009


[Officer Name]
c/o SBT Bancorp, Inc.
760 Hopmeadow Street
P.O. Box 248 Simsbury, CT 06070-0248


Dear [Officer],


         As you know, SBT Bancorp, Inc. (the "Company," as further defined
below) has entered into a Letter Agreement, dated March 27, 2009, including the
Securities Purchase Agreement - Standard Terms incorporated therein (the
"Participation Agreement"), with the United States Department of the Treasury
("Treasury") that provides for the Company's participation in the Treasury's
TARP Capital Purchase Program ("CPP").

         For the Company to participate in the CPP, and as a condition to the
closing of the investment contemplated by the Participation Agreement, the
Company is required to establish specified standards for incentive compensation
to its senior executive officers and to make changes to its compensation
arrangements. To comply with these requirements, and in consideration of the
benefits that you will receive as a result of the Company's participation in the
CPP, you agree as follows:

               (1)        No Golden Parachute Payments. The Company is
               prohibiting any golden parachute  payments to you during any "CPP
               Covered  Period".  A "CPP  Covered  Period" is any period  during
               which (A) you are a senior executive officer of the Company,  and
               (B) Treasury  holds an equity or debt position  acquired from the
               Company in the CPP.

               (2)        Recovery of Bonus and Incentive Compensation. Any
               bonus  and/or  incentive  compensation  paid to you  during a CPP
               Covered  Period is  subject  to  recovery  or  "clawback"  by the
               Company if the  payments  were based on  statements  of earnings,
               revenues,  gains or other  criteria  that are  later  found to be
               materially inaccurate.

               (3)        No Bonus, Retention Award or Incentive Compensation.
               During the CPP Covered  Period,  the Company is  prohibited  from
               paying to you or  accruing  on your  behalf any bonus,  retention
               award or  incentive  compensation,  except for certain  long-term
               restricted stock, and except as otherwise may be provided under a
               written  employment  agreement in effect as of February 11, 2009,
               and except as may otherwise be permitted by future guidance.

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<PAGE>

               (4)        Compensation Program Amendments. Each of the Company's
               compensation,   bonus,   incentive  and  other   benefit   plans,
               arrangements  and  agreements  (including,  but not  limited  to,
               golden   parachute,    severance   and   employment   agreements)
               (collectively,  "Benefit  Plans")  with  respect to you is hereby
               amended   (notwithstanding  any  contrary  language  within  such
               Benefit  Plans)  to  the  extent  necessary  to  give  effect  to
               provisions (1), (2) and (3) above.

               In addition, the Company is required to review its Benefit Plans
               to ensure that they do not encourage senior executive officers to
               take unnecessary and excessive risks that threaten the value of
               the Company. To the extent any such review requires revisions to
               any Benefit Plan with respect to you, you and the Company hereby
               agree to execute such additional documents as the Company deems
               necessary to effect such revisions.

               (5)        Definitions and Interpretation. This letter shall be
               interpreted as follows:

                         "Senior executive officer" means the Company's "senior
                         executive officers" as defined in Subsection 111(a)(1)
                         of EESA.

                         "Golden parachute payment" has the same meaning as in
                         Subsection 111(a)(2) of EESA.

                         "EESA" means the Emergency Economic Stabilization Act
                         of 2008 as implemented by guidance or regulation that
                         has been issued and is in effect as of the "Closing
                         Date," as defined in the Participation Agreement.

                         The term "Company" includes any entities treated as a
                         single employer with the Company under 31 C.F.R. ss.
                         30.1(b) (as in effect on the Closing Date). You are
                         also delivering a waiver pursuant to the Participation
                         Agreement, and, as between the Company and you, the
                         term "employer" in that waiver will be deemed to mean
                         the Company as used in this letter.

                         The term "CPP Covered Period" shall be limited by, and
                         interpreted in a manner consistent with, Section
                         111(a)(5) of EESA.

                         Provisions (1), (2) and (3) of this letter are intended
                         to, and will be interpreted, administered and construed
                         to comply with Section 111 of EESA and, to the maximum
                         extent consistent with the preceding, to permit
                         operation of the Benefit Plans in accordance with their
                         terms before giving effect to this letter.

         This agreement will be governed by the laws of the State of
Connecticut, except to the extent that federal law controls.

         The Company's Board of Directors appreciates the concessions you are
making and looks forward to your continued leadership.

                                      -47-

<PAGE>

                                   Very truly yours,

                                   SBT Bancorp, Inc.


                                   By:  _______________________
                                   Name:    David W. Sessions
                                   Title:   Chairman of the Personnel Committee


Intending to be legally bound, I hereby
agree with, acknowledge the sufficiency
of consideration for, and accept the foregoing terms.


---------------------------------
       [Officer Name]



Dated: March 27, 2009

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