Sub Filer Id


    Exhibit
      10.09

    


    NEWMIL
      BANK

    SECOND
      AMENDED AND RESTATED SALARY CONTINUATION AGREEMENT

    


    This
      Second
      Amended and Restated Salary Continuation Agreement
      (this
“Agreement”) is entered into as of this 20th
      day of
      December, 2005, by and between NewMil Bank, a Connecticut-chartered savings
      bank
      (the “Bank”), and Francis J. Wiatr, President and Chief Executive Officer of
      NewMil Bancorp, Inc. and the Bank (the “Executive”).

    


    Whereas,
      the
      Executive has contributed substantially to the success of the Bank and its
      parent corporation, NewMil Bancorp, Inc., and the Bank desires that the
      Executive continue in its employ,

    


    Whereas,
      to
      encourage the Executive to remain an employee of the Bank, the Bank is willing
      to provide salary continuation benefits to the Executive, payable out of the
      Bank’s general assets,

    


    Whereas,
      none of
      the conditions or events included in the definition of the term “golden
      parachute payment” that is set forth in section 18(k)(4)(A)(ii) of the Federal
      Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit
      Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists
      or,
      to the best knowledge of the Bank, is contemplated insofar as the Bank is
      concerned,

    


    Whereas,
      it is
      the intent of the parties hereto that this Agreement be considered an unfunded
      arrangement maintained primarily to provide supplemental retirement benefits
      for
      the Executive, and to be considered a non-qualified benefit plan for purposes
      of
      the Employee Retirement Income Security Act of 1974, as amended. The Executive
      is fully advised of the Bank’s financial status,

    


    Whereas,
      the
      Executive and the Bank entered into an Amended and Restated Salary Continuation
      Agreement dated as of January 1, 2002,

    


    Whereas,
      the
      Bank and the Executive have negotiated and agreed to miscellaneous changes
      in
      the terms and conditions of the January 1, 2002 Amended and Restated Salary
      Continuation Agreement, and

    


    Whereas,
      the
      Bank and the Executive intend that this Agreement shall amend and restate in
      its
      entirety the January 1, 2002 Amended and Restated Salary Continuation Agreement,
      and that from and after the date of this Agreement the January 1, 2002 Amended
      and Restated Salary Continuation Agreement shall be of no further force or
      effect.

    


    Now
      Therefore,
      in
      consideration of the foregoing premises and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
      1

    DEFINITIONS

    


    The
      following words and phrases used in this Agreement have the meanings
      specified:

    


    1.1 “Accrual
      Balance”
      means
      the liability that should be accrued by the Bank under generally accepted
      accounting principles (“GAAP”) for the Bank’s obligation to the Executive under
      this Agreement, by applying Accounting Principles Board Opinion No. 12, as
      amended by Statement of Financial Accounting Standards No. 106, and the
      calculation method and discount rate specified hereinafter. The Accrual Balance
      shall be calculated assuming a level principal amount and interest as the
      discount rate is accrued each period. The principal accrual is determined such
      that when it is credited with interest each month, the Accrual Balance at Normal
      Retirement Age equals the present value of the normal retirement benefits.
      The
      discount rate used by the Plan Administrator to determine the Accrual Balance
      shall be based on the yield on a 20-year corporate bond rated Aa by Moody’s,
      rounded to the nearest 1⁄4%. The initial discount rate is 7.50%. In its sole
      discretion, the Plan Administrator may adjust the discount rate to maintain
      the
      rate within reasonable standards according to GAAP.

    


    1.2 “Beneficiary”
means
      each designated person, or the estate of the deceased Executive, entitled to
      benefits, if any, upon the death of the Executive determined according to
      Article 4.

    


      1.3 “Beneficiary
      Designation Form”
means
      the form established from time to time by the Plan Administrator that the
      Executive completes, signs, and returns to the Plan Administrator to designate
      one or more Beneficiaries.

    


    1.4 “Change
      in Control”
shall
      mean any one of the following events occurs, provided the event constitutes
      a
      change in control within the meaning of Internal Revenue Code section 409A
      and
      rules, regulations, and guidance of general application thereunder issued by
      the
      Department of the Treasury, and provided the occurrence of the event is
      objectively determinable and does not require the exercise of judgment or
      discretion on the part of the Plan Administrator or any other person
      -

    


    (a) Change
      in Ownership:
      a
      change in ownership of NewMil Bancorp, Inc., a Delaware corporation of which
      the
      Bank is a wholly owned subsidiary, occurs on the date any one person or group
      accumulates ownership of NewMil Bancorp, Inc.’s stock constituting more than 50%
      of the total fair market value or total voting power of NewMil Bancorp, Inc.’s
      stock,

    


    (b) Change
      in Effective Control:
      (1) any
      one person, or more than one person acting as a group, acquires within a
      12-month period ownership of stock of NewMil Bancorp, Inc. possessing 35% or
      more of the total voting power of NewMil Bancorp, Inc.’s stock, or (2) a
      majority of NewMil Bancorp, Inc.’s board of directors is replaced during any
      12-month period by directors whose appointment or election is not endorsed
      in
      advance by a majority of NewMil Bancorp, Inc.’s board of directors,
      or


    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (c) Change
      in Ownership of a Substantial Portion of Assets:
      a
      change in the ownership of a substantial portion of NewMil Bancorp, Inc.’s
      assets occurs on the date any one person, or more than one person acting as
      a
      group, acquires assets from NewMil Bancorp, Inc. having a total gross fair
      market value equal to or exceeding 40% of the total gross fair market value
      of
      all of the assets of NewMil Bancorp, Inc. immediately before the acquisition
      or
      acquisitions. For this purpose, gross fair market value means the value of
      NewMil Bancorp, Inc.’s assets, or the value of the assets being disposed of,
      determined without regard to any liabilities associated with the
      assets.

    


    For
      purposes of paragraphs (a) through (c) of this Section 1.4, persons shall be
      considered to be acting as a group if they would be considered to be acting
      as a
      group under Internal Revenue Code section 409A and rules, regulations, and
      guidance of general application issued thereunder by the Department of the
      Treasury. References in this Agreement to Internal Revenue Code section 409A
      include rules, regulations, and guidance of general application issued by the
      Department of the Treasury under section 409A.

    


    1.5 “Code”
means
      the Internal Revenue Code of 1986, as amended.

    


    1.6 “Disability”
means,
      because of a medically determinable physical or mental impairment that can
      be
      expected to result in death or that can be expected to last for a continuous
      period of at least 12 months, (a) the Executive is unable to engage in any
      substantial gainful activity, or (b) the Executive is receiving income
      replacement benefits for a period of at least three months under an accident
      and
      health plan of the employer. Medical determination of disability may be made
      either by the Social Security Administration or by the provider of an accident
      or health plan covering employees of the Bank. Upon request of the Plan
      Administrator, the Executive must submit proof to the Plan Administrator of
      the
      Social Security Administration’s or provider’s determination.

    


    1.7 “Early
      Retirement Age”
      [Intentionally Left Blank]

    


    1.8 “Early
      Termination”
means
      the Executive’s Separation from Service with the Bank before Normal Retirement
      Age for reasons other than death, Disability, Termination for Cause or following
      a Change in Control.

    


    1.9 “Early
      Termination Date”
means
      the date on which Early Termination occurs.

    


    1.10 “Effective
      Date”
means
      as of January 1, 2002.

    


    1.11 “Normal
      Retirement Age”
means
      the Executive’s 65th
      birthday.

    


    1.12 “Normal
      Retirement Date”
means
      the later of the Normal Retirement Age or the Executive’s Separation from
      Service with the Bank.

    


    1.13 “Person”
means
      an individual, corporation, partnership, trust, association, joint venture,
      pool, syndicate, sole proprietorship, unincorporated organization or other
      entity.

    


    1.14 “Plan
      Administrator”
means
      the plan administrator described in Article 8.

    


    1.15 “Plan
      Year”
means
      a
      twelve-month period commencing on January 1 and ending on December 31 of each
      year. The initial Plan Year shall commence on the Effective Date of this
      Agreement.


    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    1.16 “Separation
      from Service”
means
      the Executive’s service as an executive and independent contractor to the Bank
      and any member of a controlled group, as defined in Code section 414, terminates
      for any reason, other than because of a leave of absence approved by the Bank
      or
      the Executive’s death. For purposes of this Agreement, if there is a dispute
      about the employment status of the Executive or the date of the Executive’s
      Separation from Service, the Bank shall have the sole and absolute right to
      decide the dispute unless a Change in Control shall have occurred.

    


    1.17 “Termination
      for Cause”
means
      the definition of termination for cause specified in any employment or severance
      agreement existing on the date hereof or hereafter entered into between the
      Executive and NewMil Bancorp, Inc. If the Executive is not a party to an
      employment or severance agreement containing a definition of termination for
      cause, Termination for Cause means the Bank has terminated the Executive’s
      employment for any of the following reasons -

    


    (a) Gross
      negligence or gross neglect of duties,

    


    (b) Commission
      of a felony or commission of a misdemeanor involving moral turpitude,
      or

    


    (c) Fraud,
      disloyalty or willful violation of any law or significant Bank policy committed
      in connection with the Executive’s employment and resulting in an adverse effect
      on the Bank. No act, or failure to act, with an absence of good faith and
      without a reasonable belief that his action or failure to act was in the best
      interest of the Bank.

    


    ARTICLE
      2

    LIFETIME
      BENEFITS

    


    2.1 Normal
      Retirement Benefit.
      Upon
      the Executive’s Separation from Service on or after the Normal Retirement Age
      for reasons other than death, the Bank shall pay to the Executive the benefit
      described in this Section 2.1 instead of any other benefit under this
      Agreement.

    


    
      	
              2.1.1
                

            	
              Amount
                of Benefit.
                The annual benefit under this Section 2.1 is $158,000.

            
	 	 
	
              2.1.2

            	
              Payment
                of Benefit.
                The Bank shall pay the annual benefit to the Executive in 12 equal
                monthly
                installments payable on the first day of each month, beginning with
                the
                seventh month after Separation from Service. The annual benefit shall
                be
                paid to the Executive for 15 years.

            


    

    


    2.2 Early
      Termination Benefit.
      Upon
      Early Termination, the Bank shall pay to the Executive the benefit described
      in
      this Section 2.2 instead of any other benefit under this
      Agreement.


    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              2.2.1
                

            	
              Amount
                of Benefit.
                The benefit under this Section 2.2 is the Early Termination Annual
                Benefit
                amount set forth in Schedule A for the Plan Year ending immediately
                before
                the Early Termination Date.

            
	 	 
	
              2.2.2
                

            	
              Payment
                of Benefit.
                The Bank shall pay the annual benefit to the Executive in 12 equal
                monthly
                installments payable on the first day of each month, beginning with
                the
                later of (a) the seventh month after Separation from Service, or
                (b) the
                month immediately after the month in which the Executive attains
                the
                Normal Retirement Age. The annual benefit shall be paid to the Executive
                for 15 years.

            


    

     

    2.3 Disability
      Benefit.
      If the
      Executive terminates employment because of Disability before the Normal
      Retirement Age, the Bank shall pay to the Executive the benefit described in
      this Section 2.3 instead of any other benefit under this Agreement.

    


    
      	
              2.3.1
                

            	
              Amount
                of Benefit.
                The benefit under this Section 2.3 is the Disability Annual Benefit
                amount
                set forth in Schedule A for the Plan Year ending immediately before
                the
                date on which termination of the Executive’s employment
                occurs.

            
	 	 
	
              2.3.2
                

            	
              Payment
                of Benefit.
                The Bank shall pay the annual benefit to the Executive in 12 equal
                monthly
                installments payable on the first day of each month, beginning with
                the
                later of (a) the seventh month after Separation from Service, or
                (b) the
                month immediately after the month in which the Executive attains
                the
                Normal Retirement Age. The annual benefit shall be paid to the Executive
                for 15 years.

            


    

    


    2.4 Change-in-Control
      Benefit.
      If a
      Change in Control occurs during the term of this Agreement, the Bank shall
      pay
      to the Executive the benefit described in this Section 2.4 instead of any other
      benefit under this Agreement.

    


    
      	
              2.4.1
                

            	
              Amount
                of Benefit.
                For a Change in Control occurring from the Effective Date of this
                Agreement through April 30, 2006, the Change-in-Control Benefit is
                determined by taking the Normal Retirement Age Accrual Balance and
                discounting that sum back to the Executive’s current age as if the
                Executive had an additional 108 months of service and 108 additional
                months of age on the date of the Change in Control at a 4% discount
                rate.
                For a Change in Control occurring from May 1, 2006 through the Normal
                Retirement Date, the Change-in-Control Benefit is the Normal Retirement
                Age Accrual Balance.

            
	 	 
	
              2.4.2
                

            	
              Payment
                of Benefit.
                The Bank shall pay the Change-in-Control benefit under Section 2.4
                of this
                Agreement to the Executive in one lump sum within three days after
                the
                Change in Control.

            


    

    


    2.5 Change-in-Control
      Payout of Normal Retirement Benefit, Early Termination Benefit, or Disability
      Benefit Being Paid to the Executive at the Time of a Change in
      Control.
      If a
      Change in Control occurs at any time during the entire 15-year salary
      continuation benefit payment period and if at the time of that Change in Control
      the Executive is receiving the benefit provided by Section 2.1.2, Section 2.2.2
      or Section 2.3.2, the Bank shall pay the remaining salary continuation benefits
      to the Executive in a single lump sum within three days after the Change in
      Control. The lump-sum payment due to the Executive as a result of a Change
      in
      Control shall be an amount equal to the Accrual Balance amount corresponding
      to
      that particular benefit then being paid.


    
      
         

      

      
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    2.6 Contradiction
      in Terms of Agreement and Schedule A.
      If
      there is a contradiction in the terms of this Agreement and Schedule A attached
      hereto concerning the actual amount of a particular benefit due the Executive
      under Section 2.2, 2.3, or 2.4 hereof, then the actual amount of the benefit
      set
      forth in the Agreement shall control. If the Plan Administrator changes the
      discount rate used to calculate the Accrual Balance, the Plan Administrator
      shall prepare or cause to be prepared a revised Schedule A, which shall
      supersede and replace any and all Schedules A previously prepared under or
      attached to this Agreement.

    


    2.7 Savings
      Clause Relating to Compliance with Code Section 409A.
      Notwithstanding any other provision of this Agreement, if when the Executive’s
      employment terminates the Executive is a specified employee, as defined in
      Code
      section 409A, and if any payments under Article 2 of this Agreement will result
      in additional tax or interest to the Executive because of section 409A, the
      Executive will not be entitled to the payments under Article 2 until the
      earliest of (a) the date that is at least six months after termination of the
      Executive’s employment for reasons other than the Executive’s death, (b) the
      date of the Executive’s death, or (c) any earlier date that does not result in
      additional tax or interest to the Executive under section 409A. If any provision
      of this Agreement would subject the Executive to additional tax or interest
      under section 409A, the Bank shall reform the provision. However, the Bank
      shall
      maintain to the maximum extent practicable the original intent of the applicable
      provision without subjecting the Executive to additional tax or interest, and
      the Bank shall not be required to incur any additional compensation expense
      as a
      result of the reformed provision. References in this Agreement to Code section
      409A include rules, regulations, and guidance of general application issued
      by
      the Department of the Treasury under Code section 409A.

    


    ARTICLE
      3

    DEATH
      BENEFITS

    


    3.1 Death
      During Active Service.
      If the
      Executive dies in active service to the Bank before the Normal Retirement Age,
      the Executive’s Beneficiary shall be entitled solely to the benefit described in
      the January 1, 2002 Split Dollar Agreement between the Bank and the
      Executive.

    


    3.2 Death
      after Separation from Service.
      If the
      Executive dies after Separation from Service and at Separation from Service
      the
      Executive is entitled to the normal retirement benefit provided by Section
      2.1,
      the Early Termination benefit provided by Section 2.2, or the Disability benefit
      provided by Section 2.3, the Bank shall pay to the Executive’s Beneficiary the
      benefits to which the Executive was entitled at death. Beginning on the first
      day of the month after the Executive’s death, the Bank shall pay the benefits to
      the Beneficiary at the same time and in the same amounts they would have been
      paid to the Executive had the Executive survived. In that case, no death benefit
      shall be payable under this Article 3.

    


    3.3 Death
      after Receipt of Change-in-Control Benefit.
      Anything in this Agreement or in the January 1, 2002 Split Dollar Agreement
      to
      the contrary notwithstanding, neither the Executive nor the Executive’s
      Beneficiary shall be entitled to any further benefits whatsoever under this
      Agreement or under the January 1, 2002 Split Dollar Agreement after the
      Change-in-Control benefit provided by Section 2.4 is paid to the Executive.
      If
      any provision of this Agreement, including this Section 3.3, is contrary in
      any
      way to the terms of the January 1, 2002 Split Dollar Agreement, that agreement
      shall be deemed to be amended hereby.


    
      
         

      

      
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    3.4 Change-in-Control
      Payout of Normal Retirement Benefit, Early Termination Benefit or Disability
      Benefit Being Paid to the Executive’s Beneficiary at the Time of a Change in
      Control.
      If a
      Change in Control occurs at any time during the entire 15-year salary
      continuation benefit payment period and if at the time of that Change in Control
      the Executive’s Beneficiary is receiving the benefit provided by Section 2.1.2,
      Section 2.2.2, or Section 2.3.2, the Bank shall pay the remaining salary
      continuation benefits to the Beneficiary in a single lump sum within three
      days
      after the Change in Control. The lump-sum payment due to the Beneficiary as
      a
      result of a Change in Control shall be an amount equal to the Accrual Balance
      amount corresponding to that particular benefit then being paid.

    


    ARTICLE
      4

    BENEFICIARIES

    


    4.1
       Beneficiary
      Designations.
      The
      Executive shall have the right at any time to designate a Beneficiary to receive
      any benefits payable under this Agreement upon the death of the Executive.
      The
      Beneficiary designated under this Agreement may be the same as or different
      from
      the beneficiary designation under any other benefit plan of the Bank in which
      the Executive participates.

    


    4.2 Beneficiary
      Designation: Change.
      The
      Executive shall designate a Beneficiary by completing and signing the
      Beneficiary Designation Form and delivering it to the Plan Administrator or
      its
      designated agent. The Executive’s Beneficiary designation shall be deemed
      automatically revoked if the Beneficiary predeceases the Executive or if the
      Executive names a spouse as Beneficiary and the marriage is subsequently
      dissolved. The Executive shall have the right to change a Beneficiary by
      completing, signing, and otherwise complying with the terms of the Beneficiary
      Designation Form and the Plan Administrator’s rules and procedures, as in effect
      from time to time. Upon the acceptance by the Plan Administrator of a new
      Beneficiary Designation Form, all Beneficiary designations previously filed
      shall be cancelled. The Plan Administrator shall be entitled to rely on the
      last
      Beneficiary Designation Form filed by the Executive and accepted by the Plan
      Administrator before the Executive’s death.

    


    4.3 Acknowledgment.
      No
      designation or change in designation of a Beneficiary shall be effective until
      received, accepted, and acknowledged in writing by the Plan Administrator or
      its
      designated agent.

    


    4.4 No
      Beneficiary Designation.
      If the
      Executive dies without a valid beneficiary designation, or if all designated
      Beneficiaries predecease the Executive, then the Executive’s spouse shall be the
      designated Beneficiary. If the Executive has no surviving spouse, the benefits
      shall be made to the personal representative of the Executive’s
      estate.

    


    4.5 Facility
      of Payment.
      If a
      benefit is payable to a minor, to a person declared incapacitated, or to a
      person incapable of handling the disposition of his or her property, the Bank
      may pay such benefit to the guardian, legal representative, or person having
      the
      care or custody of the minor, incapacitated person, or incapable person. The
      Bank may require proof of incapacity, minority, or guardianship as it may deem
      appropriate before distribution of the benefit. Distribution shall completely
      discharge the Bank from all liability for the benefit.

    


    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ARTICLE
      5

    GENERAL
      LIMITATIONS

     

    5.1 Termination
      for Cause.
      Notwithstanding any provision of this Agreement to the contrary, the Bank shall
      not pay any benefit under this Agreement and this Agreement shall terminate
      if
      Separation from Service is a result of Termination for Cause. The Executive
      shall not be deemed to have been terminated for Cause under this Agreement
      unless and until there shall have been delivered to the Executive a copy of
      a
      resolution duly adopted by the affirmative vote of at least three-fourths (3⁄4) of
      the directors of the Bank then in office at a meeting of the Board of Directors
      called and held for such purpose, which resolution (a) contains findings that,
      in the good faith opinion of the Board, the Executive has committed an act
      constituting Termination for Cause and (b) specifies the particulars thereof
      in
      detail. Notice of that meeting and the proposed Termination for Cause shall
      be
      given to the Executive a reasonable amount of time before the Board’s meeting.
      The Executive and his counsel (if the Executive chooses to have counsel present)
      shall have a reasonable opportunity to be heard by the Board at the meeting.
      Nothing in this Agreement limits the Executive’s or his beneficiaries’ right to
      contest the validity or propriety of the Board’s determination of Termination
      for Cause, and they shall have the right under Article 6 of this Agreement
      to
      contest the validity or propriety of the Board’s determination of Termination
      for Cause even if that right does not exist under any employment agreement
      of
      the Executive.

    


    5.2 Misstatement.
      No
      benefits shall be paid under this Agreement or under the January 1, 2002 Split
      Dollar Agreement if the Executive makes any material misstatement of fact on
      any
      application or resume provided to the Bank or on any application for benefits
      provided by the Bank.

    


    5.3 Removal.
      If the
      Executive is removed from office or permanently prohibited from participating
      in
      the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the
      Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations
      of the Bank under this Agreement shall terminate as of the effective date of
      the
      order.

    


    5.4 Default.
      Notwithstanding any provision of this Agreement to the contrary, if the Bank
      is
      in “default” or “in danger of default,” as those terms are defined in section
      3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations
      under this Agreement shall terminate.

    


    5.5 FDIC
      Open-Bank Assistance.
      All
      obligations under this Agreement shall terminate, except to the extent
      determined that continuation of the contract is necessary for the continued
      operation of the Bank, when the Federal Deposit Insurance Corporation enters
      into an agreement to provide assistance to or on behalf of the Bank under the
      authority contained in Federal Deposit Insurance Act section 13(c). 12 U.S.C.
      1823(c). Rights of the parties that have already vested shall not be affected
      by
      such action, however.

    


    ARTICLE
      6

    CLAIMS
      AND REVIEW PROCEDURES

    


    6.1 Claims
      Procedure.
      A
      person or beneficiary (“claimant”) who has not received benefits under the
      Agreement that he or she believes should be paid shall make a claim for such
      benefits as follows -

    


    
      	
              6.1.1

            	
              Initiation
                - Written Claim.
                The claimant initiates a claim by submitting to the Bank a written
                claim
                for the benefits.

            


    

     

    
      
         

      

      
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              6.1.2

            	
              Timing
                of Bank Response.
                The Bank shall respond to the claimant within 90 days after receiving
                the
                claim. If the Bank determines that special circumstances require
                additional time for processing the claim, the Bank may extend the
                response
                period by an additional 90 days by notifying the claimant in writing
                before the end of the initial 90-day period that an additional period
                is
                required. The notice of extension must state the special circumstances
                and
                the date by which the Bank expects to render its
                decision.

            
	 	 	 
	
              6.1.3

            	
              Notice
                of Decision.
                If the Bank denies part or all of the claim, the Bank shall notify
                the
                claimant in writing of the denial. The Bank shall write the notification
                in a manner calculated to be understood by the claimant. The notification
                shall set forth -

            
	 	 	 
	
               

            	
              6.1.3.1
                

            	
              the
                specific reasons for the denial,

            
	 	 	 
	
               

            	
              6.1.3.2
                

            	
              a
                reference to the specific provisions of the Agreement on which the
                denial
                is based,

            
	 	 	 
	
               

            	
              6.1.3.3
                

            	
              a
                description of any additional information or material necessary for
                the
                claimant to perfect the claim and an explanation of why it is
                needed,

            
	 	 	 
	
               

            	
              6.1.3.4
                

            	
              an
                explanation of the Agreement’s review procedures and the time limits
                applicable to such procedures, and

            
	 	 	 
	
               

            	
              6.1.3.5
                

            	
              a
                statement of the claimant’s right to bring a civil action under ERISA
                section 502(a) following an adverse benefit determination on
                review.

            


    

    


    6.2 Review
      Procedure.
      If the
      Bank denies part or all of the claim, the claimant shall have the opportunity
      for a full and fair review by the Bank of the denial, as follows -

    


    
      	
              6.2.1

            	
              Initiation
                - Written Request.
                To initiate the review, the claimant, within 60 days after receiving
                the
                Bank’s notice of denial, must file with the Bank a written request for
                review.

            
	 	 
	
              6.2.2

            	
              Additional
                Submissions - Information Access.
                The claimant shall then have the opportunity to submit written comments,
                documents, records, and other information relating to the claim.
                The Bank
                shall also provide the claimant, upon request and free of charge,
                reasonable access to and copies of all documents, records, and other
                information relevant (as defined in applicable ERISA regulations)
                to the
                claimant’s claim for benefits.

            


    

    


    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
              6.2.3

            	
              Considerations
                on Review.
                In considering the review, the Bank shall take into account all materials
                and information the claimant submits relating to the claim, without
                regard
                to whether the information was submitted or considered in the initial
                benefit determination.

            
	 	 	 
	
              6.2.4
                

            	
              Timing
                of Bank Response.
                The Bank shall respond in writing to the claimant within 60 days
                after
                receiving the request for review. If the Bank determines that special
                circumstances require additional time for processing the claim, the
                Bank
                may extend the response period by an additional 60 days by notifying
                the
                claimant in writing before the end of the initial 60-day period that
                an
                additional period is required. The notice of extension must state
                the
                special circumstances and the date by which the Bank expects to render
                its
                decision.

            
	 	 	 
	 	
              6.2.5
                

            	
              Notice
                of Decision.
                The Bank shall notify the claimant in writing of its decision on
                review.
                The Bank shall write the notification in a manner calculated to be
                understood by the claimant. The notification shall set forth
                -

            
	 	 	 
	
               

            	
              6.2.5.1
                

            	
              the
                specific reason for the denial,

            
	 	 	 
	
               

            	
              6.2.5.2
                

            	
              a
                reference to the specific provisions of the Agreement on which the
                denial
                is based,

            
	 	 	 
	
               

            	
              6.2.5.3
                

            	
              a
                statement that the claimant is entitled to receive, upon request
                and free
                of charge, reasonable access to and copies of all documents, records,
                and
                other information relevant (as defined in applicable ERISA regulations)
                to
                the claimant’s claim for benefits, and

            
	 	 	 
	
               

            	
              6.2.5.4
                

            	
              a
                statement of the claimant’s right to bring a civil action under ERISA
                section 502(a).

            


    

    


    ARTICLE
      7

    MISCELLANEOUS

    


    7.1 Amendments
      and Termination.
      Subject
      to Section 7.16 of this Agreement, this Agreement may be amended solely by
      a
      written agreement signed by the Bank and by the Executive, and except for
      termination occurring under Article 5 this Agreement may be terminated solely
      by
      a written agreement signed by the Bank and by the Executive.

    


    7.2 Binding
      Effect.
      This
      Agreement shall bind the Executive and the Bank, and their beneficiaries,
      survivors, executors, successors, administrators and transferees.

    


    7.3 No
      Guarantee of Employment.
      This
      Agreement is not an employment policy or contract. It does not give the
      Executive the right to remain an employee of the Bank, nor does it interfere
      with the Bank’s right to discharge the Executive. It also does not require the
      Executive to remain an employee nor interfere with the Executive’s right to
      terminate employment at any time.

    


    7.4 Non-Transferability.
      Benefits under this Agreement cannot be sold, transferred, assigned, pledged,
      attached, or encumbered in any manner.

    


    7.5 Successors;
      Binding Agreement.
      By an
      assumption agreement in form and substance satisfactory to the Executive, the
      Bank will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      or assets of the Bank to expressly assume and agree to perform this Agreement
      in
      the same manner and to the same extent that the Bank would be required to
      perform this Agreement if no such succession had occurred.


    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    7.6 Tax
      Withholding.
      The
      Bank shall withhold any taxes that are required to be withheld from the benefits
      provided under this Agreement.

    


    7.7 Applicable
      Law.
      Except
      to the extent preempted by the laws of the United States of America, the
      validity, interpretation, construction, and performance of this Agreement shall
      be governed by and construed in accordance with the laws of the State of
      Connecticut, without giving effect to the principles of conflict of laws of
      such
      state.

    


    7.8 Unfunded
      Arrangement.
      The
      Executive and his Beneficiary are general unsecured creditors of the Bank for
      the payment of benefits under this Agreement. The benefits represent the mere
      promise by the Bank to pay such benefits. The rights to benefits are not subject
      in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
      encumbrance, attachment, or garnishment by creditors. Any insurance on the
      Executive’s life is a general asset of the Bank to which the Executive and
      Beneficiary have no preferred or secured claim.

    


    7.9 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the Bank and the Executive
      as
      to the subject matter hereof. No rights are granted to the Executive by virtue
      of this Agreement other than those specifically set forth herein. This Agreement
      supersedes in its entirety the January 1, 2002 Amended and Restated Salary
      Continuation Agreement, and effective immediately the January 1, 2002 Amended
      and Restated Salary Continuation Agreement shall be of no further force or
      effect.

    


    7.10 Severability.
      If for
      any reason any provision of this Agreement is held invalid, such invalidity
      shall not affect any other provision of this Agreement not held so invalid,
      and
      each such other provision shall, to the full extent consistent with the law,
      continue in full force and effect. If any provision of this Agreement shall
      be
      held invalid in part, such invalidity shall in no way affect the remainder
      of
      such provision, not held so invalid, and the remainder of such provision,
      together with all other provisions of this Agreement shall, to the full extent
      consistent with the law, continue in full force and effect.

    


    7.11 Headings.
      The
      headings of Sections herein are included solely for convenience of reference
      and
      shall not affect the meaning or interpretation of any provision of this
      Agreement.

    


    7.12
       Notices.
      All
      notices, requests, demands, and other communications hereunder shall be in
      writing and shall be deemed to have been duly given if delivered by hand or
      mailed, certified or registered mail, return receipt requested, with postage
      prepaid, to the following addresses or to such other address as either party
      may
      designate by like notice. Unless otherwise changed by notice, notice shall
      be
      properly addressed to the Executive if addressed to the address of the Executive
      on the books and records of the Bank at the time of the delivery of such notice,
      and properly addressed to the Bank if addressed to the Board of Directors,
      NewMil Bank, 19 Main Street, P.O. Box 600, New Milford, Connecticut
      06776-0600.

    


    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    7.13 Payment
      of Legal Fees.
      The
      Bank is aware that upon the occurrence of a Change in Control, then current
      management of the Bank could cause or attempt to cause the Bank to refuse to
      comply with its obligations under this Agreement, or could institute or cause
      or
      attempt to cause the Bank to institute litigation seeking to have this Agreement
      declared unenforceable, or could take or attempt to take other action to deny
      Executive the benefits intended under this Agreement. In these circumstances,
      the purpose of this Agreement would be frustrated. It is the intention of the
      Bank that the Executive not be required to incur the expenses associated with
      the enforcement of his rights under this Agreement, whether by litigation or
      other legal action, because the cost and expense thereof would substantially
      detract from the benefits intended to be granted to the Executive hereunder,
      and
      it is the intention of the Bank that the Executive not be forced to negotiate
      settlement of his rights under this Agreement under threat of incurring such
      expenses. Accordingly, if after a Change in Control occurs it should appear
      to
      the Executive that (a) the Bank has failed to comply with any of its obligations
      under this Agreement, or (b) the Bank or any other person has taken any action
      to declare this Agreement void or unenforceable, or instituted any litigation
      or
      other legal action designed to deny, diminish or to recover from the Executive
      the benefits intended to be provided to the Executive hereunder, the Bank
      irrevocably authorizes the Executive from time to time to retain counsel of
      his
      choice at the expense of the Bank as provided in this Section 7.13, to represent
      the Executive in connection with the initiation or defense of any litigation
      or
      other legal action, whether by or against the Bank or any director, officer,
      stockholder or other person affiliated with the Bank, in any jurisdiction.
      Notwithstanding any existing or previous attorney-client relationship between
      the Bank or NewMil Bancorp, Inc. and any counsel chosen by the Executive under
      this Section 7.13, the Bank irrevocably consents to the Executive’s entering
      into an attorney-client relationship with that counsel, and the Bank and the
      Executive agree that a confidential relationship shall exist between the
      Executive and that counsel. The fees and expenses of counsel selected from
      time
      to time by the Executive as provided in this section shall be paid or reimbursed
      to the Executive by the Bank on a regular, periodic basis upon presentation
      by
      the Executive of a statement or statements prepared by such counsel in
      accordance with such counsel’s customary practices, up to a maximum aggregate
      amount of $500,000, whether suit be brought or not, and whether or not incurred
      in trial, bankruptcy, or appellate proceedings. The Bank’s obligation to pay the
      Executive’s legal fees provided by this Section 7.13 operates separately from,
      and in addition to, any legal fee reimbursement obligation the Bank or the
      Bank’s parent NewMil Bancorp, Inc. may have with the Executive by virtue of any
      separate employment, severance, or other agreement between the Executive and
      the
      Bank or NewMil Bancorp, Inc. Anything in this Section 7.13 to the contrary
      notwithstanding however, the Bank shall not be required to pay or reimburse
      the
      Executive’s legal expenses if doing so would violate section 18(k) of the
      Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3 of the Federal
      Deposit Insurance Corporation [12 CFR 359.3].

    


    7.14 Internal
      Revenue Code Section 280G Gross Up.
      (a) If
      as a result of a Change in Control the Executive becomes entitled to
      acceleration of benefits under this Agreement or under any other plan or
      agreement of or with the Bank or NewMil Bancorp, Inc. (together, the “Total
      Benefits”), and if any of the Total Benefits will be subject to the Excise Tax
      as set forth in sections 280G and 4999 of the Internal Revenue Code of 1986
      (the
“Excise Tax”), the Bank shall pay to the Executive the following additional
      amounts, consisting of (1) a payment equal to the Excise Tax payable by the
      Executive on the Total Benefits under section 4999 of the Internal Revenue
      Code
      (the “Excise Tax Payment”), and (2) a payment equal to the amount necessary to
      provide the Excise Tax Payment net of all income, payroll and excise taxes.
      Together, the additional amounts described in clauses (1) and (2) are referred
      to in this Agreement as the “Gross-Up Payment Amount.” Payment of the Gross-Up
      Payment Amount shall be made in addition to the amount set forth in Section
      2.4
      hereof.

    


    (b) For
      purposes of determining whether any of the Total Benefits will be subject to
      the
      Excise Tax and the amount of such Excise Tax,


    
      
         

      

      
        12

        
          

        

      

      
         

      

    

          
(1) any
      other
      payments or benefits received or to be received by the Executive (whether under
      the terms of this Agreement or any other agreement, or other plan or arrangement
      with the Bank or NewMil Bancorp, Inc., any person whose actions result in a
      Change in Control or any person affiliated with NewMil Bancorp, Inc. or such
      person) in connection with a Change in Control or the Executive’s Separation
      from Service shall be treated as “parachute payments” within the meaning of
      section 280G(b)(2) of the Internal Revenue Code, and all “excess parachute
      payments,” within the meaning of section 280G(b)(1), shall be treated as subject
      to the Excise Tax, unless in the opinion of the certified public accounting
      firm
      that is retained by NewMil Bancorp, Inc. as of the date immediately before
      the
      Change in Control (the “Accounting Firm”), such other payments or benefits (in
      whole or in part) represent reasonable compensation for services actually
      rendered, within the meaning of section 280G(b)(4) of the Internal Revenue
      Code,
      or are otherwise not subject to the Excise Tax,

    
 

    (2) the
      amount of the Total Benefits which shall be treated as subject to the Excise
      Tax
      shall be equal to the lesser of (A) the total amount of the Total Benefits
      reduced by the amount of such Total Benefits that in the opinion of the
      Accounting Firm are not parachute payments, or (B) the amount of excess
      parachute payments within the meaning of section 280G(b)(1) (after applying
      clause (1) above), and

    


           (3) the
      value
      of any noncash benefits or any deferred payment or benefit shall be determined
      by NewMil Bancorp, Inc.’s Accounting Firm in accordance with the principles of
      sections 280G(d)(3) and (4) of the Internal Revenue Code.

    


    (c) For
      purposes of determining the Gross-Up Payment Amount, the Executive shall be
      deemed to pay federal income taxes at the highest marginal rate of federal
      income taxation in the calendar year in which the Gross-Up Payment Amount is
      to
      be made, and state and local income taxes at the highest marginal rate of
      taxation in the state and locality of the Executive’s residence on the date of
      Separation from Service, net of the reduction in federal income taxes that
      could
      be obtained from deduction of state and local taxes (calculated by assuming
      that
      any reduction under section 68 of the Internal Revenue Code in the amount of
      itemized deductions allowable to the Executive applies first to reduce the
      amount of state and local income taxes that would otherwise be deductible by
      the
      Executive, and applicable federal FICA and Medicare withholding
      taxes).

    


    (d) If
      the
      Excise Tax is later determined to be less than the amount taken into account
      hereunder at the time of termination of the Executive’s employment, the
      Executive shall, when the amount of such reduction in Excise Tax is finally
      determined, repay to the Bank the portion of the Gross-Up Payment Amount
      attributable to the reduction (plus that portion of the Gross-Up Payment Amount
      attributable to the Excise Tax, federal, state and local income taxes and FICA
      and Medicare withholding taxes imposed on the Gross-Up Payment Amount being
      repaid by the Executive to the extent that such repayment results in a reduction
      in Excise Tax, FICA and Medicare withholding taxes and/or a federal, state
      or
      local income tax deduction). If the Excise Tax is later determined to be more
      than the amount taken in account hereunder at the time of termination of the
      Executive’s employment (including any payment the existence or amount of which
      cannot be determined at the time the Gross-Up Payment Amount is paid), the
      Bank
      shall make an additional Gross-Up Payment Amount to the Executive of the excess
      (plus any interest, penalties or additions payable by the Executive on the
      excess) when the amount of the excess is finally determined.


    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    7.15 Accounting
      Firm Gross-Up Determination.
      (a)
      Subject to the provisions of Section 7.14, all determinations required to be
      made under this Section 7.15, including whether and when a Gross-Up Payment
      Amount is required, the Gross-Up Payment Amount and the assumptions used to
      arrive at such determination shall be made by the Accounting Firm, which shall
      provide detailed supporting calculations both to the Bank and the Executive
      within 15 business days after receipt of notice from the Bank or the Executive
      that there has been a Gross-Up Payment Amount, or such earlier time as is
      requested by the Bank (the “Determination”).

    


    (b) If
      the
      Accounting Firm is serving as accountant or auditor for the individual, entity
      or group effecting the Change in Control, the Executive may appoint another
      nationally recognized public accounting firm to make the determinations required
      hereunder (which accounting firm shall then be referred to as the Accounting
      Firm hereunder).

    


    (c) All
      fees
      and expenses of the Accounting Firm shall be borne solely by NewMil Bancorp,
      Inc. or the Bank and NewMil Bancorp, Inc. or the Bank shall enter into any
      agreement requested by the Accounting Firm in connection with the performance
      of
      its services hereunder.

    


    (d) If
      the
      Accounting Firm determines that no Excise Tax is payable by the Executive,
      it
      shall furnish the Executive with a written opinion to such effect, and to the
      effect that failure to report Excise Tax, if any, on the Executive’s applicable
      federal income tax return will not result in the imposition of a negligence
      or
      similar penalty.

    


    (e) Determinations
      by the Accounting Firm shall be binding upon the Bank and the
      Executive.

    


    (f) As
      a
      result of the uncertainty in determining whether any of the Total Benefits
      will
      be subject to the Excise Tax at the time of the Determination, it is possible
      that a Gross-Up Payment Amount will not have been made by the Bank that should
      have been made (an “Underpayment”), or that a Gross-Up Payment Amount will have
      been made that should not have been made (an “Overpayment”). If the Executive is
      required to make payment of any additional Excise Tax, the Accounting Firm
      shall
      determine the amount of the Underpayment that has occurred, and the Underpayment
      (together with interest at the rate provided in section 1274(d)(2)(B) of the
      Internal Revenue Code) shall be promptly paid by the Bank to or for the benefit
      of the Executive. If the Gross-Up Payment Amount exceeds the amount necessary
      to
      reimburse the Executive for his Excise Tax, the Accounting Firm shall determine
      the amount of the Overpayment that has been made, and the Overpayment (together
      with interest at the rate provided in section 1274(d)(2)(B) of the Internal
      Revenue Code) shall be promptly paid by the Executive to or for the benefit
      of
      the Bank. If his expenses are reimbursed by the Bank, the Executive shall
      cooperate with any reasonable requests by the Bank in any contests or disputes
      with the Internal Revenue Service concerning the Excise Tax.


    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    7.16 Termination
      or Modification of Agreement Because of Changes in Law, Rules, or
      Regulations.
      The
      Bank is entering into this Agreement on the assumption that certain existing
      tax
      laws, rules, and regulations will continue in effect in their current form.
      If
      that assumption materially changes and the change has a material detrimental
      effect on this Agreement, then the Bank reserves the right to terminate or
      modify this Agreement accordingly, subject to obtaining the written consent
      of
      the Executive, which shall not be unreasonably withheld. This Section 7.16
      shall
      become null and void effective immediately upon a Change in
      Control.

    


    ARTICLE
      8

    ADMINISTRATION
      OF AGREEMENT

    


    8.1 Plan
      Administrator Duties.
      This
      Agreement shall be administered by a Plan Administrator consisting of the board
      or such committee or person(s) as the board shall appoint. The Executive may
      be
      a member of the Plan Administrator. The Plan Administrator shall also have
      the
      discretion and authority to (a) make, amend, interpret, and enforce all
      appropriate rules and regulations for the administration of this Agreement
      and
      (b) decide or resolve any and all questions, including interpretations of this
      Agreement, as may arise in connection with the Agreement.

    


    8.2
       Agents.
      In the
      administration of this Agreement, the Plan Administrator may employ agents
      and
      delegate to them such administrative duties as it sees fit (including acting
      through a duly appointed representative) and may from time to time consult
      with
      counsel, who may be counsel to the Bank.

    


    8.3 Binding
      Effect of Decisions.
      The
      decision or action of the Plan Administrator with respect to any question
      arising out of or in connection with the administration, interpretation, and
      application of the Agreement and the rules and regulations promulgated hereunder
      shall be final and conclusive and binding upon all persons having any interest
      in the Agreement. No Executive or Beneficiary shall be deemed to have any right,
      vested or unvested, regarding the continued use of any previously adopted
      assumptions, including but not limited to the discount rate and calculation
      method described in Section 1.1.

    


    8.4 Indemnity
      of Plan Administrator.
      The
      Bank shall indemnify and hold harmless the members of the Plan Administrator
      against any and all claims, losses, damages, expenses, or liabilities arising
      from any action or failure to act with respect to this Agreement, except in
      the
      case of willful misconduct by the Plan Administrator or any of its
      members.

    


    8.5 Bank
      Information.
      To
      enable the Plan Administrator to perform its functions, the Bank shall supply
      full and timely information to the Plan Administrator on all matters relating
      to
      the date and circumstances of the retirement, Disability, death, or Separation
      from Service of the Executive and such other pertinent information as the Plan
      Administrator may reasonably require.

    


    
      
         

      

      
        15

        
          

        

      

      
         

      

    


    In
      Witness Whereof,
      the
      Executive and a duly authorized Bank officer have signed this Second Amended
      and
      Restated Salary Continuation Agreement as of the date first written
      above.

    


    
      	
              The
                EXECUTIVE:
                

            	
              THE
                BANK:

            
	 	
              NEWMIL
                BANK

            
	 	 
	
              /s/
                Francis J. Wiatr

            	 
	
              Francis
                J. Wiatr

            	
              By: 
                /s/
                Betty A. Pacocha

            
	 	
              Betty
                A. Pacocha

            
	 	
              Its:
                Secretary

            
	 	 
	 	 
	 	
              and
                by:  /s/
                Mary C. Williams

            
	 	
               
                Mary C. Williams

            
	 	
               
                Its:   Chairwoman, Salary and Benefits Committee of the Board of
                Directors

            


    

    


    


    NewMil
      Bancorp, Inc., by its undersigned officer hereunto duly authorized, hereby
      (1)
      agrees to and adopts such of the terms, conditions and obligations of this
      Second Amended and Restated Salary Continuation Agreement between NewMil Bank
      and Francis J. Wiatr as apply by their terms to NewMil Bancorp, Inc.,
      specifically the obligations stated in Section 7.14 and Section 7.15 concerning
      Gross-Up Payments, and (2) notwithstanding any existing or previous
      attorney-client relationship between NewMil Bancorp, Inc., and any counsel
      chosen by the Executive under Section 7.13, irrevocably consents to the
      Executive’s entering into an attorney-client relationship with that counsel, and
      NewMil Bancorp, Inc., agrees that a confidential relationship shall exist
      between the Executive and that counsel.

    


    
      	 	
              NewMil
                Bancorp, Inc.

            
	 	 
	 	 
	 	
              By: 
                /s/
                Betty A. Pacocha

            
	 	
              Betty
                F. Pacocha

            
	 	
              Its:
                Executive Vice President and Secretary

            
	 	 
	 	 
	 	
              and
                by:   /s/
                Mary C. Williams

            
	 	
               
                Mary C. Williams

            
	 	
               
                Its:  Chairwoman, Salary and Benefits Committee of the Board of
                Directors

            


    

    


    
      
         

      

      
        16