Exhibit 10.23 Change in Control Agreement - Shannon


    Exhibit
      10.23

    


    CHANGE
      IN CONTROL AGREEMENT

    


    This
      Change
      in Control Agreement
      (this
“Agreement”) is entered into as of this 20th
      day of
      December, 2005 by and between NewMil Bancorp, Inc., a Delaware corporation
      (hereafter “NewMil Bancorp”), and Terrence J. Shannon, Executive Vice President
      of NewMil Bank (the “Executive”).

    


    Whereas,
      the
      Executive is employed by NewMil Bank, a Connecticut-chartered savings bank
      and
      subsidiary of NewMil Bancorp, and the Executive has made and is expected to
      continue to make major contributions to the profitability, growth, and financial
      strength of NewMil Bancorp and its subsidiaries,

    


    Whereas,
      NewMil
      Bancorp desires to provide additional inducement for the Executive to continue
      to remain in the ongoing employ of NewMil Bancorp and subsidiary, and NewMil
      Bancorp desires to assure itself of the current and future continuity of
      management and establish minimum severance benefits for certain of its officers,
      including the Executive, if a Change in Control occurs,

    


    Whereas,
      NewMil
      Bancorp wishes to ensure that officers and other key employees are not
      practically disabled from discharging their duties if a proposed or actual
      transaction involving a Change in Control arises,

    


    Whereas,
      none of
      the conditions or events included in the definition of the term “golden
      parachute payment” contained 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 NewMil Bancorp, is contemplated insofar as either of NewMil Bancorp
      or any of its subsidiaries is concerned, and

    


    Whereas,
      the
      Executive and NewMil Bancorp are parties to a Change in Control Agreement dated
      as of January 1, 2002, but the Executive and NewMil Bancorp intend that this
      Agreement supersede and replace the previous agreement in its
      entirety.

    


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

    


    1. Change
      in Control.
      (a)
Benefit.
      If a
      Change in Control occurs during the term of this Agreement, within five days
      after the Change in Control NewMil Bancorp shall make a lump sum payment to
      the
      Executive in an amount in cash equal to 1.5 times the Executive’s annual
      compensation. For purposes of this Agreement, annual compensation means (1)
      the
      Executive’s annual base salary on the date of the Change in Control plus (2) any
      bonuses or incentive compensation earned for the calendar year immediately
      before the year in which the Change in Control occurred, regardless of when
      the
      bonus or incentive compensation is or was paid. NewMil Bancorp recognizes that
      the bonus and incentive compensation earned by the Executive for a particular
      year’s service might be paid in the year after the calendar year in which the
      bonus or incentive compensation is earned. The amount payable to the Executive
      hereunder shall not be reduced to account for the time value of money or
      discounted to present value. In addition, NewMil Bancorp shall cause the
      Executive to become 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    fully
      vested in any qualified and non-qualified plans, programs or arrangements in
      which the Executive participates if the plan, program, or arrangement does
      not
      address the effect of a change in control. NewMil Bancorp also shall contribute
      or cause a Subsidiary to contribute to the Executive’s 401(k) plan account, if
      any, the matching and profit-sharing contributions, if any, that the Executive
      is entitled to based upon all W-2 income earned for the plan year.

    


    (b) Definition
      of Change in Control.
      For
      purposes of this Agreement, “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 -

    


    1) Change
      in Ownership:
      a
      change in ownership of NewMil Bancorp occurs on the date any one person or
      group
      accumulates ownership of NewMil Bancorp’s stock constituting more than 50% of
      the total fair market value or total voting power of NewMil Bancorp’s
      stock,

    


    2) Change
      in Effective Control:
      (a) any
      one person, or more than one person acting as a group, acquires within a
      12-month period ownership of stock of NewMil Bancorp possessing 35% or more
      of
      the total voting power of NewMil Bancorp’s stock, or (b) a majority of NewMil
      Bancorp’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’s board of directors, or

    


    3) Change
      in Ownership of a Substantial Portion of Assets:
      a
      change in the ownership of a substantial portion of NewMil Bancorp’s assets
      occurs on the date any one person, or more than one person acting as a group,
      acquires assets from NewMil Bancorp 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 immediately before the acquisition or acquisitions. For this
      purpose, gross fair market value means the value of NewMil Bancorp’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 (1) through (3) of this Section 1(b), 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.

    


    (c) No
      mitigation required.
      NewMil
      Bancorp hereby acknowledges that its general severance pay plans do not provide
      for mitigation, offset, or reduction of any severance payment received
      thereunder. NewMil Bancorp further acknowledges that the payment of benefits
      by
      NewMil Bancorp under this Agreement is reasonable and will be liquidated
      damages, and the Executive shall not be required to mitigate the amount of
      any
      payment provided for in this Agreement by seeking other employment or otherwise,
      nor will any profits, income, earnings, or other benefits from any source
      whatsoever create any mitigation, offset, reduction, or any other obligation
      on
      the part of the Executive hereunder or otherwise.


    
      
         

      

      
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    2. Term
      of Agreement.
      The
      initial term of this Agreement shall be for a period of three years, commencing
      December 20, 2005. On the first anniversary of the effective date of this
      Agreement and on each anniversary thereafter this Agreement shall be extended
      automatically for one additional year unless NewMil Bancorp’s board of directors
      gives notice to the Executive in writing at least 90 days before the anniversary
      that the term of this Agreement will not be extended. If the board of directors
      determines not to extend the term, it shall promptly notify the Executive.
      References herein to the term of this Agreement mean the initial term and
      extensions of the initial term. If the board of directors decides not to extend
      the term of this Agreement, this Agreement shall nevertheless remain in force
      until its term expires. This Agreement shall terminate when a Change in Control
      occurs if benefits are paid to the Executive as required by Section 1, except
      that the legal fee reimbursement promise set forth in this Agreement shall
      survive termination. This Agreement shall terminate when the Executive’s
      employment with NewMil Bancorp and Subsidiaries terminates, except that the
      legal fee reimbursement promise set forth in this Agreement shall survive
      termination.

    


    3. This
      Agreement Is Not an Employment Contract.
      The
      parties hereto acknowledge and agree that (a) this Agreement is not a management
      or employment agreement and (b) nothing in this Agreement shall give the
      Executive any rights or impose any obligations to continued employment by NewMil
      Bancorp or any Subsidiary or successor of NewMil Bancorp, nor shall it give
      NewMil Bancorp any rights or impose any obligations for the continued
      performance of duties by the Executive for NewMil Bancorp or any Subsidiary
      or
      successor of NewMil Bancorp.

    


    4. Taxes.
      NewMil
      Bancorp may withhold from any benefits payable under this Agreement all Federal,
      state, local or other taxes as may be required by law, governmental regulation
      or ruling. NewMil Bancorp and the Executive intend that their exercise of
      authority or discretion under this Change in Control Agreement shall comply
      with
      section 409A of the Internal Revenue Code of 1986 and Treasury Department
      regulations and guidance of general application issued thereunder. To ensure
      that the Executive is not subject to interest and penalties that may be imposed
      under section 409A, NewMil Bancorp and the Executive agree to amend this Change
      in Control Agreement as necessary to avoid application of interest and penalties
      imposed under section 409A and the regulations and guidance of general
      application issued thereunder. If any provision of this Change in Control
      Agreement does not satisfy the requirements of section 409A or the regulations
      and guidance of general application issued thereunder, such provision shall
      be
      applied in a manner consistent with those requirements, notwithstanding any
      provision of this Change in Control Agreement.

    


    5. Successors
      and Assigns.
      (a)
This
      Agreement is binding on NewMil Bancorp’s successors.
      This
      Agreement shall be binding upon NewMil Bancorp and any successor to NewMil
      Bancorp, including any persons acquiring directly or indirectly all or
      substantially all of the business or assets of NewMil Bancorp by purchase,
      merger, consolidation, reorganization, or otherwise. Any such successor shall
      thereafter be deemed to be “NewMil Bancorp” for purposes of this Agreement. But
      this Agreement and NewMil Bancorp’s obligations under this Agreement are not
      otherwise assignable, transferable, or delegable by NewMil Bancorp. By agreement
      in form and substance satisfactory to the Executive, NewMil Bancorp shall
      require any successor to all or substantially all of the business or assets
      of
      NewMil Bancorp expressly to assume and agree to perform this Agreement in the
      same manner and to the same extent NewMil Bancorp would be required to perform
      if no such succession had occurred.


    
      
         

      

      
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    (b)
      This
      Agreement is enforceable by the Executive and the Executive’s
      heirs.
      This
      Agreement will inure to the benefit of and be enforceable by the Executive’s
      personal or legal representatives, executors, administrators, successors, heirs,
      distributes, and legatees.

    


    (c)
      This
      Agreement is personal in nature and is not assignable.
      This
      Agreement is personal in nature. Without written consent of the other party,
      neither party shall assign, transfer, or delegate this Agreement or any rights
      or obligations under this Agreement except as expressly provided in this Section
      5. Without limiting the generality or effect of the foregoing, the Executive’s
      right to receive payments hereunder is not assignable or transferable, whether
      by pledge, creation of a security interest, or otherwise, except for a transfer
      by Executive’s will or by the laws of descent and distribution. If the Executive
      attempts an assignment or transfer that is contrary to this Section 5, NewMil
      Bancorp shall have no liability to pay any amount to the assignee or
      transferee.

    


    6. 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 NewMil Bancorp at the time of the delivery of such
      notice, and properly addressed to NewMil Bancorp if addressed to the Board
      of
      Directors, NewMil Bancorp, Inc., 19 Main Street, P.O. Box 600, New Milford,
      Connecticut 06776-0600.

    


    7. Captions
      and Counterparts.
      The
      headings and subheadings used in this Agreement are included solely for
      convenience and shall not affect the interpretation of this Agreement. This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute one and
      the
      same agreement.

    


    8. Amendments
      and Waivers.
      No
      provision of this Agreement may be modified, waived, or discharged unless such
      waiver, modification, or discharge is agreed to in a writing or writings signed
      by the Executive and by NewMil Bancorp. No waiver by either party hereto at
      any
      time of any breach by the other party hereto or compliance with any condition
      or
      provision of this Agreement to be performed by such other party will be deemed
      a
      waiver of similar or dissimilar provisions or conditions at the same time or
      at
      any other time.

    


    9. Severability.
      The
      provisions of this Agreement are severable. The invalidity or unenforceability
      of any provision shall not affect the validity or enforceability of the other
      provisions of this Agreement. Any provision held to be invalid or unenforceable
      shall be reformed to the extent (and solely to the extent) necessary to make
      it
      valid and enforceable.

    10. Governing
      Law.
      The
      validity, interpretation, construction and performance of this Agreement shall
      be governed by and construed in accordance with the substantive laws of the
      State of Connecticut, without giving effect to the principles of conflict of
      laws of such State.

    


    11. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between NewMil Bancorp and the
      Executive concerning the subject matter. No rights are granted to the Executive
      under this Agreement other than those specifically set forth. No agreements
      or
      representations, oral or otherwise, expressed or implied concerning the subject
      matter hereof have been made by either party that are not set forth expressly
      in
      this Agreement. This Agreement supersedes in its entirety the Change in Control
      Agreement dated as of January 1, 2002 entered into by the Executive and NewMil
      Bancorp, as amended or supplemented. The January 1, 2002 Change in Control
      Agreement shall hereafter be void and of no force or effect.


    
      
         

      

      
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    12. Payment
      of Legal Fees after a Change in Control Occurs.
      NewMil
      Bancorp is aware that after a Change in Control management could cause or
      attempt to cause NewMil Bancorp to refuse to comply with the obligations under
      this Agreement, or could institute or cause or attempt to cause NewMil Bancorp
      to institute litigation seeking to have this Agreement declared unenforceable,
      or could take or attempt to take other action to deny the Executive the benefits
      intended under this Agreement. In these circumstances the purpose of this
      Agreement would be frustrated. It is NewMil Bancorp’s intention that the
      Executive not be required to incur the expenses associated with the enforcement
      of the Executive’s 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. It is
      NewMil Bancorp’s intention that the Executive not be forced to negotiate
      settlement of the Executive’s rights under this Agreement under threat of
      incurring expenses. Accordingly, if after a Change of Control occurs it appears
      to the Executive that (a) NewMil Bancorp has failed to comply with any of its
      obligations under this Agreement, or (b) NewMil Bancorp 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, NewMil Bancorp irrevocably authorizes the Executive from time to
      time
      to retain counsel of the Executive’s choice, at NewMil Bancorp’s expense as
      provided in this section 12, to represent the Executive in connection with
      the
      initiation or defense of any litigation or other legal action, whether by or
      against NewMil Bancorp or any director, officer, stockholder, or other person
      affiliated with NewMil Bancorp, in any jurisdiction. Notwithstanding any
      existing or previous attorney-client relationship between NewMil Bancorp and
      any
      counsel chosen by the Executive under this section 12, NewMil Bancorp
      irrevocably consents to the Executive entering into an attorney-client
      relationship with that counsel, and NewMil Bancorp 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 NewMil
      Bancorp 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 $150,000,
      whether suit be brought or not, and whether or not incurred in trial,
      bankruptcy, or appellate proceedings. NewMil Bancorp’s obligation to pay the
      Executive’s legal fees provided by this section 12 operates separately from and
      in addition to any legal fee reimbursement obligation NewMil Bancorp may have
      with the Executive under any separate severance, employment, salary
      continuation, or other agreement. Anything in this section 12 to the contrary
      notwithstanding however, NewMil Bancorp 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].

    


    
      
         

      

      
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    In
      Witness Whereof,
      the
      parties have executed this Change in Control Agreement as of the date first
      written above.

    


    
      	
              Executive

            	
              NewMil
                Bancorp, Inc.

            
	 	 
	
              /s/
                Terrence J. Shannon

            	
              By:  
                /s/
                Francis J. Wiatr

            
	
              Terrence
                J. Shannon

            	
              Francis
                J. Wiatr

            
	
              Executive
                Vice President

            	
              Its:  
                Chairman, President and Chief 

            
	 	
              Executive
                Officer

            


    

     

    County
      of
      Litchfield )

    )
      ss:

    State
      of
      Connecticut )

    


    Before
      me
      this 20th
      day of
      December, 2005, personally appeared the above named Francis J. Wiatr and
      Terrence J. Shannon, who acknowledged that they did sign the foregoing
      instrument and that the same was their free act and deed.

    


    
      	 	
              ________________________________

            
	
              (Notary
                Seal)

            	
              Notary
                Public

            
	 	
              My
                Commission Expires:

            


    

    


    


    
      
         

      

      
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