Document:

<PAGE>

                                                                    EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS AGREEMENT, made effective as of the 10th day of November, 2000, by and
between William D. Starbuck (hereinafter "Starbuck") currently residing in
Ridgefield, Connecticut, and NewMil Bank (hereinafter "NewMil" or "Bank"), a
Connecticut banking corporation with its headquarters and principal offices in
New Milford, Connecticut is intended to set forth and govern the terms of
employment by the Bank. This Agreement supersedes any prior agreements or
understandings written or oral between the parties and shall be the sole source
of either party's rights and obligations.

     SUPERCEDING AGREEMENT. This Agreement takes place in the context of an
acquisition/merger by and among NewMil Bancorp, Inc., parent company to the Bank
("Holding Company"), the Bank and Nutmeg Federal Savings & Loan Association
pursuant to which Nutmeg shall merge into the Bank with the Bank as surviving
entity. Starbuck has a Change of Control Agreement with Nutmeg. This Agreement
will supercede and replace in its entirety the Nutmeg Change of Control
Agreement, and Starbuck shall not be entitled to any payment thereunder.

     1.   Position, Duties and Term.
          -------------------------
     Beginning on the 10th day of November, 2000 Starbuck shall be employed as a
Senior Vice President of the Bank. He shall be responsible for and carry out
such duties as may be assigned to him by the President, and he shall report to
the President and/or his designee (the current designee shall be Senior Vice
President John A. Baker). He agrees to devote his full-time best efforts to the
performance of his duties. He shall not perform services for any other business
without the prior consent of the Bank, in its discretion. He may also be elected
or

<PAGE>

appointed to officer positions in the Holding Company, and/or subsidiaries of
the Bank or Holding Company, for which he will not receive additional
compensation.

     The term of this Agreement shall be from November 10, 2000 until December
1, 2002. This Agreement may be extended further only by a written extension
document executed by both parties. The Bank agrees to review a possible
extension of the Agreement no later than July 1, 2002.

     2.   Compensation.
          ------------

     Starbuck shall be employed at a base annual salary of One Hundred Twenty
Thousand Dollars ($120,000.00) per year. Salary payments shall be paid in
accordance with the Bank's general payroll schedule. Starbuck shall have his
performance reviewed each year during the month of December beginning in
December 2001 (or such other month as all senior officers are reviewed for the
2001 fiscal year end) by the Board of Directors of the Bank. The Board may
determine at that time, in its discretion, and from time to time during the term
of this Agreement, to increase Starbuck's base annual salary and/or to pay
Starbuck performance bonuses (collectively, "Total Annual Cash Compensation").

     Starbuck shall also receive a Bonus of $223,000.00, payable in two parts:
(a) $55,750.00 on January 5, 2001; and (b) $167,250.00 on December 1, 2002. In
the event of a change of control (as defined in Paragraph 5 below) the Bonus
shall vest and be deemed fully earned on the day preceding the change of
control.

     3.   Benefits.
          ---------

     Starbuck shall receive all benefits as are generally made available to
other senior executives of the Bank, such as medical insurance, dental
insurance, life insurance, long-term disability insurance, and such pension,
profit sharing and/or 401(k) plans as may be available

                                       2.

<PAGE>

from time to time. Booklets and summary plan descriptions describing benefits as
may from time to time exist shall be made available to Starbuck. Starbuck shall
be entitled to a paid vacation of four weeks per calendar year (excluding the
year 2000 for which no vacation will be available) during the term of this
Agreement. Unused vacation time shall not accrue from year to year but shall be
used, if at all, during the calendar year in which it was first available,
unless otherwise agreed to by the President of the Bank. The Bank may also
provide Starbuck with other benefits typically provided to senior officers of
community banks in its discretion.

     4.   Stock Options.
          -------------

The Bank intends to cause the Company to grant stock options to Starbuck similar
to those granted to officers of similar status at the Bank, subject to the terms
of the Company's 1986 Stock Option Plan and the availability of options
thereunder. This determination, as with stock options for all senior officers
shall be made by the Board of Directors of NewMil Bank in their discretion.

     5.   Termination.
          -----------

          a. For Cause. Starbuck may be terminated at any time for cause. In
             ---------
such event, the Bank shall have no further obligation to him under this
Agreement from the date of termination, other than payment of any compensation
due but not yet paid. Cause is defined for purposes of this Agreement as:

               (1) misconduct involving dishonesty, felonious conduct, breach of
     trust, or moral turpitude; (2) insubordination or material willful neglect
     in the performance of his duties; (3) material breach of the provisions of
     this Agreement; (4) his violation of applicable banking law having
     material, adverse consequences to the Bank or

                                       3.

<PAGE>

     Company; or (5) if the Bank's regulatory authorities obtain an order or
     assert other regulatory enforcement powers effecting Starbuck's removal as
     an officer of the Bank.

          b. Disability. The Bank may also terminate Starbuck if he is unable to
substantially and effectively perform his duties for more than six months
because of physical or mental disability. The Board of Directors is entitled to
rely on such medical or other credible information as is reasonably available to
it at the time in making such determination. Should Starbuck be terminated for
reasons of such physical or mental disability, he shall, subject to the
limitations on unused vacation time provided for in Paragraph 3 "Benefits"
above, be entitled to a lump sum payment for accrued but unused vacation time
and any compensation due but not yet paid, after payment of which the Bank shall
have no further obligation to him under this Agreement.

          c. Without Cause. The Bank may terminate Starbuck's employment other
than for cause or disability as defined in either Paragraph (a) or (b) above at
any time. It shall give him 30 days prior written notice, but shall not be
obligated to state a reason therefor, whereupon Starbuck shall receive, in full
satisfaction of any and all claims he may have against the Bank including, but
not limited to claims under this Agreement or under any Bank policy or program,
federal or state employment, discrimination or other statutes, the remainder of
the base salary which would be due to him for the balance of the employment term
(the "Deemed Term") and all other compensation due but not yet paid, and his
usual and customary medical (including vision) and dental insurance benefits for
a period of three months following notification of termination; and, in
addition, (but subject to the limitation on unused vacation time provided for in
Paragraph 3 "Benefits" above), Starbuck shall be entitled to lump sum payment
for any accrued but unused vacation time. The remainder of the base salary shall
be paid to him over the

                                       4.

<PAGE>

Deemed Term consistent with the Bank's then regular payroll practice. It is
expressly understood that the parties have discussed the payment of severance
pay in the event of termination without cause, but Starbuck has agreed that any
and all payments to him shall be limited as described herein.

          d. Termination due to Change of Control. Should a Change of Control
             ------------------------------------
occur during his term of employment, Starbuck will be entitled to an immediate
payment of any unpaid Bonus as described in Section 2 of this Agreement.

     For the purposes of this Agreement, "Change of Control" shall mean:

     (1) a merger, acquisition, consolidation, sale of assets or other
reorganization to which the Bank or the Holding Company is a party, as a
consequence of which members of the Bank's or the Holding Company's Board of
Directors in office immediately prior to such transaction constitute less than a
majority of the Board of Directors of the reorganized or successor institution
immediately thereafter;

     (2) a proxy contest to which the Holding Company is a party, as a
consequence of which members of the Holding Company's Board of Directors in
office immediately prior to such event constitute less than a majority of the
Board of Directors thereafter;

     (3) an event or events occurring after the date hereof as a result of which
any Person (as hereinafter defined) is or becomes the Beneficial Owner (as
hereinafter defined), directly or indirectly, of fifty percent (50%) or more of
the combined voting power of the Holding Company's then outstanding securities
without the prior approval of at least two-thirds of the members of the Holding
Company's Board of Directors in office immediately prior to such Person
attaining such percentage interest; or

                                       5.

<PAGE>

     (4) a merger, acquisition, consolidation, sale of assets or other
reorganization to which the Bank or the Holding Company is a party, unless in
any such case the shareholders of the Holding Company, in their capacities as
such and as a result of such transaction, shall own at least fifty percent (50%)
of the voting power of the outstanding capital stock of the Holding Company or
the survivor or successor thereto.

     A "Change of Control" shall be deemed not to have occurred if such event is
mandated or directed by a regulatory body having jurisdiction over the Bank's or
Holding Company's operations. "Person" shall have the meaning of such term as
used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Act"). "Beneficial Owner" shall have the definition of such term as defined in
Rule 13d-3 under the Act. The filing of a Form 13D or 13G by a Person shall not
in and of itself be deemed a Change of Control.

     6.   Noncompetition and Confidential Information.
          -------------------------------------------

     Starbuck agrees that during the term of employment, the Deemed Term (if
any), and, if later, for a period of six months following termination of his
employment with the Bank, he shall not either directly or indirectly as agent,
stockholder, employee, officer, director, trustee, partner, proprietor or
otherwise (except as a passive investor holding not more than 1% equity in
another entity) engage in, render advice or assistance to or be employed on a
compensation basis by any person, firm or entity which is in competition with
the Bank. This paragraph shall apply only where either: (1) the person, firm, or
entity is headquartered in New Milford or Danbury, Connecticut; or (2) the
person, firm, or entity is headquartered elsewhere but Starbuck maintains an
office in New Milford or Danbury, Connecticut. This paragraph shall not restrict
Starbuck from competing after termination of employment with the Bank if there
shall have been a

                                       6.

<PAGE>

Change of Control (as described in Paragraph 5(d) above) or if he is terminated
by the Bank without cause. Starbuck acknowledges that during the course of his
employment, he will have produced and had access to material, records, data,
trade secrets and information not generally available to the public
("confidential information") regarding the Bank and its customers. Starbuck
agrees to hold in confidence and not directly or indirectly disclose, use, copy
or make lists of any such confidential information. All records, files,
documents, and other materials or copies thereof relating to the Bank's business
and the business of any subsidiary thereof shall be and remain the sole property
of the Bank, shall not be removed from the Bank's premises except for bona fide
business purposes and shall be promptly returned to the Bank upon termination of
employment with the Bank.

     7.   Interpretation and Enforcement.
          -------------------------------

          a. This Agreement and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of
Connecticut.

          b. No waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provisions of this Agreement
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same time or any prior or subsequent time.

          c. This Agreement shall inure to the benefit of, and be binding upon,
the successors, personal representatives, heirs and assigns of Starbuck and the
Bank. Starbuck shall not be entitled to assign his duties under this Agreement.

     8.   Arbitration.
          -----------

     Except as hereinafter provided, any and all disputes involving the
interpretation or claimed breach of this Agreement shall be fully and finally
resolved in arbitration under the Commercial Arbitration Rules of the American
Arbitration Association. Any claim for

                                       7.

<PAGE>

arbitration shall be filed with the American Arbitration Association in
accordance with its Rules but no later than 180 days following the alleged
breach or 180 days following knowledge of the alleged dispute. The arbitration
hearing shall be conducted as promptly as the arbitrator determines reasonable
in the State of Connecticut.

     9.   Injunctive Relief.
          -----------------

     Notwithstanding Paragraph 8 above, the Bank may seek immediately injunctive
relief in a court of competent jurisdiction should it believe that Starbuck is
violating Paragraph 6 above regarding noncompetition or confidential
information. Arbitration shall be inapplicable to any such claim.

     10.  Regulatory Restrictions.
          -----------------------

     Notwithstanding any provision to the contrary in this Agreement, the Bank
shall not be required under this Agreement to continue Starbuck in his
position(s) at the Bank, or to make any payments to Starbuck, if the regulatory
authorities having jurisdiction over the Bank order Starbuck's removal from the
Bank, or if the Bank determines that any payment would constitute an illegal
"excess parachute" payment under 12 U.S.C. Section 1828(k), or an "unsafe or
unsound banking practice" pursuant to 12 U.S.C. Section 1818(b).

                                          NEWMIL BANK

Date:                                     By:
     -------------------                      ----------------------------
                                              Francis J. Wiatr, Chairman,
                                              President and CEO

Date:
     -------------------                      ----------------------------
                                              William D. Starbuck

                                       8.<PAGE>

                                                                    EXHIBIT 10.8

                                   NewMil Bank
                         Director Split Dollar Agreement

     This Director Split Dollar Agreement is entered into as of this 1st day of
January, 2002, by and between NewMil Bank, a Connecticut-chartered, FDIC-insured
savings bank with its main office in New Milford, Connecticut (the "Bank") and
(the "Director"). This Split Dollar Agreement shall append the Split Dollar
Endorsement entered into on even date herewith, or as subsequently amended, by
and between the aforementioned parties.

     To reward the Director for service to the Bank, the Bank is willing to
divide the death proceeds of a life insurance policy on the Director's life. The
Bank will pay life insurance premiums from its general assets.

                                    Article 1
                               General Definitions

     The following terms shall have the meanings specified:

     "Insured" means the Director

     "Insurer" means .

     "Policy" means insurance policy no.          issued by the Insurer.

     "Termination for Cause" means the Bank's board of directors or a duly
authorized committee of the board of directors determines at any time that the
Director will not be nominated by the board or committee for reelection as a
Director of the Bank or NewMil Bancorp after the expiration of his current term,
or if the Director is removed as a director of the Bank, in either case because
of the Director's B

          (1)  gross negligence or gross neglect of duties, or

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

          (3)  fraud, disloyalty, dishonesty, or willful violation of any law or
               significant policy of NewMil Bancorp committed in connection with
               the Director's service and resulting in an adverse effect on
               NewMil Bancorp or NewMil Bank, or

          (4)  removal from service or permanent prohibition from participation
               in the conduct of 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)].

     "Termination of Service" means the director ceasing to be a member for the
Bank's Board of Directors for any reason whatsoever.

                                    Article 2
                           Policy Ownership/interests

     2.1 Bank Ownership. The Bank is the sole owner of the Policy and shall have
the right to exercise all incidents of ownership. The Bank shall be the
beneficiary of any death proceeds remaining after the Director's interest has
been paid under Section 2.2 of this Split Dollar Agreement.

     2.2 Director's Interest. The Director shall have the right to designate the
beneficiary(ies) of death proceeds in the amount of $250,000. The Director shall
also have the right to elect and change settlement options specified in the
Policy that may be permitted. However, the Director, the Director's transferee
and the Director's beneficiary(ies) or estate shall have no rights or interests
in the Policy for that portion of the death proceeds designated in this Section
2.2 if Termination of Service of the Director shall have previously occurred as
a result of Termination for Cause under this Split Dollar Agreement.

<PAGE>

     2.3 Option to Purchase. The Bank shall not sell, surrender or transfer
ownership of the Policy while this Split Dollar Agreement is in effect without
first giving the Director or the Director's transferee a right of first refusal
to purchase the Policy for the Policy's interpolated terminal reserve value. The
right of first refusal to purchase the Policy must be exercised within 60 days
from the date the Bank gives written notice of the Bank's intention to sell,
surrender or transfer ownership of the Policy. This provision shall not impair
the right of the Bank to terminate this Split Dollar Agreement.

     2.4 Comparable Coverage. Upon execution of this Agreement, the Bank shall
maintain the Policy in full force and effect, and the Bank shall not amend,
terminate or otherwise abrogate the Director's interest in the Policy unless the
Bank (a) replaces the Policy with a comparable insurance policy to cover the
benefit provided under this Split Dollar Agreement and (b) executes a new Split
Dollar Agreement and Endorsement for the comparable insurance policy. The Policy
or any comparable policy shall be subject to the claims of the Bank's creditors.

                                    Article 3
                                    Premiums

     3.1 Premium Payment. The Bank shall pay any premiums due on the Policy.

     3.2 Imputed Income. The Bank shall impute income to the Director in an
amount equal to (a) the current term rate for the Director's age, multiplied by
(b) the net death benefit payable to the Director's beneficiary(ies). The
"current term rate" is the minimum amount required to be imputed under Revenue
Rulings 64-328 and 66-110, or any subsequent applicable authority.

                                    Article 4
                                   Assignment

     The Director may assign without consideration all interests in the Policy
and in this Split Dollar Agreement to any person, entity or trust. If the
Director transfers all of the Director's interest in the Policy, then all of the
Director's interest in the Policy and in the Split Dollar Agreement shall be
vested in the Director's transferee, who shall be substituted as a party
hereunder, and the Director shall have no further interest in the Policy or in
this Split Dollar Agreement.

                                    Article 5
                                     Insurer

     The Insurer shall be bound only by the terms of the Policy. Any payments
the Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and demands of all entities or persons. The
Insurer shall not be bound by or be deemed to have notice of the provisions of
this Split Dollar Agreement.

                                    Article 6
                                Claims Procedure

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

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

          6.1.2 Timing of Bank Response. The Bank shall respond to such claimant

                                       2

<PAGE>

     within 90 days after receiving the claim. If the Bank determines that
     special circumstances require additional time for processing the claim, the
     Bank can extend the response period by an additional 90 days by notifying
     the claimant in writing, prior to the end of the initial 90-day period,
     that an additional period is required. The notice of extension must set
     forth 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 such 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 Split
          Dollar 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 Split Dollar 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 B 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 B 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.

          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 such information was
     submitted or considered in the initial benefit determination.

          6.2.4 Timing of Bank Response. The Bank shall respond in writing to
     such 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 can extend the response period by an
     additional 60 days by notifying the claimant in writing, prior to the end
     of the initial 60-day period, that an additional period is required. The
     notice of extension must set forth 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 reasons for the denial,

                                       3

<PAGE>

               6.2.5.2 A reference to the specific provisions of the Split
          Dollar 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 Binding Effect. This Split Dollar Agreement shall bind the Director and
the Bank and their beneficiaries, survivors, executors, administrators and
transferees, and any Policy beneficiary.

     7.2 No Guarantee of Service. This Split Dollar Agreement is not an
agreement for services. It does not give the Director the right to remain a
director of the Bank, nor does it interfere with the right of the Bank's
shareholders not to re-elect the Director or the right of shareholders or the
Board to remove an individual as a director of the Bank. This Agreement also
does not require the Director to remain a director nor interfere with the
Director's right to terminate service at any time.

     7.3 Applicable Law. The Split Dollar Agreement and all rights hereunder
shall be governed by and construed according to the laws of the State of
Connecticut, except to the extent preempted by the laws of the United States of
America.

     7.4 Entire Agreement. This Split Dollar Agreement constitutes the entire
agreement between the Bank and the Director concerning the subject matter
hereof. No rights are granted to the Director under this Split Dollar Agreement
other than those specifically set forth herein.

     7.5 Administration. The Bank shall have powers which are necessary to
administer this Split Dollar Agreement, including but not limited to the power
to:

     (a)  interpret the provisions of the Split Dollar Agreement,

     (b)  establish and revise the method of accounting for the Split Dollar
          Agreement,

     (c)  maintain a record of benefit payments, and

     (d)  establish rules and prescribe forms necessary or desirable to
          administer the Split Dollar Agreement.

     7.6 Named Fiduciary. The Bank shall be the named fiduciary and plan
administrator under this Split Dollar Agreement. The Bank may delegate to others
certain aspects of management and operational responsibilities, including the
employment of advisors and the delegation of ministerial duties to qualified
individuals.

     7.7 Severability. If for any reason any provision of this Split Dollar
Agreement is held invalid, such invalidity shall not affect any other provision
of this Split Dollar 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 Split Dollar 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 Split Dollar Agreement shall, to the full
extent consistent with the law, continue in full force and effect.

                                       4

<PAGE>

     7.8 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 Split Dollar Agreement.

     7.9 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.

               (a)      If to the Bank, to:
                        Board of Directors
                        NewMil Bank
                        19 Main Street
                        P.O. Box 600
                        New Milford, Connecticut 06776-0600

               (b)      If to the Director, to:

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

     7.10 Amendment and Termination. This Split Dollar Agreement may be amended
or terminated only by a writing signed by the Bank and the Director. This Split
Dollar Agreement shall terminate automatically if Termination of Service of the
Director occurs as a result of Termination for Cause.

     In Witness Whereof, the Bank and the Director have signed this Split Dollar
Agreement as of the date and year first written above.

The Director:                                    the Bank:
                                                 Newmil Bank

                                                 By:

                                                 Its:

                                       5

<PAGE>

                         Split Dollar Policy Endorsement
                                   NewMil Bank
                         Director Split Dollar Agreement

Policy No.                                                             Insured:

     Supplementing and amending the application for insurance to West Coast Life
Insurance Company ("Insurer") on December 14, 2001 (the application date), the
applicant requests and directs that:

                                  Beneficiaries

     1. NewMil Bank, located in New Milford, Connecticut (the "Bank"), shall be
the beneficiary of any death proceeds remaining after the Insured's interest has
been paid under paragraph (2) below.

     2. The Insured or the Insured's transferee shall designate the
beneficiary(ies) of death proceeds in the amount of $250,000, subject to the
provisions of paragraph (5) below.

                                    Ownership

     3. The Owner of the Policy shall be the Bank. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.

     4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.

     5. Notwithstanding the provisions of paragraph (4) above, the Insured, the
Insured's transferee, or the Insured's beneficiary(ies) or estate shall have no
rights or interests in the Policy with respect to that portion of the death
proceeds designated in paragraph (2) of this endorsement if the Insured's
service with the Bank terminated because of Termination for Cause under the
Split Dollar Agreement.

               Modification of Assignment Provisions of the Policy

     6. Upon the death of the Insured, the interest of any collateral assignee
of the Owner of the Policy designated in (3) above shall be limited to the
portion of the proceeds described in paragraph (1) above.

                                Owner's Authority

     7. The Insurer is hereby authorized to recognize the Owner's claim to
rights hereunder without investigating the reason for any action taken by the
Owner, including the Owner's statement of the amount of premiums the Owner has
paid on the Policy. The signature of the Owner shall be sufficient for the
exercise of any rights under this Endorsement and the receipt of the Owner for
any sums received by it shall be a full discharge and release therefore to the
Insurer. The Insurer may rely on a sworn statement in form satisfactory to it
furnished by the Owner, its successors or assigns, as to their interest and any
payments made pursuant to such statement shall discharge the Bank accordingly.

     8. Any transferee's rights shall be subject to this Endorsement.

     9. The Owner accepts and agrees to this split dollar endorsement.

     10. The undersigned is signing in a representative capacity and warrants
that he or she has the authority to bind the entity on whose behalf this
document is being executed.

                                       6

<PAGE>

     Signed at New Milford, Connecticut, this             day of       , 2002.
                                                                ------

NewMil Bank

By:
     ------------------------------

Its:
     ------------------------------

     The Insured accepts and agrees to the foregoing and, subject to the rights
of the Owner as stated above, designates
                                                                             ,
----------------------------------------------------------------------------
(relationship:                                       ) as primary beneficiary(s)
              ---------------------------------------
and

-------------------------------------------------------------------------------
                             (relationship:
----------------------------

----------------------------------------------------------------------------
                   ) as secondary beneficiary of the portion of the proceeds
-------------------
described in (2) above.

Signed at New Milford, Connecticut, this                  day of         , 2002.
                                                                 --------
The Insured

                                       7

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