Document:

EXHIBIT 10.54
                    EXECUTIVE INCENTIVE RETIREMENT AGREEMENT

      THIS AGREEMENT is made this 22nd day of December, 2003, by and between The
First National Bank of Litchfield, a national bank, located in Litchfield,
Connecticut, (the "Company"), and Joelene E. Smith (the "Executive").

                                  INTRODUCTION

      To encourage the Executive to remain an employee of the Company, the
Company is willing to provide to the Executive a deferred incentive opportunity.
The Company will pay the benefits from its general assets.

                                    AGREEMENT

      The Executive and the Company agree as follows:

                                    Article 1
                                   Definitions

      1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:

            1.1.1 "Base Salary" means the total annual base salary payable to
      the Executive at the rate in effect on the date specified. Base Salary
      shall not be reduced for any salary reduction contributions: (i) to cash
      or deferred arrangements under Section 401(k) of the Code; (ii) to a
      cafeteria plan under Section 125 of the Code; or (iii) to a deferred
      compensation plan that is not qualified under Section 401(a) of the Code.

            1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.

            1.1.3 "Deferral Account" means the Company's accounting of the
      Executive's accumulated Deferrals plus accrued interest.

            1.1.4 "Disability" means the Executive's inability to perform
      substantially all normal duties of the Executive's position, as determined
      by the Company's Board of Directors in its sole discretion. As a condition
      to any benefits, the Company may require the Executive to submit to such
      physical or mental evaluations and tests as the Board of Directors deems
      appropriate.

            1.1.5 "Early Retirement Age" means the Executive's 55th birthday,
      provided he has completed at least 20 Years of Service.

            1.1.6 "Early Retirement Date" means the date that the Executive has
      terminated employment after attaining his 55th birthday but before his
      65th birthday provided he has completed at least 20 Years of Service.

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            1.1.7 "Earnings" means the Company's reported Net Income after
      taxes.

            1.1.8 "Effective Date" means the date first written above.

            1.1.9 "Election Form" means the Form attached as Exhibit 1.

            1.1.10 "Extraordinary Items" means those items recognized by
      Generally Accepted Accounting Principles as extraordinary that
      substantially affect shareholder equity and/or the Company's assets.
      Examples of such items are stock redemptions, mergers, acquisitions, stock
      splits and other items of that nature.

            1.1.11 "Return On Equity" means the Company's Earnings, adjusted for
      Extraordinary Items, divided by the Company's common stock equity at the
      end of the same fiscal year.

            1.1.12 "Normal Retirement Age" means the Executive's 65th birthday.

            1.1.13 "Normal Retirement Date" means the later of the Normal
      Retirement Age or Termination of Employment.

            1.1.14 "Plan Year" means the calendar year. The initial Plan Year
      shall be a short Plan Year commencing on the Effective Date and ending on
      December 31 of the same year.

            1.1.15 "Growth of Stock Rate" means the percentage change in the
      Company's fair market value common stock price ("Stock Price") over a one
      year period, measured on December 31 of each year, with a guaranteed
      minimum of 4% and a maximum of 15%, cumulatively.

            1.1.16 "Termination of Employment" means the Executive ceasing to be
      employed by the Company for any reason whatsoever, voluntary or
      involuntary, other than by reason of an approved leave of absence.

            1.1.17 "Years of Service" means the total number of twelve-month
      periods during which the Executive is employed on a full-time basis by the
      Company, inclusive of any approved leave of absence.

                                    Article 2
                                    Incentive

      2.1 Incentive Award. The three (3) year rolling average of and earnings
growth Return On Equity (the "ROE") determined as of December 31 of each plan
year shall determine the Executive's Incentive Award Percentage, in accordance
with the attached Schedule A. The chart on Schedule A is specifically subject to
change annually at the sole discretion of the Company's Board of Directors. The
Incentive Award is calculated annually by taking the Executive's Base Salary for
the Plan Year in which the ROE was calculated times the Incentive Award
Percentage.

      2.2 Incentive Deferral. On March 1 following each Plan Year, the Company
shall declare and pay the Incentive Award in the form of compensation and the
Executive shall defer such amount to the Deferral Account.

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<PAGE>

                                    Article 3
                                Deferral Account

      3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Executive, and shall credit to the Deferral Account
the following amounts:

            3.1.1 Deferrals. The Incentive Deferral as determined under Article
      2.

            3.1.2 Interest. On March 1 following each Plan Year and immediately
      prior to the payment of any benefits, interest on the account balance
      since the preceding credit under this Section 3.1.2, at an annual rate,
      compounded monthly, equal to the Growth of Stock Rate for the same period.

      3.2 Statement of Accounts. The Company shall provide to the Executive,
within one hundred twenty (120) days after each Plan Year, a statement setting
forth the Deferral Account balance.

      3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Executive is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Executive's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Executive's creditors.

      3.4 Hardship. If an unforeseeable financial emergency arising from the
death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.

                                    Article 4
                                Lifetime Benefits

      4.1 Normal Retirement Benefit. If the Executive terminates employment on
or after the Normal Retirement Age for reasons other than death, the Company
shall pay to the Executive the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.

            4.1.1 Amount of Benefit. The benefit under this Section 4.1 is the
      Deferral Account balance on the Executive's Normal Retirement Date.

            4.1.2 Payment of Benefit. The Company shall pay the benefit to the
      Executive commencing on the first day of the month following the
      Executive's Normal Retirement Date in the form elected by the Executive on
      the Election Form. If the Executive elects to receive payments in equal
      monthly installments, the Company shall continue to credit interest on the
      remaining account balance during any applicable installment period fixed
      at the rate in effect under Section 3.1.2 on the date of the Executive's
      Termination of Employment.

      4.2 Early Retirement Benefit. If the Executive terminates employment on or
after the Early Retirement Age and before the Normal Retirement Age, and for
reasons other than death or Disability, the Company shall pay to the Executive
the benefit described in this 4.2 in lieu of any other benefit under this
Agreement.

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            4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
      Deferral Account balance on the Executive's Early Retirement Date.

            4.2.2 Payment of Benefit. The Company shall pay the benefit to the
      Executive in the form and on the date elected by the Executive on the
      Election Form. If the Executive elects the Deferred Payment Option or to
      receive payments in equal monthly installments, the Company shall continue
      to credit interest on the remaining account balance during any applicable
      installment period fixed at the rate in effect under Section 3.1.2 on the
      date of the Executive's Termination of Employment.

      4.3 Early Termination Benefit. If the Executive terminates employment
before the Early Retirement Age or Normal Retirement Age for reasons other than
death or Disability, the Company shall pay to the Executive the benefit
described in this Section 4.3 in lieu of any other benefits under this
Agreement.

            4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
      vested portion of the Deferral Account balance on the Executive's
      Termination of Employment.

            4.3.2 Vesting of Awards. For purposes of this Section 4.3, Incentive
      Awards will vest 20% per year from the date the award was declared. The
      Interest credited to each Incentive Award will also vest 20% per year from
      the date the award was declared.

            4.3.3 Payment of Benefit. The Company shall pay the benefit to the
      Executive in a single lump sum within 60 days after Termination of
      Employment.

      4.4 Disability Benefit. If the Executive terminates employment for
Disability prior to the Early Retirement Age or Normal Retirement Age, the
Company shall pay to the Executive the benefit described in this Section 4.4 in
lieu of any other benefit under this Agreement.

            4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
      Deferral Account balance at Termination of Employment.

            4.4.2 Payment of Benefit. The Company shall pay the benefit to the
      Executive commencing on the first day of the month following the
      Executive's Termination of Employment in the form elected by the Executive
      on the Election Form. If the Executive elects to receive payments in equal
      monthly installments, the Company shall continue to credit interest on the
      remaining account balance during any applicable installment period fixed
      at the rate in effect under Section 3.1.2 on the date of the Executive's
      Termination of Employment.

      4.5 Hardship Distribution. Upon the Company's determination (following
petition by the Executive) that the Executive has suffered an unforeseeable
financial emergency as described in Section 3.4, the Company shall distribute to
the Executive all of the Deferral Account balance as determined by the Company.

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                                    Article 5
                                 Death Benefits

      5.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's beneficiary the
benefit described in this Section 5.1.

            5.1.1 Amount of Benefit. The benefit under Section 5.1 is the
      greater of the Deferral Account balance or the projected retirement
      benefit as per the attached Schedule B.

            5.1.2 Payment of Benefit. The Company shall pay the benefit to the
      beneficiary commencing on the first day of the month following the
      Executive's death in the form elected by the Executive on the Election
      Form. If the Executive elects payments in equal monthly installments, the
      Company shall continue to credit interest on the remaining account balance
      during any applicable installment period fixed at the rate in effect under
      Section 3.1.2 on the date of the Executive's Termination of Employment.

      5.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.

      5.3 Death After Termination of Employment But Before Benefit Payments
Commence. If the Executive is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Executive's beneficiary that the Executive was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Executive's death.

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<PAGE>

                                    Article 6
                                  Beneficiaries

      6.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new written designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. 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. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate in
a lump sum.

      6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.

                                    Article 7
                               General Limitations

      Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:

      7.1 Excess Parachute Payment. To the extent the benefit would create an
excise tax under the excess parachute rules of Section 280G of the Code.

      7.2 Termination for Cause. If the Company terminates the Executive's
employment for:

            7.2.1 Gross negligence or gross neglect of duties;

            7.2.2 Commission of a felony or of a gross misdemeanor involving
      moral turpitude; or

            7.2.3 Fraud, disloyalty, dishonesty or willful violation of any law
      or significant Company policy committed in connection with the Executive's
      employment and resulting in an adverse effect on the Company.

      7.3 Suicide. If the Executive commits suicide within two years after the
date of this Agreement, or if the Executive has made any material misstatement
of fact on any application for life insurance purchased by the Company.

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<PAGE>

                                    Article 8
                          Claims and Review Procedures

      8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against the Agreement (the "Claimant") in writing, within ninety
(90) days of Claimant's written application for benefits, of his or her
eligibility or noneligibility for benefits under the Agreement. If the Company
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the Claimant
to perfect his or her claim, and a description of why it is needed, and (4) an
explanation of the Agreement's claims review procedure and other appropriate
information as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Company determines that there are special circumstances
requiring additional time to make a decision, the Company shall notify the
Claimant of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to an additional ninety-day
period.

      8.2 Review Procedure. If the Claimant is determined by the Company not to
be eligible for benefits, or if the Claimant believes that he or she is entitled
to greater or different benefits, the Claimant shall have the opportunity to
have such claim reviewed by the Company by filing a petition for review with the
Company within sixty (60) days after receipt of the notice issued by the
Company. Said petition shall state the specific reasons which the Claimant
believes entitle him or her to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Company of the petition, the Company
shall afford the Claimant (and counsel, if any) an opportunity to present his or
her position to the Company orally or in writing, and the Claimant (or counsel)
shall have the right to review the pertinent documents. The Company shall notify
the Claimant of its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated to be
understood by the Claimant and the specific provisions of the Agreement on which
the decision is based. If, because of the need for a hearing, the sixty-day
period is not sufficient, the decision may be deferred for up to another
sixty-day period at the election of the Company, but notice of this deferral
shall be given to the Claimant.

                                    Article 9
                           Amendments and Termination

      This Agreement may be amended or terminated only by a written agreement
signed by the Company.

                                   Article 10
                                  Miscellaneous

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

      10.2 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 Company, nor does it interfere with the Company's right to
discharge the Executive. It also does not require the Executive to remain an
employee

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nor interfere with the Executive's right to terminate employment at any time.

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

      10.4 Reorganization. The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.

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

      10.6 Applicable Law. The Plan and all rights hereunder shall be governed
by and construed according to the laws of Connecticut, except to the extent
preempted by the laws of the United States of America.

      10.7 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company 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 Company to which the Executive and beneficiary have no preferred or
secured claim.

      10.8 Recovery of Estate Taxes. If the Executive's gross estate for federal
estate tax purposes includes any amount determined by reference to and on
account of this Agreement, and if the beneficiary is other than the Executive's
estate, then the Executive's estate shall be entitled to recover from the
beneficiary receiving such benefit under the terms of the Agreement, an amount
by which the total estate tax due by the Executive's estate, exceeds the total
estate tax which would have been payable if the value of such benefit had not
been included in the Executive's gross estate. If there is more than one person
receiving such benefit, the right of recovery shall be against each such person.
In the event the beneficiary has a liability hereunder, the beneficiary may
petition the Company for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.

      10.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Company 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.

      10.10 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:

            10.10.1 Interpreting the provisions of the Agreement;

            10.10.2 Establishing and revising the method of accounting for the
                    Agreement;

            10.10.3 Maintaining a record of benefit payments; and

            10.10.4 Establishing rules and prescribing any forms necessary or
                    desirable to administer the Agreement.

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<PAGE>

      10.11 Designated Fiduciary. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company shall be the named fiduciary
and plan administrator under the Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the
plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals.

      IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement.

EXECUTIVE:                              COMPANY:
The First National Bank of Litchfield

Signed: Joelene E. Smith                By    Joseph J. Greco
JOELENE E. SMITH
                                        Title CEO & President.

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                                  EXHIBIT 1 TO
                    EXECUTIVE INCENTIVE RETIREMENT AGREEMENT

                           Normal Retirement Benefits

I elect to receive my Normal Retirement Benefits under Section 4.1.2 of the
Agreement in the following form:

[Initial One]

____ Lump sum

____ Equal monthly installments for 180 months.

                            Early Retirement Benefits

I elect to receive my Early Retirement Benefits under Section 4.2.2 of the
Agreement in the following form:

[Initial One]

____ Lump sum, payable on the first day of the month following my Early
     Retirement Date.

____ Deferred Lump sum, payable on _______________________.

____ Equal monthly installments for 180 months commencing on the first day of
     the month following my Early Retirement Date.

____ Deferred Equal monthly installments for 180 months commencing on
      _______________________.

                               Disability Benefits

I elect to receive my Disability Benefits under Section 4.4.2 of the Agreement
in the following form:

[Initial One]

____ Lump sum

____ Equal monthly installments for 180 months.

                                 Death Benefits

I elect to have my Death Benefit paid under Section 5.1.2 of the Agreement in
the following form:

[Initial One]

____ Lump sum

____ Equal monthly installments for 180 months.

Signature ___________________________________

Date ____________________________

Accepted by the Company this _______ day of ________________, 2003.

By     Joseph J. Greco.
   -------------------------------
Title  President & CEO.

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                             BENEFICIARY DESIGNATION

                      The First National Bank of Litchfield
                    EXECUTIVE INCENTIVE RETIREMENT AGREEMENT

I designate the following as beneficiary of any death benefits under the
Executive Incentive Retirement Agreement:

Primary: _______________________________________________________________________

--------------------------------------------------------------------------------

Contingent: ____________________________________________________________________

--------------------------------------------------------------------------------

Note: To name a trust as beneficiary, please provide the name of the trustee(s)
      and the exact name and date of the trust agreement.

I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.

Signature ______________________________

Date ___________________________________

Accepted by the Company this ______ day of _________________, 2003.

By     Joseph J. Greco.
   -------------------------------------
Title  President & CEO.

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                                   Schedule A

                      Deferred Bonus as a % of Annual Fees

                              -------------------------------------------------
              14.0%           11.0     12.1     13.1     14.1     15.1     16.1
                              -------------------------------------------------
Earnings      13.0%           10.3     11.3     12.2     13.1     14.1     15.0
                              -------------------------------------------------
Growth        12.0%            9.6     10.5     11.4     12.2     13.1     14.0
                              -------------------------------------------------
Earnings      11.0%            8.9      9.7     10.5     11.3     12.1     13.0
G
                              -------------------------------------------------
Growth        10.0%            8.2      8.8      9.7     10.4     11.2     11.9
                              -------------------------------------------------
               9.0%            7.5      8.1      8.8      9.5     10.2     10.9
                              -------------------------------------------------
               8.0%            6.8      7.5      8.0      8.6      9.2      9.8
                              -------------------------------------------------
               7.0%            6.1      6.5      7.2      7.7      8.3      8.8
                              -------------------------------------------------
               6.0%            5.3      5.9      6.3      6.8      7.3      7.8
                              -------------------------------------------------
               5.0%            4.6      5.0      5.5      5.9      6.3      6.7
                              -------------------------------------------------
                              11.0%    12.0%    13.0%    14.0%    15.0%    16.0%

                                Return on Equity

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                                                      Schedule B

                 ---------------------------------------------------
                                                   Projected Account
                 Name                          Balance at Retirement
                 ---------------------------------------------------
                 Joseph J. Greco
                 ---------------------------------------------------
                 Carroll A. Pereira
                 ---------------------------------------------------
                 John Newton
                 ---------------------------------------------------
                 Revere Ferris
                 ---------------------------------------------------
                 Philip Samponaro
                 ---------------------------------------------------
                 Joelene E. Smith                            480,136
                 ---------------------------------------------------

                                       51EXHIBIT 10.55

                           EARLY RETIREMENT AGREEMENT

      This Early Retirement Agreement (hereinafter "Agreement"), is made by and
between PHILIP G. SAMPONARO (hereinafter "Mr. Samponaro") and the FIRST NATIONAL
BANK OF LITCHFIELD, in light of the following circumstances:

      WHEREAS Mr. Samponaro is employed by the First National Bank of Litchfield
as its Senior Vice President, and serves as Secretary of its parent company,
First Litchfield Financial Corporation and has loyally served the First National
Bank of Litchfield as an officer for more than 28 years and has served as an
officer of First Litchfield Financial Corporation since its inception;

      WHEREAS the First National Bank of Litchfield and First Litchfield
Financial Corporation are deeply appreciative of his many years of valuable
service; and

      WHEREAS, to facilitate his desire for early retirement, Mr. Samponaro and
the Bank now wish to establish the terms of such early retirement and resolve on
an amicable basis any and all issues related to his employment at the First
National Bank of Litchfield, its parent and the subsidiaries of either entity or
his separation from such employment;

      NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, Mr. Samponaro and the Bank, each acting of their own free
will, hereby agree as follows:

      1. Mr. Samponaro hereby retires and resigns any position he may hold as an
officer, director or employee of the Bank, First Litchfield Financial
Corporation and the subsidiaries of such entities (collectively, the "Bank"),
effective March 31, 2004, and further agrees to announce such retirement not
later than the expiration of the seven (7) day period referred to in Section 12
below. Effective April 1, 2004, Mr. Samponaro shall be eligible to receive
pension benefits in accordance with the provisions of the retirement plans and
programs maintained by the Bank in which he has been participating. Mr.
Samponaro shall be entitled to the vested benefits of the Bank's Long-term
Incentive Plan as set forth in the Executive Incentive Retirement Agreement
(termination without cause), including vesting of any benefits that accrue prior
to his separation date. As of this date, such vested benefits total $37,401.43.
The benefit will be paid in a lump sum by June 30, 2004.

      2. The Bank agrees to pay Mr. Samponaro a special severance benefit equal
to his regular weekly salary during the period from April 1, 2004 through June
30, 2004, subject to the standard deductions required by law or authorized by
Mr. Samponaro.

      3. The Bank agrees to allow Mr. Samponaro to remain on its group health
insurance plan and to provide him individual coverage under such plan at the
same cost he would have paid if he had remained actively employed. Mr. Samponaro
shall remain eligible for such coverage during the period specified by COBRA,
and thereafter to age 65 if permitted by the carrier.

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<PAGE>

      4. With the exception of the retirement benefits described in Section 1 of
this Agreement, and the payments and benefits described in Sections 2 and 3 of
this Agreement, Mr. Samponaro expressly acknowledges that he is not entitled to
any payments, benefits or compensation, in any form for any reason, from the
Bank.

      5. Mr. Samponaro shall execute the Release attached as Exhibit A to this
Agreement.

      6. Mr. Samponaro and the Bank shall cooperate in the orderly transfer of
Mr. Samponaro's professional responsibilities, business files and personal
possessions, so that his duties and responsibilities are completed or passed on
to other Bank personnel by March 31, 2004.

      7. (a) The Bank and Mr. Samponaro agree that (except as required by law)
they will not publish, publicize or disseminate, or cause to be published,
publicized or disseminated, in any manner, the terms or contents of this
Agreement to any third person, including, but not limited to any current or
former Bank employee, except their respective attorney(s), tax preparer(s), or
as may be required to effectuate the terms of this Agreement or comply with
legal or regulatory requirements.

            (b) The Bank and Mr. Samponaro further agree that they will not make
any negative statements concerning or referring to the other at any time, oral
or written, to any person or entity.

            (c) Should the Bank receive any inquiries from third parties
regarding Mr. Samponaro's employment with the Bank, the Bank will limit its
responses to all such inquiries to Mr. Samponaro's dates of employment, title or
position and wage or salary, unless Mr. Samponaro has provided the party or
parties making inquiry with an express written authorization to provide further
information, consistent with C.G.S. ss. 31-128a, et seq. Members of the Bank
community who make inquiries shall be informed that Mr. Samponaro has left the
Bank's employ after many years of valuable service to devote more time to his
other interests and activities, including his family and travel. Nothing herein
shall be construed to prevent Mr. Samponaro from requesting, or individual
members of the faculty of the Bank from providing, personal letters of reference
to other third parties, provided the Bank shall not be held responsible for the
contents of any such references.

      8. The Bank and Mr. Samponaro expressly acknowledge that they will not
make any claim or demand, and each of them hereby waives any rights any of them
may now have or may hereafter have or claim to have, based upon any alleged oral
alteration, amendment, modification or any other alleged change in this
Agreement; that the validity, effect and operation of this Agreement shall be
determined by the laws of the State of Connecticut; and that there is no written
or oral understanding or agreement between them that is not recited herein.

      9. Except as provided otherwise in this Agreement, if any of the
provisions, terms or clauses of this Agreement are declared illegal,
unenforceable or ineffective in a legal forum or by operation of law, those
provisions, terms and clauses shall be deemed severable, such that all other
provisions, terms and clauses of this Agreement shall remain valid and binding
upon both parties, except that the Bank's

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<PAGE>

obligation to provide the benefits and make the payments specified in Sections 2
and 3 of this agreement is conditioned upon the validity and enforceability of
the release referenced in paragraph 5 of this Agreement in its entirety.

      10. Mr. Samponaro affirmatively states that he has had an opportunity to
consult with competent counsel before executing this Agreement and the Exhibit
hereto; that he has a full understanding of the contents of this Agreement and
the Exhibit hereto and the effects thereof; that with specific reference to his
release of any and all claims under the Age Discrimination in Employment Act, 29
U.S.C. ss.ss.621 et. seq. he was afforded up to twenty-one (21) days to consider
this Agreement; and that if he signs this Agreement and the Exhibit hereto prior
to the expiration of such twenty-one (21) days, he does so voluntarily and of
his own free will.

      11. (a) Should either party commence or prosecute any action or proceeding
contrary to the provisions of this Agreement, such party agrees to indemnify the
other party for all costs, including court costs and reasonable attorneys' fees,
incurred by the other party in the defense of such action or in establishing or
maintaining the application or validity of this Agreement or the provisions
thereof, to the extent allowed by applicable law.

            (b) Except as otherwise prohibited by any applicable state, federal
or local law, the Bank agrees to indemnify Mr. Samponaro for all costs,
including court costs and reasonable attorneys' fees incurred by Mr. Samponaro
in the defense of any action against him arising out of acts or omissions
undertaken by Mr. Samponaro in good faith and in the exercise of reasonable
business judgment in his capacity as an officer of the Bank up to his separation
date as determined under Section 1(b) above. Additionally, for a period of two
(2) years from the retirement date, the Bank shall afford Mr. Samponaro the same
indemnification rights and the same insurance coverage, if any, that the Bank
provides to its other officers and directors during such period.

      12. This Agreement shall not become effective or enforceable until seven
(7) days following its execution by Mr. Samponaro. Prior to the end of this
seven (7) day period, Mr. Samponaro may revoke his assent to this Agreement by
written notice to Joseph Greco, President and CEO of First National Bank of
Litchfield.

      13. (a) Mr. Samponaro recognized and agrees that in the course of his
employment with the Bank, he had been exposed to confidential information
concerning the Bank including, but not limited to, existing and contemplated
products, trade secrets, formulas, compilations, business and financial methods
or practices, strategic plans, pricing, marketing, merchandising and selling
techniques and information, customer lists, supplier lists and confidential
information relating to policies and/or business strategies (hereinafter
referred to as "Confidential Information"). Mr. Samponaro agrees that all such
Confidential Information is and shall forever remain the sole property of the
Bank. Mr. Samponaro shall keep all such Confidential Information strictly
confidential, and he shall not disclose to any third party in any manner,

                                       54
<PAGE>

either directly or indirectly, any of such Confidential Information at any time
for any purpose. Further, Mr. Samponaro shall not use in any manner, either
directly or indirectly, any of such Confidential Information for his own benefit
or for the benefit of any third party, or for any other purpose at any time.

            (b) Mr. Samponaro acknowledges and agrees that, for a twelve (12)
month period (the "Non-compete Period") following his separation date as
determined by Section 1(b) above, without the prior written consent of the Bank,
Mr. Samponaro may not directly or indirectly be employed by or provide services
of any kind to any other bank that maintains one or more offices in Litchfield
County, Connecticut. Furthermore, during the Non-compete Period, Mr. Samponaro
acknowledges and agrees that he will not directly or indirectly solicit or
recruit any of the Bank's employees to leave employment with the Bank. Mr.
Samponaro also acknowledges and agrees that during the Non-compete Period, he
will not directly or indirectly solicit or service any client or customer or
prospective client or customer of the Bank to become a client or customer of any
other bank that maintains one or more offices in Litchfield County, Connecticut.
The parties acknowledge and agree that Section 13(b) shall be the only
non-competition and non-solicitation provision applicable to Mr. Samponaro and
any such other prior provisions are superseded and replace by this Section.

            (c) Mr. Samponaro understands and agrees that violation by him of
any portion of this Section 13 may cause the Bank to suffer immediate,
substantial and irreparable injury, and will be a sufficient basis to award
injunctive relief and monetary damages to the Bank without affecting the
remainder of this Agreement.

      14. The Bank and Mr. Samponaro expressly acknowledge that they will not
make any claim or demand and each of them hereby waives any rights any of them
may now have or may hereafter have or claim to have, based upon any alleged oral
alteration, amendment, modification or any other alleged change in this
Agreement; that the validity, effect and operation of this Agreement shall be
determined by the laws of the State of Connecticut; and that there is no oral
understanding or agreement between them that is not recited herein.

      15. The Change in Control Agreement between Mr. Samponaro and the Bank
shall expire effective [June 30, 2004]. This section shall be deemed to be an
amendment pursuant to the provisions of such Change in Control Agreement.

                                       55

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