Document:

<PAGE>

                                                                    EXHIBIT 10.1

                              NEW MIL BANCORP, INC.

                                       and

                     AMERICAN STOCK TRANSFER & TRUST COMPANY

                                 as Rights Agent

                                RIGHTS AGREEMENT

                            Dated as of July 19, 1994

<PAGE>

                                      INDEX

Page

Section  1.       Certain Definitions

Section  2.       Appointment of Rights Agent

Section  3.       Issue of Right Certificates

Section  4.       Form of Right Certificates

Section  5.       Countersignature and registration

Section  6.       Transfer, Split Up, Combination and Exchange of Right
                  Certificates; Mutilated, Destroyed, Lost or Stolen Right
                  Certificates

Section  7.       Exercise of Rights; Purchase Price; Expiration Date of Rights

Section  8.       Cancellation and Destruction of Right Certificates

Section  9.       Reservation and Availability of Capital Stock

Section 10.       Common Stock Record Date

Section 11.       Adjustment of Purchase Price, Number and Kind of Shares or
                  Number of Rights

Section 12.       Certificate of Adjusted Purchase Price or Number of Shares

Section 13.       Consolidation, Merger or Sale or Transfer of Assets or
                  Earning Power

Section 14.       Fractional Rights and Fractional Shares

Section 15.       Rights of Action

Section 16.       Agreement of Right Holders

Section 17.       Right Certificate Holder Not Deemed a Stockholder

Section 18.       Concerning the Rights Agent

Section 19.       Merger or Consolidation or Change of Name of Rights Agent

                                      -i-

<PAGE>

Section 20.       Duties of Rights Agent

Section 21.       Change of Rights Agent

Section 22.       Issuance of New Right Certificates

Section 23.       Redemption

Section 24.       Notice of Proposed Actions

Section 25.       Notices

Section 26.       Supplements and Amendments

Section 27.       Successors

Section 28.       Determinations and Actions by the Board of Directors, etc

Section 29.       Benefits of This Agreement

Section 30.       Severability

Section 31.       Governing Law

Section 32.       Counterparts

Section 33.       Descriptive Headings

Testimonium and Signatures

Exhibit A    -    Form of Right Certificate
Exhibit B    -    Summary of Rights to Purchase Common Shares

                                      -ii-

<PAGE>

                                                                   DRAFT
                                                                   July 14, 1994

                                RIGHTS AGREEMENT
                                ----------------

     This Rights Agreement dated as of July 19, 1994, between NEW MIL BANCORP,
INC., a Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Rights Agent (the "Rights Agent"),

                              W I T N E S S E T H:
                               -------------------

     WHEREAS, on July 19, 1994 the Board of Directors of the Company authorized
and declared a dividend distribution of one Right (hereafter referred to as a
"Right") for each five outstanding shares of the Common Stock, par value $.50
per share, of the Company (the "Common Stock") outstanding at the close of
business on July 19, 1994 (hereinafter referred to as the "Record Date") (other
than shares of such Common Stock held in the Company's treasury on such date)
and has authorized the issuance of one Right (as such number may hereafter be
adjusted pursuant to the provisions of Section 11(p) hereof) in respect of each
five shares of Common Stock of the Company that shall become outstanding after
the Record Date (whether originally issued or delivered from the Company's
treasury) and on or prior to the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined), each Right representing
the right to purchase one share of the Company's Common Stock upon the terms and
subject to the conditions hereinafter set forth (the "Rights");

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the
                -------------------
following terms have the meanings indicated;

          (a) "Acquiring Person" shall mean any Person (as hereinafter defined)
     who or which, together with all Affiliates (as hereinafter defined) and
     Associates (as hereinafter defined) of such Person, shall be the Beneficial
     Owner (as hereinafter defined) of 10% or more of the shares of Common Stock
     then outstanding, but shall not include the Company, any Subsidiary (as
     hereinafter defined) of the Company, any employee benefit plan of the
     Company or any

                                      -1-

<PAGE>

     Subsidiary of the Company, or any entity (including its Affiliates)
     organized, appointed or established for or pursuant to the terms of any
     such plan acting solely in its capacity (or their capacities) under such
     plan. Notwithstanding the foregoing, no Person shall become an "Acquiring
     Person" solely as the result of an acquisition of Common Stock by the
     Company which, by reducing the number of shares outstanding, increases the
     proportionate number of shares beneficially owned by such Person to 10% or
     more of the shares of Common Stock then outstanding; provided however, that
                                                          ----------------
     if a Person becomes the Beneficial Owner of 10% or more of the shares of
     Common Stock then outstanding by reason of share acquisitions by the
     Company and shall, after such acquisitions, become the Beneficial Owner of
     any additional shares of Common Stock, then such Person shall be deemed to
     be an "Acquiring Person."

          (b) "Affiliate", "Associate" and "Control" shall have the respective
     meanings ascribed to such terms in Rule 12b-2 of the General Rules and
     Regulations under the Securities Exchange Act of 1934, as amended (the
     "Exchange Act"), as in effect on the date hereof.

          (c) A Person shall be deemed the "Beneficial Owner" of, and shall be
     deemed to "beneficially own", any securities:

               (i) which such Person or any of such Person's Affiliates or
          Associates, directly or indirectly, beneficially owns (as determined
          pursuant to Rule 13d-3 of the General Rules and Regulations under the
          Exchange Act as in effect on the date of this Agreement) or has the
          right to dispose of;

               (ii) which such Person or any of such Person's Affiliates or
          Associates, directly or indirectly, has (A) the right to acquire
          (whether such right is exercisable immediately or only after the
          passage of time) pursuant to any agreement, arrangement or
          understanding (whether or not in writing), or upon the exercise of
          conversion rights, exchange rights, rights (other than the Rights),
          warrants or options, or otherwise; provided, however, that a Person
                                             -----------------
          shall not be deemed the "Beneficial Owner" of or to "beneficially own"
          securities tendered pursuant to a tender or exchange offer made by or
          on behalf of such Person or any of such Person's Affiliates or
          Associates until such tendered securities are accepted for payment or
          exchange; or (B) the right to vote,

                                      -2-

<PAGE>

          including pursuant to any agreement, arrangement or understanding
          (whether or not in writing); provided, however, that a Person shall
                                       -----------------
          not be deemed the "Beneficial Owner" of or to "beneficially own" any
          security under this clause (B) as a result of an agreement,
          arrangement or understanding to vote such security if such agreement,
          arrangement or understanding (1) arises solely from a revocable proxy
          given in response to a public proxy solicitation made pursuant to, and
          in accordance with, the applicable rules and regulations under the
          Exchange Act and (2) is not also then reportable by such Person on
          Schedule 13D under the Exchange Act (or any comparable or successor
          report); or

               (iii) which are beneficially owned, directly or indirectly, by
          any other Person (or any Affiliate or Associate thereof) with which
          such Person or any of such Person's Affiliates or Associates has any
          agreement, arrangement or understanding (whether or not in writing)
          for the purpose of acquiring, holding, voting (except pursuant to a
          revocable proxy as described in clause (B) of subparagraph (ii) of
          this paragraph (c)) or disposing of any voting securities of the
          Company.

          (d) "Business Day" shall mean any day other than a Saturday, Sunday,
     or a day on which banking institutions in the State of Connecticut are
     authorized or obligated by law or executive order to close.

          (e) "Close of business" on any given date shall mean 5:00 P.M.,
     Eastern time, on such date; provided, however, that if such date is not a
                                 -----------------
     Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
     Business Day.

          (f) "Common Stock" shall mean the Common Stock, par value $.50 per
     share, of the Company, except that "Common Stock" when used with reference
     to any Person other than the Company shall mean the capital stock of such
     Person with the greatest voting power, or the equity securities or other
     equity interest having power to control or direct the management, of such
     Person.

          (g) "Common Stock Equivalent" shall mean a share, or depositary
     receipt exchangeable for a fraction of a share, of any authorized class or
     series of preferred stock of the Company having dividend, voting,
     liquidation and other rights which result, in the judgment of the Board of
     Directors, in

                                      -3-

<PAGE>

     such share, or depositary receipt, being approximately equivalent in value
     to one share of Common Stock as of the date of occurrence of a Section II
     (a) (ii) Event (as such term is hereinafter defined) (the "Event Date");
     provided, however, that, if there is no authorized class or series of
     -----------------
     preferred stock of the Company or if in the judgment of the Board of
     Directors there are not sufficient authorized but unissued shares of
     preferred stock available for the creation of Common Stock Equivalents,
     "Common Stock Equivalent" shall mean such cash, reduction in Purchase Price
     (as such term is hereinafter defined), other equity securities, debt
     securities, other assets or any combination of the foregoing, that the
     Board of Directors shall determine to be approximately equivalent in value
     to one share of Common Stock as of the Event Date.

          (h) "Continuing Director" shall mean (i) any member of the Board of
     Directors of the Company, while such Person is a member of the Board, who
     is not an Acquiring Person or an Affiliate or Associate of an Acquiring
     Person or a representative or nominee of an Acquiring Person or of any such
     Affiliate or Associate and was a member of the Board prior to the time any
     Person becomes an Acquiring Person, and (ii) any Person who subsequently
     becomes a member of the Board, while such Person is a member of the Board,
     who is not an Acquiring Person or an Affiliate or Associate of an Acquiring
     Person or a representative or nominee of an Acquiring Person or of any such
     Affiliate or Associate, if such Person's nomination for election or
     election to the Board is recommended or approved by a majority of the
     Continuing Directors.

          (i) "Distribution Date" shall have the meaning defined in Section 3
     hereof.

          (j) "Exchange" and "Exchange Ratio" shall have the respective meanings
     defined in Section 25 hereof.

          (k) "Exchange Date" shall have the meaning defined in Section 7(a)
     hereof.

          (l) "Person" shall mean any individual, firm, limited liability
     company, corporation, partnership or other entity.

          (m) "Purchase Price" shall have the meaning defined in Section 4
     hereof.

                                      -4-

<PAGE>

          (n) "Section 11(a) (ii) Event" shall mean the event described in
     Section 11(a) (ii).

          (o) "Stock Acquisition Date" shall mean the first date of public
     announcement (which, for purposes of this definition, shall include,
     without limitation, the filing of a report pursuant to Section 13(d) under
     the Exchange Act or pursuant to a comparable successor statute) by the
     Company or an Acquiring Person indicating that an Acquiring Person has
     become such.

          (p) "Subsidiary" of any Person shall mean any other Person of which
     securities or other ownership interests having ordinary voting power, in
     the absence of contingencies, to elect a majority of the board of directors
     or other Persons performing similar functions as a board of directors are
     at the time directly or indirectly owned by such first Person, or which is
     otherwise controlled by such first Person.

          (q) "Trading Day" shall have the meaning defined in Section 11(d)
     hereof.

          (r) "Triggering Event" shall mean any Section 11(a) (ii) Event or any
     event described in Section 13(a)(i), (ii) or (iii) hereof.

     Section 2. Appointment of Rights Agent. The Company hereby appoints the
                ---------------------------
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more Co-Rights Agents, the
respective duties of the Rights Agent and any Co-Rights Agents shall be as the
Company shall determine.

     Section 3. Issue of Right Certificates.
                ---------------------------

          (a) Until the earliest of (i) the close of business on the tenth day
     after the Stock Acquisition Date (or, if the tenth business day after the
     Stock Acquisition Date occurs before the Record Date, the close of business
     on the Record Date); or (ii) the close of business on the tenth Business
     Day after the date of the commencement of a tender or exchange

                                      -5-

<PAGE>

     offer by any Person if, upon consummation thereof, such Person would be an
     Acquiring Person (including any such date which is after the date of this
     Agreement and prior to the issuance of the Rights; or (iii) the tenth day
     (or such later day as may be determined by action of the Board of Directors
     of the Company prior to such time as any person becomes an Acquiring
     Person) after the filing by any Person (other than the Company) of a
     registration statement under the Securities Act of 1933, as amended, with
     respect to a contemplated exchange offer to acquire (when added to any
     shares as to which such person is the beneficial owner immediately prior to
     such filing) beneficial ownership of 10% or more of the issued and
     outstanding shares of Common Stock; the earliest of such dates being herein
     referred to as the "Distribution Date"), (x) the Rights will be evidenced
     (subject to the provisions of paragraph (b) of this Section 3) by the
     certificates for the Common Stock registered in the names of the holders of
     the Common Stock (which certificates for Common Stock shall be deemed also
     to be Right Certificates) and not by separate Right Certificates, and (y)
     the Rights will be transferable only in connection with the transfer of the
     underlying shares of Common Stock. As soon as practicable after the Company
     has notified the Rights Agent of the occurrence of the Distribution Date,
     the Rights Agent will send, by first-class, insured, postage prepaid mail,
     to each record holder of the Common Stock as of the close of business on
     the Distribution Date, at the address of such holder shown on the records
     of the Company, one or more right certificates, in substantially the form
     of Exhibit A hereto (the "Right Certificates"), evidencing one Right for
     each five full shares of Common Stock so held, subject to adjustment as
     provided herein. In the event that an adjustment in the number of Rights
     per share of Common Stock has been made pursuant to Section 11(p) hereof,
     at the time of distribution of the Right Certificates, the Company shall
     make the necessary and appropriate rounding adjustments (in accordance with
     Section 14(a) hereof) so that the Right Certificates representing only
     whole numbers of Rights are distributed and cash is paid in lieu of any
     fractional Rights. As of and after the Distribution Date, the Rights will
     be evidenced solely by such Right Certificates.

          (b) As soon as practicable after the Record Date, the Company will
     send a copy of a Summary of Rights to Purchase Common Stock, in
     substantially the form of Exhibit B hereto (the "Summary of Rights"), by
     first-class, postage prepaid mail, to each record holder of the Common
     Stock as of the close of business on the Record Date at the address of such

                                      -6-

<PAGE>

     holder shown on the records of the Company. With respect to certificates
     for the Common Stock outstanding as of the Record Date, until the
     Distribution Date (or the earlier redemption, exchange or expiration of the
     Rights), the Rights will be evidenced by such certificates for the Common
     Stock registered in the names of the holders of the Common Stock together
     with a copy of the Summary of Rights, and the registered holders of the
     Common Stock shall also be registered holders of the associated Rights.
     Until the Distribution Date (or the earlier redemption, exchange or
     expiration of the Rights), the transfer of any of the certificates for the
     Common Stock outstanding as of the Record Date with or without a copy of
     the Summary of Rights attached thereto, shall also constitute the transfer
     of the Rights associated with the Common Stock represented by such
     certificates.

          (c) Rights shall be issued in respect of all shares of Common Stock
     which become outstanding after the Record Date but on or prior to the
     Distribution Date (or the earlier redemption, exchange or expiration of the
     Rights). Certificates representative of such shares of Common Stock shall
     be deemed also to be certificates for Rights and shall have impressed on,
     printed on, written on or otherwise affixed to them the following legend:

          This certificate also evidences and entitles the holder hereof to
          certain Rights as set forth in a Rights Agreement between New Mil
          Bancorp, Inc. and American Stock Transfer & Trust Company dated as of
          July 19, 1994 (the "Rights Agreement"), the terms of which are hereby
          incorporated herein by reference and a copy of which is on file at the
          principal executive offices of the Company. Under certain
          circumstances, as set forth in the Rights Agreement, such Rights will
          be evidenced by separate certificates and will no longer be evidenced
          by this certificate. The Company will mail to the holder of this
          certificate a copy of the Rights Agreement without charge promptly
          after receipt of a written request therefor. As described in the
          Rights Agreement, Rights beneficially owned by (i) an Acquiring Person
          or any Associate or Affiliate thereof (as such terms are defined in
          the Rights Agreement), (ii) a transferee of an Acquiring Person (or of
          any such Affiliate) who becomes a transferee after the Acquiring
          Person becomes such is designated as such or (iii) under certain
          circumstances, a transferee of an Acquiring Person (or of any such
          Affiliate) who becomes a transferee before or concurrently with the
          Acquiring Person becoming such,

                                      -7-

<PAGE>

          shall become null and void.

     With respect to such certificates containing the foregoing legend, until
the Distribution Date (or the earlier redemption, exchange or expiration of the
Rights) the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the transfer of
any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.

     Section 4. Form of Right Certificates. The Right Certificates (and the
                --------------------------
forms of election to purchase and of assignment and the certificates to be
printed on the reverse thereof) shall be substantially in the form of Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law, rule or regulation or
with any rule or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Right Certificates, whenever distributed,
shall be dated as of the Record Date and on their face shall entitle the holders
thereof to purchase such number of shares of Common Stock as shall be set forth
therein at the price set forth therein (such exercise price per share, the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.

                                      -8-

<PAGE>

     Section 5. Countersignature and Registration.
                ---------------------------------

          (a) The Right Certificates shall be executed on behalf of the Company
     by its Chairman of the Board, its President or any Vice President, either
     manually or by facsimile signature, and shall have affixed thereto the
     Company's seal or a facsimile thereof which shall be attested by the
     Secretary or an Assistant Secretary of the Company, either manually or by
     facsimile signature. The Right Certificates shall be manually countersigned
     by the Rights Agent and shall not be valid for any purpose unless so
     countersigned. In case any officer of the Company whose manual or facsimile
     signature is affixed to the Right Certificates shall cease to be such
     officer of the Company before countersignature by the Rights Agent and
     issuance and delivery by the Company, such Right Certificates,
     nevertheless, may be countersigned by the Rights Agent, issued and
     delivered with the same force and effect as though the Person who signed
     such Right Certificates had not ceased to be such officer of the Company.
     Any Right Certificate may be signed on behalf of the Company by any Person
     who, at the actual date of the execution of such Right Certificate, shall
     be a proper officer of the Company to sign such Right Certificate, although
     at the date of the execution of this Rights Agreement any such Person was
     not such an officer.

          (b) Following the Distribution Date, the Rights Agent will keep or
     cause to be kept, at its principal office or offices designated as the
     appropriate place for surrender of Right Certificates upon exercise or
     transfer, books for registration and transfer of the Right Certificates
     issued hereunder. Such books shall show the names and addresses of the
     respective holders of the Right Certificates, the number of Rights
     evidenced on its face by each of the Right Certificates, the certificate
     number of each of the Right Certificates and the date of each of the Right
     Certificates.

     Section 6. Transfer, Split Up, Combination and Exchange of Right
                -----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
---------------------------------------------------------------------

          (a) Subject to the provisions of Section 7(e) and Section 14 hereof,
     at any time after the close of business on the Distribution Date, and at or
     prior to the close of business on the Expiration Date (as such term is
     defined in Section 7(a) hereof ), any Right Certificate or Right
     Certificates may be transferred, split up, combined or

                                      -9-

<PAGE>

     exchanged for another Right Certificate or Right Certificates, entitling
     the registered holder to purchase a like number of shares of Common Stock
     (or, following a Triggering Event, Common Stock, other securities, cash or
     assets, as the case may be) as the Right Certificate or Right Certificates
     surrendered then entitled such holder (or former holder in the case of a
     transfer) to purchase. Any registered holder desiring to transfer, split
     up, combine or exchange any Right Certificate or Certificates shall make
     such request in writing delivered to the Rights Agent, and shall surrender
     the Right Certificate or Right Certificates to be transferred, split up,
     combined or exchanged at the principal office or offices of the Rights
     Agent designated for such purpose. Neither the Rights Agent nor the Company
     shall be obligated to take any action whatsoever with respect to the
     transfer of any such surrendered Right Certificate until the registered
     holder shall have completed and signed the certificate contained in the
     form of assignment on the reverse side of such Right Certificate and shall
     have provided such additional evidence of the identity of the Beneficial
     Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
     the Company shall reasonably request. Thereupon the Rights Agent shall,
     subject to Section 7(e) and Section 14 hereof, countersign and deliver to
     the Person entitled thereto a Right Certificate or Right Certificates, as
     the case may be, as so requested. The Company may require payment of a sum
     sufficient to cover any tax or governmental charge that may be imposed in
     connection with any transfer, split up, combination or exchange of Right
     Certificates.

          (b) Upon receipt by the Company and the Rights Agent of evidence
     reasonably satisfactory to them of the loss, theft, destruction or
     mutilation of a Right Certificate, and, in case of loss, theft or
     destruction, of indemnity or security reasonably satisfactory to them, and,
     at the Company's request, reimbursement to the Company and the Rights Agent
     of all reasonable expenses incidental thereto, and upon surrender to the
     Rights Agent and cancellation of the Right Certificate if mutilated, the
     Company will make and deliver a new Right Certificate of like tenor to the
     Rights Agent for countersignature and delivery to the registered owner in
     lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

     Section 7. Exercise of Rights; Purchase Price; Expiration of Rights.
                --------------------------------------------------------

                                      -10-

<PAGE>

          (a) The Rights shall not be exercisable prior to the Distribution
     Date. Subject to Section 7(e) hereof, the registered holder of any Right
     Certificate may exercise the Rights evidenced thereby (except as otherwise
     provided herein including, without limitation, the restrictions on
     exercisability set forth in Section 9(c), Section 11(a) (iii) and Section
     23(a) hereof) in whole or in part at any time after the Distribution Date
     upon surrender of the Right Certificate, with the form of election to
     purchase and the certificate on the reverse side thereof duly executed, to
     the Rights Agent at the principal office or offices of the Rights Agent
     designated for such purpose, together with payment of the aggregate
     Purchase Price with respect to the total number of shares of Common Stock
     (or other securities or property, as the case may be) as to which such
     surrendered Rights are then exercisable, at or prior to the earliest of (i)
     the close of business on July 18, 2004 (the "Final Expiration Date"), (ii)
     the time at which the Rights are redeemed as provided in Section 23 hereof
     or (iii) the time at which the Rights are exchanged as provided in Section
     24 hereof (the "Exchange Date") (the earliest of (i), (ii) and (iii) being
     herein referred to as the "Expiration Date").

          (b) The Purchase Price for each share of Common Stock pursuant to the
     exercise of a Right shall initially be $20, shall be subject to adjustment
     from time to time as provided in Section 11 and Section 13(a) hereof and
     shall be payable in lawful money of the United States of America in
     accordance with paragraph (c) below.

          (c) Upon receipt of a Right Certificate representing exercisable
     Rights, with the form of election to purchase and the certificate duly
     executed, accompanied by payment, with respect to each Right so exercised,
     of the Purchase Price per share of Common Stock (or other shares,
     securities or property, as the case may be) to be purchased, and an amount
     equal to any applicable transfer tax, in cash, or in the form of a
     certified check or money order payment to the order of the Company, the
     Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
     requisition from any transfer agent of the Common Stock (or make available,
     if the Rights Agent is the transfer agent therefor) certificates for the
     total number of shares of Common Stock to be purchased and the Company
     hereby irrevocably authorizes its transfer agent to comply with all such
     requests, (ii) requisition from the Company the amount of cash, if any, to
     be paid in lieu of

                                      -11-

<PAGE>

     issuance of fractional shares in accordance with Section 14 hereof, (iii)
     promptly after receipt of such certificates cause the same to be delivered
     to or upon the order of the registered holder of such Right Certificate,
     registered in such name or names as may be designated by such holder and
     (iv) after receipt thereof, promptly deliver such cash, if any, to or upon
     the order of the registered holder of such Right Certificate. In the event
     that the Company is obligated to issue other securities of the Company, pay
     cash and/or distribute other property pursuant to Section 11(a) hereof, the
     Company will make all arrangements necessary so that such other securities,
     cash and/or other property are available for distribution by the Rights
     Agent, if and when appropriate.

          (d) In case the registered holder of any Right Certificate shall
     exercise less than all the Rights evidenced thereby, a new Right
     Certificate evidencing Rights equivalent to the Rights remaining
     unexercised shall be issued by the Rights Agent and delivered to, or upon
     the order of, the registered holder of such Right Certificate, registered
     in such name or names as may be designated by such holder, subject to the
     provisions of Section 14 hereof.

          (e) Notwithstanding anything in this Agreement to the contrary, from
     and after the first occurrence of a Section 11(a)(ii) Event, any Rights
     beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
     of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
     such Associate or Affiliate) who becomes a transferee after the Acquiring
     Person becomes such or (iii) a transferee of an Acquiring Person (or of any
     such Associate or Affiliate) who becomes a transferee prior to or
     concurrently with the Acquiring Person becoming such and receives such
     Rights pursuant to either (A) a transfer (whether or not for consideration)
     from the Acquiring Person (or from any such Associate or Affiliate) to
     holders of equity interests in such Acquiring Person (or in any such
     Associate or Affiliate) or to any Person with whom the Acquiring Person (or
     any such Associate or Affiliate) has any continuing agreement, arrangement
     or understanding regarding the transferred Rights or (B) a transfer which
     the Board of Directors of the Company has determined (whether before or
     after such transfer) is part of a plan, arrangement or understanding which
     has as a primary purpose or effect the avoidance of this Section 7(e),
     shall become null and void without any further action and no holder of such
     Rights shall have any rights whatsoever with respect to such Rights,
     whether under any provision of this Agreement

                                      -12-

<PAGE>

     or otherwise. No Right Certificate shall be issued pursuant to Section 3
     hereof that represents Rights beneficially owned by an Acquiring Person or
     any Associate or Affiliate thereof and no Right Certificate shall be issued
     at any time upon the transfer of any Rights to an Acquiring Person or any
     Affiliate or Associate thereof or to any nominee of such Acquiring Person,
     Associate or Affiliate. Any Right Certificate delivered to the Rights Agent
     for transfer to any of the foregoing Persons, or which represents void
     Rights, shall be canceled. The Company shall use all reasonable efforts to
     insure that the provisions of this Section 7(e) are complied with, but
     shall have no liability to any holder of Right Certificates or other Person
     as a result of its failure to make any determinations with respect to an
     Acquiring Person or its Affiliates and Associates or any transferee of any
     of them hereunder.

          (f) Notwithstanding anything in this Agreement to the contrary,
     neither the Rights Agent nor the Company shall be obligated to undertake
     any action with respect to a registered holder of Rights upon the
     occurrence of any purported transfer as set forth in Section 6 hereof or
     exercise as set forth in this Section 7 unless such registered holder shall
     have (i) completed and signed the certificate contained in the form of
     election to purchase set forth on the reverse side of the Right Certificate
     surrendered for such exercise and (ii) provided such additional evidence of
     the identity of the Beneficial Owner (or former Beneficial Owner) or
     Affiliates or Associates thereof as the Company shall reasonably request.

     Section 8. Cancellation and Destruction of Right Certificates. All Right
                --------------------------------------------------
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

                                      -13-

<PAGE>

     Section 9. Reservation and Availability of Capital Stock.
                ---------------------------------------------

          (a) The Company covenants and agrees that it will cause to be reserved
     and kept available out of its currently authorized and unissued shares of
     Common Stock the number of shares of Common Stock that, as provided in this
     Agreement, including Section 11(a) (iii) hereof, will be sufficient to
     permit to the maximum extent possible the exercise of all outstanding
     Rights.

          (b) So long as the Common Stock issuable and deliverable upon the
     exercise of Rights may be listed on any national securities exchange, the
     Company shall use its best efforts to cause, from and after such time as
     the Rights become exercisable, all shares reserved for such issuance to be
     listed on such exchange upon official notice of issuance upon such
     exercise.

          (c) The Company shall use its best efforts to (i) file, as soon as
     practicable following the earliest date after the occurrence of a Section
     11(a)(ii) Event as of which the consideration to be delivered by the
     Company upon exercise of the Rights has been determined in accordance with
     Section 11(a)(ii) or Section 11(a)(iii) hereof, or as soon as is required
     by law following the Distribution Date, as the case may be, a registration
     statement under the Securities Act of 1933, as amended (the "Act"), with
     respect to the securities purchasable upon exercise of the Rights on an
     appropriate form, (ii) cause such registration statement to become
     effective as soon as practicable after such filing and (iii) cause such
     registration statement to remain effective (with a prospectus at all times
     meeting the requirements of the Act) until the earlier of (A) the date as
     of which the Rights are no longer exercisable for such securities and (B)
     the Expiration Date. The Company will also take such action as may be
     appropriate under, or to ensure compliance with, the securities or "blue
     sky" laws of the various states in connection with the exercisability of
     the Rights. The Company may temporarily suspend, for a period of time not
     to exceed 90 days after the date set forth in clause (i) of the first
     sentence of this Section 9(c), the exercisability of the Rights in order to
     prepare and file such registration statement and permit it to become
     effective. Upon any such suspension, the Company shall issue a public
     announcement stating that the exercisability of the Rights has been

                                      -14-

<PAGE>

     temporarily suspended, as well as a public announcement at such time as the
     suspension is no longer in effect. Notwithstanding any such provision of
     this Agreement to the contrary, the Rights shall not be exercisable in any
     jurisdiction if the requisite qualification in such jurisdiction shall not
     have been obtained, the exercise thereof shall not be permitted under
     applicable law or a registration statement shall not have been declared
     effective. Nothing herein shall require the Company to bear the expense of
     obtaining registration if the cost of such registration in a particular
     jurisdiction presents an unreasonable burden on the Company under the
     circumstances.

          (d) The Company covenants and agrees that it will take all such action
     as may be necessary to insure that all shares of Common Stock delivered
     upon exercise of Rights shall, at the time of delivery of the certificates
     for such shares (subject to payment of the Purchase Price), be duly and
     validly authorized and issued and fully paid and nonassessable.

          (e) The Company further covenants and agrees that it will pay when due
     and payable any and all federal and state transfer taxes and charges which
     may be payable in respect of the issuance or delivery of the Right
     Certificates and of any certificates for shares of Common Stock upon the
     exercise of Rights. The Company shall not, however, be required to pay any
     transfer tax which may be payable in respect of any transfer involved in
     the transfer or delivery of Right Certificates to a Person other than, or
     the issuance or delivery of Common Stock in respect of a name other than
     that of, the registered holder of the Right Certificate evidencing Rights
     surrendered for exercise or to issue or deliver any certificates for Common
     Stock in a name other than that of the registered holder upon the exercise
     of any Rights until any such tax shall have been paid (any such tax being
     payable by the holder of such Right Certificate at the time of surrender)
     or until it has been established to the Company's satisfaction that no such
     tax is due.

     Section 10. Common Stock Record Date. Each Person in whose name any
                 ------------------------
certificate for a share of Common Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such
shares of Common Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was duly

                                      -15-

<PAGE>

surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
                 -----------------
payment is a date upon which the Common Stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Common Stock transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

     Section 11. Adjustment of Purchase Price. Number and Kind of Shares or
                 ----------------------------------------------------------
Number of Rights. The Purchase Price, the number and kind of shares covered by
----------------
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.

          (a) (i) In the event the Company shall at any time after the date of
          this Agreement (A) declare a dividend on the Common Stock payable in
          shares of Common Stock, (B) subdivide the outstanding Common Stock,
          (C) combine the outstanding Common Stock into a smaller number of
          shares or (D) issue any shares of its capital stock in a
          reclassification of the Common Stock (including any such
          reclassification in connection with a consolidation or merger in which
          the Company is the continuing or surviving corporation) except as
          otherwise provided in this Section 11(a) and Section 7(e) hereof, the
          Purchase Price in effect at the time of the record date for such
          dividend or of the effective date of such subdivision, combination or
          reclassification, and the number and kind of shares of Common Stock or
          capital stock, as the case may be, issuable on such date, shall be
          proportionately adjusted so that the holder of any Right exercised
          after such time shall be entitled to receive, upon payment of the
          Purchase Price then in effect, the aggregate number and kind of shares
          of Common Stock or capital stock, as the case may be, which, if such
          Right had been exercised immediately prior to such date and at a time
          when the Common Stock transfer books of the Company were open, he
          would have owned upon such exercise and been entitled to

                                      -16-

<PAGE>

          receive by virtue of such dividend, subdivision, combination or
          reclassification.

               (ii) In the event that any Person, alone or together with its
          Affiliates and Associates or otherwise, shall become an Acquiring
          Person, then proper provision shall promptly be made so that each
          holder of a Right, except as provided below and in Section 7(e)
          hereof, shall thereafter have a right to receive, upon exercise
          thereof at the then current Purchase Price multiplied by the number of
          Shares of Common Stock for which a Right is then exercisable, in
          accordance with the terms of this Agreement, such number of shares of
          Common Stock of the Company as shall equal the result obtained by (x)
          multiplying the then current Purchase Price by the number of Common
          shares of Common Stock for which a Right is then exercisable and (y)
          dividing that product by 25% of the current market price per share of
          the Common Stock (determined pursuant to Section 11(d)) on the date of
          the occurrence of the Section 11(a) (ii) Event.

               (iii) In the event that the number of shares of Common Stock
          which are authorized by the Company's certificate of incorporation but
          not outstanding or reserved for issuance for purposes other than upon
          exercise of the Rights is not sufficient to permit the exercise in
          full of the Rights in accordance with the foregoing subparagraph (ii)
          of this Section 11(a), proper provision shall promptly be made so that
          each holder of a Right, except as provided in Section 7(e) hereof,
          shall, in the discretion of the Company's Board of Directors,
          thereafter have a right to receive, upon exercise thereof in
          accordance with the terms of this Agreement such number of Common
          Stock Equivalents or the maximum number of shares of Common Stock
          available for issuance to such holder at a reduced Purchase Price
          which reflects a per share Purchase Price of 25% of current market
          value as determined pursuant to subparagraph (ii) above.

          (b) In case the Company shall fix a record date for the issuance of
     rights, options or warrants (other than the Rights) to all holders of
     Common Stock entitling them to subscribe for or purchase (for a period
     expiring within 45 calendar days after such record date) Common Stock (or
     securities having the same rights, privileges and preferences as the shares
     of Common Stock ("equivalent common stock")) or securities convertible into
     Common Stock or equivalent common

                                      -17-

<PAGE>

     stock at a price per share of Common Stock or per share of equivalent
     common stock (or having a conversion or exercise price per share, if a
     security convertible into or exercisable for Common Stock or equivalent
     common stock) less than the current market price (as determined pursuant to
     Section 11(d) hereof) per share of Common Stock on such record date, the
     Purchase Price to be in effect after such record date shall be determined
     by multiplying the Purchase Price in effect immediately prior to such date
     by a fraction, the numerator of which shall be the number of shares of
     Common Stock outstanding on such record date, plus the number of shares of
     Common Stock which the aggregate offering price of the total number of
     shares of Common Stock and/or equivalent common stock so to be offered
     (and/or the aggregate initial conversion price of the convertible
     securities so to be offered) would purchase at such current market price
     and the denominator of which shall be the number of shares of Common Stock
     outstanding on such record date plus the number of additional shares of
     Common Stock and/or equivalent common stock to be offered for subscription
     or purchase (or into which the convertible securities so to be offered are
     initially convertible). In case such subscription price may be paid by
     delivery of consideration part or all of which shall be in a form other
     than cash, the value of such consideration shall be as determined in good
     faith by the Board of Directors of the Company, whose determination shall
     be described in a statement filed with the Rights Agent and shall be
     binding on the Rights Agent and the holders of Rights. Shares of Common
     Stock owned by or held for the account of the Company shall not be deemed
     outstanding for the purpose of any such computation. Such adjustment shall
     be made successively whenever such a record date is fixed; and in the event
     that such rights or warrants are not so issued, the Purchase Price shall be
     adjusted to be the Purchase Price which would then be in effect if such
     record date had not been fixed.

          (c) In case the Company shall fix a record date for the making of a
     distribution to all holders of Common Stock (including any such
     distribution made in connection with a consolidation or merger in which the
     Company is the continuing or surviving corporation) of evidences of
     indebtedness, cash (other than a regular periodic cash dividend out of the
     earnings or retained earnings of the Company), assets (other than a
     dividend payable in Common Stock, but including any dividend payable in
     stock other than Common Stock) or convertible securities, subscription
     rights or warrants

                                      -18-

<PAGE>

     (excluding those referred to in Section 11(b) hereof), the Purchase Price
     to be in effect after such record date shall be determined by multiplying
     the Purchase Price in effect immediately prior to such record date by a
     fraction, the numerator of which shall be the current market price (as
     determined pursuant to Section 11(d) hereof) per share of Common Stock on
     such record date, less the fair market value (as determined in good faith
     by the Board of Directors of the Company, whose determination shall be
     described in a statement filed with the Rights Agent and shall be binding
     on the Rights Agent and the holders of Rights) of the portion of the cash,
     assets or evidences of indebtedness so to be distributed or of such
     convertible securities, subscription rights or warrants applicable to one
     share of Common Stock and the denominator of which shall be such current
     market price (as determined pursuant to Section 11(d) hereof) per share of
     Common Stock. Such adjustments shall be made successively whenever such a
     record date is fixed; and in the event that such distribution is not so
     made, the Purchase Price shall again be adjusted to be the Purchase Price
     which would then be in effect if such record date had not been fixed.

          (d) For the purpose of any computation hereunder, the "current market
     price" per share of Common Stock on any date shall be deemed to be the
     average of the daily closing prices per share of such Common Stock for the
     30 consecutive Trading Days (as such term is hereinafter defined)
     immediately prior to such date; provided, however, that in the event that
                                     -----------------
     the current market price per share of the Common Stock is determined during
     a period following the announcement by the issuer of such Common Stock of
     (A) a dividend or distribution on such Common Stock payable in shares of
     such Common Stock or securities convertible into shares of such Common
     Stock (other than the Rights), or (B) any subdivision, combination or
     reclassification of such Common Stock, and prior to the expiration of the
     requisite 30 Trading Day period, as set forth above, after the ex-dividend
     date for such dividend or distribution, or the record date for such
     subdivision, combination or reclassification, then, and in each such case,
     the "current market price" shall be properly adjusted to take into account
     ex-dividend trading. The closing price for each day shall be the last sale
     price, regular way, or, in case no such sale takes place on such day, the
     average of the closing bid and asked prices, regular way, in either case as
     reported in the principal consolidated transaction reporting system with
     respect to securities listed or admitted to trading on the New York Stock
     Exchange or, if the shares of Common Stock

                                      -19-

<PAGE>

     are not listed or admitted to trading on the New York Stock Exchange, as
     reported in the principal consolidated transaction reporting system with
     respect to securities listed on the principal national securities exchange
     on which the shares of Common Stock are listed or admitted to trading or,
     if the shares of Common Stock are not listed or admitted to trading on any
     national securities exchange, the last quoted price or, if not so quoted,
     the average of the high bid and low asked prices in the over-the-counter
     market, as reported by the National Association of Securities Dealers, Inc.
     Automated Quotation System ("NASDAQ") or such other system then in use, or,
     if on any such date the shares of Common Stock are not quoted by any such
     organization, the average of the closing bid and asked prices as furnished
     by a professional market maker making a market in the Common Stock selected
     by the Board of Directors of the Company. If on any such date no market
     maker is making a market in the Common Stock, the fair value of such shares
     on such date as determined in good faith by the Board of Directors of the
     Company shall be used. The term "Trading Day" shall mean a day on which the
     principal national securities exchange on which the shares of Common Stock
     are listed or admitted to trading or traded is open for the transaction of
     business or, if the shares of Common Stock are not listed or admitted to
     trading on any national securities exchange, a Business Day. If the Common
     Stock is not publicly held or not so listed or traded, "current market
     price" per share shall mean the fair value per share as determined in good
     faith by the Board of Directors of the Company, or, if at the time of such
     determination there is an Acquiring Person, by a majority of the Continuing
     Directors then in office, or if there are no Continuing Directors, by a
     nationally recognized investment banking firm selected by the Board of
     Directors, which determination shall be described in a statement filed with
     the Rights Agent and shall be conclusive for all purposes.

          (e) Anything herein to the contrary notwithstanding, no adjustment in
     the Purchase Price shall be required unless such adjustment would require
     an increase or decrease of at least 1% in the Purchase Price; provided,
                                                                   --------
     however, that any adjustments which by reason of this Section 11(e) are not
     -------
     required to be made shall be carried forward and taken into account in any
     subsequent adjustment. All calculations under this Section 11 shall be made
     to the nearest cent or to the nearest ten-thousandth of a share of Common
     Stock. Notwithstanding the first sentence of this Section 11(e), any
     adjustment required by this Section 11 shall be made no later

                                      -20-

<PAGE>

     than the earlier of (i) three years from the date of the transaction which
     mandates such adjustment or (ii) the Expiration Date.

          (f) In the event that at any time, as a result of an adjustment made
     pursuant to Section 11(a) (ii), Section 11(a) (iii) or Section 13(a)
     hereof, the holder of any Right shall be entitled to receive upon exercise
     of such Right any shares of capital stock other than shares of Common
     Stock, thereafter the number of such other shares so receivable upon
     exercise of any Right and the Purchase Price thereof shall be subject to
     adjustment from time to time in a manner and on terms as nearly equivalent
     as practicable to the provisions with respect to the Common Stock contained
     in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (l) and (m) and
     the provisions of Sections 6, 7, 9, 10, 13 and 14 with respect to the
     Common Stock shall apply on like terms to any such other shares.

          (g) All Rights originally issued by the Company subsequent to any
     adjustment made to the Purchase Price hereunder shall evidence the right to
     purchase, at the adjusted Purchase Price, the number of shares of Common
     Stock purchasable from time to time hereunder upon exercise of the Rights,
     all subject to further adjustment as provided herein.

          (h) Unless the Company shall have exercised its election as provided
     in Section 11(i), upon each adjustment of the Purchase Price as a result of
     the calculations made in Section 11(b) and (c), each Right outstanding
     immediately prior to the making of such adjustment shall thereafter
     evidence the right to purchase, at the adjusted Purchase Price, that number
     of shares of Common Stock (calculated to the nearest ten thousandth)
     obtained by (i) multiplying (x) the number of shares covered by a Right
     immediately prior to this adjustment by (y) the Purchase Price in effect
     immediately prior to such adjustment of the Purchase Price and (ii)
     dividing the product so obtained by the Purchase Price in effect
     immediately after such adjustment of the Purchase Price.

          (i) The Company may elect on or after the date of any adjustment of
     the Purchase Price to adjust the number of Rights, in lieu of any
     adjustment in the number of shares of Common Stock purchasable upon the
     exercise of a Right. Each of the Rights outstanding after such adjustment
     of the number of Rights shall be exercisable for the number of shares of
     Common Stock for which such Right was exercisable immediately

                                      -21-

<PAGE>

     prior to such adjustment. Each Right held of record prior to such
     adjustment of the number of Rights shall become that number of Rights
     (calculated to the nearest ten thousandth) obtained by dividing the
     Purchase Price in effect immediately prior to adjustment of the Purchase
     Price by the Purchase Price in effect immediately after adjustment of the
     Purchase Price. The Company shall make a public announcement of its
     election to adjust the number of Rights, indicating the record date for the
     adjustment, and, if known at the time, the amount of the adjustment to be
     made. This record date may be the date on which the Purchase Price is
     adjusted or any day thereafter, but, if the Right Certificates have been
     issued, shall be at least 10 days later than the date of the public
     announcement. If Right Certificates have been issued, upon each adjustment
     of the number of Rights pursuant to this Section 11(i), the Company shall,
     as promptly as practicable, cause to be distributed to holders of record of
     Right Certificates on such record date Right Certificates evidencing,
     subject to Section 14 hereof, the additional Rights to which such holders
     shall be entitled as a result of such adjustment, or, at the option of the
     Company, shall cause to be distributed to such holders of record in
     substitution and replacement for the Right Certificates held by such
     holders prior to the date of adjustment, and upon surrender thereof, if
     required by the Company, new Right Certificates evidencing all the Rights
     to which such holders shall be entitled after such adjustment. Right
     Certificates so to be distributed shall be issued, executed and
     countersigned in the manner provided for herein (and may bear, at the
     option of the Company, the adjusted Purchase Price) and shall be registered
     in the names of the holders of record of Right Certificates on the record
     date specified in the public announcement.

          (j) Irrespective of any adjustment or change in the Purchase Price or
     the number of shares of Common Stock issuable upon the exercise of the
     Rights, the Right Certificates theretofore and thereafter issued may
     continue to express the Purchase Price per share and the number of shares
     which were expressed in the initial Right Certificates issued hereunder.

          (k) Before taking any action that would cause an adjustment reducing
     the Purchase Price below the then par value, if any, of a share of Common
     Stock issuable upon exercise of the Rights, the Company shall take any
     corporate action which may, in the opinion of its counsel, be necessary in
     order that the Company may validly and legally issue fully

                                      -22-

<PAGE>

     paid and nonassessable shares of Common Stock at such adjusted Purchase
     Price.

          (l) In any case in which this Section 11 shall require that an
     adjustment in the Purchase Price be made effective as of a record date for
     a specified event, the Company may elect to defer until the occurrence of
     such event the issuance to the holder of any Right exercised after such
     record date the number of shares of Common Stock and other capital stock or
     securities of the Company, if any, issuable upon such exercise over and
     above the number of shares of Common Stock and other capital stock or
     securities of the Company, if any, issuable upon such exercise on the basis
     of the Purchase Price in effect prior to such adjustment; provided however,
                                                               ----------------
     that the Company shall deliver to such holder a due bill or other
     appropriate instrument evidencing such holder's right to receive such
     additional shares upon the occurrence of the event requiring such
     adjustment.

          (m) Anything in this Section 11 to the contrary notwithstanding, the
     Company shall be entitled to make such reductions in the Purchase Price, in
     addition to those adjustments expressly required by this Section 11, as and
     to the extent that it in its sole discretion shall determine to be
     advisable in order that any consolidation or subdivision of the Common
     Stock, issuance wholly for cash of any Common Stock at less than the
     current market price, issuance wholly for cash of Common Stock or
     securities which by their terms are convertible into or exchangeable for
     Common Stock, stock dividends or issuance of rights, options or warrants
     referred to hereinabove in this Section 11, hereafter made by the Company
     to the holders of its Common Stock, shall not be taxable to such
     stockholders.

          (n) The Company covenants and agrees that it shall not at any time
     after the earlier of the Stock Acquisition Date and the Distribution Date
     (i) consolidate with, (ii) merge with or into, or (iii) sell or transfer
     to, in one transaction or a series of related transactions, assets or
     earning power aggregating more than 50% of the assets or earning power of
     the Company and its Subsidiaries taken as a whole, any other Person or
     Persons if (x) at the time of or immediately after such consolidation,
     merger or sale there are any rights, warrants or other instruments
     outstanding or agreements or arrangements in effect which would
     substantially diminish or otherwise eliminate the benefits intended to be
     afforded by the Rights or (y) prior to, simultaneously with or immediately

                                      -23-

<PAGE>

     after such consolidation, merger or sale, the stockholders of a Person who
     constitutes, or would constitute, the "Principal Party" for the purposes of
     Section 13(a) hereof shall have received a distribution of Rights
     previously owned by such Person or any of its Affiliates and Associates.

          (o) The Company covenants and agrees that after the earlier of the
     Stock Acquisition Date and the Distribution Date it will not, except as
     permitted by Section 23, Section 24 or Section 27 hereof, take (or permit
     any Subsidiary to take) any action if at the time such action is taken it
     is reasonably foreseeable that such action will substantially diminish or
     otherwise eliminate the benefits intended to be afforded by the Rights.

          (p) Anything in this Agreement to the contrary notwithstanding, in the
     event that the Company shall at any time after the date hereof and prior to
     the Distribution Date (i) declare a dividend on the outstanding shares of
     Common Stock payable in shares of Common Stock, (ii) subdivide the
     outstanding Common Stock, or (iii) combine the outstanding Common Stock
     into a smaller number of shares, the number of Rights associated with each
     share of Common Stock then outstanding, or issued or delivered thereafter
     but prior to the Distribution Date, shall be proportionately adjusted so
     that the number of Rights thereafter associated with each share of Common
     Stock following any such event shall equal the result obtained by
     multiplying the number of Rights associated with each share of Common Stock
     immediately prior to such event by a fraction the numerator of which shall
     be the total number of shares of Common Stock outstanding immediately prior
     to the occurrence of the event and the denominator of which shall be the
     total number of shares of Common Stock outstanding immediately following
     the occurrence of such event.

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
                 ----------------------------------------------------------
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any such

                                      -24-

<PAGE>

certificate and on any adjustment therein contained.

     Section 13. Consolidation, Merger or Sale of Assets or Earning Power.
                 --------------------------------------------------------

          (a) In the event that, following the earlier of the Distribution Date
     and the Stock Acquisition Date, directly or indirectly, (i) the Company
     shall consolidate with, or merge with and into, any other Person, and the
     Company shall not be the continuing or surviving corporation of such
     consolidation or merger, (ii) any Person shall merge with and into the
     Company, and the Company shall be the continuing or surviving corporation
     of such merger and, in connection with such merger, all or part of the
     Common Stock shall be changed into or exchanged for stock or other
     securities of any other Person or cash or any other property, or (iii) the
     Company shall sell or otherwise transfer (or one or more of its
     Subsidiaries shall sell or otherwise transfer), in one transaction or a
     series of related transactions, assets or earning power aggregating more
     than 50% of the assets or earning power of the Company and its Subsidiaries
     (taken as a whole) to any other Person or Persons, then, and in each such
     case, proper provision shall be made so that: (w) each holder of a Right,
     except as provided in Section 7(e) hereof, shall thereafter have the right
     to receive, upon the exercise thereof at the then current Purchase Price
     multiplied by the number of shares of Common Stock for which a Right is
     then exercisable (without taking into account any adjustment previously
     made pursuant to Section 11(a) (ii) or 11(a) (iii)), in accordance with the
     terms of this Agreement, such number of validly authorized and issued,
     fully paid and nonassessable shares of freely tradeable Common Stock of the
     Principal Party (as hereinafter defined), not subject to any rights of call
     or first refusal, liens, encumbrances or other claims, as shall be equal to
     the result obtained by (1) multiplying the then current Purchase Price by
     the number of shares of Common Stock for which a Right is then exercisable
     (without taking into account any adjustment previously made pursuant to
     Section 11(a) (ii) or 11(a)(iii)) and dividing that product by (2) 25% of
     the current market price (determined pursuant to Section 11(d) (i) hereof)
     per share of the Common Stock of such Principal Party on the date of
     consummation of such consolidation, merger, sale or transfer; (x) the
     Principal Party shall thereafter be liable for, and shall assume, by virtue
     of such consolidation, merger, sale or transfer, all the obligations and
     duties of the Company pursuant to this Agreement; (y) the term "Company"
     shall thereafter be deemed to refer to such Principal Party,

                                      -25-

<PAGE>

     it being specifically intended that the provisions of Section 11 hereof
     shall apply to such Principal Party and (z) such Principal Party shall take
     such steps (including, but not limited to, the authorization and
     reservation of a sufficient number of shares of its Common Stock to permit
     exercise of all outstanding Rights in accordance with this Section 13(a))
     in connection with such consummation as may be necessary to assure that the
     provisions hereof shall thereafter be applicable, as nearly as reasonably
     may be, in relation to the shares of its Common Stock thereafter
     deliverable upon the exercise of the Rights.

          (b) "Principal Party" shall mean

               (1) in the case of any transaction described in clause (i) or
          (ii) of the first sentence of Section 13(a), the Person that is the
          issuer of any securities into which shares of Common Stock of the
          Company are converted in such merger or consolidation, and if no
          securities are so issued, the Person that is the other party to the
          merger or consolidation; and

               (2) in the case of any transaction described in clause (iii) of
          the first sentence of Section 13(a), the Person that is the party
          receiving the greatest portion of the assets or earning power
          transferred pursuant to such transaction or transactions; provided,
                                                                    --------
          however, that in any such case, (x) if the Common Stock of such Person
          -------
          is not at such time and has not been continuously over the preceding
          12-month period registered under Section 12 of the Exchange Act, and
          such person is a direct or indirect Subsidiary of another Person the
          Common Stock of which is and has been so registered, "Principal Party"
          shall refer to such other Person; and (y) in case such Person is a
          Subsidiary, directly or indirectly, of more than one Person, the
          Common Stocks of two or more of which are and have been so registered,
          "Principal Party" shall refer to whichever of such Persons is the
          issuer of the Common Stock having the greatest aggregate market value.

          (c) The Company shall not consummate any such consolidation, merger,
     sale or transfer unless the Principal Party shall have a sufficient number
     of authorized shares of its Common Stock which have not been issued or
     reserved for issuance to permit the exercise in full of the Rights in
     accordance with this Section 13 and unless prior thereto the Company and
     such Principal Party shall have executed and

                                      -26-

<PAGE>

     delivered to the Rights Agent a supplemental agreement providing for the
     terms set forth in paragraphs (a) and (b) of this Section 13 and further
     providing that, as soon as practicable after the date of any consolidation,
     merger or sale of assets mentioned in paragraph (a) of this Section 13, the
     Principal Party will

          (i) prepare and file a registration statement under the Act with
          respect to the Rights and the securities purchasable upon exercise of
          the Rights on an appropriate form, will use its best efforts to cause
          such registration statement to become effective as soon as practicable
          after such filing and will use its best efforts to cause such
          registration statement to remain effective (with a prospectus at all
          times meeting the requirements of the Act) until the Expiration Date;
          and

          (ii) will deliver to holders of the Rights historical financial
          statements for the Principal Party and each of its Affiliates which
          comply in all respects with the requirements for registration on Form
          10 under the Exchange Act.

     The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. If any event described in
Section 13(a)(i), (ii) or (iii) shall occur at any time after the occurrence of
a Section 11(a) (ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).

     Section 14. Fractional Rights and Fractional Shares.
                 ---------------------------------------

          (a) The Company shall not issue fractions of Rights or distribute
     Right Certificates which evidence fractional Rights. In lieu of such
     fractional Rights, there shall be paid to the registered holders of the
     Right Certificates with regard to which such fractional Rights would
     otherwise be issuable, an amount in cash equal to the same fraction of the
     current market value of a whole Right. For the purposes of this Section
     14(a), the current market value of a whole Right shall be the closing price
     of the Rights for the Trading Day immediately prior to the date on which
     such fractional Rights would have been otherwise issuable. The closing
     price of the Rights for any day shall be the last sale price, regular way,
     or, in case no such sale takes place on such day, the average of the
     closing bid and asked prices, regular way, in either

                                      -27-

<PAGE>

     case as reported in the principal consolidated transaction reporting system
     with respect to securities listed or admitted to trading on the New York
     Stock Exchange or, if the Rights are not listed or admitted to trading on
     the New York Stock Exchange, as reported in the principal consolidated
     transaction reporting system with respect to securities listed on the
     principal national securities exchange on which the Rights are listed or
     admitted to trading or, if the Rights are not listed or admitted to trading
     on any national securities exchange, the last quoted price, or, if not so
     quoted, the average of the high bid and low asked prices in the over the
     counter market, as reported by NASDAQ or such other system then in use or,
     if on any such date the Rights are not quoted by any such organization, the
     average of the closing bid and asked prices as furnished by a professional
     market maker making a market in the Rights selected by the Board of
     Directors of the Company. If on any such date no such market maker is
     making a market in the Rights the fair value of the Rights on such date as
     determined in good faith by the Board of Directors of the Company shall be
     used and shall be conclusive for all purposes.

          (b) The Company shall not issue fractions of shares of Common Stock
     upon exercise of the Rights or distribute certificates which evidence
     fractional shares of Common Stock. In lieu of fractional shares of Common
     Stock, the Company shall pay to the registered holders of Right
     Certificates at the time such Right Certificates are exercised as herein
     provided an amount in cash equal to the same fraction of the current market
     value of one share of Common Stock. For purposes of this Section 14(b), the
     current market value of one share of Common Stock shall be the closing
     price of a share of Common Stock (as determined pursuant to Section 11(d)
     hereof) for the Trading Day immediately prior to the date of such exercise.

          (c) The holder of a Right by the acceptance of the Rights expressly
     waives his right to receive any fractional Rights or any fractional share
     upon exercise of Rights.

     Section 15. Rights of Action. All rights of action in respect of this
                 ----------------
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the

                                      -28-

<PAGE>

Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of, any Person subject to this Agreement.

     Section 16. Agreement of Right Holders. Every holder of a Right by
                 --------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:

          (a) prior to the Distribution Date, the Rights will be transferable
     only in connection with the transfer of Common Stock;

          (b) after the Distribution Date, the Right Certificates are
     transferable only on the registry books of the Rights Agent if surrendered
     at the principal office or offices of the Rights Agent designated for such
     purposes, duly endorsed or accompanied by a proper instrument of transfer
     and with the appropriate certificates fully executed;

          (c) subject to Section 6(a) and Section 7(f) hereof, the Company and
     the Rights Agent may deem and treat the Person in whose name the Right
     Certificate (or, prior to the Distribution Date, the associated Common
     Stock certificate) is registered as the absolute owner thereof and of the
     Rights evidenced thereby (notwithstanding any notations of ownership or
     writing on the Right Certificates or the associated Common Stock
     certificate made by anyone other than the Company or the Rights Agent) for
     all purposes whatsoever, and neither the Company nor the Rights Agent,
     subject to the last sentence of Section 7(e) hereof, shall be affected by
     any notice to the contrary; and

          (d) notwithstanding anything in this Agreement to the contrary,
     neither the Company nor the Rights Agent shall have any liability to any
     holder of a Right or other Person as a result of its inability to perform
     any of its obligations under this Agreement by reason of any preliminary or
     permanent injunction or other order, decree or ruling issued by a court

                                      -29-

<PAGE>

     of competent jurisdiction or by a governmental, regulatory or
     administrative agency or commission, or any statute, rule, regulation or
     executive order promulgated or enacted by any governmental authority
     prohibiting or otherwise restraining performance of such obligation;
     provided however, the Company must use its best efforts to have any such
     ----------------
     order, decree or ruling lifted or otherwise overturned as soon as possible.

     Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
                 -------------------------------------------------
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of shares of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.

     Section 18. Concerning the Rights Agent.
                 ---------------------------

          (a) The Company agrees to pay to the Rights Agent reasonable
     compensation for all services rendered by it hereunder and, from time to
     time, on demand of the Rights Agent, its reasonable expenses and counsel
     fees and disbursements and other disbursements incurred in the
     administration and execution of this Agreement and the exercise and
     performance of its duties hereunder. The Company also agrees to indemnify
     the Rights Agent for, and to hold it harmless against, any loss, liability,
     or expense, incurred without negligence, bad faith or willful misconduct on
     the part of the Rights Agent, for anything done or omitted by the Rights
     Agent in connection with the acceptance and administration of this
     Agreement, including the costs and expenses of defending against any claim
     of liability.

          (b) The Rights Agent shall be protected and shall incur no liability
     for or in respect of any action taken, suffered or omitted by it in
     connection with its administration of this Agreement in reliance upon any
     Right Certificate or certificate for Common Stock or for other securities
     of the

                                      -30-

<PAGE>

     Company, instrument of assignment or transfer, power of attorney,
     endorsement, affidavit, letter, notice, direction, consent, certificate,
     statement, or other paper or document believed by it to be genuine and to
     be signed, executed and, where necessary, verified or acknowledged, by the
     proper Person or Persons.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent.
                 ---------------------------------------------------------

          (a) Any corporation into which the Rights Agent or any successor
     Rights Agent may be merged or with which it may be consolidated, or any
     corporation resulting from any merger or consolidation to which the Rights
     Agent or any successor Rights Agent shall be a party, or any corporation
     succeeding to the corporate trust or stock transfer business of the Rights
     Agent or any successor Rights Agent, shall be the successor to the Rights
     Agent under this Agreement without the execution or filing of any paper or
     any further act on the part of any of the parties hereto, provided that
     such corporation would be eligible for appointment as a successor Rights
     Agent under the provisions of Section 21. In case at the time such
     successor Rights Agent shall succeed to the agency created by this
     Agreement, any of the Right Certificates shall have been countersigned but
     not delivered, any such successor Rights Agent may adopt the
     countersignature of the predecessor Rights Agent and deliver such Right
     Certificates so countersigned; and in case at that time any of the Right
     Certificates shall not have been countersigned, any successor Rights Agent
     may countersign such Right Certificates either in the name of the
     predecessor Rights Agent or in the name of the successor Rights Agent; and
     in all such cases such Right Certificates shall have the full force
     provided in the Right Certificates and in this Agreement.

          (b) In case at any time the name of the Rights Agent shall be changed
     and at such time any of the Right Certificates shall have been
     countersigned but not delivered, the Rights Agent may adopt the
     countersignature under its prior name and deliver Right Certificates so
     countersigned; and in case at that time any of the Right Certificates shall
     not have been countersigned, the Rights Agent may countersign such Right
     Certificates either in its prior name or in its changed name; and in all
     such cases such Right Certificates shall have the full force provided in
     the Right Certificates and in this Agreement.

                                      -31-

<PAGE>

     Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
                 ----------------------
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:

          (a) The Rights Agent may consult with legal counsel (who may be legal
     counsel for the Company), and the opinion of such counsel shall be full and
     complete authorization and protection to the Rights Agent as to any action
     taken or omitted by it in good faith and in accordance with such opinion.

          (b) Whenever in the performance of its duties under this Agreement the
     Rights Agent shall deem it necessary or desirable that any fact or matter
     (including, without limitation, the identity of any "Acquiring Person" and
     the determination of "current market price") be proved or established by
     the Company prior to taking or suffering any action hereunder, such fact or
     matter (unless other evidence in respect thereof be herein specifically
     prescribed) may be deemed to be conclusively proved and established by a
     certificate signed by the Chairman of the Board, the President or any Vice
     President and by the Treasurer or any Assistant Treasurer or the Secretary
     or any Assistant Secretary of the Company and delivered to the Rights
     Agent; and such certificate shall be full authorization to the Rights Agent
     for any action taken or suffered in good faith by it under the provisions
     of this Agreement in reliance upon such certificate.

          (c) The Rights Agent shall be liable hereunder only for its own
     negligence, bad faith or willful misconduct.

          (d) The Rights Agent shall not be liable for or by reason of any of
     the statements of fact or recitals contained in this Agreement or in the
     Right Certificates (except its countersignature thereof) or be required to
     verify the same, but all such statements and recitals are and shall be
     deemed to have been made by the Company only.

          (e) The Rights Agent shall not be under any responsibility in respect
     of the validity of this Agreement or the execution and delivery hereof
     (except the due execution hereof by the Rights Agent) or in respect of the
     validity or execution of any Right Certificate (except its countersignature
     thereof); nor shall it be responsible for any

                                      -32-

<PAGE>

     breach by the Company of any covenant or condition contained in this
     Agreement or in any Right Certificate; nor shall it be responsible for any
     change in the exercisability of the Rights (including the Rights becoming
     void pursuant to Section 7(e) hereof) or any adjustment in the terms on the
     Rights (including the manner, method or amount thereof) provided for in
     Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
     that would require any such adjustment (except with respect to the exercise
     of Rights evidenced. by Right Certificates after actual notice of any such
     adjustment); nor shall it by any act hereunder be deemed to make any
     representation or warranty as to the authorization or reservation of any
     shares of Common Stock to be issued pursuant to this Agreement or any Right
     Certificate or as to whether any shares of Common Stock will, when issued,
     be validly authorized and issued, fully paid and nonassessable.

          (f) The Company agrees that it will perform, execute, acknowledge and
     deliver or cause to be performed, executed, acknowledged and delivered all
     such further and other acts, instruments and assurances as may reasonably
     be required by the Rights Agent for the carrying out or performing by the
     Rights Agent of the provisions of this Agreement.

          (g) The Rights Agent is hereby authorized and directed to accept
     instructions with respect to the performance of its duties hereunder from
     the Chairman of the Board, the President or any Vice President or the
     Secretary or any Assistant Secretary or the Treasurer or any Assistant
     Treasurer of the Company, and to apply to such officers for advice or
     instructions in connection with its duties, and it shall not be liable for
     any action taken or suffered to be taken by it in good faith in accordance
     with instructions of any such officer.

          (h) The Rights Agent and any shareholder, director, officer or
     employee of the Rights Agent may buy, sell or deal in any of the Rights or
     other securities of the Company or become pecuniarily interested in any
     transaction in which the Company may be interested, or contract with or
     lend money to the Company or otherwise act as fully and freely as though it
     were not the Rights Agent under this Agreement. Nothing herein shall
     preclude the Rights Agent from acting in any other capacity for the Company
     or for any other legal entity.

          (i) The Rights Agent may execute and exercise any of the rights or
     powers hereby vested in it or perform any duty

                                      -33-

<PAGE>

     hereunder either itself or by or through its attorneys or agents, and the
     Rights Agent shall not be answerable or accountable for any act, default,
     neglect or misconduct of any such attorneys or agents or for any loss to
     the Company resulting from any such act, default, neglect or misconduct,
     provided reasonable care was exercised in the selection and continued
     employment thereof.

          (j) No provision of this Agreement shall require the Rights Agent to
     expend or risk its own funds or otherwise incur any financial liability in
     the performance of any of its duties hereunder or in the exercise of its
     rights if there shall be reasonable grounds for believing that repayment of
     such funds or adequate indemnification against such risk or liability is
     not reasonably assured to it.

          (k) If, with respect to any Right Certificate surrendered to the
     Rights Agent for exercise or transfer, the certificate attached to the form
     of assignment or form of election to purchase, as the cases may be, has
     either not been completed or indicates an affirmative response to any item
     therein, the Rights Agent shall not take any further action with respect to
     such requested exercise or transfer without first consulting with the
     Company.

     Section 21. Change of Rights Agent. The Rights Agent or any successor
                 ----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock by registered or certified mail and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock by registered or certified mail and to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a

                                      -34-

<PAGE>

corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, having a principal
office in the State of Connecticut or New York, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of the
                 ----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares of stock or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the earliest of the redemption, exchange or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of employee stock options or under or to any
employee plan, profit sharing trust or other arrangement outstanding, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities issued by the Company prior to such date, and (b) may, in
any other case, if deemed necessary or appropriate by a majority of Continuing
Directors, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
                                                 -----------------
such Right Certificate shall be issued if, and to the extent that, the Company
shall be advised

                                      -35-

<PAGE>

by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the person to whom such Right
Certificate would be issued, and (ii) no such Right Certificate shall be issued
if, and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.

     Section 23. Redemption.
                 ----------

          (a) The Board of Directors of the Company may, at its option, at any
     time prior to the earlier of (i) the close of business on the tenth day
     after the Stock Acquisition Date or (ii) the Final Expiration Date, redeem
     all but not less than all the then outstanding Rights at a redemption price
     of $.001 per Right appropriately adjusted to reflect any stock split, stock
     dividend, reclassification or similar transaction occurring after the date
     hereof (such redemption price being hereinafter referred to as the
     "Redemption Price"); provided, however, that if the Board of Directors of
                          -----------------
     the Company authorizes redemption of the Rights at or after the time a
     Person becomes an Acquiring Person, then there must be Continuing Directors
     then in office and such authorization shall require the concurrence of a
     majority of such Continuing Directors. Notwithstanding anything in this
     Agreement to the contrary, the Rights shall not be exercisable after the
     first occurrence of a Section 11(a) (ii) Event until such time as the
     Company's right of redemption hereunder has expired. The Company may, at
     its option, pay the Redemption Price in cash, shares of Common Stock (based
     on the "current market price," as defined in Section 11(d)(i) hereof, of
     the Common Stock at the time of redemption) or any other form of
     consideration deemed appropriate by the Board of Directors.

          (b) Immediately upon the action of the Board of Directors of the
     Company ordering the redemption of the Rights and without any further
     action and without any notice, the right to exercise the Rights will
     terminate and the only right thereafter of the holders of Rights shall be
     to receive the Redemption Price for each Right so held. Promptly after the
     action of the Board of Directors ordering the redemption of the Rights, the
     Company shall give notice of such redemption to the Rights Agent and the
     holders of the then outstanding Rights by mailing such notice to all such
     holders at their last addresses as they appear upon the registry books of
     the Rights Agent or, prior to the Distribution Date, on the registry books
     of the Transfer Agent for the Common Stock. Any notice which is mailed in
     the manner herein provided shall

                                      -36-

<PAGE>

     be deemed given, whether or not the holder receives the notice. Each such
     notice of redemption will state the method by which the payment of the
     Redemption Price will be made. Neither the Company nor any of its
     Subsidiaries may redeem, acquire or purchase for value any Rights at any
     time in any manner other than that specifically set forth in this Section
     23 or in Section 24 hereof, and other than in connection with the purchase
     or other acquisition of shares of Common Stock prior to the Distribution
     Date.

     Section 24. Notice of Proposed Actions.
                 --------------------------

          (a) In case the Company shall propose, at any time after the
     Distribution Date, (i) to pay any dividend payable in stock of any class to
     the holders of Common Stock or to make any other distribution to the
     holders of Common Stock (other than a regular quarterly cash dividend out
     of earnings or retained earnings of the Company), or (ii) to offer to the
     holders of its Common Stock rights or warrants to subscribe for or to
     purchase any additional shares of Common Stock or shares of stock of any
     class or any other securities, rights or options, or (iii) to effect any
     reclassification of its Common Stock (other than a reclassification
     involving only the subdivision of outstanding shares of Common Stock), or
     (iv) to effect any consolidation or merger into or with any other Person,
     or to effect any sale or other transfer (or to permit one or more of its
     Subsidiaries to effect any sale or other transfer), in one transaction or a
     series of related transactions, of more than 50% of the assets or earning
     power of the Company and its Subsidiaries (taken as a whole) to any other
     Person or Persons, or (v) to effect the liquidation, dissolution or winding
     up of the Company, then, in each such case, the Company shall give to each
     holder of a Right, to the extent feasible and in accordance with Section
     25, a notice of such proposed action, which shall specify the record date
     for the purposes of such stock dividend, distribution of rights or
     warrants, or the date on which such reclassification, consolidation,
     merger, sale, transfer, liquidation, dissolution, or winding up is to take
     place and the date of participation therein by the holders of Common Stock,
     if any such date is to be fixed, and such notice shall be so given in the
     case of any action covered by clause (i) or (ii) above at least 20 days
     prior to the record date for determining holders of the Common Stock for
     purposes of such action, and in the case of any such other action, at least
     20 days prior to the date of the taking of such proposed action or the date
     of participation therein by the holders of Common Stock,

                                      -37-

<PAGE>

     whichever shall be the earlier. The failure to give notice required by this
     Section 24 or any defect therein shall not affect the legality or validity
     of the action taken by the Company or the vote upon any such action.

          (b) In case any Section 11(a) (ii) Event shall occur, then, in any
     such case, the Company shall as soon as practicable thereafter give to each
     holder of a Right Certificate, in accordance with Section 25 hereof.

     Section 25. Notices. Notices or demands authorized by this Agreement to be
                 -------
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

          New Mil Bancorp, Inc.
          19 Main Street
          New Milford, CT  06776
          Attention:  Corporate Secretary

Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid~ addressed (until another address is
filed in writing with the Company) as follows:

          American Stock Transfer & Trust Company
          40 Wall Street, 46th Floor
          New York, New York  10005

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.

     Section 26. Supplements and Amendments. Prior to the earlier of the Stock
                 --------------------------
Acquisition Date and the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement (whether
or not adverse to the

                                      -38-

<PAGE>

holders of Rights) without the approval of any holders of Rights. From and after
the earlier of the Stock Acquisition Date and the Distribution Date and subject
to the penultimate sentence of this Section 26, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder (which shortening or lengthening shall be effective only
if there are Continuing Directors then in office and shall require the
concurrence of a majority of such Continuing Directors if such supplement or
amendment occurs at or after the time a Person becomes an Acquiring Person) or
(iv) to change or supplement the provisions hereof in any manner which the
Company may deem necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided,
                                                                       --------
however, that this Agreement may not be supplemented or amended to lengthen,
-------
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
decreases the Redemption Price. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.

     Section 27. Successors. All the covenants and provisions of this Agreement
                 ----------
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.

     Section 28. Determinations and Actions by the Board of Directors, etc. For
                 ---------------------------------------------------------
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the

                                      -39-

<PAGE>

General Rules and Regulations under the Exchange Act. The Board of Directors of
the Company (with, where specifically provided for herein, the concurrence of
the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this

                                      -40-

<PAGE>

Agreement (including a determination to redeem or not redeem the Rights, to
exchange or not to exchange the rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board (or, where specifically provided for herein, by
the Continuing Directors) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject to the Board or the Continuing Directors to
any liability to the holders of the Right.

     Section 29. Benefits of This Agreement. Nothing in this Agreement shall be
                 --------------------------
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock).

     Section 30. Severability. If any term, provision, covenant or restriction
                 ------------
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

     Section 31. Governing Law. This Agreement, each Right and each Right
                 -------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Connecticut and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts to
be made and performed entirely within such state.

     Section 32. Counterparts. This Agreement may be executed in any number of
                 ------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute one and the
same instrument.

     Section 33. Descriptive Headings. The captions herein and in the table of
                 --------------------
contents hereto are included for convenience of reference only, do not
constitute a part of this Agreement and shall be ignored in the construction and
interpretation hereof.

                                      -41-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.

                                                  NEW MIL BANCORP, INC.

                                                  By
                                                     ---------------------------
                                                       Chairman of the Board

                                                  AMERICAN STOCK TRANSFER &
                                                  TRUST COMPANY

                                                  By
                                                     ---------------------------
                                                       Vice President

                                      -42-

<PAGE>

                                                                       Exhibit A
                                                                       ---------

                            Form of Right Certificate

Certificate No. R-                                                        Rights
                                                                ---------

     NOT EXERCISABLE AFTER JULY 18, 2004 OR EARLIER IF REDEEMED OR EXCHANGED BY
     THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
     COMPANY, AT $.001 PER RIGHT, AND TO EXCHANGE AT THE OPTION OF THE COMPANY,
     ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. AS DESCRIBED IN THE RIGHTS
     AGREEMENT, RIGHTS BENEFICIALLY OWNED BY (l) AN ACQUIRING PERSON OR ANY
     ASSOCIATE OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
     AGREEMENT), (2) A TRANSFEREE OF AN ACQUIRING PERSON (OR OF ANY SUCH
     ASSOCIATE OR AFFILIATE) WHO BECOMES A TRANSFEREE AFTER THE ACQUIRING PERSON
     BECOMES SUCH OR (3) UNDER CERTAIN CIRCUMSTANCES, A TRANSFEREE OF AN
     ACQUIRING PERSON (OR OF ANY SUCH ASSOCIATE OF AFFILIATE) WHO BECOMES A
     TRANSFEREE BEFORE OR CONCURRENTLY WITH THE ACQUIRING PERSON BECOMING SUCH,
     SHALL BECOME NULL AND VOID.

                                Right Certificate

                              New Mil Bancorp, Inc.

          This certifies that                           , or registered assigns,
                              --------------------------
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of July 19, 1994 (the "Rights Agreement") between
New Mil Bancorp, Inc., a Delaware Corporation (the "Company"), and American
Stock Transfer & Trust Company (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M. (Eastern time) on July 18, 2004 at the
office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one fully paid, non-assessable share of Common Stock
(the "Common Stock") of the Company, at a cash purchase price of $20 per share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and the related Certificate
duly executed. The number of Rights evidenced by this Right Certificate (and the
number of

<PAGE>

shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of July 19, 1994, based on the Common Stock as constituted at such date.

     Upon the occurrence of a Section 11(a) (ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of an Acquiring Person (or of any such Affiliate or Associate)
who becomes a transferee after the Acquiring Person becomes such), or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of
an Acquiring Person (or of any such Affiliate or Associate) who becomes a
transferee before or concurrently with the Acquiring Person becoming such), such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a) (ii)
Event.

     As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Common Stock or other securities which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

     This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.

<PAGE>

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.001 per Right or (ii) may be exchanged by the Company at
its option for shares of the Company's Common Stock, par value $.50 per share
(or, in certain circumstances, Common Stock Equivalents (as such term is defined
in the Rights Agreement)).

          No fractional shares of Common Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.

          No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.

     This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.

     WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.

Dated as of                     , 19  .
            --------------------    --

Attest:                                              New Mil Bancorp, Inc.

--------------------------                           ---------------------------
Secretary                                            Title:

(seal)

Countersigned:

                                      A-3

<PAGE>

--------------------------
as Rights Agent

By
   -----------------------
   Authorized Signature

                                      A-4

<PAGE>

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT
                               ------------------

                (To be executed by the registered holder if such
               holder desires to transfer the Right Certificate.)

FOR VALUE RECEIVED
                   -------------------------------------------------------------
hereby sells, assigns and transfers unto
                                         ---------------------------------------

--------------------------------------------------------------------------------
                  (Please print name and address of transferee)

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

this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint                  Attorney, to
                                               ----------------
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.

Dated:                  , 19  .
         ---------------    --

                                               ---------------------------------
Signature Guaranteed:                          Signature

                                      A-5

<PAGE>

                                   Certificate
                                   -----------

          The undersigned hereby certifies by checking the appropriate boxes
that:

     (1) the Rights evidenced by this Right Certificate      are      are not
                                                        ----     ----
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);

     (2) after due inquiry and to the best knowledge of the undersigned, the
Rights evidenced by this Right Certificate     are     are not being sold,
                                           ---     ---
assigned and transferred to a Person who is an Acquiring Person, an Affiliate or
Associate of an Acquiring Person or a nominee of any such Acquiring Person,
Affiliate or Associate.

     (3) after due inquiry and to the best knowledge of the undersigned, it
                                                                            ----
did      did not acquire the Rights evidenced by this Right Certificate from any
    ----
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.

Dated:            , 19
       -----------    --                          ------------------------------
                                                              Signature

                                     NOTICE
                                     ------

     The signatures to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.

                                      A-6

<PAGE>

                          FORM OF ELECTION TO PURCHASE

              (To be executed if holder desires to exercise Rights
                     represented by the Right Certificate.)

To:  New Mil Bancorp, Inc.

          The undersigned hereby irrevocably elects to exercise
                                                                ----------------
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

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

          If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

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

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

Dated:                   , 19  .
       ------------------    --

                                              ----------------------------------
Signature Guaranteed:                         Signature

                                      A-7

<PAGE>

                                      A-8

<PAGE>

                                   Certificate
                                   -----------

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) the Rights evidenced by this Right Certificate      are      are not
                                                        ----     ----
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);

     (2) after due inquiry and to the best knowledge of the undersigned, it
                                                                            ----
did      did not acquire the Rights evidenced by this eight Certificate from any
    ----
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.

Dated:             , 19  .
       ------------    --                      ---------------------------------
                                               Signature

                                     NOTICE
                                     ------

          The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.

                                      A-9

<PAGE>

                                                                       Exhibit B
                                                                       ---------

                              NEW MIL BANCORP, INC.
                   SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES

On July 19, 1994 (the "Declaration Date"), the Board of Directors of New Mil
Bancorp, Inc. (the "Company") declared a dividend distribution of one Right for
each five outstanding shares of Common Stock of the Company. The dividend is
payable on July 19, 1994 to the stockholders of record as of the close of
business on such date (the "Record Date"). Each Right entitles the registered
holder to purchase from the company one share of the Company's Common Stock,
$.50 par value (the "Common Shares") at a price of $20 (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and American
Stock Transfer & Trust Company (the "Rights Agent").

Until the close of business on the earliest of (i) the tenth day after a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained the right to acquire, beneficial ownership of 10% or more
of the outstanding shares of Common Stock of the Company (an "Acquiring
Person"); (ii) the tenth day (or such later day as may be determined by action
of the Board of Directors of the Company prior to such time as any person
becomes an Acquiring Person) after the date of the commencement of a tender or
an exchange offer by any person (other than the Company) to acquire (when added
to any shares as to which such person is the beneficial owner immediately prior
to such commencement) beneficial ownership of 10% or more of the issued and
outstanding shares of Common Stock; and (iii) the tenth day (or such later day
as may be determined by action of the Board of Directors of the Company prior to
such time as any person becomes an Acquiring Person) after the filing by any
Person (other than the Company) of a registration statement under the Securities
Act of 1933, as amended, with respect to a contemplated exchange offer to
acquire (when added to any shares as to which such person is the beneficial
owner immediately prior to such filing) beneficial ownership of 10% or more of
the issued and outstanding shares of Common Stock (the earliest of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Company's Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate and this Summary. The date of
announcement of the existence of an Acquiring Person referred to in clause (i)
above is hereinafter referred to as the "Stock Acquisition Date."

<PAGE>

The Rights Agreement provides that, until the Distribution Date, the Rights will
be transferred with and only with the Company's Common Stock. New Common Stock
certificates issued after the Record Date upon transfer or new issuance of the
Company's Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date, the surrender for transfer
of any of the Common Stock certificates outstanding as of the Record Date will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate and the number of Rights associated with each
share of Common Stock shall be proportionately adjusted in the event of any
dividend in Common Stock on the Common Stock or subdivision, combination or
reclassification of the Common Stock. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Common Stock
as of the close of business on the Distribution Date and such separate
certificates alone will evidence Rights.

The Rights are not exercisable until the Distribution Date. The Rights will
expire on July 18, 2004, unless earlier redeemed by the Company as described
below.

The Purchase Price payable, and the number of shares of Common Stock or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock.

In the event that the Company is acquired in a merger or other business
combination, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the surviving company (or its parent company or other controlling entity) which
at the time of such transaction would have a market value of four times the
exercise price of the Right. In the event that the Company were the surviving
corporation in a merger with any Person, or in the event that the Stock
Acquisition Date occurs, the Rights Agreement provides that proper provision
would be made so that each holder of a Right, other than the Acquiring Person
(whose Rights would thereafter be null and void) and certain of its transferees,
would thereafter have the right to receive upon exercise that number of shares
of the Company's Common Stock having a market value of four times the exercise
price of the Right (i.e., a 75% discount to market value); if insufficient
shares are available to satisfy the Right, the Company may substitute other
consideration, as appropriate, or make an adjustment to the exercise price of
the

<PAGE>

Right to achieve substantially the intended economic benefit to shareholders
(other than the Acquiring Person) of the 75% discount.

With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares of Common Stock will be issued and, in lieu
thereof, if necessary, an adjustment in cash will be made based on the market
price of the Common Shares on the last trading date prior to the date of
exercise.

At any time prior to the close of business on the date that Rights holders
become entitled to purchase Common Stock of the Company (or of the surviving
entity after a merger with the Company) with a market value of four times the
Purchase Price (as described above), the Company may redeem the Rights in whole,
but not in part, at a price of $.001 per Right (payable in cash, shares of
Common Stock or other consideration), appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (the "Redemption Price"). Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company, including, without limitation, no right to vote or
to receive dividends.

The terms of the Rights may be amended by the Company and the Rights Agent,
provided that following the earlier of the Distribution Date and the Stock
Acquisition Date, the amendment does not materially adversely affect the
interests of the holders of the Rights (other than an Acquiring Person) and
provided that no amendment shall be made which decreases the Redemption Price.

A copy of the Rights Agreement is being filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of the
Rights Agreement will be available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference.

                                      B-3

<PAGE>

                       AMENDMENT NO. 1 TO RIGHTS AGREEMENT

     This Amendment dated as of May 1, 1995 between NEWMIL BANCORP, INC., a
Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent (the "Rights Agent") amends that certain Rights
Agreement dated as of July 19, 1994 by and between the Company and the Rights
Agent,

                               W I T N E S S E T H

     WHEREAS, on July 19, 1994, the Board of Directors of the Company authorized
and declared a dividend distribution of one Right (referred to in the Rights
Agreement as a "Right" and hereafter referred to in this Amendment as a "1994
Right") for each five outstanding shares of the Common Stock, par value $.50 per
share, of the Company (the "Common Stock") outstanding at the close of business
on July 19, 1994 (referred to in the Rights Agreement as the "Record Date")
(other than shares of such common stock held in the Company's treasury on such
date) and authorized the issuance of one 1994 Right (as such number may be
adjusted pursuant to Section 11(p) of the Rights Agreement) in respect of each
five shares of Common Stock that shall become outstanding after the Record Date
(whether originally issued or delivered from the Company's treasury) and on or
prior to the earlier of the Distribution Date and the Expiration Date (as such
terms are defined in the Rights Agreement), each Right representing the right

<PAGE>

to purchase one share of the Company's Common Stock upon the terms and subject
to the conditions set forth in the Rights Agreement (the "1994 Rights"); and

     WHEREAS, on April 18, 1995 the Board of Directors of the Company authorized
and declared a dividend distribution of four Rights (hereinafter referred to
collectively as the "1995 Rights" and individually as a "1995 Right") for each
five shares of the Common Stock outstanding at the close of business on May 1,
1995 (hereinafter referred to as the "1995 Record Date") (other than shares of
such Common Stock held in the Company's treasury on such date) and has
authorized the issuance of four 1995 Rights (as such number may hereafter be
adjusted pursuant to the provisions of Section 11(p) of the Rights Agreement) in
respect of each five shares of Common Stock of the Company that shall become
outstanding after the 1995 Record Date (whether originally issued or delivered
from the Company's treasury) and on or prior to the earlier of the Distribution
Date and the Expiration Date, each 1995 Right representing the right to purchase
one share of the Company's Common Stock upon the terms and subject to the
conditions hereinafter set forth; and

     WHEREAS, it is the intent of the Board of Directors of the Company that the
result of the declaration of the 1995 Rights when combined with the declaration
of the 1994 Rights will be that each

<PAGE>

share of the Common Stock of the Company will trade with one Right as of and
after the 1995 Record Date; and

     WHEREAS, the parties to the Rights Agreement desire to amend the Rights
Agreement to reflect the 1995 Rights;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     1. The "WHEREAS" paragraph of the Rights Agreement shall be, and hereby is,
superseded and replaced by the "WHEREAS" clauses set forth in this Amendment.

     2. For the purposes of the Rights Agreement, as amended, the term "Rights"
as used therein, shall mean the 1994 Rights and the 1995 Rights collectively.

     3. Sub-section (a) of Section 3. Issue of Rights Certificates shall be, and
                                      ----------------------------
hereby is, revised in its entirety to read as follows:

          (a) Until the earliest of (i) the close of business on the tenth day
     after the Stock Acquisition Date (or, if the

<PAGE>

     tenth business day after the Stock Acquisition Date occurs before the 1995
     Record Date, the close of business on the 1995 Record Date); or (ii) the
     close of business on the tenth Business Day after the date of the
     commencement of a tender or exchange offer by any Person if, upon
     consummation thereof, such Person would be an Acquiring Person (including
     any such date which is after the date of this Agreement and prior to the
     issuance of the Rights); or (iii) the tenth day (or such later day as may
     be determined by action of the Board of Directors of the Company prior to
     such time as any person becomes an Acquiring Person) after the filing by
     any Person (other than the Company) of a registration statement under the
     Securities Act of 1933, as amended, with respect to a contemplated exchange
     offer to acquire (when added to any shares as to which such person is the
     beneficial owner immediately prior to such filing) beneficial ownership of
     10% or more of the issued and outstanding shares of Common Stock; (the
     earliest of such dates being herein referred to as the "Distribution
     Date"), (x) the Rights will be evidenced (subject to the provisions of
     paragraph (b) of this Section 3) by the certificates for the Common Stock
     registered in the names of the holders of the Common Stock (which
     certificates for Common Stock shall be deemed also to be Right
     Certificates) and not by separate Right Certificates, and (y) the Rights
     will be transferable only in connection with the

                                       4.

<PAGE>

     transfer of the underlying shares of Common Stock. As soon as practicable
     after the Company has notified the Rights Agent of the occurrence of the
     Distribution Date, the Rights Agent will send, by first-class, insured,
     postage prepaid mail, to each record holder of the Common Stock as of the
     close of business on the Distribution Date, at the address of such holder
     shown on the records of the Company, one or more right certificates, in
     substantially the form of Exhibit A hereto (the "Right Certificates"),
     evidencing one Right for each full share of Common Stock so held, subject
     to adjustment as provided herein. In the event that an adjustment in the
     number of Rights per share of Common Stock has been made pursuant to
     Section 11(p) hereof, at the time of distribution of the Right
     Certificates, the Company shall make the necessary and appropriate rounding
     adjustments (in accordance with Section 14(a) hereof) so that the Right
     Certificates representing only whole numbers of Rights are distributed and
     cash is paid in lieu of any fractional Rights. As of and after the
     Distribution Date, the Rights will be evidenced solely by such Right
     Certificates.

     4. Sub-sections (b) and (c) of Section 3 Issue of Rights Certificates shall
                                              ----------------------------
be, and hereby are, revised by changing the term "Record Date" to read "1995
Record Date" in each instance in which such term appears in such sub-sections.

                                       5.

<PAGE>

     5. In sub-section (c) of Section 3. Issue of Rights Certificates, the
                                         ----------------------------
reference to the "Rights Agreement between NewMil Bancorp, Inc. and American
Stock Transfer & Trust Company dated as of July 19, 1994 (the "Rights
Agreement")" in the text of the legend set forth in such sub-section (c) shall
be deemed to refer to the Rights Agreement as amended by this Amendment.

     6. Section 4, Form of Right Certificates shall be, and hereby is, revised
                   --------------------------
by changing the term "Record Date" in the second sentence of this Section to
read "1995 Record Date."

     7. Exhibit A. Form of Right Certificate shall be, and hereby is, revised by
                   -------------------------
changing the reference to "July 19, 1994" in the next to last line on the first
page of the Exhibit to read "May 1, 1995."

     8. Exhibit B. Newmil Bancorp, Inc. Summary of Rights to Purchase Common
                   ---------------------------------------------------------
Shares shall be, and hereby is, revised in its entirety to read as set forth in
------
Exhibit B, attached hereto.

     9. The Rights Agreement is hereby ratified and confirmed and shall continue
in accordance with its terms as expressly modified herein.

                                       6.

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, as of the day and year first above written. NEWMIL BANCORP, INC.

                                            By
                                               ---------------------------------
                                               Chairman of the Board

                                            AMERICAN STOCK TRANSFER &
                                            TRUST COMPANY

                                            By
                                               ---------------------------------
                                               Vice President

                                       7.<PAGE>

                                                                    EXHIBIT 10.2
                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT is entered into effective as of this     day of
                                                                   -----
             ,2002, by and between Francis J. Wiatr (the "Executive")
-------------                                             ---------
 and NewMil Bancorp, Inc., a Delaware corporation.

     WHEREAS, the Executive is the Chairman, President and Chief Executive
Officer of NewMil Bancorp, Inc., possessing unique skills, knowledge, and
experience relating to NewMil Bancorp, Inc.'s business, and the Executive has
made and is expected to continue to make major contributions to the
profitability, growth and financial strength of NewMil Bancorp, Inc. and its
affiliates,

     WHEREAS, NewMil Bancorp, Inc. recognizes that, as is the case for most
companies, the possibility of a Change in Control (as defined herein) exists,

     WHEREAS, NewMil Bancorp, Inc. desires to assure itself of the current and
future continuity of management and desires to establish minimum severance
benefits for certain of its officers and other key employees, including the
Executive, if a Change in Control occurs,

     WHEREAS, NewMil Bancorp, Inc. 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, NewMil Bancorp, Inc. desires to provide additional inducement for
the Executive to remain in the employ of NewMil Bancorp, Inc. as President and
Chief Executive Officer,

     WHEREAS, NewMil Bancorp, Inc. and the Executive desire to set forth in this
Agreement the terms and conditions of the Executive's employment,

     WHEREAS, the Executive and NewMil Bank, a Connecticut-chartered savings
bank and wholly owned subsidiary of NewMil Bancorp, Inc., entered into an
"Employment Agreement" dated as of March 28, 1994, as amended by the First
Amendment dated October 20, 1996 and by the Second Amendment dated August 3,
1998, but the parties hereto intend that this Agreement supersede and replace in
its entirety that "Employment Agreement,"

     WHEREAS, NewMil Bank and the Executive entered into an Amended and Restated
Salary Continuation Agreement dated as of ,                        2002, and the
                                           -----------------------
 parties hereto intend that this Agreement shall have no effect on the Amended
and Restated Salary Continuation Agreement except as may be explicitly stated in
this Agreement, and NewMil Bancorp, Inc. and the Executive intend that the
Amended and Restated Salary Continuation Agreement, as the same may be amended
and restated after the date of this Agreement, shall continue in full force and
effect, and

     WHEREAS, none of the conditions or events included in the definition of the
term "golden parachute payment" that is set forth in Section 18(k)(4)(A)(ii) of
the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal
Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)]
exists or, to the best knowledge of NewMil Bancorp, Inc., is contemplated
insofar as NewMil Bancorp, Inc. or any of its affiliates is concerned.

     NOW THEREFORE, in consideration of these premises, the mutual covenants
contained herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.

                                    ARTICLE 1
                                   EMPLOYMENT

<PAGE>

     1.1 EMPLOYMENT. NewMil Bancorp, Inc. hereby employs the Executive to serve
NewMil Bancorp, Inc. as its President and Chief Executive Officer according to
the terms and conditions of this Agreement and for the period stated in Section
3 of this Agreement, and the Executive hereby accepts employment according to
the terms and conditions of this Agreement and for the period stated in Section
3 of this Agreement.

     1.2 SERVICE ON THE BOARD OF DIRECTORS. (a) Board of Directors of NewMil
Bancorp, Inc. NewMil Bancorp, Inc. shall nominate the Executive for election as
a director at such times as necessary so that the Executive may, if elected by
stockholders, remain a director of NewMil Bancorp, Inc. throughout the term of
this Agreement. The Executive hereby consents to serve as a director of NewMil
Bancorp, Inc., and the Executive hereby consents to being named as a director of
NewMil Bancorp, Inc. in documents filed by NewMil Bancorp, Inc. with the
Securities and Exchange Commission.

     (b) Board of Directors of NewMil Bank. The Executive is currently serving
as a director of NewMil Bank. The board of directors of NewMil Bancorp, Inc. and
the board of directors of NewMil Bank shall undertake every lawful effort to
ensure that the Executive continues throughout the term of his employment to be
elected or reelected as a director of NewMil Bank.

                                    ARTICLE 2
                                     DUTIES

     As President and Chief Executive Officer, the Executive shall serve under
the direction of NewMil Bancorp, Inc.'s board of directors and in accordance
with NewMil Bancorp, Inc.'s Certificate of Incorporation and Bylaws, as each may
be amended or restated from time to time. The Executive shall report directly to
the board of directors. He shall serve NewMil Bancorp, Inc. faithfully,
diligently, competently, and to the best of his ability, and he shall
exclusively devote his full time, energy, and attention to the business of
NewMil Bancorp, Inc. and to the promotion of its interests throughout the term
of this Agreement. Without the written consent of NewMil Bancorp, Inc.'s board
of directors, the Executive shall not render services to or for any person,
firm, corporation, or other entity or organization in exchange for compensation,
regardless of the form in which such compensation is paid and regardless of
whether it is paid directly or indirectly to the Executive. Nothing in this
Article 2 shall prevent the Executive from managing his personal investments and
affairs, provided that doing so does not interfere with the proper performance
of his duties and responsibilities as President and Chief Executive Officer.

                                    ARTICLE 3
                               TERM OF EMPLOYMENT

     The initial term of this Agreement shall be for a period of three years,
commencing              , 2002. On the first anniversary of the
          -------------                                        -----------------
, 2002 effective date of this Agreement and on each anniversary thereafter this
Agreement shall be extended automatically for one additional year unless NewMil
Bancorp, Inc.'s board of directors determines C

          (a)  that the Executive's performance has not met the board's
               expectations, and

          (b)  that the term shall not be extended.

     If the board of directors determines not to extend the term, it shall
promptly notify the Executive in writing. If the board decides not to extend the
term of this Agreement, this Agreement shall nevertheless remain in force until
its term expires. The board's decision not to extend the term of this Agreement
shall not C by itself C give the Executive any rights under this Agreement to
claim an adverse change in his position, compensation or circumstances or
otherwise to claim entitlement to severance or termination benefits under
Articles 6 or 7 of this Agreement. References herein to the term of this
Agreement shall refer to the initial term, as the same may be extended. Unless
sooner terminated, the Executive's employment shall terminate when he reaches
age 65.

                                    ARTICLE 4
                         COMPENSATION AND OTHER BENEFITS

                                       2

<PAGE>

     4.1 BASE SALARY. In consideration of the Executive's performance of his
obligations under this Agreement, NewMil Bancorp, Inc. shall cause NewMil Bank
to pay the Executive a salary at the annual rate of not less than $325,000,
payable in semi-monthly installments. The Executive's salary shall be subject to
annual review by the Salary and Benefits Committee of NewMil Bancorp, Inc.'s
board of directors. The Executive's salary, as the same may be adjusted from
time to time as a result of annual review by the Salary and Benefits Committee
and board action, is referred to in this Agreement as the "Base Salary."
                                                           -----------

     4.2 BENEFIT PLANS AND PERQUISITES. The Executive shall be entitled
throughout the term of this Agreement to participate in any and all officer or
employee compensation, bonus, incentive, and benefit plans in effect from time
to time, including without limitation plans providing pension, medical, dental,
disability, and group life benefits, and 401(k) retirement plans, and to receive
any and all other fringe benefits provided from time to time, provided that the
Executive satisfies the eligibility requirements for any such plans or benefits.
Without limiting the generality of the foregoing C

     (a) Participation in Stock Plans. The Executive shall be eligible to
participate in NewMil Bancorp, Inc.'s Second Amended and Restated 1986 Stock
Option and Incentive Plan for Officers and Key Employees (the "Stock Option
                                                               ------------
Plan") and other stock compensation, incentive, bonus, or purchase plans
----
existing on the date of this Agreement or adopted during the term of this
Agreement for the benefit of officers or employees.

     (b) Supplemental Retirement Plan. In 2005, on the third anniversary of the
execution of this Agreement and continuing every third anniversary thereafter
until payments under the Amended and Restated Salary Continuation Agreement
commence, NewMil Bancorp, Inc. will cause NewMil Bank to review the Amended and
Restated Salary Continuation Agreement for reasonableness of the Executive's
retirement benefits, taking into account projected benefits under the Amended
and Restated Salary Continuation Agreement, benefits under 401(k) plan(s) of
NewMil Bancorp, Inc. and subsidiaries, and the employer's portion of Social
Security benefits. The parties acknowledge that this triennial review obligation
is set forth in Section 7.18 of the Amended and Restated Salary Continuation
Agreement.

     (c) Life and Disability Insurance. (1) NewMil Bank is and shall remain the
owner of, and shall pay or cause to be paid all premiums as and when due on, the
Massachusetts Mutual Life Insurance Company policy on the Executive's life
(Policy Number 9681589 dated March 1, 1997), which policy has a face amount of
$1,112,282, as well as any replacement or substitute or additional whole life
policy on the Executive's life obtained in the future.

          (2) The Executive shall also be eligible to participate in any life
insurance and long-term disability plans maintained by NewMil Bancorp, Inc. and
subsidiaries from time to time during the term of this Agreement if any other
executive officers are entitled to participate in any such plans, subject to the
terms and provisions of such plans.

     (d) Automobile. The Executive shall receive an automobile allowance or use
of company-owned vehicles consistent with past practice.

     (e) Reimbursement of Business Expenses. The Executive shall be entitled to
reimbursement for all reasonable business expenses incurred in performing his
obligations under this Agreement, including but not limited to all reasonable
business travel and entertainment expenses incurred while acting at the request
of or in the service of NewMil Bancorp, Inc. or NewMil Bank, provided such
expenses are incurred and accounted for in accordance with the policies and
procedures established from time to time by NewMil Bancorp, Inc. or NewMil Bank.

     4.3 VACATION. The Executive shall be entitled to six weeks of paid vacation
annually and paid sick leave in accordance with the policies established from
time to time by NewMil Bancorp, Inc. or NewMil Bank. Unused vacation and sick
leave shall not accrue from year to year but shall be used, if at all, during
the calendar year in which they are first available, unless otherwise agreed to
by NewMil Bancorp, Inc.'s board.

                                    ARTICLE 5

                                       3

<PAGE>

                            TERMINATION OF EMPLOYMENT

     5.1 TERMINATION BY NEWMIL BANCORP, INC. (a) Death, Disability, or
Retirement. The Executive's employment shall terminate automatically on the date
of the Executive's death or on the date of the Executive's retirement. By
delivery of 30 days' advance written notice to the Executive, NewMil Bancorp,
Inc. also may terminate the Executive's employment if the Executive is
determined to be disabled, as defined in paragraph (e) below.

     (b) Termination Without Cause. With 90 days' advance written notice to the
Executive, NewMil Bancorp, Inc. may terminate the Executive's employment without
Cause.

     (c) Termination with Cause. Effective on the date on which termination
notice is given to the Executive and without the requirement of advance notice
to the Executive, NewMil Bancorp, Inc. may terminate the Executive's employment
with Cause. The Executive shall be deemed to have resigned as a director of
NewMil Bancorp, Inc. and NewMil Bank effective immediately after termination of
the Executive's employment for Cause under this Agreement, regardless of whether
the Executive submits a formal, written resignation as director.

     The Executive shall not be deemed to have been terminated for Cause under
this Agreement unless and until there is delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of at least three-fourths (:) of
the directors of NewMil Bancorp, Inc. then in office at a meeting of the board
of directors called and held for such purpose, which resolution shall (1)
contain findings that, in the good faith opinion of the board, the Executive has
committed an act constituting Cause, and (2) specify the particulars thereof in
detail. Notice of that meeting and the proposed termination for Cause shall be
given to the Executive a reasonable amount of time before the board's meeting.
The Executive and his counsel (if the Executive chooses to have counsel present)
shall have a reasonable opportunity to be heard by the board at the meeting.
Nothing in this Agreement limits the Executive's or his beneficiaries' right to
contest the validity or propriety of the board's determination of Cause.

     (d) Definition of Cause. For purposes of this Agreement, "Cause" means any
of the following C                                             -----

          (1) an intentional act of fraud, embezzlement, or theft by the
     Executive in the course of his employment with NewMil Bancorp, Inc. or
     NewMil Bank. For purposes of this Agreement, no act or failure to act on
     the part of the Executive shall be deemed to have been intentional if it
     was due primarily to an error in judgment or negligence. An act or failure
     to act on the Executive's part shall be considered intentional if it is not
     in good faith and if it is without a reasonable belief that the action or
     failure to act is in the best interests of NewMil Bancorp, Inc.,

          (2) intentional wrongful damage by the Executive to the business or
     property of NewMil Bancorp, Inc. or NewMil Bank, causing material harm to
     NewMil Bancorp, Inc. or NewMil Bank,

          (3) material breach by the Executive of this Agreement,

          (4) gross negligence or insubordination by the Executive in the
     performance of his duties as an officer of NewMil Bancorp, Inc. or NewMil
     Bank,

          (5) breach by the Executive of his fiduciary duties to NewMil Bancorp,
     Inc. and its stockholders or misconduct involving dishonesty, in either
     case whether in his capacity as an officer or as a director of NewMil
     Bancorp, Inc.,

          (6) conviction of the Executive for a felony or conviction of a
     misdemeanor involving moral turpitude,

          (7) intentional violation of any law or significant policy of NewMil
     Bancorp, Inc. or NewMil Bank committed in connection with the Executive's
     employment, which, in NewMil Bancorp, Inc.'s sole judgment, has an adverse
     effect on NewMil Bancorp, Inc. or NewMil Bank, or

                                       4

<PAGE>

          (8) removal of the Executive from office or permanent prohibition of
     the Executive from participating in the conduct of NewMil 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).

     (e) Definition of Disability. For purposes of this Agreement, the Executive
shall be deemed to be "disabled" if an independent physician selected by NewMil
                       --------
Bancorp, Inc. and reasonably acceptable to the Executive or his legal
representative determines that, because of illness or accident, the Executive is
unable to perform his duties and will be unable to perform his duties for a
period of 180 consecutive days or for any period of eight of 12 consecutive
months. The Executive shall not be deemed to be disabled, however, if he returns
to work on a full-time basis within 30 days after NewMil Bancorp, Inc. gives him
notice of termination due to disability. NewMil Bancorp, Inc. may require the
Executive to submit to such physical or mental evaluations and tests as NewMil
Bancorp, Inc.'s board of directors deems appropriate.

     5.2 TERMINATION BY THE EXECUTIVE. The Executive may terminate his
employment with 30 days' advance written notice to NewMil Bancorp, Inc., whether
with or without Good Reason. If the Executive terminates for Good Reason, the
termination will take effect at the conclusion of the 30-day period unless the
event or circumstance constituting Good Reason is cured by NewMil Bancorp, Inc.
or unless the notice of termination for Good Reason is revoked by the Executive
within the 30-day period. For purposes of this Agreement, "Good Reason" means
                                                           -----------
any of the following events occur

     (a) Reduction in Base Salary: involuntary reduction in the Executive's Base
Salary,

     (b) Reduced Participation in Bonus, Incentive, Compensation, and Other
Plans: involuntary reduction in the Executive's bonus, incentive, and other
compensation award opportunities under NewMil Bancorp, Inc.'s benefit plans and
NewMil Bank's benefit plans, unless in the case of either company a company-wide
reduction of all officers' award opportunities occurs simultaneously,

     (c) Participation in Benefit Plans: involuntary discontinuance of the
Executive's participation in any officer or employee benefit plans maintained by
NewMil Bancorp, Inc. or by NewMil Bank, unless such plans are discontinued by
reason of law or loss of tax deductibility to NewMil Bancorp, Inc. with respect
to contributions to such plans, or are discontinued as a matter of NewMil
Bancorp, Inc. policy or NewMil Bank policy applied equally to all participants
in such plans,

     (d) Reduction in Responsibilities or Status: assignment to the Executive of
duties or responsibilities that are materially inconsistent with the Executive's
position as NewMil Bancorp, Inc.'s principal executive officer or that represent
a reduction of his authority; any other action by NewMil Bancorp, Inc. or its
successor that results in a material reduction or material adverse change in the
Executive's position, authority, duties or responsibilities; failure to appoint
or reappoint the Executive as President and Chief Executive Officer of NewMil
Bancorp, Inc.; failure to nominate the Executive as a director of NewMil
Bancorp, Inc.; or failure to elect or reelect the Executive or cause the
Executive to be elected or reelected to the board of directors of NewMil Bank in
accordance with Section 1.2(b) of this Agreement without the Executive's written
consent,

     (e) Failure to Obtain Assumption Agreement: failure to obtain an assumption
of NewMil Bancorp, Inc.'s obligations under this Agreement by any successor to
NewMil Bancorp, Inc., regardless of whether such entity becomes a successor to
NewMil Bancorp, Inc. as a result of a merger, consolidation, sale of assets, or
other form of reorganization,

     (f) Termination without Compliance with this Agreement: termination by
NewMil Bancorp, Inc. of Executive's employment effected in a manner that does
not satisfy the requirements of this Agreement,

     (g) Material Breach: a material breach of this Agreement by NewMil Bancorp,
Inc. that is not corrected within a reasonable time, or

                                       5

<PAGE>

     (h) Relocation of the Executive: relocation of NewMil Bancorp, Inc.'s
principal executive offices, or requiring the Executive to change his principal
work location, to any location that is more than 15 miles from the location of
NewMil Bancorp, Inc.'s principal executive offices on the date of this
Agreement.

     5.3 NOTICE. Any purported termination by NewMil Bancorp, Inc. or by the
Executive shall be communicated by written notice of termination to the other
party. The notice must state the specific termination provision of this
Agreement relied upon. The notice must also state the date on which termination
shall become effective, which shall be a date not earlier than the date of the
termination notice. If termination is for Cause or with Good Reason, the notice
must state in reasonable detail the facts and circumstances forming the basis
for termination of the Executive's employment.

                                    ARTICLE 6
                   COMPENSATION AND BENEFITS UPON TERMINATION

     6.1 DEATH. If the Executive's employment terminates because of his death,
any bonus earned by the Executive or accrued by NewMil Bank for his benefit but
not paid at the time of the Executive's death and any compensation shall be paid
to the Executive's estate. NewMil Bancorp, Inc. shall also provide or cause to
be provided to the Executive or his estate such other benefits as may be
available under NewMil Bancorp, Inc.'s or NewMil Bank's benefit plans and
policies.

     6.2 DISABILITY. If the Executive's employment terminates because of his
disability, the Executive shall be entitled to receive the Base Salary to which
he was entitled through the date on which termination became effective and
continuing for six months thereafter, any unpaid bonus or incentive compensation
due to the Executive for the calendar year preceding the calendar year in which
the termination became effective, any payments the Executive is eligible to
receive under any disability insurance program in which the Executive
participates, and such other benefits as may be available to the Executive
through NewMil Bancorp, Inc.'s or NewMil Bank's benefit plans and policies.

     6.3 CAUSE. If the Executive's employment terminates for Cause, the
Executive shall be entitled to receive the Base Salary to which he was entitled
through the date on which termination became effective, and such other benefits
as may be available to him through NewMil Bancorp, Inc.'s or NewMil Bank's
benefit plans and policies in effect on the date of termination.

     6.4 TERMINATION BY NEWMIL BANCORP, INC. WITHOUT CAUSE AND TERMINATION BY
THE EXECUTIVE FOR GOOD Reason. (a) Continued Base Salary. If NewMil Bancorp,
Inc. terminates the Executive's employment without Cause or if the Executive
terminates employment for Good Reason, the Executive's Base Salary and other
benefits under Section 4.2 of this Agreement shall continue for a period of 36
months from the date of termination (other than continued participation in
NewMil Bancorp, Inc.'s or subsidiary's 401(k) retirement plan(s) or any stock
plans). The parties hereto acknowledge and agree that the compensation and
benefits that may be payable to the Executive under this Section 6.4 shall not
be payable if compensation and benefits are payable or shall have been
previously paid to the Executive under Article 7 of this Agreement. That is, the
parties acknowledge and agree that the Executive shall not be entitled to
duplicate compensation and benefit payments under this Section 6.4 and under
Article 7 if the Executive's employment is terminated without Cause or if the
Executive terminates employment with Good Reason within 24 months after a Change
in Control.

     (b) Cash-out of the Value of Unvested Stock Options. If NewMil Bancorp,
Inc. terminates the Executive's employment without Cause or if the Executive
terminates employment with Good Reason before full vesting of stock option or
other stock-based awards then held by him, the Executive shall be entitled to
receive from NewMil Bancorp, Inc. an amount in cash equal to the value of the
unvested stock options or stock awards as of the effective date of termination.
Amounts payable under this paragraph (b) shall be paid in a single lump sum
within 90 days after termination of the Executive's employment.

     (c) Cash-out of the Executive's 401(k) Plan Account. If NewMil Bancorp,
Inc. terminates the Executive's employment without Cause or if the Executive
terminates employment with Good Reason before full vesting of the

                                       6

<PAGE>

amounts then credited to his matching and profit-sharing contributions account
under NewMil Bancorp, Inc.'s 401(k) plan(s), the Executive shall be entitled to
receive from NewMil Bancorp, Inc. an amount in cash equal to the value of any
unvested contributions as of the effective date of termination. Amounts payable
under this paragraph (c) shall be paid in a single lump sum within 90 days after
termination of the Executive's employment.

     (d) Outplacement and Support. If NewMil Bancorp, Inc. terminates the
Executive's employment without Cause or if the Executive terminates employment
with Good Reason, NewMil Bancorp, Inc. shall pay to the Executive reasonable
outplacement expenses in an amount up to $25,000, and NewMil Bancorp, Inc. shall
provide the Executive with the use of office space and reasonable office support
facilities, including secretarial assistance, for a period of one year after
termination.

     (e) Medical Coverage. If NewMil Bancorp, Inc. terminates the Executive's
employment without Cause or if the Executive terminates employment with Good
Reason, NewMil Bancorp, Inc. shall continue or cause to be continued at NewMil
Bancorp, Inc.'s expense life, health, and disability insurance coverage for the
Executive and his dependents that is at least as favorable as the coverage
maintained by or on the Executive's behalf at the time of termination. Such
coverage shall cease when the Executive becomes employed by another employer or
thirty six months after NewMil Bancorp, Inc. terminates the Executive's
employment without Cause or thirty-six months after the Executive terminates
employment with Good Reason, whichever occurs first.

     6.5 TERMINATION BY THE EXECUTIVE OTHER THAN FOR GOOD REASON. If the
Executive terminates employment with NewMil Bancorp, Inc. other than for Good
Reason, the Executive's entitlement under this Article 6 shall be limited to the
Base Salary to which he is entitled through the date on which his termination
becomes effective, such other benefits as may be available to him through NewMil
Bancorp, Inc.'s or NewMil Bank's benefit plans and policies, and such other
benefits as may be specified in this Agreement.

                                    ARTICLE 7
                           CHANGE IN CONTROL BENEFITS

     7.1 CHANGE IN CONTROL BENEFITS. (a) Lump Sum Payment. If a Change in
Control occurs during the term of this Agreement, NewMil Bancorp, Inc. shall
make a lump sum payment to the Executive in an amount in cash equal to three
times the Executive's annual compensation. For this purpose, annual compensation
means (1) the Executive's Base Salary at the time of the Change in Control, plus
(2) any bonuses or incentive compensation earned for the calendar year
immediately preceding the year in which the Change in Control occurs, regardless
of when the bonus(es) or incentive compensation earned for the preceding
calendar year is paid and regardless of whether all or part of the bonus or
incentive compensation is subject to mandatory or elective deferral. The amount
payable to the Executive hereunder shall not be reduced to account for the time
value of money or discounted to present value. The payment required under this
paragraph (c) is payable no later than five business days after the Change in
Control, and

     (b) Benefit Plans. If a Change in Control occurs during the term of this
Agreement, NewMil Bancorp, Inc. shall cause the Executive to become fully vested
in any qualified and non-qualified plans, programs or arrangements in which the
Executive participated if the plan, program, or arrangement does not address the
effect of a change in control. NewMil Bancorp, Inc. also shall contribute or
cause to be contributed to the Executive's 401(k) plan account the matching and
profit-sharing contributions, if any, that would have been made had the
Executive's employment not terminated before the end of the plan year. NewMil
Bancorp, Inc. shall also continue or cause to be continued life, health and
disability insurance coverage for the Executive and his dependents that is at
least as favorable as the coverage maintained by or on the Executive's behalf
before his termination. The insurance coverage may cease when the Executive
becomes employed by another employer or thirty six months after the Executive's
employment terminates, whichever occurs first.

     7.2 DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement,
"Change in Control" means any of the following events occur C
 -----------------

                                       7

<PAGE>

     (a) Merger. NewMil Bancorp, Inc. merges into or consolidates with another
corporation, or merges another corporation into NewMil Bancorp, Inc., and as a
result less than 50% of the combined voting power of the resulting corporation
immediately after the merger or consolidation is held by persons who were the
holders of NewMil Bancorp, Inc.'s voting securities immediately before the
merger or consolidation. For purposes of this Agreement, the term "person" means
                                                                   ------
an individual, corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or other
entity,

     (b) Acquisition of Significant Share Ownership. A report on Schedule 13D or
another form or schedule (other than Schedule 13G) is filed or is required to be
filed under sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if
the schedule discloses that the filing person or persons acting in concert has
or have become the beneficial owner of 25% or more of a class of NewMil Bancorp,
Inc.'s voting securities, but this paragraph (b) shall not apply to beneficial
ownership of voting shares of NewMil Bancorp, Inc. held in a fiduciary capacity
by an entity in which NewMil Bancorp, Inc. directly or indirectly beneficially
owns 50% or more of the outstanding voting securities,

     (c) Change in Board Composition. during any period of two consecutive
years, individuals who constitute NewMil Bancorp, Inc.'s board of directors at
the beginning of the two-year period cease for any reason to constitute at least
a majority thereof; provided, however, that C for purposes of this paragraph (c)
C each director who is first elected by the board (or first nominated by the
board for election by stockholders) by a vote of at least two-thirds (b) of the
directors who were directors at the beginning of the period shall be deemed to
have been a director at the beginning of the two-year period, or

     (d) Sale of Assets. NewMil Bancorp, Inc. sells to a third party all or
substantially all of NewMil Bancorp, Inc.'s assets. For this purpose, sale of
all or substantially all of NewMil Bancorp, Inc.'s assets includes sale of the
shares or assets of NewMil Bank.

     7.3 NO MULTIPLE SEVERANCE PAYMENTS. If the Executive receives payment under
Section 7.1 of the full amount of the Change in Control payments to which he is
entitled as the result of termination of employment after a Change in Control,
he shall not be entitled to any additional severance benefits under Section 6.4
of this Agreement.

                                    ARTICLE 8
                                 CONFIDENTIALITY

     8.1 NON-DISCLOSURE. The Executive covenants and agrees that he will not
reveal to any person, firm, or corporation any confidential information of any
nature concerning NewMil Bancorp, Inc. or its business, or anything connected
therewith. As used in this Article 8, the term "confidential information" means
                                                ------------------------
all of NewMil Bancorp, Inc.'s confidential and proprietary information and trade
secrets in existence on the date hereof or at any time during the term of this
Agreement, including but not limited to C

          (a) the whole or any portion or phase of any business plans, financial
     information, purchasing data, supplier data, accounting data or other
     financial information,

          (b) the whole or any portion or phase of any research and development
     information, design procedures, algorithms or processes or other technical
     information,

          (c) the whole or any portion or phase of any marketing or sales
     information, sales records, customer lists, prices, sales projections or
     other sales information, and

          (d) trade secrets, as defined from time to time by the laws of the
     State of Connecticut.

Notwithstanding the foregoing, confidential information excludes information
that C as of the date hereof or at any time after the date hereof C is published
or disseminated without obligation of confidence or that becomes a part of the
public domain (1) by or through action of NewMil Bancorp, Inc., or (2) otherwise
than by or at the direction of

                                       8

<PAGE>

the Executive. This Section 8.1 does not prohibit disclosure required by an
order of a court having jurisdiction or a subpoena from an appropriate
governmental agency or disclosure made by the Executive in the ordinary course
of business and within the scope of his authority.

     8.2 RETURN OF MATERIALS. The Executive agrees to deliver or return to
NewMil Bancorp, Inc. upon termination, upon expiration of this Agreement, or as
soon thereafter as possible, all written information and any other similar items
furnished by NewMil Bancorp, Inc. or prepared by the Executive in connection
with his services hereunder. The Executive will retain no copies thereof after
termination of this Agreement or termination of the Executive's employment with
NewMil Bancorp, Inc..

     8.3 INJUNCTIVE RELIEF. The Executive acknowledges that it is impossible to
measure in money the damages that will accrue to NewMil Bancorp, Inc. if the
Executive fails to observe the obligations imposed on him by this Article 8.
Accordingly, if NewMil Bancorp, Inc. institutes an action to enforce the
provisions hereof, the Executive hereby waives the claim or defense that an
adequate remedy at law is available to NewMil Bancorp, Inc., and the Executive
agrees not to urge in any such action the claim or defense that an adequate
remedy at law exists.

     8.4 AFFILIATES' CONFIDENTIAL INFORMATION IS COVERED; CONFIDENTIALITY
OBLIGATION SURVIVES TERMINATION. For purposes of this Article 8, the term
"NewMil Bancorp, Inc." shall include NewMil Bank and any affiliate of NewMil
Bank. For purposes of this Agreement, the term "affiliate" means any entity that
                                                ---------
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with NewMil Bank. The rights and
obligations set forth in this Article 8 shall survive termination of this
Agreement.

                                    ARTICLE 9
                          INDEMNIFICATION AND INSURANCE

     9.1 INDEMNIFICATION. Subject to the exclusions contained in Section 9.6,
NewMil Bancorp, Inc. shall indemnify the Executive with respect to his
activities as a director, officer, employee, or agent of NewMil Bancorp, Inc. C
or as a person who is serving or has served at the request of NewMil Bancorp,
Inc. ("representative") as a director, officer, employee, agent, or trustee of
       --------------
an affiliated corporation, joint venture, trust, or other enterprise, domestic
or foreign, in which NewMil Bancorp, Inc. has a direct or indirect ownership
interest C against expenses (including without limitation attorneys' fees,
judgments, fines, and amounts paid in settlement) actually and reasonably
incurred by him ("Expenses") in connection with any claim against the Executive
                  --------
that is the subject of any threatened, pending, or completed action, suit, or
other type of proceeding, whether civil, criminal, administrative,
investigative, or otherwise and whether formal or informal (a "Proceeding"), to
                                                               ----------
which the Executive was, is, or is threatened to be made a party by reason of
the Executive being or having been such a director, officer, employee, agent, or
representative, to the extent of the highest and most advantageous to the
Executive, as determined by the Executive, of one or any combination of the
following C

          (a) The benefits provided by NewMil Bancorp, Inc.'s Certificate of
          Incorporation, as amended or restated (the "Certificate of
                                                      --------------
          Incorporation") or Bylaws, or the Certificate or Articles of
          -------------
          Incorporation/Association or Bylaws of an affiliated entity of which
          the Executive serves as a representative, in each case as in effect on
          the date hereof,

          (b) The benefits provided by NewMil Bancorp, Inc.'s Certificate of
          Incorporation or Bylaws, or the Certificate or Articles of
          Incorporation/Association or Bylaws of an affiliated entity of which
          the Executive serves as a representative, in each case as in effect at
          the time Expenses are incurred by the Executive,

          (c) The benefits allowable under Delaware law in effect at the date
          hereof,

          (d) The benefits allowable under the law of the jurisdiction under
          which NewMil Bancorp, Inc. exists at the time Expenses are incurred by
          the Executive,

                                       9

<PAGE>

          (e) The benefits available under any liability insurance obtained by
          NewMil Bancorp, Inc. in effect when a claim is made against the
          Executive,

          (f) The benefits available under any liability insurance obtained by
          NewMil Bancorp, Inc. in effect at the time Expenses are incurred by
          the Executive, and

          (g) Such other benefits as are or may be otherwise available to the
          Executive.

     Combination of two or more of the benefits provided by (a) through (g)
shall be available unless the Applicable Document (as hereafter defined)
requires that the benefits provided therein be exclusive of other benefits. The
document or law providing for the benefits listed in items (a) through (g) above
is called the "Applicable Document" in this Article 9. NewMil Bancorp, Inc.
               -------------------
hereby undertakes to use its best efforts to assist the Executive, in all proper
and legal ways, to obtain the benefits selected by the Executive under
paragraphs (a) through (g) above.

     For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans for employees of NewMil Bancorp, Inc. or of any
affiliated entity, without regard to ownership of such plans; references to
"fines" shall include any excise taxes assessed on the Executive with respect to
any employee benefit plan; references to "serving at the request of NewMil
Bancorp, Inc." shall include any service as a director, officer, employee or
agent of NewMil Bancorp, Inc. which imposes duties on, or involves services by,
the Executive with respect to an employee benefit plan, its participants or
beneficiaries; references to the masculine shall include the feminine;
references to the singular shall include the plural and vice versa; and if the
Executive acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan,
he shall be deemed to have acted in a manner consistent with the standards
required for indemnification by NewMil Bancorp, Inc. under the Applicable
Documents.

     9.2 INSURANCE. NewMil Bancorp, Inc. shall maintain liability insurance for
so long as the Executive's services are covered hereunder, provided and to the
extent that such insurance is available on a basis acceptable to NewMil Bancorp,
Inc.. However, NewMil Bancorp, Inc. agrees that the provisions hereof shall
remain in effect regardless of whether liability or other insurance coverage is
at any time obtained or retained by NewMil Bancorp, Inc.. But payments made to
the Executive under an insurance policy obtained or retained by NewMil Bancorp,
Inc. shall reduce NewMil Bancorp, Inc.'s obligation to make payments hereunder
by the amount of the payments made under any such insurance policy.

     9.3 PAYMENT OF EXPENSES. At the Executive's request C after the Executive
gives to NewMil Bancorp, Inc. written notice and an undertaking to repay such
amounts so paid on the Executive's behalf if it shall ultimately be determined
under the Applicable Document that the Executive is not entitled to be
indemnified by NewMil Bancorp, Inc. for such Expenses C NewMil Bancorp, Inc.
shall pay Expenses as and when incurred by the Executive. That portion of
Expenses representing attorneys' fees and other costs incurred in defending any
proceeding shall be paid by NewMil Bancorp, Inc. within 30 days after NewMil
Bancorp, Inc. receives the request and reasonable documentation evidencing the
amount and nature of the Expenses, subject to its also having received such a
notice and undertaking.

     9.4 ADDITIONAL RIGHTS. The indemnification provided in this Agreement shall
not be exclusive of any other indemnification or right to which the Executive
may be entitled and shall continue after the Executive has ceased to occupy a
position as an officer, director, employee, agent, or representative as
described in Section 9.1 above with respect to Proceedings relating to or
arising out of the Executive's acts or omissions during his service in such
position. The benefits provided to the Executive under this Agreement for the
Executive's service as a representative shall be payable if and only if and only
to the extent that reimbursement to the Executive by the affiliated entity with
which the Executive has served as a representative, whether pursuant to
agreement, applicable law, articles of incorporation or association, by-laws or
regulations of the entity, or insurance maintained by such affiliated entity, is
insufficient to compensate the Executive for Expenses actually incurred and
otherwise payable by NewMil Bancorp, Inc. under this Agreement. Any payments in
fact made to or on behalf of the Executive directly

                                       10

<PAGE>

or indirectly by the affiliated entity with which the Executive served as a
representative shall reduce the obligation of NewMil Bancorp, Inc. hereunder.

     9.5 NOTICE TO COMPANY. The Executive shall provide to NewMil Bancorp, Inc.
prompt written notice of any Proceeding brought, threatened, asserted, or
commenced against the Executive with respect to which the Executive may assert a
right to indemnification hereunder; provided, however, that failure to provide
such notice shall not in any way limit the Executive's rights under this
Agreement.

     9.6 EXCLUSIONS. (a) Notwithstanding the scope of indemnification available
to the Executive from time to time under any Applicable Document, no
indemnification, reimbursement, or payment shall be required of NewMil Bancorp,
Inc. hereunder for C

          (1) any claim or any part thereof as to which the Executive shall have
     been determined by a court of competent jurisdiction, from which no appeal
     is or can be taken, by clear and convincing evidence, to have acted with
     deliberate intent to cause injury to NewMil Bancorp, Inc. or with reckless
     disregard for the best interests of NewMil Bancorp, Inc.,

          (2) any claim or any part thereof arising under Section 16(b) of the
     Securities Exchange Act of 1934 pursuant to which the Executive shall be
     obligated to pay any penalty, fine, settlement or judgment,

          (3) any obligation of the Executive based upon or attributable to the
     Executive gaining in fact any personal gain, profit, or advantage to which
     he was not entitled, or

          (4) any proceeding initiated by the Executive without the consent or
     authorization of NewMil Bancorp, Inc.'s board of directors, but this
     exclusion shall not apply to any claims brought by the Executive (a) to
     enforce his rights under this Agreement, or (b) in any Proceeding initiated
     by another person or entity, regardless of whether such claims are brought
     by the Executive against a person or entity who was or was not otherwise a
     party to the proceeding.

     (b) Furthermore, anything herein to the contrary notwithstanding, nothing
in this Article 9 requires indemnification, reimbursement, or payment by NewMil
Bancorp, Inc., and the Executive shall not be entitled to demand
indemnification, reimbursement, or payment under this Article 9, if and to the
extent indemnification, reimbursement, or payment constitutes a "prohibited
indemnification payment" within the meaning of Federal Deposit Insurance
Corporation Rule 359.1(l)(1) [12 CFR 359.1(l)(1)].

                                   ARTICLE 10
                                  MISCELLANEOUS

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

     (b) This Agreement Is Enforceable by the Executive and His 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.

                                       11

<PAGE>

     (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 herein. 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 the
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 10.1, NewMil
Bancorp, Inc. shall have no liability to pay any amount to the assignee or
transferee.

     10.2 GOVERNING LAW, JURISDICTION AND FORUM. This Agreement shall be
construed under and governed by the internal laws of the State of Connecticut
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Connecticut or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Connecticut. By entering into this Agreement, the Executive acknowledges that he
is subject to the jurisdiction of both the federal and state courts in the State
of Connecticut. Any actions or proceedings instituted under this Agreement shall
be brought and tried solely in courts located in the County of Litchfield, State
of Connecticut, or in the federal court having jurisdiction in New Milford,
Connecticut. The Executive expressly waives his rights to have any such actions
or proceedings brought or tried elsewhere.

     10.3 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties concerning the employment of the Executive by NewMil Bancorp, Inc.,
and any oral or written statements, representations, agreements, or
understandings made or entered into prior to or contemporaneously with the
execution of this Agreement, are hereby rescinded, revoked, and rendered null
and void by the parties. Anything herein to the contrary notwithstanding
however, nothing in this Agreement shall affect the Amended and Restated Salary
Continuation Agreement dated as of January , 2002 by and between NewMil Bank and
the Executive. The Amended and Restated Salary Continuation Agreement and the
parties' rights and obligations thereunder shall remain in full force and effect
according to the terms of that agreement, as the same may be amended and
restated after the date of this Agreement. Benefits payable under this Agreement
shall not be reduced by any benefits payable under the Amended and Restated
Salary Continuation Agreement, and benefits payable under the Amended and
Restated Salary Continuation Agreement shall not be reduced by any benefits
payable under this Agreement.

     Without limiting the generality of the foregoing, the parties hereto
acknowledge and agree that this Agreement supersedes in its entirety the
"Employment Agreement" entered into by the Executive and NewMil Bank as of March
28, 1994, as amended by the First Amendment dated October 20, 1996 and the
Second Amendment dated August 3, 1998, which shall hereafter be void and of no
force or effect.

     Both parties hereto having participated in the negotiation and drafting of
this Agreement, they hereby agree that there shall not be strict interpretation
against either party in connection with any review of this Agreement in which
interpretation thereof is an issue.

     10.4 NOTICES. Any notice required or permitted under this Agreement shall
be deemed to have been effectively made or given if in writing and personally
delivered, delivered by mail properly addressed in a sealed envelope, postage
prepaid by certified or registered mail, delivered by a reputable overnight
delivery service, or sent by facsimile. 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, Inc. at the time of
the delivery of such notice, and properly addressed to NewMil Bancorp, Inc. if
addressed to NewMil Bancorp, Inc., 19 Main Street, P.O. Box 600, New Milford,
Connecticut 06776, Attention: Secretary.

     10.5 SEVERABILITY. In the case of conflict between any provision of this
Agreement and any statute, regulation or judicial precedent, the latter shall
prevail, but the affected provisions of this Agreement shall be curtailed and
limited solely to the extent necessary to bring them within the requirements of
law. If any provision of this Agreement is held by a court of competent
jurisdiction to be indefinite, invalid, void or voidable, or otherwise
unenforceable, the balance of this Agreement shall continue in full force and
effect unless such construction would clearly be contrary to the intentions of
the parties or would result in an injustice.

                                       12

<PAGE>

     10.6 CAPTIONS AND COUNTERPARTS. The captions in this Agreement are inserted
solely for convenience. The captions in no way define, limit, or describe the
scope or intent of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

     10.7 PAYMENT OF LEGAL FEES. (a) The Executive May Enforce this Agreement
Through Legal Action. NewMil Bancorp, Inc. irrevocably authorizes the Executive
to retain from time to time counsel of the Executive's choice to advise and
represent him in the interpretation, enforcement, or defense of the parties'
rights and responsibilities under this Agreement if C

          (1) the Executive concludes that NewMil Bancorp, Inc. has failed to
          comply with any of its obligations under Section 7.1 of this
          Agreement, or

          (2) if following a Change in Control NewMil Bancorp, Inc. or any other
          person takes or threatens to take any action to declare this Agreement
          void or unenforceable, or institutes any litigation or other action or
          proceeding designed to deny, or to recover from, the Executive the
          benefits provided or intended to be provided to the Executive under
          this Agreement,

including without limitation the initiation or defense of any litigation or
other legal action, whether by or against NewMil Bancorp, Inc. or any director,
officer, stockholder, or other person affiliated with NewMil Bancorp, Inc., in
any jurisdiction.

     (b) Fees and Expenses Will Be Paid by NewMil Bancorp, Inc. NewMil Bancorp,
Inc. desires that the Executive not be required to incur legal fees and the
related costs and expenses associated with the interpretation, enforcement or
defense of his rights under this Agreement by litigation or otherwise, because
the amounts thereof would substantially detract from the benefits intended to be
extended to the Executive under this Agreement. Therefore, even if the Executive
does not prevail in whole or in part in the litigation or other legal action
associated with the interpretation, enforcement, or defense of his rights under
this Agreement pursuant to the immediately preceding subparagraph (a), NewMil
Bancorp, Inc. hereby agrees to pay and be solely financially responsible for any
and all attorneys' and related fees, costs and expenses incurred by the
Executive in the litigation or other legal action, up to a maximum of $500,000.
The fees and expenses of counsel selected by the Executive shall be paid or
reimbursed to the Executive by NewMil Bancorp, Inc. on a regular, periodic
basis, upon presentation by the Executive of a statement or statements prepared
by such counsel in accordance with counsel's customary practices. Anything
herein to the contrary notwithstanding, nothing in this Agreement authorizes
NewMil Bancorp, Inc. to pay or the Executive to demand payment of fees, costs
and expenses if and to the extent payment of fees, costs and expenses
constitutes a "prohibited indemnification payment" within the meaning of Federal
Deposit Insurance Corporation Rule 359.1(l)(1) [12 CFR 359.1(l)(1)].

     (c) The Executive May Use NewMil Bancorp, Inc.'s Counsel. Notwithstanding
any existing or previous attorney-client relationship between NewMil Bancorp,
Inc. and any counsel chosen by the Executive under paragraph (a), NewMil
Bancorp, Inc. irrevocably consents to the Executive's entering into an
attorney-client relationship with that counsel, and NewMil Bancorp, Inc. and the
Executive agree that a confidential relationship shall exist between the
Executive and that counsel.

     10.8 NO DUTY TO MITIGATE. NewMil Bancorp, Inc. hereby acknowledges that it
will be difficult and could be impossible (a) for the Executive to find
reasonably comparable employment after his employment terminates, and (b) to
measure the amount of damages the Executive may suffer as a result of
termination. Additionally, NewMil Bancorp, Inc. acknowledges that its general
severance pay plans do not provide for mitigation, offset or reduction of any
severance payment received thereunder. Accordingly, NewMil Bancorp, Inc. further
acknowledges that the payment of severance and termination benefits under this
Agreement is reasonable and shall be liquidated damages. The Executive shall not
be required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment. Moreover, the amount of any payment provided for in
this Agreement shall not be reduced by any compensation earned or benefits
provided as the result of employment of the Executive or as a result of the
Executive being self-employed after termination of his employment.

                                       13

<PAGE>

     10.9 AMENDMENT AND WAIVER. This Agreement may not be amended, released,
discharged, abandoned, changed, or modified in any manner, except by an
instrument in writing signed by each of the parties hereto. The failure of any
party hereto to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such provision, nor in any
way to affect the validity of this Agreement or any part thereof or the right of
any party thereafter to enforce each and every such provision. No waiver or any
breach of this Agreement shall be held to be a waiver of any other or subsequent
breach.

     10.10 INTERNAL REVENUE CODE SECTION 280G GROSS-UP. (a) Additional Payment
to Account for Excise Taxes. If as a result of a Change in Control the Executive
becomes entitled to acceleration of benefits under this Agreement or under any
other plan or agreement of or with NewMil Bank or NewMil Bancorp, Inc.,
including accelerated vesting of stock options granted under the Stock Option
Plan and acceleration of benefits under any other benefit, compensation, or
incentive plan or arrangement with NewMil Bancorp, Inc. or NewMil Bank
(collectively, the "Total Benefits"), and if any part of the Total Benefits is
                    --------------
subject to the Excise Tax under section 280G and section 4999 of the Internal
Revenue Code (the "Excise Tax"), NewMil Bancorp, Inc. shall pay to the Executive
                   ----------
the following additional amounts, consisting of (1) a payment equal to the
Excise Tax payable by the Executive on the Total Benefits under section 4999 of
the Internal Revenue Code (the "Excise Tax Payment"), and (2) a payment equal to
                                ------------------
the amount necessary to provide the Excise Tax Payment net of all income,
payroll and excise taxes. Together, the additional amounts described in clauses
(1) and (2) are referred to in this Agreement as the "Gross-Up Payment." Payment
                                                      ----------------
of the Gross-Up Payment shall be made in addition to the amount set forth in
Article 7 hereof.

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

          (1) Determination of "Parachute Payments" Subject to the Excise Tax:
          any other payments or benefits received or to be received by the
          Executive in connection with a Change in Control or the Executive's
          termination of employment (whether under the terms of this Agreement
          or any other agreement, the Stock Option Plan or any other benefit
          plan or arrangement with NewMil Bancorp, Inc., NewMil Bank, any person
          whose actions result in a Change in Control or any person affiliated
          with NewMil Bancorp, Inc., NewMil Bank or such person) shall be
          treated as "parachute payments" within the meaning of section
          280G(b)(2) of the Internal Revenue Code, and all "excess parachute
          payments" within the meaning of section 280G(b)(1) shall be treated as
          subject to the Excise Tax, unless in the opinion of the certified
          public accounting firm that is retained by NewMil Bancorp, Inc. as of
          the date immediately before the Change in Control (the "Accounting
                                                                  ----------
          Firm") such other payments or benefits do not constitute (in whole or
          ----
          in part) parachute payments, or such excess parachute payments
          represent (in whole or in part) reasonable compensation for services
          actually rendered within the meaning of section 280G(b)(4) of the
          Internal Revenue Code in excess (as defined in section 280G(b)(3) of
          the Internal Revenue Code), or are otherwise not subject to the Excise
          Tax,

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

          (3) Value of Noncash Benefits and Deferred Payments: the value of any
          noncash benefits or any deferred payment or benefit shall be
          determined by the Accounting Firm in accordance with the principles of
          sections 280G(d)(3) and (4) of the Internal Revenue Code.

     (c) Assumed Marginal Income Tax Rate. For purposes of determining the
amount of the Gross-Up Payments, the Executive shall be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in the
calendar years in which the Gross-Up Payments are to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of the Executive's residence on the date of termination

                                       14

<PAGE>

of employment, net of the reduction in federal income taxes that can be obtained
from deduction of such state and local taxes (calculated by assuming that any
reduction under Section 68 of the Internal Revenue Code in the amount of
itemized deductions allowable to the Executive applies first to reduce the
amount of such state and local income taxes that would otherwise be deductible
by the Executive, and applicable federal FICA and Medicare withholding taxes.)

     (d) Return of Reduced Excise Tax Payment or Payment of Additional Excise
Tax. If the Excise Tax is later determined to be less than the amount taken into
account hereunder when the Executive's employment terminated, the Executive
shall repay to NewMil Bancorp, Inc. C when the amount of the reduction in Excise
Tax is finally determined C the portion of the Gross-Up Payments attributable to
the reduction (plus that portion of the Gross-Up Payments attributable to the
Excise Tax, federal, state and local income taxes and FICA and Medicare
withholding taxes imposed on the Gross-Up Payments being repaid by the Executive
to the extent that the repayment results in a reduction in Excise Tax, FICA and
Medicare withholding taxes and/or a federal, state or local income tax
deduction).

     If the Excise Tax is later determined to be more than the amount taken into
account hereunder when the Executive's employment terminated (due, for example,
to a payment whose existence or amount cannot be determined at the time of the
Gross-Up Payments), NewMil Bancorp, Inc. shall make an additional Gross-Up
Payment to the Executive for that excess (plus any interest, penalties or
additions payable by the Executive for the excess) when the amount of the excess
is finally determined.

     10.11 GROSS-UP DETERMINATION. (a) The Accounting Firm Shall Determine
Whether a Gross-Up Payment is Required. Subject to the provisions of Section
10.10 , all determinations required to be made under this Section 10.11 C
including whether and when a Gross-Up Payment is required, the amount of the
Gross-Up Payment and the assumptions to be used to arrive at the determination
(collectively, the "Determination") C shall be made by the Accounting Firm,
                    -------------
which shall provide detailed supporting calculations both to NewMil Bancorp,
Inc. and to the Executive within 15 business days after receipt of notice from
NewMil Bancorp, Inc. or the Executive that there has been a Gross-Up Payment, or
such earlier time as is requested by NewMil Bancorp, Inc..

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

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

     (d) Accounting Firm's Determination Is Binding. The Determination by the
Accounting Firm shall be binding on NewMil Bancorp, Inc., NewMil Bank and the
Executive.

     (e) Underpayment and Overpayment. Because of the uncertainty in determining
whether any of the Total Benefits will be subject to the Excise Tax at the time
of the Determination, it is possible that Gross-Up Payments that should have
been made will not have been made by NewMil Bancorp, Inc. ("Underpayment"), or
                                                            ------------
that Gross-Up Payments will be made that should not have been made by NewMil
Bancorp, Inc. ("Overpayment").
                -----------

     If, after a Determination by the Accounting Firm, the Executive is required
to make a payment of additional Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred. The Underpayment (together
with interest at the rate provided in section 1274(d)(2)(B) of the Internal
Revenue Code) shall be paid promptly by NewMil Bancorp, Inc. to or for the
benefit of the Executive.

     If the amount of the Gross-Up Payment exceeds the amount necessary to
reimburse the Executive for his Excise Tax, the Accounting Firm shall determine
the amount of the Overpayment that has been made. The

                                       15

<PAGE>

Overpayment (together with interest at the rate provided in section
1274(d)(2)(B) of the Internal Revenue Code) shall be paid promptly by the
Executive to or for the benefit of NewMil Bancorp, Inc.. Provided that his
expenses are reimbursed by NewMil Bancorp, Inc. or NewMil Bank, the Executive
shall cooperate with any reasonable requests by NewMil Bancorp, Inc. in any
contests or disputes with the Internal Revenue Service relating to the Excise
Tax.

     (f) Accounting Firm Conflict of Interest. If the Accounting Firm is serving
as accountant or auditor for the individual, entity or group effecting the
Change in Control, the Executive may appoint another nationally recognized
public accounting firm to make the Determinations required hereunder (in which
case the term "Accounting Firm" as used in this Agreement shall be deemed to
refer to the accounting firm appointed by the Executive under this paragraph).

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first written above.

WITNESSES                         NEWMIL BANCORP, INC.

                                  By:
------------------------------    Betty F. Pacocha
                                  -------------------------------------

                                  Its:     Secretary
------------------------------

                                  By:
                                           ----------------------------
                                           Mary C. Williams

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

WITNESSES                         EXECUTIVE

                                  Francis J. Wiatr
------------------------------

                                       16

<PAGE>

County of Litchfield       )
                           ) ss:
State of Connecticut       )

     Before me this         day of              , 2002, personally appeared the
                    -------        -------------
above named and Francis J. Wiatr, 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:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]