Termination & Release Agreement BY & Among Douglas K. Anderson

EXHIBIT 10.14


TERMINATION AND RELEASE AGREEMENT


This Termination and Release Agreement (this " Agreement" ) is entered into as of July 15, 2003 by and among Douglas K. Anderson (the " Executive" ), Connecticut Bancshares, Inc., a Delaware corporation (" Connecticut Bancshares" ), The Savings Bank of Manchester, a Connecticut savings bank and a wholly-owned subsidiary of Connecticut Bancshares (" Manchester" ), and The New Haven Savings Bank, a Connecticut mutual savings bank (" New Haven" ).


RECITALS


WHEREAS, New Haven, Connecticut Bancshares and Manchester have entered into an Agreement and Plan of Merger, dated as of July 15, 2003 (the " Merger Agreement" ); and

WHEREAS, Section 7.6.5 of the Merger Agreement provides that New Haven, Connecticut Bancshares, Manchester and the Executive shall enter into this Agreement which shall terminate (1) the Employment Agreement between the Executive, Connecticut Bancshares and Manchester dated March 1, 2000 (the " Bank Employment Agreement" ), (2) the Employment Agreement between the Executive and Connecticut Bancshares dated March 1, 2000 (the " Company Employment Agreement" ), and (3) the Manchester Supplemental Executive Retirement Plan, as amended and restated and dated January 1, 2000 (the " SERP" ), as of the Effective Date of the Merger, and in lieu of any rights and payments under the Bank Employment Agreement, the Company Employment Agreement and the SERP, the Executive shall be entitled to the rights and payments set forth herein.


NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the Executive, Connecticut Bancshares, Manchester and New Haven agree as follows:

1. Certain Actions to Be Taken or Not Taken in 2003 .


(a) The Executive hereby agrees to take the following actions between the date hereof and December 31, 2003, it being the intention of the parties hereto that all of such actions shall be fully effective and consummated no later than December 31, 2003:

(i) exercise all vested non-qualified stock options granted to the Executive under Connecticut Bancshares' 2000 Stock-Based Incentive Plan (the " Incentive Plan" ), including non-qualified stock options scheduled to vest prior to December 31, 2003;


(ii) both (A) exercise all vested incentive stock options granted to the Executive under the Incentive Plan (including incentive stock options scheduled to vest prior to December 31, 2003) and (B) effect a sale of the shares of Connecticut Bancshares' common stock acquired upon such exercise in a manner that will constitute a " disqualifying disposition" of such shares for purposes of Section 421(b) of the Code; and


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(iii) refrain from exercising any stock options granted to the Executive under Connecticut Bancshares' 2002 Equity Compensation Plan (the " Compensation Plan" ).


(b) Connecticut Bancshares and Manchester agree to take such actions as may be necessary or advisable by them in order to permit the Executive to take the actions set forth in Section 1(a) above and have them be fully effective and consummated no later than December 31, 2003, including without limitation promptly processing all exercises of stock options by the Executive under the Incentive Plan. Neither Connecticut Bancshares nor Manchester shall (i) accelerated the vesting of any unvested restricted stock awards granted to the Executive under the Incentive Plan or the Compensation Plan, or (ii) accelerate payment of any cash bonus to which the Executive may be entitled to receive pursuant to Manchester' s Bonus Plan for services rendered in 2003.


2. Acknowledgement of Payment, Release and Waiver .


(a) On the Effective Date of the Merger, provided the Executive is still employed by Manchester immediately prior to such date and has taken all of the actions set forth in Section 1(a) hereof, Connecticut Bancshares and/or Manchester shall pay to the Executive an amount equal to (i) one million three hundred sixty seven thousand one hundred fifty six dollars ($1,367,156.00), subject to adjustment as set forth in Section 2(b) below (the " Maximum Amount" ), minus (ii) the Initial Present Value Amount (as defined in Section 3(c) below) of the welfare benefits to be provided to the Executive pursuant to Section 3(a) below, with applicable withholding taxes to be subtracted from the amount payable to the Executive. In consideration of such payment and the other provisions of this Agreement, the Executive, Connecticut Bancshares, Manchester and New Haven hereby agree that, except as provided in Section 6 below, the Bank Employment Agreement, the Company Employment Agreement and the SERP shall be terminated without any further action of any parties hereto, effective immediately prior to the Effective Date of the Merger.

(b) If the payment pursuant to Section 2(a) hereof, either alone or together with other payments and benefits which the Executive has the right to receive from Connecticut Bancshares, Manchester or New Haven (but excluding amounts payable pursuant to the Noncompetition Agreement of even date being entered into between New Haven and the Executive), would constitute a " parachute payment" under Section 280G of the Internal Revenue Code of 1986, as amended (the " Code" ), including but not limited to the parachute payments associated with the accelerated vesting of stock options and restricted stock awards, then the amount payable by Connecticut Bancshares and/or Manchester pursuant to Section 2(a) hereof shall be reduced by the amount which is the minimum necessary to result in no portion of the payment payable by Connecticut Bancshares and/or Manchester under Section 2(a) being non-deductible to Connecticut Bancshares and/or Manchester (or any successors thereto) pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code. The parties hereto agree that the present value of the payments and benefits payable pursuant to


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this Agreement to the Executive upon termination of the Executive' s employment pursuant to Section 2(a) shall not exceed three times the Executive' s " base amount," as that term is defined in Section 280G(b)(3) of the Code, less one dollar. The determination of any reduction in the payment to be ...