Termination & Release Agreement BY & Among Michael J. Hartl

EXHIBIT 10.16


TERMINATION AND RELEASE AGREEMENT


This Termination and Release Agreement (this " Agreement" ) is entered into as of July 15, 2003 by and among Michael J. Hartl (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 the Change in Control Agreement between the Executive, Connecticut Bancshares and Manchester dated May 19, 2000 (the " Control Agreement" ) as of the Effective Date of the Merger, and in lieu of any rights and payments under said Control Agreement, 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 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" ) and 2002 Equity Compensation Plan (the " Compensation Plan" ), including non-qualified stock options scheduled to vest prior to December 31, 2003 (i.e., all vested non-qualified options under either plan to be exercised);


(ii) both (A) exercise all vested incentive stock options granted to the Executive under the Incentive Plan and/or the Compensation Plan (including incentive stock options scheduled to vest prior to December 31, 2003) and (B) effect a sale of all of the shares of Connecticut Bancshares' common stock acquired upon such exercise (including shares acquired upon the exercise of incentive stock options in 2003 prior to the date of this Agreement if such shares have not been sold prior to the date hereof) in a manner that will constitute a " disqualifying disposition" of such shares for purposes of Section 421(b) of the Code (i.e., all vested incentive options under either plan to be exercised, with the underlying shares sold);

(iii) agree to the accelerated vesting as of December 31, 2003 of all then unvested restricted stock awards granted to the Executive under the Incentive Plan and/or the Compensation Plan (i.e., all unvested restricted stock awards under either plan to be accelerated); and


(iv) accept payment on December 31, 2003 of any cash bonus to which the Executive may be entitled to receive pursuant to Manchester' s Bonus Plan for services rendered in 2003 and which otherwise would be payable in the ordinary course by Manchester to the Executive in 2004.


(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 (i) promptly processing all exercises of stock options by the Executive under the Incentive Plan and/or the Compensation Plan, (ii) accelerating to December 31, 2003 the vesting of all then unvested restricted stock awards granted to the Executive under the Incentive Plan and/or the Compensation Plan, and (iii) accelerating the 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 to December 31, 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) seven hundred sixty one thousand eight hundred thirty one dollars ($761,831.00), 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, the Executive, Connecticut Bancshares, Manches ...