<PAGE>
 
by the other party.

     13.  Severability

     If any of the terms or conditions of this Agreement shall be declared void
or unenforceable by any court or administrative body of competent jurisdiction,
such term or condition shall be deemed severable from the remainder of this
Agreement, and the other terms and conditions of this Agreement shall continue
to be valid and enforceable.

     14.  Construction.

     This Agreement shall be construed under the laws of the State of
Connecticut. Words of masculine gender mean and include correlative words of the
feminine gender. Section headings are for convenience only and shall not be
considered a part of the terms and provisions of the Agreement.

     IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by a
duly authorized officer and Employee has hereunto set her hand, this ____ day of
__________, 1996.

                    THE PEOPLE'S SAVINGS BANK OF NEW BRITAIN



                    By                                   
                       Its


                    TERESA SASINSKI


                          CHANGE IN CONTROL AGREEMENT

     THIS CHANGE IN CONTROL AGREEMENT (the "Agreement"), made as of October 
  , 1996, by and between THE PEOPLE'S SAVINGS BANK OF NEW BRITAIN, a banking
corporation organized and existing by virtue of the laws of the State of
Connecticut (the "Bank"), and RICHARD S. MANSFIELD (the "Executive").

     WHEREAS, the Executive is currently rendering services to the Bank pursuant
to an Employment Agreement dated August 1, 1986 containing "change in control"
provisions, as amended and restated by an Amended and Restated Employment
Agreement dated as of the date hereof which does not contain "change in control"
provisions (the "Employment Agreement");

     WHEREAS, the Bank considers the performance and dedication of its
management team to be significant for its overall corporate strategy and to be
essential to protecting and enhancing the best interests of the Bank and its
sole shareholder, People's Savings Financial Corp. (the "Company");

     WHEREAS, the banking industry is a dynamic one with independent public
<PAGE>
 
institutions subject to unexpected changes in ownership; 

     WHEREAS, the performance by the Executive of services to the Bank may be
negatively affected by his uncertainty over the possibility of a change in
ownership of the Bank or the Company and the possible affect thereof on his
employment with the Bank; and

     WHEREAS, the Bank wishes to additionally mitigate the fears of the
Executive regarding a potential ownership change, so as to avoid any negative
effect on his performance of services to the Bank, and in that interest the Bank
desires to afford certain additional protections to the Executive upon the
occurrence of certain events as specified herein.

     NOW, THEREFORE, to further the above recited corporate objective, and for
other good and valuable consideration, the receipt and adequacy of which each
party hereby acknowledges, the Bank and the Executive agree as follows:

1.   (a)  If, at any time while the Executive is a full-time officer of the Bank
     or the Company, there is a "Change of Control" of the Bank or the Company,
     the Executive shall be entitled to receive a severance payment (the
     "Severance Amount") in consideration of services previously rendered to the
     Bank. The Severance Amount shall be made as a lump sum cash payment and
     shall be equal to three (3) times the greater of the following: (A) the
     Executive's compensation from the Bank and the Company (the "Compensation")
     for services rendered for the last full calendar year immediately preceding
     the Change of Control, or (B) the Executive's average annual Compensation
     with respect to the three (3) most recent calendar years ending before the
     date on which the Change of Control occurs. Compensation as described above
     shall include the amount of base salary and bonus, if any, paid to the
     Executive for services rendered for the time period in question pursuant to
     the Employment Agreement, including any and all of said amounts as may have
     been deferred by the Executive under Bank deferral plans, if any, and shall
     include long-term compensation which, by its terms, is accelerated upon a
     Change of Control or, if not, shall by this Agreement be so accelerated and
     determined as the present value (determined at the discount rate provided
     in Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended, or
     its successor provision) of any cash or non-cash long-term incentive
     compensation (whether in the form of performance units or otherwise)
     previously awarded to the Executive but not yet paid, measured at the time
     of award with the assumption that the award would be 100% earned over the
     performance period. In addition to the above, Executive shall receive or be
     paid

     (1)  an amount equal to the aggregate amounts that Bank would have
          contributed on behalf of Executive under Executive's Deferred Profit
          Sharing or 401-K Plan, if any such plan shall be in effect upon the
          Change of Control, for an additional three-year period from the Change
          of Control (plus estimated earnings thereon) as if Executive had
          continued in the employ of Bank for that period and made contributions
          under said plan at a rate, as a percentage of salary, equal to the
          average rate at which Executive had made contributions to said plan in
          the period, not exceeding three (3) fiscal years of Bank, preceding
          the Change of Control;

     (2)  supplemental pension benefits equal to the difference between (i) the
          annual pension benefit that would have been payable to Executive under
          the Retirement Plan of Bank (the "Plan") if Executive had been
          continued in the employ of Bank for an
<PAGE>
 
          additional three-year period from the Change of Control and had
          received compensation at least equal to that determined pursuant to
          Paragraph 1(a) above, and (ii) the annual pension benefit actually
          payable to Executive under the Plan, such supplemental pension
          benefits to be payable at the same time and in the same manner as
          benefits under the Plan; and

     (3)  for a period of three years following the Change of Control, Executive
          shall also continue to participate in all life, health, disability and
          similar insurance plans and programs of Bank to the extent that such
          continued participation is possible under the general terms and
          provisions of such plans and programs, with Bank and Executive paying
          the same portion of the cost of each such plan or program as existed
          at the time of Executive's termination. In the event that Executive's
          continued participation in any group plans and programs is not
          permitted, then in lieu thereof, Bank shall acquire, with the same
          cost sharing, individual insurance policies providing comparable
          coverage for Executive; provided that Bank shall not be obligated to
          pay for any such individual coverage more than three (3) times Bank's
          cost of such group coverage; and provided further, if any such
          individual coverage is unavailable, then Bank shall pay to Executive
          annually for such remaining three year period an amount equal to the
          sum of the average annual contributions, payments, credits, or
          allocations made by Bank for such insurance on Executive's behalf over
          the three (3) fiscal years of Bank preceding the Change of Control,
          which amount shall be pro-rated for any fraction of a year. The
          foregoing subparagraphs (1), (2) and (3) shall also be considered part
          of the "Severance Amount" for the purposes of this Agreement.

     (b)  It is expressly understood and agreed that payment of the Severance
     Amount may include amounts which are deemed to be "excess parachute
     payments" under Section 280G of the Internal Revenue Code of 1986, as
     amended. In that event, the Bank agrees to pay Executive an additional cash
     payment (the "Additional Payment") in the amount of the excise tax imposed
     pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended,
     on the Executive for that portion of the Severance Amount which is deemed
     to be an excess parachute payment (if any). The Additional Payment shall be
     determined and paid once upon the determination of the Severance Amount
     under Paragraph 1(a) above.

     (c)  Payment of the Severance Amount and Additional Payment under this
     Section 1 shall be paid in full by Bank, Company and/or its or their
     successors or assigns within ninety (90) days following the date of the
     Change of Control and shall not be reduced by any compensation which the
     Executive may receive from the Bank or the Company or from other employment
     with another employer should Executive's employment with the Bank or the
     Company terminate.

     (d)  "Change of Control" shall be deemed to have occurred if: 

          (1)  a Person (as defined below) directly or indirectly or acting
               through one (1) or more other persons owns, controls, or has
               power to vote ten percent (10%) or more of the voting common
               stock of the Company, or a Person other than the Company directly
               or indirectly or acting through one (1) or more other persons
               owns, controls, or has the power to vote ten percent (10%) or
               more of the voting common stock of the 
<PAGE>
 
               Bank; or

          (2)  a Person acquires or agrees to acquire all or substantially all
               of the assets and business of the Bank or the Company; or

          (3)  a Person controls in any manner the election of a majority of the
               directors of the Company or a Person other than the Company
               controls in any manner the election of a majority of the
               directors of the Bank; or

          (4)  the Board of Directors of the Company determines that a Person
               directly or indirectly exercises a controlling influence over the
               management or policies of Company.

     Notwithstanding the foregoing, a "Change-in-Control" shall not be deemed to
     have occurred if (i) a majority of the directors of the Company or the
     Bank, as applicable, in office prior to the events described in (a), (b) or
     (c) above shall so vote not later than thirty (30) days following the event
     and (ii) the Employee shall so agree in writing.

          A "Person" shall include a natural person, corporation, or other
     entity. When two or more persons act as a partnership, limited partnership,
     syndicate, or other group for the purpose of acquiring, holding or
     disposing of Bank capital stock, such partnership, syndicate or group shall
     be considered a Person. Beneficial ownership shall be determined under the
     then current provisions of Rule 13d-3 of the Securities Exchange Act of
     1934, as amended, Reg. Section 240.13d-3, or their successor provision(s).
     The filing of a Form 13D or 13G by a Person shall not in and of itself be
     deemed a Change of Control.

     (e)  If, after a Change of Control of the Bank or the Company, the
     Executive incurs any fees and expenses of counsel to enforce this
     Agreement, the Bank agrees to pay such fees and expenses to the Executive.
     The Executive's choice of counsel and his/her decision to retain counsel
     shall be in his/her discretion, provided any such fees and expenses must be
     reasonable.

     (f)  Notwithstanding any other provision of this Agreement or of any other
     agreement, understanding or compensation plan, the Bank shall not be
     obligated to pay any amounts the payment of which violate restrictions
     imposed, or which may in the future be imposed, on such payments by the
     Bank pursuant to Section 18(k)(1) of the Federal Deposit Insurance Act, or
     any regulations or orders which are or may be promulgated thereunder; nor
     shall any payments be made which would constitute an "unsafe or unsound
     banking practice" pursuant to 12 U.S.C. Section 1818(b).

     (g)  The calculation of the Severance Amount shall be performed by the
     Bank's independent auditing firm at the time of Change of Control, or such
     other qualified party in the Bank's discretion; provided that, if the
     Severance Amount so determined is later challenged successfully by the
     Executive, by court decision or negotiation with the Bank, the Bank shall
     be additionally liable for all costs and expenses incurred by the Executive
     in that challenge, including reasonable attorney fees.

     (h)  This Agreement shall survive and continue for as long as the Executive
     is a full-time officer of the Bank or the Company.
<PAGE>
 
     (i)  This Agreement does not constitute an agreement for the employment of
     the Executive and shall not give the Executive any right to be retained in
     the service or employ of the Bank or the Company.

2.   This Agreement contains the entire agreement between the parties with
     respect to the subject matter herein, and there are no other repre-
     sentations, warranties, conditions or agreements relating to the subject
     matter of this Agreement.

3.   This Agreement may not be changed orally but only by an agreement in
     writing duly executed on behalf of the party against which enforcement of
     any waiver, change, modification, consent or discharge is sought.

4.   This Agreement shall be binding upon and inure to the benefit of the Bank,
     Company and the Executive and their respective successors, assigns, heirs
     and legal representatives. Without otherwise limiting the foregoing, "Bank"
     and "Company" as used herein shall refer to any successor institution
     whether by merger, consolidation, acquisition or otherwise.

5.   Each of the parties agrees to execute all further instruments and documents
     and to take all further action as the other party may reasonably request in
     order to effectuate the terms and purposes of this Agreement.

6.   This Agreement may be executed in one or more counterparts, all of which
     taken together shall constitute one and the same instrument.

7.   This Agreement shall be construed pursuant to and in accordance with the
     laws of the State of Connecticut.

8.   If any term or provision of this Agreement is held or deemed to be invalid
     or unenforceable, in whole or in part, by a court of competent
     jurisdiction, such term or provision shall be ineffective to the extent of
     such invalidity or unenforceability without rendering invalid or
     unenforceable the remaining terms and provisions of this Agreement.


     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

                         THE PEOPLE'S SAVINGS BANK OF NEW BRITAIN



                         By_____________________________________
                            Name:
                            Title:


                         EXECUTIVE


                         __________________________________
                         Richard S. Mansfield