Exhibit 10.7.2 - Blanksteen


    Exhibit
      10.7.2

     

    AMENDED
      AND RESTATED EMPLOYMENT AGREEMENT

    


    


    This
      EMPLOYMENT AGREEMENT (this "Agreement") was originally made and entered into
      as
      of April 1, 2004 and is hereby amended and restated as of January 3, 2006 by
      and
      between NewAlliance Bancshares, Inc., a business corporation organized under
      the
      laws of the State of Delaware (the "Company"), NewAlliance Bank, a Connecticut
      savings bank (the "Bank"), and Merrill B. Blanksteen (the
      "Executive").

    


    


    W
      I T N E
      S S E T H :

    


    WHEREAS,
      the Bank has converted from the mutual to the stock form of organization (the
      "Conversion") and has concurrently become a wholly owned subsidiary of the
      Company;

    


    WHEREAS,
      the Executive is currently employed as the Executive Vice President, Treasurer
      and Chief Financial Officer of the Company and the Bank;

    


    WHEREAS,
      the Company and the Bank desire to ensure that the Company and the Bank are
      assured of the continued availability of the Executive's services as provided
      in
      this Agreement, with the Company and the Bank collectively referred to herein
      as
      the "Employers"; and

    


    WHEREAS,
      the Executive is willing to serve the Company and the Bank on the terms and
      conditions hereinafter set forth;

    


    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants and
      conditions hereinafter set forth, the Employers and the Executive hereby agree
      as follows:

    


    SECTION
      1. EFFECTIVE
      DATE; EMPLOYMENT.

    


    This
      Agreement shall be effective on the date first written above (the AEffective
      Date"). Each of the Employers agrees to employ the Executive, and the Executive
      hereby agrees to such employment, during the period and upon the terms and
      conditions set forth in this Agreement.

    


    SECTION
      2. EMPLOYMENT
      PERIOD.

    


    (a)
      The
      terms and conditions of this Agreement shall be and remain in effect during
      the
      period of three years beginning on the Effective Date and ending on the third
      anniversary of the Effective Date (the "Initial Term"), plus such extensions,
      if
      any, as are provided pursuant to Section 2(b) hereof (the "Employment
      Period").


    
      
        
        

      

      
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    (b)
      Except as provided in Section 2(c), prior to the first annual anniversary of
      the
      date first above written and each annual anniversary thereafter, the Boards
      of
      Directors of the Employers shall consider and review (after taking into account
      all relevant factors, including the Executive's performance and any
      recommendation of the Chief Executive Officer) a one-year extension of the
      term
      of this Agreement, and the term shall continue to extend each year (beginning
      with the first annual anniversary date) if the Boards of Directors so approve
      such extension unless the Executive gives written notice to the Employers of
      the
      Executive's election not to extend the term, with such notice to be given not
      less than ninety (90) days prior to any such anniversary date. If the Board
      of
      Directors elects not to extend the term, it shall give written notice of such
      decision to the Executive not less than ninety (90) days prior to any such
      anniversary date. If the Executive does not receive such notice, he may, by
      written notice given at any time during the ninety (90) days prior to the
      relevant anniversary date, request from the Board of Directors written
      confirmation that the term has been extended and, if such confirmation is not
      received by the Executive within thirty (30) days after the request therefor
      is
      made, the Executive may treat the term as having not been extended. Upon
      termination of the Executive's employment with either of the Employers for
      any
      reason whatsoever, any annual extensions provided pursuant to this Section
      2(b),
      if not theretofore discontinued, shall automatically cease. In addition, no
      annual renewals shall extend beyond the Executive's 65th
      birthday, and in no event shall the Employment Period extend beyond the
      Executive's 65th
      birthday.

    


    (c)
      Nothing in this Agreement shall be deemed to prohibit the Employers at any
      time
      from terminating the Executive's employment during the Employment Period with
      or
      without notice for any reason, provided,
      however,
      that the
      relative rights and obligations of the Employers and the Executive in the event
      of any such termination, including any requirements with respect to prior notice
      of such termination, shall be determined under this Agreement.

    


    SECTION
      3. DUTIES.

    


    Throughout
      the Employment Period, the Executive shall serve as the Executive Vice
      President, Treasurer and Chief Financial Officer of each of the Employers,
      having such power, authority and responsibility and performing such duties
      as
      are prescribed by or under the Bylaws of each of the Employers and as are
      customarily associated with such positions. The Executive shall report directly
      to the Chief Executive Officer of the Company and/or the Bank. The Executive
      shall devote his full business time, attention, skills and efforts (other than
      during weekends, holidays, vacation periods, and periods of illness or leaves
      of
      absence and other than as permitted or contemplated by Section 7 hereof) to
      the
      business and affairs of the Employers and shall use his best efforts to advance
      the interests of the Employers.

    


    SECTION
      4. CASH
      AND
      OTHER COMPENSATION.

    


    (a)
      In
      consideration for the services to be rendered by the Executive hereunder, the
      Employers shall pay to him a salary of three hundred fifteen thousand and one
      hundred seventy dollars ($315,170) annually ("Base Salary") as of the date
      of
      restatement of this Agreement. The Executive's Base Salary shall be payable
      in
      approximately equal installments in accordance with the Company's and the Bank's
      customary payroll practices for senior officers. Base Salary shall include
      any
      amounts of compensation deferred by the Executive under any tax-qualified
      retirement or welfare benefit plan or any other deferred compensation
      arrangement. The Compensation Committees of the Board of Directors of the
      Company (the "Company Board") and the Board of 

    
      
        
        

      

      
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Directors
        of the Bank (the "Bank Board") (collectively the "Boards") shall review the
        Executive's annual rate of salary at such times during the Employment Period
        as
        they deem appropriate, but not less frequently than once every twelve months,
        and may, in their respective discretion, approve an increase therein. Such
        review of Executive's Base Salary shall take into account not only the
        Executive's performance as well as the Employers' performance since the date
        of
        the last review conducted pursuant to this Section 4(a) but also shall take
        into
        consideration the salaries of similar situated officers at comparably situated
        financial institutions as determined by the Boards or the Compensation
        Committees thereof as well as any recommendation of the Chief Executive Officer.
        In addition to salary, the Executive may receive other cash compensation
        from
        the Employers for services hereunder at such times, in such amounts and on
        such
        terms and conditions as the Company Board or the Bank Board may determine
        from
        time to time. Any increase in the Executive's annual salary shall become
        the
        Base Salary of the Executive for purposes hereof. The Executive's Base Salary
        as
        in effect from time to time cannot be decreased by the Employers without
        the
        Executive's express prior written consent.

    

    


    (b)
      The
      Executive shall be entitled to participate in an equitable manner with all
      other
      executive officers of the Employers in discretionary bonuses to executive
      officers as authorized by the Company Board and/or the Bank Board. No other
      compensation provided for in this Agreement shall be deemed a substitute for
      the
      Executive's right to participate in such bonuses when and as declared by the
      Company Board and/or the Bank Board. In connection with the foregoing, under
      the
      terms of the Bank's Executive Short Term Incentive Plan (the "ESTIP"), annual
      cash bonuses can be awarded to the Executive in an amount equal to up to 200%
      of
      the Executive's Base Salary as in effect at the start of the ESTIP's plan year
      to which the bonus relates. The Compensation Committee of the Board of Directors
      of the Company shall make an annual determination of the exact percentage of
      Base Salary to be used with respect to the possible bonus, if any, to be paid
      to
      the Executive for the relevant plan year and shall notify the Executive by
      the
      end of January of the ESTIP's plan year to which such percentage shall be
      applicable, commencing January 2005.

    


    SECTION
      5. EMPLOYEE
      BENEFIT PLANS AND PROGRAMS.

    


    (a)
      During the Employment Period, the Executive shall be treated as an employee
      of
      the Company and the Bank and shall be entitled to participate in and receive
      benefits under any and all qualified or non-qualified retirement, pension,
      savings or profit-sharing plans (including, but not limited to Company's
      Employee Stock Ownership Plan (the "ESOP"), the Bank's defined benefit Pension
      Plan, the Bank's 401(k) Profit Sharing Plan, the Bank's Supplemental Executive
      Retirement Plan and the Bank's 2004 Supplemental Executive Retirement Plan
      and
      any other similar plans that may be adopted in the future), any and all group
      life, health (including hospitalization, medical and major medical), dental,
      accident and long-term disability insurance plans, and any other employee
      benefit and compensation plans (including, but not limited to, the ESTIP and
      any
      incentive compensation plans or programs or any stock benefit plans) as may
      from
      time to time be maintained by, or cover employees of, the Company and the Bank,
      in accordance with the terms and conditions of such employee benefit plans
      and
      programs and compensation plans and programs and consistent with the Company's
      and the Bank's customary practices. Nothing paid to the Executive under any
      such
      plan or program will be deemed to be in lieu of other compensation to which
      the
      Executive is entitled under this Agreement. 


    
      
        
        

      

      
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    (b)
      During the Employment Period, the Employers shall provide the Executive with
      an
      expense allowance ("Expense Allowance") equal to $600 per month to pay for
      the
      costs of an automobile. Such Expense Allowance shall take into account the
      federal and state income tax effect on Executive of receipt of such allowance.
      In the event that with respect to a given calendar year occurring during the
      term of this Agreement, the Executive believes that he drove during such year
      Business Miles (as hereinafter defined) in excess of the Covered Business Miles
      (as hereinafter defined) in connection with the business of the Bank and/or
      the
      Company and wishes to seek reimbursement as provided herein for such excess,
      within 45 days after the end of such calendar year, the Executive shall provide
      information to the Company and the Bank (as well as any additional information
      as the Employers may reasonably request in order to review the Executive’s
      claim) with respect to the number of miles driven in the such calendar year
      in
      connection with the business of the Bank and/or the Company (“Business Miles”).
      In the event the number of Business Miles driven during such calendar year
      is
      determined by the Employers to be more than 5,000 (except for the year ended
      December 31, 2004, the amount shall be 3,750 miles) (“Covered Business Miles”),
      the Bank or the Company will provide Executive an additional reimbursement
      within 45 days of such determination for the Business Miles in excess of the
      Covered Business Miles at the rate of $0.375 per mile (“Reimbursement Rate”).
      The Expense Allowance, the Covered Business Miles and the Reimbursement Rate
      shall be reviewed annually by the Compensation Committee of the Company Board
      and, if increased, shall be reflected in an addendum hereto. Notwithstanding
      the
      foregoing, nothing herein shall be deemed to impose upon the Employers or
      obviate the Executive's obligation, legal or otherwise, to maintain liability
      insurance with respect to the Executive's personal use of an
      automobile.

    


    (c)
      The
      Employers shall provide and pay for a parking space for Executive in the Bank's
      main office parking garage or, if such space shall become unavailable due to
      tenant commitments or otherwise, in an alternative convenient closed parking
      garage.

    


    (d)
      The
      Executive shall be entitled to paid holidays and paid vacation consistent with
      the Employers' policy for executive officers.

    


    (e)
      The
      Employers shall provide during the term of this Agreement, subject to the
      limitations set forth herein, for the Executive to receive, at the Employers'
      expense, the services of a tax professional and a personal financial planning
      professional (which may be the same person or entity for both services) (the
      "Tax Service Professional") selected by the Employers and reasonably
      satisfactory to the Executive. Subject to the limitations set forth herein,
      if
      the Employers do not specify a Tax Services Professional reasonably acceptable
      to the Executive, the Executive will be entitled to use the services of a Tax
      Services Professional of his choosing and seek reimbursement by the Employers
      for the reasonable cost of such Tax Service Professional actually incurred
      by
      the Executive. The services to be provided shall include (i) the preparation
      of
      all required federal, state and local personal income tax returns, (ii) advice
      with respect to federal, state and local income tax treatment of cash and other
      forms of compensation paid to the Executive by the Employers and (iii)


    
      
        
        

      

      
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investment
        and retirement counseling and estate planning. Notwithstanding the foregoing,
        the annual cost to the Employers of providing the services to the Executive
        of
        such Tax Service Professional, whether such Tax Service Professional is selected
        by the Employers or the Executive, shall not exceed $2,500 (the "Annual Cost"),
        prior to any adjustment for income tax effects of reimbursement for such
        expense. Reimbursement of the Executive for the Annual Cost shall take into
        account the federal and state income tax effect on the Executive of receipt
        of
        such Annual Cost. The Annual Cost shall be reviewed annually by the Compensation
        Committee of the Company and, if increased, shall be reflected in an addendum
        hereto.

    

    


    (f)
      During the Employment Period, the Employers will reimburse and/or pay for the
      Executive's cost of membership in the Graduate Club (or such other club
      reasonably agreed to by the Employers and the Executive), including all
      membership bonds or surety, initiation or membership fees, annual dues, capital
      assessments, and all business-related expenses incurred at the club ("Club
      Expenses"). The Executive shall be reimbursed for the cost of Club Expenses
      expended by Executive and any such reimbursement and/or payment of the Club
      Expenses by the Employers shall take into account the federal and state income
      tax effect or the Executive of receipt of reimbursement for the Club
      Expenses.

    


    SECTION
      6. INDEMNIFICATION
      AND INSURANCE.

    


    (a)
      During the Employment Period and for a period of six years thereafter, the
      Employers shall cause the Executive to be covered by and named as an insured
      under any policy or contract of insurance obtained by them to insure their
      directors and officers against personal liability for acts or omissions in
      connection with service as an officer or director of the Employers or service
      in
      other capacities at the request of the Employers. The coverage provided to
      the
      Executive pursuant to this Section 6 shall be of the same scope and on the
      same
      terms and conditions as the coverage (if any) provided to other officers or
      directors of the Employers or any successors.

    


    (b)
      To
      the maximum extent permitted under applicable law, the Employers shall indemnify
      the Executive against and hold him harmless from any costs, liabilities, losses
      and exposures that may be incurred by the Executive in his capacity as a
      director or officer of the Employers or any subsidiary or
      affiliate.

    


    SECTION
      7. OUTSIDE
      ACTIVITIES.

    


    The
      Executive may (a) serve as a member of the boards of directors of such business,
      community and charitable organizations as he may disclose to and as may be
      approved by the Employers (which approval shall not be unreasonably withheld),
      and (b) perform duties as a trustee or personal representative or in any other
      fiduciary capacity, provided
      that
      in each
      case such service shall not materially interfere with the performance of his
      duties under this Agreement or present any conflict of interest. The Executive
      may also engage in personal business and investment activities which do not
      materially interfere with the performance of his duties hereunder, provided
      that
      such
      activities are not prohibited under any code of conduct or investment or
      securities trading policy established by the Employers and generally applicable
      to all similarly situated executives. If the 

    
      
        
        

      

      
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Executive
        is discharged or suspended, or is subject to any regulatory prohibition or
        restriction with respect to participation in the affairs of the Bank, he
        shall
        continue to perform services for the Company in accordance with this Agreement
        but shall not directly or indirectly provide services to or participate in
        the
        affairs of the Bank in a manner inconsistent with the terms of such discharge
        or
        suspension or any applicable regulatory order. 

    

    


    SECTION
      8. WORKING
      FACILITIES AND EXPENSES.

    


    It
      is
      understood by the parties that the Executive's principal place of employment
      shall be at the Employers' principal executive office located in New Haven,
      Connecticut, or at such other Board approved location within 50 miles
      of
      the address of such principal executive office, or at such other location as
      the
      Employers and the Executive may mutually agree upon. The Employers shall provide
      the Executive at his principal place of employment with a private office,
      secretarial services and other support services and facilities suitable to
      his
      position with the Employers and necessary or appropriate in connection with
      the
      performance of his assigned duties under this Agreement. The Employers shall
      reimburse the Executive for his ordinary and necessary business expenses
      attributable to the Employers' business, including, without limitation, the
      Executive's travel and entertainment expenses incurred in connection with the
      performance of his duties for the Employers under this Agreement, in each case
      upon presentation to the Employers of an itemized account of such expenses
      in
      such form as the Employers may reasonably require. 

    


    SECTION
      9. TERMINATION
      OF EMPLOYMENT WITH BENEFITS.

    


    (a)
      Subject to Sections 9(b) and 9(c), the Executive shall be entitled to the
      benefits described in Section 9(b) in the event that: 

    


    (i)
      his
      employment with both of the Employers terminates during the Employment Period
      as
      a result of the Executive's voluntary resignation within six full calendar
      months following:

    


    (A)
      the
      failure of either the Company Board or the Bank Board to appoint or re-appoint
      the Executive to the positions with the Company and the Bank stated in Section
      3
      of this Agreement;

    


    (B)
      the
      expiration of a 30-day period following the date on which the Executive gives
      written notice to the Employers of their material failure, whether by amendment
      of the Certificate of Incorporation or Bylaws of either the Company or the
      Bank,
      or by action of the Company Board, the Company's shareholders, the Bank Board,
      the Bank's shareholder(s), or otherwise, to vest in the Executive the functions,
      duties or responsibilities prescribed in Section 3 of this Agreement, unless,
      during such 30-day period, the Employers cure such failure;


    
      
        
        

      

      
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    (C)
      the
      expiration of a 30-day period following the date on which the Executive gives
      written notice to the Employers of their material breach of any term, condition
      or covenant contained in this Agreement (including, without limitation, any
      reduction of the Executive's rate of Base Salary in effect from time to time
      and
      any change in the terms and conditions of any compensation or benefit program
      in
      which the Executive participates which, either individually or together with
      other changes, has a material adverse effect on the aggregate value of his
      total
      compensation package), unless, during such 30-day period, the Employers cure
      such failure;

    


    (D)
      a
      Board approved change in the Executive's principal place of employment by a
      distance in excess of 50
      miles
      from the Employers' principal executive office in New Haven,
      Connecticut;

    


    (E)
      an
      adverse change in the Executive's title and position from that set forth in
      Section 3(a);

    


    (F)
      an
      adverse material change in the Executive's duties, responsibilities and
      authorities as prescribed in Section 3(a); 

    


    (G)
      the
      liquidation, dissolution, bankruptcy or insolvency of the Company or the
      Bank;

    


    (H)
      either the receipt by the Executive of written notice pursuant to Section 2(b)
      hereof that the Employment Period is not being extended as of any date or
      expiration of the 30 day period specified in Section 2(b) hereof without the
      Board of Directors having provided any requested confirmation that the
      Employment Period has been extended, if (1) within 15 days of receipt of such
      written notice or expiration of such 30 day period, the Executive notifies
      the
      Employers in writing (the "Executive Notice") that the Executive is willing
      to
      continue to serve for the remaining term of the Employment Period under the
      terms and conditions of the Agreement as then currently in effect and (2) the
      Employers notify the Executive in writing within 15 days after receipt of the
      Executive Notice that the Employers do not accept such offer; or

    


    (I)
      the
      termination of the Executive's employment by one of the Employers for reasons
      other than those specified in Section 10 hereof; or

    


    (ii)
      the
      Executive's employment with the Employers is terminated by the Employers during
      the Employment Period for any reason other than for "cause," death or
      "Disability," as provided in Section 10(a).

    


    (b)
      Subject to Section 9(c), and provided that no Change in Control (as defined
      in
      Section 11(a) hereof) has occurred, the Employers shall pay and provide to
      the
      Executive (or, in the event of his subsequent death, to his estate) the
      following severance benefits for the period beginning on the date that his
      employment terminates and ending on either (i) the last day of the Employment
      Period or (ii) 24 months subsequent to the date of termination, whichever period
      is greater (the "Severance Benefits Period"):


    
      
        
        

      

      
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    (i)
      his
      earned but unpaid Base Salary (including, without limitation, all items which
      constitute wages under applicable law and the payment of which is not otherwise
      provided for in this Section 9(b)) as of the date of the termination of his
      employment, such payment to be made at the time and in the manner prescribed
      by
      law applicable to the payment of wages but in no event later than 30 days after
      termination of employment;

    


    (ii)
      the
      benefits, if any, to which he is entitled under the employee benefit plans
      and
      programs and compensation plans and programs maintained for the benefit of
      the
      Company's and the Bank's officers and employees (such benefits not to include
      the expense allowance provided by Section 5(b)) through the date of the
      termination of his employment;

    


    (iii)
      continued group life, health, dental, accident and long term disability
      insurance benefits, in addition to that provided pursuant to Section 9(b)(ii),
      and after taking into account the coverage provided by any subsequent employer,
      if and to the extent necessary to provide for the Executive, for the Severance
      Benefits Period, coverage equivalent to the coverage to which he would have
      been
      entitled under such plans if he had continued to be employed during such period
      at the highest annual rate of Base Salary achieved during the Employment
      Period;
      provided, however,
      in the
      event that such benefits cannot be provided, in whole or in part, to the
      Executive as a non-employee subsequent to termination of employment, the
      Employers, at their option, may contribute instead to the Executive's privately
      obtained comparable coverage such that the Executive is not required to pay
      any
      more for such benefits than the Executive was required to pay immediately
      preceding the date of termination; and
      provided further,
      that if
      the provision of any of the benefits covered by this Section 9(b)(iii) would
      trigger the 20% excise tax and interest penalties under Section 409A of the
      Internal Revenue Code (the “Code”) either due to the nature of such benefit or
      the length of time it is being provided, then the benefit(s) that would trigger
      such tax and interest penalties due to the nature of the benefit shall not
      be
      provided at all and the benefit(s) that would trigger the tax and interest
      penalties if provided beyond the “limited period of time” set forth in the
      regulations under Section 409A shall not be provided beyond such limited period
      of time (collectively, the “Excluded Benefits”), and in lieu of the Excluded
      Benefits the Employers shall pay to the Executive, in a lump sum within 30
      days
      following termination of employment or within 30 days after such determination
      should it occur after termination of employment, a cash amount equal to the
      cost
      to the Employers of providing the Excluded Benefits; 

    


    (iv)
      a
      lump sum cash amount, payable within 30 days following termination of
      employment, equal to the present value of (A) the Executive's Annual
      Compensation (as hereinafter defined) multiplied by (B) a fraction which is
      either (1) the number of days left in the Employment Period if the Executive
      had
      not been terminated or (2) 730, whichever is greater, divided by 365, using
      a
      discount rate equal to the short-term applicable federal rate (determined under
      Section 1274(d) of the Code) as published by the Internal Revenue Service (the
      “IRS”) for the month in which the termination of employment
      occurs;


    
      
        
        

      

      
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    (v)
      a
      lump sum cash amount equal to the present value, determined by using a discount
      rate equal to the short-term applicable federal rate (determined under Section
      1274(d) of the Code) as published by the IRS for the month in which the
      termination of employment occurs, of the pro rata portion of any target bonus
      awarded to the Executive under the Bank's Executive Incentive Plan (the "EIP")
      (or such other short-term incentive compensation plan(s) that the Employers
      may
      adopt subsequent to the date hereof as a replacement therefor) which relates
      to
      the calendar year in which such termination occurs; provided
      that
      such pro
      rata portion will be calculated by multiplying the amount of the target bonus
      by
      a fraction the numerator of which is the number of days elapsed in the calendar
      year as of the date of termination and the denominator is 365; provided,
      further,
      that
      payment of such pro rated target bonus shall be paid within 30 days following
      termination of employment;

    


    (vi)
      a
      lump sum cash amount, payable within 30 days following termination of
      employment, equal to the present value, determined by using a discount rate
      equal to the short-term applicable federal rate (determined under Section
      1274(d) of the Code) as published by the IRS for the month in which the
      termination of employment occurs, of the excess, if any, of:

    


    (A)
      the
      value of the aggregate benefits to which he would be entitled under any and
      all
      qualified defined benefit pension plans and non-qualified plans related thereto
      maintained by, or covering employees of, the Company and the Bank if he were
      100% vested thereunder and had continued to be employed during the Severance
      Benefits Period at the highest annual rate of Base Salary achieved during the
      Employment Period; over

    


    (B)
      the
      value of the benefits to which he is actually entitled under such defined
      benefit pension plans as of the date on which his employment terminates; such
      values to be determined using the mortality tables prescribed under Section
      415(b)(2)(E)(v) of the Code;

    


    (vii)
      a
      lump sum cash amount, payable within 30 days following termination of
      employment, equal to the present value, determined by using a discount rate
      equal to the short-term applicable federal rate (determined under Section
      1274(d) of the Code) as published by the IRS for the month in which the
      termination of employment occurs, of the additional employer contributions
      to
      which he would have been entitled under any and all qualified defined
      contribution plans and non-qualified plans related thereto maintained by, or
      covering employees of, the Company and the Bank as if he were 100% vested
      thereunder and had continued to be employed during the Severance Benefits Period
      at the highest annual rate of Base Salary achieved during the Employment Period
      and making the maximum amount of employee contributions, if any, required or
      permitted under such plan or plans, provided that no payments shall be made
      pursuant to this subsection (vi) with respect to the Company's ESOP if the
      ESOP
      is terminated effective as of a date within one year of the date of the
      termination of the Executive's employment, with the Executive to reimburse
      the
      Employers for any such payments previously made; and


    
      
        
        

      

      
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    (viii)
      within 30 days following the occurrence of an event described in Section 9(a),
      upon the surrender of any shares previously awarded to the Executive under
      any
      restricted stock plan maintained by, or covering employees of, the Employers,
      which are then subject to restrictions, a lump sum payment in an amount equal
      to
      the product of:

    


    (A)
      the
      fair market value of a share of stock of the same class of stock granted under
      such plan, determined as of the date of the Executive's termination of
      employment; multiplied by

    


    (B)
      the
      number of shares which are being surrendered.

    


    The
      Executive's "Annual Compensation" for purposes of this Agreement shall be deemed
      to mean the sum of (i) the Executive's Base Salary in effect as of the date
      of
      termination of his employment and (ii) the greater of (A) the average of the
      cash incentive compensation earned by the Executive from the Employers or any
      subsidiary thereof during any one of the three calendar years immediately
      preceding the calendar year in which the date of termination occurs or (B)
      the
      amount of the Executive's target bonus under the EIP (or such other short-term
      incentive compensation plan(s) that the Employers may adopt subsequent to the
      date hereof as a replacement therefor) for the calendar year in which the
      termination occurs; provided, however, for purposes of clause (ii) bonuses
      earned under the Bank's Performance Unit Plan will not be included in cash
      incentive compensation for purposes of determining average cash incentive
      compensation (or with respect to Section 11(b), the highest level of cash
      incentive compensation). 

    


    The
      Employers and the Executive further agree that the Employers may condition
      the
      payments and benefits (if any) due under Sections 9(b)(iii), (iv), (v), (vi)
      and
      (vii) on the receipt of the Executive's resignation from any and all positions
      which he holds as an officer, director or committee member with respect to
      the
      Employers or any of their subsidiaries or affiliates and to the execution of
      a
      general release by the Executive.

    


    (c)
      The
      Executive shall not be required to mitigate the amount of any benefits provided
      pursuant to the provisions of Section 9(b) by seeking other employment or
      otherwise. However, if the Executive becomes or is employed by another employer
      subsequent to the first year following termination, any compensation received
      by
      the Executive subsequent to the first year following termination through the
      end
      of the Severance Benefits Period shall be offset dollar for dollar against
      the
      Employers' obligations set forth in Section 9(b) except with respect to Section
      9(b)(iii), with the Executive to reimburse the Employers the amount of the
      offset with respect to amounts previously paid by the Employers. In addition,
      if
      the Executive becomes employed by another entity subsequent to termination
      hereunder, and under the terms of such employment is entitled to benefits
      substantially similar to those provided in Section 9(b)(iii), the Employers
      will
      not be required to continue provision of the benefits set forth in said Section
      9(b)(iii) for the remainder of the Severance Benefits Period.


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    SECTION
      10. TERMINATION
      WITHOUT ADDITIONAL EMPLOYER LIABILITY.

    


    (a)
      In
      the event that the Executive's employment with the Employers shall terminate
      during the Employment Period on account of:

    


    (i)
      the
      discharge of the Executive for "cause," which, for purposes of this Agreement,
      shall mean a discharge because either the Company Board or the Bank Board
      determines that the Executive has: (A) willfully failed to perform his
      assigned duties under this Agreement, other than any failure resulting from
      the
      Executive's incapacity due to physical or mental injury or illness; (B)
      committed an act involving moral turpitude in the course of his employment
      with
      the Employers and their subsidiaries or affiliates; (C) engaged in willful
      misconduct; (D) breached his fiduciary duties for personal profit; (E) willfully
      violated, in any material respect, any law, rule or regulation (other than
      traffic violations or similar offenses), written agreement or final
      cease-and-desist order with respect to his performance of services for the
      Company or the Bank, as determined by the Company Board or the Bank Board;
      or
      (F) materially breached the terms of this Agreement and failed to cure such
      material breach during a 15-day period following the date on which the Company
      Board or the Bank Board gives written notice to the Executive of the material
      breach;

    


    (ii)
      the
      Executive's voluntary resignation from employment (including voluntary
      retirement) with the Company and the Bank for reasons other than those specified
      in Section 9(a)(i); or

    


    (iii)
      the
      death of the Executive while employed by the Employers, or the termination
      of
      the Executive's employment because of "Disability" as defined in Section 10(c)
      below;

    


    then
      in
      any of the foregoing events, the Employers shall have no further obligations
      under this Agreement, other than (A) the payment to the Executive of his earned
      but unpaid compensation as of the date of the termination of his employment,
      (B)
      the payment to the Executive of the benefits to which he is entitled under
      all
      applicable employee benefit plans and programs and compensation plans and
      programs as of the date of termination of his employment, and (C) the provision
      of such other benefits, if any, to which he is entitled as a former employee
      under the Company's or the Bank's employee benefit plans and programs and
      compensation plans and programs.

    


    (b)
      For
      purposes of this Section 10, no act or failure to act, on the part of the
      Executive, shall be considered willful" unless it is done, or omitted to be
      done, by the Executive in bad faith or without reasonable belief that the
      Executive's action or omission was in the best interests of the Employers.
      Any
      act, or failure to act, based upon authority given pursuant to a resolution
      duly
      adopted by the Company Board, the Bank Board or based upon the written advice
      of
      counsel for the Employers shall be conclusively presumed to be done, or omitted
      to be done, by the Executive in good faith and in the best interests of the
      Employers. The cessation of employment of the Executive shall not be deemed
      to
      be for "cause" within the meaning of Section 10(a)(i) unless and until there
      shall have been delivered to the Executive a copy of a resolution duly adopted
      by the affirmative vote 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        
of
        three-fourths of the members of the Company Board or the Bank Board at a
        meeting
        of such Board called and held for such purpose (after reasonable notice is
        provided to the Executive and the Executive is given an opportunity, together
        with counsel, to be heard before such Board), finding that, in the good faith
        opinion of such Board, the Executive is guilty of the conduct described in
        Section 10(a)(i) above, and specifying the particulars thereof in
        detail.

    

     

    (c)
      "Disability" shall be deemed to have occurred if the Executive: (i) is unable
      to
      engage in any substantial gainful activity by reason of any medically
      determinable physical or mental impairment which can be expected to result
      in
      death or can be expected to last for a continuous period of not less than 12
      months, or (ii) is, by reason of any medically determinable physical or mental
      impairment which can be expected to result in death or can be expected to last
      for a continuous period of not less than 12 months, receiving income replacement
      benefits for a period of not less than three months under an accident and health
      plan covering employees of the Employers.

     

    (d)
      During any period in which the Executive is absent due to physical or mental
      injury or disease, the Employers may, without breaching this Agreement, appoint
      another person or persons to act as interim Executive Vice President and Chief
      Financial Officer pending the Executive's return to his duties on a full-time
      basis hereunder or his termination as a result of such Disability. Prior to
      the
      Executive's employment being terminated due to Disability under Section 10(e)
      hereof, the Executive shall continue to receive his full Base Salary, bonuses
      and other benefits to which he is entitled under this Agreement, including
      continued participation in all employee benefit plans and programs.

    


    (e)
      The
      Employers may provide notice to the Executive in writing that they intend to
      terminate the Executive's employment under this Agreement, with the termination
      date to be on or after the date that the Executive is deemed to have a
      Disability. At the time his employment hereunder is terminated due to
      Disability, (i) the Executive shall not be entitled to any payments or benefits
      pursuant to Sections 4 and 5 hereof for periods subsequent to such date of
      termination, and (ii) the Executive shall become entitled to receive the
      Disability payments that may be available under any applicable long-term
      disability plan or other benefit plan.

    


    SECTION
      11. PAYMENTS
      UPON A CHANGE IN CONTROL.

    


    (a)
      The
      term "Change in Control" shall mean a change in the ownership of the Company,
      a
      change in the effective control of the Company or a change in the ownership
      of a
      substantial portion of the assets of the Company as provided under Section
      409A
      of the Code, as amended from time to time, and any IRS guidance, including
      Notice 2005-1, and regulations issued in connection with Section 409A of the
      Code. In no event, however, shall a Change in Control be deemed to have occurred
      as a result of any acquisition of securities or assets of the Company, the
      Bank,
      or a subsidiary of either of them, by the Company, the Bank, or any subsidiary
      of either of them, or by any employee benefit plan maintained by any of
      them.


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (b)
      If
      the Executive's employment by the Employers shall be terminated subsequent
      to a
      Change in Control and during the term of this Agreement by (i) the Employers
      for
      other than Cause, Disability, Retirement or the Executive's death or (ii) the
      Executive for any of the reasons specified in subsection (A) through (I),
      inclusive, of Section 9(a)(i) hereof, then the Employers shall pay to the
      Executive a severance benefit in a lump sum payment, within five (5) days after
      the effective time of such termination of employment equal to the sum of (i)
      three times his Base Salary as of the date of termination of his employment,
      (ii) three times the highest level of cash incentive compensation earned by
      the
      Executive from the Employers or any subsidiary thereof in any one of the three
      calendar years immediately preceding the year in which the termination occurs
      and (iii) the amounts specified in Sections 9(b)(i), (ii), (v), (vi), (vii)
      and
      (viii) (notwithstanding any contrary language contained therein with respect
      to
      payment being over a longer time period) except in calculating the amount of
      such benefits, to the extent applicable, the Severance Benefits Period will
      be
      for a period of three years commencing on the date of the termination of the
      Executive's employment. In addition, for purposes of calculating the amount
      due
      pursuant to clause (ii) above, bonuses earned under the Bank's Performance
      Unit
      Plan will not be included in calculating the highest level of cash incentive
      compensation. In calculating the benefits due to the Executive under Section
      9(b)(vi) with respect to the Bank's 2004 Supplemental Executive Retirement
      Plan
      related to its pension plan, in accordance with the terms thereof, the Executive
      will be treated as having attained the age equal to the greater of (x) his
      actual age as of the date of termination plus three years or (y) age 55. In
      addition, the Employers shall provide the Executive with the benefits provided
      for in Section 9(b)(iii) for the Severance Benefits Period, as adjusted above
      to
      be for a period of three years subsequent to termination of employment, subject
      to compliance with the last proviso clause contained in such subsection. In
      the
      event that the Employers are unable to provide the benefits set forth in said
      Section 9(b)(iii) due to the change in the Executive's status to that of a
      non-employee, the Employers shall include in the lump sum payment due pursuant
      to the terms of this Section 11(b) the value of the benefits required to be
      provided by said Section 9(b)(iii) for the Severance Benefits Period as amended
      by this Section 11(b). The severance and other benefits payable pursuant to
      this
      Section 11(b) shall not be subject to reduction pursuant to the provisions
      of
      Section 9(c).

    


    SECTION
      12. TAX
      INDEMNIFICATION.

    


    (a)
      If
      the payments and benefits pursuant to this Agreement, either alone or together
      with other payments and benefits which the Executive has the right to receive
      from the Employers and their subsidiaries, would constitute a "parachute
      payment" as defined in Section 280G(b)(2) of the Code (the "Initial Parachute
      Payment"), then the Company shall pay to the Executive, at the time such
      payments or benefits are paid and subject to applicable withholding
      requirements, a cash amount equal to the sum of the following: 

    


    (i)
      twenty (20) percent (or such other percentage equal to the tax rate imposed
      by
      Section 4999 of the Code) of the amount by which the Initial Parachute Payment
      exceeds the Executive's "base amount" from the Employers and their subsidiaries
      (including their predecessors), as defined in Section 280G(b)(3) of the Code,
      with the difference between the Initial Parachute Payment and the Executive's
      base amount being hereinafter referred to as the "Initial Excess Parachute
      Payment";


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (ii)
      such
      additional amount (tax allowance) as may be necessary to compensate the
      Executive for the payment by the Executive of state and federal income and
      excise taxes on the payment provided under clause (i) above and on any payments
      under this clause (ii). In computing such tax allowance, the payment to be
      made
      under clause (i) above shall be multiplied by the "gross up percentage" ("GUP").
      The GUP shall be determined as follows:

    


    
      	 	
              Tax
                Rate

            
	
              GUP
                =

            	
               _________

            
	 	
              1-
                Tax Rate

            


    

    


    The
      Tax
      Rate for purposes of computing the GUP shall be the highest marginal federal
      and
      state income and employment-related tax rate (including Social Security and
      Medicare taxes), including any applicable excise tax rate, applicable to the
      Executive in the year in which the payment under clause (i) above is made,
      and
      shall also reflect the phase-out of deductions and the ability to deduct certain
      of such taxes.

    


    (b)
      Notwithstanding the foregoing, if it shall subsequently be determined in a
      final
      judicial determination or a final administrative settlement to which the
      Executive is a party that the actual excess parachute payment as defined in
      Section 280G(b)(1) of the Code (before giving effect to the payments under
      Sections 12(a)(i) and (ii) above) is different from the Initial Excess Parachute
      Payment (such different amount being hereafter referred to as the ADeterminative
      Excess Parachute Payment"), then the Company's independent tax counsel or
      accountants shall determine the amount (the AAdjustment
      Amount") which either the Executive must pay to the Company or the Company
      must
      pay to the Executive in order to put the Executive (or the Company, as the
      case
      may be) in the same position the Executive (or the Company, as the case may
      be)
      would have been if the Initial Excess Parachute Payment had been equal to the
      Determinative Excess Parachute Payment. In determining the Adjustment Amount,
      the independent tax counsel or accountants shall take into account any and
      all
      taxes (including any penalties and interest) paid by or for the Executive or
      refunded to the Executive or for the Executive's benefit. As soon as practicable
      after the Adjustment Amount has been so determined, the Company shall pay the
      Adjustment Amount to the Executive or the Executive shall repay the Adjustment
      Amount to the Company, as the case may be.

    


    (c)
      In
      each calendar year that the Executive receives payments of benefits that
      constitute a parachute payment, the Executive shall report on his state and
      federal income tax returns such information as is consistent with the
      determination made by the independent tax counsel or accountants of the Company
      as described above. The Company shall indemnify and hold the Executive harmless
      from any and all losses, costs and expenses (including without limitation,
      reasonable attorneys' fees, interest, fines and penalties) which the Executive
      incurs as a result of so reporting such information. The Executive shall
      promptly notify the Company in writing whenever the Executive receives notice
      of
      the institution of a judicial or administrative proceeding, formal or informal,
      in which the federal tax treatment under Section 4999 of the Code of any amount
      paid or payable under this Section 12 is being reviewed or is in dispute. The
      Company shall assume control at its expense over all legal and accounting
      matters pertaining to such federal tax treatment (except to 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        
the
        extent necessary or appropriate for the Executive to resolve any such proceeding
        with respect to any matter unrelated to amounts paid or payable pursuant
        to this
        Section 12) and the Executive shall cooperate fully with the Company in any
        such
        proceeding. The Executive shall not enter into any compromise or settlement
        or
        otherwise prejudice any rights the Company may have in connection therewith
        without the prior consent of the Company.

    

    


    (d)
      The
      Executive hereby agrees with the Employers and any successor thereto to in
      good
      faith consider and take steps commonly used to minimize or eliminate any tax
      liability or costs that would otherwise be created by the tax indemnification
      provisions set forth in Section 12 of this Agreement if requested to do so
      by
      the Employers or any successor thereto; provided,
      however,
      that the
      foregoing language shall neither require the Executive to take or not take
      any
      specific action in furtherance thereof nor contravene, limit or remove any
      right
      or privilege provided thereto under this Agreement.

    


    SECTION
      13. SOURCE
      OF
      PAYMENTS; NO DUPLICATION OF PAYMENTS.

    


    All
      payments provided in this Agreement shall be timely paid in cash or check from
      the general funds of the Company or the Bank. Payments pursuant to this
      Agreement shall be allocated between the Company and the Bank in proportion
      to
      the level of activity and the time expended on such activities by the Executive
      as determined by the Company and the Bank on a quarterly basis, unless the
      applicable provision of this Agreement specifies that the payment shall be
      made
      by either the Company or the Bank. In no event shall the Executive receive
      duplicate payments or benefits from the Company and the Bank.

    


    SECTION
      14. COVENANT
      NOT TO COMPETE.

    


    In
      the
      event the Executive's employment with the Employers is terminated for any reason
      prior to the expiration of the Employment Period (except as set forth below),
      the Executive hereby covenants and agrees that for a period of two years
      following the date of his termination of employment with the Employers (or,
      if
      less, for the Severance Benefits Period), he shall not, without the written
      consent of the Employers, become an officer, employee, consultant, director
      or
      trustee of any savings bank, savings and loan association, savings and loan
      holding company, bank or bank holding company, or any direct or indirect
      subsidiary or affiliate of any such entity, that entails working within any
      county in which the Company or the Bank maintains an office as of the date
      of
      termination of the Executive's employment. This section shall not be applicable
      if the Executive is terminated upon or within one year subsequent to a Change
      in
      Control, provided that such termination is for reasons other than Cause as
      defined in Section 10(a)(i) hereof.

    


    SECTION
      15. CONFIDENTIALITY.

    


    Unless
      he
      obtains the prior written consent of the Employers, the Executive shall at
      all
      times keep confidential and shall refrain from using for the benefit of himself,
      or any person or entity other than the Employers or their subsidiaries or
      affiliates, any material document or information obtained from the Employers
      or
      their subsidiaries or affiliates, in the course of his employment with any
      of
      them concerning their properties, operations or business (unless such document
      or information is readily ascertainable from public or published information
      or
      trade sources or has otherwise been made available to the public through no
      fault of his own) until the same ceases to be material (or becomes so
      ascertainable or available); provided,
      however,
      that
      nothing in this Section 15 shall prevent the Executive, with or without the
      Employers' consent, from participating in or disclosing documents or information
      in connection with any judicial or administrative investigation, inquiry or
      proceeding or the Company's public reporting requirements to the extent that
      such participation or disclosure is required under applicable
      law.


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    SECTION
      16. SOLICITATION.

    


    The
      Executive hereby covenants and agrees that, for a period of two years following
      his termination of employment with the Employers for any reason, he shall not,
      without the written consent of the Employers, either directly or
      indirectly:

    


    (a)
      solicit, offer employment to, or take any other action intended, or that a
      reasonable person acting in like circumstances would expect, to have the effect
      of causing any officer or employee of the Employers or any of their subsidiaries
      or affiliates to terminate his or her employment and accept employment or become
      affiliated with, or provide services for compensation in any capacity whatsoever
      to, any savings bank, savings and loan association, bank, bank holding company,
      savings and loan holding company, or other institution engaged in the business
      of accepting deposits, making loans or doing business within the counties
      specified in Section 14;

    


    (b)
      provide any information, advice or recommendation with respect to any such
      officer or employee to any savings bank, savings and loan association, bank,
      bank holding company, savings and loan holding company, or other institution
      engaged in the business of accepting deposits, making loans or doing business
      within the counties specified in Section 14, that is intended, or that a
      reasonable person acting in like circumstances would expect, to have the effect
      of causing any officer or employee of the Employers or any of their subsidiaries
      or affiliates to terminate his or her employment and accept employment or become
      affiliated with, or provide services for compensation in any capacity whatsoever
      to, any savings bank, savings and loan association, bank, bank holding company,
      savings and loan holding company, or other institution engaged in the business
      of accepting deposits, making loans or doing business within the counties
      specified in Section 14; or

    


    (c)
      solicit, provide any information, advice or recommendation or take any other
      action intended, or that a reasonable person acting in like circumstances would
      expect, to have the effect of causing any customer of the Company or the Bank
      to
      terminate an existing business or commercial relationship with the Company
      or
      the Bank.

    


    SECTION
      17. NO
      EFFECT
      ON EMPLOYEE BENEFIT PLANS OR PROGRAMS.

    


    The
      termination of the Executive's employment during the Employment Period or
      thereafter, whether by the Employers or by the Executive, shall have no effect
      on the vested rights of the Executive under the Company's or the Bank's
      qualified or non-qualified retirement, pension, savings, thrift, profit-sharing
      or stock bonus plans, group life, health (including hospitalization, medical
      and
      major medical), dental, accident and long term disability insurance plans,
      or
      other employee benefit plans or programs, or compensation plans or programs
      in
      which the Executive was a participant.


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    SECTION
      18. SUCCESSORS
      AND ASSIGNS.

    


    (a)
      This
      Agreement is personal to each of the parties hereto, and no party may assign
      or
      delegate any of its rights or obligations hereunder without first obtaining
      the
      written consent of the other parties; provided, however, that the Employers
      will
      require any successor or assign (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      and/or assets of the Employers, by an assumption agreement in form and substance
      satisfactory to the Executive, to expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Employers would
      be
      required to perform it if no such succession or assignment had taken place.
      Failure of the Employers to obtain such an assumption agreement prior to the
      effectiveness of any such succession or assignment shall be a breach of this
      Agreement and shall entitle the Executive to compensation from the Employers
      in
      the same amount and on the same terms as the compensation pursuant to Section
      9
      or 11 hereof. For purposes of implementing the provisions of this Section 18(a),
      the date which any such succession becomes effective shall be deemed the date
      of
      termination of the Executive's employment.

    


    (b)
      This
      Agreement and all rights of the Executive hereunder shall inure to the benefit
      of and be enforceable by the Executive's personal and legal representatives,
      executors, administrators, successors, heirs, distributees, devises and
      legatees.

    


    SECTION
      19. NOTICES.

    


    Any
      communication required or permitted to be given under this Agreement, including
      any notice, direction, designation, consent, instruction, objection or waiver,
      shall be in writing and shall be deemed to have been given at such time as
      it is
      delivered personally, or five days after mailing if mailed, postage prepaid,
      by
      registered or certified mail, return receipt requested, addressed to such party
      at the address listed below or at such other address as one such party may
      by
      written notice specify to the other party:

    


    
      	 	
              If
                to the Executive:

            
	 	 
	 	
              Merrill
                B. Blanksteen

            
	 	
              At
                the address last appearing

            
	 	
              on
                the personnel records of

            
	 	
              the
                Employers

            


    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    
      	 	 
	 	
              If
                to the Employers:

            
	 	 
	 	
              NewAlliance
                Bancshares, Inc.

            
	 	
              NewAlliance
                Bank

            
	 	
              195
                Church Street

            
	 	
              New
                Haven, CT 06510

            
	 	
              (or
                the address of the Company's or the Bank's principal executive office,
                if
                different)

            
	 	
              Attention:
                Chairman of the Board

            
	 	 
	 	
              with
                a copy, in the case of a notice to the Employers, to:

            
	 	 
	 	
              Elias,
                Matz, Tiernan & Herrick L.L.P.

            
	 	
              734
                15th
                Street, N.W.

            
	 	
              Washington,
                D.C. 20005

            
	 	
              Attention: 
                Raymond A. Tiernan, Esq.

            
	 	
              Philip
                R. Bevan, Esq.

            


    

     

    SECTION
      20. INDEMNIFICATION
      FOR ATTORNEYS' FEES.

    


    (a)
      The
      Employers shall indemnify, hold harmless and defend the Executive against
      reasonable costs, including legal fees and expenses, incurred by him in
      connection with or arising out of any action, suit or proceeding in which he
      may
      be involved, as a result of his efforts, in good faith, to defend or enforce
      the
      terms of this Agreement. For purposes of this Agreement, any settlement
      agreement which provides for payment of any amounts in settlement of the
      Employers' obligations hereunder shall be conclusive evidence of the Executive's
      entitlement to indemnification hereunder, and any such indemnification payments
      shall be in addition to amounts payable pursuant to such settlement agreement,
      unless such settlement agreement expressly provides otherwise.

    


    (b)
      The
      Employers' obligation to make the payments provided for in this Agreement and
      otherwise to perform their obligations hereunder shall not be affected by any
      set-off, counterclaim, recoupment, defense or other claim, right or action
      which
      the Employers may have against the Executive or others. Unless it is determined
      that a claim made by the Executive was either frivolous or made in bad faith,
      the Employers agree to pay as incurred, to the full extent permitted by law,
      all
      legal fees and expenses which the Executive may reasonably incur as a result
      of
      or in connection with his consultation with legal counsel or arising out of
      any
      action, suit, proceeding or contest (regardless of the outcome thereof) by
      the
      Employers, the Executive or others regarding the validity or enforceability
      of,
      or liability under, any provision of this Agreement or any guarantee of
      performance thereof (including as a result of any contest by the Executive
      about
      the amount of any payment pursuant to this Agreement), plus in each case
      interest on any delayed payment at the applicable federal rate provided for
      in
      Section 7872(f)(2)(A) of the Code. This Section 20(b) shall apply whether such
      consultation, action, suit, proceeding or contest arises before, on, after
      or as
      a result of a Change in Control.


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    SECTION
      21. SEVERABILITY.

    


    A
      determination that any provision of this Agreement is invalid or unenforceable
      shall not affect the validity or enforceability of any other provision hereof.
      

    


    SECTION
      22. WAIVER.

    


    Failure
      to insist upon strict compliance with any of the terms, covenants or conditions
      hereof shall not be deemed a waiver of such term, covenant or condition. A
      waiver of any provision of this Agreement must be made in writing, designated
      as
      a waiver, and signed by the party against whom its enforcement is sought. Any
      waiver or relinquishment of any right or power hereunder at any one or more
      times shall not be deemed a waiver or relinquishment of such right or power
      at
      any other time or times.

    


    SECTION
      23. COUNTERPARTS.

    


    This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, and all of which shall constitute one and the same
      Agreement.

    


    SECTION
      24. GOVERNING
      LAW.

    


    This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of Connecticut applicable to contracts entered into and to
      be
      performed entirely within the State of Connecticut, except to the extent that
      federal law controls.

    


    SECTION
      25. HEADINGS
      AND CONSTRUCTION.

     

    The
      headings of sections in this Agreement are for convenience of reference only
      and
      are not intended to qualify the meaning of any section. Any reference to a
      section number shall refer to a section of this Agreement, unless otherwise
      stated.

     

     

    
 

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    SECTION
      26. ENTIRE
      AGREEMENT; MODIFICATIONS.

    


    This
      instrument contains the entire agreement of the parties relating to the subject
      matter hereof, and supersedes in its entirety any and all prior agreements,
      understandings or representations relating to the subject matter hereof
      including that certain employment agreement dated as of April 1, 2002 between
      the Bank and Executive. No modifications of this Agreement shall be valid unless
      made in writing and signed by the parties hereto; provided, however, that if
      the
      Employers determine, after a review of the final regulations issued under
      Section 409A of the Code and all applicable IRS guidance, that this Agreement
      should be further amended to avoid triggering the tax and interest penalties
      imposed by Section 409A of the Code, the Employers may amend this Agreement
      to
      the extent necessary to avoid triggering the tax and interest penalties imposed
      by Section 409A of the Code.

    


    SECTION
      27. REQUIRED
      REGULATORY PROVISIONS.

    


    Notwithstanding
      anything herein contained to the contrary, any payments to the Executive by
      the
      Employers, whether pursuant to this Agreement or otherwise, are subject to
      and
      conditioned upon their compliance with Section 18(k) of the Federal Deposit
      Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated
      thereunder in 12 C.F.R. Part 359.

    


    SECTION
      28. DISPUTE RESOLUTION.

    


    (a)
      In
      the event of any dispute, claim, question or disagreement arising out of or
      relating to this Agreement or the breach hereof, the parties hereto shall use
      their best efforts to settle such dispute, claim, question or disagreement.
      To
      this effect, they shall consult and negotiate with each other, in good faith,
      and, recognizing their mutual interests, attempt to reach a just and equitable
      solution satisfactory to both parties.

    


    (b)
      If
      they do not reach such a solution within a period of thirty (30) days, then
      the
      parties agree first to endeavor in good faith to amicably settle their dispute
      by mediation under the Commercial Mediation Rules of the American Arbitration
      Association (the AAAA"),
      before resorting to arbitration.

    


    (c)
      Thereafter, any unresolved controversy or claim arising out of or relating
      to
      this Agreement or the breach thereof, upon notice by any party to the other,
      shall be submitted to and finally settled by arbitration in accordance with
      the
      Commercial Arbitration Rules (the ARules")
      of the AAA in effect at the time demand for arbitration is made by any such
      party. The parties shall mutually agree upon a single arbitrator within thirty
      (30) days of such demand. In the event that the parties are unable to so agree
      within such thirty (30) day period, then within the following thirty (30) day
      period, one arbitrator shall be named by each party. A third arbitrator shall
      be
      named by the two arbitrators so chosen within ten (10) days after the
      appointment of the first two arbitrators. In the event that the third arbitrator
      is not agreed upon, he or she shall be named by the AAA. Arbitration shall
      occur
      in New Haven, Connecticut or such other location as may be mutually agreed
      to by
      the parties.

    


    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (d)
      The
      award made by all or a majority of the panel of arbitrators shall be final
      and
      binding, and judgment may be entered based upon such award in any court of
      law
      having competent jurisdiction. The award is subject to confirmation,
      modification, correction or vacation only as explicitly provided in Title 9
      of
      the United States Code. The prevailing party shall be entitled to receive any
      award of pre- and post-award interest as well as attorney's fees incurred in
      connection with the arbitration and any judicial proceedings related thereto.
      The parties acknowledge that this Agreement evidences a transaction involving
      interstate commerce. The United States Arbitration Act and the Rules shall
      govern the interpretation, enforcement, and proceedings pursuant to this
      Section. Any provisional remedy which would be available from a court of law
      shall be available from the arbitrators to the parties to this Agreement pending
      arbitration. Either party may make an application to the arbitrators seeking
      injunctive relief to maintain the status quo, or may seek from a court of
      competent jurisdiction any interim or provisional relief that may be necessary
      to protect the rights and property of that party, until such times as the
      arbitration award is rendered or the controversy otherwise
      resolved.

    


    


    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be
      executed by their duly authorized officers and the Executive has hereunto set
      his hand, all as of the date of the restatement of this Agreement.

    


    THIS
      AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
      THE
      PARTIES.

    


    


    


    
      	 	 	
              /s/Merrill
                B. Blanksteen 

            
	 	 	
              Merrill
                B. Blanksteen, Executive

            
	 	 	 
	 	 	 
	
              ATTEST:

            	 	
              NEWALLIANCE
                BANCSHARES, INC.

            
	 	 	 
	 	 	 
	 	 	 
	
              By:
                /s/
                Patricia
                Pacelli

            	 	
              By:
                /s/
                Peyton
                R. Patterson

            
	
              Name:
                Patricia
                Pacelli

            	 	
              Name:
                Peyton
                R. Patterson

            
	
              Title:
                Assistant
                Secretary

            	 	
              Title:
                Chairman,
                President and Chief Executive

            
	 	 	
              Officer

            
	 	 	 
	
              [Seal]

            	 	 
	 	 	 
	 	 	 
	
              ATTEST:

            	 	
              NEWALLIANCE
                BANK

            
	 	 	 
	 	 	 
	 	 	 
	
              By:
                /s/
                Patricia
                Pacelli

            	 	
              By:
                /s/
                Peyton
                R. Patterson

            
	
              Name:
                Patricia
                Pacelli

            	 	
              Name:
                Peyton
                R. Patterson

            
	
              Title:
                Assistant
                Secretary

            	 	
              Title:
                Chairman,
                President and Chief Executive

            
	 	 	
              Officer

            
	 	 	 
	
              [Seal]

            	 	 


    

     

     

     

    
      
        
        

      

      
        22