Document:

Exhibit 4.3 2005 Long Term Compensation Plan

    EXHIBIT
      4.3

     

    NEWALLIANCE
      BANCSHARES, INC.

    2005
      LONG-TERM COMPENSATION PLAN

    

    1.           DEFINITIONS.

    

    (a)
      “Affiliate” means any “parent corporation” or “subsidiary corporation” of the
      Holding Company, as such terms are defined in Sections 424(e) and 424(f) of
      the
      Code.

    

    (b)
      “Award” means, individually or collectively, a grant under the Plan of
      Non-Statutory Stock Options, Incentive Stock Options, Stock Awards, Stock
      Appreciation Rights or Performance Awards.

    

    (c)
      “Award Agreement” means an agreement evidencing and setting forth the terms of
      an Award.

    

    (d)
      “Bank” means NewAlliance Bank, a Connecticut capital stock savings
      bank.

    

    (e)
      “Board of Directors” means the board of directors of the Holding
      Company.

    

    (f)
      “Change in Control” means the occurrence of any of the following
      events:

    

    (i)         approval
      by the shareholders of the Holding Company of a transaction that would result
      and does result in the reorganization, merger or consolidation of the Holding
      Company, with one or more other persons, other than a transaction following
      which:

    

    (A)       at
      least 51% of the equity ownership interests of the entity resulting from such
      transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated
      under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in
      substantially the same relative proportions by persons who, immediately prior
      to
      such transaction, beneficially owned (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) at least 51% of the outstanding equity
      ownership interests in the Holding Company; and

    

    (B)       at
      least 51% of the securities entitled to vote generally in the election of
      directors of the entity resulting from such transaction are beneficially owned
      (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in
      substantially the same relative proportions by persons who, immediately prior
      to
      such transaction, beneficially owned (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) at least 51% of the securities entitled
      to
      vote generally in the election of directors of the Holding Company;

    

    (ii)        the
      acquisition of all or substantially all of the assets of the Holding Company
      or
      beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
      Exchange Act) of 20% or more of the outstanding securities of the Holding
      Company entitled to vote generally in the election of directors by any person
      or
      by any persons acting in concert, or approval by the
      shareholders of the Holding Company of any transaction which would result in
      such an acquisition;

    

    (iii)       a
      complete liquidation or dissolution of the Holding Company or the Bank, or
      approval by the shareholders of the Company of a plan for such liquidation
      or
      dissolution;

    

    (iv)       the
      occurrence of any event if, immediately following such event, members of the
      Board of Directors who belong to any of the following groups do not aggregate
      at
      least a majority of the Board of Directors):

    

    (A)       individuals
      who were members of the Board of Directors on the Effective Date;
      or

    

    (B)       individuals
      who first became members of the Board of Directors after the Effective Date
      either:

    

    (1)       upon
      election to serve as a member of the Board of Directors by the affirmative
      vote
      of three-quarters of the members of such Board, or of a nominating committee
      thereof, in office at the time of such first election; or

    

    (2)       upon
      election by the shareholders of the Board of Directors to serve as a member
      of
      the Board of Directors, but only if nominated for election by the affirmative
      vote of three-quarters of the members of such Board, or of a nominating
      committee thereof, in office at the time of such first nomination; provided
      that
      such individual’s election or nomination did not result from an actual or
      threatened election contest or other actual or threatened solicitation of
      proxies or consents other than by or on behalf of the Board of Directors;
      or

    

    (v)       any
      event which would be described in Section 1(f) (i), (ii), (iii) or (iv) if
      the
      term “Bank” were substituted for the term “Company” therein and the term “Board
      of Directors of the Bank” were substituted for the term “Board of Directors”
      therein.

    

    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, any subsidiary of either
      of them, or by any employee benefit plan maintained by any of them. For purposes
      of this Section 1(f), the term “person” shall include the meaning assigned to it
      under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

    

    (g)
      “Code” means the Internal Revenue Code of 1986, as amended.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (h)
      “Committee” means the committee designated by the Board of Directors, pursuant
      to Section 2 of the Plan, to administer the Plan. If no Committee is designated
      by the Board of Directors, the Compensation Committee of the Board of Directors
      shall constitute the Committee hereunder.

    

    (i)
      “Common Stock” means the common stock of the Holding Company, par value $.01 per
      share.

    

    (j)
“Date
      of Grant” means the effective date of an Award.

    

    (k)
      “Director Emeritus” and “Advisory Director” means a person appointed to serve in
      such capacity by the board of directors of either the Holding Company or the
      Bank or the successors thereto.

    

    (l)
      “Disability” means any mental or physical condition with respect to which the
      Participant qualifies for and receives benefits for under a long-term disability
      plan of the Holding Company or an Affiliate, or in the absence of such a
      long-term disability plan or coverage under such a plan, “Disability” shall mean
      a physical or mental condition which, in the sole discretion of the Committee,
      is reasonably expected to be of indefinite duration and to substantially prevent
      the Participant from fulfilling his or her duties or responsibilities to the
      Holding Company or an Affiliate. For purposes of Section 10(f) hereof with
      respect to Performance Awards, a Participant shall not be considered to have
      been terminated on account of a Disability unless the Participant is “disabled”
      within the meaning of Section 409A(a)(2)(C) of the Code and the regulations
      thereunder.

    

    (m)
      “Effective Date” means the date the Plan is approved by shareholders of the
      Holding Company.

    

    (n)
      “Employee” means any person employed by the Holding Company or an
      Affiliate.

    

    (o)
      “Exchange Act” means the Securities Exchange Act of 1934, as
      amended.

    

    (p)
      “Exercise Price” means in the case of an Option, the price at which a
      Participant may purchase a share of Common Stock pursuant to an Option, or
      in
      the case of a Stock Appreciation Right, the Exercise Price established for
      the
      Stock Appreciation Right pursuant to Section 9(b).

    

    (q)
“Fair
      Market Value” means the market price of Common Stock, determined as
      follows:

    

    (i)        If
      the Common Stock was traded on the date in question on the New York Stock
      Exchange, then the Fair Market Value shall be equal to the closing price
      reported for such date;

    

    (ii)       If
      the Common Stock was not traded on the New York Stock Exchange but was traded
      on
      another stock exchange on the date in question, then the Fair Market Value
      shall
      be equal to the closing price reported by the applicable composite transactions
      report for such date; and

    

    (iii)      If
      neither of the foregoing provisions are applicable, then the Fair Market Value
      shall be determined by the Committee in good faith on such basis as it deems
      appropriate. Whenever possible, the determination of Fair Market Value by the
      Committee shall be based on the prices reported in The Wall Street Journal.
      The
      Committee’s determination of Fair Market Value shall be conclusive and binding
      on all persons.

    

    (r)
      “Holding Company” means NewAlliance Bancshares, Inc., a Delaware
      corporation.

    

    (s)
      “Incentive Stock Option” means a stock option granted to a Participant, pursuant
      to Section 7 of the Plan that is intended to meet the requirements of Section
      422 of the Code.

    

    (t)
      “Non-Statutory Stock Option” means a stock option granted to a Participant
      pursuant to the terms of the Plan but which is not intended to be and is not
      identified as an Incentive Stock Option or a stock option granted under the
      Plan
      which is intended to be and is identified as an Incentive Stock Option but
      which
      does not meet the requirements of Section 422 of the Code.

    

    (u)
      “Option” means an Incentive Stock Option or Non-Statutory Stock
      Option.

    

    (v)
      “Outside Director” means a member of the board(s) of directors of the Holding
      Company or an Affiliate who is not also an Employee of the Holding Company
      or an
      Affiliate, including any Director Emeritus or Advisory Director.

    

    (w)
      “Participant” means any person who holds an outstanding Award.

    

    (x)
      “Performance Award” means an Award pursuant to Section 10 of the
      Plan.

    

    (y)
      “Plan” means this NewAlliance Bancshares, Inc. 2005 Long-Term Compensation
      Plan.

    

    (z)
      “Retirement” with respect to an Employee means termination of employment with
      the Holding Company and all Affiliates after attaining “Normal Retirement Age”
      as defined in the Bank’s defined benefit retirement plan; provided that if the
      Employee is not covered by such plan, the Employee will be deemed to be covered
      by such plan for purposes of this determination; and provided further that
      should such plan cease to exist, “Normal Retirement Age” shall mean the
      attainment of age sixty-five (65) and the completion of five (5) years of
      service with the Holding Company or an Affiliate. “Retirement” with respect to
      an Outside Director means the termination of service from the board of directors
      of the Holding Company and any Affiliate pursuant to the mandatory retirement
      policy then applicable to board members; provided, however, that an Outside
      Director shall not be considered to be retired if he or she continues as a
      Director Emeritus or Advisory Director.

    

    (aa)       “Stock
      Appreciation Right” means an Award pursuant to Section 9 of the
      Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (bb)       “Stock
      Award” means an Award granted to a Participant pursuant to Section 8 of the
      Plan.

    

    2.           ADMINISTRATION.

    

    (a)
      The
      Committee shall administer the Plan. The Committee shall consist of two or
      more
      disinterested directors of the Holding Company, who shall be appointed by the
      Board of Directors. A member of the Board of Directors shall be deemed to be
      “disinterested” only if he or she satisfies: (i) such requirements as the
      Securities and Exchange Commission may establish for non-employee directors
      administering plans intended to qualify for exemption under Rule 16b-3 (or
      its
      successor) under the Exchange Act; (ii) such requirements as the Internal
      Revenue Service may establish for outside directors acting under plans intended
      to qualify for exemption under Section 162(m)(4)(C) of the Code; and (iii)
      such
      requirements as may be imposed by the New York Stock Exchange for independent
      directors if the Holding Company’s Common Stock is traded on the New York Stock
      Exchange.

    

    (b)
      The
      Committee shall (i) select the Employees and Outside Directors who are to
      receive Awards under the Plan, (ii) determine the type, number, vesting
      requirements and other features and conditions of such Awards, (iii) interpret
      the Plan and Award Agreements in all respects and (iv) make all other decisions
      relating to the operation of the Plan. The Committee may adopt such rules or
      guidelines as it deems appropriate to implement the Plan. The Committee’s
      determinations under the Plan shall be final and binding on all
      persons.

    

    (c)
      Each
      Award shall be evidenced by an Award Agreement containing such provisions as
      may
      be required by the Plan and otherwise approved by the Committee. The Chairman
      of
      the Committee and such other directors and officers as shall be designated
      by
      the Committee are hereby authorized to execute Award Agreements on behalf of
      the
      Company or an Affiliate and to cause them to be delivered to the recipients
      of
      Awards. Each Award Agreement shall constitute a binding contract between the
      Holding Company or an Affiliate and the Participant, and every Participant,
      upon
      acceptance of an Award Agreement, shall be bound by the terms and restrictions
      of the Plan and the Award Agreement. The terms of each Award Agreement shall
      be
      in accordance with the Plan, but each Award Agreement may include any additional
      provisions and restrictions determined by the Committee, in its discretion,
      provided that such additional provisions and restrictions are not inconsistent
      with the terms of the Plan. In particular and at a minimum, the Committee shall
      set forth in each Award Agreement:

    

    (i)       the
      type of Award granted;

    

    (ii)      the
      Exercise Price of any Option;

    

    (iii)      the
      number of shares subject to the Award;

    

    (iv)      the
      expiration date of the Award;

    

    (v)       the
      manner, time, and rate (cumulative or otherwise) of exercise or vesting of
      such
      Award; and

    

    (vi)      the
      restrictions, if any, placed upon such Award, or upon shares which may be issued
      upon exercise of such Award.

    

    (d)
      The
      Committee may delegate all authority for: (i) the determination of forms of
      payment to be made by or received by the Plan and (ii) the execution of any
      Award Agreement. The Committee may rely on the descriptions, representations,
      reports and estimates provided to it by the management of the Holding Company
      or
      an Affiliate for determinations to be made pursuant to the Plan.

    

    3.           TYPES
      OF AWARDS.

    

    The
      following Awards may be granted under the Plan:

    

    (a)
      Non-Statutory Stock Options.

    

    (b)
      Incentive Stock Options.

    

    (c)
      Stock
      Awards.

    

    (d)
      Stock
      Appreciation Rights.

    

    (e)
      Performance Awards.

    

    4.           STOCK
      SUBJECT TO THE PLAN.

    

    (a)
      Subject to adjustment as provided in Section 14 of the Plan, the number of
      shares of Common Stock reserved for issuance in connection with Awards under
      the
      Plan is 15,982,223. Subject to adjustment as provided in Section 14 of the
      Plan,
      no more than 11,415,874 shares of Common Stock may be issued in connection
      with
      grants of Options or Stock Appreciation Rights; and no more than 4,566,349
      shares of Common Stock may be issued in connection with grants of Stock Awards
      or in connection with Performance Awards. Thus, subject to adjustment as
      provided in Section 14 of the Plan, no more than 11,415,874 shares of Common
      Stock may be issued in connection with grants of Incentive Stock Options. In
      applying the limits of this Section 4 with respect to Stock Appreciation Rights,
      the number of shares of Common Stock covered by a Stock Appreciation Right
      shall
      count against the limits, regardless of the number of shares that might be
      issued upon the exercise of the Stock Appreciation Right.

    

    (b)
      Subject to adjustment as provided in Section 14 of the Plan, no more than 25%
      of
      the number of shares of Common Stock reserved for issuance in connection with
      Awards under the Plan may be issued to an Employee during any one calendar
      year
      or in the aggregate while this Plan is in effect.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)
      Subject to adjustment as provided in Section 14 of the Plan, no more than 5%
      of
      the number of shares of Common Stock reserved for issuance in connection with
      Awards under the Plan may be issued to an Outside Director during any one
      calendar year or in the aggregate while this Plan is in effect, and no more
      than
      30% of the number of shares of Common Stock reserved for issuance in connection
      with Awards under the Plan may be issued to Outside Directors while this Plan
      is
      in effect.

    

    (d)
      The
      shares of Common Stock issued under the Plan may be either authorized but
      unissued shares or authorized shares previously issued and acquired or
      reacquired by the Holding Company. Shares underlying outstanding awards will
      be
      unavailable for any other use, including future grants under the Plan, except
      that, to the extent the awards terminate, expire or are forfeited without
      vesting or having been exercised, new awards may be granted with respect to
      these shares subject to the limitations set forth in this Section
      4.

    

    5.           ELIGIBILITY.

    

    Subject
      to the terms of the Plan, all Employees and Outside Directors shall be eligible
      to receive Awards under the Plan. In addition, the Committee may grant
      eligibility to consultants and advisors of the Holding Company or an Affiliate,
      as it sees fit.

    

    6.           NON-STATUTORY
      STOCK OPTIONS.

    

    The
      Committee may, subject to the limitations of the Plan and the availability
      of
      shares of Common Stock reserved but not previously awarded under the Plan,
      grant
      Non-Statutory Stock Options to eligible individuals upon such terms and
      conditions as it may determine to the extent such terms and conditions are
      consistent with the following provisions:

    

    (a)
      Exercise Price. The Committee shall determine the Exercise Price of each
      Non-Statutory Stock Option. However, the Exercise Price shall not be less than
      100% of the Fair Market Value of the Common Stock on the Date of
      Grant.

    

    (b)
      Terms
      of Non-Statutory Stock Options. The Committee shall determine the term during
      which a Participant may exercise a Non-Statutory Stock Option, but in no event
      may a Participant exercise a Non-Statutory Stock Option, in whole or in part,
      more than ten (10) years from the Date of Grant. The Committee shall also
      determine the date on which each Non-Statutory Stock Option, or any part
      thereof, first becomes exercisable and any terms or conditions a Participant
      must satisfy in order to exercise each Non-Statutory Stock Option. The shares
      of
      Common Stock underlying each Non-Statutory Stock Option may be purchased in
      whole or in part by the Participant at any time during the term of such
      Non-Statutory Stock Option, or any portion thereof, once the Non-Statutory
      Stock
      Option becomes exercisable.

    

    (c)
      Non-Transferability. Unless otherwise determined by the Committee, a Participant
      may not sell, transfer, assign, pledge, or otherwise encumber or dispose of
      a
      Non-Statutory Stock Option. Except in the event of the Participant’s death or
      pursuant to a domestic relations order, a Non-Statutory Stock Option is not
      transferable. Upon the death of a Participant, a Non-Statutory Stock Option
      is
      transferable by will or the laws of descent and distribution. The designation
      of
      a beneficiary shall not constitute a transfer. Non-Statutory Stock Options
      are
      transferable pursuant to a domestic relations order. The Committee may, however,
      in its sole discretion, permit transferability or assignment of a Non-Statutory
      Stock Option if such transfer or assignment is, in its sole determination,
      for
      valid estate planning purposes and such transfer or assignment is permitted
      under the Code and Rule 16b-3 under the Exchange Act and would not constitute
      an
      impermissible acceleration under Section 409A of the Code. For purposes of
      this
      Section 6(c), a transfer for valid estate planning purposes includes, but is
      not
      limited to: (i) a transfer to a revocable intervivos trust as to which the
      Participant is both the settlor and trustee; or (ii) a transfer for no
      consideration to: (w) any member of the Participant’s Immediate Family, (x) any
      trust solely for the benefit of members of the Participant’s Immediate Family,
      (y) any partnership whose only partners are members of the Participant’s
      Immediate Family, and (z) any limited liability corporation or corporate entity
      whose only members or equity owners are members of the Participant’s Immediate
      Family. For purposes of this Section 6(c), “Immediate Family” includes, but is
      not necessarily limited to, a Participant’s parents, grandparents, spouse,
      children, grandchildren, siblings (including half brothers and sisters), and
      individuals who are family members by adoption. Nothing contained in this
      Section 6(c) shall be construed to require the Committee to give its approval
      to
      any transfer or assignment of any Non-Statutory Stock Option or portion thereof,
      and approval to transfer or assign any Non-Statutory Stock Option or portion
      thereof does not mean that such approval will be given with respect to any
      other
      Non-Statutory Stock Option or portion thereof. The transferee or assignee of
      any
      Non-Statutory Stock Option shall be subject to all of the terms and conditions
      applicable to such Non-Statutory Stock Option
      immediately prior to the transfer or assignment and shall be subject to any
      other conditions prescribed by the Committee with respect to such Non-Statutory
      Stock Option.

    

    (d)
      Termination of Employment or Service (General). Unless otherwise determined
      by
      the Committee, upon the termination of a Participant’s employment or other
      service for any reason other than Retirement, Disability or death, or a
      termination following a Change in Control, the Participant may exercise only
      a
      Non-Statutory Stock Option that was vested at the date of such termination,
      but
      only for a period of three (3) months following the date of such termination,
      or, if sooner, until the expiration of the term of the Non-Statutory Option.
      To
      the extent determined by the Committee, a Participant may be deemed not to
      have
      terminated employment to the extent that the Participant is immediately engaged
      by the Holding Company or an Affiliate as a consultant or advisor or continues
      to serve the Holding Company or an Affiliate as an Outside Director, including
      a
      Director Emeritus or Advisory Director. Any Non-Statutory Stock Options held
      by
      a Participant that are not vested as of the date of termination of the
      Participant’s employment or other service shall be forfeited.

    

    (e)
      Termination of Employment or Service (Retirement). Unless otherwise determined
      by the Committee, in the event of a Participant’s Retirement, each the
      Non-Statutory Stock Option held by such Participant at Retirement shall become
      fully vested and exercisable, and shall remain exercisable for a period of
      two
      (2) years following the date of Retirement, or, if sooner, until the expiration
      of the term of the Non-Statutory Stock Option.

    

    (f)
      Termination of Employment or Service (Disability or Death). Unless otherwise
      determined by the Committee, in the event of the termination of a Participant’s
      employment or other service due to Disability or death, each Non-Statutory
      Stock
      Option held by such Participant at termination shall immediately become fully
      vested and exercisable and shall remain exercisable for a period of one (1)
      year
      following the date of such termination, or, if sooner, until the expiration
      of
      the term of the Non-Statutory Stock Option.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g)
      Acceleration Upon a Change in Control. In the event of a Change in Control,
      all
      Non-Statutory Stock Options held by a Participant as of the date of the Change
      in Control shall immediately become fully vested and exercisable and shall
      remain exercisable until the expiration of the term of the Non-Statutory Stock
      Option regardless of termination of employment or service.

    

    (h)
      Payment. Payment due to a Participant upon the exercise of a Non-Statutory
      Stock
      Option shall be made in the form of shares of Common Stock.

    

    7.           INCENTIVE
      STOCK OPTIONS.

    

    The
      Committee may, subject to the limitations of the Plan and the availability
      of
      shares of Common Stock reserved but unawarded under this Plan, grant Incentive
      Stock Options to an employee of the Holding Company or any subsidiary of the
      Holding Company (within the meaning of Section 422 of the Code) upon such terms
      and conditions as it may determine to the extent such terms and conditions
      are
      consistent with the following provisions:

    

    (a)
      Exercise Price. The Committee shall determine the Exercise Price of each
      Incentive Stock Option. However, the Exercise Price shall not be less than
      100%
      of the Fair Market Value of
      the
      Common Stock on the Date of Grant; provided, however, that if at the time an
      Incentive Stock Option is granted, the Employee owns or is treated as owning,
      for purposes of Section 422 of the Code, stock representing more than 10% of
      the
      total combined voting securities of the Holding Company (“10% Owner”), the
      Exercise Price shall not be less than 110% of the Fair Market Value of the
      Common Stock on the Date of Grant.

    

    (b)
      Amounts of Incentive Stock Options. To the extent the aggregate Fair Market
      Value of shares of Common Stock with respect to which Incentive Stock Options
      that are exercisable for the first time by an Employee during any calendar
      year
      under the Plan and any other stock option plan of the Holding Company or an
      Affiliate exceeds $100,000, or such higher value as may be permitted under
      Section 422 of the Code, such Options in excess of such limit shall be treated
      as Non-Statutory Stock Options. Fair Market Value shall be determined as of
      the
      Date of Grant with respect to each such Incentive Stock Option.

    

    (c)
      Terms
      of Incentive Stock Options. The Committee shall determine the term during which
      a Participant may exercise an Incentive Stock Option, but in no event may a
      Participant exercise an Incentive Stock Option, in whole or in part, more than
      ten (10) years from the Date of Grant; provided, however, that if at the time
      an
      Incentive Stock Option is granted to an Employee who is a 10% Owner, the
      Incentive Stock Option granted to such Employee shall not be exercisable after
      the expiration of five (5) years from the Date of Grant. The Committee shall
      also determine the date on which each Incentive Stock Option, or any part
      thereof, first becomes exercisable and any terms or conditions a Participant
      must satisfy in order to exercise each Incentive Stock Option. The shares of
      Common Stock underlying each Incentive Stock Option may be purchased in whole
      or
      in part at any time during the term of such Incentive Stock Option after such
      Option becomes exercisable.

    

    (d)
      Non-Transferability. No Incentive Stock Option shall be sold, transferred,
      assigned, pledged or otherwise encumbered or disposed of except by will or
      the
      laws of descent and distribution and is exercisable, during his or her lifetime,
      only by the Employee to whom the Committee grants the Incentive Stock Option.
      The designation of a beneficiary does not constitute a transfer of an Incentive
      Stock Option.

    

    (e)
      Termination of Employment (General). Unless otherwise determined by the
      Committee, upon the termination of a Participant’s employment or other service
      for any reason other than Retirement, Disability or death, or a termination
      following a Change in Control, the Participant may exercise only an Incentive
      Stock Option that was vested at the date of such termination and only for a
      period of three (3) months following the date of such termination, or, if
      sooner, until the expiration of the term of the Incentive Stock Option. To
      the
      extent determined by the Committee, a Participant may be deemed not to have
      terminated employment to the extent that the Participant is immediately engaged
      by the Holding Company or an Affiliate as a consultant or advisor or continues
      to serve the Holding Company or an Affiliate as an Outside Director, including
      a
      Director Emeritus or Advisory Director; however, any Option originally
      designated as an Incentive Stock Option shall be treated as a Non-Statutory
      Stock Option to the extent the Participant exercises such Option more than
      three
      (3) months following the Participant’s cessation of employment (without regard
      to any extended period during which he serves consultant, advisor or Outside
      Director). Any Incentive Stock Options in which the Participant has not become
      vested as of the date of termination of the Participant’s employment or other
service
      (including for this purpose any extended period during which he serves
      consultant, advisor or Outside Director) shall be forfeited.

    

    (f)
      Termination of Employment (Retirement). Unless otherwise determined by the
      Committee, in the event of a Participant’s Retirement, each Incentive Stock
      Option held by such Participant at Retirement shall become fully vested and
      exercisable, and shall remain exercisable for a period of two (2) years
      following the date of Retirement, or, if sooner, until the expiration of the
      term of the Incentive Stock Option. Any Option originally designated as an
      Incentive Stock Option shall be treated as a Non-Statutory Stock Option to
      the
      extent the Participant exercises such Option more than three (3) months
      following the Participant’s cessation of employment.

    

    (g)
      Termination of Employment (Disability or Death). Unless otherwise determined
      by
      the Committee, in the event of the termination of a Participant’s employment due
      to Disability or death, each Incentive Stock Option held by such Participant
      at
      termination shall immediately become fully vested and exercisable, and shall
      remain exercisable for a period of one (1) year following the date of such
      termination, or, if sooner, until the expiration of the term of the Incentive
      Stock Option.

    

    (h)
      Acceleration Upon a Change in Control. In the event of a Change in Control
      all
      Incentive Stock Options held by a Participant as of the date of the Change
      in
      Control shall immediately become fully vested and exercisable and shall remain
      exercisable until the expiration of the term of the Incentive Stock Option
      regardless of termination of employment. Any Option originally designated as
      an
      Incentive Stock Option shall be treated as a Non-Statutory Stock Option to
      the
      extent the Participant exercises such Stock Options more than three (3) months
      from the Participant’s cessation of employment.

    

    (i)
      Payment. Payment due to a Participant upon the exercise of an Incentive Stock
      Option shall be made in the form of shares of Common Stock.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (j)
      Disqualifying Dispositions. Each Award Agreement with respect to an Incentive
      Stock Option shall require the Participant to notify the Committee of any
      disposition of shares of Common Stock issued pursuant to the exercise of such
      Option under the circumstances described in Section 421(b) of the Code (relating
      to certain disqualifying dispositions) within ten (10) days of such
      disposition.

    

    8.           STOCK
      AWARDS.

    

    The
      Committee may, subject to the limitations of the Plan and the availability
      of
      shares of Common Stock reserved but unawarded under this Plan, grant Stock
      Awards to eligible individuals upon such terms and conditions as it may
      determine to the extent such terms and conditions are consistent with the
      following provisions:

    

    (a)
      Whole
      Shares Only. Stock Awards may only be made in whole shares of Common
      Stock.

    

    (b)
      Terms
      of the Stock Awards. The Committee shall determine the dates on which Stock
      Awards granted to a Participant shall vest and any terms or conditions which
      must be satisfied prior
      to
      the vesting of any Stock Award or portion thereof. Any such terms or conditions
      shall be determined by the Committee as of the Date of Grant.

    

    (c)
      Termination of Employment or Service (General). Unless otherwise determined
      by
      the Committee, upon the termination of a Participant’s employment or service for
      any reason other than Retirement, Disability or death, or termination following
      a Change in Control, any Stock Awards in which the Participant has not become
      vested as of the date of such termination shall be forfeited and any rights
      the
      Participant had to such unvested Stock Awards shall become null and void. To
      the
      extent determined by the Committee, a Participant may be deemed not to have
      terminated employment to the extent that the Participant is immediately engaged
      by the Holding Company or an Affiliate as a consultant or advisor or continues
      to serve the Holding Company or an Affiliate as an Outside Director, including
      a
      Director Emeritus or Advisory Director.

    

    (d)
      Termination of Employment or Service (Retirement). Unless otherwise determined
      by the Committee, in the event of a Participant’s Retirement, all Stock Awards
      held by the Participant at Retirement shall become fully vested.

    

    (e)
      Termination of Employment or Service (Disability or Death). Unless otherwise
      determined by the Committee, in the event of a termination of the Participant’s
      service due to Disability or death all unvested Stock Awards held by such
      Participant at termination shall immediately vest as of the date of such
      termination.

    

    (f)
      Acceleration Upon a Change in Control. In the event of a Change in Control,
      all
      unvested Stock Awards held by a Participant shall immediately vest.

    

    (g)
      Issuance of Certificates. Reasonably promptly after the Date of Grant with
      respect to shares of Common Stock pursuant to a Stock Award, the Holding Company
      shall cause to be issued a stock certificate, registered in the name of the
      Participant to whom such Stock Award was granted, evidencing such shares;
      provided, that the Holding Company shall not cause such a stock certificate
      to
      be issued unless it has received a stock power duly endorsed in blank with
      respect to such shares. Each such stock certificate shall bear the following
      legend:

    “The
      transferability of this certificate and the shares of stock represented hereby
      are subject to the restrictions, terms and conditions (including forfeiture
      provisions and restrictions against transfer) contained in the NewAlliance
      Bancshares, Inc. 2005 Long-Term Compensation Plan and Award Agreement entered
      into between the registered owner of such shares and NewAlliance Bancshares,
      Inc. or its Affiliates. A copy of the Plan and Award Agreement is on file in
      the
      office of the Corporate Secretary of NewAlliance Bancshares, Inc., 195 Church
      Street, New Haven, Connecticut 06510.” Such legend shall not be removed until
      the Participant becomes vested in such shares pursuant to the terms of the
      Plan
      and Award Agreement. Each certificate issued pursuant to this Section 8(g),
      in
      connection with a Stock Award, shall be held by the Holding Company or its
      Affiliates, unless the Committee determines otherwise.

    

    (h)
      Non-Transferability. Except to the extent permitted by the Code, the rules
      promulgated under Section 16(b) of the Exchange Act or any successor statutes
      or
      rules:

    

    (i)       Unless
      otherwise determined by the Committee, the recipient of a Stock Award shall
      not
      sell, transfer, assign, pledge, or otherwise encumber or dispose of shares
      subject to the Stock
      Award until full vesting of such shares has occurred. For purposes of this
      section, the separation of beneficial ownership and legal title through the
      use
      of any “swap” transaction is deemed to be a prohibited encumbrance.

    

    (ii)      Except
      in the event of the Participant’s death or pursuant to a domestic relations
      order, a Stock Award is not transferable and may be earned in his or her
      lifetime only by the Participant to whom it is granted. Upon the death of a
      Participant, a Stock Award is transferable by will or the laws of descent and
      distribution. The designation of a beneficiary shall not constitute a transfer.
      Stock Awards are transferable pursuant to a domestic relations
      order.

    

    (i)
      Treatment of Dividends. Whenever shares of Common Stock underlying a Stock
      Award
      are distributed to a Participant or beneficiary thereof under the Plan (or
      at
      such other time as the Committee may determine with respect to a Participant),
      such Participant or beneficiary shall also be entitled to receive, with respect
      to each such share awarded, a payment equal to any cash dividends or other
      distributions and the number of shares of Common Stock equal to any stock
      dividends, declared and paid with respect to a share of the Common Stock if
      the
      record date for determining shareholders entitled to receive such dividends
      or
      other distributions falls on or after the date a Stock Award is
      granted.

    

    (j)
      Voting of Stock Awards. After a Stock Award has been granted but for which
      the
      shares covered by such Stock Award have not yet been vested, earned and
      distributed to the Participant pursuant to the Plan, the Participant shall
      be
      entitled to vote such shares of Common Stock which the Stock Award covers
      subject to the rules and procedures adopted by the Committee for this
      purpose.

    

    (k)
      Payment. Payment due to a Participant upon the redemption of a Stock Award
      shall
      be made in the form of shares of Common Stock.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.           STOCK
      APPRECIATION RIGHTS.

    

    The
      Committee may, subject to the limitations of the Plan and the availability
      of
      shares of Common Stock reserved but not previously awarded under the Plan,
      grant
      Stock Appreciation Rights to eligible individuals upon such terms and conditions
      as it may determine to the extent such terms and conditions are consistent
      with
      the following provisions:

    

    (a)
      Exercise. Each Stock Appreciation Right shall entitle the Participant to whom
      it
      is granted, so long as the Stock Appreciation Right is exercisable and subject
      to such limitations as the Committee may have imposed, to surrender any then
      exercisable portion of the Stock Appreciation Right and to receive from the
      Company in exchange therefore, without the payment of cash (except for
      applicable employee withholding taxes) that number of shares of Common Stock
      having an aggregate Fair Market Value on the date of surrender equal to the
      product of (i) the excess of the Fair Market Value on the date of surrender
      of
      one share of Common Stock over the exercise price established by the Committee,
      which shall not be less than the Fair Market Value of a share of Common Stock
      on
      the Date of Grant, and (ii) the number of shares of Common Stock covered by
      the
      Stock Appreciation Right being surrendered.

    

    (b)
      Terms
      of Stock Appreciation Rights. The Committee shall determine the term during
      which a Participant may exercise a Stock Appreciation Right, but in no event
      may
      a Participant exercise
      a Stock Appreciation Right, in whole or in part, more than ten (10) years from
      the Date of Grant. The Committee shall also determine the date on which each
      Stock Appreciation Right, or any part thereof, first becomes exercisable and
      any
      terms or conditions a Participant must satisfy in order to exercise each Stock
      Appreciation Right. A Stock Appreciation Right may not include any feature
      for
      the deferral of compensation (within the meaning of Section 409A of the Code)
      other than the deferral of recognition of income until exercise of the Stock
      Appreciation Right. Each Award Agreement for a Stock Appreciation Right shall
      specify the maximum number of shares of Common Stock that may be issued in
      connection with the Stock Appreciation Right and in the absence of any such
      specification, the maximum number of shares of Common Stock that may be issued
      in connection with the Stock Appreciation Right shall be the number of shares
      of
      Common Stock covered by the Stock Appreciation Right.

    

    (c)
      Non-Transferability. Unless otherwise determined by the Committee, a Participant
      may not sell, transfer, assign, pledge, or otherwise encumber or dispose of
      a
      Stock Appreciation Right. Except in the event of the Participant’s death or
      pursuant to a domestic relations order, a Stock Appreciation Right is not
      transferable. Upon the death of a Participant, a Stock Appreciation Right is
      transferable by will or the laws of descent and distribution. The designation
      of
      a beneficiary shall not constitute a transfer. Stock Appreciation Rights are
      transferable pursuant to a domestic relations order.

    

    (d)
      Termination of Employment or Service (General). Unless otherwise determined
      by
      the Committee, upon the termination of a Participant’s employment or other
      service for any reason other than Retirement, Disability or death, or following
      a change in Control, the Participant may exercise a Stock Appreciation Right
      that was vested at the date of such termination but only for a period of three
      (3) months following the date of such termination, or, if sooner, until the
      expiration of the term of the Stock Appreciation Right. To the extent determined
      by the Committee, a Participant may be deemed not to have terminated employment
      to the extent that the Participant is immediately engaged by the Holding Company
      or an Affiliate as a consultant or advisor or continues to serve the Holding
      Company or an Affiliate as an Outside Director, including a Director Emeritus
      or
      Advisory Director. Any Stock Appreciation Rights in which a Participant has
      not
      become vested as of the date of termination of a Participant’s employment or
      other service shall be forfeited.

    

    (e)
      Termination of Employment or Service (Retirement). Unless otherwise determined
      by the Committee, in the event of a Participant’s Retirement, each Stock
      Appreciation Right held by such Participant at Retirement shall become fully
      vested and exercisable, and shall remain exercisable for a period of two (2)
      years following the date of Retirement, or if sooner, until the expiration
      of
      the term of the Stock Appreciation Right.

    

    (f)
      Termination of Employment or Service (Disability or Death). Unless otherwise
      determined by the Committee, in the event of the termination of a Participant’s
      employment or other service due to Disability or death, each Stock Appreciation
      Right held by such Participant at termination shall immediately become fully
      vested and exercisable, and shall remain exercisable for a period of one (1)
      year following the date of such termination, or, if sooner, until the expiration
      of the term of the Stock Appreciation Right.

    

    (g)
      Acceleration Upon a Change in Control. In the event of a Change in Control,
      all
      Stock Appreciation Rights held by a Participant as of the date of the Change
      in
      Control shall immediately
      become fully vested and exercisable, and shall remain exercisable until the
      expiration of the term of the Stock Appreciation Right regardless of termination
      of employment or service.

    

    (h)
      Payment. Payment due to a Participant upon the exercise of a Stock Appreciation
      Right shall be made in the form of shares of Common Stock.

    

    10.          PERFORMANCE
      AWARDS.

    

    The
      Committee may make grants of Performance Awards to an eligible individual upon
      such terms and conditions as it may determine to the extent such terms and
      conditions are consistent with the following provisions:

    

    (a)
      Grants of the Performance Awards. Performance awards may be granted to
      Participants at any time and from time to time as determined by the Committee.
      The Committee shall have complete discretion in determining the size and
      composition of Performance Awards granted to a Participant. The period over
      which performance is to be measured (a “performance cycle”) shall commence on
      the date specified by the Committee and shall end on the last day of a fiscal
      year specified by the Committee. A Performance Award shall be paid no later
      than
      the 15th day of the third month following the completion of a performance cycle.
      Performance awards may include (i) specific dollar-value target awards, (ii)
      performance units, the value of each such unit being determined by the Committee
      at the time of issuance, and/or (iii) performance Common Stock, the value of
      each such share of Common Stock being equal to the Fair Market Value of a share
      of Common Stock.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
      Terms
      of the Performance Awards. The Committee shall determine the dates on which
      Performance Awards granted to a Participant shall vest and any terms or
      conditions which must be satisfied prior to the vesting of any Performance
      Award
      or portion thereof. Any such terms or conditions shall be determined by the
      Committee as of the Date of Grant. The value of each Performance Award may
      be
      fixed or it may be permitted to fluctuate based on a performance factor (e.g.,
      return on equity) selected by the Committee. If a Performance Award may be
      paid
      in Common Stock, the Award Agreement for a Performance Award shall specify
      the
      maximum number of shares of Common Stock that may be paid in connection with
      the
      Performance Award.

    

    (c)
      Performance Goals. The Committee shall establish performance goals and
      objectives for each performance cycle on the basis of such criteria and
      objectives as the Committee may select from time to time, including, without
      limitation, the performance of the Participant, the Holding Company, one or
      more
      of its Affiliates or divisions or any combination of the foregoing. During
      any
      performance cycle, the Committee shall have the authority to adjust the
      performance goals and objectives for such cycle for such reasons as it deems
      equitable.

    

    (d)
      Termination of Employment or Service (General). Unless otherwise determined
      by
      the Committee, upon the termination of a Participant’s employment or service
      prior to the end of the performance cycle for any reason other than Retirement,
      Disability or death, or following a Change in Control, any Performance Awards
      in
      which the Participant has not become vested as of the date of such termination
      shall be forfeited and any rights the Participant had to such unvested
      Performance Awards shall become null and void. To the extent determined by
      the
Committee,
      a Participant may be deemed not to have terminated employment to the extent
      that
      the Participant is immediately engaged by the Holding Company or an Affiliate
      as
      a consultant or advisor or continues to serve the Holding Company or an
      Affiliate as an Outside Director, including a Director Emeritus or Advisory
      Director.

    

    (e)
      Termination of Employment or Service (Retirement). Unless otherwise determined
      by the Committee, in the event of a Participant’s Retirement, each Performance
      Award held by such Participant at Retirement shall become fully vested and
      shall
      earn a proportionate portion of the Performance Award based upon the elapsed
      portion of the performance cycle and the Holding Company’s performance over that
      portion of such cycle.

    

    (f)
      Termination of Employment or Service (Disability or Death). Unless otherwise
      determined by the Committee, in the event of a termination of the Participant’s
      service due to Disability or death, each Performance Award held by such
      Participant at termination shall become fully vested and shall earn a
      proportionate portion of the Performance Award based upon the elapsed portion
      of
      the performance cycle and the Holding Company’s performance over that portion of
      such cycle.

    

    (g)
      Acceleration Upon a Change in Control. In the event of a Change in Control
      that
      also constitutes a “change in the ownership or effective control of” the Holding
      Company, or a change in the ownership of a substantial portion of the Holding
      Company’s assets (in each case as determined under regulations issued pursuant
      to Section 409A(a)(2)(A)(v) of the Code), each Performance Award held by a
      Participant shall become fully vested and shall earn a proportionate portion
      of
      the Performance Award based upon the elapsed portion of the performance cycle
      and the Holding Company’s performance over that portion of such cycle ended
      immediately prior to the Change in Control; provided, however, that if an event
      that constitutes a Change in Control hereunder does not constitute a “change in
      the ownership or effective control of” the Holding Company, or a change in the
      ownership of a substantial portion of the Holding Company’s assets (in each case
      as determined under regulations issued pursuant to Section 409A(a)(2)(A)(v)
      of
      the Code), no payments with respect to the Performance Awards shall be made
      under this Section 10(g) to the extent such payments would constitute an
      impermissible acceleration under Section 409A of the Code.

    

    (h)
      Non-Transferability. Unless otherwise determined by the Committee, a Participant
      may not sell, transfer, assign, pledge, or otherwise encumber or dispose of
      a
      Performance Award. Except in the event of the Participant’s death or pursuant to
      a domestic relations order, a Performance Award is not transferable. Upon the
      death of a Participant, a Performance Award is transferable by will or the
      laws
      of descent and distribution. The designation of a beneficiary shall not
      constitute a transfer. Performance Awards are transferable pursuant to a
      domestic relations order.

    

    (i)
      Payment. The Committee shall determine the portion of each Performance Award
      that is earned by a Participant on the basis of the Holding Company’s
      performance over the performance cycle in relation to the performance goals
      for
      such cycle. The earned portion of a Performance Award shall be paid out in
      Common Stock, cash or any combination thereof, as the Committee may determine.
      To the extent that the earned portion of a Performance Award is paid in Common
      Stock, the number of shares of Common Stock paid shall reduce the number of
      shares of Common Stock reserved for Awards under Section 4. The maximum value
      of
      the earned
      portions of Performance Awards that can be paid to a Participant during any
      calendar year may not exceed $2,000,000. Notwithstanding anything herein to
      the
      contrary, no payment of any portion of a Performance Award shall be paid to
      a
“specified employee” (within the meaning of Code Section 409A(a)(2)(B)(i)) on
      account of termination of employment for reasons other than death or Disability
      before the date that is 6 months after the date of termination of service
      (within the meaning of Code Section 409A(a)(2)(B)(i)). To the extent determined
      by the Committee, a Participant may be deemed not to have terminated employment
      to the extent that the Participant is immediately engaged by the Holding Company
      or an Affiliate as a consultant or advisor or continues to serve the Holding
      Company or an Affiliate as a Director Emeritus or Advisory Director. A
      Participant must be a director, officer or employee of, or otherwise perform
      services for, the Holding Company or one or more of its Affiliations at the
      end
      of the performance cycle in order to be entitled to payment of a Performance
      Award issued in respect of such cycle.

    

    11.          METHOD
      OF EXERCISE OF OPTIONS.

    

    Subject
      to any applicable Award Agreement, any Option may be exercised by the
      Participant in whole or in part at such time or times, and the Participant
      may
      make payment of the Exercise Price in such form or forms permitted by the
      Committee, including, without limitation, payment by delivery of cash, Common
      Stock or other consideration (including, where permitted by law and the
      Committee, Awards) having a Fair Market Value on the day immediately preceding
      the exercise date equal to the total Exercise Price, or by any combination
      of
      cash, shares of Common Stock and other consideration, including exercise by
      means of a cashless exercise arrangement with a qualifying
      broker-dealer.

    

    12.          RIGHTS
      OF PARTICIPANTS.

    

    No
      Participant shall have any rights as a shareholder with respect to any shares
      of
      Common Stock covered by an Option until the date of issuance of a stock
      certificate for such Common Stock. Nothing contained herein or in any Award
      Agreement confers on any person any right to continue in the employ or service
      of the Holding Company or an Affiliate or interferes in any way with the right
      of the Holding Company or an Affiliate to terminate a Participant’s
      services.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    13.          DESIGNATION
      OF BENEFICIARY.

    

    A
      Participant may, with the consent of the Committee, designate a person or
      persons to receive, in the event of death, any Award to which the Participant
      would then be entitled. Such designation will be made upon forms supplied by
      and
      delivered to the Holding Company and may be revoked in writing. If a Participant
      fails effectively to designate a beneficiary, then the Participant’s estate will
      be deemed to be the beneficiary.

    
       

      14.          DILUTION
        AND OTHER ADJUSTMENTS.

    

    

    In
      the
      event of any change in the outstanding shares of Common Stock by reason of
      any
      stock dividend or split, recapitalization, merger, consolidation, spin-off,
      reorganization, combination or exchange of shares, or other similar corporate
      change, or other increase or decrease
      in such shares without receipt or payment of consideration by the Holding
      Company, or in the event an extraordinary capital distribution is made, the
      Committee may make any appropriate adjustments, including, but not limited
      to,
      such adjustments deemed necessary to prevent dilution, diminution, or
      enlargement of the rights of the Participant, in the number and kind of shares
      with respect to which Awards may be granted under this Plan (including the
      limits set forth in Section 4) and, with respect to outstanding Awards, in
      the
      number and kind of shares covered thereby and in the applicable Exercise Price,
      including any or all of the following:

    

    (a)
      adjustments in the aggregate number or kind of shares of Common Stock or other
      securities that may underlie future Awards under the Plan;

    

    (b)
      adjustments in the aggregate number or kind of shares of Common Stock or other
      securities underlying Awards already made under the Plan including, without
      limitation, substitution of securities of any other corporation in connection
      with a merger or other corporate transaction; or

    

    (c)
      adjustments in the Exercise Price of outstanding Options or Stock Appreciation
      Rights. All Awards under this Plan shall be binding upon any successors or
      assigns of the Holding Company.

    

    15.          TAXES.

    

    (a)
      Whenever under this Plan, cash or shares of Common Stock are to be delivered
      upon exercise or payment of an Award or any other event with respect to rights
      and benefits hereunder, the Committee shall be entitled to require as a
      condition of delivery (i) that the Participant remit an amount sufficient to
      satisfy all federal, state, and local withholding tax requirements related
      thereto, (ii) that the withholding of such sums come from compensation otherwise
      due to the Participant or from any shares of Common Stock due to the Participant
      under this Plan to the extent that withholding from the shares of Common Stock
      due the Participant does not cause the Award to be deferred compensation within
      the meaning of Code section 409A, or (iii) any combination of the foregoing;
      provided, however, that no amount shall be withheld from any cash payment or
      shares of Common Stock relating to an Award which was transferred by the
      Participant in accordance with this Plan.

    

    (b)
      If
      any disqualifying disposition described in Section 7(j) is made with respect
      to
      shares of Common Stock acquired under an Incentive Stock Option granted pursuant
      to this Plan, or any transfer described in Section 6(c) is made, or any election
      described in Section 16 is made, then the person making such disqualifying
      disposition, transfer, or election shall remit to the Holding Company or its
      Affiliates an amount sufficient to satisfy all federal, state, and local
      withholding taxes thereby incurred; provided that, in lieu of or in addition
      to
      the foregoing, the Holding Company or its Affiliates shall have the right to
      withhold such sums from compensation otherwise due to the Participant, or,
      except in the case of any transfer pursuant to Section 6(c), from any shares
      of
      Common Stock due to the Participant under this Plan.

    

    16.          NOTIFICATION
      UNDER SECTION 83(b).

    

    The
      Committee may, on the Date of Grant or any later date, prohibit a Participant
      from making the election described below. If the Committee has not prohibited
      such Participant from making
      such election, and the Participant shall, in connection with the exercise of
      any
      Option, or the grant of any Stock Award, make the election permitted under
      Section 83(b) of the Code, such Participant shall notify the Committee of such
      election within 10 days of filing notice of the election with the Internal
      Revenue Service, in addition to any filing and notification required pursuant
      to
      regulations issued under the authority of Section 83(b) of the
      Code.

    

    17.          AMENDMENT
      OF THE PLAN AND AWARDS.

    

    (a)
      Except as provided in paragraph (c) of this Section 17, the Board of Directors
      may at any time, and from time to time, modify or amend the Plan in any respect,
      prospectively or retroactively; provided, however, that amendments shall be
      submitted for shareholder approval to the extent required by law, regulation
      or
      otherwise. Failure to ratify or approve amendments or modifications by
      shareholders shall be effective only as to the specific amendment or
      modification requiring such ratification or approval. Other provisions of this
      Plan will remain in full force and effect. No such termination, modification
      or
      amendment may adversely affect the rights of a Participant under an outstanding
      Award without the written permission of such Participant.

    

    (b)
      Except as provided in paragraph (c) of this Section 17, the Committee may amend
      any Award Agreement, prospectively or retroactively; provided, however, that
      no
      such amendment shall adversely affect the rights of any Participant under an
      outstanding Award without the written consent of such Participant.

    

    (c)
      In no
      event shall the Board of Directors amend the Plan or shall the Committee amend
      an Award Agreement in any manner that has the effect of allowing any Option
      to
      be granted with an Exercise Price below the Fair Market Value of the Common
      Stock on the Date of Grant.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)
      Except to the extent and solely for the reasons set forth in Section 14 of
      the
      Plan, Options or Stock Appreciation Rights granted under this Plan may not,
      without the prior approval of the Company’s shareholders, be repriced, replaced
      or regranted either through cancellation of a previously granted Option or
      Stock
      Appreciation Right and issuance of a new Option (or Stock Appreciation Right)
      or
      by lowering the Exercise Price of a previously granted Option or Stock
      Appreciation Right.

    

    (e)
      It is
      intended that the grant, vesting and payment of Awards under this Plan shall
      not
      result in a deferral of compensation under Section 409A of the Code and the
      Treasury guidance promulgated thereunder. If, however, it is determined that
      the
      Plan is or may be subject to Section 409A of the Code and any provision of
      the
      Plan could be construed in form or operation not to comply with Section 409A
      and
      the Treasury guidance promulgated thereunder, such provision shall be
      interpreted and construed (and, if necessary, reformed through formal plan
      amendments) to comply with Section 409A and the Treasury guidance promulgated
      thereunder, and no consent of a Participant or beneficiary shall be necessary
      to
      give effect to such interpretation, construction or amendment.

    

    18.          EFFECTIVE
      DATE OF PLAN.

    

    The
      Plan
      shall become effective immediately upon the affirmative vote of a majority
      of
      the votes cast at the Holding Company’s 2005 annual meeting of
      shareholders.

    

    19.          TERMINATION
      OF THE PLAN.

    

    The
      right
      to grant Awards under the Plan will terminate upon the earlier of: (i) ten
      (10)
      years after the Effective Date; or (ii) the issuance of a number of shares
      of
      Common Stock pursuant to Awards is equivalent to the maximum number of shares
      reserved under the Plan as set forth in Section 4 hereof. The Board of Directors
      has the right to suspend or terminate the Plan at any time, provided that no
      such action will, without the consent of a Participant, adversely affect a
      Participant’s vested rights under a previously granted Award.

    

    20.          APPLICABLE
      LAW.

    

    The
      Plan
      will be administered in accordance with the laws of the State of Delaware to
      the
      extent not pre-empted by applicable federal law.Geoff Jones Employment Agreement

                                                                Exhibit 10.17

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made by and between Trico Marine Services, Inc., a Delaware corporation (“Company”), and Geoffrey A. Jones (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, Executive is currently employed by Company; and

 

WHEREAS, Company is desirous of continuing to employ Executive in an executive capacity on the terms and conditions, and for the consideration, hereinafter set forth and Executive is desirous of continuing to be employed by Company on such terms and conditions and for such consideration;

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

 

ARTICLE 1:    EMPLOYMENT AND DUTIES

 

1.1   Employment; Effective Date. Effective as of September 1, 2005 (the “Effective Date”) and continuing for the period of time set forth in Article 2 of this Agreement, Executive’s employment by Company shall be subject to the terms and conditions of this Agreement.

 

1.2   Positions. From and after the Effective Date, Company shall employ Executive in the positions of Vice President and Chief Financial Officer of Company, or in such other positions as the parties mutually may agree. 

 

1.3 Duties and Services. Executive agrees to serve in the positions referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s executive employees, as such policies may be amended from time to time.

 

1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote substantially all of his business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors of Company (the “Board of Directors”). The foregoing notwithstanding, the parties recognize and agree that Executive may engage in other business activities that do not conflict with the business and affairs of Company or interfere with Executive’s performance of his duties hereunder, which shall be at the sole determination of the Board of Directors.

 

1.5   Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

 

ARTICLE 2:    TERM AND TERMINATION OF EMPLOYMENT

 

2.1  Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on the first anniversary of the Effective Date (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or 2.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date that is 30 days prior to the first day of any such extension period either party shall give written notice to the other that no such automatic extension shall occur.

 

2.2  Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons:

 

(i)  upon Executive’s death;

 

(ii) upon Executive’s becoming incapacitated by accident, sickness, or other circumstances which, in the opinion of a physician selected by Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder;

 

(iii) for “Cause”, which shall mean Executive (A) has engaged in gross negligence or willful misconduct in the performance of the duties required of him hereunder, (B) has willfully refused without proper legal reason to perform the duties and responsibilities required of him hereunder, (C) has materially breached any material provision of this Agreement or any material corporate policy maintained and established by Company that is of general applicability to Company’s executive employees, (D) has willfully engaged in conduct that he knows or should know is materially injurious to Company or any of its affiliates, or (E) has been convicted of, or pleaded no contest to, a crime involving moral turpitude or any felony, or (F) has engaged in any act of serious dishonesty which adversely affects, or reasonably could in the future adversely affect, the value, reliability, or performance of Executive in a material manner; provided, however, that Executive’s employment may be terminated for Cause only if such termination is approved by at least a majority of a quorum (as defined in Company’s By-laws) of the members of the Board of Directors after Executive has been given written notice by Company of the specific reason for such termination and an opportunity for Executive, together with his counsel, to be heard before the Board of Directors; or

 

(iv)  for any other reason whatsoever, in the sole discretion of the Board of Directors.

 

Members of the Board of Directors may participate in any hearing that is required pursuant to paragraph 2.2(iii) by means of conference telephone or similar communications equipment by means of which all persons participating in the hearing can hear and speak to each other. 

 

2.3 Executive’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons:

 

(i) for “Good Reason”, which shall mean, within 60 days of and in connection with or based upon (A) a material breach by Company of any material provision of this Agreement (provided, however, that a reduction in Executive’s annual base salary that is consistent with reductions taken generally by other executives of Company shall not be considered a material breach of a material provision of this Agreement), (B) a significant reduction in the nature or scope of Executive’s duties and responsibilities, (C) the assignment to Executive of duties and responsibilities that are materially inconsistent with the positions referred to in paragraph 1.2, (D) any requirement that Executive relocate to a site more than 50 miles from his present business address, or (E) Executive not being offered a comparable position at the “resulting entity” (as defined in paragraph 4.1) in connection with a Change in Control. Prior to Executive’s termination for Good Reason, Executive must give written notice to Company of the reason for his termination and the reason must remain uncorrected for 30 days following such written notice; or

 

(ii) at any time for any other reason whatsoever, in the sole discretion of Executive.

 

2.4 Notice of Termination. If Company desires to terminate Executive’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it shall do so by giving written notice to Executive that it has elected to terminate Executive’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder. If Executive desires to terminate his employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, he shall do so by giving a 30-day written notice to the Company that he has elected to terminate his employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder.

 

2.5 Deemed Resignations. Any termination of Executive’s employment shall constitute an automatic resignation of Executive as an officer of Company and each affiliate of Company, and an automatic resignation of Executive from the Board of Directors (if applicable) and from the board of directors of any affiliate of Company and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which Company or any affiliate holds an equity interest and with respect to which board or similar governing body Executive serves as Company’s or such affiliate’s designee or other representative.

 

ARTICLE 3: COMPENSATION AND BENEFITS

 

3.1 Base Salary. During the period of this Agreement, Executive shall receive a minimum annual base salary of $215,000. Executive’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased (except for a decrease that is consistent with reductions taken generally by other executives of Company), effective as of any date determined by the Board of Directors. Executive’s annual base salary shall be paid in equal installments in accordance with Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

 

3.2 Bonuses. Executive shall be eligible to participate in Company’s annual cash incentive plan as approved from time to time by the Board of Directors in amounts to be determined by the Board of Directors (or a duly authorized committee thereof) based upon criteria established by the Board of Directors (or such committee, if any).

 

3.3 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment:

 

(i) Business and Entertainment Expenses - Subject to Company’s standard policies and procedures with respect to expense reimbursement as applied to its executive employees generally, Company shall reimburse Executive for, or pay on behalf of Executive, reasonable and appropriate expenses incurred by Executive for business related purposes, including dues and fees to industry and professional organizations and costs of entertainment and business development.

 

(ii)Vacation - During his employment hereunder, Executive shall be entitled to four weeks of paid vacation each calendar year (or such greater amount of vacation as provided to executives of Company generally) and to all holidays provided to executives of Company generally; provided, however, that for the period beginning on the Effective Date and ending on the last day of the calendar year in which the Effective Date occurs, Executive shall be entitled to four weeks of paid vacation (or such greater amount of vacation as provided to executives of Company generally) reduced by the number of vacation days that Executive has already used during such calendar year and prior to the Effective Date.

 

(iii) Restricted Stock - On the Effective Date, Executive shall receive 15,000 restricted shares of common stock of Company, with forfeiture restrictions that will lapse as to 25% of the shares on each anniversary of the Effective Date, beginning on the first anniversary of the Effective Date. The terms of the restricted stock award shall be determined by the plan administrator of the Company’s stock incentive plan based upon criteria established from time to time by the plan administrator, except that the terms of the restricted stock award must not conflict with the provisions of this Agreement. 

 

(iv)  Other Company Benefits - Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plans and programs, including improvements or modifications of the same, which are now, or may hereafter be, available to other executive employees of Company. Such benefits, plans and programs shall include, without limitation, any profit sharing plan, thrift plan, health insurance or health care plan, life insurance, disability insurance, pension plan, supplemental retirement plan, vacation and sick leave plan, and the like which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such benefit plan or program, so long as such changes are similarly applicable to executive employees generally.

 

ARTICLE 4:  EFFECT OF TERMINATION AND CHANGE IN CONTROL ON COMPENSATION; ADDITIONAL PAYMENTS

 

4.1 Defined Terms. For purposes of this Article 4, the following terms shall have the meanings indicated:

 

“Change in Control” means (i) a merger of Company with another entity, a consolidation involving Company, or the sale of all or substantially all of the assets of Company to another entity if, in any such case, (A) the holders of equity securities of Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 50% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of Company immediately prior to such transaction or event or (B) the persons who were members of the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (A) if Company has not engaged in a merger or consolidation, Company, or (B) if Company has engaged in a merger or consolidation, the resulting entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity. 

 

“Change in Control Benefits” means (i) a lump sum cash payment equal to the sum of: (A) 2.99 times Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment (or, if higher, Executive’s annual base salary in effect immediately prior to the Change in Control), (B) 2.99 times the higher of (1) Executive’s highest annual bonus paid during the three most recent fiscal years or (2) Executive’s Target Bonus (as provided in Company’s annual cash incentive plan) for the fiscal year in which Executive’s date of termination occurs, and (C) any bonus that Executive has earned and accrued as of the date of termination of Executive’s employment which relates to periods that have ended on or before such date and which have not yet been paid to Executive by Company; (ii) all of the outstanding stock options, restricted stock awards and other equity based awards granted by Company to Executive shall become fully vested and immediately exercisable in full on the date of termination of Executive’s employment; and (iii) Health Coverage.

 

“Health Coverage” means that if Executive elects to continue coverage for himself or his eligible dependents under Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), during the one-year period commencing on the date of Executive’s termination of employment from Company (the “Severance Period”), then throughout the Severance Period Company shall promptly reimburse Executive on a monthly basis for the difference between the amount Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees pay for the same or similar coverage under Company’s group health plans. Further, if after the Severance Period Executive continues his COBRA coverage and Executive’s COBRA coverage terminates at any time during the eighteen-month period commencing on the day immediately following the last day of the Severance Period (the “Extended Coverage Period”), then Company shall provide Executive (and his eligible dependents) with health benefits substantially similar to those provided under its group health plans for active employees for the remainder of the Extended Coverage Period at a cost to Executive that is no greater than the cost of COBRA coverage; provided, however, that Company shall use its reasonable efforts so that such health benefits are provided to Executive under one or more insurance policies (or such other manner) so that reimbursement or payment of benefits to Executive thereunder shall not result in taxable income to Executive. Notwithstanding the preceding provisions of this paragraph, Company’s obligation to reimburse Executive during the Severance Period and to provide health benefits to Executive during the Extended Coverage Period shall immediately end if and to the extent Executive becomes eligible to receive health plan coverage from a subsequent employer (with Executive being obligated hereunder to promptly report such eligibility to Company).

 

“Termination Benefits” means (i) a lump sum cash payment equal to the sum of: (A) one year of Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment, (B) the higher of (1) Executive’s highest annual bonus paid during the three most recent fiscal years or (2) Executive’s Target Bonus (as provided in Company’s annual cash incentive plan) for the fiscal year in which Executive’s date of termination occurs, and (C) any bonus that Executive has earned and accrued as of the date of termination of Executive’s employment which relates to periods that have ended on or before such date and which have not yet been paid to Executive by Company; and (ii) Health Coverage.

 

4.2 Termination By Expiration. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because either party has provided the notice contemplated in such paragraph, then all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of his employment.

 

4.3 Termination By Company. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that, subject to paragraph 4.7 below, if such termination shall be for any reason other than those encompassed by paragraph 2.2(i), 2.2(ii), or 2.2(iii), then Company shall provide Executive with the Termination Benefits, except that if Executive is entitled to the Change in Control Benefits pursuant to paragraph 4.5 as a result of such termination, then Executive will not receive the Termination Benefits provided by Company under this paragraph. Any lump sum cash payment due to Executive pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company; provided, however, that if the lump sum cash payment would be subject to additional taxes and interest under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then payment of the lump sum cash payment shall be deferred to the extent required to avoid such additional taxes and interest.

 

4.4  Termination By Executive. If Executive’s employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that, subject to paragraph 4.7 below, if such termination occurs for Good Reason, then Company shall provide Executive with the Termination Benefits, except that if Executive is entitled to the Change in Control Benefits pursuant to paragraph 4.5 as a result of such termination, then Executive will not receive the Termination Benefits provided by Company under this paragraph. Any lump sum cash payment due to Executive pursuant to this paragraph shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company; provided, however, that if the lump sum cash payment would be subject to additional taxes and interest under Section 409A of the Code, then payment of the lump sum cash payment shall be deferred to the extent required to avoid such additional taxes and interest.

 

4.5 Change in Control Benefits. If Executive’s employment is terminated pursuant to paragraph 2.2(iv) or paragraph 2.3(i) in connection with, based upon, or within 12 months after, a Change in Control, then Company shall provide Executive with the Change in Control Benefits. Any lump sum cash payment due to Executive pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company; provided, however, that if the lump sum cash payment would be subject to additional taxes and interest under Section 409A of the Code, then payment of the lump sum cash payment shall be deferred to the extent required to avoid such additional taxes and interest.

 

4.6 Additional Payments by Company. Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment. Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within 10 days of the receipt of such claim. Company shall notify Executive in writing at least 10 days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s action. If, as a result of Company’s action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. In addition, Company may use reasonable tax planning options to mitigate the effects of the Excise Tax and Executive agrees to cooperate fully with Company in using all available tax planning options to mitigate the effects of the Excise Tax; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with using such tax planning options and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s use of such tax planning options.

 

4.7  Release and Full Settlement. Anything to the contrary herein notwithstanding, as a condition to the receipt of Termination Benefits under paragraph 4.3 or 4.4 hereof, Executive shall first execute a release, in the form established by the Board of Directors, releasing the Board of Directors, Company, and Company’s parent corporation, subsidiaries, affiliates, and their respective shareholders, partners, officers, directors, employees, attorneys and agents from any and all claims and from any and all causes of action of any kind or character including, but not limited to, all claims or causes of action arising out of Executive’s employment with Company or its affiliates or the termination of such employment, but excluding all claims to vested benefits and payments Executive may have under any compensation or benefit plan, program or arrangement, including this Agreement. The performance of Company’s obligations hereunder and the receipt of any benefits provided under paragraphs 4.3 and 4.4 shall constitute full settlement of all such claims and causes of action.

 

4.8 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 4. Except to the extent Executive becomes eligible to receive health plan coverage from a subsequent employer as provided in paragraph 4.1 with respect to Health Coverage, any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 4 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 4.

 

4.9  Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of Executive’s employment under this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 4 shall be received by Executive as liquidated damages.

 

4.10 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters.

 

ARTICLE 5:  OWNERSHIP AND PROTECTION OF INFORMATION; COPYRIGHTS

 

5.1  Disclosure to Executive. Executive acknowledges that Company has and will in the course of his employment disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company and its affiliates; and/or shall entrust Executive with business opportunities of Company and its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company and its affiliates.

 

5.2 Property of Company. All information, ideas, concepts, improvements, discoveries, and inventions, whether patentable or not, which are conceived, made, developed or acquired by Executive, individually or in conjunction with others, during Executive’s employment by Company (whether during business hours or otherwise and whether on Company’s premises or otherwise) which relate to the business, products or services of Company or its affiliates shall be disclosed to Company and are and shall be the sole and exclusive property of Company and its affiliates. Moreover, all documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps and all other writings or materials of any type embodying any of such information, ideas, concepts, improvements, discoveries, and inventions are and shall be the sole and exclusive property of Company and its affiliates. Upon Executive’s termination of employment for any reason, Executive shall deliver the same, and all copies thereof, to Company.

 

5.3 Patent and Copyright Assignment. Executive agrees to assign and transfer to Company or its designee, without any separate remuneration or compensation, his entire right, title and interest in and to all Inventions and Works in the Field (as hereinafter defined), together with all United States and foreign rights with respect thereto, and at Company’s expenses to execute and deliver all appropriate patent and copyright applications for securing United States and foreign patents and copyrights on such Inventions and Works in the Field, and to perform all lawful acts, including giving testimony and executing and delivering all such instruments, that may be necessary or proper to vest all such Inventions and Works in the Field and patents and copyrights with respect thereto in Company, and to assist Company in the prosecution or defense of any interference which may be declared involving any of said patent applications or patents or copyright applications or copyrights. For purposes of this Agreement the words “Inventions and Works in the Field” shall include any discovery, process, design, development, improvement, application, technique, program or invention, whether patentable or copyrightable or not and whether reduced to practice or not, conceived or made by Executive, individually or jointly with others (whether on or off Company’s premises or during or after normal working hours) while employed by Company; provided, however, that no discovery, process, design, development, improvement, application, technique, program or invention reduced to practice or conceived by Executive off Company’s premises and after normal working hours or during hours when Executive is not performing services for Company, shall be deemed to be included in the term “Inventions and Works in the Field” unless directly or indirectly related to the business then being conducted by Company or its affiliates or any business which Company or its affiliates is then actively exploring.

 

5.4  No Unauthorized Use or Disclosure. Executive acknowledges that the business of Company and its affiliates is highly competitive and that their strategies, methods, books, records, and documents, their technical information concerning their products, equipment, services, and processes, procurement procedures and pricing techniques, the names of and other information (such as credit and financial data) concerning their customers and business affiliates, all comprise confidential business information and trade secrets which are valuable, special, and unique assets which Company and its affiliates use in their business to obtain a competitive advantage over their competitors. Executive further acknowledges that protection of such confidential business information and trade secrets against unauthorized disclosure and use is of critical importance to Company and its affiliates in maintaining their competitive position. Executive hereby agrees that Executive will not, at any time during or after Executive’s employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company and its affiliates, or make any use thereof, except in the carrying out of Executive’s employment responsibilities hereunder. Company and its affiliates shall be third party beneficiaries of Executive’s obligations under this paragraph. As a result of Executive’s employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as the confidential business information and trade secrets of Company and its affiliates. These obligations of confidence apply irrespective of whether the information has been reduced to a tangible medium of expression (e.g., is only maintained in the minds of Company’s employees) and, if it has been reduced to a tangible medium, irrespective of the form or medium in which the information is embodied (e.g., documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronic databases, maps and all other writings or materials of any type).

 

5.5  Assistance by Executive. Both during the period of Executive’s employment by Company and thereafter, Executive shall assist Company and its affiliates and their respective nominees, at any time, in the protection of Company’s and its affiliates’ worldwide rights, titles, and interests in and to information, ideas, concepts, improvements, discoveries, and inventions, and their copyrighted works, including without limitation, the execution of all formal assignment documents requested by Company and its affiliates or their respective nominees and the execution of all lawful oaths and applications for applications for patents and registration of copyright in the United States and foreign countries.

 

5.6  Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article 5 by Executive, and Company shall be entitled to enforce the provisions of this Article 5 by terminating any payments then owing to Executive under this Agreement and/or to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article 5, but shall be in addition to all remedies available at law or in equity to Company and its affiliates, including the recovery of damages from Executive and Executive’s agents involved in such breach and remedies available to Company and its affiliates pursuant to other agreements with Executive.

 

ARTICLE 6:   NON-COMPETITION OBLIGATIONS

 

6.1  Non-competition Obligations. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been or will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the provisions of this Article 6. Executive agrees that during the period of Executive’s non-competition obligations hereunder, Executive shall not, directly or indirectly for Executive or for others, in any geographic area or market where Company or its affiliates are conducting any business as of the date of termination of the employment relationship or have during the previous 12 months conducted any business:

	 	(i)	engage in any offshore supply vessel business serving the oil and gas industry that is competitive with the business conducted by Company or its affiliates;

	 	(ii)	render any advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, with any offshore supply vessel business serving the oil and gas industry that is competitive with the business conducted by Company or its affiliates;

	 	(iii)	induce any employee of Company or its affiliates to terminate his or her employment with Company or its affiliates, or hire or assist in the hiring of any such employee by any person, association, or entity not affiliated with Company;

	 	(iv)	request or cause any customer of Company or its affiliates to terminate any business relationship with Company or its affiliates.

These non-competition obligations shall apply during the period that Executive is employed by Company and shall continue until the first anniversary of the termination of Executive’s employment. Executive understands that the foregoing restrictions may limit Executive’s ability to engage in certain businesses anywhere in the world during the period provided for above, but acknowledges that Executive will receive sufficiently high remuneration and other benefits under this Agreement to justify such restriction.

6.2   Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article 6 by Executive, and Company shall be entitled to enforce the provisions of this Article 6 by terminating any payments then owing to Executive under this Agreement and/or to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article 6, but shall be in addition to all remedies available at law or in equity to Company, including, without limitation, the recovery of damages from Executive and Executive’s agents involved in such breach and remedies available to Company pursuant to other agreements with Executive.

6.3  Reformation. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article 6 to be reasonable and necessary to protect the proprietary information of Company and its affiliates. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such courts so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.

 

ARTICLE 7:  MISCELLANEOUS

 

7.1  Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to Company to:       Trico Marine Services, Inc.

          2401 Fountainview, Suite 920

          Houston, Texas 77057

          Attention: Chairman of the Board of Directors

 

If to Executive to:        Geoffrey A. Jones

          __________________

          __________________

 

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

 

7.2  Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas.

 

7.3  No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

7.4  Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

 

7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

 

7.6  Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

 

7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

 

7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

 

7.9  Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company.

 

7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

 

7.11  Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination.

 

7.12  Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 3.3(iv) (and any agreements between Company and Executive that have been executed under such plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 1st day of September, 2005, to be effective as of the Effective Date.

 

TRICO MARINE SERVICES, INC.

 

	
By:
	
/s/ Rishi Varma

	
Name:
	
Rishi Varma

	
Title: 
	
General Counsel, Secretary and 

	 	
Director  of Corporate Governance

	 	
“COMPANY”

	
By:
	
/s/ Geoffrey A. Jones

	 	
Geoffrey A. Jones

	 	
“EXECUTIVE”

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