Exhibit 10.6
RELEASE, CONSULTING AND
NONCOMPETITION AGREEMENT
This Release, Consulting and
Noncompetition Agreement (this “Agreement”) is entered
into as of April 12, 2005, by and between NewAlliance Bancshares,
Inc., a Delaware corporation (“NewAlliance”),
NewAlliance Bank, a Connecticut savings bank and a wholly-owned
subsidiary of NewAlliance (“NewAlliance Bank”),
Cornerstone Bancorp, Inc., a Connecticut corporation
(“Cornerstone”), Cornerstone Bank, a Connecticut bank
and a wholly-owned subsidiary of Cornerstone (“Cornerstone
Bank”), and James P. Jakubek (the
“Consultant”).
RECITALS:
WHEREAS, the Consultant is currently the Executive Vice
President and Chief Operating Officer of Cornerstone and the
President and Chief Executive Officer of Cornerstone
Bank;
WHEREAS, pursuant to an Agreement and Plan of Merger,
dated as of April 12, 2005 (the “Merger Agreement”), by
and among NewAlliance, NewAlliance Bank, Cornerstone and
Cornerstone Bank, Cornerstone will merge with and into NewAlliance,
with NewAlliance being the surviving entity (the
“Merger”), and Cornerstone Bank will merge with and
into NewAlliance Bank, with NewAlliance Bank being the surviving
entity;
WHEREAS, the parties hereto recognize and acknowledge the
interest of NewAlliance and NewAlliance Bank in protecting the
business and goodwill associated with Cornerstone and Cornerstone
Bank following the Merger by having the Consultant enter into this
Agreement; and
WHEREAS, NewAlliance and NewAlliance Bank desire to have
the Consultant provide, and the Consultant is willing to provide
NewAlliance and NewAlliance Bank with, the consulting services on
the terms and conditions set forth herein.
NOW THEREFORE,
in consideration of the mutual
covenants and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms.
Any capitalized terms not defined in
this Agreement shall have as their meanings the definitions
contained in the Merger Agreement.
2. Consultancy.
(a) Subject to the provisions of
Section 2(d) hereof, the parties hereto agree that, during the
six-month period immediately following the Effective Time of the
Merger (the “Consulting Period”), the Consultant
undertakes to provide his personal advice and counsel to
NewAlliance and its subsidiaries and affiliates (including
NewAlliance Bank) in
connection with the business of NewAlliance and
its subsidiaries, including, but not limited to, consulting with
NewAlliance regarding the operations and customer relationships of
NewAlliance and its subsidiaries, providing introductions to
customers and providing personal services similar to those the
Consultant is currently providing Cornerstone and Cornerstone Bank
(collectively the “Consulting Services”), subject to
the terms and conditions which are set forth herein. The Consultant
shall provide such Consulting Services as may be requested from
time to time by the Executive Vice President and Chief Operating
Officer of NewAlliance, and if he or she is not in the office on
the date in question, then by the President and Chief Executive
Officer of NewAlliance, and if he or she is also not in the office
on the date in question, then by the Executive Vice President -
Business Banking of NewAlliance Bank. During the Consulting Period,
the Consultant shall be available to devote his full business time,
attention, skills and effort (other than during holidays, vacations
and periods of illness) to the business and affairs of NewAlliance
and its subsidiaries and affiliates and shall use his reasonable
best efforts to promote the interests of NewAlliance and its
subsidiaries and affiliates. Such Consulting Services may be
provided in person, telephonically, electronically or by
correspondence as NewAlliance, NewAlliance Bank and the Consultant
may agree. The Consultant shall be available for meetings at the
principal executive offices of NewAlliance and NewAlliance Bank at
such times as shall be reasonable and appropriate.
(b) During the Consulting Period,
NewAlliance or NewAlliance Bank shall reimburse the Consultant or
otherwise provide for or pay for all reasonable expenses incurred
by the Consultant at the request of NewAlliance or NewAlliance
Bank, subject to such documentation and prior approval as may be
required by NewAlliance or NewAlliance Bank. In addition, during
the Consulting Period, NewAlliance Bank shall provide the
Consultant with the continued use of an automobile of the same
make, year and model as provided by Cornerstone Bank to the
Consultant as of the date of this Agreement, with NewAlliance Bank
paying the costs for fuel, insurance, maintenance and repairs of
the automobile during the Consulting Period.
(c) During the Consulting Period,
the Consultant shall be treated as an independent contractor and
shall not be deemed to be an employee of NewAlliance or any
subsidiary or affiliate of NewAlliance.
(d) The Consultant may terminate the
Consulting Period by providing thirty (30) days written notice to
NewAlliance and NewAlliance Bank. In addition, the Consulting
Period shall automatically terminate by reason of the death of the
Consultant and no notice of termination shall be required.
NewAlliance or NewAlliance Bank may terminate the Consulting
Services for Cause as hereinafter defined, in which event the
Consulting Period will end as of the date the Consulting Services
are terminated.
(e) For purposes of this Agreement,
termination for “Cause” shall mean a discharge because
the Board of Directors of NewAlliance or NewAlliance Bank (the
“NewAlliance Board”) determines that the Consultant
has: (A) willfully failed to perform his assigned duties under this
Agreement, other than any failure resulting from the
Consultant’s incapacity due to physical or mental injury or
illness; (B) committed an act involving moral turpitude in
connection with his Consulting Services; (C) engaged in willful
misconduct; (D) breached
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his fiduciary duties for personal profit; (E)
willfully violated, in any material respect, any law, rule or
regulation (other than traffic violations or similar offenses),
written agreement or final cease-and-desist order with respect to
his performance of services for NewAlliance or its subsidiaries and
affiliates, as determined by the NewAlliance Board; or (F)
materially breached the terms of this Agreement and failed to cure
such material breach during a 15-day period following the date on
which the NewAlliance Board gives written notice to the Consultant
of the material breach. For purposes of the definition of Cause, no
act or failure to act, on the part of the Consultant, shall be
considered “willful” unless it is done, or omitted to
be done, by the Consultant in bad faith or without reasonable
belief that the Consultant’s action or omission was in the
best interests of NewAlliance or its subsidiaries and affiliates.
Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the NewAlliance Board or based upon
the written advice of counsel for NewAlliance shall be conclusively
presumed to be done, or omitted to be done, by the Consultant in
good faith and in the best interests of NewAlliance or its
subsidiaries and affiliates. The cessation of the Consulting
Services shall not be deemed to be for “Cause” within
the meaning of this Section 2(e) unless and until there shall have
been delivered to the Consultant a copy of a resolution duly
adopted by the affirmative vote of three-fourths of the members of
the NewAlliance Board at a meeting of such Board called and held
for such purpose (after reasonable notice is provided to the
Consultant and the Consultant is given an opportunity, together
with counsel, to be heard before such Board), finding that, in the
good faith opinion of such Board, the Consultant is guilty of the
conduct described in this Section 2(e), and specifying the
particulars thereof in detail.
(f) The obligations of NewAlliance
and NewAlliance Bank under this Agreement are subject to and
contingent upon the Consultant continuing to be employed by
Cornerstone and Cornerstone Bank from the date hereof until the
Effective Time of the Merger.
3. Non-Disclosure of Confidential
Information.
Except in the course of his services
to NewAlliance and NewAlliance Bank hereunder, and in the pursuit
of the business of NewAlliance or any of its subsidiaries or
affiliates, the Consultant shall not, except as required by law, at
any time during or following the Consulting Period, disclose or use
any confidential information or proprietary data of NewAlliance or
any of its subsidiaries or affiliates or predecessors, unless such
confidential information or proprietary data become publicly known
through no fault of the Consultant. The Consultant agrees that all
information concerning the identity of the customers of NewAlliance
and its subsidiaries and affiliates and the relations of such
entities with their customers is confidential information. This
Section 3 shall survive the termination or expiration of the
Consulting Period.
4. Non-Competition
Provisions.
The Consultant agrees that during
the 18-month period immediately following the Effective Date of the
Merger (the “Non-Competition Period”), the Consultant
will not (i) without the prior written consent of NewAlliance Bank,
engage in, become interested in, directly or indirectly, as a sole
proprietor, as a partner in a partnership, or as a shareholder in a
corporation, or become associated with, in the capacity of
employee, director, officer, principal, agent, trustee or in any
other capacity whatsoever, any enterprise or entity located
in
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any of Fairfield, Hartford, Litchfield,
Middlesex, New Haven, New London, Tolland or Windham Counties in
the State of Connecticut or Kent, Providence or Washington Counties
in the State of Rhode Island (collectively, the
“Counties” and individually a “County”) or
in the New York, New York Primary Metropolitan Statistical Area
(“PMSA”), which proprietorship, partnership,
corporation, enterprise or other entity is, or may be deemed to be
by NewAlliance Bank, competitive with any business carried on by
NewAlliance, NewAlliance Bank or any of their subsidiaries,
including but not limited to entities which lend money and take
deposits (in each case, a “Competing Business”),
provided, however, that this provision shall not prohibit the
Consultant from owning bonds, non-voting preferred stock or up to
five percent (5%) of the outstanding common stock of any Competing
Business if such common stock is publicly traded, (ii) solicit or
induce, or cause others to solicit or induce, any employee of
NewAlliance or any of its subsidiaries to leave the employment of
such entities, or (iii) solicit (whether by mail, telephone,
personal meeting or any other means, excluding general
solicitations of the public that are not based in whole or in part
on any list of customers of NewAlliance or any of its subsidiaries)
any customer of NewAlliance or any of its subsidiaries to transact
business with any other entity, whether or not a Competing
Business, or to reduce or refrain from doing any business with
NewAlliance or its subsidiaries, or interfere with or damage (or
attempt to interfere with or damage) any relationship between
NewAlliance or its subsidiaries and any such customers. In the
event the Consultant desires to join a Competing Business and
requests the written consent of NewAlliance Bank to permit him to
do so during the Non-Competition Period, the Consultant shall
provide the President and Chief Executive Officer of NewAlliance
Bank with the identity of the Competing Business, the nature of his
proposed position, duties and responsibilities with such entity,
and such other information as may be reasonably requested by
NewAlliance Bank within fifteen (15) days of receiving such
request. NewAlliance Bank agrees to consider and review
an
