EXHIBIT 10.41

UIL HOLDINGS CORPORATION
DEFERRED COMPENSATION PLAN

GRANDFATHERED BENEFIT PROVISIONS

originally adopted effective January 27, 2003,
as amended through August 4, 2008

 
 

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TABLE OF CONTENTS

 
Page
INTRODUCTION
1
ARTICLE I – TITLE AND DEFINITIONS
1
1.1                 Definitions
1
ARTICLE II – PARTICIPATION
7
2.1                 Determination of Eligible Persons
7
2.2                 Enrollment; Duration of Participation
7
2.3                 Transfers to Non-Participating Related Companies
7
2.4                 Amendment of Eligibility Criteria
7
ARTICLE III – DEFERRAL ELECTIONS
7
3.1                 Elections to Defer Compensation
7
3.2                 Deemed Investment Elections
8
3.3                 Elections as to Form and Timing of Payment
10
ARTICLE IV – COMPENSATION DEFERRAL AND COMPANY CONTRIBUTION ACCOUNTS
11
4.1                 Compensation Deferral Subaccount
11
4.2                 Company Discretionary Contribution Subaccount
11
4.3                 Company Matching Contribution Subaccount
11
4.4                 Deferred Restricted Stock Account
12
ARTICLE V – VESTING
12
5.1                 Vesting
12
5.2                 Vesting Upon Death/Change in Control
12
ARTICLE VI – DISTRIBUTIONS
12
6.1                 Manner of Payment – Cash vs. Stock
12
6.2                 Distribution of Grandfathered Accounts
13
6.3                 Early Non-Scheduled Distributions
15
6.4                 Hardship Distribution
16
6.5                 Inability to Locate Participant
16
ARTICLE VII – ADMINISTRATION
16
7.1                 Committee Action
16
7.2                 Powers and Duties of the Committee
17
7.3                 Construction and Interpretation
17
7.4                 Information
17
7.5                 Compensation, Expenses and Indemnity
18
7.6                 Filing a Claim
18
7.7                 Appeal of Denied Claims
19
ARTICLE VIII – MISCELLANEOUS
20
8.1                 Unsecured General Creditor
20
8.2                 Restriction Against Assignment
20
8.3                 Withholding
21
8.4                 Amendment, Modification, Suspension or Termination
21
8.5                 Governing Law
21
8.6                 Receipt or Release
21
8.7                 Payments on Behalf of Persons Under Incapacity
21
8.9                 Adjustments; Assumptions of Obligations
21
8.10                 Headings
22
EXHIBIT A - PARTICIPATING BUSINESS UNITS
23

 
 

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UIL HOLDINGS CORPORATION
DEFERRED COMPENSATION PLAN
GRANDFATHERED BENEFIT PROVISIONS

INTRODUCTION

Effective as of February 1, 2003, UIL Holdings Corporation (the "Company")
established the UIL Holdings Corporation Deferred Compensation Plan to provide a
select group of its senior management and the senior management of its selected
Business Units with the opportunity to accumulate capital by deferring
compensation on a pre-tax basis, and to provide the Company and its Business
Units with a method of rewarding and retaining top executives and managerial
employees.  The Plan also permits those eligible executive employees whose
matching allocations under the United Illuminating Company 401(k)/Employee Stock
Ownership Plan ("UI KSOP") would be limited by virtue of their Compensation
Deferrals under this Plan to make up for such limitations with certain
supplemental benefits, and provides non-Employee Directors of the Company with a
means to defer receipt of certain shares of Restricted Stock and Performance
Share awards.

The terms of the Plan as set forth in this Plan document apply solely with
respect to deferrals made and vested pursuant to the terms of the Plan prior to
January 1, 2005.  With respect to deferrals made pursuant to the terms of the
Plan on and after January 1, 2005 and with respect to deferrals made pursuant to
the terms of the Plan before January 1, 2005 that vest on or after January 1,
2005, the terms of the Plan are as described in the separate Plan document
relating to “Non-Grandfathered Benefits.”  With respect to amounts subject to
this Plan document, this Plan document supersedes the prior Plan document (as
amended from time to time).

ARTICLE I
TITLE AND DEFINITIONS

1.1           Definitions.

Capitalized terms used in this Plan document shall have the meanings specified
below.

"Account" or "Accounts" shall mean a Participant's Grandfathered Amount under
the Plan, including all subaccounts as are specifically authorized for inclusion
in this portion of the Plan.

“Affiliate” shall mean any corporation, trade or business that, together with
the Company, is treated as a single employer under Code Section 414(b) or (c).

"Base Salary" shall mean an Eligible Employee's annual base salary, including
any salary continuation, excluding bonus, commissions, incentive and all other
remuneration for services rendered to the Company, but prior to reduction for
any salary contributions to a plan established pursuant to Sections 125 or
132(f) of the Code or qualified pursuant to Section 401(k) of the Code.

"Beneficiary" or "Beneficiaries" shall mean the person or persons, including a
trustee, personal representative or other fiduciary, last designated in writing
by a Participant in accordance with procedures established by the Committee to
receive the benefits specified hereunder in the event of the Participant's
death.  No beneficiary designation shall become effective until it is filed with
the Committee (or the Recordkeeper).  Any designation shall be revocable at any
time through a written instrument filed by the Participant with the Committee
(or the Recordkeeper) with or without the consent of the previous

 
 

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Beneficiary, provided, however, that no designation of a Beneficiary other than
the Participant's spouse shall be valid unless consented to in writing by such
spouse.  If there is no such designation or if there is no surviving designated
Beneficiary, then the Participant's surviving spouse shall be the
Beneficiary.  If there is no surviving spouse to receive any benefits payable in
accordance with the preceding sentence, the duly appointed and currently acting
personal representative of the Participant's estate shall be the
Beneficiary.  In any case where there is no such personal representative of the
Participant's estate duly appointed and acting in that capacity within 90 days
after the Participant's death (or such extended period as the Committee
determines is reasonably necessary to allow such personal representative to be
appointed, but not to exceed 180 days after the Participant's death), then
Beneficiary shall mean the person or persons who can verify by affidavit or
court order to the satisfaction of the Committee that they are legally entitled
to receive the benefits specified hereunder.  In the event any amount is payable
under the Plan to a minor, payment shall not be made to the minor, but instead
be paid to such minor's legal guardian duly appointed and currently acting to
hold the funds for such minor.  If no guardian of the estate for the minor is
duly appointed and currently acting within 60 days after the date the amount
becomes payable, payment shall be deposited with the court having jurisdiction
over the estate of the minor.  Payment by the Company pursuant to any unrevoked
Beneficiary designation, or to the Participant's estate if no such designation
exists, of all benefits owed hereunder shall terminate any and all liability of
the Company.

"Board of Directors" or "Board" shall mean the Board of Directors of UIL
Holdings Corporation.

"Bonuses" shall mean the bonuses earned pursuant to any bonus plan or program
approved by the Company (or its affiliates).

"Business Unit" means The United Illuminating Company (“UI”) and any other
subsidiary of the Company which, with the consent of the Board, has adopted the
Plan.  Business Units shall be listed on Exhibit A to the Plan.

A "Change in Control" of the Company or any Business Unit (“an Employing
Company”) occurs on the date on which any of the following events occur: a
change of the ownership of the Employing Company; a change of the effective
control of the Employing Company; or a change in the ownership of a substantial
portion of the assets of the Employing Company.

For purposes of this definition:

(i)  A change in the ownership of the Employing Company occurs on the date on
which any one person, or more than one person acting as a group, acquires
ownership of stock of the Employing Company that, together with stock held by
such person or group constitutes more than 50% of the total fair market value or
total voting power of the stock of the Employing Company.

(ii)  A change in the effective control of the Employing Company occurs on the
date on which either (A) a person, or more than one person acting as a group,
acquires ownership of stock of the Employing Company possessing 30% or more of
the total voting power of the stock of the Employing Company, taking into
account all such stock acquired during the 12-month period ending on the date of
the most recent acquisition, or (B) a majority of the members of the Employing
Company’s Board of Directors is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members
of such Board of Directors prior to the date of the appointment or election, but
only if no other corporation is a majority shareholder of the Employing Company.

 
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(iii)  A change in the ownership of a substantial portion of assets occurs on
the date on which any one person, or more than one person acting as a group,
other than a person or group of persons that is related to the Employing
Company, acquires assets from the Employing Company that have a total gross fair
market value equal to or more than 50% of the total gross fair market value of
all of the assets of the Employing Company immediately prior to such acquisition
or acquisitions, taking into account all such assets acquired during the
12-month period ending on the date of the most recent acquisition.

In determining whether a person or group has acquired a percentage of stock,
stock of the Company held pursuant to the terms of an employee benefit plan of
the Company or any subsidiary thereof in a suspense account or otherwise
unallocated to a Participant’s account shall be disregarded to the extent that
expressing the applicable percentage as a fraction, such shares shall not be
included in the numerator, but such shares will be included in the denominator.

An event constitutes a Change in Control with respect to a Participant only if
the Participant performs services for the Employing Company that has experienced
the Change in Control, or the Participant’s relationship to the affected
Employing Company otherwise satisfies the requirements of Treasury Regulation
Section 1.409A-3(2)(i)(5)(ii).

The determination as to the occurrence of a Change in Control shall be based on
objective facts and in accordance with the requirements of Code Section 409A.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Compensation and Executive Development Committee of
the Board (or such other committee as shall be designated by the Board).

"Company" shall mean UIL Holdings Corporation, a Connecticut corporation.

"Company Discretionary Contribution" shall mean such discretionary
contributions, if any, credited by the Company to the Company Discretionary
Contribution Subaccount of a Participant for a Plan Year.  Such contribution may
differ from Participant to Participant both in amount (including no
contribution) and as a percentage of Compensation.

"Company Discretionary Contribution Subaccount" shall mean the bookkeeping
account maintained by the Company for each Participant that is credited with an
amount equal to (i) the Company Discretionary Contribution Amount, if any, paid
by the Company and (ii) net earnings and losses attributable thereto.

"Company Matching Contribution" shall mean such matching contributions, if any,
made by the Company with respect to a Participant, in order to make up for the
loss of a matching contribution under the UI KSOP resulting from the
Participant's Compensation Deferrals under this Plan.

"Company Matching Contribution Subaccount" shall mean the bookkeeping account
maintained by the Company for each Participant that is credited with an amount
equal to (i) the number of Stock units equal in value to the Company Matching
Contributions, if any, and the Dividend Equivalents, if any, paid by the
Company, plus (ii) net earnings and losses attributable thereto.

“Compensation” shall mean, in the case of Eligible Employees, Base Salary,
increases in Base Salary received during the Plan Year, Bonuses and other
incentive awards, compensation in excess of the amount deductible under Section
162(m) of the Code, and any other compensation permitted by the Committee to be
deferred.

 
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"Compensation Deferrals" shall mean the compensation deferred by a Participant
pursuant to Section 3.1 of this Plan.

"Compensation Deferral Subaccount" shall mean the bookkeeping account maintained
by the Recordkeeper for each Participant that is credited with amounts equal to
(i) the portion of the Participant's Compensation that he or she elects to
defer, and (ii) net earnings and losses attributable thereto.

“Designated Individuals” shall mean those Eligible Employees and Eligible
Directors designated as eligible to defer Restricted Stock Awards and/or
Performance Shares Awards.

"Disability" shall mean that the Participant meets the definition of "disabled"
under the terms of The United Illuminating Company Long-Term Disability Plan in
effect on the date in question, whether or not such Participant actually is
covered by such plan.

"Distributable Amount" shall mean the vested balance in the Participant's
Accounts subject to distribution in a given Plan Year.

"Dividend Equivalents" shall mean the amount of cash dividends or other cash
distributions paid by the Company on that number of shares equal to the number
of Stock Units credited to a Participant's Stock Unit Subaccount as of the
applicable record date for the dividend or other distribution, which amount
shall be credited in the form of additional Stock Units to the Participant's
Stock Unit Subaccount.

"Early Distribution" shall mean an election by a Participant in accordance with
Section 6.3 to receive a withdrawal of amounts from his or her Compensation
Deferral Subaccount, and any vested Company Discretionary and/or Matching
Contribution Subaccounts, prior to the time at which such Participant would
otherwise be entitled to such amounts.

"Effective Date" of the Plan means February 1, 2003.

“Election Period” shall mean the time period associated with deferral of
Compensation under the Plan.  The first Election Period with respect to Eligible
Employees becoming Participants on the Effective Date (February 1, 2003) shall
end on January 24, 2003.  Thereafter, except as expressly provided otherwise in
this definition or by the Committee, subsequent elections with respect to a
subsequent calendar year must be filed by October 30th of the preceding year (by
December 20th of the preceding year with respect to elections made in 2004 and
later years), to be effective with respect to such subsequent calendar
year.  The Election Period with respect to the deferral by a Designated
Individual of some portion or all of a Restricted Stock Award shall be any
period designated by the Committee, which ends prior to receipt of such Award,
and which shall be deemed effective contemporaneously with the granting of such
Award with respect to any Restricted Stock vesting at least one year after such
election is processed.  The Election Period with respect to the deferral by a
Designated Individual of some portion or all of a Performance Share Award shall
be any period designated by the Committee, which ends no later than 12 months
prior to the end of the performance period related to such Performance Share
Award, and which shall be deemed effective contemporaneously with the vesting of
such Award with respect to any Performance Share vesting at least one year after
such election is processed.  Notwithstanding the foregoing, no Election Period
hereunder shall commence on or after January 1, 2005.

"Eligible Employee" shall mean each Employee of the Company or a participating
Business Unit who is eligible to participate in the Plan, as determined in
Section 2.1.

 
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"Eligible Person" shall mean each Eligible Employee or Director of the Company
or a participating Business Unit, to the extent that such individual is eligible
to participate in the Plan, as determined in Section 2.1.  Notwithstanding the
foregoing, because no deferral under this Plan by a Director vested prior to
January 1, 2005, no Director of the Company is an Eligible Person for purposes
of this Plan Document.

"Employer" shall mean the Company and its Affiliates.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Fund" or "Funds" shall mean one or more of the investment funds selected by the
Committee pursuant to Section 3.2.

“Grandfathered Amount” means the vested Account Balances of Plan Participants
determined as of December 31, 2004, together with actual or notional earnings
thereon accruing after December 31, 2004, which shall be subject to the
provisions of the Plan and tax law in effect immediately prior to the enactment
of Section 409A of the Internal Revenue Code (i.e., as of October 3, 2004),
including, without limitation, requirements as to election of the timing and
form of payment; expressly provided, however that the Grandfathered Amounts
shall be so grandfathered only to the extent that the Plan terms governing such
Amounts are not materially modified after October 3, 2004.

"Hardship Distribution" shall mean a distribution made on account of a severe
financial hardship of the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of his or her dependent (as defined in
Section 152(a) of the Code), loss of a Participant's property due to casualty,
or other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant.

"Investment Rate" shall mean, for each Fund, an amount equal to the closing
price of such Fund during each business day, recorded for internal reporting to
the Company on a monthly basis and reported to Participants on a calendar
quarterly basis.

"Participant" shall mean any Eligible Person who became a Participant in this
Plan in accordance with Article II.

"Payment Date" shall mean the date for payment of Distributable Amounts, as
provided in Article VI.

“Performance Share Award” or “Performance Share” shall mean a phantom stock
award issued under the UIL Holdings Corporation CEO/CFO Long Term Incentive
Program, the UIL Holdings Corporation UI Long-Term Incentive Program, the UIL
Holdings Corporation UIL Long-Term Incentive Program, or the UIL Holdings
Corporation Xcelecom Long-Term Incentive Program, which awards are settled in
shares of Stock drawn from the UIL Holdings Corporation 1999 Restated Stock
Plan, with the limited exception of certain of the Performance Share awards
payable in cash to the CEO.
Notwithstanding the foregoing, because no deferral of a Performance Share award
vested prior to January 1, 2005, all such deferrals shall be governed by the
provisions of this Plan relating to Non-Grandfathered Benefits.

 
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"Plan" shall mean the UIL Holdings Corporation Deferred Compensation Plan.  The
terms of the Plan are reflected in this document entitled “UIL Holdings
Corporation Deferred Compensation Plan - Grandfathered Benefit Provisions” and
the document entitled “UIL Holdings Corporation Deferred Compensation Plan –
Non-Grandfathered Benefit Provisions.”

"Plan Year" shall mean January 1 to December 31 of each year.

“Recordkeeper” shall mean the administrator appointed by the Committee.  As of
February 1, 2003, TBG Financial was appointed the Recordkeeper.

"Restricted Stock" shall mean shares of Stock issued under the Restricted Stock
feature of the UIL Holdings Corporation 1999 Amended and Restated Stock Plan,
which shares are subject to forfeiture based on non-compliance with certain
enumerated criteria.

“Restricted Stock Award” shall mean any award of Restricted Stock which, if
deferred under this Plan, shall be credited as Restricted Stock Units, and which
is settled in shares of Company Stock that may be drawn from the UIL Holdings
Corporation 1999 Amended and Restated Stock Plan or from this Plan, or both, to
the extent permitted under the terms of said plans.  Notwithstanding the
foregoing, because no deferral of a Restricted Stock Award vested prior to
January 1, 2005, all such deferrals shall be governed by the provisions of this
Plan relating to Non-Grandfathered Benefits.

"Retirement" shall mean termination of service after the Participant has
satisfied the requirements for early retirement under the terms of The United
Illuminating Company Pension Plan.

"Scheduled In-Service Withdrawal Date" shall mean February of the year elected
by the Participant to withdraw, or begin to withdraw, balances attributable to
amounts deferred in a given Plan Year, and earnings and losses attributable
thereto.  A Participant’s Scheduled In-Service Withdrawal Date in a given Plan
Year may be no earlier than three years from the last day of the Plan Year for
which Compensation Deferrals, deferrals of Restricted Stock, deferrals of
Performance Shares, and contributions of Company Discretionary and Matching
Contribution Amounts, are made; expressly provided, however, that in the case of
the deferrals of Restricted Stock, Performance Shares, and any other
Compensation subject to a vesting schedule, the three year period shall be
deemed to begin running from the date on which such Restricted Stock,
Performance Shares or Compensation would otherwise vest.

"Stock" shall mean common stock of UIL Holdings Corporation, or any successor to
UIL Holdings Corporation.

"Stock Fund" or "Company Stock Fund" shall mean the deemed unitized investment
Fund established to record (i) Participants' deemed investments in Stock Units,
(ii) Designated Individuals' deferrals of Restricted Stock in Stock Units, (iii)
Company Matching Contributions invested in Stock Units, and (iv) Dividend
Equivalents deemed reinvested in Stock Units.  The Company has reserved 83,333
(post split) shares of Company Stock for deemed investment in this Plan.

“Stock Unit” shall mean a unit of value, equivalent to the value of a share of
Stock, or Restricted Stock, or a Performance Share, established by the Committee
as a means of measuring value of the Stock-related portion of an Account under
the Plan.

“Stock Unit Subaccount” shall mean the bookkeeping account maintained by the
Committee on behalf of each Participant who is credited with Stock Units and
Dividend Equivalents resulting from Compensation Deferrals and Company Matching
Contributions, that are deemed invested in Stock Units, and deferrals of
Restricted Stock and Performance Shares.

 
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ARTICLE II
PARTICIPATION

2.1           Determination of Eligible Persons.

All (i) officers of the Company and its Business Units, and (ii) those Employees
of the Company and Business Units whose Base Salary is fixed at more than
$100,000 per year (determined during the Election Period) and who, in the case
of Company and UI Employees, are classified in Grade 10 or above (collectively,
"Eligible Employees"), shall be eligible to participate in this Plan.  Any other
key management or highly compensated Employee from time to time designated by
the Committee to be eligible to participate shall also be considered an Eligible
Employee under the Plan.  With respect to the 2003 Plan Year, Directors of the
Company and its Participating Business Units shall be eligible to participate
only in that portion of the Plan permitting deferral of Restricted Stock.

Notwithstanding the foregoing, no Eligible Employee or Director who was not an
Eligible Person prior to January 1, 2005 shall participate in this portion of
the Plan, and only Grandfathered Amounts shall be subject to the terms of this
Plan document.

2.2           Enrollment; Duration of Participation.

An Eligible Person shall become a Participant in the Plan by electing to make
deferrals in accordance with Section 3.1 during an Election Period, in
accordance with such procedures as may be established from time to time by the
Committee.  An individual who, at any time, ceases to be an Eligible Person as
determined in the sole discretion of the Committee, shall cease making deferrals
in the Plan, and no future deferrals will be allowed until such time as the
individual again becomes an Eligible Person.  In such case, the individual shall
remain a Participant in the Plan with respect to amounts already deferred that
have not yet been distributed or forfeited.  Notwithstanding the foregoing, no
deferral election shall be made pursuant to the terms of this Plan document with
respect to compensation earned on or after January 1, 2005, and only
Grandfathered Amounts shall be subject to the terms of this Plan document.

2.3           Transfers to Non-Participating Related Companies.

An Eligible Employee who becomes employed by an Affiliate, which is not a
participating Business Unit, shall no longer be eligible to make any future
deferral elections under the Plan.  However, such individual shall remain a
participant in the Plan with respect to amounts already deferred and deferral
elections that become irrevocable prior to the date of transfer.

2.4           Amendment of Eligibility Criteria.

The Committee may change the criteria for eligibility on a prospective basis.
ARTICLE III
DEFERRAL ELECTIONS

3.1           Elections to Defer Compensation.

(a)  Election to Defer.  Subject to the provisions of Article II and subsection
(e), below, each Eligible Employee may elect to defer Compensation earned after
the Election Period, by filing an election with the Recordkeeper (a "Deferral
Election") that conforms to the requirements of this Section 3.1 either via the
internet or mail, on a form provided by the Recordkeeper, by no later than the

 
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last day of the Election Period.  Deferral Elections are irrevocable for the
Plan Year, except as otherwise expressly provided in the Plan.

(b)  Deferrals of Base Salary and Bonus Amounts.  With respect to each Plan
Year, an Eligible Employee may defer, in either whole percentages or a flat
dollar amount, up to 85% of Annual Base Salary and up to 100% of increases in
Base Salary that become effective during the Year; and up to 100% of Bonuses or
other incentive awards that would be payable in a calendar year subsequent to
the filing of the Deferral Election.  Notwithstanding the foregoing, the total
amount deferred shall be limited, as necessary, to satisfy income tax and Social
Security Tax (including Medicare) withholding obligations, and employee benefit
plan withholding requirements as determined in the sole and absolute discretion
of the Committee.  The minimum contribution that must be made in any Plan Year
by an Eligible Employee shall not be less than $5,000, which may be satisfied
from any deferral source (e.g., Base Salary, Bonus, etc.).

(c)  Deferral of Restricted Stock and Performance Shares.  A Designated
Individual may elect to defer all or any portion of a Restricted Stock Award or,
on or after September 27, 2004, a Performance Share Award as of the date such
Award is made provided that such deferral is permitted by the terms of the
Award.  Any such deferral election must be made in a time period designated by
the Committee in accordance with the applicable Election Period as defined with
respect to deferrals of Restricted Stock and Performance Shares.  Such Election
shall be irrevocable.  All such deferrals shall be deemed invested only in Stock
Units.

(d)  Mandatory Deferral of Excess 162(m) Compensation.  Notwithstanding the
foregoing, but subject to subsection (e), below, to the extent that any
Compensation to be paid to an Eligible Employee with respect to a taxable year
would exceed the amount deductible by the Company or a Business Unit under
Section 162(m) of the Code (the "Excess"), such Excess automatically shall be
deferred under the terms of this Plan without the necessity of an election to
defer.  Such deferred Excess shall be held and administered subject to the terms
of the Plan, provided that, irrespective of the Employee's election as to timing
and form of payment under Section 3.3, no deferred Excess shall be distributed
to the affected Employee prior to the first taxable year in which such amounts,
if paid, would be deductible under Section 162(m) of the Code (or any successor
provision).

(e)  Grandfathered Amounts Only.  Notwithstanding the foregoing, no deferral
with respect to compensation earned on or after January 1, 2005 shall be subject
to the terms of this Plan document.  Any deferral that is not with respect to a
Grandfathered Amount shall be subject to the terms of the Plan document entitled
“UIL Holdings Corporation Deferred Compensation Plan-Non-Grandfathered Benefit
Provisions.”

3.2           Deemed Investment Elections.

(a)  With Respect to Compensation Deferrals.  At the time of making the deferral
elections described in Section 3.1(b), the Participant shall designate, on a
form provided by the Recordkeeper, or, if allowed by the Committee, via voice
response, internet or other technology, the types of investment Funds (selected
and made available by the Committee),in which the Participant's Compensation
Deferral Subaccount will be deemed to be invested for purposes of determining
the amount of net earnings or losses to be credited to that Subaccount.  In
making the designation pursuant to this Section 3.2, the Participant may specify
that all, or any portion, of his or her Compensation Deferral Subaccount be
deemed to be invested, in whole percentage increments, in one or more of the
types of investment Funds provided under the Plan, as communicated from time to
time by the Committee.

A Participant may change the designation made under this Section 3.2 by filing
an election, on a form provided by the Recordkeeper, or, if allowed by the
Committee, via voice response,

 
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Internet or other technology on any business day; provided, however, that a
Participant who has elected to have some portion of his Compensation Deferrals
deemed invested in the Company Stock Fund may not transfer out of such
investment with respect to such Compensation Deferral amount.  A Participant may
elect to have each Plan Year of Compensation Deferrals hypothetically invested
in investment allocations different or distinct from his or her prior elections.

A Participant's Compensation Deferral will be deemed invested in the Money
Market Investment Fund (i) if a Participant fails to make a deemed investment
election under this Section 3.2, or (ii) pending the effective date of the
deemed investment in the Company Stock Fund as provided in Section 3.2(c).

(b)  With Respect to Deferrals of Restricted Stock Awards and Performance Share
Awards.  As of the date that Restricted Stock vests, a Participant’s Stock Unit
Subaccount shall be credited with the number of Stock Units equivalent in value
to the amount of shares of Restricted Stock vested.  As of the date that
Performance Shares would be payable to the Participant in the absence of a
deferral election made pursuant to Section 3.1, the Participant’s Stock Unit
Subaccount shall be credited with a number of Stock Units equivalent in value to
the number of Shares that would be payable to the Participant in settlement of
the Performance Share Award absent such deferral election.  Notwithstanding the
foreoing, only amounts that are deferred and vested prior to January 1, 2005
shall be subject to the terms of this Plan document.

(c)  Deemed Investments Will Be Valued Daily.  Except as otherwise provided in
this Subsection 3.2(c) with respect to deemed investments in the Company Stock
Fund, a deemed investment direction, or change in deemed investment direction,
shall be processed based on the closing values for the date received, if such
direction is received by the Recordkeeper by 4 p.m. Eastern Time.  Otherwise,
such direction shall be processed based on the closing values of the particular
investment Funds on the next business day on which the markets are open.  The
net gain or loss of each deemed investment Fund (the "Investment Rate") shall be
recorded monthly, and reported quarterly as provided in (e) below.  Except as
provided in Section 6.5, below, a Participant’s Account shall be credited with
earnings (and losses) until all amounts credited to such Account have been
distributed or forfeited.

Except as provided in Subsection 3.2(b) above, a deemed investment in the
Company Stock Fund shall be deemed to be a direction to invest in the UIL Stock
Money Market Fund pending the end of the quarter, and shall be credited with the
rate of return of such deemed investment in the UIL Stock Money Market Fund,
with the direction to invest in the Company Stock Fund to be effective as of the
third business day following the end of the quarter in which such direction is
received, based on the closing price of the Company Stock Fund as of the end of
the business day on which such investment is deemed acquired.  Except as
provided in Subsection 3.2(b) above, deemed purchases in the Company Stock Fund
shall be made on a non-calendar quarter basis, beginning with the third business
day following the non-calendar quarter ending with the month of February, 2003,
and continuing quarterly thereafter.

Once the investment in the Company Stock Fund is effective with respect to
Compensation Deferrals and with respect to deferrals of Restricted Stock and
Performance Shares, a Participant may not re-direct such investment back into
other deemed investment Funds available under the Plan.

(d)  Committee Discretion concerning Deemed Investment Designations.  Although
the Participant may designate deemed investments for his Compensation Deferrals,
the Committee shall not be bound by such designation.  The Committee shall have
no obligation to actually make any hypothetical investment, but may do so if it
chooses.  If a hypothetical investment is actually made by the Committee,  then
for the period the investment is held, the timing of actual investment changes
and the actual value of

 
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investments, less actual costs, fees and expenses incurred, shall be used to
measure investment return of the deemed investment under this Plan.  The
Committee shall select from time to time, in its sole and absolute discretion,
investment funds, may rebalance funds, and shall communicate the same to the
Recordkeeper.

(e)  Quarterly Reporting.  The Investment Rate of each such deemed investment
fund shall be used to determine the amount of earnings or losses to be credited
to all Participants' Subaccounts under Article IV, and shall be reported on a
calendar quarterly basis to Participants.

(f)  Administration and Costs.  The Committee in its discretion shall establish
reasonable and uniform rules applicable to all Participants for hypothetical
investments under the Plan, which rules shall include, but not be limited to,
rules governing the frequency of permitted changes in hypothetical investments
and the effective date of such changes.  All direct costs, management fees and
other expenses that would have been incurred if a hypothetical investment or
change in investment had actually been made shall be charged against a
Participant's Account, unless otherwise determined by the Committee.

3.3           Elections as to Form and Timing of Payment.  The provisions of
this Section 3.3 apply only to Grandfathered Amounts.

(a)  At the time of making the deferral elections described in Section 3.1, the
Participant shall elect, on a form provided by the Recordkeeper:

(i)  to receive his or her Compensation Deferral Account, deferred Restricted
Stock Account, deferred Performance Share Account, and any Company Contributions
made with respect to such Plan Year either (A) commencing upon his or her
termination of service (due to Retirement, death, disability, or voluntary or
involuntary termination) or (B) at a specified future date while the Participant
remains employed (a “Scheduled In-Service Withdrawal Date”); and

(ii)  the payment method in which such amounts (and hypothetical net earnings
thereon) shall be distributed from among the forms of benefit payment available
under Section 6.2.

In determining the Scheduled In-Service Withdrawal Date, the Participant and the
Recordkeeper shall take into account the fact that, with respect to Restricted
Stock and Performance Share Awards, the Scheduled In-Service Withdrawal Date
shall be measured from the date on which such Awards would otherwise vest.

(b)  The Participant may, but is not required to, elect to subject each Plan
Year's Compensation Deferrals and earnings thereon to a separate distribution
schedule.

(c)  Each election as to the timing and form of payment shall apply only for one
Plan Year, and only to the Compensation Deferrals, deferrals of Restricted
Stock, deferrals of Performance
Shares, and any Company Contributions made with respect to such year, and shall
not carry forward.  To the extent that a Participant does not file an election
as to form and timing of payment with respect to Compensation Deferrals,
Deferrals of Restricted Stock, Deferrals of Performance Shares, and Company
Contributions for a Plan Year, the deemed distribution election automatically
shall be a lump sum following termination of employment with the Company and its
Affiliates.

 
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ARTICLE IV
COMPENSATION DEFERRAL AND COMPANY CONTRIBUTION ACCOUNTS

4.1           Compensation Deferral Subaccount.

The Recordkeeper shall maintain a Compensation Deferral Subaccount for each
Participant under the Plan.  Each Participant's Compensation Deferral Subaccount
shall be further divided into separate Subaccounts ("Investment Fund
Subaccounts"), each of which corresponds to an investment Fund elected by the
Participant pursuant to Section 3.2.  A Participant's Compensation Deferral
Subaccount shall be credited as follows:

(a)  As soon as administratively feasible, and in no event later than ten (10)
days, after amounts are withheld and/or deferred from a Participant's
Compensation, the Committee shall credit the Investment Fund Subaccounts of the
Participant's Compensation Deferral Subaccount with an amount equal to
Compensation deferred by the Participant in accordance with the Participant's
election under Section 3.1.

(b)  Each business day, each Investment Fund Subaccount of a Participant's
Compensation Deferral Subaccount shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such
investment Fund Subaccount as of the prior day plus contributions credited that
day to the Investment Fund Subaccount by the Investment Rate for the
corresponding deemed Fund selected by the Participant.

4.2           Company Discretionary Contribution Subaccount.

With approval of the Board, the Company or any Business Unit may from time to
time make Discretionary Contributions to the Accounts of Participants or
selected Participants, and, if it so decides, may impose a vesting schedule on
such Contributions.  In the event that the Company or any Business Unit
determines to make such a contribution, the Record keeper shall establish and
maintain a Company Discretionary Contribution Subaccount for each Participant
under the Plan.  Each Participant's Company Discretionary Contribution
Subaccount shall be further divided into separate Subaccounts, each of which
corresponds to a Fund elected by the Participant pursuant to Section 3.2(a).  A
Participant's Company Discretionary Contribution Subaccount shall be credited as
follows:

(a)  The Recordkeeper shall credit the Investment Fund Subaccounts of the
Participant's Company Discretionary Contribution Subaccount with an amount equal
to the Company Discretionary Contribution Amount, if any, applicable to that
Participant, within ten (10) business days after such amount is deemed
contributed; and

(b)  Such Subaccount shall be deemed invested, and valued, in the same manner
and proportion as the Participant's other Account balances under the Plan,
unless otherwise determined by the Company.

4.3           Company Matching Contribution Subaccount.  The provisions of this
Section 4.3 apply only to Grandfathered Amounts.

(a)  In the event that the Committee determines that a Participant is unable
with respect to a calendar year to receive the maximum matching allocation in
the UI KSOP due to the Compensation Deferrals made by the Participant to this
Plan, the Company shall make a supplemental Company Matching Contribution in the
amount of such shortfall to this Plan as soon as administratively feasible
following the end of such calendar year.

 
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(b)  In such case, the Recordkeeper shall establish and maintain a Company
Matching Contribution Subaccount for such Participant.  Each such Participant's
Company Matching Contribution Subaccount shall be deemed invested in the Company
Stock Fund, at the end of the quarter in which such contribution is allocated to
the Participant's Company Matching Contribution Subaccount, with such
contribution deemed invested in the Money Market Fund pending the end of such
quarter.

(c)  A Participant's Company Matching Contribution Subaccount shall be valued in
the same manner, and at the same time, as the Company Stock Fund.

4.4           Deferred Restricted Stock Account.

(a)  The Recordkeeper shall maintain a Restricted Stock Unit Subaccount for each
Designated Individual to record the number of Restricted Stock Units to be
credited to such Designated Individual as of the date that such Units vest.

(b)  The number of Restricted Stock Units to be credited shall be equivalent in
value to the number of shares of Restricted Stock when vesting restrictions (and
any other applicable conditions) have been satisfied.

(c)  The Designated Individual's Restricted Stock Unit Subaccount shall be
credited with Dividend Equivalents.

(d)  Until such time as such Subaccounts are actually paid in Stock to the
Designated Individual, the Designated Individual shall have no voting rights
associated with such Subaccounts.

ARTICLE V
VESTING

5.1           Vesting.

A Participant shall be 100% vested in his or her Compensation Deferral Account
and Company Matching Contribution Subaccount.  A Participant shall be vested in
accordance with any schedule that the Committee may establish with respect to
his or her Company Discretionary Contribution Account, if any.  A Participant
shall vest in his or her Restricted Stock Unit Account and Performance Share
Unit Account in accordance with the terms of the applicable awards.

5.2           Vesting Upon Death/Change in Control.

Upon death of a Participant, or in the event of a Change in Control, the
Participant shall be 100% vested in his or her Compensation Deferral Account,
Company Matching Contribution Subaccount, and in any Company Discretionary
Contribution Subaccount.

ARTICLE VI
DISTRIBUTIONS

6.1           Manner of Payment—Cash vs. Stock.

With respect to Grandfathered Amounts, distributions shall be made in cash,
except to the extent that a Participant’s Subaccounts are deemed invested in the
Company Stock Fund.  With respect to Grandfathered Amounts, distributions of
Company Stock Fund Subaccounts shall be paid in shares of

 
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Company Stock, except to the extent that the Committee determines some portion
of such Subaccount must be paid in cash due to limitations contained in the UIL
Holdings Corporation 1999 Restated Stock Plan, the UIL Holdings Corporation
Senior Executive Incentive Compensation Plan, or otherwise.  All fractional
shares in a Company Stock Fund Subaccount shall be paid in cash.

6.2           Distribution of Grandfathered Accounts.

(a)  Distribution Due to Retirement, Disability or Termination of Service.

(1)  Termination of Service with $10,000 Account Balance or Less.  In the case
of a Participant who terminates service with the Company and all affiliates, and
who has a total Account balance of $10,000 or less ($50,000 or less for
terminations prior to January 1, 2005), the Distributable Amount shall be paid
to the Participant in a lump sum distribution as soon as administratively
practicable after the end of the calendar quarter in which the Participant
terminates service.

(2)  Termination of Service with More than $10,000 Account Balance.

(i) For Reasons other than Retirement or Disability.  In the case of a
Participant who terminates service with the Company and all affiliates for
reasons other than Retirement or Disability with an Account balance of more than
$10,000 ($50,000 or less for terminations prior to January 1, 2005), the
Distributable Amount shall be paid to the Participant in a lump sum after the
end of the quarter in which the Participant terminates service.

(ii) Due to Retirement or Disability.  In the case of a Participant who
terminates service with the Company and all affiliates due to Retirement or
Disability and has a total Account balance more than $10,000 ($50,000 or less
for terminations prior to January 1, 2005), the Distributable Amount shall be
paid to the Participant in a lump sum unless the Participant has made a timely
election to have the Distributable Amount paid in one of the optional
installment forms set forth in Section 6.2(a)(3).

(3)  Election of Installment Form.  An installment form of benefit may be
elected by the Participant (to be implemented upon the Participant’s Retirement
or Disability), with respect to each Plan Year’s Compensation Deferrals,
deferred Restricted Stock Units, deferred Performance Shares Units, and Company
Contributions, on a form provided by the Recordkeeper, or, if permitted by the
Committee, via voice response, Internet or other approved technology, during an
Election Period, from among the following:
(i) annual installments over five (5) years beginning on the Participant’s
Payment Date;
(ii) annual installments over ten (10) years beginning on the Participant’s
Payment Date;

(iii)                 annual installments over fifteen (15) years beginning on
the Participant’s Payment Date.

(4)  Modification of Election of Form of Payment.  A Participant may modify the
form of benefit that he or she has previously elected, provided such
modification occurs at least one (1) year before the Participant terminates
employment with the Company.

(5)  Delay of Payment Date with respect to Retiring Participants.  Prior to
Retirement a Participant may delay the Payment Date for any Plan Year's
Compensation Deferrals to a date later than the otherwise applicable Payment
Date, provided such extension occurs at least one year before the Participant's
Retirement Date.  The Participant may delay his or her Payment Date no more than
twice.

 
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(6)  Timing of Installment Payments.  Upon a Participant's termination of
service due to Retirement or Disability, the first annual installment
distribution will be made as soon as administratively practicable following the
end of the calendar quarter in which the Participant terminates service, but not
later than sixty (60) days following the end of the calendar quarter containing
the Participant's termination.  Subsequent annual installments will be
distributed in February of each year.

(7)  Deferral of Installment Commencement Date to February following Retirement
or Disability.  A Participant who terminates service with the Company and all
affiliates due to Retirement or Disability may elect to defer commencement of
his or her annual installment payments until February of the year following his
termination of service due to Retirement or Disability, but any such election
must be made at least twelve (12) months prior to such termination of service.

(8)  Timing of Lump Sum Distributions.  Lump sum distributions will be paid as
soon as administratively practicable following the end of the calendar quarter
in which the Participant terminates service (due to retirement, disability,
death or otherwise), but not later than sixty (60) days following the calendar
quarter containing his or her termination of service.

(9)  Termination Not on Account of Retirement or Disability.  Notwithstanding
anything to the contrary in this Section 6.2(a), in the event that a Participant
terminates service with the Company and all affiliates for any reason other than
Retirement or Disability, including on account of a Change in Control of UIL
Holdings or a Business Unit (for whom the Participant was employed as of the
Change in Control), then the Participant's entire Account balance will be
distributed in a single lump sum.  In the event that a Participant is receiving
Scheduled In-Service Withdrawals and then terminates service, any unpaid balance
of Subaccounts will be paid in a lump sum.

(10)  Delay of Distribution Due to Disability Offset.  If any distribution from
the Plan shall have the effect of reducing disability benefits receivable by the
Participant under any other policy, plan, program or arrangement, such
distribution may be postponed, in the sole discretion of the Committee, upon
application by the Participant.

(b)  Distribution With a Scheduled In-Service Withdrawal Date.

(1)  In the case of a Participant who has elected a Scheduled In-Service
Withdrawal, such Participant shall receive his or her Distributable Amount as
scheduled, but only with respect to those deferrals of Compensation, deferrals
of Restricted Stock, deferral of Performance Shares, any vested Company
Discretionary Contribution Amounts, Company Matching Contribution Amounts and
earnings or losses attributable thereto, as shall have been elected by the
Participant to be subject to the Scheduled In-Service Withdrawal Date (as
defined in Section 1.1, above).

(2)  A Participant’s Scheduled In-Service Withdrawal Date in a given Plan Year
may be no earlier than three (3) years from the last day of the Plan Year for
which the deferrals of Compensation are deemed effective, provided, however that
in the case of Restricted Stock Awards and Performance Share Awards, the
Scheduled In-Service Withdrawal Date shall be measured from the date that such
awards vest.  A Participant may elect either a lump sum, or annual installments
over a period ranging from two (2) years, up to and including five (5) years
from the Scheduled In-Service Withdrawal Date.

(3)  A Participant may extend the Scheduled In-Service Withdrawal Date for any
Plan Year, provided such extension occurs at least one (1) year before the
Scheduled In-Service Withdrawal Date and is for a period of not less than five
(5) years from the Scheduled In-Service Withdrawal Date (not less than two (2)
years with respect to any extension occurring prior to January 1, 2005).  The

 
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Participant may modify any Scheduled In-Service Withdrawal Date in the manner
set forth above, no more than two (2) times.

(4)  The first annual installment subject to a Scheduled In-Service Withdrawal
Date shall commence to be paid in February of the Plan Year in which the
Scheduled In-Service Withdrawal Date falls.  Subsequent annual installments will
be distributed in February of each year.

(5)  Lump sum distributions will be paid in February of the year specified on
the Participant’s election of a Scheduled In-Service Withdrawal Date.

(6)  If a Participant terminates service with the Company and all affiliates for
reasons other than Retirement or Disability prior to his or her Scheduled
In-Service Withdrawal Date, any amounts subject to such Scheduled In-Service
Withdrawal Date will instead be distributed in the form of a lump sum.  Such
lump sum distribution will be paid as soon as administratively feasible
following the end of the calendar quarter in which the Participant terminates
service, but not later than sixty (60) days following the calendar quarter
containing his or her termination of service.

(c)  Distribution for Termination Due to Death.  In the case of the death of a
Participant while in the service of the Company or an affiliate, the
Participant's entire vested Account balance shall be distributed to the
Participant's Beneficiary, in a lump sum as soon as practicable following the
end of the calendar quarter in which death occurs.  In the event a Participant
dies while receiving installment payments, the remaining installments shall be
paid to the Participant's Beneficiary in a lump sum as soon as practicable
following the end of the calendar quarter in which death occurs.

(d)  Delayed Distribution attributable to Code Section 162(m).  Notwithstanding
the foregoing, to the extent the Company reasonably anticipates that if a
payment were made at the time provided for in this Section 6.2, the Company’s
deduction with respect to such payment would not be permitted due to the
application of Code Section 162(m), it may delay the payment until the
Participant’s first taxable year in which the Company reasonably anticipates (or
should reasonably anticipate) that if the payment is made during the year, the
deduction of such payment will not be barred by the application of Code Section
162(m).

6.3           Early Non-Scheduled Distributions.

A Participant shall be permitted to elect an unplanned Early Distribution from
his or her Grandfathered Account Balance prior to the Payment Date, subject to
the following restrictions and penalties:

(a)  The election to take an Early Distribution shall be made by filing a form
provided by and filed with the Committee or, if permitted by the Committee, via
voice response, Internet or other approved technology prior to the end of any
calendar month.  No more than two Early Distributions may be taken by any
Participant.

(b)  The total amount of the Early Distribution shall be no more than 65% of the
Participant's vested Account balance.

(c)  The amount described in subsection (b) above shall be paid in a cash lump
sum as soon as practicable after the end of the calendar month in which the
Early Distribution election is made.

(d)  If a Participant requests an Early Distribution of his or her entire vested
Account, the remaining balance of his or her Account (35% of the Account) shall
be permanently forfeited and the Company shall have no obligation to the
Participant or his or her Beneficiary with respect to such

 
15

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forfeited amount.  If a Participant receives an Early Distribution of less than
his or her entire vested Account, such Participant shall forfeit 35% of the
gross amount to be distributed from the Participant's Account and the Company
shall have no obligation to the Participant or his or her Beneficiary with
respect to such forfeited amount.

(e)  If a Participant receives an Early Distribution of either all or a part of
his or her Account, the Participant will be ineligible to participate in the
Plan for the balance of the Plan Year and for the following Plan Year; provided,
however, that such individual shall remain a Participant in the Plan with
respect to amounts already deferred.

6.4           Hardship Distribution.

(a)  A Participant shall be permitted to elect a Hardship Distribution from his
or her Compensation Deferral Subaccount, Matching Contribution Subaccount, and
any vested Company Discretionary Contribution Subaccounts prior to the Payment
Date, subject to the following restrictions:

(1)  The election to take a Hardship Distribution shall be made by filing a form
provided by and filed with Committee or its delegate prior to the end of any
calendar month.

(2)  The Committee, or its delegatee, shall have made a determination, in its
sole discretion, that the requested distribution constitutes a Hardship
Distribution as defined in Section 1.1 of the Plan.

(3)  Notwithstanding anything to the contrary, no Hardship Distribution may be
made to the extent that such Hardship is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii) by liquidation of
the Participant's assets, to the extent the liquidation of assets would not
itself cause severe financial hardship, or (iii) by cessation of deferrals under
this Plan.

(b)  The amount determined to qualify for a Hardship Distribution shall be paid
in a cash lump sum as soon as practicable after the Hardship Distribution
election is made and approved by the Committee or its delegatee.

6.5           Inability to Locate Participant.

In the event that the Committee is unable to locate a Participant or Beneficiary
within two years following the required Payment Date, the amount allocated to
the Participant's Account shall be forfeited.  If, after such forfeiture, the
Participant or Beneficiary later claims such benefit, such benefit shall be
reinstated without additional interest or earnings.

ARTICLE VII
ADMINISTRATION

7.1           Committee Action.

The Committee shall act at meetings by affirmative vote of a majority of the
members of the Committee.  Any action permitted to be taken at a meeting may be
taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee.  A member of the
Committee shall not vote or act upon any matter which relates solely to himself
or herself as a Participant.  The Chairman or any other member or members of the
Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.  Notwithstanding any provision of
the

 
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Plan to the contrary, in the event of any conflict between the Plan and the
Committee’s charter, the Committee’s charter shall govern.

7.2           Powers and Duties of the Committee.

The Committee, on behalf of the Participants and their Beneficiaries, shall
enforce the Plan in accordance with its terms, shall be charged with the general
administration of the Plan, and shall have all powers necessary to accomplish
its purposes, including, but not limited to, the following:

(i)  To select the funds in accordance with Section 3.2(a) hereof;

(ii)  To construe and interpret the terms and provisions of this Plan;

(iii)  To compute and certify to the amount and kind of benefits payable to
Participants and their Beneficiaries;

(iv)  To maintain all records that may be necessary for the administration of
the Plan, and to approve all administrative forms and procedures to be used in
the establishment and maintenance of Accounts and Subaccounts;

(v)  To provide for the disclosure of all information and the filing or
provision of all reports and statements to Participants, Beneficiaries or
governmental agencies as shall be required by law;

(vi)  To make and publish such rules for the regulation of the Plan and
procedures for the administration of the Plan as are not inconsistent with the
terms hereof;

(vii)  To appoint a Recordkeeper or any other agent, and to delegate to them
such powers and duties in connection with the administration of the Plan as the
Committee may from time to time prescribe; and

(viii)  To take all actions necessary for the administration of the Plan.

The Committee shall be the named fiduciary and plan adminstrator of the plan for
purposes of ERISA.

7.3           Construction and Interpretation.

The Committee shall have full discretion to construe and interpret the terms and
provisions of this Plan, which interpretations or construction shall be final
and binding on all parties, including but not limited to the Company and any
Participant or Beneficiary.  The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan.

7.4           Information

To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other events which cause
termination of their participation in this Plan, and such other pertinent facts
as the Committee may require.

 
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7.5           Compensation, Expenses and Indemnity.

(a)  The members of the Committee shall serve without additional compensation
for their services hereunder.

(b)  The Committee is authorized at the expense of the Company to employ such
legal counsel as it may deem advisable to assist in the performance of its
duties hereunder.  Expenses and fees in connection with the administration of
the Plan shall be paid by the Company.

(c)  To the extent permitted by applicable state law, the Company shall
indemnify and hold harmless the Committee and each member thereof, the Board of
Directors and any delegate of the Committee who is an employee of the Company
against any and all expenses, liabilities and claims, including legal fees to
defend against such liabilities and claims arising out of their discharge in
good faith of responsibilities under or incident of the Plan, other than
expenses and liabilities arising out of willful misconduct.  This indemnity
shall not preclude such further indemnities as may be available under insurance
purchased by the Company or provided by the Company under any bylaw, agreement
or otherwise, as such indemnities are permitted under state law.

7.6           Filing a Claim.  Any controversy or claim arising out of or
relating to the Plan shall be filed in writing with the Committee which shall
make all determinations concerning such claim.  Any claim filed with the
Committee and any decision by the Committee denying such claim shall be in
writing and shall be delivered to the Participant or Beneficiary filing the
claim (the “Claimant”).

(a)  In General.  Notice of a denial of benefits (other than Disability
benefits) will be provided within ninety (90) days of the Committee’s receipt of
the Claimant's claim for benefits.  If the Committee determines that it needs
additional time to review the claim, the Committee will provide the Claimant
with a notice of the extension before the end of the initial ninety (90) day
period.  The extension will not be more than ninety (90) days from the end of
the initial ninety (90) day period and the notice of extension will explain the
special circumstances that require the extension and the date by which the
Committee expects to make a decision.

(b)  Disability Benefits.  Notice of denial of Disability benefits will be
provided within forty-five (45) days of the Committee’s receipt of the
Claimant’s claim for Disability benefits.  If the Committee determines that it
needs additional time to review the Disability claim, the Committee will provide
the Claimant with a notice of the extension before the end of the initial
forty-five (45) day period.  If the Committee determines that a decision cannot
be made within the first extension period due to matters beyond the control of
the Committee, the time period for making a determination may be further
extended for an additional thirty (30) days.  If such an additional extension is
necessary, the Committee shall notify the Claimant prior to the expiration of
the initial thirty (30) day extension.  Any notice of extension shall indicate
the circumstances necessitating the extension of time, the date by which the
Committee expects to furnish a notice of decision, the specific standards on
which such entitlement to a benefit is based, the unresolved issues that prevent
a decision on the claim and any additional information needed to resolve those
issues.  A Claimant will be provided a minimum of forty-five (45) days to submit
any necessary additional information to the Committee.  In the event that a
thirty (30) day extension is necessary due to a Claimant’s failure to submit
information necessary to decide a claim, the period for furnishing a notice of
decision shall be tolled from the date on which the notice of the extension is
sent to the Claimant until the earlier of the date the Claimant responds to the
request for additional information or the response deadline.

(c)  Contents of Notice.  If a claim for benefits is completely or partially
denied, notice of such denial shall be in writing and shall set forth the
reasons for denial in plain language.  The notice shall (i) cite the pertinent
provisions of the Plan document and (ii) explain, where appropriate, how the

 
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Claimant can perfect the claim, including a description of any additional
material or information necessary to complete the claim and why such material or
information is necessary.  The claim denial also shall include an explanation of
the claims review procedures and the time limits applicable to such procedures,
including a statement of the Claimant’s right to bring a civil action under
Section 502(a) of ERISA following an adverse decision on review.  In the case of
a complete or partial denial of a Disability benefit claim, the notice shall
provide a statement that the Committee will provide to the Claimant, upon
request and free of charge, a copy of any internal rule, guideline, protocol, or
other similar criterion that was relied upon in making the decision.

7.7           Appeal of Denied Claims.  A Claimant whose claim has been
completely or partially denied shall be entitled to appeal the claim denial by
filing a written appeal with a committee designated to hear such appeals (the
“Appeals Committee”).  A Claimant who timely requests a review of the denied
claim (or his or her authorized representative) may review, upon request and
free of charge, copies of all documents, records and other information relevant
to the denial and may submit written comments, documents, records and other
information relevant to the claim to the Appeals Committee.  All written
comments, documents, records, and other information shall be considered
“relevant” if the information (i) was relied upon in making a benefits
determination, (ii) was submitted, considered or generated in the course of
making a benefits decision regardless of whether it was relied upon to make the
decision, or (iii) demonstrates compliance with administrative processes and
safeguards established for making benefit decisions.  The Appeals Committee may,
in its sole discretion and if it deems appropriate or necessary, decide to hold
a hearing with respect to the claim appeal.

(a)  In General.  Appeal of a denied benefits claim (other than a Disability
benefits claim) must be filed in writing with the Appeals Committee no later
than sixty (60) days after receipt of the written notification of such claim
denial.  The Appeals Committee shall make its decision regarding the merits of
the denied claim within sixty (60) days following receipt of the appeal (or
within one hundred and twenty (120) days after such receipt, in a case where
there are special circumstances requiring extension of time for reviewing the
appealed claim).  If an extension of time for reviewing the appeal is required
because of special circumstances, written notice of the extension shall be
furnished to the Claimant prior to the commencement of the extension.  The
notice will indicate the special circumstances requiring the extension of time
and the date by which the Appeals Committee expects to render the determination
on review.  The review will take into account comments, documents, records and
other information submitted by the Claimant relating to the claim without regard
to whether such information was submitted or considered in the initial benefit
determination.

(b)  Disability Benefits.  Appeal of a denied Disability benefits claim must be
filed in writing with the Appeals Committee no later than one hundred eighty
(180) days after receipt of the written notification of such claim denial.  The
review shall be conducted by the Appeals Committee (exclusive of the person who
made the initial adverse decision or such person’s subordinate).  In reviewing
the appeal, the Appeals Committee shall (i) not afford deference to the initial
denial of the claim, (ii) consult a medical professional who has appropriate
training and experience in the field of medicine relating to the Claimant’s
disability and who was neither consulted as part of the initial denial nor is
the subordinate of such individual and (iii) identify the medical or vocational
experts whose advice was obtained with respect to the initial benefit denial,
without regard to whether the advice was relied upon in making the
decision.  The Appeals Committee shall make its decision regarding the merits of
the denied claim within forty-five (45) days following receipt of the appeal (or
within ninety (90) days after such receipt, in a case where there are special
circumstances requiring extension of time for reviewing the appealed claim).  If
an extension of time for reviewing the appeal is required because of special
circumstances, written notice of the extension shall be furnished to the
Claimant prior to the commencement of the extension.  The notice will indicate
the special circumstances requiring the extension of time and the date by which
the Appeals Committee expects to render the determination on

 
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review.  Following its review of any additional information submitted by the
Claimant, the Appeals Committee shall render a decision on its review of the
denied claim.

(c)  Contents of Notice.  If a benefits claim is completely or partially denied
on review, notice of such denial shall be in writing and shall set forth the
reasons for denial in plain language.  The decision on review shall set forth
(i) the specific reason or reasons for the denial, (ii) specific references to
the pertinent Plan provisions on which the denial is based, (iii) a statement
that the Claimant is entitled to receive, upon request and free of charge,
reasonable access to and copies of all documents, records, or other information
relevant (as defined above) to the Claimant’s claim, and (iv) a statement
describing any voluntary appeal procedures offered by the plan and a statement
of the Claimant’s right to bring an action under Section 502(a) of ERISA.  For
the denial of a Disability benefit, the notice will also include a statement
that the Appeals Committee will provide, upon request and free of charge, (i)
any internal rule, guideline, protocol or other similar criterion relied upon in
making the decision, (ii) any medical opinion relied upon to make the decision,
and (iii) the required statement under Section 2560.503-1(j)(5)(iii) of the
Department of Labor regulations.

(d)  Discretion of Appeals Committee.  All interpretations, determinations and
decisions of the Appeals Committee with respect to any claim shall be made in
its sole discretion, and shall be final and conclusive.

ARTICLE VIII
MISCELLANEOUS

8.1           Unsecured General Creditor.

Participants and their Beneficiaries, heirs, successors, and assign shall have
no legal or equitable rights, claims, or interest in any specific property or
assets of the Company, including in any Compensation Deferrals made under this
Plan.  No assets of the Company shall be held in any way as collateral security
for the fulfilling of the obligations of the Company under this Plan.  Any and
all of the Company's assets shall be, and remain, the general unpledged,
unrestricted assets of the Company.  The Company's obligation under the Plan
shall be merely that of an unfunded and unsecured promise of the Company to pay
money in the future, and the rights of the Participants and Beneficiaries shall
be no greater than those of unsecured general creditors.  It is the intention of
the Company that this Plan be unfunded for purposes of the Code and for purposes
of Title 1 of ERISA.  Notwithstanding the foregoing, the Company may enter into
one or more rabbi trusts, in accordance with the provisions of Revenue Procedure
92-64, to assist it and its Business Units in providing benefits under this
Plan.

8.2           Restriction Against Assignment.

The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or corporation.  No
part of a Participant's Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall a Participant's Accounts be subject to execution by levy,
attachment, or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any right to alienate, anticipate, sell, transfer,
commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever.  If any Participant, Beneficiary or successor in interest is
adjudicated bankrupt or purports to anticipate, alienate, sell, transfer,
commute, assign, pledge, encumber or charge any distribution or payment from the
Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit of such
Participant, Beneficiary or successor in interest in such manner as the
Committee shall direct.

 
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8.3           Withholding.

There shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes that are
required to be withheld by the Company under applicable federal, state and local
laws.  The Company shall have the right to reduce any payment (or compensation)
by the amount of cash sufficient to provide the amount of said taxes.

8.4           Amendment, Modification, Suspension or Termination.

The Committee, with the approval of the Board, may amend, modify, suspend or
terminate this portion of the Plan in whole or in part, except to the extent
that such power has been expressly reserved otherwise under the terms of this
portion of the Plan.  No amendment, modification, suspension or termination
shall have any retroactive effect to reduce any amounts allocated to a
Participant's Accounts.  In the event that this portion of the Plan is
terminated, the amounts allocated to a Participant's Accounts shall be
distributed to the Participant or, in the event of his or her death, his or her
Beneficiary, in a lump sum within thirty (30) days following the date of
termination.

8.5           Governing Law.

This Plan shall be construed, governed and administered in accordance with the
laws of the State of Connecticut without regard to the conflicts of law
principles thereof.

8.6           Receipt or Release.

Any payment to a Participant or the Participant's Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full satisfaction
of all claims against the Committee and the Company.  The Committee may require
such Participant or Beneficiary as a condition precedent to such payment, to
execute a receipt and release to such effect.

8.7           Payments on Behalf of Persons Under Incapacity.

In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have assumed the care of such person.  Any payment made
pursuant to such determination shall constitute a full release and discharge of
the Committee and the Company.

8.8           Limitation of Rights and Employment Relationship.

Neither the establishment of the Plan nor any modification thereof, nor the
creating of any fund or account, nor the payment of any benefits shall be
construed as giving any Participant, or Beneficiary or other person any legal or
equitable right against the Company except as provided in the Plan; and in no
event shall the terms of employment of any Employee or Participant be modified
or in any way be affected by the provisions of the Plan.

8.9           Adjustments; Assumptions of Obligations.

In the event of a reorganization, recapitalization, stock split, stock or
extraordinary cash dividend, combination of shares, merger, consolidation,
distribution of assets, or any other change in the corporate structure or shares
of the Company, the Committee shall make the appropriate adjustments in (i) the
number of Stock Units credited to Participants' Accounts, (ii) the number (or
type) of shares of Stock reserved for issuance hereunder, (iii) the number (or
type) of shares subject to any deferred

 
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Restricted Stock Units and deferred Performance Shares, and (iv) any Share
limitations imposed under the Plan, in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under the
Plan or any Stock Units credited hereunder.  In the event of any merger,
consolidation or other reorganization in which the Company is not the surviving
or continuing entity, all Stock Units, deferred Restricted Stock and deferred
Performance Shares hereunder shall be assumed by the surviving or continuing
entity.  In the event of any reorganization in which all of the shares of the
Company's Stock are exchanged for shares of the common stock of another
corporation, all Stock Units credited hereunder and all deferred Restricted
Stock Units and deferred Performance Shares outstanding on the effective date of
the share exchange shall be automatically converted into obligations of the
other corporation on identical terms, and the other corporation shall assume
this Plan, or if the Committee deems such action appropriate, it may provide for
a cash payment to the Participant.  The Committee may also make adjustments to
Stock Units, and deferred Restricted Stock Units and deferred Performance Shares
under this Plan on account of those events set forth in Section 8 of the UIL
Holdings Corporation 1999 Amended and Restated Stock Plan.

8.10           Headings.

Headings and subheadings in this Plan are inserted for convenience of reference
only and are not to be considered in the construction of the provisions hereof.

Executed as of the 4th day of August, 2008.

                                        UIL HOLDINGS CORPORATION

                                        By    /s/ James P.
Torgerson__________________
                                                               James P.
Torgerson
                                         Its President & Chief Executive Officer
    

 
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EXHIBIT A
 
PARTICIPATING BUSINESS UNITS
 
As of January 1, 2008
 

 
Company
Name                                                                                                     Date
of Participation
 
The United Illuminating Company
("UI")                                                                                           2/1/03
 
 
 
 
 
 
 
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