EXHIBIT 10.42

UIL HOLDINGS CORPORATION
DEFERRED COMPENSATION PLAN

NON-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
8
2.1         Determination of Eligible Persons
8
2.2         Enrollment; Duration of Participation
8
2.3         Transfers to Non-Participating Related Companies
8
2.4         Amendment of Eligibility Criteria
8
ARTICLE III – DEFERRAL ELECTIONS
9
3.1         Elections to Defer Compensation
9
3.2         Deemed Investment Elections
10
3.3         Elections as to Form and Timing of Payment
12
3.4         Code Section 409A Transition Provisions
13
ARTICLE IV – COMPENSATION DEFERRAL AND COMPANY CONTRIBUTION ACCOUNTS
14
4.1         Compensation Deferral Subaccount
14
4.2         Company Discretionary Contribution Subaccount
14
4.3         Company Matching Contribution Subaccount
14
4.4         Deferred Restricted Stock Account
15
4.5         Deferred Performance Share Account
15
ARTICLE V – VESTING
16
5.1         Vesting
16
5.2         Vesting Upon Death/Change in Control
16
ARTICLE VI – DISTRIBUTIONS
16
6.1         Manner of Payment – Cash vs. Stock
16
6.2         Distribution of Accounts
16
6.3         Hardship Distribution
19
6.4         Inability to Locate Participant
19
6.5         Uninvested Amounts
19
ARTICLE VII – ADMINISTRATION
19
7.1         Committee Action
19
7.2         Powers and Duties of the Committee
20
7.3         Construction and Interpretation
20
7.4         Information
20
7.5         Compensation, Expenses and Indemnity
21
7.6         Filing a Claim
21
7.7         Appeal of Denied Claims
22
ARTICLE VIII – MISCELLANEOUS
23
8.1         Unsecured General Creditor
23
8.2         Restriction Against Assignment
23
8.3         Withholding
24
8.4         Amendment, Modification, Suspension or Termination
24
8.5         Governing Law
24
8.6         Receipt or Release
24
8.7         Payments on Behalf of Persons Under Incapacity
24
8.8         Limitations of Rights and Employment Relationship
24
8.9         Adjustments; Assumptions of Obligations
25
8.10       Headings
25
EXHIBIT A - PARTICIPATING BUSINESS UNITS
26

 
 

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UIL HOLDINGS CORPORATION
DEFERRED COMPENSATION PLAN
NON-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 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.  With respect to
deferrals made and vested pursuant to the terms of the Plan prior to January 1,
2005, the terms of the Plan are as described in the separate Plan document
relating to “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, shall have the meanings specified below.

"Account" or "Accounts" shall mean a Participant's Non-Grandfathered Amounts
under this 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, excluding
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

 
 

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by the Participant with the Committee (or the Recordkeeper) with or without the
consent of the previous 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.

"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 in the ownership of the Employing Company;  a change in the effective
control of the Employing Company; and 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 all Eligible Employees, Base Salary,
increases in Base Salary received during the Plan Year, incentive awards,
deferrals of compensation in

 
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excess of the amount deductible under Section 162(m) of the Code, and any other
compensation permitted by the Committee to be deferred.

"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” or “Disabled” shall mean that the Participant is, by reason of any
medically-determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve months, (i) unable to engage in any substantial gainful activity, or
(ii) receiving income replacement benefits for a period of not less than three
months under an accident and health plan covering employees of the Participant’s
employer.  The Committee shall determine whether a Participant is Disabled in
accordance with Code Section 409A and related regulations, provided, however,
that a Participant shall be deemed to be Disabled if determined to be totally
disabled by the Social Security Administration or if the Participant becomes
eligible for disability benefits under the Company’s long-term disability 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.

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

“Election Period” shall mean the time period provided to elect to defer
Compensation under the Plan, as provided in Section 3.1.

“Eligible Director” shall mean each non-Employee Director of the Company who is
eligible to participate in the Plan, as determined in Section 2.1.

"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.

"Eligible Person" shall mean each Eligible Employee or Eligible 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.

"Employer" shall mean the Company and its Affiliates.

 
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"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.

"Hardship Distribution" shall mean a distribution made on account of an
Unforeseeable Emergency as defined for purposes of Code Section 409A, including
Treasury Regulation Section 1.409A-3(i)(3).  Generally, this means a severe
financial hardship of the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of his or her spouse, beneficiary or
dependent, 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.

“Non-Grandfathered Amount” means any amount deferred under the Plan which is not
a Grandfathered Amount.  A “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.  Non-Grandfathered Amounts shall be subject to requirements of Code
Section 409A and the terms of this Plan document.  Grandfathered Amounts shall
be subject to the terms of the Plan document entitled “UIL Holdings Corporation
Deferred Compensation Plan Grandfathered Benefit Provisions.”

"Participant" shall mean any Eligible Person who becomes 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 long-term
incentive performance share award which, if deferred under this Plan, is
credited in Stock Units when such Performance Share is vested at the end of the
performance period, and which is settled in shares of Company Stock that may be
drawn from this Plan, the UIL Holdings Corporation 1999 Amended and Restated
Stock Plan, the UIL Holdings Corporation 2008 Stock and Incentive Compensation
Plan or any other stock plan of the Company which allows for awards to be
deferred pursuant to the terms of this Plan, to the extent permitted under the
terms of said plans.

"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 – Non-Grandfathered Benefit Provisions”
and the document entitled “UIL Holdings Corporation Deferred Compensation Plan –
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.

 
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"Restricted Stock" shall mean shares of Stock issued under the Restricted Stock
feature of the UIL Holdings Corporation 1999 Amended and Restated Stock Plan,
the UIL Holdings Corporation 2008 Stock and Incentive Compensation Plan or any
other stock plan of the Company, 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 this Plan, the UIL
Holdings Corporation 1999 Amended and Restated Stock Plan, the UIL Holdings
Corporation 2008 Stock and Incentive Compensation Plan or any other stock plan
of the Company which allows for awards to be deferred pursuant to the terms of
this Plan, to the extent permitted under the terms of said plans.

"Retirement" shall mean termination of service after the Participant has
satisfied the age and service 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.

“Separation from Service” shall mean a Separation from Service within the
meaning of Code Section 409A and related regulations.  The Committee will
determine, in accordance with Code Section 409A, whether a Separation from
Service has occurred.

(i)  An Employee incurs a Separation from Service upon termination of employment
with the Employer.  Except in the case of an Employee on a bona fide leave of
absence as provided below, an Employee is deemed to have incurred a Separation
from Service if the Employer and the Employee reasonably anticipated that the
level of services to be performed by the Employee after a date certain would be
reduced to 20% or less of the average services rendered by the Employee during
the immediately preceding 36-month period (or the total period of employment, if
less than 36 months), disregarding periods during which the Employee was on a
bona fide leave of absence.

(ii)  An Employee who is absent from work due to military leave, sick leave, or
other bona fide leave of absence shall incur a Separation from Service on the
first date immediately following the later of the six-month anniversary of the
commencement of the leave or the expiration of the Employee’s right, if any, to
reemployment under statute or contract.

(iii)  For purposes of determining whether a Separation from Service has
occurred, the Employer means the Employer as defined above, except that for
purposes of determining whether another organization is an Affiliate of the
Company, common ownership of at least 50% shall be determinative.

(iv)  Generally, a Director incurs a Separation from Service upon termination of
service as a Director of the Company.

 
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(v)  The Committee specifically reserves the right to determine whether a sale
or other disposition of substantial assets to an unrelated party constitutes a
Separation from Service with respect to a Participant providing services to the
seller immediately prior to the transaction and providing services to the buyer
after the transaction.  Such determination shall be made in accordance with the
requirements of Code Section 409A.

“Specified Employee” means a Specified Employee as defined for purposes of Code
Section 409A and related regulations.  Specified Employee means an Employee who,
as of the date of his or her Separation from Service, is a “key employee” of the
Company or any Affiliate, any stock of which is actively traded on an
established securities market or otherwise.  An Employee is a key employee if he
or she meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii)
(applied in accordance with applicable regulations thereunder and without regard
to Code Section 416(i)(5)) at any time during the 12-month period ending on the
Specified Employee Identification Date.  Such Employee shall be treated as a key
employee for the entire 12-month period beginning on the Specified Employee
Effective Date.  In the event of corporate transactions described in Treasury
Regulation Section 1.409A-1(i)(6), the identification of Specified Employees
shall be determined in accordance with the default rules described therein,
unless the Committee elects to utilize the available alternative methodology
through designations made within the timeframes specified therein.  For purposes
of this definition, Specified Employee Effective Date means the first day of the
fourth month following the Specified Employee Identification Date, or such
earlier date as is selected by the Committee; and Specified Employee
Identification Date means December 31, unless the Committee has elected a
different date through action that is legally binding with respect to all
nonqualified deferred compensation plans maintained by the Company.

"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, (iv) Stock Units
credited to Participants’ Accounts upon the vesting of deferred Performance
Shares, and (v) 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.  Such Stock Units shall be settled in Shares of Company
Stock that may be drawn from this Plan, the UIL Holdings Corporation 1999
Amended and Restated Stock Plan, the UIL Holdings Corporation 2008 Stock and
Incentive Compensation Plan or any other stock plan of the Company which allows
for awards to be deferred pursuant to the terms of this Plan, to the extent
permitted under the terms of said plans.

“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, as
applicable, Dividend Equivalents, resulting from Compensation Deferrals, Company
Matching Contributions deemed invested in Stock Units, deferred Restricted Stock
Units and deferred Performance Shares.

“Unforeseeable Emergency” shall mean the circumstances under which a Hardship
Distribution may be made.

 
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ARTICLE II
PARTICIPATION

2.1           Determination of Eligible Persons.

All officers of the Company and its Business Units who have been selected by the
Committee 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.

Non-Employee Directors of the Company and its Participating Business Units shall
be eligible to participate in that portion of the Plan permitting deferral of
Restricted Stock and Performance Shares.  Such Directors shall be eligible to
participate prospectively in that portion of the Plan permitting elective
deferrals of Compensation and other features of the Plan, to the extent that
they are made applicable to Directors through subsequent Plan amendment.  A
Director shall be deemed an Eligible Person with respect to elective deferrals
of Compensation (including fees and retainers) and other features of the Plan at
such time as such provisions are made applicable to the Directors.

Notwithstanding the foregoing, this portion of the Plan applies only to Eligible
Employees and Directors who are Eligible Persons on or after January 1, 2005,
and only Non-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 filing a Deferral
Election 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 discretion of the Committee shall not be permitted to enter
into future Deferral Elections, and no such Deferral Elections will be allowed
until such time as the individual again becomes an Eligible Person; expressly
provided, however, that nothing herein shall prohibit the Company from giving
effect to any previously filed Deferral Election that was timely made.  An
individual shall remain a Participant in the Plan with respect to amounts
already deferred that have not yet been distributed or forfeited.

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 became 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.

 
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ARTICLE III
DEFERRAL ELECTIONS

3.1           Elections to Defer Compensation.

(a)  Election to Defer.  Subject to the provisions of Article II and this
Article III, each Eligible Employee may elect to defer Compensation earned for
services after the Election Period ends, 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 last day of the Election Period.  Except as
expressly provided in (b), (c) or (d) below, an Eligible Person may elect to
defer Compensation by an election filed by December 20th (or such later date as
determined by the Committee, but in no event later than December 31st) of the
year preceding the year in which the services are to be performed and the
Compensation earned.  Deferral elections shall become irrevocable as of the last
day of the Election Period and shall remain irrevocable for any subsequent Plan
Year to which such Deferral Election relates, except as otherwise expressly
provided in the Plan.  Except as otherwise determined by the Committee, Deferral
Elections will continue in effect from Plan Year to Plan Year, unless decreased,
increased, or terminated during an Election Period with respect to a subsequent
Plan Year.

(b)  First Year of Eligibility.  An Eligible Person shall have a 30 day Election
Period beginning as of the date the Eligible Person becomes eligible to
participant in the Plan in which to file an initial Deferral Election, provided
that the Eligible Person has not participated in any other account balance
nonqualified deferred compensation plan maintained by the Company.  Any such
Deferral Election shall only be effective with respect to Compensation earned
for services to be rendered after the Deferral Election is made.  The amount of
annual incentive Compensation that is subject to a first year Deferral Election
must be pro-rated, with such pro-ration being based on the days remaining in the
calendar year from the date of the election, divided by 365.

                      (c)  Deferral of Performance Share Awards.  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 6 months prior to the end of the performance
period related to such Performance Share Award (12 months in the case of
Deferral Elections filed prior to January 1, 2007), provided that in no event
may an election to defer Performance Shares be made (i) if the performance
period is not at least 12 consecutive months in duration, or (ii) after such
compensation has become both substantially certain to be paid and readily
ascertainable.  In addition, the Designated Individual must have provided
services continuously from the later of the beginning of the performance period
or the date the performance criteria are established through the date that the
Deferral Election is filed.  All deferrals of Performance Shares shall be
credited as, and invested only in, Stock Units, without voting rights or any
property right.

                      (d)  Deferral of Restricted Stock Units.  The Election
Period with respect to deferral by a Designated Individual of some portion or
all of a Restricted Stock Unit Award shall be the taxable year ending on
December 20th (or such later date as determined by the Committee, but in no
event later than December 31st) prior to the year in which such Award is
granted, and which shall be deemed effective contemporaneously with the granting
of such Award with respect to any Restricted Stock Unit vesting at least one
year after such Election.  Notwithstanding the foregoing, with respect to
deferrals of Restricted Stock Unit Awards made in 2006 and later, the Election
Period with respect to the deferral by a Designated Individual of some portion
or all of a Restricted Stock Unit Award shall be a date that ends no later than
the thirtieth day following the date of the grant, provided that the Deferral
Election is made at least 12 months in advance of the earliest vesting date
applicable to such award.  Notwithstanding anything to the contrary, any
deferral of Restricted Stock shall be deemed to be a rejection of the

 
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Restricted Stock Award and a simultaneous award of Restricted Stock Units, all
effective as of the date of such Award.  All deferrals of Restricted Stock Units
shall be credited as, and invested only in, Stock Units, without voting rights
or any property right.

(e)  Deferral Amounts.  Subject to the provisions of this Section 3.1 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 following
the year of the Deferral Election; and up to 100% of incentive awards (including
Performance Share Awards and Restricted Stock Unit Awards).  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, annual
incentive, etc.).

(f)  Mandatory Deferral of Excess Code Section 162(m)
Compensation.  Notwithstanding anything in the foregoing to the contrary, 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 as a
Compensation Deferral 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 not be
non-deductible under Section 162(m) of the Code.

3.2           Deemed Investment Elections.

(a)  With Respect to Compensation Deferrals.  Except as otherwise provided in
this Section 3.2, at the time of making a Deferral Election, 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, 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 establishment of a full
array of deemed investment options by the Committee, or (iii) pending the
effective date of the deemed investment in the Company Stock Fund as provided in
Section 3.2(e).

 
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(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.

(c)  With Respect to Company Contribution Subaccounts.  Contributions to a
Participant’s Company Discretionary Contributions Subaccount, if any, shall be
deemed invested, and valued, in the same manner and proportion as the
Participant's Compensation Deferral Subaccount under the Plan, unless otherwise
determined by the Company.  Contributions to a Participant's Company Matching
Contribution Subaccount, if any, shall be deemed invested in the Company Stock
Fund.

(d)  Deemed Investments Will Be Valued Daily.  Except as otherwise provided in
Subsection 3.2(e) 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 (g), below.  Except as
provided in Section 6.4, below, a Participant’s Account shall be credited with
earnings (and losses) until all amounts credited to such Account have been
distributed or forfeited.

(e)  Company Stock Fund.  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 Money Market Investment Fund pending the end of the quarter, and
shall be credited with the rate of return of such deemed investment in the Money
Market Investment 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, and continuing quarterly thereafter.  Once the investment in
the Company Stock Fund is effective, a Participant may not re-direct such
investment back into other deemed investment Funds available under the Plan.

(f)  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 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 and shall communicate the same to the
Recordkeeper.

(g)  Quarterly Reports.  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 of Participants' Subaccounts under Article IV, and shall be reported on a
calendar quarterly basis to Participants.

 
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(h)  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.

(a)  At the same time that the Participant makes 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
Separation from 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)  Except as otherwise provided by the Plan Administrator, each election as to
the timing and form of payment shall carry forward from year to year, unless
modified by the Participant by means of filing a subsequent election in
accordance with Section 3.3(d).  Elections as to time and form of payment are
irrevocable as of the end of the related Deferral Election Period (as provided
in Section 3.1) except as provided in Section 3.3(d).  Timing and form of
payment elections applicable to Company contributions shall become irrevocable
in accordance with the timing rules applicable to Compensation Deferral
Elections (as provided in Section 3.1(a)).  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 the Participant’s
Separation from Service.

(d)  Subsequent Elections as to Timing and Form of Payment.  A Participant may
change an election as to the timing or form of payment of Non-Grandfathered
Amounts in the Participant’s Account by filing a subsequent written distribution
election, provided however that with respect to such Non-Grandfathered Amounts:

(i)  such subsequent election is consistent with one of the forms of benefit
payment provided in Section 6.2 (i.e., a permitted installment form or a lump
sum);

(ii)  such subsequent election does not take effect until at least 12 months
after the date on which the subsequent election is made;

 
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(iii)  in the case of an election relating to a payment other than on account of
death, Disability or the occurrence of an Unforeseeable Emergency, the first
payment with respect to which such election is made is deferred for a period of
not fewer than five (5) years from the date that payment would otherwise have
been made or commenced; and

(iv)  with respect to any election relating to a distribution to be made (or to
commence) as of a specified time or fixed schedule (as defined in Code Section
409(a)(2)(A))(iv)), the subsequent election is made not fewer than 12 months
prior to the date of the first scheduled payment.

No change of election shall permit the acceleration or delay of the time or
schedule of any payment under the Plan, except as may be provided by regulation
or other guidance issued pursuant to Code Section 409A(a)(3) (including, without
limitation, Treasury Regulation Section 1.409A-3(j)(4)).

3.4           Code Section 409A Transition Provisions.

(a)  Grandfathering Pre-2005 Accruals; Time and Form of Payment.  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 (the “Grandfathered Amount”) 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.  Grandfathered Amounts shall be
subject to the terms of the Plan document entitled “UIL Holdings Corporation
Deferred Compensation Plan Grandfathered Benefit Provisions,” and not this Plan
document.

(b)  Non-Grandfathered Amounts.  That portion of a Participant’s Account Balance
attributable to Deferral Elections and/or Company contributions made with
respect to the 2005 Plan Year and thereafter, and amounts subject to earlier
Deferral Elections that did not vest prior to January 1, 2005, together with
actual or notional earnings thereon, are a Participant’s Non-Grandfathered
Amounts.  Non-Grandfathered Amounts are subject to the provisions of Code
Section 409A and guidance issued thereunder, and the terms of this Plan
document.

(c)  Modification of Elections as to Time and Form of  Payment During Transition
Period.  Notwithstanding Section 3.3(d), Participants in the Plan as of January
1, 2005 or who became Participants on or after January 1, 2005 and before
December 31, 2008, may change benefit distribution elections with respect to
Non-Grandfathered Amounts during the period from January 1, 2005 through
December 31, 2008 with respect to benefits accrued prior to the election,
provided the election is timely made and in accordance with the transition
relief published by the Internal Revenue Service in Notice 2005-1, Notice
2006-64, Notice 2007-86, the preamble to the proposed and formal regulations
under Code Section 409A and other IRS guidance.

 
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ARTICLE IV
COMPENSATION DEFERRAL AND COMPANY CONTRIBUTION ACCOUNTS

4.1           Compensation Deferral Subaccount.

The Recordkeeper shall establish and 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 Recordkeeper 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
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.

(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.

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 Stock Units
vest.  The Recordkeeper shall also maintain records of Deferral Elections
relating to Restricted Stock Units that have not yet vested.

(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.

4.5           Deferred Performance Share Account.

(a)  The Recordkeeper shall maintain a Stock Unit Subaccount for each Designated
Individual to record the number of Stock Units to be credited to such Designated
Individual as of the date that any Performance Shares would otherwise be payable
to the Participant upon vesting thereof in the absence of a deferral election
made pursuant to Section 3.1.

(b)  The number of Stock Units to be credited shall be equivalent in value to
the number of shares of Stock that would have been payable to the Participant in
settlement of the Performance Share Award absent his deferral election.

(c)  The Designated Individual’s Performance Share Subaccount shall not be
credited with Dividend Equivalents; expressly provided however, that with
respect to Stock Units credited to a Participant’s account in respect of
Performance Shares that vest on or after December 31, 2006, such Stock Units
shall be credited with Dividend Equivalents from, and after, the date of vesting
of such Performance Shares.

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

 
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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.

Distributions shall be made in cash, except to the extent that a Participant’s
Subaccounts are deemed invested in the Company Stock Fund.  Distributions of
Company Stock Fund Subaccounts shall be paid in shares of 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 2008 Stock and Incentive
Compensation Plan (or any other stock plan of the Company which allows for
awards to be deferred pursuant to the terms of this 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 Accounts.

Distribution of Non-Grandfathered Amounts shall be made only in the event of a
Participant’s Separation from Service (including on account of Retirement, death
or Disability), or on account of a Scheduled In-Service Withdrawal
Date.  Benefits will be paid (or commence to be paid) as of the Participant’s
Payment Date.

(a)  Distribution Due to Separation from Service.

(1)  De Minimis Account Balances.  Subject to Section 6.2(a)(6), in the case of
a Participant who has a Separation from Service (other than on account of death)
and who has a total Account balance of $10,000 or less, the Amount shall be paid
to the Participant in a lump sum distribution within 60 days of the
Participant’s Separation from Service Date, provided that in no event shall the
Participant have a right to designate the date or taxable year of the payment.

(2)  Distribution of Accounts over $10,000.  Subject to Section 6.2(a)(6), in
the case of a Participant who has a Separation from Service (other than on
account of death) and who has a total Account balance of more than $10,000, the
Distributable Amount shall be paid to the Participant in a single lump sum
distribution as of the first day of the first calendar quarter

 
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following the calendar quarter in which the Participant has a Separation from
Service, unless the Participant has made a timely election, in accordance with
the provisions of Section 3.3, to receive payments in one of the optional
installment forms set forth in Section 6.2(a)(3).

(3)  Election of Payment Form.  In accordance with Section 3.3, a Participant
may elect to have Distributable Amounts distributed either in a single lump sum
or in one of the following installment forms.  The installment forms that are
available are:

(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.

Notwithstanding the foregoing, in the event a Participant has a Separation from
Service (other than on account of death) within 24 months after a Change in
Control, the Distributable Amount shall be paid to the Participant in a single
lump sum distribution as of the first day of the first calendar quarter
following the calendar quarter in which the Participant’s Separation from
Service occurs, subject to Section 6.2(a)(6).

(4)  Commencement of Distributions.  Except with respect to de minimis Account
balances, as provided in Section 6.2(a)(1) and subject to Section 6.2(a)(6), all
installment payments and lump sum distributions shall commence to be paid, or be
paid on the first day of the first calendar quarter following the calendar
quarter in which the Participant Separates from Service.

(5)  Modification of Election of Form of Payment.  A Participant may change his
or her election as to the timing and payment of Non-Grandfathered Amounts only
in accordance with the provisions of Section 3.3(d) on subsequent elections and
Section 3.4.

(6)  Delay in Distribution for Specified Employees.  Notwithstanding the
foregoing, at any time the Company is publicly traded on an established
securities market (as defined for purposes of Code Section 409A) and a
distribution is to be made to a Specified Employee (as defined for purposes of
Code Section 409A(a)(2)(B)(i)) on account of a Separation from Service, other
than on account of death, no distribution shall be made to the Specified
Employee before the date which is six months after the date of the Specified
Employee’s Separation from Service or, if earlier, the date of death of the
Specified Employee (the “Distribution Restriction Period”), and the Specified
Employee’s Payment Date shall be the first day of the first calendar quarter
beginning on or after the end of the Distribution Restriction Period.

(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).

 
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(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 elect to extend the Scheduled In-Service Withdrawal Date
for any Plan Year, provided such election otherwise complies with the
requirements of Section 3.3(d) on “subsequent elections.”  The 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 has a Separation from Service 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 on the first day of the calendar
quarter beginning on or after the Separation from Service, subject to the
provisions of Section 6.2(a)(6) concerning distributions to a Specified Employee
upon a Separation from Service.

(c)  Death of a Participant.  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 on the first day of the calendar quarter beginning after the 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 on the first day of the calendar quarter beginning after the death
occurs.

(d)  Delayed Payment Date Attributable to Impracticability of Calculation.  In
accordance with Treasury Regulation Section 1.409A-3(d), if as of a Payment
Date, calculation of the amount of the payment is not administratively
practicable due to events beyond the control of the participant (or the
participant’s beneficiary), payment shall be made during the first taxable year
of the participant (or beneficiary) in which the calculation of the amount of
the payment is administratively practicable.

(e)  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).  This Section 6.2(f) shall be administered in accordance with Treasury
Regulation Section 1.409A-2(b)(7)-(i).

 
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6.3           Hardship Distribution.

(a)  In the event of an Unforeseeable Emergency, 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.  The amount
paid shall be debited pro rata from the Participant’s Compensation Deferral
Subaccount, Matching Contribution Subaccount and vested Company Discretionary
Contribution Subaccount.

(c)  This Section 6.3 is intended to and shall be interpreted to be consistent
with Treasury Regulations Section 409A-3(i)(3).

6.4           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.

6.5           Unvested Amounts.  Any amounts that are not (or do not become)
vested as of the date they would otherwise be paid shall be forfeited.

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

 
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certificate or other written direction on behalf of the
Committee.  Notwithstanding any provision of the 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 administrator 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

 
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(i) cite the pertinent provisions of the Plan document and (ii) explain, where
appropriate, how the 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

 
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extension of time and the date by which the Appeals Committee expects to render
the determination on 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 assigns 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

 
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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.

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 or suspend 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 or suspension shall have any retroactive
effect to reduce any amounts allocated to a Participant's Accounts.  The
Committee, with the approval of the Board, may also terminate this portion of
the Plan and pay Participants (and beneficiaries) their Account Balances in a
single lump sum at any time, to the extent and in accordance with Treas. Reg.
Section 1.409A-3(j)(4)(ix).

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.

 
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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 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.  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, Section 10(c) of the UIL Holdings Corporation 2008 Stock and Incentive
Compensation Plan and comparable sections of any other stock plan of the Company
which allows for awards to be deferred pursuant to the terms of this 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        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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