EXHIBIT 10.14a

FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT

This amendment (the “First Amendment”) is made the 4th day of August, 2008,
between The United Illuminating Company, a Connecticut Corporation (the
“Company”), and Richard J. Nicholas (the “Executive”).

WHEREAS, the Company previously entered into an Employment Agreement with the
Executive dated as of March 1, 2005 (the “Agreement”); and

WHEREAS, in light of changes to the law concerning severance and deferred
compensation, including Internal Revenue Code Section 409A and related Treasury
Regulations, the Company and the Executive wish to further amend the Agreement
by this First Amendment to clarify certain provisions in the event the
Executive’s employment is involuntarily terminated, and to make other minor,
clarifying revisions to the Agreement,

NOW THEREFORE, the following Sections of the Agreement are hereby amended as
follows:

1. The third sentence of Section (1)(b) of the Agreement is deleted.

2. The second sentence of Section (2)(c) of the Agreement is revised to read as
follows:

In the event that the Executive’s employment is not so continued, the Executive
may be eligible for benefits on account of a Constructive Termination in
accordance with the terms of the UIL CIC Plan II.

3. The third paragraph of Section (4)(b) of the Agreement is revised to read as
follows:

The Executive’s “Stub-Period Incentive Compensation” shall mean the annual
short-term incentive compensation being earned in the year in which the
Executive terminates employment, pro-rated for the year in which he terminates
service, and shall be equal to that short-term annual incentive compensation
payment to which the Executive would be entitled, if any, under the terms of the
Company’s executive incentive compensation plan, calculated as if he had been
employed by the Company on the last day of the year including his Date of
Termination, based on actual performance with respect to the achievement of UIL
and Company goals (collectively referred to as “Company goals”), multiplied by a
fraction, the numerator of which is the number of days which have elapsed in
such year through the Date of Termination and the denominator of which is
365.  UIL shall determine in its discretion the composition of the Executive’s
scorecard.  In the event that the ‘gate’, if any, is not achieved with respect
to Company goals, then no Stub-Period Incentive Compensation will be paid.  Any
Stub-Period Incentive Compensation payable upon termination of the Executive
shall be paid in accordance with Section (6)(e) of this Agreement.

 
 

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4. Section (5)(d) of the Agreement is hereby revised in its entirety to provide
as follows:

(d)  Termination by Executive.

(i)  Breach by the Company, not during Change of Control Protective Period.  If
the Executive is not in default of any of the Executive’s obligations under
Section (2), (9), (10), (11) or (12) hereof, the Executive may terminate
employment hereunder on account of a Constructive Termination in accordance with
this Section (5)(d)(i).  For purposes of this Agreement, a Constructive
Termination means:

(1)  a Separation from Service (as defined for purposes of the UIL CIC Plan II)
within ninety (90) days of the initial occurrence of one of the following events
arising without the consent of the Executive (a “Constructive Termination
Event”):

(A)  A material diminution in the Executive’s annual base salary rate, unless
such reduction is part of, and consistent with, a general reduction of the
compensation rates of all employees of the Company or of the Executive’s
business unit;

(B)  Except as provided in Section (2)(b), a material diminution in the
Executive’s authority, duties, or responsibilities, including the assignment of
duties materially inconsistent in any adverse respect with such Executive’s
position, duties, responsibilities and status with the Company immediately prior
thereto, or diminishment in such Executive’s management responsibilities, duties
or powers as in effect immediately prior thereto, or the removal from or failure
to re-elect such Executive to any such position or office;

(C)  A requirement that the Executive relocate his principal place of employment
by more than fifty (50) miles from the Company’s current executive offices in
New Haven, Connecticut; or

(D)  Any other action or inaction that constitutes a material breach by the
Company of the Agreement, including (1) a failure to include the Executive in
the management salary compensation programs then in effect on substantially the
same terms and conditions as that applicable to the other officers or similarly
situated executives of the Company; (2) a failure to continue the Executive’s
participation in the material benefit plans of the Company on substantially the
same basis, both in terms of the amount of benefits provided (other than due to
the Company’s stock price performance, provided such performance is a relevant
criterion in determining the amount of benefits) and the level of the
Executive’s participation relative to other officers or similarly
 

 
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situated executives of such Company, as that in effect immediately prior
thereto; or (3) a failure to renew the Executive’s Employment Agreement at the
time such Agreement expires, provided that the Executive was willing and able to
execute a new Agreement providing terms and conditions substantially similar to
those in the expiring Agreement and to continue working for the Company; and

(2)  The Executive has given notice to the UIL Board stating that in the
Executive’s opinion at least one of the Constructive Termination Events has
occurred and setting forth in reasonable detail the relevant facts, and such
notice was given within thirty-one (31) days of the occurrence of the
Constructive Termination Event; and

(3)  The Company shall have failed to remedy or otherwise cure the situation
within thirty-one (31) days after receipt of the notice.

(ii)  Breach by the Company, during Change of Control Protective Period.  If the
Executive is not in default of any of the Executive’s obligations under Section
(2), (9), (10), (11) or (12) hereof, the Executive may terminate employment
hereunder on account of a Constructive Termination in accordance with the UIL
CIC Plan II.

(iii)  In the absence of Breach by the Company.  If the Executive is not in
default of any of the Executive’s obligations under Section (2), (9), (10), (11)
or (12) hereof, the Executive may terminate employment in the absence of a
Breach by the Company, effective upon at least ninety (90) days prior written
notice.

5. The initial paragraph of Section (6)(c) of the Agreement is hereby revised to
provide as follows:

(c)  Upon Termination Without Cause or a Constructive Termination prior to a
Change in Control.  If the Company terminates the Executive’s employment
hereunder without Cause or if the Executive terminates the Executive’s
employment hereunder on account of a Constructive Termination, and in either
case the termination constitutes an Involuntary Separation from Service within
the meaning of Treasury Regulations Section 1.409A-1(n) and is not upon a Change
in Control or within the Change in Control Protective Period, the Company shall
pay or provide (as applicable) to the Executive, all of the following:

6. Subsection (6)(c)(v) of the Agreement is hereby revised in its entirety to
read as follows:

(v)  benefits under the Company’s health care plans during the COBRA
continuation period on the same terms as are then available to active employees
of the Company.

 
 
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7. Subsection (6)(c)(vi) of the Agreement is hereby revised in its entirety to
read as follows:
 
(vi)  the addition of two (2) years of service deemed as an Employee of the
Company in the calculation of the entitlement to and benefits payable under the
Company’s retiree medical benefit plan.

8. New Subsection (6)(c)(vii) of the Agreement is hereby added, to read as
follows:

(vii)  a supplemental lump sum payment that is actuarially equivalent to the
amount by which the value of the Executive’s accrued benefit under The United
Illuminating Company Pension Plan would have increased had the Executive been
credited with two (2) additional years of credited service for purposes of
calculation of benefits payable under the Pension Plan.

9. Subsection (6)(d) of the Agreement is hereby revised in its entirety to
provide as follows:

(d)  Separation from Service.  Notwithstanding anything herein to the contrary,
no compensation constituting severance or deferred compensation shall be paid
under this Agreement upon a termination of employment or termination of service
unless such termination of employment or termination of service constitutes a
Separation from Service as defined in the UIL CIC Plan II.

10. Subsection (6)(e) of the Agreement is hereby revised in its entirety to
provide as follows:

(e)  Timing of Payment.  Any cash amount that is due and owing to the Executive
upon a termination of service pursuant to Section (6) or Section (7) (other than
pursuant to the UIL CIC Plan II) will be paid on the thirtieth (30th) day
following the Executive’s Separation from Service and in no event may the
Executive designate the timing or year of payment.  Notwithstanding the
foregoing, however, (i) any Stub-Period Incentive Compensation shall be
calculated in accordance with the terms of the applicable plan or program and
such incentive compensation and that portion of any severance payment that is
based on such incentive compensation shall be paid at the same time that such
incentive compensation generally would be payable to all other employees, but in
no event later than March 15th of the calendar year following the end of the
performance period to which such incentive compensation relates; (ii) any
long-term incentive compensation shall be calculated in accordance with the
terms of the applicable plan or program and such incentive compensation shall be
paid at the same time that such incentive compensation generally would be
payable to all other employees, but in no event later than March 15th of the
calendar year following the end of the performance period to which such
compensation relates; and (iii) any qualified or non-qualified deferred
compensation payable pursuant to the terms of a plan of the Company shall be
paid in accordance with the terms of the applicable plan.

11. The first paragraph of Section (7)(a) of the Employment Agreement is hereby
revised in its entirety to provide as follows:

 
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(7)           CHANGE IN CONTROL

(a)  If on, or within twenty-four (24) months following, a Change in Control,
the Company (or its successor or other entity employing the Executive following
such Change in Control) either terminates the Executive’s employment hereunder
without Cause or fails to renew this Agreement on substantially identical terms,
or if the Executive terminates the Executive’s employment on account of a
Constructive Termination (as defined in the UIL CIC Plan II), and in any such
case the termination constitutes an Involuntary Separation from Service within
the meaning of Treasury Regulations Section 1.409A-1(n), then the Executive
shall be entitled to the following:

12. Subsection (7)(a)(iv) of the Agreement (including the second, flush
paragraph thereof) is hereby revised in its entirety to provide as follows:

(iv) those payments, and benefits, if any, to which the Executive is entitled by
reason of having been designated a Participant in the UIL CIC Plan II.  The
severance payments, pension supplements and other benefit provisions under the
UIL CIC Plan II shall be controlling and shall supplant the payments and
benefits to which the Executive would be otherwise be entitled under Section
(6)(c)(iv), (v), (vi) and (vii) of this Agreement; expressly provided, however,
that if the severance benefit provided for in Section (6)(c)(iv), taking into
account Section (11)(b) of this Agreement, exceeds the value of the analogous
severance benefit provided under the UIL CIC Plan II, then the amount of the
severance benefit paid under the UIL CIC Plan II shall be determined as provided
in Section (6)(c)(iv), taking into account Section (11)(b) of this Agreement.

13. Section (9) of the Agreement is revised in its entirety to read as follows:

(9)           GROSS UP FOR EXCISE TAX.

Notwithstanding anything to the contrary in the UIL CIC Plan II, and conditioned
upon the Executive providing the release called for in Section (6)(f) and
complying with the confidentiality and non-compete provisions of this Agreement,
in the event that it shall be determined that any payment made and benefits
provided by the Company or UIL to or for the Executive, whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement, the UIL
CIC Plan II or otherwise, would constitute an “excess parachute payment” within
the meaning of Section 280G of the Internal Revenue Code subject to an excise
tax under Code Section 4999 (or any successor provisions) (the “Excise Tax”),
the Executive shall be paid an additional amount (the “Gross-Up Payment”) which
shall be calculated as the amount needed to reimburse the Executive for the
Excise Tax and the additional excise, income and employment taxes imposed on the
Executive due to the Company’s payment of the Excise Tax, so that the net amount
retained by Executive after deduction of any Excise Tax, and any federal, state
and local income and employment tax (including any Excise Tax imposed upon the
Gross-Up Payment itself) shall be equal to the total amount of all payments and
benefits to which the Executive would be entitled from the Company absent the
Excise Tax, but net of all applicable federal, state and local taxes.  Unless

 
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otherwise agreed to by the Executive, the calculation and administration of the
Gross-Up Payment shall be in accordance with the terms of the UIL CIC Plan II,
as in effect on August 4, 2008, and applicable Treasury regulations.

14. Section (11)(b) of the Agreement is hereby revised in its entirety to
provide as follows:

(b)  The Executive acknowledges and agrees that, of the total payments and
benefits to which he would be entitled under Section (6)(c) (termination of the
Executive without Cause) of this Agreement an amount equal to one (1) times his
Target Total Remuneration (or, if less, the lump sum severance amount that would
be payable to the Executive under Section (6)(c) absent this adjustment) shall
be deemed to be on account of, and paid as consideration for, the covenant not
to compete provided in this Section.  The Executive acknowledges and agrees that
the amount attributable to this covenant shall be paid out in twelve (12) equal,
fixed monthly installments beginning with the month following the month in which
the Executive’s Separation from Service occurs, and that such amount shall be
deducted from, and not be in addition to, the amounts otherwise payable under
Section (6)(c) of this Agreement.

In the event that benefits shall become payable under the UIL CIC Plan II rather
than this Agreement, in addition to such amounts as may become payable under the
UIL CIC Plan II on account of an Involuntary Separation from Service, an amount
equal to one (1) times the Executive’s Target Total Remuneration (or, if less,
the lump sum severance amount that would be payable to the Executive under the
UIL CIC Plan II absent the deduction equal to Target Total Remuneration) shall
be deemed to be on account of, and paid as consideration for, the covenant not
to compete provided in this Section, and shall be paid ratably over the twelve
(12) month period hereinbefore provided.

Target Total Remuneration shall be defined as the sum of the following
components of the Executive’s remuneration as most recently approved by the
Compensation and Executive Development Committee of the Board prior to the date
of the Executive’s termination: (1) Base Salary, (2) target annual short-term
incentive award, and (3) target long-term incentive award.

In the event that the Company determines that this covenant has been violated,
no further payments shall be made under this Section, the Executive shall be
obligated immediately to repay any amounts paid hereunder, and the Company shall
have all of the rights and remedies provided under Section (13) of this
Agreement.  Payments hereunder shall be subject to the rabbi trust deposit
requirements of Section (8).

In the event any payments are made in accordance with this Section (11)(b),
payments shall be made in equal, fixed monthly installments beginning with the
month following the month in which the Executive’s Separation from Service
occurs.  Notwithstanding the foregoing, if the value of the payments to be made
in accordance with this Section (11)(b) exceeds two times the lesser of the
Executive’s annualized compensation or the maximum amount that may be taken into
account for qualified plan purposes (in each case determined in accordance with
Treasury Regulations Section 1.409A-

 
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1(b)(9)(iii)(A)), the excess shall be not be paid prior to the first business
day of the month following the date that is six months after the Executive’s
Separation from Service date, at which time that portion of the excess amount
that would have otherwise been paid in the preceding six months shall be paid in
a single lump sum.  No interest or earnings shall be paid on the excess amount
for which payment is delayed.  In no event may the Executive designate the
timing or year of any payment made pursuant to this Section (11)(b) or
accelerate or delay any such payment, nor shall any such payment be made later
than the last day of the second taxable year of the Executive following the
taxable year in which occurs the Executive’s separation from service.  In the
event of the Executive’s death, amounts otherwise payable hereunder shall be
paid to the Executive’s estate.

15. Section (13)(c) of the Agreement is hereby revised in its entirety to
provide as follows:

(c)  Binding Agreement; Assignment.

 
(i)  The Company will require the acquirer of all or substantially all of the
business or assets of the Company (whether directly or indirectly, by purchase
of stock or assets, merger, consolidation or otherwise), by agreement in form
and substance reasonably satisfactory to the Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place.  As used in this Section, the term the “Company” shall include The United
Illuminating Company, UIL Holdings Corporation, and any successor to, or
acquirer of, the business or assets of the Company that executes and delivers
the agreement provided for in this Section (13)(c) or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law.
 

(ii)  This Agreement, and the Executive’s rights and obligations hereunder, may
not be assigned by the Executive.  Any attempted assignment of this Agreement by
the Executive shall be void and of no force and effect.  This Agreement and all
rights of the Executive hereunder shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

16. New Subsection (13)(j) is hereby added to the Agreement to provide as
follows:

(j)  Code Section 409A Compliance.  The parties hereto recognize that certain
provisions of this Agreement may be affected by Section 409A of the Internal
Revenue Code and guidance issued thereunder, and agree to amend this Agreement,
or take such other action as may be necessary or advisable, to comply with
Section 409A.  It is intended that all payments hereunder shall comply with
Section 409A and the regulations promulgated thereunder so as to not subject the
Executive to payment of interest or any additional tax under Section 409A.  In
furtherance thereof, if payment or provision of any amount or benefit hereunder
(including any transfer to a “rabbi” trust or similar funding

 
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entity) that is subject to Section 409A at the time specified herein would
subject such amount or benefit to any additional tax under Section 409A, the
payment or provision of such amount or benefit shall be postponed to the
earliest date on which the payment or provision of such amount or benefit could
be made without incurring such additional tax.  In addition, to the extent that
any regulations or other guidance issued under Section 409A (after application
of the previous provisions of this Section (13)(j)) would result in the
Executive’s being subject to the payment of interest or any additional tax under
Section 409A, the parties agree, to the extent reasonably possible, to amend
this Agreement in order to avoid the imposition of any such interest or
additional tax under Section 409A, which amendment shall have the minimum
economic effect necessary and be reasonably determined in good faith by the
Company and the Executive.

Notwithstanding anything herein to the contrary, it is expressly understood that
at any time the Company (or any related employer treated with the Company as the
service recipient for purposes of Code Section 409A) is publicly traded on an
established securities market (as defined for purposes of Code Section 409A), if
a payment or provision of an amount or benefit constituting a deferral of
compensation is to be made pursuant to the terms of this Agreement to the
Executive on account of a Separation from Service (as defined under the UIL CIC
Plan II) at a time when the Executive is a Specified Employee (as defined for
purposes of Code Section 409A(a)(2)(B)(i)), such deferred compensation shall not
be paid to the Executive prior to the date that is six (6) months after the
Separation from Service.  In the event this restriction applies, the deferred
compensation that the Executive would have otherwise been entitled to during the
restriction period will be accumulated and paid (without adjustment for the
delay in payment) on the first business day of the seventh month following the
date of the Executive’s Separation from Service.

The parties hereto intend that the Agreement, as amended, be consistent with IRS
Notice 2007-78, IRS Notice 2007-86 and other Code Section 409A transition
relief, and it shall be interpreted accordingly.

All of the other terms and conditions of the Agreement shall remain in full
force and effect.

                              THE UNITED ILLUMINATING COMPANY

Attest:
 
By           /s/ James P. Torgerson                
  /s/ Angel Bruno  
James P. Torgerson
   
UIL Holdings Corporation, President and
   
Chief Financial Officer
   
The United Illuminating Company
   
Chief Executive Officer
               
 /s/ Richard J.
Nicholas                                                                                          
   
Richard J. Nicholas

 
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