uil_exh10-41.htm


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    EXHIBIT
10.41

    


    


    


    


    


    


    


    UIL
HOLDINGS CORPORATION

    DEFERRED
COMPENSATION PLAN

    


    GRANDFATHERED
BENEFIT PROVISIONS

    


    


    


    


    originally
adopted effective January 27, 2003,

    as
amended through August 4, 2008

    


    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    TABLE
OF CONTENTS

    


    
      	 
      	
              Page

            
	
              INTRODUCTION

            	
              1

            
	
              ARTICLE
      I – TITLE AND DEFINITIONS

            	
              1

            
	
              1.1                 Definitions

            	
              1

            
	
              ARTICLE
      II – PARTICIPATION

            	
              7

            
	
              2.1                 Determination
      of Eligible Persons

            	
              7

            
	
              2.2                 Enrollment;
      Duration of Participation

            	
              7

            
	
              2.3                 Transfers
      to Non-Participating Related Companies

            	
              7

            
	
              2.4                 Amendment
      of Eligibility Criteria

            	
              7

            
	
              ARTICLE
      III – DEFERRAL ELECTIONS

            	
              7

            
	
              3.1                 Elections
      to Defer Compensation

            	
              7

            
	
              3.2                 Deemed
      Investment Elections

            	
              8

            
	
              3.3                 Elections
      as to Form and Timing of Payment

            	
              10

            
	
              ARTICLE
      IV – COMPENSATION DEFERRAL AND COMPANY CONTRIBUTION
    ACCOUNTS

            	
              11

            
	
              4.1                 Compensation
      Deferral Subaccount

            	
              11

            
	
              4.2                 Company
      Discretionary Contribution Subaccount

            	
              11

            
	
              4.3                 Company
      Matching Contribution Subaccount

            	
              11

            
	
              4.4                 Deferred
      Restricted Stock Account

            	
              12

            
	
              ARTICLE
      V – VESTING

            	
              12

            
	
              5.1                 Vesting

            	
              12

            
	
              5.2                 Vesting
      Upon Death/Change in Control

            	
              12

            
	
              ARTICLE
      VI – DISTRIBUTIONS

            	
              12

            
	
              6.1                 Manner
      of Payment – Cash vs. Stock

            	
              12

            
	
              6.2                 Distribution
      of Grandfathered Accounts

            	
              13

            
	
              6.3                 Early
      Non-Scheduled Distributions

            	
              15

            
	
              6.4                 Hardship
      Distribution

            	
              16

            
	
              6.5                 Inability
      to Locate Participant

            	
              16

            
	
              ARTICLE
      VII – ADMINISTRATION

            	
              16

            
	
              7.1                 Committee
      Action

            	
              16

            
	
              7.2                 Powers
      and Duties of the Committee

            	
              17

            
	
              7.3                 Construction
      and Interpretation

            	
              17

            
	
              7.4                 Information

            	
              17

            
	
              7.5                 Compensation,
      Expenses and Indemnity

            	
              18

            
	
              7.6                 Filing
      a Claim

            	
              18

            
	
              7.7                 Appeal
      of Denied Claims

            	
              19

            
	
              ARTICLE
      VIII – MISCELLANEOUS

            	
              20

            
	
              8.1                 Unsecured
      General Creditor

            	
              20

            
	
              8.2                 Restriction
      Against Assignment

            	
              20

            
	
              8.3                 Withholding

            	
              21

            
	
              8.4                 Amendment,
      Modification, Suspension or Termination

            	
              21

            
	
              8.5                 Governing
      Law

            	
              21

            
	
              8.6                 Receipt
      or Release

            	
              21

            
	
              8.7                 Payments
      on Behalf of Persons Under Incapacity

            	
              21

            
	
              8.9                 Adjustments;
      Assumptions of Obligations

            	
              21

            
	
              8.10                 Headings

            	
              22

            
	
              EXHIBIT
      A - PARTICIPATING BUSINESS UNITS

            	
              23

            


    

    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    UIL
HOLDINGS CORPORATION

    DEFERRED
COMPENSATION PLAN

    GRANDFATHERED
BENEFIT PROVISIONS

    


    


    INTRODUCTION

    


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

    


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

    


    ARTICLE
I

    TITLE AND
DEFINITIONS

    


    1.1           Definitions.

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


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

    


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

    


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

    


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

    


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

    


    For
purposes of this definition:

    


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

    


    (ii)  A change in the
effective control of the Employing Company occurs on the date on which either
(A) a person, or more than one person acting as a group, acquires ownership of
stock of the Employing Company possessing 30% or more of the total voting power
of the stock of the Employing Company, taking into account all such stock
acquired during the 12-month period ending on the date of the most recent
acquisition, or (B) a majority of the members of the Employing Company’s Board
of Directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the
members

    of such
Board of Directors prior to the date of the appointment or election, but only if
no other corporation is a majority shareholder of the Employing
Company.

    


    
      
        
           


        

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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


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

    


    "Employer" shall mean the
Company and its Affiliates.

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    “Performance Share Award” or
“Performance Share”
shall mean a phantom stock award issued under the UIL Holdings Corporation
CEO/CFO Long Term Incentive Program, the UIL Holdings Corporation UI Long-Term
Incentive Program, the UIL Holdings Corporation UIL Long-Term Incentive Program,
or the UIL Holdings Corporation Xcelecom Long-Term Incentive Program, which
awards are settled in shares of Stock drawn from the UIL Holdings Corporation
1999 Restated Stock Plan, with the limited exception of certain of the
Performance Share awards payable in cash to the CEO.

    Notwithstanding
the foregoing, because no deferral of a Performance Share award vested prior to
January 1, 2005, all such deferrals shall be governed by the provisions of
this Plan relating to Non-Grandfathered Benefits.

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

        
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    ARTICLE
II

    PARTICIPATION

    


    2.1           Determination of Eligible
Persons.

    


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

    


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

    


    2.2           Enrollment; Duration of
Participation.

    


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

    


    2.3           Transfers to
Non-Participating Related Companies.

    


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

    


    2.4           Amendment of Eligibility
Criteria.

    


    The Committee may change the criteria
for eligibility on a prospective basis.

    ARTICLE
III

    DEFERRAL
ELECTIONS

    


    3.1           Elections to Defer
Compensation.

    


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

    


    


    
      
        
           


        

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

    


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

    


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

    


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

    


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

    


    3.2           Deemed Investment
Elections.

    


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

    


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

    


    
      
        
           


        

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

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    (c)  Each election as to the
timing and form of payment shall apply only for one Plan Year, and only to the
Compensation Deferrals, deferrals of Restricted Stock, deferrals of
Performance

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

    


    
      
        
           


        

        
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    ARTICLE
IV

    COMPENSATION DEFERRAL AND
COMPANY CONTRIBUTION ACCOUNTS

    


    4.1           Compensation Deferral
Subaccount.

    


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

    


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

    


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

    


    4.2           Company Discretionary
Contribution Subaccount.

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

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

    


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

    


    4.4           Deferred Restricted Stock
Account.

    


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

    


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

    


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

    


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

    


    


    ARTICLE
V

    VESTING

    


    5.1           Vesting.

    


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

    


    5.2           Vesting Upon Death/Change in
Control.

    


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

    


    


    ARTICLE
VI

    DISTRIBUTIONS

    


    6.1           Manner of Payment—Cash vs.
Stock.

    


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

    


    
      
        
           


        

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

    


    6.2           Distribution of
Grandfathered Accounts.

    


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

    


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

    


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

    


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

    


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

    


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

    (i) annual
installments over five (5) years beginning on the Participant’s Payment
Date;

    (ii) annual
installments over ten (10) years beginning on the Participant’s Payment
Date;

    


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

    


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

    


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

    


    
      
        
           


        

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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    


    
      
        
           


        

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

    


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

    


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

    


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

    


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

    


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

    


    6.3           Early Non-Scheduled
Distributions.

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

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

    


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

    


    6.4           Hardship
Distribution.

    


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

    


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

    


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

    


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

    


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

    


    6.5           Inability to Locate
Participant.

    


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

    


    


    ARTICLE
VII

    ADMINISTRATION

    


    7.1           Committee
Action.

    


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

    


    
      
        
           


        

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

    


    7.2           Powers and Duties of the
Committee.

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    7.3           Construction and
Interpretation.

    


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

    


    7.4           Information

    


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

    


    
      
        
           


        

        
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    7.5           Compensation, Expenses and
Indemnity.

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

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

    


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

    


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

    


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

    


    
      
        
           


        

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

    


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

    


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

    


    


    ARTICLE
VIII

    MISCELLANEOUS

    


    8.1           Unsecured General
Creditor.

    


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

    


    8.2           Restriction Against
Assignment.

    


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

    


    
      
        
           


        

        
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    8.3           Withholding.

    


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

    


    8.4           Amendment, Modification,
Suspension or Termination.

    


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

    


    8.5           Governing
Law.

    


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

    


    8.6           Receipt or
Release.

    


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

    


    8.7           Payments on Behalf of
Persons Under Incapacity.

    


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

    


    8.8           Limitation of Rights and
Employment Relationship.

    


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

    


    8.9           Adjustments; Assumptions of
Obligations.

    


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

    


    
      
        
           


        

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

            


    

    


    8.10           Headings.

    


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

    


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

    


                                            UIL HOLDINGS
CORPORATION

    


    


                                            By    /s/ James P.
Torgerson__________________

                                                                   James P.
Torgerson

                                             Its President & Chief Executive
Officer

        


    
      
        
           


        

        
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    EXHIBIT
A

     

    PARTICIPATING
BUSINESS UNITS

     

    As
of January 1, 2008

     

    


     

    Company
Name                                                                                                     Date of
Participation

     

    The
United Illuminating Company
("UI")                                                                                           2/1/03

     

     

     

     

     

     

     

     23