uil_exh10-28a.htm


    EXHIBIT
10.28a

    


    


    UIL
HOLDINGS CORPORATION

    


    ________________________________

    


    CHANGE
IN CONTROL SEVERANCE PLAN II

    Originally
effective October 24, 2003

    As
amended and restated August 4, 2008

    


    ________________________________

    


    


    


    ARTICLE
I

    


    Purpose
of Plan

    


    1.1           The
purpose of the UIL Holdings Corporation Change in Control Severance Plan
(“Plan”) is to provide the officers and certain other executive employees of UIL
Holdings Corporation (“UIL”), The United Illuminating Company and any other
wholly-owned direct or indirect subsidiary of UIL (UIL and its subsidiaries each
referred to herein as an “Employing Company” and collectively, along with any
successor, as the “Company”) with appropriate assurances of continued income and
other benefits for a reasonable period of time in the event that the
individual’s employment with the Company is terminated under any of the
circumstances described herein, thereby encouraging the continued attention and
dedication of each such employee to the continued success of the
Company.

    


    


    ARTICLE
II

    


    Eligibility
for Participation

    


    2.1           The
Board of Directors of UIL (the “UIL Board”) shall, from time to time and in its
absolute discretion, (i) select the persons to be covered by the Plan (each a
“Participant”), (ii) determine the classification and benefit levels applicable
to such Participant, and (iii) direct that each Participant be notified of this
selection and provided with a copy of the Plan.

    


    2.2           Participation
in the Plan shall not in any respect be deemed to grant the Participant a right
to continued participation in the Plan; nor shall participation in the Plan be
deemed to grant the Participant a right to continued employment by the
Company.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    2.3           A
Participant may be a party to an employment agreement with an Employing Company
that provides for the payment of severance and other benefits to such
Participant under certain circumstances which constitute an Involuntary
Separation from Service.  In the event that a Change in Control has
occurred, as defined in this Plan, and thereafter the Participant experiences an
Involuntary Separation from Service as described in Section 4.2, below, except
as otherwise expressly provided herein or in the Participant’s employment
agreement, benefits under this Plan shall be paid in lieu of the benefits to
which the Participant would or may be entitled to on account of an Involuntary
Separation from Service pursuant to the terms of the Participant’s employment
agreement and in lieu of any benefits a Participant may be eligible for under
any severance plan or policy of the Company that is generally applicable to
employees of the Company.

    


    2.4           Notwithstanding
the foregoing, nothing in this Plan shall impair a Participant’s rights to (a)
regular compensation and benefits through the date of the Participant’s
Separation from Service; (b) deferred compensation and other employee benefits
otherwise payable to a Participant in accordance with the terms of the
Participant’s employment agreement and/or Company plans or arrangements on
account of a Separation from Service which are not contingent on the Separation
from Service being an Involuntary Separation from Service; or (c) compensation
that is payable on account of a non-compete agreement (or comparable provisions
in such Participant’s employment agreement), regardless of whether eligibility
for such compensation shall arise either before or after a Change in
Control.

    


    


    ARTICLE
III

    


    Effect
of Change in Control on Modification or Termination

    


    3.1           Termination
or suspension of the Plan, or any amendment of the Plan that impairs the rights
of any Participant, occurring on or after a Change in Control, as defined
herein, shall not take effect until twenty-four (24) months after the occurrence
of such Change in Control.

    


    3.2           Subject
to Section 3.1, above, the UIL Board may, at any time and from time to time,
remove a Participant from the Plan, or modify or amend, in whole or in part, any
or all of the provisions of the Plan, or suspend or terminate it
entirely.

    


    


    ARTICLE
IV

    


    Eligibility
for Benefits

    


    4.1           A
“Change in Control” of UIL or any subsidiary (an “Employing Company”) occurs on
the date on which any of the following events occur:  a change in the
ownership of the Employing Company;  a change in the effective control
of the


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    Employing
Company; and a change in the ownership of a substantial portion of the assets of
the Employing Company.

     

    (a)           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.

     

     

    (b)           A
change in the effective control of the Employing Company occurs on the date on
which either (i) 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 (ii) 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.

     

     

    (c)           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.

     

     

    (d)           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
§1.409A-3(i)(5)(ii).

     

     

    (e)           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.

     


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    (f)           The
determination as to the occurrence of a Change in Control shall be based on
objective facts and in accordance with the requirements of Internal Revenue
Service Code (“Code”) §409A.

     

    4.2           If
an Employing Company (or its successor) terminates a Participant’s employment
involuntarily other than for Cause, as defined in Section 4.4 below, and under
circumstances constituting an Involuntary Separation from Service, as defined in
Section 4.3, below, during the 24-month period beginning on the date a Change in
Control with respect to the Participant occurs, the benefits described in
Article V hereof shall become payable to the Participant.  Likewise,
if a Participant has an Involuntary Separation from Service after a Constructive
Termination Event, as defined in Section 4.3, below, during the 24-month period
beginning on the date a Change in Control with respect to the Participant occurs
and the Participant’s Employing Company (or its successor) did not have Cause
(as defined in Section 4.4, below) to terminate the Participant’s employment,
the benefits described in Article V hereof shall become payable to the
Participant.

    


    4.3           Involuntary
Separation from Service means a Separation from Service due to the independent
exercise of the unilateral authority of the Participant’s Employing Company (or
its successor) to terminate the Participant’s employment, other than due to the
Participant’s implicit or explicit request, where the Participant was willing
and able to continue working for the Employing Company (or its
successor).

     

    (a)           A
voluntary Separation from Service will be treated as an Involuntary Separation
from Service by the Company for purposes of this Plan if the Separation from
Service occurs under the following circumstances:

     

     

    (1) One (or more) of the following
events arises without the consent of the Participant (a “Constructive
Termination Event”):

     

     

    (i)  A material diminution in the
Participant’s annual Base Salary, unless such reduction is part of, and
consistent with, a general reduction of the compensation rates of all employees
of the Participant’s Employing Company;

     

     

    (ii)  A material diminution in the
Participant’s authority, duties, or responsibilities, including the assignment
of duties inconsistent in any material adverse respect with such Participant’s
position, duties, responsibilities and status with the Participant’s Employing
Company immediately prior to the Change in Control, or material diminishment in
such Participant’s management responsibilities, duties or powers as in effect
immediately prior to the Change in Control, or the removal from or failure to
re-elect such Participant to any such position or office;

     


    
      
         


      

      
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    (iii)  A requirement that the
Participant relocate his or her principal place of employment by more than
seventy-five (75) miles from such location immediately prior to the Change in
Control; or

     

     

    (iv)  Any other action or inaction
that constitutes a material breach by the Participant’s Employing Company (or
its successor) of the agreement under which the Participant provides services,
including (1) a failure to include the Participant 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 Participant’s
participation in the material benefit plans of the Participant’s Employing
Company (or its successor) 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 Participant’s participation
relative to other officers or similarly situated executives of the Company, as
that in effect immediately prior to the Change in Control; (3) a failure to
renew the Participant’s employment agreement at the time such agreement expires,
provided that the Participant 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; or (4) any successor to UIL
fails to assume and adopt this Plan for a period of no less than twenty-four
(24) months following a Change in Control; and

     

     

    (2)  Within thirty-one (31)
days of the occurrence of the Constructive Termination Event the Participant has
given notice to the UIL Board (or the governing board of its successor) stating
that, in the Participant’s opinion, a Constructive Termination Event has
occurred and setting forth in reasonable detail the relevant facts;
and

     

     

    (3)  The Company shall fail
to remedy or otherwise cure the situation within thirty-one (31) days after
receipt of the notice described in (2), above; and

     

     

    (4)  The Separation from
Service occurs within 90 days of the initial occurrence of the Constructive
Termination Event; and

     

     

    (5)  Until the Separation
from Service, the Participant was willing and able to continue working for the
Company and the Company did not have grounds to terminate the Participant’s
employment for Cause.

     


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


     

    (b)           Whether
an Involuntary Separation from Service has occurred will be determined in
accordance with Treasury Regulation §1.409A-1(n).

     

     

    (c)           “Separation
from Service” means a Separation from Service within the meaning of Code §409A
and related regulations.  The UIL Board (or its successor) will
determine, in accordance with Code §409A, whether a Separation from Service has
occurred.

     

     

    (1)  A Participant incurs a
Separation from Service upon termination of employment with the Company and all
affiliates.  For purposes of determining whether another entity is an
affiliate of the Company, common ownership of at least 50% shall be
determinative.

     

     

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

     

     

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

     

    4.4           For
the purposes of the Plan, an Employing Company (or its successor) shall be
deemed to have Cause to terminate a Participant’s employment only upon such
Participant’s (A) commission of a serious crime, such as an act of fraud,
misappropriation of funds, embezzlement, or a crime involving personal
dishonesty or moral turpitude; or (B) willful failure of the Participant to
substantially perform his or her duties (other than by reason of incapacity due
to physical or mental illness or injury); or (C) misconduct that is demonstrably
injurious to the Company or its affiliates.  The placement of an
executive on paid leave for up to ninety (90) days pending a determination of
whether or not there is a basis to terminate the executive for Cause will not
constitute a Constructive Termination Event under Section 4.3.  Any
termination of a Participant by his or her Employing Company (or its successor)
for Cause shall be given in writing and shall specify the relevant facts and
circumstances.

    


    4.5           Except
as provided in Section 4.3(a), in no event shall the voluntary resignation or
retirement of a Participant give rise to any benefits under this
Plan.


    
      
         


      

      
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    ARTICLE
V

    


    Benefits

    


    5.1           In
the event of an Involuntary Separation from Service described in Sections 4.2
and 4.3, above, subject to Section 5.5, below, the Participant shall be entitled
to receive benefits in accordance with Schedule A hereto (as amended from time
to time).  Such benefits may consist of the following:

    


    (a)  A lump sum severance
payment based on the Participant’s (i) Base Salary, or (ii) Total
Compensation.  For purposes of calculating the lump sum severance
payment, Base Salary is determined as of the Participant’s Separation from
Service date, and Total Compensation means the Participant’s Base Salary plus
the target amount payable to such Participant under any annual short-term
executive incentive compensation program of the Company in effect as of the
Participant’s Separation from Service date.  If a lump sum severance
payment shall become payable hereunder, it shall be paid on the thirtieth
(30th) day
following the Participant’s Separation from Service date.

    


    (b)  Benefits under the
Company’s healthcare plans during the COBRA continuation period on the same
terms as are then available to active employees of the Participant’s Employing
Company.

    


    (c)  A supplemental lump sum
payment in lieu of continued coverage under the Company’s life insurance,
disability and other employee welfare and fringe benefit plans (other than
healthcare plans subject to COBRA).  The amount of this supplemental
payment shall be determined as a multiple of the estimated annual cost of
providing replacement coverage, as determined by the UIL Board (or its
successor) in its complete discretion.  The formula for determining a
Participant’s benefit supplement payment shall be as provided on Schedule
A.  If a lump sum benefit supplement payment shall become payable
hereunder, it shall be paid on the thirtieth (30th) day
following the Participant’s Separation from Service date.

    


    (d)  Additional credited
years of service for purposes of calculating benefits payable to the Participant
under the Company’s retiree medical benefit plan(s).

    


    (e)  A
supplemental lump sum payment that is actuarially equivalent to the amount by
which the value of the Participant’s accrued benefit under The United
Illuminating Company Pension Plan would have increased had the Participant been
credited with additional years of credited service for purposes of calculation
of benefits payable under the Pension Plan.  If a lump sum
supplemental pension payment shall become payable hereunder, it shall be paid on
the thirtieth (30th) day
following the Participant’s Separation from Service date.


    
      
         


      

      
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    (f)  A
tax “gross-up” payment if the Participant becomes subject to an excise tax under
Code §4999 on account of any payments or benefits that are determined to
constitute an “excess parachute payment” within the meaning of Code
§280G.  If a tax gross-up payment becomes payable hereunder, it shall
be calculated and paid as provided in Schedule B hereto.

    


    Notwithstanding the foregoing, except
with respect to Participants who have been designated as eligible for a tax
gross-up payment, as provided on Schedule A, if any portion of the payments that
a Participant has the right to receive hereunder would constitute “excess
parachute payments” (as defined in Code §280G) subject to the excise tax imposed
by Code §4999, the amount otherwise payable under subsection (a), shall be
reduced to the largest amount that will result in no portion of such excess
parachute payments being subject to the excise tax imposed by Code
§4999.

    


    5.2           Unless
otherwise expressly approved by the UIL Board (or its successor), no benefits
shall be payable under the terms of this Plan to any individual who is covered
by, and entitled to benefits under, another plan of the Company (or any
affiliate) providing severance benefits upon a Change In Control.

    


    5.3           In
no event may a Participant designate the timing or year of any payment payable
under this Plan.  All payments due under Subsections 5.1(a), (c) and
(e) shall be made, if at all, by no later than the end of the “applicable 2-1/2
month period” described in Treasury Regulation
§1.409A-1(b)(4)(i)(A).  Notwithstanding the foregoing, at any time
that UIL (or its successor) or any related employer treated as the service
recipient for purposes of Code §409A is publicly traded on an established
securities market (as defined for purposes of Code §409A), if a distribution of
amounts constituting a deferral of compensation is to be made pursuant to the
terms of this Plan to a Specified Employee (as defined for purposes of Code
§409A(a)(2)(B)(i)) on account of a Separation from Service, such deferred
compensation shall not be paid to the Specified Employee prior to the date that
is six months after the Separation from Service.  In the event this
restriction applies, the deferred compensation that the Specified Employee 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.

    


    5.4           If
any Participant who has become entitled to benefits under this Article V should
die while any amounts are still payable to him or her hereunder, all such
amounts shall be paid to the Participant’s estate.

    


    5.5           All
payments and obligations of the Company under this Plan shall be conditioned
upon the execution and delivery by the Participant to the Company of a full and
effective release by the Participant of any liability by the Company to the
Participant in form and substance reasonably satisfactory to the
Company.

    


    5.6           A
Participant’s benefits that become payable hereunder shall be forfeited and
discontinued if such Participant violates the terms of any agreement with
the


    
      
         


      

      
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    Company
or Company policy relating to confidential information, non-competition or
disclosure and assignment of inventions and discoveries, or if such Participant
engages in conduct that is materially injurious to the Company, monetarily or
otherwise, all as determined by the Company, in its sole
discretion.

    


    


    ARTICLE
VI

    


    General
Provisions

    


    6.1           Unless
otherwise agreed to by the parties, any dispute or controversy arising under or
in connection with the Plan shall be settled exclusively by arbitration in New
Haven, Connecticut, in accordance with the rules of the American Arbitration
Association then in effect, and judgment may be entered on the arbitration award
in any court having jurisdiction.

    


    6.2           In
the event that a Participant institutes any legal action to enforce his or her
rights under the Plan, and provided that he or she is the prevailing party, such
Participant shall be entitled to recover from the Company any actual and
documented expenses for reasonable attorney’s fees and disbursements incurred by
him or her.

    


    6.3           Any
notice or other communication pursuant to the Plan intended for a Participant
shall be deemed given when personally delivered to such Participant or sent to
such Participant by registered or certified mail, return receipt requested, at
such Participant’s residence address as it appears on the records of the
Participant’s Employing Company (or its successor), or at such other address as
such Participant shall have specified by notice to the Company in the manner
herein provided.  Any notice or other communication pursuant to the
Plan intended for the Participant’s Employing Company (or its successor) shall
be deemed given when personally delivered to the Secretary or Assistant
Secretary of UIL (or its successor), or sent to the attention of the Secretary
or Assistant Secretary by registered or certified mail, return receipt
requested, at the Company’s headquarters at 157 Church Street, New Haven,
Connecticut, or at such other address as the Company shall have specified by
notice to all of the Participants in the manner herein provided.

    


    6.4           A
Participant may not assign, anticipate, transfer, pledge, hypothecate or
alienate in any manner any interest arising under the Plan, nor shall any such
interest be subject to attachment, bankruptcy proceedings or to any other legal
processes or to the interference or control of creditors or others.

    


    6.5           It
is intended that the decisions of the UIL Board (or its successor) or its
delegate shall be exclusive and final with respect to the interpretation or
application of the Plan.  If any body of law should be used or applied
in determining the meaning or effect of the Plan, it shall be the law of the
State of Connecticut.


    
      
         


      

      
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    6.6           In
the event any provision of the Plan, if challenged, would be declared invalid,
illegal or unenforceable, such provision shall be construed and enforced as if
it had been more narrowly drawn so as not to be illegal, invalid or
unenforceable and the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired thereby.

    


    


    IN
WITNESS WHEREOF, the undersigned has set his hand, this 4th day of August,
2008.

    


                                       UIL HOLDINGS CORPORATION,
INC.

    


    
      	 
      	 
      	 
      
	 
      	 
      	
              By:    /s/
      James P. Torgerson            

            
	 
      	 
      	
              Its President & Chief
      Executive Officer

            
	 
      	 
      	
              Duly
  Authorized

            


    

    



    
      
         


      

      
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    SCHEDULE
A

    Part
1

    Executive
Officers

    as of
August 4, 2008

    


     

    


     

    
      	
              Name

            	
              Lump Sum Severance1

            	
              Medical/ Dental (active
      employee terms)

            	
              Pension Supplement (lump
      sum)2

            	
              Welfare Benefit Supplement
      (lump sum)3

            	
              Retiree
      Medical Credit

            	
              Code
      §280G

            
	
              Susan
      E. Allen

            	
              2X
      Total Compensation

            	
              subsidized
      during COBRA period

            	
              2
      years

            	
              2X

            	
              2
      years

            	
              Cut-back

            
	
              Steven
      P. Favuzza

            	
              1.5X
      Total Compensation

            	
              subsidized
      during COBRA period

            	
              no

            	
              1.5X

            	
              1.5
      years

            	
              Cut-back

            
	
              Deborah
      C. Hoffman

            	
              1.5-2X
      Total Compensation4

            	
              subsidized
      during COBRA period

            	
              no

            	
              1.5X

            	
              1.5
      years

            	
              Cut-back

            
	
              Richard
      J. Nicholas

            	
              2X
      Total Compensation, minus 1X Target Total Remuneration

            	
              subsidized
      during COBRA period

            	
              2
      years

            	
              2X

            	
              2
      years

            	
              Gross-up

            
	
              Linda
      L. Randell

            	
              2X
      Base Salary, minus 1X Target Total Remuneration

            	
              subsidized
      during COBRA period

            	
              no

            	
              1X

            	
              not
      applicable

            	
              Gross-up

            


    

     

     

    
      
 1 Total
Compensation is defined for purposes of the Plan as the Participant’s base
salary plus the target amount payable to such employee under any annual short
term executive incentive compensation program of the Company (or its successor)
in effect as of the Participant’s Separation from Service
date.  Target Total Remuneration is the sum of the following as most
recently approved by the Compensation and Executive Development Committee of the
Board prior to the Separation from Service: base salary, target annual
short-term incentive award and target long-term incentive award.

    
        
        2 Except
as otherwise noted, the Pension Supplement is calculated as the difference
between the pension benefit actually payable under the Company’s qualified
Pension Plan and the pension benefit that would have been payable had the
Participant been credited with the additional years of service shown
above.

      

        
        3 The
Benefit Supplement is a fixed dollar amount, currently $5,500, multiplied by the
multiplier shown above.

      

        
        4 Ms.
Hoffman’s lump sum severance payment is based on her years of service (0.08333
times years of service times Total Compensation), with a floor of 1.5 times her
Total Compensation and a cap of 2 times her Total
Compensation

      

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
 

    
      
        	
                Name

              	
                Lump Sum Severance1

              	
                Medical/ Dental (active
      employee terms)

              	
                Pension Supplement (lump
      sum)2

              	
                Welfare Benefit Supplement
      (lump sum)3

              	
                Retiree
      Medical Credit

              	
                Code
      §280G

              


      

    

    
      	
              Richard
      J. Reed

            	
              2X
      Total Compensation

            	
              subsidized
      during COBRA period

            	
              no

            	
              1.5X

            	
              1.5
      years

            	
              Cut-back

            
	
              James
      P. Torgerson

            	
              3X
      Base Salary, minus 1X Target Total Remuneration

            	
              subsidized
      during COBRA period

            	
              no

            	
              3X

            	
              not
      applicable

            	
              Gross-up

            
	
              Anthony
      J. Vallillo

            	
              2X
      Total Compensation, minus 1X Target Total Remuneration

            	
              subsidized
      during COBRA period

            	
              2
      years5

            	
              2X

            	
              2
      years

            	
              Gross-up

            


    

    


    


    

      

    

    
      5 Mr.
Vallillo has a special enhanced SERP benefit under the terms of his employment
agreement.  If benefits become payable under this Plan, he will be
credited with 2 years of additional service for purposes of his special SERP
(subject to applicable limits thereunder), in lieu of the supplemental SERP
benefit that may be payable hereunder.

    


    
      
         


      

      
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    SCHEDULE
B

    TAX
GROSS-UP PAYMENTS

    


    


    1.           In
the event a Participant becomes eligible for a tax gross-up payment pursuant to
this Plan or the Participant’s employment agreement, on account of any payments
or benefits constituting an “excess parachute payment” within the meaning of
Code §280G and the imposition of an excise tax on the Participant under Code
§4999 (the “Excise Tax”), the Participant shall be paid an amount (the “Gross-Up
Payment”) which shall be calculated as the amount needed to reimburse the
Participant for the Excise Tax and the additional excise, income and employment
taxes imposed on the Participant due to the Company’s payment of the Excise Tax,
so that the net amount retained by the Participant after deduction of any Excise
Tax, and any federal, state or 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 Participant would be
entitled pursuant to this Plan absent the Excise Tax, but net of all applicable
federal, state and local taxes.  (For purposes of this Schedule B, the
term “Participant” shall an include an employee who is entitled to a Gross-Up
Payment pursuant to the terms of his or her employment agreement, regardless of
whether such employee is also a Participant in this Plan.)

    


    2.           The
Gross-Up Payment, if any, shall be paid, at the discretion of the Company,
directly to governmental authorities through tax withholding on the
Participant’s behalf, or to the Participant as soon as practicable following the
payment of the excess parachute payment, but in any event not later than 30 days
immediately following such payment.

    


    3.           Subject
to the provisions of Paragraph 4, below, all determinations required to be made
under this Schedule B, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by tax counsel appointed by UIL
(or its successor) (the “Tax Counsel”), which shall provide its determinations
and any supporting calculations both to the Company and the Participant within
10 business days of having made such determination.  The Tax Counsel
shall consult with the Company’s benefit consultants and counsel in determining
which payments to, or for the benefit of, the Participant are to be deemed to be
“parachute payments” within the meaning of Code §280G(b)(2). Any such determination by
the Tax Counsel shall be final and binding upon the Company and the
Participant.  All fees and expenses of the Tax Counsel (and, if
applicable, benefits consultants or other counsel) shall be borne solely by the
Company.  As a result of the uncertainty in the application of Code
§4999 at the time of the initial determination by the Tax Counsel hereunder, it
is possible that Gross-Up Payments, which will not have been made by the
Company, should have been made (“Underpayment”).  In the event that it
is ultimately determined in accordance with the procedures set forth in
Paragraph 4, below, that the Participant is required to make a payment of Excise
Tax, the Tax Counsel shall determine the amount of the Underpayment that has
occurred, and any such Underpayment shall be paid by the


    
      
         


      

      
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    Company
to or for the benefit of the Participant within 30 days immediately following
the underpayment determination.

    


    4.           The
Participant shall notify UIL (or its successor) (“the Corporation”) in writing
of any claims by the Internal Revenue Service that, if successful, would require
the payment by the Corporation of any, or any additional, Gross-Up
Payment.  Such notification shall be given as soon as practicable but
no later than 30 days after the Participant actually receives notice in writing
of such claim and shall apprise the Corporation of the nature of such claim and
the date on which such claim is requested to be paid.  The Participant
shall not pay such claim prior to the expiration of the 30-day period following
the date on which he gives such notice to the Corporation (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due).  If the Corporation notifies the Participant in writing prior
to the expiration of such period that it desires to contest such claim, the
Participant shall:

    


    (a)  give the Corporation any
information reasonably requested by the Corporation relating to such
claim;

    


    (b)  take such action in
connection with contesting such claim as the Corporation shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney selected by the
Corporation and reasonably acceptable to the Participant;

    


    (c)  cooperate with the
Corporation in good faith in order to contest such claim effectively;
and

    


    (d)  if the Corporation
elects not to assume and control the defense of such claim, permit the
Corporation to participate in any proceedings relating to such
claim;

    


    provided,
however, that the Corporation shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Participant harmless, on an after-tax
basis, for any Excise Tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the foregoing provisions of this
Paragraph 4, the Corporation shall have the right, at its sole option, to assume
the defense of and control all proceedings in connection with such contest, in
which case it may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may either direct the Participant to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner, and the Participant
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Corporation shall determine; provided, however, that if the
Corporation directs the Participant to pay such claim and sue for a refund, the
Corporation shall advance the amount of such payment to the Participant, on an
interest-free basis, and shall indemnify and hold the Participant harmless, on
an after-tax basis,


    
      
         


      

      
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    from any
Excise Tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Participant
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount.  Furthermore, the Corporation’s right
to assume the defense of and control the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder, and the
Participant shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

    


    5.           If,
after the receipt by the Participant of an amount advanced by the Corporation
pursuant to Paragraph 4, the Participant becomes entitled to receive any refund
with respect to such claim, the Participant shall (subject to the Corporation’s
complying with the requirements of Paragraph 4) promptly pay to the Corporation
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto).  If, after the receipt by the
Participant of an amount advanced by the Corporation pursuant to Paragraph 4, a
determination is made that the Participant shall not be entitled to any refund
with respect to such claim, and the Corporation does not notify the Participant
in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid, and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

    


    6.           Notwithstanding
the foregoing, any and all payments made pursuant to this Schedule B shall be in
accordance with Treasury Regulations §1.409A-3(i)(1)(v), including, but not
limited to, the following:

    


    (a)  Payments
constituting reimbursements of the designated portions of the applicable taxes
imposed on the Participant as a result of compensation paid or made available to
the Participant will be made by the end of the Participant’s taxable year next
following the taxable year in which the Participant remits the applicable
taxes.

    


    (b)  Payments
constituting reimbursements of expenses incurred due to a tax audit or
litigation addressing the existence or amount of a tax liability, whether
federal, state or local shall be made by the end of the participant’s taxable
year next following the taxable year in which the taxes that are the subject of
the audit or litigation are remitted to the taxing authority, or where as a
result of such audit or litigation no taxes are remitted, the end of the
Participant’s taxable year following the Participant’s taxable year in which the
audit is completed or there is a final and nonappealable settlement or other
resolution of the litigation.

    
 

     

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