uil_exh10-42.htm


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    EXHIBIT
10.42

    


    


    


    


    


    


    


    


    UIL
HOLDINGS CORPORATION

    DEFERRED
COMPENSATION PLAN

    


    NON-GRANDFATHERED
BENEFIT PROVISIONS

    


    


    


    


    


    originally
adopted effective January 27, 2003,

    as
amended through August 4, 2008

    


    


    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    TABLE
OF CONTENTS

    


    
      	 
      	
              Page

            
	
              INTRODUCTION

            	
              1

            
	
              ARTICLE
      I – TITLE AND DEFINITIONS

            	
              1

            
	
              1.1         Definitions

            	
              1

            
	
              ARTICLE
      II – PARTICIPATION

            	
              8

            
	
              2.1         Determination
      of Eligible Persons

            	
              8

            
	
              2.2         Enrollment;
      Duration of Participation

            	
              8

            
	
              2.3         Transfers
      to Non-Participating Related Companies

            	
              8

            
	
              2.4         Amendment
      of Eligibility Criteria

            	
              8

            
	
              ARTICLE
      III – DEFERRAL ELECTIONS

            	
              9

            
	
              3.1         Elections
      to Defer Compensation

            	
              9

            
	
              3.2         Deemed
      Investment Elections

            	
              10

            
	
              3.3         Elections
      as to Form and Timing of Payment

            	
              12

            
	
              3.4         Code
      Section 409A Transition Provisions

            	
              13

            
	
              ARTICLE
      IV – COMPENSATION DEFERRAL AND COMPANY CONTRIBUTION
    ACCOUNTS

            	
              14

            
	
              4.1         Compensation
      Deferral Subaccount

            	
              14

            
	
              4.2         Company
      Discretionary Contribution Subaccount

            	
              14

            
	
              4.3         Company
      Matching Contribution Subaccount

            	
              14

            
	
              4.4         Deferred
      Restricted Stock Account

            	
              15

            
	
              4.5         Deferred
      Performance Share Account

            	
              15

            
	
              ARTICLE
      V – VESTING

            	
              16

            
	
              5.1         Vesting

            	
              16

            
	
              5.2         Vesting
      Upon Death/Change in Control

            	
              16

            
	
              ARTICLE
      VI – DISTRIBUTIONS

            	
              16

            
	
              6.1         Manner
      of Payment – Cash vs. Stock

            	
              16

            
	
              6.2         Distribution
      of Accounts

            	
              16

            
	
              6.3         Hardship
      Distribution

            	
              19

            
	
              6.4         Inability
      to Locate Participant

            	
              19

            
	
              6.5         Uninvested
      Amounts

            	
              19

            
	
              ARTICLE
      VII – ADMINISTRATION

            	
              19

            
	
              7.1         Committee
      Action

            	
              19

            
	
              7.2         Powers
      and Duties of the Committee

            	
              20

            
	
              7.3         Construction
      and Interpretation

            	
              20

            
	
              7.4         Information

            	
              20

            
	
              7.5         Compensation,
      Expenses and Indemnity

            	
              21

            
	
              7.6         Filing
      a Claim

            	
              21

            
	
              7.7         Appeal
      of Denied Claims

            	
              22

            
	
              ARTICLE
      VIII – MISCELLANEOUS

            	
              23

            
	
              8.1         Unsecured
      General Creditor

            	
              23

            
	
              8.2         Restriction
      Against Assignment

            	
              23

            
	
              8.3         Withholding

            	
              24

            
	
              8.4         Amendment,
      Modification, Suspension or Termination

            	
              24

            
	
              8.5         Governing
      Law

            	
              24

            
	
              8.6         Receipt or
      Release

            	
              24

            
	
              8.7         Payments
      on Behalf of Persons Under Incapacity

            	
              24

            
	
              8.8         Limitations
      of Rights and Employment Relationship

            	
              24

            
	
              8.9         Adjustments;
      Assumptions of Obligations

            	
              25

            
	
              8.10       Headings

            	
              25

            
	
              EXHIBIT
      A - PARTICIPATING BUSINESS UNITS

            	
              26

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    


    UIL
HOLDINGS CORPORATION

    DEFERRED
COMPENSATION PLAN

    NON-GRANDFATHERED
BENEFIT PROVISIONS

    


    


    INTRODUCTION

    


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

    


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

    


    


    ARTICLE
I

    TITLE AND
DEFINITIONS

    


    1.1           Definitions.

    


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

    


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

    


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

    


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

    


    "Beneficiary" or "Beneficiaries" shall mean the
person or persons, including a trustee, personal representative or other
fiduciary, last designated in writing by a Participant in accordance with
procedures established by the Committee to receive the benefits specified
hereunder in the event of the Participant's death.  No beneficiary
designation shall become effective until it is filed with the Committee (or the
Recordkeeper).  Any designation shall be revocable at any time through
a written instrument filed

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    by the
Participant with the Committee (or the Recordkeeper) with or without the consent
of the previous Beneficiary, provided, however, that no designation of a
Beneficiary other than the Participant's spouse shall be valid unless consented
to in writing by such spouse.  If there is no such designation or if
there is no surviving designated Beneficiary, then the Participant's surviving
spouse shall be the Beneficiary.  If there is no surviving spouse to
receive any benefits payable in accordance with the preceding sentence, the duly
appointed and currently acting personal representative of the Participant's
estate shall be the Beneficiary.  In any case where there is no such
personal representative of the Participant's estate duly appointed and acting in
that capacity within 90 days after the Participant's death (or such extended
period as the Committee determines is reasonably necessary to allow such
personal representative to be appointed, but not to exceed 180 days after the
Participant's death), then Beneficiary shall mean the person or persons who can
verify by affidavit or court order to the satisfaction of the Committee that
they are legally entitled to receive the benefits specified
hereunder.  In the event any amount is payable under the Plan to a
minor, payment shall not be made to the minor, but instead be paid to such
minor's legal guardian duly appointed and currently acting to hold the funds for
such minor.  If no guardian of the estate for the minor is duly
appointed and currently acting within 60 days after the date the amount becomes
payable, payment shall be deposited with the court having jurisdiction over the
estate of the minor.  Payment by the Company pursuant to any unrevoked
Beneficiary designation, or to the Participant's estate if no such designation
exists, of all benefits owed hereunder shall terminate any and all liability of
the Company.

    


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

    


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

    


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

    


    For
purposes of this definition:

    


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

    


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

    


    


    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    “Compensation” shall mean, in
the case of all Eligible Employees, Base Salary, increases in Base Salary
received during the Plan Year, incentive awards, deferrals of compensation
in

    


    
      
        
           


        

        
          3

          
            

          

        

        
           


        

      

    

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    "Eligible Person" shall mean
each Eligible Employee or Eligible Director of the Company or a participating
Business Unit, to the extent that such individual is eligible to participate in
the Plan, as determined in Section 2.1.

    


    "Employer" shall mean the
Company and its Affiliates.

    


    
      
        
           


        

        
          4

          
            

          

        

        
           


        

      

    

    


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

    


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

    


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

    


    "Hardship Distribution" shall
mean a distribution made on account of an Unforeseeable Emergency as defined for
purposes of Code Section 409A, including Treasury Regulation Section
1.409A-3(i)(3).  Generally, this means a severe financial hardship of
the Participant resulting from a sudden and unexpected illness or accident of
the Participant or of his or her spouse, beneficiary or dependent, loss of a
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant.

    


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

    


    “Non-Grandfathered Amount”
means any amount deferred under the Plan which is not a Grandfathered
Amount.  A “Grandfathered Amount” means the vested Account Balances of
Plan Participants determined as of December 31, 2004, together with actual or
notional earnings thereon accruing after December 31,
2004.  Non-Grandfathered Amounts shall be subject to requirements of
Code Section 409A and the terms of this Plan document.  Grandfathered
Amounts shall be subject to the terms of the Plan document entitled “UIL
Holdings Corporation Deferred Compensation Plan Grandfathered Benefit
Provisions.”

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

        
          5

          
            

          

        

        
           


        

      

    

    


    "Restricted Stock" shall mean
shares of Stock issued under the Restricted Stock feature of the UIL Holdings
Corporation 1999 Amended and Restated Stock Plan, the UIL Holdings Corporation
2008 Stock and Incentive Compensation Plan or any other stock plan of the
Company, which shares are subject to forfeiture based on non-compliance with
certain enumerated criteria.

    


    “Restricted Stock Award” shall
mean any award of Restricted Stock which, if deferred under this Plan, shall be
credited as Restricted Stock Units, and which is settled in shares of Company
Stock that may be drawn from this Plan, the UIL Holdings Corporation 1999
Amended and Restated Stock Plan, the UIL Holdings Corporation 2008 Stock and
Incentive Compensation Plan or any other stock plan of the Company which allows
for awards to be deferred pursuant to the terms of this Plan, to the extent
permitted under the terms of said plans.

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

        
          6

          
            

          

        

        
           


        

      

    

    


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

    


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

    


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

    


    "Stock Fund" or "Company Stock Fund" shall mean
the deemed, unitized, investment Fund established to record (i) Participants'
deemed investments in Stock Units, (ii) Designated Individuals' deferrals of
Restricted Stock in Stock Units, (iii) Company Matching Contributions invested
in Stock Units, (iv) Stock Units credited to Participants’ Accounts upon the
vesting of deferred Performance Shares, and (v) Dividend Equivalents deemed
reinvested in Stock Units.  The Company has reserved 83,333 (post
split) shares of Company Stock for deemed investment in this
Plan.  Such Stock Units shall be settled in Shares of Company Stock
that may be drawn from this Plan, the UIL Holdings Corporation 1999 Amended and
Restated Stock Plan, the UIL Holdings Corporation 2008 Stock and Incentive
Compensation Plan or any other stock plan of the Company which allows for awards
to be deferred pursuant to the terms of this Plan, to the extent permitted under
the terms of said plans.

    


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

    


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

    


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

    


    
      
        
           


        

        
          7

          
            

          

        

        
           


        

      

    

    


    ARTICLE
II

    PARTICIPATION

    


    2.1           Determination of Eligible
Persons.

    


    All officers of the Company and its
Business Units who have been selected by the Committee shall be eligible to
participate in this Plan.  Any other key management or highly
compensated Employee from time to time designated by the Committee to be
eligible to participate shall also be considered an Eligible Employee under the
Plan.

    


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

    


    Notwithstanding the foregoing, this
portion of the Plan applies only to Eligible Employees and Directors who are
Eligible Persons on or after January 1, 2005, and only Non-Grandfathered Amounts
shall be subject to the terms of this Plan document.

    


    2.2           Enrollment; Duration of
Participation.

    


    An Eligible Person shall become a
Participant in the Plan by filing a Deferral Election in accordance with Section
3.1 during an Election Period, in accordance with such procedures as may be
established from time to time by the Committee.  An individual who, at
any time, ceases to be an Eligible Person as determined in the discretion of the
Committee shall not be permitted to enter into future Deferral Elections, and no
such Deferral Elections will be allowed until such time as the individual again
becomes an Eligible Person; expressly provided, however, that nothing herein
shall prohibit the Company from giving effect to any previously filed Deferral
Election that was timely made.  An individual shall remain a
Participant in the Plan with respect to amounts already deferred that have not
yet been distributed or forfeited.

    


    2.3           Transfers to
Non-Participating Related Companies.

    


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

    


    2.4           Amendment of Eligibility
Criteria.

    


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

    


    
      
        
           


        

        
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    ARTICLE
III

    DEFERRAL
ELECTIONS

    


    3.1           Elections to Defer
Compensation.

    


    (a)  Election to
Defer.  Subject to the provisions of Article II and this
Article III, each Eligible Employee may elect to defer Compensation earned for
services after the Election Period ends, by filing an election with the
Recordkeeper (a "Deferral Election") that conforms to the requirements of this
Section 3.1 either via the internet or mail, on a form provided by the
Recordkeeper, by no later than the last day of the Election
Period.  Except as expressly provided in (b), (c) or (d) below, an
Eligible Person may elect to defer Compensation by an election filed by
December 20th (or such later date as determined by the Committee, but in no
event later than December 31st) of the year preceding the year in which the
services are to be performed and the Compensation earned.  Deferral
elections shall become irrevocable as of the last day of the Election Period and
shall remain irrevocable for any subsequent Plan Year to which such Deferral
Election relates, except as otherwise expressly provided in the
Plan.  Except as otherwise determined by the Committee, Deferral
Elections will continue in effect from Plan Year to Plan Year, unless decreased,
increased, or terminated during an Election Period with respect to a subsequent
Plan Year.

    


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

    


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

    


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

    


    
      
        
           


        

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

    


    (e)  Deferral
Amounts.  Subject to the provisions of this Section 3.1 with
respect to each Plan Year, an Eligible Employee may defer, in either whole
percentages or a flat dollar amount, up to 85% of Annual Base Salary and up to
100% of increases in Base Salary that become effective during the year following
the year of the Deferral Election; and up to 100% of incentive awards (including
Performance Share Awards and Restricted Stock Unit
Awards).  Notwithstanding the foregoing, the total amount deferred
shall be limited, as necessary, to satisfy income tax and Social Security Tax
(including Medicare) withholding obligations, and employee benefit plan
withholding requirements as determined in the sole and absolute discretion of
the Committee.  The minimum contribution that must be made in any Plan
Year by an Eligible Employee shall not be less than $5,000, which may be
satisfied from any deferral source (e.g., Base Salary, annual incentive,
etc.).

    


    (f)  Mandatory Deferral of Excess
Code Section 162(m) Compensation.  Notwithstanding anything in
the foregoing to the contrary, to the extent that any Compensation to be paid to
an Eligible Employee with respect to a taxable year would exceed the amount
deductible by the Company or a Business Unit under Section 162(m) of the Code
(the “Excess”), such Excess automatically shall be deferred under the terms of
this Plan without the necessity of an election to defer.  Such
deferred Excess shall be held and administered as a Compensation Deferral
subject to the terms of the Plan, provided that, irrespective of the Employee’s
election as to timing and form of payment under Section 3.3, no deferred Excess
shall be distributed to the affected Employee prior to the first taxable year in
which such amounts, if paid, would not be non-deductible under Section 162(m) of
the Code.

    


    3.2           Deemed Investment
Elections.

    


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

    


    A Participant may change the
designation made under this Section 3.2 by filing an election, on a form
provided by the Recordkeeper, or, if allowed by the Committee, via voice
response, Internet or other technology on any business day; provided, however,
that a Participant who has elected to have some portion of his Compensation
Deferrals deemed invested in the Company Stock Fund may not transfer out of such
investment with respect to such Compensation Deferral amount.  A
Participant may elect to have each Plan Year of Compensation Deferrals
hypothetically invested in investment allocations different or distinct from his
or her prior elections.

    


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

    


    
      
        
           


        

        
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    (b)  With Respect to Deferrals of
Restricted Stock Awards and Performance Share Awards.  As of
the date that Restricted Stock vests, a Participant’s Stock Unit Subaccount
shall be credited with the number of Stock Units equivalent in value to the
amount of shares of Restricted Stock vested.  As of the date that
Performance Shares would be payable to the Participant in the absence of a
Deferral Election made pursuant to Section 3.1, the Participant’s Stock Unit
Subaccount shall be credited with a number of Stock Units equivalent in value to
the number of Shares that would be payable to the Participant in settlement of
the Performance Share Award absent such Deferral Election.

    


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

    


    (d)  Deemed Investments Will Be
Valued Daily.  Except as otherwise provided in Subsection
3.2(e) with respect to deemed investments in the Company Stock Fund, a deemed
investment direction, or change in deemed investment direction, shall be
processed based on the closing values for the date received, if such direction
is received by the Recordkeeper by 4 p.m. Eastern Time.  Otherwise,
such direction shall be processed based on the closing values of the particular
investment Funds on the next business day on which the markets are
open.  The net gain or loss of each deemed investment Fund (the
"Investment Rate") shall be recorded monthly, and reported quarterly as provided
in (g), below.  Except as provided in Section 6.4, below, a
Participant’s Account shall be credited with earnings (and losses) until all
amounts credited to such Account have been distributed or
forfeited.

    


    (e)  Company Stock
Fund.  Except as provided in Subsection 3.2(b) above, a deemed
investment in the Company Stock Fund shall be deemed to be a direction to invest
in the Money Market Investment Fund pending the end of the quarter, and shall be
credited with the rate of return of such deemed investment in the Money Market
Investment Fund, with the direction to invest in the Company Stock Fund to be
effective as of the third business day following the end of the quarter in which
such direction is received, based on the closing price of the Company Stock Fund
as of the end of the business day on which such investment is deemed
acquired.  Except as provided in Subsection 3.2(b) above, deemed
purchases in the Company Stock Fund shall be made on a non-calendar quarter
basis, beginning with the third business day following the non-calendar quarter
ending with the month of February, and continuing quarterly
thereafter.  Once the investment in the Company Stock Fund is
effective, a Participant may not re-direct such investment back into other
deemed investment Funds available under the Plan.

    


    (f)  Committee Discretion
Concerning Deemed Investment Designations.  Although the
Participant may designate deemed investments for his Compensation Deferrals, the
Committee shall not be bound by such designation.  The Committee shall
have no obligation to actually make any hypothetical investment, but may do so
if it chooses.  If a hypothetical investment is actually made by the
Committee,  then for the period the investment is held, the timing of
actual investment changes and the actual value of investments, less actual
costs, fees and expenses incurred, shall be used to measure investment return of
the deemed investment under this Plan.  The Committee shall select
from time to time, in its sole and absolute discretion, investment funds and
shall communicate the same to the Recordkeeper.

    


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

    


    
      
        
           


        

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

    


    3.3           Elections as to Form and
Timing of Payment.

    


    (a)  At the same time that
the Participant makes the Deferral Elections described in Section 3.1, the
Participant shall elect, on a form provided by the Recordkeeper:

    


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

    


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

    


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

    


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

    


    (c)  Except as otherwise
provided by the Plan Administrator, each election as to the timing and form of
payment shall carry forward from year to year, unless modified by the
Participant by means of filing a subsequent election in accordance with Section
3.3(d).  Elections as to time and form of payment are irrevocable as
of the end of the related Deferral Election Period (as provided in Section 3.1)
except as provided in Section 3.3(d).  Timing and form of payment
elections applicable to Company contributions shall become irrevocable in
accordance with the timing rules applicable to Compensation Deferral Elections
(as provided in Section 3.1(a)).  To the extent that a Participant
does not file an election as to form and timing of payment with respect to
Compensation Deferrals, Deferrals of Restricted Stock, Deferrals of Performance
Shares, and Company Contributions for a Plan Year, the deemed distribution
election automatically shall be a lump sum following the Participant’s
Separation from Service.

    


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

    


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

    


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

    


    
      
        
           


        

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

    


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

    


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

    


    3.4           Code Section 409A Transition
Provisions.

    


    (a)  Grandfathering Pre-2005
Accruals; Time and Form of Payment.  The vested Account
Balances of Plan Participants determined as of December 31, 2004, together with
actual or notional earnings thereon accruing after December 31, 2004 (the
“Grandfathered Amount”) shall be subject to the provisions of the Plan and tax
law in effect immediately prior to the enactment of Section 409A of the Internal
Revenue Code (i.e., as of October 3, 2004), including without limitation
requirements as to election of the timing and form of payment; expressly
provided, however that the Grandfathered Amounts shall be so grandfathered only
to the extent that the Plan terms governing such Amounts are not materially
modified after October 3, 2004.  Grandfathered Amounts shall be
subject to the terms of the Plan document entitled “UIL Holdings Corporation
Deferred Compensation Plan Grandfathered Benefit Provisions,” and not this Plan
document.

    


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

    


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

    


    
      
        
           


        

        
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    ARTICLE
IV

    COMPENSATION DEFERRAL AND
COMPANY CONTRIBUTION ACCOUNTS

    


    4.1           Compensation Deferral
Subaccount.

    


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

    


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

    


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

    


    4.2           Company Discretionary
Contribution Subaccount.

    


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

    


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

    


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

    


    4.3           Company Matching
Contribution Subaccount.

    


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

    


    
      
        
           


        

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

    


    4.4           Deferred Restricted Stock
Account.

    


    (a)  The Recordkeeper shall
maintain a Restricted Stock Unit Subaccount for each Designated Individual to
record the number of Restricted Stock Units to be credited to such Designated
Individual as of the date that such Stock Units vest.  The
Recordkeeper shall also maintain records of Deferral Elections relating to
Restricted Stock Units that have not yet vested.

    


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

    


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

    


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

    


    4.5           Deferred Performance Share
Account.

    


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

    


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

    


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

    


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

    


    
      
        
           


        

        
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    ARTICLE
V

    VESTING

    


    5.1           Vesting.

    


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

    


    5.2           Vesting Upon Death/Change in
Control.

    


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

    


    


    ARTICLE
VI

    DISTRIBUTIONS

    


    6.1           Manner of Payment—Cash vs.
Stock.

    


    Distributions shall be made in cash,
except to the extent that a Participant’s Subaccounts are deemed invested in the
Company Stock Fund.  Distributions of Company Stock Fund Subaccounts
shall be paid in shares of Company Stock, except to the extent that the
Committee determines some portion of such Subaccount must be paid in cash due to
limitations contained in the UIL Holdings Corporation 1999 Restated Stock Plan,
the UIL Holdings Corporation 2008 Stock and Incentive Compensation Plan (or any
other stock plan of the Company which allows for awards to be deferred pursuant
to the terms of this Plan), the UIL Holdings Corporation Senior Executive
Incentive Compensation Plan, or otherwise.  All fractional shares in a
Company Stock Fund Subaccount shall be paid in cash.

    


    6.2           Distribution of
Accounts.

    


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

    


    (a)  Distribution Due to
Separation from Service.

    


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

    


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

    


    
      
        
           


        

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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    
      
        
           


        

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

    


    (3)  A
Participant may elect to extend the Scheduled In-Service Withdrawal Date for any
Plan Year, provided such election otherwise complies with the requirements of
Section 3.3(d) on “subsequent elections.”  The Participant may modify
any Scheduled In-Service Withdrawal Date in the manner set forth above, no more
than two (2) times.

    


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

    


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

    


    (6)  If a Participant has a
Separation from Service prior to his or her Scheduled In-Service Withdrawal
Date, any amounts subject to such Scheduled In-Service Withdrawal Date will
instead be distributed in the form of a lump sum.  Such lump sum
distribution will be paid on the first day of the calendar quarter beginning on
or after the Separation from Service, subject to the provisions of Section
6.2(a)(6) concerning distributions to a Specified Employee upon a Separation
from Service.

    


    (c)  Death of a
Participant.  In the case of the death of a Participant while
in the service of the Company or an Affiliate, the Participant's entire vested
Account balance shall be distributed to the Participant's Beneficiary in a lump
sum on the first day of the calendar quarter beginning after the death
occurs.  In the event a Participant dies while receiving installment
payments, the remaining installments shall be paid to the Participant's
Beneficiary in a lump sum on the first day of the calendar quarter beginning
after the death occurs.

    


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

    


    (e)  Delayed Distribution
Attributable to Code Section 162(m).  Notwithstanding the
foregoing, to the extent the Company reasonably anticipates that if a payment
were made at the time provided for in this Section 6.2, the Company’s deduction
with respect to such payment would not be permitted due to the application of
Code Section 162(m), it may delay the payment until the Participant’s first
taxable year in which the Company reasonably anticipates (or should reasonably
anticipate) that if the payment is made during the year, the deduction of such
payment will not be barred by the application of Code Section
162(m).  This Section 6.2(f) shall be administered in accordance with
Treasury Regulation Section 1.409A-2(b)(7)-(i).

    


    
      
        
           


        

        
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    6.3           Hardship
Distribution.

    


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

    


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

    


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

    


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

    


    (b)  The amount determined to
qualify for a Hardship Distribution shall be paid in a cash lump sum as soon as
practicable after the Hardship Distribution election is made and approved by the
Committee or its delegatee.  The amount paid shall be debited pro rata
from the Participant’s Compensation Deferral Subaccount, Matching Contribution
Subaccount and vested Company Discretionary Contribution
Subaccount.

    


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

    


    6.4           Inability to Locate
Participant.

    


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

    


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

    


    


    ARTICLE
VII

    ADMINISTRATION

    


    7.1           Committee
Action.

    


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

    


    
      
        
           


        

        
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    certificate
or other written direction on behalf of the
Committee.  Notwithstanding any provision of the Plan to the contrary,
in the event of any conflict between the Plan and the Committee’s charter, the
Committee’s charter shall govern.

    


    7.2           Powers and Duties of the
Committee.

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


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

    


    7.3           Construction and
Interpretation.

    


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

    


    7.4           Information.

    


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

    


    
      
        
           


        

        
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    7.5           Compensation, Expenses and
Indemnity.

    


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

    


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

    


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

    


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

    


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

    


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

    


    (c)  Contents of
Notice.  If a claim for benefits is completely or partially
denied, notice of such denial shall be in writing and shall set forth the
reasons for denial in plain language.  The notice shall

    


    
      
        
           


        

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

    


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

    


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

    


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

    


    
      
        
           


        

        
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    extension
of time and the date by which the Appeals Committee expects to render the
determination on review.  Following its review of any additional
information submitted by the Claimant, the Appeals Committee shall render a
decision on its review of the denied claim.

    


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

    


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

    


    


    ARTICLE
VIII

    MISCELLANEOUS

    


    8.1           Unsecured General
Creditor.

    


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

    


    8.2           Restriction Against
Assignment.

    


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

    


    


    
      
        
           


        

        
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    distribution
or payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such manner as the Committee shall
direct.

    


    8.3           Withholding.

    


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

    


    8.4           Amendment, Modification,
Suspension or Termination.

    


    The Committee, with the approval of the
Board, may amend, modify or suspend this portion of the Plan in whole or in
part, except to the extent that such power has been expressly reserved otherwise
under the terms of this portion of the Plan.  No amendment,
modification or suspension shall have any retroactive effect to reduce any
amounts allocated to a Participant's Accounts.  The Committee, with
the approval of the Board, may also terminate this portion of the Plan and pay
Participants (and beneficiaries) their Account Balances in a single lump sum at
any time, to the extent and in accordance with Treas. Reg. Section
1.409A-3(j)(4)(ix).

    


    8.5           Governing
Law.

    


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

    


    8.6           Receipt or
Release.

    


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

    


    8.7           Payments on Behalf of
Persons Under Incapacity.

    


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

    


    8.8           Limitation of Rights and
Employment Relationship.

    


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

    


    
      
        
           


        

        
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    8.9           Adjustments; Assumptions of
Obligations.

    


    In the
event of a reorganization, recapitalization, stock split, stock or extraordinary
cash dividend, combination of shares, merger, consolidation, distribution of
assets, or any other change in the corporate structure or shares of the Company,
the Committee shall make the appropriate adjustments in (i) the number of Stock
Units credited to Participants' Accounts, (ii) the number (or type) of shares of
Stock reserved for issuance hereunder, (iii) the number (or type) of shares
subject to any deferred Restricted Stock Units and deferred Performance Shares,
and (iv) any Share limitations imposed under the Plan, in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or any Stock Units credited
hereunder.  In the event of any merger, consolidation or other
reorganization in which the Company is not the surviving or continuing entity,
all Stock Units, deferred Restricted Stock and deferred Performance Shares
hereunder shall be assumed by the surviving or continuing entity.  In
the event of any reorganization in which all of the shares of the Company's
Stock are exchanged for shares of the common stock of another corporation, all
Stock Units credited hereunder and all deferred Restricted Stock Units and
deferred Performance Shares outstanding on the effective date of the share
exchange shall be automatically converted into obligations of the other
corporation on identical terms, and the other corporation shall assume this
Plan.  The Committee may also make adjustments to Stock Units, and
deferred Restricted Stock Units and deferred Performance Shares under this Plan
on account of those events set forth in Section 8 of the UIL Holdings
Corporation 1999 Amended and Restated Stock Plan, Section 10(c) of the UIL
Holdings Corporation 2008 Stock and Incentive Compensation Plan and comparable
sections of any other stock plan of the Company which allows for awards to be
deferred pursuant to the terms of this Plan.

    


    8.10           Headings.

    


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

    


    


    


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

    


     

                                        UIL HOLDINGS
CORPORATION

     

    


     

                                            By        James P.
Torgerson________________

     

                                            James P.
Torgerson

                                            Its President &
Chief Executive Officer

    


    


    
      
        
           


        

        
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    EXHIBIT
A

     

    PARTICIPATING
BUSINESS UNITS

     

    As of
January 1, 2008

     

    


     

    Company
Name                                                                                                    Date of
Participation

     

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

     

     

     

     

     

     

     

     

     

    26