UIL Exhibit 10.1 - 2nd Draft to the UIL Deferred Compensation Plan


    

      EXHIBIT
        10.1

      


      SECOND
        AMENDMENT

      TO
        THE

      UIL
        HOLDINGS CORPORATION

      DEFERRED
        COMPENSATION PLAN

      


      UIL
        Holdings Corporation (UIL) hereby amends the UIL Holdings Corporation Deferred
        Compensation Plan as follows. Except as otherwise expressly provided in this
        amendment, such amendments shall apply only to Non-Grandfathered Amounts,
        and
        shall not apply to Grandfathered Amounts as defined in Section 3.4
        below:

      


      1.  The
        following Glossary definitions are revised, or added, effective as of January
        1,
        2005, to read as follows with respect to Non-Grandfathered Amounts.


      


      Section
        1.1 o) is amended in its entirety to read as follows:

      


      o) “Compensation”
        shall mean, in the case of all Eligible Employees, Base Salary, increases
        in
        Base Salary received during the Plan Year; Bonuses and other incentive awards;
        lump sum payments made from the Company SERP, but only with respect to
        Compensation Deferrals entered into prior to January 1, 2005; deferrals of
        compensation in excess of the amount deductible under Section 162(m) of the
        Code, and any other compensation permitted to be deferred by the
        Committee.

      


      Section
        1.1 t) is amended in its entirety to read as follows:

      


      t) “Disability”
        or “Disabled” shall mean that the Participant is disabled in accordance with one
        of the definitions of “Disability” permitted under the Treasury Regulations
        issued under Section 409A.

      


      


      The
        definition of Election Period contained in Section 1.1 bb) is amended in
        its
        entirety to read as follows with respect to Non-Grandfathered
        Amounts:

      


      bb) “Election
        Period” shall mean the time period associated with deferral of Compensation
        under the Plan. The first Election Period with respect to Eligible Employees
        becoming Participants on the Effective Date (February 1, 2003) shall end
        on
        January 24, 2003. Thereafter, except as expressly provided otherwise in this
        definition or by the Committee, subsequent elections with respect to a
        subsequent calendar year must be filed by October 30th
        of the
        preceding year (by December 20th
        of the
        preceding year with respect to elections made in 2004 and later years), to
        be
        effective with respect to Compensation earned for services performed in such
        subsequent calendar year. The Election Period with respect to the deferral
        by a
        Designated Individual of some portion or all of a Restricted Stock Award
        shall
        be any period designated by the Committee, which ends prior to receipt of
        such
        Award, and which shall be deemed effective contemporaneously with the granting
        of such Award with respect to any Restricted Stock vesting at least one year
        after such election is processed; provided however that, with respect to
        deferrals of Restricted Stock Awards made in 2006 and after, the Election
        Period
        shall be the first thirty


      
        
           

          
          

        

        
          1

          
            

          

        

        
          
          

        

      


      (30)
        days
        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. The Election Period with respect to the deferral by a Designated
        Individual of some portion or all of a Performance Share Award shall be any
        period designated by the Committee, which ends no later than 12 months prior
        to
        the end of the performance period related to such Performance Share Award,
        and
        which shall be deemed effective contemporaneously with the vesting of such
        Award
        with respect to any Performance Share vesting at least one year after such
        election is processed. 

      


      New
        Section 1vv) and 1ww) are hereby added to read as follows:

      


      vv)
        “Separation from Service” shall have the meaning specified in Treasury
        Regulation 1.409A-1(h), or any successor provision.

      


      ww)
        “Specified Employee” or “Key Employee” shall mean a key employee, as defined in
        Section 1.409A-1(i) of Treasury Regulations.

      


      2.  Subsections
        3.1(a) and (b) are hereby revised in their entirety to read as follows,
        effective as of January 1, 2005, with respect to all Eligible
        Employees:

      


      3.1 Elections
        to Defer Compensation.

      


      (a)
        Election
        to Defer.
        Subject
        to the provisions of Article II, each Eligible Employee may elect to defer
        Compensation earned for services performed in the taxable year(s) after the
        Election Period ends, by filing an election with the Plan Administrator (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 Plan Administrator,
        by no later than the last day of the Election Period (as defined in the
        Glossary). Deferral elections shall become irrevocable as of the last day
        of the
        Election Period and shall remain irrevocable for the subsequent Plan Year
        to
        which such Deferral Election relates, except as otherwise expressly provided
        in
        the Plan. 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)
        Deferrals
        of Base Salary, Bonus and certain SERP Amounts.
        With
        respect to each Plan Year, an Eligible Employee may defer, in either whole
        percentages or a flat dollar amount, up to 85% of Annual Base Salary and
        up to
        100% of increases in Base Salary that become effective during the Year; up
        to
        100% of Bonuses or other incentive awards; and, only with respect to Deferral
        Elections timely filed prior to January 1, 2005, up to 100% of any lump sum
        SERP
        payments that would be payable in a calendar year subsequent to the filing
        of
        the Deferral Election. Notwithstanding the foregoing, the total amount deferred
        shall be limited, as necessary, to satisfy income tax and Social Security
        Tax
        (including Medicare) withholding obligations, and employee benefit plan
        withholding requirements as determined in the sole and absolute discretion
        of
        the Committee. The minimum contribution that must be made in any Plan Year
        by an
        Eligible Employee shall not be less than $5,000, which may be satisfied from
        any
        deferral source (e.g., Base Salary, Bonus, etc.). For the first Plan Year
        of the
        Plan, this required minimum contribution amount shall be pro-rated.

      


      
        	3.  	
                Subsections
                  3.3(a), (c) and (d) are amended in their entirety to read as
                  follows:

              


      

      


      (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 Plan
        Administrator, (i) to receive his


      
        
           

          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      Compensation
        Deferral Account, his deferred Restricted Stock Account, his 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 shall also elect (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
        Plan Administrator 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.

      


      (c)
        Each
        election as to the timing and form of payment shall apply only for one Plan
        Year, and only to the Compensation Deferrals, deferrals of Restricted Stock,
        deferrals of Performance Shares, and any Company Contributions made with
        respect
        to such year, expressly
        provided, however,
        that
        with respect to elections as to time and form of payment made for the 2006
        Plan
        Year and later, such election 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(e). To the extent that a Participant does not
        file
        an election as to form and timing of payment with respect to Compensation
        Deferrals, Deferrals of Restricted Stock, Deferrals of Performance Shares,
        and
        Company Contributions for a Plan Year, the deemed distribution election
        automatically shall be a lump sum following termination of employment with
        the
        Company and its affiliates.

      


       

      (d)
        Notwithstanding the foregoing, in the event that a Participant has a Separation
        from Service (whether due to retirement, death, Disability or otherwise,
        and his
        Account Balance is $10,000 or less as of such termination date, the entire
        Account Balance will be distributed in a single lump sum no later than sixty
        (60) days following such Separation from Service, subject to the requirement
        for
        a six month delay for Key Employees as provided in Section 6.2. 

       

      4.  Section
        3.3 is hereby amended by adding a new subsection 3.3(e) to read as follows
        with
        respect to Non-Grandfathered Amounts:

      


      (e) 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 Deferral Account by filing a
        subsequent written distribution election during an Election Period, provided
        however that with respect to Non-Grandfathered Amounts (as defined in Section
        3.4)

      


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

              


      

      


      
        	(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

              


      


      
        
           

          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      


      
        	(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.

      


      5.  Section
        6.2 is hereby amended in its entirety to read as follows with respect to
        Non-Grandfathered Amounts. Grandfathered Amounts shall be governed by the
        provisions of Section 6.2 prior to its amendment herein, except that the
        cash-out threshold of $50,000 shall be reduced to $10,000 for both Grandfathered
        and Non-Grandfathered Amounts.

      


      
        	6.2  	
                Distribution
                  of Accounts.
                  Distribution of Non-Grandfathered Accounts shall be made only in
                  the event
                  of a Participant’s Separation from Service, death, or Disability, or on
                  account of a Scheduled In-Service Withdrawal Date. All distributions
                  of
                  Non-Grandfathered Amounts on account of a Separation from Service
                  shall be
                  subject to a six (6) month delay as provided in Section 6.2 for
                  distributions to Key Employees, except if such distribution is
                  due to the
                  Participant’s death or Disability.

              


      

      


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

      


      (1)
        De
        Minimis Account Balances.
        In the
        case of a Participant who terminates service with the Company and all affiliates
        and who has a total Account Balance of $10,000 or less, the Distributable
        Amount
        shall be paid to the Participant in a lump sum distribution no later than
        sixty
        (60) days after termination of service, expressly provided that no distribution
        of a Non-Grandfathered Amount shall be payable to a Key Employee sooner than
        six
        (6) months following his or her Separation from Service, except in the event
        that his or her Separation from Service is due to death or
        Disability.

      


      (2)
        Distribution
        of Accounts over $10,000. In
        the
        case of a Participant who terminates service with the Company and all affiliates
        and who has a total Account Balance more than $10,000, the Distributable
        Amount
        shall be paid to the Participant in a lump sum distribution unless he or
        she has
        made a timely election, in accordance with the provisions of Section 3.3
        to
        receive payments in one of the following optional installment forms set forth
        in
        Section 6.2(a)(3), expressly provided that no distribution of a
        Non-Grandfathered Amount shall be payable to a Key Employee sooner than six
        (6)
        months following his or her Separation from Service, except in the event
        that
        his or her Separation from Service is due to death or Disability.

      


      (3)
        Election
        of Payment Form.
        In
        accordance with Section 3.3, a Participant may elect, at the same time that
        he
        makes a Deferral Election, to have the amounts subject to such Deferral Election
        distributed either in a single lump sum or in one of the following installment
        forms, with respect to such Participant’s Compensation Deferrals, deferred
        Restricted Stock, deferred Performance Shares, and Company Contributions,
        on a
        form provided by the Plan Administrator, or, if permitted by the Committee,
        via
        voice response, Internet or other approved technology. 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.

              


      


      
        
           

          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      


      (4)  Commencement
        of Distributions.
        All
        installment payments and lump sum distributions shall commence to be paid,
        or be
        paid, no later than sixty days following the Participant’s Separation From
        Service; expressly provided that no distribution of a Non-Grandfathered Amount
        shall be payable to a Key Employee sooner than six (6) months following his
        or
        her Separation from Service, except in the event that his or her Separation
        from
        Service is due to death or Disability. In the event that such a Participant
        has
        elected installment payments in a timely manner and in accordance with Section
        3.3 and 6.2(a)(3) of this Plan, then the installment payments to which such
        Participant otherwise would be entitled during the first six (6) months
        following Separation from Service shall be accumulated and paid as of the
        first
        day of the seventh month following such Participant’s Separation 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(e) on subsequent elections.
        

      


      (6)   Delay
        in Distribution for Key Employees.
        In the
        case of a “Specified Employee” as defined and determined in accordance with
        Section 1.409A-1(i) of Treasury Regulations, no distribution may be made
        to such
        Employee before the date that is six months after his Separation from Service
        (or, if earlier, the date of death of the Specified Employee). 

      


      
        	6.  	
                Section
                  6.2(b) is amended in its entirety to read as
                  follows:

              


      

      


      (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 in accordance with Section
        1.1(pp) of the Plan.

      


      (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 is made at least one (1) year before the
        Scheduled In-Service Withdrawal Date and is for a period of not fewer than
        five
        years with respect to any extension occurring on or after January 1, 2005
        (two
        years for extensions filed prior to January 1, 2005 and for extensions with
        respect to Grandfathered Amounts), and the election otherwise complies with
        the
        requirements of Section 3.3(e) 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. 


      
        
           

          
          

        

        
          5

          
            

          

        

        
          
          

        

      


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

      


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

      


      (6)
        If a
        Participant terminates service with the Company and all affiliates for reasons
        other than Retirement or Disability prior to his or her Scheduled In-Service
        Withdrawal Date, the Compensation Deferral, deferred Restricted Stock, deferred
        Performance Shares, and any amounts attributable to Company Contributions,
        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 not later
        than sixty (60) days following the Participant’s Separation from Service,
        subject to the requirement for a six month delay in the case of
        Non-Grandfathered Amounts of Key Employees.

      


      
        	7.  	
                The
                  first phrase of Section 6.3 is hereby amended to read as follows
                  effective
                  as of January 1, 2005:

              


      

      


      A
        Participant shall be permitted to elect an unplanned Early Distribution
only
        from his
        or her Grandfathered Amounts prior to what otherwise would be the Payment
        Date,
        subject to the following restrictions and penalties: 

      


      
        	8.  	
                A
                  new Section 3.4 is hereby added to the Plan to read as
                  follows:

              


      

      


      
        	(i)  	
                Grandfathering
                  Pre-2005 Accruals; Time and Form of Payment.
                  The 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. To the extent that any amendment to the Plan would
                  constitute a material modification of Grandfathered Amounts, the
                  amendment
                  shall be void ab initio
                  and
                  not be effective as to the Grandfathered Amounts.
                  

              


      

      


      
        	(ii)  	
                Non-Grandfathered
                  Amounts
                  shall be that portion of a Participant’s Account Balance attributable to
                  Deferral Elections made with respect to the 2005 Plan Year and
                  thereafter.
                  Non-Grandfathered Amounts shall be subject to the provisions of
                  Code
                  Section 409A and guidance issued thereunder, including, without
                  limitation
                  the six month delay in distribution applicable to Key Employees
                  upon
                  Separation from Service.

              


      

      


      
        	(iii)  	
                Cancellations
                  of Participation During 2005.
                  During 2005, a Participant may cancel participation in the Plan
                  or cancel
                  a Deferral election, without causing the Plan to violate the provisions
                  of
                  409A of the Internal Revenue Code and guidance issued thereunder
                  and
                  without causing his or her Account Balance to be includable in
                  income
                  under the doctrine of constructive receipt; provided that the amounts
                  subject to the election to terminate participation or cancellation
                  are
                  includable in the Participant’s income in 2005 or, if later, the taxable
                  year in which the amounts are earned and vested.
                  

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	(iv)  	
                Modification
                  of Elections as to Time and Form of Payment During Transition
                  Period.
                  With respect to amounts that are subject to Section 409A, the Participant
                  may, on or before December 31, 2006, file a new payment election
                  as to
                  time and form of payment and the election will not be treated as
                  a change
                  in the form and timing of payment under Section 409(a)(4) or an
                  acceleration of a payment under Section 409(a)(3), provided that
                  if the
                  Participant makes such election on or after January 1, 2006 and
                  before
                  January 1, 2007, the Participant cannot change payment elections
                  with
                  respect to payments that he or she otherwise would receive in 2006,
                  or
                  cause payments to be made in 2006.

              


      

       

      


      The
        foregoing amendments shall be effective as of January 1, 2005, except as
        otherwise expressly provided.

      


      


      


                        UIL
        HOLDINGS
        CORPORATION

      


      


      
        	
                Date:

              	
                November
                  28, 2005

              	 	
                By:

              	
                /s/Susan
                  E. Allen           

              
	 	 	 	 	
                Its,
                  VP, Treasurer, Secretary

              


      

       

      
        7