Document:

UIL Exhibit 10.34 - Employment Agreement Dated February 28, 2007 Between UIL
      Holdings Corp. and Linda L. Randell

    EXHIBIT
      10.34

     

    

    EMPLOYMENT
      AGREEMENT

     

     

    THIS
      AGREEMENT (the “Agreement”) is
      made
      as of the 28th
      day of
      February, 2007, between UIL
      Holdings Corporation,
      a
      Connecticut Corporation (the “Company”) and Linda
      L. Randell
      (the
“Executive”),

    

    

    WITNESSETH
      THAT

    

    WHEREAS,
      the Company desires to employ the Executive as the Senior Vice-President and
      General Counsel of the Company, and the Executive desires to be so employed
      by
      the Company;

    

    NOW
      THEREFORE, in consideration of the foregoing and the respective covenants and
      agreements of the parties herein contained, and the services to be rendered
      to
      the Company pursuant hereto, the parties hereby agree as follows:

     

     

    (1)  EMPLOYMENT;
      TERM 

     

    (a)  The
      Company hereby agrees to employ the Executive, and the Executive hereby agrees
      to serve the Company, at the pleasure of the Chief Executive Officer of UIL
      Holdings Corporation (the “UIL CEO”) and/or the Board of Directors of UIL
      Holdings Corporation (the “ UIL Board”), all upon the terms and conditions set
      forth herein.

     

    (b)  The
      term
      of this Agreement shall be for a period commencing on March 26, 2007 and ending
      on March 25, 2009, unless this Agreement is earlier terminated as provided
      in
      Section 5 (the “Initial Term”). Unless the Company has provided the Executive
      with at least ninety (90) days prior written notice of its decision not to
      renew
      this Agreement after the Initial Term or any subsequent term, this Agreement
      shall be automatically renewed for a successive one (1) year term (the Initial
      Term and any renewal term being referred to as the “Term”). For
      purposes of this Agreement, a non-renewal at the election of the Company at
      the
      end of a Term shall not constitute a termination of employment without Cause,
      but shall be governed by the provisions of Section 6(d). In no event shall
      the
      Company give notice of a non-renewal from the time that an impending Change
      in
      Control (as hereinafter defined) is announced through the date of the
      consummation of such Change in Control.

     

    

    (2)
      POSITION AND DUTIES

    

    (a)
      The
      Executive shall be employed by the Company as its Senior Vice-President and
      General Counsel, or in such other equivalent or higher position as the UIL
      CEO
      and/or UIL Board may determine. The Executive shall:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)
      accept such employment and perform and discharge, faithfully, diligently and
      to
      the best of the Executive's abilities, the duties and obligations of the
      Executive's office and such other duties as may from time to time be assigned
      to
      the Executive by, or at the direction of, the UIL CEO; and

    

    (ii)
      devote substantially all of the Executive's working time and efforts to the
      business and affairs of the Company.

    

    (b)
      Prior
      to a Change in Control, in the event that the Executive is named by the UIL
      CEO
      and/or UIL Board to a position higher in rank or compensation than that
      applicable at the commencement of the Initial Term, nothing in this Agreement
      shall obligate the Company to continue such Executive in such higher position;
      and the Company shall not be deemed in “Breach” of the Agreement (as defined in
      Section 5(d)) for failure to continue the Executive in such higher
      position.

    

    

    (3)
      PLACE OF PERFORMANCE

    

    In
      her
      employment by the Company, the Executive shall be based within a fifty (50)-mile
      radius of the current executive offices of the Company at the address stated
      in
      section 12(d) in New Haven, Connecticut.

    

    

    (4)
      COMPENSATION

    

    (a)
      Base
      Salary.
      During
      the Initial Term of the Executive's employment hereunder, the Executive shall
      receive a base salary (“Base Salary”) at an annual rate of 

    Two
      Hundred Seventy Five Thousand Dollars ($275,000.00), payable in accordance
      with
      the then customary payroll practices of the Company. The Executive's performance
      and Base Salary shall be reviewed by the UIL CEO and the Compensation and
      Executive Development Committee of the UIL Board (the “CEDC”) at least annually,
      and may be adjusted as a result of any such review, with the first adjustment
      scheduled to be effective as of April 1, 2008. 

    

    (b)
      Incentive
      Compensation.
      During
      the Term of the Executive’s employment hereunder, the Executive shall be
      eligible to be designated, by the CEDC, as a participant in each annual
      short-term incentive compensation program, and any long-term incentive program,
      maintained for management employees of the Company, with grants under such
      programs being made to the Executive at the same time as they are made with
      respect to other participating executives; provided, however, that entitlement
      to participation, and continued participation, in any long-term equity incentive
      program shall be conditioned upon the Executive fully complying with any stock
      ownership and retention guidelines from time to time established and promulgated
      by the UIL Board. Pursuant to such guidelines, the position of Senior
      Vice-President requires that the Executive own a minimum number of shares of
      Company common stock equal to two times the Base Salary, then in effect, by
      March 1, 2012, acquired ratably during 2007-2012.

    
      
        
        

      

      
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    (i)
      Initial
      Short-term Incentive.
      With
      respect to the Executive’s first year of participation in the Company’s
      short-term incentive plan, she will be provided with an opportunity to earn
      to a
      short-term incentive equal to 45% of her Base Salary for performance ‘at
      target’, and 67.5% of Base Salary (i.e., 150% of target) for ‘maximum’
performance, with the incentive payment being pro-rated for employment of less
      than a full calendar year during the performance period. Performance criteria
      for the short-term incentive award will be established by the CEDC in the 2007
      annual incentive program during the first quarter of 2007. Short-term incentive
      compensation shall be calculated following the close of the calendar year in
      which such incentive is earned in accordance with the terms of the applicable
      plan, and shall be paid at the same time as such incentives are payable to
      other
      executives, but in no event later than March 15 of the year following the end
      of
      the calendar year to which such incentive relates. 

    

    (ii)
      Initial
      Long-term Incentive.
      As a
      long-term performance incentive, the Executive will be provided with an
      opportunity to earn a long-term incentive equal to 65% of Base Salary for
      performance at ‘target’ and 97.5% of Base Salary (i.e., 150% of target) for
‘maximum performance.’ Performance criteria for the long-term incentive award
      will be based on the 2007 financial goals established by the CEDC. The Executive
      will participate in the currently existing long-term plans (i.e. the 2005-2007
      Long-Term Incentive Plan (“LTIP”), the 2006-2008 LTIP and the 2007-2009 LTIP) on
      a pro-rated basis. The pro-ration will be a percentage equal to the number
      of
      months employed during the period divided by 36. All vested shares shall be
      paid
      by no later than March 15 of the year following the end of each vesting period.
      Any such shares of restricted stock that are unvested as of the Executive’s
      termination of employment shall be forfeited in the event that the Executive
      terminates employment for any reason other than death, disability, retirement
      or
      a termination by the Company without cause. 

    

    For
      purposes of this Agreement, the Executive’s “Accrued
      Incentive Compensation”
      shall
      mean the amount of any annual short-term incentive compensation earned with
      respect to the calendar year ended prior to the Date of Termination (as defined
      in Section 5) but not yet paid as of the Executive’s Date of
      Termination.

    

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

    
      
        
        

      

      
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    (c)
      Change
      in Control Severance Plan.
      The
      Executive shall be designated by the UIL Board as an individual covered by
      the
      UIL Holdings Corporation Change in Control Severance Plan II of the Company
      (the
“UIL CIC Plan II”), provided that the Executive’s UIL CIC Plan II benefit shall
      be equal to her then Base Salary, plus one year of continued employee benefit
      plan participation. For purposes of this Agreement, “Change in Control” shall
      have the meaning set forth in the UIL CIC Plan II.
      Nothing
      in this subsection, however, shall entitle the Executive to continued
      participation in such Plan should the UIL Board determine otherwise in
      accordance with the terms of that Plan. 

    

    (d)
      Business
      Expenses.
      During
      the Term, the Executive shall be entitled to receive prompt reimbursement for
      all reasonable employment- related business expenses incurred by the Executive,
      including various professional organizations, associations, and committees,
      e.g.
      ABA, EEI, in accordance with the policies and procedures established by the
      UIL
      Board from time to time for all of the Company's executives, provided that
      the
      Executive properly accounts therefor.

    

    (e)
      Benefit
      Programs.
      During
      the Term of the Executive's employment hereunder and to the extent she meets
      the
      applicable eligibility requirements, the Executive shall be entitled to
      participate in and receive benefits under all of the Company's employee benefit
      plans, programs and arrangements for its similarly situated executives on the
      same terms and conditions that apply to such executives, including, without
      limitation, any plan or program of an affiliated company in which the Company
      is
      a participating employer, but only for so long as the Company remains a
      participating employer. Notwithstanding the foregoing, the Executive shall
      not
      be entitled to participate in the UI Pension Plan, or in any supplemental
      executive retirement plan. Nothing
      in this Agreement shall require the Company to maintain a particular benefit
      plan or program, or preclude the Company from amending or terminating any such
      plans, programs or arrangements, including its participation therein, or
      eliminating, reducing or otherwise changing any benefit provided thereunder,
      so
      long as such change similarly affects all similarly situated employees of the
      Company and is in compliance with applicable law.

    

    (f)
      Vacations
      and Holidays.
      The
      Executive shall be entitled to five (5) weeks of paid vacation in each calendar
      year, and shall also be entitled to all paid holidays afforded by the Company
      to
      its management employees, all in accordance with applicable Company
      policies.

    

    (g)
      One-Time
      Equity Grant.
      In
      recognition of the forfeiture by the Executive of certain partnership benefits
      resulting from termination of employment with her former employer, the Executive
      will be entitled to a one-time grant, made on or about March 26, 2007, of shares
      of restricted stock valued at $150,000 at the date of the grant, which will
      vest
      ratably over a five (5) year period, commencing with the date of the grant.
      All
      vested shares shall be paid by no later than March 15 of the year following
      the
      end of each vesting period. Any such shares of restricted stock that are
      unvested as of the Executive’s termination of employment shall be forfeited in
      the event that the Executive terminates employment for any reason other than
      death, disability, retirement or a termination by the Company without
      cause.

    
      
        
        

      

      
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    (5)
      TERMINATION

    

    (a)
      Death
      or Disability.
      The
      Executive's employment hereunder shall terminate upon the Executive's death
      or
      termination due to disability (as described in Section 6(a) of this
      Agreement).

     

    (b)
      Termination
      by Company for Cause.
      The
      Company may at any time by written notice to the Executive terminate the
      Executive’s employment for Cause in accordance with the following provisions:

     

     

    (i)
      Termination
      for Cause Prior to a Change in Control.
      Prior
      to the date of a Change in Control, the Company shall be deemed to have “Cause”
to terminate the Executive’s employment hereunder only upon the Executive’s:

     

    (1)
      failure to comply with any material term of this Agreement, or to perform and
      discharge the duties or obligations of the Executive’s office, or such other
      duties as may from time to time be assigned to the Executive by, or at the
      direction of, the UIL CEO and/or UIL Board, faithfully, diligently, and
      competently, in the opinion of the UIL CEO,
      unless
      any such failure is cured in all material respects to the reasonable
      satisfaction of the UIL CEO within sixty (60) days after the Executive receives
      written notice of such failure; or

    

    (2)
      failure to devote substantially all of her working time and efforts to the
      business and affairs of the Company unless any such failure is cured in all
      material respects to the reasonable satisfaction of the UIL CEO within sixty
      (60) days after the Executive receives written notice of such failure;
      or

     

    (3)
      misconduct that is demonstrably injurious to the interests of the Company or
      its
      Affiliates (as that term is defined in Section 9, unless such misconduct is
      rectified in all material respects to the reasonable satisfaction of the UIL
      CEO
      within thirty (30) days after the Executive receives written notice of such
      misconduct; or

     

     

    (4)
      commission of a serious crime, such as an act of fraud, misappropriation of
      funds, embezzlement, or a crime involving personal dishonesty or moral
      turpitude. 

     

     

    (ii)
      Termination
      for Cause After a Change in Control.
      During
      the period that commences on a Change in Control and for twenty-four (24) months
      thereafter (the “Change in Control Protective Period”), and subject to the same
      notice and cure provisions specified above, the Company (or its successor or
      other entity employing the Executive following such Change in Control) shall
      be
      deemed to have Cause to terminate the Executive’s employment hereunder only upon
      the Executive’s:

     

    
      
        
        

      

      
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    (1)
      commission of a serious crime, such as an act of fraud, misappropriation of
      funds, embezzlement, or a crime involving personal dishonesty or moral
      turpitude; or

     

    (2)
      misconduct that is demonstrably injurious to the interests of the Company or
      its
      Affiliates; or

    

    (3)
      willful failure of the Executive to substantially perform her duties (other
      than
      by reason of incapacity due to physical or mental illness or
      injury).

    

     

    (c)  Termination
      by Company without Cause.
      The
      Company may terminate the Executive’s employment at any time, without cause,
      upon ninety (90) days prior written notice to the Executive. 

     

    (d)  Termination
      by Executive.
      

     

    (i)  If
      the
      Executive is not in default of any of the Executive’s obligations under Sections
      (2), (9), (10), or (11) hereof, the Executive may terminate employment hereunder
      upon at least thirty (30) days’ prior notice, for failure of the Company to
      observe and perform one or more of its obligations under Sections (2), (3)
      and/or (4) hereof, which failure the Company fails to remedy within such notice
      period (a “Breach by the Company”). 

     

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

     

    (e)  Date
      of Termination.
      For
      purposes of this Agreement, the “Date of Termination” is defined as (i) the
      Executive’s date of death, in the event of her death; or the date of her
      termination due to disability, as hereafter defined, in the case of disability;
      or retirement, as hereafter defined, or (ii) the date specified in the notice
      of
      termination, in the case of the Executive’s termination pursuant to Sections
      (5)(b), (5)(c), or 5(d) hereof.

     

     

    (6)
      CONSEQUENCES OF TERMINATION OR NON-RENEWAL.

     

    (a)
      Termination
      on Death or Disability or Retirement; or by the Executive in the Absence of
      a
      Breach by the Company upon Adequate Notice. 
      If the
      Executive’s employment terminates by reason of the Executive’s death, her total
      or partial physical or mental disability such
      that
      the Executive becomes entitled to long-term disability benefits under the
      Company’s long-term disability plan,
      or if
      the Executive retires on or after reaching age 55 and completing ten years
      of
      service, or terminates employment hereunder in the absence of a Breach by the
      Company upon ninety (90) days prior written notice, the Company shall pay to
      the
      Executive or, in the event of death or disability, the Executive’s personal
      representative and/or spouse:

     

    
      
        
        

      

      
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    (i)
      the
      Executive’s Base Salary earned but unpaid as of the Date of Termination, and
      Accrued Incentive Compensation (as defined in Section 4(b)) earned, but unpaid
      as of the Date of Termination; plus

     

    (ii)
      Stub-Period Incentive Compensation (as defined in Section 4(b)) earned, but
      unpaid, as of the Date of Termination, but only in the case of the Executive’s
      death, termination due to disability or retirement (as hereinbefore defined),
      and not in case of her voluntary termination other than on account of such
      retirement; plus

     

    (iii)
      any
      amounts payable pursuant to (4)(d) (unreimbursed business expenses), (4)(e)
      (employee benefits due and owing), (4)(f) (accrued, but unpaid vacation or
      holidays), and (4)(g) and 4(b)(ii) (payment of restricted stock, to the extent
      then vested); plus

     

    (iv)
      any
      benefits or amounts payable, on account of the Executive’s (A) participation in
      any long-term incentive compensation plan and equity compensation plan or
      arrangement, and (B) participation in any elective deferred compensation plan
      in
      which she was a participant as of her termination of service, all as determined
      in accordance with the terms and conditions of such plans and arrangements.
      

     

    Pending
      a
      determination that the Executive is entitled to long-term disability benefits,
      the Executive’s short-term disability benefits shall be extended, as necessary,
      at 50% of Base Salary, if her length of employment with the Company is of such
      short duration that her short term disability benefits would otherwise expire
      before her entitlement to long-term disability benefits is
      determined.

     

    Upon
      payment of these amounts, the Company shall have no further obligation to the
      Executive, the Executive’s personal representative and/or spouse under this
      Agreement or on account of, or arising out of, the termination of the
      Executive’s employment.

     

    (b)
      Upon
      Termination for Cause; or by the Executive on fewer than 90 days
      notice.
      If the
      Company terminates the Executive’s employment for Cause, or the Executive
      terminates employment hereunder in the absence of a Breach by the Company and
      upon fewer than ninety
      (90) days prior
      written notice, the Company shall pay to the Executive:

     

    (i)
      the
      Executive’s Base Salary earned, but unpaid, as of the Date of Termination;
      plus

     

    (ii)
      any
      amounts payable pursuant to Sections (4)(d), (4)(e), 4(f) and (4)(g) and
      4(b)(ii) (payment of restricted stock, to the extent then vested), hereof,
      and

     

    (iii)
      any
      benefits or amounts payable under any elective non-qualified deferred
      compensation plan in which the Executive had been a participant, 

     

    whereupon
      the Company shall have no further obligation to the Executive under this
      Agreement or on account of, or arising out of, the termination of the
      Executive’s employment.

     

    
      
        
        

      

      
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    (c)
      Upon
      Termination Without Cause, or Upon Breach by the Company, not on account of
      a
      Change in Control.
      If the
      Company terminates the Executive's employment hereunder without Cause, or if
      the
      Executive terminates the Executive's employment hereunder on account of a Breach
      by the Company, and in either case the termination is not upon a Change in
      Control or within the Change in Control Protective Period, the Company shall
      pay
      or provide (as applicable) to the Executive, the following:

     

    (i)
      the
      Executive’s Base Salary earned but unpaid as of the Date of Termination, Accrued
      Incentive Compensation (as defined in Section 4(b)) earned, but unpaid as of
      the
      Date of Termination and Stub-Period Incentive Compensation earned, but unpaid,
      as of the Date of Termination; plus

     

    (ii)
      any
      amounts payable pursuant to (4)(d) (unreimbursed business expenses), (4)(e)
      (employee benefits due and owing), (4)(f) (accrued, but unpaid vacation or
      holidays), (4)(g) and 4(b)(ii) (payment of restricted stock, to the extent
      then
      vested); plus

     

    (iii)
      any
      benefits or amounts payable, on account of the Executive’s (A) participation in
      any long-term incentive compensation plan and equity compensation plan or
      arrangement, and (B) participation in any elective deferred compensation plan
      in
      which she was a participant as of her termination of service, all as determined
      in accordance with the terms and conditions of such plans and arrangements;
      plus

    

    (iv)
      lump
      sum severance, payable on the first day of the seventh (7th)
      month
      following the Executive’s termination of service, equal to one (1)
      times the
      sum
      of:

    

    (1)
      the
      Executive’s annual Base Salary rate in effect immediately prior to the
      Executive’s Date of Termination, as determined by the UIL Board’s most recent
      review of salary rates pursuant to Section 4(a); and

    

    (2)
      the
      short-term annual incentive compensation payment to which the Executive would
      be
      entitled, calculated as if she had been employed by the Company on the last
      day
      of the year of her Termination, and as if both personal goals and Company goals
      had been achieved ‘at target’ without pro-ration for the fact that the Executive
      was employed only a portion of such year. 

    

    (v)
      for
      the period ending on the first anniversary
      of the date of the Executive’s Date of Termination, continued participation in
      the medical and dental plan(s) in which she was a participant as of her Date
      of
      Termination on the same basis as if she remained an active employee, provided
      that such participation is possible under the terms and provisions of such
      plans
      and programs and applicable law. Such period of continued participation shall
      run concurrently with, and reduce day-for-day, any obligation that the Company
      or any Affiliate would have to provide “COBRA” continuation coverage with
      respect to the Executive’s termination of employment. If the Executive’s
      participation in any such plan or program is barred as a result of the
      Executive’s termination, the Company shall arrange to provide the

    
      
        
        

      

      
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    Executive
      with benefits substantially similar on an after-tax basis to those that the
      Executive would have been entitled to receive under such plan or program,
      provided that with respect to any benefit to be provided on an insured basis,
      the value of such coverage shall be based on the present value of the premiums
      expected to be paid for such coverage, and with respect to other benefits,
      such
      value shall be the present value of the expected cost to the Company of
      providing such benefits.

     

    (d)
      Upon
      Non-renewal of Agreement at end of Term.
      If the
      Executive’s employment hereunder is terminated due to non-renewal of this
      Agreement, the Company shall pay or provide (as applicable) to the Executive,
      the following:

     

    (i)
      the
      Executive’s Base Salary earned but unpaid as of the Date of Termination, Accrued
      Incentive Compensation (as defined in Section 4(b)) earned, but unpaid as of
      the
      Date of Termination and Stub-Period Incentive Compensation earned, but unpaid,
      as of the Date of Termination; plus

     

    (ii)
      any
      amounts payable pursuant to (4)(d) (unreimbursed business expenses), (4)(e)
      (employee benefits due and owing), (4)(f) (accrued, but unpaid vacation or
      holidays), (4)(g) and 4(b)(ii) (payment of restricted stock, to the extent
      then
      vested; plus

     

    (iii)
      any
      benefits or amounts payable, on account of the Executive’s (A) exercise of her
      then exercisable rights under any long-term incentive compensation plan or
      arrangement, and (B) participation in any deferred compensation plan in which
      she was a participant as of her termination of service; plus

    

    (iv)
      lump
      sum severance equal to six (6) months of the
      Executive’s annual Base Salary rate in effect immediately prior to the
      Executive’s Date of Termination, which amount shall be payable as of the first
      day of the seventh (7th)
      month
      following the Executive’s termination of service.

    

    (e)
      Timing
      of Payment.
      Any
      cash
      amount that is due and owing to the Executive upon her termination of service
      pursuant to Section 6 or Section 7 will be paid as soon as administratively
      feasible following the effective date (including any revocation period) of
      the
      Release provided for in Section 6(f); provided, however, that (i) any
      Stub-Period Incentive Compensation shall be calculated following the close
      of
      the calendar year to which such incentive relates in accordance with the terms
      of the applicable plan, and shall be paid at the same time as such incentives
      are payable to other executives, but in no event later than March 15 of the
      year
      following the end of the calendar year to which such incentive relates, (ii)
      any
      long-term incentive compensation shall be paid by March 15 of the calendar
      year
      following the end of the performance period to which such compensation relates,
      (iii) any severance payment (or other payment subject to Section 409A of the
      Internal Revenue Code) shall be paid as of the first day of the seventh
      (7th)
      month
      following the Date of Termination; and (iv) any elective deferred compensation
      shall be paid in accordance with the terms of the deferred compensation plan,
      subject to the requirements under Section 409A of the Internal Revenue Code
      for
      a six month delay in the case of distributions to ‘key’ employees.

    
      
        
        

      

      
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    (f)
      Release.
      All
      payments and obligations of the Company under Section (6) and (7) shall be
      conditioned upon the execution and delivery by Executive to the Company of
      a
      full and effective release by Executive of any liability of the Company, its
      affiliates, successors, assigns, directors, officers, employee and
      representatives to Executive in form and substance reasonably satisfactory
      to
      the Company. 

     

    

    (7)
      CHANGE IN CONTROL

    

    (a)
      If
      on, or within twenty-four (24) months following, a Change in Control, the
      Company (or its successor or other entity employing the Executive following
      such
      Change in Control) either terminates the Executive's employment hereunder
      without Cause or fails to renew this Agreement on substantially identical terms,
      or if the Executive terminates the Executive's employment on account of a
      Constructive Termination (as defined in the UIL CIC Plan II), then the Executive
      shall be entitled to the following:

     

    (i)
      the
      Executive’s Base Salary earned but unpaid as of the Date of Termination, Accrued
      Incentive Compensation (as defined in Section 4(b)) earned, but unpaid as of
      the
      Date of Termination and Stub-Period Incentive Compensation earned, but unpaid,
      as of the Date of Termination; plus

     

    (ii)
      any
      amounts payable pursuant to (4)(d) (unreimbursed business expenses), (4)(e)
      (employee benefits due and owing), (4)(f) (accrued, but unpaid vacation or
      holidays), (4)(g) and 4(b)(ii) (payment of restricted stock, to the extent
      then
      vested); plus

     

    (iii)
      any
      benefits or amounts payable, on account of the Executive’s (A) participation in
      any long-term incentive compensation plan and equity compensation plan or
      arrangement, and (B) participation in any deferred compensation plan in which
      she was a participant as of her termination of service, all as determined in
      accordance with the terms and conditions of such plans and arrangements;
      plus

    

    (iv)
      those payments, and benefits, if any, to which the Executive is entitled by
      reason of having been designated a Participant in the UIL CIC Plan II, as
      described in Section 4(c) of this Agreement. The severance payments, and other
      benefit provisions under such Plan (the “Total UIL CIC Plan Package”) shall be
      controlling and shall supplant the payments and benefits to which the Executive
      would be entitled assuming the Executive were terminated without Cause pursuant
      to the terms of this Agreement, including without limitation any severance
      benefits, short-term incentive compensation and other compensation and benefits
      (other than long term incentive compensation) under this Agreement (the
“Employment Agreement Termination Package”); expressly provided, however, that
      in the event that the Employment Agreement Termination Package exceeds the
      value
      of the Total UIL CIC Plan II Package, then the Executive shall be entitled
      to
      select one or the other Package, but shall not be entitled to both, and shall
      not be entitled to select among compensation elements in each
      Package.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    (b)
      For
      purposes of this Agreement, Change in Control shall mean “Change in Control” as
      defined with respect to the Company employing the Executive in the UIL CIC
      Plan
      II, as amended from time to time.

    

    (c)
      Payment of benefits under this Section 7 shall be subject to, and conditioned
      upon, the provisions of Section 6(e) and (f) hereof.

    

    

    (8)
      GROSS
      UP FOR EXCISE TAX.

    

    (a)
      Anything in this Agreement to the contrary notwithstanding, in the event that
      it
      shall be determined that any payment made and benefits provided by the Company
      to or for the Executive, whether paid or payable or distributed or distributable
      pursuant to the terms of this Agreement or otherwise, would constitute an
“excess parachute payment” within the meaning of Section 280G of the Internal
      Revenue Code of 1986 subject to an excise tax under Section 4999 of the Internal
      Revenue Code of 1986 as amended (the “Code”) or any successor provision (the
“Excise Tax”), the Executive shall be paid an additional amount (the “Gross-Up
      Payment”) such that the net amount retained by Executive after deduction of any
      Excise Tax, and any federal, state and local income and employment tax
      (including any Excise Tax imposed upon the Gross-Up Payment itself) shall be
      equal to the total amount of all payments and benefits to which the Executive
      would be entitled pursuant to this Agreement absent the Excise Tax, but net
      of
      all applicable federal, state and local taxes. For purposes of determining
      the
      amount of the Gross-Up Payment, Executive shall be deemed to pay federal income
      tax and employment taxes at the highest marginal rate of federal income and
      employment taxation in the calendar year in which the Gross-Up Payment is to
      be
      made and state and local income taxes at the highest marginal rate of taxation
      in the state and locality of Executive’s residence in the calendar year in which
      the Gross-Up Payment is to be made, net of the maximum reduction in federal
      income taxes that may be obtained from the deduction of state and local
      taxes.

    

    (b)
      The
      Gross-Up Payment, if any, shall be paid to the Executive or, at the discretion
      of the Company, directly to governmental authorities through tax withholding
      on
      the Executive’s behalf, as soon as practicable following the payment of the
      excess parachute payment, but in any event not later than 30 business days
      immediately following such payment; provided that any Gross-up Payment under
      this Section 8, including Section 8(d), shall be conditioned upon the Executive
      providing the release called for in Section 6(f) and complying with the
      confidentiality and non-compete provisions of this Agreement.

    

    (c)
      Subject to the provisions of Section 8(d), all determinations required to be
      made under this Section 8, including whether and when a Gross-Up Payment is
      required and the amount of such Gross-Up Payment and the assumptions to be
      utilized in arriving at such determination, shall be made by tax counsel
      appointed by the Company (the "Tax Counsel"), which shall provide its
      determinations and any supporting calculations both to the Company and Executive
      within 10 business days of having made such determination. The Tax Counsel
      shall
      consult with the Company’s benefit consultants and counsel in determining which
      payments to, or for the benefit of, the Executive are to be deemed to be
‘parachute payments’ within the meaning of Section 280G(b)(2) of the
      Code. Any
      such
      determination by the Tax Counsel shall 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    be
      final
      and binding upon the Company and Executive. All fees and expenses of the Tax
      Counsel (and, if applicable benefits consultants or other counsel) shall be
      borne solely by the Company. As a result of the uncertainty in the application
      of Section 4999 of the Code at the time of the initial determination by the
      Tax
      Counsel hereunder, it is possible that Gross-Up Payments, which will not have
      been made by the Company, should have been made ("Underpayment"). In the event
      that it is ultimately determined in accordance with the procedures set forth
      in
      Section 8(d) that the Executive is required to make a payment of Excise Tax,
      the
      Tax Counsel shall determine the amount of the Underpayment that has occurred,
      and any such Underpayment shall be promptly paid by the Company to or for the
      benefit of the Executive.

    

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

    

    (1)
      give
      the Company any information reasonably requested by the Company relating to
      such
      claim;

    

    (2)
      take
      such action in connection with contesting such claim as the Company shall
      reasonably request in writing from time to time, including, without limitation,
      accepting legal representation with respect to such claim by an attorney
      selected by the Company and reasonably acceptable to the Executive;

    

    (3)
      cooperate with the Company in good faith in order to contest such claim
      effectively; and

    

    (4)
      if
      the Company elects not to assume and control the defense of such claim, permit
      the Company to participate in any proceedings relating to such
      claim;

     

    provided,
      however, that the Company shall bear and pay directly all costs and expenses
      (including additional interest and penalties) incurred in connection with such
      contest and shall indemnify and hold the Executive harmless, on an after-tax
      basis, for any Excise Tax (including interest and penalties with respect
      thereto) imposed as a result of such representation and payment of costs and
      expenses. Without limitation on the foregoing provisions of this Section 8(d),
      the Company shall have the right, at its sole option, to assume the defense
      of
      and control all proceedings in connection with such contest, in which case
      it
      may pursue or forego any and all administrative appeals, proceedings, hearings
      and conferences with the taxing authority in respect of such claim and may
      either direct the Executive to pay the tax claimed and sue for a refund or
      contest the claim in any permissible manner, and the Executive agrees to
      prosecute such contest to a determination before any administrative tribunal,
      in
      a court of initial 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    jurisdiction
      and in one or more appellate courts, as the Company shall determine; provided,
      however, that if the Company directs the Executive to pay such claim and sue
      for
      a refund, the Company shall advance the amount of such payment to the Executive,
      on an interest-free basis, and shall indemnify and hold the Executive harmless,
      on an after-tax basis, from any Excise Tax (including interest or penalties
      with
      respect thereto) imposed with respect to such advance or with respect to any
      imputed income with respect to such advance; and further provided, that any
      extension of the statute of limitations relating to payment of taxes for the
      taxable year of the Executive with respect to which such contested amount is
      claimed to be due is limited solely to such contested amount. Furthermore,
      the
      Company's right to assume the defense of and control the contest shall be
      limited to issues with respect to which a Gross-Up Payment would be payable
      hereunder, and the Executive shall be entitled to settle or contest, as the
      case
      may be, any other issue raised by the Internal Revenue Service or any other
      taxing authority.

    

    (e)
      If,
      after the receipt by the Executive of an amount advanced by the Company pursuant
      to Section 8(d), the Executive becomes entitled to receive any refund with
      respect to such claim, the Executive shall (subject to the Company's complying
      with the requirements of Section 8(d)) promptly pay to the Company the amount
      of
      such refund (together with any interest paid or credited thereon after taxes
      applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 8(d), a determination is made that
      the Executive shall not be entitled to any refund with respect to such claim,
      and the Company does not notify the Executive in writing of its intent to
      contest such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid, and the amount of such advance shall offset, to the extent thereof,
      the amount of Gross-Up Payment required to be paid.

    

    

    (9)
      CONFIDENTIAL INFORMATION

    

    The
      Executive recognizes that the Executive’s employment by the Company is one of
      highest trust and confidence by reason of her access to certain trade secrets,
      confidential business practices, and proprietary information concerning the
      Company or any person or entity that directly, or indirectly through one or
      more
      intermediaries, controls or is controlled by, or is under common control with,
      the Company (an “Affiliate”), including, without limitation, the Company’s
      methods of doing business, marketing and strategic business plans, employees’
compensation and contract terms, customer lists and customer characteristics
      (collectively referred to as “Proprietary Information”). The Executive agrees
      and covenants to exercise utmost diligence to protect and safeguard the trade
      secrets, confidential business practices and Proprietary Information concerning
      the Company and any Affiliate. The Executive further agrees and covenants that,
      except with the prior written consent of the Company, she will not, either
      during the Term hereof or thereafter, directly or indirectly, use for her own
      benefit or for the benefit of any other person or organization, or disclose,
      disseminate or distribute to any other person or organization, any of the
      Proprietary Information (whether or not acquired, learned, obtained or developed
      by the Executive alone or in conjunction with another), unless and until such
      Proprietary Information has become a matter of public knowledge through no
      action or fault of the Executive or unless otherwise required by law, by
      regulation, or by court order to comply with legal process. All memoranda,
      notes, records, drawings, documents or other writings 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    whatsoever
      made, compiled, acquired or received by the Executive during the Term hereof
      arising out of, in connection with, or related to any activity or business
      of
      the Company are and shall continue to be the sole and exclusive property of
      the
      Company, and shall, together with all copies thereof, be returned and delivered
      to the Company by the Executive immediately, when she ceases to be employed
      by
      the Company, or at any other time upon the Company’s demand. The foregoing
      confidentiality obligations are in addition to any ethical obligations that
      Executive may have under the applicable Rules of Professional Conduct. In the
      event that there is any conflict between this Section 9 and the applicable
      Rules
      of Professional Conduct, the latter shall be controlling and adhered to by
      the
      Executive. 

    

    

    (10)
      NON-COMPETITION.

    

    The
      Executive agrees and covenants that, during the Term of this Agreement and
      for a
      period of twelve (12) months following the month during which the Executive
      ceases to be employed by the Company and its Affiliates (the “time in
      question”), the Executive will not, in any capacity, directly or
      indirectly,
      whether
      as a consultant, employee, officer, director, partner, member, principal,
      shareholder, or otherwise: 

    

    (a)
      become employed by, enter into a consulting arrangement with, or otherwise
      perform services for, manage, acquire an ownership in, or participate in the
      management or ownership of, a Competitor; or

    

    (b)
      directly or indirectly divert or attempt to divert from the Company or any
      Affiliate any business in which the Company or any Affiliate has been actively
      engaged during the Term hereof, or in any way interfere with the relationships
      that the Corporation or any Affiliate has with its sources of supply or
      customers; or

    

    (c)
      directly or indirectly interfere or attempt to interfere with the relationship
      between the Company or any Affiliate and any of such entity’s employees;

    

    unless
      the Company has granted prior written approval which may be withheld for any
      reason.

    

    For
      purposes of this Section “Competitor” means any person or entity (a ‘business’)
      that sells goods or services that are directly competitive with those goods
      or
      services sold or provided by the Company or any Affiliate, in a geographic
      area
      in which the Company or Affiliate is doing business and such Competitor is
      also
      doing business at the time in question, and such goods or services were being
      sold or provided at the Date of Termination, and, for the Company’s most
      recently completed fiscal year ending with, or immediately prior to, the Date
      of
      Termination, contributed more than 10% of the revenue of the Company and its
      Affiliates. Notwithstanding anything to the contrary in this Section, a business
      shall not be deemed to be a Competitor with the Company if the Executive is
      employed by, or otherwise associated with such business, and that business
      has a
      unit that is in competition with the Company or an Affiliate, but the Executive
      does not have direct or indirect responsibilities for the services or goods
      involved in the competition.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    Nothing
      in this Section shall be construed to prohibit the ownership by the Executive
      of
      less than five percent (5%) of any class of securities of any entity that is
      engaged in any of the foregoing businesses having a class of securities
      registered pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”),
      provided that such ownership represents a passive investment and that neither
      the Executive, nor any group of persons including the Executive, in any way,
      directly or indirectly, manages or exercises control of such entity, guarantees
      any of its financial obligations, or otherwise takes any part in its business,
      other than through exercising the Executive’s rights as a
      shareholder.

    

    For
      purposes of this Section “Affiliate” means any entity that directly or
      indirectly controls, is controlled by, or is under common control with the
      Company.

    

    As
      used
      in Sections 9-11, the term the “Company” shall mean UIL Holdings Corporation,
      and any successor to, or acquirer of, the business or assets of the
      Company.

     

     

    (11)
      DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND DISCOVERIES. 

     

    (a)
      Disclosure
      of Inventions.
      The
      Executive agrees to make prompt and complete disclosure to the Company of all
      inventions and discoveries made or conceived by her, alone or with others,
      while
      this Agreement is in effect, or within a reasonable time thereafter, which
      arise
      out of or relate to the services rendered pursuant to this Agreement. The
      Executive also agrees to keep necessary records, including notes, sketches,
      drawings, models and data supporting all such
      inventions and discoveries made by her, alone or with others, during the course
      of performing the services pursuant to this Agreement, and the Executive agrees
      to furnish the Company, upon request, all such records. 

     

        
(b)
      Assignment
      of Inventions and Discoveries.
      The
      Executive also agrees that she will assign to the Company all inventions and
      discoveries made by her which arise out of and pertain to the services rendered
      pursuant to this Agreement, together with all domestic and foreign patents
      as
      may be obtained on these inventions and discoveries. The Executive further
      agrees that, upon request of the Company, she will execute all necessary papers
      and cooperate in the fullest degree with the Company in securing, maintaining
      and enforcing any such patents which arise out of her services under this
      Agreement. It is understood, however, that these obligations undertaken by
      Executive will be at no expense to her.

     

     

    (12)
      MISCELLANEOUS. 

     

         
(a)
      Equitable
      Remedies.
      The
      Executive acknowledges that the restrictions provided for in Sections (9)
      through (11) are reasonable and necessary in order to protect the legitimate
      interests of the Company and its Affiliates, and that any violation thereof
      would result in serious damage and irreparable injury to the Company and its
      Affiliates. Further, the
      Executive acknowledges that the services to be rendered by her are of such
      unique and extraordinary nature, and the resulting injury to the Company from
      a
      breach of Sections (9) through (11), inclusive, by the Executive would be of
      such a nature, that an action at law for the collection of 

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    damages
      would not provide adequate relief to the Company for the enforcement of its
      rights in the event of an actual or threatened violation by the Execution of
      her
      commitments and obligations under Sections (9) through (11). The Executive
      agrees that upon the actual or threatened breach
      or
      violation of any of the commitments under Sections (9) through (11), the Company
      shall be entitled to both preliminary and permanent injunctive relief, in any
      action or proceeding brought in an appropriate court having jurisdiction over
      the Executive, to restrain her from committing any violation of any such
      commitments and obligations. 

     

    (b)
      Effect
      Of Breach.
      All
      payments and other benefits payable but not yet distributed to Executive under
      Sections (6), (7) or (8) shall be forfeited and discontinued in the event that
      the Executive violates Sections (9) through (11) of this Agreement, or willfully
      engages in conduct which is materially injurious to the Company, monetarily
      or
      otherwise, all as determined in the sole discretion of the Company.

     

    (c)
      Successors;
      Binding Agreement; Assignment.
      

     

    (i)
      The
      Company will require the acquirer of all or substantially all of the business
      or
      assets of the Company (whether directly or indirectly, by purchase of stock
      or
      assets, merger, consolidation or otherwise), by agreement in form and substance
      reasonably satisfactory to the Executive, to expressly assume and agree to
      perform this Agreement in the same manner and to the same extent that the
      Company would be required to perform it if no such succession had taken place.
      If the Company fails to obtain such agreement prior to the effective date of
      any
      such succession, the Executive may terminate her employment within thirty (30)
      days of such succession and treat such termination as a Breach by the Company
      and termination without cause on account of a Change in Control entitling the
      Executive to payments and benefits under Section (7) of this Agreement. For
      purposes of implementing the foregoing, the date on which any such succession
      becomes effective shall be deemed the Date of Termination. 

     

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

     

    As
      used
      in this Section, the term “Company” shall include The
      United Illuminating Company, UIL Holdings Corporation, and any successor to,
      or
      acquirer of, the business or assets of the Company that executes and delivers
      the agreement provided for in this Section (12)(c) or which otherwise becomes
      bound by all the terms and provisions of this Agreement by operation of
      law.

     

    (d)  Notices.
      For the
      purpose of this Agreement, notices and all other communications to either party
      hereunder provided for in the Agreement shall be in writing and shall be deemed
      to have been duly given when delivered or mailed by United States certified
      or
      registered mail, return receipt requested, postage prepaid, addressed, in the
      case of the Company, to the Secretary of the Company at 157 Church Street,
      New
      Haven, Connecticut 06506, or, in the case of the Executive, to the Executive
      at
      her residence, or to such other address as either party shall designate by
      giving written notice of such change to the other party. 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (e) Waiver;
      Amendment.
      Except
      to the extent that the UIL Board and/or the CEDC possesses the power to modify
      or amend this Agreement pursuant to its charter, no provision of this Agreement
      may be modified, waived or discharged unless such waiver, modification or
      discharge is approved by the UIL Board and agreed to in a writing signed by
      the
      Executive and the Company. No waiver by either party hereto at any time of
      any
      breach by the other party hereto of, or compliance with, any condition or
      provision of this Agreement to be performed by such other party, shall be deemed
      a waiver of any similar or dissimilar provisions or conditions at the same
      or at
      any prior or subsequent time. No agreements or representations, oral or
      otherwise, express or implied, with respect to the subject matter hereof have
      been made by either party that are not set forth expressly in this Agreement.
      The parties hereto recognize that certain provisions of this Agreement may
      be
      affected by Section 409A of the Internal Revenue Code and guidance issued
      thereunder, and agree to amend this Agreement, or take such other action as
      may
      be necessary or advisable, to comply with Section 409A.

    

    (f) Code
      Section 409A Compliance.
      Certain
      provisions of this Agreement may be required to comply with Section 409A.
      Notwithstanding anything in the Agreement to the contrary, if this Agreement
      or
      any provision of this Agreement is deemed to be subject to Code section 409A,
      the parties agree to make any changes necessary to ensure that the
      Agreement complies with Code section 409A. It is intended that all payments
      hereunder shall comply with Section 409A of Code and the regulations promulgated
      thereunder so as not to subject the Executive to payment of interest or any
      additional tax under Section 409A. In furtherance thereof, if payment or
      provision of any amount or benefit hereunder that is subject to Section 409A
      at
      the time specified herein would subject such amount or benefit to any additional
      tax under Section 409A, the payment or provision of such amount or benefit
      shall
      be postponed to the earliest commencement date on which the payment or provision
      of such amount or benefit could be made without incurring such additional tax.
      In addition, to the extent that any regulations or other guidance issued under
      Section 409A (after application of the previous provisions of this Section
      12(f)) would result in the Executive’s being subject to the payment of interest
      or any additional tax under Section 409A of the Code, the parties agree, to
      the
      extent reasonably possible, to amend this Agreement in order to avoid the
      imposition of any such interest or additional tax under Section 409A, which
      amendment shall have the minimum economic effect necessary and be reasonably
      determined in good faith by the Company and the Executive.

     

    (g) Governing
      Law; Severability.
      The
      validity, interpretation, construction and performance of this Agreement shall
      be governed by the laws of the State of Connecticut. The validity or
      unenforceability of any provision or provisions of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall remain in full force and effect. In the event one or more of the
      provisions of this Agreement should, for any reason, be held to be invalid,
      illegal or unenforceable in any respect, the parties agree that such provisions
      shall be legally enforceable to the extent permitted by applicable law, and
      that
      any court of competent jurisdiction shall so enforce such provision, or shall
      have the authority hereunder to modify it to make it enforceable to the greatest
      extent permitted by law. 

     

    (h) No
      Conflict.
      The
      Executive hereby represents and warrants to the Company that neither the
      execution nor the delivery of this Agreement, nor the employment of the
      Executive by the Company will result in the breach of any agreement to which
      the
      Executive is a party.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (i) Survival.
      The
      provisions of this Agreement shall not survive the termination of this Agreement
      or of the Executive’s employment hereunder, except that the provisions of
      Sections (6) through (12) hereof shall survive such termination and shall be
      binding upon the Executive, the Executive’s personal representative and/or
      spouse, the Company, and the Company’s successors and assigns.

     

    (j) Counterparts;
      Facsimile Execution.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which together shall constitute one and the same
      instrument. Facsimile execution and delivery of this Agreement is legal, valid
      and binding execution and delivery for all purposes.

    
 

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year first above written.

    

    

    

                          UIL
      HOLDINGS
      CORPORATION

    

    

    
      	
              Attest:

            	 	 	 
	 	 	 	 
	
              /s/
                Richard J. Nicholas        

            	
            	
              By:

            	
              /s/
                James P. Torgerson                  
                 

            
	 	 	 	
                James
                P.
                Torgerson, President
                and Chief Executive 

                       
                Officer

            

    

    

    

    

    
      	
              /s/
                Bernice L. Herring        

            	 	 	
              /s/
                Linda L. Randell                      

            
	 	 	 	
              Linda
                L. Randell,

            

    

    
 

    DM2\946438.4

     

    18UIL Exhibit 10.35 - Second Amendment to UIL 1999 Amended and Restated Stock
      Plan

    EXHIBIT
      10.35

     

    SECOND
      AMENDMENT

    TO
      THE

    UIL
      HOLDINGS CORPORATION

    1999
      AMENDED AND RESTATED STOCK PLAN

     

    1. The
      definition of Performance Goals contained in the Glossary to the Plan is hereby
      amended to add a reference to total shareholder return and to conform the
      definition to that contained in the UIL Holdings Corporation Senior Executive
      Incentive Compensation Plan: 

    

    "Performance
      Goals" shall mean one or more objective performance goals, established by the
      Committee at the time an Award opportunity is authorized, and based upon the
      attainment of specified performance levels with respect to one or any
      combination of the following criteria, which may be determined by reference
      to
      the Company's performance or the performance of a Subsidiary (or any business
      unit): (i) net income; (ii) earnings, before or after income taxes; (iii)
      earnings per share; (iv) pre-tax operating income; (v) expense management;
      (vi)
      profitability, including profitability of an identifiable business unit or
      product; (vii) revenue; (viii) shareholder value creation measures, including
      but not limited to stock price or total shareholder return; (ix) return
      measures, including return on assets (gross or net), return on investment,
      return on capital, or return on equity; (x) cash flow, free cash flow, cash
      flow
      return on investment (discounted or otherwise), net cash provided by operations,
      or cash flow in excess of cost of capital; (xi) net economic profit (operating
      earnings minus a charge for capital) or economic value created; (xii) strategic
      innovation; (xiii) dividend levels; (xiv) strategic business criteria,
      consisting of one or more objectives based on meeting specified market
      penetration, geographic business expansion goals, cost targets, completion
      of
      capital and debt transactions, customer satisfaction, employee satisfaction,
      management of employment practices and employee benefits, supervision of
      litigation and information technology, and goals relating to acquisitions or
      divestitures of subsidiaries, affiliates or joint ventures; or (xv) any
      combination of the foregoing. The level or levels of performance with respect
      to
      such business criteria may be established at such levels and in such terms
      as
      the Committee may determine, in its discretion, including in absolute terms,
      as
      a goal relative to performance in prior periods, or as a goal compared to the
      performance of one or more comparable companies or an index covering multiple
      companies.

    

    2.
      Section 6 is hereby revised in its entirety to read as follows:

    

    6.
      Adjustments.

    

    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 and
      kind
      of shares which may be purchased or awarded pursuant to the Plan, (ii) the
      number or kind of Shares available for the future granting of Awards hereunder,
      (iii) the number and kind of Shares covered by the Awards granted, and (iv)
      the
      grant, purchase, or exercise price with respect to any Award, in order to
      prevent dilution or enlargement of the benefits or potential benefits intended
      to be made available under the Plan or any outstanding Award; provided, however,
      that with respect to an Incentive Stock Option no such adjustment shall be
      authorized to the extent that such would cause the termination of the Incentive
      Stock Option treatment pursuant to applicable Code requirements. In the event
      of
      any merger, consolidation or other reorganization in which the Company is not
      the surviving or continuing 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    entity,
      all Awards granted hereunder and outstanding on the date of such event 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 Common Stock are
      exchanged for shares of the common stock of another corporation, all Awards
      granted hereunder and outstanding on the effective date of the share exchange
      shall be automatically converted into Awards of the other corporation on
      identical terms, and the other corporation shall assume this Plan, or if the
      Administrator deems such action appropriate, it may provide for a cash payment
      to the holder of an outstanding Award.

     

     

    3.
      Section 7(b) shall be amended in its entirety to incorporate the Change in
      Control definition previously approved by the Board:

     

    (b)
      “Change
      in Control” of
      the
      Company shall have the following meaning: 

     

    (A)
      UIL
      and its subsidiaries.
      With
      respect to UIL and its subsidiaries, the
      occurrence of any of the following shall constitute a Change of
      Control:

     

    (i)
      When
      any Person, other than UIL, its Affiliates, or any employee benefit plan of
      UIL
      or its Affiliate s (including any trustee of such plan acting as trustee),
      is or
      becomes the Beneficial Owner, directly or indirectly, of securities of UIL
      representing more than 25% of the combined voting power of the then outstanding
      securities entitled to vote generally in the election of directors (“Voting
      Securities”) of UIL; or

     

    (ii)
      Individuals, who constitute the Board of Directors of UIL (the “Incumbent
      Directors”) as of the beginning of any twenty-four month period (not including
      any period prior to the date of this Agreement), cease for any reason to
      constitute at least a majority of the directors. Notwithstanding the foregoing,
      any individual becoming a director subsequent to the beginning of such period,
      whose election or nomination for election by UIL’s stockholders was approved by
      a vote of at least a majority of the directors then comprising the Incumbent
      Directors, shall be considered an Incumbent Director; or 

     

    (iii)
      Consummation by UIL of a recapitalization, reorganization, merger, consolidation
      or other similar transaction (a “Business Combination”), with respect to which
      all or substantially all of the individuals and entities who were the Beneficial
      Owners of the Voting Securities immediately prior to such Business Combination
      (the “Incumbent Shareholders”) do not, following consummation of all
      transactions intended to constitute part of such Business Combination,
      beneficially own, directly or indirectly, more than 50% of the Voting Securities
      of the corporation, business trust or other entity resulting from or being
      the
      surviving entity in such Business Combination (the “Surviving Entity”), in
      substantially the same proportion as their ownership of such Voting Securities
      immediately prior to such Business Combination; or

     

    (iv)
      Consummation of a complete liquidation or dissolution of UIL, or the sale or
      other disposition of all or substantially all of the assets of UIL, other than
      to a corporation, business trust or other entity with respect to which,
      following consummation of all transactions intended to constitute part of such
      sale or disposition, more than 50% of the combined Voting Securities is then
      owned beneficially, directly or indirectly, by the Incumbent Shareholders in
      substantially the same proportion as their ownership of the Voting Securities
      immediately prior to such sale or disposition.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (B)
      Certain
      Business Units.
      With
      respect to the following business units, namely The United Illuminating Company,
      and Xcelecom, Inc. (each, a “Business Unit”), the occurrence of either of the
      following shall constitute a Change of Control, but only with respect to
      individuals whose primary employment is by the affected Business
      Unit:

     

    (i)
      Consummation of a Business Combination involving such Business Unit with respect
      to which UIL (together with the Incumbent Shareholders) does not, following
      consummation of all transactions intended to constitute part of such Business
      Combination, beneficially own, directly or indirectly, more than 50% of the
      Voting Securities of the surviving entity; or 

     

    (ii)
      Consummation of a complete liquidation or dissolution of such Business Unit,
      or
      the sale or other disposition of all or substantially all of the assets of
      such
      Business Unit, other than to a corporation, business trust or other entity
      with
      respect to which, following consummation of all transactions intended to
      constitute part of such sale or disposition, more than 50% of the Voting
      Securities of such entity is then owned beneficially, directly or indirectly,
      by
      UIL (together with the Incumbent Shareholders).

     

    (C)
      Defined
      Terms.
      The
      following terms shall have the meanings set forth below:

     

    (i)
      “Affiliate” shall have the meaning set forth in Rule 12b-2 under the Exchange
      Act;

     

    (ii)
      “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the
      Exchange Act;

     

    (iii)
      “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended;
      and

     

    (iv)
      “Person” shall have the meaning as used in Sections 13(d) and 14(d) of the
      Exchange Act.

     

     

    The
      foregoing amendment shall be effective in accordance with its
      terms.

     

     

                   UIL
      HOLDINGS
      CORPORATION

     

     

    
      	 	
              By  /s/
                James P. Torgerson      

            
	 	
                
Its 
                President and CEO

            

    

    

     

    

    \14746\9\605179.2

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