Document:

EXHIBIT 10.44
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                                   VIVUS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                         (AS AMENDED ON APRIL 21, 2003)

         The following constitute the provisions of the 1994 Employee Stock
Purchase Plan of Vivus, Inc.

         1.   Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2.   Definitions.

              (a)  "Board" shall mean the Board of Directors of the company.

              (b)  "Change of Control" shall mean the occurrence of any of the
following events:

                   (i)    Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities; or

                   (ii)   The consummation of the sale or disposition by the
Company of all or substantially all of the Company's assets; or

                   (iii)  The consummation of a merger or consolidation of the
Company, with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting
securities of the Company, or such surviving entity or its parent outstanding
immediately after such merger or consolidation; or

                   (iv)   A change in the composition of the Board, as a result
of which fewer than a majority of the Directors are Incumbent Directors.
"Incumbent Directors" shall mean Directors who either (A) are Directors of the
Company, as applicable, as of the date hereof, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
those Directors whose election or nomination was not in connection with any
transaction described in subsections (i), (ii) or (iii) or in connection with an
actual or threatened proxy contest relating to the election of Directors of the
Company.
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              (c)  "Code" shall mean the Internal Revenue Code of 1986, as
amended.
              (d)  "Common Stock" shall mean the Common Stock of the Company.

              (e)  "Company" shall mean Vivus, Inc. and any Designated
Subsidiary of the Company.

              (f)  "Compensation" shall mean all base straight time gross
earnings and commissions, exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.

              (g)  "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

              (h)  "Eligible Employee" shall mean any individual who is a common
law employee of the Company or any Designated Subsidiary whose customary
employment with the Company or any Designated Subsidiary is at least twenty (20)
hours per week and more than five (5) months in any calendar year. For purposes
of the Plan, the employment relationship shall be treated as continuing intact
while the individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the employment
relationship will be deemed to have terminated on the 91st day of such leave.

              (i)  "Enrollment Date" shall mean the first day of each Offering
Period.
              (j)  "Exercise Date" shall mean the last day of each Offering
Period.
              (k)  "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:

                   (1)    If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be the closing sale
price for the Common Stock (or the mean of the closing bid and asked prices, if
no sales were reported), as quoted on such exchange (or the exchange with the
greatest volume of trading in Common Stock) or system on the date of such
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable, or;

                   (2)    If the Common Stock is quoted on the NASDAQ system
(but not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable, or;

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                   (3)    In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.

              (l)  "Offering Period" shall mean a period of approximately six
(6) months, commencing on the first Trading Day on or after May 1 and
terminating on the last Trading Day in the period ending the following October
31, or commencing on the first Trading Day on or after November 1 and
terminating on the last Trading Day in the period ending the following April 30,
during which an option granted pursuant to the Plan may be exercised. The
duration of Offering Periods may be changed pursuant to Section 4 of this Plan.
The initial Offering Period shall be determined by the Board of Directors.

              (m)  "Plan" shall mean this Employee Stock Purchase Plan.

              (n)  "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

              (o)  "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

              (p)  "Subsidiary" shall mean a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.

              (q)  "Trading Day" shall mean a day on which national stock
exchanges and the National Association of Securities Dealers Automated Quotation
(NASDAQ) System are open for trading.

         3.   Eligibility.

              (a)  Any Eligible Employee (as defined in Section 2(g)), who shall
be employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan.

              (b)  Any provisions of the Plan to the contrary notwithstanding,
no Eligible Employee shall be granted an option under the Plan (i) to the
extent, immediately after the grant, such Eligible Employee (or any other person
whose stock would be attributed to such Eligible Employee pursuant to Section
424(d) of the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of the capital stock
of the Company or of any Subsidiary, or (ii) to the extent his or her rights to
purchase stock under all employee stock purchase plans of the Company and its
subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the fair market value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time.

         4.   Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after May 1 and November 1 each year, or on such other date as the Board
shall determine, and continuing thereafter until terminated in accordance with
Section 19 hereof. The Board shall have the power to change the duration of

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Offering Periods (including the commencement dates thereof) with respect to
future offerings without stockholder approval if such change is announced prior
to the scheduled beginning of the first Offering Period to be affected
thereafter.

         5.   Participation.

              (a)  An Eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.

         6.   Payroll Deductions.

              (a)  At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not less than one percent (1%) not
exceeding ten percent (10%) of the Compensation which he or she receives on each
pay day during the Offering Period; provided, however, that should a pay day
occur on an Exercise Date, a participant shall have the payroll deductions made
on such day applied to his or her account under the new Offering Period. A
participant's subscription agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 10 hereof.

              (b)  Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

              (c)  All payroll deductions made for a participant shall be
credited to his or her account under the Plan and will be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

              (d)  A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in payroll
deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 10 hereof.

              (e)  Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at such
time during any Offering Period which is scheduled to end during the current
calendar year (the "Current Offering Period") that the aggregate of all payroll
deductions which were previously used to purchase stock under the Plan in a
prior Offering Period which ended during that calendar year plus all payroll
deductions accumulated with respect to the Current Offering Period equal
$21,250. Payroll deductions shall recommence at the rate provided in such

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participant' s subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10 hereof.

              (f)  At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any time,
the Company may, but will not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Eligible Employee.

         7.   Grant of Option. On the Enrollment Date of each Offering Period,
each Eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Eligible Employee's payroll deductions
accumulated prior to such Exercise Date and retained in the Participant's
account as of the Exercise Date by the applicable Purchase Price; provided that
in no event shall an Eligible Employee be permitted to purchase during each
Offering Period more than 7,000 shares of the Company's Common Stock (subject to
any adjustment pursuant to Section 18), on the Enrollment Date, and provided
further that such purchase shall be subject to the limitations set forth in
Sections 3(b) and 12 hereof. The Eligible Employee may accept the grant of such
option by turning in a completed and signed subscription agreement (in the form
attached hereto as Exhibit A) to the Company on or prior to an Enrollment Date.
The Board (or its committee) may, for future Offering Periods, increase or
decrease, in its absolute discretion, the maximum number of shares of the
Company's Common Stock an Eligible Employee may purchase during an Offering
Period. Exercise of the option shall occur as provided in Section 8 hereof,
unless the participant has withdrawn pursuant to Section 10 hereof, and shall
expire on the last day of the Offering Period.

         8.   Exercise of Option.

              (a)  Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant' s account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. Any other monies left over in a participant's account after
the Exercise Date shall be returned to the participant. During a participant's
lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.

              (b)  If the Board (or its committee) determines that, on a given
Exercise Date, the number of shares with respect to which options are to be
exercised may exceed (i) the number of shares of Common Stock that were
available for sale under the Plan on the Enrollment Date of the applicable

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Offering Period, or (ii) the number of shares available for sale under the Plan
on such Exercise Date, the Board (or its committee) may in its sole discretion
(x) provide that the Company shall make a pro rata allocation of the shares of
Common Stock available for purchase on such Enrollment Date or Exercise Date, as
applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, or (y)
provide that the Company shall make a pro rata allocation of the shares
available for purchase on such Enrollment Date or Exercise Date, as applicable,
in as uniform a manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date. The Company may make pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
stockholders subsequent to such Enrollment Date.

         9.   Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.

         10.  Withdrawal; Termination of Employment.

              (a)  A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account will be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Offering Period.
If a participant withdraws from an Offering Period, payroll deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.

              (b)  A participant's withdrawal from an Offering Period will not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering Periods
which commence after the termination of the Offering Period from which the
participant withdraws.

              (c)  Upon a participant's ceasing to be an Eligible Employee (as
defined in Section 2(g) hereof ), for any reason, he or she will be deemed to
have elected to withdraw from the Plan and the payroll deductions credited to
such participant's account during the Offering Period but not yet used to
exercise the option will be returned to such participant or, in the case of his
or her death, to the person or persons entitled thereto under Section 14 hereof,
and such participant's option will be automatically terminated. The preceding
sentence notwithstanding, a participant who receives payment in lieu of notice
of termination of employment shall be treated as continuing to be an Eligible
Employee for the participant's customary number of hours per week of employment
during the period in which the participant is subject to such payment in lieu of
notice.

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         11.  Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.

         12.  Stock.

              (a)  The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be 1,400,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in Section 18 hereof.

              (b)  The participant will have no interest or voting right in
shares covered by his option until such option has been exercised.

              (c)  Shares to be delivered to a participant under the Plan will
be registered in the name of the participant or in the name of the participant
and his or her spouse.

         13.  Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

         14.  Designation of Beneficiary.

              (a)  A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

              (b)  Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

         15.  Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such

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attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

         16.  Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions. Until
shares are issued, participants shall only have the rights of an unsecured
creditor.

         17.  Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees at least annually, which statements will set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         18.  Adjustments Upon Changes in Capitalization.

              (a)  Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the Reserves as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration". Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.

              (b)  Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and
shall terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Board (or its
committee). The New Exercise Date shall be before the date of the Company's
proposed dissolution or liquidation. The Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant's option has been changed to the New
Exercise Date and that the participant's option shall be exercised automatically
on the New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10 hereof.

              (c)  Merger or Change of Control. In the event of a merger or a
Change of Control, each option under the Plan shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
to shorten the Offering Period then in progress by setting a new Exercise Date
(the "New Exercise Date") or to cancel each outstanding right to purchase and

                                       -8-
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refund all sums collected from participants during the Offering Period then in
progress. If the Board shortens the Offering Period then in progress in lieu of
assumption or substitution in the event of a merger or Change of Control, the
Board shall notify each participant in writing, at least ten (10) business days
prior to the New Exercise Date, that the Exercise Date for his or her option has
been changed to the New Exercise Date and that his or her option will be
exercised automatically on the New Exercise Date, unless prior to such date he
or she has withdrawn from the Offering Period as provided in Section 10 hereof.
For purposes of this paragraph, an option granted under the Plan shall be deemed
to be assumed if, following the merger or Change of Control, the option confers
the right to purchase, for each share of option stock subject to the option
immediately prior to the merger or Change of Control, the consideration (whether
stock, cash or other securities or property) received in the merger or Change of
Control by holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if such
consideration received in the merger or Change of Control was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Board may, with the consent of the successor corporation,
provide for the consideration to be received upon exercise of the option to be
solely common stock of the successor corporation or its parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or Change of Control.

         The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.

         19.  Amendment or Termination.

              (a)  The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 18 hereof,
no such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best
interests of the Company and its stockholders. Except as provided in Section 18
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law or regulation), the Company shall obtain stockholder
approval in such a manner and to such a degree as required.

              (b)  Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock

                                       -9-
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for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.

              (c)  In the event the Board (or its committee) determines that the
ongoing operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary or
desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:

                   (i)    increasing the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase
Price;

                   (ii)   shortening any Offering Period so that Offering Period
ends on a new Exercise Date, including an Offering Period underway at the time
of the Board action; and

                   (iii)  allocating shares.

              Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants

         20.  Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         21.  Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

         As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

         22.  Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company. It shall continue in effect for a term of twenty
(20) years unless sooner terminated under Section 19 hereof.

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                                    EXHIBIT A
                                    ---------

                                   VIVUS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

_____ Original Application                           Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

     1. _____________________________________ hereby elects to participate in
the Vivus, Inc. 1994 Employee Stock Purchase Plan (the "Employee Stock Purchase
Plan") and subscribes to purchase shares of the Company' s Common Stock in
accordance with this Subscription Agreement and the Employee Stock Purchase
Plan.

     2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (not to exceed 10%) during the
Offering Period in accordance with the Employee Stock Purchase Plan. (Please
note that no fractional percentages are permitted.)

     3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price determined
in accordance with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option.

     4. I have received a copy of the complete "Employee Stock Purchase Plan." I
understand that my participation in the Employee Stock Purchase Plan is in all
respects subject to the terms of the Plan. I understand that the grant of the
option by the Company under this Subscription Agreement is subject to obtaining
stockholder approval of the Employee Stock Purchase Plan.

     5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Eligible Employee or Eligible Employee and Spouse
Only):

     6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the Offering
Period during which I purchased such shares), I will be treated for federal
income tax purposes as having received ordinary income at the time of such
disposition in an amount equal to the excess of the fair market value of the
shares at the time such shares were purchased by me over the price which I paid
for the shares. I hereby agree to notify the Company in writing within 30 days
after the date of any disposition of shares and I will make adequate provision
for Federal, state or other tax withholding obligations, if any, which arise
upon the disposition of the Common Stock. The Company may, but will not be
obligated to, withhold from my compensation the amount necessary to meet any
<PAGE>
applicable withholding obligation including any withholding necessary to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by me. If I dispose of such shares at any time
after the expiration of the 2-year holding period, I understand that I will be
treated for federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as ordinary income
only to the extent of an amount equal to the lesser of (1) the excess of the
fair market value of the shares at the time of such disposition over the
purchase price which I paid for the shares, or (2) 15% of the fair market value
of the shares on the first day of the Offering Period. The remainder of the
gain, if any, recognized on such disposition will be taxed as capital gain.

     7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Employee Stock Purchase Plan.

     8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Stock Purchase Plan:

NAME: (Please print)
                     -----------------------------------------------------------
                                 (First)    (Middle)    (Last)

--------------------------                 -------------------------------------
Relationship
                                           -------------------------------------
                                                          (Address)

                                       -2-
<PAGE>
EMPLOYEE NAME: (Please print)
                              --------------------------------------------------
                                        (First)    (Middle)    (Last)

                              --------------------------------------------------

                              --------------------------------------------------
                                                   (Address)

Employee's Social
Security Number:
                              --------------------------------------------------

Employee's Address:
                              --------------------------------------------------

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
       -----------------------          ----------------------------------------
                                        Signature of Employee

                                        ----------------------------------------
                                        Spouse's Signature (If beneficiary
                                        other than spouse)

                                       -3-
<PAGE>
                                    EXHIBIT B
                                    ---------

                                   VIVUS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Vivus, Inc. 1994
Employee Stock Purchase Plan which began on ___________ 19____ (the "Enrollment
Date") hereby notifies the Company that he or she hereby withdraws from the
Offering Period. He or she hereby directs the Company to pay to the undersigned
as promptly as practicable all the payroll deductions credited to his or her
account with respect to such Offering Period. The undersigned understands and
agrees that his or her option for such Offering Period will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement.

                                         Name and Address of Participant:

                                         ---------------------------------------

                                         ---------------------------------------

                                         ---------------------------------------

                                         Signature:

                                         ---------------------------------------

                                         Date:
                                               ---------------------------------EXHIBIT 4.3

                            UIL HOLDINGS CORPORATION
                           DEFERRED COMPENSATION PLAN

               (AS ORIGINALLY ADOPTED EFFECTIVE JANUARY 27, 2003,
                  REFLECTING AMENDMENTS THROUGH MARCH 24, 2003)

<PAGE>

                            UIL HOLDINGS CORPORATION
                           DEFERRED COMPENSATION PLAN

                                  INTRODUCTION
                                  ------------

         UIL Holdings Corporation (the "Company") hereby establishes the UIL
Holdings Corporation Deferred Compensation Plan to provide a select group of its
senior management, and those of its selected Business Units, with the
opportunity to accumulate capital by deferring compensation on a pre-tax basis,
and to provide the Company with a method of rewarding and retaining its top
executives and managerial employees.

         The purpose of this Plan also is to permit those eligible executive
employees whose matching allocations under the United Illuminating Company
401(k)/Employee Stock Ownership Plan ("UI KSOP") would be limited by virtue of
their Compensation Deferrals under this Plan, with certain supplemental benefits
to make up for such limitations.

         The Plan, as set forth herein, is effective as of February 1, 2003.

                                    ARTICLE I
                              TITLE AND DEFINITIONS
                              ---------------------

         1.1      Definitions.
                  -----------

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

                  a) "Account" or "Accounts" shall mean a Participant's account
under this Plan, including all of such subaccounts as are specifically
authorized for inclusion in this Plan.

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

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

                                        1

<PAGE>

                  d) "Business Unit" means The United  Illuminating  Company
("UI"), American Payment Systems, Inc. ("APS"), Xcelecom, Inc., United
Resources, Inc. ("URI"),and each other subsidiary of the Company which, with
the consent of the Board,has adopted the Plan.  Business Units shall be listed
on Exhibit A to the Plan.

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

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

                  g) "Change in Control" of the Company shall mean any of the
following events, with the term "Company" being used in this definition to refer
also to a Change in Control of any Business Unit with respect to each
Participant employed by such Business Unit:

                           (i) any merger or consolidation of the Company with
any corporate shareowner or group of corporate shareowners holding twenty-five
percent (25%) or more of the Stock of UIL Holdings Corporation (or a successor
to UIL Holdings Corporation, whether direct or indirect, by purchase, merger,
consolidation or otherwise - a "Successor"), or with any other corporation or
group of corporations that is, or after such merger or consolidation would be,
or be affiliated with, a shareowner or group of shareowners owning at least
twenty-five percent (25%) of the Stock of UIL Holdings Corporation or a
Successor, or

                           (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of any assets of the Company having an aggregate
fair market value of $50 million or more to or with any shareowner or group of
shareowners holding twenty-five percent (25%) or more of the Stock of UIL
Holdings Corporation or a Successor, or to or with any affiliate of any such
shareowner or group of shareowners; or

                           (iii) the issuance or sale by the Company, or the
sale by UIL Holdings Corporation or a Successor, in exchange for cash,
securities or other consideration having an aggregate fair market value of $50
million or more, of any securities of such Company to any shareowner or group of
shareowners holding twenty-five percent (25%) or more of the Stock of UIL
Holdings Corporation or a Successor, or to any affiliate of any such shareowner
or group of shareowners; or

                           (iv) the implementation of any plan or proposal for
the liquidation or dissolution of the Company, or of UIL Holdings Corporation or
a Successor, proposed by or on behalf of any shareowner or group of shareowners
owning at least twenty-five percent (25%) of the Stock of UIL Holdings
Corporation or a Successor, or by or on behalf of any affiliate of any such
shareowner or group of shareowners; or

                           (v) any reclassification of securities (including a
reverse stock split), or recapitalization, of UIL Holdings Corporation or a
Successor, or any other transaction, which has the effect, directly or
indirectly, of increasing the proportionate share of outstanding shares of any
class of equity securities, or securities convertible into any equity
securities, of UIL Holdings Corporation or a Successor, which class of
securities is directly or indirectly owned by a shareowner or group of
shareowners owning at least twenty-five percent (25%) of the Stock of UIL
Holdings Corporation or a Successor, or by any affiliate of any such shareowner
or group of shareowners.

         The Board of Directors of the Company may, from time to time, by the
affirmative vote of not less than a majority of the entire membership of said
Board of Directors, at a meeting of said Board of Directors called and held for
the purpose, modify the phrase "twenty-five percent (25%)" in one or more of the
foregoing subparagraphs to a lesser percentage, but not less than twenty percent
(20%).

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

                  i) "Committee" shall mean the Administrative Committee
appointed by the Chief Executive Officer to administer the Plan in accordance
with Article VII.

                                       2
<PAGE>

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

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

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

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

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

                  o) "Compensation" shall mean, in the case of Eligible
Employees, Base Salary, increases in Base Salary received during the Plan Year;
Bonuses and other incentive awards; any lump sum payments made from the
Company's SERP; compensation in excess of the amount deductible under Section
162(m) of the Code, and any other compensation permitted to be deferred by the
Chief Executive Officer or Committee.

                  p) "Compensation Committee" shall mean the Compensation and
Executive Development Committee of the Board of Directors of the Company or any
subcommittee thereof.

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

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

                  s) "Designated Individuals" shall mean those Eligible
Employees and Directors designated as eligible to defer Restricted Stock Awards.

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

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

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

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

                                       3
<PAGE>

                x) "Effective Date" shall be February 1, 2003.

                y) "Eligible Employee" shall mean each Employee of the Company
or a Participating Subsidiary eligible to participate in the Plan, as determined
in Section 2.1.

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

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

                bb) "Election Period" shall mean the time period associated with
enrollment in 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, subsequent elections with respect to a
subsequent calendar year must be filed by October 30th of the preceding year to
be effective with respect to such subsequent calendar year. Each newly Eligible
Person shall have thirty days after becoming eligible in which to file an
election with respect to Compensation deferrals for the initial Plan Year in
which he or she is eligible to participate. Notwithstanding the foregoing, 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 the Award, and which shall be deemed
effective contemporaneously with the Award with respect to any Restricted Stock
vesting at least one year after such election is processed.

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

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

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

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

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

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

                ii) "Plan" shall mean the UIL Holdings Corporation Deferred
Compensation Plan.

                jj) "Plan Administrator" shall mean the administrator appointed
by the Committee with the approval of the Chief Executive Officer of the
Company. As of February 1, 2003, TBG Financial was appointed the Plan
Administrator.

                kk) "Plan Year" shall mean January 1 to December 31 of each
year; except that the initial plan year shall extend from February 1, 2003
through December 31, 2003.

                ll) "Related Company" shall mean any entity in which the Company
owns, directly or indirectly, more than 50% of the outstanding voting stock or
capital at the relevant time.

                                       4
<PAGE>

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

                nn) "Restricted Stock Award" shall mean any award of Restricted
Stock under UIL Holdings Corporation 1999 Amended and Restated Stock Plan.

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

                pp) "Scheduled In-Service Withdrawal Date" shall mean February
of the year elected by the Participant to withdraw, or begin to withdraw,
balances attributable to amounts deferred in a given Plan Year, and earnings
and losses attributable thereto. A Participant's Scheduled In-Service Withdrawal
Date in a given Plan Year may be no earlier than three years from the last day
of the Plan Year for which Compensation Deferrals, deferrals of Restricted
Stock, and contributions of Company Discretionary and Matching Contribution
Amounts, are made.

                qq) "SERP" shall mean The United Illuminating Company
Supplemental Executive Retirement Plan, as that plan may be amended from time to
time, including, without limitation, by substituting the Company as plan
sponsor.

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

                ss) "Stock Fund" or "Company Stock Fund" shall mean the deemed,
unitized, investment Fund established to record (i) Participants' deemed
investments in Stock Units, (ii) Designated Individuals' deferrals of Restricted
Stock in Stock Units, (iii) Company Matching Contributions invested in Stock
Units, and (iv) Dividend Equivalents deemed reinvested in Stock Units. The
Company has reserved 50,000 shares of Company Stock for deemed investment in
this Plan.

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

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

                                   ARTICLE II
                                  PARTICIPATION
                                  -------------

         2.1      Determination of Eligible Persons.
                  ----------------------------------

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

         With respect to the initial Plan Year of the Plan, Directors of the
Company and its Participating Business Units shall be eligible to participate
only in that portion of the Plan permitting deferral of Restricted Stock.
Thereafter, with respect to subsequent Plan Years, such Directors shall be
eligible to participate in that portion of the Plan permitting elective
deferrals of Compensation and other features of the Plan, to the extent that
they are made applicable to Directors through subsequent Plan amendment. A
Director shall be deemed an Eligible Person with

                                       5
<PAGE>

respect to elective deferrals of Compensation (including fees and retainers) and
other features of the Plan at such time as such provisions are made applicable
to the Directors.

         2.2      Enrollment; Duration of Participation.
                  -------------------------------------

         An Eligible Person shall become a Participant in the Plan by electing
to make deferrals in accordance with Section 3.1 during an Election Period, in
accordance with such procedures as may be established from time to time by the
Committee. An individual who, at any time, ceases to be an Eligible Person as
determined in the sole discretion of the Committee, shall cease making deferrals
in the Plan, and no future deferrals will be allowed until such time as the
individual again becomes an Eligible Person. In such case, the individual may
remain a Participant in the Plan with respect to amounts already deferred.

         2.3      Transfers to Non-Participating Related Companies.
                  ------------------------------------------------

         An Eligible Employee who becomes employed by a Related Company, which
is not a participating Business Unit, shall no longer be eligible to make any
further deferrals under the Plan. However, such individual shall remain a
participant in the Plan with respect to amounts already deferred. Any deferrals
for the current Plan Year shall terminate as of the date of transfer.

         2.4      Amendment of Eligibility Criteria.
                  ---------------------------------

         The Committee may, with the approval of the Compensation Committee,
change the criteria for eligibility on a prospective basis.

                                   ARTICLE III
                               DEFERRAL ELECTIONS
                               ------------------

         3.1      Elections to Defer Compensation.
                  -------------------------------

                  (a) Election to Defer. Subject to the provisions of Article
                      -----------------
II, each Eligible Employee may elect to defer Compensation earned after the
Election Period, 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. Deferral Elections are irrevocable for the
Plan Year, 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 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.

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

                                       6
<PAGE>

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

         3.2      Deemed Investment Elections.
                  ---------------------------

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

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

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

                  (b) With Respect to Deferrals of Restricted Stock Awards. As
                      ----------------------------------------------------
of the date that Restricted Stock vests, a Participant's Stock Unit Subaccount
shall be credited with the number of Stock Units equivalent in value to the
amount of shares of Restricted Stock vested.

                  (c) Deemed investments will be valued daily. Except as
                      ---------------------------------------
otherwise provided in this Subsection 3.2(c) with respect to deemed investments
in the Company Stock Fund, a deemed investment direction, or change in deemed
investment direction, shall be processed based on the closing values for the
date received, if such direction is received by the Plan Administrator by 4 p.m.
Eastern Time. Otherwise, such direction shall be processed based on the closing
values of the particular investment Funds on the next business day on which the
markets are open. The net gain or loss of each deemed investment Fund (the
"Investment Rate") shall be recorded monthly, and reported quarterly as provided
in (e) below.

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

                                       7
<PAGE>

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

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

                  (e) The Investment Rate of each such deemed investment fund
shall be used to determine the amount of earnings or losses to be credited to
all of Participants' Subaccounts under Article IV, and shall be reported on a
calendar quarterly basis to Participants. Rebalancing of deemed investments on
Compensation Deferral Accounts, based on aggregate Participant hypothetical
investment directions shall occur as soon as administratively feasible following
the close of each month; provided, however, that rebalancing of the Company
Stock Account shall occur as soon as administratively feasible following the
close of each quarter.

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

         3.3      Elections as to Form and Timing of Payment.
                  ------------------------------------------

                  (a) At the time of making the deferral elections described in
Section 3.1, the Participant shall elect, on a form provided by the Plan
Administrator, (i) to receive his Compensation Deferral Account, his deferred
Restricted Stock Account, and any Company Contributions made with respect to
such Plan Year either (A) commencing upon his or her termination of service (due
to Retirement, death, disability, or voluntary or involuntary termination) or
(B) at a specified future date while the Participant remains employed (a
"Scheduled In-Service Withdrawal Date"), and shall 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.

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

                  (c) Each election as to the timing and form of payment shall
apply only for one Plan Year, and only to the Compensation Deferrals, deferrals
of Restricted Stock, and any Company Contributions made with respect to such
year, and shall not carry forward. To the extent that a Participant does not
file an election as to form and timing of payment with respect to Compensation
Deferrals, Deferrals of Restricted Stock, 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 terminates service for any reason other than Retirement or
termination due to long-term disability, including on account of a Change in
Control of the Company or a Business Unit for whom the Participant was employed
as of the Change in Control, then the Participant's entire account balance will
be distributed in a single lump sum as soon as administratively feasible
following the end of the calendar quarter in which such termination occurs, but
in no event more than sixty (60) days following the end of such quarter. In the
event that a Participant is receiving Scheduled In-Service Withdrawals and then
terminates service, any unpaid balance of Subaccounts will be paid in a lump
sum.

                                       8
<PAGE>

                                   ARTICLE IV
             COMPENSATION DEFERRAL AND COMPANY CONTRIBUTION ACCOUNTS
             -------------------------------------------------------

         4.1      Compensation Deferral Subaccount.
                  --------------------------------

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

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

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

         4.2      Company Discretionary Contribution Subaccount.
                  ---------------------------------------------

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

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

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

         4.3      Company Matching Contribution Subaccount.
                  ----------------------------------------

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

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

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

                                       9
<PAGE>

         4.4      Deferred Restricted Stock Account.
                  ---------------------------------

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

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

                  (c) The Designated Individual's Restricted Stock sub-account
shall be credited with Dividend Equivalents.

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

                                    ARTICLE V
                                     VESTING
                                     -------

         5.1      Vesting.
                  -------

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

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

                                   ARTICLE VI
                                  DISTRIBUTIONS
                                  -------------

6.1      Manner of Payment--Cash vs. Stock.
         ---------------------------------

         Distributions of Compensation Deferral Subaccounts, Company
Discretionary Contribution Subaccounts, Company Matching Contribution
Subaccounts, and deemed earnings thereon, shall be made in cash, except to the
extent that such Subaccounts are deemed invested in the Company Stock Fund.
Distributions of Company Stock Fund Subaccounts (including Subaccounts
attributable to deferred Restricted Stock, Compensation Deferrals and Company
Matching Contributions), shall be paid in shares of Company Stock. All
fractional shares of Stock shall be paid in cash.

         6.2      Distribution of Accounts.
                  ------------------------

         (a) Distribution Due to Retirement, Disability or Termination of
             ------------------------------------------------------------
Service.
-------
                  (1) Termination of Service with $50,000 Account Balance or
                      ------------------------------------------------------
Less. In the case of a Participant terminates service with the Company and all
----
affiliates, and who has a total Account balance of $50,000 or less, the
Distributable Amount shall be paid to the Participant in a lump sum distribution
after the end of the calendar quarter in which the Participant terminates
service.

                                       10
<PAGE>

                  (2) Termination of Service with More than $50,000 Account
                      -----------------------------------------------------
Balance.
-------

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

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

                  (3) Election of Installment Form. An installment form of
                      ----------------------------
benefit may be elected by the Participant (to be implemented upon the
Participant's Retirement or Disability), with respect to each Plan Year's
Compensation Deferrals, deferred Restricted Stock, 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, during an Election
Period, from among the following:

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

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

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

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

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

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

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

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

                  (9) Termination Not on Account of Retirement or Disability.
                      ------------------------------------------------------
Notwithstanding anything to the contrary in this Section 6.2(a), in the event
that a Participant terminates service with the Company and all affiliates for
any reason other than Retirement or Disability, including on account of a Change
in Control of UIL Holdings or a Business Unit (for whom the Participant was
employed as of the Change in Control), then the Participant's entire

                                       11
<PAGE>

Account balance will be distributed in a single lump sum. In the event that a
Participant is receiving Scheduled In-Service Withdrawals and then terminates
service, any unpaid balance of Subaccounts will be paid in a lump sum.

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

                  (11) Continued Crediting of Investment Rate. The Participant's
                       --------------------------------------
Account shall continue to be credited with earnings pursuant to Article IV of
the Plan until all amounts credited to his or her Account under the Plan have
been distributed.

         (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, 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, Restricted Stock,
contributions of Company Discretionary and Matching Contribution Amounts are
made. A Participant may elect either a lump sum, or annual installments over a
period ranging from two (2) years, up to and including five (5) years from the
Scheduled In-Service Withdrawal Date.

                  (3) A Participant may extend the Scheduled In-Service
Withdrawal Date for any Plan Year, provided such extension occurs at least one
(1) year before the Scheduled In-Service Withdrawal Date and is for a period of
not less than two years from the Scheduled In-Service Withdrawal Date. The
Participant may modify any Scheduled In-Service Withdrawal Date in the manner
set forth above, no more than two (2) times.

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

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

                  (6) If a Participant 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, 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 as soon as
administratively feasible following the end of the calendar quarter in which the
Participant terminates service, but not later than sixty (60) days following the
calendar quarter containing his or her termination of service.

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

         (d) Distribution Date with respect to Deferred Restricted Stock.
             -----------------------------------------------------------
Deferrals of Restricted Stock shall be subject to the same rules regarding
timing and forms of payment as are applicable to other Subaccounts under this

                                       12
<PAGE>

Plan, provided, however, that in no event shall the any amounts be payable with
respect to such subaccounts prior to the vesting of such Restricted Stock.

         6.3      Early Non-Scheduled Distributions.
                  ---------------------------------
         A Participant shall be permitted to elect an unplanned Early
Distribution from his or her Account prior to the Payment Date, subject to the
following restrictions and penalties:

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

                  (b) The total amount of the Early Distribution shall be no
more than 90% of the Participant's vested Account balance.

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

                  (d) If a Participant requests an Early Distribution of his or
her entire vested Account, the remaining balance of his or her Account (10% of
the Account) shall be permanently forfeited and the Company shall have no
obligation to the Participant or his or her Beneficiary with respect to such
forfeited amount. If a Participant receives an Early Distribution of less than
his or her entire vested Account, such Participant shall forfeit 10% of the
gross amount to be distributed from the Participant's Account and the Company
shall have no obligation to the Participant or his or her Beneficiary with
respect to such forfeited amount.

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

         6.4      Hardship Distribution.
                  ---------------------

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

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

                  (c) The Committee shall have made a determination, in its sole
discretion, that the requested distribution constitutes a Hardship Distribution
in accordance with Section 1.1(ee) of the Plan.

                  (d) The amount determined by the Committee as a Hardship
Distribution shall be paid in a cash lump sum as soon as practicable after the
Hardship Distribution election is made and approved by the Committee.

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

                                       13
<PAGE>

         6.5      Inability to Locate Participant.
                  -------------------------------

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

                                   ARTICLE VII
                                 ADMINISTRATION
                                 --------------
         7.1      Committee.
                  ---------

         A Committee shall be appointed by, and serve at the pleasure of, the
Chief Executive Officer (CEO) of the Company. The number of members comprising
the Committee shall be determined by the CEO, who may from time to time vary the
number of members. A member of the Committee may resign by delivering a written
notice of resignation to the CEO. The CEO may remove any member by delivering a
certified copy of its resolution of removal to such member. Vacancies in the
membership of the Committee shall be filled promptly by the CEO.

         7.2      Committee Action.
                  ----------------

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

         7.3      Powers and Duties of the Committee.
                  ----------------------------------

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

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

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

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

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

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

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

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

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

                                       14
<PAGE>

         7.4      Construction and Interpretation.
                  -------------------------------

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

         7.5      Information.
                  -----------

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

         7.6      Compensation, Expenses and Indemnity.
                  ------------------------------------

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

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

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

         7.7      Quarterly Statements.
                  --------------------
         Under procedures established by the Committee, a Participant shall
receive a statement with respect to such Participant's Accounts on a quarterly
basis.

         7.8      Disputes.
                  --------

                  (a)  Claim.
                       -----

                  A person who believes that he or she is being denied a benefit
to which he or she is entitled under this Plan (hereinafter referred to as
"Claimant") must file a written request for such benefit with the Company,
setting forth his or her claim within ninety (90) days of the date such Claimant
believes he or she was entitled to benefits under the Plan. The request shall be
addressed to the Committee, at its then principal place of business.

                  (b)  Claim Decision.
                       --------------

                  Upon receipt of a claim, the Company shall advise the Claimant
that a reply will be forthcoming within ninety (90) days and shall, in fact,
deliver such reply within such period. The Company may, however, extend the
reply period for an additional ninety (90) days for special circumstances.

                  If the claim is denied in whole or in part, the Company shall
inform the Claimant in writing, setting forth: (i) the specified reason or
reasons for such denial; (ii) the specific reference to pertinent provisions of
this Plan on which such denial is based; (iii) a description of any additional
material or information necessary for the Claimant to perfect his or her claim
and an explanation of why such material or such information is necessary; (iv)
appropriate information as to the steps to be taken if the Claimant wishes to
submit the claim for review; and (v) the time limits for requesting a review
under subsection (c).

                                       15
<PAGE>

                  (c)  Request for Review.
                       ------------------

                  Within sixty (60) days after the receipt by the Claimant of
the written opinion described above, the Claimant may request in writing that
the Committee review the determination of the Company. Such request shall be
addressed to the Compensation Committee of the Company, at its then principal
place of business. The Claimant or his or her duly authorized representative
may, but need not, review the pertinent documents and submit issues and comments
in writing for consideration by the Committee. If the Claimant does not request
a review within such sixty (60) day period, he or she shall be barred and
estopped from challenging the Company's determination.

                  (d)  Review of Decision.
                       ------------------

                  Within sixty (60) days after the Committee's receipt of a
request for review, after considering all materials presented by the Claimant,
the Committee will inform the Claimant in writing, the decision setting forth
the specific reasons for the decision, written in a manner calculated to be
understood by the Claimant, containing specific references to the pertinent
provisions of this Plan on which the decision is based. If special circumstances
require that the sixty (60) day time period be extended, the Committee will so
notify the Claimant and will render the decision as soon as possible, but no
later than one hundred twenty (120) days after receipt of the request for
review.

                                  ARTICLE VIII
                                  MISCELLANEOUS
                                  -------------

         8.1      Unsecured General Creditor.
                  --------------------------

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

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

                                       16
<PAGE>

         8.3      Withholding.
                  -----------

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

         8.4      Amendment, Modification, Suspension or Termination.
                  --------------------------------------------------

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

         8.5      Governing Law.
                  -------------

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

         8.6      Receipt or Release.
                  ------------------

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

         8.7      Payments on Behalf of Persons Under Incapacity.
                  ----------------------------------------------

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

         8.8      Limitation of Rights and Employment Relationship.
                  ------------------------------------------------

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

         8.9      Adjustments; Assumption of Obligations.
                  --------------------------------------

         In the event of a reorganization, recapitalization, stock split, stock
or extraordinary cash dividend, combination of shares, merger, consolidation,
distribution of assets, or any other change in the corporate structure or shares
of the Company, such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or any Stock
Units credited hereunder, the Committee shall make such adjustments as it deems
appropriate in (i) the number of Stock Unit credited to Participants' Accounts,
(ii) the number (or type) of shares of Stock reserved for issuance hereunder,
and (iii) the number (or type) of shares subject to any deferred Restricted
Stock award. In the event of any merger, consolidation or other reorganization
in which the Company is not the surviving or continuing entity, all Stock Units,
and deferred Restricted Stock hereunder shall be assumed by the surviving or
continuing entity. In the event of any reorganization in which all of the shares
of the Company's Stock are exchanged for shares of the common stock of another
corporation, all Stock Units credited hereunder, and all deferred restricted
Stock

                                       17
<PAGE>

outstanding on the effective date of the share exchange shall be
automatically converted into obligations of the other corporation on identical
terms, and the other corporation shall assume this Plan, or if the Committee
deems such action appropriate, it may provide for a cash payment to the
Participant. The Committee may also make adjustments to Stock Units, and
deferred restricted Stock under this Plan on account of those events set forth
in Section 8 of the UIL Holdings Corporation 1999 Amended and Restated Stock
Plan.

         8.10     Headings.
                  --------

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

Executed as of the 27th day of January, 2003.

                                    UIL HOLDINGS CORPORATION

                                    By   /s/ Susan E. Mullen
                                      -----------------------------------------
                                      Its Senior Human Resources Representative

                                       18
<PAGE>

                                    EXHIBIT A

                          PARTICIPATING BUSINESS UNITS

COMPANY NAME                                              DATE OF PARTICIPATION
------------                                              ---------------------

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

American Payment Systems, Inc. ("APS")                          2/1/03

Xcelecom, Inc.                                                  2/1/03

United Resources, Inc., ("URI")                                 2/1/03

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