Document:

uil_exh10-37b.htm

    EXHIBIT
      10.37b

    

    

    AMENDMENT
      TO

    EMPLOYMENT
      AGREEMENT

    BETWEEN
      THE UNITED ILLUMINATING COMPANY

    AND

    ANTHONY
      J. VALLILLO

    (dated
      November 28, 2005)

    

    

    WHEREAS,
      the Department of the Treasury has issued proposed regulations and Notice 2005-1
      concerning the implementation of the new non-qualified deferred compensation
      rules contained in Section 409A of the Internal Revenue Code; and

    

    WHEREAS,
      such guidance permits amendment of non-qualified deferred compensation plans
      and
      arrangements in order to provide transitional flexibility with regard to the
      implementation of the new rules;

    

    NOW
      THEREFORE,  The United Illuminating Company (the ‘Company’) and
      Anthony J. Vallillo (the ‘Executive’), hereby agree that Section 4(g) of the
      Employment Agreement dated as of November 8, 2004 between the Company and the
      Executive, as amended, is further amended by the addition of the following
      paragraphs at the end thereof:

    

    

    During
      2005, the Executive may cancel participation in his SERP or cancel a deferral
      election, without causing the SERP to violate the provisions of 409A of the
      Internal Revenue Code and guidance issued thereunder, and without causing his
      Accrued Benefit to be includable in income under the doctrine of constructive
      receipt; provided that the amounts subject to the election to terminate SERP
      participation are includable in the Executive’s income in 2005 or, if later, the
      taxable year in which the amounts are earned and vested.

    

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

    

    During
      2005, the Grandfathered portion of the SERP may be terminated in its entirety,
      provided that all amounts deferred thereunder are included in income in the
      taxable year in which the termination occurs.

    

    Notwithstanding
      anything to the contrary in this subsection, the grandfathered amount shall
      be
      determined in accordance with Treasury Regulations and other guidance issued
      pursuant to Section 409A of the Code, including, without limitation, regulations
      permitting the grandfathered amount to be calculated taking into account early
      retirement subsidies that the Executive becomes eligible for after December
      31,
      2004, without regard to additional services performed after December 31,
      2004.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

    

                                            THE
      UNITED
      ILLUMINATING COMPANY

    

    Attest:

    

    

    
      	
              /s/
                Susan E. Allen

            	 	
              By

            	
              /s/
                Nathanial D. Woodson

            
	
              Susan
                E. Allen, Vice President

            	 	 	
              Nathanial
                D. Woodson Chairman

            
	
              Investor
                Relations, Corporate Secretary &

            	 	 	
              and
                Chief Executive Officer

            
	
              Treasurer

            	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
              /s/
                Anthony J. Vallillo

            
	 	 	 	
              Anthony
                J. Vallillo

            

    

     

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      2
      -uil_exh10-38.htm

    EXHIBIT
      10.38

    

    

    EMPLOYMENT
      AGREEMENT

    

    

    THIS
      AGREEMENT ( the “Agreement”)
is made as of the 26th  day
      of March,
      2004, between
      The United Illuminating Company, a Connecticut Corporation (the “Company”) and
      Richard J. Reed (the “Executive”),

    

    

    WITNESSETH
      THAT

    

    WHEREAS,
      the Executive previously has
      been employed by the Company as its Vice President Electric System, and is
      covered by the terms of a certain employment agreement with the Company dated
      as
      of July 24, 2001; and

    

    WHEREAS,
      the Company desires to
      continue to employ the Executive as its Vice President Electric System, and
      the
      Executive desires to be so employed by the Company, and the parties desire
      to be
      bound by the terms of this revised employment Agreement (the “Agreement”), which
      shall supersede and replace all provisions of the prior employment
      agreement;

    

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

    

     

    (1) EMPLOYMENT;
      TERM

     

     

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

     

     

    (b) The
      term
      of this Agreement shall be for a period commencing on the date hereof and ending
      on the second anniversary of the date hereof, unless this Agreement is earlier
      terminated as provided in Section 4 (the “Initial Term”).  Unless the
      Company has provided the Executive with at least ninety (90) days prior written
      notice of its decision not to renew this Agreement after the Initial Term or
      any
      subsequent term, this Agreement shall be automatically renewed for a successive
      one year term (the Initial Term and any renewal term being referred to as the
      “Term”). For
      purposes of this Agreement, a non-renewal at the election of the Company at
      the
      end of a Term shall constitute a termination of this Agreement without cause,
      and shall be governed by the provisions of Section 6(c). In no event shall
      the
      Company give notice of a non-renewal from the time that an impending Change
      in
      Control (as hereinafter defined) is announced through the date of the
      consummation of such Change in Control.

     

    
      
        
        

         

      

      
         

        
          

        

      

      
         

      

    

    (2)           
      POSITION AND DUTIES

    

    (a)
      The Executive shall be employed by
      the Company as its Vice President Electric System, or in such other equivalent
      or higher position as the UIL Board may determine. The Executive shall:

    

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

    

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

    

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

    

    (c)
      If the Executive is a participant
      in the UIL Holdings Corporation Change in Control Severance Plan (the “UIL CIC
      Plan II”) as of a Change in Control as therein defined, then for the twenty-four
      month period after such Change in Control, the Company’s employment of the
      Executive shall be without diminishment in the Executive's management
      responsibilities, duties or powers. In the event that the Executive’s employment
      is not so continued, the Executive may claim to have suffered a Constructive
      Termination, in accordance with the terms of the UIL CIC Plan II.

    

    (3)           
      PLACE OF PERFORMANCE

    

    In
      his employment by the Company, the
      Executive shall be based within a fifty (50)-mile radius of the current
      executive offices of the Company in New Haven, Connecticut.

    

    

    (4)           
      COMPENSATION

    

    (a)
Base
      Salary.  During the Initial Term of the Executive's employment
      hereunder, the Executive shall receive a base salary (“Base Salary”) at an
      annual rate of One Hundred Fifty Nine Thousand One Hundred dollars
      ($159,100.00), payable in accordance with the then customary payroll practices
      of the Company.  The Executive's performance and Base Salary shall be
      reviewed by the UIL Board at least annually, and may be revised upward as a
      result of any such review.  The Executive’s Base Salary may be revised
      downward by the UIL Board contemporaneously with any general reduction of the
      salary rates of the Company’s other officers.

    
      
        
        

         

      

      
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    (b)
Incentive
      Compensation.  During the Term of the Executive’s employment
      hereunder, the Executive shall be eligible to be designated by the Company
      Board, or by the UIL Board in the event that the plan is a UIL plan, as a
      participant in each annual short-term incentive compensation program, and any
      long-term incentive program, maintained for management employees of the Company;
      provided, however, that entitlement to participation, and continued
      participation, in any long-term equity incentive program shall be conditioned
      upon the Executive fully complying with any stock ownership and retention
      guidelines from time to time established and promulgated by the UIL
      Board.

    

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

    

    The
      Executive’s “Stub-Period
      Incentive Compensation” shall mean the annual short-term incentive
      compensation being earned in the year in which the Executive terminates
      employment, pro-rated for the year in which he terminates service, and shall
      be
      equal to that short-term annual incentive compensation payment to which the
      Executive would be entitled, if any, under the terms of the Company’s executive
      incentive compensation plan, calculated as if he had been employed by the
      Company on the last day of the year including his Date of Termination, and
      had
      achieved personal goals ‘at target’, but based on actual performance with
      respect to the achievement of UIL and Company financial goals (collectively
      referred to as “Company goals”), multiplied by a fraction, the numerator of
      which is the number of days which have elapsed in such year through the Date
      of
      Termination and the denominator of which is 365.  UIL shall determine
      in its discretion the composition of the Executive’s scorecard, and what
      constitutes a ‘personal goal’ and ‘Company goal’; provided generally that an
      Executive’s ‘personal goals’ shall include, for example, his strategic
      opportunities, leadership, and balance scorecard goals, other than business
      unit
      and UIL total financial goals, and Company goals shall include, for example,
      UIL
      and business unit financial goals based on earnings per share, cash flow, and
      all other goals not defined as personal goals.  In the event that the
‘gate’, if any, is not achieved with respect to Company goals, then no
      Stub-Period Incentive Compensation will be paid.  Any Stub-Period
      Incentive Compensation payable upon termination of the Executive shall be paid
      in accordance with Section 6(e) of this Agreement.

    

    (c)
Change
      in
      Control Severance Plan. The Executive
      shall be
      designated by the UIL Board as an individual covered by the UIL Holdings
      Corporation Change in Control Severance Plan II (the “UIL CIC Plan II”), subject
      to all of the terms and provisions of the UIL CIC Plan II as it may be amended
      from time to time.  For purposes of this Agreement, “Change in
      Control” shall have the meaning set forth in the UIL CIC Plan II.  Nothing in this
      subsection, however, shall entitle the Executive to continued participation
      in
      such Plan should the UIL Board determine otherwise in accordance with the terms
      of that Plan. In no event shall the Executive be entitled to participate in
      the
      UIL CIC Plan II if he is still a participant under the terms of the UIL Change
      in Control Severance Plan (restated effective October 24, 2003) (“UIL CIC Plan
      I”), and in no event shall he be entitled to benefits under both plans. By
      signing this Agreement, the Executive hereby relinquishes any claim he might
      have under the CIC Plan I now or in the future.

    
      
        
        

         

      

      
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    (d)
Business
      Expenses.  During the Term, the Executive shall be entitled to
      receive prompt reimbursement for all reasonable employment- related business
      expenses incurred by the Executive, in accordance with the policies and
      procedures established by the Company Board from time to time for all of the
      Company's officers, provided that the Executive properly accounts
      therefor.

    

    (e)
Benefit
      Programs.  During the Term of the Executive's employment
      hereunder and to the extent he meets the applicable eligibility requirements,
      the Executive shall be entitled to participate in and receive benefits under
      all
      of the Company's employee benefit plans, programs and arrangements for its
      similarly situated officers on the same terms and conditions that apply to
      such
      officers, including, without limitation, any plan or program of an affiliated
      company in which the Company is a participating employer, but only for so long
      as the Company remains a participating employer.  Except as otherwise
      expressly provided, nothing paid to the Executive under any such plan, program
      or arrangement presently in effect or made available by the Company in the
      future shall be deemed to be in lieu of compensation to the Executive under
      any
      other Section of this Agreement. Nothing in this Agreement shall require the
      Company to maintain a particular benefit plan or program, or preclude the
      Company from amending or terminating any such plans, programs or arrangements,
      including its participation therein, or eliminating, reducing or otherwise
      changing any benefit provided thereunder, so long as such change similarly
      affects all similarly situated employees of the Company and is in compliance
      with applicable law.

    

    (f)
Vacations
      and Holidays.  The Executive shall be entitled to that number
      of weeks of paid vacation in each calendar year determined by the Company Board
      from time to time to be available to similarly situated Company officers, and
      shall also be entitled to all paid holidays afforded by the Company to its
      management employees.

    

    (5)           
      TERMINATION

    

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

     

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

     

     

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

     

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

    
      
        
        

         

      

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

     

    (3)
      misconduct that is demonstrably injurious to the interests of the Company or
      its
      Affiliates (as that term is defined in Section 10) unless such misconduct is
      rectified in all material respects to the reasonable satisfaction of the UIL
      Board within thirty (30) days after the Executive receives written notice of
      such misconduct; or

     

     

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

     

     

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

     

     

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

     

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

    

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

    

     

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

     

     

    (d) Termination
      by Executive.

     

     

    (i) If
      the
      Executive is not in default of any of the Executive’s obligations under Sections
      (2), (10), (11) or (12) hereof, the Executive may terminate employment hereunder
      upon at least thirty (30) days’ prior notice, for failure of the Company to
      observe and perform one or more of its obligations under Sections (2), (3)
      and/or (4) hereof, which failure the Company fails to remedy within such notice
      period (a “Breach by the Company”).

     

    
      
        
        

         

      

      
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    (ii) If
      the
      Executive is not in default of any of the Executive’s obligations under Sections
      (2), (10), (11) or (12) hereof, the Executive may terminate employment hereunder
      in the absence of a Breach by the Company, effective upon at least ninety (90)
      days prior written notice.

     

     

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

     

     

     (6)           
      CONSEQUENCES OF TERMINATION OR NON-RENEWAL.

     

     

    (a)
Termination
      on Death or Disability; or by the Executive in the Absence of a Breach by the
      Company.  If
      the Executive’s employment terminates by reason of the Executive’s death, or in
      the event that the Executive’s employment is terminated due to total or partial
      physical or mental disability such that the Executive becomes entitled to
      long-term disability benefits under the Company’s long-term disability plan, or
      if the Executive terminates employment hereunder in the absence of a Breach
      by
      the Company upon ninety (90) days prior written notice, the Company shall pay
      to
      the Executive or, in the event of death or disability, the Executive’s personal
      representative and/or spouse:

     

     

    (i)
      the Executive’s Base Salary and
      Accrued Incentive Compensation (as defined in Section 4(b));

     

     

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

     

     

    (iii)
      any amounts payable pursuant to
      (4)(d) (unreimbursed business expenses), (4)(e) (employee benefits due and
      owing), and 4(f) (accrued, but unpaid vacation or holidays); plus

     

     

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

     

     

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

     

     

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

     

    
      
        
        

         

      

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

     

     

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

     

     

    (ii)
      any amounts payable pursuant to
      Sections (4)(d), (4)(e), and 4(f) hereof, and

     

     

    (iii)
      any benefits payable under any
      elective non-qualified deferred compensation plan in which the Executive had
      been a participant, other than any benefit under any supplemental executive
      retirement plan of the Company or an Affiliate,

     

     

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

     

     

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

     

    

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

    

    (ii)
      any amounts payable pursuant to
      Sections 4(d), 4(e), and 4(f); plus

    

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

    

    (iv)
      lump sum severance equal to two
      (2) times the sum
      of:

    

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

    

    (2)   the
      short-term annual incentive compensation payment to which the Executive would
      be
      entitled, calculated as if he had been employed by the Company on the last
      day
      of the year of his Termination, as if the Executive had achieved personal goals
      ‘at target’, and based on actual performance with respect to the achievement of
      Company goals, without pro-ration for the fact that the Executive was employed
      only a portion of

    
      
        
        

         

      

      
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    such
      year. In the event that the ‘gate’, if any, is not reached with respect to
      Company goals, then no short-term incentive compensation will be included in
      the
      calculation of severance. Personal and Company goals shall be defined and
      determined as set forth in Section 4(b) of this Agreement.

    

     (v)
      for the period ending on the
      first anniversary of the date of the Executive’s Date of Termination, continued
      participation in the medical and dental plan(s) in which he was a participant
      as
      of his Date of Termination on the same basis as if he remained an active
      employee, provided that such participation is possible under the terms and
      provisions of such plans and programs and applicable law. Such period of
      continued participation shall run concurrently with, and reduce day- for-day,
      any obligation that the Company or any Affiliate would have to provide “COBRA”
continuation coverage with respect to the Executive’s termination of employment.
      If the Executive’s participation in any such plan or program is barred as a
      result of the Executive’s termination, the Company shall arrange to provide the
      Executive with benefits substantially similar on an after-tax basis to those
      that the Executive would have been entitled to receive under such plan or
      program, provided that with respect to any benefit to be provided on an insured
      basis, the value of such coverage shall be based on the present value of the
      premiums expected to be paid for such coverage, and with respect to other
      benefits, such value shall be the present value of the expected cost to the
      Company of providing such benefits.]

     

    (d)
Upon
      Non-renewal of Agreement at end of Term.  If the Executive’s
      employment hereunder is terminated due to non-renewal of this Agreement, the
      Company shall pay or provide (as applicable) to the Executive the same payments
      and benefits to which the Executive would have been entitled had he been
      terminated without cause in accordance with Section 6(c) of this
      Agreement.

     

    

    (e)  Timing
      of
      Payment.  Any cash amount
      that is due and owing to the Executive upon his termination of service pursuant
      to Section 6 will be paid as soon as administratively feasible following the
      effective date (including any revocation period) of the Release provided for
      in
      Section 6(f); provided, however, that (i) any Stub-Period Incentive
      Compensation, and (ii) that portion of any severance payment that is based
      on
      annual short-term incentive compensation shall be paid following the close
      of
      the year in which the Date of Termination occurs, at the same time that
      incentive compensation generally would be payable upon authorization of the
      UIL
      Board to all other employees.

     

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

     

    
      
        
        

         

      

      
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    (7)           
      CHANGE IN CONTROL

    

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

    

    (i)
      the Executive’s Base Salary,
      Accrued Incentive Compensation and Stub-Period Incentive Compensation earned,
      but unpaid, prior to the Date of Termination; plus

    

    (ii)
      any amounts payable pursuant to
      Sections 4(d), 4(e), and 4(f) hereof; plus

    

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

    

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

    

    Notwithstanding
      the foregoing, in the event a Change in Control (as defined in the UIL CIC
      Plan
      II) occurs on or before October 24, 2008, and the Executive is an employee
      in
      good standing under a CIC plan of the Company or UIL at the time of such Change
      in Control, the Executive shall be entitled, in lieu of the severance under
      such
      CIC plan, to a grandfathered severance benefit under such plan, based on the
      severance formula in effect under the CIC Plan I as of October 23, 2003 in
      the
      amount of  Four Hundred Seven Thousand Two Hundred Ninety Six Dollars
      ($407,296.00), if such amount would be greater than the amount of the severance
      benefit to which the Executive otherwise would be entitled under the CIC II
      Plan, or such other CIC plan as may be in effect with respect to the Executive
      at such time.

    

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

    
      
        
        

         

      

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

    

    (8)
      ADDITIONAL CONSEQUENCES OF A CHANGE
      IN CONTROL

     

    (a)
Payments
      to Executive.  In the event that a Change in Control has been
      approved by all necessary shareholder, creditor and regulatory actions, then,
      the Company will pay to the Trustee of the UIL Holdings Corporation Supplemental
      Retirement Benefit Rabbi Trust, as the same may be amended or superseded, for
      the benefit of the Executive, cash equal to that amount, calculated by the
      Company’s independent certified public accountants, to be reasonably sufficient
      to pay and discharge the Company’s future obligations, if any, to the Executive
      and/or his personal representative and/or spouse, under Section 7 hereof, but
      only if (i) the Executive’s employment has been terminated or will be terminated
      prior to the date of the Change in Control and (ii) the Company does not make
      such payment directly to the Executive.

     

     

    In
      the event that the Executive’s
      employment has not been terminated prior to the date of the Change in Control,
      but subsequently is terminated other than for Cause during the Change in Control
      Protective Period, then as of the date that notice of Date of Termination is
      given to the Executive (or that it is finally determined that there is a
      Constructive Termination, in the case of termination by the Executive), the
      Company’s Successor (as defined in the UIL CIC Plan) shall deposit a sum,
      calculated by such Successor’s independent certified public accountants,
      reasonably sufficient to pay and discharge such Successor’s obligations to the
      Executive under Section 7 hereof.

     

    

     

    (b)           
      Reduction
      of Salary.  During the Change in Control Protective Period, the
      Executive’s Base Salary may not be reduced to an annual rate less than the Base
      Salary rate fixed by the UIL Board as a result of its most recent review of
      salary rates, unless such reduction is part of, and consistent with, a general
      reduction of the compensation rates of all employees of the Company, its
      successor, or purchaser of assets, as the case may be.

     

    

    (9)
      TAX SAVINGS PROVISION

    

    If
      any portion of the payments which
      the Executive has the right to receive from the Company, or any affiliated
      entity, hereunder would constitute "excess parachute payments" (as defined
      in
      Section 280G of the Internal Revenue Code, and not governed by the terms defined
      in this Agreement) subject to the excise tax imposed by Section 4999 of the
      Internal Revenue Code, such excess parachute payments shall be reduced to the
      largest amount that will result in no portion of such excess parachute payments
      being subject to the excise tax imposed by Section 4999 of the Internal Revenue
      Code.

    

    (10)
      CONFIDENTIAL INFORMATION

    

    The
      Executive recognizes that the
      Executive’s employment by the Company is one of highest trust and confidence by
      reason of his access to certain trade secrets, confidential business practices,
      and proprietary information concerning the Company or any person or entity
      that

    
      
        
        

         

      

      
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    directly,
      or indirectly through one or more intermediaries, controls or is controlled
      by,
      or is under common control with, the Company (an “Affiliate”), including,
      without limitation, the Company’s methods of doing business, marketing and
      strategic business plans, employees’ compensation and contract terms, customer
      lists and customer characteristics (collectively referred to as “Proprietary
      Information”).  The Executive agrees and covenants to exercise utmost
      diligence to protect and safeguard the trade secrets, confidential business
      practices and Proprietary Information concerning the Company and any
      Affiliate.  The Executive further agrees and covenants that, except
      with the prior written consent of the Company, he will not, either during the
      Term hereof or thereafter, directly or indirectly, use for his own benefit
      or
      for the benefit of any other person or organization, or disclose, disseminate
      or
      distribute to any other person or organization, any of the Proprietary
      Information (whether or not acquired, learned, obtained or developed by the
      Executive alone or in conjunction with another), unless and until such
      Proprietary Information has become a matter of public knowledge through no
      action or fault of the Executive or unless otherwise required by court order
      to
      comply with legal process.  All memoranda, notes, records, drawings,
      documents or other writings whatsoever made, compiled, acquired or received
      by
      the Executive during the Term hereof arising out of, in connection with, or
      related to any activity or business of the Company are and shall continue to
      be
      the sole and exclusive property of the Company, and shall, together with all
      copies thereof, be returned and delivered to the Company by the Executive
      immediately, when he ceases to be employed by the Company, or at any other
      time
      upon the Company’s demand.

    

    (11)  NON–COMPETITION

    

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

    

    (a)
      compete with the Company in the
      marketing of energy services related to the delivery or use, at retail, of
      electricity in the Company’s franchise territory; or

    

    (b)
      engage in any business activity
      that would, directly or indirectly, diminish the retail sales of electricity
      in
      the Company’s franchise territory; or

    

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

    

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

    

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

    

    Nothing
      in this Section shall be construed to prohibit the ownership by the Executive
      of
      less than five percent (5%) of any class of securities of any entity that is
      engaged in any of the foregoing

    
      
        
        

         

      

      
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    businesses
      having a class of securities registered pursuant to the Securities Exchange
      Act
      of 1934 (the “Exchange Act”), provided that such ownership represents a passive
      investment and that neither the Executive, nor any group of persons including
      the Executive, in any way, directly or indirectly, manages or exercises control
      of such entity, guarantees any of its financial obligations, or otherwise takes
      any part in its business, other than through exercising the Executive’s rights
      as a shareholder.

    

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

    

    As
      used
      in Sections 10-12, the term the “Company” shall include The United Illuminating
      Company, and any successor to, or acquirer of, the business or assets of the
      Company.

    

     

    
      	
               

            	
              (12)
                DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND DISCOVERIES
                

            

    

     

     

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

     

     

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

     

     

    (13)
      MISCELLANEOUS.

     

     

    (a)
Equitable
      Remedies.  The Executive
      acknowledges
      that the restrictions provided for in Sections (10) through (12) are reasonable
      and necessary in order to protect the legitimate interests of the Company and
      its Affiliates, and that any violation thereof would result in serious damage
      and irreparable injury to the Company and its Affiliates. Further, the
      Executive acknowledges that the services to be rendered by him are of such
      unique and extraordinary nature, and the resulting injury to the Company from
      a
      breach of Sections (10) through (12), inclusive, by the Executive would be
      of
      such a nature, that an action at law for the collection of damages would not
      provide adequate relief to the Company for the enforcement of its rights in
      the
      event of an actual or threatened violation by the Executive of his commitments
      and obligations under Sections (10) through (12). The Executive agrees that
      upon
      the actual or threatened breach or violation
      of
      any of the commitments under Section (10) through (12), the Company shall be
      entitled to both preliminary and permanent injunctive relief, in any action
      or

     

    
      
        
        

         

      

      
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    proceeding
      brought in an appropriate court having jurisdiction over the Executive, to
      restrain him from committing any violation of any such commitments and
      obligations.

     

     

    (b)
Effect
      Of
      Breach.  All payments and other benefits payable but not yet
      distributed to Executive under Sections (6) or (7) shall be forfeited and
      discontinued in the event that the Executive violates Sections (10) through
      (12)
      of this Agreement, or willfully engages in conduct which is materially injurious
      to the Company, monetarily or otherwise, all as determined in the sole
      discretion of the Company.

     

     

    (c)
Successors;
      Binding Agreement; Assignment.

     

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

     

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

     

     

    As
      used
      in this Section, the term the “Company” shall include The United Illuminating
      Company, UIL Holdings Corporation, and any successor to, or acquirer of, the
      business or assets of the Company that executes and delivers the agreement
      provided for in this Section (13)(c) or which otherwise becomes bound by all
      the
      terms and provisions of this Agreement by operation of law.

     

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

    

     

    (e)           
Waiver;
      Amendment.  No provision of this Agreement may be modified,
      waived or discharged unless such waiver, modification or discharge is approved
      by the UIL Board and agreed to in a writing signed by the Executive and the
      Company.  No waiver by either party hereto at any time of any breach
      by the other party hereto of, or compliance with, any condition or provision
      of
      this Agreement to be performed by such other party shall be deemed a

     

    
      
        
        

         

      

      
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          13
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    waiver
      of
      any similar or dissimilar provisions or conditions at the same or at any prior
      or subsequent time.  No agreements or representations, oral or
      otherwise, express or implied, with respect to the subject matter hereof have
      been made by either party that are not set forth expressly in this
      Agreement.

     

     

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

     

     

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

     

     

    (h)           
Survival.  The
      provisions of this Agreement shall not survive the termination of this Agreement
      or of the Executive’s employment hereunder, except that the provisions of
      Sections (6) through (13) hereof shall survive such termination and shall be
      binding upon the Executive, the Executive’s personal representative and/or
      spouse, the Company, and the Company’s successors and assigns.

     

     

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

     

    
      
        
        

         

      

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

    

    
      

      
        	
                Date:

              	
                   
                  April 5, 2004

              

      

    

                                  THE
      UNITED ILLUMINATING
      COMPANY

    

    Attest:

    

    

    
      	
              /s/
                Susan E. Allen

            	 	
              By:

            	
              /s/
                Nathanial D. Woodson

            
	
              Susan
                E. Allen

            	 	 	
              Its       Nathanial
                D. Woodson

            
	
              Vice
                President Investor

            	 	 	
              UIL
                Chairman, President &
                CEO

            
	
              Relations/Corporate
                Secretary &

            	 	 	
              The
                United Illuminating
                Company

            
	
              Assistant
                Treasurer

            	 	 	
              Chairman
&
CEO

            
	 	 	 	 
	 	 	 	 
	 	 	 	
              /s/
                Richard J. Reed

            
	 	 	 	
              Richard
                J. Reed

            

    

     

     

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