Document:

uil_exh10-38a.htm

    EXHIBIT
      10.38a

    

    

    FIRST
      AMENDMENT

    TO

    EMPLOYMENT
      AGREEMENT

    

    

    THIS
      AMENDMENT ( the “First
      Amendment”) is made as of the 18 day
      of November
      2004, between The United Illuminating Company, a Connecticut Corporation (the
      “Company”) and Richard J. Reed (the “Executive”),

    

    

    WITNESSETH
      THAT

    

    WHEREAS,
      the Company previously entered
      into an amended and restated employment agreement with the Executive dated
      as of
      March 26, 2004 (the “Employment Agreement”); and

    

    WHEREAS,
      the Company and the Executive
      desire to further amend the Employment Agreement by this First Amendment,
      effective as of November 18, 2004, to
      reflect
      certain changes to the severance provisions under the Employment Agreement
      and
      to make two other clarifying revisions to the Employment Agreement;

    

    NOW
      THEREFORE, the following Sections
      of the Agreement are hereby amended as follows:

    

    1.           
      The first sentence of Section 1(b) of the Agreement is revised to read as
      follows:

    

    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 5 (the “Initial Term”).

    

    2.           
      Section 6(a)(i) is revised to read as follows:

    

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

    

    3.           
      Section 6(c)(iv)(2), which describes, in part, the severance that the Executive
      is entitled to upon a termination without cause is hereby revised to read as
      follows:

    

    
      	
               

            	
              (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 both
                personal goals and Company goals had been achieved ‘at target’, without
                pro-ration for the fact that the Executive was employed only a portion
                of
                such year.  Except for the assumption that such goals shall have
                been achieved at target, personal and Company goals shall be defined
                and
                determined as set forth in Section 4(b) of this Agreement.
                

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    All
      of
      the other terms and conditions of the Employment Agreement shall remain in
      full
      force and effect.

    

    

    

    

                                           THE
      UNITED ILLUMINATING
      COMPANY

    

    Attest:

    

    

    
      	
              /s/
                Susan E. Allen

            	 	
              By

            	
              /s/
                Nathanial D. Woodson

            
	
              Susan
                E. Allen

            	 	 	
              Nathanial
                D. Woodson

            
	
              UIL
                Vice President Investor Relations

            	 	 	
              Its
                Chief Executive
                Officer

            
	
              Corporate
                Secretary & Assistant Treasurer

            	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
              /s/
                Richard J. Reed

            
	 	 	 	
              Richard
                J. Reeduil_exh10-39.htm

    EXHIBIT
      10.39

    

    

    EMPLOYMENT
      AGREEMENT

    

    

    THIS
      AGREEMENT ( the “Agreement”)
is made as of the 1st
      day
      of July, 2005, between The United Illuminating Company, a Connecticut
      Corporation (the “Company”) and Steven
      P.
      Favuzza, (the “Executive”),

    

    

    WITNESSETH
      THAT

    

    WHEREAS,
      the Company desires to employ
      the Executive as Assistant
      Vice President Corporate Planning of the Company,
      and the
      Executive desires to be so employed by the Company;

    

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

    

     

    (1) EMPLOYMENT;
      TERM

     

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (2)           
      POSITION AND DUTIES

    

    (a)
      The Executive shall be employed by
      the Company as its Assistant
      Vice President Corporate Planning, 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.

    

    

    (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 and Thirty Nine Thousand ($139,000), 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 adjusted as a result of any such review.

    

    (b)
Incentive
      Compensation.  During the Term of the Executive’s employment
      hereunder, the Executive shall be eligible to be designated by the Board of
      Directors of the Company (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.

    
      
         

      

      
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    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. The UIL Board 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(d) 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 of the Company (the
      “UIL CIC Plan II”), subject to all of the terms and provisions of the UIL CIC
      Plan 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.

    

    (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 executives, 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 executives on the same terms and conditions that apply to
      such executives, including, without limitation, any plan or program of an
      affiliated company in which the Company is a participating employer, but only
      for so long as the Company remains a participating employer.  Nothing
      in this Agreement shall require the

    
      
         

      

      
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    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 executives,
      and
      shall also be entitled to all paid holidays afforded by the Company to its
      management employees, all in accordance with applicable Company policies.

    

    

    (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

    

    (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 9) 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

     

    
      
         

      

      
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    (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 duties (other
      than
      by reason of incapacity due to physical or mental illness or injury).

    

     

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

     

     

    (d) Termination
      by Executive.

     

     

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

     

     

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

     

     

    (e) Date
      of Termination.
      For purposes of this Agreement, the “Date of Termination” is defined as (i) the
      Executive’s date of death, in the event of 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.

     

    
      
         

      

      
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    (6)           
      CONSEQUENCES OF TERMINATION OR NON-RENEWAL.

     

     

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

     

     

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

     

     

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

     

     

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

     

     

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

     

     

    Pending
      a
      determination that the Executive is entitled to long-term disability benefits,
      the Executive’s short-term disability benefits shall be extended, as necessary
      at 50% of Base Salary, if 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.

     

     

    (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:

     

    
      
         

      

      
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    (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 or amounts payable
      under any elective non-qualified deferred compensation plan in which the
      Executive had been a participant, other than or 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, 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) hereof; plus

    

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

    

    (iv)
      lump sum severance equal to one
      (1) times the sum
      of:

    

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

    

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

    
      
         

      

      
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    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
      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) 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)
      lump sum severance equal to six
      (6) months of the
      Executive’s annual Base Salary rate in effect immediately prior to the
      Executive’s Date of Termination.

    

    (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) participation in any long-term incentive
      compensation plan and equity compensation plan or arrangement, and (B)
      participation in any deferred compensation plan in which he was a participant
      as
      of his termination of service, all as determined in accordance with the terms
      and conditions of such plans and arrangements; plus

    

    (iv)
      those payments, and benefits, if
      any, to which the Executive is entitled by reason of having been designated
      a
      Participant in the UIL CIC Plan II. 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.

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

    

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

    

    (8)
      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

    
      
         

      

      
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    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.

    

    

    (9)
      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
      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.

    

    

    (10)  NON–COMPETITION.

    

    The
      Executive agrees and covenants that, during the Term of this Agreement and
      for a
      period of twelve (12) months following the month during which the Executive
      ceases to be employed by the Company, 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
      regional 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

    
      
         

      

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

    

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

    

    As
      used
      in Sections 9-11, the term the “Company” shall include The United Illuminating
      Company, and any successor to, or acquirer of, the business or assets of the
      Company.

    

     

    
      	
               

            	
               (11)  DISCLOSURE
                AND ASSIGNMENT OF INVENTIONS AND DISCOVERIES.

            

    

     

     

    (a)
Disclosure
      of Inventions. The Executive agrees to make prompt and complete
      disclosure to the Company of all inventions and discoveries made or conceived
      by
      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.

     

    
      
         

      

      
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              (12)
                MISCELLANEOUS. 

            

    

     

                         
      (a) Equitable
      Remedies.  The Executive
      acknowledges
      that the restrictions provided for in Sections (9) through (11) are reasonable
      and necessary in order to protect the legitimate interests of the Company and
      its Affiliates, and that any violation thereof would result in serious damage
      and irreparable injury to the Company and its Affiliates. Further, the
      Executive acknowledges that the services to be rendered by him are of such
      unique and extraordinary nature, and the resulting injury to the Company from
      a
      breach of Sections (9) through (11), inclusive, by the Executive would be of
      such a nature, that an action at law for the collection of 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 (9) through (11). The Executive agrees that
      upon
      the actual or threatened breach or violation
      of
      any of the commitments under Section (9) through (11), the Company shall be
      entitled to both preliminary and permanent injunctive relief, in any action
      or
      proceeding brought in an appropriate court having jurisdiction over the
      Executive, to restrain 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), (7) or (8) shall be forfeited
      and
      discontinued in the event that the Executive violates Sections (9) through
      (11)
      of this Agreement, or willfully engages in conduct which is materially injurious
      to the Company, monetarily or otherwise, all as determined in the sole
      discretion of the Company.

     

     

    (c)
Successors;
      Binding Agreement; Assignment.

     

    (i)
      The Company will require the
      acquirer of all or substantially all of the business or assets of the Company
      (whether directly or indirectly, by purchase of stock or assets, merger,
      consolidation or otherwise), by agreement in form and substance reasonably
      satisfactory to the Executive, to expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place. If the Company
      fails to obtain such agreement prior to the effective date of any such
      succession, the Executive may terminate 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 (12)(c) or which otherwise becomes bound by all
      the
      terms and provisions of this Agreement by operation of law.

     

    
      
         

      

      
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    (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 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 (12) hereof shall survive such termination and shall be
      binding upon the Executive, the Executive’s personal representative and/or
      spouse, the Company, and the Company’s successors and assigns.

     

     

    (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.

    

    

    

                                              THE
      UNITED ILLUMINATING COMPANY

    

    Attest:

    

    

    
      	
              /s/
                Randy M. Ruotolo

            	 	
              By:

            	
              /s/
                Nathanial D. Woodson

            
	 	 	 	
              Its

            
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
              /s/
                Steven P. Favuzza

            
	 	 	 	
              Steven
                P. Favuzza

            

    

     

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