Document:

UIL Holdings Exhibit 10.5 dated 07/08/05

                    EXHIBIT
      10.5

    

    UIL
      HOLDINGS CORPORATION

    PERFORMANCE
      SHARE AGREEMENT

    FOR

    TSR
      PERFORMANCE SHARES

    

    THIS
      AWARD AGREEMENT
      (the
“Award Agreement”), made as of March 28, 2005, by and between UIL
      HOLDINGS CORPORATION,
      a
      Connecticut corporation, having its principal place of business in New Haven,
      Connecticut (the “Company” or "UIL"), and Richard
      J. Nicholas (the
      “Executive”).

    

    WHEREAS,
      the Company has adopted the UIL Holdings Corporation CEO/CFO Long Term Incentive
      Program (“CEO/CFO LTIP”), a copy of which is annexed hereto, pursuant to the
      terms of the UIL Holdings Corporation Senior Executive Incentive Compensation
      Plan (the “SEICP”) and UIL Holdings Corporation 1999 Amended and Restated Stock
      Plan (the “1999 Plan”);

    

    WHEREAS,
      pursuant to the terms of the CEO/CFO LTIP, the SEICP, and the 1999 Plan, the
      Compensation and Executive Development Committee of the Company’s Board of
      Directors (the “CEDC”) has granted to the Executive an Award of Performance
      Shares, payment of which is linked to total shareholder return achieved through
      December 31, 2006; and

    

    WHEREAS,
      the Company and the Executive wish to evidence the terms and conditions
      governing the Performance Awards in this Award Agreement;

    

    NOW
      THEREFORE, in consideration of the mutual covenants and promises hereinafter
      set
      forth and for other good and valuable consideration, the parties hereto mutually
      covenant and agree as follows:

     

    1.  Grant
      of Performance Shares.
      The
      CEDC hereby makes a preliminary award to the Executive of 3,700 Performance
      Shares ("Target Shares"), payment of which is dependent upon the Company’s
      achievement, at 100% of ‘target’, of certain Performance Goals more fully
      described in Section 2 of this Award Agreement and under the terms of the
      CEO/CFO LTIP, with a maximum Award of up to 7,400 Performance Shares possible
      based upon the Company's achievement of the Performance Goals at or above the
      designated maximum level. The actual number of Performance Shares finally
      awarded to the Executive, if any, shall be determined by the CEDC, in accordance
      with the terms and conditions of the CEO/CFO LTIP, and its determination shall
      be conclusive and binding.

     

    2.  Performance
      Goals.
      The
      final number of Performance Shares to be awarded to the Executive (the “Final
      Payout”), if any, under this Award Agreement shall be determined based on the
      relative total shareholder return percentile achieved by the Company as compared
      against an established group of comparable companies selected by the CEDC (the
      “Pre-Set TSR Goal”) for the period extending from January 1, 2005 through
      December 31, 2006 (the “Performance Period”). Achievement of the Pre-Set TSR
      Goal will authorize the CEDC to award a maximum Final Payout at 135% of the
      Presumed Payout specified in the following grid, but not in excess of 200%
      of
      the target number of Performance Shares, with the minimum final payout to be
      no
      less than 65% of the Presumed Payout set forth in the following
      grid:   

     

    
      
        	
                UIL
                  TSR Percentile Achieved

              	
                Minimum
                  Award Payable as % of Target Shares

              	
                Presumed
                  Payout as % of Target Shares 

              	
                Maximum
                  Award Authorized as % of Target Shares 

              
	
                Less
                  than 20th

              	
                0%

              	
                0%

              	
                0%

              
	
                40th

              	
                52%

              	
                80%

              	
                108%

              
	
                50th

              	
                65%

              	
                100%

              	
                135%

              
	
                60th

              	
                78%

              	
                120%

              	
                162%

              
	
                80th

              	
                130%

              	
                200%

              	
                200%

              

      

                        Interim
        percentages to be interpolated.

    

     

    
      
        -
          1
          -

        
          

        

      

       

    

    In
      determining the Final Payout, the CEDC shall have the discretion to increase
      or
      decrease the Presumed Payout by up to 35%, but the Final Payout may not exceed
      the applicable percentages specified in the “Maximum” column based on actual
      achievement of the Pre-Set TSR Goal. The CEDC will exercise this discretion
      in
      determining the Final Payout based on its assessment of the Company's
      performance as compared to the general stock market and/or comparable companies,
      business conditions affecting such performance, and other considerations deemed
      relevant by the CEDC. It is understood that there is no promise or commitment,
      express or implied, that the Final Payout will exceed or equal the Presumed
      Payout. In no event will the aggregate value of the Performance Shares that
      have
      become earned and payable hereunder (after giving effect to any forfeiture
      applicable under Section 3 below) exceed the limit set forth in Section 4.5
      of
      the CEO/CFO LTIP document and all other applicable limits thereunder and under
      the 1999 Plan and SEICP. 

     

    3.  Vesting;
      Payment.
      Except
      as otherwise provided in this Section, the Executive must remain continuously
      employed by the Company or one of its subsidiaries at all times during the
      Performance Period to earn any Performance Shares under this Award
      Agreement.

     

    3.1.  If
      the
      Executive remains continuously employed by the Company (or one of its
      subsidiaries) through December 31, 2006, and no Change in Control has occurred
      by that date, then the Executive shall fully vest in his Performance Shares
      as
      of the last day of the Performance Period. The CEDC shall determine the extent
      of achievement of the Pre-Set TSR Goal as of such date, and shall determine
      the
      final award of Performance Shares to be paid to the Executive in accordance
      with
      Section 2 of this Agreement.

     

    3.2.  If
      the
      Executive’s employment with the Company and all of its subsidiaries terminates
      prior to December 31, 2006 due to his death, disability or retirement on or
      after age 65, and prior to a Change in Control, actual performance will be
      measured up to and including the date of the Executive’s termination of
      employment, and the Final Payout determined in accordance with Section 2 (but
      using the termination date for measuring the extent of achievement of the
      Pre-Set TSR) will be prorated by multiplying the number of Performance Shares
      so
      determined by a fraction the numerator of which is the number of days that
      have
      elapsed from January 1, 2005 through the Executive's date of termination and
      the
      denominator of which is 730. In such case, the Executive's right to receive
      any
      Performance Shares in excess of the pro rata portion determined under this
      Section 3.2 will be forfeited as of the date of such termination. 

     

    For
      purposes of this Award Agreement, the Executive shall be considered “disabled”
      if he or she is entitled to a disability pension or allowance under the
      Company’s disability plan.

     

    3.3.  If
      the
      Executive’s employment with the Company and its subsidiaries terminates prior to
      the end of the Performance Period for any reason other than his death,
      disability or retirement on or after age 65, and prior to a Change in Control,
      the Executive shall forfeit the right to receive any Performance Shares under
      this Award Agreement as of the date of such termination.

     

    3.4.  Notwithstanding
      any provision of this Agreement to the contrary, in the event of a Change in
      Control of the Company or The United Illuminating Company during the Performance
      Period, the Executive will be deemed to be fully vested as of the CIC Vesting
      Date, and shall be awarded that number of Performance Shares that shall be
      determined by the CEDC in accordance with Section 2, but using the Change in
      Control Vesting Date for measuring the extent of achievement of the Pre-Set
      TSR
      and, for this purpose, using for the final value of a Company Share the higher
      of the per share price actually paid in the transaction constituting the Change
      in Control or the average of the high and low sales prices of the Company Shares
      on the Change in Control Vesting Date, provided that the Executive is
      continuously employed by the Company or one of its Subsidiaries at all times
      from the date of this Award Agreement through the date of the Change in Control.
      

     

    3.5.  The
      final
      number of Performance Shares to which the Executive is entitled pursuant to
      this
      Award Agreement, if any, shall be paid and settled in actual Shares of Company
      stock (at a rate of one Share for each Performance Share to be paid out), up
      to
      a maximum of 7,400 Performance Shares, such Shares to be drawn from the 1999
      Plan and deemed also to be awarded under the SEICP, with any excess Performance
      Shares being paid in cash as amounts awarded under the SEICP. In the case of
      any
      non-deferred Performance Shares, such payments will be made as soon as
      practicable following the CEDC’s determination of the applicable number of

     

    
      
        -
          2
          -

        
          

        

      

       

    

    
      Performance
        Shares earned by the Executive pursuant to Section 2 and 3 hereof, but in
        no
        event later than thirty (30) days following the applicable Entitlement Date.
        

       

      3.6.  The
        settlement of any Performance Shares that become payable upon or after the
        Executive’s death shall be paid to the Executive’s beneficiary or beneficiaries
        if any have been designated for the receipt of such Performance Awards
        (“Beneficiary” or “Beneficiaries”, as applicable), otherwise to the legal
        representative of the Executive’s estate.

       

      3.7.  The
        Company is authorized to withhold from the settlement made for any Performance
        Shares earned under this Award Agreement the amount (in cash, Shares, other
        securities, other Awards, or other property) of all applicable withholding
        taxes
        due in respect of the Shares payable in settlement of such Performance Shares,
        and to take such other action as may be necessary in the opinion of the Company
        to satisfy all obligations for the payment of such taxes. The Company will
        withhold cash amounts payable in settlement of Performance Shares to the
        extent
        such cash is available to fully satisfy any mandatory withholding obligations,
        and will then withhold Shares deliverable in settlement of Performance Shares,
        except that Executive may elect, at least 90 days before the applicable
        withholding date, to pay the withholding amount that would be satisfied by
        withholding of Shares by making other arrangements satisfactory to the Company
        to meet the mandatory withholding obligations. 

       

    

    4.  Retention
      of Performance Shares.
      All
      Shares paid to the Executive in settlement of the Performance Shares earned
      under this Award Agreement will be subject to retention requirements set forth
      in this Section. The Executive will be required to retain ownership of a number
      of Shares having a value equal to fifty percent (50%) of the aggregate after-tax
      value of all Shares and cash received by him in settlement of Performance Shares
      under this Award Agreement or which would have been received but for an election
      to defer, for a period of at least three years from the date he receives such
      Shares. For this purpose, after-tax value will be calculated as though no
      deferral took place. This requirement will lapse upon the Executive’s retirement
      or termination of service. For purposes of this Section 4, all values will
      be
      determined as of the date the Executive receives payment of the Shares in
      settlement of the Performance Shares earned hereunder. The Company may affix
      a
      restrictive legend to share certificates and retain custody of share
      certificates to give effect to this restriction, and the CEDC may take into
      consideration any failure to abide by this restriction in determining future
      incentive awards and other discretionary compensation of the Executive.

     

    5.  Incorporation
      by Reference.
      This
      Award Agreement is subject in all respects to the terms and provisions of the
      SEICP, 1999 Plan and CEO/CFO LTIP (the “formal program documents”), all of which
      terms and provisions are made a part of and incorporated in this Award Agreement
      as if they were each expressly set forth herein. The Executive hereby
      acknowledges receipt of a true copy of the formal program documents, and that
      he
      has read these documents carefully and fully understands their content. In
      the
      event of any conflict between the terms of this Award Agreement and the terms
      of
      the formal program documents, the formal program documents shall
      control.

     

    6.  Definitions.
      Any
      capitalized term not defined in this Award Agreement shall have the same meaning
      as is ascribed thereto under the Plan. For purposes of this Award Agreement,
      the
      following terms shall have the meanings set forth below:

     

    6.1.  “Board”
      shall mean the Board of Directors of the Company. 

     

    6.2.  “Breach
      by the Company” and “Cause” shall each have the same meanings ascribed thereto
      in the Employment Agreement by and between the Executive and The United
      Illuminating Company, as amended from time to time.

     

    6.3.  “Change
      in Control” shall have the same meaning ascribed thereto in the UIL Holdings
      Corporation Change in Control Severance Plan II.

    
       

      
        -
          3
          -

        
          

        

      

       

    

    6.4.  “CIC
      Vesting Date” shall mean the closing date of the transaction that will
      constitute a Change in Control.

     

    6.5.  “Entitlement
      Date” shall mean the earliest of the following dates: (a) the Executive’s
      termination due to death, disability or retirement on or after age 65; or (b)
      the CIC Vesting Date; or (c) December 31, 2006.

     

    6.6.  “Performance
      Period” shall mean the period commencing on January 1, 2005 and ending on
      December 31, 2006.

     

    6.7.  “Shares”
      mean shares of UIL Holdings Corporation common stock.

     

    7.  No
      Shareholder or Dividend Rights.
      Prior
      to the date Shares are paid in settlement of any Performance Shares, the
      Executive will have no right to dividends and will have no voting or other
      rights on account of the Performance Shares awarded by this Award Agreement.
      The
      Executive's rights to dividend equivalents on deferred Shares, if any, will
      be
      as specified under the Deferred Compensation Plan. 

     

    8.  Transferability.
      The
      Performance Shares awarded pursuant to this Award Agreement, and any rights
      or
      interests therein may not be sold, exchanged, transferred, assigned or otherwise
      disposed of in any way at any time by the Executive (or any Beneficiary(ies)
      of
      the Executive), other than by designation of Beneficiary(ies) as permitted
      hereunder or by testamentary disposition by the Executive or the laws of descent
      and distribution. The
      Performance Shares shall not be pledged, encumbered or otherwise hypothecated
      in
      any way at any time by the Executive (or any Beneficiary(ies) of the Executive)
      and shall not be subject to execution, attachment or similar legal process.
      Any
      attempt to sell, exchange, pledge, transfer, assign, encumber or otherwise
      dispose of or hypothecate the Performance Shares, or the levy of any execution,
      attachment or similar legal process upon the Performance Shares, contrary to
      the
      terms of this Award Agreement and/or the Plan shall be null and void and without
      legal force or effect.

     

    9.  Adjustments. The
      CEDC
      is authorized to make adjustments in the number, terms and conditions of the
      Performance Shares and related Performance Goals in recognition of unusual
      or
      nonrecurring events, including stock splits, stock dividends, reorganizations,
      mergers, consolidations, large, special and non-recurring dividends, and
      acquisitions and dispositions of businesses and assets, affecting the Company
      ("Company Transactions") and its subsidiaries or other business unit, or the
      financial statements of the Company or any subsidiary, or in response to changes
      in applicable laws, regulations, accounting principles, tax rates and
      regulations or business conditions or in view of the CEDC's assessment of the
      business strategy of the Company; provided, however, that no such adjustment
      shall be authorized or made if and to the extent that the existence or exercise
      of such authority (i) would cause the Performance Shares hereunder to fail
      to
      qualify as performance-based compensation under Section 162(m) of the Internal
      Revenue Code and regulations thereunder, or (ii) would cause the CEDC to be
      deemed to have authority to change the targets, within the meaning of Treasury
      Regulation 1.162-27(e)(4)(vi), under the Performance Goals relating to an
      authorized Performance Award. The number and kind of Performance Shares subject
      to this Award Agreement and relevant information relating to the determination
      of the Pre-Set TSR Goal shall be adjusted upon the occurrence of a Company
      Transaction that affects the Shares in order to prevent dilution and enlargement
      of the rights of the Executive under the Program. 

     

    10.  Entire
      Agreement.
      This
      Award Agreement contains the entire agreement between the parties hereto with
      respect to the subject matter contained herein, and supersedes all prior
      agreements or prior understandings, whether written or oral, between the parties
      relating to such subject matter.

     

    11.  Governing
      Law.
      This
      Award Agreement shall be governed by and construed in accordance with the laws
      of the State of Connecticut and applicable federal law.

     

    12.  Binding
      Effect.
      The
      provisions of this Award Agreement are binding upon and inure to the benefit
      of
      the Company, its successors and assigns, and the Executive and the Executive’s
      guardians and Beneficiary(ies).

    
       

      
        -
          4
          -

        
          

        

      

       

    

    IN
      WITNESS WHEREOF, the parties have executed this Award Agreement on the dates
      set
      forth below.

     

    UIL
      HOLDINGS CORPORATION

    

    
      	
              Date:
                

            	
              July
                8, 2005

            

    

    

     

    Attest: 

    

    

    
      	
              /s/
                Susan E. Allen

            	 	
              By:

            	
              /s/
                Nathaniel D. Woodson

            
	
              Susan
                E. Allen

            	 	 	
              Nathaniel
                D. Woodson

            
	
              Vice
                President Investor Relations, Corporate Secretary &
                Treasurer

            	 	 	
              Its
                Chairman, President and Chief Executive
                Officer

            

    

    

     

    Grant
      of
      Performance Shares on 

    foregoing
      terms acknowledged.

     

    
      	
              Date:
                

            	
              July
                8, 2005

            	 	
              /s/
                Richard J. Nicholas

            
	 	 	 	
              Richard
                J. Nicholas

            

    

    

    
      
        
        

      

      
        -
          5
          -UIL Holdings Exhibit 10.6 dated 07/08/05

                    EXHIBIT
      10.6

    

    EMPLOYMENT
      AGREEMENT

    

    

    THIS
      AGREEMENT ( the “Agreement”) is
      made
      as of July 1, 2005, between The United Illuminating Company, a Connecticut
      Corporation (the “Company”) and Susan E. Allen (the “Executive”),

     

    WITNESSETH
      THAT

    

    WHEREAS,
      the Executive previously has been employed by UIL Holdings Corporation (“UIL”)
      as its Vice President Investor Relations, Corporate Secretary and Assistant
      Treasurer, and is covered by the terms of a certain employment agreement with
      UIL dated as of November 8, 2004, and 

    

    WHEREAS,
      as part of its finance reorganization, UIL Holdings Corporation wishes to
      transfer the Executive’s employment to The United Illuminating Company (the
“Company”) where she will be employed as Vice President--Investor Relations,
      Corporate Secretary and Treasurer of both the Company and UIL, and the Executive
      desires to be so employed, and

    

    WHEREAS,
      the Company and the Executive 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 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 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 

     

    
      
        
        

      

      
        -
          1
          -

        
          

        

      

      
        
        

      

    

    
       

      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-Investor
      Relations, Corporate Secretary and Treasurer, and shall also serve as the Vice
      President-Investor Relations, Corporate Secretary and Treasurer of UIL 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 and UIL.

    

    (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 or UIL 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
      her
      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 (effective April 1,
      2005) of One Hundred Eighty Thousand Dollars ($180,000.00), payable in
      accordance with the then customary payroll practices of the Company. The
      Executive's performance and Base Salary shall be reviewed by the UIL Board
      at
      least annually, and may be revised upward as 

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

    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.

    

    (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 program 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
      she
      terminates service, and shall be equal to that short-term annual incentive
      compensation payment to which the Executive would be entitled, if any, under
      the
      terms of the Company’s executive incentive compensation plan, calculated as if
      she had been employed by the Company on the last day of the year including
      her
      Date of Termination, and had achieved personal goals ‘at target’, but based on
      actual performance with respect to the achievement of Company and UIL financial
      goals (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, her 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 Company
      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 has been 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.

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

    (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 she meets
      the
      applicable eligibility requirements, the Executive shall be entitled to
      participate in and receive benefits under all of the Company's employee benefit
      plans, programs and arrangements for its similarly situated 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 her working time and efforts to the
      business and affairs of the Company unless any such failure is cured in all
      material respects to the reasonable satisfaction of the UIL 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 her duties (other
      than
      by reason of incapacity due to physical or mental illness or
      injury).

    

     

    (d)  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.

     

    
      
        
        

      

      
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    (e)  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”). 

     

    (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.

     

    (f)  Date
      of Termination.
      For
      purposes of this Agreement, the “Date of Termination” is defined as (i) the
      Executive’s date of death, in the event of her death; or the date of her
      termination due to disability, 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, 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, or her
      total or partial physical or mental disability such
      that
      the Executive becomes entitled to long-term disability benefits under the
      Company’s long-term disability plan,
      or if
      the Executive retires on or after 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 earned, but unpaid, as of the Date of Termination 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, or retirement (as hereinbefore defined),
      and not in case of her voluntary termination other than on account of such
      retirement; plus

     

    (iii)
      any
      amounts payable pursuant to (4)(d) (unreimbursed business expenses), (4)(e)
      (employee benefits due and owing), 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
      she was a 

     

    
      
        
        

      

      
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    participant
      as of her termination of service, all as determined in accordance with the
      terms
      and conditions of such plans and arrangements. 

     

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

     

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

     

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

     

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

     

    (ii)
      any
      amounts payable pursuant to Sections (4)(d), (4)(e), 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) participation in
      any long-term incentive compensation plan and equity compensation plan or
      arrangement, and (B) participation in any deferred compensation plan in which
      she was a 

    
      
        
        

      

      
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    participant
      as of her termination of service, all as determined in accordance with the
      terms
      and conditions of such plans and arrangements; plus

    

    (iv)
      lump
      sum severance 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 she had been employed by the Company on the last
      day
      of the year of her Termination, and as 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 second anniversary of the date of the Executive’s Date
      of Termination, continued participation in the medical and dental plans and
      programs in which she was a participant as of her Date of Termination on the
      same basis as if she remained an active employee, provided that such
      participation is possible under the terms and provisions of such plans and
      programs and applicable law. In the case of continuation in the Company’s
      medical and dental plans, 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;
      and

    

    (vi)
      the
      addition of two (2) years of service deemed as an Employee of the Company in
      the
      calculation of the entitlement to and benefits payable under the Company’s
      retiree medical benefit plan and in the calculation of benefits payable under
      The United Illuminating Company Pension Plan, which amount shall be paid as
      a
      non-qualified supplemental retirement benefit.

     

    (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
      she been terminated without cause in accordance with Section 6(c) of this
      Agreement.

     

    
      
        
        

      

      
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          8
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    (e)
      Timing
      of Payment.
      Any
      cash
      amount that is due and owing to the Executive upon her 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), (7) and (8) 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.

     

    
    

    (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
      she was a participant as of her termination of service, all as determined in
      accordance with the terms and conditions of such plans and arrangements;
      plus

    

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

    
      
        
        

      

      
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    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 Three Hundred Sixty Seven Thousand, Five Hundred Twenty Four Dollars
      ($367,524.00), 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.

    

    (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 her 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.

     

    
      
        
        

      

      
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    (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 her access to certain trade secrets,
      confidential business practices, and proprietary information concerning the
      Company or any person or entity that directly, or indirectly through one or
      more
      intermediaries, controls or is controlled by, or is under common control with,
      the Company (an “Affiliate”), including, without limitation, the Company’s
      methods of doing business, marketing and strategic business plans, employees’
      compensation and contract terms, customer lists and customer characteristics
      (collectively referred to as “Proprietary Information”). The Executive agrees
      and covenants to exercise utmost diligence to protect and safeguard the trade
      secrets, confidential business practices and Proprietary Information concerning
      the Company and any Affiliate. The Executive further agrees and covenants that,
      except with the prior written consent of the Company, she will not, either
      during the Term hereof or thereafter, directly or indirectly, use for her own
      benefit or for the benefit of any other person or organization, or disclose,
      disseminate or distribute to any other person or organization, any of the
      Proprietary Information (whether or not acquired, learned, obtained or developed
      by the Executive alone or in conjunction with another), unless and until such
      Proprietary Information has become a matter of public knowledge through no
      action or fault of the Executive or unless otherwise required by 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
      she
      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 and its Affiliates (the “time in
      question”), the Executive will not, in any capacity, directly or
      indirectly,
      whether
      as a consultant, employee, officer, director, partner, member, principal,
      shareholder, or otherwise: 

    
       

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

    

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

    

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

    

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

    

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

    

    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 10-12, the term the “Company” shall mean UIL Holdings Corporation,
      The United Illuminating Company and any successor to, or acquirer of, the
      business or assets of either of them.

    
      
        
        

      

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

     

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

     

    
    

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

     

    (b)
      Effect
      Of Breach.
      All
      payments and other benefits payable but not yet distributed to Executive under
      Sections (6), (7) or (8) shall be forfeited and discontinued in the event that
      the Executive violates Sections (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, 

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

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

     

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

     

    As
      used
      in this Section, the term 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
      her 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 

     

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

    

    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.

     

     

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

    

    

    
      	
              Date:
                

            	
              July
                8, 2005

            

    

    

    THE
      UNITED ILLUMINATING COMPANY

    

    Attest: 

    

    

    
      	
              /s/
                Richard J. Nicholas

            	 	
              By:

            	
              /s/
                Nathaniel D. Woodson

            
	
              Richard
                J. Nicholas

            	 	 	
              Nathaniel
                D. Woodson

            
	 	 	 	
              Its
                Chairman and Chief Executive
                Officer

            

    

    

    

    
      	 	 	 	
              /s/
                Susan E. Allen

            
	 	 	 	
              Susan
                E. Allen

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