CEO/CFO LTIP
Performance Share Agreement
EXHIBIT A
UIL HOLDINGS CORPORATION
PERFORMANCE SHARE AGREEMENT
FOR
ANNUAL PERFORMANCE SHARES
(INITIAL GRANT)
THIS AWARD AGREEMENT (the "Award Agreement"), made as of June 17, 2004,
by and between UIL HOLDINGS CORPORATION, a Connecticut corporation, having its
principal place of business in New Haven, Connecticut (the "Company" or "UIL"),
and XXXXXXXXX X. XXXXXXX (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; and
WHEREAS, the Company and the Executive wish to evidence the terms and
conditions governing the Performance Shares 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 awards to the Executive the
Performance Shares described below. Payment of the Performance Shares
hereunder is dependent upon the achievement of the Performance Goals described
in Section 2 of this Award Agreement and shall be made pursuant to the terms
of the CEO/CFO LTIP. 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.
1.1. UI Performance Shares. The CEDC hereby makes an award to the Executive of
10,598 Performance Shares, payment of which is dependent upon the achievement
by The United Illuminating Company ("UI"), at 100% of `target', of certain UI
Performance Goals more fully described in Section 2.1 of this Award Agreement
and under the terms of the CEO/CFO LTIP, with a maximum award of up to 15,897
Performance Shares possible based upon the achievement of the UI Performance
Goals at or above the designated maximum levels. The Performance Shares
awarded pursuant to this Section 1.1 shall be referred to herein as the "UI
Performance Shares."
1.2. Xcelecom Performance Shares. The CEDC hereby makes an award to the
Executive of 4,542 Performance Shares, payment of which is dependent upon the
achievement by Xcelecom, Inc. ("Xcelecom"), at 100% of `target', of certain
Xcelecom Performance Goals more fully described in Section 2.2 of this Award
Agreement and under the terms of the CEO/CFO LTIP, with a maximum award of up
to 9,084 Performance Shares possible based upon the achievement of the
Xcelecom Performance Goals at or above the designated maximum levels. The
Performance Shares awarded pursuant to this Section 1.2 shall be referred to
herein as the "Xcelecom Performance Shares."
2.Performance Goals. The final number of UI Performance Shares and Xcelecom
Performance Shares (collectively, the "Performance Shares") to be awarded to
the Executive (the "Final Payout"), if any, under this Award Agreement shall
be determined based upon the achievement by UI and Xcelecom, respectively, of
the UI and Xcelecom Performance Goals described below for the period extending
from April 1, 2004 through December 31, 2006 (the "Performance Period").
2.1. UI Performance Goals. The Final Payout, if any, of the UI Performance
Shares shall be determined based on the average annual return on equity
("XXX") achieved during the Performance Period compared against the target
annual XXX percentage established for the Performance Period with respect to
particular elements (e.g., transmission, distribution, CTA) of UI's business
as more fully set forth in the UI Long Term Incentive Program design document
(the "UI LTIP") approved by the CEDC (the "UI Performance Goals"). In
accordance with the UI LTIP, 5,299 Performance Shares (50% of the target
number) will be earned if the "threshold" level of performance is achieved,
10,598 Performance Shares will be earned if the "target" level of performance
is achieved, 15,897 Performance Shares (150% of the target number) will be
earned if the "maximum" level of performance is achieved, with interpolation
if performance falls between threshold and target or between target and
maximum. The actual number of UI Performance Shares finally awarded to the
Executive, if any, shall be determined by the CEDC, in accordance with the
terms and conditions of the CFO/CEO LTIP, and UI LTIP and the 1999 Plan.
2.2. Xcelecom Performance Goals. The Final Payout, if any of the Xcelecom
Performance Shares shall be determined based on the percentile ranking
achieved by Xcelecom, with respect to two equally weighted performance
measures, namely, Pre-tax Income as a Percent of Sales and Free Cash flow as a
Percent of Sales as compared against the established group of comparable
companies for the Performance Period as more fully set forth in the Xcelecom
Long Term Incentive Program design document (the "Xcelecom LTIP") approved by
the CEDC (the "Xcelecom Performance Goals"). 2,271 Performance Shares (50% of
the target number) will be earned if the "threshold" level of performance is
achieved, 4,542 Performance Shares will be earned if the "target" level of
performance is achieved, 9,084 Performance Shares (200% of the target number)
will be earned if the "maximum" level of performance is achieved with
interpolation if performance falls between threshold and target or between
target and maximum, based on the quartile results of the different performance
measures and providing equal weight to each measure. The actual number of
Xcelecom Performance Shares finally awarded to the Executive, if any, shall be
determined by the CEDC, in accordance with the terms and conditions of the
CFO/CEO LTIP, the Xcelecom LTIP and the 1999 Plan.
3.Vesting. Except as otherwise provided in this Section or Sections 4, 5 and 6
of this Award Agreement, 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.
3.2. If the Executive's employment with the Company (or one 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, then solely
for purposes of this Award Agreement, the Executive shall be deemed to have
been continuously employed by the Company (or one of its subsidiaries)
throughout the duration of the Performance Period, and, provided that the
Executive complies with the provisions of Sections 10 (Confidential
Information) and 11 (Non-competition) of his Employment Agreement (or any
successor provisions thereto), he shall fully vest in his Performance Shares
as of the last day of the Performance Period.
3.3. If the Executive's employment with the Company or one of its subsidiaries
terminates prior to December 31, 2006 for any reason other than his death,
Disability or retirement on or after age 65, and no CIC has occurred by that
date, the Executive shall forfeit the right to receive any Performance Shares
under this Award Agreement and the Award Agreement shall be cancelled as of
the date of such termination.
4. Change in Control of UIL.
4.1. Notwithstanding any provision of this Agreement to the contrary, in the
event of a Change in Control of the Company during the Performance Period,
upon the applicable CIC Vesting Date, the Executive shall be deemed to have
earned, and will have a vested right to receive, at such time as determined
pursuant to Section 7, a number of Performance Shares determined in accordance
with this Section 4, provided that he is continuously employed by the Company
(or one of its subsidiaries) at all times from June 17, 2004 through the
applicable CIC Vesting Date.
- 2 -
4.1.1. If, following a Change in Control of the Company, and prior to the
applicable CIC Vesting Date, the Executive's employment with the Company (or
one of its subsidiaries) terminates due to his death, Disability or retirement
on or after age 65, solely for purposes of this Award Agreement, the Executive
shall be deemed to have been continuously employed by the Company (or one of
its subsidiaries) at all times from June 17, 2004 through the applicable CIC
Vesting Date.
4.1.2. If, following a Change in Control of the Company, and prior to the
applicable CIC Vesting Date, the Executive's employment with the Company (or
one of its subsidiaries) is terminated for any reason other than (a) his
death, Disability or retirement on or after age 65, (b) by the Company without
Cause, or (c) by the Executive due to a Breach by the Company, the Executive
shall forfeit the right to receive any Performance Shares under this Award
Agreement and the Award Agreement shall be cancelled as of the date of such
termination.
4.2. The number of Performance Shares payable to the Executive following the
occurrence of a Change in Control of the Company during the Performance
Period, and subject to the continuous employment requirement of Section 4.1,
shall be determined by the CEDC as soon as reasonably possible following the
applicable CIC Vesting Date, in accordance with this Section 4.2.
4.2.1. Pre-CIC Performance. The number of Performance Shares payable to the
Executive with respect to the period commencing on April 1, 2004 and ending on
the date of the Change in Control (the "Pre-CIC Performance Period") shall be
determined as follows:
4.2.1.1. The CEDC shall determine the extent of achievement of the UI
Performance Goals and Xcelecom Performance Goals for the Pre-CIC Performance
Period in accordance with Section 2 of this Agreement. The actual extent of
achievement for the Pre-CIC Performance Period shall be compared to the
applicable UI Performance Goals and Xcelecom Performance Goals for the
Performance Period (adjusted to the extent necessary to measure performance
over only the Pre-CIC Performance Period) and the CEDC shall determine a base
number of UI Performance Shares and Xcelecom Performance Shares relative to
such comparisons in accordance with Section 2.
4.2.1.2. The total number of Performance Shares payable to the Executive for the
Pre-CIC Performance Period will equal (a) the sum of the base number of UI
Performance Shares plus the base number of Xcelecom Performance Shares
determined under Section 4.2.1.1, multiplied by (b) a fraction having a
numerator equal to the number of calendar days elapsed from January 1, 2004
through and including the date of the Change in Control, and a denominator
equal to 1096.
4.2.2. Post-CIC Performance. The number of Performance Shares payable to the
Executive with respect to the period commencing on the date of the Change in
Control and ending on December 31, 2006, shall equal (a) 15,140, multiplied by
(b) a fraction having a numerator equal to the number of calendar days elapsed
from the date of the Change in Control of the Company through, and including,
December 31, 2006, and a denominator equal to 1096. The Executive shall be
entitled to the number of Performance Shares determined pursuant to this
Section 4.2.2 even if the applicable CIC Vesting Date occurs prior to December
31, 2006.
4.3. Notwithstanding any provision of this Award Agreement to the contrary, in
the event of a UI Change in Control (as defined in Section 5.1) or an Xcelecom
Change in Control (as defined in Section 6.1) prior to the occurrence of a
Change in Control of the Company, the UI Performance Shares and/or Xcelecom
Performance Shares, as applicable, shall be disregarded for purposes of this
Section 4, and the payment of such UI Performance Shares and/or Xcelecom
Performance Shares shall be made pursuant to Section 5 and/or Section 6 of
this Award Agreement, as applicable.
5. Change in Control of UI.
5.1. Notwithstanding any provision of this Agreement to the contrary, in the
event of a Change in Control of UI during the Performance Period and prior to
a Change in Control of the Company (a "UI Change in Control"), upon the
applicable CIC Vesting Date, the Executive shall be deemed to have earned, and
- 3 -
will have a vested right to receive, at such time as determined pursuant to
Section 7, a number of UI Performance Shares determined in accordance with
this Section 5, provided that he is continuously employed by the Company (or
one of its subsidiaries) at all times from June 17, 2004 through the
applicable CIC Vesting Date.
5.1.1. If, following a UI Change in Control, and prior to the applicable CIC
Vesting Date, the Executive's employment with the Company (or one of its
subsidiaries) terminates due to his death, Disability or retirement on or
after age 65, solely for purposes of this Award Agreement, the Executive shall
be deemed to have been continuously employed by the Company (or one of its
subsidiaries) at all times from June 17, 2004 through the applicable CIC
Vesting Date.
5.1.2. If, following a UI Change in Control, and prior to the applicable CIC
Vesting Date, the Executive's employment with the Company (or one of its
subsidiaries) is terminated for any reason other than (a) his death,
Disability or retirement on or after age 65, (b) by the Company without Cause,
or (c) by the Executive due to a Breach by the Company, the Executive shall
forfeit the right to receive any Performance Shares under this Award Agreement
and the Award Agreement shall be cancelled as of the date of such termination.
5.2. The number of UI Performance Shares payable to the Executive following the
occurrence of a UI Change in Control, and subject to the continuous employment
requirement of Section 5.1, shall be determined by the CEDC as soon as
reasonably possible following the applicable CIC Vesting Date, in accordance
with this Section 5.2.
5.2.1. Pre-CIC Performance. The number of UI Performance Shares payable to the
Executive with respect to the period commencing on April 1, 2004 and ending on
the date of the UI Change in Control (the "UI Pre-CIC Performance Period")
shall be determined as follows:
5.2.1.1. The CEDC shall determine the extent of achievement of the UI
Performance Goals for the UI Pre-CIC Performance Period in accordance with
Section 2 of this Agreement. The actual extent of achievement of the UI
Performance Goals for the UI Pre-CIC Performance Period shall be compared to
the applicable UI Performance Goals (adjusted to the extent necessary to
measure performance over only the Pre-CIC Performance Period) for the
Performance Period and the CEDC shall determine a base number of UI
Performance Shares relative to such comparison in accordance with Section 2.1.
5.2.1.2. The total number of UI Performance Shares payable to the Executive for
the UI Pre-CIC Performance Period will equal (a) the base number of UI
Performance Shares determined under Section 5.2.1.1, multiplied by (b) a
fraction having a numerator equal to the number of calendar days elapsed from
January 1, 2004 through and including the date of a UI Change in Control, and
a denominator equal to 1096.
5.2.2. Post-CIC Performance. The number of UI Performance Shares payable to the
Executive with respect to the period commencing on the date of the UI Change
in Control and ending on December 31, 2006, shall equal (a) 10,598, multiplied
by (b) a fraction having a numerator equal to the number of calendar days
elapsed from the date of the UI Change in Control through, and including,
December 31, 2006, and a denominator equal to 1096. The Executive shall be
entitled to the number of UI Performance Shares determined pursuant to this
Section 5.2.2 even if the applicable CIC Vesting Date occurs prior to December
31, 2006.
5.3. The occurrence of a UI Change in Control shall have no effect on the
Xcelecom Performance Shares awarded under this Award Agreement, and the
determination of the Final Payout, if any, of such Xcelecom Performance Shares
shall continue to be determined in accordance with this Award Agreement.
6. Change in Control of Xcelecom.
6.1. Notwithstanding any provision of this Agreement to the contrary, in the
event of a Change in Control of Xcelecom during the Performance Period and
prior to a Change in Control of the Company (an "Xcelecom Change in Control"),
upon the applicable CIC Vesting Date, the Executive shall be deemed to have
earned, and will have a vested right to receive, at such time as determined
pursuant to Section 7, a number of Xcelecom Performance Shares determined in
- 4 -
accordance with this Section 6, provided that he is continuously employed by
the Company (or one of its subsidiaries) at all times from June 17, 2004
through the applicable CIC Vesting Date.
6.1.1. If, following an Xcelecom Change in Control, and prior to the applicable
CIC Vesting Date, the Executive's employment with the Company (or one of its
subsidiaries) terminates due to his death, Disability or retirement on or
after age 65, solely for purposes of this Award Agreement, the Executive shall
be deemed to have been continuously employed by the Company (or one of its
subsidiaries) at all times from June 17, 2004 through the applicable CIC
Vesting Date.
6.1.2. If, following an Xcelecom Change in Control, and prior to the applicable
CIC Vesting Date, the Executive's employment with the Company (or one of its
subsidiaries) is terminated for any reason other than (a) his death,
Disability or retirement on or after age 65, (b) by the Company without Cause,
or (c) by the Executive due to a Breach by the Company, the Executive shall
forfeit the right to receive any Performance Shares under this Award Agreement
and the Award Agreement shall be cancelled as of the date of such termination.
6.2. The number of Xcelecom Performance Shares payable to the Executive
following the occurrence of an Xcelecom Change in Control, and subject to the
continuous employment requirement of Section 6.1, shall be determined by the
CEDC as soon as reasonably possible following the applicable CIC Vesting Date,
in accordance with this Section 6.2.
6.2.1. Pre-CIC Performance. The number of Xcelecom Performance Shares payable to
the Executive with respect to the period commencing on April 1, 2004 and
ending on the date of the Xcelecom Change in Control (the "Xcelecom Pre-CIC
Performance Period") shall be determined as follows:
6.2.1.1. The CEDC shall determine the extent of achievement of the Xcelecom
Performance Goals for the Xcelecom Pre-CIC Performance Period in accordance
with Section 2 of this Agreement. The actual extent of achievement of the
Xcelecom Performance Goals for the Xcelecom Pre-CIC Performance Period shall
be compared to the applicable Xcelecom Performance Goals for the entire
Performance Period and the CEDC shall determine a base number of Xcelecom
Performance Shares relative to such comparison in accordance with Section 2.2.
6.2.1.2. The total number of Xcelecom Performance Shares payable to the
Executive for the Xcelecom Pre-CIC Performance Period will equal (a) the base
number of Xcelecom Performance Shares determined under Section 6.2.1.1,
multiplied by (b) a fraction having a numerator equal to the number of
calendar days elapsed from January 1, 2004 through and including the date of
the Xcelecom Change in Control, and a denominator equal to 1096.
6.2.2. Post-CIC Performance. The number of Xcelecom Performance Shares payable
to the Executive with respect to the period commencing on the date of the
Xcelecom Change in Control and ending on December 31, 2006, shall equal (a)
4542, multiplied by (b) a fraction having a numerator equal to the number of
calendar days elapsed from the date of the Xcelecom Change in Control through,
and including, December 31, 2006, and a denominator equal to 1096. The
Executive shall be entitled to the number of Xcelecom Performance Shares
determined pursuant to this Section 6.2.2 even if the applicable CIC Vesting
Date occurs prior to December 31, 2006.
6.3. The occurrence of an Xcelecom Change in Control shall have no effect on the
UI Performance Shares awarded under this Award Agreement, and the
determination of the Final Payout, if any, of such UI Performance Shares shall
continue to be determined in accordance with this Award Agreement.
7. Payment of Performance Shares/Deferral.
7.1. The CEDC shall determine the extent of achievement of the Performance Goal
as of each applicable Entitlement Date, and shall determine the Final Payout
of UI Performance Shares and Xcelecom Performance Shares (as applicable), if
any, to be made to the Executive under this Agreement. Such Final Payments, if
any, shall be paid and settled in actual Shares of Company stock (at a rate of
- 5 -
one Share for each Performance Share to be paid out), or in cash (at the Fair
Market Value of a Share at the Entitlement Date for each Performance Share to
be paid out), with such Shares and cash to come from the 1999 Plan and SEICP,
in accordance with Section 4.5 of the CEO/CFO LTIP. 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
Performance Shares earned by the Executive; provided, however, that (a) in the
absence of a Change in Control, such payments shall be made no later than
thirty (30) days following the CEDC's approval of audited financial results
for the Performance Period, and (b) with respect to any Performance Shares
that vest upon an applicable CIC Vesting Date, such Shares will be paid not
later than thirty (30) days following the later of (1) the applicable
Entitlement Date, or (2) the CEDC's approval of audited financial results for
the applicable Pre-CIC Performance Period.
7.2. 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.
7.3. Notwithstanding any provision in this Award Agreement to the contrary, to
the extent permitted by applicable law the Executive may elect to defer
settlement of the Shares that otherwise would be payable to him in settlement
of any Performance Shares earned hereunder in accordance with the provisions
of the UIL Holdings Corporation Deferred Compensation Plan, as amended from
time to time (the "Deferred Compensation Plan"), or any successor or
substitute plan, except to the extent that the Shares would be deemed
constructively received by the Executive (for federal income tax purposes)
despite such deferral. 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.
8.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 Section 4.7(i) of the CEO/CFO
LTIP. 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.
9.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.
10. 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:
10.1. "Board" shall mean the Board of Directors of UIL Holdings Corporation.
10.2. "Breach by the Company" and "Cause" shall each have the same meanings
ascribed thereto in the Employment Agreement.
- 6 -
10.3. "Change in Control" shall have the same meaning ascribed thereto in the
UIL Holdings Corporation Change in Control Severance Plan II.
10.4. "CIC Vesting Date" shall mean the earliest of (a) December 31, 2006, (b)
the vesting date specified in the purchase agreement memorializing the
transaction that will constitute a Change in Control and approved by the
Board, or (c) the Executive's termination of employment, upon or within
twenty-four (24) months immediately following a Change in Control, by the
Company without Cause or by the Executive due to a Breach by the Company.
10.5. "Disability" shall mean a disability that entitles the Executive to a
disability pension or allowance under the Company's disability plan.
10.6. "Employment Agreement" shall mean the Employment Agreement by and between
the Executive and UIL Holdings Corporation, as amended from time to time.
10.7. "Entitlement Date" shall mean the earlier of (a) the applicable CIC
Vesting Date, or (b) December 31, 2006.
10.8. "Free Cash Flow as a Percent of Sales" shall mean, with respect to each
fiscal year in the Performance Period, net cash flow from operations of
Xcelecom, Inc. reduced by additions to capital.
10.9. "Performance Period" shall mean the period commencing on April 1, 2004
and ending on December 31, 2006.
10.10. "Pre-Tax Income as a Percent of Sales" shall mean for Xcelecom,
Inc., with respect to each fiscal year in the Performance Period, gross sales
reduced by operating costs (plus extraordinary income or minority income less
extraordinary costs) divided by total sales.
10.11. "XXX" shall mean the amount of total equity invested in UI divided into
UI's total net income for the year. The performance measure will be the
average of the earned XXX achieved for each year in the three year Performance
Period, with distinct XXX goals being established for each element of UI's
business (e.g., distribution, transmission, CTA, etc), all in accordance with
the UI LTIP.
10.12. "Shares" mean shares of UIL Holdings Corporation common stock.
11. 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.
12. 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.
13. 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
- 7 -
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
achievement of the Performance Goals 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 this Agreement.
14. Entire Agreement; Amendment. 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.
This Award Agreement may be amended by a writing signed by both parties.
15. 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.
16. 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).
IN WITNESS WHEREOF, the parties have executed this Award Agreement on
the dates set forth below.
UIL HOLDINGS CORPORATION
Date: November 8, 2004 By /s/ Xxxxxx X. Xxxxxx
---------------- --------------------
Xxxxxx X. Xxxxxx, Chairman
Grant of Performance Shares on Compensation and Executive Development
foregoing terms acknowledged. Committee
Date: November 8, 2004 /s/ Xxxxxxxxx X. Xxxxxxx
------------------- ---------------------------
Xxxxxxxxx X. Xxxxxxx
