UIL HOLDINGS CORPORATION DEFERRED COMPENSATION PLAN

EXHIBIT 10.41

UIL HOLDINGS CORPORATION

DEFERRED COMPENSATION PLAN

GRANDFATHERED BENEFIT PROVISIONS

originally adopted effective January 27, 2003,

as amended through August 4, 2008

TABLE OF CONTENTS

UIL HOLDINGS CORPORATION

DEFERRED COMPENSATION PLAN

GRANDFATHERED BENEFIT PROVISIONS

INTRODUCTION

Effective as of February 1, 2003, UIL Holdings Corporation (the "Company") established the UIL Holdings Corporation Deferred Compensation Plan to provide a select group of its senior management and the senior management of its selected Business Units with the opportunity to accumulate capital by deferring compensation on a pre-tax basis, and to provide the Company and its Business Units with a method of rewarding and retaining top executives and managerial employees.  The Plan also permits those eligible executive employees whose matching allocations under the United Illuminating Company 401(k)/Employee Stock Ownership Plan ("UI KSOP") would be limited by virtue of their Compensation Deferrals under this Plan to make up for such limitations with certain supplemental benefits, and provides non-Employee Directors of the Company with a means to defer receipt of certain shares of Restricted Stock and Performance Share awards.

The terms of the Plan as set forth in this Plan document apply solely with respect to deferrals made and vested pursuant to the terms of the Plan prior to January 1, 2005.  With respect to deferrals made pursuant to the terms of the Plan on and after January 1, 2005 and with respect to deferrals made pursuant to the terms of the Plan before January 1, 2005 that vest on or after January 1, 2005, the terms of the Plan are as described in the separate Plan document relating to “Non-Grandfathered Benefits.”  With respect to amounts subject to this Plan document, this Plan document supersedes the prior Plan document (as amended from time to time).

ARTICLE I

TITLE AND DEFINITIONS

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

" Account " or " Accounts " shall mean a Participant's Grandfathered Amount under the Plan, including all subaccounts as are specifically authorized for inclusion in this portion of the Plan.

“ Affiliate ” shall mean any corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).

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

" Beneficiary " or " Beneficiaries " shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of the Participant's death.  No beneficiary designation shall become effective until it is filed with the Committee (or the Recordkeeper).  Any designation shall be revocable at any time through a written instrument filed by the Participant with the Committee (or the Recordkeeper) with or without the consent of the previous

Beneficiary, provided, however, that no designation of a Beneficiary other than the Participant's spouse shall be valid unless consented to in writing by such spouse.  If there is no such designation or if there is no surviving designated Beneficiary, then the Participant's surviving spouse shall be the Beneficiary.  If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the Participant's estate shall be the Beneficiary.  In any case where there is no such personal representative of the Participant's estate duly appointed and acting in that capacity within 90 days after the Participant's death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the Participant's death), then Beneficiary shall mean the person or persons who can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive the benefits specified hereunder.  In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid to such minor's legal guardian duly appointed and currently acting to hold the funds for such minor.  If no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.  Payment by the Company pursuant to any unrevoked Beneficiary designation, or to the Participant's estate if no such designation exists, of all benefits owed hereunder shall terminate any and all liability of the Company.

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

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

" Business Unit " means The United Illuminating Company (“UI”) and any other subsidiary of the Company which, with the consent of the Board, has adopted the Plan.  Business Units shall be listed on Exhibit A to the Plan.

A " Change in Control " of the Company or any Business Unit (“an Employing Company”) occurs on the date on which any of the following events occur: a change of the ownership of the Employing Company; a change of the effective control of the Employing Company; or a change in the ownership of a substantial portion of the assets of the Employing Company.

In determining whether a person or group has acquired a percentage of stock, stock of the Company held pursuant to the terms of an employee benefit plan of the Company or any subsidiary thereof in a suspense account or otherwise unallocated to a Participant’s account shall be disregarded to the extent that expressing the applicable percentage as a fraction, such shares shall not be included in the numerator, but such shares will be included in the denominator.

An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Employing Company that has experienced the Change in Control, or the Participant’s relationship to the affected Employing Company otherwise satisfies the requirements of Treasury Regulation Section 1.409A-3(2)(i)(5)(ii).

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

“ Committee ” shall mean the Compensation and Executive Development Committee of the Board (or such other committee as shall be designated by the Board).

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

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

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

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

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

“ Compensation ” shall mean, in the case of Eligible Employees, Base Salary, increases in Base Salary received during the Plan Year, Bonuses and other incentive awards, compensation in excess of the amount deductible under Section 162(m) of the Code, and any other compensation permitted by the Committee to be deferred.

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

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

“ Designated Individuals ” shall mean those Eligible Employees and Eligible Directors designated as eligible to defer Restricted Stock Awards and/or Performance Shares Awards.

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

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

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

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

" Effective Date " of the Plan means February 1, 2003.

“ Election Period ” shall mean the time period associated with deferral of Compensation under the Plan.  The first Election Period with respect to Eligible Employees becoming Participants on the Effective Date (February 1, 2003) shall end on January 24, 2003.  Thereafter, except as expressly provided otherwise in this definition or by the Committee, subsequent elections with respect to a subsequent calendar year must be filed by October 30th of the preceding year (by December 20th of the preceding year with respect to elections made in 2004 and later years), to be effective with respect to such subsequent calendar year.  The Election Period with respect to the deferral by a Designated Individual of some portion or all of a Restricted Stock Award shall be any period designated by the Committee, which ends prior to receipt of such Award, and which shall be deemed effective contemporaneously with the granting of such Award with respect to any Restricted Stock vesting at least one year after such election is processed.  The Election Period with respect to the deferral by a Designated Individual of some portion or all of a Performance Share Award shall be any period designated by the Committee, which ends no later than 12 months prior to the end of the performance period related to such Performance Share Award, and which shall be deemed effective contemporaneously with the vesting of such Award with respect to any Performance Share vesting at least one year after such election is processed.  Notwithstanding the foregoing, no Election Period hereunder shall commence on or after January 1, 2005.

" Eligible Employee " shall mean each Employee of the Company or a participating Business Unit who is eligible to participate in the Plan, as determined in Section 2.1.

" Eligible Person " shall mean each Eligible Employee or Director of the Company or a participating Business Unit, to the extent that such individual is eligible to participate in the Plan, as determined in Section 2.1.  Notwithstanding the foregoing, because no deferral under this Plan by a Director vested prior to January 1, 2005, no Director of the Company is an Eligible Person for purposes of this Plan Document.

" Employer " shall mean the Company and its Affiliates.

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

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

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

“ Grandfathered Amount ” means the vested Account Balances of Plan Participants determined as of December 31, 2004, together with actual or notional earnings thereon accruing after December 31, 2004, which shall be subject to the provisions of the Plan and tax law in effect immediately prior to the enactment of Section 409A of the Internal Revenue Code (i.e., as of October 3, 2004), including, without limitation, requirements as to election of the timing and form of payment; expressly provided, however that the Grandfathered Amounts shall be so grandfathered only to the extent that the Plan terms governing such Amounts are not materially modified after October 3, 2004.

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

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

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

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

“ Performance Share Award ” or “ Performance Share ” shall mean a phantom stock award issued under the UIL Holdings Corporation CEO/CFO Long Term Incentive Program, the UIL Holdings Corporation UI Long-Term Incentive Program, the UIL Holdings Corporation UIL Long-Term Incentive Program, or the UIL Holdings Corporation Xcelecom Long-Term Incentive Program, which awards are settled in shares of Stock drawn from the UIL Holdings Corporation 1999 Restated Stock Plan, with the limited exception of certain of the Performance Share awards payable in cash to the CEO.

Notwithstanding the foregoing, because no deferral of a Performance Share award vested prior to January 1, 2005, all such deferrals shall be governed by the provisions of this Plan relating to Non-Grandfathered Benefits.

" Plan " shall mean the UIL Holdings Corporation Deferred Compensation Plan.  The terms of the Plan are reflected in this document entitled “UIL Holdings Corporation Deferred Compensation Plan - Grandfathered Benefit Provisions” and the document entitled “UIL Holdings Corporation Deferred Compensation Plan – Non-Grandfathered Benefit Provisions.”

" Plan Year " shall mean January 1 to December 31 of each year.

“ Recordkeeper ” shall mean the administrator appointed by the Committee.  As of February 1, 2003, TBG Financial was appointed the Recordkeeper.

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

“Restricted Stock Award ” shall mean any award of Restricted Stock which, if deferred under this Plan, shall be credited as Restricted Stock Units, and which is settled in shares of Company Stock that may be drawn from the UIL Holdings Corporation 1999 Amended and Restated Stock Plan or from this Plan, or both, to the extent permitted under the terms of said plans.  Notwithstanding the foregoing, because no deferral of a Restricted Stock Award vested prior to January 1, 2005, all such deferrals shall be governed by the provisions of this Plan relating to Non-Grandfathered Benefits.

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

" Scheduled In-Service Withdrawal Date " shall mean February of the year elected by the Participant to withdraw, or begin to withdraw, balances attributable to amounts deferred in a given Plan Year, and earnings and losses attributable thereto.  A Participant’s Scheduled In-Service Withdrawal Date in a given Plan Year may be no earlier than three years from the last day of the Plan Year for which Compensation Deferrals, deferrals of Restricted Stock, deferrals of Performance Shares, and contributions of Company Discretionary and Matching Contribution Amounts, are made; expressly provided, however, that in the case of the deferrals of Restricted Stock, Performance Shares, and any other Compensation subject to a vesting schedule, the three year period shall be deemed to begin running from the date on which such Restricted Stock, Performance Shares or Compensation would otherwise vest.

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

" Stock Fund " or " Company Stock Fund " shall mean the deemed unitized investment Fund established to record (i) Participants' deemed investments in Stock Units, (ii) Designated Individuals' deferrals of Restricted Stock in Stock Units, (iii) Company Matching Contributions invested in Stock Units, and (iv) Dividend Equivalents deemed reinvested in Stock Units.  The Company has reserved 83,333 (post split) shares of Company Stock for deemed investment in this Plan.

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

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

ARTICLE II

PARTICIPATION

All (i) officers of the Company and its Business Units, and (ii) those Employees of the Company and Business Units whose Base Salary is fixed at more than $100,000 per year (determined during the Election Period) and who, in the case of Company and UI Employees, are classified in Grade 10 or above (collectively, "Eligible Employees"), shall be eligible to participate in this Plan.  Any other key management or highly compensated Employee from time to time designated by the Committee to be eligible to participate shall also be considered an Eligible Employee under the Plan.  With respect to the 2003 Plan Year, Directors of the Company and its Participating Business Units shall be eligible to participate only in that portion of the Plan permitting deferral of Restricted Stock.

Notwithstanding the foregoing, no Eligible Employee or Director who was not an Eligible Person prior to January 1, 2005 shall participate in this portion of the Plan, and only Grandfathered Amounts shall be subject to the terms of this Plan document.

2.2            Enrollment; Duration of Participation .

An Eligible Person shall become a Participant in the Plan by electing to make deferrals in accordance with Section 3.1 during an Election Period, in accordance with such procedures as may be established from time to time by the Committee.  An individual who, at any time, ceases to be an Eligible Person as determined in the sole discretion of the Committee, shall cease making deferrals in the Plan, and no future deferrals will be allowed until such time as the individual again becomes an Eligible Person.  In such case, the individual shall remain a Participant in the Plan with respect to amounts already deferred that have not yet been distributed or forfeited.  Notwithstanding the foregoing, no deferral election shall be made pursuant to the terms of this Plan document with respect to compensation earned on or after January 1, 2005, and only Grandfathered Amounts shall be subject to the terms of this Plan document.

2.3            Transfers to Non-Participating Related Companies .

An Eligible Employee who becomes employed by an Affiliate, which is not a participating Business Unit, shall no longer be eligible to make any future deferral elections under the Plan.  However, such individual shall remain a participant in the Plan with respect to amounts already deferred and deferral elections that become irrevocable prior to the date of transfer.

2.4            Amendment of Eligibility Criteria .

The Committee may change the criteria for eligibility on a prospective basis.

ARTICLE III

DEFERRAL ELECTIONS

(a)   Election to Defer .  Subject to the provisions of Article II and subsection (e), below, each Eligible Employee may elect to defer Compensation earned after the Election Period, by filing an election with the Recordkeeper (a "Deferral Election") that conforms to the requirements of this Section 3.1 either via the internet or mail, on a form provided by the Recordkeeper, by no later than the

last day of the Election Period.  Deferral Elections are irrevocable for the Plan Year, except as otherwise expressly provided in the Plan.

(b)   Deferrals of Base Salary and Bonus Amounts .  With respect to each Plan Year, an Eligible Employee may defer, in either whole percentages or a flat dollar amount, up to 85% of Annual Base Salary and up to 100% of increases in Base Salary that become effective during the Year; and up to 100% of Bonuses or other incentive awards that would be payable in a calendar year subsequent to the filing of the Deferral Election.  Notwithstanding the foregoing, the total amount deferred shall be limited, as necessary, to satisfy income tax and Social Security Tax (including Medicare) withholding obligations, and employee benefit plan withholding requirements as determined in the sole and absolute discretion of the Committee.  The minimum contribution that must be made in any Plan Year by an Eligible Employee shall not be less than $5,000, which may be satisfied from any deferral source (e.g., Base Salary, Bonus, etc.).

(c)   Deferral of Restricted Stock and Performance Shares .  A Designated Individual may elect to defer all or any portion of a Restricted Stock Award or, on or after September 27, 2004, a Performance Share Award as of the date such Award is made provided that such deferral is permitted by the terms of the Award.  Any such deferral election must be made in a time period designated by the Committee in accordance with the applicable Election Period as defined with respect to deferrals of Restricted Stock and Performance Shares.  Such Election shall be irrevocable.  All such deferrals shall be deemed invested only in Stock Units.

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

(e)   Grandfathered Amounts Only .  Notwithstanding the foregoing, no deferral with respect to compensation earned on or after January 1, 2005 shall be subject to the terms of this Plan document.  Any deferral that is not with respect to a Grandfathered Amount shall be subject to the terms of the Plan document entitled “UIL Holdings Corporation Deferred Compensation Plan-Non-Grandfathered Benefit Provisions.”

3.2            Deemed Investment Elections .

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

A Participant may change the designation made under this Section 3.2 by filing an election, on a form provided by the Recordkeeper, or, if allowed by the Committee, via voice response,

Internet or other technology on any business day; provided, however, that a Participant who has elected to have some portion of his Compensation Deferrals deemed invested in the Company Stock Fund may not transfer out of such investment with respect to such Compensation Deferral amount.  A Participant may elect to have each Plan Year of Compensation Deferrals hypothetically invested in investment allocations different or distinct from his or her prior elections.

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

(b)   With Respect to Deferrals of Restricted Stock Awards and Performance Share Awards .  As of the date that Restricted Stock vests, a Participant’s Stock Unit Subaccount shall be credited with the number of Stock Units equivalent in value to the amount of shares of Restricted Stock vested.  As of the date that Performance Shares would be payable to the Participant in the abs