Exhibit 10.28
UIL HOLDINGS CORPORATION
PERFORMANCE SHARE AGREEMENT
FOR
ANNUAL PERFORMANCE SHARES
(INITIAL GRANT)
THIS AWARD AGREEMENT (the "Award Agreement"), made as of
____________,
by and between UIL HOLDINGS CORPORATION, a
Connecticut corporation, having its
principal place of business in New Haven,
Connecticut (the "Company" or "UIL"),
and ___________ (the "Executive").
WHEREAS, the Company has adopted the UIL Holdings Corporation UIL
Long
Term Incentive Program ("UIL LTIP"), a copy
of which is annexed hereto, pursuant
to the terms of UIL Holdings Corporation
1999 Amended and Restated Stock Plan
(the "1999 Plan");
WHEREAS, pursuant to the terms of the UIL LTIP, 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
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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 UIL 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 UIL LTIP, and its
determination shall be
conclusive and
binding.
1.1. UI Performance Shares. The
CEDC hereby makes an award to the Executive
---------------------
of ___ 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 UIL
LTIP, with a maximum award of up to ____
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 ____ 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 UIL LTIP, with a maximum award of up to
____ 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 January 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
("ROE") achieved during the
Performance Period compared against the target
annual ROE percentage established
for the Performance Period with respect to
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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, ____
Performance Shares (50% of the target
number) will be earned if the
"threshold" level of performance is achieved,
____ Performance Shares will be
earned if the "target" level of performance
is achieved, ____ 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 UIL
LTIP, the 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 on May 10, 2004 (the
"Xcelecom Performance Goals"). No Performance
Shares (0% of the target number)
will be earned if the "threshold" level of
performance is achieved, ____
Performance Shares will be earned if the
"target" level of performance is
achieved, ____ 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 UIL
LTIP, the Xcelecom LTIP and the 1999 Plan.
3.Vesting. Except as otherwise provided in
this Section or Sections 4, 5 and 6
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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 her 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 her death,
Disability or retirement on or
after either (i) having reached age 62 1/2 and
completing at least 5 years of
service, or (ii) having reached age 55 and
completing at least 10 years of
service under the UI Pension Plan or any
successor or replacement plan (the
"the UI Pension Plan") 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 her
Employment Agreement (or any
successor provisions thereto), she shall fully
vest in her 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
her death, Disability or
retirement on or after either (i) having reached
age 62 1/2 and completing at least
5 years of service, or (ii) having reached
age 55 and completing at least 10
years of service under the UI Pension Plan,
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
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she is continuously employed by
the Company (or one of its subsidiaries) at
all times from May 10, 2004
through the applicable CIC Vesting Date.
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 her death, Disability or
retirement on or after either (i)
having reached age 62 1/2 and completing at
least 5 years of service, or (ii)
having reached age 55 and completing at
least 10 years of service under
the UI Pension Plan, 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) at all
times from ________________
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) her
death, Disability or retirement on
or after either (i) having reached age 62
1/2 and completing at least 5
years of service, or (ii) having reached age 55
and completing at least 10 years
of service under the UI Pension Plan, (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
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Executive with respect to the
period commencing on January 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) ____ 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
(i.e., UIL), 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.
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5. Change in Control of UI.
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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 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
she
