UIL HOLDINGS CORP (Form: 8-K, Received: 07/11/2005 13:55:46)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 8, 2005

(Exact name of registrant as specified in its charter)

Connecticut	1-15052	06-1541045
(State or other jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

157 Church Street, New Haven, Connecticut		06506
(Address of principal executive offices)		(Zip Code)

Registrant's Telephone Number,
Including Area Code		(203) 499-2000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 8, 2005 UIL Holdings Corporation (UIL Holdings), either directly or through its subsidiary The United Illuminating Company (UI), entered into employment agreements with the following officers: Nathaniel D. Woodson, Richard J. Nicholas, Susan E. Allen, Gregory W. Buckis and Deborah C. Hoffman. The employment agreements with Messrs. Nicholas, Buckis and Ms. Allen replace agreements that had previously been in effect. The employment agreements with Mr. Woodson and Ms. Hoffman are amendments to existing employment agreements. In addition to entering into an employment agreement, on July 8, 2005, UIL Holdings also entered into a performance share agreement with Mr. Nicholas. On July 8, 2005 UI and Mr. Woodson entered into the second amendment to Mr. Woodson’s existing Phantom Stock Option Agreement. The material terms of each agreement were approved by the Compensation and Executive Development Committee (CEDC) of the Board of Directors of UIL Holdings as summarized below.

Nathaniel D. Woodson

On July 8, 2005 UIL Holdings entered into the first and second amendments to the existing employment agreement with Nathaniel D. Woodson, dated November 8, 2004, under which Mr. Woodson serves as President, Chairman of the Board of Directors, and Chief Executive Officer of UIL Holdings. The material terms of the first amendment provide that the phantom stock options provided for in Mr. Woodson’s existing employment agreement and the Phantom Stock Option Agreement, as amended, between Mr. Woodson and UI, will be settled only in shares of UIL Holdings stock, as approved at the annual meeting of shareholders on May 11, 2005. A copy of the first amendment to Mr. Woodson’s employment agreement is attached hereto as Exhibit 10.1.

The second amendment to Mr. Woodson’s existing employment agreement dated November 8, 2004 was executed to clarify the supplemental executive retirement plan (SERP) provisions contained in Mr. Woodson’s existing employment agreement in light of the new guidance issued by the Internal Revenue Service concerning non-qualified deferred compensation rules contained in Section 409A of the Internal Revenue Code (Code). The material terms of the amendment provide for clarification of the SERP provisions of Mr. Woodson’s existing employment agreement which 1) clearly bifurcate the amounts accrued before and after January 1, 2005 under the SERP provisions provided in Mr. Woodson’s existing employment agreement, and 2) restrict applicability of the new, more restrictive rules of Section 409A of the Code to post-2004 accruals. A copy of the second amendment to Mr. Woodson’s employment agreement is attached hereto as Exhibit 10.2.

In relation to the first amendment to Mr. Woodson’s employment agreement, UI and Mr. Woodson entered into the second amendment to the existing Phantom Stock Option Agreement, as amended, between UI and Mr. Woodson to provide that the phantom stock options will be settled only in shares of UIL Holdings stock, as approved at the annual meeting of shareholders on May 11, 2005. A copy of the second amendment to Mr. Woodson’s Phantom Stock Option agreement is attached hereto as Exhibit 10.3.

Richard J. Nicholas

UI entered into an employment agreement with Richard J. Nicholas on July 8, 2005, under which Mr. Nicholas will serve as Executive Vice President and Chief Financial Officer of UIL Holdings in addition to his roles of Vice President, Finance and Chief Financial Officer of UI. The material terms of the compensation arrangement provide for an annual base salary of $227,000 and participation in UIL Holdings’ annual short-term incentive and long-term incentive programs. In

the event that Mr. Nicholas is terminated without cause, he will be entitled to (i) two times the sum of his base compensation plus short-term incentive, calculated as if company and personal goals had been achieved ‘at target’, (ii) continuation in UIL Holdings’ medical and dental plans for a two year period and (iii) the addition of two years of deemed service as an employee in the calculation of the entitlement to and benefit payable under both the UI pension plan and the UI retiree medical benefit plan. In the event that his termination is connected to a change in control, Mr. Nicholas may be entitled to additional benefits. Mr. Nicholas will be entitled to a full gross-up for any excise tax imposed as a result of any excess parachute payment as determined under Section 280G of the Internal Revenue Code. A copy of Mr. Nicholas’ employment agreement is attached hereto as Exhibit 10.4.

UIL Holdings and Mr. Nicholas also entered into a performance share agreement on July 8, 2005, that documents a performance share grant made under the UIL Holdings Corporation CEO/CFO Long-Term Incentive Program on March 28, 2005 by the CEDC. In general, the performance shares granted under this program will vest as of December 31, 2006 unless they sooner vest upon a change in control in accordance with the terms of the program. Those shares that vest under these performance share agreements, and that are intended to be paid in UIL Holdings stock, will be issued from the Stock Plan. Under the terms of this performance share agreement, Mr. Nicholas was granted a target amount of 3,700 performance shares. The issuance of performance shares upon vesting, if any, is predicated upon the achievement of total shareholder return (TSR) performance goals, as defined in the agreement, and the actual number of performance shares issued will be based on the level of performance achieved, but shall not exceed 7,400 performance shares. A copy of Mr. Nicholas’ performance share agreement for TSR performance shares is attached hereto as Exhibit 10.5.

Susan E. Allen

UI entered into an employment agreement with Susan E. Allen on July 8, 2005, under which Ms. Allen will serve as Treasurer of both UIL Holdings and UI, in addition to her roles of Vice President Investor Relations and Corporate Secretary of UIL Holdings and UI. The material terms of the compensation arrangement provide for an annual base salary of $180,000 and participation in UIL Holdings’ annual short-term incentive and long-term incentive programs. In the event that Ms. Allen is terminated without cause, she will be entitled to (i) two times the sum of her base compensation plus short-term incentive, calculated as if company and personal goals had been achieved ‘at target’, (ii) continuation in UIL Holdings’ medical and dental plans for a two year period and (iii) the addition of two years of deemed service as an employee in the calculation of the entitlement to and benefit payable under both the UI pension plan and the UI retiree medical benefit plan. In the event that the termination is connected to a change in control, Ms. Allen may be entitled to additional benefits. A copy of Ms. Allen’s employment agreement is attached hereto as Exhibit 10.6.

Gregory W. Buckis

UI entered into an employment agreement with Gregory W. Buckis on July 8, 2005, under which Mr. Buckis will serve as Vice President and Controller of UI, in addition to his role as Vice President and Controller of UIL Holdings. The material terms of the compensation arrangement provide for an annual base salary of $185,000 and participation in UIL Holdings’ annual short-term incentive and long-term incentive programs. In the event that Mr. Buckis is terminated without cause, he will be entitled to the sum of his base compensation plus short-term incentive, calculated as if company and personal goals had been achieved ‘at target’, plus continuation in UIL Holdings’ medical and dental plans for a one year period. In the event that the termination is connected to a change in control, Mr. Buckis may be entitled to additional benefits. A copy of Mr. Buckis’ employment agreement is attached hereto as Exhibit 10.7.

Deborah C. Hoffman

On July 8, 2005 UIL Holdings entered into the first amendment to the existing employment agreement with Deborah C. Hoffman, dated November 8, 2004, under which Ms. Hoffman had served as the Director of Audit Service of UIL Holdings. The material terms of the employment agreement, as amended, provide that Ms. Hoffman has been promoted to Vice President of Audit Services and Chief Compliance Officer of UIL Holdings and will be entitled to an annual base salary of $141,000 and participation in UIL Holdings’ annual short-term incentive and long-term incentive programs. In the event that Ms. Hoffman is terminated without cause, she will be entitled to (i) an amount equal to (a) 1/12 of the sum of her base compensation plus short-term incentive, calculated as if company and personal goals had been achieved ‘at target’, multiplied by (b) the number of whole and partial years of service as an employee at the time of termination (not to be less than 12 nor more than 24) and (ii) continuation in UIL Holdings’ medical and dental plans for a one year period. In the event that the termination is connected to a change in control, Ms. Hoffman may be entitled to additional benefits. A copy of Ms. Hoffman’s employment agreement dated November 8, 2004 is attached hereto as Exhibit 10.8. A copy of the first amendment to Ms. Hoffman’s employment agreement is attached hereto as Exhibit 10.9.

Item 9.01 Financial Statements and Exhibits

(c)	Exhibits - The following exhibits are filed as part of this report:

10.1	Copy of First Amendment, made July 8, 2005, to Employment Agreement, dated as of November 8, 2004, between UIL Holdings Corporation and Nathaniel D. Woodson.
10.2	Copy of Second Amendment, dated July 8, 2005, to Employment Agreement, dated as of November 8, 2004, between UIL Holdings Corporation and Nathaniel D. Woodson.
10.3	Copy of Second Amendment, dated July 8, 2005, to The United Illuminating Company Phantom Stock Option Agreement, dated as of February 28, 1998, between The United Illuminating Company and Nathaniel D. Woodson.
10.4	Copy of Employment Agreement, dated July 8, 2005, between The United Illuminating Company and Richard J. Nicholas.
10.5	Copy of Performance Share Agreement for TSR Performance Shares, dated July 8, 2005, between UIL Holdings Corporation and Richard J. Nicholas.
10.6	Copy of Employment Agreement, dated July 8, 2005, between The United Illuminating Company and Susan E. Allen.
10.7	Copy of Employment Agreement, dated July 8, 2005, between The United Illuminating Company and Gregory W. Buckis.
10.8	Copy of Employment Agreement, dated November 8, 2004 between UIL Holdings Corporation and Deborah C. Hoffman.
10.9	Copy of First Amendment, made July 8, 2005, to Employment Agreement, dated as of November 8, 2004, between UIL Holdings Corporation and Deborah C. Hoffman.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UIL HOLDINGS CORPORATION
	Registrant

Date: 7/11/05	By /s/ Richard J. Nicholas
	Richard J. Nicholas
	Executive Vice President
	and Chief Financial Officer

Exhibit Index

Exhibit	Description

10.1	Copy of First Amendment, made July 8, 2005, to Employment
	Agreement, dated as of November 8, 2004, between UIL Holdings
	Corporation and Nathaniel D. Woodson.
10.2	Copy of Second Amendment, dated July 8, 2005, to Employment
	Agreement, dated as of November 8, 2004, between UIL Holdings
	Corporation and Nathaniel D. Woodson.
10.3	Copy of Second Amendment, dated July 8, 2005, to The United
	Illuminating Company Phantom Stock Option Agreement, dated as
	of February 28, 1998, between The United Illuminating Company
	and Nathaniel D. Woodson.
10.4	Copy of Employment Agreement, dated July 8, 2005, between The
	United Illuminating Company and Richard J. Nicholas.
10.5	Copy of Performance Share Agreement for TSR Performance
	Shares, dated July 8, 2005, between UIL Holdings Corporation and
	Richard J. Nicholas.
10.6	Copy of Employment Agreement, dated July 8, 2005, between The
	United Illuminating Company and Susan E. Allen.
10.7	Copy of Employment Agreement, dated July 8, 2005, between The
	United Illuminating Company and Gregory W. Buckis.
10.8	Copy of Employment Agreement, dated November 8, 2004 between
	UIL Holdings Corporation and Deborah C. Hoffman.
10.9	Copy of First Amendment, made July 8, 2005, to Employment
	Agreement, dated as of November 8, 2004, between UIL Holdings
	Corporation and Deborah C. Hoffman.

EXHIBIT 10.1

FIRST AMENDMENT TO

RESTATED EMPLOYMENT AGREEMENT

BETWEEN UIL HOLDINGS CORPORATION

AND

NATHANIEL D. WOODSON

WHEREAS, UIL Holdings Corporation (“the Company”) and Nathaniel D. Woodson (“Executive”) desire to amend the restated employment agreement between the Company and Mr. Woodson dated as of November 8, 2004 (the “Employment Agreement”), subject to shareholder approval, to provide that the phantom stock options provided for in said Agreement will be settled only in actual shares of stock of UIL Holdings Corporation rather than cash in order (i) to avoid variable accounting and (ii) the possibility that such options will be treated as deferred compensation subject to Section 409A of the Internal Revenue Code;

NOW THEREFORE, the Employment Agreement is amended as follows:

1. Effective as of January 1, 2005, subject to approval of the shareholders of UIL Holdings Corporation, the second paragraph of Section 4(b) of the Employment Agreement is revised to read as follows:

In addition, until the earlier of (A) the first anniversary of the Executive’s Date of Termination, or (B) February 23, 2008, the Executive shall be entitled to exercise any or all of the 80,000 phantom stock options that were granted on February 20, 1998, and which became fully exercisable on February 23, 2003, to the extent that they are still unexercised, all at an exercise price equal to the average of the high and low per share sales prices of the common stock of The United Illuminating Company on the New York Stock Exchange on February 20, 1998. Upon the exercise of said phantom stock options, the Executive shall receive shares of UIL Holdings Corporation common stock (“UIL stock”) equal to the difference between the fair market value of such stock on the date of exercise, and the option exercise price net of any applicable withholding taxes. Such phantom stock options may be settled only in shares of UIL stock. For purposes of this paragraph, ‘fair market value’ shall have the meaning accorded the term under the Phantom Stock Option Agreement entered into between The United Illuminating Company (“UI”) and the Executive dated as of February 23, 1998 as amended (the “Phantom Option Agreement”). To the extent that UI discharges this obligation pursuant to the terms of the Phantom Option Agreement, then UIL Holdings Corporation’s obligation under this paragraph shall be extinguished.

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

Date:

July 8, 2005

UIL HOLDINGS CORPORATION

Attest:

/s/ Susan E. Allen		By:	/s/ Thelma R. Albright
Susan E. Allen, Vice President Investor Relations, Corporate Secretary & Treasurer			Thelma R. Albright, Chairman Compensation and Executive Development Committee

July 8, 2005		/s/ Nathaniel D. Woodson
Date		Nathaniel D. Woodson

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EXHIBIT 10.2

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

BETWEEN UIL HOLDINGS CORPORATION

AND

NATHANIEL D. WOODSON

WHEREAS, the Department of the Treasury has issued interim guidance contained in Notice 2005-1 concerning the implementation of the new non-qualified deferred compensation rules contained in Section 409A of the Internal Revenue Code; and

WHEREAS, the interim guidance has made it clear that amounts accrued under a supplemental executive retirement arrangement through December 31, 2004 may be ‘grandfathered’ and not subject to the new, more restrictive rules, provided that there is no material amendment made to such arrangement after October 3, 2004; and

WHEREAS, in light of the guidance, UIL Holdings Corporation (“the Company”) and Nathaniel D. Woodson (“the Executive”) wish to clarify the SERP provisions contained in the employment agreement dated as of November 8, 2004 between the Company and the Executive, as amended (the “Employment Agreement”), to clearly bifurcate SERP accruals before and after January 1, 2005, and to restrict applicability of the new, more restrictive rules to post-2004 accruals; and

WHEREAS, the Company and the Executive further wish to take advantage of certain transition rules that allow elections as to time and form of payment to be made up through December 31, 2005 without running afoul of Section 409A of the Code;

WHEREAS, it is anticipated that this will be the first in a series of such amendments required to comply with the new non-qualified deferred compensation rules;

NOW THEREFORE, Section 4(g) of the Employment Agreement is revised in its entirety to read as follows:

(g) Supplemental Executive Retirement Benefit.

(i) Benefit Formula. Upon termination of the Executive's employment with the Company and all affiliates other than for Cause (as defined in Section 5(b) of this Agreement), a supplemental retirement benefit (“SERP”) shall be payable in accordance with the provisions of this Section (4)(g). The annual supplemental retirement benefit, expressed in the form of a single life annuity beginning at the Executive's Normal Retirement Date as defined in The United Illuminating Company Pension Plan (the “UI Pension Plan”), shall be the excess, if any, of (A) less (B), where (A) is 2.0% (.020) of the Executive's highest three-year average Total Compensation times his number of years of service as an employee of the Company (including any deemed service credited under this Agreement or the CIC Plan II) at termination (not to exceed thirty), and (B) is the benefit payable under the Company's Pension Plan expressed as a single life annuity commencing as of the Executive’s Normal Retirement Date. For purposes of this Section, Total Compensation shall mean the Executive’s Base Salary, and any amount paid to the Executive as short-term incentive compensation pursuant to the Company’s annual executive incentive compensation plan. For purposes of this Section, the Executive’s deemed service as an employee of the Company will be calculated by adding two additional years of service for each actual year of service worked on each of the first five anniversaries of February 23, 1998, so that as of February

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23, 2003, the Executive will be deemed to be credited with fifteen years of service for purposes of calculating his supplemental retirement benefit under this Section. With the exception of the lump sum methodology noted below (i.e., the present value of an immediate annuity), the benefits payable under this Section 4(g) shall be calculated using the same definitions of actuarial equivalence, and the same early retirement reduction factors that are specified in the Pension Plan in the event that the Executive becomes entitled to payment of the supplemental retirement benefit prior to what would have been his Normal Retirement Date, except that, in the event that the Executive is credited with deemed years of service, the reductions shall be based on the Executive's service deemed as an employee of the Company. If the form of payment provides for a death benefit, such benefit shall be payable to the Executive's estate, unless another beneficiary has been designated by the Executive. If the Executive dies prior to the commencement of benefit payments, then the pre-retirement death benefit provisions of the Pension Plan shall apply to the supplemental retirement benefit payable pursuant to this Section (4)(g).

(ii) Grandfathering Pre-2005 Accruals; Time and Form of Payment. SERP accruals through December 31, 2004 (the ‘grandfathered amount’) shall be subject to the tax law in effect prior to the enactment of Section 409A of the Internal Revenue Code, including without limitation requirements as to election of the timing and form of payment. For purposes of calculating the grandfathered amount, the grandfathered amount shall be determined to be the actuarially equivalent present value as of December 31, 2004 of the SERP to which the Executive would be entitled under this Section 4(g) if the Executive had voluntarily terminated service as of that date and received an actuarially equivalent lump sum equal to the present value of the immediate life annuity payable upon his termination of service. Early retirement subsidies to which the Executive would not in fact be entitled as of December 31, 2004 because the Executive had not attained sufficient age or service shall not be included in determining the grandfathered amount. The normal form of benefit payment for the grandfathered amount shall be an actuarially equivalent lump sum equal to the present value of the immediate life annuity to which the Executive would have been entitled had he terminated service as of December 31, 2004. The Executive may instead elect to receive the grandfathered amount in any other one of the actuarially equivalent forms provided for under the Pension Plan; provided that such election is made in accordance with the law in effect prior to January 1, 2005 and any transition rules provided in IRS Notice 2005-1.

(iii) Time and Form of Payment for Non-Grandfathered Amounts. Distribution of SERP accruals occurring on or after January 1, 2005 (the “non-grandfathered amount”) shall be shall be paid, or commence to be paid, in the month of January following the Executive’s termination of service with the Company and its affiliates, but in no event earlier than six months following the Executive’s termination of service in the event that the Executive is a ‘key employee’ as defined in Section 416 of the Internal Revenue Code. The non-grandfathered amount, determined as of the Executive’s termination date, shall be paid in an actuarially equivalent lump sum equal to the present value of the immediate life annuity payable as of such distribution date, unless the Executive shall have elected at least 12 months in advance of such distribution date to commence distributions in one of the other actuarially equivalent forms of benefits permitted under the Company’s Pension Plan, in which case the commencement of the non-grandfathered amount shall be deferred, except in the case of termination due to death or disability, for a period of at least five years from the date on which such distribution otherwise would have been made. Notwithstanding the foregoing to the contrary, on or before December 31, 2005, the Executive shall be permitted to make an election, pursuant to IRS Notice 2005-1, Question and Answer 19(c) to alter the form of distribution that would otherwise apply under this Subsection (iii) to the non-grandfathered amount, and to take the non-grandfathered amount in any actuarially equivalent form of distribution available under the Pension Plan, without the necessity of making such election 12 months in advance of such distribution commencement date, and without being deemed to have violated either the 5 year deferral rule contained in Sections 409A(4) or the ‘anti-acceleration’ rule of Section 409A(3) of the Code.

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(iv) Payments Conditioned upon Release. All payments under this Section 4(g) are conditioned upon the Executive executing the release provided for in Section 6(f).

(v) Compliance with Applicable Tax Law. The provisions of this section are intended to comply in good faith with all laws applicable to the taxation of non-qualified deferred compensation, and the Company and Executive agree to revise this subsection as necessary or advisable on or before December 31, 2005 in order to comply with such laws and to incorporate the applicable provisions of Section 409A of the Internal Revenue Code (and guidance issued thereon) with respect to non-grandfathered amounts.

The provisions of the foregoing amendment shall be effective as of January 1, 2005.

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

Date:

July 8, 2005

UIL HOLDINGS CORPORATION

Attest:

/s/ Susan E. Allen		By:	/s/ Thelma R. Albright
Susan E. Allen, Vice President Investor Relations, Corporate Secretary & Treasurer			Thelma R. Albright, Chairman Compensation and Executive Development Committee

July 8, 2005		/s/ Nathaniel D. Woodson
Date		Nathaniel D. Woodson

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EXHIBIT 10.3

SECOND AMENDMENT TO

PHANTOM STOCK OPTION AGREEMENT

BETWEEN THE UNITED ILLUMINATING COMPANY

AND

NATHANIEL D. WOODSON

WHEREAS, The United Illuminating Company (“the Company”) and Nathaniel D. Woodson(“ Executive”) desire to amend The United Illuminating Company Phantom Stock Option Agreement dated February 23, 1998, as previously amended by a First Amendment thereto dated as of July 20, 2000 (the “Phantom Option Agreement”), subject to shareholder approval, to provide that the phantom stock options provided for in said Agreement will be settled only in actual shares of stock of UIL Holdings Corporation rather than cash, in order (i) to avoid variable accounting and (ii) the possibility that such options will be treated as deferred compensation subject to Section 409A of the Internal Revenue Code;

NOW THEREFORE, the Agreement is amended as follows:

1. Effective as of January 1, 2005, subject to approval of the shareholders of UIL Holdings Corporation, Section 3 of the Agreement is revised to read as follows:

3. Payment Upon Exercise. On each date that the Executive or his personal representative exercises one or more Options, the Company shall be obligated to pay the Executive or his personal representative, in shares of UIL Holdings Common Stock, an amount equal to the excess of the fair market value of the Common Stock of UIL Holdings Corporation on that date over the Exercise Price, multiplied by the number of options exercised. “Fair market value” shall be the average of the high and low sales prices of the shares of the Common Stock of UIL Holdings Corporation on the New York Stock Exchange composite tape on the exercise date or, if there is no sale on such date, then such average price on the last previous day on which at least one sale shall have been reported. The Company shall discharge each payment obligation to the Executive or his personal

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representative on or before the second business day following the exercise.

Date:

July 8, 2005

UIL HOLDINGS CORPORATION

Attest:

/s/ Susan E. Allen		By:	/s/ Thelma R. Albright
Susan E. Allen, Vice President Investor Relations, Corporate Secretary & Treasurer			Thelma R. Albright, Chairman Compensation and Executive Development Committee

July 8, 2005		/s/ Nathaniel D. Woodson
Date		Nathaniel D. Woodson

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EXHIBIT 10.4

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AGREEMENT ( the “Agreement”) is made as of the first day of March, 2005, between The United Illuminating Company, a Connecticut Corporation (the “Company”) and Richard J. Nicholas (the “Executive”),

WITNESSETH THAT

WHEREAS, the Executive previously has been employed by the Company as its Vice President, Finance and Chief Financial Officer of the Company, and is covered by the terms of a certain employment agreement with The United Illuminating Company, dated as of March 22, 2004, as amended by a First Amendment thereto; and

WHEREAS, the Company desires to continue to employ the Executive as its Vice President, Finance and Chief Financial Officer, and to reflect the appointment of the Executive, effective as of March 1, 2005, as the Executive Vice President and Chief Financial Officer of UIL Holdings Corporation (“UIL”), and the parties 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 the Board of Directors of UIL Holdings Corporation (the “UIL Board”), all upon the terms and conditions set forth herein.

(b) The term of this Agreement shall be for a period commencing on the date first stated above and ending on the second anniversary of that date, 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 the time that an impending Change in Control (as hereinafter defined) is announced through the date of the consummation of such Change in Control.

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(2) POSITION AND DUTIES

(a) The Executive shall be employed by the Company as its Vice President, Finance and Chief Financial Officer, and shall also serve as the Executive Vice President and Chief Financial Officer 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 or the President and Chief Executive Officer of UIL; 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 his employment by the Company, the Executive shall be based within a fifty (50)-mile radius of the current executive offices of the Company in New Haven, Connecticut .

(4) COMPENSATION

(a) Base Salary . During the Initial Term of the Executive's employment hereunder, the Executive shall receive a base salary (“Base Salary”) at an annual rate of Two Hundred Twenty Seven Thousand Dollars ($227,000.00) effective April 1, 2005 and One Hundred Ninety Seven Thousand Dollars ($197,000.00) before that date, 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 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.

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(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 plan is a UIL plan, as a participant in each annual short-term incentive compensation program, and any long-term incentive program, maintained for management employees of the Company; provided, however, that entitlement to participation, and continued participation, in any long-term equity incentive program shall be conditioned upon the Executive fully complying with any stock ownership and retention guidelines from time to time established and promulgated by the UIL Board.

For purposes of this Agreement, the Executive’s “Accrued Incentive Compensation” shall mean the amount of any annual short-term incentive compensation earned with respect to the calendar year ended prior to the Date of Termination (as defined in Section 5) but not yet paid as of the Executive’s Date of Termination.

The Executive’s “Stub-Period Incentive Compensation” shall mean the annual short-term incentive compensation being earned in the year in which the Executive terminates employment, pro-rated for the year in which he terminates service, and shall be equal to that short-term annual incentive compensation payment to which the Executive would be entitled, if any, under the terms of the Company’s executive incentive compensation plan, calculated as if he had been employed by the Company on the last day of the year including his Date of Termination, and had achieved personal goals ‘at target’, but based on actual performance with respect to the achievement of UIL and Company financial goals (collectively referred to as “Company goals”), multiplied by a fraction, the numerator of which is the number of days which have elapsed in such year through the Date of Termination and the denominator of which is 365. 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, his strategic opportunities, leadership, and balance scorecard goals, other than business unit and UIL total financial goals, and Company goals shall include, for example, UIL and business unit financial goals based on earnings per share, cash flow, and all other goals not defined as personal goals. In the event that the ‘gate’, if any, is not achieved with respect to Company goals, then no Stub-Period Incentive Compensation will be paid. Any Stub-Period Incentive Compensation payable upon termination of the Executive shall be paid in accordance with Section 6(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 and the Executive’s level of benefits under said Plan II shall be determined by his classification as Chief Financial Officer of UIL Holdings Corporation for so long as Executive holds such office . Nothing in this subsection, however, shall entitle the Executive to continued participation in such Plan should the UIL Board determine otherwise in accordance with the terms of that Plan.

(d) Business Expenses . During the Term, the Executive shall be entitled to receive prompt reimbursement for all reasonable employment- related business expenses incurred by the Executive, in accordance with the policies and procedures established by the Company Board from time to time for all of the Company's officers, provided that the Executive properly accounts therefor.

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(e) Benefit Programs . During the Term of the Executive's employment hereunder and to the extent he meets the applicable eligibility requirements, the Executive shall be entitled to participate in and receive benefits under all of the Company's employee benefit plans, programs and arrangements for its similarly situated 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 (up to a maximum of five (5) weeks in each calendar year), 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, in the opinion of a majority of the members of the UIL Board, unless any such failure is cured in all material respects to the reasonable satisfaction of the UIL Board within sixty (60) days after the Executive receives written notice of such failure; or

(2) failure to devote substantially all of his working time and efforts to the business and affairs of the Company unless any such failure is cured in all material respects to the reasonable satisfaction of the UIL Board within sixty (60) days after the Executive receives written notice of such failure; or

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

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

(d) Termination by Executive .

(i) If the Executive is not in default of any of the Executive’s obligations under Sections (2), (9), (10), (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), (9), (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.

(e) Date of Termination . For purposes of this Agreement, the “Date of Termination” is defined as (i) the Executive’s date of death, in the event of his death; or the date of his termination due to disability, in the case of disability, or (ii) the date specified in the notice

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

(i) the Executive’s Base Salary 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 his voluntary termination other than on account of such retirement; plus

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

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

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

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

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

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

(ii) any amounts payable pursuant to Sections (4)(d), (4)(e), and 4(f) hereof, and

(iii) any benefits 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 he was a participant as of his termination of service, all as determined in accordance with the terms and conditions of such plans and arrangements; plus

(iv) lump sum severance equal to 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 he had been employed by the Company on the last day of the year of his 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

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which he was a participant as of his Date of Termination on the same basis as if he remained an active employee, provided that such participation is possible under the terms and provisions of such plans and programs and applicable law. 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 Company’s 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 he been terminated without cause in accordance with Section 6(c) of this Agreement.

(e) Timing of Payment . Any cash amount that is due and owing to the Executive upon his termination of service pursuant to Section 6 will be paid as soon as administratively feasible following the effective date (including any revocation period) of the Release provided for in Section 6(f); provided, however, that (i) any Stub-Period Incentive Compensation, and (ii) that portion of any severance payment that is based on annual short-term incentive compensation shall be paid following the close of the year in which the Date of Termination occurs, at the same time that incentive compensation generally would be payable upon authorization of the UIL Board to all other employees.

(f) Release . All payments and obligations of the Company under Section (6), (7), (8) and (9) shall be conditioned upon the execution and delivery by Executive to the Company of a full and effective release by Executive of any liability by the Company to Executive in form and substance reasonably satisfactory to the Company.

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(7) CHANGE IN CONTROL

(a) If on, or within twenty-four (24) months following a Change in Control, the Company (or its successor or other entity employing the Executive following such Change in Control) either terminates the Executive's employment hereunder without Cause or fails to renew this Agreement on substantially identical terms, or if the Executive terminates the Executive's employment on account of a Constructive Termination (as defined in the UIL CIC Plan II), then the Executive shall be entitled to the following:

(i) the Executive’s Base Salary, Accrued Incentive Compensation and Stub-Period Incentive Compensation earned, but unpaid, prior to the Date of Termination; plus

(ii) any amounts payable pursuant to Sections 4(d), 4(e), and 4(f) hereof; plus

(iv) those payments, and benefits, if any, to which the Executive is entitled by reason of having been designated a Participant in the UIL CIC Plan II. The severance payments, pension supplements and other benefit provisions under such Plan (the “Total UIL CIC Plan Package”) shall be controlling and shall supplant the payments and benefits to which the Executive would be entitled assuming the Executive were terminated without Cause pursuant to the terms of this Agreement, including without limitation any severance benefits, supplemental retirement benefits, short-term incentive compensation and other compensation and benefits (other than long term incentive compensation) under this Agreement (the “Employment Agreement Termination Package”); expressly provided, however, that in the event that the Employment Agreement Termination Package exceeds the value of the Total UIL CIC Plan Package, then the Executive shall be entitled to select one or the other Package, but shall not be entitled to both, and shall not be entitled to select among compensation elements in each Package.

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 Four Hundred Eighty Nine Thousand, Seven Hundred Six Dollars ($489,706.00), 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.

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(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 his personal representative and/or spouse, under Section 7 and (11) 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 and (11) 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.

(9) GROSS UP FOR EXCISE TAX.

(a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that any payment made and benefits provided by the Company or UIL to or for the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, would constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986 subject to an excise tax under Section 4999 of the Internal Revenue Code of 1986 as amended (the “Code”) or any successor provision (the “Excise Tax”), the Executive shall be paid an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive after deduction of any Excise Tax, and any federal, state and local income and employment tax (including any Excise Tax imposed upon the Gross-Up Payment itself) shall be equal to the total amount of all payments and benefits to which the Executive would be entitled pursuant to this Agreement absent the Excise Tax, but net of all applicable federal, state and local taxes. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of

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Executive’s residence in the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes that may be obtained from the deduction of state and local taxes.

(b) The Gross-Up Payment, if any, shall be paid to the Executive or, at the discretion of the Company, directly to governmental authorities through tax withholding on the Executive’s behalf, as soon as practicable following the payment of the excess parachute payment, but in any event not later than 30 business days immediately following such payment; provided that any Gross-up Payment under this Section 9, including Section 9(d) shall be conditioned upon the Executive providing the release called for in Section 6(f) and complying with the confidentiality and non-compete provisions of this Agreement.

(c) Subject to the provisions of Section 9(d), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by tax counsel appointed by the Company (the "Tax Counsel"), which shall provide its determinations and any supporting calculations both to the Company and Executive within 10 business days of having made such determination. The Tax Counsel shall consult with the Company’s benefit consultants and counsel in determining which payments to, or for the benefit of, the Executive are to be deemed to be ‘parachute payments’ within the meaning of Section 280G(b)(2) of the Code. Any such determination by the Tax Counsel shall be final and binding upon the Company and Executive. All fees and expenses of the Tax Counsel (and, if applicable benefits consultants or other counsel) shall be borne solely by the Company. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Tax Counsel hereunder, it is possible that Gross-Up Payments, which will not have been made by the Company, should have been made ("Underpayment"). In the event that it is ultimately determined in accordance with the procedures set forth in Section 9(d) that the Executive is required to make a payment of Excise Tax, the Tax Counsel shall determine the amount of the Underpayment that has occurred, and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(d) The Executive shall notify the Company in writing of any claims by the Internal Revenue Service that, if successful, would require the payment by the Company of any, or any additional, Gross-Up Payment. Such notification shall be given as soon as practicable but no later than 30 days after the Executive actually receives notice in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(1) give the Company any information reasonably requested by the Company relating to such claim;

(2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company and

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reasonably acceptable to the Executive;

(3) cooperate with the Company in good faith in order to contest such claim effectively; and

(4) if the Company elects not to assume and control the defense of such claim, permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(d), the Company shall have the right, at its sole option, to assume the defense of and control all proceedings in connection with such contest, in which case it may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's right to assume the defense of and control the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(e) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(d), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(d)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(d), a determination is made that the Executive shall not be entitled to any refund with respect to such claim, and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid, and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(10) CONFIDENTIAL INFORMATION

The Executive recognizes that the Executive’s employment by the Company is one of highest trust and confidence by reason of his access to certain trade secrets, confidential business

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practices, and proprietary information concerning the Company or any person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Company (an “Affiliate”), including, without limitation, the Company’s methods of doing business, marketing and strategic business plans, employees’ compensation and contract terms, customer lists and customer characteristics (collectively referred to as “Proprietary Information”). The Executive agrees and covenants to exercise utmost diligence to protect and safeguard the trade secrets, confidential business practices and Proprietary Information concerning the Company and any Affiliate. The Executive further agrees and covenants that, except with the prior written consent of the Company, he will not, either during the Term hereof or thereafter, directly or indirectly, use for his own benefit or for the benefit of any other person or organization, or disclose, disseminate or distribute to any other person or organization, any of the Proprietary Information (whether or not acquired, learned, obtained or developed by the Executive alone or in conjunction with another), unless and until such Proprietary Information has become a matter of public knowledge through no action or fault of the Executive or unless otherwise required by court order to comply with legal process. All memoranda, notes, records, drawings, documents or other writings whatsoever made, compiled, acquired or received by the Executive during the Term hereof arising out of, in connection with, or related to any activity or business of the Company are and shall continue to be the sole and exclusive property of the Company, and shall, together with all copies thereof, be returned and delivered to the Company by the Executive immediately, when he ceases to be employed by the Company, or at any other time upon the Company’s demand.

(11) NON-COMPETITION

(a) 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:

(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.

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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.

(b) The Executive acknowledges and agrees that, of the total payments and benefits to which he would be entitled under Sections 6(c) (termination of the Executive without cause), Section 6(d) (non-renewal), and Section 7 (termination in connection with a Change in Control) of this Agreement, as applicable, an amount equal to one (1) times his ‘Target Total Remuneration’, as hereinafter defined, shall be deemed to be on account of, and paid as consideration for, the covenant not to compete provided in this Section. Executive acknowledges and agrees that 1/12 of the amount attributable to this covenant shall be paid out on a monthly basis during the 12 month period that this covenant is in force following his termination of service from the Company and its Affiliates, and that such amount shall be deducted from, and not be in addition to, the amounts otherwise payable under Section 6(c), 6(d) or 7 of this Agreement, as applicable. Target Total Remuneration shall be defined as the sum of the following components of the Executive’s remuneration as most recently approved by the Compensation and Executive Development Committee of the Board prior to the date of the Executive’s termination: (1) Base Salary, (2) target annual short-term incentive award, and (3) target annual long-term incentive award. In the event that the Company determines that this covenant has been violated, no further payments shall be made under this Section, the Executive shall be obligated immediately to repay any amounts paid hereunder, and the Company shall have all of the rights and remedies provided under Section 13 of this Agreement. Payments hereunder shall be subject to the rabbi trust deposit requirements of Section 8.

In the event that payments under the Change in Control Plan II would exceed those otherwise payable under this Agreement under Section 7 on account of a Change in Control, then such payments are expressly conditioned upon compliance with Section 11(a) and (b) of this Agreement and, of such Change in Control payments, an amount equal to one (1) times the Executive’s Target Total Remuneration shall be deemed to be on account of, and paid as

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consideration for, the covenant not to compete provided in this Section, and shall be paid ratably over the 12 month period hereinbefore provided.

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

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

(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, t he Executive acknowledges that the services to be rendered by him are of such unique and extraordinary nature, and the resulting injury to the Company from a breach of Sections (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 his 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 him from committing any violation of any such commitments and obligations.

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

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

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

As used in this Section, the term the “Company” shall include The United Illuminating Company, UIL Holdings Corporation, and any successor to, or acquirer of, the business or assets of the Company that executes and delivers the agreement provided for in this Section (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 his residence, or to such other address as either party shall designate by giving written notice of such change to the other party.

(e) Waiver; Amendment . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is approved by the UIL Board and agreed to in a writing signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of any similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

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reason, be held to be invalid, illegal or unenforceable in any respect, the parties agree that such provisions shall be legally enforceable to the extent permitted by applicable law, and that any court of competent jurisdiction shall so enforce such provision, or shall have the authority hereunder to modify it to make it enforceable to the greatest extent permitted by law.

(g) No Conflict . The Executive hereby represents and warrants to the Company that neither the execution nor the delivery of this Agreement, nor the employment of the Executive by the Company will result in the breach of any agreement to which the Executive is a party.

(h) Survival . The provisions of this Agreement shall not survive the termination of this Agreement or of the Executive’s employment hereunder, except that the provisions of Sections (6) through (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/ Susan E. Allen	By:	/s/ Nathaniel D. Woodson
Susan E. Allen		Nathaniel D. Woodson
		Its Chairman and Chief Executive Officer

		/s/ Richard J. Nicholas
		Richard J. Nicholas

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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%
40 ^th	52%	80%	108%
50 ^th	65%	100%	135%
60 ^th	78%	120%	162%
80 ^th	130%	200%	200%

Interim percentages to be interpolated.

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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

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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.

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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).

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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

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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;

(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

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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:

(ii) devote substantially all of the Executive's working time and efforts to the business and affairs of the Company and UIL.

(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

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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.

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.

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(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:

(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

(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.

(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

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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.

(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

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.

(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

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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:

(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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(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

(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

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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.

(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.

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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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(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.

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 .

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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, t he 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.

(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,

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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.

(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.

(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

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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.

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

EXHIBIT 10.7

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AGREEMENT ( the “Agreement”) is made as of the first day of March, 2005, between The United Illuminating Company, a Connecticut Corporation (the “Company”) and Gregory Buckis (the “Executive”),

WITNESSETH THAT

WHEREAS, the Executive previously has been employed by UIL Holdings Corporation (“UIL”) as its Vice President and Controller, 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”), effective as of March 1, 2005, where the Executive will be employed as Vice President and Controller of both the Company and UIL, and the Executive desires to be so employed, and

(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 March 1, 2005 and ending on the second anniversary of the date hereof, unless this Agreement is earlier terminated as provided in Section 5 (the “Initial Term”). Unless the Company has provided the Executive with at least ninety (90) days prior written notice of its decision not to renew this Agreement after the Initial Term or any subsequent term, this Agreement shall be automatically renewed for a successive one (1) year term (the Initial Term and any renewal term being referred to as the “Term”). For purposes of this Agreement, a non-renewal at the election of the Company at the end of a Term shall constitute a termination of this Agreement without cause, and shall be governed by the provisions of Section 6(d). In no event shall the Company give notice of a non-

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renewal from the time that an impending Change in Control (as hereinafter defined) is announced through the date of the consummation of such Change in Control.

(2) POSITION AND DUTIES

(a) The Executive shall be employed by the Company as its Vice President and Controller, and shall also serve as the Vice President and Control of UIL, or in such other equivalent or higher executive position as the UIL Board may determine. The Executive shall:

(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 an executive 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.

(3) PLACE OF PERFORMANCE

In his employment by the Company, the Executive shall be based within a fifty (50)-mile radius of the current executive offices of the Company in New Haven, Connecticut.

(4) COMPENSATION

(a) Base Salary . During the Initial Term of the Executive's employment hereunder, the Executive shall receive a base salary (“Base Salary”) at an annual rate of One Hundred Seventy Six Thousand Eight Hundred Dollars ($176,800.00), increasing to One Hundred Eighty-Five Thousand Dollars ($185,000.00) effective April 1, 2005, payable in accordance with the then customary payroll practices of the Company. The Executive's

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performance and Base Salary shall be reviewed by the UIL Board at least annually, and may be adjusted as a result of any such review.

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

The Executive’s “Stub-Period Incentive Compensation” shall mean the annual short-term incentive compensation being earned in the year in which the Executive terminates employment, pro-rated for the year in which he terminates service, and shall be equal to that short-term annual incentive compensation payment to which the Executive would be entitled, if any, under the terms of the Company’s executive incentive compensation plan, calculated as if he had been employed by the Company on the last day of the year including his Date of Termination, and had achieved personal goals ‘at target’, but based on actual performance with respect to the achievement of 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, his strategic opportunities, leadership, and balance scorecard goals, other than business unit and UIL total financial goals, and Company goals shall include, for example, UIL and 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 of the Company (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.

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(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 management employees, provided that the Executive properly accounts therefor.

(e) Benefit Programs . During the Term of the Executive's employment hereunder and to the extent he meets the applicable eligibility requirements, the Executive shall be entitled to participate in and receive benefits under all of the Company's employee benefit plans, programs and arrangements for its similarly situated executives on the same terms and conditions that apply to such executives, including, without limitation, any plan or program of an affiliated company in which the Company is a participating employer, but only for so long as the Company remains a participating employer. Nothing in this Agreement shall require the Company to maintain a particular benefit plan or program, or preclude the Company from amending or terminating any such plans, programs or arrangements, including its participation therein, or eliminating, reducing or otherwise changing any benefit provided thereunder, so long as such change similarly affects all similarly situated employees of the Company and is in compliance with applicable law.

(f) Vacations and Holidays . The Executive shall be entitled to that number of weeks of paid vacation in each calendar year determined by the Company Board from time to time to be available to similarly situated Company executives, and shall also be entitled to all paid holidays afforded by the Company to its management employees, all in accordance with applicable Company policies.

(5) TERMINATION

(a) Death or Disability . The Executive's employment hereunder shall terminate upon the Executive's death or termination due to disability (as described in Section 6(a) of this Agreement).

(b) Termination by Company for Cause . The Company may at any time by written notice to the Executive terminate the Executive’s employment for Cause in accordance with the following provisions:

(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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(3) misconduct that is demonstrably injurious to the interests of the Company or its Affiliates (as that term is defined in Section 9) unless such misconduct is rectified in all material respects to the reasonable satisfaction of the UIL Board within thirty (30) days after the Executive receives written notice of such misconduct; or

(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

(1) commission of a serious crime, such as an act of fraud, misappropriation of funds, embezzlement, or a crime involving personal dishonesty or moral turpitude; or

(2) misconduct that is demonstrably injurious to the interests of the Company or its Affiliates; or

(3) willful failure of the Executive to substantially perform his duties (other than by reason of incapacity due to physical or mental illness or injury).

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

(d) Termination by Executive .

(i) If the Executive is not in default of any of the Executive’s obligations under Sections (2), (9), (10) or (11) 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”).

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

(e) Date of Termination . For purposes of this Agreement, the “Date of Termination” is defined as (i) the Executive’s date of death, in the event of his death; or the date of his termination due to disability, in the case of disability, or (ii) the date specified in the notice of termination, in the case of the Executive’s termination pursuant to Sections (5)(b), (5)(c), 5(d) hereof.

(6) CONSEQUENCES OF TERMINATION OR NON-RENEWAL.

(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, termination due to disability or retirement (as hereinbefore defined), and not in case of his voluntary termination other than on account of such retirement; plus

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

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

(ii) any amounts payable pursuant to Sections (4)(d), (4)(e) and 4(f) hereof, and

whereupon the Company shall have no further obligation to the Executive under this Agreement or on account of, or arising out of, the termination of the Executive’s employment.

(c) Upon Termination Without Cause, or Upon Breach by the Company, not on account of a Change in Control . If the Company terminates the Executive's employment hereunder without Cause, or if the Executive terminates the Executive's employment hereunder on account of a Breach by the Company, and in either case the termination is not upon a Change in Control or within the Change in Control Protective Period, the Company shall pay or provide (as applicable) to the Executive, the following:

(i) the Executive’s Base Salary, Accrued Incentive Compensation and Stub-Period Incentive Compensation earned, but unpaid, as of the Date of Termination; plus

(ii) any amounts payable pursuant to Sections 4(d), 4(e), and 4(f) hereof; plus

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

(2) the short-term annual incentive compensation payment to which the Executive would be entitled, calculated as if he had been employed by the

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Company on the last day of the year of his Termination, 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 first anniversary of the date of the Executive’s Date of Termination, continued participation in the medical and dental plan(s) in which he was a participant as of his Date of Termination on the same basis as if he remained an active employee, provided that such participation is possible under the terms and provisions of such plans and programs and applicable law. Such period of continued participation shall run concurrently with, and reduce day- for-day, any obligation that the Company or any Affiliate would have to provide “COBRA” continuation coverage with respect to the Executive’s termination of employment. If the Executive’s participation in any such plan or program is barred as a result of the Executive’s termination, the Company shall arrange to provide the Executive with benefits substantially similar on an after-tax basis to those that the Executive would have been entitled to receive under such plan or program, provided that with respect to any benefit to be provided on an insured basis, the value of such coverage shall be based on the present value of the premiums expected to be paid for such coverage, and with respect to other benefits, such value shall be the present value of the expected cost to the Company of providing such benefits.

(f) Release . All payments and obligations of the Company under Section (6) and (7) shall be conditioned upon the execution and delivery by Executive to the Company of a full and effective release by Executive of any liability by the Company to Executive in form and substance reasonably satisfactory to the Company.

(7) CHANGE IN CONTROL

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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

(iv) those payments, and benefits, if any, to which the Executive is entitled by reason of having been designated a Participant in the UIL CIC Plan II. The severance payments, pension supplements and other benefit provisions under such Plan (the “Total UIL CIC Plan Package”) shall be controlling and shall supplant the payments and benefits to which the Executive would be entitled assuming the Executive were terminated without Cause pursuant to the terms of this Agreement, including without limitation any severance benefits, supplemental retirement benefits, short-term incentive compensation and other compensation and benefits (other than long-term incentive compensation) under this Agreement (the “Employment Agreement Termination Package”); expressly provided, however, that in the event that the Employment Agreement Termination Package exceeds the value of the Total UIL CIC Plan Package, then the Executive shall be entitled to select one or the other Package, but shall not be entitled to both, and shall not be entitled to select among compensation elements in each Package.

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

(8) TAX SAVINGS PROVISION

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(9) CONFIDENTIAL INFORMATION

The Executive recognizes that the Executive’s employment by the Company is one of highest trust and confidence by reason of his access to certain trade secrets, confidential business practices, and proprietary information concerning the Company or any person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Company (an “Affiliate”), including, without limitation, the Company’s methods of doing business, marketing and strategic business plans, employees’ compensation and contract terms, customer lists and customer characteristics (collectively referred to as “Proprietary Information”). The Executive agrees and covenants to exercise utmost diligence to protect and safeguard the trade secrets, confidential business practices and Proprietary Information concerning the Company and any Affiliate. The Executive further agrees and covenants that, except with the prior written consent of the Company, he will not, either during the Term hereof or thereafter, directly or indirectly, use for his own benefit or for the benefit of any other person or organization, or disclose, disseminate or distribute to any other person or organization, any of the Proprietary Information (whether or not acquired, learned, obtained or developed by the Executive alone or in conjunction with another), unless and until such Proprietary Information has become a matter of public knowledge through no action or fault of the Executive or unless otherwise required by court order to comply with legal process. All memoranda, notes, records, drawings, documents or other writings whatsoever made, compiled, acquired or received by the Executive during the Term hereof arising out of, in connection with, or related to any activity or business of the Company are and shall continue to be the sole and exclusive property of the Company, and shall, together with all copies thereof, be returned and delivered to the Company by the Executive immediately, when he ceases to be employed by the Company, or at any other time upon the Company’s demand.

(10) NON-COMPETITION

(a) 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

(b) 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 Company or any Affiliate has with its sources of supply or customers; or

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

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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.

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

As used in Sections 9-11, the term the “Company” shall mean UIL Holdings Corporation, The United Illuminating Company and any successor to, or acquirer of, the business or assets of either of them.

(11) DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND DISCOVERIES.

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foreign patents as may be obtained on these inventions and discoveries. The Executive further agrees that, upon request of the Company, he will execute all necessary papers and cooperate in the fullest degree with the Company in securing, maintaining and enforcing any such patents which arise out of his services under this Agreement. It is understood, however, that these obligations undertaken by Executive will be at no expense to him.

(12) MISCELLANEOUS.

(a) Equitable Remedies . The Executive acknowledges that the restrictions provided for in Sections (9) through (11) are reasonable and necessary in order to protect the legitimate interests of the Company and its Affiliates, and that any violation thereof would result in serious damage and irreparable injury to the Company and its Affiliates. Further, t he Executive acknowledges that the services to be rendered by him are of such unique and extraordinary nature, and the resulting injury to the Company from a breach of Sections (9) through (11), inclusive, by the Executive would be of such a nature, that an action at law for the collection of damages would not provide adequate relief to the Company for the enforcement of its rights in the event of an actual or threatened violation by the Executive of his commitments and obligations under Sections (9) through (11). The Executive agrees that upon the actual or threatened breach or violation of any of the commitments under Section (9) through (11), the Company shall be entitled to both preliminary and permanent injunctive relief, in any action or proceeding brought in an appropriate court having jurisdiction over the Executive, to restrain him from committing any violation of any such commitments and obligations.

(b) Effect Of Breach . All payments and other benefits payable but not yet distributed to Executive under Sections (6) or (7)) shall be forfeited and discontinued in the event that the Executive violates Sections (9) through (11) of this Agreement, or willfully engages in conduct which is materially injurious to the Company, monetarily or otherwise, all as determined in the sole discretion of the Company.

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As used in this Section, the term the “Company” shall include The United Illuminating Company, UIL Holdings Corporation, and any successor to, or acquirer of, the business or assets of the Company that executes and delivers the agreement provided for in this Section (12)(c) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(h) Survival . The provisions of this Agreement shall not survive the termination of this Agreement or of the Executive’s employment hereunder, except that the provisions of Sections (6) through (12) hereof shall survive such termination and shall be binding upon the Executive, the Executive’s personal representative and/or spouse, the Company, and the Company’s successors and assigns.

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(i) Counterparts; Facsimile Execution . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Facsimile execution and delivery of this Agreement is legal, valid and binding execution and delivery for all purposes.

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Date:

July 8, 2005

THE UNITED ILLUMINATING COMPANY

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 and Chief Executive Officer

Grant of Performance Shares on

foregoing terms acknowledged.

Date:	July 8, 2005		/s/ Gregory W. Buckis
			Gregory W. Buckis

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EXHIBIT 10.8

EMPLOYMENT AGREEMENT

THIS AGREEMENT ( the “Agreement”) is made as of the 8th day of November, 2004, between UIL Holdings Corporation, a Connecticut Corporation (the “Company”) and Deborah C. Hoffman (the “Executive”),

WITNESSETH THAT

WHEREAS, the Executive previously has been employed by the Company as its Director of Audit Services; and

WHEREAS, the Company desires to continue to employ the Executive as its Director of Audit Services, and the Executive desires to be so employed by the Company, and the parties desire to be bound by the terms of this employment Agreement (the “Agreement”), which shall supersede and replace all prior employment agreements;

(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 UIL Holdings Corporation (the “UIL Board”), all upon the terms and conditions set forth herein.

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(2) POSITION AND DUTIES

(a) The Executive shall be employed by the Company as its Director of Audit Services, or in such other equivalent or higher position as the UIL Board may determine. The Executive shall:

(ii) devote substantially all of the Executive's working time and efforts to the business and affairs of the Company.

(b) Prior to a Change in Control, in the event that the Executive is named by the UIL Board to a position higher in rank or compensation than that applicable at the commencement of the Initial Term, nothing in this Agreement shall obligate the Company to continue such Executive in such higher position; and the Company shall not be deemed in “Breach” of the Agreement (as defined in Section 5(d)) for failure to continue the Executive in such higher position.

(3) PLACE OF PERFORMANCE

In 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 of One Hundred Twenty Six Thousand Seven Hundred Dollars ($126,700.00), 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 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 executives.

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

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 UIL consolidated 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 UIL total financial goals, and Company goals shall include, for example, UIL consolidated 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 shall be 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. In no event shall the Executive be entitled to participate in the UIL CIC Plan II if she is still a participant under the terms of the UIL Change in Control Severance Plan (restated effective October 24, 2003) (“UIL CIC Plan I”), and in no event shall she be entitled to benefits under both plans. By signing this Agreement, the Executive hereby relinquishes any claim she might have under the CIC Plan I now or in the future.

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(d) Business Expenses . During the Term, the Executive shall be entitled to receive prompt reimbursement for all reasonable employment- related business expenses incurred by the Executive, in accordance with the policies and procedures established by the Company Board from time to time for all of the Company's executives, provided that the Executive properly accounts therefor.

(e) Benefit Programs . During the Term of the Executive's employment hereunder and to the extent 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 executives on the same terms and conditions that apply to such executives, including, without limitation, any plan or program of an affiliated company in which the Company is a participating employer, but only for so long as the Company remains a participating employer. 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 UIL Board from time to time to be available to similarly situated Company executives, and shall also be entitled to all paid holidays afforded by the Company to its management employees.

(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:

(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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(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.

(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).

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

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(d) Termination by Executive .

(i) If the Executive is not in default of any of the Executive’s obligations under Sections (2), (9) (10), or (11) 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”).

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

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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.

(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

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.

(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

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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) a lump sum severance payment in an amount equal to the product of 1/12 of the Executive’s Base Salary rate approved by the Board of Directors of the Company at the time of its most recent review of the salary rates of all of the Company’s executives, plus 1/12 of 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 if both personal goals and Company goals had been achieved ‘at target’ without pro-ration for the fact that the Executive was employed only for a portion of the year, multiplied by the number of whole and partial years of the Executive’s service as an Employee of the Company at termination (not to be less than 12 nor more than 24 years). Except for the assumption that such goals shall have been achieved at target, personal and Company goals shall be defined and determined as set forth in Section 4(b) of this Agreement.

(v) for the period ending on the first anniversary of the date of the Executive’s Date of Termination, continued participation in the medical and dental plan(s) in which 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. Such period of continued participation shall run concurrently with, and reduce day- for-day, any obligation that the Company or any Affiliate would have to provide “COBRA” continuation coverage with respect to the Executive’s termination of employment. If the Executive’s participation in any such plan or program is barred as a result of the Executive’s termination, the Company shall arrange to provide the Executive with benefits substantially similar on an after-tax basis to those that the Executive would have been entitled to receive under such plan or program, provided that with respect to any benefit to be provided on an insured basis, the value of such coverage shall be based on the present value of the premiums expected to be paid for such coverage, and with respect to other benefits, such value shall be the present value of the expected cost to the Company of providing such benefits.

(d) Upon Non-renewal of Agreement at end of Term. If the Executive’s employment hereunder is terminated due to non-renewal of this Agreement, the Company shall pay or provide (as applicable) to the Executive the 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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(7) CHANGE IN CONTROL

(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 she were terminated without Cause pursuant to the terms of this Agreement, including without limitation any severance benefits, supplemental retirement benefits, short-term incentive compensation and other compensation and benefits (other than long term incentive compensation) under this Agreement (the “Employment Agreement Termination Package”); expressly provided, however, that in the event that the Employment Agreement Termination Package exceeds the value of the Total UIL CIC Plan Package, then the Executive shall be entitled to select one or the other Package, but shall not be entitled to both, and shall not be entitled to select among compensation elements in each Package.

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Two Dollars ($296,922.00), 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.

(c) 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.

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

(8) TAX SAVINGS PROVISION

(9) CONFIDENTIAL INFORMATION

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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.

(10) NON-COMPETITION

(b) 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

(c) 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.

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neither the Executive, nor any group of persons including the Executive, in any way, directly or indirectly, manages or exercises control of such entity, guarantees any of its financial obligations, or otherwise takes any part in its business, other than through exercising the Executive’s rights as a shareholder.

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

As used in Sections 9-11, the term the “Company” shall mean UIL Holdings Corporation, and any successor to, or acquirer of, the business or assets of the Company.

(11) DISCLOSURE AND ASSIGNMENT OF INVENTIONS AND DISCOVERIES

(b) Assignment of Inventions and Discoveries . The Executive also agrees that she will assign to the Company all inventions and discoveries made by him which arise out of and pertain to the services rendered pursuant to this Agreement, together with all domestic and foreign patents as may be obtained on these inventions and discoveries. The Executive further agrees that, upon request of the Company, 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 him.

(12) MISCELLANEOUS.

(a) Equitable Remedies . The Executive acknowledges that the restrictions provided for in Sections (9) through (11) are reasonable and necessary in order to protect the legitimate interests of the Company and its Affiliates, and that any violation thereof would result in serious damage and irreparable injury to the Company and its Affiliates. Further, t he Executive acknowledges that the services to be rendered by him are of such unique and extraordinary nature, and the resulting injury to the Company from a breach of Sections (9) through (11), inclusive, by the Executive would be of such a nature, that an action at law for the collection of damages would not provide adequate relief to the Company for the enforcement of its rights in the event of an actual or threatened violation by the Executive of her commitments and obligations under Sections (9) through (11). The Executive agrees that upon the actual or threatened breach or violation of any of the commitments under Section (9) through (11), the Company shall be entitled to both preliminary and permanent injunctive relief, in any action or proceeding brought in an appropriate court having jurisdiction over the Executive, to restrain him from committing any violation of any such commitments and obligations.

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(b) Effect Of Breach . All payments and other benefits payable but not yet distributed to Executive under Sections (6) or (7) shall be forfeited and discontinued in the event that the Executive violates Sections (9) through (11) of this Agreement, or willfully engages in conduct which is materially injurious to the Company, monetarily or otherwise, all as determined in the sole discretion of the Company.

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

As used in this Section, the term the “Company” shall include The United Illuminating Company, UIL Holdings Corporation, and any successor to, or acquirer of, the business or assets of the Company that executes and delivers the agreement provided for in this Section (12)(c) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(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.

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respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement.

(h) Survival . The provisions of this Agreement shall not survive the termination of this Agreement or of the Executive’s employment hereunder, except that the provisions of Sections (6) through (12) hereof shall survive such termination and shall be binding upon the Executive, the Executive’s personal representative and/or spouse, the Company, and the Company’s successors and assigns.

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

Date:

November 8, 2004

UIL HOLDINGS CORPORATION

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

Date:	November 8, 2004		/s/ Deborah C. Hoffman
			Deborah C. Hoffman

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EXHIBIT 10.9

FIRST AMENDMENT

EMPLOYMENT AGREEMENT

THIS AMENDMENT ( the “Amendment”) is made as of the first day of March, 2005, between UIL Holdings Corporation, a Connecticut Corporation (the “Company”) and Deborah C. Hoffman (the “Executive”),

WITNESSETH THAT

WHEREAS, the Executive previously has been employed by the Company as its Director of Audit Services pursuant to an employment agreement between the Company and the Executive dated as of November 8, 2004 (the “Agreement”); and

WHEREAS, the Company desires to promote the Executive to the position of Vice President of Audit Services and Chief Compliance Officer, and the Executive desires to be so employed by the Company;

WHEREAS, in order to reflect such promotion it is desirable to amend the Agreement;

NOW THEREFORE, the Agreement is amended as follows:

1. Section 1 of the Agreement is amended as of March 1, 2005 to read as follows:

(1) EMPLOYMENT; TERM

(b) The term of this Agreement shall be for a period commencing on March 1, 2005 and ending on the second anniversary thereof, 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 the time that an impending Change in Control (as hereinafter defined) is announced through the date of the consummation of such Change in Control.

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2. Section 2(a) of the Agreement is amended as of March 1, 2005 to read as follows:

(2) POSITION AND DUTIES

(a) Effective as of March 1, 2005. the Executive shall be employed by the Company as its Vice President of Audit Services and Chief Compliance Officer, 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 Audit Committee of the UIL Board or the President and Chief Executive Officer of the Company; and

(ii) devote substantially all of the Executive's working time and efforts to the business and affairs of the Company.

3. Section 4(a) of the Agreement is hereby amended to read as follows:

(4) COMPENSATION

(a) Base Salary . During the Initial Term of the Executive's employment hereunder, the Executive shall receive a base salary (“Base Salary”) at an annual rate of One Hundred Twenty Six Thousand Seven Hundred Dollars ($126,700.00) increasing to One Hundred Forty One Thousand Dollars ($141,000.00) as of April 1, 2005, 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 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 executives.

Date:

July 8, 2005

UIL HOLDINGS CORPORATION

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

Date:	July 8, 2005		/s/ Deborah C. Hoffman
			Deborah C. Hoffman

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