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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