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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