EXHIBIT 10.28


                             EMPLOYMENT AGREEMENT

     THIS  AGREEMENT,  made as of the 23rd day of  February,  1998,  between THE
UNITED  ILLUMINATING  COMPANY,  a  Connecticut  corporation  (the  Company)  and
NATHANIEL D. WOODSON, an individual (the Executive),

                               WITNESSETH THAT

     WHEREAS,  the Company  desires to employ the  Executive  as its  President,
effective  February 23, 1998,  and the  Executive  desires to be employed by the
Company as its President, effective February 23, 1998; and

     WHEREAS,  the  Company  and the  Executive  desire to enter  into a written
agreement conferring upon the Executive certain rights and benefits and imposing
upon the Executive certain duties and obligations,

     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, and in order to provide an incentive to
the  Executive  to  remain  in the  employ  of the  Company  hereafter  and,  in
particular,  in the event of any Change in Control  (as herein  defined)  of the
Company,  thereby  establishing  and preserving  continuity of  management,  the
Parties hereby agree as follows:

     (1) EMPLOYMENT

         (a)  The  Company  hereby  agrees  to  employ  the  Executive,  and the
Executive  hereby agrees to serve the Company all upon the terms and  conditions
set forth herein.

         (b) Unless and until  terminated  pursuant to Section  (5)(a),  Section
(5)(b)(i) or Section  (5)(c)(i)  hereof,  the employment of the Executive by the
Company  shall be for a term  expiring  on the  date  specified  in a Notice  of
Termination pursuant to Section (5)(d) hereof.

     (2) POSITION AND DUTIES

     The  Executive  shall be employed by the  Company as  President,  effective
February 23, 1998, and as President and Chief Executive  Officer,  effective May
20,  1998,  and  thereafter




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in the same or in such other  equivalent  executive  position  as the  Company's
Board of  Directors  may  determine,  without  diminishment  in his  officership
status,  privileges  or working  conditions.  The  Executive  shall  accept such
employment  and shall perform and discharge,  faithfully,  diligently and to the
best of his abilities,  the duties and  obligations of his office and such other
duties as may from time to time be assigned to him by the Board of  Directors of
the Company,  and shall devote substantially all his working time and efforts to
the business and affairs of the Company;  provided,  however, that, to an extent
consistent  with the needs of the Company,  the  Executive  shall be entitled to
expend a reasonable amount of time on civic and philanthropic activities and the
management  of his own and his family's  business  investments  and  activities.
Although a Change in Control of the Company shall not affect the  obligations of
the Company and the  Executive as set forth in the two preceding  sentences,  at
and after the date of any  Change in Control  the  Company's  employment  of the
Executive shall also be without diminishment in his management responsibilities,
duties or powers.

     (3) PLACE OF PERFORMANCE

     In his  employment  by the  Company,  the  Executive  shall be based at the
executive offices of the Company situated within the Company's statutory service
area.

     (4) COMPENSATION

         (a) Base  Salary.  During  the term of his  employment  hereunder,  the
Executive  shall  receive a base salary (Base  Salary) at an annual rate of Four
Hundred Thousand Dollars  ($400,000).  The Executive's Base Salary rate shall be
reviewed by the Board of  Directors of the Company  contemporaneously  with each
review of the salary  rates of the  Company's  other  officers  by said Board of
Directors,  and may be  revised  upwards  as a result  of any such  review.  The
Executive's  Base  Salary may be revised  downwards  by said Board of  Directors
contemporaneously  with  any  general  reduction  of  the  salary  rates  of the
Company's other officers.

         (b) Phantom Stock Options. The Executive will be awarded 80,000 phantom
stock  options on shares of the Company's  Common Stock,  under which the option
price is the  average of the high and low per share sale  prices of said  Common
Stock on the New York Stock  Exchange on February 20, 1998,  vesting at the rate
of 16,000 options on each of the first five  anniversaries



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of  February  23,  1998  occurring  during  the  term  of  this  Agreement,  and
exercisable by the Executive  and/or his personal  representative  only during a
period  ending  on the  earlier  of (A) the  first  anniversary  of the  Date of
Termination of this Agreement, or (B) February 23, 2008.

         (c) Long-Term Incentive Program.  The Executive will be designated as a
participant in the Company's 1996 Long-Term Incentive Program for the three-year
Performance  Period  commencing on January 1, 1998 and awarded 5,000  Contingent
Performance  Shares  for said  Performance  Period;  and the  Executive  will be
designated  as a  participant  in said  Program for each  succeeding  three-year
Performance Period that commences during the term of this Agreement.

         (d)  Incentive   Compensation.   During  the  term  of  his  employment
hereunder,  the  Executive  shall  be  entitled  to  participate  in each  other
incentive   compensation  program  established  for  officers  of  the  Company,
including,  in the case of the Company's 1998 Executive  Incentive  Compensation
Program,  incentive  award  amounts for  achieving  pre-established  performance
levels ranging from 35% of the Executive's Base Salary at the target performance
level to 52.5% of the Executive's Base Salary at the maximum performance level.

         (e) Business Expenses. During the term of his employment hereunder, the
Executive shall be entitled to receive prompt  reimbursement  for all reasonable
expenses  incurred  by him (in  accordance  with  the  policies  and  procedures
established  by the Board of  Directors of the Company from time to time for the
Company's senior executive officers) in performing services hereunder,  provided
that the Executive properly accounts therefor.

         (f) Fringe Benefits.  During the term of his employment hereunder,  the
Executive  shall be entitled to  participate  in and receive full benefits under
all of the Company's  employee benefit plans,  programs and arrangements for its
officers,  including,  without limitation, its Pension Plan. 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.

         (g)  Vacations.  During  the  term  of his  employment  hereunder,  the
Executive shall be entitled to the number of paid vacation days in each calendar
year  determined  by the Board of


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Directors of the Company from time to time for the  Company's  senior  executive
officers,  and shall also be entitled to all paid holidays  given by the Company
to its employees.

         (h)  Supplemental  Retirement.  Upon  termination  of  the  Executive's
employment,  a  supplemental  retirement  benefit shall be payable to him or his
beneficiary in accordance with the provisions of this Section (4)(h). 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 Company's
Pension Plan),  shall be the excess,  if any, of (A) less (B), where (A) is 2.0%
(.02) of the Executive's highest three-year average Total Compensation times the
number of years at termination (not to exceed thirty) of the Executive's service
deemed as an employee of the Company,  and (B) is the benefit  payable under the
Company's  Pension Plan. For purposes of this Agreement,  Total  Compensation is
defined as the sum of the Executive's Base Salary and any amount paid or payable
to  the  Executive   pursuant  to  the  Company's  annual  Executive   Incentive
Compensation  Program.  For purposes of this Agreement,  the Executive's service
deemed as an employee of the Company will be  calculated by adding to the period
of his actual  service as an employee of the Company,  on each of the first five
anniversaries  of February 23, 1998 occurring during the term of this Agreement,
two additional years of service.  Payment of the supplemental retirement benefit
shall begin at the same time as the  Executive's  Pension Plan benefit  payments
and shall be subject to the same reductions for early commencement,  except that
the reductions  shall be based on the Executive's  service deemed as an employee
of the  Company.  The  supplemental  retirement  benefit may be paid in any form
available  under the Pension Plan, as elected by the Executive  prior to benefit
payment commencement.  The conversion factors between forms of benefits used for
purposes of the  Pension  Plan shall be used for  purposes  of the  supplemental
retirement benefit.  The form of payment of the supplemental  retirement benefit
may be the  same or  different  from  the  form of  payment  of the  Executive's
benefits  under the Pension  Plan.  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,  the death  benefit  provisions  of the
Pension Plan shall  apply,  mutatis  mutandis,  to the  supplemental  retirement
benefit payable pursuant to this Section (4)(h).



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     (5) TERMINATION

         (a) The  Executive's  employment  hereunder  shall  terminate  upon his
death.

         (b) Termination by the Company.

               (i)  The  Company  may  terminate  the   Executive's   employment
hereunder for Cause. 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  (A) continued  failure to perform and discharge the duties
or obligations  of his office,  or such other duties as may from time to time be
assigned  to him by the Chief  Executive  Officer or by the Board of  Directors,
faithfully,  diligently,  to the best of his abilities,  and in accordance  with
standards accepted in the electric utility industry, after written notice by the
Board of Directors of the Company  specifying the alleged  failure in reasonably
detailed  terms and  including  in said  notice the opinion of a majority of the
entire  membership of said Board of Directors  that there has been such failure,
or (B) willful  misconduct that is materially and demonstrably  injurious to the
Company,  or (C)  conviction of a felony  involving  the personal  dishonesty or
moral  turpitude of the  Executive  (unless such  conviction  is reversed in any
final  appeal  therefrom),  or  (D)  total  and  permanent  physical  or  mental
disability,  or (E) absence from work on a full-time  basis,  due to physical or
mental illness, for an uninterrupted  365-day period. On and after 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 (F) conviction of a
felony  involving the personal  dishonesty  or moral  turpitude of the Executive
(unless such conviction is reversed in any final appeal therefrom), or (G) total
and  permanent  physical or mental  disability,  or (H)  absence  from work on a
full-time basis, due to physical or mental illness, for an uninterrupted 365-day
period. Notwithstanding the foregoing, the Executive shall not be deemed to have
been  terminated  for Cause unless and until there shall have been  delivered to
the Executive (I) a copy of a resolution,  duly adopted by the affirmative  vote
of not less than a majority of the entire  membership  of the Board of Directors
of the Company,  at a meeting of said Board of Directors called and held for the
purpose (after  reasonable  notice to the Executive and an opportunity  for him,
together with his counsel, to be heard before said Board of Directors),  finding
that, in the good faith opinion of such majority of said


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Board of  Directors,  the  Executive  was  guilty  of  conduct  described  in an
applicable  clause of this Section  (5)(b)(i),  and specifying  the  particulars
thereof,  or that the events  described in an applicable  clause of this Section
(5)(b)(i) have occurred,  and (II) an affidavit of the Secretary or an Assistant
Secretary of the Company stating that such resolution was in fact adopted by the
affirmative  vote of not less than a majority  of the entire  membership  of the
Board of Directors of the Company; and (III) delivery of a Notice of Termination
pursuant to Section (5)(d) hereof.

                (ii) Without  Cause.  The Company may terminate the  Executive's
employment without Cause,  effective upon at least three (3) years' prior Notice
of Termination delivered to the Executive pursuant to Section (5)(d) hereof; and
during such three-year period all of the terms and provisions of this Agreement,
other than this Section (5)(b)(ii), shall continue in full force and effect.

          (c) Termination by the Executive.

               (i) Upon Breach by the Company.  The  Executive may terminate his
employment  hereunder,  upon  thirty  (30)  days'  prior  Notice of  Termination
delivered to the Company  pursuant to Section (5)(d) hereof,  for failure of the
Company to observe  and perform one or more of its  obligations  under  Sections
(1),  (2),  (3) and/or (4) hereof (a Breach by the  Company)  at a time when the
Executive is not in default of any of his obligations  under Sections (1) and/or
(2) hereof.

               (ii) Absent  Breach by the Company.  The  Executive may terminate
his  employment  hereunder in the absence of a Breach by the Company,  effective
upon at least six (6)  months'  prior  Notice of  Termination  delivered  to the
Company pursuant to Section (5)(d) hereof;  and during such six-month period all
of the  terms  and  provisions  of  this  Agreement,  other  than  this  Section
(5)(c)(ii), shall continue in full force and effect.

          (d) Notice of  Termination.  Any  termination  of  employment,  by the
Company or by the  Executive,  shall be  communicated  by  delivery of a written
Notice of Termination to the other party.

          (e) Date of Termination.  For purposes of this Agreement,  the Date of
Termination  is defined as the earlier of (i) if the  Executive's  employment is
terminated  pursuant to Section  (5)(b)(ii)  hereof,  the date  specified in the
Notice of


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Termination,  or (ii) if the  Executive's  employment is  terminated  (A) by his
death,  the date of his death,  (B)  pursuant  to Section  (5)(b)(i)  or Section
(5)(c) hereof,  the date specified in the Notice of  Termination,  or (C) in any
other event, the date on which a Notice of Termination is delivered.

     (6) CONSEQUENCES OF TERMINATION

          (a) If the  Executive's  employment  terminates  pursuant  to  Section
(5)(a)  hereof,  the Company  shall pay to the  personal  representative  and/or
spouse of the  Executive  his  Total  Compensation  earned  prior to the Date of
Termination, any amounts payable pursuant to Sections (4)(e), (4)(f), (4)(g) and
(4)(h) hereof and any benefits or amounts  payable on account of the Executive's
exercise of his phantom stock options  and/or under the Company's 1996 Long-Term
Incentive  Program and/or any deferred  compensation plan in which the Executive
had been a participant,  and the Company shall have no further  obligation under
this Agreement.

          (b) If the  Executive's  employment  terminates  pursuant  to  Section
(5)(b)(ii) or Section  (5)(c)(ii) hereof, the Company shall pay to the Executive
and/or his personal  representative  and/or spouse his Total Compensation earned
prior to the Date of  Termination,  any  amounts  payable  pursuant  to Sections
(4)(e),  (4)(f), (4)(g) and (4)(h) hereof and any benefits or amounts payable on
account of the  Executive's  exercise of his phantom stock options and under the
Company's 1996 Long-Term Incentive Program and any deferred compensation plan in
which the  Executive  had been a  participant,  and the  Company  shall  have no
further  obligation to the Executive and/or his personal  representative  and/or
spouse under this Agreement or on account of, or arising out of, the termination
of the Executive's  employment.  The Executive may elect to receive an immediate
lump sum  payment,  in lieu of any amounts  payable  pursuant to Section  (4)(h)
hereof on account of the  Executive's  termination  of  employment  pursuant  to
Section  (5)(b)(ii)  or Section  (5)(c)(ii)  hereof,  in an amount  equal to the
actuarial present value of a supplemental  retirement benefit,  expressed in the
form of a single life annuity beginning at Executive's termination of employment
equal  to the  excess  if any of (A)  less (B)  where  (A) is 2.0%  (.02) of the
Executive's  highest  three-year  average Total Compensation times the number of
years at termination (not to exceed thirty) of the Executive's service deemed as
an employee of the Company,  and


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(B) is the benefit  payable under the Company's  Pension Plan at the Executive's
termination of employment. For purposes of this Agreement, Total Compensation is
defined as the sum of the Executive's Base Salary and any amount paid or payable
to  the  Executive   pursuant  to  the  Company's  annual  Executive   Incentive
Compensation  Program.  For purposes of this Agreement,  the Executive's service
deemed as an employee of the Company will be  calculated by adding to the period
of his actual  service as an employee of the Company,  on each of the first five
anniversaries  of February 23, 1998 occurring during the term of this Agreement,
two  additional  years  of  service.   The  actuarial   present  value  of  such
supplemental  retirement  benefit shall be calculated on the basis of the annual
yield on thirty-year  United States  Treasury bonds on the final business day of
the month preceding the termination of his employment and the 1983 Group Annuity
table.

          (c) If the  Executive's  employment is terminated  pursuant to Section
(5)(b)(i) hereof,  or if the Executive  terminates his employment in the absence
of a Breach by the Company and not in accordance with Section (5)(c)(ii) hereof,
the Company  shall pay to the Executive his full Base Salary earned prior to the
Date of Termination,  any amounts payable pursuant to Sections  (4)(e),  (4)(f),
(4)(g) and 4(h) hereof and any  benefits or amounts  payable  under any deferred
compensation  plan in which the Executive had been a participant,  and, provided
that the  Company  is not in default of any of its  obligations  hereunder,  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.

          (d) If the  Executive's  employment is terminated  pursuant to Section
(5)(c)(i)  hereof,  or if the  Company  terminates  the  Executive's  employment
without Cause and not in accordance with Section (5)(b)(ii) hereof:

               (i) The Company shall pay to the Executive his Total Compensation
earned  prior  to the Date of  Termination,  any  amounts  payable  pursuant  to
Sections  (4)(e),  (4)(f),  (4)(g),  and 4(h) hereof and any benefits or amounts
payable on account of the Executive's  exercise of his phantom stock options and
under the Company 1996 Long-Term Incentive Program and any deferred compensation
plan in  which  the  Executive  had been a  participant;  and if the  Notice  of
Termination  is  delivered  on or after the


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date of, and in connection  with, a Change in Control,  the Company shall afford
the Executive the severance benefits set forth on Schedule C attached hereto.

               (ii) In lieu of any amounts  payable  pursuant to Section  (4)(h)
hereof on account of the  Executive's  termination of employment,  the Executive
may elect to receive an immediate lump sum amount equal to the actuarial present
value of a supplemental  retirement  benefit,  expressed in the form of a single
life annuity  beginning at Executive's  termination of employment,  equal to the
excess  if any of (A) less  (B),  where  (A) is 2.0%  (.02)  of the  Executive's
highest  three-year  average  Total  Compensation  times the  number of years at
termination  (not to exceed  thirty)  of the  Executive's  service  deemed as an
employee of the  Company,  and (B) is the benefit  payable  under the  Company's
Pension Plan at the Executive's termination of employment.  For purposes of this
Agreement,  Total  Compensation  is defined as the sum of the  Executive's  Base
Salary and any amount paid or payable to the Executive pursuant to the Company's
annual Executive Incentive Compensation Program. For purposes of this Agreement,
the Executive's  service deemed as an employee of the Company will be calculated
by adding to the period of his actual service as an employee of the Company,  on
each of the first five  anniversaries  of February 23, 1998 occurring during the
term of this Agreement,  two additional years of service.  The actuarial present
value of such supplemental  retirement  benefit shall be calculated on the basis
of the annual yield on  thirty-year  United States  Treasury  bonds on the final
business day of the month  preceding the  termination  of his employment and the
1983 Group Annuity table.

               (iii) The Company  shall  maintain in full force and effect,  for
the  continued  benefit  of the  Executive  for the  period  ending on the first
anniversary of the Date of Termination,  all employee benefit plans and programs
in which the Executive was entitled to participate immediately prior to the Date
of  Termination,  provided  that  the  Executive's  continued  participation  is
possible under the general terms and  provisions of such plans and programs.  If
the Executive's  participation in any such plan or program is barred as a result
of such  termination,  the Company shall  arrange to provide the Executive  with
benefits  substantially  similar  on an  after-tax  basis  to  those  which  the
Executive was entitled to receive under such plan or program.

               (iv) The Company shall pay to the  Executive  and/or his personal
representative  his full Base Salary,  during


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the period  commencing on the date following the Date of Termination  and ending
on the first  anniversary of the Date of  Termination,  at the rate in effect at
the time the Notice of Termination is delivered;  provided, however, that if the
Notice of  Termination  is  delivered  after  February 23, 1999 and on or before
February  23,  2000,  the  aforesaid  payment  period  shall  end on the  second
anniversary  of the Date of  Termination;  and  provided,  further,  that if the
Notice of  Termination  is delivered  after  February 23,  2000,  the  aforesaid
payment period shall end on the third  anniversary  of the Date of  Termination;
and provided,  further, that if the Notice of Termination is delivered after the
date of, and in  connection  with, a Change in Control the Company  shall pay to
the Executive,  in lieu of the payments  prescribed by the foregoing clauses, an
immediate  lump sum amount  equal to the  aggregate  sum of all of the  payments
prescribed by the next preceding clause.

               (v) The Executive shall not be required to mitigate the amount of
any  payment  provided  for in this  Section  (6)(d) by  seeking  employment  or
otherwise.  The benefits  payable under this Section (6)(d) shall not be reduced
by reason of the Executive's  securing other employment or for any other reason,
unless the Notice of  Termination  is delivered on or after,  and in  connection
with, a Change in Control,  in which event the provisions of the following three
sentences  shall  apply.  If,  prior  to the  third  anniversary  of the Date of
Termination,  the  Executive  obtains  employment  as  the  Chairman  and  Chief
Executive  Officer (or an  equivalent  executive  position) of another  business
organization,  the  Executive  shall refund to the Company a portion of the lump
sum payment  provided for in Section  (6)(d)(iv)  equal to the amounts earned by
the Executive from his subsequent  employer prior to said anniversary  date, but
in no event  more than the  amount of said lump sum  payment  prorated  over the
number of months in the  period  commencing  on the date  following  his Date of
Termination  and  ending on the third  anniversary  of the Date of  Termination,
multiplied  by  the  number  of  months   remaining   between  the   Executive's
date-of-hire  in his new  employment  and the third  anniversary  of his Date of
Termination.  The Executive  shall refund to the Company any amount  required by
the  preceding  sentence  within one  hundred  and  eighty  (180) days after the
date-of-hire in his new employment.  The employee  benefit plans and programs to
be provided by the Company pursuant to Section  (6)(d)(iii)  shall be reduced as
and to the  extent  that  such  benefits  are  provided  to the  Executive  by a
subsequent employer during the period covered by said Section (6)(d)(iii).



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               (vi) The payment to, and  acceptance by, the Executive of any sum
of money or benefit  prescribed in this Section (6)(d) shall effect and evidence
a release by the Executive of any and all claims  against the Company on account
of, or arising out of, the termination of the Executive's employment,  except as
prescribed in this Section (6)(d).

     (7) CHANGE IN CONTROL

     For  purposes of this  Agreement,  Change in Control  shall mean any of the
following events:

          (a) any merger or  consolidation  of the  Company  with any  corporate
shareholder or group of corporate shareholders holding twenty-five percent (.25)
or more of the  Common  Stock of the  Company or with any other  corporation  or
group of corporations which is, or after such merger or consolidation  would be,
or be affiliated with, a shareholder  owning at least twenty-five  percent (.25)
of the Common Stock of the Company; or

          (b) any sale, lease,  exchange,  mortgage,  pledge,  transfer or other
disposition  to or  with  any  shareholder  or  group  of  shareholders  holding
twenty-five  percent  (.25) or more of the Common Stock of the  Company,  or any
affiliate of such  shareholder  or group of  shareholders,  of any assets of the
Company having an aggregate fair market value of $50 million or more; or

          (c) the  issuance  or sale by the  Company  of any  securities  of the
Company to any shareholder or group of shareholders  holding twenty-five percent
(.25) or more of the Common  Stock of the Company,  or to any  affiliate of such
shareholder or group of shareholders,  in exchange for cash, securities or other
consideration having an aggregate fair market value of $50 million or more; or

          (d) the  implementation of any plan or proposal for the liquidation or
dissolution of the Company  proposed by or on behalf of any shareholder or group
of shareholders owning at least twenty-five percent (.25) of the Common Stock of
the Company, or any affiliate of such shareholder or group of shareholders; or

          (e) any  reclassification  of  securities  (including a reverse  stock
split),  or  recapitalization  of the Company or any other transaction which has
the effect,  directly or indirectly,  of increasing the  proportionate  share of
outstanding shares of


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any  class of equity  securities,  or  securities  convertible  into any  equity
securities,  of  the  Company,  which  is  directly  or  indirectly  owned  by a
shareholder or group of shareholders  owning at least twenty-five  percent (.25)
of the Common Stock of the Company,  or any  affiliate  of such  shareholder  or
group of shareholders.

     The Board of  Directors  of the  Company  may,  from  time to time,  by the
affirmative  vote of not less than a majority of the entire  membership  of said
Board of Directors,  at a meeting of said Board of Directors called and held for
the purpose, modify the phrase "twenty-five percent (.25)" in one or more of the
foregoing  Sections  (7)(a),  (7)(b),  (7)(c),  (7)(d) and/or (7)(e) to a lesser
percentage, but not less than twenty percent (.20).

     (8) ADDITIONAL CONSEQUENCES OF A CHANGE IN CONTROL

          (a) In the event that a Change in  Control  has been  approved  by all
necessary  shareholder,   creditor  and  regulatory  actions:  (i)  all  of  the
Executive's unvested phantom stock options will become vested and exercisable on
the day prior to the date of the Change in Control;  provided,  however, that if
the date of the Change in  Control is on or prior to  February  22,  1999,  only
20,000 of such unvested phantom stock options, plus such number of the remaining
60,000  unvested  phantom stock options as the Company's  Board of directors may
determine in its sole  discretion,  will become so vested and exercisable on the
day  prior to the date of the  Change  in  Control;  and  (ii)  the  earning  of
Performance Shares by the Executive under the Company's 1996 Long-Term Incentive
Program  will be  accelerated  to the day  prior  to the date of the  Change  in
Control,  and the Executive  will be deemed to have earned all of the Contingent
Performance  Shares  outstanding with respect to him, payable to him on said day
prior to the  date of the  Change  in  Control,  at his  option,  either  (A) in
authorized but unissued  shares of the Company's  Common Stock,  or (B) in cash,
based  upon the market  value of the  Company's  Common  Stock at the end of the
business day next preceding said day prior to the date of the Change in Control.

          (b) In the event that a Change in  Control  has been  approved  by all
necessary  shareholder,  creditor and regulatory actions,  the Company will, not
later  than the day  prior  to the date of the  Change  in  Control,  pay to the
Trustee of The United Illuminating Company Supplemental Retirement Benefit Trust
established  pursuant  to the  Agreement,  made as of the 1st day of June,  1995
between the Company and State Street Bank and Trust


                                     - 12 -
<PAGE>

Company,  as  Trustee,  cash in an amount  equal to:  (A) In the event  that the
Executive's  employment has been  terminated or will be terminated  prior to the
date of the Change in Control,  a sum,  calculated by the Company's  independent
certified  public  accountants,  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 (6)(a),  Section (6)(b) or Section
(6)(d) hereof; or (B) in the event that the Executive's  employment has not been
terminated  and  will not be  terminated  prior  to the  date of the  Change  in
Control,  a  sum,  calculated  by the  Company's  independent  certified  public
accountants,   reasonably   sufficient   to  pay  and  discharge  the  Company's
obligations to the Executive under Section (6)(d) hereof assuming,  for purposes
of such  calculation,  that the Executive's  employment is terminated under said
Section (6)(d) by a Notice of Termination delivered on the date of the Change in
Control and specifying an immediate Date of Termination.

          (c) On and after the date of the Change in  Control,  the  Executive's
Base Salary may not be reduced by the Board of  Directors to an annual rate less
than the rate fixed by the Board of  Directors of the Company as a result of its
most recent review of salary rates,  pursuant to Section (4)(a) hereof, prior to
the date of the Change in Control.

     (9) SUCCESSORS; BINDING AGREEMENT

          (a)  The  Company  shall  pay to the  Executive  and/or  his  personal
representative  and/or  spouse all legal fees and expenses  and court costs,  if
any,  incurred by the  Executive  and/or such  representative  and/or  spouse in
successful litigation to enforce his rights under this Agreement.

          (b)  The  Company  will  require  any  successor  (whether  direct  or
indirect,   by  purchase,   merger,   consolidation  or  otherwise)  to  all  or
substantially all of the business or assets of the Company, 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.  Failure of the Company to obtain such agreement by the  effectiveness of
any such  succession  shall be a breach of this  Agreement and shall entitle the
Executive to compensation  from the Company in the same amount and upon the same
terms as he would be entitled to hereunder if he terminated his employment  upon
Breach by the Company,  except that, for


                                     - 13 -
<PAGE>

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
Agreement, the term "the Company" shall include The United Illuminating Company,
any parent and any  successor  to the  business or assets of either as aforesaid
which  executes and delivers the  agreement  provided for in this Section (9) or
which otherwise  becomes bound by all the terms and provisions of this Agreement
by operation of law.

          (c) 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. If the Executive should die while any amounts would still
be payable to him  hereunder  if he had  continued  to live,  all such  amounts,
unless otherwise provided herein,  shall be paid in accordance with the terms of
this  Agreement to the  Executive's  devisee,  legatee or other  designee or, if
there be no such designee, to the Executive's estate.

     (10) NOTICE

     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 United Illuminating  Company, 157
Church Street, New Haven, Connecticut,  Attention: Secretary, or, in the case of
the Executive, to him at 157 Church Street, New Haven,  Connecticut,  or to such
other address as either party shall  designate by giving  written notice of such
change to the other party.

     (11) MISCELLANEOUS

          (a) No  provision  of  this  Agreement  may  be  modified,  waived  or
discharged  unless such  waiver,  modification  or  discharge is approved by the
Board of  Directors  of the  Company  and  agreed to in a writing  signed by the
Executive  and such officer as may be  specifically  authorized  by the Board of
Directors  of 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 similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or  representations,


                                     - 14 -
<PAGE>

oral or otherwise, express or implied, with respect to the subject matter hereof
have been  made by  either  party  which  are not set  forth  expressly  in this
Agreement.  The validity,  interpretation,  construction and performance of this
Agreement shall be governed by the laws of the State of Connecticut.

          (b) Exhibits  A-1 and A-2 attached  hereto,  showing  calculations  of
supplemental  retirement  benefits under Section (4)(f),  and Exhibit B attached
hereto,  showing a calculation  of a lump sum payment under Section  (6)(d)(ii),
are  incorporated  herein by reference and set forth,  by example,  the parties'
intended interpretation and application of such Sections.

     (12) VALIDITY

     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.

     (13) SURVIVAL

     The provisions of this Agreement  shall not survive the termination of this
Agreement or of  employment  hereunder,  except that the  provisions of Sections
(4), (6), (8), (9) and (10) hereof shall survive such  termination  and shall be
binding upon the Company's successors and assigns.

     (14) COUNTERPARTS

     This Agreement may be executed in one or more  counterparts,  each of which
shall be deemed to be an original but all of which together will  constitute one
and the same instrument.



                                     - 15 -
<PAGE>


     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on the
date and year first above written.




Attest:                              THE UNITED ILLUMINATING COMPANY




/s/ Kurt Mohlman                     By:      /s/ Richard J. Grossi
---------------------                   ----------------------------------------
Secretary                                     Chairman of the Board of
                                              Directors and Chief Executive
                                              Officer




                                             /s/ Nathaniel D. Woodson
                                        ----------------------------------------
                                                 Nathaniel D. Woodson



                                     - 16 -