8-K

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): June 30, 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 June 30, 2005, UIL Holdings Corporation (UIL Holdings) and Charles J. Pepe, Treasurer and Assistant Secretary of UIL Holdings, executed an amendment to Mr. Pepe’s existing employment agreement dated November 8, 2004. The amendment was executed to clarify the supplemental executive retirement plan (SERP) provisions contained in Mr. Pepe’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. Pepe’s existing employment agreement which 1) clearly bifurcate the amounts accrued before and after January 1, 2005 under the SERP provisions provided in Mr. Pepe’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 amendment to Mr. Pepe’s employment agreement is attached hereto as exhibit 10.1.

On June 30, 2005, UIL Holdings, along with its subsidiary The United Illuminating Company (UI), entered into a Separation and Release Agreement (Separation Agreement) with Mr. Pepe effectively terminating Mr. Pepe’s employment as of June 30, 2005. The Separation Agreement defines with greater specificity the payments and benefits to be provided to Mr. Pepe and replaces those related provisions in Mr. Pepe’s existing employment agreement dated November 8, 2004. The Separation Agreement provides that Mr. Pepe is being terminated without cause, and shall receive, in addition to benefits accrued and payable under UI’s qualified pension plan, 1) a payment of $24,418 representing all accumulated unused vacation due to Mr. Pepe in accordance with UIL Holdings’ and UI’s existing vacation pay policies and practices, 2) a short-term annual incentive payment for 2005 equal to one-half of that short-term annual incentive compensation payment to which Mr. Pepe would be entitled under the UIL Holdings executive incentive compensation program, calculated as if he had been employed by UIL Holdings on the last day of 2005 and had achieved goals “at target”, but based on actual performance with respect to achievement of UIL Holdings financial goals, the payment of which will be made following approval of the 2005 short-term incentive compensation for all executives of UIL Holdings, 3) a cash bonus of $4,200, and 4) benefit payments due to Mr. Pepe under the SERP provisions of his existing employment agreement, as amended, in the amount of $2,468.20 per month commencing July 1, 2005 in the form of a 100% joint and survivor annuity, and an additional $368.59 per month commencing January 1, 2006 in the same form. Additionally, the Separation Agreement provides that, 1) with respect to stock options, Mr. Pepe will be treated as retiring under the provisions of the UIL Holdings 1999 Amended and Restated Stock Plan, and as such, all stock options granted to Mr. Pepe which have not expired or been exercised shall become immediately exercisable and Mr. Pepe shall be entitled to exercise such stock options for a three-year period, and 2) in regards to Mr. Pepe’s participation in the UIL Holdings Long-Term Incentive Program, Mr. Pepe shall be treated as retiring with respect to the 1,600 performance shares granted to him pursuant to a performance share agreement dated May 10, 2004, and as such Mr. Pepe shall be deemed to have been continuously employed by UIL Holdings throughout the duration of the performance period ending on December 31, 2006 and shall be entitled to receive payment of his performance shares, calculated and paid in accordance with the terms of the performance share agreement dated May 10, 2004. The Separation Agreement also provides that Mr. Pepe will be entitled to continued participation in the medical and dental plans in which he was a participant at the time of his termination through June 30, 2006. Thereafter, he shall be entitled to commence retiree medical benefits under the UI retiree medical program. Receipt of the payments and benefits under his Separation Agreement are conditioned upon Mr. Pepe’s executing a release of claims with respect to UIL Holdings and its affiliates. A copy of Mr. Pepe’s Separation Agreement is attached hereto as exhibit 10.2.

Item 8.01 Other Events.

In connection with the restructuring of the UIL Holdings’ Finance organization previously disclosed in UIL Holdings’ filing on Form 8-K dated December 31, 2004, effective June 30, 2005 Susan E. Allen assumed the role of Treasurer of UIL Holdings and UI, in addition to her current roles of Vice President Investor Relations and Corporate Secretary of UIL Holdings and UI.

Ms. Allen replaces Mr. Pepe as Treasurer of UIL Holdings and UI following his retirement effective June 30, 2005. Ms. Allen served as Director Finance and Corporate Secretary Administration of UI from January 1, 2000 to June 25, 2000. She has served as Vice President Investor Relations, Corporate Secretary and Assistant Treasurer of UI since June 26, 2000 and of UIL Holdings since August 28, 2000. Ms. Allen is currently 45 years old.

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 as of June 30, 2005, to Employment Agreement, dated as of November 8, 2004, between UIL Holdings Corporation and Charles J. Pepe.

10.2   Copy of Separation and Release Agreement, dated June 30, 2005, among UIL Holdings Corporation, The United Illuminating Company and Charles J. Pepe.

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: 7/01/05	By/s/  Richard J. Nicholas
	Richard J. Nicholas
	Executive Vice President
	and Chief Financial Officer

Exhibit Index

ExhibitDescription

10.1   Copy of First Amendment, made as of June 30, 2005, to Employment Agreement, dated as

    of November 8, 2004, between UIL Holdings Corporation and Charles J. Pepe.

10.2   Copy of Separation and Release Agreement, dated June 30, 2005, among UIL Holdings

    Corporation, The United Illuminating Company and Charles J. Pepe.

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

BETWEEN UIL HOLDINGS CORPORATION

AND

CHARLES J. PEPE

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 IRS guidance, UIL Holdings Corporation (the “Company”) and Charles J. Pepe (the “Executive”) wish to clarify the supplemental executive retirement plan (“SERP”) provisions contained in the employment agreement between UIL Holdings Corporation and Charles J. Pepe dated November 8, 2004 (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 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 SERP benefit 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

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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 1.9% (.019) 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 and/or deemed age credited under this Agreement or the CIC Plan II) at termination (not to exceed twenty-five years), plus 0.1% (.001) of the Executive’s highest three-year average Total Compensation times the number of years at termination in excess of twenty-five (not to exceed five) of the Executive’s service as an employee of the Company and all affiliates (including deemed service), and (B) is the benefit payable under the UI Pension Plan, where (A) and (B) are both 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. 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 and/or age, the reductions shall be based on the Executive's deemed age and years of service. 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 benefit 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, upon his termination of service, a full payment of benefits from the SERP, including in such calculation the addition of up to six years of age or service (or any combination) to which the Executive became entitled under Section 6(c)(B) of this Employment Agreement by virtue of having been notified in 2004 that he was being terminated without cause. 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 service shall not be included in determining the grandfathered amount. The normal form of benefit

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payment for the grandfathered amount shall be an actuarially equivalent lump sum equal to the present value of the deferred life annuity payable as of the Executive’s Normal Retirement Date to which the Executive would have been entitled under this Section 4(g) 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 the SERP benefit accruals occurring on or after January 1, 2005 (the “non-grandfathered amount”) shall be shall be paid, or commence, 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 deferred life annuity commencing at Normal Retirement 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 for a period of at least five years from the date on which such distribution otherwise would have been made, unless termination of service is due to death or disability. 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.

(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

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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 as of the day and year first above written.

UIL HOLDINGS CORPORATION

Attest:  June 30, 2005

/s/ Susan E. Allen	By: /s/ Nathaniel D. Woodson
Susan E. Allen, Vice President Investor Relations, Corporate Secretary & Assistant Treasurer	Nathaniel D. Woodson      Chairman and Chief       Executive Officer

      /s/ Charles J. Pepe  

               Charles J. Pepe

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