Exhibit 10.7
CONNECTICUT WATER SERVICE, INC.
THE CONNECTICUT WATER COMPANY
DIRECTORS’ DEFERRED COMPENSATION PLAN
Amended and Restated Effective as of January 1, 2008

1.   PURPOSE OF THE PLAN       The purpose of the Directors’ Deferred
Compensation Plan (hereinafter referred to as the “Plan”) is to provide a
procedure whereby a member of the Board of Directors of The Connecticut Water
Company and of Connecticut Water Service, Inc. (hereinafter collectively
referred to as the “Company”) who is not an employee of the Company (hereinafter
referred to as a “Director”) may defer the payment of all or a specified part of
the compensation payable to the Director for services as a Director of The
Connecticut Water Company and of Connecticut Water Service, Inc., including
compensation payable to a Director for services as a member of a Committee of
said Boards.       This document amends and restates the Plan, effective as of
January 1, 2008. The primary purpose for this amendment and restatement is to
comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) which was added by the American Jobs Creation Act of 2004.   2.  
APPLICABILITY       This amended and restated Plan shall have no applicability
with respect to former Directors whose entire benefits were earned and vested as
of December 31, 2004. The provisions of the Plan as in effect prior to this
amendment and restatement shall continue to apply with respect to such former
Directors, if any, without modification. It is intended that the benefits of
these former Directors shall be “grandfathered” and shall not be subject to
Section 409A of the Code.   3.   ELECTION TO DEFER       A Director may elect to
defer receipt of payment of all or a specified portion of all cash compensation
payable to the Director for services as a Director earned during the calendar
year. Such election must be made by the December 31 preceding the year in which
the compensation is earned. Such election will remain in effect for the calendar
year and succeeding calendar years until the Director ceases to be a Director or
until the election to defer is terminated pursuant to Section 7 below. Any such
elections shall be made by written notice delivered to the Secretary of the
Company.

 

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4.   DIRECTORS’ ACCOUNTS       All deferred compensation shall be held in the
general funds of the Company and shall be credited to each Director’s account.
On the first day of each month, interest shall be credited to each such account
calculated on the basis of the balance in such account on the first day of each
month and at the monthly rate equal to one twelfth of the “return on rate base”
of the most recent rate decision for The Connecticut Water Company.   5.  
PAYMENT FROM DIRECTORS’ ACCOUNTS       The aggregate amount of deferred
compensation, together with interest accrued thereon, credited to the account of
any Director shall be paid in a lump sum. The lump sum shall be paid sixty
(60) days following termination of the Director’s service as a Director,
provided such termination constitutes a “separation from service” under
Section 409A of the Code and regulations issued thereunder; otherwise 60 days
following the date such separation from service occurs.   6.   PAYMENT IN EVENT
OF DEATH       If a Director should die before all deferred amounts credited to
the Director’s account have been distributed, the balance of any deferred
compensation and interest then in the Director’s account shall be paid to the
Director’s designated beneficiary in a lump sum sixty (60) days after the date
of the Director’s death. If such Director did not designate a beneficiary or in
the event that the beneficiary designated by such Director shall have
predeceased the Director, the balance in the Director’s account shall be paid to
the Director’s estate in a lump sum sixty (60) days after the date of the
Director’s death.   7.   TERMINATION OF ELECTION       A Director may terminate
an election to defer payment of compensation by written notice delivered to the
Secretary of the Company. Such termination shall become effective as of the end
of the calendar year in which notice of termination is given with respect to
cash compensation payable for services as a Director earned during subsequent
calendar years. Amounts credited to the account of a Director prior to the
effective date of termination shall not be affected thereby and shall be paid
only in accordance with paragraphs 5 and 6 above.   8.   NONASSIGNABILITY      
All rights to payments under this Plan are not subject in any manner to
anticipation, alienation, transfer, assignment, pledge, encumbrance, attachment
or garnishment by creditors of the Director or the Director’s spouse or other
beneficiary.

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9.   INTERPRETATION AND AMENDMENT       The Plan shall be administered by the
Boards of the Directors of the Company. The decision of the Boards of Directors
with respect to any questions arising as to the interpretation of this Plan,
including the severability of any and all of the provisions thereof, shall be
final, conclusive and binding. The Boards of Directors reserve the right to
amend this Plan from time to time, provided, however that no amendment of this
Plan shall operate to annul an election already in effect for the then current
calendar year.       This Agreement has been prepared with reference to
Section 409A of the Code and should be interpreted and administered in a manner
consistent with Section 409A.   10.   PAYMENTS       Payments pursuant to this
Plan shall be made by the Company out of its general corporate assets. Neither a
Director nor any beneficiary or spouse of a Director may assert any right or
claim against any specified assets of the Company. The Director and any such
beneficiary or spouse shall have the status of general unsecured creditors of
the Company and shall have only contractual rights against the Company for
amounts credited to an account pursuant to this Plan.

Executed this          day of                    , 2007.

            THE CONNECTICUT WATER COMPANY
      By:                           CONNECTICUT WATER SERVICE, INC.
      By:                      

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