Exhibit 10.4
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
     THIS AGREEMENT (the “Deferred Compensation Agreement”) is made this 24th
day of January, 2008 and between The Connecticut Water Company (together with
any affiliated companies hereinafter collectively referred to as the “Employer”)
and [                                        ] (hereinafter referred to as the
“Employee”).
WITNESSETH:
     WHEREAS, the Employee is among a select group of management or highly
compensated employees of the Employer; and
     WHEREAS, the Employer and the Employee entered into a [n Amended and
Restated] Deferred Compensation Agreement dated
[                                        ]; and
     WHEREAS, the parties wish to amend and restate the Deferred Compensation
Agreement to comply with Section 409A of the Internal Revenue Code as amended,
and regulations issued thereunder (collectively “Section 409A”); and
     WHEREAS, the Employer and the Employee are willing to enter into this
Amended and Restated Deferred Compensation Agreement (the “Agreement”) on the
terms herein set forth, effective as of January 1, 2008;
     NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises herein, the parties hereto agree as follows:
     1. DEFERRED COMPENSATION. The Employee may file a written election with the
Employer in the form attached to this Agreement or such other form as may be
approved by the Employer to defer up to 12 percent (12%) of the Employee’s
salary. Such amount shall be credited to a Deferred Compensation Account as
provided in Section 2 hereof. This election to defer the receipt of salary must
be made before the beginning of the calendar year for which the salary is earned
and shall remain in effect, unless terminated or changed, or until the date the
Employee ceases to be an employee of the Employer. Any election termination or
change of a deferral election must be made on a form provided by the Employer
for such purpose and may only be made with respect to salary which will be
earned on and after the January 1 following the Employer’s receipt of such form
provided that such form is received at least seven (7) days prior to the
applicable January 1.
     2. DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its books
and records a Deferred Compensation Account to record its liability for future
payments of deferred compensation and interest thereon required to be paid to
the Employee or [her] beneficiary pursuant to this Agreement. However, the
Employer shall not be required to segregate or earmark any of its assets for the
benefit of the Employee or [her] beneficiary. The amount reflected in said
Deferred

 

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Compensation Account shall be available for the Employer’s general corporate
purposes and shall be available to the Employer’s general creditors. The amount
reflected in said Deferred Compensation Account shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors of the Employee or [her]
beneficiary, and any attempt to anticipate, alienate, transfer, assign or attach
the same shall be void. Neither the Employee nor [her] beneficiary may assert
any right or claim against any specific assets of the Employer. The Employee or
[her] beneficiary shall have only a contractual right against the Employer for
the amount reflected in said Deferred Compensation Account and shall have the
status of general unsecured creditors. Notwithstanding the foregoing, in order
to pay amounts which may become due under this Agreement, the Employer may
establish a grantor trust (hereinafter the “Trust”) within the meaning of
Section 671 of the Internal Revenue Code of 1986, as amended. The assets in such
Trust shall at all times be subject to the claims of the general creditors of
the Employer in the event of the Employer’s bankruptcy or insolvency, and
neither the Employee nor any beneficiary shall have any preferred claim or
right, or any beneficial ownership interest in, any such assets of the Trust
prior to the time such assets are paid to an Employee or beneficiary pursuant to
this Agreement.
     The Employer shall credit to said Deferred Compensation Account the amount
of any salary to which the Employee becomes entitled and which is deferred
pursuant to Section 1 hereof, such amount to be credited as of the first
business day of each month. The Employer shall also credit to said Deferred
Compensation Account an Interest Equivalent in the amount and manner set forth
in Section 3 hereof.
     3. PAYMENT OF DEFERRED COMPENSATION
     (a) Separation from Service On or After Attainment of Age 55. If the
Employee should separate from service on or after [her] attainment of age
fifty-five (55) for any reason other than death or an account of “Cause” as
defined in subsection (c) below, [she] shall be entitled to receive payment of
the entire amount of [her] Deferred Compensation Account including an Interest
Equivalent, as described below, in the form of an actuarially equivalent life
annuity providing for equal annual payments for the life of the Employee. Such
actuarially equivalent life annuity shall be computed on the basis of a
mortality table that assumes a life expectancy of age eighty (80) and uses the
Interest Factor described below (payment shall continue for the life of the
Employee, even if the Employee continues to live past eighty (80)). If the
Employee is a “specified employee” as that term is defined under Section 409A at
the time of separation from service, the first annual annuity payment under this
subsection shall be paid on the first day of the seventh month following the
date of the Employee’s separation from service, and subsequent payments shall be
made on anniversaries of that date. If the Employee is not a “specified
employee” at the time of separation from service, the first annual payment under
this subsection shall be paid on the first day of the month following the date
of the Employee’s separation from service, and subsequent payments shall be made
on anniversaries of that date.
     There shall be credited to the Employee’s Deferred Compensation Account as
of each January 1 and July 1, commencing with
[                                        ] until payment of such account begins,
as additional deferred compensation, an Interest Equivalent equal

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to fifty percent (50%) of the product of (i) the AAA Corporate Bond Yield
Averages published by Moody’s Bond Survey for the Friday ending on or
immediately preceding the applicable January 1 and July 1 plus
[                    ] percentage points (the “Interest Factor”), multiplied by
(ii) the balance of the Employee’s Deferred Compensation Account, including the
amount of Interest Equivalent previously credited to such Employee’s account, as
of the preceding day (i.e., December 31 or June 30). The Interest Factor used to
compute the annuity payable upon the Employee’s separation from service on or
after [her] attainment of age fifty-five (55) shall be calculated based upon the
Interest Factor as of the January 1 or July 1 immediately preceding the date of
the Employee’s separation from service, whichever shall fall nearer to the date
of the Employee‘s separation from service.
     (b) Separation from Service Prior to Attainment of Age 55. If the Employee
should separate from service prior to [her] attainment of age fifty-five
(55) for any reason other than death or on account of “Cause” as defined in
subsection (c) below, the Employee shall be entitled to receive payment in a
lump sum of the entire amount of [her] Deferred Compensation Account, including
the same Interest Equivalent as described in subsection (a) above. If the
Employee is a “specified employee” as that term is defined under Section 409A at
the time of separation from service, payment under this subsection shall be made
on the date which is six (6) months following the date payment would otherwise
be made pursuant to the following sentence. If the Employee is not a “specified
employee” at the time of separation from service, payment under this subsection
shall be made on the third (3rd) day following separation from service.
     (c) Separation from Service for Cause.
     (i) If the employment of the Employee is terminated by the Employer for
Cause, the Employee shall be entitled only to a return of amounts deferred
pursuant to Section 1 hereof.
     (ii) If the Employee is so terminated on or after age 55, payment shall be
made in accordance with the terms of Section 3(a) above. However, the Employee
shall not be entitled to the Interest Equivalent for any years prior to such
termination, and such Interest Equivalent shall not be included in determining
Employee’s benefit hereunder. An Interest Factor shall be utilized in
calculating the amount of the annuity payable in accordance with the last
sentence of subsection (a) above.
     (iii) If the Employee is so terminated prior to attainment of age 55,
payment of the return of amounts deferred (excluding any Interest Equivalent)
shall be made in a lump sum. If the Employee is a “specified employee” as that
term is defined under Section 409A at the time of separation from service,
payment under this subsection shall be made on the date which is six (6) months
following the date payment would otherwise be made pursuant to the following
sentence. If the Employee is not a “specified employee” at the time of
separation from service, payment under this subsection shall be made on the
third (3rd) day following separation from service.

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     (iv) As used in this Agreement, the term “Cause” shall mean:

  (A)   the Employee’s rendering, while employed by the Employer, of any
services, assistance or advice, either directly or indirectly, to any person,
firm or organization competing with, or in opposition to, the Employer;     (B)
  the Employee’s allowing, while employed by the Employer, any use of [her] name
by any person, firm or organization competing with, or in opposition to, the
Employer; or     (C)   willful misconduct by the Employee, including, but not
limited to, the commission by the Employee of a felony or the perpetration by
the Employee of a common law fraud upon the Employer.

     (d) Death While Employed. Notwithstanding anything to the contrary
contained in the foregoing, if the Employee should die while employed by the
Employer, [her] beneficiary, designated pursuant to Section 4 hereof, shall
receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the greater of (i) the
Hypothetical Death Benefit, as defined in subsection (f) hereof, and (ii) the
entire amount of [her] Deferred Compensation Account at the date of [her] death,
assuming that an Interest Equivalent were credited to such account as of each
January 1 and July 1, occurring after the first deferral hereunder until the
date of death at the rate set forth in subsection (a) hereof. Such beneficiary
shall receive such death benefit on the thirtieth (30th) day following the death
of the Employee.
     (e) Death After Separation from Service.
     (i) If the Employee should die after [her] separation from service, whether
prior to or on or after attainment of age 55, and prior to the date on which
payment of [her] Deferred Compensation Account has commenced in the form of an
annuity in accordance with subsection (a) or has been paid in the form of a lump
sum as provided in subsection (b), [her] beneficiary, designated pursuant to
Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s)
otherwise payable to the Employee under this Agreement, a death benefit equal to
the entire amount of the Employee’s Deferred Compensation Account, including the
same Interest Equivalent as described in subsection (a) above, at the date of
[her] death, provided that the Employee’s employment shall not have terminated
on account of “Cause” as defined in subsection (c) hereof. In the event that the
Employee should die after the termination of [her] employment for “Cause,”
whether prior to or on or after attainment of age 55, and in either case prior
to the date upon which payment of [her] Deferred Compensation Account has been
made or has commenced, [her] beneficiary, designated pursuant to Section 4
hereof, shall receive a return of the amounts deferred (excluding any Interest
Equivalent). No Interest Equivalent shall be credited to the Employee‘s Deferred
Compensation Account in the event of the Employee’s death after [her]
termination on

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account of “Cause” as provided in subsection (c) hereof. In either case, the
Employee’s beneficiary shall receive such death benefit on the thirtieth (30th)
day following the death of the Employee.
     (ii) If the Employee should die after [her] separation from service with
the Employer on or after attainment of age 55 (not on account of “Cause”) and
after the date on which payment of [her] Deferred Compensation Account and the
Interest Equivalent set forth in subsection (a) hereof has commenced in the form
of an annuity as provided in subsection (a), no additional benefits shall be
payable under this Agreement after the Employee’s death except to the extent
that the Employee did not receive prior to [her] death benefits in an amount
equal to or greater than the Employee’s Deferred Compensation Account plus any
Interest Equivalent credited thereto, as of the date of the Employee’s death. If
the Employee dies prior to receiving benefits equal to or greater than the
Employee’s Deferred Compensation Account plus any Interest Equivalent credited
thereto as of the date of the Employee’s death, [her] beneficiary shall be
entitled to a lump sum payment, thirty (30) days following Employee’s death,
equal to the difference between benefits paid to the Employee hereunder and the
Employee’s Deferred Compensation account, plus any Interest Equivalent credited
thereto, as of the date of the Employee’s death.
     (iii) If the Employee should die after [her] separation from service with
the Employer on or after attainment of age 55 on account of “Cause” and after
the date payments have commenced to [her] in the form of an annuity as provided
in subsection (c), no additional benefits shall be payable under this Agreement
after the Employee’s death except to the extent the Employee did not receive
prior to [her] death benefits in an amount equal to or greater than the amounts
deferred (excluding any Interest Equivalent earned while employed). In such
event, [her] beneficiary shall be entitled to a lump sum payment, thirty
(30) days following Employee’s death, equal to the difference between benefits
paid to the Employee hereunder and the amounts deferred (excluding any Interest
Equivalent earned while employed).
     (iv) If the Employee should die after [her] separation from service with
the Employer and after the date on which payment has been paid to [her] in the
form of a lump sum pursuant to subsection (b) or (c), no additional benefits
shall be payable upon the Employee’s death.
     (f) Hypothetical Death Benefit. For purposes of this Agreement, the term
“Hypothetical Death Benefit” shall mean a lump sum benefit equal to the proceeds
of any policy of key-man life insurance on the life of the Employee, of which
the Employer is owner and beneficiary, and which policy is designated by the
Employer as subject to the provisions hereof, reduced by (i) the amount of any
tax imposed on the Employer with respect to such proceeds and (ii) the cost to
the Employer of any tax deductions postponed as a result of salary deferrals
pursuant to Section 1 hereof and increased by (iii) the tax deduction to the
Employer which would result from payment of the Hypothetical Death Benefit to a
beneficiary of the Employee. For purposes of (ii) above, an opportunity cost
factor of six (6) percent pre-tax interest will be applied during the

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period of postponed deductions under (ii). The calculation of the Hypothetical
Death Benefit shall be done by the Employer, whose calculation shall be final
and binding on the Employee and [her] beneficiary. Anything herein to the
contrary notwithstanding, the Employer shall not be required to purchase a
policy of key-man life insurance on the life of any Employee, and any such
policy purchased by the Employer, and all proceeds thereof, shall remain at all
times available to the Employer’s general creditors.
     (g) Termination of Employment. In order for the Employee to be considered
to have terminated employment with the Employer, the Employee must have incurred
a separation from service from the Employer (and all related companies) within
the meaning of Section 409A, and the term termination of employment shall be
construed and interpreted in a manner consistent with the term separation from
service.
     4. BENEFICIARY. The Employee has notified or will in the future notify the
Employer of the person or persons entitled to receive payments on the death of
the Employee. For the purposes of this Agreement, such person or persons are
herein referred to collectively as the “beneficiary.” The person whom an
Employee designates as [her] beneficiary for this purpose must be one of the
following: the Employee‘s spouse; father, mother, sister, brother, son or
daughter. The beneficiary may also be a legal ward living with and dependent on
the Employee at the time of [her] death. If the Employee dies and has not
designated a beneficiary, [her] beneficiary shall be [her] spouse, if living;
otherwise, [her] beneficiary shall be deemed to be [her] estate. An Employee’s
beneficiary designation may be changed at any time by the Employee giving
written notice to the Employer of such change. The rights of any beneficiary
presently or hereafter designated are subject to any changes made in this
Agreement by the Employee and the Employer.
     5. WITHHOLDING. The Employer shall be permitted to withhold from any
payment to the Employee or [her] beneficiary hereunder all federal, state or
other taxes which may be required with respect to such payment.
     6. ARBITRATION. In the event that a dispute shall arise with respect to any
of the provisions of this Agreement, either the Employer or the Employee or
[her] beneficiary, as the case may be, may give written notice to the other
stating the claims that said party desires to arbitrate, and naming an
arbitrator. Within ten (10) days after the receipt of such notice, the party
receiving same shall appoint a second arbitrator by written notice to be sent to
the party who requested arbitration. Within ten (10) days after receipt of such
notice of appointment of the second arbitrator, the two (2) arbitrators so
appointed shall meet to select a third arbitrator and shall give written notice
of such selection to the Employer and the Employee or [her] beneficiary. The
decision of a majority of the arbitrators shall be conclusive and binding upon
the Employer and the Employee or [her] beneficiary. All notices hereunder shall
be by registered mail addressed to the last known address of the party entitled
to receive notice. The Employer and the Employee shall each pay their own costs
incurred in the arbitration proceeding.

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     7. MISCELLANEOUS.
     (a) This Agreement shall be binding upon the parties hereto, their heirs,
executors, administrators, successors and assigns. The Employer agrees that it
will not be a party to any merger, consolidation or reorganization unless and
until its obligations hereunder shall be expressly assumed by its successor or
successors.
     (b) This Agreement may be amended at any time by mutual written agreement
of the parties hereto, but no amendment shall operate to give the Employee, or
any beneficiary designated by [her], either directly or indirectly, any interest
whatsoever in any funds or assets of the Employer, except the right to receive
the payments herein provided.
     (c) Deferrals under this Agreement may be suspended by the Employer
effective as of any January 1, following the time that tax or other laws are
enacted or interpreted which result or will result in costs to the Employer
significantly in excess of those contemplated at the time of the execution
hereof. In the event of such suspension, the Employer‘s sole obligation shall be
to pay to the Employee in accordance with Section 3 above. In no event may
deferrals be ceased during a calendar year by action of either the Employer or
the Employee, or both.
     (d) This Agreement shall not supersede any contract of employment, whether
oral or written, between the Employer and the Employee, nor shall it affect or
impair the rights and obligations of the Employer and the Employee,
respectively, thereunder. Nothing contained herein shall impose any obligation
on the Employer to continue the employment of the Employee.
     (e) If Moody’s Bond Survey shall cease to publish the Corporate Bond Yield
Averages referred to in Section 3 hereof, a similar average selected by the
Board of Directors of the Employer, in its sole discretion, shall be used.
     (f) This Agreement shall be executed in duplicate, and each executed copy
of this Agreement shall be deemed an original.
     (g) This Agreement shall be construed in all respects under the laws of the
State of Connecticut, subject to applicable federal law.
     (h) This Agreement has been prepared with reference to Section 409A and
should be interpreted and administered in a manner consistent with Section 409A.
     (i) This Amendment and Restatement is effective as of January 1, 2008.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.

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THE CONNECTICUT WATER COMPANY

                 
 
      By        
 
               
                    Date
               
 
               
 
          Its    
 
                                                  Date      
[                                        ]    

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