Exhibit 10.1

 

2007 Officer Bonus Plan - Summary of Material Terms

 

The Pennichuck Corporation Board of Directors established an Executive Officer
Bonus Plan for calendar year 2007 at its January 26, 2007 meeting.

 

Under the Plan, which covers all qualifying Executive Officers of Pennichuck
Corporation (see employment test below) except for the President and Chief
Executive Officer, bonus amounts are credited into a "pool" based on the amount
of Company-wide (i.e., consolidated) pre-tax pre-bonus income (defined as
consolidated income for calendar year 2007 before, (a) net eminent domain costs,
(b) all cash bonuses, and (c) income taxes) (hereinafter, "Company-Wide
Income"). The attached schedule indicates what amounts are credited into the
pool at varying levels of Company-Wide Income. The actual bonus pool amount will
be determined at the end of the annual audit process after year-end (around
March 1, 2008).

 

Once determined, bonus pool amounts will be paid-out as cash awards as follows:

 

% of Pool

 

How Awarded

     

55%

 

Automatic: Pro-rata based on 2007 beginning base salaries as a percent of total
covered compensation (i.e., the sum of such salaries for all qualifying Plan
participants)

     

45%

 

Discretionary: Allocated among officers by the Compensation Committee of the
Board based on an assessment of each officer's individual performance for the
year. A very important factor in this regard will be the accomplishment of the
executive's Goals & Objectives for the year (including financial goals).

     

If Company-Wide Income falls below $[ ], no cash bonuses will be payable under
the Plan.

 

To be eligible for any bonus award under the Plan, you must be an employee of
Pennichuck Corporation or one of its subsidiaries (collectively, "Pennichuck")
on the actual payment date. Bonus awards under the Plan will normally be paid
out (net of tax withholding and other required deductions) on or about March 15,
2008.

 

Exceptional Circumstances Provision: If, prior to the actual payment date,
unforeseen or unusual circumstances arise which have serious negative financial
consequences (e.g., loss of the eminent domain litigation, plant fire, etc.) and
which would render the payment of any awards under the Plan imprudent in light
of the then current financial or operating condition of the Company, Pennichuck
reserves the right to delay or cancel such awards by giving notice to
participants prior to the regular payment date.

<PAGE>  1

Schedule

 

PENNICHUCK
OFFICER BONUS PLAN
2007 BONUS POOL AMOUNTS

 

       

Officer Pool

       

--------------------------------------------------------------------------------

Company Wide
Income (1)

     

Bonus

 

% of

--------------------------------------------------------------------------------

     

Pool

 

Covered

% of Plan

 

(000's)

 

Amount(3)

 

Comp.(2)

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

             

120%+

 

$[  ]

 

$250,000

 

34.8%

             

116%

 

[  ]

 

236,000

 

32.8%

             

112%

 

[  ]

 

222,000

 

30.9%

             

108%

 

[  ]

 

208,000

 

28.9%

             

104%

 

[  ]

 

194,000

 

27.0%

             

100%

 

[  ]

 

180,000

 

25.0%

             

  96%

 

[  ]

 

155,000

 

21.6%

             

  92%

 

[  ]

 

130,000

 

18.1%

             

  88%

 

[  ]

 

105,000

 

14.6%

             

  84%

 

[  ]

 

80,000

 

11.1%

             

Footnotes:

(1)

Defined as full year (i.e., 12 months) consolidated income for calendar 2007
before, (a) net eminent domain costs, (b) all cash bonuses, and (c) income
taxes.

(2)

Based on beginning of year base salaries.

(3)

Performance between indicated income levels will be pro-rated to create a bonus
pool proportional to such performance.

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