EX-10.7



 





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.




 









 






	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.




-2-









 






	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:  	 	 
	 	 	 	 
	 	 	 	 



-3-