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| Delaware                                                             | 51-0002090                                        |
|----------------------------------------------------------------------|---------------------------------------------------|
| -------------------------------------------------------------------- | ------------------------------------------------- |
| (State or other jurisdiction of incorporation or organization)       | (I.R.S. Employer Identification Number)           |

| Title of each class                       | Class A Non-Voting Common Stock |
|-------------------------------------------|---------------------------------|
|                                      |                            |
| Name of each exchange on which registered | The NASDAQ Global Select Market |

| o | Yes | þ | No |   |
|---|-----|--------|----|--------|

| o | Yes | þ | No |   |
|---|-----|--------|----|--------|

| þ | Yes | o | No |   |
|--------|-----|---|----|--------|

| o | Yes | o | No |   |
|---|-----|---|----|--------|

| Large Accelerated Filer o | Accelerated Filer þ | Non-Accelerated Filer o | Smaller Reporting Company o |
|---------------------------|--------------------------|-------------------------|-----------------------------|

| o | Yes | þ | No |   |
|---|-----|--------|----|--------|

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ARTESIAN RESOURCES CORPORATION

| FORWARD LOOKING STATEMENTS                                                                                                                    |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                          |   |
| PART I                                                                                                                                        |   |
| Item 1. – Business                                                                                                                      |   |
| Item 1A. – Risk Factors                                                                                                                 |   |
| Item 1B. – Unresolved Staff Comments                                                                                                    |   |
| Item 2. – Properties                                                                                                                    |   |
| Item 3. – Legal Proceedings                                                                                                             |   |
| Item 4. – [Reserved]                                                                                                                    |   |
| PART II                                                                                                                                       |   |
| Item 5. – Market for Registrant’s Common Equity, Related Stockholder  Matters and Issuer Purchases of Equity Securities |   |
| Item 6. – Selected Financial Data                                                                                                       |   |
| Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations                                   |   |
| Item 7A. – Quantitative and Qualitative Disclosure About Market Risk                                                                    |   |
| Item 8. – Financial Statements and Supplementary Data                                                                                   |   |
| Item 9. – Changes in and Disagreements With Accountants on Accounting and Financial Disclosures                                         |   |
| Item 9A. – Controls and Procedures                                                                                                      |   |
| Item 9B. – Other Information                                                                                                            |   |
| PART III                                                                                                                                      |   |
| Item 10. – Directors, Executive Officers and Corporate Governance                                                                       |   |
| Item 11. – Executive Compensation                                                                                                       |   |
| Item 12. – Security Ownership of Certain Beneficial  Owners and Management and Related Stockholder Matters                    |   |
| Item 13. – Certain Relationships and Related Transactions, and Director Independence                                                    |   |
| Item 14. – Principal Accountant Fees and Services                                                                                       |   |
| PART IV                                                                                                                                       |   |
| Item 15. – Exhibits and Financial Statement Schedules                                                                                   |   |
|                                                                                                                                          |   |
| SIGNATURES                                                                                                                                    |   |
|                                                                                                                                          |   |
| Exhibit 21-Subsidiaries of the Company                                                                                                        |   |
| Exhibit 23.1-Consent of BDO USA, LLP                                                                                                          |   |
| Exhibit 31.1-Certification of Chief Executive Officer                                                                                         |   |
| Exhibit 31.2-Certification of Chief Financial Officer                                                                                         |   |
| Exhibit 32- Certification of Chief Executive Officer and Chief Financial Officer                                                              |   |

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FORWARD-LOOKING 

PART I

ITEM 1. BUSINESS

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| Ø   | Carpenters Point Water Company – August 2007 acquisition of the Carpenters Point Water Company, which includes a 141 home community in Cecil County near the Interstate 95 growth corridor between Philadelphia and Baltimore and which has sufficient groundwater supply and elevated water storage to serve additional customers in the undeveloped portions of its franchise and surrounding area. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Ø   | Mountain Hill Water Company - August 2008 acquisition of Mountain Hill Water Company, which includes service rights to 8,000 acres of undeveloped land in Cecil County’s growth area.  Included in this Mountain Hill Service Area is the Principio Business Park, as well as the proposed 660 home residential development of Charlestown Crossing.  We currently serve three commercial accounts in the Principio Business Park.  On June 4, 2009, the Maryland Public Service Commission, or MDPSC, approved installation of a water main to serve residents of Whitaker Woods, an existing 172 home development located adjacent to the Mountain Hill Service Area.  As of December 31, 2010, 39 homes in Whitaker Woods were receiving water service.  On September 9, 2009, the MDPSC approved Artesian Water Maryland’s request to construct a water system to serve the first phase, consisting of 71 homes, in the Charlestown Crossing housing development. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Town of Port Deposit – November 2010 purchase of water assets, which includes access to the Susquehanna River as a source of water supply and water service rights for the service area that encompasses Port Deposit’s existing 280 customers and several adjacent tracts of land including the Bainbridge property, a 1,200-acre former U.S. Navy facility, which has the potential to be developed for 2,800 residential homes as well as office, commercial, and educational uses.  In December 2009, Artesian Water Maryland signed an agreement, or the Port Deposit Purchase Agreement, to purchase all of the assets used in providing potable water, water distribution and water meter services, or the Facilities, from Port Deposit.  On November 1, 2010, Artesian Water Maryland closed on this transaction.  Port Deposit transferred to Artesian Water Maryland all of Port Deposit’s right, title and interest in and to all of the plant and equipment, associated real property, contracts and permits possessed by Port Deposit at closing related to the operation of the Facilities as well as the water distribution, treatment and water meter systems possessed by Port Deposit or used in the operation of the Facilities.  Port Deposit also transferred to Artesian Water Maryland all rights to serve the customers within Port Deposit (which shall include Port Deposit as it currently exists as well as certain additional growth areas that may be added to Port Deposit in the future) and all rights to be served by all vendors and suppliers of Port Deposit.  Port Deposit shall collect and remit to Artesian Water Maryland its tariffed connection charges as approved by the MDPSC for new connections to the water system within Port Deposit.  Artesian Water Maryland also assumed certain liabilities arising as of and after the closing.  In addition, the Port Deposit Purchase Agreement includes a provision granting Port Deposit a right of first refusal in the event that Artesian Water Maryland ever wishes to sell all or part of the acquired assets, as well as a provision governing Artesian Water Maryland’s ability to raise rates between closing and March 31, 2013.  The total price for the purchased assets and access to the Susquehanna River as a source of water supply was $1,256,000.  Artesian Water Maryland paid $250,000 to Port Deposit, less $85,000 already paid as a deposit and $82,000 owed to Artesian Utility for operating the plant and equipment prior to closing.  Artesian Water Maryland also executed a promissory note in the amount of $800,000, or the Promissory Note.  In December 2010, the Promissory Note was paid in full.  In addition, Artesian Water Maryland paid off Port Deposit’s $206,000 loan from the Maryland Water Quality Financing Administration, or MWQFA.  The MDPSC approved this transaction on July 28, 2010, including the exercise of franchise agreements granted by Port Deposit and Cecil County, Maryland.  The existing water system consists of a water treatment facility, an existing 700,000 gallon per day Susquehanna River Water Appropriation Permit, a 500,000-gallon ground storage tank and water mains. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Cecil County Agreement - In October 2008, Artesian Water Maryland signed an agreement, or the Cecil County Purchase Agreement, to purchase from Cecil County all of Cecil County’s rights, title and interest in and to the Meadowview, Pine Hills, Harbourview and Route 7 water facilities and the associated parcels of real property, easement rights and water transmission and distribution systems at a price equal to the net asset value of the purchased assets, which was approximately $2.2 million as of June 30, 2008, and assume certain liabilities at closing.  This sum may be paid in cash at closing or, upon mutual agreement, by a note payable to Cecil County.  In response to the Cecil County Purchase Agreement, the Appleton Regional Community Alliance, or Appleton Alliance, filed a petition with The Circuit Court of Cecil County, Maryland, or Circuit Court, in opposition to the transactions on the grounds that Cecil County has no right to sell the assets involved in the transaction, which has delayed the closing.  The Circuit Court decided in favor of Cecil County on July 24, 2009.  On August 19, 2009, the Appleton Alliance filed an appeal of the Circuit Court’s decision with the Maryland Court of Special Appeals.  Upon the request of Cecil County, which was not opposed by the Appleton Alliance, the matter was moved to the state’s highest Court of Appeals, where it was heard on June 2, 2010.  The Court of Appeals decision is now pending.  Closing on this transaction is also subject to the approval of the MDPSC.  The Cecil County Purchase Agreement may be terminated by either party, subject to certain exceptions, in the event of uncured breach by the other party.  Upon the mutual agreement of the parties, the closing date has been extended to within six months after the final judicial determination by the Maryland Court of Appeals on the Appleton Alliance petition. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Ø   | Meadowview Wastewater Facility - In October 2008, Artesian Wastewater Maryland signed an agreement, or the Meadowview Agreement, to purchase the Meadowview Wastewater Facility and the Highlands Wastewater Facility and the associated parcels of real property, easement rights and wastewater collection systems with respect to each facility from Cecil County at a price equal to the net asset value of the purchased assets, which was approximately $7.8 million as of June 30, 2008, and assume certain liabilities at closing.  The majority of the purchase price shall be paid by Artesian Wastewater Maryland’s assumption of $7.2 million due by Cecil County under a tax-exempt Cecil County Sanitary District Bond, Series 2004B, or the Bond.  In the event that the net asset value of the purchased assets as of the closing exceeds the amount due under the Bond, then the positive difference (if any) shall be paid by Artesian Wastewater Maryland to Cecil County in cash at closing or, upon mutual agreement, by a note payable to Cecil County. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | Cherry Hill and Harbourview Wastewater Facilities - In October 2008, Artesian Wastewater Maryland signed an agreement, or the Cherry Hill Agreement, to purchase the Cherry Hill Wastewater Facility and the Harbourview Wastewater Facility and the associated parcels of real property, easement rights and wastewater collection systems with respect to each facility from Cecil County at a price equal to the net asset value of the purchased assets, which was approximately $3.8 million as of June 30, 2008, and assume certain liabilities at closing.  Cecil County shall immediately upon receipt of such payment, pay to its creditors an amount sufficient to pay all indebtedness of Cecil County in respect of the Cherry Hill and Harbourview Wastewater facilities, or the Indebtedness.  If the amount of the purchase price under the Cherry Hill Agreement is less than the Indebtedness, Cecil County will pay out of its own funds any amount sufficient to discharge in full the Indebtedness in excess of the purchase price. If the purchase price exceeds the amount of Indebtedness, the positive difference will be paid by Artesian Wastewater Maryland and may be financed through a note payable to Cecil County. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 1A. RISK FACTORS

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ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 2. PROPERTIES

| Utility plant comprises:              |   |                  |   |   |   |   |
|---------------------------------------|--------|-----------------------|--------|--------|--------|--------|
|  In thousands                    |   |                  |   |   |   |   |
|                                  |   | Estimated Useful Life |   |   |   |   |
|                                  |   | (In Years)            |   |   | 2010   |   |
| Utility plant at original cost        |   |                  |   |   |   |   |
| Utility plant in service-Water        |   |                  |   |   |   |   |
| Intangible plant                      |   |                  | ---    |   |   | $      | 140 |   |
| Source of supply plant                |   |                  | 45-85  |   |   |   | 16,422 |   |
| Pumping and water treatment plant     |   |                  | 35-62  |   |   |   | 57,168 |   |
| Transmission and distribution plant   |   |                  |   |   |   |   |   |   |
| Mains                                 |   |                  | 81     |   |   |   | 182,319 |   |
| Services                              |   |                  | 39     |   |   |   | 29,770 |   |
| Storage tanks                         |   |                  | 76     |   |   |   | 22,703 |   |
| Meters                                |   |                  | 26     |   |   |   | 17,208 |   |
| Hydrants                              |   |                  | 60     |   |   |   | 9,678 |   |
| General plant                         |   |                  | 3-31   |   |   |   | 42,645 |   |
|                                  |   |                  |   |   |   |   |   |   |
| Utility plant in service-Wastewater   |   |                  |   |   |   |   |   |   |
| Treatment and Disposal Plant          |   |                  | 35-62  |   |   |   | 11,611 |   |
| Collection Mains and Lift Stations    |   |                  | 81     |   |   |   | 4,944 |   |
| General plant                         |   |                  | 3-31   |   |   |   | 1,015 |   |
|                                  |   |                  |   |   |   |   |   |   |
| Property held for future use          |   |                  | ---    |   |   |   | 13,489 |   |
| Construction work in progress         |   |                  | ---    |   |   |   | 5,521 |   |
|                                  |   |                  |   |   |   |   | 414,633 |   |
| Less – accumulated depreciation |   |                  |   |   |   |   | 69,250 |   |
|                                  |   |                  |   |   |   | $      | 345,383 |   |

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ITEM 3. LEGAL PROCEEDINGS

ITEM 4. [RESERVED]

PART II

ITEM 5. MARKET FOR 

|           |   | High   |   |   | Low    |   |   | Dividend Per Share |   |
|----------------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|
| 2009           |   |   |   |   |   |   |   |               |   |
| First Quarter  |   | $      | 16.19  |   |   | $      | 12.95  |               |   | $ | 0.1784 |   |
| Second Quarter |   |   | 16.44  |   |   |   | 13.90  |               |   |   | 0.1784 |   |
| Third Quarter  |   |   | 17.83  |   |   |   | 16.06  |               |   |   | 0.1784 |   |
| Fourth Quarter |   |   | 18.61  |   |   |   | 15.65  |               |   |   | 0.1873 |   |
|           |   |   |   |   |   |   |   |               |   |   |   |   |
| 2010           |   |   |   |   |   |   |   |               |   |   |   |   |
| First Quarter  |   | $      | 18.62  |   |   | $      | 17.05  |               |   | $ | 0.1873 |   |
| Second Quarter |   |   | 19.33  |   |   |   | 16.61  |               |   |   | 0.1882 |   |
| Third Quarter  |   |   | 19.07  |   |   |   | 17.31  |               |   |   | 0.1882 |   |
| Fourth Quarter |   |   | 19.50  |   |   |   | 18.53  |               |   |   | 0.1892 |   |

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| Equity Compensation Plan Information                       |   |
|------------------------------------------------------------|--------|
| Plan category                                              |   | Number of securities to be issued upon exercise of outstanding options (a) |   |   | Weighted-average exercise price of outstanding options |   |   | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |   |
|                                                       |   |   |   |   |   |   |   |   |   |
| Equity compensation plans approved by security holders     |   |   | 440,800 |   |   | $ | 17.18 |   |   |   | 466,500 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity compensation plans not approved by security holders |   |   | --- |   |   |   | --- |   |   |   | --- |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                      |   |   | 440,800 |   |   |   |   |   |   |   | 466,500 |   |

|                           |        | INDEXED RETURNS          |
|--------------------------------|-------------|--------------------------|
|                           | Base Period | Years Ending December 31 |
| Company Name / Index           | 2005        | 2006                     | 2007 | 2008 | 2009 | 2010 |
| Artesian Resources Corporation | 100         | 102.78                   | 102.25 | 89.47 | 107.81 | 116.30 |
| S&P 500 Index              | 100         | 115.79                   | 122.16 | 76.96 | 97.33 | 111.99 |
| Peer Group                     | 100         | 100.30                   | 96.46 | 96.75 | 95.64 | 114.05 |

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ITEM 6. SELECTED FINANCIAL 

| In thousands, except per share and operating data |   | 2010   |   |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENT OF OPERATIONS DATA                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenues                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Water sales                                       |   | $      | 56,685 |   |   | $      | 53,871 |   |   | $      | 50,101 |   |   | $      | 48,461 |   |   | $ | 44,272 |   |
| Other utility operating revenue                   |   |   | 2,973  |   |   |   | 2,208  |   |   |   | 2,019  |   |   |   | 1,699  |   |   |   | 1,268 |   |
| Non-utility operating revenue                     |   |   | 5,227  |   |   |   | 4,833  |   |   |   | 4,065  |   |   |   | 2,364  |   |   |   | 1,725 |   |
| Sale of land                                      |   |   | ---    |   |   |   | ---    |   |   |   | ---    |   |   |   | ---    |   |   |   | 1,322 |   |
| Total operating revenues                          |   | $      | 64,885 |   |   | $      | 60,912 |   |   | $      | 56,185 |   |   | $      | 52,524 |   |   | $ | 48,587 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating and maintenance                         |   | $      | 34,714 |   |   | $      | 32,368 |   |   | $      | 30,871 |   |   | $      | 28,594 |   |   | $ | 25,733 |   |
| Depreciation and amortization                     |   |   | 7,032  |   |   |   | 6,556  |   |   |   | 5,782  |   |   |   | 5,162  |   |   |   | 4,610 |   |
| State and federal income taxes                    |   |   | 5,082  |   |   |   | 4,860  |   |   |   | 4,427  |   |   |   | 4,134  |   |   |   | 3,887 |   |
| Property and other taxes                          |   |   | 3,789  |   |   |   | 3,483  |   |   |   | 3,199  |   |   |   | 2,868  |   |   |   | 2,562 |   |
| Total operating expenses                          |   | $      | 50,617 |   |   | $      | 47,267 |   |   | $      | 44,279 |   |   | $      | 40,758 |   |   | $ | 36,792 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                  |   | $      | 14,268 |   |   | $      | 13,645 |   |   | $      | 11,906 |   |   | $      | 11,766 |   |   | $ | 11,795 |   |
| Other income, net                                 |   |   | 647    |   |   |   | 835    |   |   |   | 1,125  |   |   |   | 802    |   |   |   | 613 |   |
| Total income before interest charges              |   | $      | 14,915 |   |   | $      | 14,480 |   |   | $      | 13,031 |   |   | $      | 12,568 |   |   | $ | 12,408 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest charges                                  |   | $      | 7,295  |   |   | $      | 7,218  |   |   | $      | 6,613  |   |   | $      | 6,305  |   |   | $ | 6,337 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                        |   | $      | 7,620  |   |   | $      | 7,262  |   |   | $      | 6,418  |   |   | $      | 6,263  |   |   | $ | 6,071 |   |
| Dividends on preferred stock                      |   |   | ---    |   |   |   | ---    |   |   |   | ---    |   |   |   | ---    |   |   |   | --- |   |
| Net income applicable to common stock             |   | $      | 7,620  |   |   | $      | 7,262  |   |   | $      | 6,418  |   |   | $      | 6,263  |   |   | $ | 6,071 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income per share of common stock:             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                             |   | $      | 1.01   |   |   | $      | 0.97   |   |   | $      | 0.87   |   |   | $      | 0.92   |   |   | $ | 1.00 |   |
| Diluted                                           |   | $      | 1.00   |   |   | $      | 0.97   |   |   | $      | 0.86   |   |   | $      | 0.90   |   |   | $ | 0.97 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Avg. shares of common stock outstanding           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                             |   |   | 7,557  |   |   |   | 7,454  |   |   |   | 7,353  |   |   |   | 6,787  |   |   |   | 6,055 |   |
| Diluted                                           |   |   | 7,618  |   |   |   | 7,512  |   |   |   | 7,427  |   |   |   | 6,936  |   |   |   | 6,235 |   |
| Cash dividends per share of common stock          |   | $      | 0.75   |   |   | $      | 0.72   |   |   | $      | 0.71   |   |   | $      | 0.66   |   |   | $ | 0.61 |   |

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| In thousands, except per share and operating data |   | 2010   |    |   | 2009   |   |    | 2008   |   |   | 2007    |   |   | 2006   |    |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| BALANCE SHEET DATA                                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Utility plant, at original cost                   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| less accumulated depreciation                     |   | $      | 345,383 |   |   | $      | 326,899 |   |   | $      | 318,243 |   |   | $      | 272,396 |   |   | $ | 253,182 |   |
| Total assets                                      |   | $      | 371,529 |   |   | $      | 358,895 |   |   | $      | 348,706 |   |   | $      | 294,589 |   |   | $ | 269,360 |   |
| Lines of credit                                   |   | $      | 29,071  |   |   | $      | 25,123  |   |   | $      | 20,286  |   |   | $      | 898     |   |   | $ | 7,906 |   |
| Long-term obligations and                         |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| redeemable preferred stock,                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| including current portions                        |   | $      | 106,606 |   |   | $      | 107,555 |   |   | $      | 109,071 |   |   | $      | 92,073  |   |   | $ | 92,383 |   |
| Stockholders’ equity                        |   | $      | 95,146  |   |   | $      | 91,174  |   |   | $      | 87,794  |   |   | $      | 85,132  |   |   | $ | 61,800 |   |
| Total capitalization                              |   | $      | 200,207 |   |   | $      | 197,199 |   |   | $      | 195,349 |   |   | $      | 176,889 |   |   | $ | 153,873 |   |

| OPERATING DATA                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Average water sales per customer   |   | $      | 723    |   |   | $      | 701    |   |   | $      | 661    |   |   | $      | 645    |   |   | $ | 600 |   |
| Water pumped (millions of gallons) |   |   | 7,517  |   |   |   | 7,063  |   |   |   | 7,526  |   |   |   | 7,755  |   |   |   | 7,608 |   |
| Number of metered customers        |   |   | 78,400 |   |   |   | 76,900 |   |   |   | 75,800 |   |   |   | 75,149 |   |   |   | 73,814 |   |
| Miles of water main                |   |   | 1,131  |   |   |   | 1,124  |   |   |   | 1,112  |   |   |   | 1,086  |   |   |   | 1,051 |   |

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ITEM 7. MANAGEMENT'S 

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| Percentage of Operating Revenues |   |   |   |   |   |   |   |   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                             |   | 2010   |   |   | 2009   |   |   | 2008   |   |
| Water Sales                      |   |   |   |   |   |   |   |   |   |
| Residential                      |   |   | 54.0   | %      |   |   | 54.2   | %      |   |   | 55.3 | % |
| Commercial                       |   |   | 20.6   |   |   |   | 21.3   |   |   |   | 21.4 |   |
| Industrial                       |   |   | 0.2    |   |   |   | 0.3    |   |   |   | 0.5 |   |
| Government and Other             |   |   | 12.6   |   |   |   | 12.7   |   |   |   | 12.0 |   |
| Non-utility operating revenues   |   |   | 8.1    |   |   |   | 7.9    |   |   |   | 7.2 |   |
| Other utility operating revenues |   |   | 4.5    |   |   |   | 3.6    |   |   |   | 3.6 |   |
| Total                            |   |   | 100.0  | %      |   |   | 100.0  | %      |   |   | 100.0 | % |

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| Percentage of Operating and Maintenance Expenses |   |   |   |   |   |   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                             |   | 2010   |   |   | 2009   |   |   | 2008 |   |
|                                             |   |   |   |   |   |   |   |   |   |
| Payroll and Associated Expenses                  |   |   | 46.9   | %      |   |   | 46.7   | % |   |   | 46.8 | % |
| Administrative                                   |   |   | 21.0   |   |   |   | 22.6   |   |   |   | 24.1 |   |
| Purchased Water                                  |   |   | 10.5   |   |   |   | 10.0   |   |   |   | 9.6 |   |
| Repair and Maintenance                           |   |   | 6.7    |   |   |   | 6.1    |   |   |   | 7.2 |   |
| Water Treatment                                  |   |   | 4.0    |   |   |   | 4.1    |   |   |   | 3.4 |   |
| Non-utility Operating                            |   |   | 10.9   |   |   |   | 10.5   |   |   |   | 8.9 |   |
| Total                                            |   |   | 100.0  | %      |   |   | 100.0  | % |   |   | 100.0 | % |

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|                                                |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| In thousands                                        |   | 2010   |   |   | 2009   |   |   | 2008   |   |
| Source of supply                                    |   | $      | 976    |   |   | $      | 295    |   |   | $ | 1,665 |   |
| Treatment and pumping                               |   |   | 1,095  |   |   |   | 1,044  |   |   |   | 6,094 |   |
| Transmission and distribution                       |   |   | 9,089  |   |   |   | 8,023  |   |   |   | 13,381 |   |
| General plant and equipment                         |   |   | 4,811  |   |   |   | 5,118  |   |   |   | 13,980 |   |
| Developer financed utility plant                    |   |   | 1,633  |   |   |   | 1,584  |   |   |   | 3,178 |   |
| Wastewater facilities (including NSRWRC)            |   |   | 2,210  |   |   |   | 1,739  |   |   |   | 7,518 |   |
| Allowance for Funds Used During Construction, AFUDC |   |   | (183   | )      |   |   | (413   | )      |   |   | (759 | ) |
| Total                                               |   | $      | 19,631 |   |   | $      | 17,390 |   |   | $ | 45,057 |   |
|                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Mountain Hill                                       |   |   | ---    |   |   |   | ---    |   |   | $ | 4,772 |   |

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| Line of Credit Commitments |   | Commitment Due by Period |   |
|----------------------------|--------|--------------------------|--------|
|   In thousands   |   | Less than1 Year          |   |   | 1-3 Years |   |   | 4-5 Years |   |   | Over 5 Years |   |
| Lines of Credit            |   | $                        | 29,071 |   |   | $ | ----- |   |   | $ | ----- |   |   | $ | ----- |   |

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| Contractual Obligations                       |   | Payments Due by Period |   |
|-----------------------------------------------|--------|------------------------|--------|
| In thousands                                  |   | Less than1 Year   |   |   | 1-3Years |   |   | 4-5Years |   |   | After 5Years |   |   | Total |   |
| First Mortgage Bonds (Principal and Interest) |   | $                      | 7,067  |   |   | $ | 14,022 |   |   | $ | 13,847 |   |   | $ | 154,594 |   |   | $ | 189,530 |   |
| State revolving fund loans                    |   |                   | 610    |   |   |   | 1,260 |   |   |   | 1,260 |   |   |   | 4,923 |   |   |   | 8,053 |   |
| Note Payable (Principal and Interest)         |   |                   | 591    |   |   |   | 580 |   |   |   | --- |   |   |   | --- |   |   |   | 1,171 |   |
| Operating leases                              |   |                   | 64     |   |   |   | 92 |   |   |   | 96 |   |   |   | 1,638 |   |   |   | 1,890 |   |
| Unconditional purchase obligations            |   |                   | 3,770  |   |   |   | 7,549 |   |   |   | 7,539 |   |   |   | 22,638 |   |   |   | 41,496 |   |
| Tank painting contractual obligation          |   |                   | 312    |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | 312 |   |
| Total contractual cash obligations            |   | $                      | 12,414 |   |   | $ | 23,503 |   |   | $ | 22,742 |   |   | $ | 183,793 |   |   | $ | 242,452 |   |

Note 17

ITEM 7A. QUANTITATIVE 

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ITEM 8. FINANCIAL STATEMENTS 

| CONSOLIDATED BALANCE SHEETS                                                       |   |
|-----------------------------------------------------------------------------------|--------|
| (In thousands)                                                                    |   |
| ASSETS                                                                            |   | December 31, 2010 |   |   | December 31, 2009 |   |
| Utility plant, at original cost less accumulated depreciation                     |   | $ | 345,383 |   |   | $ | 326,899 |   |
| Current assets                                                                    |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                         |   |   | 179 |   |   |   | 474 |   |
| Accounts receivable (less allowance for doubtful accounts 2010 - $230; 2009-$142) |   |   | 5,094 |   |   |   | 5,505 |   |
| Unbilled operating revenues                                                       |   |   | 3,614 |   |   |   | 3,518 |   |
| Materials and supplies                                                            |   |   | 1,246 |   |   |   | 1,220 |   |
| Prepaid property taxes                                                            |   |   | 1,260 |   |   |   | 1,222 |   |
| Prepaid expenses and other                                                        |   |   | 2,640 |   |   |   | 1,304 |   |
| Total current assets                                                              |   |   | 14,033 |   |   |   | 13,243 |   |
| Other assets                                                                      |   |   |   |   |   |   |   |   |
| Non-utility property (less accumulated depreciation 2010-$377; 2009-$255)         |   |   | 4,480 |   |   |   | 11,241 |   |
| Other deferred assets                                                             |   |   | 5,023 |   |   |   | 4,994 |   |
| Total other assets                                                                |   |   | 9,503 |   |   |   | 16,235 |   |
| Regulatory assets, net                                                            |   |   | 2,610 |   |   |   | 2,518 |   |
|                                                                              |   | $ | 371,529 |   |   | $ | 358,895 |   |
|                                                                              |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                              |   |   |   |   |   |   |   |   |
| Stockholders' equity                                                              |   |   |   |   |   |   |   |   |
| Common stock                                                                      |   | $ | 7,637 |   |   | $ | 7,507 |   |
| Preferred stock                                                                   |   |   | --- |   |   |   | --- |   |
| Additional paid-in capital                                                        |   |   | 69,989 |   |   |   | 68,090 |   |
| Retained earnings                                                                 |   |   | 17,520 |   |   |   | 15,577 |   |
| Total stockholders' equity                                                        |   |   | 95,146 |   |   |   | 91,174 |   |
| Long-term debt, net of current portion                                            |   |   | 105,061 |   |   |   | 106,025 |   |
|                                                                              |   |   | 200,207 |   |   |   | 197,199 |   |
| Current liabilities                                                               |   |   |   |   |   |   |   |   |
| Lines of credit                                                                   |   |   | 29,071 |   |   |   | 25,123 |   |
| Current portion of long-term debt                                                 |   |   | 1,545 |   |   |   | 1,530 |   |
| Accounts payable                                                                  |   |   | 3,401 |   |   |   | 3,696 |   |
| Accrued expenses                                                                  |   |   | 2,126 |   |   |   | 685 |   |
| Overdraft payable                                                                 |   |   | 740 |   |   |   | 1,026 |   |
| Deferred income taxes                                                             |   |   | 459 |   |   |   | 439 |   |
| Accrued interest                                                                  |   |   | 1,189 |   |   |   | 1,361 |   |
| Customer deposits                                                                 |   |   | 805 |   |   |   | 592 |   |
| Other                                                                             |   |   | 2,549 |   |   |   | 2,069 |   |
| Total current liabilities                                                         |   |   | 41,885 |   |   |   | 36,521 |   |
|                                                                              |   |   |   |   |   |   |   |   |
| Commitments and contingencies (Note 10)                                           |   |   | --- |   |   |   | --- |   |
|                                                                              |   |   |   |   |   |   |   |   |
| Deferred credits and other liabilities                                            |   |   |   |   |   |   |   |   |
| Net advances for construction                                                     |   |   | 16,159 |   |   |   | 18,433 |   |
| Postretirement benefit obligation                                                 |   |   | 525 |   |   |   | 737 |   |
| Deferred investment tax credits                                                   |   |   | 664 |   |   |   | 685 |   |
| Deferred income taxes                                                             |   |   | 37,558 |   |   |   | 34,077 |   |
| Total deferred credits and other liabilities                                      |   |   | 54,906 |   |   |   | 53,932 |   |
|                                                                              |   |   |   |   |   |   |   |   |
| Net contributions in aid of construction                                          |   |   | 74,531 |   |   |   | 71,243 |   |
|                                                                              |   | $ | 371,529 |   |   | $ | 358,895 |   |

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| CONSOLIDATED STATEMENTS OF OPERATIONS                |   |
|------------------------------------------------------|--------|
| In thousands, except per share amounts               |   |
|                                                 |   | For the Year Ended December 31, |   |
|                                                 |   | 2010 |   |   | 2009 |   |   | 2008 |   |
|                                                 |   |   |   |   |   |   |   |   |   |
| Operating revenues                                   |   |   |   |   |   |   |   |   |   |
| Water sales                                          |   | $ | 56,685 |   |   | $ | 53,871 |   |   | $ | 50,101 |   |
| Other utility operating revenue                      |   |   | 2,973 |   |   |   | 2,208 |   |   |   | 2,019 |   |
| Non-utility operating revenue                        |   |   | 5,227 |   |   |   | 4,833 |   |   |   | 4,065 |   |
|                                                 |   |   | 64,885 |   |   |   | 60,912 |   |   |   | 56,185 |   |
| Operating expenses                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility operating expenses                           |   |   | 30,934 |   |   |   | 28,965 |   |   |   | 28,154 |   |
| Non-utility operating expenses                       |   |   | 3,780 |   |   |   | 3,403 |   |   |   | 2,717 |   |
| Depreciation and amortization                        |   |   | 7,032 |   |   |   | 6,556 |   |   |   | 5,782 |   |
| Taxes                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| State and federal income                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                                              |   |   | 950 |   |   |   | 116 |   |   |   | 74 |   |
| Deferred                                             |   |   | 4,132 |   |   |   | 4,744 |   |   |   | 4,353 |   |
| Property and other                                   |   |   | 3,789 |   |   |   | 3,483 |   |   |   | 3,199 |   |
|                                                 |   |   | 50,617 |   |   |   | 47,267 |   |   |   | 44,279 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                     |   |   | 14,268 |   |   |   | 13,645 |   |   |   | 11,906 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income, net                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for funds used during construction (AFUDC) |   |   | 183 |   |   |   | 413 |   |   |   | 759 |   |
| Miscellaneous                                        |   |   | 464 |   |   |   | 422 |   |   |   | 366 |   |
|                                                 |   |   | 647 |   |   |   | 835 |   |   |   | 1,125 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before interest charges                       |   |   | 14,915 |   |   |   | 14,480 |   |   |   | 13,031 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest charges                                     |   |   | 7,295 |   |   |   | 7,218 |   |   |   | 6,613 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income applicable to common stock                |   | $ | 7,620 |   |   | $ | 7,262 |   |   | $ | 6,418 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Income per common share:                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                |   | $ | 1.01 |   |   | $ | 0.97 |   |   | $ | 0.87 |   |
| Diluted                                              |   | $ | 1.00 |   |   | $ | 0.97 |   |   | $ | 0.86 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding:          |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                |   |   | 7,557 |   |   |   | 7,454 |   |   |   | 7,353 |   |
| Diluted                                              |   |   | 7,618 |   |   |   | 7,512 |   |   |   | 7,427 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends per share of common stock             |   | $ | 0.7529 |   |   | $ | 0.7225 |   |   | $ | 0.7136 |   |

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| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                |   |
|----------------------------------------------------------------------------------------------------------------------|--------|
| In thousands                                                                                                         |   | For the Year Ended December 31, |   |
|                                                                                                                 |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                                 |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                           |   | $ | 7,620 |   |   | $ | 7,262 |   |   | $ | 6,418 |   |
| Adjustments to reconcile net income to net cash  provided by operating activities:                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                                        |   |   | 7,032 |   |   |   | 6,556 |   |   |   | 5,782 |   |
| Deferred income taxes, net                                                                                           |   |   | 3,480 |   |   |   | 4,600 |   |   |   | 4,390 |   |
| Stock compensation                                                                                                   |   |   | 111 |   |   |   | 98 |   |   |   | 122 |   |
| Allowance for funds used during construction                                                                         |   |   | (183 | ) |   |   | (413 | ) |   |   | (759 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in assets and liabilities:                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts receivable, net of reserve for bad debts                                                                    |   |   | 290 |   |   |   | (603 | ) |   |   | 1,275 |   |
| Unbilled operating revenues                                                                                          |   |   | (96 | ) |   |   | 79 |   |   |   | (399 | ) |
| Materials and supplies                                                                                               |   |   | (26 | ) |   |   | (73 | ) |   |   | 45 |   |
| Prepaid property taxes                                                                                               |   |   | (38 | ) |   |   | (103 | ) |   |   | (61 | ) |
| Prepaid expenses and other                                                                                           |   |   | (1,336 | ) |   |   | (813 | ) |   |   | 366 |   |
| Other deferred assets                                                                                                |   |   | (111 | ) |   |   | (159 | ) |   |   | (836 | ) |
| Regulatory assets                                                                                                    |   |   | (92 | ) |   |   | 45 |   |   |   | (882 | ) |
| Accounts payable                                                                                                     |   |   | (295 | ) |   |   | (860 | ) |   |   | 1,331 |   |
| Accrued expenses                                                                                                     |   |   | 1,441 |   |   |   | (2,183 | ) |   |   | 385 |   |
| Accrued interest                                                                                                     |   |   | (172 | ) |   |   | 110 |   |   |   | 925 |   |
| Customer deposits and other, net                                                                                     |   |   | 693 |   |   |   | (92 | ) |   |   | 129 |   |
| Postretirement benefit obligation                                                                                    |   |   | (212 | ) |   |   | (75 | ) |   |   | (56 | ) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES                                                                            |   |   | 18,106 |   |   |   | 13,376 |   |   |   | 18,175 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS USED IN INVESTING ACTIVITIES                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures (net of AFUDC)                                                                                  |   |   | (19,631 | ) |   |   | (17,390 | ) |   |   | (45,057 | ) |
| Investments in acquisitions                                                                                          |   |   | --- |   |   |   | --- |   |   |   | (4,772 | ) |
| Proceeds from sale of assets                                                                                         |   |   | 61 |   |   |   | 43 |   |   |   | 62 |   |
| NET CASH USED IN INVESTING ACTIVITIES                                                                                |   |   | (19,570 | ) |   |   | (17,347 | ) |   |   | (49,767 | ) |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net borrowings under lines of credit agreements                                                                      |   |   | 3,948 |   |   |   | 4,837 |   |   |   | 19,388 |   |
| (Decrease) increase in overdraft payable                                                                             |   |   | (286 | ) |   |   | 242 |   |   |   | (888 | ) |
| Net advances and contributions in aid of construction                                                                |   |   | 2,179 |   |   |   | 1,854 |   |   |   | 2,667 |   |
| Increase in deferred debt issuance costs                                                                             |   |   | 36 |   |   |   | 114 |   |   |   | 1 |   |
| Net proceeds from issuance of common stock                                                                           |   |   | 1,918 |   |   |   | 1,399 |   |   |   | 1,314 |   |
| Dividends                                                                                                            |   |   | (5,677 | ) |   |   | (5,379 | ) |   |   | (5,193 | ) |
| Issuance of long-term debt                                                                                           |   |   | --- |   |   |   | --- |   |   |   | 15,000 |   |
| Principal repayments of long-term debt                                                                               |   |   | (949 | ) |   |   | (1,516 | ) |   |   | (323 | ) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                                                            |   |   | 1,169 |   |   |   | 1,551 |   |   |   | 31,966 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                                                 |   |   | (295 | ) |   |   | (2,420 | ) |   |   | 374 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                                                       |   |   | 474 |   |   |   | 2,894 |   |   |   | 2,520 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS AT END OF YEAR                                                                             |   | $ | 179 |   |   | $ | 474 |   |   | $ | 2,894 |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information:                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility plant received as construction advances and contributions                                                    |   | $ | 376 |   |   | $ | 845 |   |   | $ | 7,101 |   |
| Contractual amounts of contributions in aid of construction due from developers included in accounts receivable      |   | $ | 509 |   |   | $ | 678 |   |   | $ | --- |   |
| Contractual amounts of contributions in aid of construction received from developers included in accounts receivable |   | $ | 630 |   |   | $ | --- |   |   | $ | --- |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |

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| CONSOLIDATED STATEMENTS OF CASH FLOWS CONTINUED                          |   |
|--------------------------------------------------------------------------|--------|
| In thousands                                                             |   | For the Year Ended December 31, |   |
|                                                                     |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Artesian Water Maryland, Inc. acquired all the outstanding               |   |   |   |   |   |   |   |   |   |
| membership interests of Mountain Hill Water Company, LLC                 |   |   |   |   |   |   |   |   |   |
| in August 2008 for approximately $7.1 million.  In conjunction |   |   |   |   |   |   |   |   |   |
| with the acquisition, liabilities were assumed as follows:               |   |   |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |
| Fair value of assets acquired                                            |   | $ | --- |   |   | $ | --- |   |   | $ | 7,093 |   |
| Cash paid for membership interests                                       |   |   | --- |   |   |   | --- |   |   |   | (4,772 | ) |
| Liabilities assumed                                                      |   | $ | --- |   |   | $ | --- |   |   | $ | 2,321 |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information:                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest paid                                                            |   | $ | 7,467 |   |   | $ | 7,107 |   |   | $ | 5,576 |   |
| Income taxes paid                                                        |   | $ | 1,942 |   |   | $ | 350 |   |   | $ | --- |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |

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STATEMENTS OF CHANGES 

|                                 |   | Common Shares Outstanding Class A Non-Voting (1) (3) (4) |   |   | Common Shares Outstanding Class B Voting (2) |   |   | $1 Par Value Class A Non-Voting |   |   | $1 Par Value Class B Voting |   |   | Additional Paid-in Capital |   |   | Retained Earnings |   |   | Total  |   |
|--------------------------------------|--------|----------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|---------------------------------|--------|--------|-----------------------------|--------|--------|----------------------------|--------|--------|-------------------|--------|--------|--------|--------|
|                                 |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |
| Balance as of December 31, 2007      |   |                                                     | 6,418  |   |                                         |   | 882    |                            |   | $      | 6,418                       |   |   | $                          | 882    |   |              | $      | 65,363 |   |   | $ | 12,469 |   |   | $ | 85,132 |   |
|                                 |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net income                           |   |                                                     | ---    |   |                                         |   | ---    |                            |   |   | ---                         |   |   |                       | ---    |   |              |   | ---    |   |   |   | 6,418 |   |   |   | 6,418 |   |
| Cash dividends declared              |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Common stock                         |   |                                                     | ---    |   |                                         |   | ---    |                            |   |   | ---                         |   |   |                       | ---    |   |              |   | ---    |   |   |   | (5,193 | ) |   |   | (5,193 | ) |
| Issuance of common stock             |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Dividend reinvestment plan           |   |                                                     | 18     |   |                                         |   | ---    |                            |   |   | 18                          |   |   |                       | ---    |   |              |   | 299    |   |   |   | --- |   |   |   | 317 |   |
| Employee stock options and awards(4) |   |                                                     | 60     |   |                                         |   | ---    |                            |   |   | 60                          |   |   |                       | ---    |   |              |   | 674    |   |   |   | --- |   |   |   | 734 |   |
| Employee Retirement Plan(3)          |   |                                                     | 23     |   |                                         |   | ---    |                            |   |   | 23                          |   |   |                       | ---    |   |              |   | 363    |   |   |   | --- |   |   |   | 386 |   |
| Balance as of December 31, 2008      |   |                                                     | 6,519  |   |                                         |   | 882    |                            |   | $      | 6,519                       |   |   | $                          | 882    |   |              | $      | 66,699 |   |   | $ | 13,694 |   |   | $ | 87,794 |   |
|                                 |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net income                           |   |                                                     | ---    |   |                                         |   | ---    |                            |   |   | ---                         |   |   |                       | ---    |   |              |   | ---    |   |   |   | 7,262 |   |   |   | 7,262 |   |
| Cash dividends declared              |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Common stock                         |   |                                                     | ---    |   |                                         |   | ---    |                            |   |   | ---                         |   |   |                       | ---    |   |              |   | ---    |   |   |   | (5,379 | ) |   |   | (5,379 | ) |
| Issuance of common stock             |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Dividend reinvestment plan           |   |                                                     | 19     |   |                                         |   | ---    |                            |   |   | 19                          |   |   |                       | ---    |   |              |   | 289    |   |   |   | --- |   |   |   | 308 |   |
| Employee stock options and awards(4) |   |                                                     | 65     |   |                                         |   | ---    |                            |   |   | 65                          |   |   |                       | ---    |   |              |   | 772    |   |   |   | --- |   |   |   | 837 |   |
| Employee Retirement Plan(3)          |   |                                                     | 22     |   |                                         |   | ---    |                            |   |   | 22                          |   |   |                       | ---    |   |              |   | 330    |   |   |   | --- |   |   |   | 352 |   |
| Balance as of December 31, 2009      |   |                                                     | 6,625  |   |                                         |   | 882    |                            |   | $      | 6,625                       |   |   | $                          | 882    |   |              | $      | 68,090 |   |   | $ | 15,577 |   |   | $ | 91,174 |   |
|                                 |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net income                           |   |                                                     | ---    |   |                                         |   | ---    |                            |   |   | ---                         |   |   |                       | ---    |   |              |   | ---    |   |   |   | 7,620 |   |   |   | 7,620 |   |
| Cash dividends declared              |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Common stock                         |   |                                                     | ---    |   |                                         |   | ---    |                            |   |   | ---                         |   |   |                       | ---    |   |              |   | ---    |   |   |   | (5,677 | ) |   |   | (5,677 | ) |
| Issuance of common stock             |   |                                                     |   |   |                                         |   |   |                            |   |   |                        |   |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Dividend reinvestment plan           |   |                                                     | 18     |   |                                         |   | ---    |                            |   |   | 18                          |   |   |                       | ---    |   |              |   | 310    |   |   |   | --- |   |   |   | 328 |   |
| Employee stock options and awards(4) |   |                                                     | 91     |   |                                         |   | ---    |                            |   |   | 91                          |   |   |                       | ---    |   |              |   | 1,231  |   |   |   | --- |   |   |   | 1,322 |   |
| Employee Retirement Plan(3)          |   |                                                     | 21     |   |                                         |   | ---    |                            |   |   | 21                          |   |   |                       | ---    |   |              |   | 358    |   |   |   | --- |   |   |   | 379 |   |
| Balance as of December 31, 2010      |   |                                                     | 6,755  |   |                                         |   | 882    |                            |   | $      | 6,755                       |   |   | $                          | 882    |   |              | $      | 69,989 |   |   | $ | 17,520 |   |   | $ | 95,146 |   |

| (1)    | At December 31, 2010, 2009, and 2008, Class A Non-Voting Common Stock had 15,000,000 shares authorized.  For the same periods, shares issued were 6,779,878, 6,650,002 and 6,543,606, respectively.                                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)    | At December 31, 2010, 2009, and 2008, Class B Common Stock had 1,040,000 shares authorized and 882,000 shares issued.                                                                                                                                                                                                                                   |
| (3)    | Artesian Resources Corporation registered 500,000 shares of Class A Non-Voting Common Stock available for purchase through the Artesian Retirement Plan and the Artesian Supplemental Retirement Plan.                                                                                                                                                  |
| (4)    | Under the Equity Compensation Plan, effective May 25, 2005 Artesian Resources Corporation authorized up to 500,000 shares of Class A Non-Voting Common Stock for issuance of grants in forms of stock options, stock units, dividend equivalents and other stock-based awards, subject to adjustment in certain circumstances as discussed in the Plan. |
|   |                                                                                                                                                                                                                                                                                                                                                    |

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NOTES TO THE CONSOLIDATED 

NOTE 1

Note 11 - Northern Sussex Regional Water Recycling Complex, LLC

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| Utility plant comprises:              |   |                             |   |   |         |   |
|---------------------------------------|--------|----------------------------------|--------|--------|--------------|--------|
| In thousands                          |   |                             |   |   |         |   |
|                                  |   |                             |   |   | December 31, |   |
|                                  |   | Estimated Useful Life (In Years) |   |   | 2010         |   |   | 2009 |   |
| Utility plant at original cost        |   |                             |   |   |         |   |   |   |   |
| Utility plant in service-Water        |   |                             |   |   |         |   |   |   |   |
| Intangible plant                      |   |                             | ---    |   |         | $      | 140 |   |   | $ | 140 |   |
| Source of supply plant                |   |                             | 45-85  |   |         |   | 16,422 |   |   |   | 16,327 |   |
| Pumping and water treatment plant     |   |                             | 35-62  |   |         |   | 57,168 |   |   |   | 55,995 |   |
| Transmission and distribution plant   |   |                             |   |   |         |   |   |   |   |   |   |   |
| Mains                                 |   |                             | 81     |   |         |   | 182,319 |   |   |   | 175,164 |   |
| Services                              |   |                             | 39     |   |         |   | 29,770 |   |   |   | 28,533 |   |
| Storage tanks                         |   |                             | 76     |   |         |   | 22,703 |   |   |   | 22,237 |   |
| Meters                                |   |                             | 26     |   |         |   | 17,208 |   |   |   | 14,766 |   |
| Hydrants                              |   |                             | 60     |   |         |   | 9,678 |   |   |   | 9,283 |   |
| General plant                         |   |                             | 3-31   |   |         |   | 42,645 |   |   |   | 43,716 |   |
|                                  |   |                             |   |   |         |   |   |   |   |   |   |   |
| Utility plant in service-Wastewater   |   |                             |   |   |         |   |   |   |   |   |   |   |
| Treatment and Disposal Plant          |   |                             | 35-62  |   |         |   | 11,611 |   |   |   | 11,495 |   |
| Collection Mains & Lift Stations  |   |                             | 81     |   |         |   | 4,944 |   |   |   | 4,575 |   |
| General plant                         |   |                             | 3-31   |   |         |   | 1,015 |   |   |   | 929 |   |
|                                  |   |                             |   |   |         |   |   |   |   |   |   |   |
| Property held for future use          |   |                             | ---    |   |         |   | 13,489 |   |   |   | 1,932 |   |
| Construction work in progress         |   |                             | ---    |   |         |   | 5,521 |   |   |   | 6,457 |   |
|                                  |   |                             |   |   |         |   | 414,633 |   |   |   | 391,549 |   |
| Less – accumulated depreciation |   |                             |   |   |         |   | 69,250 |   |   |   | 64,650 |   |
|                                  |   |                             |   |   |         | $      | 345,383 |   |   | $ | 326,899 |   |

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| In thousands                                      |   | 2010   |   |   | 2009   |   |
|---------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                              |   |   |   |   |   |   |
| Postretirement benefit obligation                 |   | $      | 637    |   |   | $      | 849 |   |
| Deferred income taxes recoverable in future rates |   |   | 521    |   |   |   | 536 |   |
| Goodwill                                          |   |   | 355    |   |   |   | 363 |   |
| Deferred acquisition costs                        |   |   | 1,009  |   |   |   | 542 |   |
| Expense of rate and regulatory proceedings        |   |   | 88     |   |   |   | 228 |   |
|                                              |   | $      | 2,610  |   |   | $      | 2,518 |   |

| In thousands          |   | 2010   |   |   | 2009   |   |
|-----------------------|--------|--------|--------|--------|--------|--------|
|                  |   |   |   |   |   |   |
| Debt issuance cost    |   | $      | 2,300  |   |   | $      | 2,356 |   |
| Investment in Co-Bank |   |   | 2,067  |   |   |   | 1,840 |   |
| Other                 |   |   | 656    |   |   |   | 798 |   |
|                  |   | $      | 5,023  |   |   | $      | 4,994 |   |

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Note 8 “Stock Compensation Plans”

|                    |   | 2010   |   | 2009   |   | 2008   |
|-------------------------|--------|--------|--------|--------|--------|--------|
| Dividend Yield          |   |   | 4.2    |   | %      |   |   | 4.5 |   | % |   |   | 3.6 |   | % |
| Expected Volatility     |   |   | .27    |   |   |   |   | .26 |   |   |   |   | .25 |   |   |
| Risk Free Interest Rate |   |   | 3.38   |   | %      |   |   | 2.81 |   | % |   |   | 3.45 |   | % |
| Expected Term           |   |   | 8.97   |   | years  |   |   | 7.06 |   | years |   |   | 6.93 |   | years |
|                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                       |   | December 31, |   |
|--------------------------------------------|--------|--------------|--------|
| In thousands                               |   | 2010         |   |   | 2009 |   |   | 2008 |   |
|                                       |   |         |   |   |   |   |   |   |   |
| Customer accounts receivable – water |   | $            | 3,161  |   |   | $ | 3,039 |   |   | $ | 2,637 |   |
| Other                                      |   |         | 2,163  |   |   |   | 2,608 |   |   |   | 1,693 |   |
|                                       |   |         | 5,324  |   |   |   | 5,647 |   |   |   | 4,330 |   |
| Less allowance for doubtful accounts       |   |         | 230    |   |   |   | 142 |   |   |   | 106 |   |
| Net accounts receivable                    |   | $            | 5,094  |   |   | $ | 5,505 |   |   | $ | 4,224 |   |
|                                       |   |         |   |   |   |   |   |   |   |   |   |   |

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|                                |   | December 31, |   |
|-------------------------------------|--------|--------------|--------|
| In thousands                        |   | 2010         |   |   | 2009 |   |   | 2008 |   |
|                                |   |         |   |   |   |   |   |   |   |
| Beginning balance                   |   | $            | 142    |   |   | $ | 106 |   |   | $ | 283 |   |
| Allowance adjustments               |   |         | 370    |   |   |   | 291 |   |   |   | 221 |   |
| Recoveries                          |   |         | 78     |   |   |   | 74 |   |   |   | 35 |   |
| Write off of uncollectible accounts |   |         | (360   | ) |   |   | (329 | ) |   |   | (433 | ) |
| Ending balance                      |   | $            | 230    |   |   | $ | 142 |   |   | $ | 106 |   |
|                                |   |         |   |   |   |   |   |   |   |   |   |   |

| In thousands         | December 31, |   |
|----------------------|--------------|--------|
|                 | 2010         |   | 2009 |   |
| Carrying amount      |         | $      | 105,061 |   |   | $ | 106,025 |   |
| Estimated fair value |         |   | 111,679 |   |   |   | 103,650 |   |
|                 |         |   |   |   |   |   |   |   |

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| Components of Income Tax Expense |                            |   |
|----------------------------------|---------------------------------|--------|
| In thousands                     | For the Year Ended December 31, |   |
| State income taxes               |                            | 2010   |   |   | 2009 |   |   | 2008 |   |
| Current                          |                            | $      | 127 |   |   | $ | 64 |   |   | $ | 74 |   |
| Deferred                         |                            |   | 984 |   |   |   | 996 |   |   |   | 887 |   |
| Total state income tax expense   |                            | $      | 1,111 |   |   | $ | 1,060 |   |   | $ | 961 |   |
|                             |                            |   |
|                             | For the Year Ended December 31, |   |
| Federal income taxes             |                            |   | 2010 |   |   |   | 2009 |   |   |   | 2008 |   |
| Current                          |                            | $      | 823 |   |   | $ | 52 |   |   | $ | --- |   |
| Deferred                         |                            |   | 3,148 |   |   |   | 3,748 |   |   |   | 3,466 |   |
| Total federal income tax expense |                            | $      | 3,971 |   |   | $ | 3,800 |   |   | $ | 3,466 |   |

| Reconciliation of effective tax rate:        |
|----------------------------------------------|
|                                         | For the Year Ended December 31, |   |
| In thousands                                 |   | 2010 |   | 2010 |   | 2009 |   | 2009 |   | 2008 |   | 2008 |   |
|                                         |   | Amount |   | Percent |   | Amount |   | Percent |   | Amount |   | Percent |   |
| Reconciliation of effective tax rate         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before federal and state income taxes | $ | 12,702 | % | 100.0 | $ | 12,153 | % | 100.0 | $ | 10,899 | % | 100.0 |   |
|                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amount computed at statutory rate            |   | 4,319 |   | 34.0 |   | 4,132 |   | 34.0 |   | 3,706 |   | 34.0 |   |
| Reconciling items                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State income tax-net of federal tax benefit  |   | 726 |   | 5.7 |   | 683 |   | 5.6 |   | 678 |   | 6.2 |   |
| Other                                        |   | 37 |   | 0.3 |   | 45 |   | 0.4 |   | 43 |   | 0.4 |   |
| Total income tax expense and effective rate  | $ | 5,082 | % | 40.0 | $ | 4,860 | % | 40.0 | $ | 4,427 | % | 40.6 |   |

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|                                                                                                                            |   | For the Year Ended December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|
| In thousands                                                                                                                    |   | 2010                            |    |   | 2009 |   |   | 2008 |   |
|                                                                                                                            |   |                            |    |   |   |   |   |   |   |
| Deferred tax assets related to:                                                                                                 |   |                            |    |   |   |   |   |   |   |
| Federal alternative minimum tax credit carry-forwards                                                                           |   | $                               | 3,775   |   |   | $ | 2,547 |   |   | $ | 2,495 |   |
| Federal and state operating loss carry-forwards                                                                                 |   |                            | 2,521   |   |   |   | 4,899 |   |   |   | 5,330 |   |
| Bad debt allowance                                                                                                              |   |                            | 132     |   |   |   | 97 |   |   |   | 83 |   |
| Valuation allowance                                                                                                             |   |                            | (45     | ) |   |   | (37 | ) |   |   | (71 | ) |
| Stock options                                                                                                                   |   |                            | ---     |   |   |   | --- |   |   |   | --- |   |
| Other                                                                                                                           |   |                            | 196     |   |   |   | 214 |   |   |   | 242 |   |
| Total deferred tax assets                                                                                                       |   | $                               | 6,579   |   |   | $ | 7,720 |   |   | $ | 8,079 |   |
|                                                                                                                            |   |                            |    |   |   |   |   |   |   |   |   |   |
| Deferred tax liabilities related to:                                                                                            |   |                            |    |   |   |   |   |   |   |   |   |   |
| Property plant and equipment basis differences                                                                                  |   | $                               | (43,767 | ) |   | $ | (41,410 | ) |   | $ | (37,151 | ) |
| Expenses of rate proceedings                                                                                                    |   |                            | (18     | ) |   |   | (91 | ) |   |   | (149 | ) |
| Property taxes                                                                                                                  |   |                            | (470    | ) |   |   | (486 | ) |   |   | (445 | ) |
| Other                                                                                                                           |   |                            | (341    | ) |   |   | (249 | ) |   |   | (220 | ) |
| Total deferred tax liabilities                                                                                                  |   | $                               | (44,596 | ) |   | $ | (42,236 | ) |   | $ | (37,965 | ) |
|                                                                                                                            |   |                            |    |   |   |   |   |   |   |   |   |   |
|                                                                                                                            |   |                            |    |   |   |   |   |   |   |   |   |   |
| Net deferred tax liability                                                                                                      |   | $                               | (38,017 | ) |   | $ | (34,516 | ) |   | $ | (29,886 | ) |
|                                                                                                                            |   |                            |    |   |   |   |   |   |   |   |   |   |
| Deferred taxes, which are classified into a net current and non-current balance, are presented in the balance sheet as follows: |   |
|                                                                                                                            |   |                            |    |
| Current deferred tax liability                                                                                                  |   | $                               | (459    | ) |   | $ | (439 | ) |   | $ | (363 | ) |
| Non-current deferred tax liability                                                                                              |   |                            | (37,558 | ) |   |   | (34,077 | ) |   |   | (29,523 | ) |
| Net deferred tax liability                                                                                                      |   | $                               | (38,017 | ) |   | $ | (34,516 | ) |   | $ | (29,886 | ) |

| Schedule of Valuation Allowance                                                 |                           |                          |       |                     |
|---------------------------------------------------------------------------------|--------------------------------|-------------------------------|------------|--------------------------|
|                                                                            |                           | Additions                     |       |                     |
|                                                                            | Balance at Beginning Of Period | Charged to Costs and Expenses | Deductions | Balance at End of Period |
| In thousands                                                                    |                           |                          |       |                     |
|                                                                            |                           |                          |       |                     |
| Classification                                                                  |                           |                          |       |                     |
| For the Year Ended December 31, 2010Valuation allowance for deferred tax assets | $37                            | $8                            | ---        | $45                      |
| For the Year Ended December 31, 2009Valuation allowance for deferred tax assets | $71                            | ---                           | $34        | $37                      |
| For the Year Ended December 31, 2008Valuation allowance for deferred tax assets | $88                            | ---                           | $17        | $71                      |
|                                                                            |                           |                          |       |                     |

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|                                                   |   | December 31, |    |
|--------------------------------------------------------|--------|--------------|---------|
| In thousands                                           |   | 2010         |    |   | 2009 |   |
| First mortgage bonds                                   |   |         |    |   |   |   |
|                                                   |   |         |    |   |   |   |
| Series O, 8.17%, due December 29, 2020                 |   | $            | 20,000  |   |   | $ | 20,000 |   |
| Series P, 6.58%, due January 31, 2018                  |   |         | 25,000  |   |   |   | 25,000 |   |
| Series Q, 4.75%, due December 1, 2043                  |   |         | 15,400  |   |   |   | 15,400 |   |
| Series R, 5.96%, due December 31, 2028                 |   |         | 25,000  |   |   |   | 25,000 |   |
| Series S, 6.73%, due December 31, 2033                 |   |         | 13,800  |   |   |   | 14,400 |   |
|                                                   |   |         | 99,200  |   |   |   | 99,800 |   |
|                                                   |   |         |    |   |   |   |   |   |
| State revolving fund loans                             |   |         |    |   |   |   |   |   |
|                                                   |   |         |    |   |   |   |   |   |
| 4.48%, due August 1, 2021                              |   |         | 2,827   |   |   |   | 3,022 |   |
| 3.57%, due September 1, 2023                           |   |         | 1,076   |   |   |   | 1,140 |   |
| 3.64%, due May 1, 2025                                 |   |         | 1,761   |   |   |   | 1,852 |   |
| 3.41%, due February 1, 2031                            |   |         | 581     |   |   |   | --- |   |
|                                                   |   |         | 6,245   |   |   |   | 6,014 |   |
|                                                   |   |         |    |   |   |   |   |   |
| Notes Payable                                          |   |         |    |   |   |   |   |   |
| Promissory Note, variable interest, due August 1, 2012 |   |         | 1,161   |   |   |   | 1,741 |   |
|                                                   |   |         | 1,161   |   |   |   | 1,741 |   |
|                                                   |   |         |    |   |   |   |   |   |
|                                                   |   |         |    |   |   |   |   |   |
| Sub-total                                              |   |         | 106,606 |   |   |   | 107,555 |   |
|                                                   |   |         |    |   |   |   |   |   |
| Less: current maturities (principal amount)            |   |         | 1,545   |   |   |   | 1,530 |   |
|                                                   |   |         |    |   |   |   |   |   |
| Total long-term debt                                   |   | $            | 105,061 |   |   | $ | 106,025 |   |

| Payments of principal amounts due during the next five years and thereafter: |   |
|------------------------------------------------------------------------------|--------|
|                                                                         |   |
| In thousands                                                                 |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | 2015 |   |   | Thereafter |   |
| First Mortgage bonds                                                         |   | $ | 600 |   |   | $ | 600 |   |   | $ | 600 |   |   | $ | 600 |   |   | $ | 600 |   |   | $ | 96,200 |   |
| State revolving fund loans                                                   |   |   | 365 |   |   |   | 411 |   |   |   | 417 |   |   |   | 434 |   |   |   | 452 |   |   |   | 4,166 |   |
| Notes Payable                                                                |   |   | 580 |   |   |   | 581 |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |
| Total payments                                                               |   | $ | 1,545 |   |   | $ | 1,592 |   |   | $ | 1,017 |   |   | $ | 1,034 |   |   | $ | 1,052 |   |   | $ | 100,366 |   |

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| In thousands                  |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                          |   |   |   |   |   |   |   |   |   |
| Artesian Utility              |   | $      | 2,311  |   |   | $      | 2,308  |   |   | $ | 1,934 |   |
| Artesian Development          |   |   | 24     |   |   |   | ---    |   |   |   | --- |   |
| Artesian Resources            |   |   | 847    |   |   |   | 660    |   |   |   | 562 |   |
| Artesian Consulting Engineers |   |   | 598    |   |   |   | 435    |   |   |   | 221 |   |
| Total                         |   | $      | 3,780  |   |   | $      | 3,403  |   |   | $ | 2,717 |   |

NOTE 8

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|                             |   | 2010 Shares |    |   | 2010 Weighted Average Exercise Price |   |   | 2009 Shares |   |   | 2009 Weighted Average Exercise Price |   |   | 2008 Shares |   |   | 2008 Weighted Average Exercise Price |   |
|----------------------------------|--------|-------------|---------|--------|--------------------------------------|--------|--------|-------------|--------|--------|--------------------------------------|--------|--------|-------------|--------|--------|--------------------------------------|--------|
| Plan options                     |   |        |    |   |                                 |   |   |        |   |   |                                 |   |   |        |   |   |                                 |   |
| Outstanding at beginning of year |   |        | 497,889 |   |                                 | $      | 15.91  |        |   |   | 530,921                              |   |   | $           | 15.14  |   |                                 |   | 574,696 |   |   | $ | 14.62 |   |
| Granted                          |   |        | 33,750  |   |                                 |   | 18.61  |        |   |   | 33,750                               |   |   |        | 15.26  |   |                                 |   | 33,750 |   |   |   | 18.43 |   |
| Exercised                        |   |        | (90,839 | )      |                                 |   | 10.75  |        |   |   | (65,132                              | )      |   |        | 9.48   |   |                                 |   | (59,525 | ) |   |   | 10.46 |   |
| Expired                          |   |        | ---     |   |                                 |   | ---    |        |   |   | (1,650                               | )      |   |        | 9.33   |   |                                 |   | (18,000 | ) |   |   | 20.23 |   |
| Outstanding at end of year       |   |        | 440,800 |   |                                 | $      | 17.18  |        |   |   | 497,889                              |   |   | $           | 15.91  |   |                                 |   | 530,921 |   |   | $ | 15.14 |   |
|                             |   |        |    |   |                                 |   |   |        |   |   |                                 |   |   |        |   |   |                                 |   |   |   |   |   |   |   |
| Options exercisable at year end  |   |        | 407,050 |   |                                 | $      | 17.06  |        |   |   | 464,139                              |   |   | $           | 15.95  |   |                                 |   | 497,171 |   |   | $ | 14.92 |   |
|                             |   |        |    |   |                                 |   |   |        |   |   |                                 |   |   |        |   |   |                                 |   |   |   |   |   |   |   |

| Options Outstanding     |                                    |                            |                            |
|-------------------------|-----------------------------------------|---------------------------------|---------------------------------|
| Range of Exercise Price | Shares Outstanding at December 31, 2010 | Weighted Average Remaining Life | Weighted Average Exercise Price | Range of Exercise Price |
| $10.85 - $18.43         | 240,550                                 | 4.00 Years                      | $15.09                          | $10.85 - $18.43 |
| $18.61 - $21.11         | 200,250                                 | 5.95 Years                      | $19.69                          | $18.61 - $21.11 |
|                    |                                    |                            |                            |   |
| Options Exercisable     |                                    |                            |                            |
| Range of Exercise Price | Shares Exercisable at December 31, 2010 | Weighted Average Remaining Life | Weighted Average Exercise Price | Range of Exercise Price |
| $10.85 - $18.43         | 240,550                                 | 4.00 Years                      | $15.09                          | $10.85 - $18.43 |
| $18.61 - $21.11         | 166,500                                 | 5.26 Years                      | $19.91                          | $18.61 - $21.11 |

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| Benefit Obligations and Funded Status                                      |   |        |   |
|----------------------------------------------------------------------------|--------|-------------|--------|
| In thousands                                                               |   | Year Ending |   |
|                                                                       |   | December 31 |   |
|                                                                       |   | 2010        |   |   | 2009 |   |
| Change in Accumulated Postretirement Benefit Obligation                    |   |        |   |   |   |   |
| Accumulated Postretirement Benefit Obligation at the Beginning of the Year |   | $           | 785    |   |   | $ | 801 |   |
| Service Cost                                                               |   |        | ---    |   |   |   | --- |   |
| Interest Cost                                                              |   |        | 44     |   |   |   | 45 |   |
| Actuarial (Gain) or Loss                                                   |   |        | (40    | ) |   |   | 53 |   |
| Benefits Paid                                                              |   |        | (115   | ) |   |   | (118 | ) |
| Plan Participant's Contributions                                           |   |        | 4      |   |   |   | 4 |   |
| Accumulated Postretirement Benefit Obligation at the End of the Year       |   |        | 678    |   |   |   | 785 |   |
| Change in Plan Assets                                                      |   |        |   |   |   |   |   |   |
| Fair Value of Plan Assets at the Beginning of the Year                     |   |        | ---    |   |   |   | --- |   |
| Benefits Paid                                                              |   |        | (115   | ) |   |   | (118 | ) |
| Employer Contributions                                                     |   |        | 111    |   |   |   | 114 |   |
| Plan Participant's Contributions                                           |   |        | 4      |   |   |   | 4 |   |
| Fair Value of Assets at the End of the Year                                |   |        | ---    |   |   |   | --- |   |
| Net Amount Recognized                                                      |   |        |   |   |   |   |   |   |
| Funded Status                                                              |   |        | (678   | ) |   |   | (785 | ) |
| Unrecognized Transition Obligation Asset                                   |   |        | 26     |   |   |   | 34 |   |
| Unrecognized Net Gain or Loss                                              |   |        | 15     |   |   |   | (98 | ) |
| Net Amount Recognized:                                                     |   |        | (637   | ) |   |   | (849 | ) |
| Amounts Recognized in the Statement of Financial Position                  |   |        |   |   |   |   |   |   |
| Accrued Benefit Liability-Current                                          |   |        | (112   | ) |   |   | (112 | ) |
| Accrued Benefit Liability-Noncurrent                                       |   |        | (525   | ) |   |   | (737 | ) |
| Net Amount Recognized                                                      |   | $           | (637   | ) |   | $ | (849 | ) |
| Weighted Average Assumptions at the End of the Year                        |   |        |   |   |   |   |   |   |
| Discount Rate                                                              |   |        | 5.50   | % |   |   | 6.00 | % |
| Assumed Health Care Cost Trend Rates                                       |   |        |   |   |   |   |   |   |
| Health Care Cost Trend Rate Assumed for Next Year                          |   |        | 7.00   | % |   |   | 10.00 | % |
| Ultimate Rate                                                              |   |        | 4.50   | % |   |   | 5.00 | % |
| Year that the Ultimate Rate is Reached                                     |   |        | 2014   |   |   |   | 2015 |   |

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| Net Periodic Benefit Cost                            |   |        |   |
|------------------------------------------------------|--------|-------------|--------|
|                                                 |   | Year Ending |   |
|                                                 |   | December 31 |   |
| In thousands                                         |   | 2010        |   |   | 2009 |   |   | 2008 |   |
|                                                 |   |        |   |   |   |   |   |   |   |
| Interest Cost                                        |   | $           | 44     |   |   | $ | 45 |   |   | $ | 53 |   |
| Amortization of Net (Gain) or Loss                   |   |        | (4     | ) |   |   | (15 | ) |   |   | --- |   |
| Amortization of Transition Obligation/(Asset)        |   |        | 9      |   |   |   | 9 |   |   |   | 9 |   |
| Total Net Periodic Benefit Cost                      |   | $           | 49     |   |   | $ | 39 |   |   | $ | 62 |   |
| Weighted Average Assumptions                         |   |        |   |   |   |   |   |   |   |   |   |   |
| Discount Rate                                        |   |        | 6.00   | % |   |   | 6.00 | % |   |   | 6.00 | % |
| Assumed Health Care Cost Trend Rates                 |   |        |   |   |   |   |   |   |   |   |   |   |
| Health Care Cost Trend Rate Assumed for Current Year |   |        | 10.00  | % |   |   | 11.00 | % |   |   | 11.00 | % |
| Ultimate Rate                                        |   |        | 5.00   | % |   |   | 5.00 | % |   |   | 5.00 | % |
| Year that the Ultimate Rate is Reached               |   |        | 2015   |   |   |   | 2015 |   |   |   | 2015 |   |

| Impact of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates |   |
|-------------------------------------------------------------------------------|--------|
|                                                                          |   | Increase |   |   | Decrease |   |
| Effect on Service Cost & Interest Cost                                    |   | $ | 2 |   |   | $ | (2 | ) |
| Effect on Postretirement Benefit Obligation                                   |   | $ | 26 |   |   | $ | (24 | ) |

| In thousands      |   | Other Benefits |   |
|-------------------|--------|----------------|--------|
|              |   |           |   |
| 2011              |   | $              | 104    |   |
| 2012              |   |           | 100    |   |
| 2013              |   |           | 94     |   |
| 2014              |   |           | 87     |   |
| 2015              |   |           | 79     |   |
| 2016 through 2020 |   |           | 277    |   |
|              |   | $              | 741    |   |

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NOTE 10

| In thousands      |   |   |   |
|-------------------|--------|--------|--------|
| 2011              |   | $      | 64     |   |
| 2012              |   |   | 46     |   |
| 2013              |   |   | 46     |   |
| 2014              |   |   | 48     |   |
| 2015              |   |   | 48     |   |
| 2016 through 2043 |   |   | 1,638  |   |
|              |   | $      | 1,890  |   |

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| In thousands      |   |   |   |
|-------------------|--------|--------|--------|
| 2011              |   | $      | 3,770  |   |
| 2012              |   |   | 3,779  |   |
| 2013              |   |   | 3,770  |   |
| 2014              |   |   | 3,769  |   |
| 2015              |   |   | 3,770  |   |
| 2016 through 2021 |   |   | 22,638 |   |
|              |   | $      | 41,496 |   |

| In thousands |   |   |   |
|--------------|--------|--------|--------|
| 2011         |   | $      | 1,800  |   |
| 2012         |   |   | 2,005  |   |
| 2013         |   |   | 455    |   |
| 2014         |   |   | 455    |   |
| 2015         |   |   | 3,915  |   |
|         |   | $      | 8,630  |   |

NOTE 11

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Note 1 – Summary of Significant Accounting Policies, Basis of Presentation

Note 11 - Northern Sussex Regional Water Recycling Complex, LLC

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|                                                                        |   | For the Year       |   |
|-----------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                        |   | Ended December 31, |   |
|                                                                        |   | 2010               |   |   | 2009 |   |   | 2008 |   |
|                                                                        |   | (in thousands)     |   |
|                                                                        |   |               |   |   |   |   |   |   |   |
| Average common shares outstanding during the period for Basic computation   |   |               | 7,557  |   |   |   | 7,454 |   |   |   | 7,353 |   |
| Dilutive effect of employee stock options                                   |   |               | 61     |   |   |   | 58 |   |   |   | 74 |   |
| Average common shares outstanding during the period for Diluted computation |   |               | 7,618  |   |   |   | 7,512 |   |   |   | 7,427 |   |

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|                                  |   | First Quarter |   |   | Second Quarter |   |   | Third Quarter |   |   | Fourth Quarter |   |
|---------------------------------------|--------|---------------|--------|--------|----------------|--------|--------|---------------|--------|--------|----------------|--------|
| In thousands (except per share data)  |   | 2010          |   |   | 2009           |   |   | 2010          |   |   | 2009           |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                  |   |          |   |   |           |   |   |          |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenues                    |   | $             | 14,983 |   |           | $      | 13,876 |          |   | $      | 16,003         |   |   | $ | 15,370 |   |   | $ | 17,963 |   |   | $ | 16,161 |   |   | $ | 15,936 |   |   | $ | 15,505 |   |
| Operating income                      |   | $             | 2,787  |   |           | $      | 2,828  |          |   | $      | 3,620          |   |   | $ | 3,676 |   |   | $ | 4,706 |   |   | $ | 3,851 |   |   | $ | 3,155 |   |   | $ | 3,291 |   |
| Net income applicable to common stock |   | $             | 1,646  |   |           | $      | 1,607  |          |   | $      | 1,798          |   |   | $ | 1,997 |   |   | $ | 2,897 |   |   | $ | 2,112 |   |   | $ | 1,279 |   |   | $ | 1,546 |   |
|                                  |   |          |   |   |           |   |   |          |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income per common share               |   |          |   |   |           |   |   |          |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                 |   | $             | 0.22   |   |           | $      | 0.22   |          |   | $      | 0.24           |   |   | $ | 0.27 |   |   | $ | 0.38 |   |   | $ | 0.28 |   |   | $ | 0.17 |   |   | $ | 0.21 |   |
| Diluted                               |   | $             | 0.22   |   |           | $      | 0.22   |          |   | $      | 0.24           |   |   | $ | 0.27 |   |   | $ | 0.38 |   |   | $ | 0.28 |   |   | $ | 0.17 |   |   | $ | 0.20 |   |

NOTE 17

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Report of Independent Registered Public Accounting 

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ITEM 9. CHANGES 

ITEM 9A. CONTROLS 

| CHIEF EXECUTIVE OFFICER: |   |   | CHIEF FINANCIAL OFFICER: |
|--------------------------|--------|--------|--------------------------|
|                     |   |   |                     |
| /s/ DIAN C. TAYLOR       |   |   | /s/ DAVID B. SPACHT      |
| Dian C. Taylor           |   |   | David B. Spacht          |

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ITEM 9B. OTHER 

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PART III

ITEM 10. DIRECTORS

| Name                        | Age    | Position                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Dian C. Taylor              | 65     | Biography:  Director since 1991 - Chair of the Board since July 1993, and Chief Executive Officer and President of Artesian Resources Corporation and its subsidiaries since September 1992.  Ms. Taylor has been employed by the Company since August 1991.  She was formerly a consultant to the Small Business Development Center at the University of Delaware from February 1991 to August 1991 and Owner and President of Achievement Resources Inc. from 1977 to 1991.  Achievement Resources, Inc. specialized in strategic planning, marketing, entrepreneurial and human resources development consulting.  Ms. Taylor was a marketing director for SMI, Inc. from 1982 to 1985.  Ms. Taylor is the aunt of John R. Eisenbrey, Jr. and Nicholle R. Taylor.  She serves on the Executive and Strategic Planning, Budget and Finance Committees. Qualifications:  Ms. Dian Taylor has 19 years of experience as Chief Executive Officer and President of the Company, during which the Company has continuously expanded its service area, extensive knowledge of the complex issues facing smaller companies and prior strategic planning expertise.  Ms. Taylor has served as President of the National Association of Water Companies, a trade organization of the investor-owned water utility industry.  Ms. Taylor also has served on the Delaware Economic and Financial Advisory Council, on the Board of Directors of the Delaware State Chamber of Commerce, the Committee of 100 and the Delaware Council on Economic Education, and as a Trustee of the Delaware Grand Opera, among other business and community organizations.  The Board views Ms. Taylor’s experience with various aspects of the utility industry and her demonstrated leadership roles in business and community activities as important qualifications, skills and experiences for the Board of Directors’ conclusion that Ms. Taylor should serve as a director of the Company. |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Kenneth R. Biederman        | 67     | Biography:  Director since 1991 - Professor of Finance at the Lerner College of Business and Economics of the University of Delaware, since May 1996.  Interim Dean of the College of Business and Economics of the University of Delaware from February 1999 to June 2000.  Dean of the College of Business and Economics of the University of Delaware from 1990 to 1996.  Former Director of the Mid-Atlantic Farm Credit Association from 2006 to 2010.  Director of Chase Manhattan Bank USA from 1993 to 1996.  Formerly a financial and banking consultant from 1989 to 1990 and President of Gibraltar Bank from 1987 to 1989.  Previously Chief Executive Officer and Chairman of the Board of West Chester Savings Bank; Economist and former Treasurer of the State of New Jersey and Staff Economist for the United States Senate Budget Committee.  He serves on the Executive; Audit; Strategic Planning, Budget and Finance; Governance and Nominating; and Compensation Committees. Qualifications:  Mr. Biederman’s experience as a former State Treasurer of New Jersey and the former Dean of the College of Business and Economics at the University of Delaware gives him a substantial amount of business, economic and financial reporting knowledge.  The Board of Directors has determined that Mr. Biederman’s knowledge of economic principles and experience in treasury and financial reporting matters provide for valuable insight and input and serve as important qualifications and skills in his service as a director.                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| John R. Eisenbrey, Jr.      | 55     | Biography:  Director since 1993 – Small Business Executive.  For more than 25 years, Owner and President of Bear Industries, Inc., a successful privately held contracting firm providing building fire sprinkler protection installations for businesses throughout the Delmarva Peninsula.  Mr. Eisenbrey is also co-owner and President of Peninsula Masonry Inc.   Mr. Eisenbrey is the nephew of Dian C. Taylor and the cousin of Nicholle R. Taylor.  He serves on the Audit; Governance and Nominating; and Compensation Committees. Qualifications:  The Board of Directors has determined that Mr. Eisenbrey’s hands-on experience as a business owner in one of our primary geographic regions qualifies him to be a member of the Board.  For more than 25 years, Mr. Eisenbrey has been the Owner and President of a successful privately held contracting firm providing fire sprinkler protection installations for businesses throughout the Delmarva Peninsula.  Mr. Eisenbrey’s operating business background provides hands-on experience with operational, technical and regulatory matters also applicable to our water business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Nicholle R. Taylor          | 43     | Biography:  Director since 2007 - Vice President of Artesian Resources Corporation and its subsidiaries since May 2004.  Ms. Taylor has been employed by the Company since 1991 and has held various management level and operational positions within the Company.  She serves on the Strategic Planning, Budget and Finance Committee. Ms. Taylor is the niece of Dian C. Taylor and the cousin of John R. Eisenbrey, Jr. Qualifications:  Ms. Nicholle Taylor has twenty years of experience with the Company in a variety of field, office and managerial positions.  The Board of Directors has determined that the range of her experience across various company functions gives her a clear perception of how the Company operates, thus enhancing the Board’s ability to know the Company’s current capabilities and limitations, and qualifies her to serve as a director.  Ms. Taylor has also served on the Board of Directors of the National Association of Water Companies, a trade organization of the investor-owned water utility industry.  Ms. Taylor currently serves on the Board of Directors of the Committee of 100.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| William C. Wyer             | 64     | Biography:  Director since 1991 - Business Consultant with Wyer Group, Inc. since September 2005.  Previously, Mr. Wyer served as Managing Director of Wilmington Renaissance Corporation (formerly Wilmington 2000) from January 1998 to August 2005.  Wilmington Renaissance Corporation was a private organization seeking to revitalize the City of Wilmington, Delaware.  Mr. Wyer served as a Director and member of the Audit Committee of GMAC Bank and its’ successor National Motors Bank, FBS since August 2001 through 2008.  President of All Nation Life Insurance and Senior Vice President of Blue Cross/Blue Shield of Delaware from September 1995 to January 1998.  Managing Director of Wilmington 2000 from May 1993 to September 1995.  Formerly President of Wyer Group, Inc. from 1991 to 1993 and Commerce Enterprise Group from 1989 to 1991, both of which are management-consulting firms specializing in operations reviews designed to increase productivity, cut overhead and increase competitiveness, and President of the Delaware State Chamber of Commerce from 1978 to 1989.  He serves on the Executive; Audit; Strategic Planning, Budget and Finance; Governance and Nominating; and Compensation Committees. Qualifications:  Mr. Wyer has extensive management experience with both local and national organizations that facilitates the Company’s growth from a local to a regional provider of water and wastewater services.  Mr. Wyer’s extensive experience in economic development efforts and as President of the Delaware Chamber of Commerce and his associated skills in public, media and governmental communications were determined by the Board of Directors to qualify him to serve as a director.                                                                                                                                                                                                                   |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Joseph A. DiNunzio, CPA     | 48     | Executive Vice President and Corporate Secretary of Artesian Resources Corporation and its subsidiaries since May 2007.  Mr. DiNunzio previously served as Senior Vice President and Corporate Secretary of Artesian Resources Corporation and its subsidiaries since March 2000 and as Vice President and Secretary of Artesian Resources Corporation and its subsidiaries since January 1995.  Mr. DiNunzio has been employed by the Company since 1989 and has held various executive and management level positions within the Company.  Prior to joining Artesian, Mr. DiNunzio was employed by PriceWaterhouseCoopers LLP from 1984 to 1989.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Bruce P. Kraeuter, PE       | 61     | Senior Vice President of Engineering and Planning since May 2007.  Mr. Kraeuter previously served as Vice President of Engineering and Planning since March 1995.  He currently serves as an officer of Artesian Water Company, Inc., Artesian Water Maryland, Inc., Artesian Wastewater Management, Inc., Artesian Utility Development, Inc. and Artesian Water Pennsylvania, Inc.  Mr. Kraeuter has been employed by the Company since July 1989 and has held various executive and operational positions within the Company.  Mr. Kraeuter served as Senior Engineer with the Water Resources Agency for New Castle County, Delaware from 1974 to 1989.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Jennifer L. Finch, CPA      | 42     | Vice President and Assistant Treasurer since February 2010.  Ms. Finch previously served as Chief Accounting Director for the Company and its subsidiaries since August 2008.  She currently serves as Chief Financial Officer of Artesian Consulting Engineers, Inc., one of the Company’s eight wholly owned subsidiaries.  Prior to joining the Company, Ms. Finch served as Chief Financial Officer of Handler Corporation, a home builder company located in Wilmington, Delaware.  Ms. Finch was employed by the Handler Corporation from 1994 through 2008.  During that time she held various accounting positions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| John J. Schreppler II, ESQ. | 54     | Vice President, Assistant Secretary and General Counsel of Artesian Resources Corporation and its subsidiaries since July 2000.  Prior to joining the Company, he practiced law in Wilmington, Delaware as John J. Schreppler, II P.A. from February 1999, and before that as a partner in The Bayard Firm from 1988 to 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| David B. Spacht             | 51     | Chief Financial Officer and Treasurer of Artesian Resources Corporation and its subsidiaries since January 1995, except that he has not been Chief Financial Officer of the wholly owned subsidiary Artesian Consulting Engineers, Inc. since May 2009.  The Company has employed Mr. Spacht since 1980 and he has held various executive and management level positions within the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| John M. Thaeder             | 53     | Senior Vice President of Operations since May 2007.  Mr. Thaeder previous served as Vice President of Operations since February 1998.  He currently serves as an officer of Artesian Water Company, Inc., Artesian Wastewater Management, Inc., Artesian Water Maryland, Inc., Artesian Water Pennsylvania, Inc. and Artesian Utility Development, Inc.  Prior to joining the Company, Mr. Thaeder was employed by Hydro Group, Inc. from 1996 to 1998 as Southeastern District Manager of Sales and Operations from Maryland to Florida.  During 1995 and 1996, Mr. Thaeder was Hydro Group's Sales Manager of the Northeast Division with sales responsibilities from Maine to Florida.  From 1988 to 1995, he served as District Manager of the Layne Well and Pump Division of Hydro Group.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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Table of Contents

| Name              | Fees Earned orPaid inCash($)  | OptionAwards($)(1)  |    All other Compensation($)(2)  | Total($)  |
|------------------------|------------------------------------|--------------------------|------------------------------------------------------|----------------|
| Kenneth R. Biederman   | 77,900                             | 25,151                   | ---                                                  | 103,051        |
| John R. Eisenbrey, Jr. | 68,400                             | 25,151                   | ---                                                  | 93,551         |
| William C. Wyer        | 78,900                             | 25,151                   | 19,387                                               | 123,438        |

| (1)   | On May 18, 2010, each Director received option grants of 6,750 shares of Class A Non-voting Common stock at exercise prices equal to the fair market value on the date of grant (last reported sale price on the date of grant) or $18.61.  All options are exercisable one year from the date of grant and with terms of ten years.  The grant date fair market value, computed in accordance with Financial Accounting Standard Board, Accounting Standards Codification Topic 718, or ASC718, based upon the assumptions made in the valuations as described in Note 1 of the 2010 Financial Statements, is reflected in the “Option Awards” column in the table above.  The aggregate number of option awards outstanding at December 31, 2010 for each Director is: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                   |   | Option Shares Outstanding at December 31, 2010 |   |
|------------------------|--------|------------------------------------------------|--------|
| Kenneth R. Biederman   |   |                                           | 65,250 |   |
| John R. Eisenbrey, Jr. |   |                                           | 65,250 |   |
| William C. Wyer        |   |                                           | 65,250 |   |
|                   |   |                                           |   |   |

| (2)   | $19,350 was paid for medical insurance premiums for Mr. Wyer and his spouse.  In addition, Mr. Wyer receives a life insurance benefit from the Company. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

ITEM 11. EXECUTIVE COMPENSATION

| Ø   | ensuring superior customer service; |
|--------------------|-------------------------------------|

| Ø   | continuously improving our efficiency and performance; |
|--------------------|--------------------------------------------------------|

| Ø   | managing risk appropriately; |
|--------------------|------------------------------|

| Ø   | expanding our franchised service territory and customer base at a consistent and sustainable rate - including by acquisitions - where growth is strong and demand is increasing; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | identifying and developing dependable sources of supply; |
|--------------------|----------------------------------------------------------|

| Ø   | constructing and maintaining reliable treatment facilities and water delivery and wastewater collection systems; |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| Ø   | developing and continuing positive relationships with regulators, municipalities, developers and customers in both existing and prospective service areas; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | developing a skilled and motivated work force that is adaptive to change. |
|--------------------|---------------------------------------------------------------------------|

| Ø   | provide compensation levels that are competitive with those provided by other companies with which we may compete for executive talent; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | motivate and reward contributions and performance aligned with the Company’s objectives; and |
|--------------------|----------------------------------------------------------------------------------------------------|

| Ø   | attract and retain qualified, seasoned executives. |
|--------------------|----------------------------------------------------|

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Table of Contents

| Ø   | Base Salary |
|--------------------|-------------|

| Ø   | Cash Bonus Award |
|--------------------|------------------|

| Ø   | Equity Compensation as may be awarded under the 2005 Equity Compensation Plan |
|--------------------|-------------------------------------------------------------------------------|

| Ø   | Severance or post-termination agreements |
|--------------------|------------------------------------------|

| Ø   | Post-retirement benefits |
|--------------------|--------------------------|

| Ø   | Defined benefit pension benefits or any supplemental executive retirement plan benefits |
|--------------------|-----------------------------------------------------------------------------------------|

| Ø   | Non-qualified deferred compensation |
|--------------------|-------------------------------------|

| Ø   | Change-in-Control agreements |
|--------------------|------------------------------|

| Ø   | AWWA Water Utility Compensation Survey |
|--------------------|----------------------------------------|

| Ø   | ERI Salary Assessor |
|--------------------|---------------------|

| Ø   | Watson Wyatt Report on Top Management Compensation |
|--------------------|----------------------------------------------------|

| Ø   | William M. Mercer Benchmark Database, Executive Positions |
|--------------------|-----------------------------------------------------------|

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Table of Contents

| Ø   | recommendations provided by the Chief Executive Officer; |
|--------------------|----------------------------------------------------------|

| Ø   | market rate for the position as provided by the Company’s compensation consultant; |
|--------------------|------------------------------------------------------------------------------------------|

| Ø   | internal equity with other executives and Company personnel; |
|--------------------|--------------------------------------------------------------|

| Ø   | individual executive performance; and |
|--------------------|---------------------------------------|

| Ø   | individual contributions to the Company’s strategic objectives. |
|--------------------|-----------------------------------------------------------------------|

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Table of Contents

| Ø   | current executive compensation levels; |
|--------------------|----------------------------------------|

| Ø   | executive compensation recommendations made by the Chief Executive Officer; |
|--------------------|-----------------------------------------------------------------------------|

| Ø   | salary grade minimum, midpoint and maximums for each executive as recommended by the Company’s compensation consultant; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| Ø   | actual base salary, cash bonus and equity compensation for each of the prior three years for each executive; |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| Ø   | copy of the most recent compensation study performed by Astron Solutions; |
|--------------------|---------------------------------------------------------------------------|

| Ø   | copies of proxies for the investor-owned water companies of Aqua America, Inc., California Water Company, Connecticut Water Company, Middlesex Water Company, Pennichuck Water Company, Southwest Water Company and York Water Company; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | analysis of water industry entities comparing Artesian to those water companies in terms of market capitalization, number of customers, number of employees, total assets and revenues. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Name and Principal Position                                  | Year   | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($)(1) | All Other Compensation ($)(2),(3),(4) | Total ($) |
|--------------------------------------------------------------|--------|------------|-----------|------------------|----------------------|---------------------------------------|-----------|
|                                                         |   |       |      |             |                 |                                  |      |
| Dian C. Taylor, Chair, CEO & President                   | 2010   | 390,225    | 101,600   | N/A              | 25,151               | 119,325                               | 636,301   |
|                                                         | 2009   | 390,225    | 81,750    | N/A              | 17,290               | 82,866                                | 572,131   |
|                                                         | 2008   | 380,801    | 72,300    | N/A              | 24,299               | 97,149                                | 574,549   |
|                                                         |   |       |      |             |                 |                                  |      |
| David B. Spacht, Chief Financial Officer & Treasurer     | 2010   | 236,250    | 46,600    | N/A              | N/A                  | 32,430                                | 315,280   |
|                                                         | 2009   | 236,250    | 38,000    | N/A              | N/A                  | 28,197                                | 302,447   |
|                                                         | 2008   | 232,356    | 37,300    | N/A              | N/A                  | 28,019                                | 297,675   |
|                                                         |   |       |      |             |                 |                                  |      |
| Joseph A. DiNunzio, Executive Vice President & Secretary | 2010   | 270,300    | 55,850    | N/A              | N/A                  | 29,204                                | 355,354   |
|                                                         | 2009   | 270,300    | 37,250    | N/A              | N/A                  | 26,840                                | 334,390   |
|                                                         | 2008   | 265,004    | 35,700    | N/A              | N/A                  | 26,606                                | 327,310   |
|                                                         |   |       |      |             |                 |                                  |      |
| Nicholle R. Taylor, Vice President                           | 2010   | 189,000    | 45,850    | N/A              | 25,151               | 63,566                                | 323,567   |
|                                                         | 2009   | 189,000    | 37,250    | N/A              | 17,290               | 51,863                                | 295,403   |
|                                                         | 2008   | 185,885    | 35,700    | N/A              | 24,299               | 50,161                                | 296,045   |
|                                                         |   |       |      |             |                 |                                  |      |
| John M. Thaeder, Senior Vice President of Operations         | 2010   | 254,400    | 45,850    | N/A              | N/A                  | 15,338                                | 315,588   |
|                                                         | 2009   | 254,400    | 37,250    | N/A              | N/A                  | 17,044                                | 308,694   |
|                                                         | 2008   | 249,415    | 35,700    | N/A              | N/A                  | 18,508                                | 303,623   |

| (1)   | On May 18, 2010, May 19, 2009 and May 14, 2008, Dian C. Taylor and Nicholle R. Taylor received option grants of 6,750 shares of Class A Non-voting Common stock at exercise prices equal to fair market value on the date of grant (last reported sale price on the date of grant), exercisable one year from the date of grant and with a term of ten years.  The fair market value, computed in accordance with ASC 718, based upon the assumptions made in the valuation as described in Note 1 of the 2010 Financial Statements, is reflected in the “Option Awards” column in the table above. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Under the Company’s defined contribution 401(k) Plan, the Company contributes two percent of an eligible employee's gross earnings.  The Company also matches fifty percent of the first six percent of the employee's gross earnings that the employee contributes to the 401(k) Plan.  In addition, all employees hired before April 26, 1994 and under the age of sixty at that date are eligible for additional contributions to the 401(k) Plan.  Employees over the age of sixty at that date receive Company paid medical, dental and life insurance benefits upon retirement.  The Company will not provide such benefits to any other current or future employees.  In 2010, Company contributions to the 401(k) Plan under terms available to all other employees based upon their years of service and plan eligibility were made in the amounts of: |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Dian C. Taylor     | $24,500 |
|--------------------|---------|
| David B. Spacht    | $25,988 |
| Joseph A. DiNunzio | $24,500 |
| Nicholle R. Taylor | $18,900 |
| John M. Thaeder    | $12,250 |

| (3)   | Executive officers are reimbursed for eligible medical expenses not otherwise covered by the Company’s medical insurance plan under the Officer’s Medical Reimbursement Plan.  Amounts reimbursed are included in the “All Other Compensation” column in the table above.  Dian C. Taylor received reimbursements of $13,305 in 2010. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Also included in the “All Other Compensation” column in the table above are amounts received by Dian C. Taylor as compensation for attendance at meetings of the Board and its committees in 2010 totaling $43,400, golf club dues of $20,765, security provided at her personal residence of $14,057 and personal use of a company-owned vehicle.  Also included in the “All Other Compensation” column in the table above are amounts received by Nicholle R. Taylor as compensation for attendance at meetings of the Board and its committees in 2010 totaling $43,400. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Name              | Grant Date   | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/share) | Grant Date Fair Value of Stock & Option Awards ($) |
|-------------------|--------------|----------------------------------------------------------------|----------------------------------------------------------------------|---------------------------------------------------|--------------------------------------------------------|
|              |         |                                                           |                                                                 |                                              |                                                   |
| Dian C. Taylor    | May 18, 2010 | N/A                                                            | 6,750                                                                | 18.61                                             | 25,151                                                 |
| Nicholle R Taylor | May 18, 2010 | N/A                                                            | 6,750                                                                | 18.61                                             | 25,151                                                 |
|              |         |                                                           |                                                                 |                                              |                                                   |

| (i)   | The expiration of the 90-day period after the Grantee ceases to provide service to the Company, if the termination of service is for any reason other than Disability, death or Cause (as defined in the award); |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | The expiration of the one year period after Grantee ceases to provide service to the Company on account of her Disability; |
|------------------|----------------------------------------------------------------------------------------------------------------------------|

| (iii)   | The expiration of the one year period after Grantee ceases to provide service to the Company, if she dies while providing service to the Company or within 90 days after the she ceases to provide such services on account of a termination described in (i) above; or |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | The date on which Grantee ceases to provide service to the Company for Cause.  In addition, notwithstanding the prior provisions, if Grantee engages in conduct that constitutes Cause after her employment or service terminates, the Option shall immediately terminate. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

|               | Option Awards                                                                       |
|--------------------|-------------------------------------------------------------------------------------|
| Name               | Number of Securities Underlying Unexercised Options(#) Exercisable   | Number of Securities Underlying Unexercised Options(#) Unexercisable | Option Exercise Price($)   | Option Expiration Date |
|               |                                                                                |   |   |   |
| Dian C. Taylor     | 6,750                                                                               | 0 | 13.30 | 5/21/2013 |
|               | 6,750                                                                               | 0 | 16.13 | 5/26/2014 |
|               | 11,250                                                                              | 0 | 19.70 | 12/20/2015 |
|               | 6,750                                                                               | 0 | 21.11 | 5/12/2016 |
|               | 6,750                                                                               | 0 | 19.56 | 5/16/2017 |
|               | 6,750                                                                               | 0 | 18.43 | 5/14/2018 |
|               | 6,750                                                                               | 0 | 15.26 | 5/19/2019 |
|               | 0                                                                                   | 6,750(1) | 18.61 | 5/18/2020 |
|               |                                                                                |   |   |   |
| David B. Spacht    | 2,750                                                                               | 0 | 12.40 | 6/5/2012 |
|               | 6,750                                                                               | 0 | 14.85 | 5/21/2013 |
|               | 6,750                                                                               | 0 | 16.13 | 5/26/2014 |
|               | 11,250                                                                              | 0 | 19.70 | 12/20/2015 |
|               |                                                                                |   |   |   |
| Joseph A. DiNunzio | 6,750                                                                               | 0 | 14.85 | 5/21/2013 |
|               | 6,750                                                                               | 0 | 16.13 | 5/26/2014 |
|               | 11,250                                                                              | 0 | 19.70 | 12/20/2015 |
|               |                                                                                |   |   |   |
| Nicholle R. Taylor | 6,750                                                                               | 0 | 16.13 | 5/26/2014 |
|               | 11,250                                                                              | 0 | 19.70 | 12/20/2015 |
|               | 6,750                                                                               | 0 | 18.43 | 5/14/2018 |
|               | 6,750                                                                               | 0 | 15.26 | 5/19/2019 |
|               | ---                                                                                 | 6,750(1) | 18.61 | 5/18/2020 |
|               |                                                                                |   |   |   |
| John M. Thaeder    | 6,750                                                                               | 0 | 12.40 | 6/5/2012 |
|               | 6,750                                                                               | 0 | 14.85 | 5/21/2013 |
|               | 6,750                                                                               | 0 | 16.13 | 5/26/2014 |
|               | 11,250                                                                              | 0 | 19.70 | 12/20/2015 |
|               |                                                                                |   |   |   |

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Table of Contents

|               |   | Option Awards                             |   |   | Stock Awards                   |   |
|--------------------|--------|-------------------------------------------|--------|--------|--------------------------------|--------|
|  Name         |   | Number of Shares Acquired on Exercise (#) |   |   | Value Realized on Exercise ($) |   |   | Number of Shares Acquired on Vesting (#) |   |   | Value Realized on Vesting ($) |   |
| Dian C. Taylor     |   |                                      | 20,250 |   |                           |   | 163,034 |   |   |   | N/A |   |   |   | N/A |   |
| David B. Spacht    |   |                                      | 10,750 |   |                           |   | 66,510 |   |   |   | N/A |   |   |   | N/A |   |
| Joseph A. DiNunzio |   |                                      | 18,000 |   |                           |   | 127,998 |   |   |   | N/A |   |   |   | N/A |   |
| John M. Thaeder    |   |                                      | 6,750  |   |                           |   | 53,106 |   |   |   | N/A |   |   |   | N/A |   |
|               |   |                                      |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |

ITEM 12. SECURITY 

|                                                                     | Class A Non-Voting Common Stock(1) |       | Class B Common Stock(1) |
|--------------------------------------------------------------------------|------------------------------------|------------|-------------------------|
|                                                                     | Shares                             | Percent(2) |                    | Shares | Percent(2) |
|                                                                     |                               |       |                    |   |   |
| Dian C. Taylor (3)664 Churchmans RoadNewark, Delaware 19702              | 151,596                            | 2.2        |                    | 159,364 | 18.1 |
|                                                                     |                               |       |                    |   |   |
| Kenneth R. Biederman (3)(4)                                              | 73,375                             | 1.1        |                    | --- | --- |
|                                                                     |                               |       |                    |   |   |
| John R. Eisenbrey, Jr. (3)(5)(6)15 Albe DriveNewark, Delaware 19702      | 104,251                            | 1.5        |                    | 45,707 | 5.2 |
|                                                                     |                               |       |                    |   |   |
| Nicholle R. Taylor (3)(7)(8)206 Rothwell DriveWilmington, Delaware 19804 | 37,533                             | *          |                    | 279,476 | 31.7 |
|                                                                     |                               |       |                    |   |   |
| William C. Wyer (3)                                                      | 72,000                             | 1.1        |                    | --- | --- |
|                                                                     |                               |       |                    |   |   |
| Joseph A. DiNunzio (3)(9)                                                | 39,628                             | *          |                    | 103 | * |
|                                                                     |                               |       |                    |   |   |
| David B. Spacht (3)                                                      | 36,330                             | *          |                    | 189 | * |
|                                                                     |                               |       |                    |   |   |
| John M. Thaeder (3)                                                      | 58,937                             | *          |                    | 1,350 | * |
|                                                                     |                               |       |                    |   |   |
| Louisa Taylor Welcher (10)219 Laurel AvenueNewark, DE  19711   | 61,559                             | *          |                    | 136,006 | 15.4 |
|                                                                     |                               |       |                    |   |   |
| Directors and Executive Officers as a Group (11 Individuals)(3)          | 672,772                            | 9.4        |                    | 486,189 | 55.2 |
|                                                                     |                               |       |                    |   |   |
| * less than 1%                                                           |                               |       |                    |   |   |

| (1)    | The nature of ownership consists of sole voting and investment power unless otherwise indicated.  The amount also includes all shares issuable to such person or group upon the exercise of options held by such person or group to the extent such options are exercisable within 60 days after March 4, 2011.                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)    | The percentage of the total number of shares of the class outstanding is shown where that percentage is one percent or greater.  Percentages for each person are based on the aggregate number of shares of the applicable class outstanding as of March 4, 2011, and all shares issuable to such person upon the exercise of options held by such person to the extent such options are exercisable within 60 days of that date.  |
| (3)    | Includes options to purchase shares of the Company’s Class A Stock, as follows: Ms. D. Taylor (51,750 shares); Mr. Biederman (58,500 shares); Mr. Eisenbrey (58,500 shares); Ms. N. Taylor (31,500 shares);Mr. Wyer (58,500 shares); Mr. DiNunzio (24,750 shares); Mr. Spacht (27,500 shares); and Mr. Thaeder (31,500 shares).                                                                                                   |
| (4)    | 16,875 shares were pledged as collateral for Mr. Biederman’s margin account.                                                                                                                                                                                                                                                                                                                                                           |
| (5)    | 39,611 shares were pledged by Mr. Eisenbrey, Jr. as collateral for a loan.                                                                                                                                                                                                                                                                                                                                                                   |
| (6)    | Includes 780 shares of the Class B Stock owned by a trust, of which Mr. Eisenbrey, Jr. is a trustee and has a beneficial ownership interest, and 1,555 shares of the Class B Stock held in custodial accounts for Mr. Eisenbrey, Jr.’s daughters.                                                                                                                                                                                      |
| (7)    | 100,202 shares were pledged by Ms. Taylor as collateral for a loan.                                                                                                                                                                                                                                                                                                                                                                          |
| (8)    | Includes 7 shares of the Class A Stock held in a custodial account for Ms. Taylor’s daughter.                                                                                                                                                                                                                                                                                                                                          |
| (9)    | Includes 17 shares of the Class A Stock held by Mr. DiNunzio’s son.                                                                                                                                                                                                                                                                                                                                                                    |
| (10)   | Includes 144 shares of the Class B Stock held jointly by Ms. Welcher’s husband and son, and 421 shares of the Class A Stock held by Ms. Welcher’s husband for which Ms. Welcher disclaims beneficial ownership.                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                              |

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ITEM 13. CERTAIN 

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Table of Contents

ITEM 14. PRINCIPAL ACCOUNTANT 

| (In thousands)     |   | 2010   |   |   | 2009   |   |
|--------------------|--------|--------|--------|--------|--------|--------|
| Audit Fees         |   | $      | 425    |   |   | $      | 444 |   |
| Audit-Related Fees |   |   | ---    |   |   |   | --- |   |
| Tax Fees           |   |   | ---    |   |   |   | --- |   |
| All Other Fees     |   |   | ---    |   |   |   | --- |   |
|               |   |   |   |   |   |   |   |   |
| Total Fees         |   | $      | 425    |   |   | $      | 444 |   |

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Table of Contents

PART IV

ITEM 15. EXHIBITS 

|   | The following documents are filed as part of this report:                                                    | Page(s)*     |
|--------|--------------------------------------------------------------------------------------------------------------|--------------|
| (1)    | Financial Statements:                                                                                        |         |
|   | Reports of Independent Registered Public Accountants                                                         |   62    |
|   | Consolidated Balance Sheets at December 31, 2010 and 2009                                                    |   35    |
|   | Consolidated Statements of Operations for the three years ended December 31, 2010                            |   36    |
|   | Consolidated Statements of Cash Flows for the three years ended December 31, 2010                            |   37-38 |
|   | Consolidated Statements of Changes in Stockholders’ Equity for the three years ended December 31, 2010 |   39    |
|   | Notes to Consolidated Financial Statements                                                                   |   40    |
|   |                                                                                                         |         |
| (2)    | Exhibits:  see the exhibit list below                                                              |   80    |
|   |                                                                                                         |         |
|   | * Page number shown refers to page number in this Report on Form 10-K                                        |         |

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Table of Contents

ARTESIAN RESOURCES CORPORATION

|          | EXHIBIT LIST                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  3.1     | Restated Certificate of Incorporation of the Company effective April 28, 2004 incorporated by reference to Exhibit 3.1 filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2004.                                                                                                                                                                                                                                                                                                                                               |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  3.2     | By-laws of the Company effective March 26, 2004 incorporated by reference to Exhibit 3.3 filed withthe Company’s Form 10-Q for the quarterly period ended March 31, 2004.                                                                                                                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.1     | Twentieth Supplemental Indenture dated as of December 1, 2008, between Artesian Water Company, Inc., subsidiary of the Company, and Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 4.1 filed with the Company's Form 8-K filed on December 4, 2008.                                                                                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.2     | Eighteenth Supplemental Indenture dated as of August 1, 2005, between Artesian Water Company, Inc., subsidiary of the Company, and Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005.                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.3     | Seventeenth supplemental Indenture dated as of December 1, 2003 between Artesian Water Company, Inc., subsidiary of the Company, and the Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 4.1 filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.                                                                                                                                                                                                                 |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.4     | Sixteenth supplemental Indenture dated as of January 31, 2003 between Artesian Water Company, Inc., subsidiary of the Company, and the Wilmington Trust Company, as Trustee. Incorporated by reference to Exhibit 4.2 filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.5     | Fifteenth supplemental Indenture dated as of December 1, 2000 between Artesian Water Company, Inc.,subsidiary of the Company, and the Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 4.1 filed with the Company's Form 10-Q for the quarterly period ended March 31, 2002.                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.6     | Bond Purchase Agreement, dated December 1, 2008 by and between Artesian Water Company, Inc., subsidiary of the Company, and CoBank, ACB.  Incorporated by reference to exhibit 4.2 filed with the Company’s form 8-K filed on December 4, 2008.                                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1          | Amendment to Agreement for Purchase of Water Assets of the Town of Port Deposit and for the provision of Potable Water Services, dated November 1, 2010 by and among Artesian Water Maryland, Inc., a Delaware Corporation, Artesian Resources Corporation, a Delaware Corporation and the Mayor and Town Council of Port Deposit, Maryland, a body corporate and politic organized under the laws of the State of Maryland.  Incorporated by reference to exhibit 10.2 filed with the Company’s form 8-K filed on November 4, 2010.         |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2          | Conclusion and Termination Agreement, dated August 6, 2010 between Artesian Resources Corporation on behalf of itself and all applicable subsidiaries and Darin A. Lockwood on behalf of himself and all business entities in which he has an interest.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on August 11, 2010.                                                                                                                                                                               |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.3          | Financing Agreement and General Obligation Note dated February 12, 2010 between Artesian Water Company, Inc. and Delaware Drinking Water State Revolving Fund Delaware Department of Health and Social Services, Division of Public Health.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on February 17, 2010.                                                                                                                                                                                         |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.4          | Revolving Credit Agreement dated January 19, 2010 between Artesian Water Company, Inc. and CoBank, ACB.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on January 25, 2010.                                                                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.5          | Demand Line of Credit Agreement dated January 19, 2010 between Artesian Resources Corporation and each of its subsidiaries and Citizens Bank of Pennsylvania.  Incorporated by reference to exhibit 10.2 filed with the Company’s form 8-K filed on January 25, 2010.                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.6          | Water Asset Purchase Agreement, dated December 1, 2009 by and among Artesian Water Maryland, Inc., a Delaware Corporation, Artesian Resources Corporation, a Delaware Corporation and the Mayor and Town Council of Port Deposit, Maryland, a body corporate and politic organized under the laws of the State of Maryland.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on December 2, 2009.                                                                                                          |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.7          | Asset Purchase Agreement between Artesian Water Maryland, Inc., subsidiary of the Company, and Cecil County, Maryland, dated October 7, 2008.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on October 10, 2008.                                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.8          | Asset Purchase Agreement between Artesian Wastewater Maryland, Inc., subsidiary of the Company, and Cecil County, Maryland, dated October 7, 2008.  Incorporated by reference to exhibit 10.2 filed with the Company’s form 8-K filed on October 10, 2008.                                                                                                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.9          | Asset Purchase Agreement between Artesian Wastewater Maryland, Inc., subsidiary of the Company, and Cecil County, Maryland, dated October 7, 2008.  Incorporated by reference to exhibit 10.3 filed with the Company’s form 8-K filed on October 10, 2008.                                                                                                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.10         | Limited Liability Interest Purchase Agreement between Artesian Water Maryland, Inc., subsidiary of the Company, and Mountain Hill Water Company, LLC, dated May 5, 2008.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on May 9, 2008.                                                                                                                                                                                                                                                                  |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.11         | Wastewater Services Agreement between Artesian Utility Development, Inc., subsidiary of the Company, and Northern Sussex Regional Water Recharge Complex, LLC, dated June 30, 2008.  This exhibit is subject to an order granting confidential treatment issued by the SEC and therefore certain confidential portions have been omitted as indicated by the bracketed language [CONFIDENTIAL PORTION DELETED].  Incorporated by reference to exhibit 10.1 filed with the Company’s form 10-Q for the quarter ended June 30, 2008. |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.12         | Artesian Resources Corporation 2005 Equity Compensation Plan.  Incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005. **                                                                                                                                                                                                                                                                                                                                                     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.13         | Amended and Restated Artesian Resources Corporation 1992 Non-Qualified Stock Option Plan, as amended.  Incorporated by reference to Exhibit 10.4 filed with the Company’s Form 10-Q for the quarterly period ended June 30, 2003.**                                                                                                                                                                                                                                                                                                          |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.14         | Artesian Resources Corporation Incentive Stock Option Plan.  Incorporated by reference to Exhibit 10(e) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 1995.**                                                                                                                                                                                                                                                                                                                                                |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.15         | Officer's Medical Reimbursement Plan dated May 27, 1992.  Incorporated by reference to Exhibit 10.6 filed with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2001.**                                                                                                                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 21            | Subsidiaries of the Company as of December 31, 2010. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 23.1          | Consent of BDO USA, LLP *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.1          | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2          | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32            | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *                                                                                                                                                                                                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| *             | Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **            | Compensation plan or arrangement required to be filed or incorporated as an exhibit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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Table of Contents

SIGNATURES

| Date March 15, 2011 | By: /s/ DAVID B. SPACHT               |   |
|---------------------|---------------------------------------|--------|
|                | David B. Spacht                       |   |
|                | Chief Financial Officer and Treasurer |   |

| Signature                                   | Title                                 | Date           |
|---------------------------------------------|---------------------------------------|----------------|
| Principal Executive Officer:                |                                  |           |
| /s/ DIAN C. TAYLOR                          |                                  |           |
| Dian C. Taylor                              | President and Chief Executive Officer | March 15, 2011 |
|                                        |                                  |           |
| Principal Financial and Accounting Officer: |                                  |
| /s/ DAVID B. SPACHT                         |                                  |           |
| David B. Spacht                             | Chief Financial Officer and Treasurer | March 15, 2011 |
|                                        |                                  |           |
| Directors:                                  |                                  |           |
| /s/ DIAN C. TAYLOR                          |                                  |           |
| Dian C. Taylor                              | Director                              | March 15, 2011 |
|                                        |                                  |           |
| /s/ KENNETH R. BIEDERMAN                    |                                  |           |
| Kenneth R. Biederman                        | Director                              | March 15, 2011 |
|                                        |                                  |           |
| /s/ WILLIAM C. WYER                         |                                  |           |
| William C. Wyer                             | Director                              | March 15, 2011 |
|                                        |                                  |           |
| /s/ JOHN R. EISENBREY, JR.                  |                                  |           |
| John R. Eisenbrey, Jr.                      | Director                              | March 15, 2011 |
|                                        |                                  |           |
| /s/ NICHOLLE R. TAYLOR                      |                                  |           |
| Nicholle R. Taylor                          | Director                              | March 15, 2011 |

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Table of Contents

|          | EXHIBIT LIST                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ExhibitNumber | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  3.1     | Restated Certificate of Incorporation of the Company effective April 28, 2004 incorporated by reference to Exhibit 3.1 filed with the Company’s Form 10-Q for the quarterly period ended March 31, 2004.                                                                                                                                                                                                                                                                                                                                               |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  3.2     | By-laws of the Company effective March 26, 2004 incorporated by reference to Exhibit 3.3 filed withthe Company’s Form 10-Q for the quarterly period ended March 31, 2004.                                                                                                                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.1     | Twentieth Supplemental Indenture dated as of December 1, 2008, between Artesian Water Company, Inc., subsidiary of the Company, and Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 4.1 filed with the Company's Form 8-K filed on December 4, 2008.                                                                                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.2     | Eighteenth Supplemental Indenture dated as of August 1, 2005, between Artesian Water Company, Inc., subsidiary of the Company, and Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005.                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.3     | Seventeenth supplemental Indenture dated as of December 1, 2003 between Artesian Water Company, Inc., subsidiary of the Company, and the Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 4.1 filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.                                                                                                                                                                                                                 |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.4     | Sixteenth supplemental Indenture dated as of January 31, 2003 between Artesian Water Company, Inc., subsidiary of the Company, and the Wilmington Trust Company, as Trustee. Incorporated by reference to Exhibit 4.2 filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.5     | Fifteenth supplemental Indenture dated as of December 1, 2000 between Artesian Water Company, Inc.,subsidiary of the Company, and the Wilmington Trust Company, as Trustee.  Incorporated by reference to Exhibit 4.1 filed with the Company's Form 10-Q for the quarterly period ended March 31, 2002.                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  4.6     | Bond Purchase Agreement, dated December 1, 2008 by and between Artesian Water Company, Inc., subsidiary of the Company, and CoBank, ACB.  Incorporated by reference to exhibit 4.2 filed with the Company’s form 8-K filed on December 4, 2008.                                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.1          | Amendment to Agreement for Purchase of Water Assets of the Town of Port Deposit and for the provision of Potable Water Services, dated November 1, 2010 by and among Artesian Water Maryland, Inc., a Delaware Corporation, Artesian Resources Corporation, a Delaware Corporation and the Mayor and Town Council of Port Deposit, Maryland, a body corporate and politic organized under the laws of the State of Maryland.  Incorporated by reference to exhibit 10.2 filed with the Company’s form 8-K filed on November 4, 2010.         |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.2          | Conclusion and Termination Agreement, dated August 6, 2010 between Artesian Resources Corporation on behalf of itself and all applicable subsidiaries and Darin A. Lockwood on behalf of himself and all business entities in which he has an interest.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on August 11, 2010.                                                                                                                                                                               |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.3          | Financing Agreement and General Obligation Note dated February 12, 2010 between Artesian Water Company, Inc. and Delaware Drinking Water State Revolving Fund Delaware Department of Health and Social Services, Division of Public Health.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on February 17, 2010.                                                                                                                                                                                         |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.4          | Revolving Credit Agreement dated January 19, 2010 between Artesian Water Company, Inc. and CoBank, ACB.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on January 25, 2010.                                                                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.5          | Demand Line of Credit Agreement dated January 19, 2010 between Artesian Resources Corporation and each of its subsidiaries and Citizens Bank of Pennsylvania.  Incorporated by reference to exhibit 10.2 filed with the Company’s form 8-K filed on January 25, 2010.                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.6          | Water Asset Purchase Agreement, dated December 1, 2009 by and among Artesian Water Maryland, Inc., a Delaware Corporation, Artesian Resources Corporation, a Delaware Corporation and the Mayor and Town Council of Port Deposit, Maryland, a body corporate and politic organized under the laws of the State of Maryland.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on December 2, 2009.                                                                                                          |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.7          | Asset Purchase Agreement between Artesian Water Maryland, Inc., subsidiary of the Company, and Cecil County, Maryland, dated October 7, 2008.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on October 10, 2008.                                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.8          | Asset Purchase Agreement between Artesian Wastewater Maryland, Inc., subsidiary of the Company, and Cecil County, Maryland, dated October 7, 2008.  Incorporated by reference to exhibit 10.2 filed with the Company’s form 8-K filed on October 10, 2008.                                                                                                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.9          | Asset Purchase Agreement between Artesian Wastewater Maryland, Inc., subsidiary of the Company, and Cecil County, Maryland, dated October 7, 2008.  Incorporated by reference to exhibit 10.3 filed with the Company’s form 8-K filed on October 10, 2008.                                                                                                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.10         | Limited Liability Interest Purchase Agreement between Artesian Water Maryland, Inc., subsidiary of the Company, and Mountain Hill Water Company, LLC, dated May 5, 2008.  Incorporated by reference to exhibit 10.1 filed with the Company’s form 8-K filed on May 9, 2008.                                                                                                                                                                                                                                                                  |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.11         | Wastewater Services Agreement between Artesian Utility Development, Inc., subsidiary of the Company, and Northern Sussex Regional Water Recharge Complex, LLC, dated June 30, 2008.  This exhibit is subject to an order granting confidential treatment issued by the SEC and therefore certain confidential portions have been omitted as indicated by the bracketed language [CONFIDENTIAL PORTION DELETED].  Incorporated by reference to exhibit 10.1 filed with the Company’s form 10-Q for the quarter ended June 30, 2008. |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.12         | Artesian Resources Corporation 2005 Equity Compensation Plan.  Incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005. **                                                                                                                                                                                                                                                                                                                                                     |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.13         | Amended and Restated Artesian Resources Corporation 1992 Non-Qualified Stock Option Plan, as amended.  Incorporated by reference to Exhibit 10.4 filed with the Company’s Form 10-Q for the quarterly period ended June 30, 2003.**                                                                                                                                                                                                                                                                                                          |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.14         | Artesian Resources Corporation Incentive Stock Option Plan.  Incorporated by reference to Exhibit 10(e) filed with the Company's Annual Report on Form 10-K for the year ended December 31, 1995.**                                                                                                                                                                                                                                                                                                                                                |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.15         | Officer's Medical Reimbursement Plan dated May 27, 1992.  Incorporated by reference to Exhibit 10.6 filed with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2001.**                                                                                                                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 21            | Subsidiaries of the Company as of December 31, 2010. *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 23.1          | Consent of BDO USA, LLP *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.1          | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2          | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32            | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *                                                                                                                                                                                                                                                                                                                                                                                                                            |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| *             | Filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **            | Compensation plan or arrangement required to be filed or incorporated as an exhibit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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Table of Contents