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                                                                    EXHIBIT 10.3

                         CONNECTICUT WATER SERVICE, INC.
                          THE CONNECTICUT WATER COMPANY
                      DIRECTORS' DEFERRED COMPENSATION PLAN

                       AMENDED AND RESTATED APRIL 22, 1994

1.       PURPOSE OF THE PLAN

         The purpose of the Directors' Deferred Compensation Plan (hereinafter
         referred to as the "Plan") is to provide a procedure whereby a member
         of the Board of Directors of The Connecticut Water Company and of
         Connecticut Water Service, Inc. (hereinafter collectively referred to
         as the "Company") who is not an employee of the Company (hereinafter
         referred to as a "Director") may defer the payment of all or a
         specified part of the compensation payable to the Director for services
         as a Director of The Connecticut Water Company and of Connecticut Water
         Service, Inc., including compensation payable to a Director for
         services as a member of a Committee of said Boards.

2.       ELECTION TO DEFER

         A Director may elect to defer receipt of payment of all or a specified
         portion of all compensation payable to the Director for services as a
         Director during the calendar year or portion thereof following such
         election and succeeding calendar years until the Director ceases to be
         a Director, said election to be effective only with respect to
         compensation earned after the date of such election. Any such election
         shall be made by written notice delivered to the Secretary of the
         Company.

3.       DIRECTORS' ACCOUNTS

         All deferred compensation shall be held in the general funds of the
         Company and shall be credited to each Director's account. On the first
         day of each month, interest shall be credited to each such account
         calculated on the basis of the balance in such account on the first day
         of each month and at the monthly rate equal to one twelfth of the
         "return on rate base" of the most recent rate decision for The
         Connecticut Water Company.

4.       PAYMENT FROM DIRECTORS' ACCOUNTS

         The aggregate amount of deferred compensation, together with interest
         accrued thereon, credited to the account of any Director shall be paid
         in a lump sum or, if the Director

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         elects and The Connecticut Water Company, in its sole discretion,
         agrees, in substantially equal annual installments over a period of
         years specified by the Director, not to exceed the number of years
         which the Director served as a member of the Board of Directors of the
         Company after electing to defer compensation as provided in this Plan.
         Such election must be made by written notice delivered to the Secretary
         of the Company prior to the date on which the Director ceases to be a
         Director. In the case of installment payments, the first installment
         shall be paid promptly following the calendar year in which the
         Director ceases to be a Director, and subsequent installments shall be
         paid promptly at the beginning of such succeeding calendar year until
         the entire amount credited to the Director's account shall have been
         paid. In the case of a lump sum payment, the lump sum shall be paid
         within sixty (60) days after the commencement of the calendar year
         following the date on which the Director ceases to be a Director or, at
         the option of The Connecticut Water Company in its sole discretion,
         within sixty (60) days after the Director ceases to be a Director.

5.       PAYMENT IN EVENT OF DEATH

         If a Director should die before all deferred amounts credited to the
         Director's account have been distributed, the balance of any deferred
         compensation and interest then in the Director's account shall be paid
         promptly to the Director's designated beneficiary; provided, however,
         that the Director may specify that such deferred amounts (plus
         interest) shall be paid to the Director's spouse in substantially equal
         annual installments over a period of years not to exceed the lesser of:
         (i) either ten or five, as the Director shall elect, or (ii) the number
         of years which the Director served as a member of the Boards of
         Directors of the Company after electing to defer compensation as
         provided in this Plan, reduced by (iii) the number of years (if any)
         during which the Director had received payment under this Plan prior to
         death. If such Director did not designate a beneficiary or in the event
         that the beneficiary designated by such Director shall have predeceased
         the Director, the balance in the Director's account shall be paid
         promptly to the Director's estate. If payments are being made in
         installments to the spouse of the deceased Director, then upon the
         death of said spouse any amount then undistributed shall be paid
         promptly to the estate of said spouse.

6.       TERMINATION OF ELECTION

         A Director may terminate an election to defer payment of compensation
         by written notice delivered to the Secretary of the Company. Such
         termination shall become effective as of the end of the calendar year
         in which notice of termination is given with

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         respect to compensation payable for services as a Director during
         subsequent calendar years. Amounts credited to the account of a
         Director prior to the effective date of termination shall not be
         affected thereby and shall be paid only in accordance with paragraphs 4
         and 5 above.

7.       NONASSIGNABILITY

         All rights to payments under this Plan are not subject in any manner to
         anticipation, alienation, transfer, assignment, pledge, encumbrance,
         attachment or garnishment by creditors of the Director or the
         Director's spouse or other beneficiary.

8.       INTERPRETATION AND AMENDMENT

         The Plan shall be administered by the Boards of the Directors of the
         Company. The decision of the Boards of Directors with respect to any
         questions arising as to the interpretation of this Plan, including the
         severability of any and all of the provisions thereof, shall be final,
         conclusive and binding. The Boards of Directors reserve the right to
         amend this Plan from time to time or to terminate the Plan entirely,
         provided, however that no amendment or termination of this Plan shall
         operate to annul an election already in effect for the current calendar
         year.

9.       PAYMENTS

         Payments pursuant to this Plan shall be made by the Company out of its
         general corporate assets. Neither a Director nor any beneficiary or
         spouse of a Director may assert any right or claim against any
         specified assets of the Company. The Director and any such beneficiary
         or spouse shall have the status of general unsecured creditors of the
         Company and shall have only contractual rights against the Company for
         amounts credited to an account pursuant to this Plan.

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