Document:

exhibit_10-1.htm

Exhibit 10.1

	
CONNECTICUT WATER SERVICE, INC.

	
AND SUBSIDIARIES

	  
	
Code of Conduct

	
November 20, 2009

	
(A revision of Appendix B, Employee Handbook)

	  	
Index

	
Statement of Our Shared Principals
	
1

	
Government & Regulatory Agencies who oversee our business
	
2

	
Shareholders who own our business
	
3

	
Customers who receive our service
	
4

	
Business Practices
	
5

	
Confidential Information
	
5

	
Conflict of Interest
	
5-6

	
Prohibition of Gifts to Public Officials and State Employees
	
7

	
Campaign Contributions
	
8

	
Code of Conduct Violations and Audit Misconduct Reporting
	
9

	
Ethics Decision Tree
	
10

	
Insider Trading Policy
	
11

	
Responsibility Statement
	
12

 

  

 

  

CONNECTICUT WATER SERVICE, INC.

AND SUBSIDIARIES

	
  
	
       Code of Business Conduct

November 20, 2009

Statement of Our Shared Principles

I understand that producing a product for human consumption, being a steward of natural resources that will serve the needs of generation to come, and honoring the investments of those who own our Company -- imposes special obligations of public trust upon me.

I understand that the success of our Company is based on a foundation of trust. Our Company will only succeed if we build and maintain trust with customers, shareholders, co-workers, regulators, business partners, and communities.

I understand that as an employee of the Company, my actions and attitude have a direct influence on what others think of the Company and its reputation.

I will avoid any situation that represents a real or perceived Conflict of Interest. There can be no question that my motives are based solely for the best interest of the Company and its customers, shareholders, regulators, and communities.

I understand that I use equipment and facilities provided through the investment of shareholders for the purpose of serving our customers, and it is not acceptable for me to use these resources for personal gain.

I understand that I have access to confidential information provided by customers, shareholders and the Company, and I safeguard that information from accidental or inappropriate disclosure.

I understand that I have a responsibility as a Connecticut Water employee to do the “right thing” when it comes to my own actions and to share my concerns when I see or suspect something that could harm customers, co-workers, shareholders, or the communities
we serve.

Above all, I pledge to conduct my affairs to the highest ethical standard.

 

  

- 1 -

  

Government and Regulatory Agencies

who oversee our business

	
Producing a product for human consumption, being a steward of natural resources that will serve the needs of generation to come, and honoring the investments of those who
own our Company -- imposes special obligations of public trust upon me.

 

Regulatory Compliance – The Company operates as a highly regulated business. The agencies that regulate our business are Environmental Protection Agency, Internal Revenue Service, Department of Revenue
Services, Department of Labor, Occupational Safety and Health Administration, and the Securities and Exchange Commission, plus many other federal, state, and local agencies, such as the Connecticut Department of Public Utility Control. The Company is committed to operating in compliance with applicable laws and regulations and provides training and communicates to employees regarding the requirements of these agencies.  Employees should be knowledgeable about such regulatory requirements as they pertain
to their job and generally as they pertain to the Company.

Employees should also knowledgeable about the Company’s and their department’s policies and procedures to assure regulatory compliance.

You are required to immediately report regulatory violations, suspected regulatory violations, or potentially harmful/dangerous conditions to a supervisor, Company officer, or the Company’s Ethics Officer. If the call (personally or anonymously) concerns misconduct of the Company’s preparation of financial statements, audit, or
disclosure of financial statements, the Chairman of the Audit Committee will be advised of the matter to be investigated.

Regulatory Agency Investigations, Inspections, and Requests for Information – We cooperate with all government investigations, inspections, and requests for information. During a government inspection
never:

 

	
·  
	
conceal, destroy, or alter Company documents

 

	
·  
	
lie or make misleading statements to a government investigator

 

	
·  
	
attempt to cause another employee to fail to provide accurate information

 

In the event the Company undergoes a federal investigation, any employee who cooperates with a federal investigation, including a securities fraud investigation, or any provision of federal law relating to fraud against shareholders, cannot be discharged, demoted, harassed, or in any other manner discriminated against in the terms and conditions
of his employment because s/he has lawfully provided information in such investigations.

 

  

- 2 -

  

Shareholders

who own our business

	
The success of our Company is based on a foundation of trust. Our Company will only succeed if we build and maintain trust with customers, shareholders, co-workers, regulators, business partners, and communities.

 

We provide accurate and timely information about our business to our investors, the media, and the general public.

· The release of information to our investors is handled by Corporate Communications. If you receive an inquiry from the media, immediately refer the caller to Corporate Communications, the Chief Financial Officer, or the Manager of
Public Affairs.

 

· The issuance of financial information is based on a system of internal controls and a procedure for timely disclosure. The Company has established a system of internal controls to safeguard Company assets against loss and unauthorized
use or disposition and to assure that financial statements are prepared, reviewed, and disclosed to ensure the quality and accuracy of the information presented. While the President/CEO and the Vice President/CFO certify the quality and accuracy of our financial statements quarterly and annually, it is every employee’s responsibility to abide by these internal controls. Such controls, in the form of procedures, are communicated to employees, and if you have a question on any procedure within your department,
please discuss it with your supervisor or a Company officer.

 

· The Company has established and communicated a policy that forbids employees from disclosing material, non-public information.  If you possess material information that the Company has not yet disclosed publicly, you may
not buy or sell CTWS securities or disclose such information to anyone who is not an officer of the Company. As of January 24, 2008 the following employees are officers: Peter Bancroft, David Benoit, Kristen Johnson, Thomas Marston, Daniel Meaney, Terrance O’Neill, Nick Rinaldi, Eric Thornburg, and Maureen Westbrook. If an employee is uncertain as to who is an officer, they may ask the Ethics Officer or any member of management. (See Appendix A for full policy.)

 

 

  

- 3 -

  

 

Customers

	
  
	
who receive our service

	
I have access to confidential information provided by customers, shareholders and the Company, and I will safeguard that information from accidental or inappropriate disclosure.

 

The Company is committed to a high standard of water quality, customer service and customer satisfaction. Employees have an obligation to consider customers in all of our activities and to work to ensure that their needs are met.  In dealing with customers, employees are expected to:

	
• Demonstrate that the Company is committed to providing a high quality of service in an efficient manner;

 

	
• Apply our customer policies, practices and programs in a fair, equitable and nondiscriminatory manner;

 

	
• Respond to customer inquiries and requests in a prompt, courteous and accurate manner;

 

	
• Avoid any action that will endanger the health or safety of the public, and promptly correct and report any unsafe condition or hazard.

 

  

- 4 -

  

 

Business Practices

	
I use equipment and facilities provided through the investment of shareholders for the purpose of serving our customers, and it is not acceptable for me to use these resources for personal gain.

Confidential Information – Company information, including among other things, financial data, mergers/acquisitions, business processes and procedures, computer programs, wage and salary information,
customer/supplier/subcontractor and other information and developments not released to the general public, must be used solely for Company purposes and never for personal gain. Confidential information must not be shared with anyone outside of the Company unless they have a legitimate need to know based on their business with us. Employees who have access to Company confidential information must protect that information from disclosure.  Additionally, employees who have access to confidential information
shall not reveal the source or content of such information to individuals within the company, except as necessary for business purposes.

Conflict of Interest – Employees should conduct their personal or business affairs in a manner that will avoid any likelihood of conflict, or the appearance of a conflict, between their performance
and responsibilities to the Company and their personal other business interests. Employees must not participate in any activity that could conflict with–or appear to conflict with–their performance or responsibilities to the Company. Following are possible conflicts of interest situations:

	
•
	
Personal business relationships – Personal business relationships should not influence the decisions you make for the Company. You should disclose to the Company’s Ethics Officer any financial interest that you or your immediate family has in Connecticut Water’s suppliers, customers, or competitors. Nominal ownership of common
stock of a publicly owned corporation will not of itself be considered a conflict and need not be disclosed.

•Organizational relationships – If you or an immediate member of your family serves as a director, officer, or consultant with any company that does business with us, you are required disclose these obligations
in writing to the Company’s Ethics Officer within a reasonable time frame, even if you receive no money for your services.

	
I will disclose any Organizational Relationships and Outside Employment annually to the Company’s Ethics Officer

• Outside employment – Outside employment or business activity must not conflict or appear to conflict with the employee’s ability to perform his or her work at the Company. Such employment or business activity should not utilize Company time or property
or proprietary knowledge to create a conflict of interest. Do not accept outside employment with our competitors, suppliers, or any business, including a self-owned business, that poses a conflict of interest with Connecticut Water. You are required to annually disclose in writing to the Company’s Ethics Officer all outside employment.

•      Employees should never accept money, gifts, or services that would appear to undermine or influence
good business judgment or accept anything that could be construed as an attempt to influence the performance of duties or to favor a supplier, customer, or competitor. The following examples and guidelines are provided:

 

 

- 5 -

 

 

Money: No employee may solicit or accept any cash, tip or compensation in conjunction with services provided or acquired on behalf of the Company.

Gifts: On occasion, employees may accept gifts such as novelties or promotional items of a nominal value if:

	
·  
	
the gift complies with the giver’s company’s rules;

	
·  
	
the gift was not solicited;

	
·  
	
open disclosure of the gift would not embarrass the Company or the people involved.

	
I understand that as an employee of the Company, my actions and attitude have a direct influence on what others think of the Company and its reputation.

Entertainment:  Employees may accept an occasional invitation to an event, entertainment, or meals if the activity is infrequent and of reasonable value. Employees should reciprocate, as appropriate,
to prevent the appearance of an obligation.

The possible conflicts of interest noted above are examples and are not all inclusive.  If you have any question about whether a relationship or activity presents a conflict of interest, consult with the Corporate Secretary.  Possible conflict of interest matters, involving officers or board members, will be reviewed during
the annual proxy process by the Corporate Secretary who will refer any questionable matter to the Board’s Corporate Governance Committee or the independent members of the full Board for a determination.

Political Process – The Company supports employees’ rights to participate in government activities and the political process but needs to ensure that such activities do not create a conflict
or an appearance of a conflict of interest.

	
  
	
•
	
To avoid any suggestion of an indirect corporate contribution to a candidate, an employee may not work on behalf of candidate’s campaign during working hours or at any time use Company facilities or property for that purpose.

 

	
  
	
•
	
The Company will not reimburse employees for financial or personal time contributed to political campaigns.

 

	
  
	
•
	
An employee accepting public office or serving on a public body acts as an individual, not as a representative of the Company.

 

	
  
	
•
	
Employees must exercise good judgment in relationships with government officials and employees. It is important that we not place these officials in compromising positions. Even the appearance of compromise would reflect adversely upon the official and the Company.

 

 

  

- 6 -

  

	
  
	
Prohibition of Gifts to Public Officials

and State Employees

	
I will avoid any situation that represents a real or perceived Conflict of Interest. There can be no question that my motives are based solely for the best interest of the Company and its customers, shareholders,
regulators, and communities.

 

The State’s Code of Ethics for Public Officials prohibits public officials or State employees from accepting certain gifts from registered lobbyists and individuals or entities doing or seeking to do business with, or regulated by, the official or employee’s State agency or department.  While there are exceptions to the
general ban, they are very specific.  The most common exceptions to the gift ban are gifts with a value of $10 or less (e.g. pens, mugs, etc.), provided that the annual aggregate of such gifts from a single source is under $50, and up to $50 worth of food and beverage in a calendar year, provided that the giver is in attendance when the food or beverage is consumed.

Penalties for violating the gift ban can apply equally to both the giver and the recipient. Accordingly, all Company employees must contact Daniel J. Meaney, Corporate Secretary, 800-428-3985, ext. 3016, before giving any gifts to any public official or state employee to ensure that such
gifts are being given in compliance with the State’s Code of Ethics.

 

  

- 7 -

  

Campaign Contributions

	
I have a responsibility as a Connecticut Water employee to do the “right thing” when it comes to my own actions and to share my concerns when I see or suspect something that could harm customers, co-workers, shareholders,
or the communities we serve.

 

In addition, Connecticut enacted campaign reform legislation, effective December 31, 2006, that “principals” (defined below) of the Company may not contribute or solicit campaign contributions for a candidate for election to one of Connecticut's Constitutional State Offices (e.g., the Governor or the Attorney General), a party
committee or a political committee authorized to provide financial support to such a campaign at any time when the Company has a single agreement or contract with the State of Connecticut (or any of its branches, departments or agencies) valued at $50,000 or more in a fiscal year, or one or more agreements or contracts valued at $100,000 in the aggregate in a fiscal year.  The same prohibitions exist during a Request for Proposal process for prospective contract business with the State.  If
the Company has any existing or proposed contracts valued at the same levels as above with the Legislative branch (General Assembly), the new legislation also imposes similar personal contribution bans on Company “principals” with respect to committees for General Assembly candidates (i.e., State Senate or State Representatives), political action committees supporting such candidates, and state party committees.

For purposes of the above bans, the term “principal” means members of the Company’s board of directors, 5% or greater stockholders, certain executive officers, employees having managerial or discretionary responsibilities for administering the State contract, the spouses and dependent children of any of the foregoing persons,
and political action committees established by or on behalf of any of the foregoing persons.  Accordingly, all Company officers, directors, managerial personnel MUST verify with Daniel J. Meaney, Corporate Secretary, 860-669-8630, ext. 3016, their own status and the status of the Company's contracts under the new legislation, before they (or their spouses or dependent children) make or solicit campaign contributions to or for candidates for election to
any of the Constitutional State Offices or to the General Assembly.

 

  

- 8 -

  

Code of Conduct Violations and

Company Audit Misconduct

	
Code of Conduct Violations and Company Audit Misconduct should be reported to Daniel J. Meaney, the Company’s ethics Officer, or anonymously to Values Line at 1-888-475-8376

Each employee has a responsibility to report any activity which appears to violate laws, regulations (including misconduct related to the preparation, issuance, and disclosure of financial information), policies, and this Code of Conduct.

If you report a violation, please provide the time, location, names of people involved, and other details so that either the Human Resources Department or an independent member of the Board of Directors can investigate. You can report anonymously—you are not required to provide your name.

To report a violation, you may call or send a confidential note to:

Daniel J. Meaney

Corporate Secretary

Connecticut Water Service, Inc.

93 West Main Street

Clinton, CT 06413

860-669-8630, ext. 3016

Or you may anonymously call the company’s Values Line that is operated by Global Compliance, Inc., a firm retained by the company for this purpose, toll-free at 1-888-475-8376.

Prohibition Against Retaliation – The Company prohibits retaliation and/or retribution against any person who in good faith reports an ethical concern or violation of the Code of Conduct. However, anyone who uses the
Code of Conduct to spread falsehoods, threaten others, or damage another person’s reputation will be subject to disciplinary action up to and including termination.

 

 

  

- 9 -

  

 

  

- 10 -

  

Non-Public Information and Insider Trading

Connecticut Water Service, Inc. (CTWS) and its subsidiaries, including The Connecticut Water Company (collectively, the “Company”), have an Insider Trading Policy that forbids employees from disclosing material non-public information about the Company or the companies it deals with, or from profiting from such non­public information.
If you possess material information that the Company has not disclosed publicly, you may not buy or sell CTWS securities or disclose such information to anyone who is not an officer of the company.

In addition, because the CTWS shareholders and the investing public should be afforded time to receive the information and act upon it, employees who possess material non-public information should not engage in any transactions in CTWS securities until the third business day after
such information has been released.

Anyone who purchases or sells securities on the basis of material inside information, or who discloses material inside information to someone else who purchases or sells securities on the basis of such information, may be subject to serious consequences including civil penalties of up to three times the profit gained or
loss avoided, criminal fines of up to $1,000,000, and imprisonment for a term of up to 10 years. In addition, the Company may impose sanctions, including dismissal for cause, for failure to comply with the Company’s policy.

These penalties apply whether or not you derive any personal benefit. In fact, the Securities and Exchange Commission has imposed large penalties on tippers of inside information even though the tippers did not profit from their tippee’s trading. The restrictions described herein also apply to your family members and other persons living
in your household.

For the purpose of this policy, material information includes any information that a reasonable investor would consider important in a decision to buy, hold or sell stock. In short, any information which could reasonably affect the price of the stock, positively or negatively. Examples include:

	
  
	
•
	
change in revenues or earnings of the Company

	
  
	
•
	
change in the value or composition of any of the Company’s assets

	
  
	
•
	
change in operations, such as a significant interruption or curtailment of service

	
  
	
•
	
contemplated acquisition of another company or its securities or disposition of an existing business or significant assets

	
  
	
•
	
offer by another company to acquire the Company

	
  
	
•
	
contemplated issuance of securities or stock split/stock dividend

	
  
	
•
	
significant drinking water violations

	
  
	
•
	
adverse actions by the DPUC, DPH or DEP

	
  
	
•
	
commencement of a new business, negotiation of a major contract or loss of the same

	
  
	
•
	
change in management or dividend policy

	
  
	
•
	
initiation or termination of litigation

 

If you have any questions about specific transactions or about this Policy, please contact Dan Meaney, Corporate Secretary, Ext. 3016.

 

 

- 11 -

 

Responsibility Statement

 

I have received and read the Connecticut Water Service, Inc. and Subsidiaries Employees Code of Conduct, dated, November 20, 2009.  I understand its contents and accept my responsibility for acting in accordance with the Code.

 

 

Name

 

 

Signature

 

 

Date

Please list organizational relationships and outside employment, including self-employment as described on page 5:

 

 

- 12 -exhibit_10-2.htm

Exhibit 10.2

TWELFTH AMENDMENT TO

THE CONNECTICUT WATER COMPANY

EMPLOYEES' RETIREMENT PLAN

(as amended and restated as of January 1, 1997, except as otherwise provided therein)

 

1.           The following new Section 4.6 is added to the Plan:

4.6           Funding-Based Limits on Benefits and Benefit Accruals.

(a)           Intent.  This provision is included in order to comply with the requirements of Section 436 of the Code and shall be interpreted and administered in accordance with the terms thereof.  This
provision applies with respect to the entire Plan including Appendix C and Appendix D.  This provision is effective as of January 1, 2008.

(b)           Limitations on Unpredictable Contingent Event Benefits.

(1)           If a Participant is entitled to an Unpredictable Contingent Event Benefit payable with respect to any event occurring during any Plan Year, such benefit may not be provided if the Adjusted Funding Target Attainment Percentage
(AFTAP) for such Plan Year:

(A)           is less than 60 percent, or

(B)           would be less than 60 percent taking into account such occurrence.

(2)           Subparagraph (1) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year, upon payment by the Employer of a contribution (in addition to any minimum required contribution under
Section 430 of the Code) equal to:

(A)           in the case of subparagraph (1)(A), the amount of the increase in the funding target of the Plan (under Section 430 of the Code) of the Plan Year attributable to the occurrence referred to in subparagraph (1), and

(B)           in the case of subparagraph (1)(B), the amount sufficient to result in an AFTAP of 60 percent.

(3)           For purposes of this paragraph (b), the term “Unpredictable Contingent Event Benefit” means any benefit payable solely by reason of:

(A)           a plant shutdown (or similar event, as determined by the Secretary of the Treasury), or

(B)           an event other than the attainment of any age, performance of any service, receipt or derivation of any compensation, or occurrence of death or disability.

(c)           Limitations on Plan Amendments Increasing Liability for Benefits.

(1)           No amendment which has the effect of increasing liabilities of the Plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become
nonforfeitable will take effect during any Plan Year if the AFTAP for such Plan Year is:

(A)           less than 80 percent, or

(B)           would be less than 80 percent taking into account such amendment.

(2)           Subparagraph (1) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year (or if later, the effective date of the amendment), upon payment by the Employer of a contribution (in addition
to any minimum required contribution under Section 430 of the Code) equal to:

(A)           in the case of subparagraph (1)(A), the amount of the increase in the funding target of the Plan (under Section 430 of the Code) for the Plan Year attributable to the amendment, and

(B)           in the case of subparagraph (1)(B), the amount sufficient to result in an AFTAP of 80 percent.

(3)           Subparagraph (1) shall not apply to any amendment which provides for an increase in benefits under a formula which is not based on a Participant’s compensation, but only if the rate of such increase is not in excess
of the contemporaneous rate of increase in average wages of Participants covered by the amendment.

(d)           Limitations on Accelerated Benefit Distributions.

(1)           If the Plan’s AFTAP for a Plan Year is less than 60 percent, the Plan may not pay any Prohibited Payment after the Valuation Date for the Plan Year.

(2)           During any period that the Employer is a debtor in a case under title 11, United States Code, or similar Federal or State law, the Plan may not pay any Prohibited Payment.  The preceding sentence shall not apply
on or after the date on which the enrolled actuary of the Plan certifies that the AFTAP of the Plan is not less than 100 percent.

(3)           (A)           In any case in which the Plan’s AFTAP for a Plan Year is 60 percent or greater but less than 80 percent, the Plan may not pay any Prohibited Payment
after the valuation date for the Plan Year to the extent the amount of the payment exceeds the lesser of:

(i)           50 percent of the amount of the payment which could be made without regard to this provision, or

(ii)           the present value (determined under guidance prescribed by the Pension Benefit Guaranty Corporation, using the interest and mortality assumptions under Section 417(e) of the Code) of the maximum guarantee with respect
to the Participant under Section 4022 of the Employee Retirement Income Security Act of 1974.

(B)           One-Time Application:

(i)           Only one payment meeting the requirements of subparagraph (A) may be made with respect to any Participant during any period of consecutive Plan Years to which the limitations under subparagraph (1), (2) or (3) of this paragraph
(d) applies.

(ii)           For purposes of this subparagraph, a Participant and any beneficiary on his behalf (including an alternate payee, as defined in Section 414(p)(8) of the Code) shall be treated as one Participant .  If the accrued
benefit of a Participant is allocated to such an alternate payee and one or more other persons, the amount under subparagraph (A) shall be allocated among such persons in the same manner as the accrued benefit is allocated unless the qualified domestic relations order provides otherwise.

(4)           This paragraph (d) shall not apply for any Plan Year if the terms of the Plan (as in effect for the period beginning on September 1, 2005, and ending with such Plan Year) provide for no benefit accruals with respect to any
Participant during such period.

(5)           For purposes of this paragraph (d), the term “Prohibited Payment” means:

(A)           any payment, in excess of the monthly amount paid under a single life annuity (plus any social security supplements described in the last sentence of Section 411(a)(9) of the Code), to a Participant or beneficiary whose
Annuity Starting Date occurs during any period a limitation under subparagraph (1) or (2) is in effect;

(B)           any payment for the purchase of an irrevocable commitment from an insurer to pay benefits; and

(C)           any other payment specified by the Secretary of the Treasury by regulations.

Such terms shall not include the payment of a benefit which under Section 411(a)(11) of the Code may be immediately distributed without the consent of the Participant.

(e)           Limitation on Benefit Accruals.

(1)           In any case in which the Plan’s AFTAP for a Plan Year is less than 60 percent, benefit accruals under the Plan shall cease as of the valuation date for the Plan Year.

(2)           Subparagraph (1) shall cease to apply with respect to any Plan Year, effective as of the first day of the Plan Year, upon payment by the Employer of a contribution (in addition to any minimum required contribution under
Section 430 of the Code) equal to the amount sufficient to result in an AFTAP of 60 percent.

(f)           The rules relating to contributions required to avoid such benefit limitations which are set forth in Section 436(f) of the Code shall be applied to the extent applicable.

(g)           Presumed Underfunding.

(1)           In any case in which a benefit limitation under paragraphs (b), (c), (d) or (e) of this Section 4.6 has been applied to the Plan with respect to the Plan Year preceding the current Plan Year, the AFTAP of the Plan for the
current Plan Year shall be presumed to be equal to the AFTAP of the Plan for the preceding Plan Year until the enrolled actuary of the Plan certifies the actual AFTAP of the Plan for the current Plan Year.

(2)           In any case in which no certification of the AFTAP for the current Plan Year is made with respect to the Plan before the first day of the 10th month
of such year, for purposes of paragraph (b), (c), (d) and (e) of this Section 4.6, such first day shall be deemed, for purposes of such paragraph, to be the valuation date of the Plan for the current Plan Year and the Plan’s AFTAP shall be conclusively presumed to be less than 60 percent as of such first day.

(3)           In any case in which:

(A)           a benefit limitation under paragraphs (b), (c), (d) or (e) of this Section 4.6 did not apply to a Plan with respect to the Plan Year preceding the current Plan Year, but the AFTAP of the Plan for such preceding Plan Year
was not more than 10 percentage points greater than the percentage which would have caused such paragraph to apply to the Plan with respect to such preceding Plan Year, and

(B)           as of the first day of the 4th month of the current Plan Year, the enrolled actuary of the Plan has not certified the actual AFTAP of the Plan
for the current Plan Year, then until the enrolled actuary so certifies, such first day shall be deemed, for purposes of such paragraph, to be the valuation date of the Plan for the current Plan Year and the AFTAP of the Plan as of such first day shall, for purposes of such paragraph, be presumed to be equal to 10 percentage points less than the AFTAP of the Plan for such preceding Plan Year.

(4)           Nothing herein shall preclude the use of range certification during the first nine (9) months of the Plan Year, to the extent permitted under applicable proposed or final Treasury Regulations and in a manner consistent therewith.

(h)           Treatment of Plan as of the Close of Prohibited or Cessation Period.

(1)           Payments and accruals will resume effective as of the day following the close of the period for which any limitation of payment or accrual of benefits under paragraph (d) or (e) applies.

(2)           Nothing in this paragraph (h) shall be construed as affecting the Plan’s treatment of benefits which would have been paid or accrued but for this Section 4.6.

(i)           For purposes of this Section 4.6, the term “Adjusted Funding Target Attainment Percentage” or “AFTAP” shall have the meaning set forth in Section 436(j) of the Code.”

 

2.           Section 10.2 is amended, effective January 1, 2007, by the deletion of “90” wherever the same shall appear therein and the substitution of “180” in lieu thereof.

 

3.           The following paragraph is added to Section 10.2 at the end thereof:

“Effective January 1, 2008, the joint and 75% survivor option with the Participant’s Spouse as Contingent Annuitant shall be referred to as the “qualified optional survivor annuity.”  The notification provided to the Participant pursuant to this Section 10.2 shall include information concerning the terms
and conditions of the qualified optional survivor annuity.  Effective January 1, 2007, the notification provided to the Participant pursuant to this Section 10.2 who has the right to defer receipt of a distribution shall notify the Participant of the consequences of a failure to defer receipt of such a distribution.”

 

4.           The following sentence is added to paragraph (b) of Section 10.3 at the end thereof:

“Effective January 1, 2008, the joint and 75% survivor option with the Participant’s Spouse as Contingent Annuitant shall be referred to a the qualified optional survivor annuity.”

 

5.           Section 10.6 is amended to read as follows:

“10.6           (a)           Direct Rollovers.  This Section 10.6 applies to distributions made under
the Plan on or after January 1, 2002.  Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Plan Administrator, and subject to such rules as the Plan Administrator may adopt consistent with the provisions of the Code and regulations thereunder, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified
by the distributee in a direct rollover.

(b)           Definitions.

(1)  Eligible rollover distribution:  An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution on account of hardship; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

(2)  Eligible retirement plan:  An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code,
an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the distributee's eligible rollover distribution.  For distributions made after December 31, 2001, an eligible retirement plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan.  The definition of eligible retirement plan shall also apply in the case of a distribution to a surviving Spouse, or to a Spouse or former Spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code.  Effective January 1, 2008, an eligible retirement plan with respect to the direct rollover provisions
also includes a Roth IRA, in accordance with the provisions of Section 408A of the Code and Notice 2008-30.

(3)  Distributee:  A distributee includes an employee or former employee.  In addition, the employee's or former employee's surviving Spouse and the employee's or former employee's Spouse or former
Spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the Spouse or former Spouse.  Effective January 1, 2007, a distributee also includes the Participant’s non-Spouse designated Beneficiary.  In the case of a non-Spouse designated Beneficiary, the direct rollover may be made only to an individual retirement account or annuity described in Sections 408(a) and (b) of the Code,
or effective January 1, 2008, a Roth IRA under Section 408A of the Code and Notice 2008-30 that is established on behalf of the designated Beneficiary and that will be treated as an inherited IRA pursuant to the provisions of Section 402(c)(11) of the Code.  Also, in this case, the determination of any required minimum distribution under Section 401(a) (9) of the Code that is ineligible for rollover shall be made in accordance with Notice 2007-7, Q&A 17 and 18, 2007-5 I.R.B. 395.

(4)  Modification of definition of eligible rollover distribution to include after tax employee contributions.  A portion of a distribution shall not fail to be an eligible rollover distribution merely because
the portion consists of after tax employee contributions which are not includible in gross income.  However, such portion may be paid only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code (or, effective January 1, 2007, a qualified defined benefit plan or an annuity contract described in Section 403(b) of the Code) that agrees to separately account for amounts
so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

(5)  Direct rollover:  A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee.”

 

6.         The following paragraph is added to Section 13.2 at the end thereof:

“The vested percentage of a Participant’s Accrued Benefit, determined as of the later of the date the amendment is adopted or the date it is effective, shall not be reduced by any such amendment.  Furthermore, in no event shall an amendment to the Plan which revises the vesting schedule result in a less liberal vesting
schedule (at any point in the schedule) with respect to the Participant’s Accrued Benefit as of the later of the adoption or the effective date of the Amendment.”

 

7.           The following paragraph is added to Exhibit I at the end thereof:

“Effective for lump sum distributions with annuity starting dates on or after January 1, 2008, the mortality and interest assumptions utilized for purposes of this Exhibit I and Appendix C and D of this Plan shall be the “Applicable Mortality Table” and the “Applicable Interest Rate”, as follows; and, for
purposes of Section 415 of the Code and Article XVI hereof, as set forth in the Eleventh Amendment, such terms shall also have the meanings set forth below:

(1)  The “Applicable Mortality Table” shall be the mortality table prescribed by the Secretary of the Treasury pursuant to Section 417(e)(3)(B) of the Code.  This provision is intended to automatically incorporate changes to such table without requirement for
Plan amendment.

 

(2)  The “Applicable Interest Rate” shall be the rates determined in accordance with Section 417(e)(3) of the Code, as amended by the Pension Protection Act, including the transition rules from 2008-2011, for the Lookback Month.  The “Lookback Month”
shall be the month of November preceding the “Stability Period” and the “Stability Period” shall be the Plan Year.”

 

8.              The following paragraph (e) is added to the definition of “Actuarial Equivalent” in Article II of Appendix C:

“(e)  Effective for lump sum distributions with annuity starting dates on or after January 1, 2008, the mortality and interest assumptions utilized shall be the Applicable Mortality Table and the Applicable Interest Rate as set forth in Exhibit I, as amended by this Twelfth Amendment.”

9.              The following sentence is added to Section 5.1 as Appendix C at the end thereof:

“Effective January 1, 2008, for purposes of this Appendix C only, the joint and 50% survivor annuity with the Participant’s surviving spouse as contingent annuitant is referred to as the qualified optional survivor annuity.”

 

10.              The following sentence is added to paragraph (a) of Section 2.2 of Appendix D:

“Effective January 1, 2008, for purposes of determining the amount of a lump sum payment under Sections 7.5 and 8.2(e), the Applicable Morality Table and Applicable Interest Rate, as set forth in Exhibit I, as amended by this Twelfth Amendment, shall be utilized; and”

 

11.              Section 7.3 of Appendix D is amended, effective January 1, 2007, by the deletion of “90” or “ninety (90)” wherever the same shall appear therein and the substitution of “180” or “one hundred eighty (180)”
in lieu thereof.

 

12.             Section 7.3 of Appendix D is amended, effective January 1, 2007, by the addition of the following sentence at the end thereof:

“Effective January 1, 2007, the notification provided to the Participant pursuant to this Section 7.3 who has the right to defer receipt of a distribution shall notify the Participant of the consequences of a failure to defer receipt of such a distribution.”

 

13.             The following three sentences are added to subparagraph (1) of paragraph (a) of Section 7.4 of Appendix D:

“Effective January 1, 2008, the joint and 75% survivor option with the Participant’s spouse as contingent annuitant shall be referred to as the qualified optional survivor annuity.  The notification provided to the Participant pursuant to Section 7.3 shall include information concerning terms and conditions of the
qualified optional survivor annuity.  Effective January 1, 2007, the notification provided to the Participant pursuant to this Section 7.4 who has the right to defer receipt of a distribution shall notify the Participant of the consequences of a failure to defer receipt of such a distribution.”

 

14.             Except as hereinabove modified and amended, the Plan, as amended, shall remain in full force and effect.

This Amendment is effective as of the various dates specified herein.

  

  

  

	
  
	
CERTIFICATE

The undersigned hereby certifies that The Connecticut Water Company Employees' Retirement Plan, as amended and restated effective as of January 1, 1997, except as otherwise provided therein, was duly amended by the Board of Directors of The Connecticut Water Company by a Twelfth Amendment on  November
20, 2009, and the Plan, as so amended, is in full force and effect.

	
Date:  November 23, 2009
	
By:  /s/ Daniel J. Meaney

 

Daniel J. Meaney

Corporate Secretary

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