Document:

ex10-13h.htm

    Exhibit
      10.13(h)

    
 

    CHANGE
      IN CONTROL TERMINATION AGREEMENT

    

    

    This
      Change in Control Termination Agreement (the “Agreement”) is entered into as of
      April 1, 2007, between Middlesex Water Company, a New Jersey corporation, with
      its principal place of business located at 1500 Ronson Road, P.O. Box 1500,
      Iselin, New Jersey 08830-0452, (the “Company”), and Bernadette M. Sohler,
      residing at 62 Timberlane Drive, Colonia, New Jersey 07067, (referred to as
      “You” in this Agreement).

    

    Recitals

    

    A.           The
      Company considers it essential to the best interests of its stockholders to
      foster the continuous employment of key management personnel. In this
      connection, the Board of Directors of the Company (the “Board”) recognizes that,
      as is the case with many publicly held Companies, the possibility of a Change
      In
      Control may exist.  This possibility, and the uncertainty and
      questions that it may raise among management, may result in the departure or
      distraction of management personnel to the detriment of the Company and its
      stockholders.

    

    B.           The
      Board has determined that appropriate steps should be taken to reinforce and
      encourage the continued attention and dedication of members of the Company’s
      management, including yourself, to the assigned duties without distraction
      in
      the face of potentially disturbing circumstances arising from the possibility
      of
      a Change In Control of the Company.

    

    C.           To
      induce you to remain in the employ of the Company, and in consideration of
      your
      agreement set forth below, the Company agrees that you shall receive the
      severance benefits set forth in this Agreement in the event your employment
      with
      the Company is terminated or “constructively terminated” as defined herein in
      connection with a “Change In Control of the Company” (as defined in Section 2
      below) under the circumstances described below.  This Agreement is
      meant to supersede any other specific written agreements that may have been
      entered into between yourself and the Company concerning termination of
      employment.

    

    Therefore,
      in consideration of your continued employment and the parties’ agreement to be
      bound by the terms contained in this Agreement, the parties agree as
      follows:

    

    1.  Term
      of Agreement.  This Agreement shall commence as
      of  April 1, 2007 and shall continue in effect through December 31,
      2007.  However, commencing on December 31, 2007, and each December 31
      afterwards, the term of this Agreement shall automatically be extended for
      one
      additional year unless, no later than the preceding November 1, the Company
      shall have given notice that

    

    
      
        
          
          

        

        
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    it
      does
      not wish to extend this Agreement. Notwithstanding the foregoing, if a Change
      In
      Control of the Company shall be proposed to occur or have occurred during the
      original or any extended term of this Agreement, this Agreement shall continue
      in effect until your termination of employment with the Company or its successor
      or when all amounts due under this Agreement following a termination have been
      paid, whichever is later.

    

    2.  Change
      In Control.  No benefits shall be payable under this
      Agreement unless there shall have been a Change In Control of the Company,
      as
      set forth below.  For purposes of this Agreement, a “Change In
      Control” of the Company shall be deemed to occur if any party or group acquires
      beneficial ownership of 20 percent or more of the voting shares of the Company;
      or if shareholder approval is required for a transaction involving the
      acquisition of the Company through the purchase or exchange of the stock or
      assets of the Company by merger or otherwise; or if one-third or more of the
      Board elected in a 12-month period or less are so elected without the approval
      of a majority of the Board as constituted at the beginning of such period;
      or a
      liquidation or dissolution of Company.

    

    3.  Termination
      Following Change In Control.  If any of the events
      described in Section 2 above constituting a Change In Control of the Company
      shall have occurred, unless the termination is (A) because of your death,
      Disability or Retirement, (B) by the Company for Cause, or (C) by you other
      than
      for Good Reason, on the subsequent termination or “Constructive Termination” of
      your employment during the term of this Agreement:  (i) you shall be
      entitled to the benefits provided in subsection 4.3 below if such termination
      occurs on or before the third anniversary of the Change in Control or (ii)
      you
      shall be entitled to the benefits provided in subsection 4.4 below if such
      termination occurs after the third anniversary of the Change in
      Control.

    

    3.1 Disability;
      Retirement.  If, as a result of your incapacity due to
      physical or mental illness, you shall have been absent from the full-time
      performance of your duties with the Company for 6 consecutive months, and within
      30 days after written notice of termination is given you shall not have returned
      to the full-time performance of your duties, your employment may be terminated
      for "Disability."  Termination by the Company or you of your
      employment based on "Retirement" shall mean termination in accordance with
      the
      Company's retirement policy, including early retirement, generally applicable
      to
      its salaried employees or in accordance with any retirement arrangement
      established with your consent with respect to you.

    

    3.2  Cause.  Termination
      by the Company of your employment for "Cause" shall mean termination
      on:

    

    3.2.1  The
      willful and continued failure by you to substantially perform your duties with
      the Company as such employment was

    

    
      
        
          
          

        

        
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    performed
      by you prior to the Change of Control (other than any such failure resulting
      from your incapacity due to physical or mental illness or any such actual or
      anticipated failure after the issuance by you of a Notice of Termination for
      Good Reason as defined in Subsections 3.4 and 3.3, respectively) after a written
      demand for substantial performance is delivered to you by the Board, which
      demand specifically identifies the manner in which the Board believes that
      you
      have not substantially performed your duties; or

    

    3.2.2 The
      willful act by you in conduct that is demonstrably and materially injurious
      to
      the Company, and which the Board deems to cause or will cause substantial
      economic damage to the Company or injury to the business reputation of the
      Company, monetarily or otherwise.  For purposes of this Subsection, no
      act, or failure to act, on your part shall be deemed “willful" unless done, or
      omitted to be done, by you not in good faith and without a reasonable belief
      that your action or omission was in the best interest of the
      Company.  Notwithstanding the foregoing, you shall not be deemed to
      have been terminated for Cause unless and until there shall have been delivered
      to you a copy of a resolution duly adopted by the affirmative vote of not less
      than three-quarters of the entire membership of the Board at a meeting of the
      Board called and held for such purpose (after reasonable notice to you and
      an
      opportunity for you, together with your counsel, to be heard before the Board),
      finding that in the good faith opinion of the Board you were guilty of conduct
      set forth above in clauses 3.2.1 or 3.2.2 of the first sentence of this
      Subsection and specifying the particulars in detail.

    

    3.3 Good
      Reason.  You shall be entitled to terminate your
      employment for Good Reason.  For purposes of this Agreement, "Good
      Reason" shall mean, without your express written consent, the occurrence in
      connection with a Change In Control of the Company of any of the following
      circumstances unless, in the case of paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7,
      or
      3.3.8, the circumstances are fully corrected prior to the Date of Termination
      specified in the Notice of Termination, as defined in Subsections 3.5 and 3.4,
      respectively, given in respect of them.  If you have Good Reason for
      your termination you shall be considered to have been “Constructively
      Terminated” by the Company under the following circumstances:

    

    3.3.1  The
      assignment to you of any duties inconsistent with your status and position
      (i)
      prior to the Change In Control where such change is a direct result of any
      pending Change in Control; or (ii) as such status exists immediately prior
      to
      the Change In Control of the Company, or (iii) a substantial adverse alteration
      in the nature or

    

    
      
        
          
          

        

        
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    status
      of your responsibilities from those in effect immediately
      prior to the Change In Control of the Company whichever is applicable;

    

    3.3.2 A
      reduction by the Company in your annual
      base salary as in effect on this date or as the same may be increased from
      time
      to time irrespective of future Company policies including any across-the-board
      salary reductions similarly affecting all key employees of the Company;

    

    3.3.3 Your
      relocation, without your consent, to
      a location not within twenty-five (25) miles of your present office or job
      location, except for required travel on the Company's business to an extent
      substantially consistent with your present business travel obligations;

    

    3.3.4 The
      failure by the Company, without your
      consent, to pay to you any part of your current compensation, or to pay to
      you
      any part of an installment of deferred compensation under any deferred
      compensation program of the Company, within fourteen (14) days of the date
      the
      compensation is due;

    

    3.3.5 The
      failure by the Company to continue in
      effect any bonus to which you were entitled, or any compensation plan in which
      you participate (i) prior to the Change in Control where such change is a direct
      result of any pending Change In Control, or (ii) immediately prior to the Change
      In Control of the Company that is material to your total compensation, including
      but not limited to the Company's Restricted Stock Plan, 401(k) Plan, and Benefit
      Plans, or any substitute plans adopted prior to the Change In Control of the
      Company, unless an equitable arrangement (embodied in an ongoing substitute
      or
      alternative plan) has been made with respect to the plan, or the failure by
      the
      Company to continue your participation in it (or in such substitute or
      alternative plan) on a basis not materially less favorable, both in terms of
      the
      amount of benefits provided and the level of your participation relative to
      other participants, as existed at the time of the Change In Control;

    

    3.3.6 The
      failure by the Company to continue to
      provide you with (i) benefits substantially similar to those enjoyed by you
      under any of the Company's life insurance, medical, health and accident, or
      disability plans in which you were participating at the time of the Change
      In
      Control of the Company was in effect for the employees of the Company generally
      at the time of the Change In Control, (ii) the failure to continue to provide
      you with a Company automobile or allowance in lieu of it at the time of the
      Change In Control of the Company, (iii) the taking of any action by the Company
      that would

    

    
      
        
          
          

        

        
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    directly
      or indirectly materially reduce any of such benefits or deprive you of any
      material fringe benefit enjoyed by you at the time of the Change In Control
      of
      the Company, or (iv) the failure by the Company to provide you with the number
      of paid vacation days to which you are entitled on the basis of years of service
      with the Company in accordance with the Company's normal vacation policy in
      effect at the time of the Change In Control of the Company;

    

    3.3.7 The
      failure of the Company to obtain a satisfactory agreement from any successor
      to
      assume and agree to perform this Agreement, as contemplated in Section 5 of
      this
      Agreement; or

    

    3.3.8 Any
      purported termination of your employment that is not effected pursuant to a
      Notice of Termination satisfying the requirements of Subsection 3.4 below (and,
      if applicable, the requirements of Subsection 3.2 above); for purposes of this
      Agreement, no such purported termination shall be effective.

    

    3.4 Notice
      of Termination.  Any purported termination of your
      employment by the Company or by you shall be communicated by written Notice
      of
      Termination to the other party to this Agreement in accordance with Section
      6 of
      this Agreement.  For purposes of this Agreement, a "Notice of
      Termination" shall mean a notice that shall indicate the specific termination
      provision in this Agreement relied on, and shall set forth in reasonable detail
      the facts and circumstances claimed to provide a basis for termination of your
      employment under the provision so indicated.   Your rights to
      terminate your employment pursuant to this Subsection shall not be affected
      by
      your incapacity due to physical or mental illness.  Your continued
      employment shall not constitute consent to, or a waiver of rights with respect
      to, any circumstance constituting Good Reason under this
      Agreement.  In the event you deliver Notice of Termination based on
      circumstances set forth in Paragraphs 3.3.1, 3.3.5, 3.3.6, 3.3.7, or 3.3.8
      above, which are fully corrected prior to the Date of Termination set forth
      in
      your Notice of Termination, the Notice of Termination shall be deemed withdrawn
      and of no further force or effect.

    

    3.5 Date
      of Termination, etc.  "Date of Termination" shall mean
      (A) if your employment is terminated for Disability, 30 days after Notice of
      Termination is given (provided that you shall not have returned to the full-time
      performance of your duties during such 30-day period), and (B) if your
      employment is terminated pursuant to Subsection 3.2 or 3.3 above or for any
      other reason (other than Disability), the date specified in the Notice of
      Termination (which, in the case of a termination pursuant to Subsection 3.2
      above shall not be less than 30 days, and in the case of a termination pursuant
      to Subsection 3.3 above shall not be less than 15 nor more than 60 days,
      respectively, from the date the Notice of Termination is
      given).  However, if within 15 days after any Notice

    

    
      
        
          
          

        

        
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    of
      Termination is given, or, if later, prior to the Date of Termination (as
      determined without regard to this provision), the party receiving the Notice
      of
      Termination notifies the other party that a dispute exists concerning the
      termination, then the Date of Termination shall be the date on which the dispute
      is finally determined, either by mutual written agreement of the parties, by
      a
      binding arbitration award, or by a final judgment, order, or decree of a court
      of competent jurisdiction (which is not appealable or with respect to which
      the
      time for appeal has expired and no appeal has been perfected).  The
      Date of Termination shall be extended by a notice of dispute only if the notice
      is given in good faith and the party giving the notice pursues the resolution
      of
      the dispute with reasonable diligence.  Notwithstanding the pendency
      of any such dispute, the Company will continue to pay you your full compensation
      in effect when the notice giving rise to the dispute was given (including,
      but
      not limited to, base salary) and continue you as a participant in all
      compensation, benefit, and insurance plans in which you were participating
      when
      the notice giving rise to the dispute was given, until the dispute is finally
      resolved in accordance with this Subsection.  Amounts paid under this
      Subsection are in addition to all other amounts due under this Agreement and
      shall not be offset against or reduce any other amounts due under this
      Agreement.

    

    4.  Compensation
      on Termination or During Disability.  Following a Change
      In Control of the Company, as defined by Section 2, on termination of your
      employment or during a period of disability you shall be entitled to the
      following benefits:

    

    4.1 During
      any period that you fail to perform your full-time duties with the Company
      as a
      result of incapacity due to physical or mental illness, you shall continue
      to
      receive your base salary at the rate in effect at the commencement of any such
      period, together with all amounts payable to you under any compensation plan
      of
      the Company during the period, until this Agreement is terminated pursuant
      to
      section 3.1 above.  Thereafter, or in the event your employment shall
      be terminated by the Company or by you for Retirement, or by reason of your
      death, your benefits shall be determined under the Company's retirement,
      insurance, and other compensation programs then in effect in accordance with
      the
      terms of those programs.

    

    4.2  If
      your employment shall be terminated by the Company for Cause or by you other
      than for Good Reason, Disability, death, or Retirement, the Company shall pay
      you your full base salary through the Date of Termination at the rate in effect
      at the time Notice of Termination is given, plus all other amounts and benefits
      to which you are entitled under any compensation plan of the Company at the time
      the payments are due.  The Company shall have no obligations to you
      under this Agreement.

    

    
      
        
          
          

        

        
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    4.3  On
      or before the third anniversary of the Change In Control, if your employment
      by
      the Company shall be terminated (a) by the Company other than for Cause,
      Retirement or Disability, or (b) by you for Good Reason (as defined in Section
      3.3 herein), then you shall be entitled to the benefits provided
      below:

    

    4.3.1  The
      Company shall pay you your full salary through the Date of Termination at the
      rate in effect at the time notice of Termination is given, plus all other
      amounts and benefits to which you are entitled under any compensation plan
      of
      the Company, at the time the payments are due, except as otherwise provided
      below.

    

    4.3.2 In
      lieu of any further salary payments to you for periods subsequent to the Date
      of
      Termination, the Company shall pay to you, as severance pay the
      following:  (i) a lump sum severance payment equal to three (3) times
      the average of your Compensation for the five (5) years prior to the occurrence
      of the circumstance giving rise to the notice of Termination (or if employed
      less than 5 years, the average annualized compensation of the period worked
      to
      date), plus (ii) the amounts in the forms set forth in paragraphs 4.3.3, 4.3.4
      and 4.3.5 (the “Severance Payments”).  In addition to the Severance
      Payments, the Company shall pay to you an additional amount equal to the amount
      of the Excise Tax, if any,  that is due or determined to be due under
      Section 4999 of the Internal Revenue Code of 1986, as amended, resulting from
      the Severance Payments or any other payments under this Agreement or any other
      agreement between you and the Company and an amount sufficient to pay the taxes
      on any such Excise Taxes (the “Gross-up”).

    

    4.3.3 The
      Company shall continue coverage for you and your dependents under any health
      or
      welfare benefit plan under which you and your dependents were participating
      prior to the Change in Control for a period ending on the earlier to
      occur of (i) the date you become covered by a new employer’s health and welfare
      benefit plan, (ii) the date you become covered by Medicare, or (iii) the date
      which is thirty-six (36) months from the date of Termination.  The
      coverage for your dependents shall end earlier than (i), (ii) or (iii) if
      required by the health or welfare benefit plan due to age
      eligibility.

    

    4.3.4 The
      Company shall pay to you any deferred compensation, including, but not limited
      to deferred bonuses, allocated or credited to you or your account as of the
      Date
      of Termination.

    

    
      
        
          
          

        

        
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    4.3.5 Outstanding
      stock options or Restricted Stock grants, if any, granted to you under the
      Company's Stock Plans which are not vested on Termination shall immediately
      vest.

    

    4.3.6 Where
      you shall prevail in any such action, the Company shall also pay to you all
      legal and accounting fees and expenses incurred by you as a result of the
      termination (including all such fees and expenses incurred by you as a result
      of
      the termination (including all such fees and expenses, if any, incurred in
      contesting or disputing any termination or in seeking to obtain or enforce
      any
      right or benefit provided by this Agreement or in connection with any tax audit
      or proceeding to the extent attributable to the application of Code Section
      4999
      to any payment or benefit provided under this Agreement) or any other agreement
      with the Company.

    

    4.3.7 The
      amount of Severance Payments and any Gross-up due to you under this or any
      other
      relevant agreement with the Company shall be determined by a third party agreed
      to by you and the Company.  If you cannot agree on a third party, then
      both third parties shall determine the amounts due under this
      Agreement.  If the third parties do not agree on the amount to be paid
      to you, then either party may submit the calculation of the amounts which are
      in
      dispute to Arbitration in accordance with this Agreement.  The
      payments provided for in Paragraphs 4.3.2, 4.3.4 and 4.3.5 above, shall be
      made
      no later than the thirtieth (30th) day following the Date of
      Termination.  However, if the amounts of the payments cannot be
      finally determined on or before that day, the Company shall pay to you on that
      day an estimate, as determined in good faith by the Company, of the minimum
      amount of such payments and shall pay the remainder of those payments (together
      with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as
      soon
      as the amount can be determined but in no event later than the 30th day after
      the Date of Termination.  In the event that the amount of the estimate
      payments exceeds the amount subsequently determined to have been due, the excess
      shall constitute a loan by the Company to you payable on the 30th day after
      demand by the Company (together with interest at the rate provided in Section
      1274(b)(2)(B) of the Code).

    

    4.4  After
      the third anniversary of the Change In Control, if your employment by the
      Company shall be terminated (a) by the Company other than for Cause, Retirement
      or Disability, or (b) by you for Good Reason (as defined in Section 3.3 herein),
      then you shall be entitled to the benefits provided in Section 4.3 above and
      as
      otherwise provided under this Agreement except that sub paragraph 4.3.2(i)
      shall
      read: (i) a lump sum severance payment equal to one and

    

    
      
        
          
          

        

        
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    one
      half
      (1.5) times the average of your Compensation for the five (5) years prior to
      the
      occurrence of the circumstance giving rise to the notice of Termination (the
      “Termination Payment”).

    

    4.5  For
      purposes of this Agreement, “Compensation” shall mean the aggregate remuneration
      paid by the Company to you during a calendar year, including bonuses, awards
      under the Company’s Restricted Stock Plan, benefits under employee benefit
      plans, automobile allowances or any fees paid to you as remuneration for serving
      as a Director of the Company.

    

    4.6 You
      shall not be required to mitigate the amount of any payment provided for in
      this
      Section 4 by seeking other employment or otherwise, nor shall the amount of
      any
      payment or benefit provided for in this Section 4 be reduced by any compensation
      earned by you as the result of employment by another employer, by retirement
      benefits, by offset against any amount claimed to be owed by you to the Company,
      or otherwise except as specifically provided in this Section 4.

    

    4.7 In
      addition to all other amounts payable to you under this Section 4, you shall
      be
      entitled to receive all qualified benefits payable to you under the Company's
      401(k) Plan, Defined Benefit Plan and any other plan or agreement relating
      to
      retirement benefits in accordance with the terms of those plans.

    

    5.  Successors;
      Binding Agreement.

    

    5.1 The
      Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation, or otherwise) to all or substantially all of the business
      and/or assets of the Company to expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place.  Failure
      of the Company to obtain the assumption and agreement prior to the effectiveness
      of any succession shall be a breach of this agreement and shall entitle you
      to
      compensation from the Company in the same amount and on the same terms as you
      would have been entitled to under this Agreement if you had terminated your
      employment for Good Reason following a Change In Control of the Company, except
      that for purposes of implementing the foregoing, the date on which any such
      succession becomes effective shall be deemed the Date of
      Termination.

    

    5.2 This
      Agreement shall inure to the benefit of and be enforceable by your personal
      or
      legal representatives, executors, administrators, heirs, distributees, and
      legatees.  If you should die while any amount would still be payable
      to you if you had continued to live, all such amounts, unless otherwise provided
      in this Agreement, shall be paid in accordance with the terms of
      this

    

    
      
        
          
          

        

        
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    Agreement
      to your legatee or other designee or, if there is no such designee, to your
      estate.

    

    6.  Notice.  For
      the purpose of this Agreement, all notices and other communications provided
      for
      in the Agreement shall be in writing and shall be deemed to have been duly
      given
      when delivered or mailed by United States registered or certified mail, return
      receipt requested, postage prepaid, addressed to the respective addresses set
      forth on the first page of this Agreement, provided that all notices to the
      Company shall be directed to the attention of the Board with a copy to the
      Secretary of the Company, or to such other address as either party may have
      furnished to the other in writing in accordance this Agreement, except that
      notice of a change of address shall be effective only on receipt.

    

    7.  Miscellaneous

    

    7.1 No
      provision of this Agreement may be modified, waived, or discharged unless the
      waiver, modification, or discharge is agreed to in writing and signed by you
      and
      such officer as may be specifically designated by the Board.

    

    7.2 No
      waiver by either party to this Agreement at any time of any breach by the other
      party of, or compliance with, any condition or provision of this Agreement
      to be
      performed by such other party shall be deemed a waiver of similar or dissimilar
      provisions or conditions at the same or at any prior or subsequent
      time.

    

    7.3 No
      agreements or representations, oral or otherwise, express or implied, with
      respect to the subject matter of this Agreement have been made by either party
      that are not expressly set forth in this Agreement.

    

    7.4 Nothing
      in this Agreement is intended to reduce any benefits payable to you under any
      other agreement you may have with the Company or in any Company plan in which
      you may participate.

    

    7.5 The
      validity, interpretation, construction, and performance of this Agreement shall
      be governed by the law of New Jersey without reference to its conflict of laws
      principles.

    

    7.6 All
      references to sections of the Exchange Act or the Code shall be deemed also
      to
      refer to any successor provisions to such sections.  Any payments
      provided for shall be paid net of any applicable withholding or deduction
      required under federal, state or local law.

    

    7.7 The
      obligations of the Company under Section 4 shall survive the expiration of
      the
      term of this Agreement.

    

    
      
        
          
          

        

        
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    8.  Validity.  The
      validity or enforceability of any provision of this Agreement shall not affect
      the validity or unenforceability of any other provision of this Agreement,
      which
      shall remain in full force and effect.

    

    9.  Counterparts.  This
      Agreement may be executed in several counterparts, each of which shall be deemed
      to be an original but all of which together will constitute one and the same
      instrument.

    

    10.  Arbitration.  Any
      dispute or controversy arising under or in connection with this Agreement shall
      be settled exclusively by arbitration in New Jersey in accordance with the
      rules
      of the American Arbitration Association then in effect.  Judgment may
      be entered on the arbitrator's award in any court having
      jurisdiction.  However, you shall be entitled to seek specific
      performance of your right to be paid until the Date of Termination during the
      pendency of any dispute or controversy arising under or in connection this
      Agreement.

    

    11.  Entire
      Agreement.  This Agreement sets forth the entire
      understanding of the parties with respect to its subject matter and supersedes
      all prior written or oral agreements or understandings with respect to the
      subject matter.

    

    In
      witness whereof, the parties have executed this Agreement as of the day and
      year
      first above written.

     

    
      
        	 	 	
                MIDDLESEX
                  WATER COMPANY

              
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  Dennis W. Doll

              
	 	 	 	
                Dennis
                  W. Doll

              
	 	 	 	
                President

              
	 	 	 	 
	
                ATTEST:

              	 	 	 
	 	 	 	 
	
                /s/
                  Kenneth J. Quinn

              	 	 	 
	
                Kenneth
                  J. Quinn

              	 	 	 
	
                Vice
                  President and

              	 	 	 
	
                Secretary

              	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
                /s/
                  Bernadette M. Sohler

              
	 	 	 	
                Bernadette
                  M. Sohler

              

      

    

    

    (Corporate
      Secretary/Change in Control/Sohler)

    

    Page
      11 of 11Untitled Document

 Exhibit
      10.1

 

RAM
      HOLDINGS LTD.

RAM
      REINSURANCE COMPANY LTD.

DIRECTOR
      COMPENSATION

 

On
    August 3, 2007, the Boards of Directors of RAM Holdings Ltd. and RAM Reinsurance
    Company Ltd., on recommendation of the Nominating and Corporate Governance
    Committee, approved the compensation program described below to compensate
    non-employee directors for service on the Boards of Directors of RAM Holdings
    Ltd., RAM Reinsurance Company Ltd., and their respective committees. The
    compensation program described below replaces the compensation program currently
    in effect.

 

Directors
    who are “independent” as defined under Section 301 of the Sarbanes
    Oxley Act of 2002 and the rules thereunder, and the non-employee Chairman
    of the Board of Directors, will receive the following compensation:

 

	 
	•
	Annual
          cash retainer for Board service of $35,000

	 
	•
	Annual
          cash retainer for Audit Committee service of $5,000

	 
	•
	Annual
          cash retainer for service on the Compensation Committee, Nominating
          and Corporate Governance Committee and Risk Management Committee of
          $4,000 each

	 
	•
	Annual
          cash retainer for service as the Chair of the Audit Committee of $10,000

	 
	•
	Annual
          cash retainer for service as the Chair of the Compensation Committee,
          Nominating and Corporate Governance Committee and Risk Management Committee
          of $6,000 each

	 
	•
	Annual
          cash retainer for service as the Chair of the Board of Directors of
          $25,000

	 
	•
	Initial
          award of 13,000 options for new directors

	 
	•
	Annual
          award of $40,000 fair value of options or restricted share units for
          all directors

 

The
    above cash retainer amounts are all additive. For example, the Chair of the
    Audit Committee will receive the Board retainer of $35,000, the Audit Committee
    retainer of $5,000 and the Audit Committee Chair retainer of $10,000, for
    a total of $50,000. 

 

The
    cash retainers will be paid on a quarterly basis (1/4 each quarter) and are
    not dependent upon meeting attendance.

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