Document:

EX-10.2

 

Exhibit 10.2

DEFERRED COMPENSATION AGREEMENT

     THIS AGREEMENT (the “Deferred Compensation Agreement”) is made as of the 20th day
of March, 2006, and between The Connecticut Water Company (together with any affiliated companies
hereinafter collectively referred to as the “Employer”) and Eric W. Thornburg
(hereinafter referred to as the “Employee”).

WITNESSETH:

     WHEREAS, the Employee is among a select group of management or highly compensated employees of
the Employer; and

     WHEREAS, the Employer and the Employee are willing to enter into this Deferred Compensation
Agreement (the “Agreement”) on the terms herein set forth, effective as of the date first above
written;

     NOW, THEREFORE, in consideration of the premises and the mutual and dependent promises herein,
the parties hereto agree as follows:

          1. DEFERRED COMPENSATION. The Employee may file a written election with the Employer
in the form attached to this Agreement or such other form as may be approved by the Employer to
defer up to 12 percent (12%) of the Employee’s salary. Such amount shall be credited to a Deferred
Compensation Account as provided in Section 2 hereof. This election to defer the receipt of salary
must be made before the beginning of the calendar year for which the salary is earned and shall
remain in effect, unless terminated or changed, or until the date the Employee ceases to be an
employee of the Employer. Any election termination or change of a deferral election must be made
on a form provided by the Employer for such purpose and may only be made with respect to salary
which will be earned on and after the January 1 following the Employer’s receipt of such form
provided that such form is received at least seven (7) days prior to the applicable January 1.

          2. DEFERRED COMPENSATION ACCOUNT. The Employer shall maintain on its books and
records a Deferred Compensation Account to record its liability for future payments of deferred
compensation and interest thereon required to be paid to the Employee or his beneficiary pursuant
to this Agreement. However, the Employer shall not be required to segregate or earmark any of its
assets for the benefit of the Employee or his beneficiary. The amount reflected in said Deferred
Compensation Account shall be available for the Employer’s general corporate purposes and shall be
available to the Employer’s general creditors. The amount reflected in said Deferred Compensation
Account shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by creditors of the Employee or his beneficiary, and
any attempt to anticipate, alienate, transfer, assign or attach the same shall be void. Neither
the Employee nor his beneficiary may

 

 

assert any right or claim against any specific assets of the Employer. The Employee or his
beneficiary shall have only a contractual right against the Employer for the amount reflected in
said Deferred Compensation Account and shall have the status of general unsecured creditors.
Notwithstanding the foregoing, in order to pay amounts which may become due under this Agreement,
the Employer may establish a grantor trust (hereinafter the “Trust”) within the meaning of Section
671 of the Internal Revenue Code of 1986, as amended. The assets in such Trust shall at all times
be subject to the claims of the general creditors of the Employer in the event of the Employer’s
bankruptcy or insolvency, and neither the Employee nor any beneficiary shall have any preferred
claim or right, or any beneficial ownership interest in, any such assets of the Trust prior to the
time such assets are paid to an Employee or beneficiary pursuant to this Agreement.

          The Employer shall credit to said Deferred Compensation Account the amount of any salary to
which the Employee becomes entitled and which is deferred pursuant to Section 1 hereof, such amount
to be credited as of the first business day of each month. The Employer shall also credit to said
Deferred Compensation Account an Interest Equivalent in the amount and manner set forth in Section
3 hereof.

          3. PAYMENT OF DEFERRED COMPENSATION

          (a) Termination of Employment On or After Attainment of Age 55. If the Employee’s
employment should terminate on or after his attainment of age fifty-five (55) for any reason other
than death or an account of “Cause” as defined in subsection (d) below, he shall be entitled to
receive payment of the entire amount of his Deferred Compensation Account including an Interest
Equivalent, as described below, in the form of an actuarially equivalent life annuity providing for
equal annual payments for the life of the Employee. Such actuarially equivalent life annuity shall
be computed on the basis of a mortality table that assumes a life expectancy of age eighty (80) and
uses the Interest Factor described below. The first annuity payment under this subsection shall be
paid seven (7) months following the date of the Employee’s termination of employment, and
subsequent payments shall be made on anniversaries of that date.

          There shall be credited to the Employee’s Deferred Compensation Account as of each January 1
and July 1, commencing with July 1, 2007 until payment of such account begins, as additional
deferred compensation, an Interest Equivalent equal to fifty percent (50%) of the product of (i)
the AAA Corporate Bond Yield Averages published by Moody’s Bond Survey for the Friday ending on or
immediately preceding the applicable January 1 and July 1 plus ___(___) percentage points (the
“Interest Factor”), multiplied by (ii) the balance of the Employee’s Deferred Compensation Account,
including the amount of Interest Equivalent previously credited to such Employee’s account, as of
the preceding day (i.e., December 31 or June 30). The Interest Factor used to compute the annuity
payable upon the Employee’s termination of employment on or after his attainment of age fifty-five
(55) shall be calculated based upon the Interest Factor as of the January 1 or July 1 immediately
preceding the date of the Employee’s termination of employment, whichever shall fall nearer to the
date of the Employee‘s termination of employment.

 

 

          (b) Termination of Employment Prior to Attainment of Age 55. If the Employee’s
employment should terminate prior to his attainment of age fifty-five (55) for any reason other
than death or on account of “Cause” as defined in subsection (d) below, the Employee shall be
entitled to receive payment in a lump sum of the entire amount of his Deferred Compensation
Account, including the same Interest Equivalent as described in subsection (a) above. Payment
under this subsection shall be made on the date which is seven (7) months following the Employee’s
termination of employment.

          (c) Termination of Employment for Cause.

               (i) If the employment of the Employee is terminated by the Employer for Cause, the Employee
shall be entitled only to a return of amounts deferred pursuant to Section 1 hereof.

               (ii) If the Employee is so terminated on or after age 55, payment shall be made in accordance
with the terms of Section 3(a) above. However, the Employee shall not be entitled to the Interest
Equivalent for any years prior to such termination, and such Interest Equivalent shall not be
included in determining Employee’s benefit hereunder. An Interest Factor shall be utilized in
calculating the amount of the annuity payable in accordance with the last sentence of subsection
(a) above.

               (iii) If the Employee is so terminated prior to attainment of age 55, payment of the return of
amounts deferred (excluding any Interest Equivalent) shall be made in a lump sum on the date which
is seven (7) months following the Employee’s termination of employment.

               (iv) As used in this Agreement, the term “Cause” shall mean:

                    (A) the Employee’s rendering, while employed by the Employer, of any services, assistance or
advice, either directly or indirectly, to any person, firm or organization competing with, or in
opposition to, the Employer;

                    (B) the Employee’s allowing, while employed by the Employer, any use of his name by any
person, firm or organization competing with, or in opposition to, the Employer; or

                    (C) willful misconduct by the Employee, including, but not limited to, the commission by the
Employee of a felony or the perpetration by the Employee of a common law fraud upon the Employer.

          (d) Death While Employed. Notwithstanding anything to the contrary contained in the
foregoing, if the Employee should die while employed by the Employer, his beneficiary, designated
pursuant to Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise
payable to the Employee under this Agreement, a death benefit equal to the greater of (i) the
Hypothetical Death Benefit, as defined in subsection

 

 

(g) hereof, and (ii) the entire amount of his Deferred Compensation Account at the date of his
death, assuming that an Interest Equivalent were credited to such account as of each January 1 and
July 1, occurring after the first deferral hereunder until the date of death at the rate set forth
in subsection (a) hereof. Such beneficiary shall receive such death benefit on the thirtieth
(30th) day following the death of the Employee.

          (e) Death After Termination of Employment.

               (i) If the Employee should die after the termination of his employment, whether prior to or on
or after attainment of age 55, and prior to the date on which payment of his Deferred Compensation
Account has commenced in the form of an annuity in accordance with subsection (a) or has been paid
in the form of a lump sum as provided in subsection (b), his beneficiary, designated pursuant to
Section 4 hereof, shall receive in a lump sum, in lieu of the amount(s) otherwise payable to the
Employee under this Agreement, a death benefit equal to the entire amount of the Employee’s
Deferred Compensation Account, including the same Interest Equivalent as described in subsection
(a) above, at the date of his death, provided that the Employee’s employment shall not have
terminated on account of “Cause” as defined in subsection (c) hereof. In the event that the
Employee should die after the termination of his employment for “Cause,” whether prior to or on or
after attainment of age 55, and in either case prior to the date upon which payment of his Deferred
Compensation Account has been made or has commenced, his beneficiary, designated pursuant to
Section 4 hereof, shall receive a return of the amounts deferred (excluding any Interest
Equivalent). No Interest Equivalent shall be credited to the Employee‘s Deferred
Compensation Account in the event of the Employee’s death after his termination on account of
“Cause” as provided in subsection (d) hereof. In either case, the Employee’s beneficiary shall
receive such death benefit on the thirtieth (30th) day following the death of the
Employee.

               (ii) If the Employee should die after the termination of his employment with the Employer on
or after attainment of age 55 (not on account of “Cause”) and after the date on which payment of
his Deferred Compensation Account and the Interest Equivalent set forth in subsection (a) hereof
has commenced in the form of an annuity as provided in subsection (a), no additional benefits shall
be payable under this Agreement after the Employee’s death except to the extent that the Employee
did not receive prior to his death benefits in an amount equal to or greater than the Employee’s
Deferred Compensation Account plus any Interest Equivalent credited thereto, as of the date of the
Employee’s death. If the Employee dies prior to receiving benefits equal to or greater than the
Employee’s Deferred Compensation Account plus any Interest Equivalent credited thereto as of the
date of the Employee’s death, his beneficiary shall be entitled to a lump sum payment, thirty (30)
days following Employee’s death, equal to the difference between benefits paid to the Employee
hereunder and the Employee’s Deferred Compensation account, plus any Interest Equivalent credited
thereto, as of the date of the Employee’s death.

               (iii) If the Employee should die after the termination of his employment with the Employer on
or after attainment of age 55 on account of “Cause” and after the

 

 

date payments have commenced to him in the form of an annuity as provided in subsection (c),
no additional benefits shall be payable under this Agreement after the Employee’s death except to
the extent the Employee did not receive prior to his death benefits in an amount equal to or
greater than the amounts deferred (excluding any Interest Equivalent earned while employed). In
such event, his beneficiary shall be entitled to a lump sum payment, thirty (30) days following
Employee’s death, equal to the difference between benefits paid to the Employee hereunder and the
amounts deferred (excluding any Interest Equivalent earned while employed).

               (iv) If the Employee should die after the termination of his employment with the Employer and
after the date on which payment has been paid to him in the form of a lump sum pursuant to
subsection (b) or (c), no additional benefits shall be payable upon the Employee’s death.

          (f) Hypothetical Death Benefit. For purposes of this Agreement, the term
“Hypothetical Death Benefit” shall mean a lump sum benefit equal to the proceeds of any policy of
key-man life insurance on the life of the Employee, of which the Employer is owner and beneficiary,
and which policy is designated by the Employer as subject to the provisions hereof, reduced
by (i) the amount of any tax imposed on the Employer with respect to such proceeds and (ii) the
cost to the Employer of any tax deductions postponed as a result of salary deferrals pursuant to
Section 1 hereof and increased by (iii) the tax deduction to the Employer which would
result from payment of the Hypothetical Death Benefit to a beneficiary of the Employee. For
purposes of (ii) above, an opportunity cost factor of six (6) percent pre-tax interest will be
applied during the period of postponed deductions under (ii). The calculation of the Hypothetical
Death Benefit shall be done by the Employer, whose calculation shall be final and binding on the
Employee and his beneficiary. Anything herein to the contrary notwithstanding, the Employer shall
not be required to purchase a policy of key-man life insurance on the life of any Employee, and any
such policy purchased by the Employer, and all proceeds thereof, shall remain at all times
available to the Employer’s general creditors.

          (g) Termination of Employment. In order for the Employee to be considered to have
terminated employment with the Employer, the Employee must have incurred a separation from service
from the Employer (and all related companies) within the meaning of Section 409A of the Code.

          4. BENEFICIARY. The Employee has notified or will in the future notify the Employer
of the person or persons entitled to receive payments on the death of the Employee. For the
purposes of this Agreement, such person or persons are herein referred to collectively as the
“beneficiary.” The person whom an Employee designates as his beneficiary for this purpose must be
one of the following: the Employee‘s spouse; father, mother, sister, brother, son or
daughter. The beneficiary may also be a legal ward living with and dependent on the Employee at
the time of his death. If the Employee dies and has not designated a beneficiary, his beneficiary
shall be his spouse, if living; otherwise, his beneficiary shall be deemed to be his estate. An
Employee’s beneficiary designation may be changed at any time by the Employee giving written notice
to the

 

 

Employer of such change. The rights of any beneficiary presently or hereafter designated are
subject to any changes made in this Agreement by the Employee and the Employer.

          5. WITHHOLDING. The Employer shall be permitted to withhold from any payment to the
Employee or his beneficiary hereunder all federal, state or other taxes which may be required with
respect to such payment.

          6. ARBITRATION. In the event that a dispute shall arise with respect to any of the
provisions of this Agreement, either the Employer or the Employee or his beneficiary, as the case
may be, may give written notice to the other stating the claims that said party desires to
arbitrate, and naming an arbitrator. Within ten (10) days after the receipt of such notice, the
party receiving same shall appoint a second arbitrator by written notice to be sent to the party
who requested arbitration. Within ten (10) days after receipt of such notice of appointment of the
second arbitrator, the two (2) arbitrators so appointed shall meet to select a third arbitrator and
shall give written notice of such selection to the Employer and the Employee or his beneficiary.
The decision of a majority of the arbitrators shall be conclusive and binding upon the Employer and
the Employee or his beneficiary. All notices hereunder shall be by registered mail addressed to
the last known address of the party entitled to receive notice. The Employer and the Employee
shall each pay their own costs incurred in the arbitration proceeding; provided, however, that the
arbitrators may require that the losing party reimburse the prevailing party for its costs if it
shall be determined that the claim which gave rise to the dispute was without substantial
foundation.

          7. MISCELLANEOUS.

          (a) This Agreement shall be binding upon the parties hereto, their heirs, executors,
administrators, successors and assigns. The Employer agrees that it will not be a party to any
merger, consolidation or reorganization unless and until its obligations hereunder shall be
expressly assumed by its successor or successors.

          (b) This Agreement may be amended at any time by mutual written agreement of the parties
hereto, but no amendment shall operate to give the Employee, or any beneficiary designated by him,
either directly or indirectly, any interest whatsoever in any funds or assets of the Employer,
except the right to receive the payments herein provided.

          (c) Deferrals under this Agreement may be suspended by the Employer effective as of any
January 1, following the time that tax or other laws are enacted or interpreted which result or
will result in costs to the Employer significantly in excess of those contemplated at the time of
the execution hereof. In the event of such suspension, the Employer‘s sole obligation
shall be to pay to the Employee in accordance with Section 3 above. In no event may deferrals be
ceased during a calendar year by action of either the Employer or the Employee, or both.

          (d) This Agreement shall not supersede any contract of employment, whether oral or written,
between the Employer and the Employee, nor shall it affect or impair the

 

 

rights and obligations of the Employer and the Employee, respectively, thereunder. Nothing
contained herein shall impose any obligation on the Employer to continue the employment of the
Employee.

          (e) If Moody’s Bond Survey shall cease to publish the Corporate Bond Yield Averages referred
to in Section 3 hereof, a similar average selected by the Board of Directors of the Employer, in
its sole discretion, shall be used.

          (f) This Agreement shall be executed in duplicate, and each executed copy of this Agreement
shall be deemed an original.

          (g) This Agreement shall be construed in all respects under the laws of the State of
Connecticut, subject to applicable federal law.

          (h) This Agreement has been prepared with reference to Section 409A of the Internal Revenue
Code and should be interpreted and administered in a manner consistent with Section 409A. In the
event that any part of the Agreement is determined to be in violation of 409A, such part of the
Agreement shall be automatically revised to be in compliance with Section 409A in such way as most
closely approximates the intent of the parties.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of
the day and year first above written.

	 	 	 	 	 
	 	THE CONNECTICUT WATER COMPANY

 	 
	 	By:  	Michele G. DiAcri	 
	 	 	Its Corporate Secretary	 
	 	 	 	 
	 
	 	 	 
	 	/s/ Eric W. Thornburg
 	 
	 	Eric W. ThornburgEX-10.3

 

Exhibit 10.3

SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

     This Agreement, made this 20th day of March, 2006, by and between THE CONNECTICUT
WATER COMPANY (hereinafter referred to as the “Employer”) and ERIC W. THORNBURG (hereinafter
referred to as the “Employee”).

WITNESSETH THAT:

     WHEREAS, the Employee is and is expected to render valuable services to the Employer in his
capacity as President and Chief Executive Officer, and

     WHEREAS, the Employer desires to ensure that it will have the benefit of the Employee’s
services until he reaches retirement, and

     WHEREAS, the Employer wishes to assist the Employee in providing for the financial
requirements of the Employee in the event of his retirement, disability or death; and

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
herein contained, the parties hereto agree to enter into the Agreement, as follows:

1. SUPPLEMENTAL RETIREMENT BENEFIT

     a. Normal or Deferred Retirement. If, upon or after the Employee’s attainment of age
65, the Employee’s employment shall be terminated and he shall be eligible to receive a benefit
under The Connecticut Water Company Employees’ Retirement Plan (hereinafter referred to as the
“Retirement Plan”), the Employee shall be entitled to receive pursuant to this Agreement a benefit
having a value equal to an annual benefit for his life of (a) 60% of the Employee’s Average
Earnings reduced by (b) the annual benefit payable to the Employee under the Retirement Plan in the
form of a single life annuity for the life of the Employee (whether or not the benefit under the
Retirement Plan is actually paid in such form), commencing at the same time as of which benefits
commence hereunder, and further reduced by (c) the annual benefit payable to the Employee under any
qualified defined benefit plan maintained by American Water Works or any subsidiary thereof, in the
form of a single life annuity for the life of the Employee (whether or not the benefit under such
Plan is actually paid in such form) commencing at the same time as of which benefits commence
hereunder. Such benefit will be payable in accordance with Section 2 below. The date as of which
benefits commence hereunder is the first day of the month following the Employee’s retirement, even
though actual payment is delayed in accordance with Section 2 hereof.

     b. Early Retirement. If, upon or after the Employee’s attainment of age 55

 

 

and prior to attainment of age 65, the Employee’s employment shall be terminated and he shall
be eligible to receive a benefit under the Retirement Plan, the Employee shall be entitled to
receive pursuant to this Agreement a benefit having a value equal to an annual benefit for his life
of (a) 60% of the Employee’s Average Earnings reduced by (b) the annual benefit payable to the
Employee under the Retirement Plan in the form of a single life annuity for the life of the
Employee (whether or not the benefit under the Retirement Plan is actually paid in such form)
commencing at age 65 (whether or not the benefit under the Retirement Plan commences at such time)
and further reduced by (c) the annual benefit payable to the Employee under any qualified defined
benefit plan maintained by American Water Works or any subsidiary thereof, in the form of a single
life annuity for the life of the Employee (whether or not the benefit payable under such Plan is
actually payable in such form) commencing at age 65 (whether or not the benefit under such Plan
commences at such time). If such benefit shall commence to be paid prior to the Employee’s
attainment of age 62, such benefit shall be reduced by 4% for each complete year by which the date
of benefit commencement precedes his attainment of age 62. Such benefit shall be paid in
accordance with Section 2 below.

     c. For purposes of a. and b. above, “Average Earnings” shall have the meaning set forth in the
Retirement Plan, except that in determining Average Earnings, Annual Earnings (as defined in the
Retirement Plan) shall not be limited to the OBRA ‘93 annual compensation limit, the annual
compensation limit imposed under the Economic Growth and Tax Relief Reconciliation Act of 2001
(“EGTRRA”), or any similar limit on annual compensation under Section 401(a)(17) of the Internal
Revenue Code of 1986, as amended (the “Code”), imposed by any future legislation.

     In determining Average Earnings, if the Employee retires under this Agreement on or after
attainment of age 62, Annual Earnings shall also include the value of all of the following: (1)
Cash Units, (2) Restricted Stock, and (3) Performance Shares awarded to a Participant under the
Connecticut Water Service, Inc. Performance Stock Program (the “Program”) for any year in which
such awards are made. Notwithstanding the foregoing, in no event shall awards which are long-term
awards or PARSAs be taken into account in determining Average Earnings. The value of such awards
(other than long-term awards or PARSAs) shall be included within Annual Earnings in the year in
which such amounts are finally determined and actually awarded. Such amounts, if credited to a
Performance Share Account, shall not be counted a second time when payment is made from such
Account.

     The calculation of the benefit set forth in a. and b. above, and of all other benefits payable
under this Agreement, shall be performed by the Committee under the Retirement Plan, and the
calculations and interpretations of such Committee shall be final and binding on the parties
hereto.

     The Employee will not be deemed to have retired unless he has experienced a separation from
service as defined in Section 409A of the Code.

     d. Disability Benefit. If the Employee’s employment shall be terminated by a

 

 

disability such that the Employee is considered eligible for a full disability pension under
the provisions of the Social Security Act, the Employee shall be entitled to receive pursuant to
this Agreement a benefit having a value equal to an annual benefit for his life calculated in the
manner set forth in b. above; provided, however, that the reduction factor pursuant to b. above
shall be .72 if the Employee’s benefit commencement date precedes age 62 by more than 7 complete
years. The Employee will not be deemed to have terminated employment unless he has experienced a
separation from service as defined in Section 409A of the Code. Such benefit shall be paid in
accordance with Section 2 below.

     e. Absence of Other Benefits. No benefits shall be paid to the Employee pursuant to
this Agreement other than as provided in a. through d. above.

     2. TERMS AND CONDITIONS OF BENEFIT. The annual lifetime benefit calculated in
accordance with Section 1 hereof shall be paid in monthly installments on the first day of each
month. Such installments paid pursuant to 1.a, 1.b or 1.d shall be calculated as if the were to
commence to be paid on the first day of the first month following the Employee’s retirement or
termination of employment. However, actual payment will commence on the first day of the seventh
(7th) month following the date of the Employee’s retirement or termination of
employment, although the first payment shall include all payments that would have been made had
payments commenced on the first day of the month following the Employee’s retirement or termination
of employment. The first installment made pursuant to 1.a., 1.b. or 1.d shall be equal to seven
(7) such installments.

     The form in which the benefit hereunder shall be paid is, if the Employee is unmarried, an
annuity for the life of the Employee only and, if the Employee is married, an annuity for the life
of the Employee with the provision that after the Employee’s death, 50% of the annual benefit that
was payable to the Employee shall be continued to the Employee’s surviving spouse for life (a
“Joint and Survivor Annuity”). The benefit payable as a Joint and Survivor Annuity shall be
calculated by applying to the benefit calculated in accordance with Section 1.a., l.b. or 1.d.
hereof, as appropriate, the factors for the 50% contingent annuity option set forth in the
Retirement Plan.

     Monthly installments of benefits shall cease to be paid as of the first day of the month
following the date of the Employee’s death, unless a Joint and Survivor Annuity was then in effect,
in which event the installments shall cease as of the first day of the month following the death of
the Employee’s surviving spouse.

     3. DEATH BENEFIT. If the Employee has attained age 55 while in service with the
Employer and dies thereafter but prior to the commencement of benefits pursuant to this Agreement,
and if the Employee’s spouse or other beneficiary is entitled, to a death benefit under
the Retirement Plan, said spouse or other beneficiary shall be entitled to receive a death benefit
pursuant to this Plan. However, if the Employee is survived by his spouse, such spouse shall be
deemed to be entitled to receive a spousal pre-retirement death benefit under the Retirement Plan
even if a waiver of such spousal

 

 

pre-retirement death benefit is in effect under such Plan. The amount of said death benefit
shall be determined as if the Employee had retired on the day prior to his death with either a
Joint and Survivor Annuity in effect, if his spouse survives him, or a five years certain and life
annuity (as described in the Retirement Plan) in effect, if his spouse does not survive him. If
the benefit is determined under a Joint and Survivor Annuity, installment payments shall begin on
the first day of the first month following the Employee’s death. If the benefit is determined
under a five years certain and life annuity, it shall be paid in an actuarially equivalent lump
sum, as determined by the Committee under the Retirement Plan using the appropriate factors set
forth in the Retirement Plan. Such lump sum payment shall be made on the fifteenth
(15th) day following the Employee’s death.

     No other death benefits shall be payable in the event of the Employee’s death prior to the
commencement of benefits hereunder.

     4. LIMITATION OF BENEFIT. If the Employee’s employment shall be terminated for cause
involving fraud, dishonesty, moral turpitude, gross misconduct, gross failure to perform his
duties, or disclosure of secret or other confidential information of the Employer to any competitor
or to any person not authorized to receive such information, neither the Employee, his spouse nor
his estate shall be entitled to receive any benefit under this Agreement.

     5. ABSENCE OF FUNDING. Benefits payable pursuant to this Agreement shall not be
funded, and the Employer shall not be required to segregate or earmark any of its assets for the
benefit of the Employee, his spouse or his estate. Such benefits shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Employee, his spouse or his estate, and any attempt to anticipate,
alienate, transfer, assign or attach these benefits shall be void. The Employee, his spouse or his
estate shall have only a contractual right against the Employer for the benefits hereunder and
shall have the status of general unsecured creditors. Notwithstanding the foregoing, in order to
pay benefits pursuant to this Agreement, the Employer may establish a grantor trust (hereinafter
the “Trust”) within the meaning of Section 671 of the Internal Revenue Code of 1986, as amended.
Some or all of the assets of the Trust may be dedicated to providing benefits to the Employee, his
spouse or his estate pursuant to this Agreement, but, nevertheless, all assets of the Trust shall
at all times remain subject to the claims of the Employer’s general creditors in the event of the
Employer’s bankruptcy or insolvency.

     6. MISCELLANEOUS.

     a. This Agreement may be amended at any time by mutual written agreement of the parties
hereto, but no amendment shall operate to give the Employee, his spouse, his estate or any other
beneficiary, either directly or indirectly, any interest whatsoever in any funds or assets of the
Employer, except the right to receive the payments herein provided and the right to receive such
payments from assets held in the Trust.

 

 

     b. This Agreement shall not supersede any other contract of employment, whether oral or in
writing, between the Employer and the Employee, nor shall it affect or impair the rights and
obligations of the Employer and the Employee, respectively, thereunder. Nothing contained herein
shall impose any obligation on the Employer to continue the employment of the Employee.

     c. This Agreement shall be construed in all respects under the laws of the State of
Connecticut.

     d. This Agreement has been prepared with reference to Section 409A of the Internal Revenue
Code and should be interpreted in a manner consistent with Section 409A. In the event that any
part of the Agreement is determined to be in violation of 409A, such part of the Agreement shall be
automatically revised to be in compliance with Section 409A in such way as most closely
approximates the intent of the parties.

     IN WITNESS WHEREOF, the Employer and the Employee have executed this Agreement as of the day
and year above written.

	 	 	 	 	 
	 	THE CONNECTICUT WATER COMPANY

 	 
	 	By:  	Michele G. DiAcri	 
	 	 	Its Corporate Secretary	 
	 	 	 	 
	 
	 	 	 
	 	/s/ Eric W. Thornburg
 	 
	 	Eric W. Thornburg

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}]]