EXHIBIT 10.3
CONNECTICUT WATER SERVICE, INC.
THE CONNECTICUT WATER COMPANY
DIRECTORS' DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED APRIL 22, 1994
1. PURPOSE OF THE PLAN
The purpose of the Directors' Deferred Compensation Plan (hereinafter
referred to as the "Plan") is to provide a procedure whereby a member
of the Board of Directors of The Connecticut Water Company and of
Connecticut Water Service, Inc. (hereinafter collectively referred to
as the "Company") who is not an employee of the Company (hereinafter
referred to as a "Director") may defer the payment of all or a
specified part of the compensation payable to the Director for services
as a Director of The Connecticut Water Company and of Connecticut Water
Service, Inc., including compensation payable to a Director for
services as a member of a Committee of said Boards.
2. ELECTION TO DEFER
A Director may elect to defer receipt of payment of all or a specified
portion of all compensation payable to the Director for services as a
Director during the calendar year or portion thereof following such
election and succeeding calendar years until the Director ceases to be
a Director, said election to be effective only with respect to
compensation earned after the date of such election. Any such election
shall be made by written notice delivered to the Secretary of the
Company.
3. DIRECTORS' ACCOUNTS
All deferred compensation shall be held in the general funds of the
Company and shall be credited to each Director's account. On the first
day of each month, interest shall be credited to each such account
calculated on the basis of the balance in such account on the first day
of each month and at the monthly rate equal to one twelfth of the
"return on rate base" of the most recent rate decision for The
Connecticut Water Company.
4. PAYMENT FROM DIRECTORS' ACCOUNTS
The aggregate amount of deferred compensation, together with interest
accrued thereon, credited to the account of any Director shall be paid
in a lump sum or, if the Director
elects and The Connecticut Water Company, in its sole discretion,
agrees, in substantially equal annual installments over a period of
years specified by the Director, not to exceed the number of years
which the Director served as a member of the Board of Directors of the
Company after electing to defer compensation as provided in this Plan.
Such election must be made by written notice delivered to the Secretary
of the Company prior to the date on which the Director ceases to be a
Director. In the case of installment payments, the first installment
shall be paid promptly following the calendar year in which the
Director ceases to be a Director, and subsequent installments shall be
paid promptly at the beginning of such succeeding calendar year until
the entire amount credited to the Director's account shall have been
paid. In the case of a lump sum payment, the lump sum shall be paid
within sixty (60) days after the commencement of the calendar year
following the date on which the Director ceases to be a Director or, at
the option of The Connecticut Water Company in its sole discretion,
within sixty (60) days after the Director ceases to be a Director.
5. PAYMENT IN EVENT OF DEATH
If a Director should die before all deferred amounts credited to the
Director's account have been distributed, the balance of any deferred
compensation and interest then in the Director's account shall be paid
promptly to the Director's designated beneficiary; provided, however,
that the Director may specify that such deferred amounts (plus
interest) shall be paid to the Director's spouse in substantially equal
annual installments over a period of years not to exceed the lesser of:
(i) either ten or five, as the Director shall elect, or (ii) the number
of years which the Director served as a member of the Boards of
Directors of the Company after electing to defer compensation as
provided in this Plan, reduced by (iii) the number of years (if any)
during which the Director had received payment under this Plan prior to
death. If such Director did not designate a beneficiary or in the event
that the beneficiary designated by such Director shall have predeceased
the Director, the balance in the Director's account shall be paid
promptly to the Director's estate. If payments are being made in
installments to the spouse of the deceased Director, then upon the
death of said spouse any amount then undistributed shall be paid
promptly to the estate of said spouse.
6. TERMINATION OF ELECTION
A Director may terminate an election to defer payment of compensation
by written notice delivered to the Secretary of the Company. Such
termination shall become effective as of the end of the calendar year
in which notice of termination is given with
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respect to compensation payable for services as a Director during
subsequent calendar years. Amounts credited to the account of a
Director prior to the effective date of termination shall not be
affected thereby and shall be paid only in accordance with paragraphs 4
and 5 above.
7. NONASSIGNABILITY
All rights to payments under this Plan are not subject in any manner to
anticipation, alienation, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors of the Director or the
Director's spouse or other beneficiary.
8. INTERPRETATION AND AMENDMENT
The Plan shall be administered by the Boards of the Directors of the
Company. The decision of the Boards of Directors with respect to any
questions arising as to the interpretation of this Plan, including the
severability of any and all of the provisions thereof, shall be final,
conclusive and binding. The Boards of Directors reserve the right to
amend this Plan from time to time or to terminate the Plan entirely,
provided, however that no amendment or termination of this Plan shall
operate to annul an election already in effect for the current calendar
year.
9. PAYMENTS
Payments pursuant to this Plan shall be made by the Company out of its
general corporate assets. Neither a Director nor any beneficiary or
spouse of a Director may assert any right or claim against any
specified assets of the Company. The Director and any such beneficiary
or spouse shall have the status of general unsecured creditors of the
Company and shall have only contractual rights against the Company for
amounts credited to an account pursuant to this Plan.
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