AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
AMENDED
AND RESTATED
This
Agreement, made this _____ day of _________, 2008 by and between THE CONNECTICUT
WATER COMPANY (hereinafter referred to as the "Employer") and
[___________________] (hereinafter referred to as the "Employee").
WITNESSETH
THAT:
WHEREAS,
the Employee has and is expected to continue to render valuable services to the
Employer, 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
WHEREAS, the Employer and the Employee
entered into an amended and restated Supplemental Executive Retirement Agreement
dated [______________]; and
WHEREAS, the parties wish to amend and
restate the Supplemental Retirement Agreement to comply with Section 409A of the
Internal Revenue Code of 1986, as amended, and regulations issued thereunder
(collectively “Section 409A”);
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the parties hereto agree to enter into this Amended
and Restated Supplemental Executive Retirement Agreement, effective
January 1, 2009, as follows:
1. SUPPLEMENTAL RETIREMENT
BENEFIT
a. Normal or Deferred
Retirement. If, upon or after the Employee's attainment of age
65, the Employee shall separate from service 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 (whether or
not the benefit under the Retirement Plan commences at such time), [and further
reduced by the annual benefit payable to Employee under any qualified defined
benefit plan maintained by ____________________ in the form of a single life
annuity on the life 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 (whether or not the benefit under such plan commences at such
time).]
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 separation from service, even though actual payment may
be 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 shall separate from service
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 Employee under any qualified defined benefit plan
maintained by ______________________ 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 under the Program 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 Compensation
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 shall incur a separation from service
due to a disability, 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. Notwithstanding the foregoing in this 1d, “disability” shall
be determined by the Compensation Committee, and the Employee will be considered
to be disabled if the Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than twelve months.
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 they were to commence to be paid on the first day of the
first month following the Employee’s separation from
service. However, if the Employee is a “specified employee” as that
term is defined under Section 409A, at the time of separation from service,
actual payment will commence on the first day of the seventh (7th) month
following the date of the Employee’s separation from service, and 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 separation from
service, so that the first installment made pursuant to 1.a., 1.b. or 1.d, if
the Employee is a specified employee, shall be equal to seven (7) such
installments. If the Employee is not a “specified employee” at the
time of separation from service, payment of monthly installments shall commence
on the first day of the first month following the Employee’s separation from
service.
If the
Employee is a specified employee at the time of separation and should die after
separation, but prior to the first day of the seventh (7th) month
following separation from service, a lump sum equal to the amount the Employee
would have received had [he] commenced receiving benefits immediately upon the
first day of the month following separation from service and ending on the date
of death shall be paid to the Employee’s estate; and the Employee’s surviving
spouse, if any, shall receive any 50% survivor annuity payments for the period
from the Employee’s date of death to the first day of the seventh (7th) month
following separation from service. Any payments made pursuant to the
preceding sentence shall be made on the first day of the seventh (7th) month
following separation from service.
The form
in which the benefit hereunder shall be paid is, if the Employee is unmarried at
the time of separation from service, an annuity for the life of the Employee
only and, if the
Employee
is married at the time of separation from service, 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. The Joint and
Survivor Annuity shall be actuarially equivalent to the life annuity form of
payment.
Monthly
installments of benefits shall be paid on the first day of the month and 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 is then in effect, in
which event the installments shall continue to be paid on the first day of the
month and shall cease as of the first day of the month following the death of
the Employee's surviving spouse. A Joint and Survivor Annuity shall
be deemed to be in effect if the Employee is married at the time of separation
from service, regardless of whether the Employee dies prior to actual
commencement of benefits.
3. DEATH
BENEFIT. If the Employee has attained age 55 while in service
with the Employer and dies thereafter, while in the service of the Employer, 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
[he] has no spouse or [his] spouse does not survive [him]. However,
rather than being paid in the form of a survivor annuity or in installments for
the five-year period, payment of the present value of the death benefit shall be
made in a lump sum on the first day of the first month following the Employee’s
death. The actuarial assumptions to be utilized in computing the
present value thereof shall be the interest rate and mortality assumptions then
being utilized under the Retirement Plan in computing lump sum
payments.
No other
death benefits shall be payable in the event of the Employee's death while in
the service of the Employer.
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, [his] beneficiary
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, [his] beneficiary 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, [his]
beneficiary or [his] estate, and any attempt to anticipate, alienate, transfer,
assign or attach these benefits shall be void. The Employee, [his]
spouse, [his] beneficiary 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, [his] beneficiary 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.
4. 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 and administered in a manner consistent
with Section 409A.
e. This
Amendment and Restatement is effective as of January 1, 2009.
IN
WITNESS WHEREOF, the Employer and the Employee have executed this Agreement on
the day and year above written.
