AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
Exhibit 10.3
AMENDED AND RESTATED
This Agreement, made this 24th day of January, 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 [she] reaches retirement, and
WHEREAS, the Employer wishes to assist the Employee in providing for the financial
requirements of the Employee in the event of [her] retirement, disability or death; and
[WHEREAS, the Employer and the Employee entered into a Supplemental Executive Retirement
Agreement dated [ ], as amended by a First Amendment dated
[ ]; and]
[WHEREAS, the Employer and the Employee entered into a Supplemental Executive Retirement
Agreement dated [ ]; and]
[WHEREAS, the Employer and the Employee entered into a Supplemental Executive Retirement
Agreement dated [ ], as amended by a First Amendment dated [ ] and
further amended by a Second Amendment 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, 2008, 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 [she] 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 [her] 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 [she] 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 [her]
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 [her] 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 [and (4) Director’s fees paid to Employee not otherwise included in the
definition of Average Earnings]. Notwithstanding the foregoing, in no event shall awards which
are long-term
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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 [and Director’s fees shall be taken into account in the
year paid]. 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 [she] 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 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 [her] 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 [she] 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 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 [she] commenced
receiving benefits immediately upon the first day of the month
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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.
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 [her] 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 [her] death with either a Joint
and Survivor Annuity in effect, if [her] spouse survives [her], or a five years certain and life
annuity (as described in the Retirement Plan) in effect, if [she] has no spouse or [her] spouse
does not survive [her]. 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,
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gross failure to perform [her] 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,
[her] spouse, [her] beneficiary nor [her] 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, [her] spouse, [her] beneficiary or [her] 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, [her] spouse, [her] beneficiary or [her] estate, and any attempt to anticipate,
alienate, transfer, assign or attach these benefits shall be void. The Employee, [her] spouse,
[her] beneficiary or [her] 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, [her] spouse, [her] beneficiary or [her] 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, [her] spouse, [her] 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, 2008.
IN WITNESS WHEREOF, the Employer and the Employee have executed this Agreement as of the day
and year above written.
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| THE CONNECTICUT WATER COMPANY | ||||||
| By | ||||||
| Its | ||||||
| Date | [ ] | |||||
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