AMENDED AND RESTATED DEFERRED COMPENSATION AGREEMENT

Exhibit 10.3

AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT

     THIS AGREEMENT (the “Deferred Compensation Agreement”) is made as of the 2nd day of January 2007 and between The Connecticut Water Company (together with any affiliated companies hereinafter collectively referred to as the “Employer”) and Marshall T. Chiaraluce (hereinafter referred to as the “Employee”).

WITNESSETH:

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

     WHEREAS, the Employer and the Employee entered into an Amended and Restated Deferred Compensation Agreement dated May 14, 1999; and

     WHEREAS, the parties wish to amend and restate the Deferred Compensation Agreement to comply with Section 409A of the Internal Revenue Code as amended;

     WHEREAS, the Employer and the Employee are willing to enter into this Amended and Restated 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 (c) 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 eight (8) 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 January 1, 1992 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 2 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 (c) 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 eight (8) 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 eight (8) months following the Employee’s termination of employment.

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