Item 6. Indemnification
of Directors and Officers.
Section 33-771(a)
of the Connecticut Business Corporation Act
(“
CBCA
“) provides that the Registrant shall, subject to the determination and authorization requirements of
Section 33-775,
indemnify an individual who is a party to a proceeding because
he or she is a director of the Registrant against liability incurred in the proceeding if such individual acted in good faith and reasonably believed, in the case of conduct in his or her official capacity, that his or her conduct was in the best
interests of the Registrant, and, in all other cases, that his or her conduct was at least not opposed to the best interests of the Registrant. For indemnification in the case of any criminal proceeding, a director must have had no reasonable cause
to believe his or her conduct was unlawful.
Section 33-776
of the CBCA provides that the Registrant shall, subject to the determination and authorization requirements of
Section 33-775,
indemnify an individual who is a party to a proceeding because he or she is an officer of the Company to the same extent as if the individual was a director of the Registrant under
Section 33-771.
An officer of the Company who is not a director is entitled to mandatory indemnification under
Section 33-772
to the same extent to which a director
may be entitled to indemnification under said section.
The termination of a proceeding by judgment, order, settlement or conviction or
upon a plea of nolo contendere or its equivalent is not, of itself, determinative that a
- 3 -
director did not meet the relevant standard of conduct described in
Section 33-771
of the CBCA. Section 771(d) of the CBCA provides that, unless
ordered by a court, the Registrant shall not indemnify a director under
Section 33-771
of the CBCA in connection with a proceeding by or in the right of the Registrant, except for reasonable expenses
incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under
Section 33-771
of the CBCA, or in connection with any proceeding with
respect to conduct for which the director was found liable on the basis that he or she received a financial benefit to which he or she was not entitled, whether or not involving action in his or her official capacity.
Section 33-772
of the CBCA requires the Registrant to indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of any proceeding to which such director was a party because he or she was a director of the Registrant against reasonable expenses incurred by him in connection with the proceeding.
Section 33-773
of the CBCA provides that the Registrant may advance funds to pay for or reimburse
the reasonable expenses incurred by a director who is a party to a proceeding because he or she is a director. The director is required to deliver a written affirmation of his good faith belief that he has met the relevant standard of conduct
described in
Section 33-771
of the CBCA and an undertaking to repay any funds advanced if such director is not entitled to mandatory indemnification and it is ultimately determined that he or she has not
met the relevant standard of conduct.
Section 33-775
of the CBCA provides that the
Registrant shall not indemnify a director under
Section 33-771
unless authorized for a specific proceeding after a determination has been made that indemnification of the director is permissible because
he or she has met the relevant standard of conduct set forth in
Section 33-771.
For directors, the determination and authorization required by
Section 33-775
may be made by, if there are two or more disinterested directors, a majority vote of all the disinterested directors or by a majority vote of the members of a committee of two or more disinterested directors, by special legal counsel, or by the
shareholders. For officers, the determination and authorization required by
Section 33-775
may be also be made by the general counsel of the Registrant or such other or additional officer or officers as
the board of directors may specify.
Articles Sixth and Seventh of the Amended and Restated Certificate of Incorporation, as amended, of
the Registrant provide for indemnification of directors, officers and other persons as follows:
SIXTH: The personal liability of any
person who is or was a director of the Company to the Company or its stockholders for monetary damages for breach of duty as a director is hereby limited to the amount of the compensation received by the director for serving the Company during the
year or years in which the violation occurred so long as such breach did not (i) involve a knowing and culpable violation of law by the director, (ii) enable the director or an associate, as defined in
Section 33-840
of the Connecticut General Statutes, to receive an improper personal economic gain, (iii) show a lack of good faith and a conscious disregard
- 4 -
for the duty of the director to the Company under circumstances in which the director was aware that his or her conduct or omission created an unjustifiable risk of serious injury to the Company,
(iv) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of the director’s duty to the Company, or (v) create liability under
Section 33-757
of the
Connecticut General Statutes. Any lawful repeal or modification of this provision of the Amended and Restated Certificate of Incorporation of the Company by the stockholders and the Board of Directors of the Company shall not adversely affect any
right or protection of a person who is or was a director of the Company existing at or prior to the time of such repeal or modification.
SEVENTH: A. The Company shall, to the fullest extent permitted by law, indemnify its directors from and against any and all of the liabilities,
expenses and other matters referred to in or covered by the Connecticut Business Corporation Act. In furtherance and not in limitation thereof, the Company shall indemnify each director for liability, as defined in subsection (5) of
Section 33-770
of the Connecticut General Statutes, to any person for any action taken, or any failure to take any action, as a director, except liability that (i) involved a knowing and culpable violation
of law by the director, (ii) enabled the director or an associate, as defined in
Section 33-840
of the Connecticut General Statutes, to receive an improper personal economic gain, (iii) showed a
lack of good faith and a conscious disregard for the duty of the director to the Company under circumstances in which the director was aware that his or her conduct or omission created an unjustifiable risk of serious injury to the Company,
(iv) constituted a sustained and unexcused pattern of inattention that amounted to an abdication of the director’s duty to the Company, or (v) created liability under
Section 33-757
of the
Connecticut General Statutes; provided that nothing in this sentence shall affect the indemnification of or advance of expenses to a director for any liability stemming from acts or omissions occurring prior to the effective date of this Article
SEVENTH.
The Company shall indemnify each officer of the Company who is not a director, or who is a director but is made a party to a
proceeding in his or her capacity solely as an officer, to the same extent as the Company is permitted to provide the same to a director, and may indemnify such persons to the extent permitted by
Section 33-776
of the Connecticut General Statutes.
The indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as
to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
B. Expenses incurred by a director or officer of the Company in defending a civil or criminal action, suit or proceeding shall be paid for or
reimbursed by the Company to the fullest extent permitted by law in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall be
ultimately determined that such director or officer is not entitled to be indemnified by the Company.
- 5 -
C. The Company may indemnify and pay for or reimburse the expenses of employees and agents not
otherwise entitled to indemnification pursuant to this Article SEVENTH on such terms and conditions as may be established by the Board of Directors.
D. No amendment to or repeal of this Article SEVENTH shall apply to or have any effect on the indemnification of any director, officer,
employee or agent of the Company for or with respect to any acts or omissions of such director, officer, employee or agent occurring prior to such amendment or repeal, nor shall any such amendment or repeal apply to or have any effect on the
obligations of the Company to pay for or reimburse in advance expenses incurred by a director, officer, employee or agent of the Company in defending any action, suit or proceeding arising out of or with respect to any acts or omissions occurring
prior to such amendment or repeal.
Section 33-777
of the CBCA authorizes the Registrant to
purchase and maintain insurance on behalf of the Registrant’s directors and officers. The directors and officers of the Registrant are covered by liability insurance. The Registrant has also purchased an insurance policy covering the possible
liability of its officers and employees, as well as directors and former directors, for any losses or liability they might incur in their positions as administrators of The Connecticut Water Company Employees’ Retirement Plan and Trust.
Item 9. Undertakings.
(A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and
(c) to include any material information with respect to the Plan of Distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (A)(1)(a) and (A)(1)(b) do not apply
if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of determining liability under the Securities Act,
each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is incorporated by reference in this registration statement shall be deemed a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
C. Insofar as
indemnification for liabilities arising under the Securities Act may be
- 7 -
permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication of such issue.
- 8 -