CONNECTICUT WATER SERVICE INC / CT, S-3D/A, 1994-07-14

CONNECTICUT WATER SERVICE INC / CT
S-3D/A, 1994-07-14
WATER SUPPLY

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<PAGE> 1

REGISTRATION NO. 33-53211

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CONNECTICUT WATER SERVICE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
STATE OF CONNECTICUT 06-0739839
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>

93 WEST MAIN STREET, CLINTON, CONNECTICUT 06413
(203) 669-8636
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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BERTRAM L. LENZ
VICE PRESIDENT -- FINANCE
93 WEST MAIN STREET
CLINTON, CONNECTICUT 06413
(203) 669-8636
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

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It is also respectfully requested that the Commission send copies of all
notices, orders and communications to:

MICHAEL F. HALLORAN, ESQ.
DAY, BERRY & HOWARD
CITYPLACE
HARTFORD, CONNECTICUT 06103
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time following the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/

CALCULATION OF REGISTRATION FEE

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<CAPTION>
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT* OFFERING PRICE* FEE*

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<S> <C> <C> <C> <C>
Common Stock (without par value) 800,000 Shares $ 25.375 $ 20,300,000 $ 7,000.00
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</TABLE>

* Pursuant to Rule 457(c) the registration fee has been calculated on the basis
of $25.375 per share, which equals the average of closing bid and asked prices
of the Common Stock of the Company on April 19, 1994 in the over-the-counter
market according to NASDAQ.
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PURSUANT TO RULE 429 OF THE COMMISSION UNDER THE SECURITIES ACT OF 1933,
THE PROSPECTUS FILED AS A PART OF THIS REGISTRATION STATEMENT RELATES TO SHARES
OF COMMON STOCK OF THE COMPANY COVERED BY REGISTRATION STATEMENTS NOS. 2-74938,
2-92822, 2-97468 AND 33-6187 FOR ISSUE UNDER THE COMPANY'S DIVIDEND REINVESTMENT
AND COMMON STOCK PURCHASE PLAN.

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<PAGE> 2

CROSS-REFERENCE SHEET

<TABLE>
<CAPTION>
PROSPECTUS CAPTION OR
FORM S-3 ITEM NO. AND CAPTION LOCATION
--------------------------------------------------------- -----------------------------
<S> <C> <C>
1. Forepart of Registration Statement and Outside Front
Cover Page of Prospectus................................. Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus............................................... Inside Front Cover Page and
Outside Back Cover Page
3. Summary Information, Risk Factors and Ratio of Earnings
to Fixed Charges......................................... Not Applicable
4. Use of Proceeds.......................................... Use of Proceeds
5. Determination of Offering Price.......................... Description of the Plan
6. Dilution................................................. Not Applicable
7. Selling Security Holders................................. Not Applicable
8. Plan of Distribution..................................... Description of the Plan
9. Description of Securities to be Registered............... Documents Incorporated by
Reference
10. Interests of Named Experts and Counsel................... Not Applicable
11. Material Changes......................................... Not Applicable
12. Incorporation of Certain Information by Reference........ Documents Incorporated by
Reference
13. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities............................... Part II, Item 17
</TABLE>
<PAGE> 3

PROSPECTUS

CONNECTICUT WATER SERVICE, INC.
[CWS LOGO]

DIVIDEND REINVESTMENT AND
COMMON STOCK PURCHASE PLAN

The Dividend Reinvestment and Common Stock Purchase Plan (the "Plan") of
Connecticut Water Service, Inc. (the "Company") provides the Company's
stockholders and customers of the Company's subsidiary, The Connecticut Water
Company ("CWC") who reside in Connecticut with

AUTOMATIC DIVIDEND REINVESTMENT

of all or a percentage of dividends on Common Stock of the Company in additional
Common Stock and

INVESTMENT OF OPTIONAL CASH PAYMENTS

of an aggregate from $100 to $10,000 per quarter in Common Stock of the Company.

Participants pay NO brokerage commission or service charge upon the
purchase of shares.

The purchase price for shares purchased with reinvested dividends will be
95% of the average closing price of the Company's Common Stock in the
over-the-counter market as reported by the National Association of Securities
Dealers Automated Quotations (NASDAQ) National Market System on the last five
trading days ending with, and including, the day the Common Stock is purchased
for the Participants' accounts. The purchase price for shares purchased with
optional cash payments will be 100% of such average market price.

Participants may also deposit stock certificates with the Plan's Agent for
safekeeping.

This Prospectus relates to 1,500,000 authorized shares of Common Stock of
the Company registered for purchase under the Plan (of which 919,436 were
unissued as of December 31, 1993). It is suggested that this Prospectus be
retained for future reference.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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THE DATE OF THIS PROSPECTUS IS JULY 15, 1994

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TABLE OF CONTENTS

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<S> <C>
AVAILABLE INFORMATION................................................................... 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................................... 3
THE COMPANY............................................................................. 4
DESCRIPTION OF THE PLAN................................................................. 4
Purpose............................................................................ 4
Features........................................................................... 4
Administration..................................................................... 5
Eligibility........................................................................ 5
Participation...................................................................... 6
Purchases.......................................................................... 8
Optional Cash Payments and Initial Investments..................................... 9
Safekeeping........................................................................ 10
Reports to Participants............................................................ 10
Dividends.......................................................................... 11
IRA Accounts....................................................................... 11
Certificates for Shares............................................................ 12
Withdrawal......................................................................... 12
Other Information.................................................................. 13
USE OF PROCEEDS......................................................................... 17
LEGAL OPINION........................................................................... 17
EXPERTS................................................................................. 17
</TABLE>

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THESE
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION.

NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE OF
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

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AVAILABLE INFORMATION

The Company is subject to the information requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission. Certain information
concerning the Company's directors and officers and their remuneration, the
principal holders of securities of the Company and with respect to interests of
management and others in transactions with the Company, has been disclosed in
proxy statements distributed to stockholders of the Company and filed with the
Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the Commission's regional offices in Chicago (Northwestern Atrium Center, Suite
1400, 500 West Madison Street, Chicago, IL 60661) and New York (Public Reference
Room, 13th Floor, 7 World Trade Center, New York, NY 10048). Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

There are hereby incorporated by reference in this Prospectus the following
documents heretofore filed with the Securities and Exchange Commission:

1. The Company's Annual Report for the year ended December 31, 1993 on
Form 10-K filed March 11, 1994 pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (the "1934 Act");

2. The Company's Quarterly Report for the quarter ended March 31, 1994
on Form 10-Q filed on May 11, 1994 pursuant to Section 13(a) or
15(d) of the 1934 Act since the end of the fiscal year covered by
the Annual Report referred to in 1. above;

3. All other reports filed pursuant to Section 13(a) or 15(d) of the
1934 Act since the end of the fiscal year covered by the Annual
Report referred to in 1. above; and

4. The description of the Company's Capital Stock contained in the
Company's Registration Statement No. 33-36794 on Form S-2 filed
under the Securities Act of 1933.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to the
termination of the offering of the additional shares of Common Stock offered by
this Prospectus shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.

Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any more recent incorporated
document modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

The information relating to the Company contained in this Prospectus
summarizes, is based upon, or refers to, information and financial statements
contained in one or more of the documents incorporated by reference herein;
accordingly, such information contained herein is qualified in its entirety by
reference to such documents and should be read in conjunction therewith.

The Company hereby undertakes to provide without charge to each stockholder
to whom a copy of the Prospectus has been delivered, on the request of any such
person, a copy of any or all of the documents described above which are or may
be incorporated in this Prospectus by reference, other than exhibits to such
documents. Requests for such copies should be directed to the attention of
Corporate Secretary, Connecticut Water Service, Inc., 93 West Main Street,
Clinton, Connecticut, 06413, telephone (203) 669-8630, Extension 340.

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THE COMPANY

Connecticut Water Service, Inc. (the "Company") is the parent company of
The Connecticut Water Company ("CWC") which provides water for residential,
commercial, industrial, municipal and fire protection purposes in various areas
in the State of Connecticut through three operating regions. The Company and CWC
represent the second largest investor-owned water system in Connecticut in terms
of operating revenue and utility plant investment.

The Company was organized in 1956 as Suburban Water Service, Inc. and has
engaged in the business of acquiring and operating water companies through
controlling stock ownership. In 1975, the Company changed its name to
Connecticut Water Service, Inc., after acquiring all of the outstanding common
stock of CWC. The Company is a non-operating company substantially all of whose
income is derived from the earnings on the common stock of CWC. CWC's debt and
preferred stock are held primarily by institutional investors.

The profitability of the operations of the water utility industry generally
and of CWC (and hence the Company) is largely dependent on the timeliness and
adequacy of rate relief allowed by utility regulatory commissions. In addition,
profitability is dependent on numerous factors over which CWC has little or no
control, such as the quantity of rainfall and temperature in a given period of
time, industrial demand, prevailing rates of interest for short and long-term
borrowings, energy rates, wages, and compliance with environmental and water
quality regulations. In addition, inflation and other factors beyond the
Company's or CWC's control impact on the costs of construction, materials and
employee costs. See "Rates," "Financing" and "Regulation" under "Item 1.
Business" in the Company's latest Annual Report on Form 10-K filed pursuant to
Section 13(a) of the 1934 Act.

The Company's principal office is located at 93 West Main Street, Clinton,
Connecticut 06413 and its telephone is (203) 669-8636.

DESCRIPTION OF THE PLAN

The following description of the terms and conditions of the Plan is set
forth for your convenience in a question and answer form.

PURPOSE

1. What is the purpose of the Plan?

The Plan provides holders of record of the Company's Common Stock ("Common
Stock") and customers of CWC who reside in Connecticut with a simple and
convenient method of purchasing shares of Common Stock and either investing cash
dividends, or investing cash dividends and optional cash payments, in additional
shares of Common Stock without payment of any brokerage commission. Participants
may also deposit stock certificates with the Plan's Agent for safekeeping. Since
such additional shares will be purchased from the Company and not in the open
market, the Company will receive additional equity funds needed for CWC's
construction program and for the Company's general corporate purposes.

FEATURES

2. What are the features of the Plan?

A stockholder or customer who participates in the Plan (a "Participant")
will obtain the following advantages:

(a) Participants may have all or a percentage (50% or any higher even
multiple of 10%) of their cash dividends on shares of Common Stock
registered in their name and all cash dividends on shares credited to their
Plan account automatically reinvested in Common Stock at a discount of 5%
from the average market price as more fully explained under Question 12
below.

(b) Participants may, in addition, invest quarterly in additional
shares of Common Stock by making optional cash payments of at least $100
and not exceeding $10,000. The purchase price of the shares

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purchased with optional cash payments pursuant to the Plan will be 100% of
such average market price. Optional cash payments may be made by check,
money order or wire transfer.

(c) Residential customers of CWC, including all members of households
served by CWC, residing in Connecticut who do not presently own shares of
Common Stock may become Participants by making an initial cash investment
of at least $100 to purchase shares under the Plan.

(d) A Participant will pay no brokerage commissions or service charges
in connection with purchases under the Plan.

(e) A Participant's funds will be fully invested because the Plan
permits fractions of shares to be credited to a Participant's account.
Dividends on such fractions will be reinvested in additional shares or
fractions thereof and such shares credited to a Participant's account.

(f) Since the Agent that administers the Plan holds and acts as
custodian of shares purchased under the Plan, a Participant may also elect
to deposit certificates for shares of Common Stock held in his or her name
with the Agent. This relieves a Participant of the responsibility for the
safekeeping of certificates and protects such Participant against loss,
theft or destruction of such certificates.

(g) Regular statements of account will provide Participants with a
record of each transaction to simplify recordkeeping.

(h) A Participant may choose to establish an Individual Retirement
Account ("IRA") through a custodian (see Question 23) and to contribute or
roll over amounts to the IRA through a Plan account.

See Question 10 for a discussion of the disadvantages and risks relating to
the Plan.

ADMINISTRATION

3. Who administers the Plan for Participants?

The State Street Bank and Trust Company (the "Agent") has been designated
by the Company as the agent to administer the Plan as Agent for Participants, to
purchase and hold shares of Common Stock acquired through the Plan, to maintain
records, to send statements of account to Participants and to perform other
duties relating to the Plan. The Company and the Agent are not affiliated.

Shares purchased for a Participant will be held by or through the Agent
until termination of participation in the Plan or until a written request is
received from the Participant for withdrawal of all or part of such
Participant's shares. Shares purchased under the Plan and held by the Agent will
be registered in its name or the name of one of its nominees. The Company may
replace the Agent at any time. In the event that the Agent should cease to
administer the Plan, the Company will make such other arrangements as it deems
appropriate for the administration of the Plan.

All correspondence concerning the Plan should be addressed to the Agent as
follows:

THE STATE STREET BANK AND TRUST COMPANY
DIVIDEND REINVESTMENT DEPARTMENT

P.O. BOX 8200
BOSTON, MASSACHUSETTS 02266-8200
TELEPHONE NO. 1-800-426-5523

ELIGIBILITY

4. Who is eligible to participate?

(a) Stockholders. All holders of record of shares of Common Stock are
entitled to participate in the Plan. In order to be eligible to
participate, beneficial owners of Common Stock whose shares are registered
in names other than their own (e.g., broker or bank nominees) must become
stockholders of record by having their shares transferred into their names.

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(b) Customers. All residential customers of CWC are eligible to
participate in the Plan, as well as all members of households served by
CWC. Water consumers in the franchise territory served by CWC who are not
customers, such as renters and condominium owners, may participate in the
Plan, except that groups of individuals such as tenant associations are not
eligible to participate. All customer Participants must reside in
Connecticut. Business customers of CWC are not eligible to participate.
Customers who are eligible to participate in the Plan are herein referred
to as "Customers".

A Customer may enroll under the Plan in his or her own name, in the joint
name of the Customer and another person, or in his or her name as custodian or
trustee for another person, by marking the Dividend Reinvestment and Common
Stock Purchase Plan Authorization Form (the "Authorization Form") in the
appropriate manner. In certain cases, Customers may also enroll under the Plan
in the name of the trustee of an IRA for the benefit of the Customer. (See
Question 23).

PARTICIPATION

5. How does an eligible stockholder or Customer participate?

A stockholder of record or Customer of CWC may join the Plan at any time by
completing and signing an Authorization Form and returning it to the Agent.
Authorization Forms will be provided from time to time to all non-participating
stockholders and Customers and may also be obtained at any time by telephone or
written request to the Agent or to the Secretary of the Company.

A Customer need not be a registered holder of Common Stock but, by
executing the Authorization Form, agrees to have at least $100 of Common Stock
purchased on his or her behalf on the next Investment Date (as defined under
Question 6) at a price equal to 100% of the applicable average market price, and
must acknowledge that he or she is a Connecticut resident. Each Authorization
Form for a Customer who is not a registered stockholder must be accompanied by a
check for at least $100.

A Participant must furnish his or her Federal tax identification number to
the Agent when opening a Plan Account. Where the Common Stock is registered in
more than one name (i.e., joint tenants, trustees, etc.), all registered holders
must sign the Authorization Form. All joint accounts will be "Joint Tenants"
unless otherwise instructed by the Customer. A person returning a signed
Authorization Form, and who wishes partial reinvestment, must check the "Partial
Automatic Dividend Reinvestment" box and indicate the percentage (50% or any
higher even multiple of 10%) of dividends on shares registered in the
Participant's name which the Participant wishes to reinvest; otherwise, all
dividends or shares registered in the Participant's name will be reinvested. A
Participant automatically continues in the Plan unless he or she notifies the
Agent in writing or by telephone that he or she wishes to withdraw. (See
Question 28). A Participant who ceases to be a Customer of CWC may continue to
participate in the Plan as long as at least one whole share of Common Stock is
registered in the Participant's name or held through the Plan. See Question 30
for information concerning termination by the Company of participation by a
Participant. CURRENT PARTICIPANTS DO NOT NEED TO COMPLETE AND RETURN A NEW
AUTHORIZATION FORM UNLESS THEY WISH TO CHANGE THEIR METHOD OF PARTICIPATION.

6. When may a stockholder or Customer join the Plan?

If the Authorization Form is received prior to the record date for the next
dividend, the Participant will be enrolled as of the next Investment Date (as
described below), for the purpose of the reinvestment of dividends and the
making of optional cash payments. The record dates for dividends are normally on
or around the 1st day of March, June, September and December. The "Investment
Date" will normally be on or around the dividend payment date. Dividends are
normally paid on the 15th day of March, June, September and December. If such
date falls on a Saturday, Sunday or other day on which the New York Stock
Exchange is closed, or on which trading is suspended, the dividend payment date
and the Investment Date will normally be the preceding trading day.

If the Authorization Form is received by the Agent after the record date
for the next dividend, the Participant's reinvestment of dividends will not
start until the second succeeding Investment Date. For example, in order to
invest the quarterly dividend expected to be payable on March 15 to stockholders
of record on March 1, or to have optional cash payments received with an
Authorization Form invested on or

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around March 15, a Participant's Authorization Form must be received by the
Agent no later than March 1. If the Authorization Form is received after March
1, the dividend payable on March 15 will be paid in cash and the Participant's
reinvestment of dividends will commence with the next Investment Date (expected
to be June 15).

Optional cash payments may be made when enrolling by enclosing with the
Authorization Form a check payable to The State Street Bank and Trust Company.
(See Questions 14 and 15). Optional cash payments received by the Agent in any
dividend payment month at least 5 business days prior to the Investment Date
will be held by the Agent and invested on the Investment Date next succeeding
the date of receipt; provided, however, that the Agent will return any such
optional cash payments, in whole or in part if the amount remaining with the
Agent is at least $100, to the Participant if written or telephone request
therefor is received by the Agent no later than 48 hours prior to the next
succeeding Investment Date. A Participant desiring to make optional cash
purchases on an Investment Date may do so by check or money order made payable,
or by wire transfer of funds, to the Agent, for the amount he or she wishes to
invest, in an amount not less than $100 for any single investment or more than
$10,000 during any calendar quarter. See Questions 13 and 17 for further
discussion on how this option works. NO INTEREST WILL BE CREDITED OR PAID ON
PAYMENTS RECEIVED OR HELD BY THE AGENT UNDER THE PLAN.

Initial investments, for Customers who do not already own Common Stock,
must be at least $100, in the form of a personal check or money order, and must
be included with the completed Authorization Form returned to the Agent.

7. What does the Authorization Form provide?

The Authorization Form permits a Participant, by checking the "Full
Dividend Reinvestment" box, to direct the Agent to invest in additional shares
of Common Stock all of the cash dividends on the shares registered in his or her
own name, as well as all dividends on shares credited to his or her account
under the Plan, and to invest optional cash payments (from $100 to $10,000 per
quarter), if any, which the Participant chooses to make. Alternatively, if the
"Partial Dividend Reinvestment" box on the Authorization Form is checked, a
percentage of dividends, indicated by the Participant on the Authorization Form
(50%, 60%, 70%, 80% or 90%), on shares registered in the Participant's name will
be invested in additional shares of Common Stock, as well as all dividends on
shares credited to the Participant's account and optional cash payments (of at
least $100 and not exceeding $10,000 per quarter), if any. A Customer must
direct the Agent to purchase shares of Common Stock with the minimum initial
investment enclosed with the Authorization Form. Customers may also select the
full or partial reinvestment option. A stockholder or Customer may not
participate in the Plan solely with respect to optional cash payments. At least
50% of dividends on shares registered in the Participant's name and all
dividends on shares credited to a Participant's account must be reinvested under
the Plan.

Once a Participant elects reinvestment, cash dividends paid on shares of
Common Stock registered in such Participant's name or held in such Participant's
account will be reinvested in additional shares of Common Stock. If a
Participant specifies partial reinvestment, that portion of such dividend
payment not being reinvested will be sent to such Participant by check in the
usual manner.

A participant may elect to deposit certificates with the Agent for
safekeeping and may elect to reinvest dividends on all or a portion of such
shares or to receive dividends in cash. (See Question 19).

No matter which of the above options is chosen, all shares purchased under
the Plan and held in the Plan account will be subject to automatic dividend
reinvestment, and the dividends on all such shares will automatically be
reinvested in Common Stock at a price equal to 95% of the applicable five-day
average market price.

8. May a Participant change the method of participation after enrollment?

Yes. If a Participant after enrollment wishes to change his or her method
of participation, either an additional Authorization Form must be executed and
returned to the Agent as specified in Question 5 or the Participant must give
the Agent telephone notice of such change as specified in Question 9.
Participants who

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wish to change the percentage of dividends reinvested with respect to shares
registered in their names must also either execute and return to the Agent an
additional Authorization Form or give the Agent telephone notice of such change.
If a Participant changes the percentage of his or her dividends that is to be
reinvested with respect to shares registered in his or her name by submitting a
later-dated Authorization Form or telephone notice to the Agent, the later-dated
Authorization Form or telephone notice must be received prior to the record date
for the next dividend in order for the later-dated Authorization Form or
telephone notice to take effect as of the next Investment Date. If the
later-dated Authorization Form or telephone notice is received after the record
date for the next dividend, the percentage of such dividends reinvested on the
next Investment Date will be the percentage indicated on the original
Authorization Form.

9. How may Participants give notice to the Agent by telephone?

Telephone notice may be given by calling the Agent at 1-800-426-5523.
Please be prepared with the Company's name, your Plan account number and your
Social Security number.

10. Does participation in the Plan involve any risk?

The risk to stockholders and Customers who participate in the Plan is the
same as with any other investment in shares of Common Stock of the Company. It
should be recognized that a Participant or Customer who purchases Common Stock
under the Plan loses any advantage otherwise available from being able to select
the timing of his or her investment. It should also be recognized that, like any
investment, the Company cannot assure the Participant or Customer of a profit or
protect the Participant or Customer against a loss on the shares purchased under
the Plan.

The Plan does not represent a change in the Company's dividend policy or a
guarantee of future dividends.

PURCHASES

11. How many shares will be purchased for a Participant?

All shares purchased for Participants under the Plan will be newly-issued
shares purchased directly from the Company. The number of shares to be purchased
depends on the amount of the Participant's dividend or optional cash payments,
or both, and the price of the Common Stock. The Participant's account will be
credited with a number of shares, including fractions computed to three decimal
places, equal to the total amount invested divided by the purchase price. Thus,
the shares purchased for a Participant under the Plan will be held separately
from the shares of Common Stock which the Participant purchases (or has
previously purchased) outside the Plan and holds in his or her own name. A
Participant may not specify the number of shares to be purchased or the price at
which shares are to be purchased, or otherwise seek to restrict or control
purchases made pursuant to the Plan.

12. What will be the price of shares of Common Stock purchased under the
Plan?

The price of shares of Common Stock purchased from the Company as of the
Investment Date with reinvested dividends will be 95% of the fair market value
of the shares as of the Investment Date, which for this purpose will be the
average closing price of the Company's Common Stock in the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotations (NASDAQ) National Market System on the last five trading days ending
with, and including, the Investment Date. The price of shares purchased from the
Company as of the Investment Date with optional cash payments will be 100% of
such five-day average market price. The price of shares purchased from the
Company as of the Investment Date with initial cash payments from Customers will
be 100% of such average market price. Shares acquired from the Company will be
purchased for Participants' accounts as of the close of business on the relevant
Investment Date. Dividend and voting rights will normally commence on the
Investment Date.

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OPTIONAL CASH PAYMENTS AND INITIAL INVESTMENTS

13. How do optional cash payments work?

On each Investment Date in a dividend payment month, the Agent will invest
in additional shares of Common Stock optional cash payments, if any, received
from the Participant at least 5 business days prior to such Investment Date,
provided the Agent has not received a written or telephone request from the
Participant at least 48 hours prior to such Investment Date to return all or any
portion of such optional cash payment. Each optional cash payment must be at
least $100 and optional cash payments may not exceed $10,000 in any quarter.
Provisions applicable to foreign Participants are set forth under Question 36.

The Company reserves the right to limit the number of shares of Common
Stock to be purchased through optional cash purchases and initial investments to
50,000 shares per year. All payments accompanying requests to purchase Common
Stock received through the close of business on the date the 50,000 annual share
limit is reached will be honored. All payments received after that time will be
returned. The Company reserves the right, in its sole discretion, to waive the
annual share limit and/or to reduce or increase such annual share limit. There
is no limit to the number of shares of Common Stock to be purchased with
reinvested dividends.

The Agent will also invest in additional shares of Common Stock, as of each
Investment Date in a dividend payment month, all cash dividends on shares
credited to a Participant's account and all (or, if partial reinvestment is
specified, a percentage equal to 50% or any higher even multiple of 10%) of the
cash dividends on shares of Common Stock held by such Participant.

14. How are optional cash payments and initial investments made?

More than one optional cash payment may be made in each quarter, but the
aggregate of such payments may not be more than $10,000 in any calendar quarter.
Any amount in excess of $10,000 will be returned to the Participant. For
purposes of this limitation, all Plan accounts under common control or
management will be aggregated and deemed to be one account. The Agent will
purchase as many whole shares and fractional shares (computed to three decimal
places) of Common Stock as can be purchased with the amount submitted.

An optional cash payment may be made by a Participant and an initial
investment may be made by a Customer when enrolling by enclosing a check payable
to The State Street Bank and Trust Company with the Authorization Form.
Thereafter, this type of investment may be made only through the use of cash
payment forms which are attached to those statements of account sent to
Participants periodically by the Agent. The same amount of money need not be
invested each time and there is no obligation to make any optional cash
payments. However, each optional cash payment must be at least $100.

15. When will optional cash payments and initial investments received by
the Agent be invested?

Optional cash payments received from Participants AT LEAST 5 BUSINESS DAYS
PRIOR TO THE NEXT INVESTMENT DATE will be invested as of the next Investment
Date. (See Question 6). Initial investments received from Customers at least 5
business days prior to the next Investment Date will be invested as of the next
Investment Date.

Optional cash payments received from Participants, and initial investments
received from Customers, within 4 business days prior to the Investment Date
will be held by the Agent and will be invested on the Investment Date in a
dividend paying month next succeeding the date of receipt of such optional cash
payments by the Agent. NO INTEREST WILL BE PAID BY THE COMPANY OR THE AGENT ON
OPTIONAL CASH PAYMENTS OR INITIAL INVESTMENTS.

If a Participant or a Customer submits funds to purchase stock and then
wishes to have it returned rather than invested, the Agent will not be obligated
to return such funds unless a written or telephone request that they be returned
is received at least 48 hours prior to the next Investment Date.

16. Will shares acquired through optional cash payments and initial
investments be subject to automatic dividend reinvestment?

9
<PAGE> 12

Yes. All dividends paid on shares acquired through optional cash payments
and initial investments, so long as the shares are held in the Participant's
Plan account, will be automatically reinvested in shares of Common Stock. If
certificates for shares acquired through optional cash payments or initial
investment by Customers are issued to the Participant, the dividends paid on
such shares will continue to be reinvested unless the Participant elects to have
them paid in cash by submitting a new Authorization Form to the Agent.

17. How can optional cash payments be made?

(a) Check or Money Order. Optional cash payments and initial
investments may be made by personal check or money order payable in U.S.
dollars to the Agent. Checks must be drawn against U.S. banks. Optional
cash payments must be mailed to the Agent at the address set forth in
Question 3 together with the cash payment form attached to a Participant's
statement of account. CASH PAYMENTS FORWARDED TO ANY OTHER ADDRESS DO NOT
CONSTITUTE VALID DELIVERY. Additional cash payment forms are available upon
request from the Agent.

In the event that any check is returned unpaid for any reason, the
Agent will consider the request for investment of such funds void and
without effect and will immediately remove from the Participant's account
any shares purchased upon the prior credit of such funds. The Agent may
then sell such shares to satisfy any uncollected amounts. If the net
proceeds of the sale of such shares are insufficient to satisfy the balance
of the uncollected amounts, the Agent will be entitled to sell additional
shares from the Participant's account to satisfy the uncollected balance.

(b) Wire Transfers. Optional cash purchases may also be made by wire
transfer to the Agent. Wire transfers must include the name of the Plan,
the name in which the Plan account is registered and the Participant's Plan
account number. Participants making wire transfer purchases may be charged
fees by the commercial bank initiating the transfer. PARTICIPANTS MUST
CONTACT THE AGENT AT 1-800-426-5523 TO OBTAIN PROPER WIRE TRANSFER
INSTRUCTIONS.

18. Are there any expenses to Participants in connection with purchases
under the Plan?

There are no brokerage fees when shares are purchased under the Plan.
Additionally, all general costs of administration of the Plan are to be paid by
the Company. However, if a Participant requests that the Agent sell any of the
shares credited to such Participant's account under the Plan, the Participant
will pay a brokerage commission and any transfer tax or other fees or charges.
See Questions 26 and 27 regarding fees assessed for sales of Common Stock;
Question 26 regarding charges for withdrawal from the Plan; Question 17
regarding fees assessed if the Participant makes optional cash purchases by wire
transfer; and Question 23 regarding fees for maintaining an IRA account under
the Plan.

SAFEKEEPING

19. How can Participants deposit stock certificates with the Agent for
safekeeping?

Participants who wish to avail themselves of the safekeeping feature of the
Plan should mail their certificates to State Street Bank and Trust Company,
Dividend Reinvestment Department, P.O. Box 8200, Boston, Massachusetts
02266-8200. Certificates should be sent by registered or certified mail, return
receipt requested, accompanied by a completed Authorization Form specifying that
(i) the shares are furnished for safekeeping, and (ii) dividends on all or a
portion of such shares are to be either reinvested pursuant to the Plan or paid
in cash. The Agent will confirm the receipt of any certificates which are
delivered for safekeeping. Shares deposited for safekeeping must remain in a
Participant's account for 60 days before they can be sold.

REPORTS TO PARTICIPANTS

20. What kind of reports will be sent to Participants in the Plan?

Each Participant will be sent quarterly a statement of his or her account
showing dollars invested, shares purchased, the purchase price, the number of
shares purchased, deposited for safekeeping, sold, transferred, or withdrawn and
total shares held for him or her in the Plan. All year-to-date transactions in
the account will be included. These statements are a Participant's continuing
record of the cost of his or her purchases and should

10
<PAGE> 13

be retained permanently for Federal income tax purposes. The Agent will also
send each Participant a confirmation promptly after enrollment and the purchase
of shares with an accompanying initial investment or optional cash purchase. In
addition, each Participant will receive the most recent prospectus or supplement
relating to the Plan and copies of the same communications sent to every other
holder of the Company's Common Stock, including the Company's interim reports,
annual report, notice of annual meeting and proxy statement, and Federal income
tax information for reporting dividends paid and dividends reinvested.

A stockholder account will be opened by the Agent for Customers who become
new stockholders as a result of their purchase of Common Stock under the Plan.
The account will be opened in accordance with the Customer's instructions on the
Authorization Form.

DIVIDENDS

21. Will Participants earn dividends on fractional shares?

Yes. Dividends will be earned on full shares and any fraction of a share
credited to a Participant's account.

22. Will dividends be paid on Common Stock if the Investment Date
coincides with a dividend payment date?

No. Normal dividend payment dates are the 15th day of March, June,
September and December. To receive the dividend, a person must be a stockholder
of record on the record date for a dividend as set by the Board of Directors
(normally on or around the 1st day of March, June, September and December) so as
to allow a sufficient time for the Company to process dividend payments.
Although the Investment Date will normally be on or around the dividend payment
date, if the Investment Date and dividend payment date were the same, the
Customer would not be entitled to any dividend payment with respect to the
Common Stock purchased on the Investment Date.

IRA ACCOUNTS

23. Is a Participant permitted to establish an IRA?

The Plan allows individual Participants to establish an IRA and to make
Plan purchases through the IRA. Participants may make their own arrangements to
establish an IRA or use First Trust Corporation, the trustee identified by the
Company which has implemented a simplified procedure for establishing a Plan
IRA. Participants may request the appropriate First Trust IRA forms by filling
out the IRA Request Form and returning it directly to First Trust Corporation,
717 17th Street, Suite 2600, Denver, Colorado 80202-3322 ("First Trust").
Individuals may open an IRA by completing and signing an IRA Enrollment Form
(adoption agreement) provided by First Trust and returning it to First Trust
with an initial contribution and instructions to make a purchase under the Plan.
Purchases may be funded by regular IRA contributions or by rolling over an
existing IRA or other qualified plan distribution. There is a minimum initial
investment for an IRA Plan account of $250. If an existing IRA or a qualified
plan distribution is rolled over into the IRA, the Plan's maximum quarterly
investment limitations do not apply. IRA Enrollment Forms are available upon
request from First Trust which may be contacted at the above Denver address or
by telephone at 800-525-8188.

All IRA Participants will operate through an IRA trustee or custodian
rather than the Agent with respect to their IRA accounts. Thus, for purposes of
an IRA account, references in this Prospectus to the Participant mean the IRA
trustee or custodian. All payments and instructions and requests relating to
Plan transactions for the IRA must be forwarded to the IRA trustee or custodian
and not to the Agent. The IRA trustee or custodian will work directly with the
Agent in establishing, giving instructions, making payments and otherwise
effecting Plan transactions with respect to each IRA account.

An initial set up fee, an annual administrative fee and other fees may be
charged by a trustee or custodian for maintaining the IRA. First Trust's fees
are set forth in the IRA Disclosure Statement which each interested individual
will receive from First Trust with the IRA Enrollment Form. The First Trust IRA
Trust

11
<PAGE> 14

Agreement provides that such fees may be deducted from shares purchased by the
IRA under the Plan by cashing out any shares necessary to cover the amount of
such fees.

The Company has agreed to pay the set-up fee for all IRA accounts
established with First Trust on or before December 31, 1997. The Company
reserves the right to extend the period during which it will pay First Trust's
start-up fee for IRA accounts.

CERTIFICATES FOR SHARES

24. Will certificates be issued for shares of Common Stock purchased?

Normally, certificates for shares of Common Stock purchased under the Plan
will not be issued to Participants. The number of shares credited to an account
under the Plan and the number of shares deposited by a Participant with the
Agent for safekeeping will be shown on the Participant's statement of account.
This service protects against loss, theft or destruction of share certificates.

Upon written or telephone request of a Participant to the Agent,
certificates representing any number of whole shares credited to his or her
account under the Plan will be issued to him or her, even though such
Participant wishes to remain in the Plan. Withdrawal of shares in certificate
form in no way affects dividend investment. A new certificate will be mailed to
a Participant promptly after receipt of the request by the Agent. In such event,
any remaining full shares for which certificates are not requested and any
fractional shares will continue to be credited to the Participant's account
under the Plan.

Certificates for fractional shares will not be issued under any
circumstances.

25. In whose name will certificates be registered when issued?

Accounts under the Plan are maintained in the names in which certificates
for shares of Common Stock of Participants were registered at the time they
entered the Plan. Consequently, certificates for whole shares will be similarly
registered when issued.

26. May a Participant sell shares in his or her Plan account?

Participants may request the Agent to sell any number of whole shares held
in their Plan accounts by giving written or telephone instructions to the Agent.
The Agent will make the sale as promptly as practicable, and in no event later
than ten business days following receipt of the request. The Participant will
receive the proceeds, less applicable brokerage fees or commissions (payable to
the broker selected by the Agent, which may be an affiliate of the Agent) and
transfer tax, if any. Participants will also be charged an administrative fee of
$5.00 per transaction payable to the agent when selling shares. Proceeds of
shares sold through the Plan will be paid to the Participant by check. No check
will be mailed prior to settlement, which typically occurs five business days
after the sale of shares.

No Participant shall have the authority or power to direct the date or
price at which Common Stock may be sold. Requests must indicate the number of
shares to be sold and not the dollar amount to be attained. Any request that
does not clearly indicate the number of shares to be sold will be returned to
the Participant with no action taken. A request to sell all shares held in a
Participant's account will be treated as a withdrawal from the Plan. (See
"Withdrawal" below).

WITHDRAWAL

27. How does a Participant withdraw from the Plan?

In order to withdraw from the Plan, a Participant must notify the Agent in
writing or by telephone that he or she wishes to withdraw. Participants will be
charged an administrative fee of $5.00 per transaction when withdrawing shares
from the Plan. If the fee is not paid by the Participant concurrently with the
request for withdrawal, the Agent may sell shares to satisfy such charges. When
a Participant withdraws from the Plan, or upon termination of the Plan by the
Company, certificates for whole shares credited to the Participant's account
under the Plan will be issued and cash will be remitted for any fractional
share. If, upon withdrawal from the Plan, the Participant desires to sell all
shares credited to his or her account under the Plan, such

12
<PAGE> 15

desire must be specified in his or her request to the Agent for withdrawal. If
the Participant requests such sale or a sale is necessary to pay the withdrawal
charge, the sale will be made by the Agent at the market price at the time of
sale, within ten trading days after receipt of the request. The Participant will
receive the proceeds of the sale less any related brokerage commission and any
transfer tax or other fees or charges. (See Question 26).

28. When may a Participant withdraw from the Plan?

A Participant may cancel and will be deemed to have canceled his or her
reinvestment of dividends as of an Investment Date if written or telephone
notice of withdrawal from the Plan is received by the Agent prior to the record
date preceding such Investment Date. Dividends payable on or around such
Investment Date and all subsequent dividends will be paid in cash to the
stockholder unless he or she re-enrolls in the Plan pursuant to the procedures
outlined in Questions 5 and 6. Optional cash payments not yet invested will be
refunded upon receipt of the written or telephone notice of withdrawal. A
Participant who withdraws from the Plan may not join again for 12 months unless
the Company consents.

If notice of withdrawal is received by the Agent after a record date and at
least 48 hours prior to the next Investment Date, any optional cash payments
received prior to receipt of such request will be returned to the Participant
and/or any dividends paid will be invested for the Participant's account on the
next succeeding Investment Date. If such written notice of withdrawal is
received by the Agent after a record date but less than 48 hours prior to the
next Investment Date, any optional cash payments received prior to receipt of
such request and/or any dividends paid will be invested for the Participant's
account on the next succeeding Investment Date. The next dividend and all
subsequent dividends will be paid to such stockholder in cash unless he or she
re-enrolls in the Plan pursuant to the procedures outlined in Questions 5 and 6.

29. May a Participant discontinue dividend reinvestment on shares held
outside the Plan account without withdrawing from the Plan?

Yes, a Participant who wishes to discontinue the automatic reinvestment of
the dividends on the shares held outside the Plan account may do so, without
withdrawing from the Plan, by filing a new Authorization Form or by changing his
or her method of participation by telephone. (See Question 9). However, the
dividends on the shares held in the Plan account will continue to be reinvested.

30. May the Company terminate participation by a Plan Participant?

If a Participant does not own at least one whole share registered in the
Participant's name or held through the Plan, the Participant's participation in
the Plan may be terminated. The Company may also terminate any Participant's
participation in the Plan after written notice in advance mailed to such
Participant at the address appearing on the Agent's records. Participants whose
participation in the Plan has been terminated will receive certificates for
whole shares held in their accounts and a check for the cash value of any
fractional shares held in their Plan accounts. The value of fractional shares
will be based upon the market price of the Common Stock at the time payment is
made.

31. What happens when a Participant sells or transfers some or all of the
shares registered in his or her name?

If a Participant disposes of some or all shares of the Company's Common
Stock registered in his or her name, that transfer will not affect participation
in the Plan. The Agent will continue to reinvest the dividends on the shares
credited to the Participant's account under the Plan until notified by such
Participant that he or she wishes to withdraw from the Plan. However, if less
than one whole share is held in the Plan account, the Participant will receive a
cash payment for the fractional share, and the Plan account will be closed.

OTHER INFORMATION

32. If the Company has a rights offering, how will a Participant's
entitlement be computed?

A Participant's entitlement in a rights offering will be based upon his or
her total holdings -- just as his or her dividend is computed each quarter.
Rights on shares of stock registered in the name of a Participant, as

13
<PAGE> 16

well as on whole shares credited to the Participant's account under the Plan,
will be mailed directly to the Participant in the same manner as to holders of
stock not participating in the Plan. Any rights based on a fraction of a share
held in a Participant's account will be sold by the Agent, if transferable, and
the net proceeds will be invested in the same manner as an optional cash payment
as of the next Investment Date.

33. What happens if the Company issues a stock dividend or declares a
stock split?

Any stock dividends or split shares distributed by the Company on shares
credited to the account of a Participant under the Plan will be added to the
Participant's account. Stock dividends or split shares distributed on shares
registered in the name of the Participant will be mailed directly to such
Participant in the same manner as to stockholders who are not participating in
the Plan.

34. How will a Participant's shares be voted in meetings of stockholders?

Proxy materials will be sent to Participants in connection with any annual
or special meeting of stockholders. Any shares held in a Participant's account
will be voted by the Agent in accordance with the Participant's direction. In
the event that the Participant does not direct the Agent, the Agent will vote or
not vote shares held in a Participant's account as it deems proper. The total
number of shares held in a Participant's account may also be voted in person at
the meeting.

35. What are the Federal income tax consequences of participation in the
Plan?

Reinvestment of dividends does not relieve a Participant of the liability
for any income tax which may be payable on such dividends. A Participant
reinvesting dividends will be treated for Federal income tax purposes as having
received, on the Investment Date, a dividend equal to the then full fair market
value of the shares purchased with such reinvested dividends plus any tax
withheld prior to investment, even though such amount is not actually received
in cash. The fair market value will be the average of the high and low prices of
such Common Stock on the Investment Date as reported by NASDAQ, and not the
five-day average used to calculate the purchase price under the Plan.

The cost basis for Federal income tax purposes of any shares acquired with
reinvested dividends will be equal to the fair market value of such shares as of
the applicable Investment Date. The basis of shares which are purchased with an
initial investment or optional cash payments will be equal to the purchase price
of such shares.

A Participant will not realize any taxable income when he or she receives
certificates for whole shares credited to his or her account under the Plan.
However, a Participant who, upon withdrawal, receives the proceeds from the sale
of a fractional share credited to his or her account may realize a gain or loss
with respect to such fraction. Gain or loss may also be realized by the
Participant when whole shares are sold, either pursuant to the Participant's
request (see Question 26) or upon withdrawal from the Plan (see Question 27) and
the subsequent sale of the shares withdrawn. The amount of such gain or loss
will be the difference between the amount realized by the Participant and such
Participant's tax basis for the shares sold. The amount realized by a
Participant will be the gross proceeds less brokerage fees and commissions and
any transfer taxes paid by the Participant. Subject to limitations contained in
the Internal Revenue Code, the administrative fees and charges incurred by
Participants upon the sale of shares may be deductible by Participants who
itemize deductions.

If such a sale is made within one year of acquisition, any gain (or loss)
may be taxed as short-term capital gain (or loss). If the sale is made after one
year, the gain (or loss) will be taxed as a long-term capital gain (or loss).
The holding period for shares acquired pursuant to the Plan will begin on the
day following the purchase of such shares.

Federal law requires the Company to notify the Internal Revenue Service of
all sales of stock made under the Plan during the year. If a Participant sells
any shares purchased under the Plan, he or she will be sent a form 1099B for
each sale pursuant to Federal income tax regulations. In the case of
Participants (including foreign stockholders) who elect to have their dividends
reinvested and whose dividends are subject to United States income tax or backup
withholding, the amount required to be withheld will be deducted from the
dividends payable to such Participants, and the remaining amount, will be
applied to the purchase of shares of

14
<PAGE> 17

Common Stock under the Plan. The filing of any documentation required to obtain
an exemption from, or a reduction in, United States withholding tax is the
responsibility of the Participant.

The Company believes the foregoing is an accurate summary of the Federal
tax consequences of participation in the Plan as of the date of this Prospectus.
This summary may not reflect every possible situation that could result from
participation in the Plan. THEREFORE, EACH PARTICIPANT IS URGED TO CONSULT HIS
OR HER OWN TAX ADVISOR TO DETERMINE THE PARTICULAR FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES RESULTING FROM PARTICIPATION IN THE PLAN AND THE SUBSEQUENT
DISPOSAL OF SHARES PURCHASED PURSUANT TO THE PLAN. If you do not reside in the
United States, your income tax consequences will vary from jurisdiction to
jurisdiction. In addition, the foregoing rules may not be applicable to certain
Participants in the Plan, such as tax-exempt entities (e.g., pension funds and
IRAs).

36. What provision is made for foreign stockholders whose dividends are
subject to income tax withholding?

In the case of those foreign holders of shares of the Company's Common
Stock whose dividends are subject to United States income tax withholding, the
Agent will invest in such Common Stock an amount equal to the dividends to be
reinvested less the amount of tax required to be withheld. The statements
confirming purchases made for such foreign Participants will indicate the gross
amount of dividends received and the net amount invested.

Optional cash payments received from foreign Participants must be in United
States dollars and will be invested in the same manner as payments from the
other Participants.

37. What is the responsibility of the Company and the Agent under the
Plan?

The Company and the Agent in administering the Plan will not be liable for
any act done in good faith or for any good faith omission to act including,
without limitation, any claim or liability arising out of failure to terminate a
Participant's account upon such Participant's death, or with respect to the
prices at which shares are purchased or sold for the Participant's account and
the times when such purchases or sales are made, or with respect to any
fluctuation in the market value before or after purchase or sale of shares, or
with respect to the tax treatment of dividends reinvested under the Plan. The
Plan's limitations on liability would not preclude a Participant, acting as a
stockholder of the Company rather than as a Participant, from taking appropriate
action based upon alleged violations of federal securities laws. The Agent
reserves the right to resign at any time upon sixty days' notice to the Company
in writing.

THE PARTICIPANT SHOULD RECOGNIZE THAT THE COMPANY CANNOT ASSURE HIM OR HER
OF A PROFIT OR PROTECT HIM OR HER AGAINST A LOSS ON THE SHARES PURCHASED OR SOLD
UNDER THE PLAN.

38. May the Plan be changed or discontinued?

Notwithstanding any other provision of the Plan, the Board of Directors of
the Company may modify, amend, supersede, suspend or terminate the Plan at any
time, including the period between a dividend record date and a dividend payment
date. The Board of Directors may increase the number of shares which may be
issued by the Company under the Plan, but may not increase the number of
authorized shares of the Common Stock without stockholder approval. Notice of
any material amendment or modification, or any superseding, suspension or
termination of the Plan, will be mailed to all Participants. No such event will
affect any shares then credited to a Participant's account. Upon any whole or
partial termination of the Plan, certificates for whole shares credited to a
Participant's account under the Plan will be issued to the Participant and a
cash payment will be made for any fraction of a share.

39. Who interprets and regulates the Plan?

The Company reserves the sole right, in its sole discretion, to interpret
and regulate the Plan. If it appears to the Company that any Participant is
using or contemplating the use of the Plan in a manner or with an effect that,
in the sole judgment and discretion of the Company, is not in the best interests
of the Company or its other stockholders, then the Company may decline to issue
all or any portion of the shares of Common

15
<PAGE> 18

Stock for which any payment by or on behalf of such Participant is tendered.
Such payment (or the portion thereof not to be invested in shares of Common
Stock) will be returned by the Company as promptly as practicable, without
interest. Under such circumstances, the Company may also act to terminate
participation by such Plan Participant.

40. May shares held in a Participant's Plan account be pledged or
assigned?

Shares credited to a Participant's Plan account may not be pledged or
assigned, and any such purported pledge or assignment will be void. If a
Participant wishes to pledge or assign such shares, a certificate for them must
first be issued in his or her name.

41. How may stockholders and Customers obtain answers to other questions
regarding the Plan?

Any additional questions should be addressed to:

The State Street Bank and Trust Company
Dividend Reinvestment Department
P.O. Box 8200
Boston, Massachusetts 02266-8200

Telephone No. 1-800-426-5523

Vincent F. Susco, Jr.
Corporate Secretary
Connecticut Water Service, Inc.
93 West Main Street
Clinton, Connecticut 06413
Telephone No. (203) 669-8630, Extension 340.

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<PAGE> 19

USE OF PROCEEDS

The Company does not know either the number of shares that will ultimately
be purchased under the Plan or the prices at which shares will be sold. The
proceeds from the sale of the additional shares of Common Stock will be added to
the general funds of the Company and will be used for the construction program
of CWC and for general corporate purposes.

LEGAL OPINION

The legality of issuance of the Common Stock offered hereby was passed upon
for the Company by Day, Berry & Howard, CityPlace I, Hartford, Connecticut
06103.

EXPERTS

The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen & Co., independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.

17
<PAGE> 20

- ---------------------------------------------------------
- ---------------------------------------------------------

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION................... 3
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE............................. 3
THE COMPANY............................. 4
DESCRIPTION OF THE PLAN................. 4
Purpose............................ 4
Features........................... 4
Administration..................... 5
Eligibility........................ 5
Participation...................... 6
Purchases.......................... 8
Optional Cash Payments and Initial
Investments...................... 9
Safekeeping........................ 10
Reports to Participants............ 10
Dividends.......................... 11
IRA Accounts....................... 11
Certificates for Shares............ 12
Withdrawal......................... 12
Other Information.................. 13
USE OF PROCEEDS......................... 17
LEGAL OPINION........................... 17
EXPERTS................................. 17
</TABLE>

CONNECTICUT WATER SERVICE, INC.
[LOGO]

DIVIDEND REINVESTMENT AND

COMMON STOCK PURCHASE PLAN

COMMON STOCK
(NO PAR VALUE)

--------------------
PROSPECTUS
--------------------

DATED: JULY 15, 1994

- ---------------------------------------------------------
- ---------------------------------------------------------
<PAGE> 21

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.................................. $ 7,000.00
Printing and Engraving Expenses*..................................................... 10,000.00
Accountant's Fees and Expenses*...................................................... 2,500.00
Legal Fees and Expenses*............................................................. 50,000.00
Agent Fees*.......................................................................... 500.00
Blue Sky Fees and Expenses*.......................................................... 2,500.00
Miscellaneous*....................................................................... 2,500.00
----------
Total...................................................................... $75,000.00
=========
</TABLE>

- ---------------

* Estimated

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Incorporated by reference to Item 15 of Part II of the Company's
Registration Statement on Form S-2, Registration Statement No. 33-36794.

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ---------------------------------------------------------------------------
<S> <C>
1.1* Form of Dividend Reinvestment and Common Stock Purchase Plan.
1.2* Draft letter to Stockholders describing changes in Plan.
1.3* Proposed letter to Customers of Connecticut Water Company describing Plan.
1.4* Draft brochure for Customers describing Plan.
3.1 Certificate of Incorporation of Connecticut Water Service, Inc. amended and
restated September 15, 1988. (Incorporated by reference to Exhibit 3.1 to
Form 10-K for year ended December 31, 1989).
3.2 Certificate Amending Certificate of Incorporation of Connecticut Water
Service, Inc. creating $25 par value Preferred Stock dated September 5,
1989. (Incorporated by reference to Exhibit 3.1a to Form 10-K for year
ended December 31, 1989).
3.3 Certificate Amending Certificate of Incorporation of Connecticut Water
Service, Inc. dated April 23, 1990 (Incorporated by reference to Exhibit
3.5 to Registration Statement No. 33-36794).
3.4 By-Laws, as amended, of Connecticut Water Service, Inc. dated April 24,
1988. (Incorporated by reference to Exhibit 3.2 to Form 10-K for year ended
December 31, 1989).
5* Opinion of Day, Berry & Howard as to legality of Common Stock registered
hereunder, including consent of said counsel.
23.1* Consent of Arthur Andersen & Co.
23.2 Consent of Messrs. Day, Berry & Howard (see Exhibit 5).
24* Power of Attorney (see page II-3).
</TABLE>

II-1
<PAGE> 22

ITEM 17. 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:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) 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,
represents a fundamental change in the information set forth in the
registration statement;

(iii) 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)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, 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.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be 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 Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 or the making of a claim
to, or payment by, an insurer under any applicable indemnification policy) 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 Act and will be governed by the final
adjudication of such issue.

II-2
<PAGE> 23

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, CONNECTICUT
WATER SERVICE, INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND THAT IT HAS DULY CAUSED
THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE TOWN OF WESTBROOK AND STATE OF CONNECTICUT, ON
THE 14TH DAY OF JULY, 1994.

CONNECTICUT WATER SERVICE, INC.

<TABLE>
<S> <C> <C>
By: /s/ MARSHALL T. CHIARALUCE ) By: /s/ BERTRAM L. LENZ
- ------------------------------------------ ) ---------------------------------------------
(MARSHALL T. CHIARALUCE) ) (BERTRAM L. LENZ)
PRESIDENT AND CHIEF ) ATTORNEY-IN-FACT
EXECUTIVE OFFICER ) July 14, 1994

</TABLE>

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1993, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.

The Company and each person whose signature appears below hereby
constitutes Marshall T. Chiaraluce, Bertram L. Lenz, Vincent F. Susco, Jr. and
Michael F. Halloran, and each of them singly, such person's true and lawful
attorneys, with full power to them and each of them to sign for such person and
in such person's name, in the capacities indicated below, any and all amendments
to this Registration Statement, hereby ratifying and confirming such person's
signature as it may be signed by said attorneys to any and all amendments to
said Registration Statement.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------- ------------------------ ------------------------------
<S> <C> <C> <C>
/s/ MARSHALL T. CHIARALUCE Director and President )
- ----------------------------------- and Chief Executive )
MARSHALL T. CHIARALUCE Officer )
(PRINCIPAL EXECUTIVE OFFICER) )
)
/s/ BERTRAM LENZ Director and Vice )
- ----------------------------------- President -- Finance )
BERTRAM LENZ )
(PRINCIPAL FINANCIAL AND )
ACCOUNTING OFFICER) )
)
/s/ WILLIAM F. GUILLAUME Director and Vice )
- ----------------------------------- President -- Planning )
WILLIAM F. GUILLAUME )
) By: /s/ BERTRAM L. LENZ
/s/ FRANCIS E. BAKER, JR. Director ) --------------------------
- ----------------------------------- ) BERTRAM L. LENZ
FRANCIS E. BAKER, JR. ) ATTORNEY-IN-FACT
) July 14, 1994
/s/ HAROLD E. BIGLER, JR. Director )
- ----------------------------------- )
HAROLD E. BIGLER, JR. )
)
/s/ WILLIAM F. EMSWILER Director )
- ----------------------------------- )
WILLIAM F. EMSWILER )
)
/s/ ASTRID T. HANZALEK Director )
- ----------------------------------- )
ASTRID T. HANZALEK )
</TABLE>

II-3
<PAGE> 24

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------- ------------------------ ------------------------------
<S> <C> <C> <C>
/s/ FREDERICK E. HENNICK Director )
- ----------------------------------- )
FREDERICK E. HENNICK )
)
/s/ MARCIA L. HINCKS Director )
- ----------------------------------- )
MARCIA L. HINCKS )
)
/s/ WILLIAM C. LICHTENFELS Director )
- ----------------------------------- )
WILLIAM C. LICHTENFELS )
)
Director )
- ----------------------------------- )
HARVEY G. MOGER ) By: /s/ BERTRAM L. LENZ
) --------------------------
/s/ ROBERT F. NEAL Director ) BERTRAM L. LENZ
- ----------------------------------- ) ATTORNEY-IN-FACT
ROBERT F. NEAL ) July 14, 1994
)
/s/ WARREN C. PACKARD Director )
- ----------------------------------- )
WARREN C. PACKARD )
)
Director )
- ----------------------------------- )
RUDOLPH E. LUGINBUHL )
)
/s/ DONALD B. WILBUR Director )
- ----------------------------------- )
DONALD B. WILBUR )
</TABLE>

II-4
<PAGE> 25

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------- ------------
<C> <S> <C>
1.1* Form of Dividend Reinvestment and Common Stock Purchase Plan.
1.2* Draft letter to Stockholders describing changes in Plan.
1.3* Draft letter to Customers of Connecticut Water Company describing Plan.
1.4* Draft brochure for Customers describing Plan.
3.1 Certificate of Incorporation of Connecticut Water Service, Inc. amended
and restated September 15, 1988. (Incorporated by reference to Exhibit
3.1 to Form 10-K for year ended December 31, 1989).
3.2 Certificate Amending Certificate of Incorporation of Connecticut Water
Service, Inc. creating $25 par value Preferred Stock dated September 5,
1989. (Incorporated by reference to Exhibit 3.1a to Form 10-K for year
ended December 31, 1989).
3.3 Certificate Amending Certificate of Incorporation of Connecticut Water
Service, Inc. dated April 23, 1990 (Incorporated by reference to Exhibit
3.5 to Registration Statement No. 33-36794).
3.4 By-Laws, as amended, of Connecticut Water Service, Inc. dated April 24,
1988. (Incorporated by reference to Exhibit 3.2 to Form 10-K for year
ended December 31, 1989).
5* Opinion of Day, Berry & Howard as to legality of Common Stock registered
hereunder, including consent of said counsel.
23.1* Consent of Arthur Andersen & Co.
23.2 Consent of Messrs. Day, Berry & Howard (see Exhibit 5).
24* Power of Attorney (see page II-3).
</TABLE>

<PAGE> 1

Exhibit 1.1

CONNECTICUT WATER SERVICE, INC.

AMENDED AND RESTATED
DIVIDEND REINVESTMENT AND
COMMON STOCK PURCHASE PLAN

1. The purpose of the Plan is to provide holders of record
of the Company's Common Stock ("Common Stock") and customers and employees of
CWC who reside in Connecticut with a simple and convenient method of purchasing
shares of Common Stock and either investing cash dividends, or investing cash
dividends and optional cash payments, in additional shares of Common Stock
without payment of any brokerage commission. The number of shares of Common
Stock available under the Plan will be such number as the Board of Directors
may determine from time to time. Participants may also deposit stock
certificates with the Plan's Agent for safekeeping. Since such additional
shares will be purchased from the Company and not in the open market, the
Company will receive additional equity funds needed for CWC's construction
program and for the Company's general corporate purposes.

2. A stockholder, customer or employee who participates in
the Plan (a "Participant") will obtain the following advantages:

(a) Participants may have all or a percentage (50% or
any higher even multiple of 10%) of their cash dividends on shares
of Common Stock registered in their name and all cash dividends on
shares credited to their Plan account automatically reinvested in
Common Stock at a discount of 5% from the average market price.

(b) Participants may, in addition, invest quarterly
in additional shares of Common Stock by making optional cash
payments of at least $100 and not exceeding $10,000. The purchase
price of the shares purchased with optional cash payments pursuant
to the Plan will be 100% of such average market price. Optional
cash payments may be made by check, money order or wire transfer.

(c) Residential customers of CWC, including all
members of households served by CWC, and full-time employees of
CWC, residing in Connecticut who do not presently own shares of
Common Stock may become Participants by making an initial cash
investment of at least $100 to purchase shares under the Plan.
<PAGE> 2
-2-

(d) A Participant will pay no brokerage commissions
or service charges in connection with purchases under the Plan.

(e) A Participant's funds will be fully invested
because the Plan permits fractions of shares to be credited to a
Participant's account. Dividends on such fractions will be
reinvested in additional shares or fractions thereof and such
shares credited to a Participant's account.

(f) Since the Agent that administers the Plan holds
and acts as custodian of shares purchased under the Plan, a
Participant may also elect to deposit certificates for shares of
Common Stock held in his or her name with the Agent. This
relieves a Participant of the responsibility for the safekeeping
of certificates and protects such Participant against loss, theft
or destruction of such certificates.

(g) Regular statements of account will provide
Participants with a record of each transaction to simplify
recordkeeping.

(h) A Participant may choose to establish an
Individual Retirement Account ("IRA") through a custodian and to
contribute or roll over amounts to the IRA through a Plan account.

3. The State Street Bank and Trust Company (the "Agent") has
been designated by the Company as the agent to administer the Plan as Agent for
Participants, to purchase and hold shares of Common Stock acquired through the
Plan, to maintain records, to send statements of account to Participants and to
perform other duties relating to the Plan.

Shares purchased for a Participant will be held by or through the
Agent until termination of participation in the Plan or until a written request
is received from the Participant for withdrawal of all or part of such
Participant's shares. Shares purchased under the Plan and held by the Agent
will be registered in its name or the name of one of its nominees. The Company
may replace the Agent at any time. In the event that the Agent should cease to
administer the Plan, the Company will make such other arrangements as it deems
appropriate for the administration of the Plan.

4. The following entities are eligible to participate in the
Plan:
<PAGE> 3
-3-

(a) Stockholders. All holders of record of shares of
Common Stock are entitled to participate in the Plan. In order to
be eligible to participate, beneficial owners of Common Stock
whose shares are registered in names other than their own (e.g.,
broker or bank nominees) must become stockholders of record by
having their shares transferred into their names.

(b) Customers. All residential customers of CWC are
eligible to participate in the Plan, as well as all members of
households served by CWC. Water consumers in the franchise
territory served by CWC who are not customers, such as renters and
condominium owners, may participate in the Plan, except that
groups of individuals such as tenant associations are not eligible
to participate. All customer Participants must reside in
Connecticut. Business customers of CWC are not eligible to
participate. Customers who are eligible to participate in the
Plan are herein referred to as "Customers".

(c) Employees. All full-time employees of CWC
(referred to herein as "Employees") are eligible to participate in
the Plan.

A Customer or Employee may enroll under the Plan in his or her own
name, in the joint name of the Customer or Employee and another person, or in
his or her name as custodian or trustee for another person, by marking the
Dividend Reinvestment and Common Stock Purchase Plan Authorization Form (the
"Authorization Form") in the appropriate manner. In certain cases, Customers
and Employees may also enroll under the Plan in the name of the trustee of an
IRA for the benefit of the Customer or Employee.

5. A stockholder of record or Customer or Employee may join
the Plan at any time by completing and signing an Authorization Form and
returning it to the Agent. Authorization Forms will be provided from time to
time to all non-participating stockholders and Customers and Employees and may
also be obtained at any time by telephone or written request to the Agent or to
the Secretary of the Company.

A Customer or Employee need not be a registered holder of Common
Stock but, by executing the Authorization Form, agrees to have at least $100 of
Common Stock purchased on his or her behalf on the next Investment Date at a
price equal to 100% of the applicable average market price, and
<PAGE> 4
-4-

must acknowledge that he or she is a Connecticut resident. Each Authorization
Form for a Customer or Employee who is not a registered stockholder must be
accompanied by a check for at least $100.

A Participant must furnish his or her Federal tax identification
number to the Agent when opening a Plan Account. Where the Common Stock is
registered in more than one name (i.e., joint tenants, trustees, etc.), all
registered holders must sign the Authorization Form. All joint accounts will
be "Joint Tenants" unless otherwise instructed by the Customer or Employee. A
person returning a signed Authorization Form, and who wishes partial
reinvestment, must check the "Partial Automatic Dividend Reinvestment" box and
indicate the percentage (50% or any higher even multiple of 10%) of dividends
on shares registered in the Participant's name which the Participant wishes to
reinvest; otherwise, all dividends or shares registered in the Participant's
name will be reinvested. A Participant automatically continues in the Plan
unless he or she notifies the Agent in writing or by telephone that he or she
wishes to withdraw. A Participant who ceases to be a Customer or Employee of
CWC may continue to participate in the Plan as long as at least one whole share
of Common Stock is registered in the Participant's name or held through the
Plan.

6. If the Authorization Form is received prior to the record
date for the next dividend, the Participant will be enrolled as of the next
Investment Date (as described below), for the purpose of the reinvestment of
dividends and the making of optional cash payments. The record dates for
dividends are normally on or around the 1st day of March, June, September and
December. The "Investment Date" will normally be on or around the dividend
payment date. Dividends are normally paid on the 15th day of March, June,
September and December. If such date falls on a Saturday, Sunday or other day
on which the New York Stock Exchange is closed, or on which trading is
suspended, the dividend payment date and the Investment Date will normally be
the preceding trading day.

If the Authorization Form is received by the Agent after the
record date for the next dividend, the Participant's reinvestment of dividends
will not start until the second succeeding Investment Date. For example, in
order to invest the quarterly dividend expected to be payable on March 15 to
stockholders of record on March 1, or to have optional cash payments received
with an Authorization Form invested on or around March 15, a Participant's
Authorization Form must be received by the
<PAGE> 5
-5-

Agent no later than March 1. If the Authorization Form is received after March
1, the dividend payable on March 15 will be paid in cash and the Participant's
reinvestment of dividends will commence with the next Investment Date (expected
to be June 15).

Optional cash payments may be made when enrolling by enclosing
with the Authorization Form a check payable to the Agent. Optional cash
payments received by the Agent in any dividend payment month at least 5
business days prior to the Investment Date will be held by the Agent and
invested on the Investment Date next succeeding the date of receipt; provided,
however, that the Agent will return any such optional cash payments, in whole
or in part if the amount remaining with the Agent is at least $100, to the
Participant if written or telephone request therefor is received by the Agent
no later than 48 hours prior to the next succeeding Investment Date. A
Participant desiring to make optional cash purchases on an Investment Date may
do so by check or money order made payable, or by wire transfer of funds, to
the Agent, for the amount he or she wishes to invest, in an amount not less
than $100 for any single investment or more than $10,000 during any calendar
quarter. No interest will be credited or paid on payments received or held by
the Agent under the Plan.

Initial investments, for Customers or Employees who do not already
own Common Stock, must be at least $100, in the form of a personal check or
money order, and must be included with the completed Authorization Form
returned to the Agent.

7. The Authorization Form permits a Participant, by checking
the "Full Dividend Reinvestment" box, to direct the Agent to invest in
additional shares of Common Stock all of the cash dividends on the shares
registered in his or her own name, as well as all dividends on shares credited
to his or her account under the Plan, and to invest optional cash payments
(from $100 to $10,000 per quarter), if any, which the Participant chooses to
make. Alternatively, if the "Partial Dividend Reinvestment" box on the
Authorization Form is checked, a percentage of dividends, indicated by the
Participant on the Authorization Form (50%, 60%, 70%, 80% or 90%), on shares
registered in the Participant's name will be invested in additional shares of
Common Stock, as well as all dividends on shares credited to the Participant's
account and optional cash payments (of at least $100 and not exceeding $10,000
per quarter), if any. A Customer or Employee must direct the Agent to purchase
shares of Common Stock with the minimum initial investment enclosed with the
<PAGE> 6
-6-

Authorization Form. Customers or Employees may also select the full or partial
reinvestment option. A stockholder, Customer or Employee may not participate
in the Plan solely with respect to optional cash payments. At least 50% of
dividends on shares registered in the Participant's name and all dividends on
shares credited to a Participant's account must be reinvested under the Plan.

Once a Participant elects reinvestment, cash dividends paid on
shares of Common Stock registered in such Participant's name or held in such
Participant's account will be reinvested in additional shares of Common Stock.
If a Participant specifies partial reinvestment, that portion of such dividend
payment not being reinvested will be sent to such Participant by check in the
usual manner.

A Participant may elect to deposit certificates with the Agent for
safekeeping and may elect to reinvest dividends on all or a portion of such
shares or to receive dividends in cash.

No matter which of the above options is chosen, all shares
purchased under the Plan and held in the Plan account will be subject to
automatic dividend reinvestment, and the dividends on all such shares will
automatically be reinvested in Common Stock at a price equal to 95% of the
applicable five-day average market price.

8. If a Participant after enrollment wishes to change his or
her method of participation, either an additional Authorization Form must be
executed and returned to the Agent as specified in Section 5 or the Participant
must give the Agent telephone notice of such change as specified in Section 9.
Participants who wish to change the percentage of dividends reinvested with
respect to shares registered in their names must also either execute and return
to the Agent an additional Authorization Form or give the Agent telephone
notice of such change. If a Participant changes the percentage of his or her
dividends that is to be reinvested with respect to shares registered in his or
her name by submitting a later-dated Authorization Form or telephone notice to
the Agent, the later-dated Authorization Form or telephone notice must be
received prior to the record date for the next dividend in order for the
later-dated Authorization Form or telephone notice to take effect as of the
next Investment Date. If the later- dated Authorization Form or telephone
notice is received after the record date for the next dividend, the percentage
of such dividends reinvested on the next Investment Date will be the percentage
indicated on the original Authorization Form.
<PAGE> 7
-7-

9. Telephone notice may be given by calling the Agent.

10. The risk to stockholders, Customers and Employees who
participate in the Plan is the same as with any other investment in shares of
Common Stock of the Company. The Plan does not represent a change in the
Company's dividend policy or a guarantee of future dividends.

11. All shares purchased for Participants under the Plan will
be newly-issued shares purchased directly from the Company. The number of
shares to be purchased depends on the amount of the Participant's dividend or
optional cash payments, or both, and the price of the Common Stock. The
Participant's account will be credited with a number of shares, including
fractions computed to three decimal places, equal to the total amount invested
divided by the purchase price. Thus, the shares purchased for a Participant
under the Plan will be held separately from the shares of Common Stock which
the Participant purchases (or has previously purchased) outside the Plan and
holds in his or her own name. A Participant may not specify the number of
shares to be purchased or the price at which shares are to be purchased, or
otherwise seek to restrict or control purchases made pursuant to the Plan.

12. The price of shares of Common Stock purchased from the
Company as of the Investment Date with reinvested dividends will be 95% of the
fair market value of the shares as of the Investment Date, which for this
purpose will be the average closing price of the Company's Common Stock in the
over-the-counter market as reported by the National Association of Securities
Dealers Automated Quotations (NASDAQ) National Market System on the last five
trading days ending with, and including, the Investment Date. The price of
shares purchased from the Company as of the Investment Date with optional cash
payments will be 100% of such five-day average market price. The price of
shares purchased from the Company as of the Investment Date with initial cash
payments from Customers and Employees will be 100% of such average market
price. The Company reserves the right in its sole discretion to refuse to make
any shares available for purchase under the Plan if such average market price
is less than the Company's equity per Common Stock (book value) as determined
by the Company from time to time. Shares acquired from the Company will be
purchased for Participants' accounts as of the close of business on the
relevant Investment Date. Dividend and voting rights will normally commence on
the Investment Date.
<PAGE> 8
-8-

13. On each Investment Date in a dividend payment month, the
Agent will invest in additional shares of Common Stock optional cash payments,
if any, received from the Participant at least 5 business days prior to such
Investment Date, provided the Agent has not received a written or telephone
request from the Participant at least 48 hours prior to such Investment Date to
return all or any portion of such optional cash payment. Each optional cash
payment must be at least $100 and optional cash payments may not exceed $10,000
in any quarter. Provisions applicable to foreign Participants are set forth
under Section 35.

The Company reserves the right to limit the number of shares of
Common Stock to be purchased through optional cash purchases and initial
investments to 50,000 shares per year. All payments accompanying requests to
purchase Common Stock received through the close of business on the date the
50,000 annual share limit is reached will be honored. All payments received
after that time will be returned. The Company reserves the right, in its sole
discretion, to waive the annual share limit and/or to reduce or increase such
annual share limit. There is no limit to the number of shares of Common Stock
to be purchased with reinvested dividends.

The Agent will also invest in additional shares of Common Stock,
as of each Investment Date in a dividend payment month, all cash dividends on
shares credited to a Participant's account and all (or, if partial reinvestment
is specified, a percentage equal to 50% or any higher even multiple of 10%) of
the cash dividends on shares of Common Stock held by such Participant.

14. More than one optional cash payment may be made in each
quarter, but the aggregate of such payments may not be more than $10,000 in any
calendar quarter. Any amount in excess of $10,000 will be returned to the
Participant. For purposes of this limitation, all Plan accounts under common
control or management will be aggregated and deemed to be one account. The
Agent will purchase as many whole shares and fractional shares (computed to
three decimal places) of Common Stock as can be purchased with the amount
submitted.

An optional cash payment may be made by a Participant and an
initial investment may be made by a Customer or Employee when enrolling by
enclosing a check payable to the Agent with the Authorization Form.
Thereafter, this type of investment may be made only through the use of cash
<PAGE> 9
-9-

payment forms which are attached to those statements of account sent to
Participants periodically by the Agent. The same amount of money need not be
invested each time and there is no obligation to make any optional cash
payments. However, each optional cash payment must be at least $100.

15. Optional cash payments received from Participants at least
5 business days prior to the next investment date will be invested as of the
next Investment Date. Initial investments received from Customers and
Employees at least 5 business days prior to the next Investment Date will be
invested as of the next Investment Date.

Optional cash payments received from Participants, and initial
investments received from Customers and Employees, within 4 business days prior
to the Investment Date will be held by the Agent and will be invested on the
Investment Date in a dividend paying month next succeeding the date of receipt
of such optional cash payments by the Agent. No interest will be paid by the
Company or the Agent on optional cash payments or initial investments.

If a Participant, Customer or Employee submits funds to purchase
stock and then wishes to have it returned rather than invested, the Agent will
not be obligated to return such funds unless a written or telephone request
that they be returned is received at least 48 hours prior to the next
Investment Date.

16. All dividends paid on shares acquired through optional cash
payments and initial investments, so long as the shares are held in the
Participant's Plan account, will be automatically reinvested in shares of
Common Stock. If certificates for shares acquired through optional cash
payments or initial investments by Customers and Employees are issued to the
Participant, the dividends paid on such shares will continue to be reinvested
unless the Participant elects to have them paid in cash by submitting a new
Authorization Form to the Agent.

17. Optional cash payments can be made as follows:

(a) Check or Money Order. Optional cash payments and
initial investments may be made by personal check or money order
payable in U.S. dollars to the Agent. Checks must be drawn
against U.S. banks. Optional cash payments must be mailed to the
Agent together with the cash payment form attached to a
Participant's statement of account. Cash payments forwarded to
any other address do not constitute valid
<PAGE> 10
-10-

delivery. Additional cash payment forms are available upon
request from the Agent.

In the event that any check is returned unpaid for any
reason, the Agent will consider the request for investment of such
funds void and without effect and will immediately remove from the
Participant's account any shares purchased upon the prior credit
of such funds. The Agent may then sell such shares to satisfy any
uncollected amounts. If the net proceeds of the sale of such
shares are insufficient to satisfy the balance of the uncollected
amounts, the Agent will be entitled to sell additional shares from
the Participant's account to satisfy the uncollected balance.

(b) Wire Transfers. Optional cash purchases may also
be made by wire transfer to the Agent. Wire transfers must
include the name of the Plan, the name in which the Plan account
is registered and the Participant's Plan account number.
Participants making wire transfer purchases may be charged fees by
the commercial bank initiating the transfer. Participants must
contact the Agent to obtain proper wire transfer instructions.

18. There are no brokerage fees when shares are purchased
under the Plan. Additionally, all general costs of administration of the Plan
are to be paid by the Company. However, if a Participant requests that the
Agent sell any of the shares credited to such Participant's account under the
Plan, the Participant will pay a brokerage commission and any transfer tax or
other fees or charges. See Sections 26 and 27 regarding fees assessed for
sales of Common Stock; Section 26 regarding charges for withdrawal from the
Plan; Section 17 regarding fees assessed if the Participant makes optional cash
purchases by wire transfer; and Section 23 regarding fees for maintaining an
IRA account under the Plan.

19. Participants who wish to avail themselves of the
safekeeping feature of the Plan should mail their certificates to the Agent.
Certificates should be sent by registered or certified mail, return receipt
requested, accompanied by a completed Authorization Form specifying that (i)
the shares are furnished for safekeeping, and (ii) dividends on all or a
portion of such shares are to be either reinvested pursuant to the Plan or paid
in cash. The Agent will confirm the receipt of any certificates which are
delivered for safekeeping. Shares deposited for
<PAGE> 11
-11-

safekeeping must remain in a Participant's account for 60 days before they can
be sold.

20. Each Participant will be sent quarterly a statement of his
or her account showing dollars invested, shares purchased, the purchase price,
the number of shares purchased, deposited for safekeeping, sold, transferred,
or withdrawn and total shares held for him or her in the Plan. All
year-to-date transactions in the account will be included. The Agent will also
send each Participant a confirmation promptly after enrollment and the purchase
of shares with an accompanying initial investment or optional cash purchase.
In addition, each Participant will receive the most recent prospectus or
supplement relating to the Plan and copies of the same communications sent to
every other holder of the Company's Common Stock, including the Company's
interim reports, annual report, notice of annual meeting and proxy statement,
and Federal income tax information for reporting dividends paid and dividends
reinvested.

A stockholder account will be opened by the Agent for Customers
and Employees who become new stockholders as a result of their purchase of
Common Stock under the Plan. The account will be opened in accordance with the
Customer's or Employee's instructions on the Authorization Form.

21. Dividends will be earned on full shares and any fraction
of a share credited to a Participant's account.

22. Normal dividend payment dates are the 15th day of March,
June, September and December. To receive the dividend, a person must be a
stockholder of record on the record date for a dividend as set by the Board of
Directors (normally on or around the 1st day of March, June, September and
December) so as to allow a sufficient time for the Company to process dividend
payments. Although the Investment Date will normally be on or around the
dividend payment date, if the Investment Date and dividend payment date were
the same, the Participant would not be entitled to any dividend payment with
respect to the Common Stock purchased on the Investment Date.
<PAGE> 12
-12-

23. The Plan allows individual Participants to establish an
IRA and to make Plan purchases through the IRA. Participants may make their
own arrangements to establish an IRA or use the trustee identified by the
Company. Individuals may open an IRA by completing and signing an IRA
Enrollment Form (adoption agreement) provided by the IRA trustee or custodian.
Purchases may be funded by regular IRA contributions or by rolling over an
existing IRA or other qualified plan distribution. There is a minimum initial
investment for an IRA Plan account of $250. If an existing IRA or a qualified
plan distribution is rolled over into the IRA, the Plan's maximum quarterly
investment limitations do not apply.

All IRA Participants will operate through an IRA trustee or
custodian rather than the Agent with respect to their IRA accounts. Thus, for
purposes of an IRA account, references in this Plan to the Participant mean the
IRA trustee or custodian. All payments and instructions and requests relating
to Plan transactions for the IRA must be forwarded to the IRA trustee or
custodian and not to the Agent. The IRA trustee or custodian will work
directly with the Agent in establishing, giving instructions, making payments
and otherwise effecting Plan transactions with respect to each IRA account.

An initial set up fee, an annual administrative fee and other fees
may be charged by a trustee or custodian for maintaining the IRA. Such fees
are set forth in the IRA Disclosure Statement which each interested individual
will receive from their trustee or custodian. Such fees may be deducted from
shares purchased by the IRA under the Plan by cashing out any shares necessary
to cover the amount of such fees.

24. Normally, certificates for shares of Common Stock
purchased under the Plan will not be issued to Participants. The number of
shares credited to an account under the Plan and the number of shares deposited
by a Participant with the Agent for safekeeping will be shown on the
Participant's statement of account. This service protects against loss, theft
or destruction of share certificates.

Upon written or telephone request of a Participant to the Agent,
certificates representing any number of whole shares credited to his or her
account under the Plan will be issued to him or her, even though such
Participant wishes to remain in the Plan. Withdrawal of shares in certificate
form in no way affects dividend reinvestment. A new certificate will be mailed
to a Participant promptly after receipt of the request by the Agent. In such
event, any remaining full
<PAGE> 13
-13-

shares for which certificates are not requested and any fractional shares will
continue to be credited to the Participant's account under the Plan.

Certificates for fractional shares will not be issued under any
circumstances.

25. Accounts under the Plan are maintained in the names in
which certificates for shares of Common Stock of Participants were registered
at the time they entered the Plan. Consequently, certificates for whole shares
will be similarly registered when issued.

26. Participants may request the Agent to sell any number of
whole shares held in their Plan accounts by giving written or telephone
instructions to the Agent. The Agent will make the sale as promptly as
practicable, and in no event later than ten business days following receipt of
the request. The Participant will receive the proceeds, less applicable
brokerage fees or commissions (payable to the broker selected by the Agent,
which may be an affiliate of the Agent) and transfer tax, if any. Participants
will also be charged an administrative fee per transaction payable to the Agent
when selling shares. Proceeds of shares sold through the Plan will be paid to
the Participant by check. No check will be mailed prior to settlement, which
typically occurs five business days after the sale of shares.

No Participant shall have the authority or power to direct the
date or price at which Common Stock may be sold. Requests must indicate the
number of shares to be sold and not the dollar amount to be attained. Any
request that does not clearly indicate the number of shares to be sold will be
returned to the Participant with no action taken. A request to sell all shares
held in a Participant's account will be treated as a withdrawal from the Plan.

27. In order to withdraw from the Plan, a Participant must
notify the Agent in writing or by telephone that he or she wishes to withdraw.
Participants will be charged an administrative fee per transaction when
withdrawing shares from the Plan. If the fee is not paid by the Participant
concurrently with the request for withdrawal, the Agent may sell shares to
satisfy such charges. When a Participant withdraws from the Plan, or upon
termination of the Plan by the Company, certificates for whole shares credited
to the Participant's account under the Plan will be issued and cash will be
remitted for any fractional share. If, upon withdrawal from the Plan, the
Participant desires to sell all shares credited to his or her account under the
Plan, such desire must be specified in his or her request to the
<PAGE> 14
-14-

Agent for withdrawal. If the Participant requests such sale or a sale is
necessary to pay the withdrawal charge, the sale will be made by the Agent at
the market price at the time of sale, within ten trading days after receipt of
the request. The Participant will receive the proceeds of the sale less any
related brokerage commission and any transfer tax or other fees or charges.

28. A Participant may cancel and will be deemed to have
canceled his or her reinvestment of dividends as of an Investment Date if
written or telephone notice of withdrawal from the Plan is received by the
Agent prior to the record date preceding such Investment Date. Dividends
payable on or around such Investment Date and all subsequent dividends will be
paid in cash to the stockholder unless he or she re-enrolls in the Plan.
Optional cash payments not yet invested will be refunded upon receipt of the
written or telephone notice of withdrawal. A Participant who withdraws from
the Plan may not join again for 12 months unless the Company consents.

If notice of withdrawal is received by the Agent after a record
date and at least 48 hours prior to the next Investment Date, any optional cash
payments received prior to receipt of such request will be returned to the
Participant and/or any dividends paid will be invested for the Participant's
account on the next succeeding Investment Date. If such written notice of
withdrawal is received by the Agent after a record date but less than 48 hours
prior to the next Investment Date, any optional cash payments received prior to
receipt of such request and/or any dividends paid will be invested for the
Participant's account on the next succeeding Investment Date. The next
dividend and all subsequent dividends will be paid to such stockholder in cash
unless he or she re-enrolls in the Plan.

29. A Participant who wishes to discontinue the automatic
reinvestment of the dividends on the shares held outside the Plan may do so,
without withdrawing from the Plan, by filing a new Authorization Form or by
changing his or her method of participation by telephone. However, the
dividends on the shares held in the Plan account will continue to be
reinvested.

30. If a Participant does not own at least one whole share
registered in the Participant's name or held through the Plan, the
Participant's participation in the Plan may be terminated. The Company may
also terminate any Participant's participation in the Plan after written notice
in advance mailed to such Participant at the address appearing on the Agent's
records. Participants whose participation in the
<PAGE> 15
-15-

Plan has been terminated will receive certificates for whole shares held in
their accounts and a check for the cash value of any fractional shares held in
their Plan accounts. The value of fractional shares will be based upon the
market price of the Common Stock at the time payment is made.

31. If a Participant disposes of some or all shares of the
Company's Common Stock registered in his or her name, that transfer will not
affect participation in the Plan. The Agent will continue to reinvest the
dividends on the shares credited to the Participant's account under the Plan
until notified by such Participant that he or she wishes to withdraw from the
Plan. However, if less than one whole share is held in the Plan account, the
Participant will receive a cash payment for the fractional share, and the Plan
account will be closed.

32. A Participant's entitlement in a rights offering will be
based upon his or her total holdings -- just as his or her dividend is computed
each quarter. Rights on shares of stock registered in the name of a
Participant, as well as on whole shares credited to the Participant's account
under the Plan, will be mailed directly to the Participant in the same manner
as to holders of stock not participating in the Plan. Any rights based on a
fraction of a share held in a Participant's account will be sold by the Agent,
if transferable, and the net proceeds will be invested in the same manner as an
optional cash payment as of the next Investment Date.

33. Any stock dividends or split shares distributed by the
Company on shares credited to the account of a Participant under the Plan will
be added to the Participant's account. Stock dividends or split shares
distributed on shares registered in the name of the Participant will be mailed
directly to such Participant in the same manner as to stockholders who are not
participating in the Plan.

34. Proxy materials will be sent to Participants in connection
with any annual or special meeting of stockholders. Any shares held in a
Participant's account will be voted by the Agent in accordance with the
Participant's direction. In the event that the Participant does not direct the
Agent, the Agent will vote or not vote shares held in a Participant's account
as it deems proper. The total number of shares held in a Participant's account
may also be voted in person at the meeting.

35. In the case of those foreign holders of shares of the
Company's Common Stock whose dividends are subject to United States income tax
withholding, the Agent will invest
<PAGE> 16
-16-

in such Common Stock an amount equal to the dividends to be reinvested less the
amount of tax required to be withheld. The statements confirming purchases
made for such foreign Participants will indicate the gross amount of dividends
received and the net amount invested.

Optional cash payments received from foreign Participants must be
in United States dollars and will be invested in the same manner as payments
from the other Participants.

36. The Company and the Agent in administering the Plan will
not be liable for any act done in good faith or for any good faith omission to
act including, without limitation, any claim or liability arising out of
failure to terminate a Participant's account upon such Participant's death, or
with respect to the prices at which shares are purchased or sold for the
Participant's account and the times when such purchases or sales are made, or
with respect to any fluctuation in the market value before or after purchase or
sale of shares, or with respect to the tax treatment of dividends reinvested
under the Plan. The Agent reserves the right to resign at any time upon sixty
days' notice to the Company in writing.

37. Notwithstanding any other provision of the Plan, the Board
of Directors of the Company may modify, amend, supersede, suspend or terminate
the Plan at any time, including the period between a dividend record date and a
dividend payment date. The Board of Directors may increase the number of
shares which may be issued by the Company under the Plan. Notice of any
material amendment or modification, or any superseding, suspension or
termination of the Plan, will be mailed to all Participants. No such event
will affect any shares then credited to a Participant's account. Upon any
whole or partial termination of the Plan, certificates for whole shares
credited to a Participant's account under the Plan will be issued to the
Participant and a cash payment will be made for any fraction of a share.

38. The Company reserves the sole right, in its sole
discretion, to interpret and regulate the Plan. If it appears to the Company
that any Participant is using or contemplating the use of the Plan in a manner
or with an effect that, in the sole judgment and discretion of the Company, is
not in the best interests of the Company or its other stockholders, then the
Company may decline to issue all or any portion of the shares of Common Stock
for which any payment by or on behalf of such Participant is tendered. Such
payment (or the portion thereof not to be invested in shares of Common Stock)
will be returned by the Company as
<PAGE> 17
-17-

promptly as practicable, without interest. Under such circumstances, the
Company may also act to terminate participation by such Plan Participant.

39. Shares credited to a Participant's Plan account may not be
pledged or assigned, and any such purported pledge or assignment will be void.
If a Participant wishes to pledge or assign such shares, a certificate for them
must first be issued in his or her name.

40. The officers of the Company are authorized to take such
actions to carry out the Plan as may be consistent with its terms and
conditions.

41. The terms and conditions of the Plan and its operations
shall be governed by and construed in accordance with the laws of the State of
Connecticut.

42. The Company's obligation to issue Common Stock under the
Plan is subject to having in effect an effective registration statement under
the Securities Act of 1933 (the "1933 Act"), covering such shares, and any
required registrations under the state Securities or "Blue Sky" laws.

43. This Amended and Restated Plan shall be effective as of
July 22, 1994.

<PAGE> 1

EXHIBIT 1.2

CONNECTICUT WATER SERVICE, INC.
93 WEST MAIN STREET
CLINTON, CT 06413-0562

, 1994
-----------------
Dear Stockholder:

We are pleased to announce the availability of several enhancements to
our Dividend Reinvestment and Stock Purchase Plan (the "Plan"), which provides
stockholders with a convenient way of purchasing additional shares of Common
Stock of Connecticut Water Service, Inc. The number of stockholders taking
advantage of the Plan has increased to over 1800 participants representing
approximately 40% of all our stockholders. With this type of interest, we have
recently considered other features that we could incorporate into the Plan for
your convenience.

First, let me note changes we are making to the current Plan:

* Voluntary cash contributions have a minimum requirement of
$100 per contribution, but we have increased the maximum
contribution to $10,000 (from $3,000) per quarter.

* We have expanded plan participation so it is also available to
residential customers and employees of our subsidiary, The
Connecticut Water Company, who reside in Connecticut.

Newly available features of the Plan are:

* Wire transfer of voluntary contributions to the Plan.

* Ability of the Plan Agent to retain your shares for
safekeeping.

* Ability to use the Plan to establish, and make contributions
to, an IRA account.

Enclosed you will find the new Plan Prospectus, written in a question
and answer format, along with several forms which will make it even easier for
you to elect the features I have described. If you are already a participant in
the Plan, there is nothing further you need to do unless there is an additional
feature of which you wish to take advantage. For additional information please
contact State Street Bank at 1-800-426-5523.

I hope you will read the Plan Prospectus thoroughly. We are making
every effort not only to increase the value of your shares, but also to
increase your benefits in being a stockholder of Connecticut Water Service,
Inc.

Sincerely,

Marshall T. Chiaraluce

<PAGE> 1

EXHIBIT 1.3

[CWC Letterhead]

, 1994
----------------

Dear Connecticut Water Company Customer:

I am pleased to offer you an opportunity to purchase the Common Stock
of Connecticut Water Service, Inc. (CWS), the Parent of The Connecticut Water
Company, without the expense of brokerage fees or commissions. This offer is
being made to all residential water company customers who reside in the State
of Connecticut through a Customer Stock Ownership Plan. This plan is unique
for Connecticut based water utilities and is the first such plan offered by a
New England based water utility.

You may become a CWS shareowner with an initial investment of as low
as $100. Participants have the flexibility of choosing the amount they wish to
invest from a minimum of $100 to a maximum of $10,000 per calendar quarter.
Once you become a CWS shareowner, at least 50% of the cash dividends paid by
the Company will be automatically reinvested allowing you to increase your
stock ownership. Dividends reinvested purchase additional common stock at a 5%
discount. As an added convenience, you may also select the automatic
"safekeeping" feature so you do not have to handle share certificates or worry
about the loss or destruction of a share certificate. This also makes it
easier and less expensive to sell shares when you want to.

You might ask why CWS is introducing this plan. To begin with, it
enables us to raise additional capital that will be used for general corporate
purposes including the improvement of our water distribution system. We also
want to encourage our customers to be shareowners in the Company because we
believe there are mutual benefits that strengthen our relationship. Through
our predecessor companies we have been providing water service since 1866. We
have paid uninterrupted cash dividends to our shareowners since 1956. The
features mentioned above are incentives aimed at encouraging your participation
in the plan.

With this letter we invite you to become a shareowner and are
enclosing a copy of the Prospectus written in a question and answer format,
some information on how our stock has performed historically as an investment,
where to find additional investment information on CWS, and how to find our
stock price in daily newspapers as well as current financial results. Please
read the Prospectus and other information thoroughly before making your
investment decision.

Sincerely yours,

Marshall T. Chiaraluce
President

<PAGE> 1

EXHIBIT 1.4

CONNECTICUT WATER SERVICE, INC.

CUSTOMER STOCK PURCHASE PLAN

WHAT YOU SHOULD KNOW
<PAGE> 2
Connecticut Water Service, Inc. whose principal subsidiary is The Connecticut
Water Company (CWC), is now able to offer a Customer Stock Purchase Plan to
CWC's customers as part of its Dividend Reinvestment and Stock Purchase Plan
(Plan). This is the first such plan offered by a Connecticut-based water
utility and the first offered by a New England-based water utility.

ADVANTAGES OF JOINING THE PLAN

* Own a piece of the Company which provides you and your community with
safe, dependable drinking water.

* Become a stockholder with an initial contribution as low as $100
without paying any brokerage commission.

* Continue to buy shares, never paying a brokerage fee on the purchase.

* Own a stock that has paid consecutive cash dividends since its
organization in 1956 and has increased its dividend in each year since
1970.

* Dividends reinvested will purchase additional common stock at a 5%
discount.

* You may invest up to $40,000 a year.

INVESTMENT TRACK RECORD

Although there is no assurance that Connecticut Water Service, Inc. stock will
experience similar rates of return in the future, here are a few of its
benchmarks.

* Connecticut Water Service, Inc., through our predecessor companies,
has been PAYING DIVIDENDS WITHOUT INTERRUPTION SINCE 1956, when the
Company was first organized.

* We have maintained MODEST INCREASES in our dividends paid in each of
the last 24 years.

* The AVERAGE ANNUAL TOTAL RETURN to our Common Stockholders (price
appreciation plus dividends) for the ten-year period ended December
31, 1993, assuming dividends were reinvested, was 17.2% compared to
the S&P 500 average total return of 14.9% for the same ten-year period
and 16.5% compared to the S&P 500 average of 14.5% for the five-year
period ended December 31, 1993.

On March 31, 1994:

<TABLE>
<S> <C>
Closing price per share of CWS Common Stock $25.00
Annual indicated dividend per share $1.64
Dividend yield on above price 6.56%
One Year Certificates of Deposit* 4.01%
</TABLE>

*Average of major New York banks

Q. WHO IS ELIGIBLE TO JOIN?

A. Residential customers of CWC whose primary residence is in
Connecticut.
<PAGE> 3
-2-

Q. HOW DO I JOIN?

A: Read the attached Prospectus. It is written in a question and answer
format and should answer any questions you have about becoming a
Connecticut Water Service stockholder through participation in this
Plan. If you decide to become a stockholder, fill out all the
information and sign the enclosed authorization form. Include the
form and a check for your initial contribution of at least $100 in the
enclosed envelope addressed to State Street Bank and Trust Company.

Q. HOW WILL I KNOW HOW MANY SHARES I HAVE?

A. You will receive a statement from State Street within 30 days after
your initial contribution has been utilized to purchase shares. The
statement will show the amount of your contribution and the number of
shares purchased. You will also automatically receive a quarterly
statement after your dividends have been reinvested.

Q. WHEN ARE CASH CONTRIBUTIONS AND DIVIDENDS INVESTED?

A. Cash contributions and dividends are usually invested on or around the
Company's normal dividend payment dates of the 15th day of March,
June, September and December, so State Street should receive any
voluntary cash contributions at least five days prior to such
investment dates.

Q. WHAT IF I HAVE OTHER QUESTIONS ABOUT THE PLAN?

A. The Prospectus, which follows, should be able to answer most of your
questions about the Plan. Any additional questions can be handled by
a State Street representative at 1-800-426-5523. Once you have opened
an account, a State Street representative will bring your account
information up on their computer screen to give you quick, accurate
information about your specific account, or provide instructions on
selling shares or changing your address.

Q. HOW DO I FIND OUT MORE ABOUT THE STOCK?

A. Connecticut Water Service's common stock is traded in the
over-the-counter market under the symbol CTWS and is included in the
NASDAQ National Market System. Price quotes may be obtained in daily
newspapers where it is listed under "ConnWtrSvc". The Hartford
Courant and New Haven Register also list the stock in the Utilities
Section under State Stocks or local stocks in the Business Section.
Questions about Connecticut Water Service and its operations can be
answered by calling the Company's Corporate Secretary at (203)
669-8630, Extension 340.

<PAGE> 1

EXHIBIT 5

July 14, 1994

Connecticut Water Service, Inc.
93 West Main Street
Clinton, CT 06413-0562

Gentlemen:

We have acted as your counsel with respect to the registration
statement on Form S-3 (the "Registration Statement") (File No.33- 53211) under
the Securities Act of 1933, as amended (the "Act"), as filed by Connecticut
Water Service, Inc. (the "Company") with the Securities and Exchange Commission
(the "Commission") relating to the offer and sale of 800,000 shares of the
Company's Common Stock, without par value (the "Common Stock") pursuant to the
Company's Common Stock Purchase and Dividend Reinvestment Plan.

We have examined the Registration Statement, including Pre-Effective
Amendment No. 1 thereto and the related Prospectus (the "Prospectus"). We have
also examined documents and records, and have made such examination of law as
we deemed relevant and necessary in order to give this opinion. We have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents submitted to us as copies. We
have assumed without verification the accuracy of the representations as to
factual matters set forth in the Prospectus.

The opinions set forth herein are based on the federal laws of the
United States and the laws of the State of Connecticut, and no opinion is
expressed as to the laws of any other jurisdiction.
<PAGE> 2
Connecticut Water Service, Inc.
July 14, 1994
Page 2

Based upon and subject to the foregoing, we are of the opinion that:

1. The Company is a corporation duly organized, validity existing
and in good standing under the laws of the State of
Connecticut, has 7,500,000 shares of authorized Common Stock
and has the power and authority to issue said 800,000 shares
of Common Stock.

2. Said 800,000 shares of Common Stock have been duly authorized
and at such time as certificates representing up to said
800,000 shares of Common Stock have been duly delivered and
paid for in accordance with the terms and conditions described
in the Registration Statement, up to said 800,000 shares of
Common Stock will be validly issued, fully paid and
nonassessable shares of Common Stock.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, including Pre-Effective Amendment No. 1 thereto, and to
the references to us in the Registration Statement and Prospectus.

Very truly yours,

/s/DAY, BERRY & HOWARD
-----------------------
DAY, BERRY & HOWARD

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.

ARTHUR ANDERSEN & CO.

Hartford, Connecticut

July 14, 1994