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<SEC-DOCUMENT>0000950116-05-002528.txt : 20050727
<SEC-HEADER>0000950116-05-002528.hdr.sgml : 20050727
<ACCEPTANCE-DATETIME>20050727111120
ACCESSION NUMBER:		0000950116-05-002528
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20050727
DATE AS OF CHANGE:		20050727
EFFECTIVENESS DATE:		20050727

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARTESIAN RESOURCES CORP
		CENTRAL INDEX KEY:			0000863110
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				510002090
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-8
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-126910
		FILM NUMBER:		05976026

	BUSINESS ADDRESS:	
		STREET 1:		664 CHURCHMANS RD
		CITY:			NEWARK
		STATE:			DE
		ZIP:			19702
		BUSINESS PHONE:		3024536900

	MAIL ADDRESS:	
		STREET 1:		664 CHURCHMANS RD
		CITY:			NEWARK
		STATE:			DE
		ZIP:			19702
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>s-8.txt
<DESCRIPTION>S-8.TXT
<TEXT>
<PAGE>


       FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 2005.
                                                     REGISTRATION NO. 333-
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

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

                               ARTESIAN RESOURCES
                                   CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                      51-0002090
(STATE OR OTHER JURISDICTION OF                         (IRS EMPLOYER
 INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)


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

                              664 CHURCHMANS ROAD
                             NEWARK, DELAWARE 19702
                                 (302) 453-6900
         (ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)

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

                         ARTESIAN RESOURCES CORPORATION
                         2005 EQUITY COMPENSATION PLAN
                            (FULL TITLE OF THE PLAN)

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

                                 DIAN C. TAYLOR
                     CHIEF EXECUTIVE OFFICER AND PRESIDENT
                         ARTESIAN RESOURCES CORPORATION
                              664 CHURCHMANS ROAD
                             NEWARK, DELAWARE 19702
                                 (302) 453-6900
                      (NAME, ADDRESS AND TELEPHONE NUMBER,
                   INCLUDING AREA CODE, OF AGENT FOR SERVICE)

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

                                    COPY TO:
                             JOANNE R. SOSLOW, ESQ.
                          MORGAN, LEWIS & BOCKIUS LLP
                               1701 MARKET STREET
                             PHILADELPHIA, PA 19103
                                 (215) 963-5000

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


<PAGE>

<TABLE>
<CAPTION>

                                                  CALCULATION OF REGISTRATION FEE
===========================================================================================================================
               TITLE OF SECURITIES                   NUMBER OF     PROPOSED MAXIMUM   PROPOSED MAXIMUM       AMOUNT OF
                      TO BE                         SHARES TO BE    OFFERING PRICE        AGGREGATE      REGISTRATION FEE
                   REGISTERED                      REGISTERED (1)     PER SHARE        OFFERING PRICE           (3)
- ---------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>            <C>    <C>         <C>                 <C>
Class A Non-Voting Common Stock, par value $1.00       500,000        $29.64 (2)         $14,820,000         $1,744.31
per share
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      This registration statement covers shares of Class A Non-Voting Common
         Stock of Artesian Resources Corporation that may be offered or sold
         pursuant to the Artesian Resources Corporation 2005 Equity Compensation
         Plan. This registration statement also relates to an indeterminate
         number of shares of Class A Non-Voting Common Stock that may be issued
         by reason of any stock split, stock dividend, spinoff, recapitalization
         or any other similar transaction in accordance with Rule 416 under the
         Securities Act of 1933, as amended (the "Securities Act"). In addition,
         pursuant to Rule 416(c) under the Securities Act, this registration
         statement also covers an indeterminate amount of interests to be
         offered or sold pursuant to the Artesian Resources Corporation 2005
         Equity Compensation Plan.
(2)      The price of $29.64 per share, which is the average of the high and low
         prices of the Class A Non-Voting Common Stock reported by the Nasdaq
         National Market on July 20, 2005, is set forth solely for the purpose
         of calculating the filing fee pursuant to [Rule 457(c) and] Rule 457(h)
         under the Securities Act.
(3)      Calculated pursuant to Section 6(b) of the Securities Act as follows:
         proposed maximum aggregate offering price multiplied by $.0001177.



<PAGE>



                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

The documents containing the information specified in this Part I of Form S-8
will be sent or given to participants as specified by Rule 428(b)(1) promulgated
under the Securities Act. Such documents need not be filed with the Securities
and Exchange Commission (the "Commission") either as part of this registration
statement or as prospectuses or prospectus supplements pursuant to Rule 424.
These documents and the documents incorporated by reference in this registration
statement pursuant to Item 3 of Part II of this Form S-8, taken together,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act.


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.           INCORPORATION OF DOCUMENTS BY REFERENCE.

The following documents filed by Artesian Resources Corporation (the
"registrant") with the Commission are incorporated by reference into this
registration statement:

         (1)      The registrant's Annual Report on Form 10-K and amended Annual
                  Report on Form 10-K/A for the fiscal year ended December 31,
                  2004.

         (2)      The registrant's Quarterly Report on Form 10-Q for the fiscal
                  quarter ended March 31, 2005.

         (3)      The registrant's Current Reports on Form 8-K dated February 2,
                  2005 and April 5, 2005.

         (4)      The description of the registrant's shares of Class A
                  Non-Voting Common Stock, par value $1.00 per share, contained
                  in the registrant's registration statements on Form 10, as
                  amended (File No. 000-18516), filed with the Commission on
                  April 30, 1990 to register such securities under the
                  Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), including any amendments or reports filed for the
                  purpose of updating such description.

All reports and other documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this registration statement and to be a part
hereof from the date of the filing of such reports and documents.

Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.






<PAGE>

ITEM 4.           DESCRIPTION OF SECURITIES.

Not Applicable.

ITEM 5.           INTERESTS OF NAMED EXPERTS AND COUNSEL.

Not Applicable.

ITEM 6.           INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation, in its certificate of incorporation, to limit or eliminate, subject
to certain statutory limitations, the liability of directors to the corporation
or its stockholders for monetary damages for breaches of fiduciary duty, except
for liability (a) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) for any
willful or negligent payment of an unlawful dividend, stock purchase or
redemption, or (d) for any transaction from which the director derived an
improper personal benefit.

Section 145 of the Delaware General Corporation Law states that a corporation
has the power to indemnify directors and officers under certain prescribed
circumstances and subject to certain limitations against certain costs and
expenses, including attorney's fees actually and reasonably incurred, in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which any of them is a party by reason of
being a director or officer of the corporation if it is determined that the
director or officer acted in accordance with the applicable standard of conduct
set forth in such statutory provision.

         Article Tenth of the registrant's Restated Certificate of Incorporation
provides that the personal liability of its directors is eliminated to the
fullest extent permitted by the Delaware General Corporation Law.

Article VIII of the registrant's Bylaws provides that the registrant shall
indemnify and hold harmless its directors and officers to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may be
hereafter amended (but, in the case of any such amendment, only to the extent
that such amendment permits the registrant to provide broader indemnification
rights than such law permitted the registrant to provide prior to such
amendment). These provisions indemnify these persons against all expenses,
liabilities, and losses that are reasonably incurred or suffered in connection
with any action or proceeding described above. Further, the bylaws provide that
the registrant shall advance expenses to persons eligible for indemnification
upon delivery by any such person of an undertaking to repay all amounts advanced
if it shall ultimately be determined that this person is not entitled to be
indemnified. In addition, the registrant's bylaws authorize the registrant to
maintain insurance to protect the registrant and any of its directors or
officers against any expense, liability, or loss, whether or not the registrant
would have the power to indemnify any such person against such expense,
liability, or loss under the Delaware General Corporation Law.

The registrant has purchased a directors' and officers' indemnity insurance
policy as permitted by its Bylaws.

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.

<PAGE>

ITEM 7.           EXEMPTION FROM REGISTRATION CLAIMED.

Not Applicable.

ITEM 8.           EXHIBITS.

         EXHIBIT  DESCRIPTION
         ------   ---------

4.1      Artesian Resources Corporation 2005 Equity Compensation Plan.

5.1      Opinion of Morgan, Lewis & Bockius LLP.

23.1     Consent of Independent Registered Public Accounting Firm.

23.2     Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1).

24       Power of Attorney (included as part of the signature page).

ITEM 9.           UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                  (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, represent a fundamental change in the information set forth
         in the registration statement. Notwithstanding the foregoing, any
         increase or decrease in volume of securities offered (if the total
         dollar value of securities offered would not exceed that which was
         registered) and any deviation from the low or high end of the estimated
         maximum offering range may be reflected in the form of prospectus filed
         with the Commission pursuant to Rule 424(b) if, in the aggregate, the
         changes in volume and price represent no more than 20 percent change in
         the maximum aggregate offering price set forth in the "Calculation of
         Registration Fee" table in the effective registration statement; and

                  (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
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
<PAGE>

         (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 that remain unsold at the termination of
the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, 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.

(c) 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) 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.


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Newark, State of Delaware, on July 26, 2005.

                                       ARTESIAN RESOURCES CORPORATION


                                       By:
                                          --------------------------
                                          Name:   David B. Spacht
                                          Title:  Chief Financial Officer
                                                  and Treasurer

<PAGE>

                                POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Dian C. Taylor and David B. Spacht, his (or her)
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him (or her) and in his (or her) name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>


<S>                                        <C>                                          <C>
                SIGNATURE                                     TITLE                                 DATE
- ------------------------------------------ -------------------------------------------- -----------------------------

                                           Chairman of the Board, Chief Executive       July 25, 2005
- ------------------------------------          Officer, President and Director
Dian C. Taylor                                (Principal Executive Officer)



                                           Vice President, Chief Financial Officer      July 25, 2005
- ------------------------------------          and Treasurer (Principal Financial and
David B. Spacht                               Accounting Officer)


                                           Director                                     July 25, 2005
- ------------------------------------
Kenneth R. Biederman


                                           Director                                     July 25, 2005
- ------------------------------------
John R. Eisenbrey


                                           Director                                     July 25, 2005
- ------------------------------------
Norman H. Taylor, Jr.


                                           Director                                     July 25, 2005
- ------------------------------------
William C. Wyer

</TABLE>




<PAGE>

                         ARTESIAN RESOURCES CORPORATION

                                INDEX TO EXHIBITS


  Exhibit Number  Document
  --------------  --------

      4.1         Artesian Resources Corporation 2005 Equity Compensation Plan.

      5.1         Opinion of Morgan, Lewis & Bockius LLP.

      23.1        Consent of Independent Registered Public Accounting Firm.

      23.2        Consent of Morgan, Lewis & Bockius LLP (included with
                  Exhibit 5.1).

      24          Power of Attorney (included as part of the signature page).





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>2
<FILENAME>ex4-1.txt
<DESCRIPTION>EX4-1.TXT
<TEXT>
<PAGE>


                                                                     EXHIBIT 4.1

                         ARTESIAN RESOURCES CORPORATION

                          2005 EQUITY COMPENSATION PLAN


         1. PURPOSE

         The purpose of the Artesian Resources Corporation 2005 Equity
Compensation Plan (the "Plan") is to provide (i) designated employees of
Artesian Resources Corporation (the "Company") and its subsidiaries, and (ii)
non-employee members of the board of directors of the Company with the
opportunity to receive grants of stock options, stock units, stock awards,
dividend equivalents and other stock-based awards. The Company believes that the
Plan will encourage the participants to contribute materially to the growth of
the Company, thereby benefitting the Company's shareholders, and will align the
economic interests of the participants with those of the shareholders. The Plan
shall be effective as of May 25, 2005, subject to approval by the shareholders
of the Company.

         2. DEFINITIONS

         Whenever used in this Plan, the following terms will have the
respective meanings set forth below:

         (a) "Board" means the Company's Board of Directors.

         (b) "Change of Control" shall be deemed to have occurred if:

                  (i) Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) becomes a "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 50% of the voting power of the then outstanding
securities of the Company; provided that a Change of Control shall not be deemed
to occur as a result of a transaction in which the Company becomes a subsidiary
of another corporation and in which the shareholders of the Company, immediately
prior to the transaction, will beneficially own, immediately after the
transaction, shares entitling such shareholders to more than 50% of all votes to
which all shareholders of the parent corporation would be entitled in the
election of directors;

                  (ii) The consummation of (i) a merger or consolidation of the
Company with another corporation where the shareholders of the Company,
immediately prior to the merger or consolidation, will not beneficially own,
immediately after the merger or consolidation, shares entitling such
shareholders to more than 50% of all votes to which all shareholders of the
surviving corporation would be entitled in the election of directors, (ii) a
sale or other disposition of all or substantially all of the assets of the
Company, or (iii) a liquidation or dissolution of the Company; or

                  (iii) After the date this Plan is approved by the shareholders
of the Company, directors are elected such that a majority of the members of the
Board shall have been members of the Board for less than two years, unless the
election or nomination for election of each new director who was not a director
at the beginning of such two-year period was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period.

         (c) "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE>

         (d) "Committee" means (i) with respect to Grants to Employees, the
Compensation Committee of the Board or another committee appointed by the Board
to administer the Plan, or its delegate, (ii) with respect to Grants made to
Non-Employee Directors, the Board or its delegate, and (iii) with respects to
Grants designated as "qualified performance-based compensation" under section
162(m) of the Code, a committee that consists of two or more persons appointed
by the Board, all of whom shall be "outside directors" as defined under section
162(m) of the Code and related Treasury regulations.

         (e) "Company" means Artesian Resources Corporation and any successor
corporation.

         (f) "Dividend Equivalent" means an amount determined by multiplying the
number of shares of Stock subject to a Grant by the per-share cash dividend, or
the per-share fair market value (as determined by the Committee) of any dividend
in consideration other than cash, paid by the Company on its Stock.

         (g) "Effective Date" of the Plan means May 25, 2005, subject to
approval of the Plan by the shareholders of the Company.

         (h) "Employee" means an employee of the Employer (including an officer
or director who is also an employee).

         (i) "Employer" means the Company and its subsidiaries.

         (j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         (k) "Exercise Price" means the per share price at which shares of Stock
may be purchased under an Option, as designated by the Committee.

         (l) "Fair Market Value" of Stock means, unless the Committee determines
otherwise with respect to a particular Grant, (i) if the principal trading
market for the Stock is a national securities exchange or the Nasdaq National
Market, the last reported sale price thereof on the relevant date or (if there
were no trades on that date) the latest preceding date upon which a sale was
reported, (ii) if the Stock is not principally traded on such exchange or
market, the mean between the last reported "bid" and "asked" prices of Stock on
the relevant date, as reported on Nasdaq or, if not so reported, as reported by
the National Daily Quotation Bureau, Inc. or as reported in a customary
financial reporting service, as applicable and as the Committee determines, or
(iii) if the Stock is not publicly traded or, if publicly traded, is not subject
to reported transactions or "bid" or "asked" quotations as set forth above, the
Fair Market Value per share shall be as determined by the Committee.

         (m) "Grant" means an Option, Stock Unit, Stock Award, Dividend
Equivalent or Other Stock-Based Award granted under the Plan.

         (n) "Grant Agreement" means the written instrument that sets forth the
terms and conditions of a Grant, including all amendments thereto.

         (o) "Incentive Stock Option" means an Option that is intended to meet
the requirements of an incentive stock option under section 422 of the Code.
<PAGE>

         (p) "Non-Employee Director" means a member of the Board who is not an
employee of the Employer.

         (q) "Nonqualified Stock Option" means an Option that is not intended to
be taxed as an incentive stock option under section 422 of the Code.

         (r) "Option" means an option to purchase shares of Stock, as described
in Section 7.

         (s) "Other Stock-Based Award" means any Grant based on, measured by or
payable in Stock (other than a Grant described in Sections 7, 8, 9 or 10 of the
Plan), as described in Section 11.

         (t) "Participant" means an Employee or Non-Employee Director designated
by the Committee to participate in the Plan.

         (u) "Plan" means this Artesian Resources Corporation 2005 Equity
Compensation Plan, as in effect from time to time.

         (v) "Stock" means the Class A Non-voting common stock of the Company.

         (w) "Stock Award" means an award of Stock as described in Section 9.

         (x) "Stock Unit" means an award of a phantom unit representing a share
of Stock, as described in Section 8.

         3. ADMINISTRATION

         (a) Committee. The Plan shall be administered and interpreted by the
Compensation Committee of the Board or another committee appointed by the Board
to administer the Plan with respect to grants to Employees. The Plan shall be
administered and interpreted by the Board, or by a committee of directors to
whom the Board has delegated responsibility, with respect to grants to
Non-Employee Directors. The Board or committee, as applicable, that has
authority with respect to a specific Grant shall be referred to as the
"Committee" with respect to that Grant.

         (b) Committee Authority. The Committee shall have the sole authority to
(i) determine the Participants to whom Grants shall be made under the Plan, (ii)
determine the type, size and terms and conditions of the Grants to be made to
each such Participant, (iii) determine the time when the grants will be made and
the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms and conditions of any previously issued Grant, subject to the
provisions of Section 18 below, and (v) deal with any other matters arising
under the Plan.

         (c) Committee Determinations. The Committee shall have full power and
express discretionary authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations, agreements
and instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion. The Committee's
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any awards granted hereunder.
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
Participants.
<PAGE>

         4. GRANTS

         (a) Grants under the Plan may consist of Options as described in
Section 7, Stock Units as described in Section 8, Stock Awards as described in
Section 9, Dividend Equivalents as described in Section 10 and Other Stock-Based
Awards as described in Section 11. All Grants shall be subject to such terms and
conditions as the Committee deems appropriate and as are specified in writing by
the Committee to the Participant in the Grant Agreement.

         (b) All Grants shall be made conditional upon the Participant's
acknowledgement, in writing or by acceptance of the Grant, that all decisions
and determinations of the Committee shall be final and binding on the
Participant, his or her beneficiaries and any other person having or claiming an
interest under such Grant. Grants under a particular Section of the Plan need
not be uniform as among the Participants.

         (c) The Committee may make Grants that are contingent on, and subject
to, shareholder approval of the Plan or an amendment to the Plan.

         5. SHARES SUBJECT TO THE PLAN

         (a) Shares Authorized. The total aggregate number of shares of Stock
that may be issued under the Plan is 500,000 shares, subject to adjustment as
described in subsection (e) below.

         (b) Source of Shares; Cash Payments. Shares issued under the Plan may
be authorized but unissued shares of Stock or reacquired shares of Stock,
including shares purchased by the Company on the open market for purposes of the
Plan. Grants paid in cash shall not count against the share limits described in
subsection (a) above.

         (c) Share Counting. For administrative purposes, when the Committee
makes a Grant payable in Stock, the Committee shall reserve shares equal to the
maximum number of shares that may be issued under the Grant. If and to the
extent Options granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised, and if and to
the extent that any Stock Awards, Stock Units, Dividend Equivalents or Other
Stock-Based Awards are forfeited or terminated, or otherwise are not paid in
full, the shares reserved for such Grants shall again be available for purposes
of the Plan. Shares of Stock surrendered in payment of the Exercise Price of an
Option shall again be available for issuance under the Plan. To the extent that
Grants are paid in cash, and not in shares of Stock, any shares previously
reserved for issuance pursuant to such Grants shall again be available for
issuance under the Plan.

         (d) Individual Limits. All Grants under the Plan, other than Dividend
Equivalents, shall be expressed in shares of Stock. The maximum aggregate number
of shares of Stock with respect to which all Grants, other than Dividend
Equivalents, may be made under the Plan to any individual during any calendar
year shall be 25,000 shares, subject to adjustment as described in subsection
(e) below. A Participant may not accrue Dividend Equivalents during any calendar
year in excess of $50,000. The individual limits of this subsection (d) shall
apply without regard to whether the Grants are to be paid in Stock or cash. All
cash payments (other than with respect to Dividend Equivalents) shall equal the
Fair Market Value of the shares of Stock to which the cash payments relate.
<PAGE>

         (e) Adjustments. If there is any change in the number or kind of shares
of Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Stock as a class
without the Company's receipt of consideration, or if the value of outstanding
shares of Stock is substantially reduced as a result of a spinoff or the
Company's payment of an extraordinary dividend or distribution, the maximum
number of shares of Stock available for issuance under the Plan, the maximum
number of shares of Stock for which any individual may receive Grants in any
year, the number of shares covered by outstanding Grants, the kind of shares
issued and to be issued under the Plan, and the price per share or the
applicable market value of such Grants may be appropriately adjusted by the
Committee to reflect any increase or decrease in the number of, or change in the
kind or value of, issued shares of Stock to preclude, to the extent practicable,
the enlargement or dilution of rights and benefits under such Grants; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated. Any adjustments determined by the Committee shall be final, binding
and conclusive.

         6. ELIGIBILITY FOR PARTICIPATION

         (a) Eligible Persons. All Employees, including Employees who are
officers or members of the Board, and all Non-Employee Directors shall be
eligible to participate in the Plan.

         (b) Selection of Participants. The Committee shall select the Employees
and Non-Employee Directors to receive Grants and shall determine the number of
shares of Stock subject to each Grant.

         7. OPTIONS

         (a) General Requirements. The Committee may grant Options to an
Employee or Non-Employee Director upon such terms and conditions as the
Committee deems appropriate under this Section 7. The Committee shall determine
the number of shares of Stock that will be subject to each Grant of Options to
Employees and Non-Employee Directors. The Committee may grant Dividend
Equivalents with respect to Options.

         (b) Type of Option, Price and Term.

                  (i) The Committee may grant Incentive Stock Options or
Nonqualified Stock Options or any combination of the two, all in accordance with
the terms and conditions set forth herein. Incentive Stock Options may be
granted only to Employees of the Company or its parents or subsidiaries, as
defined in section 424 of the Code. Nonqualified Stock Options may be granted to
Employees or Non-Employee Directors.

                  (ii) The Exercise Price of Stock subject to an Option shall be
determined by the Committee and may be equal to, greater than, or less than the
Fair Market Value of a share of Stock on the date the Option is granted;
provided, however, that (x) the Exercise Price of an Incentive Stock Option
shall be equal to, or greater than, the Fair Market Value of a share of Stock on
the date the Incentive Stock Option is granted and (y) an Incentive Stock Option
may not be granted to an Employee who, at the time of grant, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary, as defined in
section 424 of the Code, unless the Exercise Price per share is not less than
110% of the Fair Market Value of the Stock on the date of grant.
<PAGE>

                  (iii) The Committee shall determine the term of each Option,
which shall not exceed ten years from the date of grant. However, an Incentive
Stock Option that is granted to an Employee who, at the time of grant, owns
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary, as defined in
section 424 of the Code, may not have a term that exceeds five years from the
date of grant.

         (c) Exercisability of Options. Options shall become exercisable in
accordance with such terms and conditions as may be determined by the Committee
and specified in the Grant Agreement. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.

         (d) Termination of Employment or Service. Except as provided in the
Grant Agreement, an Option may only be exercised while the Participant is
employed by the Employer, or providing service as a Non-Employee Director. The
Committee shall determine in the Grant Agreement under what circumstances and
during what time periods a Participant may exercise an Option after termination
of employment or service.

         (e) Exercise of Options. A Participant may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company. The Participant shall pay the Exercise Price for the Option (i) in
cash, (ii) if the Committee so permits, by delivering shares of Stock owned by
the Participant and having a Fair Market Value on the date of exercise equal to
the Exercise Price or by attestation to ownership of shares of Stock having an
aggregate Fair Market Value on the date of exercise equal to the Exercise Price,
(iii) by payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board, or (iv) by such other method as the
Committee may approve. Shares of Stock used to exercise an Option shall have
been held by the Participant for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. Payment for
the shares pursuant to the Option, and any required withholding taxes, must be
received by the time specified by the Committee depending on the type of payment
being made, but in all cases prior to the issuance of the Stock.

         (f) Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that, if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Participant during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, as defined in
section 424 of the Code, exceeds $100,000, then the Option, as to the excess,
shall be treated as a Nonqualified Stock Option. An Incentive Stock Option shall
not be granted to any person who is not an Employee of the Company or a parent
or subsidiary, as defined in section 424 of the Code.

         8. STOCK UNITS

         (a) General Requirements. The Committee may grant Stock Units to an
Employee or Non-Employee Director, upon such terms and conditions as the
Committee deems appropriate under this Section 8. Each Stock Unit shall
represent the right of the Participant to receive a share of Stock or an amount
based on the value of a share of Stock. All Stock Units shall be credited to
bookkeeping accounts on the Company's records for purposes of the Plan.

         (b) Terms of Stock Units. The Committee may grant Stock Units that are
payable on terms and conditions determined by the Committee, which may include
payment based on achievement of performance goals. Stock Units may be paid at
the end of a specified vesting or performance period, or payment may be deferred
to a date authorized by the Committee. The Committee shall determine the number
of Stock Units to be granted and the requirements applicable to such Stock
Units. The Committee may grant Dividend Equivalents with respect to Stock Units.
<PAGE>

         (c) Payment With Respect to Stock Units. Payment with respect to Stock
Units shall be made in cash, in Stock, or in a combination of the two, as
determined by the Committee. The Grant Agreement shall specify the maximum
number of shares that can be issued under the Stock Units.

         (d) Requirement of Employment or Service. The Committee shall determine
in the Grant Agreement under what circumstances a Participant may retain Stock
Units after termination of the Participant's employment or service, and the
circumstances under which Stock Units may be forfeited.

         9. STOCK AWARDS

         (a) General Requirements. The Committee may issue shares of Stock to an
Employee or Non-Employee Director under a Stock Award, upon such terms and
conditions as the Committee deems appropriate under this Section 9. Shares of
Stock issued pursuant to Stock Awards may be issued for cash consideration or
for no cash consideration, and subject to restrictions or no restrictions, as
determined by the Committee. The Committee may establish conditions under which
restrictions on Stock Awards shall lapse over a period of time or according to
such other criteria as the Committee deems appropriate, including restrictions
based upon the achievement of specific performance goals. The Committee shall
determine the number of shares of Stock to be issued pursuant to a Stock Award.

         (b) Requirement of Employment or Service. The Committee shall determine
in the Grant Agreement under what circumstances a Participant may retain Stock
Awards after termination of the Participant's employment or service, and the
circumstances under which Stock Awards may be forfeited.

         (c) Restrictions on Transfer. While Stock Awards are subject to
restrictions, a Participant may not sell, assign, transfer, pledge or otherwise
dispose of the shares of a Stock Award except upon death as described in Section
15(a). Each certificate for a share of a Stock Award shall contain a legend
giving appropriate notice of the restrictions in the Grant. The Participant
shall be entitled to have the legend removed when all restrictions on such
shares have lapsed. The Company may retain possession of any certificates for
Stock Awards until all restrictions on such shares have lapsed.

         (d) Right to Vote and to Receive Dividends. The Committee shall
determine to what extent, and under what conditions, the Participant shall have
the right to vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares during the restriction period.

         10. DIVIDEND EQUIVALENTS

         (a) General Requirements. When the Committee makes a Grant under the
Plan, the Committee may grant Dividend Equivalents in connection with the Grant,
under such terms and conditions as the Committee deems appropriate under this
Section 10. Dividend Equivalents may be paid to Participants currently or may be
deferred, as determined by the Committee. All Dividend Equivalents that are not
paid currently shall be credited to bookkeeping accounts on the Company's
records for purposes of the Plan. Dividend Equivalents may be accrued as a cash
obligation, or may be converted to Stock Units for the Participant, and deferred
Dividend Equivalents may accrue interest, all as determined by the Committee.
The Committee may provide that Dividend Equivalents shall be payable based on
the achievement of specific performance goals.
<PAGE>

         (b) Payment with Respect to Dividend Equivalents. Dividend Equivalents
may be payable in cash or shares of Stock or in a combination of the two, as
determined by the Committee.

         11. OTHER STOCK-BASED AWARDS

         The Committee may grant other awards not specified in Sections 7, 8, 9
and 10 above, including stock appreciation rights, that are based on or measured
by Stock to Employees or Non-Employee Directors, on such terms and conditions as
the Committee deems appropriate under this Section 11. Other Stock-Based Awards
may be granted subject to achievement of performance goals or other conditions
and may be payable in Stock or cash, or in a combination of the two, as
determined by the Committee in the Grant Agreement. The Committee may grant
Dividend Equivalents with respect to Other Stock-Based Awards.

         12. QUALIFIED PERFORMANCE-BASED COMPENSATION

         (a) Designation as Qualified Performance-Based Compensation. The
Committee may determine that Stock Units, Stock Awards, Dividend Equivalents or
Other Stock-Based Awards granted to an Employee shall be considered "qualified
performance-based compensation" under section 162(m) of the Code, in which case
the provisions of this Section 12 shall apply to such Grants. The Committee may
also grant Options under which the exercisability of the Options is subject to
achievement of performance goals as described in this Section 12.

         (b) Performance Goals. When Grants are made under this Section 12, the
Committee shall establish in writing (i) the objective performance goals that
must be met, (ii) the period during which performance will be measured, (iii)
the maximum amounts that may be paid if the performance goals are met, and (iv)
any other conditions that the Committee deems appropriate and consistent with
the requirements of section 162(m) of the Code for "qualified performance-based
compensation." The performance goals shall satisfy the requirements for
"qualified performance-based compensation," including the requirement that the
achievement of the goals be substantially uncertain at the time they are
established and that the performance goals be established in such a way that a
third party with knowledge of the relevant facts could determine whether and to
what extent the performance goals have been met. The Committee shall not have
discretion to increase the amount of compensation that is payable, but may
reduce the amount of compensation that is payable, pursuant to Grants identified
by the Committee as "qualified performance-based compensation."

         (c) Criteria Used for Objective Performance Goals. The Committee shall
use objectively determinable performance goals based on one or more of the
following criteria: stock price, earnings per share, price-earnings multiples,
net earnings, operating earnings, revenue, number of days sales outstanding in
accounts receivable, productivity, margin, EBITDA (earnings before interest,
taxes, depreciation and amortization), net capital employed, return on assets,
shareholder return, return on equity, return on capital employed, growth in
assets, unit volume, sales, cash flow, market share, relative performance to a
comparison group designated by the Committee, or strategic business criteria
consisting of one or more objectives based on meeting specified revenue goals,
market penetration goals, customer growth, geographic business expansion goals,
cost targets or goals relating to acquisitions or divestitures. The performance
goals may relate to one or more business units or the performance of the Company
as a whole, or any combination of the foregoing. Performance goals need not be
uniform as among Participants.
<PAGE>

         (d) Timing of Establishment of Goals. The Committee shall establish the
performance goals in writing either before the beginning of the performance
period or during a period ending no later than the earlier of (i) 90 days after
the beginning of the performance period or (ii) the date on which 25% of the
performance period has been completed, or such other date as may be required or
permitted under applicable regulations under section 162(m) of the Code.

         (e) Certification of Results. The Committee shall certify the
performance results for the performance period specified in the Grant Agreement
after the performance period ends. The Committee shall determine the amount, if
any, to be paid pursuant to each Grant based on the achievement of the
performance goals and the satisfaction of all other terms of the Grant
Agreement.

         (f) Death, Disability or Other Circumstances. The Committee may provide
in the Grant Agreement that Grants under this Section 12 shall be payable, in
whole or in part, in the event of the Participant's death or disability, a
Change of Control or under other circumstances consistent with the Treasury
regulations and rulings under section 162(m) of the Code.

         13. DEFERRALS

         The Committee may permit or require a Participant to defer receipt of
the payment of cash or the delivery of shares that would otherwise be due to the
Participant in connection with any Grant. The Committee shall establish rules
and procedures for any such deferrals.

         14. WITHHOLDING OF TAXES

         (a) Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company may require that the Participant or other person
receiving or exercising Grants pay to the Company the amount of any federal,
state or local taxes that the Company is required to withhold with respect to
such Grants, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.

         (b) Election to Withhold Shares. If the Committee so permits, a
Participant may elect to satisfy the Company's tax withholding obligation with
respect to Grants paid in Stock by having shares withheld, at the time such
Grants become taxable, up to an amount that does not exceed the minimum
applicable withholding tax rate for federal (including FICA), state and local
tax liabilities. The election must be in a form and manner prescribed by the
Committee.

         15. TRANSFERABILITY OF GRANTS

         (a) Restrictions on Transfer. Except as described in subsection (b) or
(c) below, only the Participant may exercise rights under a Grant during the
Participant's lifetime, and a Participant may not transfer those rights except
by will or by the laws of descent and distribution. When a Participant dies, the
personal representative or other person entitled to succeed to the rights of the
Participant may exercise such rights. Any such successor must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Participant's will or under the applicable laws of descent and distribution.

         (b) Transfer of Nonqualified Stock Options to or for Family Members.
Notwithstanding the foregoing, the Committee may provide, in a Grant Agreement,
that a Grantee may transfer Nonqualified Stock Options to family members, or one
or more trusts or other entities for the benefit of or owned by family members,
consistent with the applicable securities laws, according to such terms as the
Committee may determine; provided that the Grantee receives no consideration for
the transfer of an Option and the transferred Option shall continue to be
subject to the same terms and conditions as were applicable to the Option
immediately before the transfer.
<PAGE>

         16. CONSEQUENCES OF A CHANGE OF CONTROL

         (a) Assumption of Grants. Upon a Change of Control where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
by, the surviving corporation (or a parent or subsidiary of the surviving
corporation), and other Grants that remain outstanding after the Change of
Control shall be converted to similar grants of the surviving corporation (or a
parent or subsidiary of the surviving corporation).

         (b) Other Alternatives. Notwithstanding the foregoing, in the event of
a Change of Control, the Committee may take any of the following actions with
respect to any or all outstanding Grants, without the consent of any
Participant: (i) the Committee may determine that outstanding Options shall be
fully exercisable, and restrictions on outstanding Stock Awards and Stock Units
shall lapse, as of the date of the Change of Control or at such other time as
the Committee determines, (ii) the Committee may require that Participants
surrender their outstanding Options in exchange for one or more payments by the
Company, in cash or Stock as determined by the Committee, in an amount equal to
the amount by which the then Fair Market Value of the shares of Stock subject to
the Participant's unexercised Options exceeds the Exercise Price, if any, and on
such terms as the Committee determines, (iii) after giving Participants an
opportunity to exercise their outstanding Options, the Committee may terminate
any or all unexercised Options at such time as the Committee deems appropriate,
and (iv) with respect to Participants holding Stock Units, Dividend Equivalents
or Other Stock-Based Awards, the Committee may determine that such Participants
shall receive one or more payments in settlement of such Stock Units, Dividend
Equivalents or Other Stock-Based Awards, in such amount and form and on such
terms as may be determined by the Committee. Such acceleration, surrender,
termination or settlement shall take place as of the date of the Change of
Control or such other date as the Committee may specify.

         (c) Other Transactions. The Committee may provide in a Grant Agreement
that a sale or other transaction involving a subsidiary or other business unit
of the Company shall be considered a Change of Control for purposes of a Grant,
or the Committee may establish other provisions that shall be applicable in the
event of a specified transaction.

         17. REQUIREMENTS FOR ISSUANCE OF SHARES

         No Stock shall be issued in connection with any Grant hereunder unless
and until all legal requirements applicable to the issuance of such Stock have
been complied with to the satisfaction of the Committee. The Committee shall
have the right to condition any Grant made to any Participant hereunder on such
Participant's undertaking in writing to comply with such restrictions on his or
her subsequent disposition of such shares of Stock as the Committee shall deem
necessary or advisable, and certificates representing such shares may be
legended to reflect any such restrictions. Certificates representing shares of
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon. No
Participant shall have any right as a shareholder with respect to Stock covered
by a Grant until shares have been issued to the Participant.
<PAGE>

         18. AMENDMENT AND TERMINATION OF THE PLAN

         (a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without approval of
the shareholders of the Company if such approval is required in order to comply
with the Code or applicable laws, or to comply with applicable stock exchange
requirements. No amendment or termination of this Plan shall, without the
consent of the Participant, materially impair any rights or obligations under
any Grant previously made to the Participant under the Plan, unless such right
has been reserved in the Plan or the Grant Agreement, or except as provided in
Section 19(b) below.

         (b) No Repricing Without Shareholder Approval. Notwithstanding anything
in the Plan to the contrary, the Committee may not reprice Options, nor may the
Board amend the Plan to permit repricing of Options, unless the shareholders of
the Company provide prior approval for such repricing.

         (c) Shareholder Approval for "Qualified Performance-Based
Compensation." If Grants are made under Section 12 above, the Plan must be
reapproved by the Company's shareholders no later than the first shareholders
meeting that occurs in the fifth year following the year in which the
shareholders previously approved the provisions of Section 12, if additional
Grants are to be made under Section 12 and if required by section 162(m) of the
Code or the regulations thereunder.

         (d) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its Effective Date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the shareholders. The termination of the Plan shall not impair the
power and authority of the Committee with respect to an outstanding Grant.

         19. MISCELLANEOUS

         (a) Grants in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including Grants to employees thereof
who become Employees, or for other proper corporate purposes, or (ii) limit the
right of the Company to grant stock options or make other stock-based awards
outside of this Plan. Without limiting the foregoing, the Committee may make a
Grant to an employee of another corporation who becomes an Employee by reason of
a corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company in substitution for a grant
made by such corporation. The terms and conditions of the Grants may vary from
the terms and conditions required by the Plan and from those of the substituted
stock incentives, as determined by the Committee

         (b) Compliance with Law. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Stock under Grants
shall be subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required. With respect to persons subject to section
16 of the Exchange Act, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule 16b-3
or its successors under the Exchange Act. In addition, it is the intent of the
Company that Incentive Stock Options comply with the applicable provisions of
section 422 of the Code and that Grants of "qualified performance-based
compensation" comply with the applicable provisions of section 162(m) of the
Code. To the extent that any legal requirement of section 16 of the Exchange Act
or section 422 or 162(m) of the Code as set forth in the Plan ceases to be
required under section 16 of the Exchange Act or section 422 or 162(m) of the
Code, that Plan provision shall cease to apply. The Committee may revoke any
Grant if it is contrary to law or modify a Grant to bring it into compliance
with any valid and mandatory government regulation. The Committee may also adopt
rules regarding the withholding of taxes on payments to Participants. The
Committee may, in its sole discretion, agree to limit its authority under this
Section.
<PAGE>

         (c) Enforceability. The Plan shall be binding upon and enforceable
against the Company and its successors and assigns.

         (d) Funding of the Plan; Limitation on Rights. This Plan shall be
unfunded. The Company shall not be required to establish any special or separate
fund or to make any other segregation of assets to assure the payment of any
Grants under this Plan. Nothing contained in the Plan and no action taken
pursuant hereto shall create or be construed to create a fiduciary relationship
between the Company and any Participant or any other person. No Participant or
any other person shall under any circumstances acquire any property interest in
any specific assets of the Company. To the extent that any person acquires a
right to receive payment from the Company hereunder, such right shall be no
greater than the right of any unsecured general creditor of the Company.

         (e) Rights of Participants. Nothing in this Plan shall entitle any
Employee, Non-Employee Director or other person to any claim or right to receive
a Grant under this Plan. Neither this Plan nor any action taken hereunder shall
be construed as giving any individual any rights to be retained by or in the
employment or service of the Employer.

         (f) No Fractional Shares. No fractional shares of Stock shall be issued
or delivered pursuant to the Plan or any Grant. The Committee shall determine
whether cash, other awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

         (g) Employees Subject to Taxation Outside the United States. With
respect to Participants who are subject to taxation in countries other than the
United States, the Committee may make Grants on such terms and conditions as the
Committee deems appropriate to comply with the laws of the applicable countries,
and the Committee may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws.

         (h) Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Agreements issued under the Plan shall be governed
and construed by and determined in accordance with the laws of the State of
Delaware, without giving effect to the conflict of laws provisions thereof.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>3
<FILENAME>ex5-1.txt
<DESCRIPTION>EX5-1.TXT
<TEXT>
<PAGE>


                                                                     EXHIBIT 5.1

                    [Morgan, Lewis & Bockius LLP Letterhead]


July 26, 2005


Artesian Resource Corporation
664 Churchmans Road
Newark, Delaware 19702

Re:      Artesian Resources Corporation, Registration Statement on Form S-8

Ladies and Gentlemen:

We have acted as counsel to Artesian Resources Corporation, a Delaware
corporation (the "Company"), in connection with the filing of a Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended (the "Act"), with the Securities and Exchange Commission (the
"SEC"). The Registration Statement relates to 500,000 shares (the "Shares") of
the Company's Class A Non-Voting Common Stock, $1.00 par value, issuable under
the Artesian Resources Corporation 2005 Equity Compensation Plan (the "Plan").

In connection with this opinion letter, we have examined the Registration
Statement and originals, or copies certified or otherwise identified to our
satisfaction, of the Restated Certificate of Incorporation and Bylaws of the
Company and such other documents, records and instruments as we have deemed
appropriate for purposes of the opinion set forth herein.

We have assumed the genuineness of all signatures, the legal capacity of all
natural persons, the authenticity of the documents submitted to us as originals,
the conformity with the originals of all documents submitted to us as certified,
facsimile or photostatic copies and the authenticity of the originals of all
documents submitted to us as copies.

Based upon the foregoing, we are of the opinion that Shares have been duly
authorized by the Company and, when issued and delivered by the Company in the
manner and on the terms described in the Plan, will be validly issued, fully
paid and non-assessable.

The opinions expressed herein are limited to the Delaware General Corporation
Law.

We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such consent, we do not hereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the SEC thereunder.

Very truly yours,


MORGAN, LEWIS & BOCKIUS LLP


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>4
<FILENAME>ex23-1.txt
<DESCRIPTION>EX23-1.TXT
<TEXT>

<PAGE>


                                                                    EXHIBIT 23.1

            Consent of Independent Registered Public Accounting Firm


The Board of Directors
Artesian Resources Corporation:

We consent to the use of our report dated March 30, 2005 with respect to the
consolidated balance sheets of Artesian Resources Corporation as of December 31,
2004 and 2003, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 2004, and the related financial statement schedule,
and also to the use of our report dated April 29, 2005 with respect to
management's assessment of the effectiveness of internal control over finanical
reporting as of December 31, 2004 and the effectiveness of internal control over
finanical reporting as of December 31, 2004, both of which incorporated herein
by reference.


KPMG LLP

Philadelphia, Pennsylvania
July 19, 2005




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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