Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between
CHRISTOPHER FRANKLIN (“Executive”), and AQUA AMERICA, INC., a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania (the
“Company”) as of this 2nd day of June, 2015.

WHEREAS, the Board of Directors of Company (“Board of Directors”) wishes to have
the Company retain Executive to serve as President and Chief Executive Officer
(“CEO”) of the Company on the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties, subject to the
terms and conditions set forth herein, agree as follows:

1. Employment and Term. Executive hereby agrees to serve as President and CEO
from July 1, 2015 (the “Commencement Date”) hereof through July 1, 2018 (the
“Initial Term”), and the Company hereby agrees to retain Executive as President
and CEO through the Initial Term. By executing this Agreement the Company
confirms that the Board of Directors has approved this Agreement. The parties
may mutually agree in writing to renew the term of employment under this
Agreement for successive one (1) year periods (or for such other period(s) as
agreed by the parties) at the end of the Initial Term or any renewal term. This
Agreement shall terminate at the end of the Initial Term or, in the event of
renewal, at the end of the extended term, unless terminated earlier as provided
in this Agreement. The Initial Term and, if the period of employment is
extended, such successive periods of employment, subject to earlier termination
of employment as provided in this Agreement, are collectively referred to herein
as the “Term”.

2. Duties. During the Term, Executive will have the title of President and CEO.
Executive shall report exclusively to and receive instructions from the Board of
Directors and shall have such duties and responsibilities customary for the
positions of president and chief executive officer of public companies similarly
situated. While serving as President and CEO, Executive shall have full
authority and discretion relating to the general and day-to-day management of
the affairs of the Company, including, but not limited to, finances and other
financial matters, compensation matters (other than with respect to the
compensation of Executive, himself, and the other executive officers of the
Company, and other than long-term compensation of employees, which shall be
determined by the Executive Compensation Committee of the Board of Directors
(the “Executive Compensation Committee”)), personnel matters (other than such
matters that relate to Executive himself), operating and capital budgeting,
operations, intellectual property, investor relations, retention of
professionals and strategic planning and implementation. Executive will be the
most senior executive officer of the Company and all other executives and
businesses of the Company will report to Executive or his designee. The
foregoing language shall not be construed so as to limit the duties and
responsibilities of the Board of Directors as described in the Company’s
Articles of Incorporation and Bylaws.

3. Other Business Activities. Executive shall serve the Company faithfully and
shall devote his reasonable best efforts and substantially all of his business
time, attention, skill and efforts to the performance of the duties required by
or appropriate for his position as President and CEO. In furtherance of the
foregoing, and not by way of limitation, for so long as Executive remains
President and CEO, Executive shall not directly or indirectly engage in any
other business or charitable activities or pursuits, except for those arising
from positions held as of the date hereof as set forth on Appendix A or such
other activities as would not materially interfere with Executive’s ability to
carry out his duties under this Agreement and are identified by Executive to the
Board of Directors as described in the

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

following sentence. Notwithstanding the foregoing, Executive shall be permitted
to engage in activities in connection with (i) service as a volunteer, officer
or director or in a similar capacity of any charitable or civic organization;
(ii) managing personal investments; (iii) serving as a director, executor,
trustee or in another similar fiduciary capacity for a non-commercial entity; or
(iv) serving as a director of a business organization; provided, however, that
Executive has disclosed his intention to engage in such activities to the Board
of Directors and the Board of Directors concludes that such activities do not
materially interfere with Executive’s performance of his responsibilities and
obligations pursuant to this Agreement.

4. Base Salary. The Company shall pay Executive a salary at the annual rate of
six hundred thirty-five thousand dollars ($635,000) (the “Base Salary”)
effective as of the effective date of this Agreement, payable pursuant to the
Company’s normal practice, but no less frequently than monthly. The Base Salary
shall be inclusive of all applicable income, Social Security and other taxes and
charges which are required by law or requested to be withheld by Executive and
which shall be withheld and paid in accordance with Company’s normal payroll
practice for its similarly-situated executives as in effect from time to time.
The Executive Compensation Committee, in consultation with Executive, shall
periodically review Executive’s Base Salary during the Term at least annually
for increases based on Executive’s performance and other relevant factors.

5. Annual Incentive Compensation. Executive shall participate in incentive
compensation programs which will enable Executive to earn bonus compensation in
accordance with performance criteria developed and evaluated by the Executive
Compensation Committee in consultation with Executive. Executive’s target annual
bonus shall not be less than eighty percent (80%) of Executive’s Base Salary.
For 2015, Executive’s target bonus payable under this Agreement shall be pro
rated based upon the number of months remaining in the year after the
Commencement Date and Executive’s target bonus payable under his previous
arrangement based upon his previous target bonus percentage shall be pro rated
based upon the number of months in the year before the Commencement Date.

6. Annual Equity Incentives. For 2016 and thereafter during the term of this
Agreement, Executive shall be granted annual, equity-based long term incentive
compensation at the discretion of the Executive Compensation Committee under the
Company’s 2009 Omnibus Equity Compensation Plan (the “Omnibus Plan”), consistent
with existing compensation practices; provided, however, that the target annual
equity grant shall not be less than one hundred sixty-five percent (165%) of
Executive’s Base Salary. For 2015, Executive shall be granted an equity award
with a value equal to fifty percent (50%) of the difference between one hundred
sixty-five percent (165%) of Executive’s Base Salary and his current long-term
incentive award under the Omnibus Plan, measured as of the grant date (the
“Stock Award”) with performance-based vesting as determined by the Executive
Compensation Committee.

7. Other Benefits. Nothing in this Agreement shall affect Executive’s
participation in standard Company benefit plans and the level of those benefits
shall be at least as favorable as those provided to senior management generally.

8. 2015 Performance-Based Stock Award; Termination of Employment.

(a) If the Company terminates Executive’s employment without Cause, Executive
terminates employment for Good Reason, or in the event of Executive’s
termination due to non-renewal of the Term by the Company, any unvested shares
of the Stock Award shall become fully vested if the applicable performance goals
are met for any of the three successive calendar years immediately following the
date of grant of such Stock Award. If Executive dies while employed by the
Company, or Executive’s employment is terminated on account of Disability, any
unvested shares of the Stock Award shall become vested in full upon Executive’s
death or termination of employment on account of Disability. If Executive’s
employment is terminated for Cause or if Executive voluntarily terminates
employment without Good Reason, any unvested shares of the Stock Award will be
forfeited.

 

- 2 -

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

(b) If the Company terminates Executive’s employment and this Agreement for
Cause, or if Executive terminates Executive’s employment without Good Reason, or
for death or Disability, Executive shall receive (or his estate in the event of
his death) any accrued but unpaid salary and accrued vacation under this
Agreement.

(d) If the Company terminates Executive’s employment and this Agreement without
Cause, if Executive terminates Executive’s employment for Good Reason, or in the
event of Executive’s termination due to non-renewal of the Term by the Company,
Executive shall receive any accrued but unpaid salary and accrued vacation under
this Agreement, as well as a lump sum payment equal to (i) twenty-four
(24) months of Base Salary; and (ii) two (2) times the target annual bonus, such
lump sum payment to be paid on the thirtieth day following the date of
termination.

(e) For the avoidance of doubt, the payment of severance benefits under this
Agreement shall be conditioned upon Executive executing a general release of all
claims in a form provided by the Company no later than 21 days following the
date of termination, and not revoking such release during the seven day period
following execution.

9. Defined Terms. For purposes of this Agreement:

(a) The term “Cause” shall mean (i) Executive’s conviction of, or pleading
guilty or nolo contendere to, a felony or crime involving moral turpitude;
(ii) in carrying out his duties hereunder, Executive engages in conduct that
constitutes willful gross misconduct, or willful gross neglect and that, in
either case, results in material economic or reputational harm to the Company;
or (iii) Executive refuses to perform, or repeatedly fails to undertake good
faith efforts to perform, the duties or responsibilities reasonably assigned to
him (consistent with this Agreement) by the Board of Directors, in either case,
after written notice thereof. Any determination of Cause shall be subject to a
reasonable notice and cure period.

(b) The term “Disability” shall mean Executive’s mental or physical incapacity
that entitles Executive to long-term disability benefits under the Company’s
long-term disability plan applicable to Executive.

(c) The term “Good Reason” shall mean a termination of employment initiated by
Executive upon one or more of the following occurrences after the Commencement
Date:

(i) a diminution in Executive’s authority, title, duties, responsibilities or
reporting lines,

(ii) relocation of Executive’s principal place of employment, to a location that
is more than fifty (50) miles from the location on the Commencement Date; or

(iii) a material decrease in Base Salary or the target annual bonus.

Executive must provide written notice of termination for Good Reason to the
Company within sixty (60) days after the event constituting Good Reason. The
Company shall have a period of thirty (30) days in which it may correct the act
or failure to act that constitutes the grounds for Good Reason as set forth in
Executive’s notice of termination. If the Company does not correct the act or
failure to act, Executive must terminate his or her employment for Good Reason
within thirty (30) days after the end of the cure period, in order for the
termination to be considered a Good Reason termination.

 

- 3 -

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

10. Restrictive Covenants.

(a) Executive agrees that on and after the Commencement Date, for a period of
twelve (12) months after termination of his employment under this Agreement,
Executive will not, directly or indirectly, individually, or in association or
in combination with any other person or entity, whether as a shareholder of a
corporation, or a manager or member of a limited liability company, or as an
employee, agent, independent contractor, consultant, advisor, joint venturer,
partner or otherwise:

(i) employ, engage or solicit for employment any person who is, or was, at any
time during the twelve (12) months after termination of his employment under
this Agreement and the immediately preceding twelve (12) month period, an
employee of the Company or otherwise seek to adversely influence or alter such
person’s relationship with the Company (without written consent of the Board);
or

(ii) solicit or encourage any person or entity that is, or was, at any time
during the twelve (12) months after termination of his employment under this
Agreement and the immediately preceding twelve (12) month period, a prospective
affiliate of the Company or a customer, client or vendor or prospective
customer, client or vendor of the Company, to terminate or otherwise alter his,
her or its relationship with Company.

(b) Executive agrees that on and after the Commencement Date, for a period of
twelve (12) months after termination of his employment under this Agreement,
Executive agrees that he will not, unless acting pursuant with the prior written
consent of the Board of Directors, directly or indirectly, own, manage, operate,
join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected as an officer, director, employee,
partner, principal, agent, representative, consultant or otherwise with or use
or permit his name to be used in connection with, any business or enterprise
engaged in a geographic area within twenty-five (25) miles of any location from
which the Company or any of its subsidiaries is operating on the date of such
termination (the “Geographic Area”), in any business that is competitive to a
business from which the Company and any of its subsidiaries, taken as a whole,
derived at least ten percent of its respective annual gross revenues for the
twelve (12) months preceding the date of termination. It is recognized by
Executive that the business of the Company and its subsidiaries and Executive’s
connection therewith is or will be involved in activity throughout the
Geographic Area, and that more limited geographical limitations on this
non-competition covenant are therefore not appropriate. The foregoing
restriction shall not be construed to prohibit the ownership by Executive of
less than one percent of any class of securities of any corporation which is
engaged in any of the foregoing businesses having a class of securities
registered pursuant to the Securities Exchange Act of 1934, provided that such
ownership represents a passive investment and that neither Executive nor any
group of persons including Executive in any way, either directly or indirectly,
manages or exercises control of any such corporation, guarantees any of its
financial obligations, otherwise takes any part in its business, other than
exercising his rights as a shareholder, or seeks to do any of the foregoing.

(c) Executive acknowledges that the restrictions contained in paragraph (a) are
reasonable and necessary to protect the legitimate interests of the Company and
its subsidiaries and affiliates, and that any violation of those provisions will
result in irreparable injury to the Company. Executive represents that his
experience and capabilities are such that the restrictions contained in
paragraph (a) will not prevent Executive from obtaining employment or otherwise
earning a living at the same general level of economic benefit as is the case as
of the date hereof. Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages,

 

- 4 -

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

which right shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled. In the event that any of the provisions of
paragraph (a) should ever be adjudicated to exceed the time, geographic,
service, or other limitations permitted by applicable law in any jurisdiction,
then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic, service, or other limitations permitted by applicable
law.

11. Other Agreements. Executive represents and warrants to Company that:

(a) Executive has informed the Company in writing of any restrictions,
agreements or understandings whatsoever to which Executive is a party or by
which he is bound that could prevent or make unlawful Executive’s execution of
this Agreement or Executive’s employment hereunder, or which could be
inconsistent or in conflict with this Agreement or Executive’s employment
hereunder, or could prevent, limit or impair in any way the performance by
Executive of his obligations hereunder.

(b) Executive shall disclose the existence and terms of the restrictive
covenants set forth in Section 10 to any employer by whom Executive may be
employed during the Term (which employment is not hereby authorized) or any
period during which his activities are restricted by virtue of the covenants
described in Section 10 hereof.

12. Survival of Provisions. The provisions of this Agreement shall survive the
termination of Executive’s employment hereunder and the payment of all amounts
payable and delivery of all post-termination compensation and benefits pursuant
to this Agreement incident to any such termination of employment.

13. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon Company and its successors or permitted assigns and Executive and
his executors, administrators or heirs. The Company shall require any successor
or successors expressly to assume the obligations of Company under this
Agreement. For purposes of this Agreement, the term “successor” shall include
the ultimate parent corporation of any corporation involved in a merger,
consolidation, or reorganization with or including the Company that results in
the stockholders of Company immediately before such merger, consolidation or
reorganization owning, directly or indirectly, immediately following such
merger, consolidation or reorganization, securities of another corporation.
Executive may not assign any obligations or responsibilities under this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of Company.

14. Notices. All notices required to be given to any of the parties of this
Agreement shall be in writing and shall be deemed to have been sufficiently
given, subject to the further provisions of this Section 14, for all purposes
when presented personally to such party, or sent by facsimile transmission, any
national overnight delivery service, or certified or registered mail, to such
party at its address set forth below:

(a) If to Executive:

Christopher Franklin

(b) If to the Company:

Aqua America, Inc.

762 W. Lancaster Avenue

Bryn Mawr, PA 19010-3489

Attn: Chairman, Executive Compensation Committee

 

- 5 -

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

Such notice shall be deemed to be received when delivered if delivered
personally, upon electronic or other confirmation of receipt if delivered by
facsimile transmission, the next business day after the date sent if sent by a
national overnight delivery service, or three (3) business days after the date
mailed if mailed by certified or registered mail. Any notice of any change in
such address shall also be given in the manner set forth above. Whenever the
giving of notice is required, the giving of such notice may be waived in writing
by the party entitled to receive such notice.

15. Entire Agreement; Amendments. This Agreement and any other documents,
instruments or other writings delivered or to be delivered in connection with
this Agreement as specified herein constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and supersede all
prior and contemporaneous agreements, understandings, and negotiations, whether
written or oral, with respect to the terms of Executive’s employment by Company
(except for the Change in Control and Severance Agreement). This Agreement may
be amended or modified only by a written instrument signed by all parties
hereto.

16. Waiver. The waiver of the breach of any term or provision of this Agreement
shall not operate as or be construed to be a waiver of any other or subsequent
breach of this Agreement.

17. Governing Law. This Agreement shall be governed and construed as to its
validity, interpretation and effect by the laws of the Commonwealth of
Pennsylvania.

18. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

19. Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its
interpretation.

20. Counterparts. This Agreement may be executed in any number of counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute one and the same instrument.

21. Indemnification. During the Term and thereafter, the Company agrees to
indemnify and hold Executive harmless in connection with actual, potential or
threatened actions or investigations related to Executive’s services for or
employment by the Company and/or its subsidiaries in the same manner as other
officers and directors to the extent provided in the Company’s by-laws.

22. Taxes. Any payment required under this Agreement shall be subject to all
requirements of the law with regard to the withholding of taxes, filing, making
of reports and the like, and Company shall use its best efforts to satisfy
promptly all such requirements.

23. Section 409A of the Internal Revenue Code. This Agreement shall be
interpreted and administered in accordance with section 409A of the Internal
Revenue Code (“Section 409A”), to the extent applicable. Any payments to be made
under this Agreement in connection with a termination of employment shall only
be made if such termination of employment constitutes a “separation from
service” under Section 409A. Notwithstanding any provision of this Agreement to
the contrary, if

 

- 6 -

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

Executive is a “specified employee” within the meaning of Section 409A, any
payments or arrangements due upon a termination of Executive’s employment under
any arrangement that constitutes a “nonqualified deferral of compensation”
within the meaning of Section 409A and which do not otherwise qualify under the
exemptions under Treas. Regs. Section 1.409A-1 (including without limitation,
the short-term deferral exemption or the permitted payments under Treas. Regs.
Section 1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided, without
interest, on the earlier of (i) the date which is six months after Executive’s
“separation from service” (as such term is defined in Section 409A and the
regulations and other published guidance thereunder) for any reason other than
death, and (ii) the date of Executive’s death. All reimbursements and in-kind
benefits provided under this Agreement shall be made or provided in accordance
with the requirements of section 409A.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the
day and year first written above.

 

Attest: AQUA AMERICA, INC.

/s/ Christopher P. Luning

By:

/s/ Nicholas DeBenedictis

By:

/s/ Christopher H. Franklin

CHRISTOPHER FRANKLIN

 

- 7 -

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

Appendix A

Business and Charitable Activities

Business

 

  •   ITC Holdings, Inc.

Charitable/Civic

 

  •   Trustee, University of Pennsylvania Board of Trustees, Philadelphia, PA

 

  •   Trustee, West Chester University’s Council of Trustees, West Chester, PA

 

  •   Director, Magee Rehabilitation Hospital, Philadelphia, PA

 

  •   Director, The Walnut Street Theatre, Philadelphia, PA

 

- 8 -