EX-10.1






EMPLOYMENT AGREEMENT




THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between NICHOLAS
DEBENEDICTIS, a resident of the Commonwealth of Pennsylvania (“Executive”), and AQUA AMERICA, INC.,
a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (“Company”)
as of this 31st day of January, 2010 (the “Commencement Date”).



WHEREAS, the Board of Directors of Company (“Board of Directors”) wishes to have the Company
continue to retain Executive to serve as President and Chief Executive Officer of 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 continue his service as President
and Chief Executive Officer of Company from the Commencement Date hereof through January 31, 2013
(the “Initial Term”), and Company hereby agrees to retain Executive as President and Chief
Executive Officer 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-year or partial year periods
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 Chief
Executive Officer of Company. Executive shall report exclusively to and receive instructions from
Company’s 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. Without
limitation, 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), 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 Chief Executive Officer. In furtherance of the foregoing, and not by way of limitation, for so
long as Executive remains President and Chief Executive Officer of Company, 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 five
hundred sixty thousand dollars ($560,000) (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
of the Board of Directors, 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 of the Board
of Directors in consultation with Executive. Executive’s target annual bonus shall be at least
70% of his Base Salary.



6. Annual Equity Incentives. Executive shall be granted annual, equity-based long
term incentive compensation at the discretion of the Executive Compensation Committee of the Board
of Directors under the Company’s 2009 Omnibus Equity Compensation Plan (the “Omnibus Plan”),
consistent with existing compensation practices.



7. Other Benefits. Nothing in this Agreement shall affect Executive’s participation
in Company benefit plans in which he is participating as of the Commencement Date, and the level of
those benefits shall continue to be at least as favorable as those provided to senior management
generally.



8. 2010 Performance-Based Stock Award; Termination of Employment



(a) In addition to the foregoing, as an inducement for Executive to continue in employment
with the Company and devote significant effort to increase shareholder value, Executive shall be
granted fifty seven thousand (57,000) shares of common stock of the Company in the form of a
performance-based stock award (the “Stock Award”) under the Omnibus Plan, effective as of the
Commencement Date. The shares shall be earned based on achievement of Company performance goals
based on increases in operating income for 2010, 2011 or 2012 (the “Performance Goals”). The
Executive Compensation Committee of the Board of Directors shall certify attainment of the
Performance Goals within 60 days after the end of the calendar year for which the Performance Goals
are met (the “Certification Date”). If the Performance Goals are met for 2010, one-third
(1/3rd) of the shares shall become vested on the 2011 Certification Date, and one-third
(1/3rd) of the shares shall become vested on each of January 31, 2012 and January 31,
2013, respectively, subject to continued employment through the applicable vesting date. If the
Performance Goals are not met for 2010 but are met for 2011, one-half (1/2) of the shares shall
become vested on the 2012 Certification Date and one-half (1/2) of the shares shall become vested
on January 31, 2013, subject to continued employment through the applicable vesting date. If the
Performance Goals are not met for 2010 and 2011 but are met for 2012, all of the shares shall
become vested on the 2013 Certification Date, subject to continued employment through January 31,
2013.



(b) If the Company terminates Executive’s employment without Cause or Executive terminates
employment for Good Reason, any unvested shares of the Stock Award shall become fully vested if the
Performance Goals are met for any of the calendar years 2010, 2011 or 2012. 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.



(c) If the Company or Executive terminates Executive’s employment and this Agreement for any
reason (including without limitation death or Disability), Executive (or his estate in the event of
his death) shall receive any accrued but unpaid salary and accrued vacation under this Agreement,
any applicable vesting of the Stock Award under this Section 8, any benefits that may be payable
under the Change in Control and Severance Agreement as amended and restated as of December 31, 2008
between Executive and the Company (the “Change in Control and Severance Agreement”) and any vested
benefits under Company benefit plans.



9. Defined Terms. For purposes of this Agreement:



(a) The term “Cause” shall mean Executive’s willful failure to perform or observe any of his
employment duties or to comply with the lawful directives of the Board after notice and reasonable
opportunity to cure said failure; dishonesty; or conviction of a crime involving moral turpitude.



(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) any failure of the Company or its successor to comply with and satisfy any of the
terms of this Agreement;




(ii) any significant involuntary reduction of the authority, duties, responsibilities
or reporting relationships held by Executive;




(iii) any involuntary removal of Executive from the employment grade, compensation
level or officer positions which Executive holds with the Company, except in connection with
promotions to higher office;




(iv) any involuntary reduction in Executive’s target level of annual and long-term
compensation;




(v) any transfer of Executive, without his express consent, to a location that is
outside the Bryn Mawr, Pennsylvania area by more than 50 miles, other than on a temporary
basis (less than six months); or




(vi) Executive being required to undertake business travel to an extent substantially
greater than Executive’s then existing business travel obligations.



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



10. Agreement Not to Compete.



(a) Executive agrees that on and after the Commencement Date, for a period of 12 months after
termination of his employment under this Agreement, the 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 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 the Executive that the business of the Company and its subsidiaries and the
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 the
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 the Executive nor any group of persons including the 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.



(b) The 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. The Executive represents that his experience and capabilities are such that the
restrictions contained in paragraph (a) will not prevent the 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. The Executive agrees that the Company shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual damages, 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:




Nicholas DeBenedictis


231 Golf View Road


Ardmore, PA 19003



(b) If to Company:




Aqua America, Inc.


762 W. Lancaster Avenue


Bryn Mawr, PA 19010-3489


Attn: Chairman, Executive Compensation Committee



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 the 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, to the extent
applicable. All reimbursements and in-kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of section 409A.



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



	 	 	 	 	 
	Attest:

/s/ Maria Gordiany
	 	AQUA AMERICA, INC.

By: /s/ Roy H. Stahl

	 	          



	 
	 	 

 

 

 

By: /s/ Nicholas DeBenedictis

NICHOLAS DEBENEDICTIS

	 	          

















 



 



 



 



 



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Appendix A



Business and Charitable Activities




Business




	 	1.	 	Board of Directors of Exelon Corporation






	 	2.	 	Board of Directors of P.H. Glatfelter Company






	 	3.	 	Board of Directors of Harleysville Mutual Insurance Company






	 	4.	 	Board of Directors of Independence Blue Cross






	 	5.	 	Advisory Board – PNC Bank of Southeast Pennsylvania






	 	6.	 	Board of Advisors – Pennoni Associates





Charitable/Civic




	 	1.	 	Board of Trustees of Drexel University






	 	2.	 	The Philadelphia Convention and Visitors Bureau






	 	3.	 	The Greater Philadelphia Chamber of Commerce






	 	4.	 	The Greater Philadelphia Tourism and Marketing Board






	 	5.	 	Pennsylvania Business Roundtable






	 	6.	 	National Association of Water Companies






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