Exhibit 10.1


 


RENEWED
EMPLOYMENT AGREEMENT


 


THIS
RENEWED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between CHRISTOPHER FRANKLIN (“Executive”),
and ESSENTIAL UTILITIES, INC., a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (the “Company”)
as of this 1st day of July, 2021.


WHEREAS,
Executive and the Company were parties to an Employment Agreement dated July 1, 2015 with a term expiring on July 1, 2018 (the
“2015 Agreement”);


WHEREAS,
Executive and the Company were parties to an extension of the 2015 Agreement dated July 1, 2018 with a term expiring on July 1,
2021 (the “2018 Agreement”) (the 2015 Agreement and the 2018 Agreement are collectively referred to as the “Prior
Employment Agreements”); and


WHEREAS,
the Board of Directors of Company (“Board of Directors”) wishes to renew the Prior Employment Agreements and
have the Company continue to employ 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 continue to serve as
President and CEO from July 1, 2021 (the “Commencement Date”) through July 1, 2024 (the “Term”),
and the Company hereby employs Executive as President and CEO pursuant to the terms of this Agreement. Executive and Company agree
that this Agreement replaces the Prior Employment Agreements and governs the terms of Executive’s employment with the Company.
By executing this Agreement, the Company confirms that the Board of Directors has approved this Agreement. This Agreement shall
terminate at the end of the Term, unless terminated earlier as provided in this Agreement.


2.            Duties. During the Term, Executive will have the titles 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,
Bylaws, and Corporate Governance Guidelines. Executive is currently serving as Chairman of the Board of Directors for no additional
compensation, having such duties as set forth in the Bylaws and Corporate Governance Guidelines.



    	 



    	 



    




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, 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. 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 base salary (the “Base
Salary”) 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 one hundred percent (100%) of Executive’s Base Salary (“Bonus”).


6.            Annual Equity Incentives. 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 Omnibus Equity Compensation Plan (the “Omnibus Plan”), consistent with existing compensation
practices (“LTI”); provided, however, that the target annual equity grant shall not be less than
two hundred fifty percent (250%) of Executive’s Base Salary.


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.



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8.            Termination of Employment.


(a)               
If the Company does not renew Executive’s employment upon expiration of the
Term or terminates Executive’s employment and this Agreement for Cause, or if Executive terminates Executive’s employment
without Good Reason, without CIC Good Reason or Executive’s employment is terminated due to his death or Disability, Executive
shall receive (or his estate in the event of his death) any accrued but unpaid Base Salary and accrued vacation under this Agreement.
Such payment shall be made in a lump sum and paid for the payroll period in which the termination date arises.


(b)              
If the Company terminates Executive’s employment and this Agreement without
Cause or if Executive terminates Executive’s employment for Good Reason, Executive shall receive any accrued but unpaid
Base Salary pursuant to the Company’s payroll practice, unpaid Bonus, unpaid LTI, and accrued but unused vacation under
this Agreement in a lump sum payment within thirty (30) days of the effective date of the release referenced in clause (e) of
this Section 8, Executive will also receive payment equal to (i) twenty four (24) months of his current Base Salary; (ii) an amount
equal to twenty (24) months of the COBRA rate in effect at the Executive’s termination of employment; and, (iii) two
(2) times the target annual bonus for the year in which the date of termination arises (“Severance Benefits”).
Such severance payments shall be made consistent with the Company’s payroll practice during the period which starts on the
effective date of the release described in clause (e) of this Section 8 and continuing for the period for which the restrictive
covenants continue under Section 10 of this Agreement, and the remainder in a lump sum, such lump sum payment to be paid on the
thirtieth day following the date the restrictive covenants period ends.


(c)               
If during a Change in Control Period, the Company terminates Executive’s employment
and this Agreement without Cause or if Executive terminates Executive’s employment for CIC Good Reason, Executive shall
receive any accrued but unpaid Base Salary pursuant to the Company’s payroll practice, unpaid Bonus, unpaid LTI, and accrued
but unused vacation under this Agreement in a lump sum payment within thirteen (13) days of the effective date of the release
referenced in clause (e) of this Section 8, as well as a lump sum payment equal to (i) thirty-six (36) months of his current Base
Salary; (ii) three (3) times the target annual Bonus for the year in which the date of termination arises; (iii) an amount equal
to thirty-six (36) months of the COBRA rate in effect at the Executive’s termination of employment, and (iv) fully-paid
executive level reasonable outplacement services from the provider of Executive’s choice for thirty-six (36) months following
the termination date (“CIC Severance Benefits”). Any lump sum payment under this Section 8(c) shall be paid
on or before the thirteenth (13th) day following the date of termination; provided, that the release contemplated by
Section 8(e) is effective.


(d)              
For the avoidance of doubt, if Executive receives CIC Severance Benefits under clause
(c) of this Section 8, he shall not be entitled to receive Severance Benefits under clause (b) of this Section 8. The Company
does not intend for Executive to be eligible for any duplicate payments upon termination of employment.



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(e)               
For the avoidance of doubt, the payment of Severance Benefits or CIC Severance Benefits
under this Agreement shall be conditioned upon Executive executing a general release of all claims in a form provided by the Company
containing customary terms and conditions, and not revoking such release during the seven (7) day period following Executive’s
execution.


(f)               
The Company sponsors an irrevocable trust fund pursuant to a trust agreement to hold
assets to satisfy its obligations to, among others, Executive under this Agreement. Funding of such trust fund shall be subject
to the discretion of the officer designated by the Company, as set forth in the agreement pursuant to which the fund has been
established.


9.            Defined Terms. For purposes of this Agreement:


(a)               
“Affiliate” and “Associate” have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.


(b)              
“Beneficial Owner” A Person shall be deemed a “Beneficial
Owner” of any securities: (i) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of securities
tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for payment, purchase or exchange; (ii) that such Person or any of such Person’s Affiliates
or Associates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including without limitation pursuant to
any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the
“Beneficial Owner” of any security under this clause (ii) as a result of an oral or written agreement, arrangement
or understanding to vote such security if such agreement, arrangement or understanding (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act, and (B) is not then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report); or (iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or Associates)
has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to clause (ii) above) or disposing of any voting securities of the Company;
provided, however, that nothing in this definition shall cause a Person engaged in business as an underwriter of securities to
be the “Beneficial Owner” of any securities acquired through such Person’s participation in good faith in a
firm commitment underwriting until the expiration of forty days after the date of such acquisition.


(c)               
“Cause” shall mean that the Board reasonably determines that Executive
engaged in: (i) fraud, misappropriation, embezzlement or willful misconduct by Executive; (ii) willful failure by Executive to
perform any of his duties after a written notification by the Board which identifies such failure and permits thirty (30) days
to rectify such failure; (iii) Executive being convicted of a felony, or any crime or offense involving the Company; (iv) pleading
guilty or nolo contendere or being convicted of any other criminal act, not including traffic offenses; (iv) failure to follow
the lawful directions of the Board which, if curable in the judgement of the Board, is not cured within thirty (30) days after
Executive’s receipt of written notice of his failure to follow such lawful directions; (v) a material breach of this Agreement;
which is not cured within ten (10) days after Executive’s receipt of written notice of such material breach; or (vi) a determination
by the Board that Executive has violated a written policy of the Company against unlawful discrimination or harassment. No act,
or failure to act, on the Executive’s part shall be deemed “willful” unless committed or omitted by the Executive
in bad faith and without reasonable belief that the Executive’s act or failure to act was in, or not opposed to, the best
interest of the Company.



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(d)              
“Change in Control” shall be deemed to have occurred if: (i) any
Person, together with all Affiliates and Associates of such Person, shall become the Beneficial Owner in the aggregate of 20%
or more of the Company Stock then outstanding; (ii) during any twenty-four (24) month period, individuals who at the beginning
of such period constitute the Board cease for any reason to constitute a majority thereof, unless the election, or the nomination
for election by the Company’s shareholders, of at least seventy-five percent of the directors who were not directors at
the beginning of such period was approved by a vote of at least seventy-five percent of the directors in office at the time of
such election or nomination who were directors at the beginning of such period; or (iii) there occurs a sale of 50% or more of
the aggregate assets or earning power of the Company and its subsidiaries, or its liquidation is approved by a majority of its
shareholders or the Company is merged into or is merged with an unrelated entity such that following the merger, the shareholders
of the Company no longer own more than 50% of the resultant entity. Notwithstanding anything in this definition to the contrary,
a Change in Control shall not be deemed to have taken place under clause (i) above if (A) such Person becomes the Beneficial Owner
in the aggregate of 20% or more of the Company Stock then outstanding as a result, in the determination of a majority of those
members of the Board of Directors in office prior to the acquisition, of an inadvertent acquisition by such Person if such Person,
as soon as practicable, divests itself of a sufficient amount of its Company Stock so that it no longer owns 20% or more of the
Company Stock then outstanding, or (B) such Person becomes the Beneficial Owner in the aggregate of 20% or more of the Company
Stock outstanding as a result of an acquisition of Company Stock by the Company which, by reducing the number of shares of Company
Stock outstanding, increases the proportionate number of shares of Company Stock beneficially owned by such Person to 20% or more
of the shares of Company Stock then outstanding; provided, however that if a Person shall become the Beneficial Owner of 20% or
more of the shares of Company Stock then outstanding by reason of Company Stock purchased by the Company and shall, after such
share purchases by the Company become the Beneficial Owner of any additional shares of Company Stock, then the exemption set forth
in this clause shall be inapplicable.


(e)               
“Change in Control Period” means the time period that begins six
(6) months immediately prior to, and continues until the elapse of twenty-four (24) months immediately following a Change in Control
of the Company.


(f)               
“CIC Good Reason” for termination by the Executive of the Executive’s
employment means the occurrence (without the Executive’s express written consent) during any Change in Control Period, of
any one of the following acts by the Company, or failures by the Company to act, unless such act or failure to act is corrected
prior to the date of termination specified in the notice of termination given in respect thereof:



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(i)                
a significant adverse change or diminution in the Executive’s authority, duties, responsibilities
or reporting requirements as in effect immediately prior to the Change in Control Period or the assignment to the Executive of
any duties or responsibilities which are inconsistent with such role or position(s) (including status, offices, titles, public
company status and reporting requirements), or any removal of the Executive from, or any failure to reappoint or reelect the Executive
to, such position(s), excluding for this purpose an isolated, insubstantial, inadvertent and immaterial action not taken in bad
faith and that is remedied promptly after receipt of notice thereof given by the Executive;


(ii)              
a reduction of more than ten percent (10%) in the Executive’s total annual target
compensation (as compared to the Executive’s total annual target compensation immediately prior to the Change in Control), other
than pursuant to an across-the-board reduction in total annual target compensation which applies to all similarly situated executives
of the Company and any acquirer (and defining total annual target compensation for purposes of this definition as base salary
and target annual cash incentive compensation (and not including equity or equity-based compensation));


(iii)            
the failure to continue to provide the Executive with employee benefits substantially
similar to those enjoyed by the Executive under any pension, life insurance, medical, health, accident and disability plans, or
any retirement plan for which the Executive is eligible immediately prior to the time of the Change in Control Period; or


(iv)            
the Company requiring the Executive to be based at an office that is greater than
50 miles from where the Executive’s office is located immediately prior to the Change in Control Period except for required travel
on the Company’s business to an extent substantially consistent with the business travel obligations which the Executive
undertook on behalf of the Company prior to the Change in Control Period; provided, however, that the Executive’s termination
of employment shall not be deemed to be for CIC Good Reason unless (A) the Executive has delivered to the Company written notice
describing the occurrence of one or more CIC Good Reason events within sixty (60) days of such occurrence, (B) the Company fails
to cure such CIC Good Reason event or events within thirty (30) days after its receipt of such written notice and (C) the Executive
delivers to the Company a notice of termination of employment for CIC Good Reason within thirty (30) days after the expiration
of the 30-day cure period.


(g)              
“Disability” means 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
after reasonable accommodation.



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(h)              
“Good Reason” means a termination of employment initiated by Executive
upon one or more of the following occurrences after the Commencement Date: (i) a significant adverse change or diminution in Executive’s
authority, title, duties, responsibilities or reporting lines, or the assignment to the Executive of any duties or responsibilities
which are inconsistent with such role or position(s) (including status, offices, titles, public company status and reporting requirements),
or any removal of the Executive from, or any failure to reappoint or reelect the Executive to, such position(s), excluding for
this purpose an isolated, insubstantial, inadvertent and immaterial action not taken in bad faith and that is remedied promptly
after receipt of notice thereof given by the Executive; (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 reduction of more than ten
percent (10%) in Base Salary or the target annual bonus; or (iv) the failure to continue to provide the Executive with employee
benefits substantially similar to those enjoyed by the Executive under any pension, life insurance, medical, health, accident
and disability plans, or any retirement plan for which the Executive is eligible as of the Commencement Date 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 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.


(i)                
“Person” means any individual, firm, corporation, partnership or
other entity except the Company, any subsidiary of the Company, any employee benefit plan of the Company or of any subsidiary,
or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such employee benefit
plan.


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, entice, broker 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.



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(b)              
Executive agrees that on and after the Commencement Date and 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, which consent will not be unreasonably withheld, 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 Competing Business located in the Geographic Area. For purposes of this
Agreement, a “Competing Business” is any business or enterprise actively engaged (i) in a business from which
the consolidated Company (the Company and its subsidiaries), taken as a whole, derived at least ten percent of its annual gross
revenues for the twelve (12) months immediately preceding the date of termination, or (ii) in any strategic initiative of the
Company commenced in the twelve (12) months immediately preceding the date of termination, or actively being considered by the
Company on the date of termination, and “Geographic Area” means the states in which the Company and its subsidiaries
are operating as of 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) and (b) 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 paragraphs (a) and (b) 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, 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) or (b) 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. Executive further agrees that he shall reimburse
Company for its expenses incurred in enforcing this Agreement, if Company prevails in any suit under this Agreement or if he is
found to have breached or threatened to breach any term of this Agreement, including without limitation, Company’s attorneys’
fees and costs. Executive agrees that in the event that the Company finds it necessary to enforce this Agreement in a court of
law or equity, the twelve (12) month restriction referred to in clauses (a) and (b)above shall begin from the date of entry of
the final order of the court.



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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. If
a successor or assign of the Company refused to accept this Agreement, Executive shall be entitled to receive CIC Severance Benefits
from the 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 byany national overnight delivery service, or certified
or registered mail, to such party at its address set forth below:


(a) If to Executive:


 


Christopher Franklin


8 Greenbriar Lane


Paoli, Pennsylvania 19301





 


(b) If to the Company:


 


Essential Utilities, Inc.


762 W. Lancaster Avenue


Bryn Mawr, PA 19010-3489


Attn: Lead Independent
Director c/o Corporate Secretary



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Such
notice shall be deemed to be received when delivered if delivered personally, upon electronic or other confirmation of receipt
if delivered by electronic mail or 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 (including the Prior Employment Agreements and any restrictive covenants against competition contained in the Non-Competition
provision of Executive’s Restricted Share Agreements). 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, including in .pdf format, 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 Bylaws.



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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.           Coordination with Release and Delay Required by the Internal Revenue Code.


(a)               
Notwithstanding anything to the contrary in this Agreement, if the Executive is a
“disqualified individual” (as defined in Internal Revenue Code Section 280G(c)), and the payments and benefits provided
for in this Agreement or any other payments and benefits which the Executive has the right to receive from the Company (collectively,
the “Payments”), would constitute a “parachute payment” (as defined in Internal Revenue Code Section 280G(b)(2)),
then the Payments shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits
received by the Executive from the Company will be one dollar ($1.00) less than three (3) times Executive’s “base
amount” (as defined in Internal Revenue Code Section 280G(b)(3)) and so that no portion of such amounts and benefits received
by the Executive shall be subject to the excise tax imposed by Internal Revenue Code Section 4999 or (b) paid in full, after taking
into account the applicable federal, state and local income taxes and the excise tax imposed by Internal Revenue Code Section
4999, whichever produces the better net-after-tax position to the Executive. The reduction of Payments, as applicable, shall be
made by (a) first, reducing any severance payments due pursuant to Section 4 paid in cash, with later payments being reduced first;
(b) next, the waiver of accelerated vesting of equity awards, with awards having a later vesting date being reduced first; and
(d) lastly, reducing all other Payments, with later payments being reduced first, in each case, in accordance with Internal Revenue
Code Section 409A. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder
is necessary shall be made by the Board of Directors in good faith. If a reduced Payment is made or provided and through error
or otherwise that Payment, when aggregated with other Payments from the Company used in determining if a parachute payment exists,
exceeds one dollar ($1.00) less than three (3) times the Executive’s base amount, then the Executive shall immediately repay
such excess to the Company upon notification that an overpayment has been made. In the event any reduction under this Agreement
is disputed by the Executive, then determinations required to be made under this Section 19, including the assumptions to be utilized
in arriving at such determination, shall be made by an outside nationally recognized accounting or consulting firm mutually selected
by the Executive and the Company or the Board of Directors, in their reasonable discretion (the “Accounting Firm”),
which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt
of notice from the Executive that there has been a payment hereunder, or such earlier time as is requested by the Company or the
Board of Directors, as applicable. In no event shall the Accounting Firm be an accounting firm that was, or is, serving as accountant
or auditor for the individual, entity or group affecting the change of ownership or effective control of the Company. Nothing
in this Section 19 shall require the Company to be responsible for, or have any liability or obligation with respect to, the Executive’s
excise tax liabilities under Internal Revenue Code Section 4999.



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(b)              
To the maximum extent possible, all amounts payable hereunder are intended to be exempt
from the requirements of Section 409A of the Internal Revenue Code (“Code Section 409A”) and this Agreement
shall be construed and administered in accordance with such intention. To the extent any continuing benefit (or reimbursement
thereof) to be provided is not “deferred compensation” for purposes of Code Section 409A, then such benefit shall
commence or be made immediately after the date the release of claims required under Section 8(e) of this Agreement becomes effective.
To the extent any continuing benefit (or reimbursement thereof) to be provided is “deferred compensation” for purposes
of Code Section 409A, then such benefits shall be reimbursed or commence upon the earliest later date as may be required in order
to comply with the requirements of Code Section 409A. The delayed benefits shall in any event expire at the time such benefits
would have expired had the benefits commenced immediately upon Executive’s termination of employment.


(c)               
Notwithstanding any other payment schedule provided herein to the contrary, if the
Executive is deemed on the date of termination to be a Specified Employee, then, once the release required by Section 8(e) is
executed and delivered and no longer subject to revocation, any payment that is considered deferred compensation under Code Section
409A payable on account of a “separation from service” shall be made on the date which is the earlier of (A) the expiration
of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) the date
of Executive’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration
of the Delay Period, all payments delayed pursuant to this Section 23 (whether they would have otherwise been payable in a single
sum or in installments in the absence of such delay) shall be paid to Executive in a lump sum, and any remaining payments due
under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.


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


	 	 	 	 	 
	Attest:	 	ESSENTIAL UTILITIES, INC.
	 	 	 
	By: 	                                          	 	By: 	   /s/
    Daniel J. Hilferty
	 	 	Name:  Daniel J. Hilferty
	 	 	Title:    Lead
    Independent Director
	 	 	 
	 	 	
	Attest:	 	CHRISTOPHER FRANKLIN
	 	 	 
	By:	 	 	 /s/
    Christopher Franklin
	 	 	 	 







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Appendix
A


Business
and Charitable Activities


 


Charitable/Civic


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



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



		·	Director,
                                         Franklin Institute, Philadelphia, PA