Document:

Filed by Bowne Pure Compliance

Exhibit 10.24

AQUA AMERICA, INC.

and SUBSIDIARIES

2009 ANNUAL CASH INCENTIVE COMPENSATION PLAN

BACKGROUND

	•	 	In 1989, the Company and its compensation consultant conducted a
feasibility study to determine whether the Company should implement an
incentive compensation plan. The study was prompted by the positive
experience of other investor-owned water companies with incentive
compensation.
	 
	•	 	The study included interviews with executives and an analysis of
competitive compensation levels. Based on the results, the
compensation consultant recommended that the Company’s objectives and
competitive practice supported the adoption of an annual incentive
plan (the “Plan”). The Company has had a cash incentive compensation
plan in place since 1990 and management and the Board of Directors
believe it has had a positive effect on the Company’s operations,
aiding employees, shareholders (higher earnings) and customers (better
service and controlling expenses).
	 
	•	 	The Plan has two components — a Management Incentive Program and an
Employee Recognition (“Chairman’s Award”) Program.
	 
	•	 	The Plan is designed to provide an appropriate incentive to the
officers, managers and certain other key employees of the Company.
The Management Incentive Program covers officers, managers and certain
key employees of Aqua America, Inc., and its subsidiaries.
	 
	•	 	All incentive awards under the Plan shall be paid by March 15 of the
calendar year following the calendar year in which such awards are
earned.

MANAGEMENT INCENTIVE PROGRAM

	•	 	Performance Measures

	 	•	 	Annual incentive bonus awards are calculated by multiplying an individual’s
Target Bonus by a Company Factor based on the applicable company’s performance and an
Individual Factor based on the individual employee’s performance.

 

 

 

The approach of having a portion of the calculation of the annual incentive bonus
tied to the applicable company’s financial performance is appropriate as the participants’ assume some of the same risks and rewards as the shareholders who are
investing in the company and making its capital construction and acquisition
programs possible. Customers also benefit from the participants’ individual
objectives being met, as improvements in performance are accomplished by controlling
costs, improving efficiencies and enhancing customer service. For these reasons,
future rate relief should be lessened and less frequent, which directly benefits all
customers.

	 	•	 	The after-tax net income from continuing operations or earnings before
interest, taxes and depreciation (“EBITD”) for the applicable company or business unit
relative to its annual budget will be the primary measure for the company’s
performance. The measurement to be used as the Company Factor (financial factor,
thresholds and weighting by applicable business unit) for each participant will be
established by the Executive Compensation Committee for those participants whose annual
incentive compensation is determined by the Committee and by the Chairman of the
Company for all other participants. Each year a “Target Net Income” or “Target EBITD”
level will be established for the applicable company or business unit. Portions of the
Company Factor may be tied to the financial targets of more than one company or
business unit for some participants whose responsibilities involve more than one
company or business unit. For purposes of the Plan, the Target Net Income or EBITD may
differ from the budgeted net income or EBITD level. The applicable company’s or
business unit’s final net income or EBITD may exclude the impact of any unbudgeted
extraordinary gains or losses as a result of changes in accounting principles and the
financial results may be adjusted for other factors as deemed appropriate by the
Executive Compensation Committee for those participants whose annual incentive
compensation is determined by the Committee, and by the Chairman of the Company for the
other participants.
	 
	 	•	 	The threshold level of performance is set at 75 percent of the Target Net
Income or Target EBITD. If the final net income or EBITD for the applicable company or
business unit for the year is less than 75 percent of the Target Net Income or Target
EBITD, the Company Factor for that company or business unit will be set at 0%. No
additional bonus will be earned for results exceeding 110 percent of the Target Net
Income or EBITD.
	 
	 	•	 	Each individual’s performance and achievement of his or her objectives will
also be evaluated and factored into the bonus calculation (the “Individual Factor”).
Performance objectives for each participant are established each year and are primarily
directed toward customer growth, improving customer service, controlling costs and
improving efficiencies and productivity. Each objective has specific performance
measures that are used to determine the level of achievement for each objective. A
participant’s target Individual Factor should be no more than 90 points, with the
possibility of additional points up to 110 points being awarded for measurable
performance above the participant’s targeted performance level. Participants must achieve at least 70 points for their
Individual Factor to be eligible for a bonus award under the Plan.

 

 

 

	•	 	Participation

	 	•	 	Eligible participants consist of officers, managers and certain key employees.
	 
	 	•	 	Participation in the Management Incentive Program will be determined each year.
Each participant will be assigned a “Target Bonus Percentage” ranging from 5 to 70
percent depending on duties and responsibilities. The Executive Compensation Committee
will approve the Target Bonus Percentage for the CEO and the senior officers designated
by the Committee each year.
	 
	 	•	 	The Target Bonus Percentage for each participant will be applied to their base
salary.
	 
	 	•	 	Actual bonuses may range from 0, if the company’s financial results fall below
the minimum threshold or the participant does not make sufficient progress toward
achieving his or her objectives (i.e. performance measure points totaling less than 70
points), to 187.5 percent if performance — both Company and individual — is rated at
the maximum.
	 
	 	•	 	New employees who are hired into a position that is eligible to participate in
the Management Incentive Plan, will normally be eligible to receive a portion of the
bonus calculated in accordance with this Plan that is pro-rated based on the number of
full calendar months between the new employee’s hire date and the end of the calendar
year.
	 
	 	•	 	Employees who would otherwise be eligible to participate in this Management
Incentive Plan, but who leave employment with the company, either voluntarily (other
than for retirement), or involuntarily, prior to the end of the Company’s fiscal year
will not receive a bonus for the year in which their employment terminates.
	 
	 	•	 	If an employee who would otherwise be eligible to participate in this
Management Incentive Plan dies, the company will pay the deceased employee’s estate a
portion of the bonus the deceased employee would otherwise have been entitled to
assuming a 100% Company Factor and 100% Individual Factor, but pro-rated for the number
of full calendar months the employee completed before his or her death.

 

 

 

	 	•	 	If an employee who would otherwise be eligible to participate in this
Management Incentive Plan retires from the Company within the first ten (10) months of
the Company’s fiscal year, the employee will receive payment of the bonus calculated
under the terms of this Plan that the employee would otherwise have been entitled to assuming a 100% Company Factor and 100% Individual Factor, but
pro-rated for the number of full calendar months the employee completed before his
or her retirement. If an employee who would otherwise be eligible to participate in
this Management Incentive Plan retires from the Company after completion of the
first ten (10) months of the Company’s fiscal year, the employee will receive
payment of the bonus calculated under the terms of this Plan, but pro-rated for the
number of full calendar months the employee completed before his or her retirement.

Compliance

	 	•	 	The Management Incentive Program is intended to comply with the short-term
deferral rule set forth in the regulations under section 409A of the Code, in order to
avoid application of section 409A to the Management Incentive Program. If and to the
extent that any payment under this Management Incentive Program is deemed to be
deferred compensation subject to the requirements of section 409A, this Management
Incentive Program shall be administered so that such payments are made in accordance
with the requirements of section 409A.

	•	 	Company Factor

	 	•	 	Company performance will be measured on the following schedule:

	 	 	 	 	 	 	 	 	 
	 	 	Percent of	 	 	Company	 
	 	 	Target	 	 	Factor	 
	Threshold
	 	 	<75	%	 	 	0	%
	 
	 	 	75	 	 	 	35	 
	 
	 	 	80	 	 	 	40	 
	 
	 	 	85	 	 	 	45	 
	 
	 	 	89.9	 	 	 	50	 
	 
	 	 	90	 	 	 	60	 
	 
	 	 	95	 	 	 	80	 
	Plan
	 	 	100	 	 	 	100	 
	 
	 	 	105	 	 	 	110	 
	 
	 	 	>110	 	 	 	125	 

	 	•	 	The actual Company Factor should be calculated by interpolation between the
points shown in the table above.
	 
	 	•	 	Regardless of the Company rating resulting from this Schedule, the Executive
Compensation Committee retains the authority to determine the final Company Factor for
participants whose annual incentive compensation is determined by the Committee and by
the Chairman of the Company for the other participants under the Plan.

 

 

 

	•	 	Individual Factor

	 	•	 	Individual performance will be measured on the following scale:

	 	 	 	 	 
	Performance Measure	 	Individual	 
	Points	 	Factor	 
	0 - 69
	 	 	0	%
	70
	 	 	70	%
	80
	 	 	80	%
	90
	 	 	90	%
	100
	 	 	100	%
	110
	 	 	110	%

	 	•	 	In addition, up to 40 additional points and additional percentage points may be
awarded to a participant at the discretion of the Chairman for exemplary performance,
subject to approval by the Executive Compensation Committee for those participants
whose annual incentive compensation is determined by the Committee. Individual
performance points for the Chief Executive Officer are determined by the Executive
Compensation Committee.

Sample Calculations

	•	 	Example 1

	 	 	 
	Salary or

	 	$70,000 
	Target Bonus

	 	10 percent ($7,000)
	Company Factor

	 	100 percent
	Individual Factor

	 	90 percent

Calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Individual
	 	 	 	Company
	 	 	 	Individual
	 	 
	 

	 	Target Bonus
	 	x
	 	Factor 
	 	x
	 	 Factor
	 	=
	 	Bonus Earned
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	$	7,000	 	 	x
	 	 	100	%	 	x
	 	 	90	%	 	=
	 	$	6,300	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	•	 	Example 2

	 	 	 
	Salary or

	 	$70,000 
	Target Bonus

	 	10 percent ($7,000)
	Company Factor

	 	70 percent
	Individual Factor

	 	90 percent

 

 

 

Calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Individual
	 	 	 	Company
	 	 	 	Individual
	 	 
	 

	 	Target Bonus
	 	x
	 	Factor 
	 	x
	 	Factor
	 	=
	 	Bonus Earned
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	$	7,000	 	 	x
	 	 	90	%	 	x
	 	 	70	%	 	=
	 	$	4,410	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Example 3

	 	•	 	If the Individual Factor is rated below 70 points, no bonus would be earned
regardless of the Company Factor.

Calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Individual
	 	 	 	Company
	 	 	 	Individual
	 	 	 	 	 	 
	 

	 	Target Bonus
	 	x
	 	Factor
	 	x
	 	Factor
	 	=
	 	Bonus Earned

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	$	7,000	 	 	x
	 	 	100	%	 	x
	 	 	0	 	 	=
	 	$	0	 

Example 4

	 	•	 	If the Company Factor is allocated between two companies, the bonus will be
calculated separately based on the allocation.

Calculation:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Company
	 	 	 	Company
	 	 	 	Individual
	 	 	 	 	 	 
	Target Bonus

	 	x
	 	Factor
	 	x
	 	Allocation
	 	x
	 	Factor
	 	=
	 	Bonus Earned

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$7,000

	 	x
	 	 	100	%	 	x
	 	 	20	%	 	x
	 	 	90	%	 	=
	 	$	1,260	 
	$7,000

	 	x
	 	 	110	%	 	x
	 	 	80	%	 	x
	 	 	90	%	 	=
	 	$	5,544	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Bonus

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	=
	 	$	6,804	 

 

 

 

EMPLOYEE RECOGNITION (“CHAIRMAN’S AWARD”) PROGRAM

	1.	 	In addition to the Management Incentive Program, the Company maintains an Employee
Recognition Program known as the Chairman’s Award program to reward non-union employees who
are not eligible for the management bonus plan for superior performance that contains costs,
improves efficiency and productivity of the workforce and better serves our customers. Awards
may also be made for a special action or heroic deed, or for a project that positively impacts
the performance or image of the Company. Awards are entirely discretionary and may or may not
be awarded to any individual employee. The availability of Awards is also contingent upon the
Company’s meeting certain metrics of successful performance.

	2.	 	Awards may be made from an annual pool designated by the Chairman of Aqua America with the
approval of the Executive Compensation Committee. Unused funds will not be carried over to
the next year. If financial performance warrants, management may request special Awards under
the program. The individual Award calculation and the distribution of Chairman’s Awards to
non-management employees are solely at the discretion of the officer to whom the employee
reports and the Chairman of Aqua America. No Chairman’s Award(s) granted to non-management
employees in prior years should be construed as a guaranty of future awards.

	3.	 	In general, Chairman’s Awards will not be made to employees of a company or business unit
that does not achieve at least 75% of its EBITD objective for the year, however, the Chairman
may approve a pool of up to one-third of the annual pool that would otherwise be available for
that company or business unit for awards to the eligible employees of that company or business
unit.

	4.	 	Awards may be made throughout the year, however, no more than one-third of a company’s
Chairman’s Award pool may be awarded until the company’s final EBITD for the year is
determined.

	5.	 	Nominations for employees to receive Chairman’s Awards will be made to the applicable officer
and should include documentation on the reasons for the recommendations. The applicable
officer will review the nominations and forward their recommendations to the Chairman of Aqua
America. The applicable officer has complete discretion to choose to recommend an Award or
not, depending on factors and considerations deemed by the officer as relevant. Moreover, the
Chairman may exercise his own discretion to determine if any individual employee will receive
an Award.

	6.	 	The Chairman will determine the individuals to actually receive a bonus and the amount. The
maximum award to any one employee is $5,000.

	7.	 	An employee must be actively employed by the Company at the end of the fiscal year in order
to be eligible to be considered to receive a Chairman’s Award, unless the award is made to the
eligible employee during the year.

 

 

 

	8.	 	All Chairman’s Awards under the Employee Recognition Program shall be paid by March 15 of the
calendar year following the calendar year in which such awards are earned.

	9.	 	The Employee Recognition Program is intended to comply with the short-term deferral rule set
forth in the regulations under section 409A of the Code, in order to avoid application of
section 409A to the Plan. If and to the extent that any payment under this Employee
Recognition Program is deemed to be deferred compensation subject to the requirements of
section 409A, this Employee Recognition Program shall be administered so that such payments
are made in accordance with the requirements of section 409A.Filed by Bowne Pure Compliance

Exhibit 10.32

Non-Employee Directors’ Compensation for 2009

At its regularly scheduled meeting on December 1, 2008, the Board of Directors of Aqua America,
Inc., upon the recommendation of its Executive Compensation and Employee Benefits Committee,
approved the following directors’ compensation for 2009 for the non-employee directors of Aqua
America, Inc.: (1) an annual cash retainer of $25,000; (2) an annual cash retainer for the Chair of
the Executive Compensation and Employee Benefits Committee and Corporate Governance Committee of
$6,000; (3) an annual cash retainer for the Chair of the Audit Committee of $9,000; (4) a meeting
fee of $1,500 for each meeting of the Board of Directors; (5) a meeting fee of $1,500 per meeting
for meetings of the Board Committees; and (6) an annual stock grant to directors of 2,000 shares
payable on the first of the month following the Annual Meeting of Shareholders. All directors are
reimbursed for reasonable expenses incurred in connection with attendance at Board or Committee
meetings.

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