AMENDED AND RESTATED AGREEMENT
Exhibit 10.44
AMENDED AND RESTATED AGREEMENT
THIS amended and restated Agreement made as of the 31st day of December, 2008, by and between,
Aqua America, Inc., a Pennsylvania corporation (“Aqua America”), and Xxxxx X. Xxxxxxxx (the
“Executive”).
WHEREAS, the Executive is presently employed as an executive of Aqua America or one of its
Subsidiaries;
WHEREAS, Aqua America considers it essential to xxxxxx the employment of well-qualified, key
management personnel, and, in this regard, the board of directors of Aqua America recognize that,
as is the case with many publicly-held corporations such as Aqua America, the possibility of a
change of control of Aqua America may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or distraction of key
management personnel to the detriment of Aqua America;
WHEREAS, the board of directors of Aqua America have determined that appropriate steps should
be taken to reinforce and encourage the continued attention and dedication of key members of
management of Aqua America and its Subsidiaries to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the possibility of a change of control of
Aqua America, although no such change is now contemplated; and
WHEREAS, in order to induce the Executive to remain in the employ of Aqua America or its
Subsidiaries, for which the Executive provides key executive services, Aqua America previously
entered into an Agreement to provide the Executive with certain compensation in the event
Executive’s employment is terminated subsequent to a “Change in Control” (as defined in Section 1
hereof) of Aqua America as a cushion against the financial and career impact on the Executive of
any such Change in Control (the “Prior Change in Control Agreement”); and
WHEREAS, the Company and Executive desire to amend and restate the Prior Change in Control
Agreement at this time to comply with the requirements of section 409A of the Internal Revenue Code
of 1986, as amended, and the final regulations issued thereunder.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows
effective January 1, 2009:
1. Definitions. For all purposes of this Agreement, the following terms shall have
the meanings specified in this Section unless the context clearly otherwise requires:
(a) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”).
(b) “Base Compensation” shall mean the Executive’s current base annual salary, plus the
greater of the Executive’s target bonus for the year in which the Executive incurs a Termination of
Employment, or the last actual bonus paid to the Executive under the Annual Cash Incentive
Compensation Plan (or any successor plan maintained by Aqua America), in all capacities with Aqua
America and its Subsidiaries or Affiliates. The Executive’s Base Compensation shall be determined
prior to reduction for salary deferred by the Executive under any deferred compensation plan of
Aqua America and its Subsidiaries or Affiliates, or otherwise.
(c) A Person shall be deemed the “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 Aqua America; provided,
however, that nothing in this Section 1(c) 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.
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(d) “Board” shall mean the board of directors of Aqua America.
(e) “Cause” shall mean 1) misappropriation of funds, 2) habitual insobriety or substance
abuse, 3) conviction of a crime involving moral turpitude, or 4) gross negligence in the
performance of duties, which gross negligence has had a material adverse effect on the business,
operations, assets, properties or financial condition of Aqua America or its Subsidiaries and
Affiliates.
(f) “Change in Control” shall mean:
(i) any Person (including any individual, firm, corporation, partnership or other entity
except Aqua America, any subsidiary of Aqua America, any employee benefit plan of Aqua America or
of any subsidiary, or any Person or entity organized, appointed or established by Aqua America for
or pursuant to the terms of any such employee benefit plan), together with all Affiliates and
Associates of such Person, shall become the Beneficial Owner in the aggregate of 20% or more of the
Common Stock of Aqua America then outstanding;
(ii) during any twenty-four 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 Aqua America’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 Aqua
America and its subsidiaries, or its liquidation is approved by a majority of its shareholders or
Aqua America is merged into or is merged with an unrelated entity such that
following the merger the shareholders of Aqua America no longer own more than 50% of the
resultant entity.
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Notwithstanding anything in this subsection 1(f) to the contrary, a Change in Control shall
not be deemed to have taken place under clause (f)(i) above if (i) such Person becomes the
beneficial owner in the aggregate of 20% or more of the Common Stock of Aqua America then
outstanding as a result, in the determination of a majority of those members of the Board of
Directors of Aqua America 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 Common
Stock so that it no longer owns 20% or more of the Common Stock then outstanding, or (ii) such
Person becomes the beneficial owner in the aggregate of 20% or more of the Common Stock of Aqua
America outstanding as a result of an acquisition of common stock by Aqua America which, by
reducing the number of common stock outstanding, increases the proportionate number of shares of
common stock beneficially owned by such Person to 20% or more of the shares of common stock then
outstanding; provided, however that if a Person shall become the beneficial owner of 20% or more of
the shares of common stock then outstanding by reason of common stock purchased by Aqua America and
shall, after such share purchases by Aqua America become the beneficial owner of any additional
shares of common stock, then the exemption set forth in this clause shall be inapplicable.
(g) “Equity Compensation Plan” shall mean Aqua America’s 1994 and 2004 Equity Compensation
Plan, and its predecessors and successors.
(h) “Good Reason Termination” shall mean, except as otherwise provided in the last paragraph
of this subsection (h), a Termination of Employment as a result of one or more of the following
events, without the Executive’s written consent to the event:
(i) any action or inaction that constitutes a material breach by Aqua America (or any
successor thereto) of this Agreement;
(ii) a material diminution of the authority, duties or responsibilities of the Executive held
immediately prior to the Change in Control;
(iii) a material diminution in the Executive’s base salary, which, for purposes of this
Agreement, means a reduction in base salary of ten (10) percent or more that does not apply
generally to all executive officers of Aqua America; or
(iv) a material change in the geographic location at which the Executive must perform services
under this Agreement, which, for purposes of this Agreement, means a requirement that the Executive
be based at any office or location which is located more than
fifty (50) miles from the Executive’s primary place of employment immediately prior to the
Change in Control on other than on a temporary basis (less than 6 months).
(v) A material diminution in the authority, duties, or responsibilities of the supervisor to
whom the service provider is required to report, including a requirement that a service provider
report to a corporate officer or employee instead of reporting directly to the board of directors
of a corporation (or similar governing body with respect to an entity other than a corporation).
(vi) A material diminution in the budget over which the service provider retains authority.
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A Termination of Employment after any of the foregoing events shall be a Good Reason
Termination only if the Executive provides written notice to Aqua America of the existence of such
event within ninety (90) days after the initial occurrence of such event, and Aqua America fails to
remedy the event within thirty (30) days following the receipt of such notice.
(i) “Normal Retirement Date” shall mean the first day of the calendar month coincident with or
next following the Executive’s 65th birthday.
(j) “Subsidiary” shall mean any corporation in which Aqua America, directly or indirectly,
owns at least a 50% interest or an unincorporated entity of which Aqua America, directly or
indirectly, owns at least 50% of the profits or capital interests.
(k) “Termination Date” shall mean the date of receipt of the Notice of Termination described
in Section 2 hereof or any later date specified therein, as the case may be.
(l) “Termination of Employment” shall mean the involuntary termination of the Executive’s
actual employment relationship with Aqua America and any of it Subsidiaries that actually employs
the Executive.
2. Notice of Termination. Any Termination of Employment following a Change in Control
shall be communicated by a Notice of Termination to the other party hereto given in accordance with
Section 14 hereof. For purposes of this Agreement, a “Notice of Termination” means a written
notice which (i) indicates the specific provision in this Agreement relied upon, (ii) briefly
summarizes the facts and circumstances deemed to provide a basis for the Executive’s Termination of
Employment under the provision so indicated, and (iii) if the Termination Date is other than the
date of receipt of such notice, specifies the Termination Date (which date shall not be more than
15 days after the giving of such notice for a termination other than a Good Reason
Termination, or, in the event of a Good Reason Termination, not more than 15 days after the
end of the cure period.)
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3. Severance Compensation upon Termination. Subject to the provisions of Section 11
and Section 23 hereof, in the event of the Executive’s involuntary Termination of Employment for
any reason other than Cause or in the event of a Good Reason Termination, in either event within
two years after a Change in Control, Aqua America shall pay to the Executive, upon the execution of
a release in the form required by Aqua America of its terminating executives prior to the Change in
Control, a single lump sum cash payment in an amount equal to two (2) times the Executive’s Base
Compensation, plus a pro-rata share of the Executive’s target bonus Executive under the Annual Cash
Incentive Compensation Plan (or any successor plan maintained by Aqua America) based on the portion
of the calendar year elapsed at the time of the Executive’s Termination of Employment, subject to
required employment taxes and deductions. Such payment shall be made to the Executive within 60
days following the Executive’s Termination of Employment.
4. Other Payments and Benefits. The payment due under Section 3 hereof shall be in
addition to and not in lieu of any payments or benefits, due to the Executive under any other plan,
policy or program of Aqua America, and its Subsidiaries or Affiliates; provided, however, that an
Executive shall not be eligible for benefits under any severance or stay-on bonus plan maintained
by Aqua America, or any of its Subsidiaries or Affiliates, if the Executive is entitled to receive
benefits under this Agreement as a result of a Termination of Employment within two years following
a Change in Control. In addition, if the Executive is entitled to a payment under Section 3
hereof, the Executive shall be entitled to
(a) an amount equal to (i) twenty-four (24) months of the COBRA rate in effect at the
Executive’s Termination of Employment, plus (ii) an additional amount which, after reduction for
applicable income and employment taxes owed with respect to such additional amount, equals the
income and employment taxes payable with respect to the amount described in clause (i), which shall
be paid in a single lump sum at the time the benefit under Section 3 is paid; and
(b) fully-paid executive level reasonable outplacement services from the provider or the
Executive’s choice for six (6) months following the Termination Date. All reimbursements paid to
the Executive for purposes of outplacement services shall be made or provided in accordance with
Treas. Reg. §1.409A-1(b)(9)(v)(A).
5. Trust Fund. Aqua America sponsors an irrevocable trust fund pursuant to a trust
agreement to hold assets to satisfy its obligations to the Executive under this Agreement. Funding
of such trust fund shall be subject to the discretion of Aqua America’s President, as set forth in
the agreement pursuant to which the fund has been established.
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6. Enforcement.
(a) In the event that Aqua America shall fail or refuse to make payment of any amounts due the
Executive under Sections 3 and 4 hereof within the respective time periods provided therein, Aqua
America shall pay to the Executive, in addition to the payment of any other sums provided in this
Agreement, interest, compounded daily, on any amount remaining unpaid from the date payment is
required under Section 3 or 4, as appropriate, until paid to the Executive, at the rate from time
to time announced by PNC Bank , or its successor, as its “prime rate” plus 1%, each change in such
rate to take effect on the effective date of the change in such prime rate.
(b) It is the intent of the parties that the Executive not be required to incur any expenses
associated with the enforcement of his rights under this Agreement by arbitration, litigation or
other legal action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to the Executive hereunder. Accordingly, Aqua America shall pay
the Executive the amount necessary to reimburse the Executive in full for all reasonable expenses
(including all attorneys’ fees and legal expenses) incurred by the Executive in enforcing any of
the obligations of Aqua America under this Agreement within five business days following the
Executive’s request for the reimbursement.
7. No Mitigation. The Executive shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for herein be reduced by any compensation
earned by other employment or otherwise.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or
other plan or program provided by Aqua America, or any of its Subsidiaries or Affiliates, and for
which the Executive may qualify. Notwithstanding any provision of this Agreement to the contrary,
an Executive shall not be eligible for benefits under any severance or stay-on bonus plan
maintained by Aqua America, or any of its Subsidiaries or Affiliates, if the Executive is entitled
to receive benefits under this Agreement as a result of a Termination of Employment within two
years following a Change in Control. The provisions of this Agreement may require a variance from
the terms and conditions of certain compensation or bonus plans under circumstances where such
plans would not provide for payment thereof in order to obtain the maximum benefits for the
Executive. It is the specific intention of the parties that the provisions of this Agreement shall
supersede any
provisions to the contrary in such plans, and such plans shall be deemed to have been amended
to correspond with this Agreement without further action by Aqua America.
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9. No Set-Off. Aqua America’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which Aqua America, or any of its Subsidiaries or Affiliates may have against the
Executive or others.
10. 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 Aqua America shall use its best efforts to satisfy promptly all such requirements.
11. Certain Reduction of Payments.
(a) In the event that it shall be determined that any payment or distribution in the nature of
compensation (within the meaning of section 280G(b)(2) of the Code) to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the
meaning of section 280G of the Code, the aggregate present value of the Payments under the
Agreement shall be reduced (but not below zero) to the Reduced Amount (defined below), provided
that the reduction shall be made only if the Accounting Firm (described below) determines that the
reduction will provide the Executive with a greater net after-tax benefit than would no reduction.
The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate
present value of Payments under this Agreement without causing any Payment under this Agreement to
be subject to the Excise Tax (defined below), determined in accordance with section 280G(d)(4) of
the Code. The term “Excise Tax” means the excise tax imposed under section 4999 of the Code,
together with any interest or penalties imposed with respect to such excise tax. The Company shall
reduce the Payments under this Agreement by first reducing Payments that are not payable in cash
and then by reducing cash Payments. Any Payment reductions made pursuant to this subsection (a)
shall be nondiscretionary and made in the manner that (i) least reduces economic value to the
Executive and (ii) amounts payable at different times with the same value shall be reduced
pro-rata. Only amounts payable under this Agreement shall be reduced pursuant to this subsection
(b). All determinations to be made under this subsection (b) shall be made by an independent
certified public accounting firm selected by Aqua America immediately prior to the Change in
Control (the “Accounting Firm”), which shall provide its determinations and any
supporting calculations both to Aqua America and the Executive within 60 days of the Change in
Control. Any such determination by the Accounting Firm shall be binding upon Aqua America and the
Executive. All of the fees and expenses of the Accounting Firm in performing the determinations
referred to in this subsection (b) shall be borne solely by Aqua America.
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(b) All of the fees and expenses of the Accounting Firm in performing the determinations
referred to in subsections (b) and (c) above shall be borne solely by Aqua America. Aqua America
agrees to indemnify and hold harmless the Accounting Firm of and from any and all claims, damages
and expenses resulting from or relating to its determinations pursuant to subsections (b) and (c)
above, except for claims, damages or expenses resulting from the gross negligence or willful
misconduct of the Accounting Firm.
12. Term of Agreement. The term of this Agreement shall be indefinite until Aqua
America notifies the Executive in writing that this Agreement will not be renewed at least sixty
days prior to the proposed termination; provided, however, that (i) after a Change in Control
during the term of this Agreement, this Agreement shall remain in effect until all of the
obligations of the parties hereunder are satisfied or have expired, and (ii) this Agreement shall
terminate if, prior to a Change in Control, the employment of the Executive with Aqua America and
its Subsidiaries, as the case may be, shall terminate for any reason; provided, however, that if a
Change in Control occurs within 18 months after (a) the Executive’s termination incurred for any
reason other than a voluntary resignation or retirement (a Good Reason Termination shall not be
deemed voluntary) or termination for Cause or (b) the termination of this Agreement, the Executive
shall be entitled to all of the terms and conditions of this Agreement as if the Executive’s
termination had occurred on the date of the Change in Control.
13. Successor Company. Aqua America shall require any successor or successors
(whether direct or indirect, by purchase, merger or otherwise) to all or substantially all of the
business and/or assets of Aqua America, by agreement in form and substance satisfactory to the
Executive, to acknowledge expressly that this Agreement is binding upon and enforceable against the
successor or successors, in accordance with the terms hereof, and to become jointly and severally
obligated with Aqua America to perform this Agreement in the same manner and to the same extent
that Aqua America would be required to perform if no such succession or successions had taken
place. Failure of Aqua America to notify the Executive in writing as to such successorship, to
provide the Executive the opportunity to review and agree to the successor’s assumption of this
Agreement or to obtain such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement. As used in this Agreement, Aqua America means Aqua America and any
successor or successors to its business and/or assets, jointly and severally.
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14. Notice. All notices and other communications required or permitted hereunder or
necessary or convenient in connection herewith shall be in writing and shall be delivered
personally or mailed by registered or certified mail, return receipt requested, or by overnight
express courier service, as follows:
If to Aqua America, to:
Aqua America, Inc.
000 X. Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attention: Chairman, Executive Compensation Committee
000 X. Xxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attention: Chairman, Executive Compensation Committee
If to the Executive, to:
Xxxxx X. Xxxxxxxx
or to such other names or addresses as Aqua America or the Executive, as the case may be, shall
designate by notice to the other party hereto in the manner specified in this Section; provided,
however, that if no such notice is given by Aqua America following a Change in Control, notice at
the last address of Aqua America or to any successor pursuant to Section 13 hereof shall be deemed
sufficient for the purposes hereof. Any such notice shall be deemed delivered and effective when
received in the case of personal delivery, five days after deposit, postage prepaid, with the U.S.
Postal Service in the case of registered or certified mail, or on the next business day in the case
of overnight express courier service.
15. Governing Law. This Agreement shall be governed by and interpreted under the laws
of the Commonwealth of Pennsylvania without giving effect to any conflict of laws provisions.
16. Contents of Agreement, Amendment and Assignment. This Agreement supersedes all
prior agreements, including the Prior Change in Control Agreement, sets forth the entire
understanding between the parties hereto with respect to the subject matter hereof, and cannot be
changed, modified, extended or terminated except upon written amendment executed by the Executive
and Aqua America. The provisions of this Agreement may require a variance from the terms and
conditions of certain compensation or bonus plans under circumstances where such plans would not
provide for payment thereof in order to obtain the maximum benefits for the Executive. It
is the specific intention of the parties that the provisions of this Agreement shall supersede
any provisions to the contrary in such plans, and such plans shall be deemed to have been amended
to correspond with this Agreement without further action by Aqua America.
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17. No Right to Continued Employment. Nothing in this Agreement shall be construed as
giving the Executive any right to be retained in the employ of Aqua America or any of its
Subsidiaries.
18. Successors and Assigns. All of the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the respective heirs,
representatives, successors and assigns of the parties hereto, except that the duties and
responsibilities of Aqua America hereunder shall not be assignable in whole or in part.
19. Severability. If any provision of this Agreement or application thereof to anyone
or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions or applications of this Agreement which can
be given effect without the invalid or unenforceable provision or application.
20. Remedies Cumulative; No Waiver. No right conferred upon the Executive by this
Agreement is intended to be exclusive of any other right or remedy, and each and every such right
or remedy shall be cumulative and shall be in addition to any other right or remedy given hereunder
or now or hereafter existing at law or in equity. No delay or omission by the Executive in
exercising any right, remedy or power hereunder or existing at law or in equity shall be construed
as a waiver thereof.
21. Miscellaneous. All section headings are for convenience only. This Agreement may
be executed in several counterparts, each of which is an original. It shall not be necessary in
making proof of this Agreement or any counterpart hereof to produce or account for any of the other
counterparts.
22. Arbitration. In the event of any dispute under the provisions of this Agreement
other than a dispute in which the sole relief sought is an equitable remedy such as an injunction,
the parties shall be required to have the dispute, controversy or claim settled by arbitration in
Bryn Mawr, Pennsylvania, in accordance with the National Rules for the Settlement of Employment
Disputes of the American Arbitration Association, before one arbitrator who shall be an executive
officer or former executive officer of a publicly traded corporation, selected by the parties. Any
award entered by the arbitrator shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically enforceable. The arbitrator
shall have no authority to modify any provision of this Agreement or to award a remedy for a
dispute involving this Agreement other than a benefit specifically provided under or by virtue of
the Agreement. Aqua America shall be responsible for all of the fees of the American Arbitration
Association and the arbitrator and any expenses relating to the conduct of the arbitration
(including reasonable attorneys’ fees and expenses).
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23. Section 409A of the Code.
(a) Compliance. This Agreement shall be interpreted to avoid any penalty sanctions
under section 409A of the Code. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under section 409A, then such benefit or payment shall
be provided in full at the earliest time thereafter when such sanctions will not be imposed. For
purposes of section 409A of the Code, all payments to be made upon a Termination of Employment
under this Agreement may only be made upon a “separation from service” under section 409A of the
Code, each payment made under this Agreement shall be treated as a separate payment and the right
to a series of installment payments under this Agreement is to be treated as a right to a series of
separate payments. In no event shall the Executive, directly or indirectly, designate the calendar
year of any payments to be made to him under this Agreement. All reimbursements and in-kind
benefits provided under this Agreement shall be made or provided in accordance with the
requirements of Treas. Reg. §1.409A-3(i)(1)(iv), including, where applicable, the requirement that
(i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter
period of time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii)
the reimbursement of an eligible expense will be made on or before the last day of the calendar
year following the year in which the expense is incurred, and (iv) the right to reimbursement or
in-kind benefits is not subject to liquidation or exchange for another benefit.
(b) Payment Delay. To the maximum extent permitted under section 409A of the Code,
severance payments payable under this Agreement are intended to comply with the “short-term
deferral exception” under Treas. Reg. §1.409A-1(b)(4), and any remaining amount is intended to
comply with the “separation pay exception” under Treas. Reg. §1.409A-1(b)(9)(iii); provided,
however, any amount payable to the Executive during the six-month
period following the Executive’s Termination of
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Employment that does not qualify within either of the foregoing
exceptions and is deemed as deferred compensation subject to the requirements of section 409A of
the Code, then such amount shall hereinafter be referred to as the “Excess Amount.” If at the time
of the Executive’s Termination of Employment, the Executive is a “specified employee” (as defined
in section 409A of the Code and determined in the sole discretion of Aqua America in accordance
with Aqua America’s “specified employee” determination policy), then Aqua America shall postpone
the commencement of the payment of the portion of the Excess Amount that is payable within the
six-month period following the Executive’s Termination of Employment for six months following the
Executive’s Termination of Employment. The delayed Excess Amount shall be paid in a lump sum to
the Executive within thirty (30) days following the date that is six (6) months following the
Executive’s Termination of Employment, and any amount payable to the Executive after the expiration
of such six (6) month period under this Agreement shall continue to be paid to the Executive in
accordance with the terms of this Agreement. If the Executive dies during such six-month period
and prior to the payment of the portion of the Excess Amount that is required to be delayed on
account of section 409A of the Code, such Excess Amount shall be paid to the personal
representative of the Executive’s estate within thirty (30) days after the Executive’s death, and
any amounts not delayed shall be paid to the personal representative of the Executive’s estate in
accordance with the terms of this Agreement.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this
Agreement as of the date first above written.
ATTEST:
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AQUA AMERICA, INC. | ||
/s/ Xxxxx Xxxxxxxx
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By | /s/ Xxx X. Xxxxx
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Secretary |
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| EXECUTIVE | |||
/s/ Xxxx xxXxxx
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/s/ Xxxxx X. Xxxxxxxx
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Witness |
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