Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On July 1, 2021, Essential Utilities, Inc. (the "Company') and Christopher H.
Franklin, the Company's President and Chief Executive Officer will enter into a
new employment agreement (the "Agreement") to replace Mr. Franklin's expiring
employment agreement.
The Agreement has a three year term beginning July 1, 2021. The Agreement
combines the employment, severance and change-in-control termination severance
provisions into one agreement replacing the expiring employment agreement.
Under the Agreement, Mr. Franklin will continue to serve as the Company's
President and Chief Executive Officer. He is entitled to receive base salary,
annual cash-based incentive compensation, at no less than 100% of base salary at
target, and annual equity-based long term incentive compensation, at no less
than 250% of base salary at target, all as determined by the Executive
Compensation Committee on an annual basis and, for the equity-based awards,
issued under a shareholder-approved equity plan. Mr. Franklin continues to serve
as Chairman of the Board of Directors of the Company for no additional
compensation.
If, during the term of the Agreement, the Company terminates Mr. Franklin's
employment without Cause (as defined in the Agreement) or Mr. Franklin
terminates his employment and the Agreement for Good Reason (as defined in the
Agreement), Mr. Franklin will receive, subject to execution of a release of
claims and compliance with restrictive covenants described below, severance
equal to two times his base salary and target annual bonus, plus a pro rata
bonus for the year of termination. If during a change in control period
(beginning six months prior to the occurrence of a Change in Control (as defined
in the Agreement) and continuing for two years after the Change in Control, the
Company terminates Mr. Franklin's employment without Cause (as defined in the
Agreement) or Mr. Franklin terminates his employment and the Agreement for CIC
Good Reason (as defined in the Agreement), Mr. Franklin will receive, subject to
execution of a release of claims and compliance with restrictive covenants
described below, severance equal to three times his base salary and target
annual bonus, plus a pro rata bonus for the year of termination, payment for
health care benefits for three years and reimbursement for placement services.
Under the Agreement, Mr. Franklin is making non-solicitation and non-compete
covenants that apply during his employment and for one year thereafter.
The foregoing summary of the Agreement is not complete. Reference is made to the
text of the Agreement, attached as Exhibit 10.1 to this Current Report on Form
8-K, and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Employment Agreement, dated July 1, 2021, between Essential Utilities,
Inc. and Christopher Franklin.
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