Company: AWK
Filing Date: 2025-10-27
Form Type: 425
Source: 0001193125-25-250649
Chunk: 2

Company: American Water Works Company, Inc.
Filing Date: 2025-10-27
Form: 425
Chunk 2
---
 converted into a number of adjusted restricted shares of American Water Common Stock as determined by applying the Exchange Ratio and otherwise on the same terms and conditions as the original restricted share of Essential Common Stock; (iii) each outstanding time-based restricted stock unit (“RSU”) award in respect of Essential Common Stock will be converted into an adjusted number of time-based RSU awards in respect of American Water Common Stock as determined by applying the Exchange Ratio and otherwise on the same terms and conditions as the original time-based RSU award in respect of Essential Common Stock; and (iv) each outstanding performance-based restricted stock unit award (“PSU”) in respect of Essential Common Stock (for ongoing performance periods, as determined based on the greater of target and actual performance through the Effective Time) will be converted into an adjusted number of time-based RSU awards in respect of American Water Common Stock by applying the Exchange Ratio and otherwise on the same terms and conditions as the original PSU award in respect of Essential Common Stock, except that any performance-based vesting conditions will no longer apply to the adjusted RSU awards. American Water, Merger Sub and Essential have each made customary representations, warranties and covenants in the Merger Agreement, including covenants not to solicit alternative transactions and, subject to certain exceptions, not to participate in discussions or negotiations regarding, or furnish non-publicinformation in connection with, a proposal or offer with respect to an alternative transaction. Until the Effective Time, each of American Water, Merger Sub and Essential has agreed to operate its business in the ordinary course of business consistent with past practice in all material respects and has agreed to certain other restrictive covenants. Additionally, American Water’s Board of Directors and Essential’s Board of Directors are each required to recommend the approval of the applicable Merger-related proposals to its respective shareholders, subject to certain exceptions. Consummation of the Merger is subject to certain customary conditions, including, without limitation: (i) approval by American Water’s shareholders of the issuance of the shares of American Water Common Stock to be issued as Merger Consideration in the Merger; (ii) approval of the Merger Agreement by Essential’s shareholders; (iii) the authorization for listing of shares of American Water Common Stock to be issued as Merger Consideration in the Merger on the New York Stock Exchange; (iv) receipt of certain governmental approvals, including (a) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (b