Company: AWK
Filing Date: 2025-10-27
Form Type: 425
Source: 0001193125-25-250649
Chunk: 3

Company: American Water Works Company, Inc.
Filing Date: 2025-10-27
Form: 425
Chunk 3
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) the approval of certain public utility commissions, in each case on such terms and conditions that would not, individually or in the aggregate, result in a “Burdensome Effect” (as defined in the Merger Agreement); (v) the absence of any law or judgment prohibiting the consummation of the Merger; (vi) the effectiveness of a registration statement on Form S-4to be filed by American Water to register the shares of American Water Common Stock to be issued as Merger Consideration in the Merger; (vii) the accuracy of the representations and warranties of the parties (subject to customary materiality qualifiers); (viii) each party’s performance in all material respects of its obligations contained in the Merger Agreement; and (ix) the absence of any “Parent Material Adverse Effect” or “Company Material Adverse Effect” (in each case, as defined in the Merger Agreement) on American Water or Essential, as applicable, since the date of the Merger Agreement. 2

The Merger Agreement contains certain customary termination rights for American Water and Essential, including, without limitation, if the Merger is not consummated on or before April 26, 2027, which date may be extended for a period of three months up to two times, until October 26, 2027 at the latest, in specified circumstances and subject to certain conditions and if necessary to obtain required regulatory approvals. Upon termination of the Merger Agreement under specified circumstances, including a change in the recommendation of Essential’s or American Water’s Board of Directors, the termination by Essential or American Water in order to accept a superior proposal with respect to an alternative transaction, or Essential or American Water entering into a definitive agreement in respect of a competing transaction within 12 months of termination of the Merger Agreement in certain circumstances involving a potential competing transaction proposal, Essential will be required to pay American Water a cash termination fee of $370 million or American Water will be required to pay Essential a cash termination fee of $835 million. The Merger Agreement provides that, upon consummation of the Merger, American Water’s Board of Directors shall be comprised of 15 directors, including the 10 directors serving on American Water’s Board of Directors at the Effective Time and five directors selected by Essential from directors on Essential’s Board of Directors as of the date of the Merger Agreement, and following reasonable consultation with American Water. American Water’s Board Chair will continue to serve in such role following the consummation of the