Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 39

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 39
---
 the Essential board unanimously approved the merger agreement and the merger. In connection with the merger, American
Water will issue to Essential shareholders 0.305 of a share of American Water common stock for each share of Essential common stock held prior to the merger (other than canceled or restricted shares).

For more information regarding the merger, see the sections entitled “The Merger” beginning on page 57, “The Merger Agreement” beginning on page 120, and Annex A.

Merger Consideration

At the effective time, each share of Essential common stock issued and outstanding immediately prior to the effective time, other than any shares of Essential
common stock owned by American Water or Merger Sub or by Essential as treasury stock (in each case, other than restricted shares), will be converted into the right to receive 0.305 shares of validly issued, fully paid, and nonassessable American
Water common stock. The aggregate number of such shares of American Water common stock to be issued in the merger is collectively referred to as the merger consideration. The exchange ratio is fixed and will not be adjusted to reflect stock price
changes of either American Water common stock or Essential common stock between the dates of the signing of the merger agreement and the completion of the merger. American Water shareholders will continue to own their existing shares of common stock
of American Water, the form or terms of which will not be changed by the merger. Fractional shares of American Water common stock will not be issued in connection with the merger, and cash will be paid in lieu of any fractional shares that would
otherwise be issued.

Treatment of Essential Equity Awards

Upon completion of the merger, each outstanding Essential stock option will be converted into an adjusted option to acquire shares of American Water common
stock by applying the exchange ratio to the number of shares of

22

Essential common stock that may be acquired thereunder, with an adjusted exercise price determined by applying the exchange ratio to the exercise price of such Essential stock option, and
otherwise on the same terms and conditions applicable to such Essential stock option (including any “double trigger” vesting protections, except that any adjusted options corresponding to performance-based Essential stock options will no
longer be subject to such performance goals). Upon completion of the merger, each outstanding Essential RSA will be converted into an adjusted RSA covering shares of American Water common stock by applying the exchange ratio and otherwise on the
same terms and conditions applicable to such Essential RSA (including any “double trigger” vesting protections). Upon completion of the merger