Company: AWK
Filing Date: 2025-12-17
Form Type: S-4
Source: 0001193125-25-321389
Chunk: 63

Company: American Water Works Company, Inc.
Filing Date: 2025-12-17
Form: S-4
Chunk 63
---
ournment proposal.

In
considering the recommendation of the Essential board to approve the merger agreement proposal, Essential shareholders should be aware that Essential’s directors and executive officers have interests in the merger that may be different from,
or in addition to, the interests of Essential shareholders generally, including treatment of outstanding Essential equity awards in connection with the transactions contemplated by the merger agreement, potential severance benefits, continued
employment benefits, potential transaction bonuses, and rights to ongoing indemnification and insurance coverage.

These interests also include that,
prior to the completion of the merger, the American Water board will increase its size from 10 to 15 directors and cause five individuals who serve on the Essential board as of the date of the merger agreement to be appointed as members of the
American Water board to fill the five new vacancies. The designees will be determined by the Essential board following reasonable consultation with American Water. The Chief Executive Officer of Essential (Christopher H. Franklin, or the individual
serving in such position immediately prior to the effective time) will serve as Executive Vice Chair of the American Water board for a period of two years following the effective time. For additional information regarding the terms of
Mr. Franklin’s prospective employment with American Water upon the completion of the merger, see “The Merger—Interests of Directors and Executive Officers in the Merger—Interests of Essential Directors and Executive Officers in the Merger—New Management Arrangements” beginning on page 108.

38

The Essential board was aware of these interests and considered them, among other matters, in approving the
merger agreement and making its recommendation that the Essential shareholders vote “FOR” the merger agreement proposal, the merger-related compensation proposal, and the Essential adjournment proposal.

These and other such interests are further described in “The Merger—Interests of Directors and Executive Officers in the Merger—Interests of American Water Directors and Executive Officers in the Merger” beginning on page 104 and “The Merger—Interests of Directors and Executive Officers in the Merger—Interests of Essential Directors and Executive Officers in the Merger” beginning on page 105.

Uncertainties associated with the merger may cause a loss of management personnel and other key employees, and American Water and Essential may have difficulty attracting and motivating management personnel and other key employees, which could adversely affect the future business and operations of the combined company.

American Water and Essential are dependent on the experience and industry knowledge of their respective management personnel and other key employees to execute
their business