Company: AWK
Filing Date: 2025-12-29
Form Type: S-4/A
Source: 0001193125-25-332292
Chunk: 168

Company: American Water Works Company, Inc.
Filing Date: 2025-12-29
Form: S-4/A
Chunk 168
---
 pursuant to which, (i) compensation for the two-year period following the effective time will be commensurate with the
compensation opportunities (including any minimums or maximums) and perquisites and benefits (including pension accruals under the retirement income plan and the associated non-qualified retirement plan)
provided to him as of October 26, 2025, subject to any increases between such date and the effective time permitted in accordance with the terms of the merger agreement, (ii) his change in title and responsibility will be considered a
diminution of duties and therefore will trigger his change in control protections, and (iii) his outstanding Essential equity awards will be converted into American Water equity awards and the vesting of such awards will accelerate in full as
of the effective time. American Water or Essential may enter into new employment or other arrangements with other executive officers in the future. As of the date of this joint proxy statement/prospectus, no such letter agreement has been entered
into with Mr. Franklin.

The terms of the prospective employment arrangements for each of Mr. Schuller, Ms. Arnold, and Mr. Franklin
as set forth herein are not expected to provide for any material increases to the levels of compensation and benefits that each of such executive officers was eligible to receive prior to the effective time.

Except as otherwise set forth herein, as of the date of this joint proxy statement/prospectus, none of the other Essential executive officers has entered into
any agreement with American Water regarding employment with, or compensation to be received from, American Water on a prospective basis following the effective time and there have been no discussions of any such arrangements between American Water
and any of such executive officers.

Section 280G Matters

Essential may, in consultation with American Water, for any executives that Essential reasonably determines to be “disqualified individuals” within
the meaning of Section 280G of the Code who may be subject to adverse tax treatment under Section 280G of the Code as the result of “excess parachute payments” within the meaning of Section 280G of the Code, in order to
mitigate the potential for such adverse tax treatment thereunder, if the closing of the merger is anticipated to occur (i) in 2026, pay in 2025 cash incentive compensation that would otherwise be payable in 2026 and settle equity incentive
awards in 2025 that would otherwise have been settled in accordance with the terms of such awards in 2026, or (ii)