[g201602250005378712460.jpg]Exhibit 10.4

 

 

Kellye L. Walker

Chief Administrative Officer,

General Counsel and Secretary

1025 Laurel Oak Road

Voorhees, NJ  08043

 

P 856.346.8200

F 856.346.5817

 

 

May 7, 2014

Mr. Loyd Warnock

12053 Leighton Court

Carmel, IN  46032

Re:  Amended and Restated Employment Letter Agreement

Dear Mr. Warnock:

On behalf of American Water, I am pleased to extend our offer of employment to
you for the position of Senior Vice President of External Affairs,
Communications and Public Policy of American Water, reporting to the company’s
Chief Executive Officer.  This letter restates and supersedes the previously
executed letter between the Company and you dated April 2, 2014. As noted in
that letter April 28, 2014 is your first day of employment.  We anticipate that
you will find this new role to be personally rewarding and one in which you can
make significant contributions to the Company. The following represents our
offer to you:

Base Salary

You will be paid bi-weekly at the rate of $13,846.16 and when annualized would
be approximately $360,000.  The salary grade for your position will be ML3.

Sign-On Bonus

You will receive a $220,000 cash sign-on bonus, subject to applicable
withholdings, within your first week of employment.   You are also entitled to
receive Restricted Stock Units (RSUs) in the amount of $220,000 which will be
granted on your start date.   This grant will vest on January 1, 2017.  In the
event of your death or disability, these Restricted Stock Units shall become
immediately vested.

2014 Annual Incentive Plan (AIP) Eligibility

You will be eligible to participate in the Company’s Annual Incentive Plan with
a target bonus award payout of 50% of your annual base salary. Any amount
awarded to you as a participant under the Annual Incentive Plan will be
determined in accordance with the terms of that plan.  Actual payout of the
Annual Incentive Plan bonus is discretionary and based on factors including
company performance and individual performance objectives.  For 2014, you will
be eligible for a full-year AIP payout based on your target level and the above
noted factors.

 

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Mr. Loyd Warnock

May 7, 2014

Page 2

 

2014 Long Term Incentive Plan (LTIP) Eligibility  

You will be eligible for a full equity award under the Company’s Long Term
Incentive Plan at a target payout of 90% of your annual base salary, beginning
in 2014, as approved by the Compensation Committee of the American Water Board
of Directors.  The 2014 award will be granted and priced as of your start
date.  

LTIP Grants Issued in 2018 and 2019

So long as the Compensation Committee approves LTIP grants to eligible employees
in 2018 and 2019 any grants made to you pursuant to the Company’s LTIP in these
years shall vest on January 1, 2020.

Benefits

American Water offers a comprehensive benefits package, the provisions of which
will begin on the first of the month after one full calendar month of employment
including medical insurance, dental insurance, life insurance, and short- and
long-term disability insurance. 

You will be eligible to participate in the Company’s Savings and Investment
Program (401k). You can roll over other qualified savings and investment
retirement programs into the American Water plan. You will also be eligible to
participate in the Non-Qualified Savings and Deferred Compensation Program and
our Executive Physical Program in accordance with the terms of the plan
details.  Please refer to the enclosed 2014 Executive Benefits at a Glance
documents for benefit details.

Vacation/Holidays 

You will be eligible for 25 vacation days in 2014.  In addition, you will be
eligible for  seven (7) paid holidays and you will be eligible for six (6)
floating holidays in a calendar year. 

Office location  

Given the nature of your role and the travel required, a relocation of your
primary residence will not be required.  Your primary work location will be in
Indiana. The company will provide appropriate office space for your use at the
offices of Indiana American Water.  The foregoing notwithstanding, it is
expressly understood that you will spend sufficient time at the company’s
corporate offices in  Voorhees, New Jersey, as requested from time to time by
the company’s CEO.

 

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Mr. Loyd Warnock

May 7, 2014

Page 3

 

Relocation Expenses

It is the Company’s understanding that relocation expenses were incurred on your
behalf by MISO, your former employer.  To the extent that you are required to
repay all or a portion of these expenses, the Company will repay any such
relocation expenses for which your former employer seeks repayment from you.

Executive Severance Policy

You will be an eligible participant under the executive severance policy which
provides severance benefits to executives whose employment is involuntarily
terminated by American Water for reasons other than cause.  Under the policy,
you will receive salary continuation benefits in the form of 12 months of your
base salary, plus a prorated annual incentive payment.  A copy of the Executive
Severance Policy will be available to you at your request.

We are looking forward to a favorable decision from you and to your joining the
American Water team.  Please signify your acceptance of this offer of employment
by signing this letter and returning it to me by email or by facsimile.

Sincerely,

/s/ Kellye L. Walker

Kellye L. Walker

Enclosure

This offer of employment extended by American Water is contingent upon
successful completion of a drug screen, applicable background checks,
verification of authorization to work and all information supplied on the resume
and other information supplied by you, and the absence of any Non-Compete or
Non-Solicitation Agreement with a prior employer.

I, Loyd Warnock, understand that my employment will be "at will," which means
that I am not guaranteed employment or any particular job for any specified
period of time.  The Company or I may terminate my employment at any time, for
any or no reason, with or without cause.

 

 

/s/ Loyd Warnock

5-8-2014

Signature:

Loyd Warnock

Date