EXHIBIT 10(i)






























                    AMERICAN WATER WORKS COMPANY, INC.

                        DEFERRED COMPENSATION PLAN

            (As amended and restated effective October 1, 1998)


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                             Table of Contents

                                                                      Page

     ARTICLE I   INTRODUCTION........................................   1
     1.1.   Name.....................................................   1
     1.2.   Effective Date...........................................   1
     1.3.   Employers................................................   1
     1.4.   Purpose..................................................   1

     ARTICLE II   DEFINITIONS........................................   1
     2.1.   "Administrator"..........................................   1
     2.2.   "Annual Incentive Plan"..................................   1
     2.3.   "Beneficiary"............................................   1
     2.4.   "Board"..................................................   2
     2.5.   "Change in Control"......................................   2
     2.6.   "Committee"..............................................   2
     2.7.   "Deferred Compensation Account"..........................   2
     2.8.   "Deferred Compensation Agreement"........................   2
     2.9.   "Disability".............................................   2
     2.10   "Elective Deferred Compensation".........................   2
     2.11.  "Eligible Employee"......................................   3
     2.12.  "Participant"............................................   3
     2.13.  "Plan Year"..............................................   3
     2.14.  "Retirement".............................................   3
     2.15.  "Stock"..................................................   3

     ARTICLE III   PARTICIPATION BY ELIGIBLE EMPLOYEES...............   3
     3.1.   Participation............................................   3
     3.2.   Continuity of Participation..............................   3
     3.3.   Immediate Cash-Out of Ineligible Employee................   4

     ARTICLE IV   DEFERRALS AND DEFERRED COMPENSATION ACCOUNTS.......   4
     4.1.   Compensation Eligible for Deferral.......................   4
     4.2.   Irrevocability of Deferral Elections.....................   4
     4.3.   Date of Election.........................................   5
     4.4.   Establishment of Deferred Compensation Accounts..........   5
     4.5.   Hypothetical Investment Vehicles.........................   5
     4.6.   Allocation and Reallocation of Hypothetical Investments..   5
     4.7.   Dividend Equivalents.....................................   6
     4.8.   Restrictions on Participant Direction....................   6
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                              Table of Contents

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     ARTICLE V   DISTRIBUTIONS.......................................   7
     5.1.   Election of Distribution Date............................   7
     5.2.   Distribution of Mandatory Deferrals Not Elected To Be
            Extended.................................................   7
     5.3.   Method of Payment........................................   7
     5.4.   Special Election for Early Distribution..................   8
     5.5.   Distributions on Death...................................   8
     5.6.   Valuation of Cash Distributions..........................   8
     5.7.   Financial Emergency and Other Payments...................   8

     ARTICLE VI   FUNDING AND PARTICIPANT'S INTEREST.................   9
     6.1.   Deferred Compensation Plan Unfunded......................   9
     6.2.   Participant's Interest in Plan...........................   9


     ARTICLE VII   ADMINISTRATION AND INTERPRETATION.................   9
     7.1.   Administration...........................................   9
     7.2.   Interpretation...........................................  10
     7.3.   Records and Reports......................................  10
     7.4.   Payment of Expenses......................................  10
     7.5.   Indemnification for Liability............................  11
     7.6.   Claims Procedure.........................................  11
     7.7.   Review Procedure.........................................  11

     ARTICLE VIII   AMENDMENT AND TERMINATION........................  12
     8.1.   Amendment and Termination................................  12

     ARTICLE IX   MISCELLANEOUS PROVISIONS...........................  12
     9.1.   Right of Employers to Take Employment Actions............  12
     9.2.   Alienation or Assignment of Benefits.....................  13
     9.3.   Right to Withhold........................................  13
     9.4.   Construction.............................................  13
     9.5.   Headings.................................................  13
     9.6.   Number and Gender........................................  13

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                                 ARTICLE I

                               INTRODUCTION

     1.1.  Name.  The name of this plan is the American Water Works
Company, Inc. Deferred Compensation Plan ("Deferred Compensation Plan").

     1.2.  Effective Date.  The effective date of this Deferred
Compensation Plan is January 1, 1996.

     1.3.  Employers.  American Water Works Company, Inc. ("American Water
Works"), and each subsidiary or affiliate of American Water Works that
employs one or more Eligible Employees who have become Participants in
accordance with Article III, shall each be an "Employer" under this
Deferred Compensation Plan.

     1.4.  Purpose.  This Deferred Compensation Plan is established
effective January 1, 1996 by American Water Works for the purpose of
providing deferred compensation benefits for a select group of management
or highly compensated employees of the Employers.

                                ARTICLE II

                                DEFINITIONS

     Whenever the following initially capitalized words and phrases are
used in this Deferred Compensation Plan, they shall have the meanings
specified below unless the context clearly indicates to the contrary:

     2.1.  "Administrator" shall mean the Retirement Committee of American
Water Works  Company, Inc., or its delegate.

     2.2.  "Annual Incentive Plan" shall mean American Water Works Company,
Inc.'s  Annual Incentive Plan, effective January 1, 1996.

     2.3.  "Beneficiary" shall mean such person or legal entity as may be
designated by a Participant under Section 5.5 to receive benefits hereunder
after such Participant's death.

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     2.4.  "Board" shall mean the Board of Directors of American Water
Works Company, Inc.

     2.5.  "Change in Control" shall mean a change in the control of
American Water Works Company, Inc.,  which shall be deemed to have occurred
upon the earliest to occur of the following: (i) the purchase or
announcement of an offer to purchase by a person, or group of persons
acting in concert, of at least twenty-five percent of the voting securities
of American Water Works Company, Inc.; or (ii) during any twenty-four-month
period, individuals who at the beginning of such period constituted the
Board cease for any reason to constitute a majority thereof.
     
     2.6.  "Committee" shall mean the Compensation and Management
Development Committee of the Board.
          
     2.7.  "Deferred Compensation Account" shall mean the account or
subaccount established and maintained by the Administrator for specified
deferrals by a Participant, as described in Article IV of this Deferred
Compensation Plan.   Deferred Compensation Accounts shall be maintained
solely as bookkeeping entries to evidence unfunded obligations of American
Water Works.

     2.8.  "Deferred Compensation Agreement" shall mean a document (or
documents) as made available from time to time by the Administrator,
whereby an Eligible Employee enrolls as a Participant and elects to defer
compensation pursuant to Article IV of this Deferred Compensation Plan.

     2.9.  "Disability" shall mean a physical or mental impairment of
sufficient severity such that a Participant is eligible for benefits under
the long-term disability provisions of his Employer's benefit plans.

     2.10.  "Elective Deferred Compensation" shall mean that portion of the
Participant's Compensation which the Participant elects to defer pursuant
to Article IV of this Deferred Compensation Plan in accordance with the
Deferred Compensation Agreement.

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     2.11.  "Eligible Employee" shall mean an individual employed by an
Employer who is a member of a select group of management or highly
compensated employees participating in the Annual Incentive Plan.

     2.12.  "Participant" shall mean an Eligible Employee who has amounts
standing to his credit under a Deferred Compensation Account.

     2.13.  "Plan Year" shall mean the calendar year.

     2.14.  "Retirement" shall mean a Participant's voluntary termination
of employment at or after the date on which he is eligible promptly
thereafter to commence receipt of retirement benefits under the Pension
Plan for Employees of American Water Works Company, Inc. and Its Designated
Subsidiaries or any supplemental retirement plan maintained by American
Water Works or any successor plan thereto.

     2.15.  "Stock" shall mean American Water Works Company, Inc. common
stock, or any other equity securities of American Water Works designated by
the Administrator.

                                ARTICLE III

                    PARTICIPATION BY ELIGIBLE EMPLOYEES

     3.1.  Participation.  Participation in this Deferred Compensation Plan
is limited to Eligible Employees.  An Eligible Employee shall participate
in this Deferred Compensation Plan as determined by the Administrator in
its sole discretion; provided, however, that all executive officers of
American Water Works shall automatically be considered Eligible Employees.

     3.2.  Continuity of Participation.  A Participant who separates from
service with all of the Employers will cease active participation
hereunder.  However, the separation from service of an Eligible Employee
with one Employer will not interrupt the continuity of his active
participation if, concurrently with or immediately after such separation,
he is employed by one or more of the other Employers.

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     3.3.  Immediate Cash-Out of Ineligible Employee.  This Deferred
Compensation Plan is intended to be an unfunded "top-hat" plan, maintained
primarily for the purposes of providing deferred compensation for a select
group of management or highly compensated employees.  Accordingly, if the
Administrator determines that any Participant does not qualify as a member
of the select group, one hundred percent (100%) of such Participant's
Deferred Compensation Account shall be paid to the Participant immediately.

                                ARTICLE IV

               DEFERRALS AND DEFERRED COMPENSATION ACCOUNTS

     4.1.  Compensation Eligible for Deferral.  To the extent authorized by
the Committee, a Participant may elect to defer compensation or awards
which may be in the form of cash, Stock, Stock-denominated awards or other
property to be received from an Employer, including salary, annual bonus
awards, long-term awards, shares issuable on stock option exercise and
compensation payable under other plans and programs, employment agreements
or other arrangements, or otherwise, as may be provided under the terms of
such plans, programs and arrangements or as designated by the
Administrator.  The Committee may impose limitations on the amounts
permitted to be deferred and other terms and conditions on deferrals under
the Deferred Compensation Plan.  Any such limitations, and other terms and
conditions of deferral, shall be set forth in the rules relating to the
Deferred Compensation Plan or election forms, other forms, or instructions
published by or at the direction of the Administrator.  The Committee may
permit awards and other amounts to be treated as deferrals under the
Deferred Compensation Plan, including deferrals that may be mandatory as
determined by the Committee in its sole discretion or under the terms of
another plan or arrangement of an Employer, for administrative convenience
or otherwise to serve the purposes of the Deferred Compensation Plan and
such other plan or arrangement.

     4.2.  Irrevocability of Deferral Elections.  Once a Deferred
Compensation Agreement, properly completed, is received by the
Administrator, the elections of the Participant shall be irrevocable;
provided, however, that the Administrator may, in its discretion, permit a
Participant to elect a further deferral of amounts credited to a Deferred
Compensation Account by filing a later election form; provided, further,
that, unless otherwise approved by the Administrator, any election to
further defer amounts credited to a Deferred Compensation Account must be
made at least one year prior to the date such amounts would otherwise be
payable.

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     4.3.  Date of Election.  An election to defer compensation or awards
hereunder must be received by the Administrator prior to the date specified
by the Administrator.  Under no circumstances may a Participant defer
compensation or awards to which the Participant has attained, at the time
of deferral, a legally enforceable right to current receipt of such
compensation or awards.

     4.4.  Establishment of Deferred Compensation Accounts.   One or more
Deferred Compensation Accounts will be established for each Participant, as
determined by the Administrator.  The amount of compensation or awards
deferred with respect to each Deferred Compensation Account will be
credited to such Account as of the date on which such amounts would have
been paid to the Participant but for the Participant's election to defer
receipt hereunder, unless otherwise determined by the Administrator.  With
respect to any fractional shares of Stock or Stock-denominated awards, the
Administrator, in its sole discretion, shall pay such fractional shares to
the Participant in cash, credit the Deferred Compensation Account with cash
in lieu of depositing fractional shares into the Deferred Compensation
Account, or credit the Deferred Compensation Account with a fraction of a
share calculated to at least three decimal places.  Unless otherwise
determined by the Administrator, amounts credited to a Deferred
Compensation Account shall be deemed invested in a hypothetical investment
as of the date of deferral.  The amounts of hypothetical income and
appreciation and depreciation in the value of such Account will be credited
and debited to, or otherwise reflected in, such Account from time to time. 

     4.5.  Hypothetical Investment Vehicles.  Subject to the provisions of
Sections 4.6 and 4.8, amounts credited to a Deferred Compensation Account
shall be deemed to be invested, at the Participant's direction, in one or
more investment vehicles as may be specified from time to time by the
Administrator.  The Administrator may change or discontinue any
hypothetical investment vehicle available under the Deferred Compensation
Plan in its discretion; provided, however, that each affected Participant
shall be given the opportunity, without limiting or otherwise impairing any
other right of such Participant regarding changes in investment directions,
to redirect the allocation of his Deferred Compensation Account deemed
invested in the discontinued investment vehicle among the other
hypothetical investment vehicles, including any replacement vehicle.  

     4.6.  Allocation and Reallocation of Hypothetical Investments.  A
Participant may allocate amounts credited to his Deferred Compensation
Account to one or more of the hypothetical

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investment vehicles authorized under the Deferred Compensation Plan. 
Subject to the rules established by the Administrator, a Participant may
reallocate amounts credited to his Deferred Compensation Account to one or
more of such hypothetical investment vehicles as of the next day following
the filing of the Participant's election to reallocate amounts credited to
his Deferred Compensation Account.  The Administrator may, in its
discretion, restrict allocation into or reallocation by specified
Participants into or out of specified investment vehicles or specify
minimum or maximum amounts that may be allocated or reallocated by
Participants.

     4.7.  Dividend Equivalents. Dividend equivalents will be credited on
stock equivalent units credited to a Participant's Deferred Compensation
Account as follows:

          (a)  Cash and Non-Stock Dividends.  If American Water Works 
     declares and pays a dividend on Stock in the form of cash or property
     other than shares of Stock, then a number of additional stock
     equivalent units shall be credited to a Participant's Deferred
     Compensation Account as of the payment date for such dividend equal to
     (i) the number of stock equivalent units credited to the Deferred
     Compensation Account as of the record date for such dividend,
     multiplied by (ii) the amount of cash plus the fair market value of
     any property other than shares actually paid as a dividend on each
     share at such payment date, divided by (iii) the closing market price
     of a share of Stock at such payment date as published in The Wall
     Street Journal report of New York Stock Exchange Composite
     transactions.

          (b)  Stock Dividends and Splits.  If American Water Works
     declares and pays a dividend on Stock in the form of additional shares
     of Stock, or there occurs a forward split of Stock, then a number of
     additional stock equivalent units shall be credited to the
     Participant's Deferred Compensation Account as of the payment date
     for such dividend or forward Stock split equal to (i) the number of
     stock equivalent units credited to the Deferred Compensation Account
     as of the record date for such dividend or split, multiplied by (ii)
     the number of additional shares actually paid as a dividend or issued
     in such split in respect of each share of Stock.

     4.8.  Restrictions on Participant Direction.  The provisions of
Sections 4.5 and 4.6 notwithstanding, the Administrator may restrict or
prohibit reallocations of amounts deemed invested in specified investment
vehicles, and subject such amounts to a risk of forfeiture and other

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restrictions, in order to conform to restrictions applicable to Stock, a
Stock-denominated award, or any other award or amount deferred under the
Deferred Compensation Plan and resulting in such deemed investment, to
comply with any applicable law or regulation, or for such other purpose as
the Administrator may determine is not inconsistent with the Deferred
Compensation Plan.  Notwithstanding any other provision of the Deferred
Compensation Plan to the contrary, deferrals of all Stock-denominated
awards under the American Water Works Company, Inc. Long-Term Performance-
Based Incentive Plan shall be credited to the Participant's Deferred
Compensation Account in the form of stock equivalent units and may not be
reallocated or deemed reinvested in any other investment vehicle.  

                                 ARTICLE V

                               DISTRIBUTIONS
  
     5.1.  Election of Distribution Date.  At the time a Participant makes
an election to defer compensation under Article IV, such Participant shall
also specify in writing in the Deferred Compensation Agreement the date or
event on which the payment of the Participant's Deferred Compensation
Account shall be made.  Payments in settlement of a Deferred Compensation
Account shall be made as soon as practicable after the date or dates
(including upon the occurrence of specified events), and in such number of
installments, as may be directed by the Participant in his election
relating to such Deferred Compensation Account, provided that, in the event
of termination of employment for reasons other than Retirement or
Disability, a single lump sum payment in settlement of any Deferred
Compensation Account (including an Account with respect to which one or
more installment payments have previously been made) shall be made as
promptly as practicable thereafter, unless otherwise determined by the
Administrator.

     5.2.  Distribution of Mandatory Deferrals Not Elected To Be Extended. 
If the Participant has not made an election to extend the deferral period
of any mandatory deferral of a portion of his annual incentive award to be
earned under the Annual Incentive Plan for any Plan Year, a payment of the
cash value of the stock equivalent units credited to his Deferred
Compensation Account attributable to such mandatory deferral, including
additional units credited as a result of dividends as provided under
Section 4.7, shall be made on the date the period of mandatory deferral
ends.
  
     5.3.  Method of Payment.  All distributions under this Deferred
Compensation Plan shall be in the form of a cash payment; provided,
however, that all deferrals of Stock-denominated

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awards under the American Water Works Company, Inc. Long-Term Performance-
Based Incentive Plan shall be paid by delivery of shares of Stock reserved
under such Plan.  

     5.4.  Special Election for Early Distribution.  A Participant may
apply to the Administrator for early distribution of all or any part of his
Deferred Compensation Account excluding any amounts attributable to
mandatory deferrals that have not been credited to his Deferred
Compensation Account for the minimum period of mandatory deferral.  Such
early distribution shall be made in a single lump sum, provided that 10% of
the amount withdrawn in such early distribution shall be forfeited to the
Participant's Employer prior to payment of the remainder to the
Participant.  In the event a Participant's early distribution election is
submitted within one year after a Change in Control, the forfeiture penalty
shall be reduced to 5%.
  
     5.5.  Distributions on Death.  In the event of a Participant's death
before his Deferred Compensation Account has been distributed, distribution
of his entire account (including mandatory deferrals) shall be made to the
Beneficiary selected by the Participant in a single lump sum  payment
within 30 days after the date of death (or, if later, after the proper
Beneficiary has been identified).  A Participant may from time to time
change his designated Beneficiary without the consent of such Beneficiary
by filing a new designation in writing with the Administrator.  If no
Beneficiary designation is in effect at the time of the Participant's
death, or if the designated Beneficiary is missing or has predeceased the
Participant, distribution shall be made to the Participant's estate.
  
     5.6.  Valuation of Cash Distributions.  All cash distributions under
this Deferred Compensation Plan shall be based upon the cash value of the
investment credited to a Participant's Deferred Compensation Account as of
the date immediately preceding the date of the distribution.  It is
understood that administrative requirements may lead to a delay between
such valuation date and the date of distribution, not to exceed 30 days.

     5.7.  Financial Emergency and Other Payments.  Other provisions of
this Deferred Compensation Plan notwithstanding, if, upon the written
application of a Participant, the Administrator determines that the
Participant has a financial emergency of such a substantial nature and
beyond the individual's control that payment of amounts previously deferred
under this Deferred Compensation Plan is warranted, the Administrator may
direct the payment to the Participant of all or a portion of the balance of
his Deferred Compensation Account and the time and manner of such payment.

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                                ARTICLE VI

                    FUNDING AND PARTICIPANT'S INTEREST
  
     6.1.  Deferred Compensation Plan Unfunded.  This Deferred Compensation
Plan shall be unfunded and no trust shall be created by this Deferred
Compensation Plan.  The crediting to each Participant's Deferred
Compensation Account shall be made through record keeping entries.  No
actual funds shall be set aside; provided, however, that nothing herein
shall prevent the Employers from establishing one or more grantor trusts
from which benefits due under this Deferred Compensation Plan may be paid
in certain instances.  All distributions shall be paid by the Employer from
its general assets and a Participant (or his Beneficiary) shall have the
rights of a general, unsecured creditor against the Employer for any
distributions due hereunder.  This Deferred Compensation Plan constitutes a
mere promise by the Employers to make benefit payments in the future.
  
    6.2.  Participant's Interest in Plan.  A Participant has an interest in
the cash value of amounts credited to his Deferred Compensation Account.  A
Participant has no rights or interests in Stock or dividends and has no
right to elect delivery of shares of Stock except as provided in Section
5.3.

                                ARTICLE VII

                     ADMINISTRATION AND INTERPRETATION
  
     7.1.  Administration.  Except where certain duties are delegated to
the Administrator, the Committee shall be in charge of the operation and
administration of this Deferred Compensation Plan.  The Committee has, to
the extent appropriate and in addition to the powers described elsewhere in
this Deferred Compensation Plan,  full discretionary authority to construe
and interpret the terms and provisions of this Deferred Compensation Plan;
to adopt, alter and repeal administrative rules, guidelines and practices
governing this Deferred Compensation Plan; to perform all acts, including
the delegation of its administrative responsibilities to advisors or other
persons who may or may not be employees of the Employers; and to rely upon
the information or opinions of legal counsel or experts selected to render
advice with respect to this Deferred Compensation Plan, as it shall deem
advisable, with respect to the administration of this Deferred Compensation
Plan.

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     7.2.  Interpretation.  The Committee may take any action, correct any
defect, supply any omission or reconcile any inconsistency in this Deferred
Compensation Plan, or in any election hereunder, in the manner and to the
extent it shall deem necessary to carry this Deferred Compensation Plan
into effect or to carry out the Board's purposes in adopting the Plan. Any
decision, interpretation or other action made or taken in good faith by or
at the direction of the Employers, the Board, the board of directors of any
Employer, the Committee, or the Administrator arising out of or in
connection with this Deferred Compensation Plan, shall be within the
absolute discretion of all and each of them, as the case may be, and shall
be final, binding and conclusive on the Employers and all Participants and
Beneficiaries and their respective heirs, executors, administrators,
successors and assigns.  The Committee's or Administrator's determinations
hereunder need not be uniform, and may be made selectively among Eligible
Employees, whether or not they are similarly situated.  Any actions to be
taken by the Committee or Administrator will require majority vote of the
Committee or the Administrator.  If a member of the Committee or the
Administrator is a Participant in this Deferred Compensation Plan, such
member may not decide or determine any matter or question concerning his
benefits under this Deferred Compensation Plan that such member would not
have the right to decide or determine if he were not a member.

     7.3.  Records and Reports.  The Administrator shall keep a record of
proceedings and actions and shall maintain or cause to be maintained all
such books of account, records, and other data as shall be necessary for
the proper administration of this Deferred Compensation Plan.  Such records
shall contain all relevant data pertaining to Participants and their rights
under this Deferred Compensation Plan.  The Administrator shall have the
duty to carry into effect all rights or benefits provided hereunder to the
extent assets of the Employers are properly available.
  
     7.4.  Payment of Expenses.  The Employers, in such proportions as the
Committee determines, shall bear all expenses incurred by them and by the
Committee in administering this Deferred Compensation Plan.  If a claim or
dispute arises concerning the rights of a Participant or Beneficiary to
amounts deferred under this Deferred Compensation Plan, regardless of the
party by whom such claim or dispute is initiated, the Employers shall (in
such proportions as between the Employers as the Committee determines), and
upon presentation of appropriate vouchers, pay all legal expenses,
including reasonable attorneys' fees, court costs, and ordinary and
necessary out-of-pocket costs of attorneys, billed to and payable by the
Participant or by anyone claiming under or through the Participant (such
person being hereinafter referred to as the "Participant's Claimant"), in
connection with the bringing, prosecuting, defending, litigating,
negotiating, or settling of such claim or dispute; provided, that:

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     (a)  The Participant or the Participant's Claimant shall repay to his
Employer any such expenses theretofore paid or advanced by his Employer if
and to the extent that the party disputing the Participant's rights obtains
a judgment in its favor from a court of competent jurisdiction from which
no appeal may be taken, whether because the time to do so has expired or
otherwise, and it is determined by the court that such expenses were not
incurred by the Participant or the Participant's Claimant while acting in
good faith; provided, further, that
  
     (b)  In the case of any claim or dispute initiated by a Participant or
the Participant's Claimant, such claim shall be made, or notice of such
dispute given, with specific reference to the provisions of this Deferred
Compensation Plan, to the Committee within two years (three years, in the
event of a Change in Control) after the occurrence of the event giving rise
to such claim or dispute.
  
     7.5.  Indemnification for Liability.  The Employers shall indemnify
the Administrator, the members of the Committee, and the employees of any
Employer to whom the Administrator delegates duties under this Deferred
Compensation Plan, against any and all claims, losses, damages, expenses
and liabilities arising from their responsibilities in connection with this
Deferred Compensation Plan, unless the same is determined to be due to
gross negligence or willful misconduct.
  
     7.6.  Claims Procedure.  If a claim for benefits or for participation
under this Deferred Compensation Plan is denied in whole or in part, a
Participant will receive written notification.  The notification will
include specific reasons for the denial, specific reference to pertinent
provisions of this Deferred Compensation Plan, a description of any
additional material or information necessary to process the claim and why
such material or information is necessary, and an explanation of the claims
review procedure.  If the Committee fails to respond within 90 days, the
claim is treated as denied.
  
     7.7.  Review Procedure.  Within 60 days after the claim is denied or,
if the claim is deemed denied, within 150 days after the claim is filed, a
Participant (or his duly authorized representative) may file a written
request with the Committee for a review of his denied claim.  The
Participant may review pertinent documents that were used in processing his
claim, submit pertinent documents, and address issues and comments in
writing to the Committee.  The Committee will notify the Participant of its
final decision in writing.  In its response, the Committee will explain the
reason for the decision, with specific references to pertinent Deferred
Compensation Plan provisions on which

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the decision was based.  If the Committee fails to respond to the request
for review within 60 days, the review is treated as denied.

                               ARTICLE VIII

                         AMENDMENT AND TERMINATION
  
     8.1.  Amendment and Termination.  The Committee shall have the right,
at any time, to amend or terminate this Deferred Compensation Plan, in
whole or in part, provided that such amendment or termination shall not
adversely affect the right of any Participant or Beneficiary to payment of
Participant's Deferred Compensation Account.  The Administrator, upon
review of the effectiveness of this Deferred Compensation Plan, may at any
time recommend amendments to, or termination of, this Deferred Compensation
Plan to the Committee.  American Water Works reserves the right, in its
sole discretion, to discontinue deferrals under, or completely terminate,
this Deferred Compensation Plan at any time.  If this Deferred Compensation
Plan is discontinued with respect to future deferrals, Participants'
Deferred Compensation Accounts shall be distributed on the distribution
dates elected in accordance with Section 5.1, unless the Committee
designates that distributions shall be made on an earlier date.  If the
Committee designates such earlier date, each Participant shall receive
distribution of his entire Deferred Compensation Account as specified by
the Committee.  If this Deferred Compensation Plan is completely
terminated, each Participant shall receive distribution of his entire
Deferred Compensation Account in one lump sum payment as of the date this
Deferred Compensation Plan terminates.

                                ARTICLE IX

                         MISCELLANEOUS PROVISIONS
  
     9.1.  Right of Employers to Take Employment Actions.  The adoption and
maintenance of this Deferred Compensation Plan shall not be deemed to
constitute a contract between an Employer and any Eligible Employee, or to
be a consideration for, or an inducement or condition of, the employment of
any individual.  Nothing herein contained, or any action taken hereunder,
shall be deemed to give any Eligible Employee the right to be retained in
the employ of an Employer or to interfere with the right of an Employer to
discharge any Eligible Employees at any time, nor shall it be deemed to
give to an Employer the right to require the Eligible Employee to remain in
its employ, nor shall it interfere with the Eligible Employee's right to
terminate his employment at any time.  Nothing in this Deferred
Compensation Plan shall prevent an Employer from amending, modifying, or
terminating any other benefit plan, including the Annual Incentive Plan.

                                   -12-
<PAGE>
     9.2.  Alienation or Assignment of Benefits.  A Participant's rights
and interest under this Deferred Compensation Plan shall not be assigned or
transferred except as otherwise provided herein, and a Participant's rights
to benefit payments under this Deferred Compensation Plan shall not be
subject to alienation, pledge or garnishment by or on behalf of creditors
(including heirs, beneficiaries, or dependents) of the Participant or of a
Beneficiary. 

     9.3.  Right to Withhold.  To the extent required by law in effect at
the time a distribution is made from this Deferred Compensation Plan, the
Employer or its agents shall have the right to withhold or deduct from any
distributions or payments any taxes required to be withheld by federal,
state or local governments.
  
     9.4.  Construction.  All legal questions pertaining to this Deferred
Compensation Plan shall be determined in accordance with the laws of the
State of New Jersey, to the extent such laws are not superseded by the
Employee Retirement Income Security Act of 1974, as amended, or any other
federal law.
  
     9.5.  Headings.  The headings of the Articles and Sections of this
Deferred Compensation Plan are for reference only.  In the event of a
conflict between a heading and the contents of an Article or Section, the
contents of the Article or Section shall control.
  
     9.6.  Number and Gender.  Whenever any words used herein are in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where they would so apply, and references to the
male gender shall be construed as applicable to the female gender where
applicable, and vice versa.

   AMERICAN WATER WORKS COMPANY, INC.
   
   By: J. James Barr
      President and Chief Executive Officer

    
   Attest:  W. Timothy Pohl
           General Counsel and Secretary