<PAGE> 17
                                                              EXHIBIT 10(b)


                              AMENDMENT NO. 1
                TO THE EMPLOYEES' STOCK OWNERSHIP PLAN OF
                  AMERICAN WATER WORKS COMPANY, INC. AND
                       ITS DESIGNATED SUBSIDIARIES
                   (As Amended Effective January 1, 1989)



     Pursuant to the power reserved to it in Section 13.1 of the Employees'
Stock Ownership Plan of American Water Works Company, Inc. and Its
Designated Subsidiaries, as amended effective January 1, 1989, (the
"Plan"), American Water Works Company, Inc. hereby amends the Plan as
follows, effective immediately:

     1.   SECTIONS 10.2, 10.3 AND 10.4 are hereby deleted and the following
substituted therefor:

          10.2 Distributions Upon Termination of Service.  The balance
          of a Participant's Account as of the December 31 coincident
          with or immediately preceding his termination of service for
          any reason, including disability or retirement, plus any
          amounts subsequently allocated to his Account under Section
          7.2 shall be distributed no later than the February 28 (the
          "Annuity Starting Date") coincident with or immediately
          following the end of the Plan Year in which occurs the last
          allocation to the Participant's Account.  Notwithstanding
          the foregoing, if the value of a Participant's Account
          exceeds $3,500 as of the end of the month preceding the
          month in which he is notified of his election rights under
          this Section 10.2, payment to such Participant shall not be
          made unless the Participant consents in writing to the
          distribution.  Consent to such distribution shall not be
          valid unless the Participant is informed of his right to
          defer receipt of the distribution.  The consent of the
          Participant's spouse, if any, to such distribution shall not
          be required.  A Participant must have his Account
          distributed as of the Annuity Starting Date following the
          close of the Plan Year in which he reaches age 65.  For the
          purpose of this Section 10.2 a Participant's service shall
          not be deemed to have terminated by reason of his transfer
          to an employment status with the Company or a Designated
          Subsidiary which is not covered by this Plan. 
          Notwithstanding the foregoing, the entire value of a
          Participant's Accounts must be distributed beginning no
          later than the Participant's Required Beginning Date.

<PAGE> 18
          10.3 Distribution Upon Death.  Upon termination of a
          Participant's service by reason of his death, the balance of
          his Account as of the December 31 coincident with or
          immediately preceding the Participant's date of death, plus
          any amounts subsequently allocated to his Account under
          Section 7.2, shall be distributed to the Participant's
          Beneficiary, not later than the Annuity Starting Date
          following the end of the Plan Year in which occurs the last
          allocation to the Participant's Account. To the extent
          practicable, the Committee shall insure that any
          distribution pursuant to this Section 10.3 is completed
          within the recipient's taxable year in which it begins.

          10.4 Death After Termination.  If a Participant dies
          following his termination of service, but before any
          distribution is made pursuant to Section 10.2, the balance
          of his Account, as of the December 31 coincident with or
          immediately preceding his termination of service plus any
          amounts subsequently allocated to his Account under Section
          7.2, shall be distributed to the Participant's Beneficiary,
          beginning not later than the Annuity Starting Date following
          the end of the Plan Year in which occurs the last allocation
          to the Participant's Account.  To the extent practicable,
          the Committee shall insure that any distribution pursuant to
          this Section 10.4 is completed within the recipient's
          taxable year in which it begins.

          10.5 Deferred Distribution.  A Participant who elected to
          defer distribution of his Account pursuant to Section 10.2
          may subsequently elect a distribution of his Account as of
          the Annuity Starting Date following the date he provides
          notice of his election in accordance with procedures
          established by the Committee.  A Participant may not elect a
          partial distribution of his Account pursuant to this Section
          10.5.

     2.   SECTIONS 10.5, 10.6, 10.7, 10.8 AND 10.9 are hereby renumbered as
Sections 10.6, 10.7, 10.8, 10.9 and 10.10, respectively.

     3.   SECTION 10.9 is hereby amended by adding the following at the end
thereof:

          All distributions under this Article X shall be made as soon
          as administratively feasible after the applicable Annuity
          Starting Date.


                                     2

<PAGE> 19
          4.   SECTION 13.1 is hereby amended to read as follows:

               13.1 This Plan may be amended at any time, and from
               time to time, by the Company's Retirement Plan
               Committee, provided that such amendment does not
               materially increase the cost of the Plan.  The Plan may
               also be amended at any time and from time to time by
               the Board of Directors.  No amendment shall divest any
               vested interest of any Participant or Beneficiary nor
               be effective unless that Plan, as so amended, continues
               to be maintained for the exclusive benefit of
               Participants and their Beneficiaries.

                            *     *     *     *     *

     To record the adoption of this Amendment No. 1 to the Plan, American
Water Works Company, Inc. has caused its authorized officers to affix its
corporate name and seal this 1st day of February, 1996.


                             AMERICAN WATER WORKS COMPANY, INC.


                             By:   George W. Johnstone



Attest:   W. Timothy Pohl
          General Counsel and Secretary




                                     3

<PAGE> 20
                                                              EXHIBIT 10(f)


                             AMENDMENT NO. 3
                                 TO THE
                   AMERICAN WATER WORKS COMPANY, INC.
                 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                 --------------------------------------
  

     American Water Works Company, Inc. hereby amends the Supplemental
Executive Retirement Plan (the "Plan"), as follows:

     The second sentence of Paragraph 4 of the Plan is amended to read in
its entirety as follows:

          "Average Earnings" means the average of the participant's
          salary paid and Annual Incentive Plan awards granted during
          those 36 consecutive months preceding the earlier of his
          attainment of age 65 or his actual retirement that produce
          the highest average.

     To record the adoption of this Amendment No. 3 to the Plan by its
Board of Directors on January 4, 1996, American Water Works Company, Inc.
has caused its President and Secretary to affix its corporate name and seal
hereto, this 4th day of January, 1996.

                                 AMERICAN WATER WORKS COMPANY, INC.


                                 By:  George W. Johnstone
                                      President and Chief Executive Officer


Attest:



W. Timothy Pohl
   Secretary

<PAGE> 21
                                                              EXHIBIT 10(h)


                               AMENDMENT NO. 1
                                   TO THE
                     AMERICAN WATER WORKS COMPANY, INC.
                        SUPPLEMENTAL RETIREMENT PLAN
                     ----------------------------------


     American Water Works Company, Inc. hereby amends the Supplemental
Retirement Plan (the "Plan"), as follows:

     The second sentence of Paragraph 4 of the Plan is amended to read in
its entirety as follows:

          "Average Earnings" means the average of the participant's
          salary paid and Annual Incentive Plan awards granted during
          those 60 months taken into account under Paragraph 2(s) of
          the Pension Plan in computing the participant's benefit under
          the Pension Plan or any applicable successor provision.
          
     To record the adoption of this Amendment No. 1 to the Plan by its
Board of Directors on January 4, 1996, American Water Works Company, Inc.
has caused its President and Secretary to affix its corporate name and seal
hereto, this 4th day of January, 1996.

                                 AMERICAN WATER WORKS COMPANY, INC.


                                 By:  George W. Johnstone
                                      President and Chief Executive Officer


Attest:


W. Timothy Pohl
   Secretary

<PAGE> 22
                                                              EXHIBIT 10(j)




                    AMERICAN WATER WORKS COMPANY, INC.

                          ANNUAL INCENTIVE PLAN 
                        EFFECTIVE JANUARY 1, 1996

     1.   OBJECTIVE

          The objective of the Annual Incentive Plan (the "Plan") is to
support the business goals of American Water Works Company, Inc. and
certain of its subsidiaries by providing variable, performance-based
incentive compensation to attract, retain and motivate key members of
management who have a substantial impact on the performance and growth of
the American Water System.

     2.   DEFINITIONS

          (a)  "BOARD OF DIRECTORS" shall mean the Board of Directors of
American Water Works Company, Inc.

          (b)  "COMPANY" shall mean American Water Works Company, Inc. and
its Participating Subsidiaries.

          (c)  "COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE" shall
mean the committee of the Board of Directors of that name or its successor.

          (d)  "ELIGIBLE PARTICIPANT" shall mean the President and Chief
Executive Officer and any executive officer or manager recommended for
participation in the Plan by the President and Chief Executive Officer and
approved for participation in the Plan by the Compensation and Management
Development Committee.

          (e)  "INCENTIVE YEAR" shall mean any respective fiscal year of
American Water Works Company, Inc. beginning on or after January 1, 1996
during which the Plan shall be in effect.

          (f)  "PARTICIPATING SUBSIDIARY" shall mean American Water Works
Company, Inc. and any Subsidiary which has been admitted to participation
in the Plan with the approval of the Board of Directors of American Water
Works Company, Inc..

          (g)  "PRESIDENT AND CHIEF EXECUTIVE OFFICER" shall mean the
President and Chief Executive Officer of American Water Works Company, Inc.

          (h)  "SALARY GRADE MIDPOINT" shall mean the respective midpoint
of the salary grade or the equivalent thereof of the Eligible Participant
as of January 1 of the respective Incentive Year.

          (i)  "SUBSIDIARY" shall mean any company of which at least
50 percent of the outstanding voting stock is owned directly or indirectly
by American Water Works Company, Inc.

<PAGE>  23
          (j)  "TARGET AWARD" shall mean such amount expressed as a percent
of Salary Grade Midpoint of an Eligible Participant projected for award to
such Eligible Participant as of the commencement of and for such Incentive
Year on the assumption that the performance objectives of the Company for
the Incentive Year as determined by the Compensation and Management
Development Committee will in each case be achieved.

     3.   ADMINISTRATION AND GENERAL CONDITIONS

          (a)  The Plan shall be administered by the Compensation and
Management Development Committee.

          (b)  As soon as practicable after the commencement of each
Incentive Year, the Compensation and Management Development Committee shall
consult with the President and Chief Executive Officer and shall determine
the Eligible Participants and the Target Award for each Eligible
Participant.  New Eligible Participants may be added during an Incentive
Year by the President and Chief Executive Officer and, if approved by the
Compensation and Management Development Committee, will receive a pro rata
award based on the number of full months in the Incentive Year that such an
employee was an Eligible Participant.  The Compensation and Management
Development Committee may during an Incentive Year revise the Target Award
for an Eligible Participant based on changes in such person's salary grade,
responsibilities or other factors.

          (c)  Any Eligible Participant who ceases to be a full time
employee of the Company during an Incentive Year or is not employed by the
Company on the last day of the incentive year for any reason other than
death, disability or retirement will be deemed ineligible for an award
under the Plan for such Incentive Year.

          (d)  The Compensation and Management Development Committee shall
adopt such rules and procedures and shall make such determinations and
interpretations of the Plan thereunder as it shall deem desirable.  All
such rules, procedures and determinations shall be conclusive and binding
upon all parties.

          (e)  Classification as an Eligible Participant or determination
of a Target Award shall not in themselves be deemed to create any rights or
interests under the Plan, and the interest of an Eligible Participant in
the Plan shall not be assignable either by voluntary or involuntary
assignment or by operation of the law.

          (f)  An award under the Plan shall not confer upon an Eligible
Participant any right to continue in the employ of the Company or limit in
any way the right of the Company to terminate employment of an Eligible
Participant at any time.

          (g)  The Plan shall be effective as of January  1, 1996, subject
to approval by the Board of Directors, and shall continue from year to year
until terminated by the Board of Directors.

                                    -2-

<PAGE> 24
          (h)  The Board of Directors may amend, suspend or terminate the
Plan at any time, but may in no way reduce amounts previously awarded under
the Plan and to which Eligible Participants are entitled.

     4.   DETERMINATION OF AWARDS

          The selection of Eligible Participants and the amount of the
award for each such Eligible Participant shall be determined by the
Compensation and Management Development Committee after consultation with
the President and Chief Executive Officer.  The Compensation and Management
Development Committee shall determine the award to the President and Chief
Executive Officer.

          The Compensation and Management Development Committee no later
than 90 days after the commencement of the Incentive Year shall determine
the performance objectives for the Incentive Year.

          The Compensation and Management Development Committee shall
determine the financial objectives (e.g., earnings per share, operating
income, return on equity, return on assets, total shareholder return,
etc.), the customer service objectives (e.g., water quality, reliability,
responsiveness, etc.) and the operational goals for the Incentive Year. 
The weighting of the selected objectives shall also be determined by the
Compensation and Management Development Committee.

          The Compensation and Management Development Committee may also
take into account the profitability or earnings of the Company in
comparison with a prior year or years, other companies or generally
prevailing economic conditions, the presence or absence of non-recurring or
extraordinary items or income, gain, expense, or loss (including security
gains and losses) and any and all other factors which, in its sole
discretion, it may deem relevant.  Such factors may result in the
Compensation and Management Development Committee adjusting the actual
award received upward or downward from the Target Award.

     5.   PAYMENT OF AWARDS

          Awards shall be payable in cash as soon as practicable after the
consolidated financial results, and other goals for the Incentive Year have
been determined and certified.  Each Eligible Participant's annual award,
if any, will be included as earnings under all Company-sponsored retirement
plans, whether qualified or non-qualified, in accordance with the terms of
the relevant plan as in effect from time to time.

          Twenty percent of the award will be mandatorily deferred and will
be distributed after a restriction period of three years or upon
termination of employment with the Company, if elected by the Eligible
Participant.  The mandatory 20 percent deferred compensation amount will be
invested in stock units of equivalent value of American Water Works
Company, Inc. common stock.  Dividends on such stock units will be assumed
during the deferral period, on the same basis as dividends are actually
paid on American Water Works Company, Inc. common stock, and will be
converted to additional stock units.  The mandatory three year deferral
period shall consist of the

                                    -3-
<PAGE> 25
three calendar years following the Incentive Year.  The value of the stock
units will be determined as of the first business day of the fourth
calendar year following the Incentive Year and shall be paid as soon as
practicable thereafter.

          Eligible Participants will be permitted to elect an amount for
deferral larger than the mandatory 20 percent deferral, and to elect to
defer such amount for three years or to termination of employment with the
Company.  Such request shall be in accordance with the provisions of the
American Water Works Company, Inc. Deferred Compensation Plan.  Any such
deferred awards shall be retained as part of the general assets of the
Company and paid in cash at the end of the deferral period.

     6.   APPLICABLE TAXES

          Payment of all awards hereunder shall be subject to withholding
of all federal, state or local taxes which, by law, must be withheld in
respect to such payment.

          To record the adoption of this Plan, American Water Works
Company, Inc. has caused its authorized officers to affix its corporate
name and seal this 21st day of March, 1996.


                                AMERICAN WATER WORKS COMPANY, INC.


                                By:  George W. Johnstone
                                     President and Chief Executive Officer


Attest:  W. Timothy Pohl
         General Counsel and Secretary

                                    -4-

<PAGE> 26
                                                              EXHIBIT 10(k)


                    AMERICAN WATER WORKS COMPANY, INC.

                        DEFERRED COMPENSATION PLAN

                        (Effective January 1, 1996)

<PAGE> 27
                             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 . . . . . . . . . . . . . . . . . . . . . . .   2
     2.1.     "Administrator" . . . . . . . . . . . . . . . . . . . . .   2
     2.2.     "Annual Incentive Plan" . . . . . . . . . . . . . . . . .   2
     2.3.     "Beneficiary" . . . . . . . . . . . . . . . . . . . . . .   2
     2.4.     "Board" . . . . . . . . . . . . . . . . . . . . . . . . .   2
     2.5.     "Change in Control" . . . . . . . . . . . . . . . . . . .   2
     2.6.     "Committee" . . . . . . . . . . . . . . . . . . . . . . .   2
     2.7.     "Compensation". . . . . . . . . . . . . . . . . . . . . .   3
     2.8.     "Elective Deferred Compensation". . . . . . . . . . . . .   3
     2.9.     "Deferred Compensation Account" . . . . . . . . . . . . .   3
     2.10.    "Deferred Compensation Agreement" . . . . . . . . . . . .   3
     2.11.    "Eligible Employee" . . . . . . . . . . . . . . . . . . .   3
     2.12.    "Participant" . . . . . . . . . . . . . . . . . . . . . .   3
     2.13.    "Plan Year" . . . . . . . . . . . . . . . . . . . . . . .   3

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

ARTICLE IV    ANNUAL INCENTIVE AWARD COMPENSATION DEFERRAL AND
              ACCOUNT CREDITS . . . . . . . . . . . . . . . . . . . . .   5
     4.1.     Annual Incentive Award Deferral Election. . . . . . . . .   5
     4.2.     Deferral in Stock Equivalent Units. . . . . . . . . . . .   5
     4.3.     Mandatory Deferrals of Annual Incentive Plan Awards . . .   5
     4.4.     Period for Which Deferral Election is Effective . . . . .   6

ARTICLE V     DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . .   6
     5.1.     Election of Distribution Date . . . . . . . . . . . . . .   6
     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 . . . . . . . . .   7
     5.5.     Distributions on Death. . . . . . . . . . . . . . . . . .   7
     5.6.     Valuation of Distributions. . . . . . . . . . . . . . . .   8

                                    -i-
<PAGE> 28
                             Table of Contents

                                                                       Page


ARTICLE VI    ACCOUNTS. . . . . . . . . . . . . . . . . . . . . . . . .   8
     6.1.     Deferred Compensation Account . . . . . . . . . . . . . .   8
     6.2.     Crediting of Dividends and Statement of Account . . . . .   9

ARTICLE VII   FUNDING AND PARTICIPANT'S INTEREST. . . . . . . . . . . .  10
     7.1.     Deferred Compensation Plan Unfunded . . . . . . . . . . .  10
     7.2.     Participant's Interest in Plan. . . . . . . . . . . . . .  10

ARTICLE VIII  ADMINISTRATION AND INTERPRETATION . . . . . . . . . . . .  11
     8.1.     Administration. . . . . . . . . . . . . . . . . . . . . .  11
     8.2.     Interpretation. . . . . . . . . . . . . . . . . . . . . .  11
     8.3.     Records and Reports . . . . . . . . . . . . . . . . . . .  12
     8.4.     Payment of Expenses . . . . . . . . . . . . . . . . . . .  12
     8.5.     Indemnification for Liability . . . . . . . . . . . . . .  13
     8.6.     Claims Procedure. . . . . . . . . . . . . . . . . . . . .  13
     8.7.     Review Procedure. . . . . . . . . . . . . . . . . . . . .  14

ARTICLE IX    AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . .  14
     9.1.     Amendment and Termination . . . . . . . . . . . . . . . .  14

ARTICLE X     MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . .  15
     10.1.    Right of Employers to Take Employment Actions . . . . . .  15
     10.2.    Alienation or Assignment of Benefits. . . . . . . . . . .  15
     10.3.    Right to Withhold . . . . . . . . . . . . . . . . . . . .  16
     10.4.    Construction. . . . . . . . . . . . . . . . . . . . . . .  16
     10.5.    Headings. . . . . . . . . . . . . . . . . . . . . . . . .  16
     10.6.    Number and Gender . . . . . . . . . . . . . . . . . . . .  16

                                   -ii-
<PAGE> 29
                                 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.

     This Deferred Compensation Plan provides a means whereby Participants
may defer all or a portion of their annual incentive awards they otherwise
would receive under the Annual Incentive Plan for services performed for
their Employers.  It will also be the means for maintaining Eligible
Employees' mandatory deferrals of a portion of the annual incentive awards
under the Annual Incentive Plan, whether or not those mandatory deferrals
are extended for further deferral periods under this Deferred Compensation
Plan.

     All deferrals under this Deferred Compensation Plan shall be in the
form of stock equivalent units of American Water Works, the number of which
shall be increased whenever a dividend is declared on the common stock of
American Water Works.

<PAGE> 30
                                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 Vice President-Human Resources
of American Water Works Service Company, Inc., or his 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.

     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-
<PAGE> 31
     2.7.     "Compensation" shall mean the annual incentive award payable
to a Participant for a Plan Year under the Annual Incentive Plan before any
reduction to such incentive award is effected in accordance with the Annual
Incentive Plan and Deferred Compensation Agreement.

     2.8.     "Elective Deferred Compensation" shall mean that portion of
the Participant's Compensation which the Participant elects to defer
pursuant to Section 4.1 of this Deferred Compensation Plan in accordance
with the Deferred Compensation Agreement.

     2.9.     "Deferred Compensation Account" shall mean the record keeping
account established by the Administrator for each Participant to which the
portion of a Participant's annual incentive award that is voluntarily
deferred pursuant to Section 4.1 and mandatorily deferred under the terms
of the Annual Incentive Plan (and income thereon) is credited and from
which distributions to the Participant or to his Beneficiary are debited.

     2.10.    "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 Section 4.1 of this Deferred Compensation Plan.

     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.

                                    -3-
<PAGE> 32
                                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
Committee in its sole discretion.

     3.2.     Failure to Designate.  In the event that the Committee fails
to designate the group of Eligible Employees who shall be eligible to
participate for any year, each Eligible Employee who was designated in the
prior year shall be deemed to have been designated for the next succeeding
Plan Year, provided that any such Eligible Employee shall participate for
purposes of the next succeeding Plan Year only if he is actively employed
by an Employer on the first day of such succeeding Plan Year.

     3.3.     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.

     3.4.     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
Committee 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.

                                    -4-
<PAGE> 33
                                 ARTICLE IV

                ANNUAL INCENTIVE AWARD COMPENSATION DEFERRAL

                             AND ACCOUNT CREDITS

     4.1.     Annual Incentive Award Deferral Election.  No later than June
30 of the Plan Year in which an annual incentive award under the Annual
Incentive Plan is earned, each Eligible Employee may irrevocably elect, by
completing and executing a Deferred Compensation Agreement and filing it
with the Administrator, to defer any portion of his annual incentive award
to be earned for that year that is not mandatorily deferred under the
Annual Incentive Plan.  In addition, any mandatorily deferred portion of
the annual incentive award to be earned for the Plan Year may also be
deferred for a longer period as permitted under this Deferred Compensation
Plan provided such election is also made by June 30.

     4.2.     Deferral in Stock Equivalent Units.  All deferred amounts
shall be credited to the Participant's Deferred Compensation Account in the
form of stock equivalent units.  The number of stock equivalent units
(calculated to the nearest thousandth of a unit) to be credited shall be
calculated by dividing (i) the amount of deferred annual incentive award by
(ii) the closing market price of American Water Works common stock as
published in The Wall Street Journal report of New York Stock Exchange
Composite Transactions for the date the annual incentive award was payable
to the Participant.  A Participant shall at all times be fully vested in
the balance of his Deferred Compensation Account.

     4.3.     Mandatory Deferrals of Annual Incentive Plan Awards.  Any
portion of a Participant's annual incentive award that is mandatorily
deferred under the terms of the Annual Incentive Plan shall also be
credited to a Participant's Deferred Compensation Account in the form and
amount of stock equivalent units as calculated in Section 4.2.

                                    -5-
<PAGE> 34
     4.4.     Period for Which Deferral Election is Effective.  A
Participant's deferral election under Section 4.1 shall be effective only
with respect to the annual incentive award for the Plan Year specified in
the Deferred Compensation Agreement.  A Participant must file a separate
Deferred Compensation Agreement by June 30 of each subsequent Plan Year in
order to make annual incentive award deferrals or extend mandatory
deferrals for that Plan Year.

                                 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 cash payment of the Participant's Deferred
Compensation Account shall be made.  Such date may be any of the following:

              (a)  with respect to voluntarily deferred portions of the
annual incentive award:

                   (i)  a period of time equal to the period of mandatory
deferral applicable to a portion of the Plan Year's annual incentive award
for which the voluntary deferral is being made, provided no election is
made to extend the period of deferral for that Plan Year's award subject to
mandatory deferral; or

                   (ii) the Participant's termination of employment for any
reason, including death or disability;

              (b)  with respect to the mandatorily deferred portion of a
Plan Year's annual incentive award, the Participant's termination of
employment for any reason, including death or disability.

                                    -6-
<PAGE> 35
     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 6.2, shall be made on the date the period of mandatory
deferral ends.

     5.3.     Method of Payment.  All distributions under this Plan shall
be in the form of a cash lump sum payment.

     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 and in cash, 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
cash 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

                                    -7-
<PAGE> 36
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 surviving
spouse, or if none, to his surviving children per stirpes, and if none, to
his estate.

     5.6.     Valuation of Distributions.  All distributions under this
Deferred Compensation Plan shall be based upon the cash value of the stock
equivalent units credited to a Participant's Deferred Compensation Account
as of the date immediately preceding the date of the distribution.  The
cash value payable to a Participant or Beneficiary shall be determined by
multiplying the number of stock equivalent units credited to the Deferred
Compensation Account by the closing market price of American Water Works
common stock on the day immediately preceding the date of distribution (or
the last trading day preceding that date) as published in The Wall Street
Journal report of New York Stock Exchange Composite Transactions.  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.

                                ARTICLE VI

                                 ACCOUNTS

     6.1.     Deferred Compensation Account.  The Administrator shall
establish and maintain, or cause to be established and maintained, a
separate Deferred Compensation Account for each Participant hereunder who
executes an election pursuant to Section 4.1 or has a portion of his annual
incentive award mandatorily deferred under the Annual Incentive Plan.  Each
such Participant's Compensation deferred pursuant to a Deferred
Compensation Agreement under Section 4.1 or mandatorily deferred under the
Annual Incentive Plan shall be separately accounted for and credited with
stock equivalent units, for record keeping purposes only, to his Deferred
Compensation

                                    -8-
<PAGE> 37
Account.  A Participant's Deferred Compensation Account shall be solely for
the purpose of measuring the amounts to be paid under this Deferred
Compensation Plan.  The Employers shall not be required to fund or secure
the Deferred Compensation Account in any way, the Employers' obligation to
Participants hereunder being purely contractual.

     6.2.     Crediting of Dividends and Statement of Account.  The
Participant's Deferred Compensation Account shall be deemed invested solely
in stock equivalent units of American Water Works common stock, shall be
denominated in numbers of stock equivalent units, and shall be valued each
time stock equivalent units are credited to such Deferred Compensation
Account by multiplying the units by the then-current market value of
American Water Works common stock.  Whenever a dividend is declared and
payable on American Water Works common stock, the number of stock
equivalent units in the Participant's Deferred Compensation Account will be
increased by the following calculations:

              (a)  the number of units in the Participant's Deferred
Compensation Account multiplied by any cash dividend declared by the Board
on a share of American Water Works common stock, divided by the closing
market price of American Water Works common stock on the related dividend
payment date as published in The Wall Street Journal report of New York
Stock Exchange Composite Transactions; or

              (b)  the number of units in the Participant's Deferred
Compensation Account on the related dividend payment date multiplied by any
stock dividend declared by the Board on a share of American Water Works
common stock.  In the event of any change in the number or kind of
outstanding shares of common stock of American Water Works including a
stock split or splits (other than a stock dividend as provided above) an
appropriate adjustment shall be made in the number of units credited to the
Participant's Deferred Compensation Account.  As soon as practicable

                                    -9-
<PAGE> 38
after the end of each Plan Year (and at such additional times as the
Administrator may determine), the Administrator shall furnish each
Participant with a statement of the balance credited to the Participant's
Deferred Compensation Account.

                                ARTICLE VII

                    FUNDING AND PARTICIPANT'S INTEREST

     7.1.     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.

     7.2.     Participant's Interest in Plan.  A Participant has an
interest in the cash value represented by the stock equivalent units
credited to his Deferred Compensation Account.  A Participant has no rights
or interests in any American Water Works common stock or dividends and has
no right to elect delivery of shares of American Water Works common stock.

                                   -10-
<PAGE> 39
                               ARTICLE VIII

                     ADMINISTRATION AND INTERPRETATION

     8.1.     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.

     8.2.     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 determinations hereunder need not
be uniform, and may be made selectively among Eligible Employees, whether
or not they are similarly

                                   -11-
<PAGE> 40
situated.  Any actions to be taken by the Committee will require the
consent of a majority of the Committee members.  If a member of the
Committee 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.

     8.3.     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.

     8.4.     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:

                                   -12-
<PAGE> 41
              (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.

     8.5.     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.

     8.6.     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

                                   -13-
<PAGE> 42
an explanation of the claims review procedure.  If the Committee fails to
respond within 90 days, the claim is treated as denied.

     8.7.     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 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 IX

                         AMENDMENT AND TERMINATION

     9.1.     Amendment and Termination.  The Board 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 or
Committee, 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 Board.  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

                                   -14-
<PAGE> 43
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 cash payment as of the date
of this Deferred Compensation Plan terminates.

                                 ARTICLE X

                         MISCELLANEOUS PROVISIONS

     10.1.    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.

     10.2.    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.

                                   -15-
<PAGE> 44
     10.3.    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.

     10.4.    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.

     10.5.    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.

     10.6.    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:  George W. Johnstone
                                      President and Chief Executive Officer



Attest:  W. Timothy Pohl
         General Counsel and Secretary


                                   -16-