Document:

Support Agreement, as subsequently amended, dated June 22, 2000

 Exhibit 10.3 
 SUPPORT AGREEMENT 
 BETWEEN 
 AMERICAN WATER WORKS COMPANY, INC. 
 AND 
 AMERICAN WATER CAPITAL CORP. 
 This Agreement is made the 22nd day of June 2000, by and
between AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation (“Parent”) and AMERICAN WATER CAPITAL CORP., a Delaware corporation (“Subsidiary”). 
 BACKGROUND 
 Parent is the owner of 100% of the outstanding common stock of Subsidiary: 
 From time to time Subsidiary intends to borrow from, and issue debt securities or other obligations to, and incur other obligations and liabilities to,
parties other than Parent (“Debt”), so that Subsidiary will be in a position to provide financing for Parent and some or all of Parent’s directly and indirectly owned, water utility subsidiaries; 
 Parent and Subsidiary desire to take certain actions to enhance and maintain the financial condition of Subsidiary as set forth below in order to enable
the Subsidiary to issue the Debt on more advantageous and reasonable terms; and 
 Third party creditors will rely upon this Agreement in
making loans or extending credit to Subsidiary; 
 AGREEMENT 
 THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
 1. Definitions. As used in this Agreement, the following capitalized terms have the respective meanings set forth below. 
 (a) “Debt”, means (a) all indebtedness for borrowed money; (b) all obligations evidenced by notes, bonds, debentures or other similar
instruments; (c) all obligations as lessee under leases that have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; (d) all obligations 

 
contingent or otherwise under letter of credit or similar facilities; (e) all obligations purchase, redeem, retire, defease or otherwise make any
payment in respect of any capital stock of or other ownership or profit interest of any warrants, rights or options to acquire such capital stock; (f) all obligations in respect of hedge agreements (including, without limitation, interest rate
swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar currency agreements); (g) any other obligations or liabilities involving financial or
monetary payment; and (h) guarantees of any of the foregoing. 
 (b) “Lender”, means any person, firm, corporation or other
entity to which Subsidiary is indebted for money borrowed or to which Subsidiary otherwise owes any Debt or that is acting as trustee or authorized representative on behalf of such person, firm, corporation or other entity. 
 2. Stock Ownership. Parent owns and, during the term of this Agreement shall continue to own, all of the voting stock of Subsidiary, free and
clear of any lien, security interest or other charge or encumbrance. 
 3. Net Worth. Parent agrees that it will cause Subsidiary to
have at all times a positive tangible net worth (total assets less liabilities less intangible assets), as determined in accordance with generally accepted accounting principles. 
 4. Liquidity Provision. If, during the term of this Agreement, Subsidiary is unable to make timely payment of interest, principal or premium, if
any, on any Debt issued by it, Parent promptly shall provide to Subsidiary, at its request or at the request of any Lender, such funds (in the form of cash or liquid assets) as equity or if Parent and Subsidiary shall agree as a loan. If such funds
are advanced to Subsidiary as a loan, that loan will be on such terms and conditions, including maturity and rate of interest, as Parent and Subsidiary will agree. Notwithstanding the foregoing, any such loan will be subordinated in all respects to
any and all Debt of Subsidiary, whether or not such Debt is outstanding at the time of such loan. 
 5. Waivers: Subrogation. Parent
hereby waives any failure or delay on the part of Subsidiary in asserting or enforcing any of its rights or in making any claims or demands hereunder. Subsidiary or any Lender may at any time, without Parent’s consent, without notice to Parent
and without affecting or impairing Subsidiary’s or such Lender’s rights or Parent’s obligations hereunder, do any of the following with respect to any Debt: (a) make changes, modifications, amendments or alterations, by operation
of law or otherwise, (b) grant renewals and extensions of time, for payment or otherwise, (c) accept new or additional documents, instruments or agreements relating to or in substitution of said Debt, or (d) otherwise handle the
enforcement of their respective rights and remedies in accordance with their business judgment. To the extent any rights of subrogation exist, the Parent shall not be entitled to be subrogated to any rights of any Lender against the Subsidiary for
the payment of the Debt until all Debt is indefeasibly paid in full. 
  

 - 2 - 

 6. Termination; Amendment. This Agreement may be terminated by written agreement signed by both
parties or, at any time no Debt is outstanding or committed to, by Parent upon three days’ prior written notice to Subsidiary. This Agreement may be amended at any time by written amendment signed by both parties. However, no amendment to the
Agreement that adversely affects the rights of any Lender and no termination of this Agreement shall be effective until such time as all Debt shall have been irrevocably paid in full and all commitments for Debt have been terminated, unless the
Lenders holding a majority of the aggregate principal amount of Debt outstanding and (to the extent not outstanding) committed to consent in writing thereto. Notwithstanding the foregoing. 
 (a) any amendment to this Agreement for the purpose of (i) increasing the minimum net worth as provided in paragraph 3 of this Agreement;
(ii) establishing or increasing a minimum interest coverage ratio; (iii) establishing or reducing a maximum amount of debt leverage; (iv) increasing the aggregate principal amount of debt outstanding whose holders are required to
consent to the termination or amendment of this agreement; or, (v) any combination of (i), (ii), (iii) and (iv) above, shall be effective without the consent of any Lender or the holder of any Debt, and 
 (b) nothing in this section 6 shall derogate from, or override, any provision in an instrument, indenture, agreement or other document pursuant to which
Debt is or will be issued that requires the written consent of the holders of a specified amount or percentage of such Debt to consent to an amendment or termination of this Agreement. 
 7. Rights of Lenders. Any Lender to Subsidiary shall have the right to demand that Subsidiary enforce Subsidiary’s rights under paragraphs 2,
3 4 and 5 of this Agreement, and, if Subsidiary fails or refuses to take timely action to enforce its rights under paragraphs 2, 3, 4 and 5 of this Agreement or if Subsidiary defaults in the timely payment of interest, principal or premium, if any,
on any debt owed to Lender when due, that Lender may proceed directly against Parent to enforce Subsidiary’s rights under paragraphs 2, 3, 4 and 5 of this Agreement or to obtain payment of such defaulted interest, principal or premium, if any,
owed to such Lender. 
 8. Notices. Any notice, instruction, request, consent, demand or other communication required or contemplated
by this Agreement shall be in writing, shall be given or made or communicated by United States first class mail, telex, facsimile transmission or hand delivery, addressed as follows: 
  

 - 3 - 

			
	If to Parent:	  	If to Subsidiary:
		
	 American Water Works Company, Inc.
	  	 American Water Capital Corp.

	 1025 Laurel Oak Road
	  	 1025 Laurel Oak Road

	 P.O. Box 1770
	  	 P.O. Box 1770

	 Voorhees, NJ 08043
	  	 Voorhees, NJ 08043

	 ATTN: Treasurer
	  	 ATTN: Treasurer

 9. Successors. This Agreement will be binding upon the parties hereto and their respective
successors and assigns and is also intended for the benefit of the holders from time to time of the Debt and, notwithstanding that such holders are not parties hereto, each such holder shall be entitled to the full benefits of this Agreement and to
enforce the covenants and agreements contained herein. This Agreement is not intended for the benefits of any person other than holders of Debt, and will not confer or be deemed to confer upon any other such person any benefits, rights or remedies
hereunder. 
 10. Governing Law. The laws of the State of New York shall govern this Agreement. 
 11. Remedies. The parties to this Agreement acknowledge and agree that breach of any of the covenants of Parent set forth herein may not be
compensable by payment of money damages and, therefore, that the covenants of Parent set forth herein may be enforced in equity by a decree requiring specific performance. Such remedies shall be cumulative and non-exclusive and shall be in addition
to any other rights and remedies Subsidiary may have under this Agreement. 
 IN WITNESS WHEREOF, the parties hereto have set their hands and
affixed their corporate seals as of the last day and year above written. 
  

									
	[SEAL]	 		 	AMERICAN WATER WORKS COMPANY, INC.
					
	Attest:	 	 

	 		 	By:	 	 

		 	Secretary	 		 		 	Vice President and Chief Financial Officer
				
	[SEAL]	 		 		 	AMERICAN WATER CAPITAL CORP.
					
	Attest:	 	 

	 		 	By:	 	 

		 	Secretary	 		 		 	Vice President and Treasurer

  

 - 4 - 

 FIRST AMENDMENT TO 
 SUPPORT AGREEMENT 
 BETWEEN 
 AMERICAN WATER WORKS COMPANY, INC. 
 AND 
 AMERICAN WATER CAPITAL CORP. 
 This agreement, made as of the 26th day of July, 2000, is an amendment to that certain Support Agreement made the 22nd day of June 2000 (The
“Support Agreement”), by and between AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation (“Parent”) and AMERICAN WATER CAPITAL CORP., a Delaware corporation (“Subsidiary”). 
 BACKGROUND 
 On June 22, 2000 Parent and
Subsidiary entered into a Support Agreement to maintain the financial condition of Subsidiary in order to enhance the Subsidiary’s ability to issue “Debt” (as that term is defined in therein). 
 The Support Agreement provides that it cannot be terminated while the Subsidiary’s Debt securities are outstanding, or amended in a manner that
adversely affects the rights of any Lender (as that term is defined therein), unless the Lenders holding a majority of the aggregate principal amount of Debt outstanding and, (to the extent not outstanding committed to, consent in writing thereto.

 The Support Agreement also provides that, without the consent of any Lender, the Parent and Subsidiary may amend the Support Agreement to
increase the aggregate principal amount of debt outstanding-whose holders are required to consent to such a termination or amendment. 
 The
Parent and Subsidiary have determined that it is in their best interests to amend the Support Agreement to require that that it may not be terminated while Debt is outstanding, nor amended in a manner that adversely affects the rights of any Lender,
unless the Lenders holding all of the aggregate principal amount of Debt outstanding and, (to the extent not outstanding) committed to, consent in writing thereto. 
 AGREEMENT 
 THEREFORE, in consideration of the premises, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows. 

 The third sentence of Section 6 of the Support Agreement, which formerly read: 
 However, no amendment to the Agreement that adversely affects the rights of any Lender and no termination of this Agreement shall be effective until such
time as all Debt shall have been irrevocably paid in full and all commitments for Debt have been terminated, unless the Lenders holding a majority of the aggregate principal amount of Debt outstanding and (to the extent not outstanding) committed to
consent in writing thereto. 
 is amended to read: 
 However, no amendment to the Agreement that adversely affects the rights of any Lender and no termination of this Agreement shall be effective until such time as all Debt shall have been irrevocably paid in full and
all commitments for Debt have been terminated, unless the Lenders holding all of the aggregate principal amount of Debt outstanding and (to the extent not outstanding) committed to consent in writing thereto. 
 In all other respects the Support Agreement is unchanged. 
 IN WITNESS WHEREOF, the parties hereto have set their hands and affixed their corporate seals as of the last day and year above written. 
  

							
	[SEAL]	 		 	AMERICAN WATER WORKS COMPANY, INC.
				
	Attest:	 	 

	 	By:	 	 

		 	Secretary	 		 	Vice President and Chief Financial Officer
			
	[SEAL]	 		 	AMERICAN WATER CAPITAL CORP.
				
	Attest:	 	 

	 	By:	 	 

		 	Secretary	 		 	Vice President and Assistant Treasurer

  

 - 2 -RWE Long-Term Incentive Beat Plan 2005, dated as of April 20, 2005

 Exhibit 10.7 
 

 

 Objectives/Preamble 
 RWE AG follows a corporate strategy that is aligned with the shareholders’ interests and aims to increase long-term shareholder value. To align the actions of the top-management with this corporate objective, retain key talent and to
reward loyalty with the company, phantom shares (Performance Shares) are granted under the Performance Share Plan (PSP). At the end of a vesting period (§ 4 para. 3), these Performance Shares are paid out in cash depending on the Total
Shareholder Return (TSR, see § 5) of RWE ordinary share (RWE Share) relative to the TSR of those companies in the DJ STOXX Utilities Index. The Performance Shares are granted via an individual grant letter to the eligible board members and
executives of RWE AG by RWE AG and to the remaining eligible board members, managing directors, and executives by the respective employing company within the RWE group (hereafter all referred to as the Employing Company). The following plan
conditions for the PSP are part of the individual grant letter. 
  

	§ 1	Participation, voluntary participation, voluntary grant 

  

	(1)	Eligibility extends to the members of the executive board of RWE AG, executive board members of the management companies as well as other selected executives invited with a grant
letter from their Employing Company (“Plan Participant”). The decision regarding eligibility and the number of shares granted rests with the Employing Company based on the RWE AG guidelines. 

  

	(2)	PSP participation is voluntary. 

  

	(3)	Each year RWE AG determines if and to what extent Performance Shares are granted in the respective year on a discretionary basis. 

  

	(4)	The grant of Performance Shares is at the discretion of the Employing Company. Even if Performance Shares have been granted in the past, no claim to future grants of Performance
Shares or similar benefits of equal value arises. 

  

	§ 2	Performance Shares 

  

	(1)	Performance Shares are phantom shares through which Plan Participants receive the right to an amount of cash at the end of the vesting period (§ 4 para. 3). The level of payout
is subject to the share price of the RWE Share as well as TSR relative to the other DJ STOXX Utilities Index companies over the vesting period. 

  

	(2)	The Performance Shares do not carry voting or dividend rights. 

  

	(3)	Performance Shares may not be sold, mortgaged, transferred, ceded or bequeathed. Furthermore, no legal transactions may be executed with the Performance Shares that in any way
economically lead to their sale or to the transfer of opportunities and risks linked with the shares to third parties. The Performance Shares will be forfeited without substitution or compensation to the amount that the Plan Participant uses the
Performance Shares as collateral security or to which a creditor of the Plan Participant proceeds to the forced sale of the performance share rights granted on the basis of these plan conditions. 

  

	§ 3	Mandatory personal investment of board members 

  

	(1)	A precondition for the granting of Performance Shares to members of the executive board of RWE AG and to executive board members of the management companies (hereafter all referred
to as “Board Members”) is a personal investment in the form of RWE Shares. 

  

 1 

	(2)	The personal investment equals one third of the grant value of the Performance Shares (§ 4 para. 2) after taxes. The number of shares to be purchased (“Personal Investment
Shares”) is disclosed to the Board Members through the individual grant letter. 

  

	(3)	The Personal Investment Shares must be deposited at a securities account which has specifically been opened up for this purpose and which has been blocked to the benefit of the
Employing Company. 

  

	(4)	The Personal Investment Shares are blocked up to the end of the vesting period (§ 4 para. 3). A breach of the blocking leads to the forfeiture without substitution of the
Performance Shares of the respective board member to the extent of the breach. 

  

	(5)	Concerning the purchase of Personal Investment Shares by the Board Members it must be ensured, that the purchase of RWE Shares does not infringe upon company- and/or group
directives or insider trading laws. 

  

	(6)	Further details regarding the realisation of the personal investment can be found in the “Personal Investment Regulations” which are part of these plan conditions in their
most current version. 

  

	§ 4	Grant date, Vesting Period 

  

	(1)	The Performance Shares are granted on 1st January in any particular year (Grant Year). 

  

	(2)	The Plan Participants receive, in the first quarter of the Grant Year, a grant letter which specifies the number of shares granted and their expected value (Grant Value).

  

	(3)	The term of the PSP is three years (Vesting Period). The Vesting Period begins on 1st January of the Grant Year and ends with closing of 31st December of the second year
following the Grant Year. 

  

	(4)	The right to receive a specific amount of money arises only with the expiry of the Vesting Period. Precondition for the payout is the achievement of the performance criteria
(§§ 5, 6) as well as an active employment status with a company of the RWE group at the end of the Vesting Period. The rules set out in § 7 remain unaffected by this. 

  

	§ 5	Performance criterion 

  

	(1)	The performance criterion for the determination of the payout level is the TSR of the RWE Share relative to the TSR of the shares of the companies (Index Companies) that are listed
in the DJ STOXX Utilities Index (“Index”). The relevant date for the determination of the index companies results from § 6 para. 4. 

  

	(2)	The following definitions of terms are applicable for the TSR calculation as described under § 5 para. 3: 

  

	 	a)	Base price 

 The base price is the average of the closing
prices during Average Period 1 at the stock exchange whose quotation is used for the determination of the Index. 
  

	 	b)	Trading days 

 These are all trading days on which an Index
is calculated. 
  

	 	c)	Average Period 1 

 The Average Period 1 is defined as the
last 20 trading days of the year prior to the Grant Year. 
  

 2 

	 	d)	Average Period 2 

 The Average Period 2 is defined as the
last 20 trading days prior to the end of the Vesting Period. 
  

	 	e)	The Adjusted Share Price is the closing price of the share multiplied by all adjustment factors that have been determined since the beginning of the Vesting Period (§ 5 para. 2
g). 

  

	 	f)	The Relevant Adjusted Share Price at the end of the Vesting Period results from the average of the Adjusted Share Prices of the last 20 trading days prior to the end of the Vesting
Period. 

  

	 	g)	The adjustment factors are determined for the following equity events: 

  

	 	i.	dividend payments 

  

	 	ii.	nominal value changes and stock split 

  

	 	iii.	issue of purchase rights 

  

	 	iv.	bonus shares 

  

	 	v.	spin-off 

 The determination and use of the adjustment
factors is based on the rules of the index-provider. 
  

	(3)	The TSR of a share (in %) is calculated as follows: The Base Price (§ 5 para. 2 a) is subtracted from the relevant Adjusted Share Price (§ 5 para. 2 f). This result
is divided by the Base Price. 

  

	§ 6	Payout, regular payout date 

  

	(1)	To determine the payout, the TSR of the RWE Share must be compared to the TSR of the shares of the individual index-companies. 

  

	(2)	To determine the payout for the Performance Shares, the following steps are necessary: 

  

	 	a)	First, the index weights (in %) of the individual Index Companies during the Average Period 1 are determined excluding the RWE Share. 

  

	 	b)	The TSR for each individual Index Company and the RWE Share is then calculated and ranked in descending order (i.e. the company with the highest TSR ranks first, followed by the one
with the second highest TSR, etc.). 

  

	 	c)	The TSR rank for RWE is determined along with the cumulative index weights of all Index Companies that have a lower TSR than RWE. This sum forms the subtotal.

  

	 	d)	If the subtotal is less than 25%, no payout of the Performance Shares will occur. If the subtotal is at 25% or more, the subtotal is squared and then multiplied by a factor of 1.25
(Final Result). 

  

	 	e)	The Final Result is multiplied by the initial number of Performance Shares granted as set out in the individual grant letter. The result is the final number of Performance Shares .

  

	 	f)	The final number of Performance Shares is multiplied by the average closing price of the RWE Share during the Average Period 2 (§ 5 para. 2 d) (Payout Amount).

  

	 	g)	The maximum amount is limited to three times the Grant Value of the Performance Shares (§ 4 para. 2). Furthermore, the supervisory board of RWE AG can, in case of exceptional
or unforeseeable developments, arrange for further limitations to payouts for the RWE AG executive Board Members. 

  

 3 

	(3)	The Employing Company will remit the payout after the Vesting Period together with the March salary payment (Regular Payout Date). 

  

	(4)	If the accounting of the Employing Company is done in a currency other than the Euro, the payout will be effected in this currency. The conversion of the Payout Amount is carried
out at the average of the fixing prices of the European Central Bank for the days comprising Average Period 2. 

  

	(5)	The relevant date for the determination of which companies are listed in the Index is the 31st December of the year before the Grant Year. Should any companies that are part of
the Index at this point of time drop out of the Index in the course of the Vesting Period, the index weight of the remaining Index Companies will be adjusted accordingly. Should any acquisition or merger take place between two or more Index
Companies during the Vesting Period, the company with highest index weight will be continued. The index weight of the remaining Index Companies are recalculated without the weight of those companies that have left the Index.

  

	(6)	The TSR for the RWE Share and the Index Companies as well as the payouts under the PSP will be calculated by a bank (Point of Determination) which is appointed by RWE AG. Currently
the Point of Determination is the HSBC Trinkaus & Burkhardt KGaA, Düsseldorf. RWE AG may appoint a new bank at any time. 

  

	(7)	All value calculations provided by RWE AG and/or by the Employing Company during the Vesting Period for informational purposes are without obligation. 

  

	§ 7	Termination and cancellation of employment, as well as death 

  

	(1)	If employment is terminated or cancelled before end of the Vesting Period 

  

	 	a)	by the Plan Participant or 

  

	 	b)	by the Employing Company for reasons lying in the behaviour or the person of the Plan Participant 

 the granted Performance Shares will lapse without substitution or compensation. 
  

	(2)	If, before the end of the Vesting Period, employment is 

  

	 	a)	terminated or cancelled by the Employing Company without reasons lying in the behaviour or in the person of the Plan Participant, 

 or 
  

	 	b)	terminated through (early) retirement and the Plan Participant receives a state or company pension, 

 then the Performance Shares of the Plan Participant are paid out on the regular payout date at the end of the Vesting Period according to the calculation
in § 6. 
  

	(3)	Should 

  

	 	a)	a Plan Participant leave the Employing Company for non-self initiated reasons, which do not fall under §§ 7 para. 1 and 7 para. 2, 

 or should 
  

	 	b)	a company of the RWE group, whose employees have been granted Performance Shares, leave the group, 

 then the Performance Shares of the respective affected Plan Participants will lapse. As compensation for this forfeiture a 

  

 4 

 
compensatory payment is provided at the next possible date. This payment is equivalent to the Grant Value (§ 4 para. 2) from the individual grant letter
pro-rated for the service during the Vesting Period. 
  

	(4)	In the case of death of the Plan Participant before the end of the Vesting Period all Performance Shares lapse and a compensatory payment is provided for the Performance Shares.
This payment equals the Grant Value (§ 4 para. 2) from the individual grant letter and is pro-rated for service during the Vesting Period up to the Plan Participant’s death. The compensatory payment is paid out immediately.

  

	(5)	§§ 7 para. 2 and 7 para. 3 do not apply if the Plan Participant transfers from one RWE group company to another which participates in the PSP. In this case the Performance
Shares continue to be valid. Following the transfer the new company becomes the Employing Company for the purpose of these plan conditions. 

  

	§ 8	Change-in-ControI 

  

	(1)	A change-in-control occurs when as a result of the German Securities Acquisition and Takeover Act (“Wertpapiererwerbs- und Übernahmegesetz”) a compulsory offer to the
RWE AG shareholders has to be published. 

  

	(2)	Should a change-in-control for the purpose of § 8 para. 1 occur during the Vesting Period, all Performance Shares lapse without compensation at the time of the purchase of the
RWE Shares and the actual disposal of the shares through the investor. A compensatory payment will be provided for the lapsed shares. This payment will be determined through application of §§ 5 and 6 to the time of the take-over bid.
However, the final takeover price paid for the RWE Shares - under consideration of possible improvements - is used as the relevant Adjusted Share Price (for the purpose of § 5 para. 2 f). The determined compensatory amount is paid out with the
next possible salary payment. 

  

	(3)	Should RWE AG merge with another company and the merger does not only concern RWE group companies, the Performance Shares lapse and a compensatory payment will be provided. For this
purpose the expected value of the Performance Shares at the time of the merger is calculated by the point of determination. This expected value is multiplied by the number of Performance Shares granted and prorated up to the date of the merger. The
resulting amount will be paid to the participant with the next possible salary payment. 

  

	§ 9	Administration 

  

	(1)	The administration of the PSP is carried out by RWE AG and by the Employing Company, respectively. 

  

	(2)	RWE AG and the Employing Company may issue instructions required for the administration and management and also put third parties in charge of the administration.

  

	§ 10	Costs 

  

	(1)	The Employing Company bears the costs for the administration of the performance share plan. 

  

	(2)	The Board Members who must provide a personal investment, bear the costs of setting up of the bank deposit, the costs of the purchase and the costs relating to the transfer of the
Personal Investment Shares according to § 3 para. 3. 

  

 5 

	§ 11	Adjustments as a result of changes to the nominal capital 

  

	(1)	Should there be a change to RWE AG’s nominal capital or should reorganisation measures that immediately affect RWE AG’s equity (e.g. spin-offs) occur in the course of the
term, RWE AG is entitled but not obliged to amend the number of Performance Shares so that the total value of Performance Shares granted to all participants after execution of the respective measure largely equals the total value of all granted
Performance Shares immediately before execution of the measure. Where applicable, Performance Shares which were granted as a result of the measure are included in the determination of the total value. 

  

	(2)	An adjustment will not be made by RWE AG if it is not legally permitted, already legally conducted, or if the changes in respect of the reorganisation have only a minimal effect on
the total value of the Performance Shares. 

  

	§ 12	Taxes, duties and other expenses 

  

	(1)	Taxes, duties and other expenses accruing as a result of the grant, compensation or payout of the Performance Shares are to be borne by the Plan Participants.

  

	(2)	The Employing Company will retain the accruing taxes and duties as far as this is possible according to the applicable law of the respective country. 

  

	§ 13	Price risks 

 RWE AG does not assume any guarantees
whatsoever for any possible market developments of the RWE Share price or the share prices of the other index companies, nor for the respective dividend payments after grant or for any other time frame or period. 
  

	§ 14	Written format 

 Any changes and supplements to
these plan conditions and all agreements respective to this performance share plan must be in writing. 
  

	§ 15	Applicable law and court of jurisdiction 

  

	(1)	The content of these plan conditions and the individual grant letter as well as all rights and obligations resulting thereof for the Plan Participant, the Employing Company or RWE
AG are governed in all respects by the law of the Federal Republic of Germany. 

  

	(2)	Place of fulfilment and court of jurisdiction for all legal disputes from or in connection with the Performance Shares and the stipulations set out in these plan conditions is, as
far as legally allowable, Essen. 

  

	§ 16	Miscellaneous 

  

	(1)	 Should individual clauses of these plan conditions be or become invalid or non-feasible in part or in their totality or should there be a gap in these conditions,
this shall in no way affect the validity of the other plan conditions. The invalid or non-feasible clause shall, by the way of supplementary contractual interpretation, be replaced by a valid and feasible clause which corresponds to the spirit and
purpose of the invalid and non-feasible clause. In case of a gap, an appropriate clause will be determined, which corresponds to what would have been stipulated according to the spirit and purpose of these plan conditions, 

  

 6 

	 	 
had the situation been addressed in the first place. This also holds true if the invalidity of a clause is based on a measurement of a benefit or time which
has been standardised in these plan conditions. In these cases a legally allowed measurement of a benefit or time replaces the stipulated provision that comes closest to the initial intention. 

  

	(2)	If there are any changes to the stock exchange usages during the term of the Performance Shares which make the enforcement of these plan conditions or of individual clauses
significantly more difficult or impossible, RWE AG is entitled to make appropriate amendments. 

  

	(3)	Captions of paragraphs are solely for orientation purposes and may not be drawn upon for interpretation purposes. 

  

	(4)	The version of the German original text is legally binding. In case of deviations from these plan conditions in a language other than German it must be taken into consideration that
the text in the other language is for informational purposes only. For interpretation the German version only is relevant. 

  

	§ 17	Validity 

 The plan conditions of the performance
share plan take effect retroactively to 1st January 2005. 
 Essen, 20 April, 2005 
 RWE AG 
  

 7

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