Document:

Exhibit

Exhibit 10.18
February 12, 2020

Mr. Walter Lynch        
11 John James Audubon Way
Marlton, NJ 08053

Dear Walter:  

On behalf of American Water Works Company, Inc. (the “Company”) and its Board of Directors, we are pleased to offer you the position of Chief Executive Officer and President, effective April 1, 2020.  As Chief Executive Officer and President of the Company, you shall have the authority to control the day-to-day operations of the Company and its corporate strategy subject to the Company’s Bylaws and Delegation of Authority and to the directors and decisions of the Company’s Board of Directors.  You will also be elected to serve as a member of the Board of Directors, without additional compensation for such service.  The following are the terms and conditions of your employment as the Company’s Chief Executive Officer and President.  
Base Salary: You will receive a bi-weekly salary of $35,576.93, which when annualized, would be approximately $925,000.000, subject to applicable withholdings. The salary grade for your position will be 100.  Your compensation will be reviewed annually based on your performance as assessed by the independent members of the Board of Directors. 
APP:  You will continue to participate in the Company's Annual Performance Plan (APP). Your target award under the APP is 100% of your annual base salary, and for 2020 will be prorated based on your current and new salary and target levels.  Under the terms of the APP, your actual award payout may be up to 200% of your target award and will be dependent on both (i) your individual performance which may result in an individual performance factor range of 0 to 200% of your target award and (ii) the application of the Company's Corporate Multiplier (which may range from 0 to 150%) to your individual award.  The independent members of the Board of Directors will establish each performance year a set of mutually agreed upon APP goals and objectives for you as CEO and President. Your APP award for 2020 will be based on the level of progress towards achieving the goals and objectives that were agreed upon and approved by the independent members of the Board of Directors, as reflected in the minutes of the meeting of the Board of Directors at which they were approved.
LTPP: You will continue to participate in American Water’s Long Term Performance Plan (LTPP).   Your target payout under the LTPP is 275% of your annual base salary.  In addition to the LTPP grant that you will receive in February 2020 for your role as EVP & COO, you will receive an additional LTPP grant effective April 1, 2020 to reflect the difference between your February grant and the grant you would be eligible for as CEO and President at your new salary and new level.   The additional LTPP grant will be made in the same proportions and on the same terms as the LTPP grant that you will receive in February 2020.
For reference purposes, awards are currently granted in the following forms of equity in the Company: 30% in restricted stock units, 35% in performance stock units based on relative total shareholder return (TSR) ranking and 35% percent in performance stock units based on compounded adjusted EPS growth. LTPP awards are granted under the terms and conditions of the Company’s 2017 Omnibus Equity Compensation Plan, as it may be amended from time to time (the Plan), the LTPP program then in effect, and a grant document.  Your LTPP awards must be approved by the Executive Development and Compensation Committee of the Board, as well as the independent members of the Board.  In the event of any conflict between the terms of your offer letter and the terms of the Plan, the LTPP program then in effect and the grant document, the terms of those other documents will govern.
In addition, as CEO and President, your equity awards will continue to include specific post-retirement continued vesting provisions applicable to that position. Under these provisions, your equity awards will continue to vest over the normal 

Mr. Walter Lynch
February 12, 2020

Page 2

vesting schedule of the award following a separation of service involving the executive based upon either normal retirement or early retirement, as follows:
		
	•
	in the event of a normal retirement, defined as having attained age 60 and five years of service, an award will continue to vest in full; and

		
	•
	in the event of an early retirement, defined as having attained age 55 and five years of service, 75 percent of each award will continue to vest.

Executive Severance Policy:  You will be entitled to the benefits and subject to the terms of the Company's executive severance policy which provides severance benefits to executives whose employment is involuntarily terminated by American Water for reasons other than cause.  

Benefits:  You will continue to be eligible to participate in American Water’s comprehensive benefits program for you and your eligible dependents.   

401(k) Savings Plan:  You will continue to be eligible to participate in the 401(k) Savings Plan. 

Non-Qualified Deferred Compensation: You will continue to be eligible to participate in our Non-Qualified Deferred Compensation Plan.  The Company may make Employer Matching and Defined Contribution Account contributions as soon as administratively practicable after the end of the applicable plan year.  

Vacation/Holidays:  You are entitled to five (5) weeks of vacation, six (6) floating holidays and eight (8) fixed holidays per calendar year which must be used in accordance with the Company's vacation policy.

Walter, we look forward to working with you as CEO and President as you continue to execute on our strategy and grow the Company.

Please signify your agreement with the foregoing terms of your continued employment by returning to my attention the original of this Agreement.

Sincerely,

/s/ KARL F. KURZ

Chairman of the Board
cc:  Melanie Kennedy, Senior Vice President, Human Resources

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

/s/ WALTER J. LYNCH                        February 14, 2020 ____________________________________________________________________________ 
Signature                                                                                               DateExhibit

Exhibit 10.1.3

Execution Version

EXTENSION AGREEMENT
This EXTENSION AGREEMENT (this “Agreement”), dated as of April 1, 2020, is entered into among AMERICAN WATER CAPITAL CORP., a Delaware corporation (“AWCC” or the “Borrower”), the Lenders party hereto, and Wells Fargo Bank, National Association, as administrative agent for the Lenders (the “Administrative Agent”).
RECITALS
AWCC, the Lenders and the Administrative Agent are parties to that certain Second Amended and Restated Credit Agreement, dated as of March 21, 2018 (the “Credit Agreement”).  Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement.
AWCC, the Lenders party thereto and the Administrative Agent entered into an Extension Agreement, dated April 9, 2019, whereby the Termination Date was extended by a period of one year, pursuant to Section 2.06(b) of the Credit Agreement.
AWCC has requested its second, and final, one-year extension of the Termination Date pursuant to Section 2.06(b) of the Credit Agreement and each Lender executing this Agreement as an “Extending Lender” (each, an “Extending Lender”) has approved such request pursuant to Section 2.06(b) of the Credit Agreement. 
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Extension.  Pursuant to Section 2.06(b) of the Credit Agreement, the Borrower requested an extension of the Termination Date for a period of one year from March 21, 2024 to March 21, 2025 (the “Extension”).  As of the date hereof, the Extending Lenders constituting the Required Lenders have agreed to extend (such agreement evidenced by their execution of this Agreement) the Termination Date as to the Extending Lenders for a period of one year from March 21, 2024 to March 21, 2025.  Subject to the satisfaction of the conditions in Section 3 hereof, the Termination Date as to the Extending Lenders is hereby extended to March 21, 2025.  The Termination Date as to each Non-Extending Lender remains unchanged, subject to the right of the Borrower pursuant to Section 2.06(e) of the Credit Agreement to require any Non-Extending Lender to assign to one or more Eligible Assignees all of its rights and obligations under the Credit Agreement.
2.Limited Waiver.  Subject to the satisfaction of the conditions set forth in Section 3 hereof, the Required Lenders hereby waive the various notice requirements contained in Section 2.06(b) of the Credit Agreement.
3.Conditions to Effectiveness.  The Extension set forth in Section 1 and the limited waiver set forth in Section 2 shall become effective as of the date (the “Effective Date”) on which each of the following conditions precedent shall have been satisfied:

a.    The Administrative Agent shall have received counterparts of this Agreement duly executed by AWCC, the Parent (solely for purposes of acknowledging Section 4), the Administrative Agent and Extending Lenders constituting the Required Lenders.
b.    AWCC shall have paid (i) to Wells Fargo Securities, LLC (“WFS”), for the account of each Extending Lender, an extension fee equal to 0.06% of such Lender’s Commitment as of the Effective Date, (ii) the other fees and reasonable expenses required to be paid on or prior to the Effective Date under that certain fee letter, dated as of March 17, 2020, among AWCC, WFS and Wells Fargo Bank, National Association and (iii) all other fees and reasonable expenses of the Administrative Agent and the Lenders required under the Credit Agreement and any other Loan Document to be paid on or prior to the Effective Date (including reasonable fees and expenses of counsel) in connection with this Agreement.
c.    The Administrative Agent shall have received a certificate of a Responsible Officer of AWCC, dated as of the Effective Date, confirming satisfaction of the conditions set forth in Sections 3.02(b) and 3.02(c) of the Credit Agreement (with all references in such Sections to a Borrowing or Swing Line Borrowing being deemed to be references to the extension of the Termination Date).
d.    The Administrative Agent shall have received copies (certified to be true and complete by a Responsible Officer of the Borrower) of all governmental approvals (if any) required for each of the Borrower and the Parent in connection with the Extension.
4.Reaffirmation.  The Parent hereby confirms and agrees that after giving effect to this Agreement and the Extension, the Obligations owing by the Borrower under the Credit Agreement constitute “Debt” under the Support Agreement.  The Parent acknowledges that the Administrative Agent and the Extending Lenders would not enter into this Agreement in the absence of the acknowledgment and confirmation contained herein.
5.Full Force and Effect.  Except as expressly modified hereby, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof on the date hereof.  As used in the Credit Agreement, “hereinafter,” “hereto,” “hereof,” and words of similar import shall, unless the context otherwise requires, mean the Credit Agreement after giving effect to this Agreement.  Any reference to the Credit Agreement or any of the other Loan Documents herein or in any such documents shall refer to the Credit Agreement and Loan Documents as modified hereby.  This Agreement is limited as specified and shall not constitute or be deemed to constitute an amendment, modification or waiver of any provision of the Credit Agreement except as expressly set forth herein.  This Agreement shall constitute a Loan Document under the terms of the Credit Agreement.
6.Severability of Provisions.  Any provision in this Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction.

7.Successors and Assigns.  The terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto.
8.Expenses.  The Borrower agrees on demand (i) to pay all reasonable fees and expenses of counsel to the Administrative Agent, and (ii) to reimburse the Administrative Agent for all reasonable out-of-pocket costs and expenses, in each case, in connection with the preparation, negotiation, execution and delivery of this Agreement.
9.Applicable Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of New York.
10.Construction.  The headings of the various sections and subsections of this Agreement have been inserted for convenience only and shall not in any way affect the meaning or construction of any of the provisions hereof.
11.Counterparts; Electronic Delivery.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same instrument.  Delivery by any party to this Agreement of its signatures hereon through facsimile or other electronic image file (including .pdf) may be relied upon as if this Agreement were physically delivered with an original hand-written signature of such party and shall be binding on such party for all purposes.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.

AMERICAN WATER CAPITAL CORP.
		
	By:
	/s/ JAMES S. MERANTE    

		
	Name:
	James S. Merante

		
	Title:
	Vice President and Treasurer

Acknowledged and agreed solely as to Section 4 of this Agreement: 

AMERICAN WATER WORKS COMPANY, INC.

		
	By:
	/s/ JAMES S. MERANTE    

		
	Name:
	James S. Merante

		
	Title:
	Vice President and Treasurer

SIGNATURE PAGE TO
EXTENSION AGREEMENT

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, an LC Issuing Bank, a Swing Line Bank and an Extending Lender
By:    /s/ KEITH LUETTEL        
Name:    Keith Luettel
		
	Title:
	Managing Director

SIGNATURE PAGE TO
EXTENSION AGREEMENT

JPMORGAN CHASE BANK, N.A., as an Extending Lender
By:    /s/ NANCY R. BARWIG    
Name:    Nancy R. Barwig
		
	Title:
	Executive Director

SIGNATURE PAGE TO
EXTENSION AGREEMENT

MIZUHO BANK, LTD, as an Extending Lender
By:    /s/ EDWARD SACKS    
Name:    Edward Sacks
		
	Title:
	Authorized Signatory

SIGNATURE PAGE TO
EXTENSION AGREEMENT

PNC BANK, NATIONAL ASSOCIATION, as an Extending Lender
By:    /s/ MEREDITH JERMANN    
Name:    Meredith Jermann
		
	Title:
	Vice President

SIGNATURE PAGE TO
EXTENSION AGREEMENT

U.S. Bank National Association, as an Extending Lender
By:    /s/ RYAN HUTCHINS    
Name:    Ryan Hutchins
		
	Title:
	Senior Vice President

SIGNATURE PAGE TO
EXTENSION AGREEMENT

BANK OF AMERICA, N.A., as an Extending Lender
By:    /s/ DILICIA P. HILL    
Name:    Dilicia P. Hill
		
	Title:
	Senior Vice President

SIGNATURE PAGE TO
EXTENSION AGREEMENT

Royal Bank of Canada, as an Extending Lender
By:    /s/ MARTINA WELLIK    
Name:    Martina Wellik
		
	Title:
	Authorized Signatory

SIGNATURE PAGE TO
EXTENSION AGREEMENT

MUFG Bank, Ltd., as an Extending Lender
By:    /s/ NIETZSCHE RODRICKS    
Name:    Nietzsche Rodricks
		
	Title:
	Managing Director

SIGNATURE PAGE TO
EXTENSION AGREEMENT

TD Bank, N.A., as an Extending Lender
By:    /s/ JASON SIEWERT    
Name:    Jason Siewert
		
	Title:
	Senior Vice President

SIGNATURE PAGE TO
EXTENSION AGREEMENT

TRUIST BANK, formerly known as BRANCH BANKING AND TRUST COMPANY, as an Extending Lender
By:    /s/ MAX GREER    
Name:    Max Greer
		
	Title:
	Senior Vice President

SIGNATURE PAGE TO
EXTENSION AGREEMENT

REGIONS BANK, as an Extending Lender
By:    /s/ TEDRICK TARVER    
Name:    Tedrick Tarver
		
	Title:
	Director

SIGNATURE PAGE TO
EXTENSION AGREEMENT

CoBank, ACB, as an Extending Lender
By:    /s/ BRYAN ERVIN    
Name:    Bryan Ervin
		
	Title:
	Vice President

SIGNATURE PAGE TO
EXTENSION AGREEMENT

BANK OF NEW YORK MELLON, as an Extending Lender
By:    /s/ RICHARD K. FRONAPLEL, JR.    
Name:    Richard K. Fronaplel, Jr.
		
	Title:
	Director

SIGNATURE PAGE TO
EXTENSION AGREEMENT

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