Exhibit 10.1
AMERICAN WATER WORKS COMPANY,
INC.
2007 OMNIBUS EQUITY COMPENSATION
PLAN
(As amended and restated,
effective as of May 8, 2009)
1. Purpose
The purpose of the American Water
Works Company, Inc. 2007 Omnibus Equity Compensation Plan, as
amended and restated, effective as of May 8, 2009, (the
“Plan”) is to provide (i) designated employees of
American Water Works Company, Inc. (the “Company”) and
its subsidiaries and (ii) non-employee members of the board of
directors of the Company with the opportunity to receive grants of
stock options, stock units, stock awards, stock appreciation rights
and other stock-based awards. The Company believes that the Plan
will encourage the participants to contribute materially to the
growth of the Company, thereby benefiting the Company’s
stockholders, and will align the economic interests of the
participants with those of the stockholders.
2.
Definitions
Whenever used in this Plan, the
following terms will have the respective meanings set forth
below:
(a) “Board” means
the Company’s Board of Directors.
(b) “Change of
Control” shall be deemed to have occurred if:
(i) Any “person” (as
such term is used in sections 13(d) and 14(d) of the Exchange Act)
becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing more than 50% of the voting power of the
then outstanding securities of the Company; provided that a Change
of Control shall not be deemed to occur as a result of (A) a
transaction in which the Company becomes a subsidiary of another
corporation and in which the stockholders of the Company,
immediately prior to the transaction, will beneficially own,
immediately after the transaction, shares entitling such
stockholders to more than 50% of all votes to which all
stockholders of the parent corporation would be entitled in the
election of directors, (B) the initial public offering of the
Company Stock, or (C) any subsequent offering of shares of the
Company Stock;
(ii) The consummation of (A) a
merger or consolidation of the Company with another corporation
where the stockholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately
after the merger or consolidation, shares entitling such
stockholders to more than 50% of all votes to which all
stockholders of the surviving corporation would be entitled in the
election of directors, (B) a sale or other disposition of all
or substantially all of the assets of the Company, or (C) a
liquidation or dissolution of the Company; or
(iii) After the Original Effective
Date, directors are elected such that a majority of the members of
the Board shall have been members of the Board for less than one
year, unless the election or nomination for election of each new
director who was not a director at the beginning of such one-year
period was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning
of such period.
Notwithstanding the foregoing, the
Committee may provide for a different definition of a “Change
of Control” in a Grant Agreement if such Grant is subject to
the requirements of section 409A of the Code and the Grant will
become payable on a Change of Control.
(c) “Code” means
the Internal Revenue Code of 1986, as amended.
(d) “Committee”
means (i) with respect to Grants to Employees, the
Compensation Committee of the Board or another committee appointed
by the Board to administer the Plan, (ii) with respect to
Grants made to Non-Employee Directors, the Board, and
(iii) with respect to Grants that are intended to be
“qualified performance-based compensation” under
section 162(m) of the Code, a committee that consists of two
or more persons appointed by the Board, all of whom shall be
“outside directors” as defined under
section 162(m) of the Code and related Treasury
regulations.
(e) “Company”
means American Water Works Company, Inc. and any successor
corporation.
(f) “Company
Stock” means the common stock of the Company, par value
$0.01 per share.
(g) “Dividend
Equivalent” means an amount calculated with respect to a
Stock Unit, which is determined by multiplying the number of shares
of Company Stock subject to the Stock Unit by the per-share cash
dividend, or the per-share fair market value (as determined by the
Committee) of any dividend in consideration other than cash, paid
by the Company on its Company Stock. If interest is credited on
accumulated dividend equivalents, the term “Dividend
Equivalent” shall include the accrued interest.
(h) “Effective
Date” of the Plan shall mean May 8, 2009, the
effective date of this amendment and restatement of the Plan. The
“ Original Effective Date ” is the day
immediately preceding the date of the Underwriting Agreement was
executed and the Company Stock was priced for the initial public
offering of such Company Stock.
(i) “Employee”
means an employee of the Employer (including an officer or director
who is also an employee), but excluding any person who is
classified by the Employer as a “contractor” or
“consultant,” no matter how characterized by the
Internal Revenue Service, other governmental agency or a court. Any
change of characterization of an individual by the Internal Revenue
Service or any court or government agency shall have no effect upon
the classification of an individual as an Employee for purposes of
this Plan, unless the Committee determines otherwise.
(j) “Employer”
means the Company and its subsidiaries.
(k) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
(l) “Exercise
Price” means the per share price at which shares of
Company Stock may be purchased under an Option, as designated by
the Committee.
(m) “Fair Market
Value” of Company Stock means, unless the Committee
determines otherwise with respect to a particular Grant,
(i) if the principal trading market for the Company Stock is a
national securities exchange, the last reported sale price of
Company Stock on the relevant date or (if there were no trades on
that date) the latest preceding date upon which a sale was
reported, (ii) if the Company Stock is not principally traded
on such exchange, the mean between the last reported
“bid” and “asked” prices of Company Stock
on the relevant date, as reported on the OTC Bulletin Board, or
(iii) if the Company Stock is not publicly traded or, if
publicly traded, is not so reported, the Fair Market Value per
share shall be as determined by the Committee.
(n) “Grant” means
an Option, Stock Unit, Stock Award, SAR or Other Stock-Based Award
granted under the Plan.
(o) “Grant
Agreement” means the written instrument that sets forth
the terms and conditions of a Grant, including all amendments
thereto.
(p) “Incentive Stock
Option” means an Option that is intended to meet the
requirements of an incentive stock option under section 422 of the
Code.
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(q) “Non-Employee
Director” means a member of the Board who is not an
Employee.
(r) “Nonqualified Stock
Option” means an Option that is not intended to be taxed
as an incentive stock option under section 422 of the
Code.
(s) “ 1933 Act ”
means the Securities Act of 1933, as amended.
(t) “Option”
means an option to purchase shares of Company Stock, as described
in Section 7.
(u) “Other Stock-Based
Award” means a grant that is based on, measured by or
payable in Company Stock (other than an Option, Stock Unit, Stock
Award or SAR), as described in Section 11.
(v) “Participant”
means an Employee or Non-Employee Director designated by the
Committee to participate in the Plan.
(w) “Plan” means
this American Water Works Company, Inc. 2007 Omnibus Equity
Compensation Plan, as may be amended from time to time.
(x) “SAR” means a
stock appreciation right as described in
Section 10.
(y) “Stock Award”
means an award of Company Stock as described in
Section 9.
(z) “Stock Unit”
means an award of a phantom unit representing a share of Company
Stock, as described in Section 8.
(aa) “Underwriting
Agreement” means the agreement between the Company and
the underwriter or underwriters managing the initial public
offering of the Company Stock.
3.
Administration
(a) Committee . The Plan
shall be administered and interpreted by the Committee. Ministerial
functions may be performed by an administrative committee comprised
of Company employees appointed by the Committee.
(b) Committee Authority . The
Committee shall have the sole authority to (i) determine the
Participants to whom Grants shall be made under the Plan,
(ii) determine the type, size and terms and conditions of the
Grants to be made to each such Participant, (iii) determine
the time when the Grants will be made and the duration of any
applicable exercise or restriction period, including the criteria
for exercisability and the acceleration of exercisability,
(iv) amend the terms and conditions of any previously issued
Grant, subject to the provisions of Section 18 below, and
(v) deal with any other matters arising under the
Plan.
(c) Committee Determinations
. The Committee shall have full power and express discretionary
authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations,
agreements and instruments for implementing the Plan and for the
conduct of its business as it deems necessary or advisable, in its
sole discretion. The Committee’s interpretations of the Plan
and all determinations made by the Committee pursuant to the powers
vested in it hereunder shall be conclusive and binding on all
persons having any interest in the Plan or in any awards granted
hereunder. All powers of the Committee shall be executed in its
sole discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan and need
not be uniform as to similarly situated Participants.
4. Grants
(a) Grants under the Plan may
consist of Options as described in Section 7, Stock Units as
described in Section 8, Stock Awards as described in
Section 9, SARs as described in Section 10 and Other
Stock-Based Awards as described in Section 11. All Grants
shall be subject to such terms and conditions as the Committee
deems appropriate and as are specified in writing by the Committee
to the Participant in the Grant Agreement.
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(b) All Grants shall be made
conditional upon the Participant’s acknowledgement, in
writing or by acceptance of the Grant, that all decisions and
determinations of the Committee shall be final and binding on the
Participant, his or her beneficiaries and any other person having
or claiming an interest under such Grant. Grants under a particular
Section of the Plan need not be uniform as among the
Participants.
5. Shares Subject to the
Plan
(a) Shares Authorized .
Subject to adjustment as described in subsection (d) below,
the total aggregate number of shares of Company Stock that may be
issued or transferred under the Plan is 6,000,000 shares and,
effective May 8, 2009, the aggregate number of shares of
Company Stock that may be issued or transferred under the Plan
shall be increased by 9,500,000 shares so that the total number of
shares of Company Stock authorized for issuance or transfer under
the Plan shall be 15,500,000 shares.
(b) Source of Shares; Share
Counting . Shares issued under the Plan may be authorized but
unissued shares of Company Stock or reacquired shares of Company
Stock, including shares purchased by the Company on the open market
for purposes of the Plan. If and to the extent Options or SARs
granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised,
and if and to the extent that any Stock Awards, Stock Units, or
Other Stock-Based Awards are forfeited or terminated, or otherwise
are not paid in full, the shares reserved for such Grants shall
again be available for purposes of the Plan. Shares of Stock
surrendered in payment of the Exercise Price of an Option, and
shares withheld or surrendered for payment of taxes, shall not be
available for re-issuance under the Plan. If SARs are granted, the
full number of shares subject to the SARs shall be considered
issued under the Plan, without regard to the number of shares
issued upon exercise of the SARs and without regard to any cash
settlement of the SARs. To the extent that a Grant of Stock Units
is designated in the Grant Agreement to be paid in cash, and not in
shares of Company Stock, such Grants shall not count against the
share limits in subsection (a).
(c) Individual Limits . All
Grants under the Plan shall be expressed in shares of Company
Stock. The maximum aggregate number of shares of Company Stock with
respect to which all Grants may be made under the Plan to any
individual during any calendar year shall be 500,000 shares,
subject to adjustment as described in subsection (d) below.
The individual limits of this subsection (c) shall apply
without regard to whether the Grants are to be paid in Company
Stock or cash. All cash payments (other than with respect to
Dividend Equivalents) shall equal the Fair Market Value of the
shares of Company Stock to which the cash payments relate. A
Participant may not accrue Dividend Equivalents during any calendar
year in excess of $750,000.
(d) Adjustments . If there is
any change in the number or kind of shares of Company Stock
outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of
shares, (ii) by reason of a merger, reorganization or
consolidation, (iii) by reason of a reclassification or change
in par value, or (iv) by reason of any other extraordinary or
unusual event affecting the outstanding Company Stock as a class
without the Company’s receipt of consideration, or if the
value of outstanding shares of Company Stock is substantially
reduced as a result of a spinoff or the Company’s payment of
an extraordinary dividend or distribution, the maximum number of
shares of Company Stock available for issuance under the Plan, the
maximum number of shares of Company Stock for which any individual
may receive Grants in any year, the kind and number of shares
covered by outstanding Grants, the kind and number of shares issued
and to be issued under the Plan, and the price per share or the
applicable market value of such Grants shall be equitably adjusted
by the Committee, in such manner as the Committee deems
appropriate, to reflect any increase or decrease in the number of,
or change in the kind or value of, the issued shares of Company
Stock to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under the Plan and such outstanding
Grants; provided, however, that any fractional shares resulting
from such adjustment shall be eliminated. In addition, in the event
of a Change of Control of the Company, the provisions of
Section 16 of the Plan shall apply. Any adjustments to
outstanding Grants shall be consistent with section 409A or 422 of
the Code, to the extent applicable. Any adjustments determined by
the Committee shall be final, binding and conclusive.
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6. Eligibility for
Participation
(a) Eligible Persons . All
Employees and Non-Employee Directors shall be eligible to
participate in the Plan.
(b) Selection of Participants
. The Committee shall select the Employees and Non-Employee
Directors to receive Grants and shall determine the number of
shares of Company Stock subject to each Grant.
7. Options
(a) General Requirements .
The Committee may grant Options to an Employee or Non-Employee
Director upon such terms and conditions as the Committee deems
appropriate under this Section 7. The Committee shall
determine the number of shares of Company Stock that will be
subject to each Grant of Options to Employees and Non-Employee
Directors.
(b) Type of Option, Price and
Term .
(i) The Committee may grant
Incentive Stock Options or Nonqualified Stock Options or any
combination of the two, all in accordance with the terms and
conditions set forth herein. Incentive Stock Options may be granted
only to Employees of the Company or its parents or subsidiaries, as
defined in section 424 of the Code. Nonqualified Stock Options may
be granted to Employees or Non-Employee Directors.
(ii) The Exercise Price of Company
Stock subject to an Option shall be determined by the Committee and
shall be equal to or greater than the Fair Market Value of a share
of Company Stock on the date the Option is granted. However, an
Incentive Stock Option may not be granted to an Employee who, at
the time of grant, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any
parent or subsidiary, as defined in section 424 of the Code, unless
the Exercise Price per share is not less than 110% of the Fair
Market Value of the Company Stock on the date of grant.
(iii) The Committee shall determine
the term of each Option, which shall not exceed ten years from the
date of grant. However, an Incentive Stock Option that is granted
to an Employee who, at the time of grant, owns stock possessing
more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary, as defined in
section 424 of the Code, may not have a term that exceeds five
years from the date of grant.
(c) Exercisability of
Options.
(i) Options shall become exercisable
in accordance with such terms and conditions as may be determined
by the Committee and specified in the Grant Agreement. The
Committee may grant Options that are subject to achievement of
performance goals or other conditions. The Committee may accelerate
the exercisability of any or all outstanding Options at any time
for any reason.
(ii) The Committee may provide in a
Grant Agreement that the Participant may elect to exercise part or
all of an Option before it otherwise has become exercisable. Any
shares so purchased shall be restricted shares and shall be subject
to a repurchase right in favor of the Company during a specified
restriction period, with the repurchase price equal to the lesser
of (A) the Exercise Price or (B) the Fair Market Value of
such shares at the time of repurchase, or such other restrictions
as the Committee deems appropriate.
(iii) Options granted to persons who
are non-exempt employees under the Fair Labor Standards Act of
1938, as amended, may not be exercisable for at least six months
after the date of grant (except that such Options may become
exercisable, as determined by the Committee, upon the
Participant’s death, disability or retirement, or upon a
Change of Control or other circumstances permitted by applicable
regulations).
(d) Termination of Employment or
Service . Except as provi
