8-KOther Events

American Water Works Company, Inc. 8-K Report, Corporate Update (May 12, 2009)

Filed May 12, 2009For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) filed an 8-K on May 12, 2009, reporting on an event that occurred on May 8, 2009, at its Annual Meeting of Stockholders. The primary focus of this filing is the stockholder approval of the Amended and Restated American Water Works Company, Inc. 2007 Omnibus Equity Compensation Plan. This amendment significantly increases the number of shares authorized for issuance under the plan, indicating a potential for future equity-based compensation to employees and executives. Investors should note the increase in authorized shares, which could impact share dilution if stock options or other equity awards are granted and exercised. The filing also clarifies terms related to stock option exercise prices, stock appreciation rights, and explicitly states that repricing of options or SARs will require future stockholder approval. These details are important for understanding the company's compensation strategy and its potential effects on shareholder value.

Key Highlights

  • 1Stockholders approved the Amended and Restated American Water Works Company, Inc. 2007 Omnibus Equity Compensation Plan on May 8, 2009.
  • 2The total number of authorized shares for issuance under the plan increased from 6,000,000 to 15,500,000 shares, a rise of 9,500,000 shares.
  • 3The amended plan clarifies that stock option exercise prices will not be less than the fair market value on the date of grant.
  • 4Grants of stock appreciation rights (SARs) will have a term not exceeding ten years from the grant date.
  • 5The plan now explicitly states that repricing of stock options and SARs will require stockholder approval.

Frequently Asked Questions

The main purpose of this 8-K filing is to report that American Water Works Company, Inc. stockholders approved amendments to the company's 2007 Omnibus Equity Compensation Plan at the 2009 Annual Meeting. This includes a significant increase in the number of shares authorized for equity awards.

The increase in authorized shares allows the company to issue more stock options or other equity-based awards to employees and executives. If these awards are granted and exercised, it could lead to an increase in the total number of outstanding shares, potentially diluting the ownership percentage of existing shareholders.

The amended plan clarifies that stock options will be granted with an exercise price per share that is no less than the fair market value of the company's common stock on the date the option is granted. Furthermore, the plan now requires stockholder approval for any repricing of stock options or stock appreciation rights.

A detailed description of the plan is available in the company's proxy statement for the 2009 Annual Meeting of Stockholders. A copy of the plan itself is attached as Appendix A to that proxy statement.