SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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American Water Works Company, Inc.
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(Name of Registrant as Specified In Its Charter)
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<PAGE>
[LOGO] AMERICAN WATER WORKS COMPANY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1999
TO THE HOLDERS OF:
COMMON STOCK
CUMULATIVE PREFERRED STOCK, 5% SERIES
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
American Water Works Company, Inc. will be held at The Mansion on Main
Street, Kresson & Evesham Roads, Voorhees, New Jersey, on Thursday, May 6,
1999, at 10:00 A.M. EDST, for the following purposes:
1. To vote on a proposal to amend the Company's Restated
Certificate of Incorporation, as amended, to establish a classified
Board of Directors;
2. To elect 13 directors, five to serve for a one-year term, four
to serve for a two-year term and four to serve for a three-year term;
3. To vote to ratify or reject the appointment of independent
accountants made by the Board of Directors to audit the books and
accounts of the Company at the close of the current fiscal year; and
4. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only holders of voting stock of record at the close of business on
March 8, 1999 are entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
W. TIMOTHY POHL, General Counsel and Secretary
Voorhees, New Jersey
March 26, 1999
YOUR VOTE IS IMPORTANT!
USING THE INTERNET OR TELEPHONE, YOU CAN VOTE ANYTIME, 24 HOURS A DAY, UP
UNTIL 5:00 P.M. EDST ON WEDNESDAY, MAY 5, 1999. OR IF YOU PREFER, YOU
CAN RETURN THE ENCLOSED PAPER PROXY IN THE ENVELOPE PROVIDED (TO WHICH NO
POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES). PLEASE DO NOT
RETURN THE ENCLOSED PAPER PROXY IF YOU ARE VOTING USING THE INTERNET OR
TELEPHONE.
<PAGE>
AMERICAN WATER WORKS COMPANY, INC.
1025 LAUREL OAK ROAD
VOORHEES, NEW JERSEY 08043
609-346-8200
PROXY STATEMENT FOR THE
ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1999
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of American Water Works Company, Inc.
(hereinafter called the "Company") to be used at the annual meeting of
shareholders of the Company on Thursday, May 6, 1999, and at any
adjournment thereof. Shares represented by properly executed proxies
received by the Company will be voted at the meeting. Where a choice is
specified by the shareholder, the proxy will be voted in accordance with
such choice. If no choice is specified, the proxy will be voted in
accordance with the recommendations of the Board of Directors. Any proxy
may be revoked at any time insofar as it has not been exercised.
Shareholders may revoke proxies by written notice to the Company, or by
delivery of a proxy bearing a later date, or by personally appearing at the
meeting and casting a vote. Shareholders may also vote electronically or
telephonically by following the instructions on the enclosed form of proxy.
BankBoston, the Company's stock agent, is tabulating the votes cast for the
meeting and will count the last vote received from a shareholder, whether
by telephone, proxy, ballot or electronically through the Internet. This
notice of meeting and proxy statement and the enclosed form of proxy are
being mailed beginning March 26, 1999 to the holders of all voting
securities.
The presence in person or representation by proxy of shareholders
entitled to cast a majority of votes on a particular matter to be voted
upon shall constitute a quorum for the purpose of considering such matter.
A proxy marked "withheld" in the election of directors or "abstain" on any
other matter to be voted upon, will be considered to be represented at the
meeting. A proxy marked "withheld" in the election of directors will be
considered as not being voted and, therefore, will have no effect inasmuch
as directors are elected by a plurality of votes cast in the election. A
proxy marked "abstain" on any other matter to be voted upon at the meeting
and broker non-votes will have the effect of an "against" vote inasmuch as
the affirmative vote of a majority of the votes entitled to be cast on the
matter is necessary for approval of the matter.
The close of business on March 8, 1999 has been fixed as the record
date for the determination of shareholders entitled to notice of and to
vote at the annual meeting and any adjournment thereof. On the record date,
there were outstanding and entitled to vote 81,021,992 shares of Common
Stock (one vote per share) and 101,777 shares of Cumulative Preferred
Stock, 5% Series (one-tenth of a vote per share).
<PAGE>
PROPOSAL NO. 1
AMENDMENT OF THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION, AS AMENDED, TO PROVIDE FOR THE CLASSIFICATION
OF THE BOARD OF DIRECTORS INTO THREE SEPARATE CLASSES
The Board of Directors has adopted a resolution proposing an amendment
to the Company's Restated Certificate of Incorporation, as amended, to
provide for the classification of the Board of Directors into three classes
(the "Classified Board Amendment"). At present, the Company's Board of
Directors is comprised of a single class of thirteen directors, all of whom
are elected at each annual meeting of shareholders. The Classified Board
Amendment would provide for the classification of the Board of Directors
into three separate classes as nearly equal in number as possible, with one
class being elected each year to serve a staggered three-year term. Members
in each class would be elected at the May 6, 1999 annual meeting. Directors
initially elected in Class I, i.e., William O. Albertini, Rhoda W. Cobb,
Ray J. Groves, Ross A. Webber and Horace Wilkins, Jr., would serve until
the annual meeting of shareholders in 2000; directors initially elected in
Class II, i.e., Henry G. Hager, Gerald C. Smith, Anthony P. Terracciano and
Marilyn Ware, and Class III, i.e., J. James Barr, Elizabeth H. Gemmill,
Nancy Ware Wainwright and Paul W. Ware, would serve until the annual
meetings of shareholders in 2001 and 2002, respectively. Beginning with the
election of directors to be held at the year 2000 annual meeting, each
class of directors would be elected for a three-year term.
The Board of Directors believes that classification of the Board of
Directors would promote continuity of membership and stability of
management and policies. Although the Board of Directors is not aware of,
and has not encountered, difficulties in the past with respect to
continuity and stability, the Board of Directors believes a classified
board would decrease the likelihood of such difficulties in the future.
Absent the removal or resignation of directors, two annual elections would
be required to replace a majority of directors on the classified Board and
effect a forced change in the business and affairs of the Company. The
Classified Board Amendment may, therefore, discourage an individual or
entity from acquiring a significant position in the stock of the Company
with the intention of obtaining immediate control of the Board of
Directors. The acquiror, however, could immediately effect a change of
control by amending the Restated Certificate of Incorporation, as amended,
to eliminate classification of the Board of Directors with the vote of a
majority of all the outstanding shares entitled to vote.
The Classified Board Amendment is intended to encourage persons
seeking to acquire control of the Company to initiate such an acquisition
through arms-length negotiations with the Company's management and Board of
Directors. If adopted, the Classified Board Amendment also could have the
effect of discouraging a third party from making a tender offer or
otherwise attempting to obtain control of the Company, even though such an
attempt might be beneficial to the Company and its shareholders. In
addition, the Classified Board Amendment could discourage accumulations of
large blocks of the Company's stock and fluctuations in the market price of
the Company's stock caused by such accumulations; as a consequence,
shareholders could be deprived of certain opportunities to sell their
shares at temporarily higher prices.
2
<PAGE>
The Classified Board Amendment would make more difficult or discourage
a proxy contest or the assumption of control of the Company by a holder of
a substantial block of the Company's outstanding shares or the removal of
incumbent directors or the change of control of the Board of Directors and
could thus have the effect of entrenching incumbent management. At the same
time, the Classified Board Amendment would ensure that the Board of
Directors and management, if confronted by a surprise proposal from a third
party who had acquired a block of the Company's stock, would have time to
review the proposal and appropriate alternatives to the proposal and
possibly to attempt to negotiate a better transaction. The Board of
Directors believes the Classified Board Amendment would reduce the
possibility that a third party could effect a sudden or surprise change in
control of the Board of Directors without the support of the then incumbent
Board of Directors. The Board of Directors is asking shareholders to
consider and adopt the Classified Board Amendment to encourage any person
intending to attempt such a takeover or restructuring to try first to
negotiate with the Board and management of the Company. In this way, the
Board of Directors and management would be better able to protect the
interests of all shareholders by ensuring that the best price is obtained
in any transaction involving the Company.
The foregoing summary description of the Classified Board Amendment is
not intended to be complete and is qualified in its entirety by reference
to Appendix A, which contains the complete text of the Classified Board
Amendment.
The affirmative vote of a majority of the votes entitled to be cast by
all outstanding stock of the Company having general voting rights,
including a majority of the Common Stock, is necessary to adopt the
Classified Board Amendment.
The Board of Directors recommends that the shareholders vote "FOR" the
proposed amendment to the Restated Certificate of Incorporation, as
amended, as set forth in Appendix A. The persons named in the enclosed
proxy intend to vote "FOR" adoption of the amendment unless otherwise
directed.
3
<PAGE>
PROPOSAL NO. 2
ELECTION OF DIRECTORS
Thirteen directors are to be elected at the annual meeting. All
nominees have consented to be named and to serve if elected. All of the
nominees, except Rhoda W. Cobb, are currently directors of the Company.
William R. Cobb, who is currently a director of the Company, is not
standing for reelection. Mr. Cobb has been a director of the Company for
the past six years.
It is the intention of the persons named in the accompanying form of
proxy to vote all shares they are empowered to vote for the election of as
many as possible of the nominees. In the event any nominee withdraws or is
otherwise unable to serve, which is not anticipated, the persons named in
the proxy may vote for another person of their choice.
As set forth above (see Proposal No. 1), the Board of Directors also
is proposing to stagger the terms of directors of the Company by
classifying the Board into three separate classes. If Proposal No. 1 is
approved, the Board of Directors will be divided into three separate
classes as nearly equal in number as possible, with one class being elected
each year to serve a staggered three-year term. Vacancies on the Board of
Directors may be filled by persons elected by a majority of the total
number of directors then in office. A director elected by the Board of
Directors to fill a vacancy (including a vacancy created by an increase in
the number of directors) will serve for the remainder of the term of the
class of directors in which the vacancy occurred and until such director's
successor is elected and qualified.
If Proposal No. 1 is approved, the Board of Directors intends to place
five directors, William O. Albertini, Rhoda W. Cobb, Ray J. Groves, Ross A.
Webber and Horace Wilkins, Jr., in the class whose term of office will
expire in 2000, four directors, Henry G. Hager, Gerald C. Smith, Anthony P.
Terracciano and Marilyn Ware, in the class whose term of office will expire
in 2001 and four directors, J. James Barr, Elizabeth H. Gemmill, Nancy Ware
Wainwright and Paul W. Ware, in the class whose term of office will expire
in 2002.
If Proposal No. 1 is not approved, the thirteen directors to be
elected at the annual meeting will hold office until the next annual
meeting and until their successors have been elected and qualified.
Shareholders are entitled to cumulative voting rights in the election
of directors. Each holder of Common Stock is entitled to one vote per
share, and each holder of Cumulative Preferred Stock, 5% Series, is
entitled to one-tenth of a vote per share. Each shareholder may cast as
many votes as such shareholder's number of shares shall entitle him or her
to vote in the election of directors multiplied by the number of directors
to be elected and such shareholder may cast all of such votes for a single
director or distribute them among all of the directors to be voted for, or
any two or more of them. A shareholder wishing to exercise his or her
cumulative voting rights should give instructions on the enclosed form of
proxy as to how such shareholder's votes are to be cumulated.
Unless a shareholder specifically exercises his or her cumulative
voting rights, such shareholder's votes may be distributed among the
nominees (other than those from whom the shareholder withholds his or her
vote) by the persons named in the proxy to elect as many as possible of the
nominees. Such persons may vote cumulatively for such of the nominees (in
some circumstances, less than all) as they in their discretion determine if
in their judgment such action is necessary to elect as many of the nominees
as possible.
Based on information as of March 8, 1999, the following describes the
age, position with the Company, principal occupation and business
experience during the past five years, and other directorships of each
nominee.
4
<PAGE>
NOMINEES FOR ELECTION AS CLASS I DIRECTORS FOR A TERM EXPIRING IN 2000
WILLIAM O. ALBERTINI, age 55, became a director of the
[PHOTO Company in 1990. He is a member of the Audit,
ALBERTINI] Compensation and Management Development and Finance
Committees. He has been Executive Vice President and
Chief Financial Officer since August, 1997 of Bell
Atlantic Global Wireless, Inc., a provider of wireless
communication services. He was Executive Vice President
and Chief Financial Officer from February, 1995 to
August, 1997 and Vice President and Chief Financial
Officer from February, 1991 to February, 1995 of
Bell Atlantic Corporation, a provider of
telecommunication services. Mr. Albertini is a director
of Grupo Iusacell, S.A. de C.V. and BlackRock Funds.
[PHOTO RHODA W. COBB, age 59, served as a director of the
COBB] Company from 1976 to 1993. She is a homemaker and
President of the Cobb Foundation.
RAY J. GROVES, age 63, became a director of the Company
in 1998. He is a member of the Audit and Finance
Committees. He has been Chairman of Legg Mason Merchant
[PHOTO Banking, Inc. since March, 1995. Prior to his
GROVES] retirement in September, 1994, he was Chairman of Ernst
& Young. Mr. Groves is a director of Allegheny Teledyne
Incorporated, Consolidated National Gas Company,
Electronic Data Systems Corporation, LAI Worldwide,
Inc., Marsh & McLennan Companies, Inc. and RJR Nabisco,
Inc.
ROSS A. WEBBER, age 64, became a director of the
Company in 1986. He is a member of the Audit and
[PHOTO Compensation and Management Development Committees. He
WEBBER] is Professor of Management at The Wharton School at the
University of Pennsylvania and a private consultant on
general management development. Mr. Webber is a
director of Arcadis, N.V.
HORACE WILKINS, JR., age 48, became a director of the
Company in 1996. He is a member of the Audit and
Corporate Governance Committees. He has been President-
[PHOTO Special Markets since October, 1998 of SBC
WILKINS] Telecommunications, Inc., a provider of
telecommunication services. He was Regional
President-South Texas from August, 1996 to October,
1998 and was President-Missouri from December, 1992 to
August, 1996 of Southwestern Bell Telephone Company, a
provider of telephone services. Mr. Wilkins is a
director of Cullen Frost National Bank.
5
<PAGE>
NOMINEES FOR ELECTION AS CLASS II DIRECTORS FOR A TERM EXPIRING IN 2001
HENRY G. HAGER, age 64, became a director of the
Company in 1986. He is a member of the Executive and
[PHOTO Corporate Governance Committees. He has been President
HAGER] of Insurance Federation of Pennsylvania, Inc. since
January, 1985 and a partner in the law firm of
Stradley, Ronon, Stevens & Young since November, 1993.
Mr. Hager is a director of Provident American
Corporation.
GERALD C. SMITH, age 64, became a director of the
Company in 1998. He has been a Vice President of the
[PHOTO Company since May, 1991. In addition, he was Senior
SMITH] Vice President-Operations from July, 1991 to February,
1999 of American Water Works Service Company, Inc., the
service subsidiary of the Company.
ANTHONY P. TERRACCIANO, age 60, became a director of
the Company in 1997 and has been Vice Chairman of the
Board of Directors of the Company since May, 1998. He
is a member of the Executive, Corporate Governance and
[PHOTO Finance Commitees. Prior to his retirement in January,
TERRACCIANO] 1998, he was President of First Union Corporation from
January, 1996 to January, 1998. Mr. Terracciano was
Chairman of the Board, President and Chief Executive
Officer of First Fidelity Bancorporation from February,
1990 to January, 1996.
MARILYN WARE, age 55, became a director of the Company
in 1982 and has been Chairman of the Board of Directors
[PHOTO of the Company since May, 1988. She is a member of the
M. WARE] Executive, Audit, Compensation and Management
Development, Corporate Governance and Finance
Committees. She also serves as Chief Executive Officer
of the Ware Family Offices. Ms. Ware is a director of
CIGNA Corporation and PP&L Resources, Inc.
6
<PAGE>
NOMINEES FOR ELECTION AS CLASS III DIRECTORS FOR A TERM EXPIRING IN 2002
J. JAMES BARR, age 57, became a director of the Company
in 1997. He is a member of the Executive Committee. He
has been President and Chief Executive Officer of the
Company since March, 1998 and was Acting President and
[PHOTO Chief Executive Officer of the Company from November,
BARR] 1997 to March, 1998. He was Vice President and
Treasurer of the Company prior thereto. In addition, he
has been Chairman of the Board of Directors and
President since March, 1998 of American Water Works
Service Company, Inc., the service subsidiary of the
Company. He was Senior Vice President-Financial
Services of American Water Works Service Company, Inc.
prior thereto.
ELIZABETH H. GEMMILL, age 53, became a director of the
Company in 1983. She is a member of the Compensation
[PHOTO and Management Development and Corporate Governance
GEMMILL] Committees. She is the Managing Trustee of the Warwick
Foundation. She was Vice President and Secretary of
Tasty Baking Company from February, 1988 to March,
1999. Ms. Gemmill is also a director of Universal
Display Corporation.
NANCY WARE WAINWRIGHT, age 62, became a director of the
[PHOTO Company in 1984. She is a member of the Executive and
WAINWRIGHT] Corporate Governance Committees. Prior to her
retirement in July, 1994, Mrs. Wainwright was the Vice
President of United Propane, Inc., a gas distributor.
PAUL W. WARE, age 52, became a director of the Company
in 1990. He also served as a director of the Company
from 1982 to 1986. He is a member of the Compensation
[PHOTO and Management Development and Finance Committees.
P. WARE] Prior to his retirement in August, 1998, Mr. Ware was
Chairman of Penn Fuel Gas, Inc., a gas distribution
company. Mr. Ware is a director of The York Water
Company.
Marilyn Ware and Paul W. Ware are the daughter and son of Marian S.
Ware, who beneficially owns more than 5% of the Company's Common Stock.
Rhoda W. Cobb and Nancy Ware Wainwright are sisters and are cousins of
Marilyn Ware and Paul W. Ware. Rhoda W. Cobb is the spouse of William R.
Cobb, who is retiring as a director of the Company at the end of his term.
The Board recommends a vote FOR the election of five (5) nominees as Class
I Directors of the Company, four (4) nominees as Class II Directors of the
Company and four (4) nominees as Class III Directors of the Company.
7
<PAGE>
MEETINGS OF THE BOARD AND ITS COMMITTEES
Attendance at meetings of the Board of Directors and committees of the
Board by directors averaged 92% during 1998. All incumbent nominees
attended 80% or more of their scheduled meetings of the Board of Directors
and committees of the Board of which they were members. There were 11
meetings of the Board of Directors during 1998.
The Board of Directors has an Executive Committee, an Audit Committee,
a Compensation and Management Development Committee, a Corporate Governance
Committee and a Finance Committee. Membership of the committees as of the
record date of March 8, 1999 is listed at the beginning of the description
of each committee.
Members of the Executive Committee: Marilyn Ware (Chairman), J. James
Barr, Henry G. Hager, Anthony P. Terracciano and Nancy Ware Wainwright. The
Executive Committee exercises all the powers of the Board of Directors when
the Board is not in session, except as otherwise provided by Delaware law
and the Company's by-laws. There were seven meetings of the Board's
Executive Committee during 1998.
Members of the Audit Committee: Horace Wilkins, Jr. (Chairman),
William O. Albertini, William R. Cobb, Ray J. Groves, Marilyn Ware and Ross
A. Webber. The Audit Committee recommends to the Board of Directors the
independent accountants to audit the books and accounts of the Company. The
Audit Committee met with the Company's independent accountants and the
Company's officers three times during 1998 to review the scope of the audit
to be performed, approve the fee to be paid for the audit and review the
results of the audit of the financial statements included in the Annual
Report and the adequacy of internal accounting controls and accounting
practices.
Members of the Compensation and Management Development Committee: Ross
A. Webber (Chairman), William O. Albertini, Elizabeth H. Gemmill, Marilyn
Ware and Paul W. Ware. The Compensation and Management Development
Committee met three times during 1998 to evaluate and report to the Board
of Directors concerning the Company's compensation practices and benefit
programs and to evaluate and set, subject to the concurrence of the Board
of Directors, the compensation to be paid to the President and Chief
Executive Officer.
Members of the Corporate Governance Committee: Henry G. Hager
(Chairman), Elizabeth H. Gemmill, Anthony P. Terracciano, Marilyn Ware,
Nancy Ware Wainwright and Horace Wilkins, Jr. The Corporate Governance
Committee recommends to the Board of Directors the slate of
director-nominees to stand for election each year at the annual meeting of
shareholders, and in the event of interim vacancies, candidates to fill
such vacancies on the Board of Directors. The Corporate Governance
Committee also evaluates and reports to the Board of Directors on the
effectiveness of the Board and its committee system and the compensation
and benefit program for directors. The Corporate Governance Committee met
nine times during 1998.
The Corporate Governance Committee will consider nominees for the
Board of Directors suggested by shareholders. Such suggestions for the
annual meeting of shareholders in 2000 must be in writing and delivered to
the General Counsel and Secretary of the Company by November 27, 1999.
8
<PAGE>
Members of the Finance Committee: William O. Albertini (Chairman),
William R. Cobb, Ray J. Groves, Anthony P. Terracciano, Marilyn Ware and
Paul W. Ware. The Finance Committee met four times during 1998 to assist
management and the Board of Directors in evaluating matters such as
acquisitions, divestitures, joint ventures and partnerships, to advise
management and make recommendations to the Board of Directors relative to
the various financial policies and programs of the Company, and to review
and monitor the funding, asset allocation and investment performance of the
Company's group benefit and retirement plan assets.
DIRECTOR REMUNERATION
The amounts paid to directors who are not employees of the Company or
one of its subsidiaries for their services as such and for their
participation on committees of the Board of Directors are as follows: (i)
each director receives a retainer of $30,000 per year plus a fee of $1,500
for each Board meeting attended, (ii) each member of the Executive
Committee receives an additional retainer of $5,000 per year plus a fee of
$1,000 for each Executive Committee meeting attended and (iii) the Chairmen
of the Audit Committee, Compensation and Management Development Committee,
Corporate Governance Committee and Finance Committee each receive an
additional retainer of $1,500 per year, and each member of these committees
receives a fee of $1,000 for each meeting attended. The Chairman of the
Board of Directors receives an additional annual retainer of $150,000.
Directors who are employees of the Company or one of its subsidiaries
do not receive retainers or attendance fees.
A retiring director receives, as a retirement benefit, an annual
amount of $15,500. This payment continues for a period equal to the period
the director served as a member of the Board of Directors, exclusive of any
period when the director was also a salaried employee of the Company or any
of its subsidiaries. In the event the director dies prior to the expiration
of such period of time, the annual benefit will continue to be paid to the
person selected by the director to receive the benefit for the remainder of
said period of time or the death of said selected person, whichever occurs
first.
9
<PAGE>
STOCK OWNERSHIP INFORMATION
The following table sets forth information as of March 8, 1999 with
respect to beneficial ownership of Common Stock of the Company by: (i) the
nominees, (ii) the five most highly compensated executive officers and
(iii) all nominees and executive officers of the Company as a group. If a
nominee owns less than one percent of the Company's Common Stock, no
percentage is shown under the heading "Percent of Class." Information for
the table was obtained from the nominees and executive officers. For
purposes of the table, a person is a "beneficial owner" of the Company's
Common Stock if that person, directly or indirectly, has or shares with
others (i) the power to vote or direct the voting of the Common Stock or
(ii) investment power with respect to the Common Stock, which includes the
power to dispose or direct the disposition of the Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
-----------------------------
SOLE VOTING SHARED VOTING SHARES OWNED BY
NAME OF INDIVIDUAL OR OR INVESTMENT OR INVESTMENT SPOUSE AND MINOR PERCENT
NUMBER OF PERSONS IN GROUP POWER(1) POWER(2) CHILDREN(2) TOTAL OF CLASS
- -------------------------------------- ------------- ------------- ----------------- ---------- --------
<S> <C> <C> <C> <C> <C>
William O. Albertini.................. 7,824 7,824 *
J. James Barr......................... 739,534 1,018 740,552 *
Rhoda W. Cobb......................... 6,000 455,000 1,000 462,000 *
Elizabeth H. Gemmill.................. 34,613 2,792,159 56,460 2,883,232 3.6%
Ray J. Groves......................... 1,014 1,014 *
Henry G. Hager........................ 8,000 15,195 23,195 *
Gerald C. Smith....................... 31,968 67 32,035 *
Anthony P. Terracciano................ 44,000 44,000 *
Nancy Ware Wainwright................. 6,824 535,205 542,029 *
Marilyn Ware.......................... 4,905,087 4,736,185 9,641,272 11.9%
Paul W. Ware.......................... 20,400 691,376 711,776 *
Ross A. Webber........................ 3,182 3,182 *
Horace Wilkins, Jr.................... 1,577 1,577 *
Joseph F. Hartnett, Jr................ 6,504 6,504 *
W. Timothy Pohl....................... 19,810 19,810 *
Robert D. Sievers..................... 17,561 17,561 *
All nominees and executive
officers as a group
(16 persons)....................... 5,853,898 8,532,549 73,740 14,460,187 17.8%
</TABLE>
- ------------------
* Represents holdings of less than one percent.
(1) Does not include shares of the Company's Common Stock to be credited
during 1999 to the accounts of the executive officers pursuant to the
Company's Employees' Stock Ownership Plan and Savings Plan for
Employees.
- ------------------
See footnote (2) on page 11
10
<PAGE>
(2) Cobb Foundation, a charitable trust of which Rhoda W. Cobb is a
trustee, owns 455,000 shares of the Common Stock of the Company.
Catlin-Wainwright Foundation, a charitable trust of which Nancy Ware
Wainwright is a trustee, owns 535,205 shares of the Common Stock of
the Company. Oxford Foundation, Inc., a non-profit corporation of
which Marilyn Ware and Paul W. Ware are directors, owns 677,376 shares
of the Common Stock of the Company. Warwick Foundation, a charitable
foundation of which Elizabeth H. Gemmill is the Managing Trustee, owns
580,000 shares of the Common Stock and 200 shares of 5% Cumulative
Preferred Stock of the Company. As the trustees or directors of these
non-profit organizations have voting and investment power, the shares
of the Company's Common Stock held by such non-profit organizations
are shown opposite the name of the nominee or officer, but such shares
are reported only once in the total for nominees and officers as a
group. The nominees deny beneficial ownership of such shares. The
nominees also deny beneficial ownership of shares owned by their
spouses and minor children.
None of the nominees has any material interest in any other stock of
the Company or its subsidiaries.
Based upon information available to the Company as of March 8, 1999,
the following persons beneficially own more than 5% of the Company's Common
Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
-----------------------------
SOLE VOTING SHARED VOTING
NAME AND ADDRESS OR INVESTMENT OR INVESTMENT PERCENT
OF BENEFICIAL OWNER POWER POWER OF CLASS
- -------------------------------------------------- ------------- ------------- --------
<S> <C> <C> <C>
Marian S. Ware.................................... 4,035,029 743,696 5.9%
2 East Main Street
Strasburg, PA 17579
The Bessemer Group, Incorporated.................. 4,944,533 1,769,596 8.3%
100 Woodbridge Center Drive
Woodbridge, NJ 07095
</TABLE>
Based upon filings with the Securities and Exchange Commission, as of
March 8, 1999 there are no persons who own beneficially more than 5% of the
outstanding shares of the Company's Cumulative Preferred Stock, 5% Series.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Nancy Ware Wainwright reported on Form 5 one single sale of 100 shares
of Common Stock that inadvertently was not reported earlier on Form 4.
11
<PAGE>
REPORT OF THE COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
Overview
The Compensation and Management Development Committee of the Board of
Directors (the "Committee") is comprised entirely of independent
non-employee directors. The Committee establishes, subject to the
concurrence of the Board of Directors, the Company's compensation policy
and is responsible for administering the compensation program for the
Company's executives.
The Committee endeavors to ensure that the Company's executive
compensation program enables the Company to attract and retain the talented
executives it needs. Consistent with this objective, it is the policy of
the Committee that the total compensation opportunity available to
executives should be competitive with the median remuneration received by
those in positions of similar responsibilities in other comparable
companies. To this end, an independent compensation consultant is retained
to assist the Committee by periodically studying the Company's compensation
program for executives, reporting its findings and making recommendations
consistent with the compensation policy.
The compensation program for executives is comprised of base salary,
an annual incentive opportunity and a long-term incentive opportunity. The
current salary ranges, annual incentive targets and long-term incentive
targets for executives were established in 1997 based on a study prepared
by the compensation consultant that year. The surveys utilized by the
compensation consultant for the study included many of the water utilities
comprising the Dow Jones Water Utilities Index, the published industry
index shown in the performance graph.
Salary Compensation
The President and Chief Executive Officer, with the concurrence of the
Committee, annually sets the salary within the designated salary band for
each executive other than himself based on the responsibilities and
achievements of each such executive.
The Committee, with the concurrence of the Board of Directors, sets a
salary within the designated salary band for the President and Chief
Executive Officer on the basis of merit. This evaluation of merit involves
an analysis of (i) the Company's financial performance within the
limitations imposed by state utility regulators and fluctuating and varying
weather conditions and (ii) the performance of the President and Chief
Executive Officer in maintaining the Company as a leader in the water
service industry and in expanding the Company's water service operations
consistent with the Company's commitment to quality water service to
customers of its utility subsidiaries.
Inasmuch as water service operations are the Company's principal
business, evaluating the Company's financial performance requires an
understanding of (i) the prevailing regulatory practice in each of the
states in which the Company's utility subsidiaries operate and (ii) the
effect varying weather conditions have on revenues and expenses.
Consequently,
12
<PAGE>
the Committee has not adopted a formula relationship between changes in the
Company's financial performance and changes in the level of salary
compensation for the President and Chief Executive Officer. Similarly,
because of the varied subjective considerations involved, the Committee
does not evaluate on a formula basis the performance of the President and
Chief Executive Officer in maintaining the Company as a leader in the water
service industry or in expanding the Company's water service operations.
Annual Incentive Compensation
The Board of Directors, acting on the Committee's recommendation,
adopted in 1996 an annual cash incentive plan. This plan provides an
opportunity for executives and other key employees of the Company and its
subsidiaries to earn an annual cash incentive award for achieving
financial, customer service and operational goals. The financial goals are
based on achieving the utility operating income and return on equity
authorized by the various state utility regulators for the Company's
utility subsidiaries. Customer service goals are premised on delivering at
all times safe, high quality water at adequate pressures to water service
customers and responding promptly to customer service and billing
inquiries. The operational goals are based on an evaluation of each
participant's individual performance. The exact amount of an award depends
on the performance of the Company and of the participant.
Awards made to executives under the Annual Incentive Plan for 1998 are
shown in the Summary Compensation Table of this Proxy Statement.
Long-Term Incentive Compensation
At their 1994 annual meeting, shareholders of the Company adopted the
Long-Term Performance-Based Incentive Plan for executives and other key
employees of the Company and its subsidiaries. The exact amount of an award
is a function of the Company attaining its Earnings Per Share Growth and
Total Return to Stockholders Performance Cycle Goals and the individual
performance of the participant. Awards to executives under the plan, if
any, are generally paid as follows: 75% in restricted shares of Common
Stock and 25% in cash.
Awards made to executives under the Long-Term Performance-Based
Incentive Plan for the performance cycle that began January 1, 1996 and
concluded December 31, 1998 are shown in the Summary Compensation Table of
this Proxy Statement.
Internal Revenue Code
Section 162(m) of the Internal Revenue Code generally precludes the
deduction of more than $1 million in compensation paid to the Chief
Executive Officer and any of the four other most highly compensated
executives in any one year, subject to certain specified exceptions. All
compensation earned by these executives in 1998 will be deductible.
AS SUBMITTED BY THE MEMBERS OF THE COMPENSATION
AND MANAGEMENT DEVELOPMENT COMMITTEE:
William O. Albertini Paul W. Ware
Elizabeth H. Gemmill Ross A. Webber
Marilyn Ware
Dated: January 7, 1999
13
<PAGE>
PERFORMANCE GRAPH
The following graph compares the changes over the last five years in
the value of $100 invested in (i) the Company's Common Stock ("American
Water Works"), (ii) the Standard & Poor's 500 Stock Index ("S&P 500") and
(iii) the Dow Jones Water Utilities Index ("DJ Water Utils").
The year-end values of each investment are based on share price
appreciation and the reinvestment of all dividends. The calculations
exclude trading commissions and taxes. Total shareholder returns from each
investment, whether measured in dollars or percent, can be calculated from
the year-end investment values shown beneath the graph.
FIVE-YEAR CUMULATIVE TOTAL RETURNS
VALUE OF $100 INVESTED ON DECEMBER 31, 1993
In the printed version of the document, a line graph appears which
depicts the following plot points:
Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98
------ ------ ------ ------ ------ ------
American
Water Works $100 $ 94 $140 $148 $211 $268
S&P 500 $100 $101 $139 $171 $229 $294
DJ Water Utils $100 $ 94 $121 $144 $199 $254
14
<PAGE>
MANAGEMENT REMUNERATION
The following table sets forth the annual compensation paid to each of
the Company's five most highly compensated executive officers for services
to the Company and its subsidiaries in all capacities for each of the last
three calendar years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS PAYOUTS
----------- --------
ANNUAL COMPENSATION RESTRICTED
NAME OF EXECUTIVE OFFICER ------------------------------------- STOCK LTIP ALL OTHER
AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(1) PAYOUTS COMPENSATION(2)
- --------------------------------------- --------- ------------ ------------ ----------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
J. James Barr(3)....................... 1998 $402,917 $144,897 $126,382 $24,012 $6,109
President and Chief 1997 294,333 58,167 194,022 26,775 5,465
Executive Officer of the 1996 270,000 54,257 143,136 26,775 5,462
Company
Gerald C. Smith........................ 1998 291,833 55,924 126,382 24,012 7,338
Vice President of the 1997 279,333 58,167 194,022 26,775 6,605
Company 1996 270,000 54,257 143,136 26,775 6,587
W. Timothy Pohl........................ 1998 188,792 30,839 39,208 7,452 7,338
General Counsel and 1997 183,600 32,772 100,345 13,847 6,725
Secretary of the Company 1996 156,000 25,259 74,016 13,847 6,446
Joseph F. Hartnett, Jr................. 1998 180,000 30,839 32,422 6,160 7,413
Treasurer of the Company 1997 166,900 29,792 44,239 18,315 6,721
1996 0 0 0 0 0
Robert D. Sievers...................... 1998 150,000 30,839 32,422 6,160 6,754
Comptroller of the Company 1997 134,667 22,384 82,955 11,447 6,080
1996 130,000 20,879 61,200 11,447 5,531
</TABLE>
- ------------------
(1) Dollar values of restricted shares of Common Stock awards are based on
market price at the time of grant. The aggregate number of restricted
stock held and their value as of December 31, 1998 for the executives
were as follows: Mr. Barr -- 33,807 shares / $1,140,986; Mr. Smith --
33,807 shares / $1,140,986; Mr. Pohl -- 17,484 shares / $590,085; Mr.
Hartnett -- 1,506 shares / $50,827; and Mr. Sievers -- 14,454 shares /
$487,822. Dividends are paid on the restricted shares of Common Stock
at the same time and rate as dividends are paid to holders of
unrestricted shares of Common Stock.
- ------------------
See footnotes (2) and (3) on page 16
15
<PAGE>
(2) Dollar values of the shares of the Company's Common Stock purchased
with Company contributions and credited to the account of the named
executive officer under the Employees' Stock Ownership Plan and
Savings Plan for Employees.
(3) On November 6, 1997, J. James Barr was elected as a director and
appointed Acting President and Chief Executive Officer of the Company.
Coincident with his appointment, Mr. Barr was awarded 11,000 Common
Stock units of the Company payable on November 6, 2000 based on the
per share closing price of the Company's Common Stock on that date,
subject to certain conditions. This compensation award was filed with
the Securities and Exchange Commission as an exhibit to the Company's
Annual Report on Form 10-K for 1997. The foregoing description is
qualified in its entirety by reference to such exhibit.
The Company has maintained since 1976 an Employees' Stock Ownership
Plan (the "ESOP") which has been amended from time to time, primarily to
reflect changes in federal tax law. All employees of the Company and its
subsidiaries who are not included in a bargaining unit may participate in
the ESOP beginning on January 1 following his or her date of hire. The
Company also maintains a Savings Plan for Employees. The Savings Plan was
established in 1993. All employees of the Company and its subsidiaries who
have completed six months of service may participate in the Savings Plan.
As of March 8, 1999, the ESOP and Savings Plan together held 3.5% of the
Company's Common Stock.
16
<PAGE>
PENSION PLAN
The following table shows the approximate annual retirement benefits
which will be payable under the Company's Pension Plan, Supplemental
Executive Retirement Plan and Supplemental Retirement Plan at the normal
retirement age of 65 (assuming continuation of the plans) for specified
years of service and levels of average remuneration.
<TABLE>
<CAPTION>
FINAL YEARS OF SERVICE
AVERAGE -----------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
- ------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$150,000 $ 46,032 $ 61,376 $ 76,720 $ 81,970 $ 87,220 $ 92,470
200,000 62,532 83,376 104,220 111,220 118,220 125,220
250,000 79,032 105,376 131,720 140,470 149,220 157,970
300,000 95,532 127,376 159,220 169,720 180,220 190,720
350,000 112,032 149,376 186,720 198,970 211,220 223,470
400,000 128,532 171,376 214,220 228,220 242,220 256,220
450,000 145,032 193,376 241,720 257,470 273,220 288,970
500,000 161,532 215,376 269,220 286,720 304,220 321,720
550,000 178,032 237,376 296,720 315,970 335,220 354,470
600,000 194,532 259,376 324,220 345,220 366,220 387,220
650,000 211,032 281,376 351,720 374,470 397,220 419,970
</TABLE>
The Company and its subsidiaries have a defined benefit,
non-contributory Pension Plan which covers substantially all employees,
including the executive officers listed in the Summary Compensation Table
on page 15. Annual amounts which are contributed to the plan and charged to
expense during the year are computed on an aggregate actuarial basis and
cannot be individually allocated. The remuneration covered under the plan
includes salaries and annual cash bonuses paid to plan participants.
Directors who are not also employees do not participate in the plan.
Benefits under the plan are calculated as a percentage of the highest
average remuneration during those 60 consecutive months of employment of
the final 120 months of employment that yield the highest average. That
percentage depends on the employee's total number of years of service.
Benefits are not subject to reduction for Social Security or other
benefits, but are restricted under federal tax law to a maximum of $130,000
per year. As of March 8, 1999, Messrs. Barr, Smith, Pohl, Hartnett and
Sievers have been credited with 37, 46, 14, 6 and 22 years of service,
respectively, under the plan.
In 1985, the Company established a Supplemental Executive Retirement
Plan under which it has agreed to provide additional retirement benefits to
certain employees of the Company and its subsidiaries, designated from time
to time by the Board of Directors. Messrs. Barr, Smith, Pohl, Hartnett and
Sievers have been so designated. Benefits under the Supplemental Executive
Retirement Plan are intended to (i) provide the additional retirement
benefits that would be payable under the Company's Pension Plan if federal
tax law did not restrict such benefits as described in the preceding
paragraph, (ii) compute the benefits payable on the basis of the highest
average remuneration during 36 consecutive months rather than 60
consecutive months of employment and (iii) provide additional years of
service to those covered employees hired in mid-career.
In 1989, recognizing that the federal tax law restrictions on benefits
payable under the Pension Plan had begun to affect employees who were not
eligible for the Supplemental Executive Retirement Plan, the Company
adopted the Supplemental Retirement Plan (the "SRP"). The SRP is designed
to provide benefits to certain key employees designated by the Board of
Directors, equal to those that would be provided under the Pension Plan's
benefit formula if it were unaffected by the federal tax law restrictions
on benefits. Benefits payable under the SRP are reduced by any benefit
payable to the same individual under the Supplemental Executive Retirement
Plan.
17
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF THE
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to ratification by shareholders, the Board of Directors,
acting upon the recommendation of the Audit Committee, has appointed
PricewaterhouseCoopers LLP as independent accountants to audit the books
and accounts of the Company at the close of the current fiscal year.
PricewaterhouseCoopers LLP acted as independent accountants for the Company
during 1998. It is intended that, in the absence of contrary direction, the
proxies will be voted for the ratification of PricewaterhouseCoopers LLP as
independent accountants, and the Board of Directors recommends that the
shareholders vote to ratify the appointment of PricewaterhouseCoopers LLP
as independent accountants. In the event the appointment of
PricewaterhouseCoopers LLP is ratified, it is expected that
PricewaterhouseCoopers LLP will also audit the books and accounts of
certain subsidiaries of the Company at the close of their current fiscal
years. A representative of PricewaterhouseCoopers LLP, whose report on the
Company's financial statements appears in the 1998 Annual Report, will be
present at the annual meeting and will have the opportunity to make a
statement, if the representative desires to do so, and to respond to
appropriate questions from shareholders.
OTHER MATTERS
The Board of Directors does not know of any other matters which may
come before the meeting. However, if any other matters properly come before
the meeting, it is the intention of the persons named in the accompanying
form of proxy to vote the proxy in accordance with their judgment on such
matters.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies. Proxies may
be solicited by mail, telephone, telegram, facsimile, or in person. The
Company may pay banks, brokers or other nominees who hold stock in their
names for their expenses in sending soliciting material to their
principals. Georgeson & Company, Inc. has been retained to assist in the
solicitation of proxies at a fee of $6,500, plus reasonable out-of-pocket
expenses.
18
<PAGE>
SHAREHOLDER PROPOSALS
Any shareholder who desires to submit a proposal to be considered for
inclusion in the Company's proxy statement and form of proxy relating to
its annual meeting of shareholders in 2000 must submit such proposal in
writing to the Company by November 27, 1999. Such proposals should be
directed to the General Counsel and Secretary of the Company.
FORM 10-K REPORT
Upon the written request of any person who on the record date was a
record owner of stock of the Company, or who represents in good faith that
he or she was on such date a beneficial owner of such stock, the Company
will send to such person, without charge, a copy of its Annual Report on
Form 10-K for 1998, including financial statements and schedules, as filed
with the Securities and Exchange Commission. Requests for this report
should be directed to: W. Timothy Pohl, General Counsel and Secretary,
American Water Works Company, Inc., 1025 Laurel Oak Road, P. O. Box 1770,
Voorhees, New Jersey 08043.
By Order of the Board of Directors,
W. TIMOTHY POHL, General Counsel and Secretary
Dated: March 26, 1999
19
<PAGE>
APPENDIX A
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION
TO CLASSIFY THE BOARD OF DIRECTORS
A new Article Twelfth shall be added to the Restated Certificate of
Incorporation, as amended, to read in its entirety as follows:
TWELFTH: The Board of Directors shall be divided into three
classes, designated Classes I, II and III, as nearly equal in number
as the then total number of directors constituting the whole Board of
Directors permits, with the term of office of one class expiring each
year. At the annual meeting of shareholders in 1999, directors of
Class I shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of Class II shall be elected
to hold office for a term expiring at the second succeeding annual
meeting and directors of Class III shall be elected to hold office for
a term expiring at the third succeeding annual meeting. No decrease in
the number of directors shall shorten the term of any incumbent
director. Notwithstanding the foregoing, and except as otherwise
required by law, directors, if any, elected by the holders of
any one or more series of Cumulative Preferred Stock, Cumulative
Preference Stock or Cumulative Preferential Stock, voting separately
as a class, shall be elected to the Class with a term expiring at the
next following annual meeting of shareholders, and the number of
members of such class shall be increased accordingly. Subject to the
foregoing, at each annual meeting of shareholders the successors to
the class of directors whose term shall then expire shall be elected
to hold office for a term expiring at the third succeeding annual
meeting and until their successors shall be elected and qualified.
A-1
<PAGE>
1210-PS-99
<PAGE>
DIRECTIONS TO THE 1999 AMERICAN WATER WORKS COMPANY, INC. ANNUAL
MEETING TO BE HELD AT THE MANSION ON MAIN STREET
FROM PHILADELPHIA/CENTER CITY: 30 minutes. Take Ben Franklin Bridge to
Route 70 East. Follow Route 70 East to Route 73 South. Follow 73 South to
Evesham Road. Turn right on Evesham Road. Follow 1 1/2 miles, turn left
into Main Street Complex. Entrance is on left.
FROM PHILADELPHIA INTERNATIONAL AIRPORT: 40 minutes. Take Walt Whitman
Bridge to 42 South to 295 North to Route 561 (Voorhees Exit). Follow Route
561 to Evesham Road. Turn left on Evesham Road. Follow 1 1/2 miles, turn
right into Main Street Complex. Entrance is on left.
FROM NORTHEAST PHILADELPHIA: 30 minutes. Take Tacony Palmyra Bridge to
Route 73 South. Turn right on Evesham Road. Follow 1 1/2 miles, turn left
into Main Street Complex. Entrance is on left.
FROM NORTHERN NEW JERSEY/NEW YORK AREA: 1 hour and 15 minutes. Take New
Jersey Turnpike South to Exit 4. Follow to Route 73 South. Turn right on
Evesham Road. Follow 1 1/2 miles, turn left into Main Street Complex.
Entrance is on left.
FROM DELAWARE/BALTIMORE AREA: 60 minutes. Delaware Memorial Bridge to 295
North. Follow to Exit 32 (Haddonfield, Voorhees, Gibbsboro). Turn right
on Route 561. Follow 2 miles to Evesham Road. Turn left onto Evesham Road
(Mobil Station on left). Follow 2 miles, turn right into Main Street
Complex. Entrance is on left.
FROM ATLANTIC CITY: 50 minutes. Take Atlantic City Expressway to Route 73
North Exit (Tacony Palmyra Bridge). Proceed on Route 73 North, around
Berlin Circle, go 2 miles. Turn left on Kresson Road. Follow to second
light, Evesham Road. Turn left on Evesham Road and left into Main Street
Complex. Entrance is on left.
DETACH HERE
- ---------------------------------------------------------------------------
PROXY
AMERICAN WATER WORKS COMPANY, INC.
P
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
R FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 6, 1999
O
The undersigned, hereby revoking any contrary proxy previously
X given, hereby appoints J. James Barr and Marilyn Ware, and each of
them, attorneys and proxies, with full power of substitution and
Y revocation, to vote all of the shares of the undersigned in American
Water Works Company, Inc. (the "Company") entitled to vote at the
annual meeting of shareholders of the Company on May 6, 1999, and at
any adjournment thereof, as indicated on the reverse side and in
accordance with the judgment of said attorneys and proxies on any other
business which may come before the meeting or any such adjournment.
Except as otherwise indicated on the reverse side, the undersigned
authorizes the proxies appointed hereby to vote cumulatively for such
of the nominees (in some circumstances, less than all) as such proxies
in their discretion determine if in their judgment such action is
necessary to elect as many of the nominees as possible.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED BY THE SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3, WITH THE DISCRETIONARY AUTHORITY
DESCRIBED ABOVE.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE>
[LOGO] AMERICAN WATER WORKS
COMPANY, INC.
c/o EquiServe, P. O. Box 8040,
Boston, MA 02266-8040
Vote by Telephone Vote by Internet
It's fast, convenient, and It's fast, convenient, and your vote
immediate! Call Toll-Free on is immediately confirmed and posted.
a Touch-Tone Phone 1-877-PRX-VOTE
(1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement and Proxy Card. Statement and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/awk
For shareholders residing outside
the United States, call 1-201- 3. Enter your 14-digit Control
536-8073 on a touch-tone phone Number located on your Proxy
for a collect call. Card above your name.
3. Enter your 14-digit Control 4. Follow the instructions
Number located on your Proxy provided.
Card above your name.
4. Follow the recorded instructions.
Your vote in important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/awk
anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
Please note that all votes cast via the Telephone or Internet must be cast
prior to 5:00 p.m. EDST, May 5, 1999.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH PROPOSAL.
DETACH HERE
- ---------------------------------------------------------------------------
[ ] Please mark
votes as in
this example.
1. To amend the Restated Charter to establish a
Classified Board of Directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Election of Directors.
Class I Directors: (01) William O. Albertini, (02) Rhoda W. Cobb,
(03) Ray J. Groves, (04) Ross A. Webber, (05) Horace Wilkins, Jr.
Class II Directors: (06) Henry G. Hager, (07) Gerald C. Smith,
(08) Anthony P. Terracciano, (09) Marilyn Ware
Class III Directors: (10) J. James Barr, (11) Elizabeth H. Gemmill,
(12) Nancy Ware Wainwright, (13) Paul W. Ware
FOR WITHHELD
ALL [ ] FROM ALL [ ]
NOMINEES NOMINEES
[ ]___________________________________________________________________
Withhold vote from the nominees that I/We have written on the above
line, or cumulate vote as I/We have instructed on the above line
3. Ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, upon other matters as may properly come
before the meeting.
The Board of Directors recommends a vote "FOR" each proposal.
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE TO LEFT
Please return your signed proxy at once in the enclosed
envelope, which requires no postage if mailed in the United
States, even though you expect to attend the meeting in
person.
Please date and sign below. If a joint account, each owner
should sign. When signing in a representative capacity,
please give title. Please sign here exactly as name is
stenciled hereon.
Signature:________________Date:______ Signature:________________Date:______
