<PAGE>
As filed with the Securities and Exchange Commission on July 1, 1996
Registration No. 333-____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
THE YORK WATER COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1242500
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
130 East Market Street
York, Pennsylvania 17405
(717) 845-3601
(Address, including zip code, and telephone number, including area code, of
registrant's
principal executive offices)
William T. Morris
President
The York Water Company
130 East Market Street
York, Pennsylvania 17405
(717) 845-3601
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
James H. Carroll
Morgan, Lewis & Bockius LLP
One Commerce Square
417 Walnut Street
Harrisburg, Pennsylvania 17101-1904
----------------------------
Approximate date of commencement of proposed sale to which this
Registration Statement relates: From time to time after this Registration
Statement becomes effective.
If only the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
<PAGE>
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
-------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Title of each class Amount Proposed maximum Proposed maximum Amount of
of securities to be to be offering price per aggregate offering registration
registered registered share(1) price(1) fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $10.00 per share 80,000 shares $70.50 $5,640,000 $1,945
==========================================================================================================
</TABLE>
(1) Based upon the average of the bid and asked price of the Company's common
stock on June 25, 1996, estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) under the Securities Act of
1933, as amended.
--------------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
-2-
<PAGE>
Subject to Completion, Dated July 1, 1996
Prospectus [LOGO APPEARS HERE]
- ----------
80,000 Shares
THE YORK WATER COMPANY
Common Stock
The York Water Company (the "Company") is offering to the holders of its
common stock, par value $10.00 per share (the "Common Stock"), non-transferable
subscription rights (the "Subscription Rights") to purchase up to an aggregate
of 80,000 shares of Common Stock (the "Shares"). Holders of record of Common
Stock of the Company as of the close of business on August 1, 1996 (the
"Shareholders") have been granted one Subscription Right for every four (4)
shares of Common Stock owned of record as of such date. No fractional shares of
Common Stock will be issued upon the exercise of Subscription Rights. Any
fractional Share to which subscribing Shareholders would otherwise be entitled
will be rounded up or down to the nearest whole Share. Each Subscription Right
entitles the holder thereof to purchase one Share at a purchase price of $_____
per Share, subject to proration in the event Shareholders subscribe for more
than 80,000 shares of Common Stock (the "Basic Subscription Right"). See "Plan
of Distribution - Basic Subscription Amount." The number of Basic Subscription
Rights to which each Shareholder is entitled (the "Basic Subscription Amount")
is set forth on the pre-printed label on the subscription form which accompanies
this Prospectus (the "Subscription Form").
Shareholders shall have until 5:00 P.M. Eastern Daylight Savings Time on
September 16, 1996 (the "Expiration Date") to exercise their Subscription
Rights. As a result, the Company will not issue Shares pursuant to the exercise
of Subscription Rights on or prior to September 15, 1996, the anticipated record
date for the third quarter Common Stock dividend, and such dividend will not be
declared and payable with respect to the Shares issuable pursuant to the
exercise of Subscription Rights. If less than all of the Shares have been
subscribed for as of the Expiration Date, Shareholders who subscribe for the
entire Basic Subscription Amount are eligible to purchase, for $_____ per Share,
the remaining unsubscribed Shares (the "Oversubscription Privilege"). See "Plan
of Distribution--Oversubscription Privilege." Shareholders are not obligated to
exercise any or all of the Subscription Rights allotted to them hereunder.
The offering of Shares by the Company is conditioned upon the subscription
of a minimum of 40,000 Shares prior to the Expiration Date, unless such
condition is waived by the Company. Pending the issuance of Shares, all
subscription funds will be held in a separate, interest bearing bank account of
the Company. The offering of Shares may be modified or terminated by the
Company at any time.
__________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
__________________
THE OFFER WILL EXPIRE AT 5:00 P.M. EASTERN DAYLIGHT SAVINGS TIME ON
SEPTEMBER 16, 1996, UNLESS EXTENDED BY THE COMPANY.
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Underwriting
Price to Discounts Proceeds to
Public and Commissions(1) Company(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................ $_____ -0- $_____
- --------------------------------------------------------------------------------
Total Minimum............ $_________ -0- $_________
- --------------------------------------------------------------------------------
Total Maximum............ $_____ -0- $_____
================================================================================
</TABLE>
(1) The offering will be made directly by the Company without the payment of
any underwriting discounts, commissions or brokers' fees to any third
party.
(2) Before deducting expenses, estimated at $75,000, payable by the Company.
The date of this Prospectus is August __, 1996
-2-
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus, and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. Neither the delivery of this Prospectus
nor any sale made hereunder shall under any circumstances create an indication
that there has been no change in the affairs of the Company since the date
hereof. This Prospectus does not constitute an offer or solicitation by anyone
in any state in which such offer or solicitation is not authorized or in which
the person making such offer is not qualified to do so or to anyone to whom it
is unlawful to make such offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy statements
and other information can be inspected and copied at the public reference
facilities of the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549-1004 and at the following Regional Offices of the SEC: Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60621-2511, and New York Regional Office, Seven World Trade Center, New York, NY
10048. Copies of such materials can be obtained at prescribed rates from the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549-1004. Information, as of particular dates, concerning the directors and
officers of the Company, their remuneration and any material interest of such
persons in transactions with the Company is disclosed in proxy statements
distributed to shareholders of the Company and filed with the SEC.
The Company has filed with the SEC under the Securities Act of 1933, as
amended (the "Securities Act"), a Registration Statement on Form S-3 (including
all amendments and exhibits thereto, the "Registration Statement") with respect
to the securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC. The
Registration Statement, including any amendments and exhibits thereto, is
available for inspection and copying as set forth above. Statements contained
in this Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference.
-3-
<PAGE>
TABLE OF CONTENTS
Page
----
The Company ............................................................
Recent Developments ....................................................
Selected Financial Data ................................................
Use of Proceeds ........................................................
Plan of Distribution ...................................................
The Offering ........................................................
Purchase Period .....................................................
Basic Subscription Amount ...........................................
Basic Subscription Procedure ........................................
Oversubscription Privilege ..........................................
Exercising the Oversubscription Privilege ...........................
Exercising Subscription Rights through Brokers and Dealers ..........
Company's Right to Reject or Waive Defective
Subscriptions ......................................................
Non-Transferability of Subscription Rights ..........................
Minimum Condition of Offering .......................................
Withdrawal Rights of Company ........................................
Escrow of Subscription Funds ........................................
Irrevocability of Subscriptions .....................................
Issuance of Shares ..................................................
Regulatory Obligations ..............................................
Federal Income Tax Consequences .....................................
Determination of Offering Price ........................................
Description of the Company's Common Stock ..............................
Legal Opinion ..........................................................
Experts ................................................................
Incorporation of Certain Documents by Reference ........................
Subscription Form ......................................................
Instructions to Subscription Form ......................................
General Instructions ...................................................
Example of Subscription Form ...........................................
-4-
<PAGE>
THE COMPANY
The Company is a Pennsylvania corporation which was incorporated by
Special Act of the General Assembly of Pennsylvania in 1816. It is the oldest
investor-owned water utility in Pennsylvania. The Company is engaged in the
business of impounding, purifying and distributing water within its franchised
territory, which is located within York County, Pennsylvania. The Company
presently operates under the Pennsylvania Business Corporation Law and the
Pennsylvania Public Utility Code and is subject to regulation by the
Pennsylvania Public Utility Commission (the "PPUC"). The Company has no direct
competitors within its area of operations.
The Company's franchised territory is comprised of approximately 275
square miles and includes portions of the City of York, the Boroughs of Hallam,
Jacobus, Jefferson, Loganville, Manchester, Mount Wolf, East Prospect, New
Salem, North York, Seven Valleys, West York, York Haven and Yorkana and portions
of the Townships of Codorus, East Manchester, Hellam, Jackson, Lower Windsor,
Manchester, North Codorus, Spring Garden, Springettsbury, Springfield, West
Manchester, Windsor and York. The portion of York County serviced by the Company
is located in the south-central part of Pennsylvania, about 80 miles west of
Philadelphia, 23 miles south of Harrisburg and 20 miles north of the Maryland
border. The population of York County in 1990 was 337,617 according to the U.S.
Census Bureau. During the five-year period ended in 1995, the Company maintained
increased growth with respect to its customers and the distribution facilities
which it has placed into service.
The address of the Company is 130 East Market Street, York, Pennsylvania
17405-7089, and its telephone number is (717) 845-3601.
RECENT DEVELOPMENTS
The Company's water rates are regulated by the PPUC. Within the past
several years the Company has filed written applications for rate increases with
the PPUC and has been granted rate relief as the result of such requests.
Generally, such requests have been made on an approximate 21 month basis, and
relief has been granted within an average of seven months following each such
request. The most recent formal rate request was filed by the Company on May 9,
1996, seeking a 9.6% increase in annual revenues. While it is not anticipated
that the Company will obtain the full amount of the rate increase requested,
such an increase, if approved in its entirety, is designed to produce
approximately $1,534,000 in additional annual operating revenues; however, the
exact amount of any rate increase authorized by the PPUC and the timing of such
approval cannot be determined at this time.
During 1994, the Company received approval of a rate increase from the
PPUC. Effective September 23, 1994, the Company was granted a 3.7% rate increase
(the "1994 PPUC Order"), which was designed to produce an increase in annual
operating revenues of approximately $550,000. The 1994 PPUC Order was issued in
response to the Company's April 29, 1994 request for a 6.7% increase in rates.
During 1995, the Company incurred approximately $5.3 million in capital
expenditures and anticipates capital expenditures of approximately $5.4 million
for 1996. The Company anticipates satisfying such requirements through
internally generated funds, customer advances and short-term borrowings. The
receipt of approximately $[5.2] million from the sale of Shares pursuant to the
exercise of the Subscription Rights will be used to repay short-term borrowings.
For the fiscal years 1997 and 1998, the Company projects approximately $3.7
million and $3.9 million in construction expenditures. In order to meet these
projected capital expenditures, the Company anticipates raising funds through
internally generated funds, customers' advances, short-term borrowings and
proceeds from the issuance of common stock under its employee stock purchase
plan and dividend reinvestment plan. As of __________, 1996, the Company had
$_____ million available for borrowing
-5-
<PAGE>
pursuant to its existing $11 million bank lines of credit. The Company
anticipates that it will continue to submit an application or applications with
the PPUC from time to time in the future proposing increases in rates to provide
a fair rate of return on the capital expenditures associated with its
construction projects.
SELECTED FINANCIAL DATA
The following table sets forth certain selected historical financial
information for the Company which has been derived from and should be read in
conjunction with, and is qualified in its entirety by, the financial statements
of the Company, including the notes thereto, incorporated by reference in this
Prospectus. Interim unaudited data for the three month periods ended March 31,
1996 and 1995 reflect, in the opinion of management, all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of such
data. Results for the periods ended March 31, 1996 and 1995 are not necessarily
indicative of results which may be expected for any other period or for the
fiscal year as a whole.
<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
------------------------ ---------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Water operating revenue....... $ 3,674,399 $ 3,695,008 $15,449,296 $14,755,707 $14,201,756 $13,216,692 $13,021,354
Operating expenses............ 2,215,268 2,219,946 9,119,832 8,881,499 8,591,315 7,932,765 7,723,259
Income taxes.................. 270,468 329,654 1,419,907 1,055,448 1,285,799 765,278 931,408
Operating income.............. 1,188,663 1,145,408 4,909,557 4,818,760 4,324,642 4,518,649 4,366,687
Interest expense.............. 719,999 640,969 2,738,846 2,720,535 3,045,872 2,609,708 2,619,323
Gain on sale of land.......... -- -- -- 215,417 842,002 -- --
Other income, net............. 49,010 57,635 141,536 131,036 430,111 259,177 279,004
Net income.................... 517,674 562,074 2,312,247 2,444,678 2,550,883 2,168,118 2,026,368
Per Common Share Data:
Book value.................... $34.16 $33.83 $34.16 $33.75 $33.12 $32.31 $0.28
Net income.................... 0.81 0.89 3.66 3.91 4.13 3.71 3.70
Cash dividends declared....... 0.90 0.90 3.60 3.60 3.60 3.68 3.68
Number of shares outstanding
at period-end.............. 639,225 631,585 637,374 629,684 621,817 613,889 551,243
Utility Plant:
Original cost................. $89,379,798 $84,628,027 $88,710,279 $83,642,650 $77,241,368 $71,624,043 $69,108,568
Construction expenditures..... 681,706 988,823 5,256,959 6,629,903 6,040,584 2,777,903 3,568,214
Balance Sheet Data:
Total assets.................. $90,493,021 $87,408,229 $90,459,706 $86,967,330 $84,738,162 $80,330,004 $69,613,666
Long-term debt................ 32,000,000 32,000,000 32,000,000 32,000,000 32,000,000 34,966,327 29,531,111
</TABLE>
USE OF PROCEEDS
The net proceeds of the offering, assuming the sale of all Shares being
offered hereby, are estimated to be approximately $5.167 million, after
deducting expenses of the offering estimated to be approximately $75,000.
Approximately $5.167 million of such net proceeds will be used to retire short-
term debt. If less than $5.167 million is received, the Company will fund its
remaining capital expenditure requirements by drawing down additional amounts
from its existing bank lines of credit.
-6-
<PAGE>
PLAN OF DISTRIBUTION
The Offering
The Company is offering non-transferable Subscription Rights to purchase up
to a maximum of 80,000 shares of its Common Stock (the Shares) at a subscription
price of $_____ per Share (the "Purchase Price"). The offering of Shares through
Subscription Rights (the "Offering") will be made directly by the Company to the
Shareholders.
Each Shareholder of the Company as of the close of business on August 1,
1996 will receive one Subscription Right for every four (4) shares of Common
Stock owned as of such date (the "Record Date"). Each Subscription Right
entitles the holder thereof to purchase one Share for each Subscription Right,
subject to proration in the event Shareholders subscribe for an aggregate of
more than 80,000 shares of Common Stock in accordance with the basic
subscription procedure set forth herein (the "Basic Subscription Procedure").
Fractional Subscription Rights will not be granted, and Shareholders who would
otherwise be entitled to receive a fractional Subscription Right will receive
the number of Subscription Rights rounded up or down to the nearest whole
Subscription Right. The Basic Subscription Amount to which each Shareholder is
entitled is set forth on the pre-printed label on the Subscription Form which
accompanies this Prospectus. Beneficial owners of Common Stock held in "street
name" should refer to "Exercising Subscription Rights through Brokers and
Dealers."
Subject to the allocation described below, each Subscription Right also
carries the right to subscribe at the Purchase Price for additional Shares (the
"Oversubscription Privilege"), up to the amount offered hereby. All beneficial
holders who exercise the Basic Subscription Right in full will be entitled to
exercise the Oversubscription Privilege in accordance with the additional
subscription procedure described below in "Exercising the Oversubscription
Privilege." Shareholders are under no obligation to exercise any or all of the
Subscription Rights which have been granted to them pursuant to the Offering.
Purchase Period
Shareholders shall have until 5:00 P.M. Eastern Daylight Savings Time
("EDST") on September 16, 1996 (the "Expiration Date") to deliver properly
exercised Subscription Rights to the Company, in accordance with the procedure
described below in "Basic Subscription Procedure." The Offering will expire at
5:00 P.M. EDST on the Expiration Date, unless extended by the Company. All
Subscription Rights which have not been exercised prior to the Expiration Date
will terminate and become null and void for all purposes.
Basic Subscription Amount
Shareholders shall receive one Subscription Right for every four (4) shares
of Common Stock which are held as of the Record Date. Subscription Rights will
entitle the holders thereof to purchase, at the Purchase Price, one Share for
each Subscription Right which is held. However, in the event Shareholders
subscribe for an aggregate of more than 80,000 Shares through the exercise of
their Basic Subscription Rights, the Company will issue 80,000 shares of Common
Stock on a pro rata basis (adjusted by rounding up or down to the nearest whole
Share to avoid the issuance of fractional Shares), based upon the number of
Subscription Rights validly exercised. For instance, if Shareholder A exercised
in full its Basic Subscription Right for 100 Shares and Shareholders subscribed
for an aggregate of 100,000 shares of Common Stock, the Company would issue 80
Shares to Shareholder A and 80,000 Shares to all Shareholders.
The Company will promptly refund to subscribing Shareholders, without
interest or deduction, all subscription funds which are not applied against the
purchase of Shares due to any such proration of Shares. No fractional
Subscription Rights will be granted. Shareholders who would otherwise be
entitled to a fractional
-7-
<PAGE>
Subscription Right will receive the number of Subscription Rights rounded up or
down to the nearest whole Subscription Right.
Basic Subscription Procedure
Shareholders may exercise their Subscription Rights by completing and
signing the accompanying Subscription Form in accordance with the instructions
attached thereto and by mailing or delivering the completed Subscription Form
to:
The York Water Company
130 East Market Street,
York, Pennsylvania 17405-7089
Attention: Lois L. Shultz, Assistant
Secretary
The completed Subscription Form and full payment of the Purchase Price must be
received by the Company on or before the Expiration Date in order for Shares to
be validly purchased under the Basic Subscription Procedure. Payment of the
Purchase Price for all Shares subscribed must be made by personal, certified or
cashier's check, or money order, payable to the order of the Company. A return
envelope has been provided for the convenience of the Shareholders. The risk of
delivery of the Subscription Form and payment of the Purchase Price to the
Company shall be borne by the Shareholder exercising Subscription Rights and not
by the Company. Shareholders are recommended to use certified or registered
mail, return receipt requested, for all returns which are sent by mail.
Oversubscription Privilege
All Shareholders who have fully purchased the Basic Subscription Amount
allotted to them are eligible to purchase, at the Purchase Price, any
unsubscribed Shares pursuant to the Oversubscription Privilege. There is no
limit on the number of Shares which a Shareholder may subscribe for under the
Oversubscription Privilege.
The only Shares available for additional subscription are those Shares
which remain unsubscribed under the Basic Subscription Procedure. If the amount
of unsubscribed Shares is insufficient to satisfy all additional subscription
requests, the available Shares will be allotted among those Shareholders
electing to subscribe for additional Shares on a pro rata basis in proportion,
not to the number of Shares requested pursuant to the Oversubscription
Privilege, but to the number of Shares each beneficial holder exercising the
Oversubscription Privilege has purchased pursuant to Basic Subscription
Privilege; provided, however, that if such pro rata allocation results in any
--------
Shareholder being allocated a greater number of additional Shares than such
Shareholder subscribed for pursuant to the exercise of such Shareholder's
Oversubscription Privilege, then such holder will be allocated only such number
of additional Shares as such Shareholder subscribed for and the remaining
additional Shares will be allocated among all other Shareholders exercising the
Oversubscription Privilege.
Exercising the Oversubscription Privilege
Shareholders who purchase the entire Basic Subscription Amounts allotted to
them may purchase additional unsubscribed Shares by completing the accompanying
Subscription Form in accordance with the instructions described below in
"Instructions to Subscription Form." A down payment equal to 10% of the Purchase
Price for the additional Shares must be made at the same time payment is made
for Shares purchased under the Basic Subscription Procedure. Within five
business days after the Expiration Date, the Company will mail to each
Shareholder who properly subscribed for additional Shares an invoice which sets
forth the exact number of additional Shares which are available for purchase and
the exact amount of the balance due from the Shareholder with respect to such
additional Shares. Payment for the additional Shares must be made by personal,
certified or cashier's check, or money order, payable to the order of the
Company and must be received by the Company within 15 business days following
the Expiration Date. If the full amount of such balance due
-8-
<PAGE>
has not been received by the Company within such 15-day period, the 10% down
payment previously paid by the Shareholder will be returned to such Shareholder,
without interest or deduction, and no additional Shares (other than the Shares
to be issued under the Basic Subscription Procedure) will be issued to such
Shareholder.
The exact number of additional Shares that will be available will not be
determined until the Expiration Date. If the total number of additional
subscribed Shares exceeds the total number of unsubscribed Shares which are
available, such additional Shares will be allocated on a pro rata basis in
proportion, not to the number of Shares requested pursuant to the
Oversubscription Privilege, but to the number of Shares each beneficial holder
exercising the Oversubscription Privilege has purchased pursuant to Basic
Subscription Privilege; provided, however, that if such pro rata allocation
--------
results in any Shareholder being allocated a greater number of additional Shares
than such Shareholder subscribed for pursuant to the exercise of such
Shareholder's Oversubscription Privilege, then such holder will be allocated
only such number of additional Shares as such Shareholder subscribed for and the
remaining additional Shares will be allocated among all other Shareholders
exercising the Oversubscription Privilege. The Company will promptly refund to
subscribing Shareholders, without interest or deduction, subscription funds
which are not applied against the purchase of additional Shares due to any such
proration of Shares.
Exercising Subscription Rights through Brokers and Dealers
Shareholders, such as broker-dealers, depositories, banks, agents,
administrators, trustees or their nominees, who hold shares of Common Stock for
the account of others ("Agent Shareholders") should forward this Prospectus to
the respective beneficial owners of such shares as of the Record Date (the
"Street-Name Holders") as soon as possible to ascertain the Street-Name Holders'
intentions and to obtain instructions with respect to their participation in the
Offering. Since Street-Name Holders are not holders of record of Common Stock,
they will not receive Subscription Forms which set forth the number of
Subscription Rights that may be exercised; however, such holders should receive
a letter of instruction from their Agent Shareholder which sets forth the number
of Shares such holders may subscribe for in the Offering through the Agent
Shareholder. The Company will reimburse Agent Shareholders for customary mailing
and handling expenses in forwarding copies of this Prospectus. If a Street-Name
Holder instructs the Agent Shareholder to purchase Shares in the Offering and
forwards proper payment for such Shares, the Agent Shareholder should complete
the Subscription Form and remit funds to the Company to effect such purchase.
Since an Agent Shareholder may be required to process purchase orders on
behalf of many Street-Name Holders and may complete and forward its Subscription
Form several days prior to the Expiration Date to ensure that Shares are
properly purchased, Street-Name Holders should contact their Agent Shareholder
well in advance of the Expiration Date to make the necessary arrangements for
the purchase of Shares prior to the date the Agent Shareholder completes and
forwards the Subscription Form. A Street-Name Holder may only acquire additional
shares through the Oversubscription Privilege in the event (i) such holder
properly elects to acquire additional Shares and forwards the appropriate down
payment to the Agent Shareholder and (ii) the Agent Shareholder exercises its
entire Basic Subscription Amount.
Company's Right to Reject or Waive Defective Subscriptions
All questions as to the validity of the exercise of any Subscription Rights
or as to the time of receipt of the Subscription Form will be determined by the
Company, which determination shall be final and binding. The Company, in its
sole discretion, reserves the right to waive any defect or irregularity, permit
a defect or irregularity to be corrected within such time as it may determine or
reject any improper exercise of a Subscription Right. The Company shall not be
under any duty to notify any Shareholder of any defects or irregularities in the
exercise of Subscription Rights and shall not incur any liability for the
failure to give any such notification.
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<PAGE>
The risk of nondelivery of the Prospectus, the Subscription Form, the
Company's invoice for additional subscription Shares, if any, and any and all
payments for subscription amounts due the Company will be borne by the
Shareholder who exercises Subscription Rights and not by the Company. No monies
paid to the Company will be returned to any Shareholder except if (i) 40,000
Shares are not subscribed for or the Company otherwise terminates the Offering,
(ii) there is a proration of Shares, or (iii) the price of allotted additional
Shares is less than the 10% down payment. All monies to be returned by the
Company will be mailed promptly without interest or deduction.
Non-Transferability of Subscription Rights
Subscription Rights may not be sold, transferred, donated, pledged,
assigned or otherwise voluntarily or involuntarily disposed of, except that,
upon the death of any Shareholder, any outstanding Subscription Rights granted
to such Shareholder may be exercised by such Shareholder's duly authorized
representative prior to 5:00 P.M., EDST on the Expiration Date. A Shareholder
who sells shares of Common Stock after the Record Date will still be entitled to
receive Subscription Rights with respect to such Common Stock. Such sale will
not constitute a transfer of the Subscription Rights relating to such shares.
Minimum Condition of Offering
The Offering is conditioned upon the valid exercise of a minimum of 40,000
Subscription Rights prior to the Expiration Date.
Withdrawal Rights of Company
The Company reserves the absolute right to withdraw from, cancel, modify or
terminate the Offering at any time prior to the Expiration Date.
Escrow of Subscription Funds
Pending the issuance of Shares, all subscription funds will be held in a
separate, interest bearing bank account of the Company. In the event the Company
withdraws or terminates the Offering for any reason, the subscription funds will
be refunded promptly to subscribing Shareholders, without interest or deduction,
and the Company will retain the interest earned on such funds, if any.
Irrevocability of Subscriptions
Once the Company has received an executed Subscription Form, such
Subscription Form shall not be revocable by the Shareholder for any reason.
Delivery of an executed Subscription Form and the required Purchase Price from a
Shareholder to the Company on or before the Expiration Date will constitute a
binding agreement between such Shareholder and the Company in accordance with
the terms and conditions set forth herein.
Issuance of Shares
Shareholders are not required to hold Common Stock through the date the
Shares are issued in order to exercise Subscription Rights and participate in
the Offering. If Shareholders fully subscribe for all Shares through the
exercise of their Basic Subscription Rights, certificates for the Shares will be
issued by the Company as soon as practicable following the Expiration Date
(i.e., September 16, 1996). If Shares remain following the exercise of Basic
Subscription Rights, certificates for all Shares will be issued following the
exercise period for the Oversubscription Privilege (i.e., as soon as practicable
after October 7, 1996). However, in any event, the Company will not issue any
Shares prior to September 15, 1996, the anticipated record date for the third
quarter Common Stock dividend, and, therefore, the third quarter Common Stock
dividend will not be
-10-
<PAGE>
declared and payable for Shares issuable pursuant to the exercise of
Subscription Rights. Prior to the issuance of Shares, a Shareholder who elects
to exercise Subscription Rights shall not be considered to beneficially own the
Shares issuable upon exercise of such Subscription Rights, and such Shares shall
not be deemed to be held of record for any purpose. Moreover, prior to any
issuance of Shares, the Subscription Rights shall not be deemed to bestow upon
Shareholders any voting, dividend or other rights with respect to the
Subscription Rights or the Shares underlying such Subscription Rights.
Regulatory Obligations
The offer and sale of Common Stock pursuant to the Offering is subject
to PPUC approval. On _________, 1996 the PPUC registered a Securities
Certificate with respect to the Offering, thereby authorizing the distribution
of the Subscription Rights and the issuance of Common Stock.
Federal Income Tax Consequences
The following is a brief summary of some of the federal income tax
consequences relating to the Offering. This summary is based upon the Internal
Revenue Code of 1986, as amended (the "Code"), applicable regulations, judicial
decisions and administrative interpretations of law, all of which are subject to
change or modification. Any change in the current tax laws may or may not be
retroactive. Additionally, state, local or foreign tax laws may have an impact
on certain investors. Since the following is only intended as a brief review,
Shareholders should consult their own tax advisors with respect to the federal
income tax discussion herein, as well as state, local or foreign tax
considerations, insofar as the same are applicable to each Shareholder's tax
situation.
For United States federal income tax purposes, receipt of the Subscription
Rights pursuant to the Offering should be treated as a nontaxable distribution.
A Shareholder will have a zero basis in the Subscription Rights received in the
Offering, except that a portion of such Shareholder's basis in the Shares shall
be allocated to the Subscription Rights (based on the relative fair market
values of the Shares and the Subscription Rights at the time of the
distribution) if (i) such Shareholder exercises Subscription Rights and (ii)
either (A) such Shareholder elects under Section 307 of the Code to make such an
allocation or (B) the fair market value of the Subscription Rights at the time
of the distribution equals or exceeds 15% of the fair market value of the Shares
at that time.
Upon exercise of a Subscription Right, a Shareholder will not recognize
income, gain or loss. The basis of Shares acquired upon exercise of Subscription
Rights will equal the sum of the Purchase Price and such Shareholder's basis, if
any, in the Subscription Rights exercised. The holding period for Shares will
begin on the date of exercise.
No loss will be recognized by a Shareholder who receives Subscription
Rights in the Offering and allows those Subscription Rights to lapse.
DETERMINATION OF OFFERING PRICE
There is no established trading market for the Company's Common Stock
except for sporadic trading in the over-the-counter market. The following table
sets forth, for the periods indicated, the high and low bid prices per share as
compiled by the National Quotation Bureau, Inc. and the per share quarterly
Common Stock dividend declared during the relevant periods. These quotations
represent prices between dealers and do not include retail mark-ups, mark-downs
or commissions, nor do they represent actual transactions.
-11-
<PAGE>
<TABLE>
<CAPTION>
High Low Quarterly Dividend
------- ------- ------------------
<S> <C> <C> <C>
1994
1st Quarter........... $58 $58 $.90
2nd Quarter........... 59 1/2 58 .90
3rd Quarter........... 61 59 1/2 .90
4th Quarter........... 63 61 .90
1995
1st Quarter........... $64 3/4 $63 $.90
2nd Quarter........... 64 3/4 64 1/4 .90
3rd Quarter........... 65 1/4 64 1/4 .90
4th Quarter........... 67 3/4 64 1/4 .90
1996
1st Quarter........... $69 $67 $.90
2nd Quarter........... ___ ___ .90
3rd Quarter (through
August __, 1996).. ___ ___ --
</TABLE>
In setting the Purchase Price of $_____, the Board of Directors of the
Company determined the average published bid and ask prices for Common Stock for
the ten business days preceding the Record Date (the "Recent Market Price") and
subtracted a 5% discount from the Recent Market Price. In determining the
Recent Market Price, the Board of Directors assumed an ask price of $2.00 above
the bid price, in accordance with historic trading patterns, when there was no
trading activity for Common Stock. The Board of Directors selected a 5%
discount to the Recent Market Price for Common Stock based upon the approximate
savings of underwriting fees and third party commissions resulting from the
Company's sale of the Shares directly to the Shareholders. Based on these
considerations, the Board of Directors concluded that the Purchase Price is fair
and reasonable.
DESCRIPTION OF THE COMPANY'S COMMON STOCK
The authorized capital stock of the Company consists of 1,200,000 shares of
Common Stock, with a par value of $10.00 per share. As of March 31, 1996, there
were 639,225 shares of Common Stock outstanding held by approximately 1,229
shareholders of record. After the Offering, assuming all of the Shares offered
hereby are subscribed for and sold, there will be approximately 719,225 shares
of Common Stock outstanding.
Authorized but unissued shares of Common Stock may be issued at any time
and from time to time by the Board of Directors of the Company. Each share of
Common Stock entitles the holder to one vote, except in the election of
directors, where each holder has cumulative voting rights. Cumulative voting
rights allow a shareholder to cast as many votes in an election of Directors as
shall equal the number of such shareholder's shares multiplied by the number of
Directors to be elected, and such shareholder may cast all such votes for a
single Director nominee or distribute votes among two or more nominees in such
proportion as such shareholder sees fit. The Board of Directors of the Company
consists of a total of ten directors, with three separate classes of directors
elected every three years to a staggered three-year term of office. As a result
of this classification, a greater number of votes is required to elect a
director than if the entire Board of Directors were elected at the same time,
thus making it more difficult for Shareholders, even with cumulative voting
rights, to obtain board representation in proportion to their shareholdings.
All shares of Common Stock are entitled to participate pro rata in such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. Subject to the prior rights of creditors, all shares
-12-
<PAGE>
of Common Stock are entitled in the event of liquidation to participate ratably
in the distribution of all the remaining assets of the Company.
Certain of the Company's trust indentures and agreements relating to its
outstanding indebtedness impose restrictions upon the payment of Common Stock
dividends. In general, these restrictive provisions prohibit the payment of
Common Stock dividends when cumulative dividend payments, over a specified
period of time, exceed cumulative net income, over the same period, plus, in
certain cases, a specified base amount. In view of the Company's historic net
income, management believes that these contractual provisions should not have
any direct, adverse impact on the Company's Common Stock dividend.
Notwithstanding these contractual provisions, the Board of Directors of the
Company periodically considers a variety of factors in evaluating the Company's
Common Stock dividend rate. The continued maintenance of the current Common
Stock dividend rate will be dependent upon (i) the Company's success in
financing future capital expenditure requirements through debt and equity
issuances, (ii) the Company's success in obtaining pending and future rate
increases from the PPUC, (iii) future interest rates, and (iv) other events or
circumstances which could have an effect on operating results.
All outstanding shares of Common Stock are, and upon issuance as set forth
herein the Shares being sold by the Company will be, duly authorized, validly
issued, fully paid and non-assessable. There are no preemptive rights
applicable to any shares of Common Stock.
The Company is subject to the Pennsylvania Business Corporation Law (the
"BCL"), which contains several provisions which may deter, or make more
difficult, attempts to acquire control of the Company. The general effect of
these provisions, which may in certain circumstances be waived by the
shareholders or the Board of Directors of the Company, are described in summary
fashion below.
Subchapter 25E of the BCL provides generally that, if the Company were
involved in a "control transaction," shareholders of the Company would have the
right to demand payment of the fair value of the shares from a "controlling
person or group." For purposes of Subchapter 25E, a "controlling person or
group" is a person or group of persons acting in concert that, through voting
shares, has voting power over at least 20% of the votes which shareholders of
the Company would be entitled to cast in the election of directors. A control
transaction arises, in general, when a person or group acquires the status of a
controlling person or group. Upon the occurrence of a control transaction, the
controlling person or group must give prompt notice to each shareholder of
record of the Company and to the Court of Common Pleas in York County,
Pennsylvania. Shareholders, other than the controlling person or group, would
thereupon be entitled to demand that the controlling person or group pay them
the "fair value" of their shares. The fair value for this purpose may not be
less than the highest price paid per share by the controlling person or group at
any time during the 90 day period ending on and including the date on which the
controlling person or group became such, plus an increment representing any
value which may not be reflected in such price including, without limitation,
value payable for the acquisition of control.
In general, Subchapter 25F of the BCL delays for five years and imposes
conditions upon "business combinations" between an "interested shareholder" and
the Company. The term "business combination" is defined broadly to include
various merger, consolidation, division, exchange or sale transactions,
including transactions utilizing the Company's assets for purchase price
amortization or refinancing purposes. An "interested shareholder," in general,
would be a beneficial owner of at least 20% of the Company's voting shares.
In general, Subchapter 25G of the BCL suspends the voting rights of the
"control shares" of a shareholder that acquires for the first time 20% or more,
33-1/3% or more, or 50% or more of the Company's shares entitled to be voted in
an election of directors. "Control shares" are defined generally to include
shares acquired which result in ownership in excess of any of the above-
specified percentages, plus shares acquired (i) within 180 days of such
acquisitions or (ii) with the intention of effecting such acquisitions. The
voting rights of the control shares generally remain suspended until such time
as the "disinterested" shareholders of the Company
-13-
<PAGE>
vote to restore the voting power of the acquiring shareholder. Failure to
obtain such approval exposes the owner to the risk of forced sale of the shares
to the Company.
Subchapter 25H of the BCL provides in certain circumstances for the
recovery by the Company of profits made upon the sale of Common Stock by a
"controlling person or group" if the sale occurs within 18 months after the
controlling person or group became such and the Common Stock was acquired during
such 18 month period or within 24 months prior thereto. For purposes of
Subchapter 25H, a "controlling person or group," in general, is a person or
group that (i) has acquired, (ii) offered to acquire, or (iii) publicly
disclosed or caused to be disclosed an intention to acquire voting power over
shares that would entitle such person or group to cast at least 20% of the votes
that shareholders of the Company would be entitled to cast in the election of
directors.
Subchapters 25E-25H contain a wide variety of transactional and status
exemptions, exclusions and safe harbors. The foregoing description of
Subchapters 25E-25H of the BCL does not purport to be a complete or a definitive
explanation of the BCL's application to transactions in the Company's securities
or related circumstances that may arise in the future.
Corporations and persons owning or holding directly or indirectly five
percent or more of the Common Stock are "affiliated interests" of the Company
under the Pennsylvania Public Utility Code. PPUC approval is required for
contracts or arrangements providing for the furnishing of management,
supervisory, construction, engineering, accounting, legal, financial or similar
services and contracts or arrangements for the purchase, sale, lease or exchange
of any property, right or thing or for the furnishing of any service, property,
right or thing other than those above enumerated, made or entered into between
the Company and any affiliated interest. In addition, PPUC approval would be
required before any person could acquire 20% or more of the outstanding common
stock of the Company.
LEGAL OPINION
The validity of the Shares offered hereby will be passed upon for the
Company by Morgan, Lewis & Bockius LLP, 417 Walnut Street, Harrisburg,
Pennsylvania 17101-1904.
EXPERTS
The financial statements and schedule of the Company as of December 31,
1995 and 1994, and for each of the years in the three-year period ended December
31, 1995, have been incorporated by reference herein and in the registration
statement in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The report of
KPMG Peat Marwick LLP covering the December 31, 1993 financial statements refers
to a change in the method of accounting for income taxes.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Certain documents previously filed by the Company with the SEC pursuant to
the Exchange Act are hereby incorporated by reference in this Prospectus as
follows:
(1) the Annual Report on Form 10-K for the year ended December 31,
1995; and
(2) the Quarterly Report on Form 10-Q for the quarter ended March 31,
1996.
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<PAGE>
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination of
the offering of the Common Stock shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing thereof. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein, or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus. All information appearing in this
Prospectus should be read in conjunction with, and is qualified in its entirety
by, the information and financial statements (including notes thereto) appearing
in the documents incorporated herein by reference, except to the extent set
forth in the immediately preceding statement.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any or all of the documents referred to above (not including exhibits
thereto, unless such exhibits are specifically incorporated by reference
therein). Written or telephone requests should be directed to: Lois L. Shultz,
Assistant Secretary, The York Water Company, 130 East Market Street, York,
Pennsylvania 17405-7089, telephone number (717) 845-3601.
-15-
<PAGE>
SUBSCRIPTION FORM
for
Shares of Common Stock
THE YORK WATER COMPANY
TO: The York Water Company
130 East Market Street
York, Pennsylvania 17405-7089
GENERAL PROVISIONS APPLICABLE TO BASIC
SUBSCRIPTION AMOUNT AND OVERSUBSCRIPTION PRIVILEGE
The undersigned shareholder (the "Shareholder") of The York Water Company
(the "Company") hereby acknowledges and agrees to the following provisions:
1. The number of Shares that may be acquired upon the exercise of
Subscription Rights granted to the Shareholder ("Subscription Shares") is set
forth on the label above PART A of the Subscription Form.
2. The Shareholder may purchase the Subscription Shares allotted, subject
to proration as described in "Basic Subscription Amount" of the accompanying
Prospectus.
3. The Shareholder may purchase Shares at a purchase price of $_____ per
Share.
4. The Company reserves the right to reject any defective subscriptions
to purchase Shares.
5. The obligation of the Company to issue Shares to the Shareholder in
accordance with this Subscription Form is subject to the Company's timely
receipt of the required Purchase Price for the Shares, in accordance within the
instructions set forth herein, by personal, certified or cashier's check, or
money order, payable to the order of the Company.
6. The Company's obligation to issue Shares to the Shareholder is further
conditioned upon the subscription of a minimum of 40,000 Shares, unless such
condition is waived by the Company, and the right of the Company to modify or
terminate the Offering at any time.
7. Certificates for Shares shall be issued to the Shareholder by the
Company as soon as practicable (i) following September 16, 1996 if the Offering
is fully subscribed through the Shareholders' exercise of their Basic
Subscription Rights or (ii) following October 7, 1996 if Shares remaining after
the exercise of Basic Subscription Rights are offered pursuant to the
Oversubscription Privilege.
8. Shareholders who exercise Subscription Rights are not obligated to
hold shares of Common Stock continuously through the date the Shares are issued
(as described in paragraph 7 above) in order to receive Shares pursuant to the
exercise of the Subscription Rights.
9. The Subscription Rights granted hereunder may not be sold,
transferred, assigned, pledged, donated or in any way disposed of by the
Shareholder.
-16-
<PAGE>
10. The Shareholder is not obligated to exercise any or all of the
Subscription Rights which have been granted hereunder.
11. The Company's Offering will expire at 5:00 P.M. EDST on September 16,
1996 unless otherwise extended by the Company.
12. The Subscription Form, once executed and delivered to the Company
hereunder, shall not be revocable by the Shareholder.
13. All capitalized terms used herein which have not been defined shall
have the same meanings ascribed to them in this Prospectus.
-17-
<PAGE>
SUBSCRIPTION FORM
for
Shares of Common Stock
THE YORK WATER COMPANY
To: The York Water Company
130 East Market Street
York, Pennsylvania 17405-7089
PART A. BASIC SUBSCRIPTION AMOUNT
Shares Eligible For Purchase Upon Exercise of Subscription
Rights, as Allotted to Shareholder
("Subscription Shares"): _____________________________________________
(as specified on above label)
Subscription Shares Purchase Price Payment to Company
------------------- -------------- ------------------
X $ per share = $
----------- ----- -----
PART B. OVERSUBSCRIPTION PRIVILEGE
Subscription Shares Down Payment
------------------- ------------
* X $ per share x 10% = $
-------- ----- -----
TOTAL PAYMENT ENCLOSED $ **
=====
- -------------
* Prior to the purchase of any additional Shares under PART B, the
Shareholder is obligated to purchase the maximum amount of Subscription
Shares allotted under PART A. There is no limit on the number of
additional Shares which can be subscribed for in PART B.
** Include the entire Purchase Price for Subscription Shares purchased
under PART A and the 10% down payment of the Purchase Price for
Subscription Shares purchased, if any, under PART B. The balance of
the Purchase Price for PART B Subscription Shares will be invoiced by
the Company. The Company will not be responsible for failure of
delivery or receipt of any
-18-
<PAGE>
documents or payments relating in any manner to the subscription
procedure. The Company recommends that you use hand delivery or
certified or registered mail with return receipt requested.
PART C. SHAREHOLDER'S SIGNATURE, ADDRESS AND DATE
Shareholder's Name___________________________________
(please print)
Shareholder's Address________________________________
Telephone (____________) ___________ Date____________
Shareholder's Signature______________________________
PRIOR TO THE ISSUANCE OF COMMON STOCK PURSUANT TO THE EXERCISE OF SUBSCRIPTION
RIGHTS IN THE OFFERING, THE SUBSCRIPTION RIGHTS SHALL NOT BE DEEMED TO BESTOW
UPON SHAREHOLDERS VOTING RIGHTS, DIVIDEND RIGHTS OR OTHER RIGHTS WITH RESPECT TO
THE SUBSCRIPTION RIGHTS OR THE COMMON STOCK SUBJECT TO THE SUBSCRIPTION RIGHTS.
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<PAGE>
INSTRUCTIONS TO SUBSCRIPTION FORM
1. If you wish to purchase all or part of your BASIC SUBSCRIPTION
AMOUNT, complete PART A and PART C of the SUBSCRIPTION FORM which accompanies
this Prospectus and return it together with proper payment to the Company.
2. If you wish to purchase all of your BASIC SUBSCRIPTION AMOUNT in PART
A as well as all or part of any available OVERSUBSCRIPTION PRIVILEGE in PART B,
complete PART A, PART B and PART C of the SUBSCRIPTION FORM and return it
together with proper payment to the Company. An example of a partially completed
Subscription Form with Shares and dollar amounts inserted is set forth
immediately hereafter in this Prospectus.
GENERAL INSTRUCTIONS
The total number of Shares you may acquire in the Basic Subscription is
printed on the pre-printed label on the SUBSCRIPTION FORM which accompanies this
Prospectus. One Subscription Right and the full $_______ Purchase Price per
Share are required for each Share you subscribe for under PART A, together with
the 10% down payment for any subscribed Shares under PART B. Only if you have
purchased the maximum number of Shares available to you under PART A of the
SUBSCRIPTION FORM, may you also subscribe to purchase additional Shares under
PART B. There is no limit on the number of additional Shares which can be
subscribed for in PART B. If sufficient Shares are not available to satisfy
completely all requests for Shares under PART A or PART B, a pro rata allotment,
as described in the Prospectus, will be used to apportion the available Shares
among all Shareholders electing to purchase Shares under PART A or additional
Shares under PART B, with any fractional allotted Shares being rounded up or
down to the nearest whole Share. Subscription Rights may not be transferred or
sold by the Shareholder. Please send your completed SUBSCRIPTION FORM and
required payment in the enclosed return envelope to:
THE YORK WATER COMPANY
130 East Market Street
York, PA 17405-7089
Attention: Lois L. Shultz, Assistant Secretary
To be effective, your completed SUBSCRIPTION FORM and required payment must be
received by the Company on or before 5:00 P.M. EDST on September 16, 1996.
INSTRUCTIONS FOR PART A - If you wish to subscribe under the Basic
Subscription Procedure for all or part of the number of Shares allotted to you,
as set forth on the pre-printed label on the SUBSCRIPTION FORM which accompanies
this Prospectus, please complete PART A of the SUBSCRIPTION FORM as follows:
(1) Enter in PART A the number of Shares you desire to purchase (up to
but not in excess of the number of Shares shown on the label).
(2) Multiply the number of Shares you desire to purchase by the
Purchase Price of $_____ per Share and enter the resulting amount in the
Payment to Company column in PART A.
(3) If you are not subscribing for additional Shares under PART B,
enter the total amount shown for PART A on the TOTAL PAYMENT ENCLOSED line
of PART B, complete all portions of PART C of the SUBSCRIPTION FORM and
return your SUBSCRIPTION FORM and a personal, certified or cashier's check,
or money order, in the correct amount to the Company's office in the
enclosed envelope by hand delivery or by mail with postage prepaid by you.
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<PAGE>
INSTRUCTIONS FOR PART B - If you wish to subscribe for additional Shares
under the Oversubscription Privilege and have subscribed for the maximum number
of Shares allotted to you under PART A of the SUBSCRIPTION FORM, please complete
PART B of the SUBSCRIPTION FORM as follows:
(1) Enter on PART B the number of additional Shares you wish to
purchase. There is no limit on the number of additional Shares which can
be subscribed for in PART B.
(2) Multiply that number of Shares by the Purchase Price of $______
per Share and enter 10% of the resulting Purchase Price in the Payment to
Company column for PART B.
(3) Enter in the TOTAL PAYMENT ENCLOSED line of PART B the total of
the amounts of Payments to Company shown in PARTS A and B, complete all
portions of PART C of the SUBSCRIPTION FORM and return your SUBSCRIPTION
FORM and a personal, certified or cashier's check, or money order, in the
correct amount to the Company's office in the enclosed envelope by hand
delivery or by mail with postage prepaid by you.
(4) Within five business days following the Expiration Date, the
Company will mail to each Shareholder who has subscribed to purchase
additional Shares under PART B an invoice which sets forth the exact number
of additional Shares which are available for purchase and the exact amount
of the balance due from the Shareholder with respect to such additional
Shares. Payment for the balance of any additional Shares purchased must be
received by the Company within 15 business days following the Expiration
Date in order for such subscription to be valid. If the full amount of the
balance due has not been received by the Company within this 15-day period,
the 10% down payment previously paid by such Shareholder shall be refunded
in full and no additional Shares will be issued to such subscribing
Shareholder.
INSTRUCTIONS FOR PART C - Print your name, address, telephone number and
date in PART C. The signature of the Shareholder must also appear in PART C.
The SUBSCRIPTION FORM with the signature of one of multiple owners will be
acceptable to the Company. However, if the SUBSCRIPTION FORM is signed and
executed by an attorney, executor, administrator, guardian or other fiduciary,
or by an officer of a corporation, and the Subscription Rights are not granted
in such manner, the person so executing must give his or her full title in such
capacity.
SUBSCRIPTION FORMS received for subscriptions with less than the correct
payments will be returned to the senders.
-21-
<PAGE>
SAMPLE -- FOR ILLUSTRATION PURPOSES ONLY
Example of
SUBSCRIPTION FORM
for
Shares of Common Stock
THE YORK WATER COMPANY
To: The York Water Company
130 East Market Street
York, Pennsylvania 17405-7089
1234567 SUBSCRIPTION SHARES: 10
JOHN DOE & JANE DOE TEN ENT
123 MAIN STREET
ANYTOWN, PA 00000
PART A. BASIC SUBSCRIPTION AMOUNT
Shares Eligible for Purchase Upon Exercise of Subscription
Rights, as Allotted to Shareholder ("Subscription Shares"):_____________________
(as specified on
above label)
Subscription Shares Purchase Price Payment to Company
------------------- -------------- ------------------
10 X $ per share = $
-------- ------ -------
PART B. OVERSUBSCRIPTION PRIVILEGE
Subscription Shares Down Payment
------------------- ------------
15 * X $ per share x 10% = $
-------- ------ -------
TOTAL PAYMENT ENCLOSED $ **
=======
________________
* Prior to the purchase of any additional Shares under PART B, the
Shareholder is obligated to purchase the maximum amount of Subscription
Shares allotted under PART A. There is no limit on the number of
additional Shares which can be subscribed for in PART B.
-22-
<PAGE>
** Include the entire Purchase Price for Subscription Shares purchased under
PART A and the 10% down payment of the Purchase Price for Subscription
Shares purchased, if any, under PART B. The balance of the Purchase Price
for PART B Subscription Shares will be invoiced by the Company. The
Company will not be responsible for failure of delivery or receipt of any
documents or payments relating in any manner to the subscription procedure.
The Company recommends that you use hand delivery or certified or
registered mail with return receipt requested.
(Continued on next page)
PART C. SHAREHOLDER'S SIGNATURE, ADDRESS AND DATE
Shareholder's Name__________________________________________________________
(please print)
Shareholder's Address_______________________________________________________
Telephone (_________) ___________ Date_____________________________________
Shareholder's Signature_____________________________________________________
PRIOR TO THE ISSUANCE OF COMMON STOCK PURSUANT TO THE EXERCISE OF SUBSCRIPTION
RIGHTS IN THE OFFERING, THE SUBSCRIPTION RIGHTS SHALL NOT BE DEEMED TO BESTOW
UPON SHAREHOLDERS VOTING RIGHTS, DIVIDEND RIGHTS OR OTHER RIGHTS WITH RESPECT TO
THE SUBSCRIPTION RIGHTS OR THE COMMON STOCK SUBJECT TO THE SUBSCRIPTION RIGHTS.
-23-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated fees and expenses in connection with the issuance and
distribution of the Shares being registered hereunder will be paid by the
Registrant and are as follows:
<TABLE>
<CAPTION>
<S> <C>
Registration fee.............. $ 1,945
Printing and engraving........ 10,000
Blue Sky fees and expenses.... 5,000
Accounting fees and expenses.. 15,000
Legal fees and expenses....... 40,000
Miscellaneous................. 3,055
-------
Total Expenses........ $75,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers.
Sections 1741 and 1742 of the Pennsylvania Business Corporation Law of
1988, as amended (the "BCL"), provide that a business corporation may indemnify
directors and officers against liabilities they may incur as such if the
particular person acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and, with respect to any criminal proceeding, had no reasonable cause to believe
his or her conduct was unlawful. In general, the power to indemnify under these
sections does not exist in the case of actions against a director or officer by
or in the right of the corporation if the person otherwise entitled to
indemnification shall have been adjudged to be liable to the corporation unless
it is judicially determined that, despite the adjudication of liability but in
view of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnification for specified expenses. The corporation is required
to indemnify directors and officers against expenses they may incur in defending
such actions against them in such capacities if they are successful on the
merits or otherwise in defense of such actions.
Section 1713 of the BCL permits the shareholders to adopt a bylaw provision
relieving a director (but not an officer) of personal liability for monetary
damages except where (i) the director has breached the applicable standard of
care, and (ii) such conduct constitutes self-dealing, willful misconduct or
recklessness. The statute provides that a director may not be relieved of
liability for the payment of taxes pursuant to any federal, state or local law
or responsibility under a criminal statute. Article X of the Company's Bylaws
limit the liability of any director of the Company to the fullest extent
permitted by Section 1713 of the BCL.
Section 1746 of the BCL grants a corporation broad authority to indemnify
its directors, officers and other agents for liabilities and expenses incurred
in such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness. Pursuant to Section 1746 of the
BCL, Article X of the Company's Bylaws provides for indemnification of
directors, officers and other agents of the Company to the extent otherwise
permitted by Section 1741 of the BCL and also in circumstances not otherwise
permitted by Sections 1741 and 1742 of the BCL.
Article X of the Company's Bylaws provides, except as expressly prohibited
by law, a right to indemnification for expenses and certain liabilities paid or
incurred by any director or officer of the Company, or any other person
designated by the Board of Directors as an indemnified representative, in
connection with any actual or threatened claim, action, suit or proceeding
(including derivative suits) in which he or she may be
II-1
<PAGE>
involved by reason of being or having been a director, officer, employee or
agent of the Company, or at the request of the company, of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity. The
Bylaws specifically authorize indemnification against both judgments and amounts
paid in settlement of derivative suits, unlike Section 1742 of the BCL which
authorizes indemnification only of expenses incurred in defending a derivative
action.
Unlike the provisions of BCL Sections 1741 and 1742, Article X does not
require the Company to determine the availability of indemnification by the
procedures or the standard of conduct specified in Sections 1741 and 1742 of the
BCL. A person who has incurred an indemnifiable expense or liability has a
right to be indemnified independent of any procedures or determinations that
otherwise would be required, and that right is enforceable against the Company
as long as indemnification is not prohibited by law or the Company's Bylaws.
Article X of the Company's Bylaws authorize the Company to further effect
or secure its indemnification obligations by entering into indemnification
agreements and purchasing and maintaining insurance.
The Registrant has purchased officers' and directors' liability insurance
which covers certain liabilities incurred by its officers and directors in
connection with the performance of their duties, subject to the limitations of
such policy.
Item 16. List of Exhibits.
<TABLE>
<CAPTION>
Exhibit Description of Reference to
No. Exhibits -----------------
- ------- --------------
<S> <C> <C>
4.1* Amended and Restated Articles of Incorporation of
the Registrant
4.2* By-Laws, as amended, of the Registrant
4.3 Optional Dividend Reinvestment Plan.............. Incorporated herein by reference. Filed
previously with the Securities and Exchange
Commission as the Company's Form S-3
dated November 20, 1982 (File No. 2-
80547).
4.4 Employees' Stock Purchase Plan Dated November Incorporated herein by reference. Filed
28, 1988......................................... previously with the Securities and Exchange
Commission as an exhibit to the Company's
Registration Statement Form S-8 (File No.
33-26180) dated December 19, 1988.
4.5 Note Agreement Relative to the $6,000,000 10.17% Incorporated herein by reference. Filed
Senior Notes, Series A and $5,000,000 9.60% previously with the Securities and Exchange
Senior Notes, Series B dated January 2, 1989..... Commission as Exhibit 4.5 to the
Company's 1989 Form 10-K.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Incorporated by
Reference to
Exhibit Description of ------------------
No. Exhibits
- ------- --------------
<S> <C> <C>
4.6 Note Agreement Relative to the $6,500,000 10.05% Incorporated herein by reference. Filed
Senior Notes, Series C dated August 15, 1990...... previously with the Securities and Exchange
Commission as Exhibit 4.6 to the
Company's 1990 Form 10-K.
4.7 Note Agreement Relative to the $7,500,000 8.43% Incorporated herein by reference. Filed
Senior Notes, Series D dated December 15, 1992.... previously with the Securities and Exchange
Commission as Exhibit 4.7 to the
Company's 1992 Form 10-K.
4.8 Fourth Supplemental Acquisition, Financing and Incorporated herein by reference. Filed
Sale Agreement Relative to the $2,700,000 4.75% previously with the Securities and Exchange
Water Facilities Revenue Refunding Bonds dated Commission as Exhibit 4.8 to the
February 1, 1994.................................. Company's Quarterly Report Form 10-Q for
the quarter ended June 30, 1994.
4.9 Fifth Supplemental Acquisition, Financing and Sale Incorporated herein by reference. Filed
Agreement Relative to the $4,300,000 5% Water previously with the Securities and Exchange
Facilities Revenue Refunding Bonds dated October Commission as Exhibit 4.9 to the
1, 1995........................................... Company's Quarterly Report Form 10-Q for
the quarter ended September 30, 1995.
5.1* Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of Morgan, Lewis & Bockius (contained in
their opinion to be filed as Exhibit 5.1 to the
Registration Statement)
23.2* Consent of KPMG Peat Marwick LLP
24.1 Powers of Attorney are included on the signature
page of this registration statement
- ------------------
</TABLE>
* Filed herewith.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or
II-3
<PAGE>
in the aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of this
-------- -------
section do not apply if the information required to be included in a post-
effective amendment by those subparagraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of York, Pennsylvania, on July 1, 1996.
THE YORK WATER COMPANY
By/s/William T. Morris
----------------------------------
William T. Morris
President, Chief Executive Officer
and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated below. Each person in so signing, also
makes, constitutes and appoints William T. Morris and Jeffrey S. Osman, and each
of them acting alone, his or her true and lawful attorney-in-fact, with full
power of substitution, to execute and cause to be filed with the Securities and
Exchange Commission pursuant to the requirements of the Securities Act of 1933,
as amended, any and all amendments and post-effective amendments to this
Registration Statement, with exhibits thereto and other documents in connection
therewith, and hereby ratifies and confirms all that said attorney-in-fact or
his substitute or substitutes may do or cause to be done by virtue hereof.
Signature Title Date
--------- ----- ----
/s/William T. Morris
- ------------------------------ President, Chief Executive July 1, 1996
William T. Morris Officer and Director
(Principal Executive
and Financial Officer)
/s/Jeffrey S. Osman
- ------------------------------ Vice President of Finance, July 1, 1996
Jeffrey S. Osman Secretary and Treasurer
(Principal Accounting Officer)
/s/Horace Keesey, III
- ------------------------------ Vice Chairman of the Board July 1, 1996
Horace Keesey, III and Director
/s/Irvin S. Naylor
- ------------------------------ Chairman of the Board July 1, 1996
Irvin S. Naylor and Director
/s/Michael W. Gang
- ------------------------------ Director July 1, 1996
Michael W. Gang
/s/Josephine S. Appell
- ------------------------------ Director July 1, 1996
Josephine S. Appell
<PAGE>
/s/Paul W. Ware
- ------------------------------ Director July 1, 1996
Paul W. Ware
/s/Frank Motter
- ------------------------------ Director July 1, 1996
Frank Motter
/s/George Hay Kain, III
- ------------------------------ Director July 1, 1996
George Hay Kain, III
/s/Chloe' Eichelberger
- ------------------------------ Director July 1, 1996
Chloe' Eichelberger
/s/John L. Finlayson
- ------------------------------ Director July 1, 1996
John L. Finlayson
<PAGE>
EXHIBIT 4.1
<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
THE YORK WATER COMPANY
Article I.
The name of the Corporation is The York Water Company
Article II.
The address of the registered office of the Corporation in this
Commonwealth is 130 East Market Street, York, Pennsylvania 17401.
Article III.
The purpose or purposes for which the Corporation is incorporated
under the Business Corporation Law of the Commonwealth of Pennsylvania are to
engage in, and do any lawful act concerning, any or all lawful business for
which a corporation may be incorporated under said Business Corporation Law;
provided, however, that the Corporation shall be authorized and have the
- --------
corporate power to supply water to the public only within the service territory
as described in the attached Schedule 1.
Article IV.
The term for which the Corporation is to exist is perpetual.
Article V.
The aggregate number of shares which the Corporation shall have
the authority to issue is 1,200,000 shares of Common Stock, par value $10.00 per
share.
Article VI.
The designations, qualifications, limitations, restrictions, and
the special or relative rights in respect of the shares shall be as follows:
DIVISION A - COMMON STOCK
SECTION 1. Dividends and Shares in Distribution on Common Stock.
The Common Stock alone shall receive all further dividends and shares upon
liquidation, dissolution, winding up or distribution.
SECTION 2. Voting Rights. At any meeting of the shareholders,
each holder of Common Stock shall be entitled to one vote per share. Holders of
Common Stock shall have the right to cumulate their votes for the election of
directors of the Corporation.
-1-
<PAGE>
SCHEDULE 1
All of the City of York, the Boroughs of East Prospect,
Hallam, Jacobus, Jefferson, Loganville, Manchester, Mount Wolf, New
Salem, North York, Seven Valleys, Spring Grove, West York,
Wrightsville, York Haven and Yorkana, and the Townships of East
Manchester, Hellam, Manchester, Springfield, Spring Garden,
Springettsbury and West Manchester, and parts of the Townships of
Codorus, Jackson, Lower Windsor, Newberry, North Codorus, Windsor and
York, all in the County of York and Commonwealth of Pennsylvania,
collectively bounded and described as follows, to wit:
BEGINNING at a point in the center line of the Codorus Creek
at the junction of the boundary lines of Hellam Township and East
Manchester Township which is also a point of intersection on the York
County-Lancaster County boundary line; thence in a generally
northwestwardly direction along the York County-Lancaster County
boundary line and along the southwestern side of the Susquehanna River
to a point at the intersection of the York County, Dauphin County and
Lancaster County boundary lines which point is located in a generally
northwestwardly direction from the Borough of York Haven; thence in a
generally southwardly direction in a straight line to the point of
intersection of the center lines of the Little Conewago Creek, the
Conewago Creek and the common point of the boundary lines of East
Manchester Township, Newberry Township and Conewago Township which
point is located in a generally westwardly direction from Conewago
Heights; thence in a generally southwestwardly direction along the
center line of the Little Conewago Creek which is also the East
Manchester Township-Conewago Township boundary line and also becomes
the Manchester Township-Conewago Township boundary line and also
becomes the Manchester Township-Dover Township boundary line and also
becomes the West Manchester Township-Dover Township boundary line, to
the point of intersection on the center line of the Little Conewago
Creek with the center line of Honey Run Creek which point is located
in a generally westwardly direction from the northern portion of Honey
Run Golf Course; thence in a generally southwardly direction along the
center line of the Honey Run Creek which is also the West Manchester
Township-Dover Township boundary line, to a point located
approximately 1,800 feet north of the point of junction of the
southern boundary line of Dover Township with the northern boundary
line of Jackson Township and the western boundary line of West
Manchester Township which point is located 200 feet north of Pa. Rte.
234 also known as the East Berlin Road; thence in a generally
westwardly direction along the Jackson Township-Dover Township
boundary line to a point on said line 200 feet north of Pa. Rte. 234
also known as the East Berlin Road; thence in a generally westwardly
direction along a line 200 feet north of Pa. Rte. 234 also known as
the East Berlin Road parallel to and concentric with thereto to a
point 200 feet north of Pa. Rte. 234 at the intersection of the
Jackson-Paradise Township boundary line; thence in a generally
southeastwardly direction to a point at the intersection of the North
Codorus-Codorus Township boundary line with the Codorus Creek adjacent
to Manheim Township; thence in a generally southeastwardly direction
to a point BM 649 at Brodbecks at the Codorus Creek; thence generally
northeastwardly to the point of intersection thereof with the junction
of the southern boundary line of Springfield Township, with the
northern boundary line of Shrewsbury Township and the eastern boundary
line of Codorus Township; thence in a generally eastwardly direction
to a point at the junction of the southern boundary line of
Springfield Township, with the northern boundary line of Shrewsbury
Township and the western boundary line of North Hopewell Township;
thence in a generally northwardly direction along the center line of
the East Branch of the Codorus Creek which is also the Springfield
Township-North Hopewell Township boundary line to the point of
intersection thereof with the junction of the eastern boundary of
Springfield Township, with the
-2-
<PAGE>
northern boundary line of North Hopewell Township and the southern
boundary line of York Township; thence in said York Township in a
generally northeastwardly direction to a point at the intersection of
Chapel Church Road (York Township Rte. T-736) and Springwood Road
(L.R. 66053) which point is located at Relay; thence in a straight
line in a generally northeastwardly direction to a point in Windsor
Road (L.R. 66020) in Windsor Township 200 feet in a generally
southwardly direction as measured along said road from its
intersection with Ruppert Road (T-753) which leads eastwardly from
Windsor Road to Holtz; thence in a straight line in a generally
northeastwardly direction to a point in Lower Windsor Township located
5,300 feet north of the center line of Beaver Creek with such point
being located on the York County-Lancaster County boundary line in the
Village of Long Level; thence in a generally northwestwardly direction
along the York County-Lancaster County line to a point in the center
line of the Codorus Creek at the junction of the boundary lines of
Hellam Township and East Manchester Township, the place of the
BEGINNING.
-3-
<PAGE>
EXHIBIT 4.2
<PAGE>
BYLAWS
of
THE YORK WATER COMPANY
(a Pennsylvania corporation)
Article I
OFFICES AND FISCAL YEAR
-----------------------
Section 1.01. Registered Office
- ------------ -----------------
The registered office of the corporation in the Commonwealth of
Pennsylvania shall be at 130 East Market Street, York, Pennsylvania 17401, until
otherwise established by a vote of a majority of the board of directors, and a
statement of such change is filed with the Department of State.
Section 1.02. Fiscal Year
- ------------ -----------
The fiscal year of the corporation shall begin on the first day of January
in each year.
Article II
SHAREHOLDERS
------------
Section 2.01. Place of Meeting
- ------------ ----------------
All meetings of the shareholders of the corporation shall be held at the
registered office of the corporation unless another place is designated by the
board of directors in the notice of such meeting.
Section 2.02. Annual Meeting
- ------------ --------------
The board of directors may fix the date and time of the annual meeting of
the shareholders, but if no such date and time is fixed by the board, the
meeting for any calendar year shall be held on the first Monday of May in such
year, if not a legal holiday under the laws of Pennsylvania and if a legal
holiday, then on the next succeeding business day, not a Saturday, at 1:00
o'clock P.M. (prevailing time) and at said meeting the shareholders then
entitled to vote shall elect directors and shall transact such other business as
may properly be brought before the meeting.
<PAGE>
Section 2.03. Special Meetings
- ------------ ----------------
Special meetings of the shareholders of the corporation for any purpose or
purposes may be called at any time by the chairman of the board, by the
president or by the board of directors, or by shareholders entitled to cast at
least one-fifth of the votes which all shareholders are entitled to cast at the
particular meeting.
At any time, upon written request of any person or persons who have duly
called a special meeting, which written request shall state the object of the
meeting, it shall be the duty of the secretary to fix the date of the meeting
which, if the meeting is called pursuant to a statutory right, shall be held not
more than sixty days after the receipt of the request, and to give due notice
thereof. If the secretary shall neglect or refuse to fix the date and time of
such meeting and give notice thereof, the person or persons calling the meeting
may do so.
Section 2.04. Notice of Meetings
- ------------ ------------------
Written notice of every meeting of the shareholders, whether annual or
special, shall be given to each shareholder of record entitled to vote at the
meeting, at least ten days prior to the day named for the meeting. Every notice
of a special meeting shall specify the general nature of the business to be
transacted, and no business, other than that specified in such notice and
matters germane thereto, shall be transacted at any special meeting without
further notice to shareholders not present in person or by proxy. The
corporation shall not have a duty to augment the notice.
In the case of a meeting of shareholders that has as one of its purposes
action on the bylaws, written notice shall be given to each shareholder that the
purpose, or one of the purposes, of the meeting is to consider the adoption,
amendment or repeal of the bylaws. There shall be included in, or enclosed
with, the notice a copy of the proposed amendment or a summary of the changes to
be effected thereby.
Whenever the language of a proposed resolution is included in a written
notice of a meeting of shareholders, the resolution may be adopted at such
meeting with such clarifying or other amendments as do not enlarge its original
purpose without further notice to shareholders not present in person or by
proxy.
Section 2.05. Quorum, Manner of Acting and Adjournment
- ------------ ----------------------------------------
The presence in person or by proxy of shareholders entitled to cast a
majority of the votes which all shareholders are entitled to cast on a
particular matter to be acted upon at the meeting shall constitute a quorum for
the purposes of consideration and action on the matter. Treasury shares shall
not be counted in determining the total number of outstanding shares for voting
purposes at any given time. The shareholders present in person or by proxy at a
duly organized meeting can continue to do business until adjournment,
notwithstanding withdrawal of enough shareholders to leave less than a quorum.
If a meeting cannot be organized because a quorum has not attended, the
shareholders entitled to vote and present in person or represented by proxy may,
except as provided in the
-2-
<PAGE>
Pennsylvania Business Corporation Law, adjourn the meeting to such time and
place as they may determine. When a meeting is adjourned, it shall not be
necessary to give any notice of the adjourned meeting or of the business to be
transacted at an adjourned meeting, other than by announcement at the meeting at
which the adjournment is taken, unless the board fixes a new record date for the
adjourned meeting. At any such adjourned meeting at which a quorum may be
present, such business may be transacted as might have been transacted at the
meeting as originally called. No notice of any adjourned meeting of the
shareholders of the corporation shall be required to be given, except by
announcement at the meeting. In case of any meeting called for the election of
directors, those who attend the second of such adjourned meetings, although less
than a quorum, shall nevertheless constitute a quorum for the purpose of
electing directors. Any meeting at which directors are to be elected shall be
adjourned only from day to day, or for such longer periods not exceeding 15 days
each, as may be directed by shareholders who are present in person or by proxy
and who are entitled to cast at least a majority of the votes which all such
shareholders would be entitled to cast at an election of directors, until such
directors are elected.
Except as otherwise specified in the articles or these bylaws or provided
by statute, whenever any corporate action is to be taken by vote of the
shareholders, it shall be authorized upon receiving the affirmative vote of a
majority of the votes cast, in person or by proxy, by all shareholders entitled
to vote thereon and, if any shareholders are entitled to vote thereon as a
class, upon receiving the affirmative vote of a majority of the votes cast by
the shareholders entitled to vote as a class.
Section 2.06. Organization
- ------------ ------------
At every meeting of the shareholders, the chairman of the board, if there
be one, or in the case of vacancy in office or absence of the chairman of the
board, one of the following officers present in the order stated: the vice
chairman of the board, if there be one and if there be more than one in their
order of seniority, the president, vice presidents in their order of seniority,
or a chairman chosen by the shareholders entitled to cast a majority of the
votes which all shareholders present in person or by proxy are entitled to cast,
shall act as the presiding officer, and the secretary, or, in the absence of the
secretary, an assistant secretary, or in the absence of both the secretary and
assistant secretaries, a person appointed by the chairman, shall act as
secretary.
Section 2.07. Voting
- ------------ ------
Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for the shareholder by proxy. The
presence of, or vote or other action at a meeting of shareholders, or the
expression of consent or dissent to corporate action in writing, by a proxy of a
shareholder shall constitute the presence of, or vote or action by, or written
consent or dissent of, the shareholder. Where two or more proxies of a
shareholder are present, the corporation shall, unless otherwise expressly
provided in the proxy, accept as the vote of all shares represented thereby the
vote cast by a majority of them and, if a majority of the proxies cannot agree
whether the shares represented shall be voted or upon the manner of voting the
shares, the voting of the shares shall be divided equally among those persons.
-3-
<PAGE>
Every proxy shall be executed in writing by the shareholder or by the
shareholder's duly authorized attorney-in-fact and filed with the secretary of
the corporation. A telegram, telex, cablegram, datagram or similar transmission
from a shareholder or attorney-in-fact, or a photographic, facsimile or similar
reproduction of a writing executed by a shareholder or attorney-in-fact may be
treated as properly executed for purposes of this section 2.07, and shall be so
treated if it sets forth a confidential and unique identification number or
other mark furnished by the corporation to the shareholder for the purposes of a
particular meeting or transaction.
A proxy, unless coupled with an interest, shall be revocable at will,
notwithstanding any other agreement or any provision in the proxy to the
contrary, but the revocation of a proxy shall not be effective until notice
thereof has been given to the secretary of the corporation. No unrevoked proxy
shall be valid after three years from the date of its execution, unless a longer
time is expressly provided therein. A proxy shall not be revoked by the death
or incapacity of the maker unless, before the vote is counted or the authority
is exercised, written notice of such death or incapacity is given to the
secretary of the corporation. A proxy coupled with an interest shall include a
vote pooling or similar arrangement among shareholders and include an unrevoked
proxy in favor of an existing or potential creditor of a shareholder.
Every shareholder of record, except the holder of shares which have been
called for redemption and with respect to which an irrevocable deposit of funds
has been made, shall have the right, at every shareholders' meeting, to such a
vote for every share, and to such a fraction of a vote with respect to every
fractional share, of stock of the corporation standing in such shareholder's
name on the books of the corporation as may be provided in the articles, and to
one vote for every share, and to a fraction of a vote equal to every fractional
share, if no express provision for voting rights is made in the articles.
Treasury shares shall not be voted, directly or indirectly, at any meeting of
shareholders or be counted in connection with the expression of consent or
dissent to corporate action in writing without a meeting.
Section 2.08. Voting Lists
- ------------ ------------
The officer or agent of the corporation having charge of the transfer books
for shares of the corporation shall make a complete list of the shareholders
entitled to vote at any meeting of shareholders, arranged in alphabetical order,
with the address of and the number of shares held by each. The list shall be
produced and kept open at the time and place of the meeting, and shall be
subject to the inspection of any shareholder during the whole time of the
meeting for the purposes thereof. Failure to comply with the requirements of
this section shall not affect the validity of any action taken at a meeting
prior to a demand at the meeting by any shareholder entitled to vote thereat to
examine the list. The original share ledger or transfer book, or a duplicate
thereof, kept in Pennsylvania, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book, or
to vote, in person or by proxy, at any meeting of shareholders.
Section 2.09. Judges of Election
- ------------ ------------------
The vote upon any matter, including the election of directors, need not be
by ballot. In advance of any meeting of shareholders, the board of directors
may appoint judges of election, who need not be shareholders, to act at such
meeting or any adjournment thereof. If judges of
-4-
<PAGE>
election are not so appointed, the presiding officer of the meeting may, and
upon the demand of any shareholder or the shareholder's proxy at the meeting and
before voting begins, shall appoint judges of election. The number of judges
shall be either one or three, as determined, in the case of judges appointed
upon demand of a shareholder, by shareholders present entitled to cast a
majority of the votes which all shareholders present are entitled to cast
thereon. No person who is a candidate for office to be filled at the meeting
shall act as a judge. In case any person appointed as a judge fails to appear
or fails or refuses to act, the vacancy may be filled by appointment made by the
board of directors in advance of the convening of the meeting, or at the meeting
by the presiding officer thereof.
If judges of election are appointed as aforesaid, they shall determine the
number of shares outstanding and the voting power of each, the shares
represented at the meeting, the existence of a quorum, the authenticity,
validity and effect of proxies, receive votes or ballots, hear and determine all
challenges and questions in any way arising in connection with the right to
vote, count and tabulate all votes, determine the result, and do such acts as
may be proper to conduct the election or vote with fairness to all shareholders.
If there are three judges of election, the decision, act or certificate of a
majority shall be effective in all respects as the decision, act or certificate
of all.
On request of the presiding officer of the meeting or of any shareholder or
the shareholder's proxy, the judges shall make a report in writing of any
challenge or question or matter determined by them, and execute a certificate of
any fact found by them.
Section 2.10. Determination of Shareholders of Record
- ------------ ---------------------------------------
The board of directors may fix a time prior to the date of any meeting of
shareholders as a record date for the determination of the shareholders entitled
to notice of, or to vote at, the meeting, which time, except in the case of an
adjourned meeting, shall be not more than 90 days prior to the date of the
meeting of the shareholders. Only shareholders of record on the date fixed
shall be so entitled notwithstanding any transfer of shares on the books of the
corporation after any such record date fixed as aforesaid. The board of
directors may similarly fix a record date for the determination of shareholders
of record for any other purpose. When a determination of shareholders of record
has been made as provided in this section for purposes of a meeting, the
determination shall apply to any adjournment thereof unless the board fixes a
new record date for the adjourned meeting.
Section 2.11. Resolutions Proposed by Shareholders
- ------------ ------------------------------------
Resolutions proposed by shareholders for consideration at the annual
meeting of the shareholders must be submitted to and received by the corporation
in writing not less than ninety (90) days before the date of the annual meeting.
Whenever the language of a proposed resolution is included in a written notice
of a meeting required to be given by statute or by the Articles or By-Laws, the
meeting considering the resolution may without further notice adopt it with any
clarifying or other amendments that do not enlarge its original purpose.
-5-
<PAGE>
Article III
BOARD OF DIRECTORS
------------------
Section 3.01. Powers
- ------------ ------
The board of directors shall have full power to conduct, manage, and direct
the business and affairs of the corporation; and all powers of the corporation,
except those specifically reserved or granted to the shareholders by statute or
by the articles or these bylaws, are hereby granted to and vested in the board
of directors.
Section 3.02. Qualification and Election
- ------------ --------------------------
All directors of the corporation shall be natural persons of full age and
shareholders, but need not be residents of Pennsylvania. Except in the case of
vacancies, directors shall be elected by the shareholders. If the board of
directors is classified with respect to the power to elect directors or with
respect to the terms of directors and if, due to a vacancy or vacancies, or
otherwise, directors of more than one class are to be elected, each class of
directors to be elected at the meeting shall be nominated and elected
separately. Any shareholder who desires to nominate a person for the office of
director must submit such nomination in writing, which nomination must be
received by the corporation not less than ninety (90) days before the date of
the annual meeting. Only candidates who have been duly nominated in accordance
therewith shall be eligible for election.
Section 3.03. Number and Term of Office
- ------------ -------------------------
The board of directors shall consist of not less than nine (9) nor more
than ten (10) shareholders of record as shall be determined from time to time by
the board of directors in its sole discretion. At each annual meeting the
shareholders shall choose by ballot one (1) of three (3) classes of directors,
each consisting of at least three (3) but not more than four (4) directors, to
conduct the affairs of the corporation for three (3) year terms and until their
respective successors shall have been elected and qualified. If the
shareholders shall have elected nine (9) directors, the board of directors may
increase the number of directors to ten (10) at any time thereafter. Whenever a
vacancy shall occur in the board of directors, including any vacancy resulting
from an increase in the number of directors, the remaining members of the board
of directors may fill such vacancy until the next election of the class to which
such director shall have been elected.
Section 3.04. Organization
- ------------ ------------
At every meeting of the board of directors, the chairman of the board, if
there be one, or, in the case of a vacancy in the office or absence of the
chairman of the board, one of the following officers present in the order
stated: the deputy chairman of the board, if there be one and if there be more
than one in their order of seniority, the president, the vice-presidents in
their order of seniority, or a chairman chosen by a majority of the directors
present, shall preside, and the secretary, or, in the absence of the secretary,
an assistant secretary, or in the absence of the
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<PAGE>
secretary and the assistant secretaries, any person appointed by the chairman of
the meeting, shall act as secretary.
Section 3.05. Resignations
- ------------ ------------
Any director of the corporation may resign at any time by giving written
notice to the president or the secretary of the corporation. Such resignation
shall take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective. When one or more
directors resign from the board effective at a future date, the directors then
in office, including those who have resigned, shall have power by the applicable
vote to fill the vacancies, the vote thereon to take effect when the
resignations become effective.
Section 3.06. Removal
- ------------ -------
The entire board of directors, or a class of the board where the board is
classified, or any individual director, may be removed from office without
assigning any cause, by the vote of shareholders. In case the board or such
class of the board or any one or more directors are so removed, new directors
may be elected at the same meeting.
The board of directors may declare vacant the office of a director if such
director has been judicially declared of unsound mind, or convicted of an
offense punishable by imprisonment for a term of more than one year, or if,
within sixty days after notice of election, the director does not accept such
office either in writing or by attending a meeting of the board of directors.
Section 3.07. Place of Meeting
- ------------ ----------------
The board of directors may hold its meetings at such place or places within
or without Pennsylvania as the board of directors may from time to time appoint,
or as may be designated in the notice calling the meeting.
Section 3.08. Organization Meeting
- ------------ --------------------
Immediately after each annual election of directors or other meeting at
which the entire board of directors is elected, the newly elected board of
directors shall meet for the purpose of organization, election of officers, and
the transaction of other business, at the place where said election of directors
was held. Notice of such meeting need not be given. Such organization meeting
may be held at any other time or place which shall be specified in a notice
given as hereinafter provided for special meetings of the board of directors.
Section 3.09. Regular Meetings
- ------------ ----------------
Regular meetings of the board of directors shall be held at such time and
place as shall be designated from time to time by resolution of the board of
directors. If the date fixed for any such regular meeting be a legal holiday
under the laws of the state where such meeting is to be held, then the same
shall be held on the next succeeding business day, not a Saturday, or at such
other time as may be determined by resolution of the board of directors. At
such meetings, the
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<PAGE>
directors shall transact such business as may properly be brought before the
meeting. Notice of regular meetings need not be given.
Section 3.10. Special Meetings
- ------------ ----------------
Special meetings of the board of directors shall be held whenever called by
the chairman, the president or by two or more of the directors. Notice of each
such meeting shall be given to each director by telephone or in writing at least
twenty-four hours (in the case of notice by telephone, telex, TWX or facsimile
transmission) or forty-eight hours (in the case of notice by telegraph, courier
service or express mail) or five days (in the case of notice by first class
mail) before the time at which the meeting is to be held. Every such notice
shall state the time and place of the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
need be specified in the notice of the meeting.
Notice of any special meeting of the board of directors during any
emergency resulting from warlike damage or an attack on the United States or any
nuclear or atomic disaster shall be given only to such of the directors as it
may be feasible to reach at the time and by such means as may be feasible at the
time, including publication or radio.
Section 3.11. Quorum, Manner of Acting, and Adjournment
- ------------ -----------------------------------------
A majority of the directors in office shall be present at each meeting in
order to constitute a quorum for the transaction of business. Except as
otherwise specified in the articles or these bylaws or provided by statute, the
acts of a majority of the directors present and voting at a meeting at which a
quorum is present shall be the acts of the board of directors. In the absence
of a quorum, a majority of the directors present may adjourn the meeting from
time to time until a quorum be present, and no notice of any adjourned meeting
need be given, other than by announcement at the meeting. The directors shall
act only as a board and the individual directors shall have no power as such,
provided, however, that any action which may be taken at a meeting of the board
may be taken without a meeting if, prior or subsequent to the action, a consent
or consents thereto by all of the directors in office is filed with the
secretary of the corporation.
To the extent required to constitute a quorum at any meeting of the board
of directors during any emergency resulting from warlike damage or an attack on
the United States or any nuclear or atomic disaster, the officers of the
corporation who are present shall be deemed in order of rank and within the same
rank in order of seniority, directors for such meeting.
Section 3.12. Executive and Other Committees
- ------------ ------------------------------
The board of directors may, by resolution adopted by a majority of the
directors in office, establish an Executive Committee and one or more other
committees, each committee to consist of one or more directors. The board may
designate one or more directors as alternate members of any committee who may
replace any absent or disqualified member at any meeting of the committee or for
the purposes of any written action by the committee. In the absence or
disqualification of a member and alternate member or members of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they present
-8-
<PAGE>
constitute a quorum, may unanimously appoint another director to act at the
meeting in the place of the absent or disqualified member.
Except as otherwise provided in this section, the Executive Committee shall
have and may exercise all of the powers and authority of the board in the
management of the business and affairs of the corporation and any other
committee shall have and may exercise the powers and authority of the board to
the extent provided in the resolution designating the committee.
No such committee of the board shall have the authority of the board in
reference to:
(1) the submission to shareholders of any action which, by law,
requires approval of shareholders;
(2) the creation or filling of vacancies in the board of directors;
(3) the adoption, amendment or repeal of the bylaws;
(4) the amendment or repeal of any resolution of the board that by its
terms is amendable or repealable only the board; or
(5) action on matters committed by the bylaws or resolution of the
board of directors to another committee of the board.
A majority of the directors in office designated to a committee, or
directors designated to replace them as provided in this section, shall be
present at each meeting to constitute a quorum for the transaction of business
and the acts of a majority of the directors in office designated to a committee
or their replacements shall be the acts of the committee.
Each committee shall keep regular minutes of its proceedings and report
such proceedings periodically to the board of directors.
Sections 3.09, 3.10, and 3.11 shall be applicable to committees of the
board of directors.
Section 3.13. Interested Directors or Officers; Quorum
- ------------ ----------------------------------------
A contract or transaction between the corporation and one or more of its
directors or officers, or between the corporation and any other corporation,
partnership, joint venture, trust or other enterprise in which one or more of
its directors or officers are directors or officers, or have a financial or
other interest, shall not be void or voidable solely for that reason, or solely
because the director or officer is present at or participates in the meeting of
the board of directors that authorizes the contract or transaction, or solely
because his, her or their votes are counted for that purpose, if:
(1) the material facts as to the relationship or interest and as to the
contract or transaction are disclosed or are known to the board of
directors and the board authorizes the contract or transaction by the
affirmative votes of a majority of the
-9-
<PAGE>
disinterested directors even though the disinterested directors are less
than a quorum; or
(2) the material facts as to the relationship or interest and as to the
contract or transaction are disclosed or are known to the shareholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of those shareholders; or
(3) the contract or transaction is fair as to the corporation as of the
time it is authorized, approved or ratified by the board of directors or
the shareholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the board of directors that authorizes a contract or
transaction specified in this section.
Section 3.14. Fees
- ------------ ----
Each director shall be paid such reasonable fee, if any, as shall be fixed
by the board of directors for each meeting of the board of directors or
committee of directors which such director shall attend and may be paid such
other compensation for services as a director as may be fixed by the board of
directors.
Article IV
NOTICE - WAIVERS - MEETINGS
---------------------------
Section 4.01. Notice, What Constitutes
- ------------ ------------------------
Whenever written notice is required to be given to any person under the
provisions of the articles, these bylaws, or the Pennsylvania Business
Corporation Law, it may be given to such person, either personally or by sending
a copy thereof by first class or express mail, postage prepaid or by telegram
(with messenger service specified), telex or TWX (with answerback received) or
courier service, charges prepaid, or by facsimile transmission to his address
(or to his telex, TWX or facsimile number) of the person appearing on the books
of the corporation or, in the case of directors, supplied by him to the
corporation for the purpose of notice. If the notice is sent by mail,
telegraph, or courier service, it shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail or with a
telegraph office or courier service for delivery to such person, or, in the case
of telex, TWX or facsimile transmission, when dispatched. A notice of a meeting
shall specify the place, day and hour of the meeting and in the case of a
special meeting of shareholders, the general nature of the business to be
transacted.
Section 4.02. Waivers of Notice
- ------------ -----------------
Whenever any written notice is required to be given under the provisions of
the articles, these bylaws, or the Pennsylvania Business Corporation Law, a
waiver thereof in writing, signed
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<PAGE>
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be deemed equivalent to the giving of such notice.
Neither the business to be transacted at, nor the purpose of, the meeting need
be specified in the waiver of notice of such meeting.
Attendance of a person, either in person or by proxy, at any meeting, shall
constitute a waiver of notice of such meeting, except where a person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting was not lawfully called
or convened.
Section 4.03. Conference Telephone Meetings
- ------------ -----------------------------
One or more directors or shareholders may participate in a meeting of the
board, of a committee of the board or of the shareholders by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this section shall constitute presence in person at such meeting.
Article V
OFFICERS
--------
Section 5.01. Number, Qualifications and Designation
- ------------ --------------------------------------
The officers of the corporation shall be a president, one or more vice
presidents (including executive or senior vice-presidents), a secretary and a
treasurer, and such other officers as may be elected or appointed in accordance
with the provisions of this section and section 5.03 of this article. One
person may hold more than one office. Officers may but need not be directors or
shareholders of the corporation. The president and secretary shall be natural
persons of full age; the treasurer, however, may be a corporation, but if a
natural person, shall be of full age.
Section 5.02. Election and Term of Office
- ------------ ---------------------------
The officers of the corporation, except those elected by delegated
authority pursuant to section 5.03 of this article, shall be elected annually by
the board of directors, and each such officer shall hold office until the next
annual organization meeting of directors and until a successor shall have been
duly chosen and qualified, or until his or her earlier death, resignation, or
removal.
Section 5.03. Other and Subordinate Officers, Committees and Agents
- ------------ -----------------------------------------------------
The board of directors may from time to time appoint such other officers
and appoint such committees, employees or other agents as the business of the
corporation may require, including a chairman of the board and one or more
deputy or vice-chairmen, one or more assistant secretaries, and one or more
assistant treasurers, each of whom shall hold office for such period, have such
authority, and perform such duties as are provided in these bylaws, or as the
board of
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<PAGE>
directors may from time to time determine. The board of directors may delegate
to any officer or committee the power to appoint subordinate officers and to
retain or appoint employees or other agents, or committees thereof, and to
prescribe the authority and duties of such subordinate officer, committees,
employees or other agents.
Section 5.04. Resignations
- ------------ ------------
Any officer or agent may resign at any time by giving written notice to the
board of directors, or to the president or the secretary of the corporation.
Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 5.05. Removal
- ------------ -------
Any officer, committee, employee or other agent of the corporation may be
removed, either with or without cause, by the board of directors or other
authority which elected or appointed such officer, committee or other agent.
Election or appointment of an officer or employee or other agent shall not of
itself create contract rights.
Section 5.06. Vacancies
- ------------ ---------
A vacancy in any office because of death, resignation, removal,
disqualification, or any other cause, shall be filled by the board of directors
or by the officer or committee to which the power to fill such office has been
delegated pursuant to section 5.03 of this article, as the case may be, and if
the office is one for which these bylaws prescribe a term, shall be filled for
the unexpired portion of the term.
Section 5.07. General Powers
- ------------ --------------
All officers of the corporation as between themselves and the corporation,
shall have such authority and perform such duties in the management of the
corporation as may be provided by or pursuant to resolutions or orders of the
board of directors, or in the absence of controlling provisions in the
resolutions or orders of the board of directors, as may be determined by or
pursuant to these bylaws.
Section 5.08. The Chairman and Vice Chairman of the Board
- ------------ -------------------------------------------
The chairman of the board or in the absence of the chairman, the vice
chairman or chairmen of the board in their order of seniority, the president,
the vice presidents in their order of seniority, or a chairman chosen by a
majority of the directors present, shall preside at all meetings of the
shareholders and of the board of directors, and shall perform such other duties
as may from time to time be assigned by the board of directors. The vice
chairmen shall perform such duties as may from time to time be assigned by the
board of directors.
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<PAGE>
Section 5.09. The President
- ------------ -------------
The president shall be the chief executive officer of the corporation and
shall have general supervision over the business and operations of the
corporation, subject, however, to the control of the board of directors. The
president shall sign, execute, and acknowledge, in the name of the corporation,
deeds, mortgages, bonds, contracts or other instruments, authorized by the board
of directors, except in cases where the signing and execution thereof shall be
expressly delegated by the board of directors, or by these bylaws, to some other
officer or agent of the corporation; and, in general, shall perform all duties
incident to the office of president and such other duties as from time to time
may be assigned by the board of directors.
Section 5.10. The Vice Presidents
- ------------ -------------------
In the absence of the president a vice president, as designated by the
board of directors, shall perform the duties of the president and such other
duties as may from time to time be assigned to them by the board of directors or
by the president.
Section 5.11. The Secretary
- ------------ -------------
The secretary or an assistant secretary shall attend all meetings of the
shareholders and of the board of directors and shall record all the votes of the
shareholders and of the directors and the minutes of the meetings of the
shareholders and of the board of directors and of committees of the board in a
book or books to be kept for that purpose; shall see that notices are given and
records and reports properly kept and filed by the corporation as required by
law; shall be the custodian of the seal of the corporation and see that it is
affixed to all documents to be executed on behalf of the corporation under its
seal; and, in general, shall perform all duties incident to the office of
secretary, and such other duties as may from time to time be assigned by the
board of directors or the president.
Section 5.12. The Treasurer
- ------------ -------------
The treasurer or an assistant treasurer shall have or provide for the
custody of the funds or other property of the corporation; shall collect and
receive or provide for the collection and receipt of moneys earned by or in any
manner due to or received by the corporation; shall deposit all funds in his or
her custody as treasurer in such banks or other places of deposit as the board
of directors may from time to time designate; shall, whenever so required by the
board of directors, render an account showing all transactions as treasurer, and
the financial condition of the corporation; and, in general, shall discharge
such other duties as may from time to time be assigned by the board of directors
or the president.
Section 5.13. Officers' Bonds
- ------------ ---------------
Any officer shall give a bond for the faithful discharge of the duties of
the officer in such sum, if any, and with such surety or sureties as the board
of directors may require.
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<PAGE>
Section 5.14. Salaries
- ------------ --------
The salaries of the officers elected by the board of directors shall be
fixed from time to time by the board of directors or by such officer as may be
designated by resolution of the board. The salaries or other compensation of
any other officers, employees and other agents shall be fixed from time to time
by the officer or committee to which the power to elect such officers or to
retain or appoint such employees or other agents has been delegated pursuant to
section 5.03 of this article. No officer shall be prevented from receiving such
salary or other compensation by reason of the fact that the officer is also a
director of the corporation.
Article VI
CERTIFICATES OF STOCK, TRANSFER, ETC.
-------------------------------------
Section 6.01. Issuance
- ------------ --------
The share certificates of the corporation shall be numbered and registered
in the share ledger and transfer books of the corporation as they are issued.
They shall be signed by the chairman of the board or the president or a vice
president and by the secretary or an assistant secretary or the treasurer or an
assistant treasurer, and shall bear the corporate seal, which may be a
facsimile, engraved or printed; but where such certificate is signed by a
transfer agent or a registrar the signature of any corporate officer upon such
certificate may be a facsimile, engraved or printed. In case any officer who
has signed, or whose facsimile signature has been placed upon any share
certificate shall have ceased to be such officer because of death, resignation
or otherwise, before the certificate is issued, it may be issued with the same
effect as if the officer had not ceased to be such at the date of its issue.
Section 6.02. Transfer
- ------------ --------
Transfers of shares shall be made on the books of the corporation upon
surrender of the certificates therefor, endorsed by the person named in the
certificate or by attorney lawfully constituted in writing. No transfer shall
be made inconsistent with the provisions of the "Uniform Commercial Code-
Investment Securities," 13 Pa.C.S.A. (S)8101 et seq., and its amendments and
-- ----
supplements.
Section 6.03. Share Certificates
- ------------ ------------------
Certificates for shares of the corporation shall be in such form as
approved by the board of directors, and shall state that the corporation is
incorporated under the laws of Pennsylvania, the name of the person to whom
issued, and the number and class of shares and the designation of the shares (if
any) that the certificate represents. The share record books and the blank
share certificate books shall be kept by the secretary or by any agency
designated by the board of directors for that purpose. Every certificate
exchanged or returned to the corporation shall be marked "canceled," with the
date of cancellation.
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<PAGE>
Section 6.04. Record Holder of Shares
- ------------ -----------------------
The corporation shall be entitled to treat the person in whose name any
share or shares of the corporation stand on the books of the corporation as the
absolute owner thereof, and shall not be bound to recognize any equitable or
other claim to, or interest in, such share or shares on the part of any other
person.
Section 6.05. Lost, Destroyed or Mutilated Certificates
- ------------ -----------------------------------------
The holder of any shares of the corporation shall immediately notify the
corporation of any loss, destruction or mutilation of the certificate therefor,
and the board of directors may, in its discretion, cause a new certificate or
certificates to be issued to such holder, in case of mutilation of the
certificate, upon the surrender of the mutilated certificate, or in case of loss
or destruction of the certificate, upon satisfactory proof of such loss or
destruction, and, if the board of directors shall so determine, the deposit of a
bond in such form and in such sum, and with such surety or sureties, as it may
direct.
Article VII
DIRECTOR LIABILITY
------------------
Section 7.01. Director's Personal Liability
- ------------ -----------------------------
A director of the corporation shall not be personally liable for monetary
damages for any action taken, or any failure to take any action, unless the
director has breached or failed to perform the duties of the director's office
under 15 Pa. C.S. (S) 512 (relating to standard of care and justifiable
reliance) and such breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness. Notwithstanding the foregoing, the
provisions of this section 7.01 shall not eliminate or limit (1) the
responsibility or liability of such director pursuant to any criminal statute,
or (2) the liability of a director for the payment of taxes pursuant to local,
state or federal law.
Section 7.02. Preservation of Rights
- ------------ ----------------------
Any repeal or modification of this article by the shareholders of the
corporation shall not adversely affect any right or protection existing at the
time of such repeal or modification to which any director or former director may
be entitled under this article. The rights conferred by this article shall
continue as to any person who has ceased to be a director of the corporation and
shall inure to the benefit of the heirs, executors and administrators of such
person.
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<PAGE>
Article VIII
INDEMNIFICATION
---------------
Section 8.01. Indemnification
- ------------ ---------------
Subject to the provisions of this Article VIII, the corporation shall
indemnify to the fullest extent now or hereafter permitted by law, any person
who was or is made a party to or a witness in or is threatened to be made a
party to or a witness in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation), by reason of the fact that
such person is or was an authorized representative of the corporation, against
all expenses (including attorneys' fees and disbursements), judgments, fines
(including excise taxes and penalties) and amounts paid in settlement actually
and reasonably incurred by such person in connection with such action, suit or
proceeding.
Section 8.02. Standard of Conduct
- ------------ -------------------
Indemnification shall be provided only if it is determined that the person
seeking indemnification acted in good faith in a manner such person reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminial proceeding, had no reasonable cause to believe his
conduct was unlawful. Indemnification under this article shall not be made by
the corporation in any case where the alleged act or failure to act giving rise
to the claim for indemnification is determined by a court to have constituted
willful misconduct, recklessness or self-dealing. The termination of any action
or proceeding by judgment, order, settlement or conviction or upon a plea of
nolo contendere or its equivalent shall not of itself create a presumption that
- ---------------
the person did not act in good faith and in a manner that he reasonably believed
to be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 8.03. Procedure
- ------------ ---------
Indemnification under section 8.01 shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification is
proper in the circumstances because the person seeking indemnification has met
the standard of conduct set forth in section 8.02.
(1) Method of Determination. All determinations regarding
-----------------------
indemnification and advancement of expenses shall be made (a) by the board
of directors by majority vote of a quorum consisting of directors who were
not parties to the action, suit or proceeding in respect of which
indemnification is sought; or (b) in the event that such a quorum is not
obtainable or, even if obtainable, a majority of such quorum so directs, by
independent counsel in a written opinion to the board of directors, a copy
of which shall be delivered to the person seeking indemnification. In the
event a determination adverse to the person or persons
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seeking indemnification is made by the board of directors, any such person
shall have the right to request a determination by independent counsel and
the determination by independent counsel shall be substituted for the
decision of the board.
(2) Selection and Payment of Independent Counsel. In the event that a
--------------------------------------------
determination is to be made by independent counsel, such independent
counsel shall be selected by the board of directors and the law firm or
person so selected shall be subject to the approval of the person seeking
indemnification, which approval shall not be unreasonably withheld. The
corporation shall pay all reasonable fees and expenses of the independent
counsel. For purposes of this article, "independent counsel" shall mean a
law firm, or a member of a law firm, that is experienced in matters of
corporation law and that has not in the immediately preceding five years
been retained to represent the corporation, the person seeking
indemnification or any other party to the action, suit or proceeding giving
rise to the claim for indemnification.
Section 8.04. Advancement of Expenses
- ------------ -----------------------
The corporation may, as determined by the board of directors from time to
time, pay expenses (including attorneys' fees and disbursements) incurred in
connection with the defense of or other response to any civil or criminal
action, suit or proceeding described in section 8.01 hereof in advance of the
final disposition of such action, suit or proceeding. The expenses incurred by
such person shall be paid by the corporation in advance of the final disposition
of such action, suit or proceeding only upon receipt of an undertaking by or on
behalf of such person to repay all amounts advanced if it shall ultimately be
determined that such person is not entitled to be indemnified by the
corporation.
Section 8.05. Successful Defense
- ------------ ------------------
Notwithstanding any other provision of this article, to the extent that a
person has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in section 8.01 above, or in defense of any
claim, issue or matter therein, such person shall be indemnified by the
corporation against all expenses (including attorneys' fees, court costs,
transcript costs, fees of experts and witnesses, travel expenses and all other
similar expenses) actually and reasonably incurred by such person in connection
therewith.
Section 8.06. Insurance; Funding to Meet Indemnification Obligations
- ------------ ------------------------------------------------------
The corporation shall have the power to purchase and maintain insurance on
behalf of any authorized representative of the corporation against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of his or her status as such, whether or not the corporation
would have the power to indemnify such person against such liability. The board
of directors, without further approval of the shareholders, shall have the power
to borrow money on behalf of the corporation, including the power to pledge the
assets of the corporation, from time to time to discharge the corporation's
obligations with respect to indemnification and the advancement and
reimbursement of expenses, and the purchase and maintenance of insurance
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on behalf of each director and officer against any liability asserted against or
incurred by such director or officer in any capacity.
Section 8.07. Miscellaneous
- ------------ -------------
The rights of indemnification and advancement of expenses provided by this
article shall not be deemed exclusive of any other rights to which any person
seeking indemnification or advancement of expenses may be entitled under any
agreement, vote of shareholders or disinterested directors, statute or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office or position, and shall continue as
to a person who has ceased to be an authorized representative of the corporation
and shall inure to the benefit of the heirs, executors and administrators of
such person. Any repeal or modification of this article by the shareholders or
the board of directors of the corporation shall not adversely affect any right
or protection existing at the time of such repeal or modification to which any
person may be entitled under this article.
Section 8.08. Definition of Authorized Representative
- ------------ ---------------------------------------
For the purposes of this article, the term "authorized representative"
shall mean a director, officer, employee or agent of the corporation or of any
subsidiary of the corporation, or a trustee, custodian, administrator,
committeeman or fiduciary of any employee benefit plan established and
maintained by the corporation or by any subsidiary of the corporation, or a
person serving another corporation, partnership, joint venture, trust or other
enterprise in any of the foregoing capacities at the request of the corporation.
Article IX
MISCELLANEOUS
-------------
Section 9.01. Corporate Seal
- ------------ --------------
The corporation shall have a corporate seal in the form of a circle
containing the name of the corporation, the year of incorporation and such other
details as may be approved by the board of directors.
Section 9.02. Checks
- ------------ ------
All checks, notes, bills of exchange or other orders in writing shall be
signed by such person or persons as the board of directors may from time to time
designate.
Section 9.03. Contracts
- ------------ ---------
Except as otherwise provided in these bylaws, the board of directors may
authorize any officer or officers, agent or agents, to enter into any contract
or to execute or deliver any instrument on behalf of the corporation, and such
authority may be general or confined to specific instances.
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Section 9.04. Deposits
- ------------ --------
All funds of the corporation shall be deposited from time to time to the
credit of the corporation in such banks, trust companies, or other depositaries
as the board of directors may approve or designate, and all such funds shall be
withdrawn only upon checks signed by such one or more officers or employees as
the board of directors shall from time to time determine.
Section 9.05. Reports
- ------------ -------
Unless otherwise agreed between the corporation and a shareholder, the
corporation shall furnish to its shareholders annual financial statements,
including at least a balance sheet as of the end of each fiscal year and a
statement of income and expenses for the fiscal year. The financial statements
shall be prepared on the basis of generally accepted accounting principles, if
the corporation prepares financial statements for the fiscal year on that basis
for any purpose, and may be consolidated statements of the corporation and one
or more of its subsidiaries. The financial statements shall be mailed by the
corporation to each of its shareholders entitled thereto within 120 days after
the close of each fiscal year and, after the mailing and upon written request,
shall be mailed by the corporation to any shareholder or beneficial owner
entitled thereto to whom a copy of the most recent annual financial statements
has not previously been mailed. Statements that are audited or reviewed by a
public accountant shall be accompanied by the report of the accountant; in other
cases, each copy shall be accompanied by a statement of the person in charge of
the financial records of the corporation, which shall (i) state his reasonable
belief as to whether or not the financial statements were prepared in accordance
with generally accepted accounting principals and, if not, describing the basis
of presentation; and (ii) describe any material respects in which the financial
statements were not prepared on a basis consistent with those prepared for the
previous year.
Section 9.06. Corporate Records
- ------------ -----------------
There shall be kept at the registered office or principal place of business
of the corporation an original or duplicate record of the proceedings of the
shareholders and of the directors, and the original or a copy of the bylaws
including all amendments or alterations thereto to date, certified by the
secretary of the corporation. An original or duplicate share register shall
also be kept at the registered office or principal place of business of the
corporation, or at the office of a transfer agent or registrar, giving the names
of the shareholders, their respective addresses and the number and class of
shares held by each. The corporation shall also keep appropriate, complete and
accurate books or records of account, which may be kept at its registered office
or at its principal place of business.
Every shareholder shall, upon written verified demand stating the purpose
thereof, have a right to examine, in person or by agent or attorney, during the
usual hours for business for any proper purpose, the share register, books and
records of account, and records of the proceedings of the incorporators,
shareholders and directors, and to make copies or extracts therefrom. A proper
purpose shall mean a purpose reasonably related to such person's interest as a
shareholder. In every instance where an attorney or other agent shall be the
person who seeks the right of inspection, the demand shall be accompanied by a
verified power of attorney or such other writing which authorizes the attorney
or other agent to so act on behalf of the shareholder. The
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demand shall be directed to the corporation at its registered office in
Pennsylvania or at its principal place of business wherever situated. Where the
shareholder seeks to inspect the books and records of the corporation, other
than its share register or list of shareholders, the shareholder shall first
establish (1) compliance with the provisions of this section respecting the form
and manner of making demand for inspection of such documents, and (2) that the
inspection sought is for a proper purpose. Where the shareholder seeks to
inspect the share register or list of shareholders of the corporation and has
complied with the provisions of this section respecting the form and manner of
making demand for inspection of such documents, the burden of proof shall be
upon the corporation to establish that the inspection sought is for an improper
purpose.
Section 9.07. Amendment of Bylaws
- ------------ -------------------
These bylaws may be amended or repealed, or new bylaws may be adopted,
either (1) by vote of the shareholders entitled to cast at least a majority of
the votes which all shareholders are entitled to cast thereon at any duly
organized annual or special meeting of shareholders, or (2) with respect to
those matters which are not by statute reserved exclusively to the shareholders,
by vote of a majority of the board of directors of the corporation in office at
any regular or special meeting of directors. In the case of a meeting of
shareholders, such proposed amendment, repeal or new bylaws, or a summary
thereof, shall be set forth in the notice of such meeting, whether annual,
regular or special.
Section 9.08. Amendment of Charter Territory
- ------------ ------------------------------
The board of directors may at any time and from time to time make voluntary
amendments to the Charter Territory (pursuant to appropriate resolutions duly
entered upon the Minutes of the corporation) in York County, Commonwealth of
Pennsylvania, as they deem prudent and appropriate. Any such amendments, deemed
by the board of directors to be of an unusual or extraordinary nature shall
nevertheless be referred to the shareholders for their approval.
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EXHIBIT 5.1
<PAGE>
MORGAN, LEWIS & BOCKIUS LLP
One Commerce Square
417 Walnut Street
Harrisburg, PA 17101
Tel: (717) 237-4000
Fax: (717) 237-4004
July 1, 1996
The York Water Company
130 East Market Street
York, Pennsylvania 17405
Re: The York Water Company Rights Offering of up to 80,000 Shares of Common
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Stock
-----
Ladies and Gentlemen:
We have acted as counsel to The York Water Company, a Pennsylvania corporation
(the "Company"), in connection with the preparation of a Registration Statement
on Form S-3 (the "Registration Statement"), to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
relating to the offering by the Company of up to 80,000 shares (the "Shares") of
the Company's common stock, par value $10.00 per share, to the Company's
shareholders (the "Shareholders" or "Shareholder") in proportion to the amount
of shares owned by each Shareholder presently.
In rendering the opinion set forth below, we have reviewed (a) the Registration
Statement; (b) the Company's Amended and Restated Articles of Incorporation; (c)
the Company's Bylaws; (d) certain records of the Company's corporate proceedings
as reflected in its minute books; and (e) such records, documents, statutes and
decisions as we have deemed relevant. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original of all documents submitted to
us as copies thereof.
Based upon the foregoing, we are of the opinion that, when and to the extent the
Shares are issued to the Shareholders pursuant to, and in accordance with, the
terms of the Subscription Rights described in the Registration Statement, the
Shares will be duly authorized, validly issued, fully paid and nonassessable.
Our opinion set forth above is limited to the Pennsylvania Business Corporation
Law of 1988, as amended.
We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
The opinion expressed herein is solely for your benefit, and may be relied upon
only by you.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT 23.2
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
The York Water Company:
We consent to the use of our reports incorporated by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
Our report on the financial statements refers to a change in the method of
accounting for income taxes in 1993.
KPMG PEAT MARWICK LLP
Harrisburg, Pennsylvania
July 1, 1996
