SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
X Preliminary Proxy Statement
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Exchange Act Rule 14a-11 or
14a-12
THE YORK WATER COMPANY
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Lois L. Shultz
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or
14a-6(j)(2)
$500 per each part to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which the transaction
applies;
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
THE YORK WATER COMPANY
130 EAST MARKET STREET
YORK, PENNSYLVANIA 17401
April 1, 1996
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF THE YORK WATER COMPANY
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Shareholders of The York Water Company will be held at the office
of the Company, 130 East Market Street, in the City of York,
Pennsylvania, on May 6, 1996 at 1:00 P.M. for the purpose of
taking action upon the following proposals:
(1) To elect three (3) Directors to three-year terms of
office;
(2) To appoint independent accountants to audit the books
and accounts of the Company for the year 1996;
(3) To consider and vote upon a proposal to amend and
restate the Articles of Incorporation of the Company;
and
(4) To transact such other business as may properly come
before the meeting.
The Board of Directors has fixed the close of business on
March 15, 1996 as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting,
and at any adjournment or adjournments thereof.
You are cordially invited to attend the meeting. In the event
you will be unable to attend, you are respectfully requested to
sign, date and return the enclosed proxy at your earliest
convenience in the enclosed stamped return envelope.
By order of the Board of Directors,
JEFFREY S. OSMAN
Secretary
<PAGE>
THE YORK WATER COMPANY
130 EAST MARKET STREET
YORK, PENNSYLVANIA 17405
April 1, 1996
PROXY STATEMENT
This Proxy Statement and the accompanying form of proxy are
being furnished to the shareholders of The York Water Company
(hereinafter referred to as the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company
for proxies, whereby shareholders would appoint Irvin S. Naylor,
William T. Morris, and Horace Keesey III and each of them, as
Proxies on behalf of the shareholders, to be used at the Annual
Meeting of the Shareholders of the Company to be held at 1:00
p.m. at the office of the Company on May 6, 1996 (the "Annual
Meeting") and at any adjournment or adjournments thereof.
Solicitation of proxies will be primarily by mail. Proxies
may also be solicited personally and by telephone by regular
employees of the Company. The expenses of the solicitation will
be borne by the Company. Such expenses may also include ordinary
charges and expenses of brokerage houses and other custodians,
nominees and other fiduciaries for forwarding documents to
shareholders. This Proxy Statement has been mailed to
shareholders of the Company on or about March 31, 1996.
A shareholder who completes and forwards the enclosed proxy
to the Company is not precluded from attending the Annual Meeting
and voting his or her shares in person, and may revoke the proxy
by delivering a later dated proxy or by written notification to
the Company at any time before the proxy is exercised.
PURPOSE OF THE MEETING
At the Annual Meeting, shareholders of the Company will
consider and vote upon proposals: (i) to elect three (3)
Directors to serve for a term of three (3) years; (ii) to ratify
the appointment of KPMG Peat Marwick as independent auditors for
the fiscal year ending December 31, 1996; and (iii) to amend and
restate the Company's Articles of Incorporation (the "Existing
Articles") to, among other things, increase the authorized Common
Stock from 1,000,000 to 1,200,000 shares and to add a portion of
Codorus Township to the description of the Company's chartered
territory contained in the Existing Articles. Shareholders may
also consider and vote upon such other matters as may properly
come before the Annual Meeting or any adjournment thereof.
VOTING AT THE MEETING
The outstanding securities of the Company entitled to vote
at the meeting consist of 637,041 shares of Common Stock, par
value $10.00 per share. The presence at the Annual Meeting in
person or by proxy of shareholders entitled to cast a majority of
the votes which all shareholders are entitled to cast will
constitute a quorum for the Annual Meeting.
The record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting or at any
adjournment or adjournments thereof is the close of business on
March 15, 1996. Shareholders are entitled to one vote for each
share on all matters coming before the meeting, except that
shareholders have cumulative voting rights with respect to the
election of Directors. Cumulative voting rights permit each
shareholder to cast as many votes in the election of each class
of Directors to be elected as shall equal the number of such
shareholder's shares of Common Stock multiplied by the number of
Directors to be elected in such class of Directors, and each
shareholder may cast all such votes for a single nominee or
distribute such votes among two or more nominees in such class as
the shareholder may see fit. Discretionary authority to cumulate
votes is not being solicited.
In accordance with Pennsylvania law, a shareholder can
withhold authority to vote for all nominees for directors or can
withhold authority to vote for certain nominees for directors.
Directors will be elected by a plurality of the votes cast.
Votes that are withheld will be excluded from the vote and will
have no effect.
The approval of the proposals to ratify the Company's
auditors and to amend and restate the Existing Articles each
requires the affirmative vote of a majority of the votes cast by
all the holders of the Common Stock entitled to vote thereon.
Abstentions and broker non-votes, because they are not treated as
votes cast, will have no effect on whether these proposals are
approved by the shareholders.
The Company believes that brokers who have received no
voting instructions from their customers will not have discretion
to vote on the proposal to amend and restate the Existing
Articles. Brokers will have such discretion to vote with respect
to election of directors and the proposal to ratify the Company's
auditors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
No person, so far as known to the Company, based upon
information contained in SEC filings, beneficially owns five (5)
percent or more of the Company's outstanding Common Stock as of
March 15, 1996.
ELECTION OF DIRECTORS
At the Annual Meeting, all the nominees, each of whom is
currently serving as Director, are to be elected to serve for the
ensuing three (3) years and until their respective successors
have been elected and qualified. The Company has a total of nine
Directors, who are elected to staggered three-year terms of
office. Each share represented by the enclosed proxy will be
voted for each of the nominees listed, unless authority to do so
is withheld. If any nominee becomes unavailable for any reason
or if a vacancy should occur before the election (which events
are not anticipated), the shares represented by the enclosed
proxy may be voted for such other person as may be determined by
the Proxies.
The three directors are to be elected by a plurality of the
votes cast at the Annual Meeting. The Board of Directors
unanimously recommends a vote "FOR" each of the nominees.
The information appearing in the following table with respect to
principal occupation and beneficial ownership of Common Stock of
the Company has been furnished to the Company by the three
nominees and the seven directors continuing in office as of March
15, 1996.
<TABLE>
<CAPTION>
Full Shares Percent of
Principal Occupation Director Owned Total Shares
Name Age During Last Five Years Since Beneficially<F1> Outstanding
<S> <C> <C> <C> <C> <C>
NOMINEES FOR ELECTION TO THREE YEAR TERMS EXPIRING IN 1999
Paul W. Ware 49 Chairman, Penn Fuel Gas, Inc.,June, 3/27/89 32,120<F2> 5.04
1990 to date. President, June, 1989
to March, 1992. Vice Chairman, May,
1987 to June, 1990. Executive Vice
President, June, 1988 to June 1989
President, North Penn Gas Company, June,
1988 to March, 1992
John L. Finlayson 55 Vice President-Finance and 9/2/93 211 0.03
Administration, Susquehanna Pfaltzgraff
Co., August, 1978 to date
Chloe R. Eichelberger 61 Owner/President/Chief Executive Officer, 9/15/95 309 0.04
Chloe Eichelberger Textiles, Inc.,
September, 1987 to date
TO CONTINUE FOR TERMS EXPIRING IN 1997
Josephine S. Appell* 72 Chairman of the Board, York Blue 3/26/79 1,380 0.21
Print Company, Inc., October, 1986
to date; Treasurer, May, 1973 to
December, 1993; Secretary, January,
1993 to date
Executive Vice President and Treasurer,
C. S. Davidson, Inc. Engineers, May,
1973 to February, 1993; Director,
May, 1973 to date
Frank Motter* 68 President, Motter Printing Press Co., 3/26/79 3,259 0.51
June, 1972 to date
Consultant, KBA-Motter Corp., Manufacturer
of web-fed printing equipment, December,
1991 to March 1993. Executive Vice President,
October, 1990 to December, 1991
George Hay Kain, III, Esq. 47 Sole Practitioner, Attorney at Law 8/25/86 3,137<F3> 0.49
April, 1982 to date
Michael W. Gang, Esq. 45 Partner, Morgan, Lewis & Bockius LLP, 1/22/96 239 0.03
Counselors at Law, October, 1984
to date. Morgan, Lewis & Bockius LLP
is counsel to the Company
TO CONTINUE FOR TERMS EXPIRING IN 1998
Irvin S. Naylor* 60 Chairman of the Board, The York Water 10/31/60 2,579 0.40
Company, September, 1993 to date
Secretary-Treasurer, The York Water
Company, May, 1977 to September, 1993
President/Owner, Snow Time, Inc., Owns
and Operates Ski Areas, June, 1964 to date
Vice Chairman/Owner, Cor-Box, Inc.,
Mfg. Corrugated Boxes, June, 1966 to date
William T. Morris, P.E.* 58 President and Chief Executive Officer, 4/19/78 1,809<F4> 0.28
The York Water Company, May, 1995 to date
President and General Manager,
The York Water Company, May, 1982
to May, 1995
Horace Keesey III* 67 Vice Chairman of the Board, The York 8/27/79 2,188<F5> 0.30
Water Company, May, 1995 to date
Vice President, The York Water
Company, May, 1986 to May, 1995
Consultant to the paper industry,
October, 1991 to date
Sales Manager, Recycled Mills,
Stone Container Corp.,
March, 1986 to October, 1991
All Directors and
Executive Officers
as a group 46,992<F6> 7.37
* Members and () Alternate Members of the Executive Committee.
<F1>Except as indicated in the footnotes below, Directors possessed sole voting
power and sole investment power with respect to all shares set forth in this
column.
<F2>Includes 685 shares held by Mr. Ware as custodian for two minor children for
which Mr. Ware disclaims beneficial ownership. Also includes 30,865 shares
held by Oxford Foundation, a charitable foundation, of which Mr. Ware is a Direc
tor. Mr. Ware shares voting power and investment power with respect to this
holding. Mr. Ware's address is 2 East Main Street, Strasburg, PA 17579.
<F3>Includes 596 shares held by wife and child for which Mr. Kain disclaims
beneficial ownership. Also includes 1,425 shares held by estate of his
grandfather, for which he is one of three co-trustees and shares voting power and investment power.
<F4>Includes 478 shares owned by Mr. Morris' wife for which Mr. Morris
disclaims beneficial ownership.
<F5>Includes 457 shares owned jointly with Mr. Keesey's four adult children
on which he shares voting and investment power.
<F6>Includes shares owned by family members, and certain other shares, as to
which some Directors and Officers disclaim any beneficial ownership and which
are further disclosed in the notes above.
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
The Company believes that during the year ended December 31,
1995, its directors and executive officers complied with all
applicable filing requirements of Section 16(a) of the Securities
Exchange Act of 1934. The foregoing statement is based solely
upon a review of copies of reports furnished to the Company and
written representations of its Directors and executive officers
that no other reports were required.
MEMBERS OF OTHER BOARDS OF DIRECTORS
The following members of the Board of Directors of The York
Water Company are Board members of publicly held companies as
indicated below:
Companies Other Than
Board Members The York Water Company
Mrs. Josephine S. Appell Drovers Bancshares Corp.
and
The Drovers & Mechanics Bank
Mr. Frank Motter Drovers Bancshares Corp. and
The Drovers & Mechanics Bank
Mr. Paul W. Ware American Water Works Company
COMMITTEES AND FUNCTIONS
The Company has an Executive Committee, an Audit Committee
and a Compensation and Nomination Committee, all of which are
composed of members of the Board of Directors.
The Executive Committee held eleven (11) meetings during
the fiscal year ended December 31, 1995. The Executive Committee
is empowered to function as delegated by the Board of Directors.
The Audit Committee held two (2) meetings in 1995. The
Audit Committee monitors the audit functions of our independent
public accountants and internal controls of the Company. The
Audit Committee of the Company is composed of the following
Directors appointed by the Board: Frank Motter, Chairman;
Josephine S. Appell; Paul W. Ware; and John L. Finlayson.
The Compensation and Nomination Committee held two (2)
meetings in 1995 and considers and makes recommendations to the
Board of Directors concerning the proposed compensations,
salaries and per diems of the corporate officers, Directors and
members of the Committees of the Board of Directors of the
Company and makes recommendations to the Board of Directors for
nominations for Directors and officers of the Company. This
Committee will consider nominees recommended by shareholders of
the Company. Such recommendations should be made in writing,
should include a statement of the recommended nominee's
qualifications, and should be addressed to the Committee at the
address of the Company. In accordance with the Company's bylaws,
actual nominations must be made in writing and must be received
by the Company not less than ninety (90) days before the date of
the Annual Meeting. The Compensation and Nomination Committee is
composed of the following Directors appointed by the Board:
Frank Motter, Chairman; Josephine S. Appell; Paul W. Ware; and
Irvin S. Naylor, ex officio.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning
compensation paid or accrued by the Company to the chief
executive officer of the Company. No other executive officer of
the Company earned more than $100,000 in salary during any of the
last three fiscal years. The Company has not paid any bonuses in
any of the last three fiscal years.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and All Other
Principal Compensation
Position year Salary($)(1) ($)(2)
William T. Morris, 1995 119,978 2,339
President and 1994 104,960 2,339
Chief Executive Officer 1993 99,543 1,839
(1) Includes amounts deferred by Mr. Morris
under the Company's deferred compensation
program for management and supervisory
personnel (the "Deferred Compensation
Program").
(2) Represents $500 of Company matching
contributions to the 401(k) plan and $1,839
in insurance policy premiums expended by
the Company to fund Mr. Morris' interest in
the Deferred Compensation Program. It is
anticipated that the Company will expend
the total of $7,355 in remaining policy
premiums to fund Mr. Morris' interest in
the Deferred Compensation Program.
Officers with five years' service are entitled to benefits
under the Company's General and Administrative Employees Pension
Plan (the "Pension Plan") upon retirement after attaining age 55.
The pension benefit computation is based on the years of service
times the sum of $15.50 and 1-1/2% of that portion of the final
average monthly earnings which are in excess of $400. The final
average monthly earnings are the average of the employee's
earnings, exclusive of overtime earnings, for the 60 months
immediately preceding the date the pension benefit calculation is
made. As of December 31, 1995, Mr. Morris has been credited with
27 years of service under the Pension Plan. The following table
illustrates the approximate annual benefit that may become
payable under the Pension Plan to the executive officers who have
met both the five year and 55 year age requirements, based upon
the indicated assumptions as to remuneration and years of
credited service. estimated salary increases over amounts
reported herein prior to retirement.
Remuneration Years of Service
10 15 20 25 30
145000 22,890 34,335 45,780 57,225 68,670
The above figures assume retirement at age 65 with a
straight-life annuity and without reduction for a
survivor benefit.
The Company maintains a supplemental retirement program
(the "Supplemental Plan"), which provides senior management with
a retirement benefit in addition to the Pension Plan. The
Supplemental Plan is designed to encourage management to stay
with the Company until retirement. Supplemental Plan benefits
have been made available to five members of the Company's
management and are payable to the executive or his beneficiary (a
"Supplemental Plan Beneficiary") monthly over a period of 180
months. The annual benefit payable under the Supplemental Plan
(the "Annual Benefit") may be calculated by multiplying the
number of years of service subsequent to December 31, 1983 but
prior to the attainment of age 65, by a predetermined annual
retirement benefit unit, which in the case of Mr. Morris is
$3,600 and in the case of all Supplemental Plan Participants
ranges from $1,200 to $3,600. The estimated Annual Benefit
payable to Mr. Morris at normal retirement age under the
Supplemental Plan is $70,176. The Supplemental Plan is funded by
insurance policies owned by the Company on each manager covered
by the Supplemental Plan, and if the assumptions made as to
mortality experience, policy dividends and other factors (the
"Funding Assumptions") are realized, the Company will recover all
of its payments made under the Supplemental Plan plus a factor
for the use of the Company's money. The Company is obligated to
pay Annual Benefits, and Supplemental Plan Beneficiaries have the
status of unsecured creditors of the Company with respect to
Annual Benefits, regardless of whether the Funding Assumptions
are realized and the insurance policies fully fund or reimburse
the Company for its payments under the Supplemental Plan. The
following table illustrates the approximate Annual Benefits that
may become payable to Supplemental Plan Beneficiaries:
PAGE
<PAGE>
Annual
Retirement
Benefit
Unit Years of Service
Subsequent to December 31, 1983
10 15 20 25 30
3,600 36000 54000 72000 90000 108000
2,100 21000 31500 42000 52500 63000
1,440 14400 21600 28800 36000 43200
1,200 12000 18000 24000 30000 36000
The Deferred Compensation Program permits eligible
supervisors, managers and executives to defer up to 5% of
salary, normally over an eleven (11) year period, with the
Company matching the deferment, up to 2-1/2% of salary. The
Company has obtained life insurance policies for participants
under the Deferred Compensation Program to fund its future
payment obligations under the Deferred Compensation Program,
and no cash balances are maintained by the Company to fund
participant deferrals, Company matching contributions, or
earnings with respect to such balances derived from the
insurance policies (together, the "Deferred Compensation
Program Balances"). At retirement, each participant, or
beneficiary, is entitled to receive over a ten-year period
monthly payments equal in the aggregate to the Deferred
Compensation Program Balance that accrued with respect to such
participant in Company maintained book-entry accounts. Except
for Mr. Morris, no other directors participate in this
program. Mr. Morris' projected annual payment following under
this program is $20,599.
Each Director of the Company is entitled to receive
$3,500 either in the form of a cash payment by the Company to
the Director or on behalf of the Director to fund a life
insurance policy for the benefit of the Director's named
beneficiary. In addition, each Director who is not a regular
full-time employee of the Company is entitled to receive the
following amounts for services rendered to the Company: $3,100
per annum in Directors' fees; $3,100 per annum for service as a
regular member of the Executive Committee; a per diem of $390
for each Board of Directors' Meeting; and a per diem of $340
for a regular or alternate member's attendance at each
Executive Committee Meeting. There were 14 Board of Directors'
Meetings and 11 Executive Committee Meetings during the fiscal
year ended December 31, 1995. All Directors attended at least
75% of the scheduled Board of Directors' Meetings and
Committee Meetings.
COMPANY PERFORMANCE
The following line graph presents the annual and
cumulative total shareholder return for The York Water Company
Common Stock over a five-year period, as compared to a
comparable return associated with an investment in the S&P 500
Composite Index and a composite index of water companies
prepared and maintained by Edward D. Jones & Co. (the "Peer
Index").
(Details of graph not transmitted electronically are as
follows:)
1991 1992 1993 1994 1995
Group 129 143 154 140 150
York Water 110 124 136 151 165
S&P 500 147 156 171 159 193
The line graph above assumes $100 invested on December
31, 1990 in the Company's Common Stock and the stock of
companies included in the S&P 500 and the Peer Index and
assumes the quarterly reinvestment of dividends. The return
for the Peer Index presented above took into consideration the
cumulative total return of the common stock of the following
water companies included in the Peer Index: American Water
Works Inc.; Aquarion Company; California Water Service;
Connecticut Water Service Inc.; Consumers Water Company;
Elizabethtown Corp.; GWC Corp.; IWC Resources Corp.; Middlesex
Water Company; Philadelphia Suburban Corp.; SJW Corp.; Southern
California Water; Southwest Water Co.; and United Water
Resources.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Nomination Committee of the Board of
Directors of the Company establishes general compensation
policies of the Company and considers and makes recommendations
to the Board of Directors concerning the proposed compensation,
salaries and per diems of the President and Chief Executive
Officer, the Chairman, Vice Chairman, directors and members of
the Committees of the Board of Directors of the Company. The
Chairman and Vice Chairman serve the Company in a part-time
capacity, and the amount of salary payable to such officers has
been determined by the Committee based upon the amount of time
dedicated and value of contributions made to the Company.
Mr. Morris, the Chief Executive Officer of the Company,
has served the Company as its President and General Manager
from May, 1982 to May, 1995, when he assumed the position of
President and Chief Executive Officer. The Compensation and
Nomination Committee historically has established Mr. Morris'
compensation after considering comparative salary data from
industry and other salary surveys (including data derived from
publicly disclosed compensation information concerning many of
the companies identified in the Peer Index), individual past
performance, the Company's performance (on an absolute basis
and in comparison to peer performance within the context of a
regulated industry), and to a lesser extent changes in the cost
of living in the Company's service territory. While no formal
salary or compensation guidelines have been developed or used,
salary levels have been determined after balancing the
foregoing factors (in their entirety, without giving weight to
any particular factor and without regard to any particular
relationship between compensation levels and any quantitative
or qualitative aspect of the Company's performance) with the
interests of the Company's shareholders, customers and
employees.
Section 162(m) of the Internal Revenue Code generally
disallows, in certain circumstances, a tax deduction to public
companies for compensation over $1 million paid to a
corporation's chief executive officer and next four most highly
compensated executive officers. The Company does not have any
compensation programs that would be impacted by Section 162(m).
Frank Motter, Chairman Paul W. Ware, Member
Josephine S. Appell, Member Irvin S. Naylor, ex officio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Irvin Naylor, Chairman of the Board, is a non-voting
ex officio member of the Compensation and Nomination Committee.
A member of the Compensation and Nomination Committee, Mrs.
Josephine S. Appell is the wife of Louis J. Appell, Jr., the
President and Chief Executive Officer and a shareholder of
Susquehanna Pfaltzgraff Co., the parent company of Cable TV of
York. The Company and Cable TV of York are parties to an
agreement whereby Cable TV of York performs remote meter
reading services on a monthly basis for a portion of the
Company's customers. During 1995, the Company paid Cable TV of
York $259,160 for such services.
PROPOSAL TO AMEND AND RESTATE THE ARTICLES OF INCORPORATION
The Board has adopted a resolution unanimously approving
and recommending to the Company's shareholders an amendment and
restatement of the Existing Articles. The text of the proposed
amended and restated articles (the "Restated Articles") is
attached hereto as Exhibit A and is incorporated herein by
reference.
The proposed Restated Articles (i) increase the
authorized Common Stock of the Company from 1,000,000 to
1,200,000 shares; (ii) add a portion of Codorus Township to the
description of the Company's chartered territory contained in
the Existing Articles; and (iii) restate the Existing Articles
to delete provisions which are no longer applicable and to
conform the Existing Articles to the simpler format permitted
by modern corporate statutes.
Increase in Authorized Common Stock
The Company currently has 1,000,000 shares of Common
Stock authorized, of which 637,041 were outstanding as of March
15, 1996. The Company has no authorized or outstanding
preferred stock.
The Board believes the increase in the authorized amount
of Common Stock is in the best interests of the Company and
believes it is advisable to authorize such shares to have them
available for, among other things, possible issuance in
connection with such activities as public or private offerings
of shares for cash, issuance in connection with the Company's
dividend reinvestment plan, employee stock purchase plan and
other stock-based plans that might be implemented in the
future, stock splits, dividends payable in stock of the
Company, and issuance in connection with acquisition of other
companies and properties.
The additional shares of Common Stock could be issued for
any proper corporate purpose by the Board without further
shareholder approval. The voting and equity ownership rights
of the Company's shareholders may be diluted by any additional
issuances of Common Stock of the Company. Shareholders will
not have preemptive rights to subscribe for shares of Common
Stock unless the Company grants such rights at the time of
issue. Except as described below, the Company has no plans or
proposals to issue any additional shares of Common Stock.
The Company is currently considering the issuance, in the
form of a shareholder subscription offering, of up to $5
million of Common Stock during 1996. The proceeds of such
issuance would be used for capital expenditures and other
general corporate purposes. The Company is also considering
amendments to become effective in 1997 to the dividend
reinvestment plan to remove the current limitation on the
amount of dividends which a shareholder can reinvest and to
permit shareholders to purchase additional shares of Common
Stock through voluntary cash payments.
The Board is required to make any determination to issue
shares of Common Stock based on its judgment as to the best
interests of the Company. Although the Board has no present
intention of doing so, it could issue shares of Common Stock
that could, depending on the circumstances make more difficult
or discourage an attempt to obtain control of the Company by
means of a merger, tender offer, proxy contest or otherwise.
When in the judgment of the Board such use would be in the best
interest of the Company, such shares could be used to create
voting or other impediments or to discourage persons seeking to
gain control of the Company. Such shares could be privately
placed with purchasers favorable to the Board in opposing such
action. The issuance of new shares of Common Stock also could
be used to dilute the stock ownership of a person or entity
seeking to obtain control of the Company should the Board
consider the action of such entity or person not to be in the
best interest of the Company. Any such issuance could also
have the effect of diluting the earnings per share, book value
per share and/or voting power of the Common Stock.
Addition to Chartered Territory
The Existing Articles set forth a description of the
chartered territory within York County in which the Company may
supply water to the public. This territory has been added to
numerous times over the years, most recently in February 1994.
The Restated Articles, if approved by shareholders, would add a
portion of Codorus Township to the chartered territory and
would consolidate the present territory and the proposed
addition into one all-inclusive description. The proposed
addition consists of a portion of Codorus Township and
Jefferson Borough. Because the water supply and distribution
system of Jefferson Borough is inadequate and the supply is of
poor quality, the Borough has requested The York Water Company
to acquire their facilities and supply water to their
customers. The shareholders are not required to approve the
purchase of the Jefferson Borough system and are not being
requested to do so.
Restatement of Existing Articles
The Company was incorporated by a special act of the
Pennsylvania legislature in 1816. Since that time, the
Company's articles of incorporation have been amended numerous
times but have never been restated; the Existing Articles now
comprise more than 100 pages, many of which are hand written.
Although the Company was previously governed by the
Pennsylvania Corporation Act of 1874 and Business Corporation
Law of 1933, and is now governed by Business Corporation Law of
1988 (the "BCL"), the Existing Articles have never been
comprehensively revised to conform to the style and format of
modern corporation statutes.
Because the Company is already governed by the BCL, the
restatement will not effect any substantive changes in the
Existing Articles except for the items specifically described
above. The restatement will merely result in a simpler
corporate document that can be more easily used by the officers
of the Company and can be more easily provided to or filed with
governmental agencies and other persons as needed.
Vote Required; Recommendation
Approval of the proposal to amend and restate the
Existing Articles requires the affirmative vote of a majority
of the votes cast by all of the holders of Common Stock
entitled to vote thereon at the Annual Meeting.
The Board of Directors recommends a vote "FOR" the
proposal to amend and restate the Existing Articles.
SHAREHOLDER APPROVAL OF
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has approved the
recommendation of the Audit Committee for the appointment of
KPMG Peat Marwick, last year's auditors, as independent public
accountants to audit the books and accounts of the Company for
the year 1996. It is intended that, unless otherwise specified
by the shareholders, votes will be cast pursuant to the proxy
hereby solicited in favor of the appointment of KPMG Peat
Marwick.
Audit fees are approved by the Company's Audit Committee
and all professional services to be rendered by KPMG Peat
Marwick are approved by the Board of Directors, and the
possible effect on auditors' independence of providing nonaudit
services was considered prior to the service being rendered.
Fees for audit services include the examination of
financial statements, assistance with the preparation of the
Annual Report to Shareholders and the annual report on Form
10-K to the Securities and Exchange Commission, tax computation
assistance, and consultation in connection with various
accounting and tax related matters.
Representatives of KPMG Peat Marwick are expected to be
present at the Annual Meeting. Such representatives will have
an opportunity to make a statement, if they so desire, and will
be available to respond to appropriate questions from
shareholders.
Adoption of this proposal requires the affirmative vote
of a majority of the votes cast by all shareholders entitled to
vote at the Annual Meeting. The Board of Directors unanimously
recommends a vote "FOR" this proposal. It is understood that
even if the selection of KPMG Peat Marwick is ratified, the
Board, at its discretion, may direct the appointment of a new
independent auditing firm at any time during the year if the
Board determines that such a change would be in the best
interests of the Company and its shareholders.
DISCRETIONARY AUTHORITY
The notice of Annual Meeting of Shareholders calls for
the transaction of such other business as may properly come
before the meeting. The Board of Directors has no knowledge of
any matters to be presented for action by the shareholders at
the meeting other than is hereinbefore set forth. In the event
additional matters should be presented, however, the proxies
will exercise their discretion in voting on such matters.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTORS
In accordance with the Company's bylaws, shareholder's
proposals and nominations for Directors for consideration at
the 1997 Annual Meeting of Shareholders must be received by the
Company in writing prior to February 1, 1997.
<PAGE>
Exhibit A
PROPOSED
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.
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 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.
PAGE
<PAGE>
EXHIBIT II
THE YORK WATER COMPANY
PROXY
(Solicited on Behalf of the Board of Directors)
The York Water Company hereby constitute(s) and appoint(s) the
proxies named in the Proxy Statement, and each of them, as the
substitute and proxy of the undersigned with power of
substitution, for and in the name of the undersigned, to vote
at the annual Meeting of the shareholders of The York Water
Company to be held at 1:00 P.M. on the date set forth on this
Proxy, and at any adjournment or adjournments thereof, upon the
proposals referred to, and , in their discrtion, upon any other
business which may properly come before the meeting, all in
accordance with and as more fully described in the Notice and
Proxy Statement for said meeting.
Account No. Shares Annual Meeting on May 6, 1996
Said Proxies are authorized and directed to vote as indicated
upon the following Proposals:
Proposal (1) Election of Directors:
For All Three Nominees
(Except as marked to the Contrary Below)
Withhold Authority
(To vote for all nominees Listed Below
Instruction: to Withhold authority to vote for any individual
nominee strike a line through the nominee's name in the list
below; or to cumulate your voted (the total may not exceed
three times the number of your shares) insert the number of
votes you desire for each nominee by specifying that number in
the space provided under such nominee's name.
Paul W. Ware
( votes)
John L. Finlayson
( votes)
Chloe R. Eichelberger
( votes)
The Board of Directors recommends a vote "for" all three
nominees
(2) Appoint KPMGF Peat Marwick as auditors
For
Against
Abstain
(3) Proposal to amend and restate the articles of
incorporation of the Company
For
Against
Abstain
(Authority to vote for the election of Directors shall be
deemed to be granted unless specifically withhold.
Shareholders' directions on other matters set forth above will
be complied with, but if no direction is made, shares will be
voted in accordance with the recommendations of the Board
ofDirectors).
Signature
Signature if held jointly
Dated
If no direction is made, this Proxy will be voted in accordance
with the recommendations of the Board of Directors
Multiple owners whould all sign. Executors, administrators,
trustees, guardians, etc., should so indicate when signing.
