UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
May 5, 1997
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(Date of earliest event reported)
The York Water Company
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-690 23-1242500
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) ID No.)
130 East Market Street
P.O. Box 15089
York, Pennsylvania 17405-7089
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(Address of principal executive offices) (Zip Code)
(717) 845-3601
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
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Item 5. OTHER EVENTS.
On May 5, 1997, at the Annual Meeting of Shareholders of The York Water
Company (the "Company"), the shareholders approved amendments to the Company's
Amended and Restated Articles of Incorporation recommended by the Company's
Board of Directors to: (1) increase the authorized capital stock of the Company
from 1,200,000 shares of Common Stock, par value $10.00 per share, to 6,500,000
shares, divided into 6,000,000 shares of Common Stock, without par value, and
500,000 shares of Series Preferred Stock, without par value; (ii) eliminate the
concept of par value of the capital stock; and (iii) delete certain provisions
relating to dividends and shares in distribution on Common Stock in order to
allow for the possible future issuance of Series Preferred Stock. On the same
date, the Board of Directors approved a four-for-one stock split, which became
effective on June 10, 1997. After the approval of the amendments, the
Description of the Company's Capital Stock is as follows:
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
The authorized capital stock of the Company consists of 6,500,000
shares, divided into 6,000,000 shares of Common Stock, without par value
("Common Stock"), and 500,000 shares of Series Preferred Stock, without par
value ("Preferred Stock"). As of June 1, 1997, there were 2,908,831 shares of
Common Stock outstanding (as adjusted for the four-for-one stock split) held by
1,276 shareholders of record, and there were no shares of Preferred Stock
outstanding.
Common Stock
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 nine directors, with three separate classes of directors
and with each such class 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 and of any shares
of Preferred Stock which may be outstanding, all shares 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 future rate increases from
the Pennsylvania Public Utility Commission (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 duly authorized, validly
issued, fully paid and non-assessable. There are no preemptive rights applicable
to any shares of Common Stock.
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The Company is subject to the Pennsylvania Business Corporation Law of
1988, as amended (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 generally 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 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 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
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enumerated, made or entered into between the Company and any affiliated
interest. In addition, it is the position of the PPUC to require PPUC approval
before any person or group acting in concert can lawfully acquire in any
transaction or series of transactions 20% or more of the voting interests in any
public utility subject to the Pennsylvania Public Utility Code.
Preferred Stock
The Company also has authorized 500,000 shares of Preferred Stock which
the Board of Directors has discretion to issue in such series and with such
preferences and rights as it may designate. Such preferences and rights may be
superior to those of the holders of Common Stock. For example, the holders of
Preferred Stock may be given a preference in payment upon liquidation of the
Company, or for the payment or accumulation of dividends before any
distributions are made to the holders of Common Stock. No shares of the
Preferred Stock have been issued. The issuance of shares of Preferred Stock,
while potentially providing desirable flexibility in connection with raising
capital for the Company's needs and other corporate purposes, could have the
effect of making it more difficult for a third party to acquire a majority of
the outstanding voting stock of the Company. The Company has no present
intention to issue shares of Preferred Stock.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
3.1 Amended and Restated Certificate of Incorporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE YORK WATER COMPANY
By: /s/ William T. Morris
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William T. Morris
President and Chief Executive Officer
Dated: June 10, 1997
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EXHIBIT INDEX
Exhibit
3.1 Amended and Restated Certificate of Incorporation
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Exhibit 3.1
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
authority to issue is 6,500,000 shares divided into 6,000,000 shares of Common
Stock, without par value, and 500,000 shares of Series Preferred Stock, without
par value. At any meeting of the shareholders, each holder of Common Stock shall
be entitled to one vote per share. The board of directors shall have the full
authority permitted by law to determine the voting rights, if any, and
designations, preferences, qualifications, limitations, restrictions, and the
special or relative rights of any class or any series of any class of the Series
Preferred Stock that may be desired.
Article VI.
Holders of Common Stock shall have the right to cumulate their votes for
the election of directors of the Corporation.
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SCHEDULE 1
ALL of the City of York, the Boroughs of East Prospect, Glen Rock,
Hallam, Jacobus, Jefferson, Loganville, Manchester, Mount Wolf, New Freedom, New
Salem, North York, Railroad, Seven Valleys, Shrewsbury, Spring Grove, West York,
Wrightsville, York Haven and Yorkana, and the Townships of East Manchester,
Hellam, Manchester, Shrewsbury, Springfield, Spring Garden, Springettsbury and
West Manchester, and parts of the Townships of Codorus, Hopewell, Jackson, Lower
Windsor, Newberry, North Codorus, North Hopewell, 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 Pennsylvania Route 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 Pennsylvania Route 234
also known as the East Berlin Road; thence in a generally westwardly direction
along a line 200 feet north of Pennsylvania Route 234 also known as the East
Berlin Road
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parallel to and concentric with thereto to a point 200 feet north of
Pennsylvania Route 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 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 Route 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 BEGINNING.
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AMENDMENT A TO SCHEDULE 1
SERVICE AREA EXPANSION
February 24, 1997
ALL of the Boroughs of Glen Rock, Shrewsbury, New Freedom, Railroad,
Township of Shrewsbury and parts of the Townships of Hopewell and North
Hopewell, collectively bounded and described as follows, to wit:
"BEGINNING at the point of junction of the Codorus Township, Springfield
Township and Shrewsbury Township boundary lines, which point is located
northwest of Glen Rock Borough; thence in a generally southwestwardly direction
along the center line of the Centerville Creek which is also the Shrewsbury
Township-Codorus Township boundary line to the point of intersection thereof
with the junction of the southern boundary of Shrewsbury Township with the
northern boundary of Baltimore County, Maryland; thence in a generally
eastwardly direction along said northern boundary line of Baltimore County to
the point of intersection thereof with the junction of the center line of Deer
Creek which point is located in Hopewell Township southeast of Stewartstown
Borough; thence in a generally northwestwardly direction to the point of
junction of Shrewsbury Township, North Hopewell Township and Springfield
Township boundary lines, which point is located northeast of Shrewsbury Borough;
thence in a generally southwestwardly direction to the point of junction of the
Codorus Township, Springfield Township and Shrewsbury Township boundary lines
and the place of the BEGINNING."
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