SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 193
X Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box
X Preliminary Proxy Statemen
Confidential, for Use of the Commission Only (as permitte
by Rule 14a-6(e)(2
Definitive Proxy Statemen
Definitive Additional Material
Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-1
The York Water Company
(Name of Registrant as Specified In Its Charter)
The York Water Company
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X No fee required
Fee computed on table below per exchange Act Rules 14a
6(i)(4) and 0-1
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:
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* Set forth the amount on which the filing fee is calculated
and state how it was determined.
Fee paid previously with preliminary materials.
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.
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4) Date Filed:
<PAGE>
THE YORK WATER COMPANY
130 EAST MARKET STREET
YORK, PENNSYLVANIA 17401
April 1, 1999
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 3, 1999 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 consider and vote upon a proposal to amend the Amended and
Restated Articles of Incorporation to increase the number of
authorized shares of capital stock of the Company; and
(3) To appoint independent accountants to audit the financial
statements of the Company for the year 1999;
(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, 1999 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 17401
April 1, 1999
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, 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 3, 1999 (the "Annual Meeting") and at any adjournment 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, 1999.
A shareholder who completes and forwards the enclosed proxy to the
Company's transfer agent, American Stock and Transfer 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 or to the transfer agent, 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 amend the Company's Amended and Restated Articles of
Incorporation (the "Existing Articles") to increase the authorized capital
stock of the Company from 6,500,000 shares, divided into 6,000,000 shares of
Common Stock, and 500,000 shares of Series Preferred Stock, to 31,500,000
shares, divided into 31,000,000 shares of Common Stock, and 500,000 shares of
Series Preferred Stock; and (iii) to ratify the appointment of KPMG Peat
Marwick LLP as independent auditors for the fiscal year ending December 31,
1999. 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 _______________ shares of Common Stock. 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, 1999. 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.
Brokers who have received no voting instructions from their customers
will have 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, beneficially owns five (5)
percent or more of the Company's outstanding Common Stock as of March 15, 1999.
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 six directors
continuing in office as of March 15, 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Principal Occupation Full Shares Percent of
During Last Director Owned Total Shares
Name Age Five Years Since Beneficially<F1> Outstanding<F2>
NOMINEES FOR ELECTION TO THREE YEAR TERMS EXPIRING IN 2002
Paul W. Ware* 52 Retired Chairman, Penn Fuel 3/27/89 136,504<F3> 4.59
Gas, Inc., August, 1998
to date
Chairman, Penn Fuel Gas, Inc.,
June, 1990 to August, 1998
John L. Finlayson 58 Vice President-Finance and 9/2/93 2,307 0.08
Administration, Susquehanna
Pfaltzgraff Co., August, 1978
to date
Chloe R. Eichelberger 64 Owner/President/Chief 9/15/95 1,981 0.07
Executive Officer,
Chloe Eichelberger
Textiles, Inc.,
September, 1987 to date
TO CONTINUE FOR TERMS EXPIRING IN 2000
Frank Motter* 71 President, Motter Printing 3/26/79 18,784<F4> 0.63
Press Co., June, 1972 to date
George Hay Kain, III, Esq. 50 Sole Practitioner, 8/25/86 15,142<F5> 0.51
Attorney at Law
April, 1982 to date
Michael W. Gang, Esq. 48 Partner, Morgan, 1/22/96 1,538 0.06
Lewis & Bockius LLP,
Counselors at Law,
October, 1984 to date.
Morgan, Lewis & Bockius
LLP is counsel to the Company
TO CONTINUE FOR TERMS EXPIRING IN 2001
Irvin S. Naylor* 63 Chairman of the Board, 10/31/60 15,156 0.51
The York Water 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.* 61 President and Chief 4/19/78 10,789<F6>(6) 0.37
Executive Officer,
The York Water Company,
May, 1995 to date
President and General Manager,
The York Water Company, May, 1982
to May, 1995
Horace Keesey III* 70 Vice Chairman of the Board, 8/27/79 13,599<F7>.46
The York Water Company, May, 1995
to date
Vice President, The York Water
Company, May, 1986 to May, 1995
All Directors and
Executive Officers
as a group 215,800<F8> 6.91
* 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> The percentage for each individual or group is based on the aggregate shares
outstanding as of March 15, 1999 (_______________________ shares).
<F3> Includes 3,955 shares held by Mr. Ware as custodian for two minor children
and 3,436 shares for his wife for which Mr. Ware disclaims beneficial ownership.
Also includes 123,460 shares held by Oxford Foundation, a charitable foundation, of which Mr. Ware is a
Director. Mr. Ware shares voting power and investment power with respect to
this holding.
<F4> Includes 4,300 shares held by wife for which Mr. Motter disclaims beneficial
ownership.
<F5> Includes 3,278 shares held by wife and child for which Mr. Kain disclaims
beneficial ownership. Also includes 6,232 shares held by estate of his
grandfather, for which he is one of three co-trustees and shares voting power and investment power.
<F6> Includes 9,348 shares owned jointly with Mr. Morris' wife and mother on
which he shares voting and investment power.
<F7> Includes 2,927 shares owned jointly with Mr. Keesey's four adult children on
which he shares voting and investment power.
<F8> 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>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that during the year ended December 31, 1998, 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
Ms. Chloe Eichelberger First Capitol 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 nine (9) meetings during the fiscal year
ended December 31, 1998. The Executive Committee is empowered to function
as delegated by the Board of Directors.
The Audit Committee held two (2) meetings in 1998. 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: Paul W. Ware,
Chairman; Frank Motter; John L. Finlayson; and Chloe R. Eichelberger.
The Compensation and Nomination Committee held three (3) meetings in
1998 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; Paul W.
Ware; John L. Finlayson; Michael W. Gang; 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
$100,000 in salary during any of the last three fiscal years. The Company
has not paid any bonuses in any of the last three fiscal years.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and All Other
Principal Compensation
Position Year Salary($)<F1> ($)<F2>
William T. Morris, 1998 152,041 2,839
President, Chief 1997 144,102 2,839
Executive Officer 1996 134,836 2,339
and Director
<F1> Includes amounts deferred by Mr. Morris under the
Company's deferred compensation program for management and
supervisory personnel (the "Deferred Compensation
Program").
<F2> Represents $1,000 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 make no additional expenditures 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 $16.50 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, 1998, Mr. Morris has been credited with 30 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.
Remuneration 15 20 25 30 35
$175,440 $41,364 $55,152 $68,940 $82,728 $96,516
The above figures assume retirement at age 65 with a straight-life annuity
and without reduction for a survivor benefit or Social Security benefits.
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 four 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:
Annual Retirement Years of Service
Benefit Unit Subsequent to December 31, 1983
10 15 20 25 30
$3,600 $36,000 $54,000 $72,000 $90,000 $108,000
$2,100 21,000 31,500 42,000 52,500 63,000
$1,440 14,400 21,600 28,800 36,000 43,200
$1,200 12,000 18,000 24,000 30,000 36,000
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 under this program is $21,454.
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: $7,040 per annum in Directors' fees; $3,420 per annum for service
as a regular member of the Executive Committee; a per diem of $430 for each
Board of Directors' Meeting; and a per diem of $380 for a regular or
alternate member's attendance at each Executive Committee Meeting. There
were 15 Board of Directors' Meetings and 9 Executive Committee Meetings
during the fiscal year ended December 31, 1998. All Directors attended at
least 75% of the scheduled Board of Directors' Meetings. All Directors
attended at least 75% of the scheduled 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:)
DOLLAR RETURN
For Past 5 Years
1994 1995 1996 1997 1998
Peer 86 96 110 138 160
York Water 115 129 135 161 161
S&P 98 132 151 182 209
The line graph above assumes $100 invested on December 31, 1993 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, served the
Company as its President and General Manager from May, 1982 to May, 1995. In
May 1995 Mr. Morris 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 John L. Finlayson, Member
Paul W. Ware, Member Michael W. Gang, Member
Irvin S. Naylor, ex officio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Irvin S. Naylor, Chairman of the Board, is a non-voting ex officio
member of the Compensation and Nomination Committee.
PROPOSAL TO AMEND THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION
The Board has adopted a resolution unanimously approving and
recommending to the Company's shareholders an amendment to the Existing
Articles. The text of the proposed amendment (the "Amendment"), which would
amend and restate Article V of the Existing Articles, is attached hereto as
Exhibit A and is incorporated herein by reference.
The proposed Amendment would increase the authorized capital stock of
the Company from 6,500,000 shares, divided into 6,000,000 shares of Common
Stock and 500,000 shares of Series Preferred Stock, to 31,500,000 shares,
divided into 31,000,000 shares of Common Stock and 500,000 shares of Series
Preferred Stock. The Company's capital stock is without par value.
Increase in Authorized Common Stock
The Company currently has 6,000,000 shares of Common Stock authorized,
of which ____________________ shares were outstanding as of March 15, 1999.
An additional _______ and _________________ shares of Common Stock have been
reserved for issuance under the Company's employee stock purchase plan and
dividend reinvestment plan, respectively, as of the same date. There are no
shares of Series Preferred Stock outstanding, but 250,000 shares have been
designated as the Series A Junior Participating Preferred Stock and reserved
for issuance under the Shareholder Rights Plan referred to below.
On January 25, 1999, the Board of Directors adopted a Shareholder
Rights Plan pursuant to which the Company declared a dividend of one right
(the "Rights") for each outstanding share of Common Stock to the Company's
shareholders of record on February 1, 1999. The Rights are exercisable only
upon the occurrence of certain triggering events, which include a person or
group of affiliated persons obtaining beneficial ownership of 15% or more of
the outstanding Common Stock or the commencement of a tender offer or
exchange offer for 15% or more of the outstanding Common Stock. Upon the
occurrence of such an event, each holder of a Right, other than of Rights
that are or were beneficially owned by an individual or entity seeking to
acquire the Company, will have the right to receive, upon the exercise of
the Right at the then current exercise price, shares of the Company's Series
A Junior Participating Preferred Stock, or under certain circumstances,
shares of Common Stock.
The additional shares of Common Stock proposed by the Amendment could
be issued for any proper corporate purpose without delay or further
shareholder approval, except as may be required by applicable law or
regulatory agencies. This could include the issuance of shares of Common
Stock to raise additional equity capital, to make acquisitions, to effect
stock distributions or stock splits, or to issue shares under employee
benefit plans. The additional shares of Common Stock would also be
available for issuance under the Shareholder Rights Plan if the Rights ever
became exercisable. The voting and other ownership rights of the Company's
shareholders may be diluted by any issuances of additional Common Stock or
shares of Series Preferred Stock. Shareholders will not have preemptive
rights to subscribe for shares of Common Stock or Series Preferred Stock,
unless the Company grants such rights at the time of issue. The additional
shares of Common Stock for which authorization is sought would be identical
to the shares of Common Stock now authorized. Except for the issuance of
Common Stock under the employee stock purchase plan and the dividend
reinvestment plan, the Company has no plans or proposals to issue any
additional shares of Common Stock or to issue shares of Series Preferred
Stock.
The Board is required to make any determination to issue additional
shares of Common Stock or shares of Series Preferred 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 or
Series Preferred Stock that could, depending on the circumstances, make more
difficult or discourage an unfriendly attempt to obtain control of the
Company by means of a merger, tender offer, proxy contest or otherwise. The
issuance of additional shares of Common Stock or shares of Series Preferred
Stock also could be used to dilute the voting power and ownership interests
of a person or entity seeking to obtain control of the Company if the Board
considered the action of such entity or person not to be in the best
interests of the Company. Any such issuance could also have the effect of
diluting the earnings per share, book value per share and voting power of
other holders of Common Stock. The Company's Board of Directors is not
aware of any present effort by any person or entity to obtain control of the
Company or any other event that would trigger the provisions of the
Shareholder Rights Plan.
Vote Required; Recommendations
Approval of the proposal to amend 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 Amendment.
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 LLP, last
year's auditors, as independent public accountants to audit the financial
statements of the Company for the year 1999. 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 LLP.
Audit fees are approved by the Company's Audit Committee and all
professional services to be rendered by KPMG Peat Marwick LLP 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 LLP 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
LLP 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 2000 Annual Meeting of
Shareholders must be received by the Company in writing prior to February 1,
2000.
<PAGE> Exhibit A
PROPOSED AMENDMENTS
TO AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
THE YORK WATER COMPANY
Article V.
The aggregate number of shares which the Corporation shall have authority to
issue is 31,500,000 shares, divided into 31,000,000 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.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE YORK WATER COMPANY
Proxy - Annual Meeting of Shareholders
May 3, 1999
The undersigned, a Shareholder of The York Water Company, a Pennsylvania
corporation (the "Company"), does hereby appoint Irvin S. Naylor, William T.
Morris and Horace Keesey III and each of them, the true and lawful attorneys
and proxies with full power of substitution, for and in the name, place and
stead of the undersigned, to vote all of the shares of Common Stock of the
Company which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Shareholders of the Company to be held
Monday, May 3, 1999 at 1:00 p.m. local time at the office of the Company,
130 East Market Street, York, Pennsylvania or at any adjournment thereof.
ELECTION OF DIRECTORS
To vote with respect to the
election of For All Nominees Withhold Authority
Listed Below For All Nominees
Paul W. Ware
John L. Finlayson
Chloe R. Eichelberger _____________ _________________
Instructions: To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below:
_______________________________
Cumulative votes for one or more nominees as follows:
Nominees: Paul W. Ware _______________
John L. Finlayson _______________
Chloe R. Eichelberger ________________
For Against Abstain
2. Approve Amendment to the
Amended and Restated Articles of
Incorporation _________ _________ __________
3. Appoint KPMG Peat Marwick
LLP as auditors _________ _________ __________
4. Discretionary authority
To transact such other business as may properly come before the
Meeting and any adjournment thereof according to the proxies
discretion and in their discretion.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 THROUGH 3.
Signature ______________
Signature if Shares Held Jointly ________________
Dated _______________ 1999
NOTE: Please mark, date and sign exactly as your name appears on this proxy
card. When shares are held jointly, both holders should sign. When signing
as attorney, executor, administrator, trustee or guardian, please give your
full title. If the holder is a corporation or partnership, the full
corporate or partnership name should be signed by a duly authorized officer.
