-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SngTSxHnziEM92lzS1FJ0fHKDhXqcEV/7R4CLdNSwOR3o6s2B+uvgIB8SVgNXqdW NZzobiKUJLjLzOSra857eg== 0000950109-96-004192.txt : 19960702 0000950109-96-004192.hdr.sgml : 19960702 ACCESSION NUMBER: 0000950109-96-004192 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960701 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: YORK WATER CO CENTRAL INDEX KEY: 0000108985 STANDARD INDUSTRIAL CLASSIFICATION: WATER SUPPLY [4941] IRS NUMBER: 231242500 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-07307 FILM NUMBER: 96589269 BUSINESS ADDRESS: STREET 1: 130 E MARKET ST CITY: YORK STATE: PA ZIP: 17405 BUSINESS PHONE: 7178453601 MAIL ADDRESS: STREET 1: PO BOX 15089 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on July 1, 1996 Registration No. 333-____ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 --------------- THE YORK WATER COMPANY (Exact name of registrant as specified in its charter) Pennsylvania 23-1242500 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 130 East Market Street York, Pennsylvania 17405 (717) 845-3601 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) William T. Morris President The York Water Company 130 East Market Street York, Pennsylvania 17405 (717) 845-3601 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copy to: James H. Carroll Morgan, Lewis & Bockius LLP One Commerce Square 417 Walnut Street Harrisburg, Pennsylvania 17101-1904 ---------------------------- Approximate date of commencement of proposed sale to which this Registration Statement relates: From time to time after this Registration Statement becomes effective. If only the securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [x] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.[ ] ------------------------------- CALCULATION OF REGISTRATION FEE
========================================================================================================== Title of each class Amount Proposed maximum Proposed maximum Amount of of securities to be to be offering price per aggregate offering registration registered registered share(1) price(1) fee - ---------------------------------------------------------------------------------------------------------- Common Stock, par value $10.00 per share 80,000 shares $70.50 $5,640,000 $1,945 ==========================================================================================================
(1) Based upon the average of the bid and asked price of the Company's common stock on June 25, 1996, estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act of 1933, as amended. -------------------------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. -2- Subject to Completion, Dated July 1, 1996 Prospectus [LOGO APPEARS HERE] - ---------- 80,000 Shares THE YORK WATER COMPANY Common Stock The York Water Company (the "Company") is offering to the holders of its common stock, par value $10.00 per share (the "Common Stock"), non-transferable subscription rights (the "Subscription Rights") to purchase up to an aggregate of 80,000 shares of Common Stock (the "Shares"). Holders of record of Common Stock of the Company as of the close of business on August 1, 1996 (the "Shareholders") have been granted one Subscription Right for every four (4) shares of Common Stock owned of record as of such date. No fractional shares of Common Stock will be issued upon the exercise of Subscription Rights. Any fractional Share to which subscribing Shareholders would otherwise be entitled will be rounded up or down to the nearest whole Share. Each Subscription Right entitles the holder thereof to purchase one Share at a purchase price of $_____ per Share, subject to proration in the event Shareholders subscribe for more than 80,000 shares of Common Stock (the "Basic Subscription Right"). See "Plan of Distribution - Basic Subscription Amount." The number of Basic Subscription Rights to which each Shareholder is entitled (the "Basic Subscription Amount") is set forth on the pre-printed label on the subscription form which accompanies this Prospectus (the "Subscription Form"). Shareholders shall have until 5:00 P.M. Eastern Daylight Savings Time on September 16, 1996 (the "Expiration Date") to exercise their Subscription Rights. As a result, the Company will not issue Shares pursuant to the exercise of Subscription Rights on or prior to September 15, 1996, the anticipated record date for the third quarter Common Stock dividend, and such dividend will not be declared and payable with respect to the Shares issuable pursuant to the exercise of Subscription Rights. If less than all of the Shares have been subscribed for as of the Expiration Date, Shareholders who subscribe for the entire Basic Subscription Amount are eligible to purchase, for $_____ per Share, the remaining unsubscribed Shares (the "Oversubscription Privilege"). See "Plan of Distribution--Oversubscription Privilege." Shareholders are not obligated to exercise any or all of the Subscription Rights allotted to them hereunder. The offering of Shares by the Company is conditioned upon the subscription of a minimum of 40,000 Shares prior to the Expiration Date, unless such condition is waived by the Company. Pending the issuance of Shares, all subscription funds will be held in a separate, interest bearing bank account of the Company. The offering of Shares may be modified or terminated by the Company at any time. __________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. __________________ THE OFFER WILL EXPIRE AT 5:00 P.M. EASTERN DAYLIGHT SAVINGS TIME ON SEPTEMBER 16, 1996, UNLESS EXTENDED BY THE COMPANY.
================================================================================ Underwriting Price to Discounts Proceeds to Public and Commissions(1) Company(2) - -------------------------------------------------------------------------------- Per Share................ $_____ -0- $_____ - -------------------------------------------------------------------------------- Total Minimum............ $_________ -0- $_________ - -------------------------------------------------------------------------------- Total Maximum............ $_____ -0- $_____ ================================================================================
(1) The offering will be made directly by the Company without the payment of any underwriting discounts, commissions or brokers' fees to any third party. (2) Before deducting expenses, estimated at $75,000, payable by the Company. The date of this Prospectus is August __, 1996 -2- No dealer, salesperson or other person has been authorized to give any information or to make any representation not contained in this Prospectus, and, if given or made, such information or representation must not be relied upon as having been authorized by the Company. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances create an indication that there has been no change in the affairs of the Company since the date hereof. This Prospectus does not constitute an offer or solicitation by anyone in any state in which such offer or solicitation is not authorized or in which the person making such offer is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549-1004 and at the following Regional Offices of the SEC: Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60621-2511, and New York Regional Office, Seven World Trade Center, New York, NY 10048. Copies of such materials can be obtained at prescribed rates from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549-1004. Information, as of particular dates, concerning the directors and officers of the Company, their remuneration and any material interest of such persons in transactions with the Company is disclosed in proxy statements distributed to shareholders of the Company and filed with the SEC. The Company has filed with the SEC under the Securities Act of 1933, as amended (the "Securities Act"), a Registration Statement on Form S-3 (including all amendments and exhibits thereto, the "Registration Statement") with respect to the securities offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. The Registration Statement, including any amendments and exhibits thereto, is available for inspection and copying as set forth above. Statements contained in this Prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. -3- TABLE OF CONTENTS Page ---- The Company ............................................................ Recent Developments .................................................... Selected Financial Data ................................................ Use of Proceeds ........................................................ Plan of Distribution ................................................... The Offering ........................................................ Purchase Period ..................................................... Basic Subscription Amount ........................................... Basic Subscription Procedure ........................................ Oversubscription Privilege .......................................... Exercising the Oversubscription Privilege ........................... Exercising Subscription Rights through Brokers and Dealers .......... Company's Right to Reject or Waive Defective Subscriptions ...................................................... Non-Transferability of Subscription Rights .......................... Minimum Condition of Offering ....................................... Withdrawal Rights of Company ........................................ Escrow of Subscription Funds ........................................ Irrevocability of Subscriptions ..................................... Issuance of Shares .................................................. Regulatory Obligations .............................................. Federal Income Tax Consequences ..................................... Determination of Offering Price ........................................ Description of the Company's Common Stock .............................. Legal Opinion .......................................................... Experts ................................................................ Incorporation of Certain Documents by Reference ........................ Subscription Form ...................................................... Instructions to Subscription Form ...................................... General Instructions ................................................... Example of Subscription Form ........................................... -4- THE COMPANY The Company is a Pennsylvania corporation which was incorporated by Special Act of the General Assembly of Pennsylvania in 1816. It is the oldest investor-owned water utility in Pennsylvania. The Company is engaged in the business of impounding, purifying and distributing water within its franchised territory, which is located within York County, Pennsylvania. The Company presently operates under the Pennsylvania Business Corporation Law and the Pennsylvania Public Utility Code and is subject to regulation by the Pennsylvania Public Utility Commission (the "PPUC"). The Company has no direct competitors within its area of operations. The Company's franchised territory is comprised of approximately 275 square miles and includes portions of the City of York, the Boroughs of Hallam, Jacobus, Jefferson, Loganville, Manchester, Mount Wolf, East Prospect, New Salem, North York, Seven Valleys, West York, York Haven and Yorkana and portions of the Townships of Codorus, East Manchester, Hellam, Jackson, Lower Windsor, Manchester, North Codorus, Spring Garden, Springettsbury, Springfield, West Manchester, Windsor and York. The portion of York County serviced by the Company is located in the south-central part of Pennsylvania, about 80 miles west of Philadelphia, 23 miles south of Harrisburg and 20 miles north of the Maryland border. The population of York County in 1990 was 337,617 according to the U.S. Census Bureau. During the five-year period ended in 1995, the Company maintained increased growth with respect to its customers and the distribution facilities which it has placed into service. The address of the Company is 130 East Market Street, York, Pennsylvania 17405-7089, and its telephone number is (717) 845-3601. RECENT DEVELOPMENTS The Company's water rates are regulated by the PPUC. Within the past several years the Company has filed written applications for rate increases with the PPUC and has been granted rate relief as the result of such requests. Generally, such requests have been made on an approximate 21 month basis, and relief has been granted within an average of seven months following each such request. The most recent formal rate request was filed by the Company on May 9, 1996, seeking a 9.6% increase in annual revenues. While it is not anticipated that the Company will obtain the full amount of the rate increase requested, such an increase, if approved in its entirety, is designed to produce approximately $1,534,000 in additional annual operating revenues; however, the exact amount of any rate increase authorized by the PPUC and the timing of such approval cannot be determined at this time. During 1994, the Company received approval of a rate increase from the PPUC. Effective September 23, 1994, the Company was granted a 3.7% rate increase (the "1994 PPUC Order"), which was designed to produce an increase in annual operating revenues of approximately $550,000. The 1994 PPUC Order was issued in response to the Company's April 29, 1994 request for a 6.7% increase in rates. During 1995, the Company incurred approximately $5.3 million in capital expenditures and anticipates capital expenditures of approximately $5.4 million for 1996. The Company anticipates satisfying such requirements through internally generated funds, customer advances and short-term borrowings. The receipt of approximately $[5.2] million from the sale of Shares pursuant to the exercise of the Subscription Rights will be used to repay short-term borrowings. For the fiscal years 1997 and 1998, the Company projects approximately $3.7 million and $3.9 million in construction expenditures. In order to meet these projected capital expenditures, the Company anticipates raising funds through internally generated funds, customers' advances, short-term borrowings and proceeds from the issuance of common stock under its employee stock purchase plan and dividend reinvestment plan. As of __________, 1996, the Company had $_____ million available for borrowing -5- pursuant to its existing $11 million bank lines of credit. The Company anticipates that it will continue to submit an application or applications with the PPUC from time to time in the future proposing increases in rates to provide a fair rate of return on the capital expenditures associated with its construction projects. SELECTED FINANCIAL DATA The following table sets forth certain selected historical financial information for the Company which has been derived from and should be read in conjunction with, and is qualified in its entirety by, the financial statements of the Company, including the notes thereto, incorporated by reference in this Prospectus. Interim unaudited data for the three month periods ended March 31, 1996 and 1995 reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of such data. Results for the periods ended March 31, 1996 and 1995 are not necessarily indicative of results which may be expected for any other period or for the fiscal year as a whole.
Three Months Ended March 31, Year Ended December 31, ------------------------ --------------------------------------------------------------- 1996 1995 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Income Statement Data: Water operating revenue....... $ 3,674,399 $ 3,695,008 $15,449,296 $14,755,707 $14,201,756 $13,216,692 $13,021,354 Operating expenses............ 2,215,268 2,219,946 9,119,832 8,881,499 8,591,315 7,932,765 7,723,259 Income taxes.................. 270,468 329,654 1,419,907 1,055,448 1,285,799 765,278 931,408 Operating income.............. 1,188,663 1,145,408 4,909,557 4,818,760 4,324,642 4,518,649 4,366,687 Interest expense.............. 719,999 640,969 2,738,846 2,720,535 3,045,872 2,609,708 2,619,323 Gain on sale of land.......... -- -- -- 215,417 842,002 -- -- Other income, net............. 49,010 57,635 141,536 131,036 430,111 259,177 279,004 Net income.................... 517,674 562,074 2,312,247 2,444,678 2,550,883 2,168,118 2,026,368 Per Common Share Data: Book value.................... $34.16 $33.83 $34.16 $33.75 $33.12 $32.31 $0.28 Net income.................... 0.81 0.89 3.66 3.91 4.13 3.71 3.70 Cash dividends declared....... 0.90 0.90 3.60 3.60 3.60 3.68 3.68 Number of shares outstanding at period-end.............. 639,225 631,585 637,374 629,684 621,817 613,889 551,243 Utility Plant: Original cost................. $89,379,798 $84,628,027 $88,710,279 $83,642,650 $77,241,368 $71,624,043 $69,108,568 Construction expenditures..... 681,706 988,823 5,256,959 6,629,903 6,040,584 2,777,903 3,568,214 Balance Sheet Data: Total assets.................. $90,493,021 $87,408,229 $90,459,706 $86,967,330 $84,738,162 $80,330,004 $69,613,666 Long-term debt................ 32,000,000 32,000,000 32,000,000 32,000,000 32,000,000 34,966,327 29,531,111
USE OF PROCEEDS The net proceeds of the offering, assuming the sale of all Shares being offered hereby, are estimated to be approximately $5.167 million, after deducting expenses of the offering estimated to be approximately $75,000. Approximately $5.167 million of such net proceeds will be used to retire short- term debt. If less than $5.167 million is received, the Company will fund its remaining capital expenditure requirements by drawing down additional amounts from its existing bank lines of credit. -6- PLAN OF DISTRIBUTION The Offering The Company is offering non-transferable Subscription Rights to purchase up to a maximum of 80,000 shares of its Common Stock (the Shares) at a subscription price of $_____ per Share (the "Purchase Price"). The offering of Shares through Subscription Rights (the "Offering") will be made directly by the Company to the Shareholders. Each Shareholder of the Company as of the close of business on August 1, 1996 will receive one Subscription Right for every four (4) shares of Common Stock owned as of such date (the "Record Date"). Each Subscription Right entitles the holder thereof to purchase one Share for each Subscription Right, subject to proration in the event Shareholders subscribe for an aggregate of more than 80,000 shares of Common Stock in accordance with the basic subscription procedure set forth herein (the "Basic Subscription Procedure"). Fractional Subscription Rights will not be granted, and Shareholders who would otherwise be entitled to receive a fractional Subscription Right will receive the number of Subscription Rights rounded up or down to the nearest whole Subscription Right. The Basic Subscription Amount to which each Shareholder is entitled is set forth on the pre-printed label on the Subscription Form which accompanies this Prospectus. Beneficial owners of Common Stock held in "street name" should refer to "Exercising Subscription Rights through Brokers and Dealers." Subject to the allocation described below, each Subscription Right also carries the right to subscribe at the Purchase Price for additional Shares (the "Oversubscription Privilege"), up to the amount offered hereby. All beneficial holders who exercise the Basic Subscription Right in full will be entitled to exercise the Oversubscription Privilege in accordance with the additional subscription procedure described below in "Exercising the Oversubscription Privilege." Shareholders are under no obligation to exercise any or all of the Subscription Rights which have been granted to them pursuant to the Offering. Purchase Period Shareholders shall have until 5:00 P.M. Eastern Daylight Savings Time ("EDST") on September 16, 1996 (the "Expiration Date") to deliver properly exercised Subscription Rights to the Company, in accordance with the procedure described below in "Basic Subscription Procedure." The Offering will expire at 5:00 P.M. EDST on the Expiration Date, unless extended by the Company. All Subscription Rights which have not been exercised prior to the Expiration Date will terminate and become null and void for all purposes. Basic Subscription Amount Shareholders shall receive one Subscription Right for every four (4) shares of Common Stock which are held as of the Record Date. Subscription Rights will entitle the holders thereof to purchase, at the Purchase Price, one Share for each Subscription Right which is held. However, in the event Shareholders subscribe for an aggregate of more than 80,000 Shares through the exercise of their Basic Subscription Rights, the Company will issue 80,000 shares of Common Stock on a pro rata basis (adjusted by rounding up or down to the nearest whole Share to avoid the issuance of fractional Shares), based upon the number of Subscription Rights validly exercised. For instance, if Shareholder A exercised in full its Basic Subscription Right for 100 Shares and Shareholders subscribed for an aggregate of 100,000 shares of Common Stock, the Company would issue 80 Shares to Shareholder A and 80,000 Shares to all Shareholders. The Company will promptly refund to subscribing Shareholders, without interest or deduction, all subscription funds which are not applied against the purchase of Shares due to any such proration of Shares. No fractional Subscription Rights will be granted. Shareholders who would otherwise be entitled to a fractional -7- Subscription Right will receive the number of Subscription Rights rounded up or down to the nearest whole Subscription Right. Basic Subscription Procedure Shareholders may exercise their Subscription Rights by completing and signing the accompanying Subscription Form in accordance with the instructions attached thereto and by mailing or delivering the completed Subscription Form to: The York Water Company 130 East Market Street, York, Pennsylvania 17405-7089 Attention: Lois L. Shultz, Assistant Secretary The completed Subscription Form and full payment of the Purchase Price must be received by the Company on or before the Expiration Date in order for Shares to be validly purchased under the Basic Subscription Procedure. Payment of the Purchase Price for all Shares subscribed must be made by personal, certified or cashier's check, or money order, payable to the order of the Company. A return envelope has been provided for the convenience of the Shareholders. The risk of delivery of the Subscription Form and payment of the Purchase Price to the Company shall be borne by the Shareholder exercising Subscription Rights and not by the Company. Shareholders are recommended to use certified or registered mail, return receipt requested, for all returns which are sent by mail. Oversubscription Privilege All Shareholders who have fully purchased the Basic Subscription Amount allotted to them are eligible to purchase, at the Purchase Price, any unsubscribed Shares pursuant to the Oversubscription Privilege. There is no limit on the number of Shares which a Shareholder may subscribe for under the Oversubscription Privilege. The only Shares available for additional subscription are those Shares which remain unsubscribed under the Basic Subscription Procedure. If the amount of unsubscribed Shares is insufficient to satisfy all additional subscription requests, the available Shares will be allotted among those Shareholders electing to subscribe for additional Shares on a pro rata basis in proportion, not to the number of Shares requested pursuant to the Oversubscription Privilege, but to the number of Shares each beneficial holder exercising the Oversubscription Privilege has purchased pursuant to Basic Subscription Privilege; provided, however, that if such pro rata allocation results in any -------- Shareholder being allocated a greater number of additional Shares than such Shareholder subscribed for pursuant to the exercise of such Shareholder's Oversubscription Privilege, then such holder will be allocated only such number of additional Shares as such Shareholder subscribed for and the remaining additional Shares will be allocated among all other Shareholders exercising the Oversubscription Privilege. Exercising the Oversubscription Privilege Shareholders who purchase the entire Basic Subscription Amounts allotted to them may purchase additional unsubscribed Shares by completing the accompanying Subscription Form in accordance with the instructions described below in "Instructions to Subscription Form." A down payment equal to 10% of the Purchase Price for the additional Shares must be made at the same time payment is made for Shares purchased under the Basic Subscription Procedure. Within five business days after the Expiration Date, the Company will mail to each Shareholder who properly subscribed for additional Shares an invoice which sets forth the exact number of additional Shares which are available for purchase and the exact amount of the balance due from the Shareholder with respect to such additional Shares. Payment for the additional Shares must be made by personal, certified or cashier's check, or money order, payable to the order of the Company and must be received by the Company within 15 business days following the Expiration Date. If the full amount of such balance due -8- has not been received by the Company within such 15-day period, the 10% down payment previously paid by the Shareholder will be returned to such Shareholder, without interest or deduction, and no additional Shares (other than the Shares to be issued under the Basic Subscription Procedure) will be issued to such Shareholder. The exact number of additional Shares that will be available will not be determined until the Expiration Date. If the total number of additional subscribed Shares exceeds the total number of unsubscribed Shares which are available, such additional Shares will be allocated on a pro rata basis in proportion, not to the number of Shares requested pursuant to the Oversubscription Privilege, but to the number of Shares each beneficial holder exercising the Oversubscription Privilege has purchased pursuant to Basic Subscription Privilege; provided, however, that if such pro rata allocation -------- results in any Shareholder being allocated a greater number of additional Shares than such Shareholder subscribed for pursuant to the exercise of such Shareholder's Oversubscription Privilege, then such holder will be allocated only such number of additional Shares as such Shareholder subscribed for and the remaining additional Shares will be allocated among all other Shareholders exercising the Oversubscription Privilege. The Company will promptly refund to subscribing Shareholders, without interest or deduction, subscription funds which are not applied against the purchase of additional Shares due to any such proration of Shares. Exercising Subscription Rights through Brokers and Dealers Shareholders, such as broker-dealers, depositories, banks, agents, administrators, trustees or their nominees, who hold shares of Common Stock for the account of others ("Agent Shareholders") should forward this Prospectus to the respective beneficial owners of such shares as of the Record Date (the "Street-Name Holders") as soon as possible to ascertain the Street-Name Holders' intentions and to obtain instructions with respect to their participation in the Offering. Since Street-Name Holders are not holders of record of Common Stock, they will not receive Subscription Forms which set forth the number of Subscription Rights that may be exercised; however, such holders should receive a letter of instruction from their Agent Shareholder which sets forth the number of Shares such holders may subscribe for in the Offering through the Agent Shareholder. The Company will reimburse Agent Shareholders for customary mailing and handling expenses in forwarding copies of this Prospectus. If a Street-Name Holder instructs the Agent Shareholder to purchase Shares in the Offering and forwards proper payment for such Shares, the Agent Shareholder should complete the Subscription Form and remit funds to the Company to effect such purchase. Since an Agent Shareholder may be required to process purchase orders on behalf of many Street-Name Holders and may complete and forward its Subscription Form several days prior to the Expiration Date to ensure that Shares are properly purchased, Street-Name Holders should contact their Agent Shareholder well in advance of the Expiration Date to make the necessary arrangements for the purchase of Shares prior to the date the Agent Shareholder completes and forwards the Subscription Form. A Street-Name Holder may only acquire additional shares through the Oversubscription Privilege in the event (i) such holder properly elects to acquire additional Shares and forwards the appropriate down payment to the Agent Shareholder and (ii) the Agent Shareholder exercises its entire Basic Subscription Amount. Company's Right to Reject or Waive Defective Subscriptions All questions as to the validity of the exercise of any Subscription Rights or as to the time of receipt of the Subscription Form will be determined by the Company, which determination shall be final and binding. The Company, in its sole discretion, reserves the right to waive any defect or irregularity, permit a defect or irregularity to be corrected within such time as it may determine or reject any improper exercise of a Subscription Right. The Company shall not be under any duty to notify any Shareholder of any defects or irregularities in the exercise of Subscription Rights and shall not incur any liability for the failure to give any such notification. -9- The risk of nondelivery of the Prospectus, the Subscription Form, the Company's invoice for additional subscription Shares, if any, and any and all payments for subscription amounts due the Company will be borne by the Shareholder who exercises Subscription Rights and not by the Company. No monies paid to the Company will be returned to any Shareholder except if (i) 40,000 Shares are not subscribed for or the Company otherwise terminates the Offering, (ii) there is a proration of Shares, or (iii) the price of allotted additional Shares is less than the 10% down payment. All monies to be returned by the Company will be mailed promptly without interest or deduction. Non-Transferability of Subscription Rights Subscription Rights may not be sold, transferred, donated, pledged, assigned or otherwise voluntarily or involuntarily disposed of, except that, upon the death of any Shareholder, any outstanding Subscription Rights granted to such Shareholder may be exercised by such Shareholder's duly authorized representative prior to 5:00 P.M., EDST on the Expiration Date. A Shareholder who sells shares of Common Stock after the Record Date will still be entitled to receive Subscription Rights with respect to such Common Stock. Such sale will not constitute a transfer of the Subscription Rights relating to such shares. Minimum Condition of Offering The Offering is conditioned upon the valid exercise of a minimum of 40,000 Subscription Rights prior to the Expiration Date. Withdrawal Rights of Company The Company reserves the absolute right to withdraw from, cancel, modify or terminate the Offering at any time prior to the Expiration Date. Escrow of Subscription Funds Pending the issuance of Shares, all subscription funds will be held in a separate, interest bearing bank account of the Company. In the event the Company withdraws or terminates the Offering for any reason, the subscription funds will be refunded promptly to subscribing Shareholders, without interest or deduction, and the Company will retain the interest earned on such funds, if any. Irrevocability of Subscriptions Once the Company has received an executed Subscription Form, such Subscription Form shall not be revocable by the Shareholder for any reason. Delivery of an executed Subscription Form and the required Purchase Price from a Shareholder to the Company on or before the Expiration Date will constitute a binding agreement between such Shareholder and the Company in accordance with the terms and conditions set forth herein. Issuance of Shares Shareholders are not required to hold Common Stock through the date the Shares are issued in order to exercise Subscription Rights and participate in the Offering. If Shareholders fully subscribe for all Shares through the exercise of their Basic Subscription Rights, certificates for the Shares will be issued by the Company as soon as practicable following the Expiration Date (i.e., September 16, 1996). If Shares remain following the exercise of Basic Subscription Rights, certificates for all Shares will be issued following the exercise period for the Oversubscription Privilege (i.e., as soon as practicable after October 7, 1996). However, in any event, the Company will not issue any Shares prior to September 15, 1996, the anticipated record date for the third quarter Common Stock dividend, and, therefore, the third quarter Common Stock dividend will not be -10- declared and payable for Shares issuable pursuant to the exercise of Subscription Rights. Prior to the issuance of Shares, a Shareholder who elects to exercise Subscription Rights shall not be considered to beneficially own the Shares issuable upon exercise of such Subscription Rights, and such Shares shall not be deemed to be held of record for any purpose. Moreover, prior to any issuance of Shares, the Subscription Rights shall not be deemed to bestow upon Shareholders any voting, dividend or other rights with respect to the Subscription Rights or the Shares underlying such Subscription Rights. Regulatory Obligations The offer and sale of Common Stock pursuant to the Offering is subject to PPUC approval. On _________, 1996 the PPUC registered a Securities Certificate with respect to the Offering, thereby authorizing the distribution of the Subscription Rights and the issuance of Common Stock. Federal Income Tax Consequences The following is a brief summary of some of the federal income tax consequences relating to the Offering. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), applicable regulations, judicial decisions and administrative interpretations of law, all of which are subject to change or modification. Any change in the current tax laws may or may not be retroactive. Additionally, state, local or foreign tax laws may have an impact on certain investors. Since the following is only intended as a brief review, Shareholders should consult their own tax advisors with respect to the federal income tax discussion herein, as well as state, local or foreign tax considerations, insofar as the same are applicable to each Shareholder's tax situation. For United States federal income tax purposes, receipt of the Subscription Rights pursuant to the Offering should be treated as a nontaxable distribution. A Shareholder will have a zero basis in the Subscription Rights received in the Offering, except that a portion of such Shareholder's basis in the Shares shall be allocated to the Subscription Rights (based on the relative fair market values of the Shares and the Subscription Rights at the time of the distribution) if (i) such Shareholder exercises Subscription Rights and (ii) either (A) such Shareholder elects under Section 307 of the Code to make such an allocation or (B) the fair market value of the Subscription Rights at the time of the distribution equals or exceeds 15% of the fair market value of the Shares at that time. Upon exercise of a Subscription Right, a Shareholder will not recognize income, gain or loss. The basis of Shares acquired upon exercise of Subscription Rights will equal the sum of the Purchase Price and such Shareholder's basis, if any, in the Subscription Rights exercised. The holding period for Shares will begin on the date of exercise. No loss will be recognized by a Shareholder who receives Subscription Rights in the Offering and allows those Subscription Rights to lapse. DETERMINATION OF OFFERING PRICE There is no established trading market for the Company's Common Stock except for sporadic trading in the over-the-counter market. The following table sets forth, for the periods indicated, the high and low bid prices per share as compiled by the National Quotation Bureau, Inc. and the per share quarterly Common Stock dividend declared during the relevant periods. These quotations represent prices between dealers and do not include retail mark-ups, mark-downs or commissions, nor do they represent actual transactions. -11-
High Low Quarterly Dividend ------- ------- ------------------ 1994 1st Quarter........... $58 $58 $.90 2nd Quarter........... 59 1/2 58 .90 3rd Quarter........... 61 59 1/2 .90 4th Quarter........... 63 61 .90 1995 1st Quarter........... $64 3/4 $63 $.90 2nd Quarter........... 64 3/4 64 1/4 .90 3rd Quarter........... 65 1/4 64 1/4 .90 4th Quarter........... 67 3/4 64 1/4 .90 1996 1st Quarter........... $69 $67 $.90 2nd Quarter........... ___ ___ .90 3rd Quarter (through August __, 1996).. ___ ___ --
In setting the Purchase Price of $_____, the Board of Directors of the Company determined the average published bid and ask prices for Common Stock for the ten business days preceding the Record Date (the "Recent Market Price") and subtracted a 5% discount from the Recent Market Price. In determining the Recent Market Price, the Board of Directors assumed an ask price of $2.00 above the bid price, in accordance with historic trading patterns, when there was no trading activity for Common Stock. The Board of Directors selected a 5% discount to the Recent Market Price for Common Stock based upon the approximate savings of underwriting fees and third party commissions resulting from the Company's sale of the Shares directly to the Shareholders. Based on these considerations, the Board of Directors concluded that the Purchase Price is fair and reasonable. DESCRIPTION OF THE COMPANY'S COMMON STOCK The authorized capital stock of the Company consists of 1,200,000 shares of Common Stock, with a par value of $10.00 per share. As of March 31, 1996, there were 639,225 shares of Common Stock outstanding held by approximately 1,229 shareholders of record. After the Offering, assuming all of the Shares offered hereby are subscribed for and sold, there will be approximately 719,225 shares of Common Stock outstanding. Authorized but unissued shares of Common Stock may be issued at any time and from time to time by the Board of Directors of the Company. Each share of Common Stock entitles the holder to one vote, except in the election of directors, where each holder has cumulative voting rights. Cumulative voting rights allow a shareholder to cast as many votes in an election of Directors as shall equal the number of such shareholder's shares multiplied by the number of Directors to be elected, and such shareholder may cast all such votes for a single Director nominee or distribute votes among two or more nominees in such proportion as such shareholder sees fit. The Board of Directors of the Company consists of a total of ten directors, with three separate classes of directors elected every three years to a staggered three-year term of office. As a result of this classification, a greater number of votes is required to elect a director than if the entire Board of Directors were elected at the same time, thus making it more difficult for Shareholders, even with cumulative voting rights, to obtain board representation in proportion to their shareholdings. All shares of Common Stock are entitled to participate pro rata in such dividends as may be declared by the Board of Directors out of funds legally available therefor. Subject to the prior rights of creditors, all shares -12- of Common Stock are entitled in the event of liquidation to participate ratably in the distribution of all the remaining assets of the Company. Certain of the Company's trust indentures and agreements relating to its outstanding indebtedness impose restrictions upon the payment of Common Stock dividends. In general, these restrictive provisions prohibit the payment of Common Stock dividends when cumulative dividend payments, over a specified period of time, exceed cumulative net income, over the same period, plus, in certain cases, a specified base amount. In view of the Company's historic net income, management believes that these contractual provisions should not have any direct, adverse impact on the Company's Common Stock dividend. Notwithstanding these contractual provisions, the Board of Directors of the Company periodically considers a variety of factors in evaluating the Company's Common Stock dividend rate. The continued maintenance of the current Common Stock dividend rate will be dependent upon (i) the Company's success in financing future capital expenditure requirements through debt and equity issuances, (ii) the Company's success in obtaining pending and future rate increases from the PPUC, (iii) future interest rates, and (iv) other events or circumstances which could have an effect on operating results. All outstanding shares of Common Stock are, and upon issuance as set forth herein the Shares being sold by the Company will be, duly authorized, validly issued, fully paid and non-assessable. There are no preemptive rights applicable to any shares of Common Stock. The Company is subject to the Pennsylvania Business Corporation Law (the "BCL"), which contains several provisions which may deter, or make more difficult, attempts to acquire control of the Company. The general effect of these provisions, which may in certain circumstances be waived by the shareholders or the Board of Directors of the Company, are described in summary fashion below. Subchapter 25E of the BCL provides generally that, if the Company were involved in a "control transaction," shareholders of the Company would have the right to demand payment of the fair value of the shares from a "controlling person or group." For purposes of Subchapter 25E, a "controlling person or group" is a person or group of persons acting in concert that, through voting shares, has voting power over at least 20% of the votes which shareholders of the Company would be entitled to cast in the election of directors. A control transaction arises, in general, when a person or group acquires the status of a controlling person or group. Upon the occurrence of a control transaction, the controlling person or group must give prompt notice to each shareholder of record of the Company and to the Court of Common Pleas in York County, Pennsylvania. Shareholders, other than the controlling person or group, would thereupon be entitled to demand that the controlling person or group pay them the "fair value" of their shares. The fair value for this purpose may not be less than the highest price paid per share by the controlling person or group at any time during the 90 day period ending on and including the date on which the controlling person or group became such, plus an increment representing any value which may not be reflected in such price including, without limitation, value payable for the acquisition of control. In general, Subchapter 25F of the BCL delays for five years and imposes conditions upon "business combinations" between an "interested shareholder" and the Company. The term "business combination" is defined broadly to include various merger, consolidation, division, exchange or sale transactions, including transactions utilizing the Company's assets for purchase price amortization or refinancing purposes. An "interested shareholder," in general, would be a beneficial owner of at least 20% of the Company's voting shares. In general, Subchapter 25G of the BCL suspends the voting rights of the "control shares" of a shareholder that acquires for the first time 20% or more, 33-1/3% or more, or 50% or more of the Company's shares entitled to be voted in an election of directors. "Control shares" are defined generally to include shares acquired which result in ownership in excess of any of the above- specified percentages, plus shares acquired (i) within 180 days of such acquisitions or (ii) with the intention of effecting such acquisitions. The voting rights of the control shares generally remain suspended until such time as the "disinterested" shareholders of the Company -13- vote to restore the voting power of the acquiring shareholder. Failure to obtain such approval exposes the owner to the risk of forced sale of the shares to the Company. Subchapter 25H of the BCL provides in certain circumstances for the recovery by the Company of profits made upon the sale of Common Stock by a "controlling person or group" if the sale occurs within 18 months after the controlling person or group became such and the Common Stock was acquired during such 18 month period or within 24 months prior thereto. For purposes of Subchapter 25H, a "controlling person or group," in general, is a person or group that (i) has acquired, (ii) offered to acquire, or (iii) publicly disclosed or caused to be disclosed an intention to acquire voting power over shares that would entitle such person or group to cast at least 20% of the votes that shareholders of the Company would be entitled to cast in the election of directors. Subchapters 25E-25H contain a wide variety of transactional and status exemptions, exclusions and safe harbors. The foregoing description of Subchapters 25E-25H of the BCL does not purport to be a complete or a definitive explanation of the BCL's application to transactions in the Company's securities or related circumstances that may arise in the future. Corporations and persons owning or holding directly or indirectly five percent or more of the Common Stock are "affiliated interests" of the Company under the Pennsylvania Public Utility Code. PPUC approval is required for contracts or arrangements providing for the furnishing of management, supervisory, construction, engineering, accounting, legal, financial or similar services and contracts or arrangements for the purchase, sale, lease or exchange of any property, right or thing or for the furnishing of any service, property, right or thing other than those above enumerated, made or entered into between the Company and any affiliated interest. In addition, PPUC approval would be required before any person could acquire 20% or more of the outstanding common stock of the Company. LEGAL OPINION The validity of the Shares offered hereby will be passed upon for the Company by Morgan, Lewis & Bockius LLP, 417 Walnut Street, Harrisburg, Pennsylvania 17101-1904. EXPERTS The financial statements and schedule of the Company as of December 31, 1995 and 1994, and for each of the years in the three-year period ended December 31, 1995, have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP covering the December 31, 1993 financial statements refers to a change in the method of accounting for income taxes. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Certain documents previously filed by the Company with the SEC pursuant to the Exchange Act are hereby incorporated by reference in this Prospectus as follows: (1) the Annual Report on Form 10-K for the year ended December 31, 1995; and (2) the Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. -14- All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering of the Common Stock shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing thereof. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. All information appearing in this Prospectus should be read in conjunction with, and is qualified in its entirety by, the information and financial statements (including notes thereto) appearing in the documents incorporated herein by reference, except to the extent set forth in the immediately preceding statement. The Company will provide without charge to each person to whom this Prospectus is delivered, upon the written or oral request of any such person, a copy of any or all of the documents referred to above (not including exhibits thereto, unless such exhibits are specifically incorporated by reference therein). Written or telephone requests should be directed to: Lois L. Shultz, Assistant Secretary, The York Water Company, 130 East Market Street, York, Pennsylvania 17405-7089, telephone number (717) 845-3601. -15- SUBSCRIPTION FORM for Shares of Common Stock THE YORK WATER COMPANY TO: The York Water Company 130 East Market Street York, Pennsylvania 17405-7089 GENERAL PROVISIONS APPLICABLE TO BASIC SUBSCRIPTION AMOUNT AND OVERSUBSCRIPTION PRIVILEGE The undersigned shareholder (the "Shareholder") of The York Water Company (the "Company") hereby acknowledges and agrees to the following provisions: 1. The number of Shares that may be acquired upon the exercise of Subscription Rights granted to the Shareholder ("Subscription Shares") is set forth on the label above PART A of the Subscription Form. 2. The Shareholder may purchase the Subscription Shares allotted, subject to proration as described in "Basic Subscription Amount" of the accompanying Prospectus. 3. The Shareholder may purchase Shares at a purchase price of $_____ per Share. 4. The Company reserves the right to reject any defective subscriptions to purchase Shares. 5. The obligation of the Company to issue Shares to the Shareholder in accordance with this Subscription Form is subject to the Company's timely receipt of the required Purchase Price for the Shares, in accordance within the instructions set forth herein, by personal, certified or cashier's check, or money order, payable to the order of the Company. 6. The Company's obligation to issue Shares to the Shareholder is further conditioned upon the subscription of a minimum of 40,000 Shares, unless such condition is waived by the Company, and the right of the Company to modify or terminate the Offering at any time. 7. Certificates for Shares shall be issued to the Shareholder by the Company as soon as practicable (i) following September 16, 1996 if the Offering is fully subscribed through the Shareholders' exercise of their Basic Subscription Rights or (ii) following October 7, 1996 if Shares remaining after the exercise of Basic Subscription Rights are offered pursuant to the Oversubscription Privilege. 8. Shareholders who exercise Subscription Rights are not obligated to hold shares of Common Stock continuously through the date the Shares are issued (as described in paragraph 7 above) in order to receive Shares pursuant to the exercise of the Subscription Rights. 9. The Subscription Rights granted hereunder may not be sold, transferred, assigned, pledged, donated or in any way disposed of by the Shareholder. -16- 10. The Shareholder is not obligated to exercise any or all of the Subscription Rights which have been granted hereunder. 11. The Company's Offering will expire at 5:00 P.M. EDST on September 16, 1996 unless otherwise extended by the Company. 12. The Subscription Form, once executed and delivered to the Company hereunder, shall not be revocable by the Shareholder. 13. All capitalized terms used herein which have not been defined shall have the same meanings ascribed to them in this Prospectus. -17- SUBSCRIPTION FORM for Shares of Common Stock THE YORK WATER COMPANY To: The York Water Company 130 East Market Street York, Pennsylvania 17405-7089 PART A. BASIC SUBSCRIPTION AMOUNT Shares Eligible For Purchase Upon Exercise of Subscription Rights, as Allotted to Shareholder ("Subscription Shares"): _____________________________________________ (as specified on above label) Subscription Shares Purchase Price Payment to Company ------------------- -------------- ------------------ X $ per share = $ ----------- ----- ----- PART B. OVERSUBSCRIPTION PRIVILEGE Subscription Shares Down Payment ------------------- ------------ * X $ per share x 10% = $ -------- ----- ----- TOTAL PAYMENT ENCLOSED $ ** ===== - ------------- * Prior to the purchase of any additional Shares under PART B, the Shareholder is obligated to purchase the maximum amount of Subscription Shares allotted under PART A. There is no limit on the number of additional Shares which can be subscribed for in PART B. ** Include the entire Purchase Price for Subscription Shares purchased under PART A and the 10% down payment of the Purchase Price for Subscription Shares purchased, if any, under PART B. The balance of the Purchase Price for PART B Subscription Shares will be invoiced by the Company. The Company will not be responsible for failure of delivery or receipt of any -18- documents or payments relating in any manner to the subscription procedure. The Company recommends that you use hand delivery or certified or registered mail with return receipt requested. PART C. SHAREHOLDER'S SIGNATURE, ADDRESS AND DATE Shareholder's Name___________________________________ (please print) Shareholder's Address________________________________ Telephone (____________) ___________ Date____________ Shareholder's Signature______________________________ PRIOR TO THE ISSUANCE OF COMMON STOCK PURSUANT TO THE EXERCISE OF SUBSCRIPTION RIGHTS IN THE OFFERING, THE SUBSCRIPTION RIGHTS SHALL NOT BE DEEMED TO BESTOW UPON SHAREHOLDERS VOTING RIGHTS, DIVIDEND RIGHTS OR OTHER RIGHTS WITH RESPECT TO THE SUBSCRIPTION RIGHTS OR THE COMMON STOCK SUBJECT TO THE SUBSCRIPTION RIGHTS. -19- INSTRUCTIONS TO SUBSCRIPTION FORM 1. If you wish to purchase all or part of your BASIC SUBSCRIPTION AMOUNT, complete PART A and PART C of the SUBSCRIPTION FORM which accompanies this Prospectus and return it together with proper payment to the Company. 2. If you wish to purchase all of your BASIC SUBSCRIPTION AMOUNT in PART A as well as all or part of any available OVERSUBSCRIPTION PRIVILEGE in PART B, complete PART A, PART B and PART C of the SUBSCRIPTION FORM and return it together with proper payment to the Company. An example of a partially completed Subscription Form with Shares and dollar amounts inserted is set forth immediately hereafter in this Prospectus. GENERAL INSTRUCTIONS The total number of Shares you may acquire in the Basic Subscription is printed on the pre-printed label on the SUBSCRIPTION FORM which accompanies this Prospectus. One Subscription Right and the full $_______ Purchase Price per Share are required for each Share you subscribe for under PART A, together with the 10% down payment for any subscribed Shares under PART B. Only if you have purchased the maximum number of Shares available to you under PART A of the SUBSCRIPTION FORM, may you also subscribe to purchase additional Shares under PART B. There is no limit on the number of additional Shares which can be subscribed for in PART B. If sufficient Shares are not available to satisfy completely all requests for Shares under PART A or PART B, a pro rata allotment, as described in the Prospectus, will be used to apportion the available Shares among all Shareholders electing to purchase Shares under PART A or additional Shares under PART B, with any fractional allotted Shares being rounded up or down to the nearest whole Share. Subscription Rights may not be transferred or sold by the Shareholder. Please send your completed SUBSCRIPTION FORM and required payment in the enclosed return envelope to: THE YORK WATER COMPANY 130 East Market Street York, PA 17405-7089 Attention: Lois L. Shultz, Assistant Secretary To be effective, your completed SUBSCRIPTION FORM and required payment must be received by the Company on or before 5:00 P.M. EDST on September 16, 1996. INSTRUCTIONS FOR PART A - If you wish to subscribe under the Basic Subscription Procedure for all or part of the number of Shares allotted to you, as set forth on the pre-printed label on the SUBSCRIPTION FORM which accompanies this Prospectus, please complete PART A of the SUBSCRIPTION FORM as follows: (1) Enter in PART A the number of Shares you desire to purchase (up to but not in excess of the number of Shares shown on the label). (2) Multiply the number of Shares you desire to purchase by the Purchase Price of $_____ per Share and enter the resulting amount in the Payment to Company column in PART A. (3) If you are not subscribing for additional Shares under PART B, enter the total amount shown for PART A on the TOTAL PAYMENT ENCLOSED line of PART B, complete all portions of PART C of the SUBSCRIPTION FORM and return your SUBSCRIPTION FORM and a personal, certified or cashier's check, or money order, in the correct amount to the Company's office in the enclosed envelope by hand delivery or by mail with postage prepaid by you. -20- INSTRUCTIONS FOR PART B - If you wish to subscribe for additional Shares under the Oversubscription Privilege and have subscribed for the maximum number of Shares allotted to you under PART A of the SUBSCRIPTION FORM, please complete PART B of the SUBSCRIPTION FORM as follows: (1) Enter on PART B the number of additional Shares you wish to purchase. There is no limit on the number of additional Shares which can be subscribed for in PART B. (2) Multiply that number of Shares by the Purchase Price of $______ per Share and enter 10% of the resulting Purchase Price in the Payment to Company column for PART B. (3) Enter in the TOTAL PAYMENT ENCLOSED line of PART B the total of the amounts of Payments to Company shown in PARTS A and B, complete all portions of PART C of the SUBSCRIPTION FORM and return your SUBSCRIPTION FORM and a personal, certified or cashier's check, or money order, in the correct amount to the Company's office in the enclosed envelope by hand delivery or by mail with postage prepaid by you. (4) Within five business days following the Expiration Date, the Company will mail to each Shareholder who has subscribed to purchase additional Shares under PART B an invoice which sets forth the exact number of additional Shares which are available for purchase and the exact amount of the balance due from the Shareholder with respect to such additional Shares. Payment for the balance of any additional Shares purchased must be received by the Company within 15 business days following the Expiration Date in order for such subscription to be valid. If the full amount of the balance due has not been received by the Company within this 15-day period, the 10% down payment previously paid by such Shareholder shall be refunded in full and no additional Shares will be issued to such subscribing Shareholder. INSTRUCTIONS FOR PART C - Print your name, address, telephone number and date in PART C. The signature of the Shareholder must also appear in PART C. The SUBSCRIPTION FORM with the signature of one of multiple owners will be acceptable to the Company. However, if the SUBSCRIPTION FORM is signed and executed by an attorney, executor, administrator, guardian or other fiduciary, or by an officer of a corporation, and the Subscription Rights are not granted in such manner, the person so executing must give his or her full title in such capacity. SUBSCRIPTION FORMS received for subscriptions with less than the correct payments will be returned to the senders. -21- SAMPLE -- FOR ILLUSTRATION PURPOSES ONLY Example of SUBSCRIPTION FORM for Shares of Common Stock THE YORK WATER COMPANY To: The York Water Company 130 East Market Street York, Pennsylvania 17405-7089 1234567 SUBSCRIPTION SHARES: 10 JOHN DOE & JANE DOE TEN ENT 123 MAIN STREET ANYTOWN, PA 00000 PART A. BASIC SUBSCRIPTION AMOUNT Shares Eligible for Purchase Upon Exercise of Subscription Rights, as Allotted to Shareholder ("Subscription Shares"):_____________________ (as specified on above label) Subscription Shares Purchase Price Payment to Company ------------------- -------------- ------------------ 10 X $ per share = $ -------- ------ ------- PART B. OVERSUBSCRIPTION PRIVILEGE Subscription Shares Down Payment ------------------- ------------ 15 * X $ per share x 10% = $ -------- ------ ------- TOTAL PAYMENT ENCLOSED $ ** ======= ________________ * Prior to the purchase of any additional Shares under PART B, the Shareholder is obligated to purchase the maximum amount of Subscription Shares allotted under PART A. There is no limit on the number of additional Shares which can be subscribed for in PART B. -22- ** Include the entire Purchase Price for Subscription Shares purchased under PART A and the 10% down payment of the Purchase Price for Subscription Shares purchased, if any, under PART B. The balance of the Purchase Price for PART B Subscription Shares will be invoiced by the Company. The Company will not be responsible for failure of delivery or receipt of any documents or payments relating in any manner to the subscription procedure. The Company recommends that you use hand delivery or certified or registered mail with return receipt requested. (Continued on next page) PART C. SHAREHOLDER'S SIGNATURE, ADDRESS AND DATE Shareholder's Name__________________________________________________________ (please print) Shareholder's Address_______________________________________________________ Telephone (_________) ___________ Date_____________________________________ Shareholder's Signature_____________________________________________________ PRIOR TO THE ISSUANCE OF COMMON STOCK PURSUANT TO THE EXERCISE OF SUBSCRIPTION RIGHTS IN THE OFFERING, THE SUBSCRIPTION RIGHTS SHALL NOT BE DEEMED TO BESTOW UPON SHAREHOLDERS VOTING RIGHTS, DIVIDEND RIGHTS OR OTHER RIGHTS WITH RESPECT TO THE SUBSCRIPTION RIGHTS OR THE COMMON STOCK SUBJECT TO THE SUBSCRIPTION RIGHTS. -23- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The estimated fees and expenses in connection with the issuance and distribution of the Shares being registered hereunder will be paid by the Registrant and are as follows:
Registration fee.............. $ 1,945 Printing and engraving........ 10,000 Blue Sky fees and expenses.... 5,000 Accounting fees and expenses.. 15,000 Legal fees and expenses....... 40,000 Miscellaneous................. 3,055 ------- Total Expenses........ $75,000 =======
Item 15. Indemnification of Directors and Officers. Sections 1741 and 1742 of the Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"), provide that a business corporation may indemnify directors and officers against liabilities they may incur as such if the particular person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. In general, the power to indemnify under these sections does not exist in the case of actions against a director or officer by or in the right of the corporation if the person otherwise entitled to indemnification shall have been adjudged to be liable to the corporation unless it is judicially determined that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnification for specified expenses. The corporation is required to indemnify directors and officers against expenses they may incur in defending such actions against them in such capacities if they are successful on the merits or otherwise in defense of such actions. Section 1713 of the BCL permits the shareholders to adopt a bylaw provision relieving a director (but not an officer) of personal liability for monetary damages except where (i) the director has breached the applicable standard of care, and (ii) such conduct constitutes self-dealing, willful misconduct or recklessness. The statute provides that a director may not be relieved of liability for the payment of taxes pursuant to any federal, state or local law or responsibility under a criminal statute. Article X of the Company's Bylaws limit the liability of any director of the Company to the fullest extent permitted by Section 1713 of the BCL. Section 1746 of the BCL grants a corporation broad authority to indemnify its directors, officers and other agents for liabilities and expenses incurred in such capacity, except in circumstances where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness. Pursuant to Section 1746 of the BCL, Article X of the Company's Bylaws provides for indemnification of directors, officers and other agents of the Company to the extent otherwise permitted by Section 1741 of the BCL and also in circumstances not otherwise permitted by Sections 1741 and 1742 of the BCL. Article X of the Company's Bylaws provides, except as expressly prohibited by law, a right to indemnification for expenses and certain liabilities paid or incurred by any director or officer of the Company, or any other person designated by the Board of Directors as an indemnified representative, in connection with any actual or threatened claim, action, suit or proceeding (including derivative suits) in which he or she may be II-1 involved by reason of being or having been a director, officer, employee or agent of the Company, or at the request of the company, of another corporation, partnership, joint venture, trust, employee benefit plan or other entity. The Bylaws specifically authorize indemnification against both judgments and amounts paid in settlement of derivative suits, unlike Section 1742 of the BCL which authorizes indemnification only of expenses incurred in defending a derivative action. Unlike the provisions of BCL Sections 1741 and 1742, Article X does not require the Company to determine the availability of indemnification by the procedures or the standard of conduct specified in Sections 1741 and 1742 of the BCL. A person who has incurred an indemnifiable expense or liability has a right to be indemnified independent of any procedures or determinations that otherwise would be required, and that right is enforceable against the Company as long as indemnification is not prohibited by law or the Company's Bylaws. Article X of the Company's Bylaws authorize the Company to further effect or secure its indemnification obligations by entering into indemnification agreements and purchasing and maintaining insurance. The Registrant has purchased officers' and directors' liability insurance which covers certain liabilities incurred by its officers and directors in connection with the performance of their duties, subject to the limitations of such policy. Item 16. List of Exhibits.
Exhibit Description of Reference to No. Exhibits ----------------- - ------- -------------- 4.1* Amended and Restated Articles of Incorporation of the Registrant 4.2* By-Laws, as amended, of the Registrant 4.3 Optional Dividend Reinvestment Plan.............. Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as the Company's Form S-3 dated November 20, 1982 (File No. 2- 80547). 4.4 Employees' Stock Purchase Plan Dated November Incorporated herein by reference. Filed 28, 1988......................................... previously with the Securities and Exchange Commission as an exhibit to the Company's Registration Statement Form S-8 (File No. 33-26180) dated December 19, 1988. 4.5 Note Agreement Relative to the $6,000,000 10.17% Incorporated herein by reference. Filed Senior Notes, Series A and $5,000,000 9.60% previously with the Securities and Exchange Senior Notes, Series B dated January 2, 1989..... Commission as Exhibit 4.5 to the Company's 1989 Form 10-K.
II-2
Incorporated by Reference to Exhibit Description of ------------------ No. Exhibits - ------- -------------- 4.6 Note Agreement Relative to the $6,500,000 10.05% Incorporated herein by reference. Filed Senior Notes, Series C dated August 15, 1990...... previously with the Securities and Exchange Commission as Exhibit 4.6 to the Company's 1990 Form 10-K. 4.7 Note Agreement Relative to the $7,500,000 8.43% Incorporated herein by reference. Filed Senior Notes, Series D dated December 15, 1992.... previously with the Securities and Exchange Commission as Exhibit 4.7 to the Company's 1992 Form 10-K. 4.8 Fourth Supplemental Acquisition, Financing and Incorporated herein by reference. Filed Sale Agreement Relative to the $2,700,000 4.75% previously with the Securities and Exchange Water Facilities Revenue Refunding Bonds dated Commission as Exhibit 4.8 to the February 1, 1994.................................. Company's Quarterly Report Form 10-Q for the quarter ended June 30, 1994. 4.9 Fifth Supplemental Acquisition, Financing and Sale Incorporated herein by reference. Filed Agreement Relative to the $4,300,000 5% Water previously with the Securities and Exchange Facilities Revenue Refunding Bonds dated October Commission as Exhibit 4.9 to the 1, 1995........................................... Company's Quarterly Report Form 10-Q for the quarter ended September 30, 1995. 5.1* Opinion of Morgan, Lewis & Bockius LLP 23.1 Consent of Morgan, Lewis & Bockius (contained in their opinion to be filed as Exhibit 5.1 to the Registration Statement) 23.2* Consent of KPMG Peat Marwick LLP 24.1 Powers of Attorney are included on the signature page of this registration statement - ------------------
* Filed herewith. Item 17. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or II-3 in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of this -------- ------- section do not apply if the information required to be included in a post- effective amendment by those subparagraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of York, Pennsylvania, on July 1, 1996. THE YORK WATER COMPANY By/s/William T. Morris ---------------------------------- William T. Morris President, Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated below. Each person in so signing, also makes, constitutes and appoints William T. Morris and Jeffrey S. Osman, and each of them acting alone, his or her true and lawful attorney-in-fact, with full power of substitution, to execute and cause to be filed with the Securities and Exchange Commission pursuant to the requirements of the Securities Act of 1933, as amended, any and all amendments and post-effective amendments to this Registration Statement, with exhibits thereto and other documents in connection therewith, and hereby ratifies and confirms all that said attorney-in-fact or his substitute or substitutes may do or cause to be done by virtue hereof. Signature Title Date --------- ----- ---- /s/William T. Morris - ------------------------------ President, Chief Executive July 1, 1996 William T. Morris Officer and Director (Principal Executive and Financial Officer) /s/Jeffrey S. Osman - ------------------------------ Vice President of Finance, July 1, 1996 Jeffrey S. Osman Secretary and Treasurer (Principal Accounting Officer) /s/Horace Keesey, III - ------------------------------ Vice Chairman of the Board July 1, 1996 Horace Keesey, III and Director /s/Irvin S. Naylor - ------------------------------ Chairman of the Board July 1, 1996 Irvin S. Naylor and Director /s/Michael W. Gang - ------------------------------ Director July 1, 1996 Michael W. Gang /s/Josephine S. Appell - ------------------------------ Director July 1, 1996 Josephine S. Appell /s/Paul W. Ware - ------------------------------ Director July 1, 1996 Paul W. Ware /s/Frank Motter - ------------------------------ Director July 1, 1996 Frank Motter /s/George Hay Kain, III - ------------------------------ Director July 1, 1996 George Hay Kain, III /s/Chloe' Eichelberger - ------------------------------ Director July 1, 1996 Chloe' Eichelberger /s/John L. Finlayson - ------------------------------ Director July 1, 1996 John L. Finlayson EX-4.1 2 ARTICLES OF INCORPORATION OF THE REGISTRANT EXHIBIT 4.1 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 the authority to issue is 1,200,000 shares of Common Stock, par value $10.00 per share. Article VI. The designations, qualifications, limitations, restrictions, and the special or relative rights in respect of the shares shall be as follows: DIVISION A - COMMON STOCK SECTION 1. Dividends and Shares in Distribution on Common Stock. The Common Stock alone shall receive all further dividends and shares upon liquidation, dissolution, winding up or distribution. SECTION 2. Voting Rights. At any meeting of the shareholders, each holder of Common Stock shall be entitled to one vote per share. Holders of Common Stock shall have the right to cumulate their votes for the election of directors of the Corporation. -1- SCHEDULE 1 All of the City of York, the Boroughs of East Prospect, Hallam, Jacobus, Jefferson, Loganville, Manchester, Mount Wolf, New Salem, North York, Seven Valleys, Spring Grove, West York, Wrightsville, York Haven and Yorkana, and the Townships of East Manchester, Hellam, Manchester, Springfield, Spring Garden, Springettsbury and West Manchester, and parts of the Townships of Codorus, Jackson, Lower Windsor, Newberry, North Codorus, Windsor and York, all in the County of York and Commonwealth of Pennsylvania, collectively bounded and described as follows, to wit: BEGINNING at a point in the center line of the Codorus Creek at the junction of the boundary lines of Hellam Township and East Manchester Township which is also a point of intersection on the York County-Lancaster County boundary line; thence in a generally northwestwardly direction along the York County-Lancaster County boundary line and along the southwestern side of the Susquehanna River to a point at the intersection of the York County, Dauphin County and Lancaster County boundary lines which point is located in a generally northwestwardly direction from the Borough of York Haven; thence in a generally southwardly direction in a straight line to the point of intersection of the center lines of the Little Conewago Creek, the Conewago Creek and the common point of the boundary lines of East Manchester Township, Newberry Township and Conewago Township which point is located in a generally westwardly direction from Conewago Heights; thence in a generally southwestwardly direction along the center line of the Little Conewago Creek which is also the East Manchester Township-Conewago Township boundary line and also becomes the Manchester Township-Conewago Township boundary line and also becomes the Manchester Township-Dover Township boundary line and also becomes the West Manchester Township-Dover Township boundary line, to the point of intersection on the center line of the Little Conewago Creek with the center line of Honey Run Creek which point is located in a generally westwardly direction from the northern portion of Honey Run Golf Course; thence in a generally southwardly direction along the center line of the Honey Run Creek which is also the West Manchester Township-Dover Township boundary line, to a point located approximately 1,800 feet north of the point of junction of the southern boundary line of Dover Township with the northern boundary line of Jackson Township and the western boundary line of West Manchester Township which point is located 200 feet north of Pa. Rte. 234 also known as the East Berlin Road; thence in a generally westwardly direction along the Jackson Township-Dover Township boundary line to a point on said line 200 feet north of Pa. Rte. 234 also known as the East Berlin Road; thence in a generally westwardly direction along a line 200 feet north of Pa. Rte. 234 also known as the East Berlin Road parallel to and concentric with thereto to a point 200 feet north of Pa. Rte. 234 at the intersection of the Jackson-Paradise Township boundary line; thence in a generally southeastwardly direction to a point at the intersection of the North Codorus-Codorus Township boundary line with the Codorus Creek adjacent to Manheim Township; thence in a generally southeastwardly direction to a point BM 649 at Brodbecks at the Codorus Creek; thence generally northeastwardly to the point of intersection thereof with the junction of the southern boundary line of Springfield Township, with the northern boundary line of Shrewsbury Township and the eastern boundary line of Codorus Township; thence in a generally eastwardly direction to a point at the junction of the southern boundary line of Springfield Township, with the northern boundary line of Shrewsbury Township and the western boundary line of North Hopewell Township; thence in a generally northwardly direction along the center line of the East Branch of the Codorus Creek which is also the Springfield Township-North Hopewell Township boundary line to the point of intersection thereof with the junction of the eastern boundary of Springfield Township, with the -2- northern boundary line of North Hopewell Township and the southern boundary line of York Township; thence in said York Township in a generally northeastwardly direction to a point at the intersection of Chapel Church Road (York Township Rte. T-736) and Springwood Road (L.R. 66053) which point is located at Relay; thence in a straight line in a generally northeastwardly direction to a point in Windsor Road (L.R. 66020) in Windsor Township 200 feet in a generally southwardly direction as measured along said road from its intersection with Ruppert Road (T-753) which leads eastwardly from Windsor Road to Holtz; thence in a straight line in a generally northeastwardly direction to a point in Lower Windsor Township located 5,300 feet north of the center line of Beaver Creek with such point being located on the York County-Lancaster County boundary line in the Village of Long Level; thence in a generally northwestwardly direction along the York County-Lancaster County line to a point in the center line of the Codorus Creek at the junction of the boundary lines of Hellam Township and East Manchester Township, the place of the BEGINNING. -3- EX-4.2 3 BY LAWS EXHIBIT 4.2 BYLAWS of THE YORK WATER COMPANY (a Pennsylvania corporation) Article I OFFICES AND FISCAL YEAR ----------------------- Section 1.01. Registered Office - ------------ ----------------- The registered office of the corporation in the Commonwealth of Pennsylvania shall be at 130 East Market Street, York, Pennsylvania 17401, until otherwise established by a vote of a majority of the board of directors, and a statement of such change is filed with the Department of State. Section 1.02. Fiscal Year - ------------ ----------- The fiscal year of the corporation shall begin on the first day of January in each year. Article II SHAREHOLDERS ------------ Section 2.01. Place of Meeting - ------------ ---------------- All meetings of the shareholders of the corporation shall be held at the registered office of the corporation unless another place is designated by the board of directors in the notice of such meeting. Section 2.02. Annual Meeting - ------------ -------------- The board of directors may fix the date and time of the annual meeting of the shareholders, but if no such date and time is fixed by the board, the meeting for any calendar year shall be held on the first Monday of May in such year, if not a legal holiday under the laws of Pennsylvania and if a legal holiday, then on the next succeeding business day, not a Saturday, at 1:00 o'clock P.M. (prevailing time) and at said meeting the shareholders then entitled to vote shall elect directors and shall transact such other business as may properly be brought before the meeting. Section 2.03. Special Meetings - ------------ ---------------- Special meetings of the shareholders of the corporation for any purpose or purposes may be called at any time by the chairman of the board, by the president or by the board of directors, or by shareholders entitled to cast at least one-fifth of the votes which all shareholders are entitled to cast at the particular meeting. At any time, upon written request of any person or persons who have duly called a special meeting, which written request shall state the object of the meeting, it shall be the duty of the secretary to fix the date of the meeting which, if the meeting is called pursuant to a statutory right, shall be held not more than sixty days after the receipt of the request, and to give due notice thereof. If the secretary shall neglect or refuse to fix the date and time of such meeting and give notice thereof, the person or persons calling the meeting may do so. Section 2.04. Notice of Meetings - ------------ ------------------ Written notice of every meeting of the shareholders, whether annual or special, shall be given to each shareholder of record entitled to vote at the meeting, at least ten days prior to the day named for the meeting. Every notice of a special meeting shall specify the general nature of the business to be transacted, and no business, other than that specified in such notice and matters germane thereto, shall be transacted at any special meeting without further notice to shareholders not present in person or by proxy. The corporation shall not have a duty to augment the notice. In the case of a meeting of shareholders that has as one of its purposes action on the bylaws, written notice shall be given to each shareholder that the purpose, or one of the purposes, of the meeting is to consider the adoption, amendment or repeal of the bylaws. There shall be included in, or enclosed with, the notice a copy of the proposed amendment or a summary of the changes to be effected thereby. Whenever the language of a proposed resolution is included in a written notice of a meeting of shareholders, the resolution may be adopted at such meeting with such clarifying or other amendments as do not enlarge its original purpose without further notice to shareholders not present in person or by proxy. Section 2.05. Quorum, Manner of Acting and Adjournment - ------------ ---------------------------------------- The presence in person or by proxy of shareholders entitled to cast a majority of the votes which all shareholders are entitled to cast on a particular matter to be acted upon at the meeting shall constitute a quorum for the purposes of consideration and action on the matter. Treasury shares shall not be counted in determining the total number of outstanding shares for voting purposes at any given time. The shareholders present in person or by proxy at a duly organized meeting can continue to do business until adjournment, notwithstanding withdrawal of enough shareholders to leave less than a quorum. If a meeting cannot be organized because a quorum has not attended, the shareholders entitled to vote and present in person or represented by proxy may, except as provided in the -2- Pennsylvania Business Corporation Law, adjourn the meeting to such time and place as they may determine. When a meeting is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which the adjournment is taken, unless the board fixes a new record date for the adjourned meeting. At any such adjourned meeting at which a quorum may be present, such business may be transacted as might have been transacted at the meeting as originally called. No notice of any adjourned meeting of the shareholders of the corporation shall be required to be given, except by announcement at the meeting. In case of any meeting called for the election of directors, those who attend the second of such adjourned meetings, although less than a quorum, shall nevertheless constitute a quorum for the purpose of electing directors. Any meeting at which directors are to be elected shall be adjourned only from day to day, or for such longer periods not exceeding 15 days each, as may be directed by shareholders who are present in person or by proxy and who are entitled to cast at least a majority of the votes which all such shareholders would be entitled to cast at an election of directors, until such directors are elected. Except as otherwise specified in the articles or these bylaws or provided by statute, whenever any corporate action is to be taken by vote of the shareholders, it shall be authorized upon receiving the affirmative vote of a majority of the votes cast, in person or by proxy, by all shareholders entitled to vote thereon and, if any shareholders are entitled to vote thereon as a class, upon receiving the affirmative vote of a majority of the votes cast by the shareholders entitled to vote as a class. Section 2.06. Organization - ------------ ------------ At every meeting of the shareholders, the chairman of the board, if there be one, or in the case of vacancy in office or absence of the chairman of the board, one of the following officers present in the order stated: the vice chairman of the board, if there be one and if there be more than one in their order of seniority, the president, vice presidents in their order of seniority, or a chairman chosen by the shareholders entitled to cast a majority of the votes which all shareholders present in person or by proxy are entitled to cast, shall act as the presiding officer, and the secretary, or, in the absence of the secretary, an assistant secretary, or in the absence of both the secretary and assistant secretaries, a person appointed by the chairman, shall act as secretary. Section 2.07. Voting - ------------ ------ Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for the shareholder by proxy. The presence of, or vote or other action at a meeting of shareholders, or the expression of consent or dissent to corporate action in writing, by a proxy of a shareholder shall constitute the presence of, or vote or action by, or written consent or dissent of, the shareholder. Where two or more proxies of a shareholder are present, the corporation shall, unless otherwise expressly provided in the proxy, accept as the vote of all shares represented thereby the vote cast by a majority of them and, if a majority of the proxies cannot agree whether the shares represented shall be voted or upon the manner of voting the shares, the voting of the shares shall be divided equally among those persons. -3- Every proxy shall be executed in writing by the shareholder or by the shareholder's duly authorized attorney-in-fact and filed with the secretary of the corporation. A telegram, telex, cablegram, datagram or similar transmission from a shareholder or attorney-in-fact, or a photographic, facsimile or similar reproduction of a writing executed by a shareholder or attorney-in-fact may be treated as properly executed for purposes of this section 2.07, and shall be so treated if it sets forth a confidential and unique identification number or other mark furnished by the corporation to the shareholder for the purposes of a particular meeting or transaction. A proxy, unless coupled with an interest, shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary, but the revocation of a proxy shall not be effective until notice thereof has been given to the secretary of the corporation. No unrevoked proxy shall be valid after three years from the date of its execution, unless a longer time is expressly provided therein. A proxy shall not be revoked by the death or incapacity of the maker unless, before the vote is counted or the authority is exercised, written notice of such death or incapacity is given to the secretary of the corporation. A proxy coupled with an interest shall include a vote pooling or similar arrangement among shareholders and include an unrevoked proxy in favor of an existing or potential creditor of a shareholder. Every shareholder of record, except the holder of shares which have been called for redemption and with respect to which an irrevocable deposit of funds has been made, shall have the right, at every shareholders' meeting, to such a vote for every share, and to such a fraction of a vote with respect to every fractional share, of stock of the corporation standing in such shareholder's name on the books of the corporation as may be provided in the articles, and to one vote for every share, and to a fraction of a vote equal to every fractional share, if no express provision for voting rights is made in the articles. Treasury shares shall not be voted, directly or indirectly, at any meeting of shareholders or be counted in connection with the expression of consent or dissent to corporate action in writing without a meeting. Section 2.08. Voting Lists - ------------ ------------ The officer or agent of the corporation having charge of the transfer books for shares of the corporation shall make a complete list of the shareholders entitled to vote at any meeting of shareholders, arranged in alphabetical order, with the address of and the number of shares held by each. The list shall be produced and kept open at the time and place of the meeting, and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof. Failure to comply with the requirements of this section shall not affect the validity of any action taken at a meeting prior to a demand at the meeting by any shareholder entitled to vote thereat to examine the list. The original share ledger or transfer book, or a duplicate thereof, kept in Pennsylvania, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or transfer book, or to vote, in person or by proxy, at any meeting of shareholders. Section 2.09. Judges of Election - ------------ ------------------ The vote upon any matter, including the election of directors, need not be by ballot. In advance of any meeting of shareholders, the board of directors may appoint judges of election, who need not be shareholders, to act at such meeting or any adjournment thereof. If judges of -4- election are not so appointed, the presiding officer of the meeting may, and upon the demand of any shareholder or the shareholder's proxy at the meeting and before voting begins, shall appoint judges of election. The number of judges shall be either one or three, as determined, in the case of judges appointed upon demand of a shareholder, by shareholders present entitled to cast a majority of the votes which all shareholders present are entitled to cast thereon. No person who is a candidate for office to be filled at the meeting shall act as a judge. In case any person appointed as a judge fails to appear or fails or refuses to act, the vacancy may be filled by appointment made by the board of directors in advance of the convening of the meeting, or at the meeting by the presiding officer thereof. If judges of election are appointed as aforesaid, they shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies, receive votes or ballots, hear and determine all challenges and questions in any way arising in connection with the right to vote, count and tabulate all votes, determine the result, and do such acts as may be proper to conduct the election or vote with fairness to all shareholders. If there are three judges of election, the decision, act or certificate of a majority shall be effective in all respects as the decision, act or certificate of all. On request of the presiding officer of the meeting or of any shareholder or the shareholder's proxy, the judges shall make a report in writing of any challenge or question or matter determined by them, and execute a certificate of any fact found by them. Section 2.10. Determination of Shareholders of Record - ------------ --------------------------------------- The board of directors may fix a time prior to the date of any meeting of shareholders as a record date for the determination of the shareholders entitled to notice of, or to vote at, the meeting, which time, except in the case of an adjourned meeting, shall be not more than 90 days prior to the date of the meeting of the shareholders. Only shareholders of record on the date fixed shall be so entitled notwithstanding any transfer of shares on the books of the corporation after any such record date fixed as aforesaid. The board of directors may similarly fix a record date for the determination of shareholders of record for any other purpose. When a determination of shareholders of record has been made as provided in this section for purposes of a meeting, the determination shall apply to any adjournment thereof unless the board fixes a new record date for the adjourned meeting. Section 2.11. Resolutions Proposed by Shareholders - ------------ ------------------------------------ Resolutions proposed by shareholders for consideration at the annual meeting of the shareholders must be submitted to and received by the corporation in writing not less than ninety (90) days before the date of the annual meeting. Whenever the language of a proposed resolution is included in a written notice of a meeting required to be given by statute or by the Articles or By-Laws, the meeting considering the resolution may without further notice adopt it with any clarifying or other amendments that do not enlarge its original purpose. -5- Article III BOARD OF DIRECTORS ------------------ Section 3.01. Powers - ------------ ------ The board of directors shall have full power to conduct, manage, and direct the business and affairs of the corporation; and all powers of the corporation, except those specifically reserved or granted to the shareholders by statute or by the articles or these bylaws, are hereby granted to and vested in the board of directors. Section 3.02. Qualification and Election - ------------ -------------------------- All directors of the corporation shall be natural persons of full age and shareholders, but need not be residents of Pennsylvania. Except in the case of vacancies, directors shall be elected by the shareholders. If the board of directors is classified with respect to the power to elect directors or with respect to the terms of directors and if, due to a vacancy or vacancies, or otherwise, directors of more than one class are to be elected, each class of directors to be elected at the meeting shall be nominated and elected separately. Any shareholder who desires to nominate a person for the office of director must submit such nomination in writing, which nomination must be received by the corporation not less than ninety (90) days before the date of the annual meeting. Only candidates who have been duly nominated in accordance therewith shall be eligible for election. Section 3.03. Number and Term of Office - ------------ ------------------------- The board of directors shall consist of not less than nine (9) nor more than ten (10) shareholders of record as shall be determined from time to time by the board of directors in its sole discretion. At each annual meeting the shareholders shall choose by ballot one (1) of three (3) classes of directors, each consisting of at least three (3) but not more than four (4) directors, to conduct the affairs of the corporation for three (3) year terms and until their respective successors shall have been elected and qualified. If the shareholders shall have elected nine (9) directors, the board of directors may increase the number of directors to ten (10) at any time thereafter. Whenever a vacancy shall occur in the board of directors, including any vacancy resulting from an increase in the number of directors, the remaining members of the board of directors may fill such vacancy until the next election of the class to which such director shall have been elected. Section 3.04. Organization - ------------ ------------ At every meeting of the board of directors, the chairman of the board, if there be one, or, in the case of a vacancy in the office or absence of the chairman of the board, one of the following officers present in the order stated: the deputy chairman of the board, if there be one and if there be more than one in their order of seniority, the president, the vice-presidents in their order of seniority, or a chairman chosen by a majority of the directors present, shall preside, and the secretary, or, in the absence of the secretary, an assistant secretary, or in the absence of the -6- secretary and the assistant secretaries, any person appointed by the chairman of the meeting, shall act as secretary. Section 3.05. Resignations - ------------ ------------ Any director of the corporation may resign at any time by giving written notice to the president or the secretary of the corporation. Such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. When one or more directors resign from the board effective at a future date, the directors then in office, including those who have resigned, shall have power by the applicable vote to fill the vacancies, the vote thereon to take effect when the resignations become effective. Section 3.06. Removal - ------------ ------- The entire board of directors, or a class of the board where the board is classified, or any individual director, may be removed from office without assigning any cause, by the vote of shareholders. In case the board or such class of the board or any one or more directors are so removed, new directors may be elected at the same meeting. The board of directors may declare vacant the office of a director if such director has been judicially declared of unsound mind, or convicted of an offense punishable by imprisonment for a term of more than one year, or if, within sixty days after notice of election, the director does not accept such office either in writing or by attending a meeting of the board of directors. Section 3.07. Place of Meeting - ------------ ---------------- The board of directors may hold its meetings at such place or places within or without Pennsylvania as the board of directors may from time to time appoint, or as may be designated in the notice calling the meeting. Section 3.08. Organization Meeting - ------------ -------------------- Immediately after each annual election of directors or other meeting at which the entire board of directors is elected, the newly elected board of directors shall meet for the purpose of organization, election of officers, and the transaction of other business, at the place where said election of directors was held. Notice of such meeting need not be given. Such organization meeting may be held at any other time or place which shall be specified in a notice given as hereinafter provided for special meetings of the board of directors. Section 3.09. Regular Meetings - ------------ ---------------- Regular meetings of the board of directors shall be held at such time and place as shall be designated from time to time by resolution of the board of directors. If the date fixed for any such regular meeting be a legal holiday under the laws of the state where such meeting is to be held, then the same shall be held on the next succeeding business day, not a Saturday, or at such other time as may be determined by resolution of the board of directors. At such meetings, the -7- directors shall transact such business as may properly be brought before the meeting. Notice of regular meetings need not be given. Section 3.10. Special Meetings - ------------ ---------------- Special meetings of the board of directors shall be held whenever called by the chairman, the president or by two or more of the directors. Notice of each such meeting shall be given to each director by telephone or in writing at least twenty-four hours (in the case of notice by telephone, telex, TWX or facsimile transmission) or forty-eight hours (in the case of notice by telegraph, courier service or express mail) or five days (in the case of notice by first class mail) before the time at which the meeting is to be held. Every such notice shall state the time and place of the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board need be specified in the notice of the meeting. Notice of any special meeting of the board of directors during any emergency resulting from warlike damage or an attack on the United States or any nuclear or atomic disaster shall be given only to such of the directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication or radio. Section 3.11. Quorum, Manner of Acting, and Adjournment - ------------ ----------------------------------------- A majority of the directors in office shall be present at each meeting in order to constitute a quorum for the transaction of business. Except as otherwise specified in the articles or these bylaws or provided by statute, the acts of a majority of the directors present and voting at a meeting at which a quorum is present shall be the acts of the board of directors. In the absence of a quorum, a majority of the directors present may adjourn the meeting from time to time until a quorum be present, and no notice of any adjourned meeting need be given, other than by announcement at the meeting. The directors shall act only as a board and the individual directors shall have no power as such, provided, however, that any action which may be taken at a meeting of the board may be taken without a meeting if, prior or subsequent to the action, a consent or consents thereto by all of the directors in office is filed with the secretary of the corporation. To the extent required to constitute a quorum at any meeting of the board of directors during any emergency resulting from warlike damage or an attack on the United States or any nuclear or atomic disaster, the officers of the corporation who are present shall be deemed in order of rank and within the same rank in order of seniority, directors for such meeting. Section 3.12. Executive and Other Committees - ------------ ------------------------------ The board of directors may, by resolution adopted by a majority of the directors in office, establish an Executive Committee and one or more other committees, each committee to consist of one or more directors. The board may designate one or more directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee or for the purposes of any written action by the committee. In the absence or disqualification of a member and alternate member or members of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they present -8- constitute a quorum, may unanimously appoint another director to act at the meeting in the place of the absent or disqualified member. Except as otherwise provided in this section, the Executive Committee shall have and may exercise all of the powers and authority of the board in the management of the business and affairs of the corporation and any other committee shall have and may exercise the powers and authority of the board to the extent provided in the resolution designating the committee. No such committee of the board shall have the authority of the board in reference to: (1) the submission to shareholders of any action which, by law, requires approval of shareholders; (2) the creation or filling of vacancies in the board of directors; (3) the adoption, amendment or repeal of the bylaws; (4) the amendment or repeal of any resolution of the board that by its terms is amendable or repealable only the board; or (5) action on matters committed by the bylaws or resolution of the board of directors to another committee of the board. A majority of the directors in office designated to a committee, or directors designated to replace them as provided in this section, shall be present at each meeting to constitute a quorum for the transaction of business and the acts of a majority of the directors in office designated to a committee or their replacements shall be the acts of the committee. Each committee shall keep regular minutes of its proceedings and report such proceedings periodically to the board of directors. Sections 3.09, 3.10, and 3.11 shall be applicable to committees of the board of directors. Section 3.13. Interested Directors or Officers; Quorum - ------------ ---------------------------------------- A contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, joint venture, trust or other enterprise in which one or more of its directors or officers are directors or officers, or have a financial or other interest, shall not be void or voidable solely for that reason, or solely because the director or officer is present at or participates in the meeting of the board of directors that authorizes the contract or transaction, or solely because his, her or their votes are counted for that purpose, if: (1) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors and the board authorizes the contract or transaction by the affirmative votes of a majority of the -9- disinterested directors even though the disinterested directors are less than a quorum; or (2) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of those shareholders; or (3) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors that authorizes a contract or transaction specified in this section. Section 3.14. Fees - ------------ ---- Each director shall be paid such reasonable fee, if any, as shall be fixed by the board of directors for each meeting of the board of directors or committee of directors which such director shall attend and may be paid such other compensation for services as a director as may be fixed by the board of directors. Article IV NOTICE - WAIVERS - MEETINGS --------------------------- Section 4.01. Notice, What Constitutes - ------------ ------------------------ Whenever written notice is required to be given to any person under the provisions of the articles, these bylaws, or the Pennsylvania Business Corporation Law, it may be given to such person, either personally or by sending a copy thereof by first class or express mail, postage prepaid or by telegram (with messenger service specified), telex or TWX (with answerback received) or courier service, charges prepaid, or by facsimile transmission to his address (or to his telex, TWX or facsimile number) of the person appearing on the books of the corporation or, in the case of directors, supplied by him to the corporation for the purpose of notice. If the notice is sent by mail, telegraph, or courier service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a telegraph office or courier service for delivery to such person, or, in the case of telex, TWX or facsimile transmission, when dispatched. A notice of a meeting shall specify the place, day and hour of the meeting and in the case of a special meeting of shareholders, the general nature of the business to be transacted. Section 4.02. Waivers of Notice - ------------ ----------------- Whenever any written notice is required to be given under the provisions of the articles, these bylaws, or the Pennsylvania Business Corporation Law, a waiver thereof in writing, signed -10- by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, the meeting need be specified in the waiver of notice of such meeting. Attendance of a person, either in person or by proxy, at any meeting, shall constitute a waiver of notice of such meeting, except where a person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not lawfully called or convened. Section 4.03. Conference Telephone Meetings - ------------ ----------------------------- One or more directors or shareholders may participate in a meeting of the board, of a committee of the board or of the shareholders by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this section shall constitute presence in person at such meeting. Article V OFFICERS -------- Section 5.01. Number, Qualifications and Designation - ------------ -------------------------------------- The officers of the corporation shall be a president, one or more vice presidents (including executive or senior vice-presidents), a secretary and a treasurer, and such other officers as may be elected or appointed in accordance with the provisions of this section and section 5.03 of this article. One person may hold more than one office. Officers may but need not be directors or shareholders of the corporation. The president and secretary shall be natural persons of full age; the treasurer, however, may be a corporation, but if a natural person, shall be of full age. Section 5.02. Election and Term of Office - ------------ --------------------------- The officers of the corporation, except those elected by delegated authority pursuant to section 5.03 of this article, shall be elected annually by the board of directors, and each such officer shall hold office until the next annual organization meeting of directors and until a successor shall have been duly chosen and qualified, or until his or her earlier death, resignation, or removal. Section 5.03. Other and Subordinate Officers, Committees and Agents - ------------ ----------------------------------------------------- The board of directors may from time to time appoint such other officers and appoint such committees, employees or other agents as the business of the corporation may require, including a chairman of the board and one or more deputy or vice-chairmen, one or more assistant secretaries, and one or more assistant treasurers, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws, or as the board of -11- directors may from time to time determine. The board of directors may delegate to any officer or committee the power to appoint subordinate officers and to retain or appoint employees or other agents, or committees thereof, and to prescribe the authority and duties of such subordinate officer, committees, employees or other agents. Section 5.04. Resignations - ------------ ------------ Any officer or agent may resign at any time by giving written notice to the board of directors, or to the president or the secretary of the corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5.05. Removal - ------------ ------- Any officer, committee, employee or other agent of the corporation may be removed, either with or without cause, by the board of directors or other authority which elected or appointed such officer, committee or other agent. Election or appointment of an officer or employee or other agent shall not of itself create contract rights. Section 5.06. Vacancies - ------------ --------- A vacancy in any office because of death, resignation, removal, disqualification, or any other cause, shall be filled by the board of directors or by the officer or committee to which the power to fill such office has been delegated pursuant to section 5.03 of this article, as the case may be, and if the office is one for which these bylaws prescribe a term, shall be filled for the unexpired portion of the term. Section 5.07. General Powers - ------------ -------------- All officers of the corporation as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided by or pursuant to resolutions or orders of the board of directors, or in the absence of controlling provisions in the resolutions or orders of the board of directors, as may be determined by or pursuant to these bylaws. Section 5.08. The Chairman and Vice Chairman of the Board - ------------ ------------------------------------------- The chairman of the board or in the absence of the chairman, the vice chairman or chairmen of the board in their order of seniority, the president, the vice presidents in their order of seniority, or a chairman chosen by a majority of the directors present, shall preside at all meetings of the shareholders and of the board of directors, and shall perform such other duties as may from time to time be assigned by the board of directors. The vice chairmen shall perform such duties as may from time to time be assigned by the board of directors. -12- Section 5.09. The President - ------------ ------------- The president shall be the chief executive officer of the corporation and shall have general supervision over the business and operations of the corporation, subject, however, to the control of the board of directors. The president shall sign, execute, and acknowledge, in the name of the corporation, deeds, mortgages, bonds, contracts or other instruments, authorized by the board of directors, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors, or by these bylaws, to some other officer or agent of the corporation; and, in general, shall perform all duties incident to the office of president and such other duties as from time to time may be assigned by the board of directors. Section 5.10. The Vice Presidents - ------------ ------------------- In the absence of the president a vice president, as designated by the board of directors, shall perform the duties of the president and such other duties as may from time to time be assigned to them by the board of directors or by the president. Section 5.11. The Secretary - ------------ ------------- The secretary or an assistant secretary shall attend all meetings of the shareholders and of the board of directors and shall record all the votes of the shareholders and of the directors and the minutes of the meetings of the shareholders and of the board of directors and of committees of the board in a book or books to be kept for that purpose; shall see that notices are given and records and reports properly kept and filed by the corporation as required by law; shall be the custodian of the seal of the corporation and see that it is affixed to all documents to be executed on behalf of the corporation under its seal; and, in general, shall perform all duties incident to the office of secretary, and such other duties as may from time to time be assigned by the board of directors or the president. Section 5.12. The Treasurer - ------------ ------------- The treasurer or an assistant treasurer shall have or provide for the custody of the funds or other property of the corporation; shall collect and receive or provide for the collection and receipt of moneys earned by or in any manner due to or received by the corporation; shall deposit all funds in his or her custody as treasurer in such banks or other places of deposit as the board of directors may from time to time designate; shall, whenever so required by the board of directors, render an account showing all transactions as treasurer, and the financial condition of the corporation; and, in general, shall discharge such other duties as may from time to time be assigned by the board of directors or the president. Section 5.13. Officers' Bonds - ------------ --------------- Any officer shall give a bond for the faithful discharge of the duties of the officer in such sum, if any, and with such surety or sureties as the board of directors may require. -13- Section 5.14. Salaries - ------------ -------- The salaries of the officers elected by the board of directors shall be fixed from time to time by the board of directors or by such officer as may be designated by resolution of the board. The salaries or other compensation of any other officers, employees and other agents shall be fixed from time to time by the officer or committee to which the power to elect such officers or to retain or appoint such employees or other agents has been delegated pursuant to section 5.03 of this article. No officer shall be prevented from receiving such salary or other compensation by reason of the fact that the officer is also a director of the corporation. Article VI CERTIFICATES OF STOCK, TRANSFER, ETC. ------------------------------------- Section 6.01. Issuance - ------------ -------- The share certificates of the corporation shall be numbered and registered in the share ledger and transfer books of the corporation as they are issued. They shall be signed by the chairman of the board or the president or a vice president and by the secretary or an assistant secretary or the treasurer or an assistant treasurer, and shall bear the corporate seal, which may be a facsimile, engraved or printed; but where such certificate is signed by a transfer agent or a registrar the signature of any corporate officer upon such certificate may be a facsimile, engraved or printed. In case any officer who has signed, or whose facsimile signature has been placed upon any share certificate shall have ceased to be such officer because of death, resignation or otherwise, before the certificate is issued, it may be issued with the same effect as if the officer had not ceased to be such at the date of its issue. Section 6.02. Transfer - ------------ -------- Transfers of shares shall be made on the books of the corporation upon surrender of the certificates therefor, endorsed by the person named in the certificate or by attorney lawfully constituted in writing. No transfer shall be made inconsistent with the provisions of the "Uniform Commercial Code- Investment Securities," 13 Pa.C.S.A. (S)8101 et seq., and its amendments and -- ---- supplements. Section 6.03. Share Certificates - ------------ ------------------ Certificates for shares of the corporation shall be in such form as approved by the board of directors, and shall state that the corporation is incorporated under the laws of Pennsylvania, the name of the person to whom issued, and the number and class of shares and the designation of the shares (if any) that the certificate represents. The share record books and the blank share certificate books shall be kept by the secretary or by any agency designated by the board of directors for that purpose. Every certificate exchanged or returned to the corporation shall be marked "canceled," with the date of cancellation. -14- Section 6.04. Record Holder of Shares - ------------ ----------------------- The corporation shall be entitled to treat the person in whose name any share or shares of the corporation stand on the books of the corporation as the absolute owner thereof, and shall not be bound to recognize any equitable or other claim to, or interest in, such share or shares on the part of any other person. Section 6.05. Lost, Destroyed or Mutilated Certificates - ------------ ----------------------------------------- The holder of any shares of the corporation shall immediately notify the corporation of any loss, destruction or mutilation of the certificate therefor, and the board of directors may, in its discretion, cause a new certificate or certificates to be issued to such holder, in case of mutilation of the certificate, upon the surrender of the mutilated certificate, or in case of loss or destruction of the certificate, upon satisfactory proof of such loss or destruction, and, if the board of directors shall so determine, the deposit of a bond in such form and in such sum, and with such surety or sureties, as it may direct. Article VII DIRECTOR LIABILITY ------------------ Section 7.01. Director's Personal Liability - ------------ ----------------------------- A director of the corporation shall not be personally liable for monetary damages for any action taken, or any failure to take any action, unless the director has breached or failed to perform the duties of the director's office under 15 Pa. C.S. (S) 512 (relating to standard of care and justifiable reliance) and such breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. Notwithstanding the foregoing, the provisions of this section 7.01 shall not eliminate or limit (1) the responsibility or liability of such director pursuant to any criminal statute, or (2) the liability of a director for the payment of taxes pursuant to local, state or federal law. Section 7.02. Preservation of Rights - ------------ ---------------------- Any repeal or modification of this article by the shareholders of the corporation shall not adversely affect any right or protection existing at the time of such repeal or modification to which any director or former director may be entitled under this article. The rights conferred by this article shall continue as to any person who has ceased to be a director of the corporation and shall inure to the benefit of the heirs, executors and administrators of such person. -15- Article VIII INDEMNIFICATION --------------- Section 8.01. Indemnification - ------------ --------------- Subject to the provisions of this Article VIII, the corporation shall indemnify to the fullest extent now or hereafter permitted by law, any person who was or is made a party to or a witness in or is threatened to be made a party to or a witness in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that such person is or was an authorized representative of the corporation, against all expenses (including attorneys' fees and disbursements), judgments, fines (including excise taxes and penalties) and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding. Section 8.02. Standard of Conduct - ------------ ------------------- Indemnification shall be provided only if it is determined that the person seeking indemnification acted in good faith in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminial proceeding, had no reasonable cause to believe his conduct was unlawful. Indemnification under this article shall not be made by the corporation in any case where the alleged act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct, recklessness or self-dealing. The termination of any action or proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that - --------------- the person did not act in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had reasonable cause to believe that his conduct was unlawful. Section 8.03. Procedure - ------------ --------- Indemnification under section 8.01 shall be made by the corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the person seeking indemnification has met the standard of conduct set forth in section 8.02. (1) Method of Determination. All determinations regarding ----------------------- indemnification and advancement of expenses shall be made (a) by the board of directors by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding in respect of which indemnification is sought; or (b) in the event that such a quorum is not obtainable or, even if obtainable, a majority of such quorum so directs, by independent counsel in a written opinion to the board of directors, a copy of which shall be delivered to the person seeking indemnification. In the event a determination adverse to the person or persons -16- seeking indemnification is made by the board of directors, any such person shall have the right to request a determination by independent counsel and the determination by independent counsel shall be substituted for the decision of the board. (2) Selection and Payment of Independent Counsel. In the event that a -------------------------------------------- determination is to be made by independent counsel, such independent counsel shall be selected by the board of directors and the law firm or person so selected shall be subject to the approval of the person seeking indemnification, which approval shall not be unreasonably withheld. The corporation shall pay all reasonable fees and expenses of the independent counsel. For purposes of this article, "independent counsel" shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and that has not in the immediately preceding five years been retained to represent the corporation, the person seeking indemnification or any other party to the action, suit or proceeding giving rise to the claim for indemnification. Section 8.04. Advancement of Expenses - ------------ ----------------------- The corporation may, as determined by the board of directors from time to time, pay expenses (including attorneys' fees and disbursements) incurred in connection with the defense of or other response to any civil or criminal action, suit or proceeding described in section 8.01 hereof in advance of the final disposition of such action, suit or proceeding. The expenses incurred by such person shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding only upon receipt of an undertaking by or on behalf of such person to repay all amounts advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation. Section 8.05. Successful Defense - ------------ ------------------ Notwithstanding any other provision of this article, to the extent that a person has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in section 8.01 above, or in defense of any claim, issue or matter therein, such person shall be indemnified by the corporation against all expenses (including attorneys' fees, court costs, transcript costs, fees of experts and witnesses, travel expenses and all other similar expenses) actually and reasonably incurred by such person in connection therewith. Section 8.06. Insurance; Funding to Meet Indemnification Obligations - ------------ ------------------------------------------------------ The corporation shall have the power to purchase and maintain insurance on behalf of any authorized representative of the corporation against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify such person against such liability. The board of directors, without further approval of the shareholders, shall have the power to borrow money on behalf of the corporation, including the power to pledge the assets of the corporation, from time to time to discharge the corporation's obligations with respect to indemnification and the advancement and reimbursement of expenses, and the purchase and maintenance of insurance -17- on behalf of each director and officer against any liability asserted against or incurred by such director or officer in any capacity. Section 8.07. Miscellaneous - ------------ ------------- The rights of indemnification and advancement of expenses provided by this article shall not be deemed exclusive of any other rights to which any person seeking indemnification or advancement of expenses may be entitled under any agreement, vote of shareholders or disinterested directors, statute or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office or position, and shall continue as to a person who has ceased to be an authorized representative of the corporation and shall inure to the benefit of the heirs, executors and administrators of such person. Any repeal or modification of this article by the shareholders or the board of directors of the corporation shall not adversely affect any right or protection existing at the time of such repeal or modification to which any person may be entitled under this article. Section 8.08. Definition of Authorized Representative - ------------ --------------------------------------- For the purposes of this article, the term "authorized representative" shall mean a director, officer, employee or agent of the corporation or of any subsidiary of the corporation, or a trustee, custodian, administrator, committeeman or fiduciary of any employee benefit plan established and maintained by the corporation or by any subsidiary of the corporation, or a person serving another corporation, partnership, joint venture, trust or other enterprise in any of the foregoing capacities at the request of the corporation. Article IX MISCELLANEOUS ------------- Section 9.01. Corporate Seal - ------------ -------------- The corporation shall have a corporate seal in the form of a circle containing the name of the corporation, the year of incorporation and such other details as may be approved by the board of directors. Section 9.02. Checks - ------------ ------ All checks, notes, bills of exchange or other orders in writing shall be signed by such person or persons as the board of directors may from time to time designate. Section 9.03. Contracts - ------------ --------- Except as otherwise provided in these bylaws, the board of directors may authorize any officer or officers, agent or agents, to enter into any contract or to execute or deliver any instrument on behalf of the corporation, and such authority may be general or confined to specific instances. -18- Section 9.04. Deposits - ------------ -------- All funds of the corporation shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositaries as the board of directors may approve or designate, and all such funds shall be withdrawn only upon checks signed by such one or more officers or employees as the board of directors shall from time to time determine. Section 9.05. Reports - ------------ ------- Unless otherwise agreed between the corporation and a shareholder, the corporation shall furnish to its shareholders annual financial statements, including at least a balance sheet as of the end of each fiscal year and a statement of income and expenses for the fiscal year. The financial statements shall be prepared on the basis of generally accepted accounting principles, if the corporation prepares financial statements for the fiscal year on that basis for any purpose, and may be consolidated statements of the corporation and one or more of its subsidiaries. The financial statements shall be mailed by the corporation to each of its shareholders entitled thereto within 120 days after the close of each fiscal year and, after the mailing and upon written request, shall be mailed by the corporation to any shareholder or beneficial owner entitled thereto to whom a copy of the most recent annual financial statements has not previously been mailed. Statements that are audited or reviewed by a public accountant shall be accompanied by the report of the accountant; in other cases, each copy shall be accompanied by a statement of the person in charge of the financial records of the corporation, which shall (i) state his reasonable belief as to whether or not the financial statements were prepared in accordance with generally accepted accounting principals and, if not, describing the basis of presentation; and (ii) describe any material respects in which the financial statements were not prepared on a basis consistent with those prepared for the previous year. Section 9.06. Corporate Records - ------------ ----------------- There shall be kept at the registered office or principal place of business of the corporation an original or duplicate record of the proceedings of the shareholders and of the directors, and the original or a copy of the bylaws including all amendments or alterations thereto to date, certified by the secretary of the corporation. An original or duplicate share register shall also be kept at the registered office or principal place of business of the corporation, or at the office of a transfer agent or registrar, giving the names of the shareholders, their respective addresses and the number and class of shares held by each. The corporation shall also keep appropriate, complete and accurate books or records of account, which may be kept at its registered office or at its principal place of business. Every shareholder shall, upon written verified demand stating the purpose thereof, have a right to examine, in person or by agent or attorney, during the usual hours for business for any proper purpose, the share register, books and records of account, and records of the proceedings of the incorporators, shareholders and directors, and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person's interest as a shareholder. In every instance where an attorney or other agent shall be the person who seeks the right of inspection, the demand shall be accompanied by a verified power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the shareholder. The -19- demand shall be directed to the corporation at its registered office in Pennsylvania or at its principal place of business wherever situated. Where the shareholder seeks to inspect the books and records of the corporation, other than its share register or list of shareholders, the shareholder shall first establish (1) compliance with the provisions of this section respecting the form and manner of making demand for inspection of such documents, and (2) that the inspection sought is for a proper purpose. Where the shareholder seeks to inspect the share register or list of shareholders of the corporation and has complied with the provisions of this section respecting the form and manner of making demand for inspection of such documents, the burden of proof shall be upon the corporation to establish that the inspection sought is for an improper purpose. Section 9.07. Amendment of Bylaws - ------------ ------------------- These bylaws may be amended or repealed, or new bylaws may be adopted, either (1) by vote of the shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast thereon at any duly organized annual or special meeting of shareholders, or (2) with respect to those matters which are not by statute reserved exclusively to the shareholders, by vote of a majority of the board of directors of the corporation in office at any regular or special meeting of directors. In the case of a meeting of shareholders, such proposed amendment, repeal or new bylaws, or a summary thereof, shall be set forth in the notice of such meeting, whether annual, regular or special. Section 9.08. Amendment of Charter Territory - ------------ ------------------------------ The board of directors may at any time and from time to time make voluntary amendments to the Charter Territory (pursuant to appropriate resolutions duly entered upon the Minutes of the corporation) in York County, Commonwealth of Pennsylvania, as they deem prudent and appropriate. Any such amendments, deemed by the board of directors to be of an unusual or extraordinary nature shall nevertheless be referred to the shareholders for their approval. -20- EX-5.1 4 EXHIBIT 5.1 EXHIBIT 5.1 MORGAN, LEWIS & BOCKIUS LLP One Commerce Square 417 Walnut Street Harrisburg, PA 17101 Tel: (717) 237-4000 Fax: (717) 237-4004 July 1, 1996 The York Water Company 130 East Market Street York, Pennsylvania 17405 Re: The York Water Company Rights Offering of up to 80,000 Shares of Common ----------------------------------------------------------------------- Stock ----- Ladies and Gentlemen: We have acted as counsel to The York Water Company, a Pennsylvania corporation (the "Company"), in connection with the preparation of a Registration Statement on Form S-3 (the "Registration Statement"), to be filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), relating to the offering by the Company of up to 80,000 shares (the "Shares") of the Company's common stock, par value $10.00 per share, to the Company's shareholders (the "Shareholders" or "Shareholder") in proportion to the amount of shares owned by each Shareholder presently. In rendering the opinion set forth below, we have reviewed (a) the Registration Statement; (b) the Company's Amended and Restated Articles of Incorporation; (c) the Company's Bylaws; (d) certain records of the Company's corporate proceedings as reflected in its minute books; and (e) such records, documents, statutes and decisions as we have deemed relevant. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original of all documents submitted to us as copies thereof. Based upon the foregoing, we are of the opinion that, when and to the extent the Shares are issued to the Shareholders pursuant to, and in accordance with, the terms of the Subscription Rights described in the Registration Statement, the Shares will be duly authorized, validly issued, fully paid and nonassessable. Our opinion set forth above is limited to the Pennsylvania Business Corporation Law of 1988, as amended. We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration Statement. In giving such opinion, we do not thereby admit that we are acting within the category of persons whose consent is required under Section 7 of the Act or the rules or regulations of the Securities and Exchange Commission thereunder. The opinion expressed herein is solely for your benefit, and may be relied upon only by you. Very truly yours, /s/ Morgan, Lewis & Bockius LLP EX-23.2 5 EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS The Board of Directors The York Water Company: We consent to the use of our reports incorporated by reference and to the reference to our firm under the heading "Experts" in the prospectus. Our report on the financial statements refers to a change in the method of accounting for income taxes in 1993. KPMG PEAT MARWICK LLP Harrisburg, Pennsylvania July 1, 1996 -----END PRIVACY-ENHANCED MESSAGE-----