SCHEDULE 14A INFORMATION
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The York Water Company
(Name of Registrant as Specified In Its Charter)
The York Water Company
(Name of Person(s) Filing Proxy Statement)
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THE YORK WATER COMPANY
130 EAST MARKET STREET
YORK, PENNSYLVANIA 17401
April 6, 2002
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF THE YORK WATER COMPANY
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of The York
Water Company will be held at the offices of the Company, 130 East Market
Street, York, Pennsylvania, on Monday, May 6, 2002 at 1:00 P.M. for the
purpose of taking action upon the following proposals:
(1) To elect three (3) Directors to three-year terms of office;
(2) To appoint independent accountants to audit the financial
statements of the Company for the year 2002; and
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 15, 2002
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting, and at any adjournment or adjournments thereof.
You are cordially invited to attend the meeting. In the event you will
be unable to attend, you are respectfully requested to sign, date and return
the enclosed proxy at your earliest convenience in the enclosed stamped return
envelope. Returning your proxy does not deprive you of the right to attend
the meeting and vote your shares in person.
By order of the Board of Directors,
JEFFREY S. OSMAN
Secretary
THE YORK WATER COMPANY
130 EAST MARKET STREET
YORK, PENNSYLVANIA 17401
April 6, 2002
PROXY STATEMENT
This Proxy Statement and the accompanying form of proxy are being
furnished to the shareholders of The York Water Company (hereinafter referred
to as the "Company") in connection with the solicitation of proxies by the
Board of Directors of the Company, whereby shareholders would appoint Michael
W. Gang, George W. Hodges, and Jeffrey S. Osman, and each of them, as Proxies
on behalf of the shareholders, to be used at the Annual Meeting of the
Shareholders of the Company to be held at 1:00 p.m. at the offices of the
Company on Monday, May 6, 2002, (the "Annual Meeting") and at any adjournment
thereof.
Solicitation of proxies will be primarily by mail. Proxies may also be
solicited personally and by telephone by regular employees of the Company.
The expenses of the solicitation will be borne by the Company. Such expenses
may also include ordinary charges and expenses of brokerage houses and other
custodians, nominees and other fiduciaries for forwarding documents to
shareholders. This Proxy Statement has been mailed to shareholders of the
Company on or about April 6, 2002.
A shareholder who completes and forwards the enclosed proxy to the
Company's transfer agent, American Stock Transfer & Trust Company, is not
precluded from attending the Annual Meeting and voting his or her shares in
person, and may revoke the proxy by delivering a later dated proxy or by
written notification to the Company or to the transfer agent, at any time
before the proxy is exercised.
PURPOSE OF THE MEETING
At the Annual Meeting, shareholders of the Company will consider and
vote upon proposals: (i) to elect three (3) Directors to serve for a term of
three (3) years; and (ii) to ratify the appointment of Stambaugh Ness, PC as
independent auditors for the fiscal year ending December 31, 2002.
Shareholders may also consider and vote upon such other matters as may
properly come before the Annual Meeting or any adjournment thereof.
VOTING AT THE MEETING
The outstanding securities of the Company entitled to vote at the
meeting consist of 3,154,332 shares of Common Stock. The presence at the
Annual Meeting in person or by proxy of shareholders entitled to cast a
majority of the votes which all shareholders are entitled to cast will
constitute a quorum for the Annual Meeting.
The record date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting or at any adjournment or adjournments
thereof was the close of business on March 15, 2002. Shareholders are
entitled to one vote for each share on all matters coming before the meeting,
except that shareholders have cumulative voting rights with respect to the
election of
Directors. Cumulative voting rights permit each shareholder to cast as many
votes in the election of each class of Directors to be elected as shall equal
the number of such shareholder's shares of Common Stock multiplied by the
number of Directors to be elected in such class of Directors, and each
shareholder may cast all such votes for a single nominee or distribute such
votes among two or more nominees in such class as the shareholder may see fit.
Discretionary authority to cumulate votes is not being solicited.
In accordance with Pennsylvania law, a shareholder can withhold
authority to vote for all nominees for directors or can withhold authority to
vote for certain nominees for directors. Directors will be elected by a
plurality of the votes cast. Votes that are withheld will be excluded from
the vote and will have no effect.
Any votes that are withheld on the proposal to ratify the selection of
the independent accountants will have the effect of a negative vote because
this proposal requires the affirmative vote of a majority of the shares
present at the meeting in person or represented by proxy at the meeting and
entitled to vote.
Brokers who have received no voting instructions from their customers
will have discretion to vote with respect to election of directors and the
proposal to ratify the Company's auditors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
No person, so far as known to the Company, beneficially owns five (5)
percent or more of the Company's outstanding Common Stock as of March 15,
2002.
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of January 31, 2002 by (1) each
director and other director nominee of the Company, (2) each executive officer
named in the summary compensation table included elsewhere herein and (3) all
executive officers and directors as a group.
The information appearing in the following table with respect to
principal occupation and beneficial ownership of Common Stock of the Company
has been furnished to the Company by the three nominees and the six directors
continuing in office as of January 31, 2002.
Director Full Shares Percent of
Principal Occupation During or Officer Owned Total Shares
Name Age Last Five Years Since Beneficially(F1) Outstanding(F2)
NOMINEES FOR ELECTION TO THREE YEAR TERMS EXPIRING IN 2005
John L. Finlayson* 60 Vice President-Finance and 09/02/93 4,897 0.16
Administration, Susquehanna Pfaltzgraff
Co., Manufacturing, Retailing, Radio
Station, Cable TV, August, 1978 to date
Chloe R. Eichelberger 67 Owner/President/Chief Executive 09/15/95 2,832 0.09
Officer, Chloe Eichelberger Textiles,
Inc., Dyeing and Finishing Fabrics,
September, 1987 to date
Thomas C. Norris 63 Retired, Chairman of the Board, P. H. 06/26/00 3,872 (3) 0.12
Glatfelter Company, Paper Manufacturer,
May, 2000 to date
Chairman of the Board, P. H. Glatfelter Company,
July, 1998 to May, 2000
Chairman, President and Chief Executive Officer,
P. H. Glatfelter Company, April, 1988 to July, 1998
TO CONTINUE FOR TERMS EXPIRING IN 2003
George Hay Kain, III, Esq. 53 Sole Practitioner, Attorney at Law 08/25/86 15,493 (4) 0.49
April, 1982 to date
Michael W. Gang, Esq.* 51 Partner/Attorney, Morgan, Lewis & 01/22/96 2,065 0.07
Bockius LLP, Counselors at Law,
October, 1984 to date. Morgan, Lewis
& Bockius LLP is counsel to the Company
George W. Hodges 50 Office of the President, The Wolf 06/26/00 29,329 (5) 0.93
Organization, Inc., Distributor of Building
Products, January, 1986 to date
TO CONTINUE FOR TERMS EXPIRING IN 2004
Irvin S. Naylor* 66 Vice Chairman of the Board, The York Water 10/31/60 21,723 0.69
Company, May, 2000 to date
Chairman of the Board, The York Water
Company, September, 1993 to May, 2000
President/Owner, Snow Time, Inc., Owns
and Operates Ski Areas, June, 1964 to date
Vice Chairman/Owner, Cor-Box, Inc.,
Mfg. Corrugated Boxes, June, 1966 to
November, 1999
William T. Morris, P.E.* 64 President and Chief Executive Officer, 04/19/78 15,329 (6) 0.49
The York Water Company, May, 1995 to date
Chairman of the Board, The York Water
Company, November, 2001 to date
Jeffrey S. Osman* 59 Vice President-Finance and Secretary- 05/01/95 601 (7) 0.02
Treasurer, The York Water Company,
May, 1995 to date
All Directors and Executive Officers as a group 96,141 (8) 3.05
* Members of the Executive Committee.
Except as indicated in the footnotes below, Directors possessed
sole voting power and sole investment power with respect to all
shares set forth in this column.
The percentage for each individual or group is based on the
aggregate shares outstanding as of March 15, 2002 (3,154,332
shares).
Includes 1,832 shares held by Mr. Norris's wife, for which Mr.
Norris disclaims beneficial ownership.
Includes 3,629 shares held by Mr. Kain's wife and child for which
Mr. Kain disclaims beneficial ownership. Also includes 6,232
shares held by the estate of Mr. Kain's grandfather, for which he
is one of three co-trustees and shares voting power and investment
power.
Includes shares owned by The Wolf Organization for which he shares
voting and investment power with other members of the Office of
the President, The Wolf Organization.
Includes 13,616 shares owned jointly with Mr. Morris' wife and
mother, for which he shares voting and investment power.
Includes shares owned jointly with Karen E. Knuepfer, for which he
shares voting and investment power.
Includes shares owned by family members, and certain other shares,
as to which some Directors and Officers disclaim any beneficial
ownership and which are further disclosed in the notes above.
ELECTION OF DIRECTORS
At the Annual Meeting, all the nominees, each of whom is
currently serving as Director, are to be elected to serve for the
ensuing three (3) years and until their respective successors have
been elected and qualified. The bylaws of the Company provide that
the Board of Directors will consist of not less than a total of nine
Directors, who are elected to staggered three-year terms of office.
Each share represented by the enclosed proxy will be voted for each of
the nominees listed, unless authority to do so is withheld. If any
nominee becomes unavailable for any reason or if a vacancy should
occur before the election (which events are not anticipated), the
shares represented by the enclosed proxy may be voted for such other
person as may be determined by the Proxies.
The three Directors are to be elected by a plurality of the
votes cast at the Annual Meeting. The Board of Directors unanimously
recommends a vote "FOR" each of the nominees.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that during the year ended December 31,
2001, its directors and executive officers complied with all
applicable filing requirements of Section 16(a) of the Securities
Exchange Act of 1934. The foregoing statement is based solely upon a
review of copies of reports furnished to the Company and written
representations of its Directors and executive officers that no other
reports were required.
GENERAL INFORMATION ABOUT OTHER BOARDS OF DIRECTORS
The following members of the Board of Directors of The York
Water Company are Board members of other publicly held companies as
indicated below:
Publicly Held
Companies Other Than
Board Members The York Water Company
Ms. Chloe Eichelberger Susquehanna Bancshares, Inc.
Mr. George W. Hodges Fulton Financial Corp.
Mr. Thomas C. Norris Cadmus Communication
COMMITTEES AND FUNCTIONS
The Company has an Executive Committee, an Audit Committee and a
Compensation and Nomination Committee, all of which are composed of
members of the Board of Directors.
The Executive Committee held ten (10) meetings during the fiscal
year ended December 31, 2001. The Executive Committee is empowered to
function as delegated by the Board of Directors. The Executive
Committee is composed of the following Directors appointed by the
Board: William T. Morris, P.E., Chairman; Irvin S. Naylor; John L.
Finlayson; Michael W. Gang, and Jeffrey S. Osman.
The Audit Committee held two (2) meetings during 2001. The
Audit Committee monitors the audit functions of our independent public
accountants and internal controls of the Company. The Audit Committee
of the Company is composed of the following independent Directors
appointed by the Board: John L. Finlayson, Chairman; Chloe R.
Eichelberger; George W. Hodges; and Thomas C. Norris. Mr. Morris,
Chairman, President and Chief Executive Officer, is an ex officio
member of the Audit Committee. The Board of Directors has adopted a
written charter for the Audit Committee.
The Compensation and Nomination Committee held five (5) meetings
during the fiscal year-ended 2001 and considers and makes
recommendations to the Board of Directors concerning the proposed
compensations, salaries and per diems of the corporate officers,
Directors and members of the Committees of the Board of Directors of
the Company and makes recommendations to the Board of Directors for
nominations for Directors and officers of the Company. This Committee
will consider nominees recommended by shareholders of the Company.
Such recommendations should be made in writing, should include a
statement of the recommended nominee's qualifications, and should be
addressed to the Committee at the address of the Company. In
accordance with the Company's bylaws, actual nominations must be made
in writing and must be received by the Company not less than ninety
(90) days before the date of the Annual Meeting. The Compensation and
Nomination Committee is composed of the following Directors appointed
by the Board: Michael W. Gang, Chairman; John L. Finlayson; George W.
Hodges; Irvin S. Naylor; Thomas C. Norris; and William T. Morris, ex
officio.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning
compensation paid or accrued by the Company to the Chief Executive
Officer and the Vice President-Finance, Secretary-Treasurer of the
Company. No other executive officer of the Company earned more than
$100,000 in salary during any of the last three fiscal years. The
Company has not paid any bonuses in any of the last three fiscal
years.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and All Other
Principal Compensation
Position Year Salary($) ($)
William T. Morris, Chairman, 2001 190,182 1,000
President, Chief Executive 2000 175,542 1,000
Officer and Director 1999 163,710 1,000
Jeffrey S. Osman, Vice 2001 116,658 1,000
President-Finance, 2000 109,753 1,000
Secretary-Treasurer 1999 102,236 1,000
and Director
Represents $1,000 of Company matching
contributions to Mr. Morris' and to Mr.
Osman's 401(k) plan in 1999, 2000, and 2001.
Officers with five years' service are entitled to benefits under
the Company's General and Administrative Employees Pension Plan (the
"Pension Plan") upon retirement after attaining age 55. The pension
benefit computation is based on the years of service times the sum of
$17.50 and 1-1/2% of that portion of the final average monthly
earnings which are in excess of $400. The final average monthly
earnings are the average of the employee's earnings for the 60 months
immediately preceding the date the pension benefit calculation is
made. As of December 31, 2001, Mr. Morris has been credited with 33
years of service and Mr. Osman has been credited with 18 years of
service under the Pension Plan. The following table illustrates the
approximate annual benefit that may become payable under the Pension
Plan to the executive officers who have met both the five year and 55
year age requirements, based upon the indicated assumptions as to
remuneration and years of credited service.
Years of Service
Remuneration 18 20 25 33 35
$228,218 $64,012 $71,225 $89,031 $117,520 $124,643
139,990 41,578 46,198 57,747 76,226 80,846
The above figures assume retirement at age 65 with a straight-life
annuity and without reduction for a survivor benefit or Social
Security benefits.
The Company maintains a supplemental retirement program (the
"Supplemental Plan"), which provides senior management with a
retirement benefit in addition to the Pension Plan. The Supplemental
Plan is designed to encourage management to stay with the Company
until retirement. Supplemental Plan benefits have been made available
to five members of the Company's management and are payable to the
executive or his beneficiary (a "Supplemental Plan Beneficiary")
monthly over a period of 180 months. The annual benefit payable under
the Supplemental Plan (the "Annual Benefit") may be calculated by
multiplying the number of years of service subsequent to December 31,
1983 but prior to the attainment of age 65, by a predetermined annual
retirement benefit unit, which in the case of Mr. Morris is $3,600, in
the case of Mr. Osman is $1,440 and in the case of all Supplemental
Plan Participants ranges from $1,200
to $3,600. The estimated Annual Benefit payable to Mr. Morris at
normal retirement age under the Supplemental Plan is $68,400, and the
estimated benefit payable to Mr. Osman at normal retirement age under
the Supplemental Plan is $34,560. The Supplemental Plan is funded by
insurance policies owned by the Company on each manager covered by the
Supplemental Plan, and if the assumptions made as to mortality
experience, policy dividends and other factors (the "Funding
Assumptions") are realized, the Company will recover all of its
payments made under the Supplemental Plan plus a factor for the use of
the Company's money. The Company is obligated to pay Annual Benefits,
and Supplemental Plan Beneficiaries have the status of unsecured
creditors of the Company with respect to Annual Benefits, regardless
of whether the Funding Assumptions are realized and the insurance
policies fully fund or reimburse the Company for its payments under
the Supplemental Plan. The following table illustrates the
approximate Annual Benefits that may become payable to Supplemental
Plan Beneficiaries:
Annual Retirement Years of Service
Benefit Unit Subsequent to December 31, 1983
10 15 20 25 30
$3,600 $36,000 $54,000 $72,000 $90,000 $108,000
2,100 21,000 31,500 42,000 52,500 63,000
1,754 17,540 26,310 35,080 43,850 52,620
1,440 14,400 21,600 28,800 36,000 43,200
1,200 12,000 18,000 24,000 30,000 36,000
The Deferred Compensation Program permits eligible supervisors,
managers and executives to defer up to 5% of salary, normally over an
eleven (11) year period, with the Company matching the deferment, up
to 2-1/2% of salary. The Company has obtained life insurance policies
for participants under the Deferred Compensation Program to fund its
future payment obligations under the Deferred Compensation Program,
and no cash balances are maintained by the Company to fund participant
deferrals, Company matching contributions, or earnings with respect to
such balances derived from the insurance policies (together, the
"Deferred Compensation Program Balances"). At retirement, each
participant, or beneficiary, is entitled to receive over a ten-year
period monthly payments equal in the aggregate to the Deferred
Compensation Program Balance that accrued with respect to such
participant in Company maintained book-entry accounts. Except for Mr.
Morris and Mr. Osman, no other directors participate in this program.
Mr. Morris' projected annual payment under this program is $24,050,
and Mr. Osman's projected annual payment under this program is
$15,204.
Mr. Morris and Mr. Osman have employment contracts with the
Company which provide that, in the event of their involuntary
termination of employment for any reason other than cause prior to or
following a change of control of the Company, they would be entitled
to severance payments. Mr. Morris would be entitled to a severance
payment equal to 2.99 times his base salary for the preceding 12
months. Mr. Morris would also be entitled to medical, dental and
other insurance benefits for a period of three years after his
termination date. Mr. Osman would be entitled to a severance payment
equal to .5 times his base salary for the preceding 12 months. Mr.
Osman would be entitled to medical, dental and other insurance
benefits for a period of one year after his termination date. The
employment contracts contain provisions regarding their obligation to
maintain the confidentiality of Company information and their
agreement not to compete with the Company within its franchised
service territory for a period of one year after termination of their
employment by the Company.
Each Director who is not a regular full-time employee of the
Company is entitled to receive the following amounts for services
rendered to the Company: $8,000 per annum in Directors' fees; $4,000
per annum for service as a regular member of the Executive Committee;
a per diem of $490 for each Board of Directors' Meeting; and a per
diem of $450 for a regular or alternate member's attendance at each
Executive Committee Meeting. There were 15 Board of Directors'
Meetings and 10 Executive Committee Meetings during the fiscal year
ended December 31, 2001. All Directors attended at least 75% of the
scheduled Board of Directors and committee meetings.
COMPANY PERFORMANCE
The following line graph presents the annual and cumulative
total shareholder return for The York Water Company Common Stock over
a five-year period, as compared to a comparable return associated with
an investment in the S&P 500 Composite Index and a composite index of
water companies maintained by Edward D. Jones & Co. (the "Peer
Index").
DOLLAR RETURN
For Past 5 Years
1996 1997 1998 1999 2000 2001
Water Peer Group 100 127 150 168 174 189
The York Water Company 100 126 125 117 136 198
S&P 500 100 131 158 177 167 154
The line graph above assumes $100 invested on December 31, 1996
in the Company's Common Stock and the stock of companies included in
the S&P 500 and the Peer Index and assumes the quarterly reinvestment
of dividends. The return for the Peer Index presented above took into
consideration the cumulative total return of the common stock of the
following water companies included in the Peer Index: American States
Water Company, American Water Works Inc., Artesian Resources Corp.,
California Water Service, Connecticut Water Service, Inc., Middlesex
Water Company, Pennichuck Corporation, Philadelphia Suburban Corp.,
SJW Corp., and Southwest Water Co.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Nomination Committee of the Board of
Directors of the Company establishes general compensation policies of
the Company and considers and makes recommendations to the Board of
Directors concerning the proposed compensation, salaries and per diems
of the President and Chief Executive Officer, the Chairman, Vice
Chairman, directors and members of the Committees of the Board of
Directors of the Company. The Vice Chairman serves the Company in a
part-time capacity, and the amount of salary payable to such officer
has been determined by the Committee based upon the amount of time
dedicated and value of contributions made to the Company.
Mr. Morris, the Chief Executive Officer of the Company, served
the Company as its President and General Manager from May, 1982 to
May, 1995. In May 1995 Mr. Morris assumed the position of President
and Chief Executive Officer, and in November 2001 the position of
Chairman. Mr. Osman has served the Company as its Vice President-
Finance and Secretary-Treasurer since May, 1995. The Compensation and
Nomination Committee historically has established Mr. Morris' and Mr.
Osman's compensation after considering comparative salary data from
industry and other salary surveys (including data derived from
publicly disclosed compensation information concerning many of the
companies identified in the Peer Index), individual past performance,
the Company's performance (on an absolute basis and in comparison to
peer performance within the context of a regulated industry), and to a
lesser extent changes in the cost of living in the Company's service
territory. While no formal salary or compensation guidelines have
been developed or used, salary levels have been determined after
balancing the foregoing factors (in their entirety, without giving
weight to any particular factor and without regard to any particular
relationship between compensation levels and any quantitative or
qualitative aspect of the Company's performance) with the interests of
the Company's shareholders, customers and employees.
Section 162(m) of the Internal Revenue Code generally disallows,
in certain circumstances, a tax deduction to public companies for
compensation over $1 million paid to a corporation's chief executive
officer and next four most highly compensated executive officers. The
Company does not have any compensation programs that would be impacted
by Section 162(m).
Michael W. Gang, Chairman Irvin S. Naylor, Member
John L. Finlayson, Member Thomas C. Norris, Member
George W. Hodges, Member William T. Morris, ex officio
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Mr. William T. Morris, Chairman of the Board, is a non-voting ex
officio member of the Compensation and Nomination Committee.
REPORT OF THE AUDIT COMMITTEE
The Company's Audit Committee (the "Committee") consists of four
non-employee directors that are considered independent according to
the guidelines set forth by the National Association of Securities
Dealers. The Board of Directors has adopted a written charter for the
Audit Committee.
The Audit Committee reviews the Company's financial reporting
process on behalf of the Board. In addition, the Committee recommends
to the Board, subject to stockholder ratification, the selection of
the Company's independent public accountants.
Management is responsible for the Company's internal controls
and the financial reporting process. The independent public
accountants are responsible for performing an independent audit of the
Company's financial statements in accordance with generally accepted
auditing standards and to issue a report thereon. The Committee's
responsibility is to monitor and oversee these processes.
In this context, the Committee has met and held discussions with
management and the independent public accountants. Management
represented to the Committee that the Company's audited financial
statements were prepared in accordance with generally accepted
accounting principles, and the Committee has reviewed and discussed
the financial statements with management and the independent public
accountants. The Committee discussed with the independent public
accountants the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees).
In addition, the Committee has discussed with the independent
public accountants the auditor's independence from the Company and its
management, including the matters in the written disclosures required
by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees).
The Committee discussed with the Company's independent public
accountants the overall scope and plans for their audits. The
Committee meets with the independent public accountants, with and
without management present, to discuss the results of their
examinations, the evaluations of the Company's internal controls, and
the overall quality of the Company's financial reporting.
Based upon the Committee's discussions with management and the
independent public accountants and the Committee's review of the
representations of management and the report of the independent public
accounts to the Committee, the Committee recommended that the Board
include the audited financial statements in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001, for filing
with the SEC.
John L. Finlayson, Chairman George W. Hodges, Member
Chloe R. Eichelberger, Member Thomas C. Norris, Member
William T. Morris, ex officio
SHAREHOLDER APPROVAL OF
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has approved the
recommendation of the Audit Committee for the appointment of Stambaugh
Ness, PC, York, Pennsylvania as independent public accountants to
audit the financial statements of the Company for the year 2002.
Stambaugh Ness, PC has audited the Company's financial statements
since 2000. There have been no disagreements between the Company and
Stambaugh Ness, PC concerning the Company's financial statements. It
is intended that, unless otherwise specified by the shareholders,
votes will be cast pursuant to the proxy hereby solicited in favor of
the appointment of Stambaugh Ness, PC.
Audit fees are approved by the Company's Audit Committee and all
professional services to be rendered by Stambaugh Ness, PC are
approved by the Board of Directors. The Board considers the possible
effect on auditors' independence of providing nonaudit services prior
to the service being rendered, but the Board does not anticipate
significant non-audit services will be rendered during 2002.
Fees for audit services include the examination of financial
statements, assistance with the preparation of the Annual Report to
Shareholders and the Annual Report on Form 10-K to the Securities and
Exchange Commission, tax computation assistance, and consultation in
connection with various accounting and tax related matters.
During 2001, fees for services provided by Stambaugh Ness, PC
were as follows:
Audit fees $50,940
SEC Registration
Statement Fees 5,900
Income Tax Service Fees 7,885
$64,725
Representatives of Stambaugh Ness, PC are expected to be present
at the Annual Meeting. Representatives of Stambaugh Ness, PC will
have an opportunity to make a statement if they desire to do so, and
will be available to respond to appropriate questions.
Adoption of this proposal requires the affirmative vote of a
majority of the votes cast by all shareholders entitled to vote at the
Annual Meeting. The Board of Directors unanimously recommends a vote
"FOR" this proposal. It is understood that even if the selection of
Stambaugh Ness, PC is ratified, the Board, at its discretion, may
direct the appointment of a new independent auditing firm at any time
during the year if the Board determines that such a change would be in
the best interests of the Company and its shareholders.
DISCRETIONARY AUTHORITY
The notice of Annual Meeting of Shareholders calls for the
transaction of such other business as may properly come before the
meeting. The Board of Directors has no knowledge of any matters to be
presented for action by the shareholders at the meeting other than is
hereinbefore set forth. In the event additional matters should be
presented, however, the proxies will exercise their discretion in
voting on such matters.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTORS
In accordance with the Company's bylaws, shareholder's proposals
and nominations for Directors for consideration at the 2003 Annual
Meeting of Shareholders must be received by the Company in writing
prior to February 5, 2003.
OTHER MATTERS
The expense of this solicitation will be paid by the Company.
If necessary, some of the officers of the Company and regular
employees of The York Water Company may solicit proxies personally or
by telephone.
Further information regarding the Company is set forth in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, which has been filed with the Securities and
Exchange Commission. The Form 10-K (including financial statements
and schedules) may be obtained free of charge by writing to: The York
Water Company, 130 East Market Street, York, Pennsylvania 17401.
Copies of exhibits to the Form 10-K will be furnished upon request and
the payment of a reasonable fee.
A copy of the Company's Annual Report to Shareholders, which
includes financial statements, is being transmitted herewith, but does
not form part of the proxy solicitation materials.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE YORK WATER COMPANY
Proxy - Annual Meeting of Shareholders
May 7, 2001
The undersigned, a Shareholder of The York Water Company, a
Pennsylvania corporation (the "Company"), does hereby appoint Michael
W. Gang, George W. Hodges, and Jeffrey S. Osman, and each of them, the
true and lawful attorneys and proxies with full power of substitution,
for and in the name, place and stead of the undersigned, to vote all
of the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the Annual Meeting
of Shareholders of the Company to be held Monday, May 6, 2002 at 1:00
p.m. local time at the offices of the Company, 130 East Market Street,
York, Pennsylvania or at any adjournment thereof.
(Continued and to be signed on reverse side)
(1) ELECTION OF DIRECTORS
To vote with respect to For All Nominees Withhold Authority
the election of Listed Below For all Nominees
John L. Finlayson
Chloe R. Eichelberger
Thomas C. Norris
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that Nominee's name on the line provided below.
Cumulative votes for one or more nominees as follows:
Nominees: John L. Finlayson
Chloe R. Eichelberger
Thomas C. Norris
For Against Abstain
(2) Appoint Stambaugh Ness,
PC as auditors
(3) DISCRETIONARY AUTHORITY
To transact such other business as may properly come before the
meeting and any adjournment thereof according to the proxies'
discretion and in their discretion.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 THROUGH 2.
Signature
Signature if Shares Held Jointly
Dated 2002
NOTE: Please mark, date and sign exactly as your name appears on
this proxy card. When shares are held jointly, both holders
should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title. If the holder
is a corporation or partnership, the full corporate or
partnership name should be signed by a duly authorized officer.