UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN

PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. ___)

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The York Water Company

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PRELIMINARY

 

THE YORK WATER COMPANY

130 EAST MARKET STREET

YORK, PENNSYLVANIA 17401

 

 

 2014

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 Strand-Capitol Performing Arts Center, 50 North George Street, York, Pennsylvania, on Monday, May 5, 2014, at 1:00 p.m. for the purpose of taking action upon the following proposals:

(1)

To elect two (2) Directors to three-year terms of office;

(2)

To ratify the appointment of ParenteBeard LLC as the independent registered public accounting firm for the fiscal year ending December 31, 2014;

(3)

To approve, by non-binding vote, the compensation of the named executive officers;

(4)

To approve The York Water Company Employees' Stock Purchase Plan, as amended October 1, 2013; and

(5)

To transact such other business as may properly come before the meeting.

The Board of Directors has fixed the close of business on February 28, 2014, 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.

It is important that your shares be represented and voted at the Annual Meeting regardless of the size of your holdings.  Whether or not you plan to attend the Annual Meeting, we encourage you to vote your shares in advance of the Annual Meeting by using one of the methods described below:

·	By mail – If you received a printed proxy card, mark, sign, date and mail the proxy card (see instructions on the Proxy Materials Notice on how to request a printed proxy card);

·	By phone – Call the toll-free telephone number listed on your Proxy Materials Notice or on your proxy card;

·	By Internet – Visit the website shown on your Proxy Materials Notice or on the proxy card to vote via the Internet; or

·

In Person – Shareholders of record may deliver their completed proxy card in person at the Annual Meeting of Shareholders or by completing a ballot available upon request at the meeting.  Beneficial shareholders whose shares are held in the name of a bank, broker or other nominee must obtain a legal proxy from the holder of record (that is, your bank, broker or nominee) to be able to vote in person at the Annual Meeting.

If you plan on attending the meeting, a boxed lunch will be provided beginning at 12:00 p.m.  Please RSVP to Bonnie at (717)718-2942 or e-mail [email protected] if you will be joining us for lunch.

Thank you for your continued interest and support of The York Water Company!

By order of the Board of Directors,

/s/ Bruce C. McIntosh

BRUCE C. McINTOSH

Secretary

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THE YORK WATER COMPANY

130 EAST MARKET STREET

YORK, PENNSYLVANIA 17401

2014

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, Jeffrey R. Hines, and George Hay Kain III, and each of them, as Proxies on behalf of the shareholders, to be used at the Annual Meeting of the Shareholders of the Company to be held at 1:00 p.m. at The Strand Capitol Performing Arts Center, 50 North George Street, York, Pennsylvania, Monday, May 5, 2014 (the "Annual Meeting"), and at any adjournment thereof.

Solicitation of proxies will be made by mail, telephone and via the internet.  Those shareholders who previously opted out of printed copies of the proxy materials will receive a Notice Regarding the Availability of Proxy Materials (the "Notice") by mail.  The Notice will instruct you as to how you may access and review the proxy materials.  The Notice also instructs you as to how you may submit your proxy over the Internet or by telephone.  If you previously opted out of printed copies of the proxy materials but would like to receive a printed copy of such materials, or vote by telephone, you should follow the instructions included in the Notice.  Those shareholders who have requested printed copies and some of those who have not specifically opted out of printed copies of the proxy materials will be provided printed copies.  It is anticipated that proxy materials will first be mailed and made available on the Internet on     2014.

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 Company may solicit proxies personally or by telephone for no additional pay.  Banks, brokerage houses and other institutions and fiduciaries will be requested to forward the proxy materials to beneficial owners and to obtain authorization for the execution of proxies.

A shareholder who submits a proxy electronically, by telephone, or completes and forwards the enclosed proxy 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 at any time before the proxy is exercised.

We offer a service approved by the SEC called householding.  This service allows shareholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials to receive only one copy of our Proxy Statement and Annual Report. We believe this service provides greater convenience to our shareholders and saves money by reducing our printing and mailing costs and fees.

If you and other shareholders of record with whom you share an address and last name currently receive multiple copies of our Proxy Statement and Annual Report and would like to participate in our householding program, please contact Broadridge Financial Solutions, or Broadridge, by calling toll-free at 800-542-1061, or by writing to Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York 11717.  Alternatively, if you participate in householding and wish to revoke your consent and receive separate copies of our Proxy Statement and Annual Report, please contact Broadridge as described above.

A number of brokerage firms have instituted householding. If you hold your shares in street name, please contact your bank, broker or other holder of record to request information about householding.

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PURPOSE OF THE MEETING

At the Annual Meeting, shareholders of the Company will consider and vote upon four proposals:  (i) to elect two (2) Directors to serve for a term of three (3) years; (ii) to ratify the appointment of ParenteBeard LLC as the independent registered public accounting firm for the fiscal year ending December 31, 2014; (iii) to approve, by non-binding vote, the compensation of the named executive officers; and (iv) to approve The York Water Company Employees' Stock Purchase Plan, as amended October 1, 2013.  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 12,834,423 shares of our common stock.  The presence at the Annual Meeting in person or by proxy of shareholders entitled to cast a majority of the votes that 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 February 28, 2014.  Shareholders are entitled to one vote for each share on all matters coming before the meeting.

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, meaning that the two nominees who receive the most affirmative votes will be elected.  Votes that are withheld will be excluded from the vote and will have no effect.

Any votes that are withheld on the proposals to ratify the appointment of the independent registered public accounting firm, to approve executive compensation or to approve The York Water Company Employees' Stock Purchase Plan, as amended October 1, 2013 will not be counted for or against the proposal.  If a signed proxy is returned with no markings for certain proposals, the votes will be counted as recommended by the Board of Directors.

Brokers who have received no voting instructions from their customers will not have discretion to vote with respect to election of directors, executive compensation or The York Water Company Employees' Stock Purchase Plan, but will have the discretion to vote with respect to the proposal to ratify the appointment of the Company's auditors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of the Company's common stock as of February 28, 2014, by (1) each director, director nominee and executive officer named in the summary compensation table included elsewhere herein; and (2) all executive officers, directors and director nominees as a group.

The information appearing in the following table with respect to beneficial ownership of common stock of the Company has been furnished to the Company by the two nominees, the seven directors continuing in office and the six executive officers, all as of February 28, 2014.

The table includes shares owned or beneficially owned by the respective individuals as of February 28, 2014.  No individual has a specific right to acquire beneficial ownership of any additional shares within 60 days.

No person or entity, so far as known to the Company, beneficially owns five (5) percent or more of the Company's outstanding common stock as of February 28, 2014.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Chief Operating Officer Hand reported purchases on October 9, 2013 made by his children through the Direct Stock Purchase and Sale Plan on October 17, 2013.  Director Rasmussen reported a December 26, 2013 stock purchase on December 31, 2013.

Other than the aforementioned transactions, the Company believes that during the year ended December 31, 2013, all directors and executive officers timely 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 on Forms 3, 4 and 5 furnished to the Company and written representations of its Directors and executive officers that no other reports were required.

PROPOSAL 1

ELECTION OF DIRECTORS

The bylaws of the Company provide that the Board of Directors will consist of no less than eight Directors and no more than twelve directors, segregated into three classes, and elected to staggered three-year terms of office.  Each director class consists of two to four directors.

The Nomination and Corporate Governance Committee recommends that all the nominees, each of whom is currently serving as Director, be elected at the Annual Meeting, to serve for the ensuing three (3) years and until their respective successors have been elected and qualified.  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 as may be determined by the Proxies.

The two Directors are to be elected by a plurality of the votes cast at the Annual Meeting, meaning that the two directors receiving the most votes are elected, whether or not they receive a majority of the vote.

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The Board of Directors unanimously recommends a vote "FOR" each of the nominees.

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CORPORATE GOVERNANCE

The Board of Directors operates under specific corporate governance principles and guidelines based on the Company's Bylaws and Standing Resolutions.  The Nomination and Corporate Governance Committee ("the Committee") monitors, develops and makes recommendations to the Board of Directors based on these principles and guidelines.  Some of the principles and guidelines are listed below.

Board Selection

The bylaws of the Company provide that the Board of Directors will consist of no less than eight Directors and no more than twelve directors, who are elected to staggered three-year terms of office.  There is a mandatory retirement age of 73 for all directors.

The Committee considers candidates for Board membership suggested by its members and other Board members, as well as management and shareholders.  The Committee recommends to the Board the appropriate size, function and needs of the Board, so that the Board as a whole collectively possesses a broad range of skills, industry and other knowledge and business and other experience useful to the effective oversight of the Company.  Some of these skills include crisis management, accounting and finance, corporate governance, merger and acquisition, business development and risk management. The Committee also seeks Board members from diverse backgrounds with a reputation for integrity.  In addition, Directors should have experience in positions with a high degree of responsibility, be leaders in the companies or institutions with which they are affiliated and be selected based upon contributions that they can make to the Company.  The Committee considers all of these qualities when selecting, subject to Board ratification, candidates for Director.  No distinctions are made between internally recommended candidates and those recommended by shareholders.

Director Independence

The Company's Common Stock is listed on the NASDAQ Global Select Market.  NASDAQ listing rules require that a majority of the Company's directors be "independent directors" as defined by NASDAQ corporate governance standards.  Generally, a director does not qualify as an independent director if the director has, or in the past three years has had, certain material relationships or affiliations with the Company, its external or internal auditors, or, is an employee of the Company.  The Board has determined that directors Dotzel, Gang, Hodges, Kain, Newcomer, Osman, Rasmussen and Waters are independent directors under the NASDAQ listing standards.  Mr. Hines, who is an employee of the Company, is not considered an independent director.

The Board based these determinations primarily on a review of the responses of the Directors and executive officers to an annual questionnaire regarding employment history, affiliations, family and other relationships, together with an examination of those companies with whom the Company transacts business.

In making the determination that Mr. Gang is independent under the NASDAQ rules, the Board considered payments of $186,280 made to Post & Schell PC, a law firm in which Mr. Gang is a principal.  Post & Schell PC is the Company's regulatory counsel.  The amounts paid represent less than 0.3% of Post & Schell PC revenue in 2013.  Mr. Gang is not a controlling shareholder of the firm.

In making the determination that Mr. Hodges and Mr. Waters are independent under the NASDAQ rules, the Board considered the Company's banking and credit arrangements with Fulton Financial Corporation and its affiliates.  Mr. Hodges is lead director, and a member of the audit, compensation and executive committees of Fulton Financial Corporation, and Mr. Waters is a board member, Chairman of the joint compliance committee and a member of the audit and risk committees of Fulton Financial Corporation, and a board member and Chairman of the trust committee of Fulton Bank. Payments of $107,106 made by the Company to these entities were not material to Fulton Bank or Fulton Financial Corporation.

In addition to these relationships, the Company purchases from and sells services to certain directors or the organizations with which they are affiliated at rates that are either regulated or the same as those charged to the same class of customers.

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The Board determined that the noted relationships do not create a conflict of interest or impair any director's judgment with respect to Board member responsibilities.  Directors who are involved with entities being discussed or voted upon at a meeting abstain from voting on that matter.

Board Leadership Structure

The preference of the Board, per its Standing Resolutions, is for the Chairman of the Board to be an independent director per the NASDAQ rules.  Generally, independent directors' provide oversight and protect shareholder interests, and they offer more objective input and leadership to the Board.  Due to the current composition of the Board, having one director who is a current Company employee and one director who is a previous employee of the Company, the Board believes it is in the best interest of shareholders to have an independent director as Chairman.  The Chairman leads regular executive sessions of the Board's independent directors.

Board Role in Risk Oversight

The Board and its Committees are responsible for oversight of the Company's risk management process.  The Audit Committee is responsible for oversight of risks relating to the Company's financial statements, financial reporting processes, the evaluation of the effectiveness of internal control over financial reporting and compliance with certain of the Company's ethics policies.

The Compensation Committee is responsible for monitoring risks associated with the design and administration of the Company's compensation programs and performs the annual performance review of the CEO.  Other risks such as regulatory risk, environmental risk, and strategic risk are monitored by the Executive Committee, the Nomination and Corporate Governance Committee, or the full Board.

Senior management of the Company is responsible for identifying risks, managing risks, and reporting and communicating risks and mitigation efforts back to the Board of Directors or the designated committee.  While certain elements of risk are addressed at each Board meeting, management and the Board of Directors conduct a comprehensive analysis of risk on an annual basis. The Board believes a Chairman that is independent of management adds another layer of insight to the risk assessment process.

Board Committees and Functions

The Company has an Executive Committee, an Audit Committee, a Compensation Committee, and a Nomination and Corporate Governance Committee, all of which are composed of members of the Board of Directors.  The Audit, Compensation, and Nomination and Corporate Governance committees must be composed of at least three directors all of which are considered independent directors under the NASDAQ rules.  Each of these three key committees has a charter which is reviewed periodically, and which is posted on the Company's website at www.yorkwater.com under "Investor Relations" then "Corporate Governance".

The Executive Committee is empowered to function as delegated by the Board of Directors.  Their main focus is on budgeting, ratemaking, and debt and equity financing.  The Executive Committee is composed of the following Directors appointed by the Board: George W. Hodges, Chairman; Michael W. Gang, Esq.; Jeffrey S. Osman; and Jeffrey R. Hines, P.E.  The Executive Committee held two (2) meetings during the fiscal year ended December 31, 2013.

The Audit Committee monitors the audit functions of the independent public accountants, and reviews the Company's financial reporting process and internal controls.  The Audit Committee is composed of the following independent Directors appointed by the Board: Cynthia A. Dotzel, CPA, Chairperson; Steven R. Rasmussen, CPA; and Ernest J. Waters.  Based on a review of the background and experience of the members of the Audit Committee, the Board of Directors has determined that all members of the Audit Committee are financially literate and are "audit committee financial experts" within the meaning of applicable SEC rules.  The Audit Committee held four (4) meetings during the fiscal year ended December 31, 2013.

  The Compensation Committee considers and makes recommendations to the Board of Directors concerning the appropriate compensation package for the corporate officers, Directors and members of the

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Committees of the Board of Directors of the Company, including incentives.  Compensation for corporate officers is further explained in the Compensation Discussion and Analysis section of this proxy statement.  Director and committee member compensation is based on a review of fees paid by peers and other public companies.

The Compensation Committee is composed of the following independent Directors appointed by the Board:  Ernest J. Waters, Chairman; George Hay Kain, III; and Robert P. Newcomer.  The Compensation Committee held two (2) meetings during the fiscal year ended December 31, 2013.

The Nomination and Corporate Governance Committee recommends the appropriate Board structure, reviews the Company's succession planning, oversees the Board's annual evaluation of its performance and the performance of other Board Committees, 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 in accordance with the Company's bylaws.

The Nomination and Corporate Governance Committee is composed of the following independent Directors appointed by the Board:  Michael W. Gang, Chairman; Cynthia A. Dotzel; and Steven R. Rasmussen.  The Nomination and Corporate Governance Committee held four (4) meetings during the fiscal year ended December 31, 2013.

Related Party Transactions

The Board has adopted a written policy setting forth procedures for the review, approval and monitoring of transactions involving the Company and any related persons (directors, nominees for directors, 5% security holders, and executive officers or their immediate family members).  Under the policy (and the Audit Committee Charter), the Audit Committee is responsible for reviewing and approving all transactions involving the Company in which any related person has a direct or indirect interest, regardless of amount.  The Audit Committee intends to approve only those related party transactions that are on terms no less favorable to the Company than could be obtained from independent third parties and are otherwise in, or are not inconsistent with, the best interests of the Company and its shareholders.

In furtherance of this policy, the Company's Board of Directors has adopted a Code of Conduct applicable to all Directors, officers and employees, which generally requires that any transaction or opportunity that may constitute a conflict of interest, be reported to management so that it may be reviewed and avoided, if possible.  The Code of Conduct is available on the Company's web site at www.yorkwater.com under "Investor Relations", then "Corporate Governance".

As noted on page 9 under Director Independence, the Company has a relationship with the law firm in which Mr. Gang is a principal.  Because the legal services provided by the law firm in 2013 were greater than the SEC threshold of $120,000, this is a reportable related party transaction.  The Company primarily deals with attorneys other than Mr. Gang on regulatory matters.  Mr. Gang does not have a direct material interest in the payment of such fees, but has an indirect interest as a member of the law firm.  His indirect interest is also immaterial.

Communication with the Board of Directors

Shareholders who wish to communicate with the Board of Directors or specific individual Directors may do so by directing a written request addressed to such Directors or Director in care of the Secretary of The York Water Company, at the address appearing on the first page of this proxy statement.  Communication(s) directed to members of the Board of Directors who are not non-management Directors will be relayed to the intended Board member(s) except to the extent that it is deemed unnecessary or inappropriate to do so pursuant to the procedures established by a majority of the independent Directors.  Communications directed to non-management Directors will be relayed to the intended Board member(s) except to the extent that doing so would be contrary to the instructions of the non-management Directors.  Any communication so withheld will nevertheless be made available to any non-management Director who wishes to review it.

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Executive Sessions of the Board

The independent directors of the Board schedule regular executive sessions of independent directors in which they meet without management participation.  The Chairman of the Board leads these sessions.

Stock Ownership

Directors are required under the bylaws of the Company to own at least one share of stock.   As part of the Company's Securities Trades Policy, directors, officers and selected employees are prohibited from trading in Company securities on a short-term basis, engaging in short sales, purchasing Company stock on margin, buying or selling puts or calls, pledging securities, or otherwise engaging in any type of hedging transactions involving Company securities.

Code of Ethics

REPORT OF THE AUDIT COMMITTEE

The Audit Committee reviews the Company's financial reporting process on behalf of the Board, including reports to the Securities and Exchange Commission on Forms 10-Q and 10-K, the Company's internal control process and releases of earnings.  In addition, the Committee selects, subject to shareholder ratification, the Company's independent registered public accounting firm and evaluates the performance of the firm.

Management is responsible for the Company's internal controls and the financial reporting process.  The independent registered public accounting firm is responsible for performing an integrated audit of the Company's financial statements in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) (United States) and to issue reports thereon. The Committee's responsibility is to monitor and oversee these processes.

In this context, the Committee has reviewed and discussed the audited financial statements with management; has discussed with the independent registered public accounting firm (ParenteBeard) the matters required to be discussed by Auditing Standards No. 16, as adopted by the Public Company Accounting Oversight Board; has received the written disclosures and the letter required by the PCAOB regarding independence communications; and has discussed ParenteBeard's independence with the firm and management.

Based upon the Committee's discussions with management and ParenteBeard and the Committee's review of the representations of management and ParenteBeard's report 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, 2013 for filing with the SEC.

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PROPOSAL 2

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has approved the appointment of ParenteBeard LLC, as the independent registered public accounting firm to audit the financial statements of the Company for the year 2014.  ParenteBeard LLC audited the Company's financial statements for the years ended December 31, 2013 and 2012.  There have been no disagreements between the Company and ParenteBeard LLC 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 ParenteBeard LLC.

Audit fees and all professional services to be rendered by ParenteBeard LLC are approved by the Company's Audit Committee.  The Board considers the possible effect on auditors' independence of providing non-audit services prior to the service being rendered, but the Board does not anticipate significant non-audit services will be rendered during 2014.

The following table presents fees for services provided by ParenteBeard LLC for 2013 and 2012:

 

The Audit Committee approves in advance any audit or non-audit services provided by outside auditors.  During 2013 and 2012, there were no exceptions to the Audit Committee's pre-approval requirements.

Representatives of ParenteBeard LLC are expected to be present at the Annual Meeting.  Representatives of ParenteBeard LLC 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.  It is understood that even if the selection of ParenteBeard LLC is ratified by the shareholders, the Audit Committee, in its discretion, may direct the appointment of a new independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its shareholders.

The Board of Directors unanimously recommends a vote "FOR" this proposal.

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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Our Named Executive Officers.  This section discusses the compensation we paid to our named executive officers (as defined by SEC rules) in 2013.  Our named executive officers are:

COMPENSATION DISCUSSION AND ANALYSIS

General Philosophy.  The goal of our compensation program is to attract, motivate and retain our executive officers who are key to the success of our Company.  We compensate our named executive officers through a combination of base salary and cash incentives designed to be competitive with comparable employers and to align management's incentives with the long-term interests of our customers and shareholders.  Our compensation setting process consists of establishing a base salary for each named executive officer and designing an annual cash incentive (currently up to 5% of salary) for such executive to reward the achievement of specific operational goals.  We only incentivize operational goals that add value for both our customers and our shareholders, such as increasing efficiency, ensuring a safe, adequate supply of water, reducing costs, improving customer service and expanding our service territory in order to gain economies of scale and spread fixed costs over a larger number of customers.  Payouts for incentives that are not in the long-term interest of customers may not be considered prudent, and therefore, may not be recoverable through water rates granted by the Pennsylvania Public Utility Commission.

Base Salary.  To assist us in establishing base salary in 2013, the Compensation Committee participated in a survey conducted by SAJE, a nationally recognized consulting firm, to provide data regarding the compensation of senior management at York and at seven comparable water utilities.  These comparables included Aqua America, Inc., Aquarion Water Company, Beckley Water Company, Middlesex Water Company, Pennichuck Corporation, San Jose Water Company and United Water.  SAJE also determined relative measures of the relationship between the size and compensation of the companies included in the survey.  SAJE provided no opinions or recommendations regarding our compensation package.  Outside of the survey, SAJE provided no other services, and no other compensation consultants were engaged or consulted by the Board of Directors, the Compensation Committee, or management for any purpose.

Based upon an analysis of the base salary levels and trend lines developed using regression analysis reflected in the survey, we establish base salaries for our named executive officers.  The average base salary of the President and Chief Executive Officer and other Named Executive Officers is currently below the 25^th percentile of the seven comparable investor-owned water utilities.  We have chosen this level based on our relative revenues, customer connections, employees and utility plant, and due to the relatively low level of complexity of the Company's business and operations as compared to many of the comparable investor-owned water utilities.  We are mainly a pure regulated water utility, with a small contract billing operation and a small wastewater operation, while some of the comparables also have a number of wastewater and other more significant non-regulated businesses.  We are a stand-alone company with no subsidiaries, parent or holding company.  We have one filtration plant and serve a relatively smaller number of customers in one state.  Many of the comparables serve in multiple states and have many subsidiaries, and many filtration plants.  In addition, there are issues specific to certain parts of the country such as water availability and regulatory environment that challenge some water utilities more than others.  Finally, the cost of living in the geographic area in which our operations are located is lower than some of the comparables.

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The base salary level of named executive officers will be reviewed annually to determine if the 25^th percentile continues to be appropriate based on changes in our statistics relative to comparable companies, our product line, the current regulatory environment, changes in water quality standards, competition for competent management and growth in our service territory, as well as other relevant factors.

In addition to the SAJE survey, the Compensation Committee considered available compensation information on other investor-owned water companies that did not take part in the survey including American Water, California Water, Connecticut Water, American States Water and Artesian Water, as well as local public companies where information was available.  The Compensation Committee also considers subjective factors such as the value of the position to the Company, the performance of the executive and the length of service in the current position and with the Company when determining base salary levels.

Bonuses and Equity Compensation.  We do not provide bonuses or equity compensation in the form of stock options to senior management.  We do, however, offer an Employee Stock Purchase Plan to all employees, including senior management, on the same terms.  Employees may purchase stock from the Company on a quarterly basis, at a 5% discount to market.  Annual purchases under this plan may not exceed 10% of the employee's regular salary.

Cash Incentives.  Our practice is to use cash awards to incentivize our senior managers to create value for our customers and shareholders.  To that end, we adopted a Cash Incentive Plan in 2005, pursuant to which our Compensation Committee sets annual performance objectives and target incentive payment amounts.  All of our supervisors and managers participate in the plan, including our named executive officers.

The plan is administered by the Compensation Committee, which has complete and final authority to, among other things, select participants, to determine the goals and circumstances under which incentive awards are granted, to grant awards and to construe and interpret the Plan.  Decisions of the Compensation Committee with respect to the administration and interpretation of the Plan are final, conclusive and binding upon all participants.

The Compensation Committee has discretion to determine all performance objectives.  In addition, the Committee may specify that any incentive award be conditioned upon achievement or satisfaction of business criteria or other measures of performance.  One or more of the following business criteria or other measures of performance may be used by the Committee:  (1) growth in revenues or assets; (2) earnings from operations; (3) net income or earnings per common share; (4) return on investment or return on equity; (5) stock price or shareholder return; and (6) strategic business criteria, consisting of meeting specified water quality standards, environmental or safety standards, affordability of rates and customer satisfaction standards.  The Compensation Committee may exercise its discretion to eliminate, reduce or increase the amounts payable as incentive, subject to such business criteria or other measures of performance.

Under the plan, annual performance objectives are established no later than ninety (90) days after the beginning of any annual incentive period, which is usually a calendar year.  Each performance objective carries with it a score of five (5) points.  No points are awarded for partial achievement of performance objectives.  Incentive awards are granted only if an overall score of seventy-five (75) percent of the available performance objective points are achieved.  The Compensation Committee believes that achieving performance objectives should be the shared responsibility of management.  Accordingly, if an overall score of seventy-five (75) percent of the available performance objective points is achieved, all participants receive their target incentive awards.  If an overall score of less than seventy-five (75) percent of the available performance objectives is achieved, no participant receives an award.

The Compensation Committee set the performance objectives and target incentive awards for 2013 on January 28, 2013.  For 2013, the Compensation Committee determined that the amount of the target cash incentive award would be 5% of the base salary as of December 31, 2013 for each management employee, including named executive officers.  The Committee selected 5% as the target cash incentive award for 2013, and for all of the previous years since the plan's inception in 2005, after considering various factors.  One such factor was the range of other benefits already provided by the Company.  Another factor was the comparison of the Company's total salary and benefit package to the compensation packages paid by other comparable companies.  A third factor was the level of motivation needed to achieve the established goals of the

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Company.  Finally, the Compensation Committee considered how the plan would be perceived by the regulators, customers and shareholders.  All of these factors together contributed to the Committee's decision to keep the target incentive relatively low as compared to other companies.

The 2013 performance objectives as determined by the Compensation Committee were, among other things:  replace and reline pipe; refinance debt; improve  customer online access; improve the payment agreement process; initiate an improved customer service line inspection program; expand the service line protection program; implement an improved  stream crossing monitoring program; complete and successfully resolve a major rate filing; implement source water protection plans; upgrade filters at the water treatment plant; review insurance coverage options;  increase paperless billing customers; and develop improved labor-management and safety training programs.

On January 27, 2014, the Compensation Committee determined that our management had achieved eighty-one (81) percent of the performance objectives listed above for 2013, as well as the set business criterion for 2013, which was, earnings per common share of $0.73. The Committee awarded the named executive officers the amounts set forth in the 2013 Grants of Plan Based Awards Table below, which was the target incentive amount for each named executive officer.

On January 27, 2014, the Compensation Committee determined performance objectives and target incentive amounts to be awarded under the plan for 2014.  The performance objectives are, among other things:  replace and reline pipe; enroll in the Partnership for Safe Water Program; implement tax repair methodology; implement distribution system efficiencies; promote the service line protection program; improve water treatment efficiencies ; review insurance coverage options; implement source water protection plans; improve safety processes and procedures; and increase paperless billing customers. The target incentive amounts for 2014, as determined by the Compensation Committee, are 5% of named executive officers' base salary as of December 31, 2014 and the business criterion for 2014 is earnings per common share.

Clawback Policy.  In the event of a material misstatement of financial results requiring restatement, the Board, or appropriate committee thereof, will review all incentive compensation paid to senior executives on the basis of having met specific performance targets during the restatement period.  If the material misstatement resulted from fraud, negligence or intentional misconduct, the Board or committee will take, in its discretion, such action as it deems necessary to recover the compensation paid, remedy the misconduct, and prevent its recurrence.  The Board will, to the extent permitted by applicable law, to the extent it is reasonable to do so (e.g. the expense of recovering the compensation does not exceed the amount recovered), and to the extent that the amount earned under restated financial results is lower than the amount originally awarded, require reimbursement from the senior executive engaged in the misconduct that caused the need for the restatement.  The required reimbursement will be the amount paid in excess of the amount earned under restated financial results.  In addition, the Board may dismiss the senior executive, authorize legal action, or take such other action to enforce the officer's obligations to the Company as it deems appropriate.

Severance Benefits.  Other than Change in Control payments described below, we do not provide severance benefits to employees as part of our compensation program.

Retirement Plans.  We provide a traditional defined benefit pension plan covering employees hired before May 1, 2010.  Named executive officers are entitled to benefits under the defined benefit pension plan upon retirement after the age of 55 on the same terms as other employees.  The pension benefit is based on the years of service multiplied by the sum of $19.25 and 1.50% 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 highest consecutive sixty (60) complete months during the last one hundred and twenty (120) complete months immediately prior to the date the pension benefit calculation is made. Normal (full) retirement benefits are payable at age 65, or at age 62 with twenty-five years of service.  Employees who terminate their employment prior to the age of 55 may elect to collect reduced benefits upon attaining age 55, or full benefits at age 62 or 65 as applicable.  Early retirement benefits are reduced by 5/9 of a percent for each of the first 60 months by which the early retirement date precedes the normal retirement date, and 5/18 of a percent for each month in excess of 60 months by which the early retirement date precedes the normal retirement date.

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We also provide a supplemental retirement program, which provides senior management with a retirement benefit after the age of 55 in addition to the defined benefit pension.  The supplemental retirement program is designed to encourage senior management to stay with the Company until retirement.  Generally, supplemental retirement benefits are made available to senior management and are payable to the executive or his or her beneficiary, after retirement, over 15 years beginning no earlier than age 60.  The annual benefit payable under the supplemental retirement program is calculated by multiplying the number of years of eligible service subsequent to December 31, 1983 (plan commencement date) by a predetermined annual retirement benefit unit as shown below:

The estimated annual benefit payable to Mr. Hines at normal retirement age under the supplemental retirement program is $53,333.  The estimated annual benefit payable to Ms. Miller, Mr. Hand, Mr. McIntosh and Mr. Strine at normal retirement age under the supplemental retirement program is $33,333.  Benefits are paid monthly.  Named executive officers who terminate their employment prior to the age of 55 forfeit their supplemental retirement benefits.  If a named executive officer were to die before distribution of his or her supplemental retirement benefit has commenced, his or her beneficiary would receive a death benefit of $500,000, with the exception of Mr. Hines' beneficiary, who would receive $800,000.

Deferred Compensation.  We also provide a deferred compensation program to management.  The deferred compensation program permits managers and executives to defer up to 5% of salary over an eight (8) year period, with the Company matching the deferment up to 2.50% of salary.  Mr. Hand is the only named executive officer currently deferring salary.  All other named executive officers have completed their deferrals. In 2013, Mr. Hand received an annual matching benefit of $2,775.  Annually, the Company credits participants' deferred compensation balances with interest on the existing credit balance at a rate selected by the Company, currently equal to the December 31 rate of Moody's AAA Corporate Bond Yield.  This rate amounted to 4.57% for 2013.  Our deferred compensation program does not provide above-market or preferential earnings.  2013 credited earnings are shown in the "2013 Nonqualified Deferred Compensation" table.  Payouts from this plan on retirement, termination, disability or death are described in detail below in the narrative discussion accompanying the 2013 Nonqualified Deferred Compensation Table.

401(k).  Our named executive officers may participate in our 401(k) savings plan on the same terms as other employees.  We provide an annual maximum matching contribution of $2,800 per employee, for participating employees hired before May 1, 2010.  All named executives received the maximum matching contribution during 2013.  Employees hired after May 1, 2010 are eligible for an enhanced 401(k) plan.  None of our named executive officers are benefiting under the enhanced plan.

Change in Control.  Our senior management has built York Water into the successful business that it is today.  We believe that it is important to protect them in the event of a change of control and to protect the Company from the distractions senior managers often suffer as a result of the uncertainties that frequently surround changes in control.  Accordingly, we entered into amended and restated agreements with each of our senior managers that provide for certain payments upon changes of control in consideration of such senior managers agreeing not to compete with us for a period of time following the termination of their employment.  Most change in control payments are only paid if the senior manager in question is terminated in connection with a change in control.  In certain circumstances, however, payments may be made to senior managers who do not terminate their employment for one year following a change in control.  These payments incentivize our senior managers to continue their employment amid the uncertainty that often follows changes in control and thereby promotes stability for the Company during such times.  Change in control benefits are paid in lump sum and are based on a multiple of base salary and cash incentive compensation.  In the event of a change of control, we also continue health and other insurance benefits for up to one year depending on circumstances.  The agreements are valid for an initial term of five years, and renew automatically for one-year periods after the first five years.  The agreements terminate upon the employee reaching age 65 or terminating employment

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with the Company.  The Company must provide 90 days notice to terminate the agreements.  These agreements are described in more detail below under the heading "Potential Payments upon Termination or Change in Control."

Perquisites and Other Benefits.  The primary perquisite for named executive officers is the use of company vehicles for personal benefit.  The most common personal use of company vehicles by senior management is commuting to and from work.  No named executive officer receives perquisites valued in the aggregate at $10,000 or more.  Named executive officers also participate in York Water's other benefit plans on the same terms as other employees.  These plans include medical and health insurance, life insurance and employee stock purchase plan (ESPP).  Under the ESPP, full-time employees with at least 90 days of service are eligible to purchase company stock through payroll deduction, up to 10% of their regular salary, at a 5% discount from fair market value.  The Compensation Committee considers the ESPP as a contributing factor to hiring and retaining employees, and as a way of aligning employee interests with those of shareholders.

Board Process.  The Compensation Committee of the Board of Directors approves all compensation and awards to executive officers, which include the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and four vice presidents.  The Compensation Committee reviews the performance and compensation of the Chief Executive and, following discussions with that individual, and a review of the data provided by SAJE and other available data, establishes his compensation level.  For the remaining executive officers, the Chief Executive Officer makes recommendations to the Compensation Committee, based on SAJE and other available data, which are subject to final approval by the committee.  With respect to the cash incentive awards, the Compensation Committee grants cash incentives when warranted.

Shareholder Say-on-Pay Votes.  The Company provides its shareholders with the opportunity to cast an advisory vote on executive compensation (a "say-on-pay proposal") every three years.  At the Company's annual meeting of shareholders held in May 2011, a substantial majority of the votes cast on the three-year say-on-pay proposal at that meeting were voted in favor of the proposal.  The Compensation Committee believes this affirms shareholders' support of the Company's executive compensation program, and did not change its program in 2013.  Executive compensation will be voted upon by shareholders during this proxy season.  The Compensation Committee will consider the outcome of the Company's say-on-pay vote when making future compensation decisions for the named executive officers.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management, and based on that review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

COMPENSATION RISK ASSESSMENT

The Compensation Committee reviewed the Company's compensation policies and practices for all employees (including non-executive officers) covering base salaries and wages, deferred compensation, incentive plans and change in control agreements in order to assess the inherent risks involved.

Considering all of the elements of the various compensation plans and the fact that the Company has no competing segments or divisions, the Compensation Committee concluded that the Company's compensation policies and practices did not incentivize excessive risk-taking that would have a material adverse effect on the Company.

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of our Compensation Committee are named in the "Board Committees and Functions" section of this proxy statement.  None of the members of the Compensation Committee is or has ever been an officer or employee of the Company.  In addition, during the last fiscal year, none of our executive officers served as a member of the board of directors or the compensation committee of any other entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning compensation paid by the Company to named executive officers or accrued by the Company for the named executive officers in 2013, 2012 and 2011.

(1)

Amounts presented represent the sum of the change in the actuarial present value of the named executive officer's accumulated benefit under the Company's defined benefit pension plan and the change in the present value of the named executive officer's benefit under the Company's supplemental executive retirement plan.  No above-market or preferential earnings are paid on deferred compensation.

(2)	Includes Company contributions to the named executive officer's 401(k) account, credited earnings and Company contributions for non-qualified deferred compensation, personal use of company vehicles, and a 5% discount on stock purchased through the Employee Stock Purchase Plan.

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2013 GRANTS OF PLAN BASED AWARDS

Non-Equity Incentive Awards.  As described in the Compensation Discussion and Analysis under the heading "Cash Incentives," our practice is to award cash incentives based upon the achievement of diverse performance objectives.  The performance objectives are established annually by the Compensation Committee, and are designed to recognize and reward the achievement of our goals and the creation of value for our customers and shareholders.  The following table sets forth awards granted to our named executive officers in 2013 pursuant to our incentive plan.

The awards appearing in this table also appear in the Summary Compensation Table.

Awards are subject to the Company's clawback policy.

We do not grant equity incentive plan awards.

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2013 PENSION BENEFITS

The table below sets forth the present value of accumulated benefits payable to each named executive officer, including the number of years of credited service, under the Company's General and Administrative Pension Plan (a defined benefit pension plan) and its Supplemental Executive Retirement Plan. Detailed information on these plans can be found in the Compensation Discussion and Analysis above, under the heading "Retirement Plans."

All assumptions made in quantifying the present value of the accumulated benefits to the named executive officers under these plans are described in Note 6 to the Company's Financial Statements included in our 2013 Annual Report on Form 10-K.  The present values are based upon a 4.65% discount rate.  There were no payments to named executives made under these plans during the last fiscal year.  Future payouts under these plans are described in more detail in the Compensation Discussion and Analysis under the heading "Retirement Plans".

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2013 NONQUALIFIED DEFERRED COMPENSATION

The table set forth below presents contributions, earnings and the balance at year-end (including future tax savings) for the accounts of our named executive officers under our deferred compensation program that is described in more detail in the Compensation Discussion and Analysis under the heading "Deferred Compensation."  Company contributions and earnings are reported in the "All Other Compensation" column of the Summary Compensation Table.  The future tax savings amounts included in the balance column below have not been included in the Summary Compensation Table in any year.

PAYOUT OF DEFERRED COMPENSATION ACCOUNTS

Payouts upon Retirement.  Following a named executive officer's retirement, a monthly retirement benefit will be paid to him or her for 120 months.  This benefit will be equal to a percentage of his or her deferred income account immediately prior to retirement divided by the following factor (1 minus the corporate federal and state income tax rate for the Company immediately prior to retirement).  Assuming a federal income tax rate of 34% and a state income tax rate of 9.99% for 2013, and assuming all named executive officers were eligible for retirement as of December 31, 2013, the named executive officers would receive the monthly benefits in the table that follows the next paragraph.  The Company does not gross up the deferred compensation payout, but rather passes on the tax benefit the Company will realize when death benefit proceeds are received under corporate-owned life insurance policies which are in place in order to reimburse the Company for the costs of the plan.

Payouts upon Disability.  If a named executive officer becomes disabled before his or her deferred income account has been distributed, a monthly retirement benefit will be paid to him or her for 120 months.  This benefit will be equal to a percentage of his or her deferred income account immediately prior to the date he or she became disabled divided by the following factor (1 minus the corporate federal and state income tax rate for the Company immediately prior to the date he or she became disabled).  Assuming a federal income tax rate of 34% and a state income tax rate of 9.99% for 2013, and assuming each named executive officer became disabled as of December 31, 2013, such named executive officer would receive the monthly benefits in the table that follows.  Once again, the Company is not grossing up the benefit, but rather passing on tax savings it will realize in the future.

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Payouts upon Termination of Employment.  If a named executive officer's employment with the Company is terminated other than by death or disability before he or she is eligible for retirement, the amount of his or her contributions, without the Company's matching contribution, without accumulated interest credited to the deferred income account, and without the tax benefit, shall be distributed to such named executive officer immediately upon his or her termination in a lump sum.  Assuming each named executive officer were terminated as of December 31, 2013, such named executive officer would be entitled to receive the following lump sum payment:

(1)	Assumes Mr. McIntosh was not terminated for cause.  If he were terminated for cause as of December 31, 2013, Mr. McIntosh would have been entitled to receive a lump sum payment of $10,021.

The named executive officer deferrals have previously been reported in the salary column of the Summary Compensation Table in the year in which they were earned.

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Payouts upon Death.  If a named executive officer were to die before distribution of his or her deferred income account has commenced, his or her beneficiary would receive a death benefit in an amount equal to the higher of $150,000, or the named executive officer's deferred income account immediately prior to his or her death divided by the following factor (1 minus the corporate federal and state income tax rate for the Company immediately prior to the date of death).  The death benefit determined as above will be paid to beneficiaries in a lump sum.  Assuming death benefits for each named executive officer became payable as of December 31, 2013, such named executive officer's respective beneficiaries would be entitled to receive the following lump sum payments:

POTENTIAL PAYMENTS UPON TERMINATION OR A CHANGE IN CONTROL

Description of Change in Control Agreements.  We have entered into Amended and Restated Change in Control Agreements with each named executive officer that provides for payments to them under certain circumstances in connection with a change in control in consideration of such named executive officers agreeing not to compete with us for a period of time following the termination of their employment.

Under all agreements, generally a "change in control" will occur if:

·	Any person or affiliated group (with limited exceptions) becomes the beneficial owner in the aggregate of 50 percent or more of all of our voting securities;

·	A majority of our Board of Directors is involuntarily removed or defeated for re-election to our Board of Directors (for example, as a result of a proxy contest);

·	We are party to a merger or reorganization pursuant to which the holders of our voting securities prior to such transaction become the holders of 50 percent or less of the voting securities of the new merged or reorganized company; or

·	The Company is liquidated or dissolved, or all of its assets are sold to a third party.

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In each circumstance described above, our Board of Directors may make a determination that the circumstances do not warrant the implementation of the provisions of the agreement, and in such case, the change in control will not trigger any payments under the agreements.

All payments under the agreements are triggered by the occurrence of a change in control, and most payments also require that the relevant senior manager's employment also be terminated.  The amounts of payments to our named executive officers under these agreements vary depending on the timing of the change in control and the timing and manner of the termination of employment.  Generally, the manner of termination is divided into four categories.

A "for cause" termination results from:

·	misappropriation of funds or any act of common law fraud;

·	habitual insobriety or substance abuse;

·	conviction of a felony or any crime involving moral turpitude;

·	willful misconduct or gross negligence by the senior manager in the performance of his duties;

·	the willful failure of the senior manager to perform a material function of his duties; or

·	the senior manager engaging in a conflict of interest or other breach of fiduciary duty.

A "good reason" termination occurs when the senior manager terminates his own employment following a change in control and after one or more of the following has occurred:

·	the Company has breached the change in control agreement;

·	the Company has significantly reduced the authority, duties or responsibilities of the senior manager or reduced his base compensation or annual bonus compensation opportunity;

·	the Company has reduced the senior manager from the employment grade or officer positions which he or she holds; or

·	the Company has transferred the senior manager, without his or her express written consent, to a location that is more than 50 miles from his or her principal place of business immediately preceding the change of control.

A voluntary termination is the termination by the senior manager of his or her own employment under circumstances that would not be a "good reason" termination.  Examples are ordinary retirement or leaving the Company to seek other job opportunities.

An involuntary termination is a termination in connection with a change in control that is not a "for cause" termination, a good reason termination or a voluntary termination.

Payouts under Change in Control Agreements. Under the agreements, all named executive officers are entitled to payment in the case of an involuntary termination or a good reason termination within some time period surrounding a change in control (generally six months prior to or one year following a change in control).  Payments are paid in lump sum and are based on a multiple of base salary and cash incentive compensation earned by the named executive officer in the preceding 12 months.  We call this amount "base pay."  Additionally, Messrs. Hines, Hand, McIntosh, and Strine, and Ms. Miller are entitled to payment of "stay bonuses" if they remain employed by us for one year following a change in control, and smaller stay bonuses if they remain employed for at least three months following a change in control and then voluntarily terminate their employment more than three months but less than one year following a change in control.  Finally, our named executive officers are entitled to have their health and welfare benefits continue for periods of up to one year following the termination of their employment (subject to such benefits terminating or such named executive officer becoming covered by the benefit plans of another employer).

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The table below sets forth the relevant base pay multiples, lump sum payout amounts and the value of continued benefits our named executive officers would receive under various circumstances under their change in control agreements.  For the purposes of this table, we have assumed that a change in control occurred on December 31, 2013.

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Payment of the lump sum payments under the change in control agreements is contingent upon the named executive officer executing a standard release.  The change in control agreements also contain non-competition provisions that generally require that, a named executive officer will not, while he or she is employed by us and for one year following the termination of his or her employment by us:

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participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with or use or permit his or her name to be used in connection with, any business or enterprise engaged in by us within our franchised territory;

·	solicit or attempt to convert any account or customer of the Company to another supplier; or

·	solicit or attempt to hire any employee of the Company.

Any breach of this non-competition agreement can result in damages being awarded to the Company, including the amount of one-half of any lump sum payments described above.

Other Payouts.  The named executive officers will also be entitled to the payouts of their pension and supplemental retirement accounts upon retirement and payout of their deferred compensation accounts upon termination of their employment with us.

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Using the assumptions described in Note 6 to the Company's Financial Statements included in the 2013 Annual Report on Form 10-K, and assuming that all of our named executive officers remain with the Company until reaching age 55 (or, for those who are currently older than age 55, assuming they retired as of December 31, 2013) our named executive officers have earned monthly benefits under the pension plan and supplemental retirement plan as follows:

 

 

Name	Plan Name	Monthly Benefit
Jeffrey R. Hines, P.E.	General and Administrative Pension Plan	$7,731
Jeffrey R. Hines, P.E.	Supplemental Executive Retirement Plan	2,883
Kathleen M. Miller	General and Administrative Pension Plan	3,507
Kathleen M. Miller	Supplemental Executive Retirement Plan	1,161
Joseph T. Hand	General and Administrative Pension Plan	1,072
Joseph T. Hand	Supplemental Executive Retirement Plan	654
Bruce C. McIntosh	General and Administrative Pension Plan	2,735
Bruce C. McIntosh	Supplemental Executive Retirement Plan	2,193
John H. Strine	General and Administrative Pension Plan	5,650
John H. Strine	Supplemental Executive Retirement Plan	926

Our named executive officers will also be entitled to be paid the amounts described in the narrative discussion accompanying the 2013 Nonqualified Deferred Compensation Table above in the manner described in that section.

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2013 DIRECTOR COMPENSATION

Director Fees Earned.  In consideration of the services they provide to us, directors who are not regular full-time employees are entitled to receive a retainer of $15,500 per year, payable quarterly.  In addition to the annual retainer, Board and Committee members are entitled to the fees in the table below for each meeting they attend.  Directors who are also current employees of the Company receive no additional compensation for Board service.

No perquisites are provided to Directors.

Mr. Finlayson retired under the Company's mandatory retirement policy for directors on March 14, 2014.  Mr. Newcomer was elected to the Board of Directors on November 25, 2013, effective December 1, 2013, to fill a vacancy due to the 2012 mandatory retirement of Thomas C. Norris, and in anticipation of Mr. Finlayson's retirement.

There were 8 Board of Directors' Meetings during calendar year 2013.  All Directors attended at least 88% of the scheduled Board of Directors and committee meetings.  In addition, all Directors other than Mr. Gang attended the 2013 Annual Meeting of Shareholders.

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PROPOSAL 3

TO APPROVE, BY NON-BINDING VOTE,

THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS

In accordance with Section 14A of the Securities Exchange Act of 1934, we are asking shareholders to approve the following advisory resolution at the 2014 Annual Meeting of Shareholders:

"RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED."

As described in the "Compensation Discussion and Analysis" section above, the goal of our executive compensation programs is to attract, motivate and retain our senior management.  We believe that our combination of base salary, incentive and deferred compensation programs as detailed above, properly support this goal while also providing increased value to our customers and shareholders.  In addition, our executive compensation compares favorably with that of our peers as discussed in detail in the "Compensation Discussion and Analysis" section contained in this proxy statement.

We encourage shareholders to read the Compensation Discussion and Analysis beginning on page 14 of the proxy statement and related compensation tables and narrative beginning on page 19, which provide detailed information on the Company's compensation policies and practices and the compensation of our named executives.

As an advisory vote, this proposal, commonly referred to as a "say-on-pay" vote, is not binding upon the Company.  However, the Compensation Committee, which is responsible for designing and administering the Company's executive compensation program, values the opinions expressed by shareholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions.

The Board has adopted a policy providing for triennial say-on-pay advisory votes, as agreed to by shareholders at our 2011 Annual Meeting of Shareholders.  Unless the Board modifies this policy, the next say-on-pay advisory vote will be held at our 2017 Annual Meeting of Shareholders.

The Board of Directors unanimously recommends a vote "FOR" the approval of the compensation of our named executive officers, as disclosed in this proxy statement.

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PROPOSAL 4

TO APPROVE THE YORK WATER COMPANY

EMPLOYEES' STOCK PURCHASE PLAN

In September 2013, our Board adopted, subject to stockholder approval, an amendment to The York Water Company Employees' Stock Purchase Plan (the "ESPP").  The amended ESPP is being submitted to shareholders to increase the number of shares reserved for use under the ESPP by 80,000 shares, and to cause the ESPP to qualify under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").  Capitalized terms used in this Proposal 4 and not otherwise defined have the meanings set forth in the ESPP, attached hereto as Appendix A.

Our Board believes that the ESPP assists the Company in hiring and retaining employees, and helps to align employee interests with those of its shareholders.  Our Board recommends that shareholders approve the amended ESPP.

Summary of Material Terms

The following is a summary of the material terms of the ESPP.  The complete text of the ESPP is set forth in Appendix A to this proxy statement.

The purpose of the ESPP is to provide an opportunity for eligible employees of The York Water Company to obtain an ownership interest in the Company through purchases of common stock by payroll deductions.  All full-time employees are eligible to participate after ninety days of service, but they are not required to participate.  Employees may specify up to 10% of their regular straight time earnings or gross salary during each offering period.  Employees may enter and exit the ESPP at any time.  As of December 31, 2013, approximately 103 employees were eligible to participate, including all of our named executive officers, and 72 employees were actually participating in the ESPP, including all of our named executive officers.

The ESPP provides for four consecutive three-month offering periods commencing on the first day of a calendar quarter and ending on the last day of a calendar quarter.  Employees fund their stock purchases through payroll deductions or cash payments which accumulate, with interest, over each offering period.  At the end of the offering period, the Company will transmit to its agent (American Stock Transfer & Trust Co. LLC), the aggregate amount for each individual.  The agent will then allocate shares, based upon the applicable purchase price, to each individual's account.  The purchase price of our common stock under the ESPP is equal to ninety-five percent (95%) of the fair market value of a share of Company common stock on the Grant Date (last business day of the offering period).  The fair market value is equal to the mean between the high and the low prices for the Company's common shares as quoted on Nasdaq on such date.  If such price is not available, the purchase price will be determined by the Board based on the latest available market quotations or on such other basis as the Board shall deem lawful and appropriate.  Shares purchased under the ESPP have the same voting, dividend and other rights as all other shares of our common stock.  No fees are charged to employees for this plan.

Authorized and unissued shares are subject to purchase under the ESPP.  There are no transfer restrictions to employees under the ESPP, although the tax consequences differ depending on how long the stock is held.  Any participating employee who, for any reason, ceases to be a full-time employee of the Company shall be deemed to have withdrawn from the ESPP on the date employment ceases.  Upon such an event, monies credited to such individual's account shall be refunded.

The Human Resources Director (currently Vice President) is the administrator of the ESPP.

Proposed Amendments

Proposal 4 requests shareholder approval of the amended ESPP, previously approved by our Board.  The amended ESPP increases the number of shares reserved for use under the ESPP by 80,000, and qualifies the ESPP under Section 423 of the Code.  Without shareholder approval of the ESPP, there are 15,558 shares remaining for future purchases by employees under the ESPP as of December 31, 2013.  Once those remaining available shares are issued, we would effectively be required to terminate the ESPP and any

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employee contributions that remain would be refunded to employees.  If shareholders approve this Proposal 4, the total number of shares reserved under the ESPP will increase from 270,000 to 350,000, leaving 95,558 shares available for future issuance (based on shares issued under the plan as of December 31, 2013).  We anticipate these additional shares will provide our ESPP with adequate shares for approximately ten years.

In addition, the amended ESPP is intended to qualify as an ESPP under Section 423 of the Code, which imposes restrictions on stock ownership by employees, and dictates the tax consequences associated with various holding periods.  Employees who are 5% or more shareholders must be excluded from the plan, and purchases are limited to $25,000 fair market value of stock during an annual period.   Summarized tax information is provided below.

New Plan Benefits

Because benefits under the ESPP depend on the fair market value of our common stock at various future dates, it is not possible to determine the benefits that will be received by employees if they participate in the ESPP.  During the fiscal year 2013, all of our named executive officers participated in the ESPP.

For the year ended December 31, 2013, the aggregate number of shares issued to each named executive officer and the various indicated groups under the ESPP are:

Tax Information

The ESPP is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended, but is not intended to constitute a qualified pension, profit-sharing or stock bonus plan under Section 401(a) of the Code.  The principal federal income tax consequences of the ESPP under the Code as currently in effect are outlined below.  It is advisable for participating employees to obtain competent professional advice regarding the precise tax consequences of participation in the Plan.

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Taxation on Sale of Stock: A participating employee will not recognize income on the grant of the option or on the exercise of the option. A participant's taxation with respect to the shares purchased pursuant to the option will depend on how long the participant holds the shares. If the participant holds the shares of stock until the later of two years from the Grant Date or one year from the Exercise Date (or in the event of the participant's death), the participant will be required to recognize ordinary income upon disposition equal to the lesser of (i) the excess of the fair market value of the stock on the Grant Date over the Purchase Price and (ii) the excess of the fair market value of the stock on the date of disposition of the stock over the Purchase Price. Any additional gain or loss will be short-term or long-term capital gain or loss, as applicable.

If the participant does not hold the shares of stock for the holding period described above, the participant will be taxed upon disposition on the excess of the fair market value of a share of stock on the Exercise Date over the Purchase Price, at ordinary income rates, and the participant will be taxed on any additional realized gain at long-term or short-term capital gains rates, as applicable.

The Board of Directors unanimously recommends a vote "FOR" the approval of The York Water Company Employees' Stock Purchase Plan as amended October 1, 2013.

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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

Shareholder proposals to be considered for inclusion in the proxy statement and form of proxy relating to the 2015 Annual Meeting of Shareholders must be received by the Company in writing no later than November 24, 2014.  In addition, all proposals will need to comply with Rule 14a-8 of the Securities Exchange Act of 1934 (the "Exchange Act"), which lists the requirements for the inclusion of shareholder proposals in company-sponsored proxy materials.

For a proposal to be timely for consideration at the annual meeting, but not included in the proxy statement and form of proxy relating to the 2015 Annual Meeting of Shareholders, the Company's bylaws provide that we must have received the shareholder proposal or director nomination not less than ninety days nor more than one hundred and twenty days prior to the anniversary of our annual meeting, meaning between January 5, 2015 and February 4, 2015 for the 2015 annual meeting.  In the event that the 2015 annual meeting of shareholders is advanced by more than thirty days or delayed by more than sixty days from the anniversary date of the Annual Meeting, proposals or nominations for the 2015 annual meeting must be received by us no earlier than the ninetieth day prior to the date of the 2015 annual meeting of shareholders or, if later, the date which is ten days after the day on which public announcement of the date of such meeting is first made.  All shareholder proposals and director nominations must also comply with the other requirements set forth in the Company's bylaws.

OTHER MATTERS

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, 2013, 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 upon written or oral request by writing to:  Bonnie Rexroth, The York Water Company, 130 East Market Street, York, Pennsylvania 17401; or by telephone to Ms. Rexroth at (717) 718-2942.  Copies of exhibits to the Form 10-K will be furnished upon request and the payment of a reasonable fee.  The Form 10-K is also available, free of charge, on the Investor Relations page of the Company's website at www.yorkwater.com.

A copy of the Company's Annual Report to Shareholders, does not form part of the proxy solicitation materials.  The Annual Report to Shareholders is also available, free of charge, on the Investor Relations page of the Company's website at www.yorkwater.com.

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APPENDIX A

December 15, 1980

Amended January 12, 1981

Amended August 12, 1982

Amended November 28, 1988

Amended December 23, 1996

Amended May 27, 1997

Amended October 1, 2013

THE YORK WATER COMPANY

EMPLOYEES' STOCK PURCHASE PLAN

The purpose of the Employees' Stock Purchase Plan (the "Plan") is to provide an opportunity for eligible employees of The York Water Company (the "Company") to obtain an ownership interest in the Company through purchases of common stock by payroll deductions. It is the intention of the Company that the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code") and the Plan shall be administered in accordance with this intent. The Plan is effective as of its approval by the Board of Directors of the Company (the "Board") on September 30, 2013 (the "Effective Date"), subject to the approval of the shareholders of the Company within 12 months of the Effective Date.

Pursuant to the Plan, 350,000 shares of the Company's Common Stock, no par value, are reserved for issuance thereunder (subject to adjustment upon changes in capitalization of the Company as provided in Section 20 hereof).

The operation of this Plan shall commence on the Effective Date and shall be automatically renewed from year to year unless terminated by action of the Board, provided that the Plan shall terminate automatically if it is not approved by shareholders within 12 months of the Effective Date.  If less than five employees elect to participate or the participation drops to less than five employees, the Plan may be terminated.

The Company shall be the Custodian for the Plan, unless the Company shall in its discretion select a bank or other similar type institution or organization to be the Custodian.  The duties of the Custodian shall be performed in a reasonable manner, but the Custodian shall not be personally responsible for any errors in judgment or performance which are not the result of willful misconduct or gross negligence.

Except to the extent that responsibilities may be delegated to and assumed by a Custodian other than the Company, the Board of the Company shall appoint an administrator (the "Administrator") annually to oversee the Plan's operation.  The Administrator's term shall be one year, to be renewed at the discretion of the Board.  The Board may remove the Administrator during his or her term, if appropriate.  The Board appointed the Human Resources Director to this position.

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The Administrator's address is:

Human Resources Director

The York Water Company

130 East Market Street

York, Pennsylvania 17401-1219

Phone:  717-845-3601

The Company's Human Resources Director shall receive no additional compensation for serving as Administrator of the Plan.

Any full-time employee who has been a full-time employee continuously for ninety days shall be eligible to participate in the Plan.  An eligible employee may join the Plan at any time, provided that the employee has submitted to the Administrator of the Plan a properly completed and executed Stock Purchase and Payroll Deduction Agreement (the "Purchase Agreement").

Notwithstanding any provisions of the Plan to the contrary, no employee may participate in the Plan if such employee (or any other person whose stock would be attributed to such employee pursuant to Section 424(d) of the Code) owns capital stock of the Company and/or holds outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any parent or subsidiary corporation.

All employees who participate in the Plan shall have the same rights and privileges under the Plan, except for differences that may be mandated by local law and that are consistent with Section 423(b)(5) of the Code.

The Plan shall be implemented by consecutive three month offering periods commencing on the first day of a calendar quarter and ending on the last day of a calendar quarter (an "Offering Period"), provided that the Board may, in its sole discretion, extend or shorten any Offering Period.

Each eligible employee wishing to purchase common stock of the Company pursuant to the Plan shall complete and execute a Purchase Agreement.

An eligible employee may specify as the dollar deduction from his or her gross compensation any dollar amount up to 10% of the periodic straight time earnings or gross salary during the Offering Period, such dollar amount to be deducted from each salary check as designated by the employee; provided, however, that each payroll deduction shall be a whole dollar amount, and further provided that the minimum amount that may be deducted is $2.  Any employee participating in the Plan may increase or decrease the dollar amount to be deducted from his or her compensation at any time during an Offering Period by submitting a revised Purchase Agreement.  Purchase Agreement forms may be obtained from the Administrator of the Plan.

In accordance with each participating employee's Purchase Agreement, payroll deductions shall be made from each of the employee's paychecks commencing with the first pay during an Offering Period after submission of a Purchase Agreement to the Plan Administrator.

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The Company shall remit the amounts deducted from the paychecks issued to an interest bearing savings account within 10 days after the pay date.

An employee participating in the Plan may make an additional lump sum contribution, provided that the maximum dollar amount in Section 7 above is not exceeded.

The Administrator shall establish and maintain a stock purchase account in the name of each participating employee.  Each amount deducted from a participant's paycheck shall be credited to such participant's stock purchase account.  The effective date of each credit to any participant's account shall be the date on which the participant is issued his or her paycheck from which the deduction is made, without regard to the date on which the check is actually received.  Interest will be paid on any amounts in any stock purchase accounts at the then current rate paid by the institution holding the account.  The interest will be prorated to each participant's account as of the first of each calendar quarter.  At the end of each Offering Period that the Plan is in effect, the Company shall prepare and transmit to the Administrator the aggregate amount in each individual account.  No fees, commissions or other charges shall be deducted from the participants' accounts.

On the last day of an Offering Period (the "Grant Date"), each employee participating in the Plan during such Offering Period shall be granted an option to purchase on the Exercise Date (as defined in Section 12), at the applicable Purchase Price (as defined in Section 13) a number of shares of Company common stock determined by dividing the amount credited to such participant's stock purchase account on such Grant Date by the applicable Purchase Price.

Notwithstanding the foregoing, (i) no option shall be granted to a participant that entitles the participant to purchase a number of shares of Company common stock that is greater than $25,000 divided by the closing price of a share of Company common stock on the Grant Date, and (ii) no participant may accrue the right to purchase Company common stock (under this Plan and any other employee stock purchase plan of the Company and any parent or subsidiary corporation) at a rate that exceeds $25,000 of the fair market value of such stock (determined as of the applicable Grant Date) during any calendar year.

The option granted to a participant pursuant to Section 11 above shall be exercised automatically on the Exercise Date. The Exercise Date shall be the sixteenth day of the month immediately following the Grant Date (provided that if such day is not a business day, the Exercise Date shall be the first business day immediately following such day). Immediately following the Exercise Date, the funds credited to a participant's stock purchase account will be used by the Administrator to purchase from the Company the stock subject to the option and each participant will have allocated to his or her account the number of shares of Company common stock purchased pursuant to the option. The participant's account will be debited for the price of said shares. Any monies left over in a participant's account after the Exercise Date due to the application of the limits set forth in Section 11 above shall be returned to the participant.

Shares which have been allocated to the account of a participating employee shall remain in the custody of the Company or its agent, as Custodian, unless otherwise directed as provided in Section 14.

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All dividends and other distributions and all voting rights with respect to shares which have been allocated to the account of a participant but not yet distributed to the participant shall belong to and be vested in such participant, except that, at the written request of the participant, such dividends, distributions and voting rights may belong to and be vested in him or her jointly with another person or persons, or in the name or names of any other person or persons, jointly or severally.

The Purchase Price will be ninety-five percent (95%) of the fair market value of a share of Company common stock on the Grant Date.  Such fair market value will equal the mean between the high and the low prices for the Company's common shares as quoted on Nasdaq on such date.  If such price is not available, the Purchase Price will be determined by the Board based on the latest available market quotations or on such other basis as the Board shall deem lawful and appropriate.

Upon written request to the Administrator, a certificate for shares shall be issued and delivered to the employee as soon as practicable.  Such shares shall be registered in the name of the participating employee except that, at the written request of the employee, they may be registered jointly in his or her name and the name of another person or persons or in the name or names of any other person or persons, jointly or severally.  However, all shares allocated to the participating employee must be registered in one stock account only and may not be divided into more than one stock account.

Any participating employee who, for any reason, ceases to be a full-time employee of the Company shall be deemed to have withdrawn from the Plan on the date employment ceases. Upon a participant's ceasing to be an employee, the payroll deductions credited to such participant's account during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death, to such participant's beneficiaries, and any unexercised option held by such participant shall be automatically terminated.

In addition, any other participating employee may voluntarily withdraw from the Plan at any time by written termination of the Purchase Agreement.  The participant will receive an option on the next Grant Date, as set forth above, relating to payroll deductions and unallocated interest until the time of withdrawal, and such option will be exercised on the next Exercise Date and any remaining amount in the participant's account shall be returned to such participant.

Upon withdrawal from the Plan, an employee, subject to any allocation of shares to his or her nominee or nominees (as referred to in Sections 11 and 14 hereof), shall be entitled to receive any shares held by the Company or its agent, as Custodian, which have been allocated or credited to the employee's account.

The charges of a Custodian other than the Company and all costs of maintaining records and executing transfers will be borne by the Company.

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As soon as practicable after the each Grant Date, the Company or its agent, as Custodian, shall distribute to each participating employee, a quarterly statement of his or her account.  The statement shall set forth as of the last day of each Offering Period during the year (i) the total number of shares allocated to the participating employee's account which is in the custody of the Custodian; (ii) the amount in the account at the beginning of the quarter and the amount of participant contributions for the quarter; (iii) dividend and interest income allocated to said participant's account; (iv) the amount debited to the account for the purchase of shares, the number of shares purchased for the account for the quarter and the purchase price; and (v) all other pertinent data relating to such account.

The Plan and the transactions with respect to the Company's common stock pursuant thereto are subject to all applicable rules and regulations of state and federal law as may from time to time be effective and to such approval of governmental agencies as may be required.

The Company may terminate or amend the Plan effective as of the first day of any quarter provided that no such termination or amendment shall impair the rights of any participating employee under the Plan, or nominee or nominees of such employee, to receive any shares which have been allocated or credited to or for his or her account, and each such employee shall receive the amount of any payroll deductions and any prorated interest or dividends which should properly be credited to his or her account but which have not been applied to the purchase of shares.  Upon termination of the Plan, in the event of any cash or shares remaining in the possession of the Custodian after satisfaction of all of the rights of participating employees, the same shall belong to the Company.

Subject to any required action by the stockholders of the Company, the number of shares reserved for issuance under the Plan, as well as the price per share and the number of shares of Company common stock covered by each option under the Plan which have not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Company common stock resulting from a stock split, reverse stock split, stock dividend, extraordinary cash dividend, combination or reclassification of Company common stock, or any other increase or decrease in the number of shares of Company common stock effected without receipt of consideration by the Company. Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive.

Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect.

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A participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Company common stock subject to an option unless and until the participant's shares of Company common stock acquired upon exercise of an option are recorded in the books of the Company (or its transfer agent).

The Plan does not constitute an employment contract. Nothing in the Plan or in the Offering shall in any way alter the at will nature of a participant's employment or be deemed to create in any way whatsoever any obligation on the part of any participant to continue in the employ of the Company, or on the part of the Company to continue the employment of a participant.

The provisions of the Plan shall be governed by the laws of the Commonwealth of Pennsylvania without resort to that state's conflicts of laws rules.

In General:  The Plan is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"), but is not intended to constitute a qualified pension, profit-sharing or stock bonus plan under Section 401(a) of the Code.  The principal federal income tax consequences of the Plan under the Code as currently in effect are outlined below.  It is advisable for participating employees to obtain competent professional advice regarding the precise tax consequences of participation in the Plan.

Taxation on Sale of Stock: A participating employee will not recognize income on the grant of the option or on the exercise of the option. A participant's taxation with respect to the shares purchased pursuant to the option will depend on how long the participant holds the shares. If the participant holds the shares of stock until the later of two years from the Grant Date or one year from the Exercise Date (or in the event of the participant's death), the participant will be required to recognize ordinary income upon disposition equal to the lesser of (i) the excess of the fair market value of the stock on the Grant Date over the Purchase Price and (ii) the excess of the fair market value of the stock on the date of disposition of the stock over the Purchase Price. Any additional gain or loss will be short-term or long-term capital gain or loss, as applicable.

If the participant does not hold the shares of stock for the holding period described above, the participant will be taxed upon disposition on the excess of the fair market value of a share of stock on the Exercise Date over the Purchase Price, at ordinary income rates, and the participant will be taxed on any additional realized gain at long-term or short-term capital gains rates, as applicable.

Earnings on Stock Purchase Account:  The participating employee must report the amount of earnings credited to his or her stock purchase account as taxable income in the year in which that interest is accrued.  The Company will report to each participant the amount of interest earned yearly on an IRS Form 1099, when required, and may require certain other information from each participant to insure that there need be no federal income tax withholding on the interest earned.

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The York Water Company

Employees' Stock Purchase Plan

Stock Purchase and Payroll Deduction Agreement

1.	Payroll Deduction and Purchase of Stock.  I authorize The York Water Company to change my withheld contribution for my plan account as follows:

Each such dollar amount shall be deducted from my paycheck; provided, however, that each payroll deduction shall be a whole dollar amount, and further provided that the minimum amount that may be deducted is $2.00 and the maximum amount is less than or equal to 10% of my regular straight time gross salary, subject to the limits set forth in the Plan.  Such payroll deductions shall continue to be made until I execute a revised Purchase Agreement, I withdraw from the Plan or the Plan terminates.  Each payroll deduction shall be credited to my stock purchase account and shall be used to purchase common stock from The York Water Company pursuant to the The York Water Company Employees' Stock Purchase Plan.

2.

Ownership of Stock.  All dividends and other distributions and all voting rights with respect to shares which have been allocated to my account but not yet distributed to me or to my nominee or nominees shall belong to and be vested in me or my nominee or nominees, and upon distribution such shares shall be registered accordingly.  At my written request, such dividends, distributions and voting rights may belong to and be vested in me jointly with another person or persons or in the name or names of any other person or persons, jointly or severally, and such shares shall then be registered accordingly.

3.	Rights Under The Plan.  I acknowledge receipt of a copy of the Description relating to the Plan October 1, 2013.  The rights under this Purchase Agreement shall be governed by The York Water Company Employees' Stock Purchase Plan as set forth in full in the Description.

4.	Original Designation.  I hereby designate the following as the name / names in which all shares due me under the provisions of this Plan shall be registered, and such designation shall remain in full force and effect until changed by me in writing (only one such designation may be made):