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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to __________
   
Commission file number 001-34245
THE YORK WATER COMPANY
(Exact name of registrant as specified in its charter)
 
graphic
 
Pennsylvania
23-1242500
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
130 East Market Street, York, Pennsylvania
17401
(Address of principal executive offices)
(Zip Code)
   
Registrant’s telephone number, including area code (717) 845-3601
 

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, No par value
YORW
The NASDAQ Global Select Market
(Title of Class)
(Trading Symbol)
(Name of Each Exchange on Which Registered)

Securities registered pursuant to Section 12(g) of the Act:
None
 
 (Title of Each Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes       ⌧ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

☐ Yes       ⌧ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

⌧ Yes        ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

⌧ Yes        ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ⌧
     
Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
☐      
Indicate by check mark if the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐      
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐      
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).  
☐      
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes        ⌧ No

The aggregate market value of the Common Stock, no par value, held by nonaffiliates of the registrant on June 30, 2025 was $455,682,094.

As of March 2, 2026, there were 14,448,548 shares of Common Stock, no par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Company’s 2026 Annual Meeting of Shareholders are incorporated by reference into Part I and Part III.




TABLE OF CONTENTS


     
PART I
    
Item 1C
Cybersecurity
     
PART II
    
     
PART III
    
     
PART IV
    
     
     
     
     
     


Page 2

FORWARD-LOOKING STATEMENTS

Certain statements contained in this annual report and in documents incorporated by reference constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933.  Words such as “may,” “should,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “objective” and similar expressions are intended to identify forward-looking statements.  These forward-looking statements include certain information relating to the Company’s business strategy and future prospects; including, but not limited to:

•
the amount and timing of rate changes and other regulatory matters including the recovery of costs recorded as regulatory assets;
•
expected profitability and results of operations;
•
trends;
•
goals, priorities and plans for, and cost of, growth and expansion;
•
strategic initiatives;
•
availability of water supply;
•
water usage by customers; and
•
the ability to pay dividends on common stock and the rate of those dividends.

The forward-looking statements in this Annual Report reflect what the Company currently anticipates will happen.  What actually happens could differ materially from what it currently anticipates will happen and caution should be exercised against placing undue reliance upon such statements, which are based only on information currently available to the Company and speak only as of the date hereof.  The Company does not intend to make a public announcement when forward-looking statements in this Annual Report are no longer accurate, whether as a result of new information, what actually happens in the future or for any other reason.  Important matters that may affect what will actually happen include, but are not limited to:

•
changes in weather or climate, including drought conditions or extended periods of heavy precipitation;
•
natural disasters, including pandemics and the effectiveness of the Company’s pandemic plans;
•
levels of rate relief granted;
•
the level of commercial and industrial business activity within the Company’s service territory;
•
construction of new housing within the Company’s service territory and increases in population;
•
changes in government policies or regulations, including the tax code, and the impact of government shutdowns;
•
the ability to obtain permits for expansion projects;
•
material changes in demand from customers, including the impact of conservation efforts which may impact the demand of customers for water;
•
changes in economic and business conditions, including interest rates;
•
loss of customers;
•
changes in, or unanticipated, capital requirements, including requirements relating to compliance with increasing environmental and safety regulations;
•
the impact of acquisitions;
•
changes in accounting pronouncements;
•
changes in the Company’s credit rating or the market price of its common stock; and
•
the ability to obtain financing.


Page 3
THE YORK WATER COMPANY

PART I

Item 1.
Business.

The York Water Company (the “Company”) is the oldest investor-owned water utility in the United States and is duly organized under the laws of the Commonwealth of Pennsylvania.  The Company has operated continuously since 1816.  The primary business of the Company is to impound, purify to meet or exceed safe drinking water standards and distribute water.  The Company also owns and operates three wastewater collection systems and twelve wastewater collection and treatment systems.  The Company operates within its franchised water and wastewater territory, which covers portions of 58 municipalities within four counties in south-central Pennsylvania.  The Company is regulated by the Pennsylvania Public Utility Commission, or PPUC, for both water and wastewater in the areas of billing, payment procedures, dispute processing, terminations, service territory, debt and equity financing and rate setting.  The Company must obtain PPUC approval before changing any practices associated with the aforementioned areas.

Water service is supplied through the Company’s own distribution system.  The Company obtains the bulk of its water supply for its primary system for York and Adams Counties from both the South Branch and East Branch of the Codorus Creek, which together have an average daily flow of approximately 73.0 million gallons from a combined watershed area of approximately 117 square miles.  The Company has two reservoirs on this primary system, Lake Williams and Lake Redman, which together hold up to approximately 2.5 billion gallons of water.  The Company supplements these reservoirs with a 15-mile pipeline from the Susquehanna River to Lake Redman which provides access to an additional supply of 12.0 million gallons of untreated water per day.  The Company obtains its water supply for its system for Franklin County from the Roxbury Dam on the Conodoguinet Creek, which has an average daily flow of approximately 26.0 million gallons from a watershed area of approximately 33 square miles.  The Company has a reservoir on this system which holds up to approximately 330 million gallons of water.  The Company also owns fifteen wells which are capable of providing a safe yield of approximately 923,000 gallons per day to supply water to the customers of its groundwater satellite systems in York, Adams, and Lancaster Counties.  As of December 31, 2025, the Company’s average daily availability was 41.1 million gallons, and average daily consumption was approximately 23.7 million gallons.  The Company’s service territory had an estimated population of 214,000 as of December 31, 2025.  Industry within the Company’s service territory is diversified, manufacturing such items as fixtures and furniture, electrical machinery, food products, paper, ordnance units, textile products, air conditioning systems, laundry detergent, barbells, and motorcycles.

The Company's water business is somewhat dependent on weather conditions, particularly the amount and timing of precipitation.  Revenues are particularly vulnerable to weather conditions in the summer months.  Prolonged periods of hot and dry weather generally cause increased water usage for watering lawns, washing cars, and keeping golf courses and sports fields irrigated.  Conversely, prolonged periods of dry weather could lead to drought restrictions from governmental authorities.  Despite the Company’s adequate water supply, customers may be required to cut back water usage under such drought restrictions which would negatively impact revenues.  The Company has addressed some of this vulnerability by instituting minimum customer charges which are intended to cover fixed costs of operations under all likely weather conditions.

The Company’s business does not require large amounts of working capital and is not dependent on any single customer or a very few customers for a material portion of its business.  Increases in revenues are generally dependent on the Company’s ability to obtain rate increases from the PPUC in a timely manner and in adequate amounts and to increase volumes of water sold through increased consumption and increases in the number of customers served.  The Company continuously looks for water and wastewater acquisition and expansion opportunities both within and outside its current service territory as well as additional opportunities to enter into bulk water contracts with municipalities and other entities to supply water.

The Company has agreements with several municipalities to provide billing and collection services.  The Company continues to review and consider opportunities to expand this initiative to further diversify the business.

Page 4
Competition

As a regulated utility, the Company operates within an exclusive franchised territory that is substantially free from direct competition with other public utilities, municipalities, and other entities.  Although the Company has been granted an exclusive franchise for each of its existing community water and wastewater systems, the ability of the Company to expand or acquire new service territories may be affected by currently unknown competitors obtaining franchises to surrounding systems by application or acquisition.  These competitors may include other investor-owned utilities, nearby municipally-owned utilities and sometimes competition from strategic or financial purchasers seeking to enter or expand in the water and wastewater industry.  The addition of new service territory and the acquisition of other utilities are generally subject to review and approval by the PPUC.

Water and Wastewater Quality and Environmental Regulations

Provisions of water and wastewater service are subject to regulation under the federal Safe Drinking Water Act, the Clean Water Act and related state laws, and under federal and state regulations issued under these laws.  In addition, the Company is subject to federal and state laws and other regulations relating to solid waste disposal, dam safety and other aspects of its operations.

The federal Safe Drinking Water Act establishes criteria and procedures for the U.S. Environmental Protection Agency, or EPA, to develop national quality standards.  Regulations issued under this Act, and its amendments, set standards on the amount of certain contaminants allowable in drinking water.  Current requirements are not expected to have a material impact on the Company’s operations or financial condition as it already meets or exceeds standards.  In the future, the Company may be required to change its method of treating drinking water and may incur additional capital investments if new regulations become effective.

Under the requirements of the Pennsylvania Safe Drinking Water Act, or SDWA, the Pennsylvania Department of Environmental Protection, or DEP, regulates the quality of the finished water supplied to customers.  The DEP requires the Company to submit monthly reports showing the results of daily bacteriological and other chemical and physical analyses. As part of this requirement, the Company conducts over 70,000 laboratory tests annually.  Management believes that the Company complies with the standards established by the agency under the SDWA.  The DEP assists the Company by regulating discharges into the Company’s watershed area to prevent and eliminate pollution.

The federal Groundwater Rule establishes protections against microbial pathogens in community water supplies.  This rule requires additional testing of water from well sources, and under certain circumstances requires demonstration and maintenance of effective disinfection.  The Company holds public water supply permits issued by the DEP, which establishes the groundwater source operating conditions for its wells, including demonstrated 4-log treatment of viruses.  All of the groundwater satellite systems operated by the Company are in compliance with the federal Groundwater Rule.

The Clean Water Act regulates discharges from water and wastewater treatment facilities into lakes, rivers, streams, and groundwater.  The Company complies with this Act by obtaining and maintaining all required permits and approvals for discharges from its water and wastewater facilities and by satisfying all conditions and regulatory requirements associated with the permits.

The DEP monitors the quality of wastewater discharge effluent under the provisions of the National Pollutant Discharge Elimination System, or NPDES.  The Company submits monthly reports to the DEP showing the results of its daily effluent monitoring and removal of sludge and biosolids.  The Company is not aware of any significant environmental remediation costs necessary from the handling and disposal of waste material from its wastewater operations.

Page 5
The primary avenue for lead and copper to enter drinking water is through plumbing materials.  The Company is required to comply with the Lead and Copper Rule established by the EPA and administered by the DEP.  The Company must monitor drinking water at customer taps for compliance with this rule.  If lead concentrations exceed an action level, the Company must undertake additional actions to control corrosion, inform the public about steps they should take to protect their health and may be required to replace lead service lines under its control.  The Company is currently in compliance with standards under the Lead and Copper Rule.

The EPA published the Lead and Copper Rule Revisions, or LCRR, that included a requirement to submit a service line inventory and a lead service line replacement plan to the respective states or agencies by October 16, 2024.  Additionally, the EPA adopted a new regulation, the Lead and Copper Rule Improvements, or LCRI, to focus on the replacement of lead and certain galvanized steel service lines and ensure public education is provided along with sampling at elementary schools and childcare facilities by 2037.  The Company successfully submitted its service line inventory and is developing elementary school and childcare facility mailings in preparation for LCRI sampling compliance.

The DEP and the Susquehanna River Basin Commission, or SRBC, regulate the amount of water withdrawn from streams in the watershed to assure that sufficient quantities are available to meet the needs of the Company and other regulated users.  Through its Division of Dam Safety, the DEP regulates the operation and maintenance of the Company’s impounding dams.  The Company routinely inspects its dams and prepares annual reports of their condition as required by DEP regulations.  The DEP reviews these reports and inspects the Company’s dams.

Since 1980, the DEP has required any new dam to have a spillway that is capable of passing the design flood without overtopping the dam.  The design flood is either the Probable Maximum Flood, or PMF, or some fraction of it, depending on the size and location of the dam.  PMF is very conservative and is calculated using the most severe combination of meteorological and hydrologic conditions reasonably possible in the watershed area of a dam.

The Company engaged a professional engineer to analyze the spillway capacities at the Lake Williams and Lake Redman dams and validate the DEP’s recommended flood design for the dams.  Management presented the results of the study to the DEP in December 2004, and DEP then requested that the Company submit a proposed schedule for the actions to address the spillway capacities.  Thereafter, the Company retained an engineering firm to prepare preliminary designs for increasing the spillway capacities to pass the PMF through armoring the dams with roller compacted concrete.  Management met with the DEP on a regular basis to review the preliminary design and discuss scheduling, permitting, and construction requirements including their concern regarding the stability of the Lake Williams spillway in light of current design standards.  The Company completed the final design and the permitting process to armor the dam and replace the spillway of the Lake Williams dam and began construction in 2022.  The Company completed the dam armoring and spillway replacement in 2023 at a total cost of approximately $40 million.  Additional capital expenditures were incurred in 2024 and 2025 and are expected to be completed in 2026 for sitework around the dam and reservoir.  The Lake Redman dam will be reassessed following the completion of the work on the Lake Williams dam.

Capital expenditures and operating costs required as a result of water quality standards and environmental requirements have been traditionally recognized by state public utility commissions as appropriate for inclusion in establishing rates.  The capital expenditures currently required as a result of water quality standards and environmental requirements have been budgeted in the Company’s capital program and represent less than 15% of its expected total capital expenditures over the next five years.  The Company is currently in compliance with wastewater environmental standards and does not anticipate any major capital expenditures for its current wastewater business.

Growth

(All dollar amounts are stated in thousands of dollars)

The Company continues to grow its number of customers and distribution facilities.

The growth in the number of customers is due primarily to the acquisition of water and wastewater systems and organic growth. During the year ended December 31, 2025, the Company increased its number of customers from 79,771 to 81,292.  See “Management’s Discussion and Analysis – Acquisitions and Growth” for a discussion of the Company’s recent acquisitions.

Page 6
The Company continues to grow its water distribution and wastewater collection systems to provide reliable service to its expanding franchised service territory and the increasing population within that territory.  During the year ended December 31, 2025, the Company installed additional water distribution mains resulting in 1,105 miles of water mains as of December 31, 2025.

The Company’s growth in revenues is primarily a result of customer growth and increases in water and wastewater rates.  During the year ended December 31, 2025, the Company recognized revenue of $77,488, an increase of $2,529, or 3.4%, as compared to $74,959 during the year ended December 31, 2024.  In 2025, operating revenue was derived from the following sources and in the following percentages: residential, 64%; commercial and industrial, 29%; and other, 7%, which is primarily from the provision for fire service but includes other water and wastewater service-related income.  See “Management’s Discussion and Analysis – Rate Matters” for a discussion of the Company’s rate case management.

Information about Our Executive Officers

The Company presently has 129 employees including the officers detailed in the information set forth under the caption “Executive Officers of the Company” of the 2026 Proxy Statement incorporated herein by reference.

Available Information

The Company makes available free of charge, on or through its website (www.yorkwater.com), its annual report on Form 10-K, its quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.  The SEC also maintains a website at www.sec.gov that contains reports, proxy statements, and other information about SEC registrants, including the Company.

Shareholders may request, without charge, copies of the Company’s financial reports.  Such requests, as well as other investor relations inquiries, should be addressed to:

Molly E. Houck
The York Water Company
(717) 718-2942
Human Resources &
130 East Market Street
(800) 750-5561
Investor Relations Coordinator
York, PA  17401
mollyh@yorkwater.com


Item 1A.
Risk Factors.

Not applicable.


Item 1B.
Unresolved Staff Comments.

None.

Page 7
Item 1C.
Cybersecurity.

Risk Management and Strategy

The Company recognizes the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard its information systems and protect the confidentiality, integrity, and availability of its data.

Managing Material Risks & Integrated Overall Risk Management
The Company embraces risk management across the company, to include cybersecurity risk.  This comprehensive approach ensures that cybersecurity considerations are an integral part of its decision-making processes at every level.  The Company’s risk management team works closely with its IT department to continuously evaluate and address cybersecurity risks in alignment with its business objectives and operational needs.

Engage Third Parties on Risk Management
To address the evolving nature and complexity of cybersecurity threats, the Company engages with a range of external experts, including cybersecurity assessors, consultants, and auditors in evaluating and testing its risk management systems.  These partnerships enable the Company to leverage specialized knowledge and insights with respect to its cybersecurity strategies and processes.  The collaboration with these third parties includes regular audits, threat assessments, penetration testing, and consultation on security enhancements.

Oversee Third-party Risk
The Company recognizes that cybersecurity threats and risks are amplified with the addition of third-party digital service providers.  In response, the Company implements stringent processes to oversee and manage these risks.  It conducts thorough security assessments of all third-party providers before engagement and maintains ongoing monitoring to ensure compliance with its cybersecurity standards.  This process is also intended to provide for the security and integrity of the Company’s data that may be stored on third-party systems.  The monitoring includes quarterly assessments made by the contracted Chief Information Officer, or CIO, and on an ongoing basis by its dedicated cybersecurity staff.  This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.

Incident Response Plan
The Company maintains and tests its Incident Response Plan, or IRP, to appropriately document plans for identifying, prioritizing, containing, and communicating information related to an incident.  The Company completes annual tabletop testing of its IRP, including a testing results review to identify opportunities for improvement.

Risk Evaluation

Water utilities face several cybersecurity risks due to their critical role in monitoring and controlling water treatment and distribution processes and servicing customers.  The key risks the Company has evaluated that could adversely impact system confidentiality, integrity, and/or availability include:
•
Unauthorized Remote Access: Vulnerabilities in remote access points can be exploited by attackers to gain control over systems, potentially disrupting water services.
•
Malware and Ransomware: Malicious software can infiltrate systems, leading to operational disruptions, data breaches, or ransom demands.  Cybercriminals can encrypt critical data and demand a ransom for its release, potentially disrupting water supply and treatment processes.
•
Insider Threats: Employees or contractors with access to systems might intentionally or unintentionally compromise security disrupting water supply and treatment processes or other utility services.
•
Denial of Service Attacks: Attackers can overwhelm systems with traffic, rendering them unavailable and disrupting water services.
•
Unsecured Human Machine Interfaces: Without proper security measures, human machine interfaces can be accessed by unauthorized users, allowing them to view and adjust real-time system settings.
•
Outdated Technology: Many systems use legacy technology that lack modern security features, making them more susceptible to attacks affecting water services.
•
Network Segmentation Issues: Poorly segmented networks can allow attackers to move laterally within the system, increasing the potential impact of an attack and impact to water services.
•
Phishing Scams: Employees might be targeted with deceptive emails to steal sensitive information or gain unauthorized access to systems resulting in unintentional loss of data.

Page 8
Identified Material Risks

To date, the Company has not encountered cybersecurity challenges, risks, or breaches that have materially impaired its business strategy, operations, or its financial standing.

Board of Directors Oversight of Cybersecurity Material Risks – Governance

The Board of Directors, or the Board, is keenly aware of the critical nature of cybersecurity risks, particularly in its business as a public utility providing a life sustaining product.  The Board, in partnership with the Executive team, has created a robust cybersecurity program, with meaningful oversight measures and tools for tracking and managing cyber risks and threats.  The Company understands the importance of its product and services to the communities that it serves and is dedicated to maintaining high stakeholder confidence in its operations.

Board Oversight
The Audit Committee is the lead Board committee with oversight of the cybersecurity program and bears the primary responsibility for this aspect of the business.  The Audit Committee is comprised of Board members with diverse professional backgrounds, such as accounting/finance, utility security, risk management, and business performance integration.  The breadth of experience in this Committee enables it to be the most appropriate lead in oversight of cybersecurity risks and capability.

Management Role
The Chief Administrative Officer and General Counsel has primary oversight of the IT Department and the cybersecurity program, with a direct reporting relationship to the President and Chief Executive Officer.  The Chief Administrative Officer and General Counsel also reports to the Audit Committee at least two times per calendar year and presents a report to the Board at least once per calendar year.  These briefings include both educational and program status information, including:
•
Current cybersecurity risks, including qualitative rating based upon underlying objective measures;
•
Status of ongoing cybersecurity initiatives and strategies;
•
Maintenance and testing of the IRP;
•
Incident and response reports and lessons learned from any cybersecurity incident(s); and
•
Compliance report with regulatory requirements and industry standards.
In addition to scheduled presentations described above, the IT Department contracted CIO, the Chief Administrative Officer and General Counsel, and the President and Chief Executive Officer maintain constant dialogue regarding emerging or potential cybersecurity risks and threats.  The Chief Administrative Officer and General Counsel is in regular contact with the Audit Committee Chair related to these risks so that the oversight by the Board can be both proactive and responsive.  The Audit Committee has the authority to actively participate in strategic decisions related to cybersecurity and offers guidance and approval for major initiatives.  As a result, cybersecurity considerations can be integrated into the foundation of broader corporate objectives.  The Audit Committee and the Board conduct an annual review of the Company’s cybersecurity risk position and the effectiveness of its risk management strategies and measures.  From this review at the Board level, the Company is able to identify areas where there exist improvement opportunities and can set goals for the following year.

Risk Management Personnel
Primary responsibility for assessing, monitoring, and managing cybersecurity risks rests with the CIO, who has oversight over the IT Department, including one dedicated cybersecurity staff person and select specialized contractors.  This group of contractors includes a Chief Information Security Officer, IT Director, Cybersecurity Analysts, Network Engineers, and Network Administrators.  The CIO, Chief Information Security Officer, and IT Director all have a minimum of ten years of experience in the cybersecurity and technology leadership field.

Monitor Cybersecurity Risks
The cybersecurity team actively monitors for cybersecurity risks by employing the use of endpoint detection and response solutions with immediate alert notifications, vulnerability scanning solutions that proactively identify risks, and by monitoring the logs of network devices.

Page 9
Reporting to the Board
The Chief Administrative Officer and General Counsel has primary responsibility to report to the President and Chief Executive Officer and to the Board and presents with the CIO where appropriate for the content of the presentation and/or to facilitate a substantive discussion.  The CIO, through the Chief Administrative Officer and General Counsel, ensures that the highest levels of the Company remain informed about the cybersecurity posture, potential risks, events, and response if they occur.  Material cybersecurity matters, and significant strategic risk management processes and decisions are elevated to the Board by the Chief Administrative Officer and General Counsel, ensuring that the Board has effective and substantive oversight and may provide input and guidance on critical cybersecurity measures and issues.


Item 2.
Properties.

Source of Water Supply

The Company obtains the bulk of its water supply for its primary system for York and Adams Counties from both the South Branch and East Branch of the Codorus Creek, which together have an average daily flow of approximately 73.0 million gallons from a combined watershed area of approximately 117 square miles.  The Company owns two impounding dams on this primary system located in York and Springfield Townships adjoining the Borough of Jacobus to the south.  The lower dam, the Lake Williams Impounding Dam, creates a reservoir covering approximately 165 acres and the upper dam, the Lake Redman Impounding Dam, creates a reservoir covering approximately 290 acres, which together hold up to approximately 2.5 billion gallons of water.  The Company supplements these reservoirs with a 15-mile pipeline from the Susquehanna River to Lake Redman which provides access to an additional supply of 12.0 million gallons per day, or MGD.

The Company obtains its water supply for its system for Franklin County from the Roxbury Dam on the Conodoguinet Creek, which has an average daily flow of approximately 26.0 million gallons from a watershed area of approximately 33 square miles.  The Company has a reservoir on this system which holds up to approximately 330 million gallons of water.

The Company also owns satellite groundwater systems in York, Adams, and Lancaster Counties.  The systems consist of fifteen wells capable of providing a combined safe yield of approximately 923,000 gallons per day.

As of December 31, 2025, the Company’s present average daily availability was 41.1 million gallons, and daily consumption was approximately 23.7 million gallons.

Pumping Stations

The Company’s main pumping station is located in Spring Garden Township, York County, on the south branch of the Codorus Creek about four miles downstream from the Company’s lower impounding dam.  The pumping station houses pumping equipment with a combined permitted capacity of 42.0 MGD.  A large diesel backup generator is installed to provide power to the pumps in the event of an emergency.  The untreated water is pumped approximately two miles to the filtration plant through pipes owned by the Company.

The Susquehanna River Pumping Station is located on the western shore of the Susquehanna River in York County, several miles south of Wrightsville.  The pumping station houses pumping equipment with a combined permitted capacity of 12.0 MGD.  The pumping station pumps water from the Susquehanna River approximately 15 miles through a combination of 30 inch and 36 inch ductile iron main to the Company’s upper impounding dam, located at Lake Redman.

The Lake Redman Pumping Station is located in York Township, York County, adjacent to Lake Redman.  The pumping station is designed to provide a redundant source with permitted capacity to pump 20.0 MGD of untreated water through a company-owned 36 inch force main approximately 3.5 miles to the filtration plant, meeting the Company’s daily consumption needs.

Page 10

Treatment Facilities

The Company’s primary water filtration plant is located in Spring Garden Township, York County, about one-half mile south of the City of York. Water at this plant is filtered through twelve dual media filters having a rated capacity of 39.0 MGD, with a maximum supply of 42.0 MGD for short periods if necessary.

The Company’s sediment recycling facility is located adjacent to this water filtration plant.  This state of the art facility employs cutting edge technology to remove fine, suspended solids from untreated water.  The Company estimates that through this energy-efficient, environmentally friendly process, approximately 600 tons of sediment will be removed annually, thereby improving the quality of the Codorus Creek watershed.

The Company also operates a water filtration plant in Greene Township, Franklin County.  Water at this plant is filtered through filters having a rated capacity of 1.16 MGD.

Based on a total average daily consumption in 2025 of approximately 23.7 million gallons, the Company believes the water pumping and filtering facilities are adequate to meet present and anticipated demands.

The Company has twelve wastewater treatment facilities located in four counties within south-central Pennsylvania.  The wastewater treatment plants consist of one pond and lagoon treatment facility with spray fields for ground application and in excess of 5 million gallon storage capacity, and the other plants range from small extended aeration package plants to three larger facilities that utilize Biological Nutrient Removal/tertiary treatment technology.  In total the plants have a combined permitted flow capacity of 1,352,500 gallons.  With a projected maximum daily demand of 519,734 gallons, the plants’ flow paths offer both capacity and operational redundancy for maintenance, high flow events, and potential growth.

Distribution and Collection

The water distribution systems of the Company have approximately 1,105 miles of water main lines which range in diameter from 2 inches to 36 inches.  The distribution systems include booster stations and standpipes and reservoirs capable of storing approximately 58.7 million gallons of potable water.  All booster stations are equipped with at least two pumps for protection in case of mechanical failure.  Following a deliberate study of customer demand and pumping capacity, the Company installed standby generators at all critical booster stations to provide an alternate energy source or emergency power in the event of an electric utility interruption.

The wastewater collection systems of the Company have approximately 117 miles of gravity collection mains and pressure force mains along with redundant sewage pumping stations.

Other Properties

The Company’s distribution center and material and supplies warehouse are located in Springettsbury Township and are composed of three one-story concrete block buildings aggregating 30,680 square feet.

The administrative and executive offices of the Company are located in one three-story and one two-story brick and masonry buildings, containing a total of approximately 21,861 square feet, in the City of York, Pennsylvania.

All of the Company’s properties described above are held in fee by the Company.  There are no material encumbrances on such properties.

In 1976, the Company entered into a Joint Use and Park Management Agreement with York County under which the Company licensed use of certain of its lands and waters for public park purposes for a period of 50 years.  Under the agreement, York County has agreed not to erect a dam upstream on the East Branch of the Codorus Creek or otherwise obstruct the flow of the creek.

Page 11
Item 3.
Legal Proceedings.

There are no material legal proceedings involving the Company.


Item 4.
Mine Safety Disclosures.

Not applicable.

Page 12

PART II

Item 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

The common stock of The York Water Company is traded on the NASDAQ Global Select Market under the symbol YORW.

Shareholders of record (excluding individual participants in securities positions listings) as of December 31, 2025 numbered approximately 1,693.

Securities Authorized for Issuance under Equity Compensation Plans

The information required by this item with respect to securities authorized for issuance under equity compensation plans is set forth in Part III, Item 12 of this Annual Report.

Purchases of Equity Securities by the Company

The Company did not repurchase any of its securities during the fourth quarter of 2025.


Item 6.
Reserved.


Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(All dollar amounts are stated in thousands of dollars.)

Overview

The York Water Company (the “Company”) is the oldest investor-owned water utility in the United States, operated continuously since 1816. The Company also owns and operates three wastewater collection systems and twelve wastewater collection and treatment systems.  The Company is a purely regulated water and wastewater utility.  Profitability is largely dependent on water revenues.  Due to the size of the Company and the limited geographic diversity of its service territory, weather conditions, particularly precipitation, economic, and market conditions can have an adverse effect on revenues.  The Company experienced increased revenues in 2025 compared to 2024 primarily due to an increase in the number of customers and higher revenues from the distribution system improvement charge, or DSIC.  The DSIC allows the Company to add a charge to customers’ bills for qualified replacement costs of certain infrastructure without submitting a rate filing.

The Company’s business does not require large amounts of working capital and is not dependent on any single customer or a very few customers for a material portion of its business.  In 2025, operating revenue was derived from the following sources and in the following percentages: residential, 64%; commercial and industrial, 29%; and other, 7%, which is primarily from the provision for fire service, but includes other water and wastewater service-related income.  The diverse customer mix helps to reduce volatility in consumption.

The Company seeks to grow revenues by increasing the volume of water sold and wastewater service provided through increases in the number of customers, making timely and prudent investments in infrastructure replacements, expansion and improvements, and timely filing for rate increases.  The Company continuously looks for acquisition and expansion opportunities both within and outside its current service territory as well as through contractual services and bulk water supply.

Page 13
The Company has agreements with several municipalities to provide billing and collection services.  The Company continues to review and consider opportunities to expand this initiative to further diversify the business.

In addition to increasing revenue, the Company consistently focuses on minimizing costs without sacrificing water quality or customer service.  Paperless billing, expanding online services, negotiation of favorable electric, banking, and other costs, and reduced pension contributions are examples of the Company’s recent efforts to minimize costs.

Performance Measures

Company management uses financial measures including operating revenues, net income, earnings per share and return on equity to evaluate its financial performance.  Additional statistical measures including number of customers, customer complaint rate, annual customer rates and the efficiency ratio are used to evaluate performance quality.  These measures are calculated on a regular basis and compared with historical information, budget and the other publicly-traded water and wastewater companies.

The Company’s performance in 2025 was strong under the above measures.  Operating revenues increased in 2025 compared to 2024 primarily due to an increase in the number of customers and higher revenues from the DSIC.  The increase in operating expenses offset the increase in operating revenues.  The Company incurred higher interest expense and lower allowance for funds used during construction.  The Company did benefit from a lower income taxes and a gain on life insurance.  The overall effect was a decrease in net income in 2025 over 2024 of 1.3% and a return on year end common equity of 8.3%.  The return on year end common equity was lower than the 2024 result and the five year historical average return on year end common equity of 10.3%.  The Company’s recently implemented rate increase should increase its opportunity to earn a higher return on year end common equity in the future.

The efficiency ratio, which is calculated as net income divided by revenues, is used by management to evaluate its ability to control expenses.  Over the five previous years, the Company’s ratio averaged 31.0%.  In 2025, the ratio was lower than the average at 25.9% due primarily to the increase in operating expenses, higher interest expense, and lower allowance for funds used during construction.  Management is confident that its ratio will compare favorably to that of its peers.  Management continues to look for ways to decrease expenses and increase efficiency as well as to file for rate increases promptly when needed.

2025 Compared with 2024

Net income for 2025 was $20,058, a decrease of $267, or 1.3%, from net income of $20,325 for 2024.  The primary contributing factors to the decrease were higher operating expenses, higher interest on debt, and a lower allowance for funds used during construction, which were partially offset by higher operating revenues, lower income taxes, and a gain on life insurance.

Operating revenues for 2025 increased $2,529, or 3.4%, from $74,959 for 2024 to $77,488 for 2025.  The increase was primarily due to growth in the customer base and revenues from the DSIC of $1,986.  The average number of water customers served in 2025 increased as compared to 2024 by 1,165 customers, from 72,415 to 73,580 customers.  The average number of wastewater customers served in 2025 increased as compared to 2024 by 490 customers, from 6,521 to 7,011 customers, primarily due to acquisitions.  Total per capita consumption for 2025 was approximately 1.6% lower than 2024.  The Company expects revenues for 2026 to increase due to an increase in rates effective March 1, 2026, and the continued increase in the number of water and wastewater customers from acquisitions and growth within the Company’s service territory.  Other regulatory actions, weather patterns, and economic conditions could impact results.

Page 14
Operating expenses for 2025 increased $2,865, or 6.1%, from $46,918 for 2024 to $49,783 for 2025.  The increase was primarily due to higher expenses of approximately $1,279 for depreciation and amortization, $931 for wages and benefits, $424 for distribution system maintenance, $161 for technology upgrades, $93 for reduced capitalized overhead, $89 for water treatment, and $59 for purchased power.  Other operating expenses increased by a net of $358.  The increase was partially offset by reduced expenses of $339 for the provision for uncollectible accounts, $118 for outside services, and $72 for wastewater treatment.  In 2026, the Company expects depreciation and amortization expense to continue to rise due to additional investment in utility plant, and other expenses to increase as costs to treat water and wastewater, and to maintain and extend the distribution and collection systems, continue to rise.  Weather patterns could further increase operating expenses.

Interest on debt for 2025 increased $1,358, or 15.3%, from $8,904 for 2024 to $10,262 for 2025.  The increase was primarily due to an increase in long-term debt outstanding and higher interest rates.  The average debt outstanding under the line of credit and short-term borrowings was $29,857 for 2025 and $10,087 for 2024.  The weighted average interest rate on the line of credit and short-term borrowings was 5.41% during 2025 and 5.23% during 2024.  Interest expense for 2026 is expected to increase due to an increase in long-term debt outstanding.  A potential equity offering to pay down the line of credit and short-term borrowings may offset the expected increase.

Allowance for funds used during construction decreased $1,232, from $2,052 in 2024 to $820 in 2025 due to a lower volume of eligible construction.  Allowance for funds used during construction in 2026 is expected to remain consistent based on the projected amount of eligible construction.

A non-recurring gain on life insurance of $831 was recorded in 2025 as a result of death benefits from life insurance policies.  No similar gains are anticipated in 2026.

Other income (expenses), net for 2025 reflects increased expenses of $344 as compared to 2024.  The increase was primarily due to higher retirement expenses of approximately $310 and higher charitable contributions of $114.  Other expenses decreased by a net of $80.  In 2026, other income (expenses) will be largely determined by the change in market returns and discount rates for retirement programs and related assets.

Income tax expense for 2025 decreased $2,166 as compared to 2024 due to higher deductions for the Internal Revenue Service, or IRS, tangible property regulations, or TPR.  The Company’s effective tax rate was (4.2)% for 2025 and 6.2% for 2024.  The Company’s effective tax rate for 2026 will be largely determined by the level of eligible asset improvements expensed for tax purposes under IRS TPR.  The Company expects the level to be lower in 2026, increasing the effective tax rate as compared to 2025.

Rate Matters

See Note 10 to the Company’s financial statements included herein for a discussion of its rate matters.

Effective January 1, 2026, the Company’s tariff included a DSIC on revenues of 4.89%.  The DSIC reset to zero when new rates took effect on March 1, 2026.

Acquisitions and Growth

See Note 2 to the Company’s financial statements included herein for a discussion of completed acquisitions included in financial results.

On December 23, 2025, the Company signed an agreement to purchase the water assets of Lenwood Management, LLC in Southampton Township, Franklin County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 90 water customers.

On December 11, 2025, the Company signed an agreement to purchase the water assets of Mt. Rock Manor Management, LLC in Southampton Township, Franklin County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 140 water customers.

Page 15
On June 13, 2025, the Company signed an agreement to purchase the wastewater collection and treatment assets of Pine Run Retirement Community in Hamilton Township, Adams County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the second quarter of 2026 at which time the Company will add approximately 100 wastewater customers.

On January 24, 2025, the Company signed an agreement to purchase the water assets of Eagle View Manufactured Housing Community in Berwick Township, Adams County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the second quarter of 2026 at which time the Company will add approximately 140 water customers.

On February 7, 2024, the Company signed an agreement to purchase the wastewater collection assets of Margaretta Mobile Home Park in Lower Windsor Township, York County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the fourth quarter of 2026 at which time the Company will add approximately 65 wastewater customers.

In total, these acquisitions are expected to be immaterial to Company results.  The Company is also pursuing other bulk water contracts and acquisitions in and around its service territory to help offset any potential declines in per capita water consumption and to grow its business.

Capital Expenditures

During 2025, the Company invested $48,725 in construction expenditures for main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items.  The Company replaced approximately 54,100 feet of water main and 1,800 feet of wastewater main in 2025.  The Company was able to fund construction expenditures using internally-generated funds, line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions from developers, municipalities, customers, or builders.  See Notes 1, 4 and 5 to the Company’s financial statements included herein.

The Company anticipates construction and acquisition expenditures for 2026 and 2027 of approximately $48,000 in each year, exclusive of any acquisitions not yet approved.  In addition to routine transmission and distribution projects, a portion of the anticipated 2026 and 2027 expenditures will be for additional main extensions, an upgrade to the enterprise software system, water treatment plant construction, water tank replacement, wastewater treatment plant construction, and various replacements of infrastructure.  The Company intends to use primarily internally-generated funds for its anticipated 2026 and 2027 construction and fund the remainder through line of credit borrowings, potential debt and equity offerings, proceeds from its stock purchase plans and customer advances and contributions (see Note 1 to the Company’s financial statements included herein).  Customer advances and contributions are expected to account for between 5% and 10% of funding requirements in 2026 and 2027.  The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, during 2026 and 2027, to fund anticipated construction and acquisition expenditures.

Liquidity and Capital Resources

Cash
The Company manages its cash through a cash management account that is directly connected to its line of credit.  Excess cash generated automatically pays down outstanding borrowings under the line of credit arrangement.  If there are no outstanding borrowings, the cash is used as an earnings credit to reduce banking fees.  Likewise, if additional funds are needed beyond what is generated internally for payroll, to pay suppliers, to fund capital expenditures, or to pay debt service, funds are automatically borrowed under the line of credit.  As of December 31, 2025, the Company borrowed $32,290 under its line of credit and incurred a cash overdraft on its cash management account of $1,836, which was recorded in accounts payable.  The cash management facility connected to the line of credit is expected to provide the necessary liquidity and funding for the Company’s operations, capital expenditures, and acquisitions for the foreseeable future.

Page 16
Accounts Receivable
The accounts receivable balance tends to follow the change in revenues but is also affected by the timeliness of payments by customers and the level of the reserve for doubtful accounts.  In 2025, higher revenue levels as compared to 2024 resulted in an increase in accounts receivable – customers.  A reserve is maintained at a level considered adequate to provide for expected credit losses.  Expected credit losses are based on historical write-offs combined with an evaluation of current conditions and reasonable and supportable forecasts including inactive accounts with outstanding balances, the aging of balances in payment agreements, adverse situations that may affect a customer’s ability to pay, economic conditions, and other relevant factors applied to the current aging of receivables.  Customer accounts are written off when collection efforts have been exhausted.  If the status of the evaluated factors deteriorate, the Company may incur additional expenses for uncollectible accounts and experience a reduction in its internally-generated funds.

Internally-generated Funds
The amount of internally-generated funds available for operations and construction depends on the Company’s ability to obtain timely and adequate rate relief, changes in regulations, customers’ water usage, weather conditions, customer growth and controlled expenses.  In 2025, the Company generated $29,860 internally as compared to $30,559 in 2024.  The decrease from 2024 was primarily due to higher interest paid partially offset by increased cash receipts from customers and the timing of payments to vendors.

Common Stock
Common stockholders’ equity as a percent of the total capitalization was 51.7% as of December 31, 2025, compared with 52.6% as of December 31, 2024.  The ratio decreased in 2025 due to higher debt primarily from capital expenditures.  The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward until it approaches fifty percent before considering additional equity.  It is the Company’s general intent to target equity between fifty and fifty-five percent of total capitalization.

The Company has an effective “shelf” Registration Statement on Form S-3 on file with the Securities and Exchange Commission, pursuant to which the Company may offer an aggregate remaining amount of up to $60,000 of its common stock or debt securities subject to market conditions at the time of any such offering.

Credit Line
Historically, the Company has borrowed under its lines of credit before refinancing with long-term debt or equity capital.  As of December 31, 2025, the Company maintained a $50,000, unsecured, committed line of credit at an interest rate of the Secured Overnight Financing Rate, or SOFR, plus 1.17% with an unused commitment fee and an interest rate floor.  The Company had $32,290 in outstanding borrowings under its line of credit as of December 31, 2025.  The interest rate on line of credit borrowings as of December 31, 2025 was 5.04%.  In the third quarter of 2025, the Company renewed its committed line of credit and extended the maturity date to September 2027.  No other terms or conditions of the line of credit agreement were modified.  The Company expects to renew this line of credit as it matures under similar terms and conditions.

The Company has taken steps to manage the risk of reduced credit availability.  It has established a committed line of credit with a 2-year revolving maturity that cannot be called on demand.  There is no guarantee that the Company will be able to obtain sufficient lines of credit with favorable terms in the future.  If the Company is unable to obtain sufficient lines of credit or to refinance its line of credit borrowings with long-term debt or equity, when necessary, it may have to eliminate or postpone capital expenditures.  Management believes the Company will have adequate capacity under its current line of credit to meet financing needs throughout 2026.

Term Loan
In December 2025, the Company entered into a $10,000 unsecured, committed term loan agreement.  Interest is payable monthly at an interest rate of SOFR plus 1.35% as established on the first day of each calendar month.  The principal balance can be repaid in whole or part at any time without premium.  The term loan matures in December 2026.  The interest rate on the term loan was 5.18% as of December 31, 2025.  The Company expects to secure permanent financing in 2026 to repay this term loan.

Page 17

Long-term Debt
The Company’s loan agreements contain various covenants and restrictions.  Management believes it is currently in compliance with all of these restrictions.  See Note 6 to the Company’s financial statements included herein for additional information regarding these restrictions.

The Company’s total long-term debt as a percentage of the total capitalization, defined as total common stockholders’ equity plus total long-term debt, was 48.3% as of December 31, 2025, compared with 47.4% as of December 31, 2024.  The Company expects to use long-term debt for its future financing needs and allow the debt percentage to trend upward.  A debt to total capitalization ratio between forty-five and fifty percent has historically been acceptable to the PPUC in rate filings.  See Note 6 to the Company’s financial statements included herein for the details of its long-term debt outstanding as of December 31, 2025.

Income Taxes, Deferred Income Taxes and Uncertain Tax Positions
Under the IRS TPR, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return.  This ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable.  It also results in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.  The Company expects to continue to expense these asset improvements in the future.

The Company’s effective tax rate will largely be determined by income before income taxes and the level of eligible asset improvements expensed for tax purposes that would have been capitalized for tax purposes prior to the implementation of the TPR.

On July 8, 2022, the Pennsylvania budget for the fiscal year ending June 30, 2023 was signed into law.  A provision within the tax code bill included with the budget provides for an annual phase-down of the Pennsylvania corporate net income tax rate of one percentage point in the first year beginning January 1, 2023 from 9.99% to 8.99%, and a one-half percentage point each year thereafter until it reaches 4.99% beginning January 1, 2031.  The Company has remeasured the state portion of the Company’s deferred income taxes.  The effect, net of the federal benefit recognized in income for the years ended December 31, 2025 and 2024, was immaterial.  Deferred income taxes for differences that are recognized for ratemaking purposes on a cash or flow-through basis were remeasured with offsetting changes to regulatory assets and liabilities on the balance sheet as of December 31, 2025 and 2024.  The Company expects any savings in its Pennsylvania current income taxes to be returned to its customers through the rate making process or as a future negative surcharge on their bills.

The Company has a substantial deferred income tax asset primarily due to the excess accumulated deferred income taxes on accelerated depreciation from the Tax Cuts and Jobs Act of 2017 and the differences between the book and tax balances of the customers’ advances for construction and contributions in aid of construction, and deferred compensation plans.  The Company does not believe a valuation allowance is required due to the expected generation of future taxable income during the periods in which those temporary differences become deductible.

The Company has seen an increase in its deferred income tax liability amounts primarily as a result of the accelerated depreciation deduction available for federal tax purposes which creates differences between book and tax depreciation expense.  The Company expects this trend to continue as it makes significant investments in capital expenditures subject to accelerated depreciation or TPR.

The Company has determined there are no uncertain tax positions that require recognition as of December 31, 2025.  See Note 14 to the Company’s financial statements included herein for additional details regarding income taxes.

Page 18
Credit Rating
On July 30, 2025, Standard & Poor’s affirmed the Company’s credit rating at A-, with a stable outlook and adequate liquidity.  The Company’s ability to maintain its credit rating depends, among other things, on adequate and timely rate relief, which it has been successful in obtaining, its ability to fund capital expenditures in a balanced manner using both debt and equity and its ability to generate cash flow.  In 2026, the Company’s objectives are to continue to maximize its funds provided by operations and maintain a strong capital structure in order to be able to attract capital.

Physical and Cyber Security

The Company maintains security measures at its facilities, and collaborates with federal, state, and local authorities, and industry trade associations regarding information on possible threats and security measures for water and wastewater utility operations.  The costs incurred are expected to be recoverable in water and wastewater rates and are not expected to have a material impact on its business, financial condition, or results of operations.

The Company relies on information technology systems in connection with the operation of the business, especially with respect to customer service, billing, accounting, and in some cases, the monitoring and operation of treatment, storage, and pumping facilities.  In addition, the Company relies on these systems to track utility assets and to manage maintenance and construction projects, materials and supplies, and human resource functions.  The information technology systems may be vulnerable to damage or interruption from cyber security attacks or other cyber-related events, including, but not limited to, power loss, computer systems failures, internet, telecommunications or data network failures, physical and electronic loss of data, computer viruses, intentional security breaches, hacking, denial of service actions, misappropriation of data, and similar events.  In some cases, administration of certain functions may be outsourced to third-party service providers that could also be targets of cyber security attacks.  A loss of these systems, or major problems with the operation of these systems, could harm the business, financial condition, and results of operations of the Company through the loss or compromise of customer, financial, employee, or operational data, disruption of billing, collections or normal field service activities, disruption of electronic monitoring and control of operational systems, and delays in financial reporting and other normal management functions.

Possible impacts associated with a cyber security attack or other events may include remediation costs related to lost, stolen, or compromised data, repairs to data processing systems, increased cyber security protection costs, adverse effects on the Company’s compliance with regulatory and environmental laws and regulation, including standards for drinking water, litigation, and reputational damage.

The Company has implemented processes, procedures, and controls to prevent or limit the effect of these possible events and maintains insurance to help defray costs associated with cyber security attacks.  The Company has not experienced a material impact on business or operations from these attacks.  Although the Company does not believe its systems are at a materially greater risk of cyber security attacks than other similar organizations and despite the implementation of robust security measures, the Company cannot provide assurance that the insurance will fully cover the costs of a cyber security event, and its robust security measures do not guarantee that reputation and financial results will not be adversely affected by such an incident.

Environmental Matters

The Company was granted approval by the PPUC to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the date of the agreement.  The tariff modification allows the Company to replace customer-owned service lines at its own initial cost.  The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period.  The cost for the customer-owned lead service line replacements was approximately $2,087 and $1,961 through December 31, 2025 and 2024, respectively, and is included as a regulatory asset.  Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $2,100.  This estimate is subject to adjustment as more facts become available.  This tariff modification will expire on March 8, 2026 unless extended by the PPUC.

Page 19
Drought

As of February 18, 2026, Pennsylvania state officials declared a drought watch for 34 counties in Pennsylvania, including York County within the Company’s service territory, and a drought warning for 17 counties in Pennsylvania, including Adams, Franklin, and Lancaster Counties within the Company’s service territory.  The watch calls for a voluntary reduction in nonessential water use of 5 to 10 percent and the warning calls for a voluntary reduction in nonessential water use of 10 to 15 percent.  These measures could potentially impact future revenues, operating expenses, and net income depending on the length and severity of the dry conditions.

Dividends

During 2025, the Company’s dividend payout ratios relative to net income and net cash provided by operating activities were 63.7% and 42.3%, respectively.  During 2024, the Company’s dividend payout ratios relative to net income and net cash provided by operating activities were 60.2% and 39.6%, respectively.  During the fourth quarter of 2025, the Board increased the dividend by 4.0% from $0.2192 per share to $0.2280 per share per quarter.

The Company’s Board declared a dividend in the amount of $0.2280 per share at its January 2026 meeting.  The dividend is payable on April 15, 2026 to shareholders of record as of February 27, 2026.  While the Company expects to maintain this dividend amount in 2026, future dividends will be dependent upon the Company’s earnings, financial condition, capital demands and other factors and will be determined by the Company’s Board.  See Note 6 to the Company’s financial statements included herein for restrictions on dividend payments.

Inflation

The Company is affected by inflation, most notably by the continually increasing costs incurred to maintain and expand its service capacity.  The cumulative effect of inflation results in significantly higher facility replacement costs which must be recovered from future cash flows.  The ability of the Company to recover this increased investment in facilities is dependent upon future rate increases, which are subject to approval by the PPUC.  The Company can provide no assurances that its rate increases will be approved by the PPUC; and, if approved, the Company cannot guarantee that these rate increases will be granted in a timely or sufficient manner to cover the investments and expenses for which the rate increase was sought.

Critical Accounting Estimates

The methods, estimates, and judgments the Company used in applying its accounting policies have a significant impact on the results reported in its financial statements. The Company’s accounting policies require management to make subjective judgments because of the need to make estimates of matters that are inherently uncertain.  The Company’s most critical accounting estimates include accounting for its pension plans.

Pension Accounting
Accounting for defined benefit pension plans requires estimates of future compensation increases, mortality, the discount rate, and expected return on plan assets as well as other variables.  These variables are reviewed annually with the Company’s pension actuary.  The Company used compensation increases of 2.5% to 3.0% in 2024 and 2025.

The Company adopted the Pri-2012 mortality table, using the white collar table for the administrative and general plan and the blue collar table for the union plan.  In 2021, the Company adopted the MP-2021 mortality improvement scale, which slightly increased the life expectancy of pension plan participants, resulting in a slight increase to the pension benefit obligation, and ultimately, a decrease in the Company’s funded status of the plans.

The Company selected its December 31, 2025 and 2024 discount rates based on the FTSE Pension Liability Index.  This index uses spot rates for durations out to 30 years and matches them to expected disbursements from the plan over the long term.  The Company believes this index most appropriately matches its pension obligations.  The present values of the Company’s future pension obligations were determined using a discount rate of 5.30% at December 31, 2025 and 5.45% at December 31, 2024.

Page 20

Adopting a new mortality table that represents a change in life expectancy and choosing a different discount rate normally changes the amount of pension expense and the corresponding liability.  In the case of the Company, these items change its liability, but do not have an impact on its pension expense.  The PPUC, in a previous rate settlement, agreed to grant recovery of the Company’s contribution to the pension plans in customer rates.  As a result, under the accounting standards regarding rate-regulated activities, expense in excess of the Company’s pension plan contribution can be deferred as a regulatory asset and expensed as contributions are made to the plans and are recovered in customer rates.  Therefore, these changes affect regulatory assets rather than pension expense.

The Company’s estimate of the expected return on plan assets is primarily based on the historic returns and projected future returns of the asset classes represented in its plans.  The target allocation of pension assets is 70% to 90% fixed income securities, 10% to 30% equity securities, and 0% to 10% cash reserves.  The Company used 5.00% as its expected rate of return in 2024 and 2025.  A decrease in the expected pension return would normally cause an increase in pension expense; however due to the aforementioned rate settlement, the Company’s expense would continue to be equal to its contributions to the plans.  The change would instead be recorded in regulatory assets.

Lower discount rates and underperformance of assets could cause future required contributions and expense to increase substantially.  If this were to happen, the Company would have to consider changes to its pension plan benefits and possibly request additional recovery of expenses through increased rates charged to customers.  See Note 11 to the Company’s financial statements included herein for additional details regarding the pension plans.

Off-Balance Sheet Transactions

The Company does not use off-balance sheet transactions, arrangements or obligations that may have a material current or future effect on financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses.  The Company does not use securitization of receivables or unconsolidated entities. For risk management purposes, the Company uses a derivative financial instrument, an interest rate swap agreement discussed in Note 7 to the financial statements included herein.  The Company does not engage in trading or other risk management activities, does not use other derivative financial instruments for any purpose, has no material lease obligations, no guarantees and does not have material transactions involving related parties.

Impact of Recent Accounting Pronouncements

There are currently no recent accounting pronouncements that are expected to have a material impact to the Company’s financial statements.


Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.


Item 8.
Financial Statements.


 
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 23)
 22
Balance Sheets
 23
Statements of Income
 25
Statements of Common Stockholders’ Equity
 26
Statements of Cash Flows
 27
Notes to Financial Statements
 28

Page 21
Report of Independent Registered Public Accounting Firm


To the Stockholders and the Board of Directors of The York Water Company

Opinion on the Financial Statements


We have audited the accompanying balance sheets of The York Water Company (the “Company”) as of December 31, 2025 and 2024, the related statements of income, common stockholders’ equity, and cash flows, for the years then ended, and the related notes and financial statement schedule listed in Item 15(a)2 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Baker Tilly US, LLP

Lancaster, Pennsylvania
March 3, 2026

We have served as the Company’s auditor since 2003.
Page 22
THE YORK WATER COMPANY

Balance Sheets
(In thousands of dollars, except per share amounts)

   
Dec. 31, 2025
    
Dec. 31, 2024
  
ASSETS
            
UTILITY PLANT, at original cost
  
$
711,121
    
$
664,927
  
Plant acquisition adjustments
    
(9,761
)
    
(9,838
)
Accumulated depreciation
    
(132,934
)
    
(124,082
)
Net utility plant
    
568,426
      
531,007
  
                 
OTHER PHYSICAL PROPERTY, net of accumulated depreciation
of $573 in 2025 and $536 in 2024
    
1,500
      
1,534
  
                 
CURRENT ASSETS:
                
Cash and cash equivalents
    
1
      
1
  
Accounts receivable, net of reserves of $1,710 in 2025
and $1,610 in 2024
    
8,572
      
7,249
  
Unbilled revenues
    
3,833
      
3,604
  
Recoverable income taxes
    
1,054
      
587
  
Materials and supplies inventories, at cost
    
3,361
      
3,413
  
Prepaid expenses
    
1,621
      
1,597
  
Total current assets
    
18,442
      
16,451
  
                 
OTHER LONG-TERM ASSETS:
                
Prepaid pension cost
    
27,969
      
25,009
  
Note receivable
    
255
      
255
  
Deferred regulatory assets
    
59,297
      
54,061
  
Other assets
    
4,999
      
5,156
  
Total other long-term assets
    
92,520
      
84,481
  
                 
Total Assets
  
$
680,888
    
$
633,473
  

The accompanying notes are an integral part of these statements.

Page 23
THE YORK WATER COMPANY

Balance Sheets
(In thousands of dollars, except per share amounts)

   
Dec. 31, 2025
    
Dec. 31, 2024
  
STOCKHOLDERS’ EQUITY AND LIABILITIES
            
COMMON STOCKHOLDERS’ EQUITY:
            
Common stock, no par value, authorized 46,500,000 shares,
issued and outstanding 14,446,581 shares in 2025
and 14,386,282 shares in 2024
  
$
139,952
    
$
138,089
  
Retained earnings
    
100,395
      
93,103
  
Total common stockholders’ equity
    
240,347
      
231,192
  
                 
PREFERRED STOCK, authorized 500,000 shares, no shares issued
    
–
      
–
  
                 
LONG-TERM DEBT
    
221,900
      
205,561
  
                 
COMMITMENTS
    
–
      
–
  
                 
CURRENT LIABILITIES:
                
Short-term borrowings     10,000       –  
Current portion of long-term debt     330       –  
Accounts payable
    
8,423
      
9,525
  
Dividends payable
    
3,032
      
2,892
  
Accrued compensation and benefits
    
1,879
      
1,806
  
Accrued interest
    
2,490
      
2,490
  
Deferred regulatory liabilities
    
889
      
864
  
Other accrued expenses
    
584
      
712
  
Total current liabilities
    
27,627
      
18,289
  
                 
DEFERRED CREDITS:
                
Customers’ advances for construction
    
22,357
      
20,546
  
Deferred income taxes
    
67,276
      
61,157
  
Deferred employee benefits
    
3,546
      
3,526
  
Deferred regulatory liabilities
    
46,298
      
43,947
  
Other deferred credits
    
479
      
386
  
Total deferred credits
    
139,956
      
129,562
  
                 
Contributions in aid of construction
    
51,058
      
48,869
  
                 
Total Stockholders’ Equity and Liabilities
  
$
680,888
    
$
633,473
  

The accompanying notes are an integral part of these statements.

Page 24
THE YORK WATER COMPANY

Statements of Income
(In thousands of dollars, except per share amounts)

 
Year Ended December 31
  
   
2025
    
2024
  
             
OPERATING REVENUES:
  
$
77,488
    
$
74,959
  
                 
OPERATING EXPENSES:
                
Operation and maintenance
    
20,812
      
19,670
  
Administrative and general
    
12,875
      
12,610
  
Depreciation and amortization
    
14,241
      
12,962
  
Taxes other than income taxes
    
1,855
      
1,676
  
     
49,783
      
46,918
  
                 
Operating income
    
27,705
      
28,041
  
                 
OTHER INCOME (EXPENSES):
                
Interest on debt
    
(10,262
)
    
(8,904
)
Allowance for funds used during construction
    
820
      
2,052
  
Other pension costs
    
530
      
524
  
Gain on life insurance     831       –  
Other income (expenses), net
    
(382
)
    
(38
)
     
(8,463
)
    
(6,366
)
                 
Income before income taxes
    
19,242
      
21,675
  
                 
Income tax expense (benefit)
    
(816
)
    
1,350
  
                 
Net Income
  
$
20,058
    
$
20,325
  
                 
Basic Earnings Per Share
  
$
1.39
    
$
1.42
  
                 
Diluted Earnings Per Share
  
$
1.39
    
$
1.42
  

The accompanying notes are an integral part of these statements.

Page 25
THE YORK WATER COMPANY

Statements of Common Stockholders’ Equity
(In thousands of dollars, except per share amounts)
For the Years Ended December 31, 2025 and 2024

 
Common
Stock
Shares
    
Common
Stock
Amount
    
Retained
Earnings
    
Total
  
                         
Balance, December 31, 2023
    
14,332,245
    
$
136,174
    
$
85,004
    
$
221,178
  
Net income
    
–
      
–
      
20,325
      
20,325
  
Cash dividends declared, $0.8516 per share
     –       –       (12,226 )     (12,226 )
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
    
48,163
      
1,669
      
–
      
1,669
  
Stock-based compensation
    
5,874
      
246
      
–
      
246
  
Balance, December 31, 2024
    
14,386,282
      
138,089
      
93,103
      
231,192
  
Net income
    
–
      
–
      
20,058
      
20,058
  
Cash dividends declared, $0.8856 per share
    
–
      
–
      
(12,766
)
    
(12,766
)
Issuance of common stock under
dividend reinvestment, direct stock and
employee stock purchase plans
    
51,774
      
1,601
      
–
      
1,601
  
Stock-based compensation
    
8,525
      
262
      
–
      
262
  
Balance, December 31, 2025
    
14,446,581
    
$
139,952
    
$
100,395
    
$
240,347
  

The accompanying notes are an integral part of these statements.

Page 26
THE YORK WATER COMPANY

Statements of Cash Flows
(In thousands of dollars, except per share amounts)
 
Year Ended December 31
  
   
2025
    
2024
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net income
  
$
20,058
    
$
20,325
  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Gain on life insurance     (831 )     –  
Depreciation and amortization
    
14,241
      
12,962
  
Stock-based compensation
    
262
      
246
  
Increase (decrease) in deferred income taxes
    
(714
)
    
476
  
Other
    
558
      
353
  
Changes in assets and liabilities:
                
Increase in accounts receivable and unbilled revenues
    
(986
)
    
(604
)
Increase in recoverable income taxes
    
(467
)
    
(255
)
Increase in materials and supplies inventories, prepaid expenses, prepaid pension cost,
deferred regulatory and other assets
    
(8,090
)
    
(8,824
)
Increase in accounts payable, accrued compensation and benefits, other accrued expenses,
deferred employee benefits, deferred regulatory liabilities, and other deferred credits
    
5,829
      
5,131
  
Increase in accrued interest
    
–
      
749
  
Net cash provided by operating activities
    
29,860
      
30,559
  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Utility plant additions, including debt portion of allowance for funds used during
construction of $458 in 2025 and $1,147 in 2024
    
(48,725
)
    
(48,226
)
Acquisitions of water and wastewater systems
    
–
      
(783
)
Net cash used in investing activities
    
(48,725
)
    
(49,009
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Customers’ advances for construction and contributions in aid of construction
    
4,716
      
3,411
  
Repayments of customer advances
    
(716
)
    
(791
)
Proceeds of long-term debt issues
    
56,785
      
86,748
  
Debt issuance costs
     –       (167 )
Repayments of long-term debt
    
(40,303
)
    
(61,213
)
Borrowings under short-term agreements     10,000       –  
Changes in cash overdraft position
    
(592
)
    
881
  
Issuance of common stock
    
1,601
      
1,669
  
Dividends paid
    
(12,626
)
    
(12,088
)
Net cash provided by financing activities
    
18,865
      
18,450
  
                 
Net change in cash and cash equivalents
    
–
      
–
  
Cash and cash equivalents at beginning of period
    
1
      
1
  
Cash and cash equivalents at end of period
  
$
1
    
$
1
  
                 
Supplemental disclosures of cash flow information:
                
Cash paid during the period for:
                
Interest, net of amounts capitalized
  
$
9,552
    
$
6,892
  
Income taxes
     364       943  
                 
Supplemental disclosure of non-cash investing and financing activities:
                
Accounts payable includes $4,018 in 2025 and $4,138 in 2024 for the construction of utility plant.
            
Contributions in aid of construction includes $621 in 2024 recorded as part of the MESCO, Inc.
and York Haven Borough acquisitions.
          
 

The accompanying notes are an integral part of these statements.
Page 27
Notes to Financial Statements

(In thousands of dollars, except per share amounts)

1.  Significant Accounting Policies

The primary business of The York Water Company, or the Company, is to impound, purify and distribute water.  The Company also owns and operates three wastewater collection systems and twelve wastewater collection and treatment systems.  The Company operates within its franchised territory located in four counties within south-central Pennsylvania and is subject to regulation by the Pennsylvania Public Utility Commission, or PPUC.

The following summarizes the significant accounting policies employed by The York Water Company.

Utility Plant and Depreciation
The cost of additions includes contracted cost, direct labor and fringe benefits, materials, overhead and, for certain utility plant, allowance for funds used during construction.  In accordance with regulatory accounting requirements, water and wastewater systems acquired are recorded at estimated original cost of utility plant when first devoted to utility service and the applicable depreciation is recorded to accumulated depreciation.  The difference between the estimated original cost less applicable accumulated depreciation, and the purchase price and acquisition costs, is recorded as an acquisition adjustment within utility plant as permitted by the PPUC.  At December 31, 2025 and 2024, utility plant includes a net credit acquisition adjustment of $9,761 and $9,838, respectively.  For those amounts approved by the PPUC, the net acquisition adjustment is being amortized over the remaining life of the respective assets.  Certain amounts are still awaiting approval from the PPUC before amortization will commence.  Amortization amounted to $77 and $79 for the years ended December 31, 2025 and 2024, respectively.

Upon normal retirement of depreciable property, the estimated or actual cost of the asset is credited to the utility plant account, and such amounts, together with the cost of removal less salvage value, are charged to the reserve for depreciation.  To the extent the Company recovers cost of removal or other retirement costs through rates after the retirement costs are incurred, a regulatory asset is reported.  Gains or losses from abnormal retirements are reflected in income currently.

The straight-line remaining life method is used to compute depreciation on utility plant cost, exclusive of land and land rights.  Annual provisions for depreciation of transportation and mechanical equipment included in utility plant are computed on a straight-line basis over the estimated service lives.  Such provisions are charged to clearing accounts and apportioned therefrom to operating expenses and other accounts in accordance with the Uniform System of Accounts as prescribed by the PPUC.

The Company charges to maintenance expense the cost of repairs and replacements and renewals of minor items of property.  Maintenance of transportation equipment is charged to clearing accounts and apportioned from there in a manner similar to depreciation.  The cost of replacements, renewals, and betterments of units of property is capitalized to the utility plant accounts.

The following remaining lives are used for financial reporting purposes:

 
December 31
    
Approximate range
  
Utility Plant Asset Category
  
2025
    
2024
    
of remaining lives
  
Mains and accessories
  
$
336,517
    
$
308,020
    
13 – 86 years
  
Services, meters, and hydrants
    
114,894
      
106,200
    
15 – 47 years
  
Operations structures, reservoirs, and water tanks
    
145,645
      
143,821
    
8 – 70 years
  
Pumping and treatment equipment
    
53,704
      
51,906
    
7 – 35 years
  
Office, transportation, and operating equipment
    
21,578
      
20,519
    
3 – 21 years
  
Land and other non-depreciable assets
    
5,845
      
5,833
      
–
  
Utility plant in service
    
678,183
      
636,299
          
Construction work in progress
    
32,938
      
28,628
      
–
  
Total Utility Plant
  
$
711,121
    
$
664,927
          

Page 28
The effective rate of depreciation was 2.45% in 2025 and 2.50% in 2024, on average utility plant, net of customers’ advances and contributions.  Larger depreciation provisions resulting from allowable accelerated methods are deducted for tax purposes.

Cash and Cash Equivalents
For the purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents except for those instruments earmarked to fund construction expenditures or repay long-term debt.

The Company periodically maintains cash balances in major financial institutions in excess of the federally insured limit by the Federal Deposit Insurance Corporation (FDIC).  The Company has not experienced any losses and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Accounts Receivable
Accounts receivable are stated at outstanding balances, less a reserve for doubtful accounts.  The reserve for doubtful accounts is established through provisions charged against income.  Accounts deemed to be uncollectible are charged against the reserve and subsequent recoveries, if any, are credited to the reserve.  The reserve for doubtful accounts is the best estimate of the amount of probable credit losses in the existing accounts receivable and is determined based on lifetime expected credit losses and the aging of account balances.  Management’s periodic evaluation of the adequacy of the reserve is based on historical write-offs combined with an evaluation of current conditions and reasonable and supportable forecasts including inactive accounts with outstanding balances, the aging of balances in payment agreements, adverse situations that may affect a customer’s ability to pay, economic conditions, and other relevant factors applied to the current aging of receivables.  This evaluation is inherently subjective.  Unpaid balances remaining after the stated payment terms are considered past due.

Materials and Supplies Inventories
Materials and supplies inventories are stated at cost.  Costs are determined using the average cost method.

Note Receivable
Note receivable is recorded at cost and represents amounts due from a municipality for construction of water mains in their municipality.  Management, considering current information and events regarding the borrowers’ ability to repay their obligations, considers a note to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the note agreement.  When a note is considered to be impaired, the carrying value of the note is written down.  The amount of the impairment is measured based on the present value of expected future cash flows discounted at the note’s effective interest rate.

Regulatory Assets and Liabilities
The Company is subject to the provisions of generally accepted accounting principles regarding rate-regulated entities.  The accounting standards provide for the recognition of regulatory assets and liabilities as allowed by regulators for costs or credits that are reflected in current customer rates or are considered probable of being included in future rates.  The regulatory assets or liabilities are then relieved as the cost or credit is reflected in rates.  Regulatory assets represent costs that are expected to be fully recovered from customers in future rates while regulatory liabilities represent amounts that are expected to be refunded to customers in future rates.  These deferred costs have been excluded from the Company’s rate base and, therefore, no return is being earned on the unamortized balances.

Page 29
Regulatory assets and liabilities are comprised of the following:

 
December 31
    
Remaining Recovery
  
   
2025
    
2024
    
Periods
  
Assets
                  
Income taxes
  
$
47,186
    
$
40,880
    
Various
  
Unrealized swap losses
    
470
      
382
    
1 – 4 years
  
Utility plant retirement costs
    
8,955
      
10,221
    
5 years
  
Customer-owned lead service line replacements
    
1,016
      
1,173
    
Various
  
Income taxes on customers’ advances for
construction and contributions in aid of
construction
    
1,119
      
1,176
    
Various
  
Service life study expenses
    
9
      
14
    
2 years
  
Rate case filing expenses
    
542
      
215
    
1 - 4 years
  
   
$
59,297
    
$
54,061
          
Liabilities
                        
Excess accumulated deferred income
taxes on accelerated depreciation
  
$
12,907
    
$
13,090
    
Various
  
Postretirement benefits
    
25,785
      
22,825
    
Not yet known
  
Income taxes
    
6,379
      
6,520
    
Various
  
IRS TPR catch-up deduction
    
2,116
      
2,376
    
8 years
  
   
$
47,187
    
$
44,811
          

The regulatory asset for income taxes includes (a) deferred state income taxes related primarily to differences between book and tax depreciation expense, (b) deferred income taxes related to the differences that arise between specific asset improvement costs capitalized for book purposes and deducted as a repair expense for tax purposes, and (c) deferred income taxes associated with the gross-up of revenues related to the differences.  These assets are recognized for ratemaking purposes on a cash or flow-through basis and will be recovered in rates as they reverse.

The Company uses regulatory accounting treatment to defer the mark-to-market unrealized gains and losses on its interest rate swap to reflect that the gain or loss is included in the ratemaking formula when the transaction actually settles.  The value of the swap as of the balance sheet date is recorded as part of other deferred credits.  Realized gains or losses on the swap will be recorded as interest expense in the statement of income over its remaining term of four years.

Utility plant retirement costs represent costs already incurred for the removal of assets, which are expected to be recovered over a five-year period in rates, through depreciation expense.

The Company was granted approval by the PPUC to modify its tariff to replace lead customer-owned service lines that were discovered when the Company replaced its lead service lines, and to include the cost of the annual replacement of up to 400 lead customer-owned service lines whenever they are discovered, regardless of the material used for the company-owned service line, over nine years.  The tariff modification allows the Company to replace customer-owned service lines at its own initial cost and record the costs as a regulatory asset to be recovered in future base rates to customers.  There is one year remaining in the recovery period established in the rate order that began March 1, 2023. There are four years remaining in the recovery period established in the most recent rate order that began March 1, 2026.  The recovery period for the customer-owned lead service line replacements completed subsequent to the most recent rate order will begin after the next rate order.

Service life study expenses are deferred and amortized over their remaining life of two years.  Rate case filing expenses are deferred and amortized over their remaining life of one year for the rate order that began March 1, 2023 and their remaining life of four years for the rate order that began March 1, 2026.

Page 30
Pursuant to the Tax Cuts and Jobs Act of 2017, or 2017 Tax Act, customers’ advances for construction and contributions in aid of construction are considered taxable income.  The Company’s tariff allows the Company to record these income taxes for inclusion in rate base.  This asset is recognized for ratemaking purposes on a cash or flow-through basis and will be recovered in rates as it reverses.  In November 2021, the Infrastructure Investment and Jobs Act of 2021, or 2021 Infrastructure Act, repealed the tax treatment of customers’ advances for construction and contributions in aid of construction made after December 31, 2020.

Under normalization rules applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated depreciation from lowering of the enacted federal statutory corporate tax rate is recorded as a regulatory liability.  The benefit will be given back to customers in rates over the remaining regulatory life of the property.

The regulatory liability for income taxes includes deferred taxes related to excess accumulated deferred income taxes on accelerated depreciation, other postretirement benefits, customers’ advances for construction and contributions in aid of construction, and bad debts, as well as deferred investment tax credits.  These liabilities will be given back to customers in rates, as tax deductions occur over the next 1 to 50 years.

The regulatory liability for the Internal Revenue Service, or IRS, tangible property regulations, or TPR, catch-up deduction represents the tax benefits realized on the Company’s 2014 income tax return for qualifying capital expenditures made prior to 2014.  The period over which it will be given back to customers in rates was established in a rate order at 15 years beginning March 1, 2019.

Postretirement benefits include the difference between contributions and deferred pension expense and the overfunded status of the pension plans.  The overfunded status represents the difference between the projected benefit obligation and the fair market value of the assets.  This liability will change in future years based on the amount of contributions made and market returns.  The liability will be given back to customers in rates over some period determined by the PPUC in a future rate filing.

Other Assets
Other assets consist mainly of the cash value of life insurance policies held as an investment by the Company for reimbursement of costs and benefits associated with its supplemental retirement and deferred compensation programs.

Deferred Debt Expense
Deferred debt expense is amortized on a straight-line basis over the term of the related debt and is presented on the balance sheet as a direct reduction from long-term debt.

Customers’ Advances for Construction
Customer advances are cash payments from developers, municipalities, customers, or builders for construction of utility plant, and are refundable upon completion of construction, as operating revenues are earned.  If the Company loans funds for construction to the customer, the refund amount is credited to the note receivable rather than paid out in cash.  After all refunds to which the customer is entitled are made, any remaining balance is transferred to contributions in aid of construction.

Contributions in Aid of Construction
Contributions in Aid of Construction is composed of (i) direct, non-refundable contributions from developers, customers, or builders for construction of water infrastructure and (ii) customer advances that have become non-refundable.  Contributions in aid of construction are deducted from the Company’s rate base, and therefore, no return is earned on property financed with contributions.  The PPUC requires that contributions received remain on the Company’s balance sheets indefinitely as a long-term liability.

Page 31
Interest Rate Swap Agreement
The Company is exposed to certain risks relating to its ongoing business operations.  The primary risk managed by using derivative instruments is interest rate risk.  The Company utilizes an interest rate swap agreement to effectively convert its variable-rate debt to a fixed rate.  Interest rate swaps are contracts in which a series of interest rate cash flows are exchanged over a prescribed period.  The notional amount on which the interest payments are based is not exchanged.  The Company has designated the interest rate swap agreement as a cash flow hedge, classified as a financial derivative used for non-trading activities.

The accounting standards regarding accounting for derivatives and hedging activities require companies to recognize all derivative instruments as either assets or liabilities at fair value on the balance sheets.  In accordance with the standards, the interest rate swap is recorded on the balance sheets in other deferred credits at fair value.

The Company uses regulatory accounting treatment rather than hedge accounting to defer the unrealized gains and losses on its interest rate swap.  These unrealized gains and losses are recorded as a regulatory asset.  Based on current ratemaking treatment, the Company expects the gains and losses to be recognized in rates and in interest expense as the swap settlements occur.  Swap settlements are recorded in the income statement with the hedged item as interest expense.  Swap settlements resulted in the reclassification from regulatory assets to interest expense of $70 in 2025 and $(6) in 2024.  The overall swap result was a (gain) loss of $158 in 2025 and $(244) in 2024.  During the year ending December 31, 2026, the Company expects to reclassify $132 before tax from regulatory assets to interest expense.

The interest rate swap will expire on October 1, 2029.  Other than the interest rate swap, the Company has no other derivative instruments.

Stock-Based Compensation
The Company records compensation expense in the financial statements for stock-based awards based on the grant date fair value of those awards.  Stock-based compensation expense is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term.  Forfeitures are recognized as they occur.

Income Taxes
Certain income and expense items are accounted for in different time periods for financial reporting than for income tax reporting purposes.

Deferred income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carryforwards.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  To the extent such income taxes increase or decrease future rates, an offsetting regulatory asset or liability has been recorded.

Investment tax credits have been deferred and are being amortized to income over the average estimated service lives of the related assets.  As of December 31, 2025 and 2024, deferred investment tax credits amounted to $319 and $356, respectively.

The Company filed for a change in accounting method under the IRS TPR effective in 2014.  Under the change in accounting method, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return.  The Company was permitted to make this deduction for prior years (the “catch-up deduction”) and each year going forward, beginning with 2014 (the “ongoing deduction”).  After receiving approval from the PPUC in a rate order, the Company began to recognize the catch-up deduction, recorded as a regulatory liability, over 15 years beginning March 1, 2019.  The ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable.  The catch-up deduction resulted in a decrease in current income taxes payable and an increase to regulatory liabilities.  Both the ongoing and catch-up deductions resulted in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.

Page 32
The 2017 Tax Act, among other things, reduces the federal statutory corporate tax rate for tax years beginning in 2018 from 34% to 21%, treats customers’ advances for construction and contributions in aid of construction as taxable income, eliminates certain deductions, and eliminates bonus depreciation on qualified water and wastewater property.  This resulted in the remeasurement of the federal portion of the Company’s deferred taxes as of December 31, 2017 to the 21% rate.  The effect was recognized in income for the year ended December 31, 2017 for all deferred tax assets and liabilities except accelerated depreciation.  Under normalization rules applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated depreciation is recorded as a regulatory liability.  The regulatory liability is a temporary difference, so a deferred tax asset is recorded including the gross-up of revenue necessary to return, in rates, the effect of the temporary difference.  In November 2021, the 2021 Infrastructure Act repealed the tax treatment of customers’ advances for construction and contributions in aid of construction made after December 31, 2020.  On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into federal law.  Among other things, the OBBBA extends or makes permanent several of the tax law changes enacted as part of the 2017 Tax Act.  The OBBBA leaves the federal statutory corporate tax rate unchanged at 21%.

Allowance for Funds Used During Construction
Allowance for funds used during construction (AFUDC) represents the estimated cost of funds used for construction purposes during the period of construction.  These costs are reflected as non-cash income during the construction period and as an addition to the cost of plant constructed.  AFUDC includes the net cost of borrowed funds and a rate of return on other funds.  The PPUC approved rate of 10.04% was applied for 2025 and 2024.  AFUDC is recovered through water and wastewater rates as utility plant is depreciated.

Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.


2.  Acquisitions

On January 31, 2024, the Company completed the acquisition of the wastewater collection and treatment assets of MESCO, Inc. in Monaghan Township, York County, Pennsylvania.  The Company began operating the existing wastewater collection and treatment assets on February 1, 2024.  The acquisition resulted in the addition of approximately 180 wastewater customers with purchase price and acquisition costs of approximately $44, which is less than the depreciated original cost of the assets and contributions in aid of construction of $63.  The Company recorded a negative acquisition adjustment of $110 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets.  This acquisition is immaterial to Company results.

On February 21, 2024, the Company completed the acquisition of the water assets of Longstown Mobile Estates in Windsor Township, York County, Pennsylvania.  The Company began operating the existing water system through an interconnection with its current distribution system on February 26, 2024.  The acquisition resulted in the addition of approximately 90 water customers with purchase price and acquisition costs of approximately $8, which is less than the depreciated original cost of the assets.  The Company recorded a negative acquisition adjustment of $2 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets.  These customers were previously served by the Company through a single customer connection to the mobile home park.  This acquisition is immaterial to Company results.

On September 26, 2024, the Company completed the acquisition of the water assets of Houston Run Community Water System, LLC in Salisbury Township, Lancaster County, Pennsylvania.  The Company began operating the existing water assets on September 30, 2024.  The acquisition resulted in the addition of approximately 15 water customers with purchase price and acquisition costs of approximately $228, which is less than the depreciated original cost of the assets.  The Company recorded a negative acquisition adjustment of $368 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets.  This acquisition is immaterial to Company results.

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On December 5, 2024, the Company completed the acquisition of the wastewater collection and treatment assets of York Haven Sewer Authority in York Haven Borough, York County, Pennsylvania.  The Company began operating the existing wastewater collection and treatment assets on December 9, 2024.  The acquisition resulted in the addition of approximately 230 wastewater customers with purchase price and acquisition costs of approximately $409, which is more than the depreciated original cost of the assets, and contributions in aid of construction of $558.  The Company recorded an acquisition adjustment of $128 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets.  This acquisition is immaterial to Company results.

On December 12, 2024, the Company completed the acquisition of the water assets of Pine Run Retirement Community in Hamilton Township, Adams County, Pennsylvania.  The Company began operating the existing water assets through an interconnection with its current distribution system on December 16, 2024.  The acquisition resulted in the addition of approximately 100 water customers with purchase price and acquisition costs of approximately $55, which is less than the depreciated original cost of the assets.  The Company recorded a negative acquisition adjustment of $157 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets.  This acquisition is immaterial to Company results.

On December 12, 2024, the Company completed the acquisition of the water assets of the Brookhaven Mobile Home Park of ATG Properties, LLC in Hellam Township, York County, Pennsylvania.  The Company began operating the existing water assets through an interconnection with its current distribution system on December 16, 2024.  The acquisition resulted in the addition of approximately 150 water customers with purchase price and acquisition costs of approximately $39, which is less than the depreciated original cost of the assets.  The Company recorded a negative acquisition adjustment of $24 and will seek approval from the PPUC to amortize the acquisition adjustment over the remaining life of the acquired assets.  This acquisition is immaterial to Company results.



3.  Accounts Receivable and Unbilled Revenue

Accounts receivable are summarized in the following table:

 
As of
    
As of
        
   
Dec. 31, 2025
    
Dec. 31, 2024
    
Change
  
                   
Accounts receivable – customers
  
$
8,761
    
$
8,392
    
$
369
  
Life insurance receivable
     1,299       –       1,299  
Other receivables
    
222
      
467
      
(245
)
     
10,282
      
8,859
      
1,423
  
Less: allowance for doubtful accounts
    
(1,710
)
    
(1,610
)
    
(100
)
Accounts receivable, net
  
$
8,572
    
$
7,249
    
$
1,323
  
                         
Unbilled revenue
  
$
3,833
    
$
3,604
    
$
229
  

Differences in timing of revenue recognition, billings, and cash collections result in receivables.  Generally, billing occurs subsequent to revenue recognition, resulting in unbilled revenue on the balance sheet.  The Company does not receive advances or deposits from customers before revenue is recognized so no contract liabilities are reported.  Accounts receivable are recorded when the right to consideration becomes unconditional and are presented separately on the balance sheet.  The changes in accounts receivable and in unbilled revenue were primarily due to normal timing difference between performance and the customer’s payments.

Page 34
4.  Note Receivable and Customers’ Advances for Construction

The Company entered into an agreement with a municipality to extend water service into a previously formed water district.  The Company loaned funds to the municipality to cover the costs related to the project.  The municipality concurrently advanced these funds back to the Company in the form of customers’ advances for construction.  The municipality is required by enacted ordinance to charge application fees and water revenue surcharges (fees) to customers connected to the system, which are remitted to the Company.  The note principal and the related customer advance that could be used to settle the note receivable are reduced periodically as operating revenues are earned by the Company from customers connected to the system and refunds of the advance are made.  There is no due date for the notes or expiration date for the advance.

The Company recorded interest income of $196 in 2025 and $158 in 2024.  The interest rate on the note outstanding is 7.5%.

Included in the accompanying balance sheets at December 31, 2025 and 2024 were the following amounts related to this project.

 
2025
    
2024
  
Note receivable, including interest
  
$
255
    
$
255
  
Customers’ advances for construction
    
165
      
172
  

The Company has other customers’ advances for construction totaling $22,192 and $20,374 at December 31, 2025 and 2024, respectively.


5.  Common Stock and Earnings Per Share

Net income of $20,058 and $20,325 for the years ended December 31, 2025 and 2024, respectively, is used to calculate both basic and diluted earnings per share.  Basic earnings per share is based on the weighted average number of common shares outstanding.  Diluted earnings per share is based on the weighted average number of common shares outstanding plus potentially dilutive shares.  The dilutive effect of employee stock-based compensation is included in the computation of diluted earnings per share.  The dilutive effect of stock-based compensation is calculated using the treasury stock method and expected proceeds upon exercise or issuance of the stock-based compensation.

The following table summarizes the shares used in computing basic and diluted earnings per share:

 
2025
    
2024
  
Weighted average common shares, basic
    
14,403,891
      
14,346,552
  
Effect of dilutive securities:
                
Employee stock-based compensation
    
416
      
209
  
Weighted average common shares, diluted
    
14,404,307
      
14,346,761
  

Under the employee stock purchase plan, all full-time employees who have been employed at least ninety consecutive days may purchase shares of the Company’s common stock limited to 10% of gross compensation.  The purchase price is 95% of the fair market value (as defined).  Shares issued during 2025 and 2024 were 5,625 and 5,137, respectively.  As of December 31, 2025, 34,654 authorized shares remain unissued under the plan.

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The Company has a Dividend Reinvestment and Direct Stock Purchase and Sale Plan (“the Plan”), which is available to both current shareholders and the general public.  On November 10, 2025, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (SEC) to authorize an additional 125,000 shares and rollover the unissued 241,689 shares authorized under the 2022 Form S-3, for issuance under the new Prospectus for the Plan.  Under the optional dividend reinvestment portion of the Plan, holders of the Company’s common stock may purchase additional shares instead of receiving cash dividends.  The purchase price is 95% of the fair market value (as defined).  Under the direct stock purchase portion of the Plan, purchases are made monthly at 100% of the stock’s fair market value, as defined in the new Prospectus.  The Registration Statement was declared effective by the SEC on December 4, 2025.  Shares issued during 2025 and 2024 were 46,149 and 43,026, respectively.  As of December 31, 2025, 356,533 authorized shares remain unissued under the Plan.

On March 11, 2013, the Board of Directors, or the Board, authorized a share repurchase program granting the Company authority to repurchase up to 1,200,000 shares of the Company’s common stock from time to time.  The stock repurchase program has no specific end date and the Company may repurchase shares in the open market or through privately negotiated transactions.  The Company may suspend or discontinue the repurchase program at any time.  During both 2025 and 2024, the Company did not repurchase or retire any shares.  As of December 31, 2025, 618,004 shares remain available for repurchase.


6.  Long-Term Debt and Short-Term Borrowings

Long-term debt as of December 31, 2025 and 2024 is summarized in the following table:

 
2025
    
2024
  
             
Variable Rate Pennsylvania Economic Development Financing Authority
Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029
  
$
12,000
    
$
12,000
  
3.00% Pennsylvania Economic Development Financing Authority Exempt
Facilities Revenue Refunding Bonds, Series A of 2019, due 2036
    
10,500
      
10,500
  
3.10% Pennsylvania Economic Development Financing Authority Exempt
Facilities Revenue Refunding Bonds, Series B of 2019, due 2038
    
14,870
      
14,870
  
3.23% Senior Notes, due 2040
    
15,000
      
15,000
  
4.00% - 4.50% York County Industrial Development Authority Exempt
Facilities Revenue Bonds, Series 2015, due 2029 - 2045
    
10,000
      
10,000
  
4.54% Senior Notes, due 2049
    
20,000
      
20,000
  
3.24% Senior Notes, due 2050
    
30,000
      
30,000
  
5.50% Senior Notes, due 2053
    40,000
       40,000
  
5.67% Senior Notes, due 2054     40,000       40,000  
Committed Line of Credit, due September 2027
    
32,290
      
15,808
  
Total long-term debt
    
224,660
      
208,178
  
Less discount on issuance of long-term debt
    
(124
)
    
(136
)
Less unamortized debt issuance costs
    
(2,306
)
    
(2,481
)
Less current maturities
     (330 )     –  
Long-term portion
  
$
221,900
    
$
205,561
  

Payments due by year as of December 31, 2025:

2026
  
2027
  
2028
  
2029
  
2030
$330
  
$44,630
  
$355
  
$370
  
$385

Page 36
Payments due in 2027 include payback of the committed line of credit.  The committed line of credit is reviewed annually, and upon favorable outcome, would likely be extended for another year.  Payments due in 2027 also include potential payments of  $12,000 on the variable rate bonds (due 2029) which would only be payable if all bonds were tendered and could not be remarketed, or in the event the Company was unable to, or chose not to, renew the letter of credit backing the bonds.  There is currently no such indication of this happening.

Fixed Rate Long-Term Debt
On February 27, 2024, the Company entered into a note purchase agreement with certain institutional investors relating to the private placement of $40,000 aggregate principal amount of the Company’s senior notes.  The senior notes bear interest at 5.67% per annum payable semiannually and mature on February 27, 2054.  The senior notes are unsecured and unsubordinated obligations of the Company.  The Company received net proceeds, after deducting issuance costs, of approximately $39,833.  The net proceeds were used to refinance line of credit borrowings incurred by the Company as interim financing for various capital projects of the Company.

Variable Rate Long-Term Debt
On May 7, 2008, the Pennsylvania Economic Development Financing Authority, or PEDFA, issued $12,000 aggregate principal amount of PEDFA Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (the “Series A Bonds”) for the Company’s benefit pursuant to the terms of a trust indenture, dated as of May 1, 2008, between the PEDFA and Manufacturers and Traders Trust Company, as trustee.  The PEDFA then loaned the proceeds of the offering of the Series A Bonds to the Company pursuant to a loan agreement, dated as of May 1, 2008, between the Company and the PEDFA.  The loan agreement provides for a $12,000 loan with a maturity date of October 1, 2029.  Amounts outstanding under the loan agreement are the Company’s direct general obligations.  The proceeds of the loan were used to redeem the PEDFA Exempt Facilities Revenue Bonds, Series B of 2004 (the “2004 Series B Bonds”).  The 2004 Series B Bonds were redeemed because the bonds were tendered and could not be remarketed due to the downgrade of the bond insurer’s credit rating.

Borrowings under the loan agreement bear interest at a variable rate as determined by PNC Capital Markets, as remarketing agent, on a periodic basis elected by the Company, which has currently elected that the interest rate be determined on a weekly basis.  The remarketing agent determines the interest rate based on the current market conditions in order to determine the lowest interest rate which would cause the Series A Bonds to have a market value equal to the principal amount thereof plus accrued interest thereon.  The variable interest rate under the loan agreement averaged 2.75% in 2025 and 3.41%  in 2024.  As of December 31, 2025 and 2024, the interest rate was 3.38% and 3.64%, respectively.

The holders of the $12,000 Series A Bonds may tender their bonds at any time.  When the bonds are tendered, they are subject to an annual remarketing agreement, pursuant to which a remarketing agent attempts to remarket the tendered bonds according to the terms of the indenture.  In order to keep variable interest rates down and to enhance the marketability of the Series A Bonds, the Company entered into a Reimbursement, Credit and Security Agreement with PNC Bank, National Association (“the Bank”) dated as of May 1, 2008.  This agreement provides for a direct pay letter of credit issued by the Bank to the trustee for the Series A Bonds.  The Bank is responsible for providing the trustee with funds for the timely payment of the principal and interest on the Series A Bonds and for the purchase price of the Series A Bonds that have been tendered or deemed tendered for purchase and have not been remarketed.  The Company’s responsibility is to reimburse the Bank the same day as regular interest payments are made, and within fourteen months for the purchase price of tendered bonds that have not been remarketed.  The reimbursement period for the principal is immediate at maturity, upon default by the Company, or if the Bank does not renew the Letter of Credit.  The current expiration date of the Letter of Credit is June 30, 2027.  It is reviewed annually for a potential extension of the expiration date.

Page 37
The Company may elect to have the Series A Bonds redeemed, in whole or in part, on any date that interest is payable for a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption.  The Series A Bonds are also subject to mandatory redemption for the same redemption price in the event that the IRS determines that the interest payable on the Series A Bonds is includable in gross income of the holders of the bonds for federal tax purposes.

Interest Rate Swap Agreement
In connection with the issuance of the PEDFA 2004 Series B Bonds, the Company entered into an interest rate swap agreement with a counterparty, in the notional principal amount of $12,000.  The Company elected to retain the swap agreement for the 2008 Series A Bonds.  Interest rate swap agreements derive their value from underlying interest rates.  These transactions involve both credit and market risk.  The notional amounts are amounts on which calculations, payments, and the value of the derivative are based.  Notional amounts do not represent direct credit exposure.  Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any.  Such difference, which represents the fair value of the swap, is reflected on the Company’s balance sheets.  See Note 7 for additional information regarding the fair value of the swap.

The interest rate swap will terminate on the maturity date of the 2008 Series A Bonds (which is the same date as the maturity date of the loan under the loan agreement), unless sooner terminated pursuant to its terms.  In the event the interest rate swap terminates prior to the maturity date of the 2008 Series A Bonds, either the Company or the swap counterparty may be required to make a termination payment to the other based on market conditions at such time.  The Company is exposed to credit-related losses in the event of nonperformance by the counterparty.  The Company controls the credit risk of its financial contracts through credit approvals, limits and monitoring procedures, and does not expect the counterparty to default on its obligations.  Notwithstanding the terms of the swap agreement, the Company is ultimately obligated for all amounts due and payable under the loan agreement.

The interest rate swap agreement contains provisions that require the Company to maintain a credit rating of at least BBB- with Standard & Poor’s.  On July 30, 2025, Standard & Poor’s affirmed the Company’s credit rating at A-, with a stable outlook and adequate liquidity.  If the Company’s rating were to fall below this rating, it would be in violation of these provisions, and the counterparty to the derivative could request immediate payment if the derivative was in a liability position.  The Company’s interest rate swap was in a liability position as of December 31, 2025.  If a violation was triggered on December 31, 2025, the Company would have been required to pay the counterparty approximately $489.

The Company’s interest rate swap agreement provides that it pays the counterparty a fixed interest rate of 3.16% on the notional amount of $12,000. In exchange, the counterparty paid the Company a floating interest rate (based on 59% of the daily simple Secured Overnight Financing Rate, or SOFR, plus a spread adjustment of 11.448 basis points) on the notional amount.  The floating interest rate paid to the Company is intended, over the term of the swap, to approximate the variable interest rate on the loan agreement and the interest rate paid to bondholders, thereby managing its exposure to fluctuations in prevailing interest rates.  The Company’s net payment rate on the swap averaged 0.59% in 2025 and 0.05% in 2024.

As of December 31, 2025, there was a spread of 106 basis points between the variable rate paid to bondholders and the variable rate received from the swap counterparty, which equated to an overall effective rate of 4.22% (including variable interest and swap payments). As of December 31, 2024, there was a spread of 90 basis points which equated to an overall effective rate of 4.06% (including variable interest and swap payments).

Page 38
Line of Credit Borrowings
As of December 31, 2025, the Company maintained a $50,000 unsecured, committed line of credit at an interest rate of SOFR plus 1.17% with an unused commitment fee and an interest rate floor.  In the third quarter of 2025, the Company renewed its committed line of credit and extended the maturity date to September 2027.  No other terms or conditions of the line of credit agreement were modified.  Average borrowings outstanding under the line of credit were $29,090 in 2025 and $10,087 in 2024.  The average cost of borrowings under the line of credit was 5.41% during 2025 and 5.23% during 2024.  The interest rate on the line of credit borrowings was 5.04% as of December 31, 2025 and 5.72% as of December 31, 2024.

The Company utilizes a cash management account that is directly connected to its line of credit.  Excess cash generated automatically pays down outstanding borrowings under the line of credit.  If there are no outstanding borrowings, the cash is used as an earnings credit to reduce banking fees.  Likewise, if additional funds are needed beyond what is generated internally, funds are automatically borrowed under the line of credit.  The Company borrowed $32,290 and $15,808 under its line of credit and incurred a cash overdraft of $1,836 and $2,428, which was recorded in accounts payable, as of December 31, 2025 and 2024, respectively.

Term Loan
In December 2025, the Company entered into a $10,000 unsecured, committed term loan agreement.  Interest is payable monthly at an interest rate of SOFR plus 1.35% as established on the first day of each calendar month.  The principal balance can be repaid in whole or part at any time without premium.  The term loan matures in December 2026 and is recorded in “Short-term borrowings” on the balance sheets.  The interest rate on the term loan was 5.18% as of December 31, 2025.

Debt Covenants and Restrictions
The terms of the debt agreements carry certain covenants and limit in some cases the Company’s ability to borrow additional funds, to prepay its borrowings and include certain restrictions with respect to declaration and payment of cash dividends and the Company’s acquisition of its stock.  Under the terms of the most restrictive agreements, the Company cannot borrow in excess of 60% of its utility plant, and cumulative payments for dividends and acquisition of stock since December 31, 1982 may not exceed $1,500 plus net income since that date.  As of December 31, 2025, none of the earnings retained in the business are restricted under these provisions.  The Company’s debt is unsecured.

The Company’s line of credit and term loan requires it to maintain a minimum equity to total capitalization ratio (defined as the sum of equity plus funded debt) and a minimum interest coverage ratio (defined as net income plus interest expense plus income tax expense divided by interest expense).  As of December 31, 2025, the Company was in compliance with these covenants.


7.  Fair Value of Financial Instruments

The accounting standards regarding fair value measurements establish a fair value hierarchy which indicates the extent to which inputs used in measuring fair value are observable in the market.  Level 1 inputs include quoted prices for identical instruments and are the most observable.  Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, commodity rates and yield curves.  Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability.

The Company has recorded its interest rate swap liability at fair value in accordance with the standards.  The liability is recorded under the caption “Other deferred credits” on the balance sheets.  The table below illustrates the fair value of the interest rate swap as of the end of the reporting period.

Description
  
December 31, 2025
  
Fair Value Measurements
at Reporting Date Using
Significant Other Observable Inputs (Level 2)
Interest Rate Swap
  
$479
  
$479

Page 39
Fair values are measured as the present value of all expected future cash flows based on the swap yield curve as of the date of the valuation.  These inputs to this calculation are deemed to be Level 2 inputs.  The balance sheet carrying value reflects the Company’s credit quality as of December 31, 2025.  The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects a representation of the yield to maturity for 30-year debt on utilities rated A- as of December 31, 2025.  The use of the Company’s credit quality resulted in a reduction in the swap liability of $10 as of December 31, 2025.  The fair value of the swap reflecting the Company’s credit quality as of December 31, 2024 is shown in the table below.

Description
  
December 31, 2024
  
Fair Value Measurements
at Reporting Date Using
Significant Other Observable Inputs (Level 2)
Interest Rate Swap
  
$386
  
$386

The carrying amount of current assets and liabilities that are considered financial instruments approximates fair value as of the dates presented.  The Company’s total long-term debt, with a carrying value of $224,660 at December 31, 2025, and $208,178 at December 31, 2024, had an estimated fair value of approximately $207,000 and $189,000, respectively.  The estimated fair value of debt was calculated using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration and risk profile.  These inputs to this calculation are deemed to be Level 2 inputs.  The Company recognized its credit rating in determining the yield curve and did not factor in third party credit enhancements including the letter of credit on the 2008 PEDFA Series A issue.

Customers’ advances for construction and note receivable have carrying values at December 31, 2025 of $22,357 and $255, respectively.  At December 31, 2024, customers’ advances for construction and note receivable had carrying values of $20,546 and $255, respectively.  The relative fair values of these amounts cannot be accurately estimated since the timing of future payment streams is dependent upon several factors, including new customer connections, customer consumption levels and future rate increases.


8.  Commitments

Based on its capital budget, the Company anticipates construction and acquisition expenditures for 2026 and 2027 of approximately $48,000 in each year, exclusive of any acquisitions not yet approved.  The Company plans to finance ongoing capital expenditures with internally-generated funds, borrowings against the Company’s line of credit, proceeds from the issuance of common stock under its dividend reinvestment and direct stock purchase and sale plan and ESPP, potential common stock or debt issues and customer advances and contributions.

The Company was granted approval by the PPUC to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the date of the agreement.  The tariff modification allows the Company to replace customer-owned service lines at its own initial cost.  The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period.  The cost for the customer-owned lead service line replacements was approximately $2,087 and $1,961 through December 31, 2025 and 2024, respectively, and is included as a regulatory asset.  Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $2,100.  This estimate is subject to adjustment as more facts become available.  This tariff modification will expire on March 8, 2026 unless extended by the PPUC.

As of December 31, 2025, approximately 28% of the Company’s full-time employees are under union contract.  The current contract was ratified in June 2023 and expires on April 30, 2026.  Management is currently preparing for negotiations with the union leadership.  The Company expects to reach an operationally and fiscally responsible agreement with no interruption of service.

The Company is involved in certain legal and administrative proceedings before various courts and governmental agencies concerning utility service and other matters.  The Company expects that the ultimate disposition of these proceedings will not have a material effect on the Company’s financial position, results of operations and cash flows.

Page 40

9.  Revenue Recognition

The following table shows the Company’s operating revenues disaggregated by service and customer type.

 
2025
    
2024
  
Water utility service:
            
Residential
  
$
42,976
    
$
41,496
  
Commercial and industrial
    
20,970
      
20,484
  
Fire protection
    
4,915
      
4,559
  
Wastewater utility service:
                
Residential
    
6,579
      
6,113
  
Commercial and industrial
    
1,385
      
1,299
  
Billing and revenue collection services
    
79
      
494
  
Collection services
    
60
      
34
  
Other revenue
    
57
      
26
  
Total Revenue from Contracts with Customers
    
77,021
      
74,505
  
Rents from regulated property
    
467
      
454
  
Total Operating Revenue
  
$
77,488
    
$
74,959
  

Utility Service
The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers.  The transaction price is detailed in the tariff pursuant to an order by the PPUC and made publicly available.  There is no variable consideration and no free service, special rates, or subnormal charges to any customer.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of water or the collection of wastewater through a series of distinct transactions that are identical in nature and have the same pattern of transfer to the customer.  The Company uses an output method to recognize the utility service revenue over time.  The stand-ready obligation is recognized through the passage of time in the form of a fixed charge and the transfer of water or the collection of wastewater is recognized at a per unit rate based on the actual or estimated flow through the meter.  Each customer is invoiced every month and the invoice is due within twenty days.  The utility service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for the passage of time and the actual or estimated usage from the latest meter reading to the end of the accounting period.  The methodology is standardized and consistently applied to reduce bias and the need for judgment.

Billing and Revenue Collection Service
The Company provides billing and revenue collection service as distinct performance obligations to two municipalities within the service territory of the Company.  The municipalities provide service to their residents and the Company acts as the billing and revenue collection agent for the municipalities.  The transaction price is a fixed amount per bill prepared as established in the contract.  There is no variable consideration.  Due to the fact that both the billing performance obligation and the revenue collection performance obligation are materially complete by the end of the reporting period, the Company does not allocate the transaction price between the two performance obligations.  The performance obligations are satisfied at a point in time when the bills are sent as the municipalities receive all the benefits and bears all of the risk of non-collection at that time.  Each municipality is invoiced when the bills are complete and the invoice is due within thirty days.  The billing and revenue collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.

Page 41
Collection Service
The Company provides collection service as a distinct and single performance obligation to several municipalities within the service territory of the Company.  The municipalities provide wastewater service to their residents.  If those residents are delinquent in paying for their wastewater service, the municipalities request that the Company post for and shut off the supply of water to the premises of those residents.  When the resident is no longer delinquent, the Company will restore water service to the premises.  The transaction price for each posting, each shut off, and each restoration is a fixed amount as established in the contract.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied at a point in time when the posting, shut off, or restoration is completed as the municipalities receive all the benefits in the form of payment or no longer providing wastewater service.  Each municipality is invoiced periodically for the posting, shut offs, and restorations that have been completed since the last billing and the invoice is due within thirty days.  The collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for postings, shut offs, and restorations that have been completed from the last billing to the end of the accounting period.

Service Line Protection Plan
The Company provides service line protection as a distinct and single performance obligation to current water customers that choose to participate.  The transaction price is detailed in the plan’s terms and conditions and made publicly available.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of service line protection through a stand-ready obligation to perform.  The Company uses an output method to recognize the service line protection revenue over time.  The stand-ready obligation is recognized through the passage of time.  A customer has a choice to prepay for an entire year or to pay in advance each month.  The service line protection plan has no returns or extended warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no material performance obligations remain unsatisfied as of the end of the reporting period.  The Company has suspended its service line protection plan and is currently evaluating the assignment of its service line protection plan to a third-party provider.  This change will not have a material impact to the Company’s revenue, results of operations, and cash flows.


10.  Rate Matters

From time to time, the Company files applications for rate increases with the PPUC and is granted rate relief as a result of such requests.  The most recent rate request was filed by the Company on May 30, 2025, and sought an annual increase in water rates of $20,312 and an annual increase in wastewater rates of $3,858.  Effective March 1, 2026, the PPUC authorized an increase in water rates designed to produce approximately $16,000 in additional annual revenues and an increase in wastewater rates designed to produce approximately $2,850 in additional annual revenues.

The PPUC permits water utilities to collect a distribution system improvement charge, or DSIC. The DSIC allows the Company to add a charge to customers’ bills for qualified replacement costs of certain infrastructure without submitting a rate filing.  This surcharge mechanism typically adjusts periodically based on additional qualified capital expenditures completed or anticipated in a future period.  The DSIC is capped at 5% of base rates, and is reset to zero when new base rates that reflect the costs of those additions become effective or when a utility’s earnings exceed a regulatory benchmark.  The DSIC reset to zero when the new base rates took effect March 1, 2023.  The DSIC provided revenues of $2,372 in 2025 and $386 in 2024.  The DSIC is subject to audit by the PPUC.

Page 42
11.  Employee Benefit Plans

Pensions
The Company maintains a general and administrative and a union-represented defined benefit pension plan covering all of its employees hired prior to May 1, 2010.  Employees hired after May 1, 2010 are eligible for an enhanced 401(k) plan rather than a defined benefit plan.  The benefits under the defined benefit plans are based upon years of service and compensation near retirement.  The Company amended its defined benefit pension plans in 2014, generally limiting the years of eligible service under the plans to 30 years. The Company’s funding policy is to contribute annually the amount permitted by the PPUC to be collected from customers in rates, but in no case less than the minimum Employee Retirement Income Security Act (ERISA) required contribution.

The following table sets forth the plans’ funded status as of December 31, 2025 and 2024.  The measurement of assets and obligations of the plans is as of December 31, 2025 and 2024.

Obligations and Funded Status
At December 31
  
2025
    
2024
  
             
Change in Benefit Obligation
            
Pension benefit obligation at beginning of year
  
$
37,556
    
$
40,198
  
Service cost
    
530
      
635
  
Interest cost
    
1,981
      
1,855
  
Actuarial (gain) loss
    
623
      
(2,997
)
Benefit payments
    
(2,209
)
    
(2,135
)
Pension benefit obligation at end of year
    
38,481
      
37,556
  
                 
Change in Plan Assets
                
Fair value of plan assets at beginning of year
    
62,565
      
63,578
  
Actual return on plan assets
    
6,094
      
1,011
  
Employer contributions
    
–
      
111
  
Benefits paid
    
(2,209
)
    
(2,135
)
Fair value of plan assets at end of year
    
66,450
      
62,565
  
                 
Funded Status of Plans at End of Year
  
$
27,969
    
$
25,009
  

The accounting standards require that the funded status of defined benefit pension plans be fully recognized on the balance sheets.  They also call for the unrecognized actuarial gain or loss, the unrecognized prior service cost, and the unrecognized transition costs to be adjustments to shareholders’ equity (accumulated other comprehensive income).  Due to a rate order granted by the PPUC, the Company is permitted under the accounting standards to defer the charges otherwise recorded in accumulated other comprehensive income as a regulatory asset.  Management believes these costs will be recovered in future rates charged to customers.  The asset for the funded status of the Company’s pension plans as of  December 31, 2025 and 2024 is recorded in “Prepaid pension cost” on its balance sheets. 

In 2025, the plans recognized an actuarial loss.  In 2025, the Company recognized a 15 basis point decrease in the discount rate.  In 2024, the plans recognized a significant actuarial gain.  In 2024, the Company recognized a 70 basis point increase in the discount rate.  The Company uses the corridor method to amortize actuarial gains and losses.  Gains and losses over 10% of the greater of pension benefit obligation or the market value of assets are amortized over the average future service of plan participants expected to receive benefits.

Page 43
Changes in plan assets and benefit obligations recognized in regulatory liabilities are as follows:

 
2025
    
2024
  
Net gain arising during the year
  
$
(2,402
)
  
$
(844
)
Recognized prior service credit
    
11
      
13
  
Total changes in regulatory liability during the year
  
$
(2,391
)
  
$
(831
)

Amounts recognized in regulatory liabilities that have not yet been recognized as components of net periodic benefit cost consist of the following at December 31:

 
2025
    
2024
  
Net loss
  
$
(3,772
)
  
$
(1,370
)
Prior service credit
    
–
   
(11
)
Regulatory liability
  
$
(3,772
)
  
$
(1,381
)

Components of net periodic benefit cost are as follows:

 
2025
    
2024
  
Service cost
  
$
530
    
$
635
  
Interest cost
    
1,981
      
1,855
  
Expected return on plan assets
    
(3,069
)
    
(3,164
)
Amortization of prior service credit
    
(11
)
    
(13
)
Rate-regulated adjustment
    
569
      
798
  
Net periodic benefit cost
  
$
–
    
$
111
  

Pension service cost is recorded in operating expenses.  All other components of net periodic pension cost are recorded as other pension costs in other income (expenses).

The rate-regulated adjustment set forth above is required in order to reflect pension expense for the Company in accordance with the method used in establishing water rates.  The Company is permitted by rate order of the PPUC to expense pension costs to the extent of contributions and defer any remaining expense to regulatory assets or recognize the excess as a regulatory liability to be collected in rates at a later date as additional contributions are made.  During 2025, the deferral decreased by $569.

No estimated costs for the defined benefit pension plans relating to the December 31, 2025 balance sheet will be amortized from regulatory liabilities into net periodic benefit cost over the next fiscal year.

The Company does not plan to contribute to the plans in 2026.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in each of the next five years and the subsequent five years in the aggregate:

2026
  
2027
  
2028
  
2029
  
2030
  
2031–2035
$2,290
  
$2,312
  
$2,557
  
$2,539
  
$2,591
  
$14,403

Page 44
The following tables show the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets as of December 31:

 
2025
    
2024
  
Projected benefit obligation
  
$
38,481
    
$
37,556
  
Fair value of plan assets
    
66,450
      
62,565
  

 
2025
    
2024
  
Accumulated benefit obligation
  
$
37,093
    
$
36,195
  
Fair value of plan assets
    
66,450
      
62,565
  

Weighted-average assumptions used to determine benefit obligations at December 31:

2025
  
2024
  
Discount rate
5.30%
  
5.45%
  
Rate of compensation increase
2.50% – 3.00%
  
2.50% – 3.00%
  

Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:

2025
  
2024
  
Discount rate
5.45%
  
4.75%
  
Expected long-term return on plan assets
5.00%
  
5.00%
  
Rate of compensation increase
2.50% – 3.00%
  
2.50% – 3.00%
  

The selected long-term rate of return on plan assets was primarily based on the asset allocation of each of the plan’s assets.  Analysis of the historic returns of these asset classes and projections of expected future returns were considered in setting the long-term rate of return.

The investment objective of the Company’s defined benefit pension plans is to grow the assets in such a manner that, when coupled with required contributions to the plans, the assets are sufficient to pay the benefits promised to the participants and beneficiaries as they come due.

The weighted-average target asset allocations are 70% to 90% fixed income securities, 10% to 30% equity securities, and 0% to 10% reserves (cash and cash equivalents).  The Company’s investment performance is reviewed on a quarterly basis, with long-term emphasis placed on results achieved over a three to five year period.

Eligible investments for fixed income securities include: (i) U.S. Treasury securities and agency securities; (ii) agency and non-agency mortgage-backed securities backed by loans secured by residential, multi-family and commercial properties including, but not limited to passthroughs, collateralized mortgage obligations, REMICs, project loans, construction loans, and adjustable rate mortgages; (iii) U.S.-dollar denominated obligations of foreign governments and supranational organizations; (iv) U.S.-dollar denominated obligations of domestic and foreign corporations; (v) asset-backed securities; (vi) municipal bonds, both taxable and tax-exempt issues; (vii) cash equivalent investments such as commercial paper, asset-backed commercial paper, certificates of deposit (domestic and U.S.-dollar denominated foreign,) bankers’ acceptances and floating rate notes; and (viii) fixed income mutual funds and exchange traded funds consistent with the investment guidelines. At the time of purchase, securities must be rated investment grade pursuant to the inclusion rules for a reference benchmark provider. Securities that are not index eligible must be rated investment grade by a nationally recognized statistical rating organization at the time of purchase.  The portfolio is allowed to hold up to 5% in aggregate market value of the portfolio in bonds downgraded below investment grade, provided that an overall investment grade rating is maintained for the total portfolio.

Page 45
Direct exposure to the following strategies and types of securities is prohibited: oil and gas wells; interest only securities; warrants; principal only securities; margin trading; and inverse floating rate securities.

The fair values of the Company’s pension plan assets at December 31, 2025 and 2024 by asset category and fair value hierarchy level are as follows.  The valuations are based on quoted prices on active markets (Level 1) or broker/dealer quotes, active market makers, models, and yield curves (Level 2).

 
Total
Fair
Value
    
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
    
Significant Other
Observable Inputs
(Level 2)
  
Asset Category
  
2025
    
2024
    
2025
    
2024
    
2025
    
2024
  
Cash and Money Market Funds (a)
  
$
794
    
$
1,665
    
$
794
    
$
1,665
     $ –     $ –  
Equity Securities:
                                                
Equity Mutual Funds (b)
    
13,053
      
11,643
      
13,053
      
11,643
       –       –  
Fixed Income Securities:
                                                
U.S. Treasury Obligations
     12,243       11,609       –       –       12,243       11,609  
Corporate and Foreign Bonds (c)
     40,360       37,648       –       –       40,360       37,648  
Total Plan Assets
  
$
66,450
    
$
62,565
    
$
13,847
    
$
13,308
     $ 52,603     $ 49,257  

(a)
The portfolios are designed to keep up to one year of distributions in immediately available funds.

(b)
This category includes a majority of investments in exchange traded funds as well as domestic equity mutual funds and international mutual funds which give the portfolio exposure to mid and large cap index funds as well as international diversified index funds.

(c)
This category includes corporate bonds and notes widely distributed among consumer discretionary, consumer staples, healthcare, information technology, energy, transportation, and financial services.

Defined Contribution Plan
The Company has a savings plan pursuant to the provisions of section 401(k) of the Internal Revenue Code.  For employees hired before May 1, 2010, this plan provides for elective employee contributions of up to 100% of compensation and Company matching contributions of 100% of the participant’s contribution, up to a maximum annual Company contribution of $2.8 for each employee.

Employees hired after May 1, 2010 are entitled to an enhanced feature of the plan.  This feature provides for elective employee contributions of up to 100% of compensation and Company matching contributions of 100% of the participant’s contribution, up to a maximum of 4% of the employee’s compensation.  In addition, the Company will make an annual contribution of $1.2 to each employee’s account whether or not they defer their own compensation.  Employees eligible for this enhanced 401(k) plan feature are not eligible for the defined benefit plans.  As of December 31, 2025, 97 employees were participating in the enhanced feature of the plan.  The Company’s contributions to both portions of the plan amounted to $462 in 2025 and $430 in 2024.

Page 46
Deferred Compensation
The Company has non-qualified deferred compensation and supplemental retirement agreements with certain members of management. The future commitments under these arrangements are offset by corporate-owned life insurance policies. At December 31, 2025 and 2024, the present value of the future obligations included in “Accrued compensation and benefits” and “Deferred employee benefits” was approximately $3,949 and $3,893, respectively. The insurance policies included in “Other assets” had a total cash value of approximately $4,851 and $4,935 at December 31, 2025 and 2024, respectively.  The Company’s net (income) expenses under the plans amounted to $283 in 2025 and $(9) in 2024.

Other
The Company has a retiree life insurance program which pays the beneficiary of a retiree $2 upon the retiree’s death.  At December 31, 2025 and 2024, the present value of the future obligations included in “Deferred employee benefits” was approximately $96 and $87, respectively.  There is no trust or insurance covering this future liability, instead the Company will pay these benefits out of its general assets.  The Company’s net (income) expenses under the plan amounted to $9 in 2025 and $(11) in 2024.


12.  Stock-Based Compensation

The Company has a Long-Term Incentive Plan, or LTIP.  The LTIP was approved by the Company’s shareholders to provide the incentive of long-term stock-based awards to officers, directors, and key employees. The LTIP provides for the granting of nonqualified stock options, incentive stock options, stock appreciation rights, performance restricted stock grants and units, restricted stock grants and units, and unrestricted stock grants.  The maximum number of shares of common stock subject to awards that may be granted to any participant in any one calendar year is 10,000.  Shares of common stock issued under the LTIP may be treasury shares or authorized but unissued shares.  The LTIP will be administered by the Compensation and Human Capital Committee of the Board, or the full Board, provided that the full Board will administer the LTIP as it relates to awards to non-employee directors of the Company.  The LTIP was originally effective on July 1, 2016 (“2016 LTIP”), and was amended, restated, and renamed the 2025 LTIP effective on May 6, 2025 (“2025 LTIP”).  The Company filed a registration statement with the Securities and Exchange Commission on May 6, 2025 covering the offering of stock under the 2025 LTIP.  The registration statement added 150,000 shares to the unissued shares from the 2016 LTIP, which may be issued under the 2025 LTIP over ten years.

On May 3, 2021, the Board awarded stock to non-employee directors effective May 3, 2021.  This stock award vested immediately.  On May 3, 2021, the Compensation and Human Capital Committee awarded restricted stock to officers and key employees effective May 3, 2021.  This restricted stock award vests ratably over three years beginning May 3, 2021 and has been fully recognized as of December 31, 2024.

On May 2, 2022, the Board awarded stock to non-employee directors effective May 2, 2022.  This stock award vested immediately.  On May 2, 2022, the Compensation and Human Capital Committee awarded restricted stock to officers and key employees effective May 2, 2022.  This restricted stock award vests ratably over three years beginning May 2, 2022 and has been fully recognized as of December 31, 2025.

On May 1, 2023, the Board awarded stock to non-employee directors effective May 1, 2023.  This stock award vested immediately.  On May 1, 2023, the Compensation and Human Capital Committee awarded restricted stock to officers and key employees effective May 1, 2023.  This restricted stock award vests ratably over three years beginning May 1, 2023.

On May 1, 2023, the Board accelerated the vesting period for restricted stock granted in 2021, 2022, and 2023 to one retiring key employee from three years to that key employee’s 2024 retirement date, which has been fully recognized as of December 31, 2024.

Page 47
On January 29, 2024, the Board accelerated the vesting period for restricted stock granted in 2022 and 2023 to one retiring officer from three years to that officer’s 2024 retirement date, which has been fully recognized as of December 31, 2024.

On May 6, 2024, the Board awarded stock to non-employee directors effective May 6, 2024.  This stock award vested immediately.  On May 6, 2024, the Compensation and Human Capital Committee awarded restricted stock to officers and key employees effective May 6, 2024.  This stock award vests ratably over three years beginning May 6, 2024, with the exception of the stock award to one key employee which vested immediately.  The Board accelerated the vesting period for this restricted stock award to one retiring officer from three years to that officer’s 2024 retirement date, which has been fully recognized as of December 31, 2024.

On November 25, 2024, the Board awarded stock to an officer effective November 25, 2024.  This stock award vested immediately.

On November 25, 2024, the Board awarded stock to an officer effective January 1, 2025.  This stock award vested immediately.

On May 5, 2025, the Board awarded stock to non-employee directors effective May 5, 2025.  This stock award vested immediately.  On May 5, 2025, the Compensation and Human Capital Committee awarded restricted stock to officers and key employees effective May 5, 2025.  The stock award vests ratably over three years beginning May 5, 2025.

On December 8, 2025, the Board awarded stock to an officer effective December 8, 2025.  This stock award vested immediately.

The restricted stock awards provide the grantee with the rights of a shareholder, including the right to receive dividends, subject to vesting restrictions, and to vote such shares, but not the right to sell or otherwise transfer the shares during the restriction period.  As a result, the awards are included in common shares outstanding on the balance sheet.  Restricted stock awards result in compensation expense valued at the fair market value of the stock on the date of the grant and are amortized ratably over the requisite service period.

The following table summarizes the stock grant amounts and activity for the years ended December 31, 2024 and 2025.

 
Number of Shares
    
Grant Date Weighted
Average Fair Value
  
Nonvested at beginning of the year 2024
    
8,944
    
$42.32
  
Granted
    
6,666
    
$36.82
  
Vested
    
(6,701
)
  
$41.35
  
Forfeited
    
(792
)
  
$42.20
  
Nonvested at end of the year 2024
    
8,117
    
$38.62
  
Granted
    
8,537
    
$34.22
  
Vested
    
(6,989
)
  
$36.70
  
Forfeited
    
(12
)
  
$42.22
  
Nonvested at the end of the year 2025
    
9,653
    
$36.11
  

For the years ended December 31, 2025 and 2024, the statement of income includes $262 and $246 of stock-based compensation, net and related recognized tax benefits of $71 and $68, respectively.  The total fair value of the shares vested in the years ended December 31, 2025 and 2024 was $256 and $277, respectively.  Total stock-based compensation related to nonvested awards not yet recognized is $349 at December 31, 2025, which will be recognized over the remaining three-year vesting period.


Page 48
13.  Taxes Other than Income Taxes

The following table provides the components of taxes other than income taxes:
     
   
2025
    
2024
  
Regulatory Assessment
  
$
493
    
$
412
  
Property
    
544
      
502
  
Payroll, net of amounts capitalized
    
813
      
757
  
Other
    
5
      
5
  
Total taxes other than income taxes
  
$
1,855
    
$
1,676
  

14.  Income Taxes

Income before income taxes by jurisdiction consists of:

   
2025
    
2024
  
Domestic
  
$
19,242
    
$
21,675
  
Foreign
    
–
      
–
  
Total income before income taxes
  
$
19,242
    
$
21,675
  

The provisions for income taxes consist of:
     
   
2025
    
2024
  
Federal current
  
$
3
    
$
728
  
State current
    
(105
)
    
147
  
Foreign current
     –       –  
Federal deferred
    
(381
)
    
409
  
State deferred
    
(295
)
    
102
  
Foreign deferred
     –       –  
Federal investment tax credit, net of current utilization
    
(38
)
    
(36
)
Total income tax expense (benefit)
  
$
(816
)
  
$
1,350
  

The Company paid (received) cash income taxes as follows:

   
2025
    
2024
  
Federal income taxes paid
  
$
380
    
$
943
  
Pennsylvania income taxes paid (refunded)
    
(16
)
    
–
  
Total income taxes paid
  
$
364
    
$
943
  

Page 49
A reconciliation of the statutory Federal tax provision to the total provision follows:

   
2025
    
2024
  
Statutory Federal tax provision
  
$
4,041
      
21.0
%
  
$
4,552
      
21.0
%
State and local income taxes, net of Federal benefit
    
(267
)
    
(1.4
)%
    
244
      
1.1
%
Foreign taxes     –       0.0 %     –       0.0 %
IRS TPR deduction
    
(4,183
)
    
(21.7
)%
    
(3,315
)
    
(15.3
)%
Tax-exempt interest
    
(41
)
    
(0.2
)%
    
(33
)
    
(0.1
)%
Amortization of investment tax credit
    
(38
)
    
(0.2
)%
    
(36
)
    
(0.2
)%
Amortization of excess accumulated deferred income
taxes on accelerated depreciation
    
(183
)
    
(1.0
)%
    
(196
)
    
(0.9
)%
Life insurance
    
(197
)
    
(1.0
)%
    
(19
)
    
(0.1
)%
Change in enacted state tax rate
     20      
0.1
%
     21      
0.1
%
Effect of cross-border tax laws     –       0.0 %     –       0.0 %
Change in valuation allowance     –       0.0 %     –       0.0 %
Change in unrecognized tax benefits     –       0.0 %     –       0.0 %
Other nondeductible items, net
     32      
0.2
%
     132      
0.6
%
Total income tax expense (benefit)
  
$
(816
)
    
(4.2
)%
  
$
1,350
      
6.2
%

The Company’s effective tax rate differs from the statutory Federal corporate income tax rate of 21% primarily due to the following items:

State and local income taxes, net of Federal benefit, decreased the effective tax rate in 2025 and increased the effective tax rate in 2024.  The change reflects the increase in the level of eligible asset improvements expensed for tax purposes under the IRS TPR each period.

The Company filed for a change in accounting method under the IRS TPR effective in 2014.  Under the change in accounting method, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return.  The Company was permitted to make this deduction for prior years (the “catch-up deduction”) and for each year going forward (the “ongoing deduction”).  As a result of the catch-up deduction, income tax benefits of $3,887 were deferred as a regulatory liability.  After receiving approval from the PPUC in a rate order, the Company began to recognize the catch-up deduction, recorded as a regulatory liability, over 15 years beginning March 1, 2019.  As a result, the Company recognized $259 in income taxes during each of the years ended December 31, 2025 and 2024.  As a result of the ongoing deduction, the net income tax benefits of $3,924 and $3,056 for the years ended  December 31, 2025 and 2024, respectively, reduced income tax expense and flowed through to net income.  The ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable.  Both the ongoing and catch-up deductions result in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.

Page 50
The 2017 Tax Act, among other things, reduces the federal statutory corporate tax rate for tax years beginning in 2018 from 34% to 21%, treats customers’ advances for construction and contributions in aid of construction as taxable income, eliminates certain deductions, and eliminates bonus depreciation on qualified water and wastewater property.  This resulted in the remeasurement of the federal portion of the Company’s deferred taxes as of December 31, 2017 to the 21% rate.  The effect was recognized in income for the year ended December 31, 2017 for all deferred tax assets and liabilities except accelerated depreciation.  Under normalization rules applicable to public utility property included in the 2017 Tax Act, the excess accumulated deferred income taxes on accelerated depreciation is recorded as a regulatory liability.  The regulatory liability is a temporary difference, so a deferred tax asset is recorded including the gross-up of revenue necessary to return, in rates, the effect of the temporary difference.  The Company is recognizing the excess accumulated deferred income taxes on accelerated depreciation, recorded as a regulatory liability, over the remaining useful life of the underlying assets.  As a result, the Company recognized $183 and $196 in income taxes for the years ended December 31, 2025 and 2024, respectively.  In November 2021, the 2021 Infrastructure Act repealed the tax treatment of customers’ advances for construction and contributions in aid of construction made after December 31, 2020.

The benefit from life insurance increased in 2025 as compared to 2024 due to the non-recurring gain on life insurance recorded as a result of death benefits from life insurance policies which is exempt from income taxes.

On July 8, 2022, the Pennsylvania budget for the fiscal year ending June 30, 2023 was signed into law.  A provision within the tax code bill included with the budget provides for an annual phase-down of the Pennsylvania corporate net income tax rate of one percentage point in the first year beginning January 1, 2023 from 9.99% to 8.99%, and a one-half percentage point each year thereafter until it reaches 4.99% beginning January 1, 2031.  The Company has remeasured the state portion of the Company’s deferred income taxes.  The effect, net of the federal benefit, of $20 and $21 was recognized in income for the years ended December 31, 2025 and 2024, respectively.  Deferred income taxes for differences that are recognized for ratemaking purposes on a cash or flow-through basis were remeasured with offsetting changes to regulatory assets and liabilities on the balance sheet as of December 31, 2025 and 2024.  The Company expects any savings in its Pennsylvania current income taxes to be returned to its customers through the rate making process or as a future negative surcharge on their bills.

Page 51
The tax effects of temporary differences between book and tax balances that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 are summarized in the following table:

 
2025
    
2024
  
Deferred tax assets:
            
Reserve for doubtful accounts
  
$
460
    
$
440
  
Compensated absences
    
215
      
178
  
Deferred compensation
    
1,005
      
998
  
Excess accumulated deferred income taxes on accelerated depreciation
    
3,231
      
3,280
  
Deferred taxes associated with the gross-up of revenues necessary to
return, in rates, the effect of temporary differences
    
1,584
      
1,622
  
Customers’ advances for construction and contributions in aid of
construction
    
970
      
1,032
  
Tax effect of pension regulatory liability
    
6,431
      
5,693
  
Tax loss carryover
     498       71  
Contribution carryover
     52       16  
Other costs deducted for book, not for tax
    
54
      
50
  
Total deferred tax assets
    
14,500
      
13,380
  
                 
Deferred tax liabilities:
                
Accelerated depreciation
    
30,492
      
30,069
  
Basis differences from IRS TPR
    
31,426
      
26,787
  
Investment tax credit
    
237
      
265
  
Deferred taxes associated with the gross-up of revenues necessary to
recover, in rates, the effect of temporary differences
    
11,779
      
10,208
  
Pensions
    
6,976
      
6,237
  
Unamortized debt issuance costs
    
304
      
333
  
Other costs deducted for tax, not for book
    
562
      
638
  
Total deferred tax liabilities
    
81,776
      
74,537
  
                 
Net deferred tax liability
  
$
67,276
    
$
61,157
  

In accordance with accounting standards, the net deferred tax liability is classified as a noncurrent deferred income tax liability on the balance sheets.

The Company has a federal tax loss carryover of $1,375.  This carryover has an indefinite life.  The Company has Pennsylvania tax loss carryovers of $3,543.  If not used, these carryovers will expire between 2042 and 2045.  The Company has contribution carryovers of $192.  If not used, these carryovers will expire between 2027 and 2030.

No valuation allowance was required for deferred tax assets as of December 31, 2025 and 2024.  In assessing the value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  Based upon expected future taxable income and the current regulatory environment, management believes it is more likely than not that the Company will realize the benefits of these deductible differences.

Page 52
The Company determined that there were no uncertain tax positions meeting the recognition and measurement test of the accounting standards recorded in the years that remain open for review by taxing authorities, which are 2022 through 2024 for both federal and state income tax returns.  The Company has not yet filed tax returns for 2025.  The Company believes that it has fully complied with any changes pursuant to the 2017 Tax Act, the 2021 Infrastructure Act, and the OBBBA and has not taken any new positions in its 2025 income tax provision.

The Company’s policy is to recognize interest and penalties related to income tax matters in other expenses.  The Company paid no interest or penalties for the years ended December 31, 2025 and 2024.


15.  Subsequent Event

On January 28, 2026, the Company completed the acquisition of the wastewater collection and treatment assets of CMV Sewage Co., Inc. in Chanceford Township, York County, Pennsylvania.  The Company began operating the existing wastewater collection and treatment assets on February 2, 2026.  The acquisition resulted in the addition of approximately 280 wastewater customers with purchase price and acquisition costs of approximately $395.  This acquisition is immaterial to Company results.


Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.


Item 9A.
Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s President and Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report.  Based upon this evaluation, the Company’s President and Chief Executive Officer along with the Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of the end of the period covered by this report are effective such that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.  A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

No change in the Company’s internal control over financial reporting occurred during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting Management’s Report on Internal Control Over Financial Reporting
.

Page 53

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management evaluated the Company’s internal control over financial reporting as of December 31, 2025.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework).  As a result of this assessment and based on the criteria in the COSO framework, management has concluded that, as of December 31, 2025, the Company’s internal control over financial reporting was effective.


Item 9B.
Other Information.

Rule 10b5-1 Trading Plans

No officers or directors, as defined in Rule 16a-1(f), adopted, modified and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the fourth quarter of fiscal 2025.


Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

Page 54


PART III

Item 10.
Directors, Executive Officers and Corporate Governance.

Directors of the Registrant

The information set forth under the caption “Election of Directors” of the 2026 Proxy Statement is incorporated herein by reference.

Executive Officers of the Registrant

The information set forth under the caption “Executive Officers of the Company” of the 2026 Proxy Statement is incorporated herein by reference.

Compliance with Section 16(a) of the Exchange Act

The information set forth under the caption “Delinquent Section 16(a) Reports” of the 2026 Proxy Statement is incorporated herein by reference.

Code of Ethics

The information set forth under the caption “Code of Ethics” of the 2026 Proxy Statement is incorporated herein by reference.

Audit Committee

The information set forth under the caption “Board Committees and Functions” of the 2026 Proxy Statement is incorporated herein by reference.

Insider Trading Policy

The information set forth under the caption “Insider Trading Policy and Procedures” of the 2026 Proxy Statement is incorporated herein by reference.

Item 11.
Executive Compensation.

The information set forth under the caption “Compensation of Directors and Executive Officers” and “Stock Ownership and Equity Granting Process” of the 2026 Proxy Statement is incorporated herein by reference.

Page 55

Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information for the equity compensation plan of the Company as of December 31, 2025:

 
 
 
 
 
 
Plan Category
  
 
Number of
securities to be
issued upon exercise
of outstanding
options, warrants
and rights
  
 
 
Weighted-average
exercise price of
outstanding
options, warrants
and rights
  
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
   
(a)
  
(b)
  
(c)
Equity compensation plans
approved by security holders*
  
 
-
  
 
-
  
 
232,896
             
Equity compensation plans not
approved by security holders
  
 
-
  
 
-
  
 
0

*Amounts are subject to adjustment to reflect stock dividends, stock splits, or other relevant changes in capitalization.

Under the Company’s Long-Term Incentive Plan, 198,242 shares remain available for awards as of December 31, 2025.  In addition, the Company has an employee stock purchase plan that allows employees to purchase stock at a 5% discount up to a maximum of 10% of their gross compensation.  Under this plan, 34,654 authorized shares remain unissued as of December 31, 2025.

The information set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” of the 2026 Proxy Statement is incorporated herein by reference.


Item 13.
Certain Relationships and Related Transactions, and Director Independence.

The information set forth under the caption “Director Independence” of the 2026 Proxy Statement is incorporated herein by reference.

Item 14.
Principal Accounting Fees and Services.

The information set forth under the caption “Principal Accountant’s Fees and Services” of the 2026 Proxy Statement is incorporated herein by reference.

Page 56
PART IV


Item 15.
Exhibits and Financial Statement Schedules.

(a)
Certain documents filed as part of the Form 10-K.

1.
The financial statements set forth under Item 8 of this Form 10-K.

Report of Independent Registered Public Accounting Firm
Balance Sheets as of December 31, 2025 and 2024
Statements of Income for Years Ended December 31, 2025 and 2024
Statements of Common Stockholders’ Equity for Years Ended December 31, 2025 and 2024
Statements of Cash Flows for Years Ended December 31, 2025 and 2024
Notes to Financial Statements

2.
Financial Statement schedules.

Schedule
Schedule
Page
Number
Description
Number
     
II
Valuation and Qualifying Accounts
 62
 
for the years ended December 31, 2025 and 2024
  

The report of the Company’s independent registered public accounting firm with respect to the financial statement schedule appears on page 24.

All other financial statements and schedules not listed have been omitted since the required information is included in the financial statements or the notes thereto, or is not applicable or required.

3.
Exhibits required by Item 601 of Regulation S-K.

Exhibit
Number
  
Exhibit
Description
  
Page Number of
Incorporation
By Reference
         
   
 
   
 

Page 57
Exhibit
Number
  
Exhibit
Description
  
Page Number of
Incorporation
By Reference
         
   
 
   
10.1
  
Articles of Agreement Between The York Water Company and Springettsbury Township relative to Extension of Water Mains dated April 17, 1985
  
Incorporated herein by reference.  Filed previously with the Securities and Exchange Commission as Exhibit 10.1 to the Company’s 1989 Form 10-K.
 
 
  
 
 
  
 
 
  
 
 
  
   


Page 58

Exhibit
Number
  
Exhibit
Description
  
Page Number of
Incorporation
By Reference
         
   
 
 
  
 
Form of Amended and Restated Supplemental Retirement Plan originally effective as of August 1, 2023 between The York Water Company and each of the individuals listed on a schedule attached thereto, which plans are identical in all material respects except as indicated in Schedule 10.9
 
   Filed herewith.
   
 
Form of Amended and Restated Deferred Compensation Plan originally effective as of January 1, 2016 between The York Water Company and each of the individuals listed on a schedule attached thereto, which plans are identical in all material respects except as indicated in Schedule 10.11
 
  
Filed herewith.
 
 
 
  
 
 
 
  
 
 
  
 
Page 59
Exhibit
Number
  
Exhibit
Description
  
Page Number of
Incorporation
By Reference
         
   


   
   
   
   
 
 10.20      
   
19        
 
Consent of Baker Tilly US, LLP, Independent Registered Public Accounting Firm
 
  
Filed herewith.
Page 60

Exhibit
Number
  
Exhibit
Description
  
Page Number of
Incorporation
By Reference
         
 31.1  
Certification pursuant to
Rule 13a-14(a) and 15d-14(a)

   Filed herewith.
 31.2
 
Certification pursuant to
Rule 13a-14(a) and 15d-14(a)

   Filed herewith.
 32.1  
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

  Filed herewith.
 32.2
 
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

  Filed herewith.
     

101.INS
  
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
 
  
Filed herewith.
101.SCH
  
Inline XBRL Taxonomy Extension Schema
 
  
Filed herewith.
101.CAL
  
Inline XBRL Taxonomy Extension Calculation Linkbase
 
  
Filed herewith.
101.DEF
  
Inline XBRL Taxonomy Extension Definition Linkbase
 
  
Filed herewith.
101.LAB
  
Inline XBRL Taxonomy Extension Label Linkbase
 
  
Filed herewith.
101.PRE
  
Inline XBRL Taxonomy Extension Presentation Linkbase
 
  
Filed herewith.
104
  
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
 
  
Filed herewith.
* Management contracts and compensatory plans or arrangements required to be filed as exhibits pursuant
to Item 15(a)(3) of this Annual Report.


Item 16.
Form 10-K Summary.

None.

Page 61
THE YORK WATER COMPANY

Schedule II Valuation and Qualifying Accounts
For the Two Years Ended December 31, 2025

     
Additions
          
Description
  
Balance at
Beginning
of Year
  
Charged to
Cost and
Expenses
  
Recoveries
  
Deductions
  
Balance at
End of Year
  
FOR THE YEAR ENDED
DECEMBER 31, 2025
Reserve for
uncollectible accounts
  
$
1,610,000
  
$
732,827
  
$
22,724
  
$
655,551
  
$
1,710,000
  
                                 
FOR THE YEAR ENDED
DECEMBER 31, 2024
Reserve for
uncollectible accounts
  
$
1,005,000
  
$
1,071,758
  
$
30,658
  
$
497,416
  
$
1,610,000
  

The Deductions column above represents write-offs of accounts receivable during the applicable year.

Page 62

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
THE YORK WATER COMPANY
 
(Registrant)
   
Dated: March 2, 2026
By: /s/ Joseph T. Hand
 
Joseph T. Hand
 
President and CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
   
By: /s/ Joseph T. Hand
By: /s/ Matthew E. Poff
Joseph T. Hand
Matthew E. Poff
(Principal Executive Officer and Director)
(Principal Accounting Officer and Chief Financial Officer)
Dated: March 2, 2026
Dated: March 2, 2026
   
Directors:
Date:
   
By: /s/ Paul R. Bonney
March 2, 2026
Paul R. Bonney
  
   
By: /s/ Douglas S. Brossman
March 2, 2026
Douglas S. Brossman
  
   
By: /s/ Joseph T. Hand
March 2, 2026
Joseph T. Hand
  
   
By: /s/ Robert F. Lambert
March 2, 2026
Robert F. Lambert
  
   
By: /s/ Jody L. Keller
March 2, 2026
Jody L. Keller
  
   
By: /s/ Erin C. McGlaughlin
March 2, 2026
Erin C. McGlaughlin
  
   
By: /s/ Steven R. Rasmussen
March 2, 2026
Steven R. Rasmussen
  
   
By: /s/ Laura T. Wand
March 2, 2026
Laura T. Wand
  
   
By: /s/ William T. Yanavitch II
  March 2, 2026
William T. Yanavitch II
  


Page 63
EX-10.9 2 exhibit10_9-123125.htm FORM OF AMENDED AND RESTATED SUPPLEMENTAL RETIREMENT PLAN
EXHIBIT 10.9





The York Water Company

Amended and Restated

Supplemental Executive Retirement Plan (“SERP”)

(Effective June 8, 2010, Amended April 1, 2023)

Ver. 3.0

















AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

I. PREAMBLE TO THIS AGREEMENT

THIS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN is an agreement (the “Agreement” and/or “SERP”) made as of this ________________, by and between THE YORK WATER COMPANY, a Pennsylvania corporation with its principal business office located at 130 East Market Street, York, Pennsylvania (hereinafter called “Employer” and/or the “Company”) and ________________ (hereinafter called “Employee”):

WHEREAS, Employer wishes to encourage Employee's continued employment, and Employee is willing to undertake such employment, subject to receipt of deferred compensation upon the terms hereinafter set forth.

WHEREAS, Employer desires to amend and update this Supplemental Executive Retirement Plan to make the provisions reflect the Company's current retirement programs and profile, and in doing so, maintain the Supplemental Executive Retirement Plan’s compliance with Internal Revenue Code, Section 409A.

THEREFORE, the parties hereto, intending to be legally bound do hereby mutually agree as follows:
II. DEFINITIONS USED THROUGHOUT THIS AGREEMENT

The following definitions are used throughout this Agreement and are applicable to any and all benefits payable hereunder:
A.
Beneficiary shall mean one or more persons, trusts, estates or other entities that are entitled to receive benefits under this Agreement upon the death of Employee as may have theretofore been designated in writing by Employee on forms provided by Employer and containing Employer's acknowledgment or acceptance thereof.
B.
Board means the Board of Directors of the Company.
C.
Claimant shall mean an Employee or Beneficiary who believes he or she is entitled to any Supplemental Retirement Benefit under this Agreement who makes a claim with Plan Administrator as provided for herein.
D.
Code shall mean the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.
E.
Company means York Water Company.
F.
Disability/Disability Retirement shall mean a condition of Employee whereby he or she either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of Employer.  Items (i) and (ii) in this Agreement are permitted provided they are in compliance with the requirements of Treasury Regulations Section 1.409A-3(g)(4).   An Employee will also be deemed disabled if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of Disability applied under such disability insurance program complies with the requirements of Treasury Regulations Section 1.409A-3(g)(4).
G.
Disability Retirement Benefit shall mean the benefit payable under this Agreement upon a Disability Retirement.  The Disability Retirement Benefit shall be the Monthly Retirement Benefit Unit multiplied by each calendar year of full-time, active service with Employer completed subsequent to December 31, ____ and as of the December 31st immediately prior to Employee’s Disability Retirement.
H.
Early Retirement Age shall mean any age from and including age fifty-five (55) to and including age sixty-four (64).
I.
Early Retirement Benefit shall mean the Monthly Retirement Benefit Unit multiplied by each calendar year of full-time, active service with Employer completed subsequent to December 31, ____ and as of the December 31st immediately prior to attainment of Early Retirement Age.
J.
ERISA shall mean the Employee Retirement Income Act of 1974, as amended, and the regulations issued thereunder.
K.
Key Employee shall mean an employee as defined by Section 416(i) of the Code without regard to this Agreement, and as further defined in Treasury Regulations Section 1.409A-(1)(i).
L.
Late Retirement Age shall mean any age from and including age sixty-six (66).
M.
Late Retirement Benefit shall mean the Monthly Retirement Benefit Unit multiplied by each calendar year of full-time, active service with Employer completed subsequent to December 31, ____ and as of the December 31st immediately prior to attainment of Late Retirement Age.
N.
Monthly Retirement Benefit Unit shall mean, for purposes of the applicable Supplemental Retirement Benefit determination hereunder, _____ the monthly benefit unit commencing at Early Retirement Age, Normal Retirement Age, Late Retirement Age, Disability Retirement or Pre-Retirement Death, as applicable.
O.
Normal Retirement Age shall mean age sixty-five (65).
P.
Normal Retirement Benefit shall mean the Monthly Retirement Benefit Unit multiplied by each calendar year of full-time, active service with Employer completed subsequent to December 31, ____ and as of the December 31st immediately prior to attainment of Normal Retirement Age.
Q.
Participant means any individual who has met the eligibility requirements set forth below and who actively partakes in the Supplemental Executive Retirement Plan.
R.
Payment Delay for Specified Employees shall mean the six (6) month payment delay of the Normal Retirement Benefit that is payable to a Key Employee (as defined by Section 416(i) of the Code without regard to this Agreement, and as further defined in Treasury Regulations Section 1.409A-(1)(i)) on account of the key employee’s Separation from Service.
S.
Plan Administrator shall mean the Board or its designee.
T.
Pre-Retirement Death Benefit shall be _______.
U.
Separation from Service shall mean “separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code.
V.
Supplemental Retirement Benefits shall mean Early Retirement Benefit, Normal Retirement Benefit, Late Retirement Benefit, Disability Retirement Benefit and the Pre-Retirement Death Benefit.
W.
Termination shall mean “separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code.
X.
Unforeseeable Emergency shall mean severe financial hardship of Employee or Beneficiary resulting from an illness or accident of Employee or Beneficiary, Employee or Beneficiary’s spouse, or Employee or Beneficiary’s dependent(s) (as defined in Section 152(a) of the Code) or loss of Employee or Beneficiary’s property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of Employee or Beneficiary within the meaning of Section 409A of the Code.
III. SECTION 409A COMPLIANCE
This Agreement is intended to comply with the requirements of Section 409A of the Code, and shall in all respects be administered in accordance with Section 409A of the Code.  Notwithstanding anything in this Agreement to the contrary, distributions may only be made under this Agreement upon an event and in a manner permitted by Section 409A of the Code, including the requirement that “specified employees,” as such term is defined in Section 409A of the Code, may not receive distributions prior to the end of the six-month period following a Separation from Service.  If a payment is not made by the designated payment date under the Agreement, the payment shall be made by December 31 of the calendar year in which the designated date occurs.  To the extent that any provision of this Agreement would cause a conflict with the requirements of Section 409A of the Code, or would cause the administration of the Agreement to fail to satisfy the requirements of Section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law.  In no event may Employee designate the year of a distribution.   Notwithstanding anything in the Agreement to the contrary, this Agreement may be amended by Employer at any time, retroactively if required, to the extent required to conform the Agreement to Section 409A of the Code.
IV. ELIGIBILITY AND PARTICIPATION IN THIS SERP

Participation in this SERP shall be limited to Officers of the Company and their participation is solely designated and approved by the Board in its discretion upon a full vote of the Board.
V. MUTUAL AGREEMENTS AND COVENANTS
A.
Employment.  Employer hereby engages Employee upon the terms and conditions as hereinafter provided.
B.
Term.  This Agreement shall continue in full force and effect until the earlier of (i) Employee's Separation from Service prior to attaining age 55, or (ii) payment to Employee or Beneficiary, as applicable, of all benefits to which Employee shall become entitled hereunder.
C.
Duties.  From and after the date hereof, Employee shall serve Employer in Employer's business in such capacity or capacities as may from time to time be determined by the President or Board of Employer.  During the period of active, full-time employment hereunder, Employee shall:
1.
devote their full time and best efforts to the business and affairs of Employer (allowing a reasonable time for vacation);
2.
perform such services, not unreasonable or inconsistent with Employee's position, education, training or background, as may be designated by the President or Board at any time and from time to time;
3.
use their best efforts to promote the business of Employer; and
4.
hold such office or directorship in Employer, to which Employee may from time to time be elected or appointed, without further compensation other than that for which provision is made in this Agreement.
D.
Compensation.  During the period of Employee's employment hereunder, Employer agrees to pay Employee for their services such a salary as may from time to time be mutually agreed between Employer and Employee.
VI. ELIGIBILITY FOR CERTAIN SUPPLEMENTAL RETIREMENT BENEFITS
A.
Retirement Benefits.  Subject to all of the terms and conditions hereof, Employer agrees to pay to Employee, and Employee shall be entitled to receive from Employer, his or her Early Retirement Benefit, Normal Retirement Benefit or Late Retirement Benefit, as applicable, upon the later of Employee’s (i) Separation from Service, provided Employee is at least age 55 at the time of such Separation from Service, or (ii) attainment of age sixty (60).  Employee’s Early Retirement Benefit, Normal Retirement Benefit or Late Retirement Benefit, as applicable, shall commence payment within sixty (60) days of Employee’s Separation from Service or Employee’s 60th birthday, as applicable, and be paid monthly for one hundred eighty (180) consecutive months thereafter.  Notwithstanding anything to the contrary in this Agreement, if Employee’s Early Retirement Benefit, Normal Retirement Benefit or Late Retirement Benefit, as applicable, is payable upon Employee’s Separation from Service and Employee is a Key Employee, the applicable retirement benefit is subject to the Payment Delay for Specified Employees.
B.
Disability Retirement Benefits.  If while actively employed on a full-time basis with Employer, Employee incurs a Disability Retirement, Employee is entitled to a Disability Retirement Benefit which shall commence payment within sixty (60) days following the Disability Retirement and be paid monthly until the December 31st immediately following Employee’s eightieth (80th) birthday.
C.
Pre-Retirement Death Benefits.  If Employee dies (i) while actively employed by Employer on a full-time basis and prior to the commencement of Normal Retirement Benefits or (ii) after satisfying the requirements of a Disability Retirement but prior to the commencement of Disability Retirement Benefits, the Pre-Retirement Death Benefit will be paid in a single lump sum within sixty (60) days following Employee’s death.
D.
Termination of Employment by Employee Prior to Age 55.  If Employee terminates employment by Employer prior to age fifty-five (55), other than as a result of death or Disability Retirement as provided for hereunder, Employee will no longer be entitled to receive benefits under this Agreement.
E.
Eligibility in Other Employer Plans.  Nothing contained in this Agreement shall affect the right of Employee to participate or to continue to participate in any pension plan or in any other supplemental compensation arrangement sponsored by Employer which may constitute a part of Employer's regular compensation structure or in any discretionary bonus which Employer may pay to its employees; and Employee may receive the benefits under the provisions of any such pension plan or other arrangements in accordance with the terms thereof.  Any benefits paid to Employee pursuant to this Agreement shall not be deemed salary or other eligible compensation for the purpose of computing fringe benefits or benefits to which Employee may be entitled under any pension plan or other arrangement sponsored by Employer for the compensation of its employees.
VII.
SEPARATION AND DISCHARGE PROVISIONS
A.
Notwithstanding anything which might be herein contained to the contrary, it being clearly understood and agreed upon by the parties hereto the EMPLOYMENT OF EMPLOYEE IS AND SHALL REMAIN EMPLOYMENT SOLELY AT-WILL, Employer may at any time discharge Employee, whether or not for cause, in which event or in the event Employee sues or in any manner contests such “at-will” employment or Employer's right to discharge Employee, then upon written notice to Employee and effective immediately upon the mailing thereof in the manner set forth herein, Employee's right to receive benefits hereunder shall be fixed and determined as of such date; provided that nothing herein shall affect Employee's right to receive payment of such benefits in the manner and at the time herein provided, except as otherwise provided in Section VI. B. hereof.
B.
If Employee incurs a Separation from Service on account of termination of employment by Employer without cause and Employee is at least age 55, a monthly benefit paid for one hundred eighty (180) consecutive months will be paid commencing within sixty (60) days following the date of the discharged Employee's attainment of Normal Retirement Age, or if sooner, within sixty (60) days following the Employee’s death.  Notwithstanding the foregoing in this Agreement, if the benefit payable under this VI. B. is paid upon Employee’s Separation from Service and Employee is a Key Employee, then such payment is subject to the Payment Delay for Specified Employees.  The benefit paid under this Section VI. B. will be calculated using the then discounted present value of the discharged Employee's Monthly Retirement Benefit Units accrued on Employer's books as of the December 31st immediately prior to the date when Employee's rights to receive a benefit is fixed under Section VI. A. hereof.  The monthly benefit will be determined assuming that the discounted present value is paid for one hundred eighty (180) consecutive equal monthly installments assuming interest at the same rate as used in determining the present value.  No Disability Retirement Benefits will be paid under this provision.
C.
In the event that Employee shall be convicted of a crime involving Employee's business affairs or in the event that Employer shall have reasonable cause to believe Employee to be guilty of any such crime, all rights of Employee under this Agreement shall terminate immediately, and Employer shall have the right to terminate and make no payments whatsoever of Supplemental Retirement Benefits hereunder, notwithstanding that such amounts would constitute all or a portion of the benefits otherwise payable hereunder.  Such right of Employer shall be in addition to, and not in lieu of, any and all other rights which Employer may have in such event.  The provisions hereof shall be applicable notwithstanding that payment of such Normal Retirement Benefit or Disability Retirement Benefits may have theretofore commenced under any provision of this Agreement.
VIII.
CLAIMS PROCEDURES
A.
Claim. Employee or Beneficiary (hereinafter referred to as a “Claimant”) who believes he or she is entitled to any Supplemental Retirement Benefit under this Agreement may file a claim with Plan Administrator. Plan Administrator shall review the claim itself or appoint an individual or entity to review the claim.
B.
Claim Decision. The Claimant shall be notified within ninety (90) days after the claim is filed whether the claim is allowed or denied (forty-five (45) days in the case of a claim involving Disability Retirement Benefits), unless, for claims not involving Disability Retirement Benefits, the claimant receives written notice from Plan Administrator or appointee of Plan Administrator prior to the end of the ninety (90) day period stating that special circumstances require an extension of the time for decision. Such extension is not to extend beyond the day which is one hundred eighty (180) days after the day the claim is filed.  In the case of a claim involving Disability Retirement Benefits, Plan Administrator will notify the Claimant within the initial forty-five (45) day period that Plan Administrator needs up to an additional thirty (30) days to review the Claimant’s claim.  If the Plan Administrator determines that the additional thirty (30) day period is not sufficient and that additional time is necessary to review the Claimant’s claim for Disability Retirement Benefits, the Plan Administrator may notify the Claimant of an additional thirty (30) day extension.  If Plan Administrator denies the claim, it must provide to the Claimant, in writing or by electronic communication:
1.
The specific reasons for such denial;
2.
Specific reference to pertinent provisions of this Agreement on which such denial is based;
3.
A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary;
4.
In the case of any claim involving Disability Retirement Benefits, a copy of any internal rule, guideline, protocol, or other similar criterion relied upon in making the initial determination or a statement that such a rule, guideline, protocol, or other criterion was relied upon in making the determination and that a copy of such rule will be provided to the Claimant free of charge at the Claimant’s request; and
5.
A description of the Agreement’s appeal procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of the appeal of the denial of the benefits claim.
C.
Review Procedures.  A request for review of a denied claim must be made in writing to Plan Administrator within sixty (60) days after receiving notice of denial (one hundred eighty (180) days in the case of a claim involving Disability Retirement Benefits). The decision upon review will be made within sixty (60) days after Plan Administrator’s receipt of a request for review (forty-five (45) days in the case of a claim involving Disability Retirement Benefits), unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than one hundred twenty (120) days after receipt of a request for review (ninety (90) days in the case of a claim for Disability Retirement Benefits). A notice of such an extension must be provided to the Claimant within the initial sixty (60) day period (the initial forty-five (45) day period in the case of a claim for Disability Retirement Benefits) and must explain the special circumstances and provide an expected date of decision.  The reviewer shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to Plan Administrator. The reviewer shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the benefit determination.  Upon completion of its review of an adverse initial claim determination, Plan Administrator will give the Claimant, in writing or by electronic notification, a notice containing:
1.
its decision;
2.
the specific reasons for the decision;
3.
the relevant Agreement provisions on which its decision is based;
4.
a statement that the Claimant is entitled to receive, upon request and without charge, reasonable access to, and copies of, all documents, records and other information in the Agreement’s files which is relevant to the Claimant’s claim for benefit;
5.
a statement describing the Claimant’s right to bring an action for judicial review under Section 502(a) of ERISA; and
6.
in the case of any claim involving Disability Retirement Benefits, a copy of any internal rule, guideline, protocol, or other similar criterion that was relied upon in making the adverse determination on review or a statement that a copy of the rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination on review and that a copy of such rule, guideline, protocol, or criterion will be provided without charge to the Claimant upon request.
Unless a Claimant voluntarily avails himself or herself of the procedures set forth herein, all interpretations, determinations and decisions of Plan Administrator in respect of any claim shall be made in its sole discretion based on the applicable Agreement documents and shall be final, conclusive and binding on all parties.
D.
Calculation of Time Periods. For purposes of the time periods specified in this Article, the period of time during which a benefit determination is required to be made begins at the time a claim is filed in accordance with the Agreement procedures without regard to whether all the information necessary to make a decision accompanies the claim. If a period of time is extended due to a Claimant’s failure to submit all information necessary, the period for making the determination shall be tolled from the date the notification is sent to the Claimant until the date the Claimant responds.
E.
Failure of Agreement to Follow Procedures. If the Agreement fails to follow the claims procedure required by this Article, a Claimant shall be entitled to pursue any available remedy under Section 502(a) of ERISA on the basis that the Agreement has failed to provide reasonable claims procedure that would yield a decision on the merits of the claim.
F.
Failure of Claimant to Follow Procedures. A Claimant’s compliance with the foregoing provisions of this Article is a mandatory prerequisite to the Claimant’s right to commence any legal action with respect to any claim for benefits under the Agreement.
G.
Arbitration of Claims.  Instead of pursuing his or her claim in court, a Participant may voluntarily agree that all claims or controversies arising out of or in connection with this Agreement shall, subject to the initial review provided for in the foregoing provisions of this Article, be resolved through arbitration as provided in this Article. Except as otherwise provided or by mutual agreement of the parties, any arbitration shall be administered under and by the Judicial Arbitration & Mediation Services, Inc. (“JAMS”), in accordance with the JAMS procedure then in effect. The arbitration shall be held in the JAMS office nearest to where the Claimant is or was last employed by Employer or at a mutually agreeable location. The prevailing party in the arbitration shall have the right to recover its reasonable attorney’s fees, disbursements and costs of the arbitration (including enforcement of the arbitration decision), subject to any contrary determination by the arbitrator.  If the Claimant voluntarily avails himself or herself of the procedures set forth herein, all determinations of the arbitrators in respect of any claim shall be final, conclusive and binding on all parties.
IX.
TERMS AND CONDITIONS OF ALL BENEFITS PROVIDED UNDER THIS AGREEMENT
A.
Employee Revocable Designation.  In the event of death of Employee prior to the payment in full of the applicable benefits hereunder, Employee's remaining monthly payments shall be paid to Beneficiary at the same time and in the same form as if it were paid to Employee had Employee survived.  Employee shall have the right at any time and from time to time to change Beneficiary regardless of whether distribution of the benefits may have commenced.  In the event of Employee's failure to make such designation, or if no designee shall survive Employee, the remaining monthly payments shall be paid to Employee's spouse; provided that if Employee's spouse shall become entitled to payment hereunder, but shall die before payment in full of the applicable benefits, any remainder thereof shall be paid in monthly installments either to the issue of Employee, per stirpes, and if none, then to Employee's estate.
B.
Unforeseeable Emergency.  Notwithstanding that an effective designation of a Beneficiary entitled to receive payment of benefits or remainder thereof may then be in force, the Board may, at its option, at any time or from time to time in its absolute and sole discretion, as permitted within the meaning of Section 409A of the Code and Treasury Regulations Section 1.409A-3(g)(3), accelerate the time and form of payment of any one or more payments hereunder in event of any Unforeseeable Emergency; provided that Employee is at least age 55 upon the occurrence of the Unforeseeable Emergency.
C.
Minority or Disability.  If Employer in its sole discretion shall deem any person entitled to receive any payments under this Agreement to be unable to care for his or her affairs because of illness or accident, or is a minor, any such payments (unless a prior claim therefore shall have been made by a duly appointed guardian, committee or other legal representative) may be made to the spouse, child or children, parent, brother or sister of such person, or to any third person or entity deemed by Employer to have incurred expense for such person, in the manner and amount that such payments would have been distributed to such person.  Any such payment shall be a complete discharge to the extent thereof of the obligations of Employer under this Agreement.
D.
Non-Alienation of Benefits.  None of the rights, interest or benefits contemplated under this Agreement may be sold, given away, assigned, transferred, pledged, mortgaged, alienated, hypothecated or in any way encumbered or disposed of by Employee, or any executor, administrator, heir, legatee, distributee, relative or any other person or entity, whether or not in being, claiming under Employee by virtue of this Agreement, and none of the rights, interest or benefits contemplated by this Agreement shall be subject to execution, attachment or similar process.  Any (or attempted) sale, gift, assignment, transfer, pledge, mortgage, alienation, hypothecation or encumbrance, or other disposition of this Agreement or of such rights, interest or benefits contrary to the foregoing provisions, or the levy or any attachment or similar process thereon, shall be null and void and without effect.
E.
Non-Competition Provision.  During the term of this Agreement and for three (3) years following the Employee’s last day of employment with the Company, no payment of any then unpaid benefit installment(s) under this Agreement shall be made and all Employee rights under this Agreement to receive payments thereof, shall be forfeited if: (i) Employee engages in any capacity, directly or indirectly, with any business entity or enterprise that is competitive with the Employer’s then current lines of business, namely, water supply and wastewater utility services, and related billing services for such utilities, for the Employee’s own benefit or for the benefit of any person or entity other than those of the Company or any entity related to the Company; and (ii) the engagement is related to competitive enterprise and/or services within sixty (60) miles of the Company’s then certificated territory, as defined by the Company’s then current Public Utility Commission Tariff(s); or (iii) Employee acquires any interest as an owner, sole proprietor, stockholder, partner, lender, director, officer, manager, employee, consultant, agent or otherwise in any business competitive with the Company’s lines of business. Such prohibited interests include a future holding company of Employer or future subsidiary of Employer, or interests which may be in any other way directly or indirectly competitive with the business of Employer or such future holding company or subsidiary of Employer.
Such forfeiture may be waived unilaterally by the Board of Directors at their sole discretion.
The Employee may hold, directly or indirectly, solely as an investment, not more than 1% of the outstanding securities of any person or entity which is listed on any national securities exchange or regularly traded in the over-the-counter market notwithstanding the fact that such person or entity is engaged in a business competitive with the Employer’s business.
F.
No Trust Relationship.  Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust or security relationship of any kind, nor a fiduciary relationship between Employer and Employee, or any Beneficiary of the latter or other person presently or prospectively entitled to the receipt of payments hereunder.  To the extent that any person becomes entitled, presently or prospectively, to receive payments from Employer under this Agreement, such right shall be no greater than the right shall be no greater than the right of any unsecured general creditor of Employer.
G.
Power and Authority.  Plan Administrator shall have full power and authority to interpret, construe and administer this Agreement, and any such interpretation or construction hereof by Plan Administrator, or other action hereunder, including the amount or recipient of any one or more payments of the benefits payable hereunder, shall be binding and conclusive on all persons, whether in being or not.  Neither Employer nor Plan Administrator shall not be liable to any person, whether in being or not, for any action taken or omitted in connection with the interpretation and administration of this Agreement, unless attributable to the willful misconduct or bad faith of Employer or Plan Administrator, it being understood and agreed, however, that the employment of Employee is and shall continue to be solely at-will.
H.
Waiver of Breach.  Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any right of power hereunder at any one time or more times be deemed a waiver or relinquishment of such right or power at any other time or times.
I.
Modification.  This Agreement shall not be modified or amended except by written Agreement duly executed by Employee and Employer.
J.
Severability.  If any clause, sentence, paragraph, section or part of this Agreement shall be held by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate any of the other parts hereof.  Rather, that invalidated provision and the remainder of this Agreement shall be interpreted to comply with the remainder of this Agreement, Section 409A, ERISA, and all other applicable laws.
K.
Notices.  Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered or certified mail, if to Employee, to their address as shown on the books of Employer, and if to Employer, to the address shown above, or such other address as Employer may have designated in writing, or if such written notice is actually received by the person to whom sent.
L.
Gender and Plural.  All references made and pronouns used herein shall be construed in the singular or plural, and in such gender as the context may require.
M.
Captions.  The captions of the various provisions shall not be deemed a part of this Agreement and shall not be construed in any way to limit the contents hereof but are inserted herein only for reference and for convenience of the parties.
N.
Governing State Law.  This Agreement may be executed at different times in different places, but all questions concerning the construction or validity hereof, or relating to performance hereunder, shall be determined in accordance with the laws of the Commonwealth of Pennsylvania.
O.
Duplicate Originals.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and there shall be no requirement to produce another counterpart.
P.
Successors or Assigns.  It is hereby agreed that the terms and provisions of this Supplemental Retirement Plan shall be binding upon the successors or assigns of The York Water Company (Employer).



IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by its duly authorized officers, and Employee has hereunto set their hand and seal as of the day and year first above written.  Further, Employee consents to any and all amendments as set forth in this Agreement and by signing below, Employer has satisfied the notice and modification provisions of this Agreement set forth above.

ATTEST: THE YORK WATER COMPANY



  _____
Secretary President, on behalf of the Company/Employer



(SEAL)
  
Employee


TO WHOM IT MAY CONCERN

I designate the following as my beneficiary for the Supplemental Executive Retirement Plan of The York Water Company.
Name of Beneficiary
Primary
Name  
Address  
 
Relationship  

Secondary in equal shares
Name  
Address  
 
Relationship  

Signed  
Date  

Commonwealth of Pennsylvania )
) SS:
County of York )


On this, the ___ day of _________________ 20__, before me a Notary Public, the undersigned personally appeared, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he or she executed the same for the purposes therein contained.

In Witness Whereof, I hereunto set my hand and official seal.


 

Notary Public

Schedule 10.9


Name
Date Credited
Service Began
Date Credited
Service Ended
Normal Monthly Retirement Unit
Pre-Retirement Death Benefit
Joseph T. Hand
December 31, 2022
  
679.28
1,000,000
Joseph T. Hand
December 31, 2019
December 31, 2022
401.50
-
Joseph T. Hand
December 31, 2009
December 31, 2019
163.40
-
Mark S. Snyder
December 31, 2009
  
111.11
500,000
Matthew E. Poff
December 31, 2018
  
163.40
500,000
Alexandra C. Chiaruttini
December 31, 2022
  
220.80
500,000
Alexandra C. Chiaruttini
December 31, 2021
December 31, 2022
128.21
-
Matthew J. Scarpato
December 31, 2024
  
120.78
500,000
Ashley M. Grimm
December 31, 2025
  132.28
 500,000

EX-10.11 3 exhibit10_11-123125.htm FORM OF AMENDED AND RESTATED DEFERRED COMPENSATION PLAN
EXHIBIT 10.11

The York Water Company DEFERRED COMPENSATION PLAN
FOR EMPLOYEES INELIGIBLE FOR THE DEFINED BENEFIT PENSION PLAN
(Effective January 1, 2016)


RECITALS

THIS DEFERRED COMPENSATION PLAN (the “Plan”) is hereby adopted as of the 1st day of January, 2016, by The York Water Company, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania (the “Plan Sponsor”).

WHEREAS, the Plan Sponsor adopt and establish a non-tax qualified plan of deferred compensation to provide additional retirement benefits for a select group of management and highly compensated employees; and

WHEREAS, the Plan Sponsor shall permit otherwise eligible employees who are Participants in any other York Water Company deferred compensation plan to terminate their participation in said plan and become a Participant in this Plan, including Account Balances from the prior plan, the Deferred Compensation Plan for Employees not Eligible for a Defined Benefit Pension Plan.

WHEREAS, effective as of January 1, 2016, the Plan Sponsor intends that the Plan shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation plan for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This Plan is not intended to qualify for favorable tax treatment pursuant to Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor section or statute. This Plan is intended to comply with the requirements of Section 409A of the Code and the Treasury Regulations (as defined below) or any other authoritative guidance issued under that section.

NOW, THEREFORE, the Plan Sponsor hereby adopts the following Deferred Compensation Plan.
 
ARTICLE 1.
Definitions

For the purpose of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

1.1
“Account or Accounts” shall mean a book account reflecting amounts credited to a Participant’s Separation From Service Account, Scheduled Withdrawal Account(s) and Plan Sponsor Contribution Account, as adjusted for deemed investment performance and all distributions or withdrawals made by the Participant or his or her Beneficiary. To the extent that it is considered necessary or appropriate, the Plan Administrator shall maintain separate sub- accounts for each source of contribution under the Plan or shall otherwise provide a means for determining that portion of an Account attributable to each contribution source.

1.2
“Affiliate” shall mean any business entity other than the Plan Sponsor that is a member of a controlled group of corporations, within the meaning of Section 414(b) of the Code, of which the Plan Sponsor is a member; all other trade or business (whether or not incorporated) under common control, within the meaning of Section 414(c) of the Code, with the Plan Sponsor; any service organization other than the Plan Sponsor that is a member of an Affiliated service group, within the meaning of Section 414(m) of the Code, of which the Plan Sponsor is a member; and any other organization that is required to be aggregated with the Plan Sponsor under Section 414(o) of the Code and whose Eligible Employees are authorized to participate in this Plan by the Plan Administrator.

1.3
“Annual Deferral Percentage” shall mean that portion of a Participant’s Base Salary that a Participant elects to defer under the plan during any Plan Year. The Participant may elect to defer between zero (0) and five (5) percent of his or her Base Salary as of January 1 of each Plan Year. The annual deferral percentage may not be changed during the Plan Year.

1.4
“Annual Deferral Percentage Election” shall mean that annual percentage, between zero (0) percent and five (5) percent of the Participant’s base salary he or she elects to defer under the Plan in any given year. The Participant may make election changes for any subsequent plan year prior to the beginning of said year. Participant’s initial annual deferral amount election shall continue in each subsequent plan year unless, and until, the Participant changes his or her election.

1.5
“Base Salary” shall mean the annual cash compensation relating to services performed during any Plan Year, (excluding bonuses, commissions, overtime, fringe benefits, incentive payments, SERP compensation, non-monetary awards, relocation expenses, retainers, directors fees and other fees, severance allowances, pay in lieu of vacations, insurance premiums paid by the Plan Sponsor, insurance benefits paid to the Participant or his or her Beneficiary, stock options and grants, and car allowances) paid to a Participant for services rendered to the Plan Sponsor or an Affiliate. Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of the Plan Sponsor or an Affiliate and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Sections 125, 402(e)(3), 402(h), or 403(b) of the Code pursuant to plans established by the Plan Sponsor; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amounts would have been payable in cash to the Participant.

1.6
“Beneficiary” shall mean one or more persons, trusts, estates or other entities that are entitled to receive benefits under this Plan upon the death of the Participant.

1.7
“Board” shall mean the Board of Directors of Plan Sponsor.

1.8
“Cause” shall mean any of the following acts or circumstances:

(a)
Willful destruction by the Participant of property of the Plan Sponsor or an Affiliate having a material value to the Plan Sponsor or such Affiliate;

(b)
fraud, embezzlement, theft, or comparable dishonest activity committed by the Participant (excluding acts involving a de minimis dollar value and not related to the Plan Sponsor or an Affiliate);

(c)
the Participant’s conviction of or entering a plea of guilty or nolo contendere to any crime constituting a felony or any misdemeanor involving fraud, dishonesty or moral turpitude (excluding acts involving a de minimis dollar value and not related to the Plan Sponsor or an Affiliate);

(d)
the Participant’s breach, neglect, refusal, or failure to materially discharge the Participant’s duties (other than due to physical or mental illness) commensurate with the Participant’s title and function or the Participant’s failure to comply with the lawful directions of the Board or a senior managing officer of the Plan Sponsor, or of the Board or a senior managing officer of an Affiliate that employs the Participant, in any such case that is not cured within fifteen (15) days after the Participant has received written notice thereof from such Board or senior managing officer;

(e)
any willful misconduct by the Participant which may cause substantial economic or reputation injury to the Plan Sponsor, including, but not limited to, sexual harassment, or;

(f)
a willful and knowing material misrepresentation to the Board or a senior managing officer of the Plan Sponsor or to the Board or a senior managing officer of an Affiliate that employs the Participant.

1.9
“Claimant” shall mean a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

1.10
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations promulgated thereunder.

1.11
“Disability” shall mean a condition of the Participant whereby he or she either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Plan Sponsor.  Items (i) and (ii) of this Section 1.10 are permitted provided they are in compliance with the requirements of Treasury Regulations Section 1.409A-3(g)(4). A Participant will also be deemed disabled if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of Disability applied under such disability insurance program complies with the requirements of Treasury Regulations Section 1.409A- 3(g)(4).

1.12
“Effective Date” of the Plan is January 1, 2016.

1.13
“Election Form” shall mean the form or forms established from time to time by the Plan Administrator on which the Participant elects, prior to the first Plan Year, in which it is earned (except as provided under the special rule for newly Eligible Employees set forth in Section 2.3 below), his or her Annual Deferral Amount for the following Plan Year and the Participant designates his or her Beneficiary, as required on that form and under the terms of the Plan.

1.14
“Eligible Employee” shall mean for any Plan Year (or applicable portion of a Plan Year), a person who is determined by the Plan Sponsor, or its designee, to be a member of a select group of management or highly compensated employees of the Plan Sponsor or an Affiliate, and who is designated by the Plan Sponsor, or its designee, to be an Eligible Employee under the Plan. If the Plan Sponsor determines that an individual first becomes an Eligible Employee during a Plan Year, the Plan Sponsor shall notify the individual of its determination and of the date during the Plan Year on which the individual shall first become an Eligible Employee, but in no case will an employee become eligible prior to one (1) complete year of service.

1.15
“Entry Date” shall mean with respect to an Eligible Employee, the first day of the pay period following the date on which the Eligible Employee becomes a Participant.

1.16
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.17
“FICA Amount” shall mean the Participant’s share of the tax imposed on a Participant’s Base Salary and Plan Sponsor Contributions, if any, under the Federal Insurance Contributions Act.

1.18
“Participant” shall mean (A) any Eligible Employee (i) who is selected to participate in this Plan, (ii) who elects to participate in this Plan by signing a Participation Agreement, (iii) who completes and signs certain Election Form(s) required by the Plan Administrator, and (iv) whose signed Election Form(s) are accepted by the Plan Administrator or (B) a former Eligible Employee who continues to be entitled to a benefit under this Plan. A spouse or former spouse of a Participant shall not be treated as a Participant in this Plan or have an Account balance under this Plan, even if he or she has an interest in the Participant’s benefits under this Plan as a result of applicable law or property settlements resulting from legal separation or marital dissolution or divorce.

1.19
“Participation Agreement” shall mean the document executed by the Eligible Employee and Plan Administrator whereby the Eligible Employee agrees to participate in the Plan.

1.20
“Permissible Payment Event” shall mean one or more of the following events upon which payment may be made to a Participant or his or her Beneficiary under the terms of the Plan: (i) the Participant’s Separation from Service, (ii) the Participant’s death, (iii) the Participant’s Disability, (iv) upon the occurrence of an Unforeseeable Emergency, or (v) a time or pursuant to a fixed schedule and/or retirement date specified under the Plan, within the meaning of Treasury Regulations Section 1.409A-3(a).

1.21
“Plan” shall mean The York Water Company Deferred Compensation Plan For Employees Ineligible for the Defined Benefit Pension Plan, as set forth herein and amended from time to time.

1.22
“Plan Administrator” shall be the Board or its designee. A Participant in the Plan should not serve as a singular Plan Administrator. If a Participant is part of a group of Participants designated as a committee or Plan Administrator, then the Participant may not (B) a former Eligible Employee who continues to be entitled to a benefit under this Plan. A spouse or former spouse of a Participant shall not be treated as a Participant in this Plan or have an Account balance under this Plan, even if he or she has an interest in the Participant’s benefits under this Plan as a result of applicable law or property settlements resulting from legal separation or marital dissolution or divorce.

1.23
“Plan Sponsor” shall mean The York Water Company, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania.

1.24
“Plan Sponsor Contribution” shall mean the amount contributed to a Participant’s Plan Sponsor Contribution Account pursuant to Section 3.1 and 3.2.

1.25
“Plan Sponsor Contribution Account” shall mean: (i) the sum of the Participant’s Plan Sponsor Contribution amounts, plus (ii) amounts credited (net of amounts debited, which may result in an aggregate negative number) pursuant to Section 3.3.

1.26
“Plan Year” shall mean the twelve (12) month period beginning January 1 of each calendar year and continuing through December 31 of such calendar year.

1.27
“Scheduled Withdrawal Account” shall mean: (i) the sum of the Participant’s Annual Deferral Amount(s) plus (ii) the sum of the Participant’s Plan Sponsor Contribution Amount(s) plus (iii) amounts credited (net of amounts debited, which may result in an aggregate negative number, pursuant to Sections 3.3)[,] less (iv) all distributions made to, or withdrawals by, the Participant or his or her Beneficiary, and tax withholding amounts which may have been deducted from the Scheduled Withdrawal Account(s).

1.28
“Section 409A” shall mean Section 409A of the Code and the Treasury Regulations or other authoritative guidance issued under that section.

1.29
“Separation from Service” shall mean a Participant’s termination of active employment, whether voluntary or involuntary, other than by death, Disability, or leave of absence with the Plan Sponsor or Affiliate(s), within the meaning of Section 409A(a)(2)(A)(i) of the Code, and the Treasury Regulations thereto.

1.30
“Separation From Service Account” shall mean (i) the sum of the Participant Annual Deferral Amount(s) plus (ii) amounts credited (net of amounts debited, which may result in an aggregate negative number) pursuant to Section 3.3 less (iii) all distributions made to or withdrawals by the Participant or his or her Beneficiary that relate to the Participant’s Separation From Service Account, and tax withholdings amounts deducted (if any) from the Participants’ Separation From Service Account.

1.31
“Specified Employee” shall mean a key employee (as defined by Section 416(i) of the Code without regard to paragraph (5) thereof), and as further defined in Treasury Regulations Section 1.409A-(1)(i),) of the Plan Sponsor the stock of which is publicly traded on an established securities market or otherwise within the meaning of Section 409A(2)(B)(i). Notwithstanding other provisions of this Plan to the contrary, distributions by the Plan Sponsor to Specified Employees (if any) may not be made before the date which is six (6) months after the date of Separation from Service (or, if earlier, the date of death of the Specified Employee) within the meaning of Treasury Regulations Section 1.409A-3(g)(2). If payments to a Specified Employee are to be made in installments each installment payment to which a Specified Employee is entitled upon a Separation from Service will be delayed by six (6) months. A Participant meeting the definition of Specified Employee on December 31 or during a 12 month period ending December 31 will be treated as a Specified Employee for the 12 month period commencing the following April 1.

1.32
“Treasury Regulations” shall mean regulations promulgated by the Internal Revenue Service for the U.S. Department of the Treasury, either proposed, or permanent, and as may be amended from time to time.

1.33
“Trust” shall mean one or more grantor trusts, of which the Plan Sponsor is the grantor, within the meaning of subpart E, part I, subchapter J, subtitle A of the Code, to pay benefits under this Plan, that may be established in accordance with the terms of the Plan.

1.34
“Unforeseeable Emergency” shall mean a severe financial hardship of the Participant or Beneficiary resulting from an illness or accident of the Participant or Beneficiary, the Participant or Beneficiary’s spouse, or the Participant or Beneficiary’s dependent(s) (as defined in Section 152(a)) of the Code or loss of the Participant or Beneficiary’s property due to casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or Beneficiary within the meaning of Section 409A.

1.35
“Vested Account” shall mean a Participant’s Separation from Service Account balance plus Plan Sponsor Contribution Account balance plus other amounts vested in accordance with Section 4.1 below.

ARTICLE 2.
Selection, Enrollment, Eligibility

2.1
Selection by Plan Sponsor. Participation in this Plan shall be limited to a select group of management or highly compensated employees of the Plan Sponsor, as determined by the Plan Sponsor in its sole and absolute discretion. The initial group of Eligible Employees shall become Participants on the Effective Date of the Plan. Any individual selected by the Plan Administrator as an Eligible Employee after the Effective Date, shall become a Participant on the first Entry Date occurring on or after the date on which he or she becomes an Eligible Employee, provided that the Eligible Employee meets the enrollment requirements set forth in Section 2.3 below.

2.2
Re-Employment. If a Participant who incurs a Separation from Service with the Plan Sponsor or an Affiliate is subsequently re-employed, he or she may, at the sole and absolute discretion of the Plan Administrator, become a Participant in accordance with the provisions of above Section 2.1.

2.3
Enrollment Requirements. As a condition to participation in this Plan, each selected Eligible Employee shall complete, execute, and return to the Plan Administrator a Participation Agreement and Election Form within the time specified by the Plan Administrator, but in no event later than thirty (30) days following the date that an Eligible Employee is first selected by the Plan Sponsor to participate in the Plan in accordance with Section 2.1 above; provided, however, that any Base Salary deferral election shall be effective only with regard to Base Salary earned following submission of the Participation Agreement and Election Form to the Plan Administrator. In addition, the Plan Administrator shall establish such other enrollment requirements as it determines necessary or advisable. All elections to defer Base Salary with respect to a Plan Year shall be irrevocable, except as permitted under Section 5.8 below (Unforeseeable Emergency).

2.4
Plan Aggregation Rules. This Plan shall constitute an “account balance plan” as defined in Treasury Regulations Section 31.3121(v)(2)-1(c)(1)(ii)(A). For purposes of Section 409A, all amounts deferred by or on behalf of a Participant under this Plan shall be aggregated with deferred amounts under other “account balance plans” currently maintained or adopted in the future by the Plan Sponsor, and all amounts shall be treated as deferred under the rules governing a single plan.

2.5
Termination of Participation. If the Plan Administrator determines that a Participant who has not experienced a Separation from Service no longer qualifies as a member of a select group of management or highly compensated employees or that such a Participant’s participation in the Plan could jeopardize the status of this Plan as “unfunded” and “maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees,” the Plan Administrator shall have the right to terminate any deferral election the Participant has made for any Plan Year following the Plan Year in which the Participant is determined by the Plan Administrator to no longer qualify as a member of a select group of management or highly compensated employees but only to the extent such termination complies with the requirements of Section 409A, and/or to prevent the Participant from making future deferral elections and receiving Plan Sponsor Contribution Amounts under the Plan.

ARTICLE 3.
Contributions and Credits

3.1
Plan Sponsor Discretionary Contributions. The Plan Sponsor may make discretionary contributions to the Participant’s Plan Sponsor Contribution Account as it may determine from time to time and may direct that such contributions be allocated to those Participants that it may select. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero. No Participant shall have a right to compel the Plan Sponsor to make a Plan Sponsor discretionary contribution under this Article and no Participant shall have the right to share in any such contribution for any Plan Year unless selected by the Plan Sponsor, in its sole and absolute discretion.

3.2
Plan Sponsor Non-Discretionary Contributions The Plan Sponsor shall make a non-discretionary contribution/match equal to, but not to exceed, 5% of the Participant’s base salary, Section 1.5.

3.3
Account Earnings. From time to time, as appropriate, the Plan Sponsor will also credit the Participant’s Plan Sponsor Contribution Account and the Participant’s Separation from Service Account with interest on the existing credit balance at a rate determined at the sole discretion of the Plan Sponsor, said rate to EQUAL THE DECEMBER 31 RATE OF MOODY’S AAA CORPORATE BOND YIELD FORECAST for the first Plan Year and for all subsequent periods unless changed by the Plan Sponsor. In no case shall the Plan Sponsor credit interest of more than a six (6) percent rate in any plan year to the Participant’s Plan Sponsor Contribution Account and the Participant’s Separation from Service Account. No interest shall be credited to any Participant’s account(s) after a Separation from Service.

3.4
Contributions and Account Earnings after Age 65  The Participant may not make any contributions to any Account after obtaining the age of 65 and actively employed by the Plan Sponsor.  The Plan Sponsor may not make any non-discretionary contributions to any of the Participant’s accounts after the Participant obtains the age of sixty-five (65). The Plan sponsor may not credit any of the Participant’s accounts with any interest after the Participant obtains the age of sixty-five (65).

ARTICLE 4.
Vesting and Taxes

4.1
Vesting of Benefits.

(a)
A Participant shall be 100% vested in his or her Separation from Service Account, Section 1.30 at all times.

(b)
A Participant shall be 100% vested in Plan Sponsor Contribution Account, Section 1.25 after ten (10) complete years of plan participation.

(c)
A Participant shall be 100% vested in the Permissible Payment Event Calculation, Section 5.15(b), after fifteen (15) complete years of plan participation.

(d)
Notwithstanding Section 4.1, (b), (c), a Participant shall be 100% vested in all accounts (including gross up as set forth in Section 5.15 below) when the Participant attains the age of 60.

(e)
In the event the Participant’s employment is terminated for Cause, no benefits of any kind will be due or payable under the terms of this Plan from amounts credited to a Participant’s Plan Sponsor Contribution Account nor shall the Permissible Payment Event Calculation be engaged to determine any Participant benefit and all rights of the Participant, his or her designated Beneficiary, executors, or administrators, or any other person, to receive payments thereof shall be forfeited. This Section 4.1(e) shall apply to a Participant’s Plan Sponsor Contribution Account and Permissible Payment Event Calculation whether or not such amounts or calculations are vested pursuant to Section 4.1 (b), (c), (d).

4.2
FICA, Withholding and Other Taxes.

(a)
Pre-Distribution Tax Withholdings. The Plan Sponsor, or trustee of the Trust, shall withhold the FICA amount and other employment taxes from the Participant’s Base Salary in a manner determined in the sole discretion of the Plan Sponsor as a Participant becomes vested in his or her accounts and calculation pursuant to Section 4.1 (a), (b), (c) and (d), as applicable.

(b)
Distributions. The Plan Sponsor, or trustee of the Trust, shall withhold from any payments made to a Participant or Beneficiary under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Plan Sponsor that complies with applicable tax withholding requirements.

ARTICLE 5.
Permissible Payment Events, Changes in Time and Form of Payments, Method of Payments

5.1
Payment Following Death While Actively Employed. In the event of the Participant’s death while actively employed, and provided that the Plan Sponsor is first provided a valid death certificate, the Participant’s Beneficiary shall be paid the higher of (a) $150,000 or (b) the Participant’s Vested Account balance (including gross up as set forth in Section 5.15 below) with payment being made in a single lump sum within ninety (90) days following the date of death of the Participant (without regard to whether the Participant was a Specified Employee) to the Participant’s Beneficiary.


5.2
Payment Following a Separation From Service with Less Than Ten Complete Years in the Plan. If a Participant Separates from Service prior to attaining ten (10) complete years in the Plan, the Participant’s Separation from Service Account balance in accordance with Section 4.1(a) shall be paid in a lump sum within ninety (90) days following the Participant’s Separation from Service.  Notwithstanding the above, if the Participant is a Specified Employee, Section 1.31 such payment shall instead be made or commence six (6) months after the Participant’s Separation from Service.

5.3
Payment Following a Separation From Service with Ten Complete Years in the Plan, but Less Than Fifteen Complete Years in the Plan and Less Than Sixty Years of Age. A Participant shall be paid his or her Scheduled Withdrawal Account balance in accordance with Section 4.1 with payments being made or commencing within ninety (90) days following the Participant’s Separation from Service and the attainment of age sixty (60). Notwithstanding the above, if the Participant is a Specified Employee, Section 1.31 such payment shall instead be made or commence six (6) months after the Participant’s Separation from Service.

5.4
Payment Following a Separation From Service with Fifteen or More Complete Years in the Plan and Less Than Sixty Years of Age.  A Participant shall be paid his or her Scheduled Withdrawal Account balance in accordance with Section 4.1 with payments being made or commencing within ninety (90) days following the Participant’s Separation from Service and the attainment of age sixty (60). Notwithstanding the above, if the Participant is a Specified Employee, Section 1.31 such payment shall instead be made or commence six (6) months after the Participant’s Separation from Service.
5.5
Payment Following a Separation From Service at Age Sixty or More. A Participant shall be paid his or her Vested Account balance in accordance with Section 4.1 with payments being made or commencing within ninety (90) days following the Participant’s Separation from Service at age sixty (60) or more.  Notwithstanding the above, if the Participant is a Specified Employee, Section 1.31 such payment shall instead be made or commence six (6) months after the Participant’s Separation from Service.



5.6
Payment Following Disability. In the event of a Participant’s Disability, the Participant shall be paid his or her Vested Account balance with payment or payments being made or commencing within ninety (90) days following the determination of a Participant’s Disability. Amounts shall be distributed according to the form of payment set forth in Section 5.9(b) below.

5.7
Payment Following Death After Receiving Payments. In the event of the Participant’s death after he or she begins receiving payments pursuant to the terms of the Plan, and provided that the Plan Sponsor is first provided a valid death certificate, the Participant’s designated Beneficiary shall be paid the Participant’s remaining Vested Account balance in a single lump sum within ninety (90) days following the date of death of the Participant (without regard to whether the Participant was treated as a Specified Employee).

5.8
Payment in the Event of an Unforeseeable Emergency. If the Participant experiences an Unforeseeable Emergency, the Participant may petition the Plan Administrator for payment of an amount that shall not exceed the lesser of: (i) the Participant’s vested Account(s), or (ii) the amount reasonably needed to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the payment. A Participant may not receive such a payment to the extent that the Unforeseeable Emergency is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise, or (ii) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship. If the Plan Administrator approves a Participant’s petition for a payment then the Participant shall receive said payment, in lump sum, as soon as administratively feasible after such approval.

5.9
Method of Payments.

(a)
Cash. All distributions under the Plan made under the Plan shall be made in cash.

(b)
Form of Payment. Upon the occurrence of a Permissible Payment Event, the Account(s) shall be calculated as of the date of said event. Installment payments made after the first payment shall be paid on or about the applicable modal anniversary of the first payment date until all required installments have been paid. Except as otherwise stated in Sections 5.1, and 5.2 above, which provide for lump sum payments, the amount of each payment shall be determined in accordance with Section 5.15 below. Lump sum payment may not be elected by the Participant.

(c)
Lump Sum Payment of Minimum Account Balances. Notwithstanding anything else contained herein to the contrary, if the Vested Account balance for a Participant at the due date of the first installment is fity thousand dollars ($50,000.00) or less, payment of the Account(s) shall be made instead in a lump sum on the due date of the first installment, and no installment payments shall be available.

5.10
No Accelerations. Notwithstanding anything in this Plan to the contrary, no change submitted on a Participant Election Form shall be accepted by the Plan Sponsor. The Plan Sponsor may, however, accelerate certain distributions under the Plan to the extent permitted under Section 409A as follows:

(a)
Conflicts of Interest. The Plan will permit such acceleration of the time or schedule of payment under the Plan as may be necessary to comply with a certificate of divesture.

(b)
De Minimis and Specified Amounts. The Plan will permit the acceleration of the time or schedule of payment to a Participant, provided that (i) the payment accompanies the termination in the entirety of the Participant’s interest in the Plan; (ii) the payment is made on or before the later of: (A) December 31 of the Plan Year in which occurs the Participant’s Separation from Service from the Plan Sponsor, or (B) the date is 2 ½ months after the Participant’s Separation from Service from the Plan Sponsor; and (iii) the payment is not greater than $50,000.

(c)
Payment of Employment Taxes. The Plan will permit the acceleration of the time or schedule of a payment to pay the FICA Amount. Additionally, the Plan will permit the acceleration of the time or schedule of a payment to pay the income tax on wages imposed as a result of the payment of the FICA amount, and to pay the additional income tax on wages attributable to the pyramiding wages and taxes. However, the total payment under this acceleration provision will not exceed the aggregate of the FICA Amount, and the income tax withholding related to such FICA Amount in accordance with the requirement of Treasury Regulations Section 1.409A-3(j)(4)(vi).

(d)
Payment upon Income Inclusion under Section 409A. The Plan will permit the acceleration of the time or schedule of a payment to a Participant at any time the Plan fails to meet the requirements of Section 409A. Such Payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Section 409A.

5.11
Unsecured General Creditor Status of Participant.

(a)
Payment to the Participant or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Plan Sponsor and no person shall have any interest in any such asset by virtue of any provision of this Plan. The Plan Sponsor’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. To the extent that any person acquires a right to receive payments from the Plan Sponsor under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of the Plan Sponsor and no such person shall have or acquire any legal or equitable right, interest or claim in or to any property or assets of the Plan Sponsor.

(b)
In the event that the Plan Sponsor purchases an insurance policy or policies insuring the life of a Participant or employee, to allow the Plan Sponsor to recover or meet the cost of providing benefits, in whole or in part, hereunder, no Participant or Beneficiary shall have any rights whatsoever in said policy or the proceeds there from. The Plan Sponsor, or Trustee, shall be the primary owner and beneficiary of any such insurance policy or property and shall possess and may exercise all incidents of ownership therein.

(c)
In the event that the Plan Sponsor purchases an insurance policy or policies on the life of a Participant as provided for above, then all of such policies shall be subject to the claims of the creditors of the Plan Sponsor.

(d)
If the Plan Sponsor chooses to obtain insurance on the life of a Participant in connection with its obligations under this Plan, the Participant hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Plan Sponsor or the insurance company designated by the Plan Sponsor.

5.12
Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Plan Administrator may make such distribution:
(i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Plan Sponsor and the Plan Administrator from further liability on account thereof.

5.13
Excise Tax Limitation: In the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the Code) to the Participant or for the Participant’s benefit paid or payable or distributed or distributable (including, but not limited to, the acceleration of the time for the vesting or payment of such benefit or payment) pursuant to the terms of this Plan or otherwise in connection with, or arising out of, the Participant’s employment with the Plan Sponsor or any of its Affiliates or a Change of Control within the meaning of Section 280G of the Code (a “Payment” or “Payments”), would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Payments shall be reduced (but not below zero) but only to the extent necessary that no portion thereof shall be subject to the Excise Tax (the “Section 4999 Limit”).  The Payments shall be reduced on a nondiscretionary basis in such a way as to minimize the reduction in the economic value deliverable to the Participant. Where more than one payment has the same value for this purpose and they are payable at different times they will be reduced on a pro rata basis.

5.14
Delay in Payment by Plan Sponsor. In the case of payments by the Plan Sponsor to a Participant or Participant’s Beneficiary, the deduction for which would be limited or eliminated by the application of Section 162(m) of the Code, payments that would otherwise violate securities laws, or payments that would violate loan covenants or other contractual terms to which the Participant is a party, and where such a violation would result in material harm to the Plan Sponsor, said payments may be delayed. In the case of deduction limitations imposed by Section 162(m) of the Code, payment will be deferred until the earlier of (i) a date in the first year in which the Plan Sponsor reasonably anticipates that a payment of such amount would not result in a limitation under 162(m) or (ii) the year in which the Participant Separates from Service. Payments delayed for other permissible reasons must be made in the first calendar year in which the Plan Sponsor reasonably anticipates that the payment would not violate the loan contractual terms, the violation would not result in material harm to the Plan Sponsor, or the payment would not result in a violation of Federal securities law or other applicable laws.

5.15
Permissible Payment Event Calculation.

The Plan Sponsor agrees that in determining the benefits payable under Section 5.3, above, that the amount of each monthly payment actually made to the Participant or his or her Beneficiary will be determined by dividing his or her Scheduled Withdrawal Account balance prior to the first payment by 240.

The Participant may request the benefit be paid over a fifteen (15) year period (180 equal payments) instead of the benefit being paid over a twenty (20) year period (240 equal payments) which is the default payment schedule. The Participant must make a written request to the Plan Sponsor no less than three (3) months prior to receiving the first payment of the benefit.

Example Without Tax Savings:

Scheduled Withdrawal Account Value at age 60 = $500,000 (Participant Separated from Service Prior to vesting  of Tax Saving Multiplier)

Step 1: Actual Benefit to be paid each year: $500,000/20 years = $25,000
Step 2: Actual Benefit to be paid each month: $500,000/240 = $2,083.34

(b) The Plan Sponsor agrees that in determining the benefits payable under Sections 5.1, 5.4, 5.5, and 5.6 above, that the amount of each monthly payment actually made to the Participant or his or her Beneficiary will be determined by dividing his or her Scheduled Withdrawal Account balance prior to the first payment by 240 and then increasing the amount by the amount of federal and state income tax saved by the Plan Sponsor, if any. The savings will be calculated based on the marginal federal and state income tax bracket for the Plan Sponsor at the time the Participant initially enters the Plan.

Example With Tax Savings:

Scheduled Withdrawal Account Value at age 60 = $500,000 Corporate Marginal Tax Rate is 0.4059. Participant Separated at age 60.
Step 1:    Determine Tax Savings Multiplier (1 minus Tax Bracket %, or 1-
.4059 = .5941)

 Step 2:
Calculate Actual Benefit To Be Paid (Divide Account Value by the Tax Savings Multiplier, or $500,000 divided by .5941 =
$841,609.16)
Step 3:    Actual Benefit to be paid each year: $841,609.16/20 years =
$42,080.45

 Step 4:
Actual Benefit to be paid each month: $841,609.16/240=$3,506.70 Beneficiary Designation

5.16
Designation of Beneficiaries.

(a)
Each Participant may designate any person or persons (who may be named contingently or successively) to receive any benefits payable under the Plan upon the Participant’s death, and the designation may be changed from time to time by the Participant by filing a new designation. Each designation will revoke all prior designations by the same Participant, shall be in the form prescribed by the Plan Administrator, and shall be effective only when filed in writing with the Plan Administrator during the Participant’s lifetime.

(b)
In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Participant, the Plan Sponsor shall pay the benefit payment to the Participant’s spouse, if then living, and if the spouse is not then living to the Participant’s then living descendants, if any, per stirpes, and if there are no living descendants, to the Participant’s estate. In determining the existence or identity of anyone entitled to a benefit payment, the Plan Sponsor may rely conclusively upon information supplied by the Participant’s personal representative, executor or administrator.

(c)
If a question arises as to the existence or identity of anyone entitled to receive a death benefit payment under the Plan, or if a dispute arises with respect to any death benefit payment under the Plan, the Plan Sponsor may distribute the payment to the Participant’s estate without liability for any tax or other consequences, or may take any other action which the Plan Sponsor deems to be appropriate.

5.17
Information to be Furnished by Participants and Beneficiaries; Inability to Locate Participants or Beneficiaries. Any communication, statement or notice addressed to a Participant or to a Beneficiary at his or her last post office address as shown on the Plan Sponsor’s records shall be binding on the Participant or Beneficiary for all purposes of this Plan. The Plan Sponsor shall not be obligated to search for any Participant or Beneficiary beyond the sending of a registered letter to the last known address.

ARTICLE 6.
Termination, Amendment or Modification

6.1
Plan Termination. The Plan Sponsor reserves the right to terminate the Plan in accordance with one of the following, subject to the restrictions imposed by Section 409A:

(a)
Corporate Dissolution or Bankruptcy. Distributions will be made if the Plan is terminated within twelve (12) months of a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A), provided that the amounts deferred under the Plan are included in the Participant’s gross income in the latest of:

(i)
The calendar year in which the Plan termination occurs;

(ii)
The calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or

(iii)
The first calendar year in which the payment is administratively practicable.

(b)
Discretionary Termination. The Plan Sponsor may also terminate the Plan and make distributions provided that:

(i)
All plans sponsored by the Plan Sponsor that would be aggregated with any terminated arrangements under Treasury Regulations Section 1.409A- 1(c) are terminated;

(ii)
No payments other than payments that would be payable under the terms of the Plan if the termination had not occurred are made within twelve (12) months of the Plan termination;

(iii)
All payments are made within twenty-four (24) months of the Plan termination;

(iv)
Termination of the Plan does not occur proximate to a downturn in the financial health of the Plan Sponsor; and

(v)
The Plan Sponsor does not adopt a new plan that would be aggregated with any terminated plan if the same Participant participated in both arrangements, at any time within three (3) years following the date of termination of the Plan.

The Plan Sponsor also reserves the right to suspend the operation of the Plan for a fixed or indeterminate period of time.

(c)
[Change in Control. The Plan Sponsor may also terminate the Plan and make distributions provided that:

(i)
All plans sponsored by the Plan Sponsor that would be aggregated with any terminated arrangements under Treasury Regulations Section 1.409A- 1(c) are liquidated and terminated;

(ii)
The Plan is terminated within thirty (30) days preceding or twelve (12) months following a change in control that constitutes a “change in control event” within the meaning of such term under Treasury Regulations Section 1.409A-3(i)(5); and

(iii)
Participants receive all amounts of deferred compensation from the plans identified in Section 7.1(c)(i) above within twelve (12) months of the date the Plan Sponsor takes all steps to terminate and liquidate the plans identified in Section 7.1(c)(i) above.]

6.2
Amendment.  The Plan Sponsor may, at any time, amend or modify this Plan in whole or in part; provided, however, that, except to the extent necessary to bring the Plan into compliance with Section 409A: (i) no amendment or modification shall be effective to decrease the value or vested percentage of a Participant’s Account(s), in existence at the time an amendment or modification is made, and (ii) no amendment or modification shall materially and adversely affect the Participant’s rights to be credited with additional amounts on such Account(s), or otherwise materially and adversely affect the Participant’s rights with respect to such Account(s). The amendment or modification of this Plan shall have no effect on any Participant or Beneficiary who has become entitled to the payment of benefits under this Plan as of the date of the amendment or modification.

ARTICLE 7.
Administration

7.1
Plan Administrator Duties. The Plan Administrator shall be responsible for the management, operation and administration of the Plan. The Plan Administrator shall act at meetings by affirmative vote of a majority of its members. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a unanimous written consent to the action is signed by all members and such written consent is filed with the minutes of the proceedings of the Plan Administrator. A member shall not vote or act upon any matter which relates solely to himself or herself as a Participant. The Chair or any other member or members of the Plan Administrator designated by the Chair may execute any certificate or other written direction on behalf of the Plan Administrator. When making a determination or calculation, the Plan Administrator shall be entitled to rely on information furnished by a Participant or the Plan Sponsor. No provision of this Plan shall be construed as imposing on the Plan Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

7.2
Plan Administrator Authority. The Plan Administrator shall enforce this Plan in accordance with its terms, shall be charged with the general administration of this Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:

(a)
To construe and interpret the terms and provisions of this Plan;

(b)
To compute and certify the amount and kind of benefits payable to Participants and their Beneficiaries; to determine the time and manner in which such benefits are paid; and to determine the amount of any withholding taxes to be deducted;

(c)
To maintain all records that may be necessary for the administration of this Plan;

(d)
To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law;

(e)
To make and publish such rules for the regulation of this Plan and procedures for the administration of this Plan as are not inconsistent with the terms hereof;

(f)
To administer this Plan’s claims procedures;

(g)
To approve election forms and procedures for use under this Plan; and

(h)
To appoint a plan record keeper or any other agent, and to delegate to them such powers and duties in connection with the administration of this Plan as the Plan Administrator may from time to time prescribe.

7.3
Binding Effect of Decision. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of this Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Plan.

7.4
Compensation, Expenses and Indemnity. The Plan Administrator shall serve without compensation for services rendered hereunder. The Plan Administrator is authorized at the expense of the Plan Sponsor to employ such legal counsel and/or Plan record keeper as it may deem advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this Plan shall be paid by the Plan Sponsor.

7.5
Plan Sponsor Information. To enable the Plan Administrator to perform its functions, the Plan Sponsor shall supply full and timely information to the Plan Administrator, on all matters relating to the Base Salary of its Participants, the date and circumstances of the Disability, death, or Separation from Service of its employees who are Participants, and such other pertinent information as the Plan Administrator may reasonably require.

7.6
Periodic Statements. Under procedures established by the Plan Administrator, a Participant shall be provided a statement of account on an annual basis (or more frequently as the Plan Administrator shall determine) with respect to such Participant’s Accounts.

ARTICLE 8.
Claims Procedures

8.1
Claims Procedure. This Article is based on final regulations issued by the Department of Labor and published in the Federal Register on November 21, 2000 and codified in Section 2560.503-1 of the Department of Labor Regulations. If any provision of this Article conflicts with the requirements of those regulations, the requirements of those regulations will prevail.

(a)
Claim. A Participant or Beneficiary (hereinafter referred to as a “Claimant”) who believes he or she is entitled to any Plan benefit under this Plan may file a claim with the Plan Administrator. The Plan Administrator shall review the claim itself or appoint an individual or entity to review the claim.

(b)
Claim Decision. The Claimant shall be notified within ninety (90) days after the claim is filed whether the claim is allowed or denied (forty-five (45) days in the case of a claim involving Disability benefits), unless, for claims not involving Disability benefits, the Claimant receives written notice from the Plan Administrator or appointee of the Plan Administrator prior to the end of the ninety (90) day period stating that special circumstances require an extension of the time for decision. Such extension is not to extend beyond the day which is one hundred eighty (180) days after the day the claim is filed. In the case of a claim involving Disability benefits, the Plan Administrator will notify the Claimant within the initial forty-five (45) day period that the Plan Administrator needs up to an additional thirty (30) days to review the Claimant’s claim. If the Plan Administrator determines that the additional thirty (30) day period is not sufficient and that additional time is necessary to review the Claimant’s claim for Disability benefits, the Plan Administrator may notify the Claimant of an additional thirty (30) day extension.  If the Plan Administrator denies the claim, it must provide to the Claimant, in writing or by electronic communication: 


(i)
The specific reasons for such denial;

(ii)
Specific reference to pertinent provisions of this Plan on which such denial is based;

(iii)
A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary;

(iv)
In the case of any claim involving Disability benefits, a copy of any internal rule, guideline, protocol, or other similar criterion relied upon in making the initial determination or a statement that such a rule, guideline, protocol, or other criterion was relied upon in making the determination and that a copy of such rule will be provided to the Claimant free of charge at the Claimant’s request; and

(v)
A description of the Plan’s appeal procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following a denial of the appeal of the denial of the benefits claim.

(c)
Review Procedures.  A request for review of a denied claim must be made in writing to the Plan Administrator within sixty (60) days after receiving notice of denial (one hundred eighty (180) days in the case of a claim involving Disability benefits). The decision upon review will be made within sixty (60) days after the Plan Administrator’s receipt of a request for review (forty-five (45) days in the case of a claim involving Disability benefits), unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than one hundred twenty (120) days after receipt of a request for review (ninety (90) days in the case of a claim for Disability benefits). A notice of such an extension must be provided to the Claimant within the initial sixty (60) day period (the initial forty-five (45) day period in the case of a claim for Disability benefits) and must explain the special circumstances and provide an expected date of decision. The reviewer shall afford the Claimant an opportunity to review and receive, without charge, all relevant documents, information and records and to submit issues and comments in writing to the Plan Administrator. The reviewer shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim regardless of whether the information was submitted or considered in the benefit determination.  Upon completion of its review of an adverse initial claim determination, the Plan Administrator will give the Claimant, in writing or by electronic notification, a notice containing:

(i)
its decision;

(ii)
the specific reasons for the decision;

(iii)
the relevant Plan provisions on which its decision is based;

(iv)
a statement that the Claimant is entitled to receive, upon request and without charge, reasonable access to, and copies of, all documents, records and other information in the Plan’s files which is relevant to the Claimant’s claim for benefit;

(v)
a statement describing the Claimant’s right to bring an action for judicial review under Section 502(a) of ERISA; and

(vi)
In the case of any claim involving Disability benefits, a copy of any internal rule, guideline, protocol, or other similar criterion that was relied upon in making the adverse determination on review or a statement that a copy of the rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination on review and that a copy of such rule, guideline, protocol, or similar criterion will be provided without charge to the Claimant upon request.

Unless a Claimant voluntarily avails himself or herself of the procedures set forth in Section 9.2 below, all interpretations, determinations and decisions of the Plan Administrator in respect of any claim shall be made in its sole discretion based on the applicable Plan documents and shall be final, conclusive and binding on all parties.

(d)
Calculation of Time Periods. For purposes of the time periods specified in this Article, the period of time during which a benefit determination is required to be made begins at the time a claim is filed in accordance with the Plan procedures without regard to whether all the information necessary to make a decision accompanies the claim. If a period of time is extended due to a Claimant’s failure to submit all information necessary, the period for making the determination shall be tolled from the date the notification is sent to the Claimant until the date the Claimant responds.

(e)
Failure of Plan to Follow Procedures. If the Plan fails to follow the claims procedure required by this Article, a Claimant shall be entitled to pursue any available remedy under Section 502(a) of ERISA on the basis that the Plan has failed toprovide reasonable claims procedure that would yield a decision on the merits of the claim.

(f)
Failure of Claimant to Follow Procedures. A Claimant’s compliance with the foregoing provisions of this Article is a mandatory prerequisite to the Claimant’s right to commence any legal action with respect to any claim for benefits under the Plan.

8.2
Arbitration of Claims. Instead of pursuing his or her claim in court, a Participant may voluntarily agree that all claims or controversies arising out of or in connection with this Plan shall, subject to the initial review provided for in the foregoing provisions of this Article, be resolved through arbitration as provided in this Article. Except as otherwise provided or by mutual agreement of the parties, any arbitration shall be administered under and by the Judicial Arbitration & Mediation Services, Inc. (“JAMS”), in accordance with the JAMS procedure then in effect. The arbitration shall be held in the JAMS office nearest to where the Claimant is or was last employed by the Plan Sponsor or at a mutually agreeable location. The prevailing party in the arbitration shall have the right to recover its reasonable attorney’s fees, disbursements and costs of the arbitration (including enforcement of the arbitration decision), subject to any contrary determination by the arbitrator. If the Claimant voluntarily avails himself or herself of the procedures set forth in this Section 9.2, all determinations of the arbitrators in respect of any claim shall be final, conclusive and binding on all parties.

ARTICLE 9.
The Trust

9.1
Establishment of Trust.  The Plan Sponsor may establish a Trust. If the Plan Sponsor establishes a Trust, all benefits payable under this Plan to a Participant shall be paid directly by the Plan Sponsor from the Trust. To the extent such benefits are not paid from the Trust, the benefits shall be paid from the general assets of the Plan Sponsor.  The Trust, if any, shall be an irrevocable grantor trust which conforms to the terms of the model trust as described in IRS Revenue Procedure 92-64, I.R.B. 1992-33. If the Plan Sponsor establishes a Trust, the assets of the Trust will be subject to the claims of the Plan Sponsor’s creditors in the event of its insolvency. Except as may otherwise be provided under the Trust, the Plan Sponsor shall not be obligated to set aside, earmark or escrow any funds or other assets to satisfy its obligations under this Plan, and the Participant and/or his or her designated Beneficiaries shall not have any property interest in any specific assets of the Plan Sponsor other than the unsecured right to receive payments from the Plan Sponsor, as provided in this Plan.

9.2
Interrelationship of the Plan and the Trust. The provisions of the Plan shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust (if established) shall govern the rights of the Participant and the creditors of the Plan Sponsor to the assets transferred to the Trust. Each shall at all times remain liable to carry out its obligations under the Plan. The Plan Sponsor’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust.

9.3
Contribution to the Trust. Amounts may be contributed by the Plan Sponsor to the Trust at the sole discretion of the Plan Sponsor.

ARTICLE 10.
Miscellaneous

10.1
Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. To the extent any provision of the Plan is determined by the Plan Administrator (acting in good faith), the Internal Revenue Service, the United States Department of the Treasury or a court of competent jurisdiction to fail to comply with Section 409A with respect to any Participant or Participants, such provision shall have no force or effect with respect to such Participant or Participants.

10.2
Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part hereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment (except to the extent the Plan Sponsor may be required to garnish amounts from payments due under this Plan pursuant to applicable law) or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participants’ or any other persons’ bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise. If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber transfer, hypothecate, alienate or convey in advance of actual receipt, the amount, if any, payable hereunder, or any part thereof, the Plan Administrator, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the Plan Administrator shall direct.

10.3
Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Plan Sponsor and the Participant. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Plan Sponsor as an employee or to interfere with the right of the Plan Sponsor to discipline or discharge the Participant at any time.

10.4
Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the Commonwealth of Pennsylvania, without regard to its conflicts of laws principles.

10.5
Notice. Any notice, consent or demand required or permitted to be given under the provisions of this Plan shall be in writing and shall be signed by the party giving or making the same. If such notice, consent or demand is mailed, it shall be sent by United States certified mail, postage prepaid, addressed to the addressee’s last known address as shown on the records of the Plan Sponsor. The date of such mailing shall be deemed the date of notice consent or demand. Any person may change the address to which notice is to be sent by giving notice of the change of address in the manner aforesaid.

10.6
Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for Employees of the Plan Sponsor. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

10.7
Compliance. A Participant shall have no right to receive payment with respect to the Participant’s Account balance until all legal and contractual obligations of the Plan Sponsor relating to establishment of the Plan and the making of such payments shall have been complied with in full.

10.8
Successor Company. The Plan will be continued after a sale of assets of the Plan Sponsor, or a merger or consolidation of the Plan Sponsor into another corporation or entity.

10.9
Section 409A Compliance. The Plan is intended to comply with the applicable requirements of Section 409A, and shall be administered in accordance with Section 409A to the extent Section 409A applies to the Plan. Notwithstanding anything in the Plan to the contrary, distributions from the Plan may only be made in a manner, and upon an event, permitted by Section 409A. If a payment is not made by the designated payment date under the Plan, the payment shall be made by December 31 of the calendar year in which the designated payment date occurs. Each installment payment shall be treated as a separate payment for purposes of Section 409A. To the extent that any provision of the Plan would cause a conflict with the applicable requirements of Section 409A, or would cause the administration of the Plan to fail to satisfy the applicable requirements of Section 409A, such provision shall be deemed null and void.  In no event shall a Participant, directly or indirectly, designate the calendar year of payment. Notwithstanding anything in the Plan to the contrary, this Plan may be amended by the Plan Sponsor at any time, retroactively if required, to the extent required to conform the Plan to Section 409A. No election made by a Participant hereunder, and no change made by a Participant to a previous election shall be accepted by the Plan Sponsor if the Plan Sponsor determines that acceptance of such election or change could violate any of the requirements of Section 409A, resulting in early taxation and penalties.

[Signature Page Follows]

IN WITNESS WHEREOF, the Plan Sponsor has signed this Plan document as of
 , 20 .

ATTEST/WITNESS
  
For: Participant
(Signature)
  
(Signature)
(Print Name)
  
(Print Name)
   
(Title)
   
(Date)
ATTEST/WITNESS
  
For:  The York Water Company
(Signature)
  
(Signature)
(Print Name)
  
(Print Name)
   
(Title)
   
(Date)
 

PLAN ENROLLMENT KIT

for the

The York Water Company
Deferred Compensation Plan For Employees Ineligible For A Defined Benefit Pension Plan






Contents:

Participant Data Participation Agreement
Plan Year Initial Enrollment Form






 
PLEASE COMPLETE EACH FORM INCLUDED IN THIS KIT. PLEASE PRINT IN INK. UPON COMPLETION OF THIS PLAN ENROLLMENT KIT, PLEASE REVIEW TO ENSURE THAT EACH FORM IS COMPLETELY FILLED OUT AND THAT YOU HAVE SIGNED WHERE APPLICABLE.
 
RETURN ALL FORMS TO YOUR PLAN ADMINISTRATOR



The York Water Company

Deferred Compensation Plan For Employees Ineligible For A Defined Benefit Pension Plan


PARTICIPANT DATA



INSTRUCTIONS:  Please complete all information below.

(Please print)



Last Name
First Name
Middle Initial
Address
City
  
State
Zip Code
Date of Birth (mm/dd/yyyy)
  
Date of Hire (mm/dd/yyyy)


DEFERRED COMPENSATION PLAN FOR EMPLOYEES INELIGIBLE FOR A DEFINED BENEFIT PLAN

PARTICIPATION AGREEMENT
(Please print)
    
Last Name
First Name
Middle Initial

The Plan Sponsor and the Plan Administrator designate the above named Eligible Employee as a Plan Participant. All capitalized terms used herein are defined in the The York Water Company Deferred Compensation Plan For Employees Not Eligible For A Defined Benefit Pension Plan..

In consideration of his or her designation as a Participant, the undersigned Eligible Employee hereby agrees and acknowledges as follows:

1.
I have received a copy of The York Water Company Deferred Compensation Plan For Employees Not Eligible For A Defined Benefit Pension Plan, as currently in effect.

2.
I agree to be bound by all of the terms and conditions of the Plan, including the determinations of the Plan Administrator, and to perform any and all acts required by me hereunder.

3.
I have the right to designate the Beneficiary or Beneficiaries, and thereafter to change the Beneficiary or Beneficiaries, of any death benefit payable under the Plan, by completing and delivering to the Plan Administrator a form designating his or her Beneficiary.

4.
I understand that the Plan may have to be amended to comply with Section 409A, and I hereby agree to execute any documents necessary to make such amendments.

5.
I understand that my participation in the Plan can have tax and financial consequences for my Beneficiaries and me. I have had the opportunity to consult with my own tax, financial and legal advisors before deciding to participate in the Plan.

6.
I understand that my Plan benefits are subject to the claims of my Plan Sponsor’s creditors should my Plan Sponsor become bankrupt or insolvent.

7.
I understand that the Plan Sponsor Contributions, Account Earnings and Tax Savings (if any) shall vest based on Section 4.1 of the Plan.

8.
I understand that the Plan Agreement and any accompanying forms shall be interpreted in accordance with, and incorporate the terms and conditions required by Section 409A. I further understand that the Plan Administrator may, in its discretion, adopt such amendments to the Plan and any accompanying forms or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Plan Administrator determines are necessary or appropriate to comply with the requirements of Section 409A. Finally, I understand that the time or form of distributions that I may be allowed to elect (if any) may not be accelerated except as otherwise permitted by Section 409A.

AGREED AND ACCEPTED BY THE PARTICIPANT
Signature of Participant
  
Date
AGREED AND ACCEPTED BY THE PLAN SPONSOR
For the Plan Sponsor
  
Date


The York Water Company Deferred Compensation Plan For Employees Not Eligible For a Defined Benefit Pension Plan

ENROLLMENT FORM
 
(Please print)



Last Name
First Name
Middle Initial
SECTION I:  DEFERRAL ELECTIONS
  
I hereby elect to defer my Base Salary as indicated below. I understand that this deferral election is subject to all of the applicable terms of the Plan, including the requirement that I may not change my election once made during a Plan Year.  I understand that my election will continue until, and unless, I change my election in accordance to the provisions of the Plan. All capitalized terms used herein are defined in the The York Water Company Deferred Compensation Plan For Employees Not Eligible For a Defined Benefit Pension Plan, unless otherwise indicated by the context.

☐
I elect to defer percent of my Base Salary as of the beginning of each Plan Year until I elect a different deferral percentage in accordance with the provisions of the Plan.

I understand that the Company will contribute a percentage equal to my deferral election, not to exceed 5.0%, in accordance pursuant to section 3.2.
SECTION II: MARGINAL FEDERAL AND STATE TAX RATE


The marginal federal and state tax rate for the term of this contract shall be .
SECTION III:  DISTRIBUTION ELECTION


☐
I hereby elect that following my Separation From Service my vested benefit be paid to me, unless prohibited by 409a regulations, in one hundred and eighty (180) equal monthly payments beginning at the later of age 60 or my Separation From Service date.

☐
I hereby elect that following my Separation From Service my vested benefit be paid to me, unless prohibited by 409a regulations, in two-hundred and forty (240) equal monthly payments beginning at the later of age 60 or my Separation From Service date.

I understand that distribution election changes must be made more than twelve (12) months in advance of the initial distribution date.

AGREED AND ACCEPTED BY THE PARTICIPANT
Signature of Participant
  
Date
AGREED AND ACCEPTED BY THE PLAN SPONSOR
For the Plan Sponsor
  
Date
 

SECTION IV:  BENEFICIARY DESIGNATION
 

I designate the Beneficiary(ies) below to receive any benefits payable under this Plan on account of my death:

PRIMARY BENEFICIARY(IES):
Name
  
Percentage of Benefits
  
Relationship to Participant
  
Social Security Number
             
             
             
             

CONTINGENT BENEFICIARY(IES) (Will receive indicated portions of my Vested Account balance if no primary Beneficiaries survive the Participant.)

 
Name
  
Percentage of Benefits
  
Relationship to Participant
  
Social Security Number
             
             
             
             
             
 
AGREED AND ACCEPTED BY THE PARTICIPANT
        
Signature of Participant
  
Date
        
AGREED AND ACCEPTED BY THE PLAN SPONSOR
        
For the Plan Sponsor
  
Date
        



Schedule 10.11

Name
Marginal Federal and State Tax Rate
Alexandra C. Chiaruttini
0.2889
Matthew J. Scarpato
0.2731
Ashley M. Grimm
 0.2692



EX-23 4 exhibit23-123125.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
EXHIBIT 23


Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File Nos. 333-283488 and 333-291421) and Forms S-8 (File Nos. 333-191497, 333-287003, and 333-211287) of The York Water Company of our report dated March 3, 2026, relating to the financial statements and the financial statement schedule, which appear in this Form 10-K for the year ended December 31, 2025.

/s/ Baker Tilly US, LLP
Lancaster, Pennsylvania
March 3, 2026  
EX-31.1 5 exhibit31_1-123125.htm YWC CERTIFICATION OF CEO
 

EXHIBIT 31.1
CERTIFICATIONS


I, Joseph T. Hand, certify that:
 
1.
I have reviewed this report on Form 10-K of The York Water Company;
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
 
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
 
 
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 3, 2026
/s/ Joseph T. Hand
 
Joseph T. Hand
 
President and CEO

EX-31.2 6 exhibit31_2-123125.htm YWC CERTIFICATION OF CFO
 

EXHIBIT 31.2
CERTIFICATIONS


I, Matthew E. Poff, certify that:
 
1.
I have reviewed this report on Form 10-K of The York Water Company;
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
 
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
 
 
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 

Date: March 3, 2026
/s/ Matthew E. Poff
 
Matthew E. Poff
 
Chief Financial Officer

EX-32.1 7 exhibit32_1-123125.htm YWC SECTION 906 CERTIFICATION OF CEO
 

EXHIBIT 32.1




CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002




In connection with the Annual Report of The York Water Company on Form 10-K for the year ending December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph T. Hand, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
   
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


 
THE YORK WATER COMPANY
   
   
   
   
 
/s/ Joseph T. Hand
 
Joseph T. Hand
 
Chief Executive Officer
   
Date: March 3, 2026
  
 
EX-32.2 8 exhibit32_2-123125.htm YWC SECTION 906 CERTIFICATION OF CFO
 

EXHIBIT 32.2




CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002




In connection with the Annual Report of The York Water Company on Form 10-K for the year ending December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew E. Poff, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
   
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


 
THE YORK WATER COMPANY
   
   
   
   
 
/s/ Matthew E. Poff
 
Matthew E. Poff
 
Chief Financial Officer
   
Date: March 3, 2026