FORM OF DEFERRED COMPENSATION AGREEMENT

 

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                                                                    Exhibit 10.8

 

 

 

                         DEFERRED COMPENSATION AGREEMENT

 

      THIS AGREEMENT, made as of this        day of June, 1991, 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

"Company"), and                              (hereinafter called "Participant").

 

      WITNESSETH:

 

      WHEREAS, Company wishes to encourage Participant's continued employment,

and Participant is willing to undertake such employment, subject to receipt of

deferred compensation upon the tern hereinafter set forth;

 

      NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,

do hereby mutually agree as follows:

 

                               ARTICLE I. GENERAL

 

      1.1 EMPLOYMENT

 

            The Company hereby engages Participant upon the terms and conditions

as hereinafter provided.

 

      1.2 TERM OF AGREEMENT

 

            This Agreement shall continue in full force and effect until the

later of (i) the termination of Participant's employment by the Company, WHICH

SHALL BE AT THE WILL OF THE COMPANY AND IN THE COMPANY'S SOLE DISCRETION AND

WITHOUT HINDRANCE IN ANY MANNER BY VIRTUE OF THE TERMS OF THIS AGREEMENT TO

WHICH PROVISION PARTICIPANT HEREBY CONSENTS AND AGREES or (ii) notwithstanding

such termination of employment, payment to Participant or his designee(s) of all

benefits to which Participant shall become entitled hereunder.

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      1.3 DUTIES

 

            From and after the date hereof, Participant shall serve the Company

in Company's business in such capacity or capacities as may from time to time be

determined by the President or Board of Directors of the Company. During the

period of active, full-time employment hereunder, Participant shall:

 

            (a) devote his full time and best efforts to the business and

affairs of the Company (allowing a reasonable time for vacation);

 

            (b) perform such services, not unreasonable or inconsistent with

Participant's position, education, training or background, as may be designated

by the President or Board of Directors of the Company at any time and from time

to time; and

 

            (c) use his best efforts to promote the business of the Company.

 

      1.4 COMPENSATION

 

            During the period of Participant's employment hereunder, the Company

agrees to pay Participant for his services such a salary as may from time to

time be mutually agreed between the Company and Participant.

 

                             ARTICLE II. DEFINITIONS

 

      Whenever the following terms are used in this Plan, they shall have the

meanings specified below unless the context indicates to the contrary:

 

      2.1 "Administrator" shall mean that individual so named by the Board.

 

      2.2 "Application for Participation" shall mean a document in the form set

forth in Exhibit A hereto, whereby an Eligible Employee enrolls as a Participant

in the Plan.

 

      2.3 "Beneficiary" shall mean such person or legal entity as may be

designated by a Participant under Section 6.6 to receive benefits hereunder

after such Participant's death; or, in

 

 

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the absence of such designation, the Participant's surviving spouse or if none,

the personal representative of the Participant.

 

      2.4 "Board" shall mean the Board of Directors of The York Water Company.

 

      2.5 "Company" shall mean The York Water Company.

 

      2.6 "Compensation" shall mean the annualized compensation plus the year

end salary adjustment of a Participant for the 19__ Fiscal Year, before any

reduction to such compensation is effective in accordance with the Application

for Participation.

 

      2.7 "Company's Matching Contribution" shall mean the amount equal to the

Participant's deferred income up to two and one-half percent contributed to the

Employee's Deferred Income Account.

 

      2.8 "Deferred Income" shall mean chat portion up to five percent (5%) of

the Participant's annualized 19__ Compensation which the Participant elects to

defer in accordance with the Application for Participation.

 

      2.9 "Deferred Income Account" shall mean the bookkeeping account

established by the Administrator for each Participant to which the Participant's

Deferred Income plus interest or any other earnings of an insurance policy or

policies maintained by the Company is credited and from which distributions to

the Participant or to his or her Beneficiary are made.

 

      2.10 "Eligible Employee" shall mean a management or highly compensated

employee selected by the Board to be a participant in the Plan.

 

      2.11 "Fiscal Year" shall mean the year beginning _________________ and

ending ___________________.

 

      2.12 "Participant" shall mean any Eligible Employee who participates in

the Plan under Article II.

 

 

 

 

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      2.13 "Plan" shall mean The York Water Company Deferred Income Plan.

 

      2.14 "Plan Year" shall mean the calendar year.

 

      2.15 "Retirement" shall wean termination of employment with the Company

which may be on or after the earlier of (i) the attainment of an age of 65 years

or (ii) the completion of eight (8) years of participation in the Plan, but in

no case will retirement be before the attainment of an age of 60 years or after

the attainment of an age of 70 years.

 

                ARTICLE III. PARTICIPATION BY ELIGIBLE EMPLOYEES

 

      3.1 PARTICIPATION

 

            Prior to the beginning of any Plan Year, an Eligible employee may

elect to participate in the Plan by completing and executing an Application for

Participation and filing it with the Administrator.

 

      3.2 CHANGE IN TERMS OF PARTICIPATION

 

            An Eligible Employee who elects under Section 3.1 to participate in

the Plan shall have his or her compensation reduced for the Plan Year following

the filing of the election in the amount set forth in the Application for

Participation. The Participant's compensation shall be reduced by a like amount

in each Plan Year for an eight (8) year period.

 

                          ARTICLE IV. INSURANCE POLICY

 

      4.1 The Company shall apply for and become the owner/beneficiary of a life

insurance policy on the life of Participant. Except as set forth hereinafter,

during such time as Participant shall be employed by the Company, the Company in

each year of an eight (8) year period shall make an annual premium deposit with

the insurance carrier of the sum of the Participant's deferred income plus the

Company's matching contribution during each calendar year of the eight (8) year

period following the effective date of this Agreement.

 

 

 

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            (a) This Agreement is conditioned upon the consent of the insurance

Company to issue upon the life of Participant.

 

            (b) For the purpose of this Agreement, the term "Effective Date of

this Agreement" shall be deemed to be _____________________.

 

            (c) The Company agrees to refrain from making policy loans against

the life insurance policy during the term of this Agreement.

 

                   ARTICLE V. DISTRIBUTION OF DEFERRED INCOME

 

      5.1 RETIREMENT

 

            In the event of a Participant's Retirement, a monthly retirement

benefit shall be paid to him or her for 120 months, commencing on the first of

the month coincident with or following the Participant's Retirement. The monthly

amount payable will be equal to _____% of his deferred income account

immediately prior to retirement divided by the following factor (1-corporate

marginal Federal income tax bracket for the corporate fiscal year ending

immediately prior to retirement), i.e., if corporate tax bracket was 341 the

factor would be (1-.34-.65). If the Participant dies before all such monthly

installments have been paid, the remaining installments shall continue to be

paid to the Participant's Beneficiary, or in the event of the death of the

Beneficiary, to the Beneficiary's surviving spouse, and if none, to the personal

representative of the Beneficiary.

 

      5.2 DEATH

 

            In the event of a Participant's death before distribution of his or

her Deferred Income Account has commenced under Sections 5.1, 5.3 or 5.4, the

Beneficiary or Beneficiaries designated by the Participant in the Application

for Participation, or in any subsequent designation under Section 7.6(a), shall

receive a death benefit in art amount equal to the proceeds

 

 

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of any insurance policy or policies maintained by the Company on the

Participant's life as an investment of the amount credited, or to be credited,

to the Participant's Deterred Income Account on or after the date of his death

plus (ii) an amount which, when added to the proceeds of such insurance policy

or policies, would be deductible by the Company for Federal corporation income

tax purposes at the corporate tax rate in effect in the year of the

Participant's death, and, at such rate, would reduce the Company's net after-tax

cost of the death benefit to the proceeds of such insurance policy or policies.

 

            The death benefit determined as above shall be paid to the

Beneficiary or Beneficiaries at their discretion in a lump sum or in ten (10)

annual installments, with each installment being an amount equal to one -- tenth

of the death benefit determined as above. Interest shall not be credited to a

Participant's Deferred Income account after the date of the Participant's death.

If the Beneficiary or Beneficiaries designated by the Participant should die

before such lump sum or annual installments have been paid, the lump sum or

remaining installments shall be paid to the surviving spouse of the participant,

and if there is no surviving spouse, then to the personal representative of the

Beneficiary.

 

      5.3 DISABILITY

 

            In the event a Participant's employment with the Company is

terminated before his or her attainment of retirement age on account of

disability, as determined by the Administrator on the basis of medical evidence

satisfactory to the Administrator, in the latter's sole discretion, or if the

Participant becomes disabled before his or her Deterred Income Account is fully

distributed, the Participant may request, and the Administrator in his sole

discretion may grant, an acceleration of the payments due the Participant, to

the extent necessary to relieve any financial hardship of the Participant caused

by such disability.

 

 

 

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            The amount of the Deferred Income Account will be that amount of the

cash value of the insurance policy or policies maintained by the Company

(Section 4.0 at the date the Participant is found to be disabled.

 

      5.4 TERMINATION OF EMPLOYMENT

 

            In the event a Participant's employment with the Company is

terminated other than by death or disability before he or she is eligible for

Retirement, the amount of the Participant's contribution plus accumulated

Interest, if any, without the Company's matching contribution credited to the

Participant's Deferred Income Account shall be distributed to the Participant

immediately upon his termination in a lump sum and the agreement shall be

immediately terminated.

 

      5.5 FINANCIAL HARDSHIP

 

            (a) Before Retirement. In the event a Participant before his or her

Retirement experiences financial hardship, the Participant may request, and the

Administrator in his sole discretion may grant, a distribution in one lump sum

of such portion of the Participant's Deferred Income Account as is required to

relieve such financial hardship and is not, reasonably available from the

Participant's other resources.

 

            (b) After Retirement. In the event a Participant after his or her

Retirement experiences financial hardship, the Participant may request, and the

Administrator in his sole discretion may grant, an acceleration of the

installments payable to the Participant to the extant necessary to relieve such

financial hardship.

 

            (c) FINANCIAL HARDSHIP. For purposes of this Section 5.5, a

distribution will be on account of "financial hardship" if the distribution is

necessary in light of immediate and heavy financial needs of the Participant.

The Administrator, in his sole discretion, shall

 

 

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determine whether or not a Participant has experienced "financial hardship"

within the meaning of this Section 5.5(c).

 

            (d) TAXES. The Participant acknowledges that such payments are

subject to income taxes and may have an adverse effect on his personal tax

situation.

 

      5.6 VALUATION OF DISTRIBUTION

 

            All distributions under the Plan shall be based upon the value of

the Participant's Deferred Income Account at the end of the calendar quarter

preceding the date of the distribution.

 

                              ARTICLE VI. FUNDING

 

      6.1 PLAN UNFUNDED

 

            The Plan shall be unfunded and no trust shall be created by the

Plan. The allocation to each Participant's Deferred Income Account shall be made

through bookkeeping entries and no actual funds need be set aside. To the extent

that any funds are credited within the general assets of the Company to an

account to cover all or part of the Company's potential liabilities under the

Plan, any funds so credited may be kept in cash or invested and reinvested in

such manner as the Company shall determine. In the exercise of the foregoing

discretionary investment powers, the Company may use the amounts so credited as

premium payments for policies of insurance issued by any insurance company

licensed to do business in Pennsylvania. Title to and beneficial ownership of

any assets whether cash or investments, shall at all times remain in the Company

and a Participant (or his or her Beneficiary) shall not have any property

interest whatsoever in any specific assets of the company. A Participant (or his

or her Beneficiary) shall have the rights of a general unsecured creditor

against the Company for any distributions due hereunder.

 

 

 

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                           ARTICLE VII. ADMINISTRATION