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Exhibit 10.5
AGREEMENT
Agreement made as of December 15, 2003, between The York Water
Company, a Pennsylvania corporation (the
"Company"), and Kathleen M. Miller
("Employee").
WHEREAS, Employee is the Chief Financial Officer of the Company
and
devotes substantially all of his business
time and efforts to the Company's
affairs;
WHEREAS, the Company recognizes that the departure or distraction
of
key management personnel would be
detrimental to the business of the Company;
and
WHEREAS, the Board of Directors of the Company has determined
that
appropriate steps should be taken to
reinforce and encourage the continued
attention and dedication of key members of
the Company's management to their
assigned duties without distraction;
WHEREAS, in consideration of Employee's employment with the
Company
and his agreement not to compete with the
Company as set forth in this
Agreement, the Company agrees that Employee
shall receive the compensation set
forth in this Agreement against the adverse
financial and career impact on
Employee if his employment with the Company
is terminated under certain
circumstances; and
WHEREAS, the Company wishes to reward the dedication and loyalty
of
Employee by providing for certain bonus
payments to be made to Employee based
upon Employee's tenure, the Company agrees
that Employee shall receive the
payments set forth in this Agreement upon
the achievement of certain temporal
milestones.
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NOW, THEREFORE, in consideration of the foregoing and the
mutual
covenants and agreements hereinafter set
forth and intending to be legally bound
hereby, the parties hereto agree as
follows:
1.
Definitions. For all purposes of this Agreement, the following
terms
shall have the meanings specified in this
Section unless the context clearly
otherwise requires:
(a) "Affiliate" and "Associate" shall have the respective
meanings
ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under
the Exchange Act.
(b) A Person
shall be deemed the "Beneficial Owner" of any
securities: (i) that such Person or any of
such Person's Affiliates or
Associates, directly or indirectly, has the
right to acquire (whether such right
is exercisable immediately or only after
the passage of time) pursuant to any
agreement, arrangement or understanding
(whether or not in writing) or upon the
exercise of conversion rights, exchange
rights, rights, warrants or options, or
otherwise; provided, however, that a Person
shall not be deemed the "Beneficial
Owner" of securities tendered pursuant to a
tender or exchange offer made by
such Person or any of such Person's
Affiliates or Associates until such tendered
securities are accepted for payment,
purchase or exchange; (ii) that such Person
or any of such Person's Affiliates or
Associates, directly or indirectly, has
the right to vote or dispose of or has
"beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange
Act), including without limitation,
pursuant to any agreement, arrangement or
understanding, whether or not in writing;
provided, however, that a Person shall
not be deemed the "Beneficial Owner" of any
security under this clause (ii) as a
result of an oral or written agreement,
arrangement
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or understanding to vote such security if
such agreement, arrangement or
understanding (A) arises solely from a
revocable proxy given in response to a
public proxy or consent solicitation made
pursuant to, and in accordance with,
the applicable provisions of the General
Rules and Regulations under the
Exchange Act, and (B) is not then
reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable
or successor report); or (iii) that
are beneficially owned, directly or
indirectly, by any other Person (or any
Affiliate or Associate thereof) with which
such Person (or any of such Person's
Affiliates or Associates) has any
agreement, arrangement or understanding
(whether or not in writing) for the purpose
of acquiring, holding, voting
(except pursuant to a revocable proxy as
described in the proviso to clause (ii)
above) or disposing of any voting
securities of the Company; provided, however,
that nothing in this Section 1(b) shall
cause a Person engaged in business as an
underwriter of securities to be the
"Beneficial Owner" of any securities
acquired through such Person's
participation in good faith in a firm commitment
underwriting until the expiration of 40
days after the date of such acquisition.
(c) "Board"
shall mean the Board of Directors of the Company.
(d) "Business
Combination" shall mean a reorganization, merger or
consolidation of the Company.
(e) "Cause"
shall mean (i) misappropriation of funds or any act of
common law fraud, (ii) habitual insobriety
or substance abuse, (iii) conviction
of a felony or any crime involving moral
turpitude, (iv) willful misconduct or
gross negligence by Employee in the
performance of his duties, (v) the willful
failure of Employee to perform
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a material function of Employee's duties
hereunder, or (vi) Employee engaging in
a conflict of interest or other breach of
fiduciary duty.
(f) "Change of
Control" shall mean:
(i) Any Person
(except the Employee, his Affiliates and
Associates, the Company, any Subsidiary of
the Company, any employee benefit
plan of the Company or of any Subsidiary of
the Company, or any Person or entity
organized, appointed or established by the
Company for or pursuant to the terms
of any such employee benefit plan),
together with all Affiliates and Associates
of such Person, becomes the Beneficial
Owner in the aggregate of 50 percent or
more of either (A) the Outstanding Company
Common Stock or (B) the Company
Voting Securities , in either case unless a
majority of the members of the Board
in office immediately prior to such
acquisition determine within five business
days of the receipt of actual notice of
such acquisition that the circumstances
do not warrant the implementation of the
provisions of this Agreement;
(ii) The Incumbent
Board ceases for any reason to constitute
at least a majority of the Board, provided
that any individual becoming a
director subsequent to the beginning of
such period whose election or nomination
for election by the Company's shareholders
was approved by a vote of at least a
majority of the directors then constituting
the Incumbent Board shall be
considered as though such individual were a
member of the Incumbent Board, but
excluding, for this purpose, any such
individual whose initial assumption of
office is in connection with an actual or
threatened election contest relating
to the election of the Directors of the
Company (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under
the Exchange Act);
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(iii) Consummation by the Company of a Business Combination,
in each case, with respect to which all or
substantially all of the individuals
and entities who were the respective
Beneficial Owners of the Outstanding
Company Common Stock and Company Voting
Securities immediately prior to such
Business Combination are not, following
such Business Combination, Beneficial
Owners, directly or indirectly, of more
than 50 percent of, respectively, the
then outstanding shares of common stock and
the combined voting power of the
then outstanding voting securities entitled
to vote generally in the election of
directors, as the case may be, of the
corporation resulting from such Business
Combination in substantially the same
proportion as their ownership immediately
prior to such Business Combination of the
Outstanding Company Common Stock and
Company Voting Securities, as the case may
be , in any such case unless a
majority of the members of the Board in
office immediately prior to such
Business Combination determines at the time
of such Business Combination that
the circumstances do not warrant the
implementation of the provisions of this
Agreement; or
(iv) (A) Consummation
of a complete liquidation or
dissolution of the Company or (B) sale or
other disposition of all or
substantially all of the assets of the
Company other than to a corporation with
respect to which, following such sale or
disposition, individuals and entities
that are the Beneficial Owners of more than
50 percent of, respectively, the
Outstanding Company Common Stock and the
Company Voting Securities are
substantially the same as the individuals
and entities who were the Beneficial
Owners, respectively, of the Outstanding
Company Common Stock and Company Voting
Securities immediately prior to such sale
or disposition in substantially
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the same proportion as their ownership of
the Outstanding Company Common Stock
and Company Voting Securities, as the case
may be, immediately prior to such
sale or disposition, in any such case
unless a majority of the members of the
Incumbent Board in office immediately prior
to such sale or disposition
determines at the time of such sale or
disposition that the circumstances do not
warrant the implementation of the
provisions of this Agreement.
(g) "Company
Voting Securities" shall mean the combined voting
power of the then outstanding voting
securities of the Company entitled to vote
generally in the election of directors.
(h)
"Compensation" shall mean the sum of base compensation and
annual bonus compensation payable in cash
to the Employee during the twelve
months preceding any date of determination
under this Agreement.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934,
as amended.
(j) "Good Reason
Termination" shall mean a Termination of
Employment initiated by Employee following
a Change in Control and the
occurrence of one or more of the following
events:
(i) any failure
of the Company to comply with or satisfy any
of the material terms of this
Agreement;
(ii) any significant
reduction by the Company of the
authority, duties or responsibilities of
Employee's principal assignment with
the Company or any reduction in Employee's
base compensation or annual bonus
compensation opportunity;
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(iii) any removal by the Company of Employee from the
employment grade or officer positions which
Employee holds as of the effective
date hereof except in connection with
promotions to higher office; or
(iv) a transfer of
Employee, without his express written
consent, to a location that is more than 50
miles from his principal place of
business immediately preceding the Change
of Control.
(k) "Incumbent
Board" shall mean those individuals who, as of any
date of determination under the Agreement,
are individuals who have constituted
the Board during the preceding 12-month
period.
(l) "Outstanding
Company Common Stock" shall mean the then
outstanding shares of common stock of the
Company.
(m) "Person"
shall mean any natural person, business trust,
corporation, partnership, limited liability
company, joint stock company,
proprietorship, association, trust, joint
venture, unincorporated association or
any other legal entity of whatever
nature.
(n) "Phase Out
Date" shall mean the first day of the calendar
month coincident with or next following
Employee's 65th birthday.
(o) "Subsidiary"
shall mean any corporation in which the Company,
directly or indirectly, owns at least a 50
percent interest or an unincorporated
entity of which the Company, directly or
indirectly, owns at least 50 percent of
the profits or capital interests.
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(p) "Termination
Date" shall mean the date of receipt of the
Notice of Termination described in Section
2 hereof or any later date specified
therein, as the case may be.
(q) "Termination
of Employment" shall mean the termination of
Employee's actual employment relationship
with the Company.
2.
Notice of
Termination. Any Termination of Employment shall be
communicated by a Notice of Termination in
accordance with Section 15 hereof.
For purposes of this Agreement, a "Notice
of Termination" means a written notice
which, in the case of a Good Reason
Termination by Employee (a) indicates the
specific reasons for the termination, (b)
briefly summarizes the facts and
circumstances deemed to provide a basis for
termination of Employee's
employment, and (c) if the Termination Date
is other than the date of receipt of
such notice, specifies the Termination Date
(which date shall not be more than
15 days after the giving of such
notice).
3.
Severance
Compensation upon Termination; Bonus Payments upon Certain
Circumstances.
(a) In the event
of (i) an involuntary Termination of Employment
for any reason other than Cause or (ii) a
Good Reason Termination, in either
case within one year following a Change of
Control or six months prior to a
Change of Control, the Company shall pay to
Employee, within 15 days after the
later of the Termination Date or the date
of the Change of Control, and
