YORK WATER CO Stock Compensation Disclosure

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.

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.

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.