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<SEC-DOCUMENT>/in/edgar/work/20000803/0000950116-00-001761/0000950116-00-001761.txt : 20000921
<SEC-HEADER>0000950116-00-001761.hdr.sgml : 20000921
ACCESSION NUMBER:		0000950116-00-001761
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20000803

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PHILADELPHIA SUBURBAN CORP
		CENTRAL INDEX KEY:			0000078128
		STANDARD INDUSTRIAL CLASSIFICATION:	 [4941
]		IRS NUMBER:				231702594
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		S-3
			SEC ACT:		
			SEC FILE NUMBER:	333-42982
			FILM NUMBER:		685625
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		762 LANCASTER AVE
				CITY:			BRYN MAWR
				STATE:			PA
				ZIP:			19010
				BUSINESS PHONE:		2155278000
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		762 LANCASTER AVE
					CITY:			BRYN MAWR
					STATE:			PA
					ZIP:			19010
</MAIL-ADDRESS>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>


<PAGE>
     As filed with the Securities and Exchange Commission on August 3, 2000.
                                                          Registration No. 333-
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             REGISTRATION STATEMENT
                                   ON FORM S-3
                                      Under
                           THE SECURITIES ACT OF 1933

                        PHILADELPHIA SUBURBAN CORPORATION
             (Exact name of registrant as specified in its charter)

          Pennsylvania                                  23-1702594
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)

                             762 W. Lancaster Avenue
                            Bryn Mawr, PA 19010-3489
                                 (610) 527-8000
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                          principal executive offices)
                             -----------------------
                                  ROY H. STAHL
                        Philadelphia Suburban Corporation
                  Executive Vice President and General Counsel
                             762 W. Lancaster Avenue
                            Bryn Mawr, PA 19010-3489
                                 (610) 527-8000
       (Name, address, including zip code, and telephone number, including
                        area code, of agent for service)

                                   Copies to:

   Stephen A. Jannetta                  David P. Falck
   Morgan, Lewis & Bockius LLP          Winthrop, Stimson, Putnam & Roberts
   1701 Market Street                   One Battery Park Plaza
   Philadelphia, PA  19103-2921         New York, NY  10004
   (215) 963-5000                       (212) 858-1000

Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared effective.

If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. / /

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<PAGE>

<TABLE>
<CAPTION>
                                                CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------

     Title of Shares             Amount                Proposed Maximum            Proposed Maximum       Amount of Registration
    To Be Registered      To Be Registered (1)   Offering Price Per Share (2)  Aggregate Offering Price            Fee
                                                                                          (2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                    <C>                       <C>                       <C>
      Common Stock,
     $.50 par value                1,150,000              $ 22.10                  $ 25,415,000              $ 6,709.56
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Includes 150,000 shares subject to an over-allotment option granted to the
     underwriters.
(2)  Estimated solely for the purpose of calculating the registration fee in
     accordance with paragraph (c) of Rule 457 on the basis of the average of
     the high and low sale prices for the Common Stock on August 1, 2000, as
     reported on the New York Stock Exchange.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>

The information in this prospectus is not complete and may be changed. We may
not sell or accept offers to buy these securities before the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.


                   SUBJECT TO COMPLETION, DATED AUGUST 3, 2000

                                1,000,000 Shares


                        Philadelphia Suburban Corporation

                                  Common Stock

                                 ---------------

         We are selling 1,000,000 shares of our common stock. Our common stock
is listed on the New York Stock Exchange and the Philadelphia Stock Exchange
under the symbol "PSC." The last reported sale price of our common stock on the
New York Stock Exchange on August 1, 2000 was $22.1875 per share.

                                  -------------

<TABLE>
<CAPTION>

                                                                               Per Share         Total
                                                                               ---------         -----
<S>                                                                           <C>
Public offering price......................................................   $                $
Underwriting discount .....................................................   $                $
Proceeds, before expenses, to Philadelphia Suburban Corporation............   $                $
</TABLE>

         The underwriters named in this prospectus may purchase up to an
additional 150,000 shares of common stock from us under certain circumstances.
The underwriters expect to deliver the shares to purchasers on or about , 2000.

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

                                 ---------------

A.G. Edwards & Sons, Inc.

                          PaineWebber Incorporated

                                                    Janney Montgomery Scott LLC





                           Prospectus dated    , 2000

<PAGE>


                              [INSIDE FRONT COVER]


[TERRITORY MAP - A graphic depicting the northeast quarter of the United States,
with the five states in which we have operations shown in a different shade than
the other states. The locations of our service territories in these five states
are represented by dots on the map and our corporate headquarters and primary
service territory is represented by a star. There are circles around the dots
closest to Chicago, Cleveland/Youngstown, and Philadelphia, where most of our
operations are concentrated. There is an arrow pointing from the star to an
enlarged map of the area around the City of Philadelphia showing the location of
Philadelphia Suburban Water Company's service territory. In the lower right hand
quarter of the page is a table setting forth the number of our customers in each
of the five states as of March 31, 2000, as set forth below. In the middle of
the page is a legend explaining that the star indicates the location of our
corporate headquarters and the Philadelphia Suburban Water Company service
territory and that the dots represent the Consumers Water Company service
territories. At the bottom of the page is a legend explaining that the shaded
area in the enlarged map around the City of Philadelphia indicates the
Philadelphia Suburban Water Company service territory.]

                        Customers by State as of 3/31/00
                -------------------------------------------------
                   Pennsylvania                368,072
                -------------------------------------------------
                       Ohio                     78,703
                -------------------------------------------------
                     Illinois                   62,463
                -------------------------------------------------
                    New Jersey                  33,817
                -------------------------------------------------
                      Maine                     16,828
                -------------------------------------------------
                      Total                    559,883
                -------------------------------------------------


<PAGE>

                                TABLE OF CONTENTS
                                                                        Page
                                                                        ----

     Prospectus Summary ..............................................    1
     Forward-Looking Statements ......................................    5
     The Water and Wastewater Utility Industries .....................    5
     Philadelphia Suburban Corporation ...............................    6
     Capital Requirements and Funding ................................   11
     Where You Can Find More Information .............................   12
     Use of Proceeds .................................................   13
     Price Range of Common Stock and Dividends .......................   13
     Description of Capital Stock ....................................   15
     Underwriting ....................................................   17
     Legal Matters ...................................................   19
     Experts .........................................................   19


                               -------------------


         You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. Our
website is located at www.suburbanwater.com. Information on this website,
however, is not part of this prospectus. We are not, and the underwriters are
not, making an offer to sell these securities in any state where the offer or
sale is not permitted. You should not assume that the information provided in
this prospectus or incorporated by reference in this prospectus is accurate as
of any date other than the date on the front of this prospectus or the date of
those documents. Our business, financial condition, results of operations and
prospects may have changed since those dates.


<PAGE>

                               PROSPECTUS SUMMARY

         This summary highlights material information contained elsewhere in
this prospectus. Before making an investment decision, you should read this
entire prospectus as well as the documents incorporated by reference. Unless
otherwise indicated, the information in this prospectus assumes that the
underwriters' over-allotment option is not exercised. Unless the context
otherwise requires, references in this prospectus to "we," "us" and "our" refer
to Philadelphia Suburban Corporation and its direct and indirect subsidiaries.
In addition, references to Philadelphia Suburban Water refer to our subsidiary,
Philadelphia Suburban Water Company, and its subsidiaries, and references to
Consumers Water refer to our subsidiary, Consumers Water Company, and its
subsidiaries.



                        Philadelphia Suburban Corporation

Our business ......................... A holding company for regulated utilities
                                       providing water or wastewater services.
                                       Among the largest investor-owned water
                                       utilities in the U.S. based on the number
                                       of customers.

Our service territory ................ Parts of Pennsylvania, Ohio, Illinois,
                                       New Jersey and Maine.

Population of our service territory .. Approximately 2.0 million.

Philadelphia Suburban Water .......... One of our subsidiaries and a regulated
                                       public utility providing water or
                                       wastewater services to about 1.1 million
                                       residents in the suburban areas west and
                                       north of the City of Philadelphia.

Consumers Water ...................... One of our subsidiaries and a holding
                                       company for several regulated public
                                       utilities providing water or wastewater
                                       services to about 850,000 residents in
                                       various communities in Pennsylvania,
                                       Ohio, Illinois, New Jersey and Maine.

Customers as of March 31, 2000 ....... Approximately 560,000 (including
                                       approximately 8,800 customers associated
                                       with operating and maintenance
                                       contracts).




                                       1


<PAGE>
Our address and telephone number ............ Philadelphia Suburban Corporation
                                              762 W. Lancaster Avenue
                                              Bryn Mawr, Pennsylvania 19010-3489
                                              610-527-8000

                                  The Offering

Common stock offered (1) .................... 1,000,000 shares.

Common stock to be outstanding after
this offering (2) ........................... 41,927,257 shares.

Current indicated annual dividend rate ...... $.72 per share. Effective with the
                                              $.19375 per share dividend payable
                                              December 1, 2000 to holders of
                                              record on November 15, 2000, the
                                              indicated annual dividend rate
                                              will be $.775 per share.

Cash dividends paid since ................... 1944

Listing ..................................... New York Stock Exchange and
                                              Philadelphia Stock Exchange
                                              (Symbol: PSC).

Use of proceeds ............................. The net proceeds of this offering
                                              will be used to reduce
                                              Philadelphia Suburban Water's
                                              short-term debt. See "Use of
                                              Proceeds."

________________________
(1)  Purchasers of offered shares will also receive preferred stock purchase
     rights. See "Description of Capital Stock - Common Stock - Shareholder
     Rights Plan."
(2)  The outstanding share information is based upon the shares of common
     stock outstanding as of March 31, 2000. This information excludes options
     to purchase 1,595,737 shares of common stock outstanding as of March 31,
     2000 under our stock option plans. In addition, on August 1, 2000, our
     board of directors approved a 25% common stock dividend payable on
     December 1, 2000 to holders of record on November 15, 2000. The share and
     per share data contained in this prospectus have not been restated to give
     effect to this stock dividend.




                                       2
<PAGE>
                       Summary Consolidated Financial Data
               (in thousands, except per share and operating data)

     The following table sets forth certain summary consolidated financial data
derived from our audited consolidated financial statements for the years ended
December 31, 1999, 1998 and 1997 and from our unaudited interim consolidated
financial statements for the three months ended March 31, 2000 and 1999. The
unaudited interim financial statements include, in the opinion of our
management, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of our financial position and results of
operations for the interim periods presented. Interim results are not
necessarily indicative of the results that may be expected for any other interim
period or for a full year.

     On March 10, 1999, we completed a merger with Consumers Water. The merger
has been accounted for as a pooling-of-interests. Accordingly, our historical
consolidated financial statements and notes thereto included in the documents
that we incorporate by reference in this prospectus, and from which certain of
the financial data presented below has been derived, were restated to include
the accounts and results of Consumers Water as if the merger had been completed
as of the beginning of the earliest period presented. You should read this
summary consolidated financial data together with our historical consolidated
financial statements and the notes thereto in the documents that we incorporate
by reference in this prospectus.

<TABLE>
<CAPTION>
                                                  Three Months
                                                  Ended March 31,                       Year Ended December 31,
                                             ------------------------   ---------------------------------------------
                                                2000        1999             1999             1998            1997
                                                ----        ----             ----             ----            ----
                                                   (unaudited)
<S>                                          <C>         <C>            <C>                 <C>             <C>
Income Statement Data:
    Operating revenues ..................... $  64,510   $ 58,597       $   257,326         $ 250,771       $ 235,852
    Operating income .......................    25,079     18,658 (1)       101,045 (1)        99,238          89,959
    Income from continuing
         operations, exclusive of certain
         non-recurring items (4) ...........    10,246      8,912 (2)        44,871 (2)        40,917 (3)      35,015
    Net income (loss) available to
         common stock:
      Continuing operations (4) ............ $  10,246    $   316 (5)   $    36,275 (5)      $ 44,820 (6)   $  35,015
      Discontinued operations ..............        --         --                --                --          (2,737)
                                             ---------    -------       -----------       -----------       ---------
          Total ............................ $  10,246    $   316 (5)   $    36,275 (5)      $ 44,820 (6)   $  32,278
                                             =========    =======       ===========       ===========       =========

Per Common Share Data: (7)
    Diluted income per share:
      Income from continuing
         operations, exclusive of certain
         non-recurring items ............... $    0.25    $ 0.22 (2)    $   1.09 (2)         $   1.00 (3)   $    0.90
      Income from continuing
         operations ........................      0.25      0.01 (5)        0.88 (5)             1.10 (6)        0.90
      Net income ...........................      0.25      0.01 (5)        0.88 (5)             1.10 (6)        0.83
    Cash dividends paid
      per common share (8) .................      0.18      0.17            0.70                 0.67            0.62
    Book value per share of
      common stock .........................      8.92      8.44            8.89                 8.53            7.70

Average common shares
    outstanding (diluted) ..................    41,256    41,285          41,305               40,854          39,018
</TABLE>


                                       3

<PAGE>

<TABLE>
<CAPTION>
                                                 March 31,                            December 31,
                                      ----------------------------  -------------------------------------------
                                          2000          1999            1999           1998           1997
                                      ------------- --------------  -------------  -------------  -------------
                                               (unaudited)
<S>                                     <C>            <C>            <C>           <C>            <C>
Balance Sheet Data:
    Total assets .....................  $1,290,106     $1,157,276     $1,280,805    $ 1,156,733    $ 1,083,162
    Property, plant & equipment, net..   1,146,822      1,026,324      1,135,364      1,016,194        952,626
    Capitalization:
      Long-term debt, including
         current portion .............  $  442,210     $  389,434     $  425,946    $   377,355    $   407,526
      Preferred stock with mandatory
         redemption, including current
         portion .....................           -              -              -              -          4,214
      Stockholders' equity ...........     369,238        348,448        368,901        353,088        306,816
                                      ------------- --------------  -------------  -------------  -------------
    Total capitalization .............  $  811,448     $  737,882     $  794,847    $   730,443    $   718,556
                                      ============= ==============  =============  =============  =============

Operating Data:
    Number of metered customers ......      551,096        527,857        548,937        525,959        519,160

                                                                 March 31, 2000
                                           -------------------------------------------------------
                                                       Actual                   As Adjusted (9)
                                           --------------------------   --------------------------
                                               Amount        Percent         Amount       Percent
                                               ------        -------         ------       -------
                                                     (unaudited)                  (unaudited)
Capitalization:
      Long-term debt (10) ............        $ 442,210        54.5%        $ 471,570       54.7%
      Preferred stock ................            1,760         0.2%            1,760        0.2%
      Common stockholders' equity ....          367,478        45.3%          388,494       45.1%
                                           -------------  -----------   --------------  ----------
Total capitalization (10) ............        $ 811,448       100.0%        $ 861,824      100.0%
                                           =============  ===========   ==============  ==========

Short-term debt:
      Revolving credit debt of Philadelphia
          Suburban Water .............        $  50,000                      $ 28,984
      Loans payable to banks under
          short-term lines of credit .           52,741                        24,229
                                           -------------                --------------
Total short-term debt ................        $ 102,741                      $ 53,213
                                           =============                ==============
</TABLE>

- -------------------------------------------
(1) Includes a charge for restructuring costs in connection with the Consumers
    Water merger of $3,787.
(2) Non-recurring items represent a charge of $6,334 ($6,134 after-tax or $0.15
    per share) for the Consumers Water merger transaction costs and a charge
    for related restructuring costs of $3,787 ($2,462 after-tax or $0.06 per
    share).
(3) Non-recurring item represents a gain of $6,680 ($3,903 after-tax or $0.10
    per share) on the sale of Consumers Water's New Hampshire operations
    pursuant to the state's condemnation statute.
(4) After provision for dividends on our preferred stock.
(5) Results include the net charges described in footnote (2) above.
(6) Results include the net gain described in footnote (3) above.
(7) The share and per share data contained in this table have not been
    restated to give effect to the 25% common stock dividend payable on
    December 1, 2000.
(8) Represents our historical dividends paid per common share. At our August
    1, 2000 board meeting, our board of directors approved an increase in our
    quarterly cash dividend from $0.18 per share to $.19375 per share effective
    with our December 1, 2000 payment.
(9) Adjusted to reflect:
          (i) the estimated net proceeds from the sale of 1,000,000 shares of
              common stock to be issued in this offering and the application of
              these net proceeds to repay the short-term debt of Philadelphia
              Suburban Water; and
          (ii)the private placements in April 2000 of $11,000 of First Mortgage
              Bonds of Philadelphia Suburban Water and in June 2000 of $18,360
              of First Mortgage Bonds of one of Consumers Water's Pennsylvania
              operating subsidiaries and the application of the net proceeds
              from these placements to repay portions of our short-term lines of
              credit. See "Use of Proceeds."
(10) Includes current portion of long-term debt of $12,978.

                                       4
<PAGE>


                           FORWARD-LOOKING STATEMENTS

         Certain statements in this prospectus, or incorporated by reference in
this prospectus, are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 made based upon, among other things, our current assumptions,
expectations and beliefs concerning future developments and their potential
effect on us. These forward-looking statements involve risks, uncertainties and
other factors, many of which are outside our control, that may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by these
forward-looking statements. In some cases you can identify forward-looking
statements where statements are preceded by, followed by or include the words
"believes," "expects," "anticipates," "plans" or similar expressions.
Forward-looking statements in this prospectus, or incorporated by reference in
this prospectus, include, but are not limited to, statements regarding:

     o        projected capital expenditures and related funding requirements;

     o        developments and trends in the water and wastewater utility
              industries;

     o        opportunities for future acquisitions;

     o        the development of new services and technologies by us or our
              competitors;

     o        the availability of qualified personnel;

     o        general economic conditions; and

     o        merger-related costs and synergies.

         Because forward-looking statements involve risks and uncertainties,
there are important factors that could cause actual results to differ materially
from those expressed or implied by these forward-looking statements, including
but not limited to:

     o        changes in general economic, business and financial market
              conditions;

     o        changes in government regulations, including environmental
              regulations;

     o        abnormal weather conditions;

     o        changes in capital requirements;

     o        our ability to integrate businesses, technologies or services
              which we may acquire;

     o        our ability to manage the expansion of our business;

     o        the extent to which we are able to develop and market new and
              improved services;

     o        the effect of the loss of major customers;

     o        our ability to retain the services of key personnel and to hire
              qualified personnel as we expand;

     o        unanticipated capital requirements; and

     o        cost overruns relating to improvements or the expansion of our
              operations.

         Given these uncertainties, you should not place undue reliance on these
forward-looking statements. You should read this prospectus and the documents
that we incorporate by reference in this prospectus completely and with the
understanding that our actual future results may be materially different from
what we expect. These forward-looking statements represent our estimates and
assumptions only as of the date of this prospectus. Except for our ongoing
obligations to disclose material information under the federal securities laws,
we are not obligated to update these forward-looking statements, even though our
situation may change in the future. We qualify all of our forward-looking
statements by these cautionary statements.

                   THE WATER AND WASTEWATER UTILITY INDUSTRIES

         With more than 50,000 community water systems in the U.S. (85% of which
serve less than 3,300 customers), the water industry is the most fragmented of


                                       5
<PAGE>

the major utility industries (telephone, natural gas, electric and water). The
nation's water systems range in size from large municipally-owned systems, like
the New York City water system that serves about 9 million people, to small
systems, where a few customers share a common well. In the states where we
operate, we believe there are over 6,400 public water systems of widely varying
size.

         The water industry is the most capital intensive of the utilities, with
more capital invested per dollar of revenue than any other utility. Customers
and regulators expect companies in the water industry, both municipally-owned
and investor-owned, to provide reliable water service at affordable prices while
meeting stringent federal and state water quality standards. Continued capital
investment is necessary to (1) repair and replace aging water distribution
infrastructure, (2) expand existing systems in response to community growth and
development, and (3) invest in new treatment plants and technology to meet water
quality standards. In its First Report to Congress in January 1997, the U.S.
Environmental Protection Agency estimated that the nation's water systems must
invest a minimum of $138.4 billion through 2015 to meet the requirements of the
Safe Drinking Water Act of 1974, as amended. Advancing technology and the
increasingly stringent drinking water regulations have transformed the drinking
water industry into one that now demands a level of technological expertise that
was previously not required. The costs associated with meeting more stringent
water quality standards, coupled with the costs of replacing aging
infrastructure, have caused many small, and some large, water utilities to sell
their systems to larger, better capitalized water utilities that can afford the
costs of making the necessary investments in their systems and have the
requisite economies of scale.

         Although not as fragmented as the water industry, the wastewater
industry in the U.S. also presents opportunities for consolidation. According to
the U.S. Environmental Protection Agency's most recent survey of publicly-owned
wastewater treatment facilities in 1996, there are approximately 16,000 such
facilities in the nation serving approximately 72% of the U.S. population. The
vast majority of wastewater facilities are government-owned rather than
privately-owned. That survey also indicates that there are about 2,900 such
facilities in operation or planned in the five states where we operate. The U.S.
Environmental Protection Agency estimates that about $140 billion will need to
be invested in wastewater systems over the next 20 years to meet environmental
standards.

                        PHILADELPHIA SUBURBAN CORPORATION

General

         We are a holding company for regulated utilities providing water or
wastewater services to approximately 2 million people in Pennsylvania, Ohio,
Illinois, New Jersey and Maine. Our two primary subsidiaries are Philadelphia
Suburban Water, a regulated public utility that provides water or wastewater
services to about 1.1 million residents in the suburban areas west and north of
the City of Philadelphia, and Consumers Water, a holding company for several
regulated public utility companies that provide water or wastewater services to
about 850,000 residents in various communities in Pennsylvania, Ohio, Illinois,
New Jersey and Maine. We are among the largest investor-owned water utilities in
the U.S. based on the number of customers. In addition, we provide water service
to approximately 25,000 people through operating and maintenance contracts with
municipal authorities and other parties close to our operating companies'
service territories. Subsidiaries of Philadelphia Suburban Water and Consumers
Water provide primarily residential wastewater services to approximately 28,000
people in Pennsylvania, Illinois and New Jersey. For the three months ended
March 31, 2000, the operating revenues associated with wastewater services were
approximately 2% of our consolidated operating revenues. Our ratio of customers
to employees as of March 31, 2000 is 595 to 1, which is one of the best ratios,
from an efficiency perspective, in the water utility industry.

         Our customer base is primarily residential, with these customers
representing approximately two-thirds of our total water revenues. Substantially
all of our customers are metered, which allows us to measure and bill our
customers' water consumption. Water consumption per customer is affected by
local weather conditions during the year, especially during the late spring and
early summer. In general, during these seasons, an extended period of dry
weather increases water consumption, while above average rainfall decreases
water consumption. Also, an increase in the average temperature generally causes
an increase in water consumption. As was the case in Pennsylvania and New Jersey
in the summer of 1999, abnormally dry weather in our service areas can sometimes
result in the governmental authorities declaring drought warnings and water use
restrictions in the affected areas. If these types of actions are taken, water
consumption and water revenues may be reduced. While parts of Pennsylvania,
particularly those dependent on groundwater, experienced water shortages during
the 1999 drought, our water supplies remained adequate. When the drought
restrictions were lifted, water revenues returned to normal levels.


                                       6
<PAGE>

         The merger with Consumers Water in 1999, with its operations in western
Pennsylvania, Ohio, Illinois, New Jersey and Maine, has allowed us to diversify
our exposure to regional weather conditions. In 1999, above average water
consumption during the summer in Ohio and Illinois offset the effect of the
drought declarations and water use restrictions in Pennsylvania and New Jersey.
More importantly, Consumers Water has over 25 locations within those five states
from which we can pursue our growth strategy. Including acquisitions,
Philadelphia Suburban Water's customer base increased at an annual compound rate
of 3.9% during the three-year period of 1997 through 1999. Including
acquisitions, Consumers Water's consolidated customer growth rate during this
period was 1.5%.

         Our largest shareholder is Vivendi S.A. and certain of its
subsidiaries. Vivendi S.A. is a company headquartered in Paris with worldwide
interests in various businesses, including the water industry primarily through
its subsidiary, Vivendi Water S.A. Vivendi S.A. and these subsidiaries owned
approximately 18% of our outstanding common stock on March 31, 2000. A recent
letter from Vivendi Water S.A. to our chairman, reaffirmed Vivendi S.A.'s
intention to hold our shares for investment, which is consistent with the
disclosure set forth in Vivendi S.A.'s Amendment No. 19 to its Schedule 13D,
filed with the SEC in April 2000. Although Vivendi S.A. indicated in this filing
that it would review its investment position in us periodically, including
possibly selling its shares, it also indicated in this filing that it may seek
to acquire (either directly or through a subsidiary) additional shares of our
common stock from time to time that would result in Vivendi S.A and its
subsidiaries holding up to 19.99% of our shares. For more information with
respect to Vivendi S.A.'s ownership of our common stock, we refer you to
Amendment No. 19 to Vivendi S.A.'s Schedule 13D. At its August 1, 2000 meeting,
our board of directors, on the recommendation of our corporate governance
committee: acknowledged the resignation of Michel Avenas, President of Vivendi
North America, from our board; increased the size of the board from 11 to 12
directors; expanded the class of directors with terms expiring at our 2001
annual meeting (the class of directors that Mr. Avenas was in) from 3 to 4; and
appointed Mr. Richard Heckmann, Chairman of Vivendi Water S.A., and Mr. Andrew
Seidel, President and Chief Operating Officer of Vivendi Water S.A. to our board
in the class of directors with terms expiring at our 2001 annual meeting.

         We have had various discussions with representatives of Vivendi S.A.'s
subsidiaries, Vivendi Water S.A. and United States Filter Corporation, exploring
possible joint activities or alliances in such areas as water treatment devices,
bottled water, contract operations of water and wastewater systems and joint
materials purchasing. Although we intend to continue these discussions and
explore any other potential areas of cooperation, we currently have no formal
agreements with Vivendi S.A., United States Filter Corporation or any of their
affiliates in any of these areas and there can be no assurance that any
agreements in these areas or other areas will be ultimately reached.

Recent Financial Results (First Quarter 2000 Compared to First Quarter 1999)

         Operating revenues in the first quarter of 2000 increased by $5,913,000
or 10.1% primarily due to revenues from the distribution system improvement
charge in Pennsylvania, increased water sales and additional water revenues
associated with acquisitions. Increased revenues from acquisitions came
primarily from the Bensalem water system acquired in December 1999. The
distribution system improvement charge, which is discussed in more detail below
under "-- Rates and Regulation," provided $1,735,000 of additional revenues over
the prior year. The improvement in water sales was due to an increase in
customer consumption.

         Costs and expenses in the first quarter of 2000 decreased by $508,000
or 1.3% primarily due to a restructuring charge of $3,787,000 recorded in the
first quarter of 1999 for severance and costs associated with the closing of the
Consumers Water corporate office, offset in part by increased operations and
maintenance expenses and depreciation. Operations and maintenance expenses in
the first quarter of 2000 increased by $2,203,000 or 9.7% due to higher
maintenance expenses and additional operating costs associated with the Bensalem
acquisition and increased wage and administrative expenses. Offsetting these
increases, in part, was a reduction in general corporate expenses related to the
closing of Consumers Water's corporate office following the merger. Depreciation
increased by $832,000 or 11.2% due to capital expenditures made to expand and
improve water utility facilities, and as a result of acquisitions of water
systems.

                                       7
<PAGE>

         Net income available to common stock for the first quarter of 2000
increased as a result of the change in operating revenues and expenses described
above and the following factors. In the first quarter of 1999, we recorded a
charge of $6,334,000 for transaction costs associated with the Consumers Water
merger consummated in March 1999. The charge represents the fees for investment
bankers, attorneys, accountants and other administrative charges. Interest
expense for the first quarter of 2000 increased $1,764,000 primarily due to
increased borrowings to finance capital projects and acquisitions. In the first
quarter of 2000, we recorded gains on the sale of marketable securities of
$1,061,000. We did not sell any marketable securities in 1999.

         Accordingly, earnings per share for the first quarter of 2000 were
$0.25 versus $0.01 for the first quarter of 1999. Earnings per share (without
the merger related restructuring and transaction costs incurred in the first
quarter of 1999 described above) were $0.25 for the first quarter of 2000 versus
$0.22 for the first quarter of 1999.

Acquisition Strategy

         We are actively exploring opportunities to expand our utility
operations through acquisitions or otherwise. As of March 31, 2000, we had
completed 54 acquisitions or other growth ventures during the past five years.
Exclusive of the Consumers Water merger in March 1999, these transactions have
added 60,200 customers to our customer base during this five-year period. The
largest of these transactions was the acquisition of the water utility assets of
Bensalem Township in December 1999, which added 14,945 customers.

         Because of the fragmented nature of the water and wastewater utility
industries, we believe that there are many potential water system acquisition
candidates throughout the U.S. We believe the factors driving consolidation of
these water systems are:

     o        the benefits of economies of scale, including the development of
              technological expertise that would not be feasible in a smaller
              organization;

     o        increasingly stringent environmental regulations; and

     o        the need for major capital investment.

         We believe that acquisitions will continue to be an important source of
growth for us. We intend to continue to pursue acquisitions of municipally-owned
and investor-owned water systems of all sizes that provide services in areas
adjacent to our existing service territories or in new service areas. We engage
in continuing activities with respect to potential acquisitions, including
calling on prospective sellers, performing analyses and investigations of
acquisition candidates, making preliminary acquisition proposals and negotiating
the terms of potential acquisitions.

         We believe that any municipally-owned water and wastewater systems that
we would acquire would be purchased with cash, while any investor-owned water
and wastewater systems that we would acquire would be purchased with cash,
shares of our common stock, shares of our preferred stock or a combination of
each. We expect to generate the cash needed for acquisitions initially with the
proceeds from the issuance of short-term debt, with subsequent repayment from
earnings, the proceeds from the issuance of long-term debt and the proceeds from
equity sold through our dividend reinvestment plan and our equity offerings. We
have filed a registration statement with the SEC to issue up to an additional
2,000,000 shares of common stock and up to an additional 500,000 shares of
preferred stock in connection with the acquisition of other water and wastewater
systems. If we issue any of these shares in connection with an acquisition,
subject to the requirements of Rule 145 under the Securities Act of 1933 and any
contractual restrictions, these shares may be immediately resold following the
completion of any acquisition.

         We are not currently a party to any definitive agreement or binding
letter of intent with respect to a material acquisition. We cannot assure you
that in the future we will be able to continue to identify and acquire any
business or water or wastewater system on acceptable terms or that such
acquisitions will be accretive to earnings.

                                       8
<PAGE>

Employee Relations

         As of March 31, 2000, we employed a total of 941 full-time employees.
Our subsidiaries are parties to agreements with labor unions covering 484
employees. These agreements are due to expire between October 2001 and August
2004. We consider our employee relations to be good.

Rates and Regulation

         Our water and wastewater utility operations are subject to regulation
by their respective state regulatory commissions, which have broad
administrative power and authority to set rates and charges, determine franchise
areas and conditions of service and authorize the issuance of securities. The
regulatory commissions also establish uniform systems of accounts and approve
the terms of contracts with both affiliates and customers. In addition, the
regulatory commissions have the authority to approve acquisitions of other
utility systems, loans and the purchase or sale of property. The profitability
of our utility operations is influenced to a great extent by the timeliness and
adequacy of rate allowances in the various states in which we operate.
Accordingly, we maintain a rate case management capability to ensure that the
rates of the utility operations reflect, to the extent practicable, current
costs of operations, capital, taxes, energy, materials and compliance with
environmental regulations. Rates for some divisions of our Ohio water utility
can be fixed by negotiated agreements with the municipalities that are served by
those divisions, in lieu of regulatory approval from the Public Utility
Commission of Ohio. Currently, two of our four regulated divisions in Ohio are
operating under these negotiated agreements.

         In 1996, the Pennsylvania Public Utility Commission approved the
distribution system improvement charge. The distribution system improvement
charge is a mechanism that allows Pennsylvania water utilities to add a
surcharge to their water bills without the need for a fully-litigated rate
proceeding. This surcharge is designed to recover, on a current basis, the
additional depreciation and capital costs associated with certain non-revenue
producing, non-expense reducing capital expenditures related to replacing and
rehabilitating distribution systems. Prior to the distribution system
improvement charge, water utilities absorbed all of the depreciation and capital
costs of these projects between base rate increases without the benefit of
additional revenues. The gap between the time that a capital project is
completed and the recovery of its costs in base rates is known as regulatory
lag. Regulatory lag often acted as a disincentive to water utilities in
rehabilitating their distribution systems. The distribution system improvement
charge is intended to eliminate or reduce regulatory lag. The Pennsylvania
distribution system improvement charge is adjusted quarterly based on additional
qualified capital expenditures made in the previous quarter. The Pennsylvania
distribution system improvement charge is capped at 5% of base rates. Once a
utility's distribution system improvement charge reaches this level, further
rate increases would require a formal rate proceeding with the Pennsylvania
Public Utility Commission, which would address all costs and expenses of the
company. The distribution system improvement charge is reset to zero when new
base rates that reflect the costs of those additions become effective. The
Pennsylvania Public Utility Commission also limits use of the distribution
system improvement charge to periods when a company's return on equity is less
than a benchmark it establishes each quarter.

         We are currently working to establish distribution system improvement
charge mechanisms in the other states in which we operate. In May 1999, the
Illinois legislature passed a bill to establish a distribution system
improvement charge mechanism in Illinois. The Illinois Commerce Commission is
analyzing the mechanism currently and considering approval of a distribution
system improvement charge for use by Illinois water utilities, beginning in
2001. The New Jersey Board of Public Utilities has established a task force to
review the merits of a distribution system improvement charge mechanism in New
Jersey.

         On April 27, 2000, the Pennsylvania Public Utility Commission approved
a rate settlement reached between our Pennsylvania utility subsidiaries and the
parties actively litigating our joint rate application filed in October 1999.
The settlement was designed to increase annual revenue by $17,000,000 or 9.4%
above the level in effect at the time of the filing. The rates in effect at the
time of the filing included $7,347,000 in distribution system improvement
charges ranging from 0.33% to 5%. Consequently, the settlement resulted in a
total base rate increase of $24,347,000 or 13.5% above the rates in effect
before the distribution system improvement charges were applied. As a part of
the settlement, the distribution system improvement charges were reset to zero
and we agreed not to file a base rate increase request prior to April 29, 2001,
absent extraordinary circumstances. In this rate case, the Pennsylvania Public
Utility Commission recognized all four of our Pennsylvania operating water
utilities as one entity for rate-making purposes. Accordingly, in 2000, we plan
to merge these four utilities into one company.

                                       9
<PAGE>

         In March 2000, an operating division of Consumers Water's Illinois
operating subsidiary was awarded an aggregate annual revenue increase of
approximately $400,000. In April 2000, a rate increase was negotiated by an
operating division of Consumers Water's subsidiary in Ohio with the local
governmental authority resulting in an aggregate annual revenue increase of
$140,000 in each of the following three years. In addition, in 2000, rate
applications were filed by seven operating divisions of Consumers Water's
subsidiaries in Illinois, Maine and New Jersey. The total additional annual
revenue requested is $6,662,000 and decisions are anticipated by late 2000 or in
the first quarter of 2001.

Environmental Regulation

         The primary federal and state laws affecting the provision of water and
wastewater services are the Clean Water Act, the Safe Drinking Water Act and the
regulations issued under these laws by the U.S. Environmental Protection Agency
and state environmental regulatory agencies, as well as federal and state laws
affecting dam safety. These laws and regulations establish criteria and
standards for drinking water and for discharges into the waters of the U.S. The
states have the right to establish criteria and standards that are more strict
than those established by the U.S. Environmental Protection Agency. In some of
the states where our subsidiaries operate they have done so. Other federal and
state environmental laws and regulations in addition to the Clean Water Act, the
Safe Drinking Water Act and the dam safety regulations affect the operations of
our subsidiaries.

         The Safe Drinking Water Act establishes criteria and procedures for the
U.S. Environmental Protection Agency to develop minimum national quality
standards for drinking water. Regulations issued pursuant to the Safe Drinking
Water Act set standards on the amount of certain inorganic and organic chemical
contaminants, microbials and radionuclides allowable in drinking water. Current
requirements under the Safe Drinking Water Act are not expected to have a
material effect on our operations or financial condition. We may, in the future,
have to change our method of treating drinking water at certain sources of
supply if additional regulations become effective.

         The Clean Water Act regulates the discharge of liquid effluents from
drinking water and wastewater treatment facilities into lakes, rivers, streams
and subsurface or sanitary sewers. The Resource Conservation and Recovery Act
regulates the handling and disposal of residuals and solids from drinking water
and wastewater treatment facilities.

         Our subsidiaries own sixteen major dams that are subject to the
requirements of federal and state regulations related to dam safety. All major
dams undergo an engineering inspection annually. We believe that all sixteen
dams are structurally sound and well-maintained.

         In addition to the capital expenditures and costs currently
anticipated, changes in environmental regulations, enforcement policies and
practices or related matters may result in additional capital expenditures and
costs. Capital expenditures and costs incurred as a result of efforts to meet
water quality standards and environmental requirements generally have been
recognized by state public utility commissions as appropriate plant additions in
establishing rates.

Rights to Conduct our Business

         In general, we believe that we have valid rights, free from unduly
burdensome restrictions, to enable us to carry on our business as presently
conducted in the territories we now serve. The rights to provide water or
wastewater service to a particular franchised service territory are generally
non-exclusive, although the applicable regulatory commissions usually allow only
one utility to provide service to a given area. In some instances, another water
utility, usually government-owned, already provides service to a separate area
within the same political subdivision served by one of our subsidiaries. In the
states where our subsidiaries operate, it is possible that portions of our
subsidiaries' operations could be acquired by municipal governments by one or
more of the following methods:

     o        eminent domain;

                                       10
<PAGE>

     o        the right of purchase given or reserved by a municipality or
              political subdivision when the original franchise was granted; and

     o        the right of purchase given or reserved under the law of the state
              in which the subsidiary was incorporated or from which it received
              its permit.

         The price paid by a municipal government for an acquisition is usually
determined in accordance with applicable law governing the taking of lands and
other property under eminent domain. In other instances, the price may be
negotiated, fixed by appraisers selected by the parties or computed in
accordance with a formula prescribed in the law of the state or in the
particular franchise or charter. Generally, our strategy is to acquire
additional water and wastewater systems, maintain our existing systems, and
actively oppose efforts by municipal governments to acquire any of our
operations, particularly for less than the fair market value of our operations
or where the municipal government seeks to acquire more than it is entitled to
under the applicable law or agreement.

         There are two matters in Ohio that involve the attempted acquisition or
condemnation of certain assets of Consumers Ohio Water Company, a subsidiary of
Consumers Water.

         In Ashtabula County, Consumers Ohio Water Company provides water
service to several municipalities and to areas of the county that are located
outside of these municipalities. Ashtabula County is seeking to purchase certain
assets of Consumers Ohio Water Company that are located outside of these
municipalities. The parties are currently litigating the question of whether
Ashtabula County's right to purchase includes all of the assets located outside
of these municipalities or only those assets that are not essential for
providing service to these municipalities. The county claims that it is entitled
to purchase all the assets and will allow Consumers Ohio Water Company to use
certain pipelines needed to convey water to the municipalities. Consumers Ohio
Water Company's position is that the county may only purchase assets not
involved in providing service to the municipalities. It is not certain that the
county will proceed with an acquisition if all the assets cannot be purchased.
If the county does proceed to acquire all or some of these assets, we believe
that Consumers Ohio Water Company will be entitled to fair value for these
assets, which, in any event, will exceed the book value for these assets.

         The City of Geneva, a municipality in Ashtabula County, Ohio, has
passed an ordinance seeking to condemn the assets of Consumers Ohio Water
Company that are located in Geneva. The issue is being submitted to a referendum
in the fall of 2000, whereby voters will determine whether the city should
proceed with this action. If the city does proceed to condemn these assets, we
believe that Consumers Ohio Water Company will be entitled to fair value for
these assets, which, in any event, will exceed the book value for these assets.

         The total number of customers included in the Ashtabula and Geneva
systems discussed above represent only 1.4% of our total customer base.

                        CAPITAL REQUIREMENTS AND FUNDING

2000 Capital Program

         During the first quarter of 2000, we had $19,691,000 of capital
expenditures, repaid $520,000 of long-term debt and repaid $1,620,000 of
customer advances for construction. Our planned 2000 capital program, exclusive
of the costs of new mains financed by advances and contributions in aid of
construction, is estimated to be approximately $110.6 million, of which
approximately $34.3 million is for distribution system improvement charge
qualified projects. We expect to continue to finance our 2000 capital program,
along with approximately $12.2 million of sinking fund obligations and debt
maturities, through internally-generated funds, our revolving credit facilities,
proceeds from this offering, the issuance of new long-term debt and proceeds
from our dividend reinvestment plan.


                                       11
<PAGE>

2001 Capital Program

         Our planned 2001 capital program, exclusive of the costs of new mains
financed by advances and contributions in aid of construction, is estimated to
be approximately $110.5 million, of which $45.8 million is for distribution
system improvement charge qualified projects. Philadelphia Suburban Water and
Consumers Water's Pennsylvania subsidiaries have increased their capital
spending for infrastructure rehabilitation in response to the availability of
the distribution system improvement charge. Should the distribution system
improvement charge in Pennsylvania be discontinued (which is not anticipated),
for any reason, Philadelphia Suburban Water and the Consumers Water subsidiaries
in Pennsylvania would likely reduce their capital programs significantly. Our
2001 capital program, along with approximately $3.8 million of sinking fund
obligations and debt maturities is expected to be financed through
internally-generated funds, the revolving credit facilities, the issuance of new
long-term debt and proceeds from our dividend reinvestment plan.

Water Main Replacement

         In our water utility systems, we maintain approximately 6,800 miles of
water mains to transmit and distribute water to our customers. On average, the
water mains are 47 years old and are made of cast iron (64%), ductile iron (26%)
and other materials (10%). We maintain a program to replace or rehabilitate
these mains through a cost-effective infrastructure rehabilitation program.

Anticipated Construction

         Future utility construction in the period 2002 through 2004, including
recurring programs, such as the ongoing replacement of water meters, the
rehabilitation of water mains and additional transmission mains and expanded and
new treatment facilities to meet customer demands is estimated to require
aggregate expenditures of approximately $360 million. This $360 million is
exclusive of the costs of new mains financed by advances and contributions in
aid of construction. We anticipate that less than one-half of these expenditures
will require external financing, including the issuance of long-term debt, the
issuance of common stock through our dividend reinvestment plan and possible
future public equity offerings. We expect to refinance approximately $87.6
million of debt maturities during this period, as they become due, with new
issues of long-term debt. The estimates discussed above do not include any
amounts for possible future acquisitions of water systems or the financing
necessary to support such acquisitions.

         The ability to finance our future construction programs, as well as our
acquisition activities, depends on our ability to attract the necessary external
financing and maintain or increase internally-generated funds. Rate orders
permitting compensatory rates of return on invested capital and timely rate
adjustments will be required by our operating subsidiaries to achieve an
adequate level of earnings to enable them to secure the capital they will need
and to maintain satisfactory debt coverage ratios.

                       WHERE YOU CAN FIND MORE INFORMATION

         We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference room. You may also obtain our SEC filings from the SEC's
website at http://www.sec.gov/.

         The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. Statements made in this prospectus as to the
contents of any contract, agreement or other documents are not necessarily
complete, and, in each instance, we refer you to a copy of such document filed
as an exhibit to the registration statement, of which this prospectus is a part,
or otherwise filed with the SEC. The information incorporated by reference is
considered to be part of this prospectus. When we file information with the SEC
in the future, that information will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings we will make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until all of the shares of common
stock that we have registered are sold:

                                       12
<PAGE>


     o        Our Annual Report on Form 10-K for the fiscal year ended December
              31, 1999 including portions of our definitive Proxy Statement for
              the 2000 Annual Meeting of Shareholders incorporated therein by
              reference;

     o        Our Quarterly Report on Form 10-Q for the quarterly period ended
              March 31, 2000;

     o        Our Current Report on Form 8-K filed on April 27, 2000 reporting
              under Item 5 the settlement of our Pennsylvania rate case;

     o        Our Current Report on Form 8-K filed on July 27, 2000 reporting
              under Item 5 our earnings for the quarter ended June 30, 2000;

     o        The description of our common stock contained in our registration
              under Section 12 of the Securities Exchange Act of 1934, including
              any amendment or report updating such description; and

     o        The description of our shareholder rights plan contained in our
              Form 8-A Registration Statement filed on March 17, 1998.

         You may request a copy of these filings, at no cost, by writing or
telephoning us at:

                        Philadelphia Suburban Corporation
                     Attention: Patricia M. Mycek, Secretary
                             762 W. Lancaster Avenue
                            Bryn Mawr, PA 19010-3489
                             Telephone: 610-527-8000

                                 USE OF PROCEEDS

         Based on current market conditions, we anticipate that the net proceeds
from the sale of the shares will be approximately $21.0 million ($24.2 million
if the underwriters' over-allotment option is exercised in full). We expect to
make a capital contribution of these proceeds to Philadelphia Suburban Water. We
expect that Philadelphia Suburban Water will use these proceeds to reduce
outstanding debt under its revolving credit agreement incurred for capital
expenditures and for acquisitions of water systems. As of March 31, 2000, the
principal amount outstanding under Philadelphia Suburban Water's revolving
credit agreement was $50 million. Interest on outstanding balances under this
revolving credit agreement is based, at Philadelphia Suburban Water's option, on
the prime rate, an adjusted federal funds rate, an adjusted London Interbank
Offered Rate corresponding to the interest period selected, an adjusted
Euro-Rate corresponding to the interest period selected or at rates offered by
the banks. As of March 31, 2000, the weighted average interest rate on the
principal amount outstanding under this revolving credit agreement was 6.32%.

                    PRICE RANGE OF COMMON STOCK AND DIVIDENDS

         The following table shows the high and low sale prices for our common
stock as reported on the New York Stock Exchange composite transactions
reporting system and the cash dividends paid per share for the periods
indicated. Our common stock is listed on the New York and Philadelphia Stock
Exchanges and is traded under the symbol "PSC".


                                       13

<PAGE>

<TABLE>
<CAPTION>
                                                                                     Quarterly
                                                                                       Cash
                                                                                     Dividends
                                                          High           Low           Paid
                                                      -------------  ------------   ------------
<S>                                                      <C>           <C>           <C>
1998
     First Quarter.................................      $ 25.75       $ 19.56       $ 0.1625
     Second Quarter................................        22.56         18.88         0.1625
     Third Quarter.................................        28.19         20.50         0.1700
     Fourth Quarter................................        30.06         23.00         0.1700


1999
     First Quarter.................................      $ 29.75       $ 19.75         $ 0.17
     Second Quarter................................        25.75         21.31           0.17
     Third Quarter.................................        25.31         21.13           0.18
     Fourth Quarter................................        24.19         20.19           0.18


2000
     First Quarter.................................      $ 22.00       $ 16.50         $ 0.18
     Second Quarter................................        24.94         18.13           0.18
     Third Quarter (through August 1, 2000)........        22.69         20.00              -

</TABLE>

         At our August 1, 2000 board meeting, our board of directors approved
our regular quarterly dividend of $0.18 per share, payable on September 1, 2000
to shareholders of record on August 15, 2000. In addition, our board of
directors approved a 25% common stock dividend payable on December 1, 2000 to
shareholders of record on November 15, 2000 and a 7.64% increase in our
quarterly cash dividend from $0.18 per share to $0.19375 per share with this
increase to be effective for our December 1, 2000 cash dividend payment payable
on December 1, 2000 to shareholders of record on November 15, 2000. On an
annualized basis, this represents an increase in the annual dividend rate from
$0.72 per share to $0.775 per share effective with the December 1, 2000
dividend. The increase in the December 1, 2000 dividend is the 10th increase in
our dividend that the board has approved in the past 9 years.

         We or our predecessor companies have paid dividends each year since
1944. We presently intend to pay quarterly cash dividends in the future on March
1, June 1, September 1 and December 1, subject to our earnings and financial
condition, regulatory requirements and such other factors as our board of
directors may deem relevant. See "Description of Capital Stock - Common Stock --
Dividend Rights and Limitations" for a description of certain limitations on our
ability to pay cash dividends.

         On August 1, 2000 the last reported sale price of our common stock on
the New York Stock Exchange was $22.1875 per share. As of March 31, 2000, there
were approximately 20,353 holders of record of our common stock.

         We offer the holders of record of less than 30,000 shares of our common
stock the opportunity to reinvest part or all of the dividend payments on their
shares of common stock through purchases of original issue common stock without
payment of any brokerage commission or service charge through our dividend
reinvestment and direct stock purchase plan. The purchase price for original
issue shares of common stock purchased through the reinvestment of dividends is
95% of the average of the high and low prices of common stock as reported on the
New York Stock Exchange composite transactions reporting system for each of the
five trading days immediately preceding the dividend payment date. This plan
also permits shareholders and investors to invest up to $30,000 annually in our

                                       14
<PAGE>

common stock in the open market through our transfer agent. At March 31, 2000,
holders of 18.3% of the shares of our common stock outstanding participated in
the dividend reinvestment portion of this plan.

                          DESCRIPTION OF CAPITAL STOCK

         The following description of our common stock sets forth material terms
and provisions of our common stock. You should read our current amended and
restated articles of incorporation for more detailed terms of our common stock.

         As of March 31, 2000, our authorized capital stock was 101,770,819
shares. Those shares consisted of:

     o        100,000,000 shares of our common stock, par value $0.50 per share,
              of which 40,927,257 shares were outstanding; and

     o        1,770,819 shares of preferred stock, par value $1.00 per share, of
              which 17,600 shares of Series B Preferred Stock were issued and
              outstanding.

Common Stock

Voting Rights

         Holders of our common stock are entitled to one vote for each share
held by them at all meetings of the shareholders and are not entitled to
cumulate their votes for the election of directors.

Dividend Rights and Limitations

         Holders of common stock may receive dividends when declared by our
board of directors. Because we are a holding company, the funds we use to pay
any dividends on our common stock are derived predominantly from the dividends
that we receive from our subsidiaries, Philadelphia Suburban Water and Consumers
Water, and the dividends they receive from their subsidiaries. Therefore, our
ability to pay dividends to holders of our common stock depends upon our
subsidiaries' earnings, financial condition and ability to pay dividends. We own
100% of the outstanding common stock of Philadelphia Suburban Water and
Consumers Water. Consumers Water owns 100% of the voting stock of four water
companies and at least 96% of the voting stock of three water companies. Most of
our subsidiaries are subject to regulation by state utility commissions and the
amounts of their earnings and dividends are affected by the manner in which they
are regulated. In addition, they are subject to restrictions on the payment of
dividends contained in their various debt agreements. Under our most restrictive
debt agreements, the amount available for payment of dividends to us as of March
31, 2000 was approximately $149 million of Philadelphia Suburban Water's
retained earnings and $60 million of Consumers Water's retained earnings.
Payment of dividends on our common stock is also subject to the preferential
rights of the holders of preferred stock to receive full cumulative dividends,
both past and current.

Liquidation Rights

         In the event that we liquidate, dissolve or wind-up, the holders of our
common stock are entitled to share ratably in all of the assets that remain
after we pay our liabilities. This right is subject, however, to the prior
distribution rights of any outstanding preferred stock.

Shareholder Rights Plan

         Holders of our common stock own, and the holders of the shares of
common stock issued in this offering will receive, one right to purchase Series
A Junior Participating Preferred Stock for each outstanding share of common
stock. These rights are issued pursuant to a shareholders rights plan. Upon the
occurrence of certain events, each right would entitle the holder to purchase
from us one one-thousandth of a share of Series A Junior Participating Preferred
Stock at an exercise price of $90 per one-thousandth of a share, subject to
adjustment. The rights are exercisable in certain circumstances if a person or
group acquires 20% or more of our common stock or if the holder of 20% or more
of our common stock engages in certain transactions with us. In that case, each
right would be exercisable by each holder, other than the acquiring person, to
purchase shares of our common stock at a substantial discount from the market
price. In addition, if, after the date that a person has become the holder of
20% or more of our common stock, any person or group merges with us or engages
in certain other transactions with us, each right entitles the holder, other

                                       15
<PAGE>

than the acquirer, to purchase common stock of the surviving corporation at a
substantial discount from the market price. These rights are subject to
redemption by us in certain circumstances. These rights have no voting or
dividend rights and, until exercisable, cannot trade separately from our common
stock and have no dilutive effect on our earnings. This plan expires on March 1,
2008.

Preferred Stock

         Our board of directors has the authority to divide the preferred stock
into one or more series and to fix and determine relative rights and preferences
of the shares of each series.

Series B Preferred Stock

         As of March 31, 2000, the only series of preferred stock outstanding
was our Series B Preferred Stock, of which there were 17,600 shares outstanding.
Holders of our Series B Preferred Stock are entitled to receive cumulative
quarterly dividends equal to $1.5125 per share or at a rate equal to 6.05% per
year. In the event that we liquidate, dissolve or wind-up, holders of Series B
Preferred Stock are entitled to receive $100 per share plus an amount equal to
any accrued but unpaid cumulative dividends together with any interest that has
accrued on those dividends. Our Series B Preferred Stock ranks senior to our
Series A Junior Participating Preferred Stock, if issued, and our common stock
with respect to the right to receive dividends and the right to the distribution
of our assets upon liquidation.

         The Series B Preferred Stock is not convertible into any other class or
series of our capital stock. We have the right to redeem, in whole or in part,
up to 6,440 shares of Series B Preferred Stock each year beginning on December
1, 2001 at a price equal to $100 per share plus any accrued and unpaid dividends
together with any interest that has accrued on those dividends through the date
of redemption. The Series B Preferred Stock is not subject to or entitled to the
benefit of a sinking fund.

         So long as any shares of our Series B Preferred Stock are outstanding,
we may not adopt any amendment to our articles of incorporation that would
adversely affect, in any material respect, the rights or preferences of the
Series B Preferred Stock without the affirmative vote of the holders of a
majority of the Series B Preferred Stock.

State Law Anti-Takeover Provisions

Pennsylvania State Law Provisions

         We are subject to various anti-takeover provisions of the Pennsylvania
Business Corporation Law of 1988, as amended. Generally, these provisions are
triggered if any person or group acquires, or discloses an intent to acquire,
20% or more of a corporation's voting power, unless the acquisition is under a
registered firm commitment underwriting or, in certain cases, approved by the
board of directors. These provisions:

     o        provide the other shareholders of the corporation with certain
              rights against the acquiring group or person;

     o        prohibit the corporation from engaging in a broad range of
              business combinations with the acquiring group or person; and

     o        restrict the voting and other rights of the acquiring person or
              group.

         In addition, as permitted by Pennsylvania law, an amendment to our
articles of incorporation or other corporate action that is approved by
shareholders may provide mandatory special treatment for specified groups of
nonconsenting shareholders of the same class. For example, an amendment to our
articles of incorporation or other corporate action may provide that shares of
common stock held by designated shareholders of record must be cashed out at a
price determined by the corporation, subject to applicable dissenters' rights.


                                       16
<PAGE>

Articles of Incorporation and Bylaw Provisions

         Certain provisions of our articles of incorporation and bylaws may have
the effect of discouraging unilateral tender offers or other attempts to take
over and acquire our business. These provisions might discourage some
potentially interested purchaser from attempting a unilateral takeover bid for
us on terms which some shareholders might favor. Our articles of incorporation
require that certain fundamental transactions must be approved by the holders of
75% of the outstanding shares of our capital stock entitled to vote on the
matter unless at least 50% of the members of the board of directors has approved
the transaction, in which case the required shareholder approval will be the
minimum approval required by applicable law. The fundamental transactions that
are subject to this provision are those transactions that require approval by
shareholders under applicable law or the articles of incorporation. These
transactions include certain amendments of our articles of incorporation or
bylaws, certain sales or other dispositions of our assets, certain issuances of
our capital stock, or certain transactions involving our merger, consolidation,
division, reorganization, dissolution, liquidation or winding up. Our articles
of incorporation and bylaws provide that:

o    a special meeting of shareholders may only be called by the chairman, the
     president, the board of directors or shareholders entitled to cast a
     majority of the votes which all shareholders are entitled to cast at the
     particular meeting;

o    nominations for election of directors may be made by any shareholder
     entitled to vote for election of directors if the name of the nominee and
     certain information relating to the nominee is filed with our corporate
     secretary not less than 14 days nor more than 50 days before any meeting of
     shareholders to elect directors; and

o    certain advance notice procedures must be met for shareholder proposals to
     be made at annual meetings of shareholders. These advance notice procedures
     generally require a notice to be delivered not less than 90 days nor more
     than 120 days before the anniversary date of the immediately preceding
     annual meeting of shareholders.

Transfer Agent and Registrar

         The transfer agent and registrar for our common stock is BankBoston,
N.A.

                                  UNDERWRITING

         Subject to the terms and conditions of the underwriting agreement
between us and the representatives on behalf of the underwriters, the
underwriters have agreed severally to purchase from us the following number of
shares of common stock at the public offering price less the underwriting
discount set forth on the cover page of this prospectus.

                                                             Number of
                  Underwriters                                 Shares
                  ------------                                 ------

         A.G. Edwards & Sons, Inc........................
         PaineWebber Incorporated........................
         Janney Montgomery Scott LLC.....................     ---------

         Total...........................................     1,000,000
                                                              =========

         The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in this offering are subject to
certain conditions precedent, and that the underwriters are obligated to take
and pay for all of the shares of common stock offered hereby (other than those
covered by the over-allotment option described below) if any are taken.

         The representatives of the underwriters have advised us that they
propose to offer the shares of common stock to the public at the public offering
price set forth on the cover page of this prospectus and to certain dealers at
such price less a concession not in excess of $__ per share. The underwriters
may allow, and such dealers may re-allow, a concession not in excess of $0.__
per share to certain other dealers. After the offering, the public offering
price and other selling terms may be changed by the underwriters.


                                       17
<PAGE>


         We have granted to the underwriters an option, exercisable for 30 days
after the date of this prospectus, to purchase up to 150,000 additional shares
of common stock at the public offering price, less the underwriting discount set
forth on the cover page of this prospectus, solely to cover over-allotments. To
the extent that the underwriters exercise this option, the underwriters will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional shares as the number set forth next to such
underwriter's name in the preceding table bears to the total number of shares in
such table, and we will be obligated, pursuant to the option, to sell such
shares to the underwriters.

         We and Vivendi S.A., together with certain of its affiliates, our
largest shareholder, have agreed not to sell or otherwise dispose of, and
Vivendi S.A. has agreed to cause each of its controlled affiliates to not sell
or otherwise dispose of, any shares of our common stock for a period of 90 days
after the date of this prospectus without the prior written consent of A.G.
Edwards & Sons, Inc. A.G. Edwards & Sons, Inc. may, in its sole discretion,
allow us or Vivendi S.A. to dispose of common stock or other securities prior to
the expiration of such 90-day period. Except as discussed above, there are,
however, no agreements between A.G. Edwards & Sons, Inc. and us or Vivendi S.A.
that would allow us or Vivendi S.A. to do so as of the date of this prospectus.
There are some exceptions to our restrictions to sell common stock, including
the issuance of our common stock in connection with our employee benefit plans,
our shareholder rights plan and our dividend reinvestment and direct stock
purchase plan and up to 600,000 shares of our common stock that may be issued as
consideration for acquisitions of businesses pursuant to our shelf registration
statement discussed earlier.

         The following table summarizes the underwriting discount that we will
pay to the underwriters in this offering. These amounts assume both no exercise
and full exercise of the underwriters' option to purchase additional shares of
common stock.
                                                           No           Full
                                                        Exercise       Exercise
         Per Share.................................   $              $
                                                       ----------     ----------
         Total.....................................   $              $
                                                       ----------     ----------

         We expect to incur expenses of approximately $150,000 in connection
with this offering. We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act.

         Until the distribution of the common stock is completed, rules of the
SEC may limit the ability of the underwriters and certain selling group members
to bid for and purchase the common stock. As an exception to these rules, the
underwriters are permitted to engage in certain transactions that stabilize,
maintain or otherwise affect the price of the common stock.

         In connection with the offering, the underwriters may make short sales
of our shares of common stock and may purchase our shares on the open market to
cover positions created by short sales. Short sales involve the sale by the
underwriters of a greater number of shares than they are required to purchase in
the offering. "Covered" short sales are made in an amount not greater than the
over-allotment option described above. The underwriters may close out any
covered short position by either exercising the over-allotment option or
purchasing shares in the open market. In determining the source of shares to
close out the covered short position, the underwriters will consider, among
other things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. "Naked" short sales are sales in excess of the
over-allotment option. The underwriters must close out any naked short position
by purchasing shares in the open market. A naked short position is more likely
to be created if the underwriters are concerned that there may be downward
pressure on the price of the shares in the open market after pricing that could
adversely affect investors who purchase in the offering.

         The underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase common stock in the open
market to reduce the selling group members' short position or to stabilize the
price of the common stock, it may reclaim the amount of the selling concession
from the selling group members who sold those shares of common stock as part of
this offering.

                                       18
<PAGE>

         In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases or such purchases could
prevent or retard a decline in the price of the security. The imposition of a
penalty bid might also have an effect on the price of a security to the extent
that it were to discourage resales of the security.

         Neither we nor the representatives make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
we nor the representatives make any representation that the underwriters will
engage in these transactions or that these transactions, once commenced, will
not be discontinued without notice.

         The representatives of the underwriters are three of the six placement
agents under Philadelphia Suburban Water's medium term note program. In
addition, the representatives of the underwriters have engaged in transactions
with and performed various financial advisory, investment banking, brokerage and
other services for us and our subsidiaries in the past and may do so from time
to time in the future.

                                  LEGAL MATTERS

         The validity of the shares of common stock offered hereby will be
passed upon for us by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania,
and for the underwriters by Winthrop, Stimson, Putnam & Roberts, New York, New
York.

                                     EXPERTS

         The consolidated financial statements of Philadelphia Suburban
Corporation and subsidiaries as of December 31, 1999 and 1998, and for each of
the years in the three-year period ended December 31, 1999, have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants, also
incorporated by reference herein and in the registration statement, and upon
authority of said firm as experts in accounting and auditing.





                                       19
<PAGE>

================================================================================



                                1,000,000 Shares



                              PHILADELPHIA SUBURBAN
                                   CORPORATION


                                  Common Stock



                                   PROSPECTUS



                            A.G. Edwards & Sons, Inc.

                            PaineWebber Incorporated

                           Janney Montgomery Scott LLC



                                       , 2000



================================================================================










<PAGE>


                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.          Other Expenses of Issuance and Distribution

The following table shows the estimated expenses of the issuance and
distribution of the securities offered hereby:


Securities and Exchange Commission Registration Fee............... $  6,710
Printing .........................................................   28,000
Accounting Services...............................................   35,000
Legal Services....................................................   50,000
NYSE Listing Fees.................................................    4,025
PHSE Listing Fees.................................................    1,250
Transfer Agent Fees...............................................    2,500
Miscellaneous.....................................................   22,515
                                                                   --------
        Total..................................................... $150,000


Item 15.          Indemnification of Directors and Officers

Sections 1741 and 1742 of the Pennsylvania Business Corporation Law of 1988, as
amended (the "BCL"), provide that a business corporation may indemnify directors
and officers against liabilities they may incur as such provided that the
particular person acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and, with respect to any criminal proceeding, had no reasonable cause to believe
his or her conduct was unlawful. In general, the power to indemnify under these
sections does not exist in the case of actions against a director or officer by
or in the right of the corporation if the person otherwise entitled to
indemnification shall have been adjudged to be liable to the corporation unless
it is judicially determined that, despite the adjudication of liability but in
view of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnification for specified expenses. The corporation is required
to indemnify directors and officers against expenses they may incur in defending
actions against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions.

Section 1713 of the BCL permits the shareholders to adopt a bylaw provision
relieving a director (but not an officer) of personal liability for monetary
damages except where (i) the director has breached the applicable standard of
care, and (ii) such conduct constitutes self-dealing, willful misconduct or
recklessness. The statute provides that a director may not be relieved of
liability for the payment of taxes pursuant to any federal, state or local law
or responsibility under a criminal statute. Section 4.01 of the Registrant's
bylaws limits the liability of any director of the Registrant to the fullest
extent permitted by Section 1713 of the BCL.

Section 1746 of the BCL grants a corporation broad authority to indemnify its
directors, officers and other agents for liabilities and expenses incurred in
such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness. Article VII of the Registrant's
bylaws provides indemnification of directors, officers and other agents of the
Registrant broader than the indemnification permitted by Section 1741 of the BCL
and pursuant to the authority of Section 1746 of the BCL.

Article VII of the bylaws provides, except as expressly prohibited by law, an
unconditional right to indemnification for expenses and any liability paid or
incurred by any director or officer of the Registrant, or any other person
designated by the board of directors as an indemnified representative, in
connection with any actual or threatened claim, action, suit or proceeding
(including derivative suits) in which he or she may be involved by reason of
being or having been a director, officer, employee or agent of the Registrant
or, at the request of the Registrant, of another corporation, partnership, joint
venture, trust, employee benefit plan or other entity. The bylaws specifically
authorize indemnification against both judgments and amounts paid in settlement
of derivative suits, unlike Section 1742 of the BCL which authorized
indemnification only of expenses incurred in defending a derivative action.
Article VII of the bylaws also allows indemnification for punitive damages and
liabilities incurred under the federal securities laws.


                                      II-1
<PAGE>

Unlike the provisions of BCL Sections 1741 and 1742, Article VII does not
require the Registrant to determine the availability of indemnification by the
procedures or the standard of conduct specified in Sections 1741 and 1742 of the
BCL. A person who has incurred an indemnifiable expense or liability has a right
to be indemnified independent of any procedures or determinations that would
otherwise be required, and that right is enforceable against the Registrant as
long as indemnification is not prohibited by law. To the extent indemnification
is permitted only for a portion of a liability, the bylaw provisions require the
Registrant to indemnify such portion. If the indemnification provided for in
Article VII is unavailable for any reason in respect of any liability or portion
thereof, the bylaws require the Registrant to make a contribution toward the
liability. Indemnification rights under the bylaws do not depend upon the
approval of any future board of directors.

Section 7.04 of the Registrant's bylaws also authorizes the Registrant to
further effect or secure its indemnification obligations by entering into
indemnification agreements, maintaining insurance, creating a trust fund,
granting a security interest in its assets or property, establishing a letter of
credit, or using any other means that may be available from time to time.

The Registrant maintains, on behalf of its directors and officers, insurance
protection against certain liabilities arising out of the discharge of their
duties, as well as insurance covering the Registrant for indemnification
payments made to its directors and officers for certain liabilities. The
premiums for such insurance are paid by the Registrant.

Item 16.          Exhibits

     The exhibits filed as part of this registration statement are as follows:

Exhibit
Number                    Description
- ------                    -----------
 1.1             Form of Underwriting Agreement**
 4.1             Amended and Restated Articles of Incorporation (1)
 4.2             Current Bylaws of Registrant*
 4.3             Amendment to Amended and Restated Articles of Incorporation,
                 to increase the number of authorized shares (2)
 4.4             Amendment to Amended and Restated Articles of  Incorporation,
                 designating the Series B Preferred Stock (2)
 4.5             Amendment  to Amended and Restated  Articles of
                 Incorporation,  designating  the Series A Junior Participating
                 Preferred Stock (3)
 4.6             Amendment to Amended and Restated Articles of Incorporation,
                 to increase the number of authorized shares (4)
 4.7             Amendment to Amended and Restated Articles of Incorporation (5)
 5.1             Opinion of Morgan, Lewis & Bockius LLP regarding legality of
                 securities when issued*
23.1             Consent of Morgan, Lewis & Bockius LLP (included in its
                 opinion filed as Exhibit 5.1 hereto)*
23.2             Consent of KPMG LLP*
24.1             Powers of Attorney (included on the signature page)*

- ---------------
     *            Filed herewith.
     **           To be filed by amendment.
     (1)          Incorporated  by reference  from the  Registrant's  Annual
                  Report on Form 10-K for the year ended December 31, 1992,
                  (Exhibit No. 3.1).
     (2)          Incorporated  by reference  from the  Registrant's  Annual
                  Report on Form 10-K for the year ended December 31, 1996,
                  (Exhibit Nos. 3.3, and 3.4).
     (3)          Incorporated  by reference  from the  Registrant's  Annual
                  Report on Form 10-K for the year ended December 31, 1997,
                  (Exhibit No. 3.6).
     (4)          Incorporated by reference from the Registrant's Registration
                  Statement on Form S-4 filed on September 11, 1998 (Annex E to
                  the Amended and Restated Agreement and Plan of Merger Dated as
                  of August 5, 1998 By and Among Philadelphia Suburban
                  Corporation, Consumers Acquisition Company and Consumers Water
                  Company).
     (5)          Incorporated  by reference from the  Registrant's  definitive
                  Proxy Statement filed on March 31, 2000 dated April 10, 2000
                  (Annex A).


                                      II-2
<PAGE>


Item 17.          Undertakings


     The undersigned registrant hereby undertakes:

     (1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (2) That for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

     (3) For the purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

      Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.



                                      II-3
<PAGE>


                                   SIGNATURES

                  Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Bryn Mawr, Commonwealth of Pennsylvania, on this
3rd day of August, 2000.

                                  PHILADELPHIA SUBURBAN CORPORATION


                                  By:  /s/ Nicholas DeBenedictis
                                           -----------------------------------
                                           Nicholas DeBenedictis
                                           Chairman and Chief Executive Officer


                  Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

                  Each person in so signing also makes, constitutes and appoints
Roy H. Stahl and David P. Smeltzer and each of them acting alone, his true and
lawful attorney-in-fact, with full power of substitution, to execute and cause
to be filed with the Securities and Exchange Commission pursuant to the
requirements of the Securities Act of 1933, as amended, any and all amendments
and post-effective amendments to this Registration Statement, and including any
Registration Statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act, with exhibits thereto
and other documents in connection therewith, and hereby ratifies and confirms
all that said attorney-in-fact or his substitute or substitutes may do or cause
to be done by virtue hereof.

<TABLE>
<CAPTION>

Signature                                           Title                                   Date
- ---------                                           -----                                   ----

<S>                                     <C>                                            <C>
/s/ Nicholas DeBenedictis               Director, Chairman and Chief                   August 3, 2000
- -----------------------------           Executive Officer (Principal
Nicholas DeBenedictis                   Executive Officer)



/s/ David P. Smeltzer                   Senior Vice President -- Finance               August 3, 2000
- -----------------------------           and Treasurer (Principal Financial
David P. Smeltzer                       and Accounting Officer)




/s/ Mary C. Carroll                     Director                                       August 3, 2000
- -----------------------------
Mary C. Carroll


/s/ G. Fred DiBona, Jr.                 Director                                       August 3, 2000
- -----------------------------
G. Fred DiBona, Jr.


/s/  Richard H. Glanton, Esq.           Director                                       August 3, 2000
- -----------------------------
Richard H. Glanton, Esq.


/s/ Richard J. Heckmann                 Director                                       August 3, 2000
- -----------------------------
Richard J. Heckmann
</TABLE>


                                      II-4
<PAGE>


<TABLE>
<CAPTION>

<S>                                     <C>                                            <C>
/s/ Alan R. Hirsig                      Director                                       August 3, 2000
- -----------------------------
Alan R. Hirsig


/s/ John F. McCaughan                   Director                                       August 3, 2000
- ----------------------------
John F. McCaughan


/s/ John E. Menario                     Director                                       August 3, 2000
- -----------------------------
John E. Menario


/s/ John E. Palmer, Jr.                 Director                                       August 3, 2000
- -----------------------------
John E. Palmer, Jr.


/s/ Andrew D. Seidel                    Director                                       August 3, 2000
- -----------------------------
Andrew D. Seidel


- -----------------------------           Director                                               , 2000
Richard L. Smoot


/s/ Robert O. Viets                     Director                                       August 3, 2000
- -----------------------------
Robert O. Viets
</TABLE>



                                      II-5
<PAGE>




                                INDEX TO EXHIBITS

 Exhibit
 Number          Description
 ------          -----------------------------
 1.1             Form of Underwriting Agreement**

 4.1             Amended and Restated Articles of Incorporation (1)

 4.2             Current Bylaws of Registrant*

 4.3             Amendment to Amended and Restated Articles of Incorporation,
                 to increase the number of authorized shares (2)

 4.4             Amendment to Amended and Restated Articles of Incorporation
                 designating the Series B Preferred Stock (2)

 4.5             Amendment to Amended and Restated Articles of Incorporation,
                 designating the Series A Junior Participating
                 Preferred Stock (3)

 4.6             Amendment to Amended and Restated Articles of Incorporation to
                 increase the number of authorized shares (4)

 4.7             Amendment to Amended and Restated Articles of Incorporation (5)

 5.1             Opinion of Morgan, Lewis & Bockius LLP regarding legality of
                 securities when issued*

 23.1            Consent of Morgan, Lewis & Bockius LLP (included in its
                 opinion filed as Exhibit 5.1 hereto)*

 23.2            Consent of KPMG LLP*

 24.1            Powers of Attorney (included on the signature page)*

 ---------------
 *       Filed herewith.
 **      To be filed by amendment.
 (1)     Incorporated by reference from the  Registrant's  Annual Report on
         Form 10-K for the year ended December 31, 1992, (Exhibit No. 3.1).
 (2)     Incorporated  by reference  from  the Registrant's Annual Report on
         Form 10-K for the Year Ended  December 31, 1996, (Exhibit Nos. 3.3
         and 3.4).
 (3)     Incorporated by reference from the Registrant's Annual
         Report on Form 10-K for the year ended December 31,
         1997 (Exhibit 3.6).
 (4)     Incorporated by reference from the Registrant's
         Registration Statement on Form S-4 filed on September
         11, 1998 (Annex E to the Amended and Restated
         Agreement and Plan of Merger Dated as of August 5,
         1998 By and Among Philadelphia Suburban Corporation,
         Consumers Acquisition Company and Consumers Water
         Company).
 (5)     Incorporated by reference from the Registrant's definitive
         Proxy Statement filed on March 31, 2000 dated April
         10, 2000 (Annex A).


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>EXHIBIT 4.2
<TEXT>


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                                                                 Exhibit 4.2
                                     BYLAWS
                                       OF
                        PHILADELPHIA SUBURBAN CORPORATION
                          (a Pennsylvania Corporation)


                                    ARTICLE I
                             Offices and Fiscal Year
         Section 1.01. Registered Office. The registered office of the
corporation in the Commonwealth of Pennsylvania, which is in Montgomery County,
shall be at 762 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010 until otherwise
established by an amendment of the articles of incorporation (the Articles) or
by the board of directors, and a statement of such change is filed with the
Department of State in the manner provided by law.

         Section 1.02. Other Offices. The corporation may also have offices at
such other places within or without the Commonwealth of Pennsylvania as the
board of directors may from time to time appoint or the business of the
corporation may require.

         Section 1.03. Fiscal Year. The fiscal year of the corporation shall
begin on the first day of January in each year.


                                   ARTICLE II

                      Notice - Waivers - Meetings Generally

         Section 2.01.  Manner of Giving Notice.

         (a) General rule. Whenever written notice is required to be given to
any person under the provisions of the Business Corporation Law or by the
articles or these bylaws, it may be given to the person either personally or by
sending a copy thereof by first class mail or express mail, postage prepaid, or
by telegram (with messenger service specified), telex or TWX (with answerback
received) or courier service, charges prepaid, or by facsimile transmission, to
the address (or to the telex, TWX or facsimile number) of the person appearing
on the books of the corporation or, in the case of directors, supplied by the
director to the corporation for the purpose of notice. If the notice is sent by
mail, telegraph or courier service, it shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail or with a
telegraph office or courier service for delivery to that person or, in the case
of telex or TWX, when dispatched or, in the case of facsimile transmission, when
received. A notice of a meeting shall specify the place, day and hour of the
meeting and any other information required by any other provision of the
Business Corporation Law, the articles or these bylaws.

         (b) Bulk mail. If the corporation has more than 30 shareholders, notice
of any regular or special meeting of the shareholders, or any other notice
required by the Business Corporation Law or by the articles or these bylaws to
be given to all shareholders or to all holders of a class or series of shares,
deposited in the United States mail at least 20 days prior to the day named for
the meeting or any corporate or shareholder action specified in the notice.

         (c) Adjourned shareholder meetings. When a meeting of shareholders is
adjourned, it shall not be necessary to give any notice of the adjourned meeting
or of the business to be transacted at an adjourned meeting, other than by
announcement at the meeting at which the adjournment is taken, unless the board
fixes a new record date for the adjourned meeting in which event notice shall be
given in accordance with Section 2.03.

         Section 2.02. Notice of Meetings of Board of Directors. Notice of a
regular meeting of the board of directors need not be given. Notice of every
special meeting of the board of directors shall be given to each director by
telephone or in writing at least 24 hours (in the case of notice by telephone,
telex, TWX or facsimile transmission) or 48 hours (in the case of notice by
telegraph, courier service or express mail) or five days (in the case of notice


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by first class mail) before the time at which the meeting is to be held. Every
such notice shall state the time and place of the meeting. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the
board need be specified in a notice of the meeting.

         Section 2.03.  Notice of Meetings of Shareholders.

         (a) General rule. Written notice of every meeting of the shareholders
shall be given by, or at the direction of, the secretary or other authorized
person to each shareholder of record entitled to vote at the meeting, at least
20 days prior to the day named for the meeting. If the secretary neglects or
refuses to give notice of a meeting, the person or persons calling the meeting
may do so. In the case of a special meeting of shareholders, the notice shall
specify the general nature of the business to be transacted.

         (b) Notice of action by shareholders on bylaws. In the case of a
meeting of shareholders that has as one of its purposes action on the bylaws,
written notice shall be given to each shareholder that the purpose, or one of
the purposes, of the meeting is to consider the adoption, amendment or repeal of
the bylaws. There shall be included in, or enclosed with, the notice of a copy
of the proposed amendment or a summary of the changes to be effected thereby.

         (c) Notice of action by shareholders on fundamental change. In the case
of a meeting of the shareholders that has as one of its purposes action with
respect to any fundamental change under 15 Pa.C.S. Chapter 19, each shareholder
shall be given, together with written notice of the meeting, a copy or summary
of the amendment or plan to be considered at the meeting in compliance with the
provisions of Chapter 19.

         (d) Notice of action by shareholders giving rise to dissenters rights.
In the case of a meeting of the shareholders that has as one of its purposes
action that would give rise to dissenters rights under the provisions of 15
Pa.C.S. Subchapter 15D, each shareholder shall be given, together with written
notice of the meeting:

                  (1) a statement that the shareholders have a right to dissent
         and obtain payment of the fair value of their shares by complying with
         the provisions of Subchapter 15D (relating to dissenters rights); and

                  (2) a copy of Subchapter 15D.

         Section 2.04.  Waiver of Notice.

         (a) Written waiver. Whenever any written notice is required to be given
under the provisions of the Business Corporation Law, the articles or these
bylaws, a waiver thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, the meeting need be specified in the waiver of notice of
such meeting.

         (b) Waiver by attendance. Attendance of a person at any meeting shall
constitute a waiver of notice of the meeting, except where a person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting was not lawfully called
or convened.


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         Section 2.05. Modification of Proposal Contained in Notice. Whenever
the language of a proposed resolution is included in a written notice of a
meeting required to be given under the provisions of the Business Corporation
Law or the articles or these bylaws, the meeting considering the resolution may
without further notice adopt it with such clarifying language or other
amendments as do not enlarge its original meaning.

         Section 2.06.  Exception to Requirement of Notice.

         (a) General rule. Whenever any notice or communication is required to
be given to any person under the provisions of the Business Corporation Law or
by the articles or these bylaws or by the terms of any agreement or other
instrument or as a condition precedent to taking any corporate action and
communication with that person is then unlawful, the giving of the notice or
communication to that person shall not be required.

         (b) Shareholders without forwarding addresses. Notice or other
communications shall not be sent to any shareholder with whom the corporation
has been unable to communicate for more than 24 consecutive months because
communications to the shareholder are returned unclaimed or the shareholder has
otherwise failed to provide the corporation with a current address. Whenever the
shareholder provides the corporation with a current address, the corporation
shall commence sending notices and other communications to the shareholder in
the same manner as to other shareholders.

         Section 2.07. Use of Conference Telephone and Similar Equipment. Any
director may participate in any meeting of the board of directors, and the board
of directors may provide by resolution with respect to a specific meeting or
with respect to a class of meetings that one or more persons may participate in
a meeting of the shareholders of the corporation by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this section shall constitute presence in person at such meeting.

                                   ARTICLE III

                                  Shareholders

         Section 3.01. Place of Meeting. All meetings of the shareholders of the
corporation shall be held at the registered office of the corporation unless
another place is designated by the board of directors in the notice of such
meeting.

         Section 3.02. Annual Meeting. The board of directors may fix the date
and time of the annual meeting of the shareholders, but if no such date and time
is fixed by the board the meeting for any calendar year shall be held on the
Second Thursday of May in such year, if not a legal holiday under the laws of
Pennsylvania, and, if a legal holiday, then on the next succeeding business day,
not a Saturday, at 10:00 o'clock A.M., and at said meeting the shareholders
entitled to vote shall elect directors and shall transact such other business as
may properly be brought before the meeting. If the annual meeting shall not have
been called and held within six months after the designated time, any
shareholder may call such meeting at any time thereafter.

         Section 3.03. Special Meetings. Special meetings of the shareholders
may be called at any time by the chairman, the president, or shareholders
entitled to cast a majority of the votes which all shareholders are entitled to
cast at the particular meeting, or by resolution of the board of directors. Any
authorized person who has called a special meeting may fix the date, time and
place of the meeting. If the person who has called the meeting does not fix the
date, time or place of the meeting, it shall be the duty of the secretary to do
so. A date fixed by the secretary shall not be more than 60 days after receipt
of the request.

         Section 3.04. Quorum and Adjournment.

         (a) General rule. A meeting of shareholders of the corporation duly
called shall not be organized for the transaction of business unless a quorum is
present. The presence of shareholders entitled to cast a majority of the votes
which all shareholders are entitled to cast on the particular matter to be acted
upon at the meeting shall constitute a quorum for the purposes of consideration
and action on the matter. Shares of the corporation owned, directly or
indirectly, by it and controlled, directly or indirectly, by the board of
directors of this corporation, as such, shall not be counted in determining the
total number of outstanding shares for quorum purposes at any given time.


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         (b) Withdrawal of a quorum. The shareholders present at a duly
organized meeting can continue to do business until adjournment, notwithstanding
withdrawal of enough shareholders to leave less than a quorum.

         (c) Adjournments generally. Any regular or special meeting of the
shareholders, including one at which directors are to be elected and one which
cannot be organized because a quorum has not attended, may be adjourned for such
period and to such place as the shareholders present and entitled to vote shall
direct. At any such adjourned meeting at which a quorum may be present such
business may be transacted as might have been transacted at the meeting as
originally called. No notice of any adjourned meeting of the shareholders of the
corporation shall be required to be given except by announcement at the meeting
at which the adjournment took place. In case of any meeting called for the
election of directors, those who attend the second of such adjourned meetings,
although less than a quorum, shall nevertheless constitute a quorum for the
purpose of electing directors. Any meeting at which directors are to be elected
shall be adjourned only from day to day, or for such longer periods not
exceeding 15 days each, as may be directed by shareholders who are present in
person or by proxy and who are entitled to cast at least a majority of the votes
which all such shareholders would be entitled to cast at an election of
directors, until such directors are elected.

         Section 3.05. Action by Shareholders. Except as otherwise provided in
the Business Corporation Law or the articles or these bylaws, the acts, at a
duly organized meeting, of the shareholders present, in person or by proxy,
entitled to cast at least a majority of the votes which all shareholders present
in person or by proxy are entitled to cast shall be the acts of the
shareholders.

         Section 3.06. Organization. At every meeting of the shareholders, the
chairman of the board, if there be one, or in the case of vacancy in office or
absence of the chairman of the board, one of the following officers present in
the order stated: the vice chairman of the board, if there be one, the
president, the vice presidents in their order of rank and seniority, or a person
chosen by vote of the shareholders present shall act as chairman of the meeting.
The secretary, or, in the absence of the secretary, an assistant secretary, or
in the absence of both the secretary and assistant secretaries, a person
appointed by the chairman of the meeting, shall act as secretary of the meeting.

         Section 3.07. Voting Rights of Shareholders. Unless otherwise provided
in the articles, every shareholder of the corporation shall be entitled to one
vote for every share standing in the name of the shareholder on the books of the
corporation.

         Section 3.08.  Voting and Other Action by Proxy.

         (a) General rule.

                  (1) Every shareholder entitled to vote at a meeting of
         shareholders may authorize another person to act for the shareholder by
         proxy.

                  (2) The presence of, or vote or other action at a meeting of
         shareholders by a proxy of a shareholder shall constitute the presence
         of, or vote or other action by the shareholder.

                  (3) When two or more proxies of a shareholder are present, the
         corporation shall, unless otherwise expressly provided in the proxy,
         accept as the vote of all shares represented thereby the vote cast by a
         majority of them and, if a majority of the proxies cannot agree whether
         the shares represented shall be voted or upon the manner of voting the
         shares, the voting of the shares shall be divided equally among those
         persons.

         (b) Minimum requirements. Every proxy shall be executed in writing by
the shareholder or by the duly authorized attorney-in-fact of the shareholder
and filed with the secretary of the corporation. A telegram, telex, cablegram,
datagram or similar transmission from a shareholder or attorney-in-fact, or a
photographic, facsimile or similar reproduction of a writing executed by a
shareholder or attorney-in-fact:

                  (1) may be treated as properly executed for purposes of this
         subsection; and


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                  (2) shall be so treated if it sets forth a confidential and
         unique identification number or other mark furnished by the corporation
         to the shareholder for the purposes of a particular meeting or
         transaction.

         (c) Revocation. A proxy, unless coupled with an interest, shall be
revocable at will, notwithstanding any other agreement or any provision in the
proxy to the contrary, but the revocation of a proxy shall not be effective
until written notice thereof has been given to the secretary of the corporation.
An unrevoked proxy shall not be valid after three years from the date of its
execution, unless a longer time is expressly provided therein. A proxy shall not
be revoked by the death or incapacity of the maker unless, before the vote is
counted or the authority is exercised, written notice of the death or incapacity
is given to the secretary of the corporation.

         (d) Expenses. The corporation shall pay the reasonable expenses of
solicitation of votes, proxies or consents of shareholders by or on behalf of
the board of directors or its nominees for election to the board, including
solicitation by professional proxy solicitors and otherwise.

         Section 3.09. Voting by Fiduciaries and Pledgees. Shares of the
corporation standing in the name of a trustee or other fiduciary and shares held
by an assignee for the benefit of creditors or by a receiver may be voted by the
trustee, fiduciary, assignee or receiver. A shareholder whose shares are pledged
shall be entitled to vote the shares until the shares have been transferred into
the name of the pledgee, or a nominee of the pledgee, but nothing in this
section shall affect the validity of a proxy given to a pledgee or nominee.

         Section 3.10.  Voting by Joint Holders of Shares.

         (a) General rule. Where shares of the corporation are held jointly or
as tenants in common by two or more persons, as fiduciaries or otherwise:

                  (1) if only one or more of such persons is present in person
         or by proxy, all of the shares standing in the names of such persons
         shall be deemed to be represented for the purpose of determining a
         quorum and the corporation shall accept as the vote of all the shares
         the vote cast by a joint owner or a majority of them; and

                  (2) if the persons are equally divided upon whether the shares
         held by them shall be voted or upon the manner of voting the shares,
         the voting of the shares shall be divided equally among the persons
         without prejudice to the rights of the joint owners or the beneficial
         owners thereof among themselves.

         (b) Exception. If there has been filed with the secretary of the
corporation a copy, certified by an attorney at law to be correct, of the
relevant portions of the agreement under which the shares are held or the
instrument by which the trust or estate was created or the order of court
appointing them or of an order of court directing the voting of the shares, the
persons specified as having such voting power in the document latest in date of
operative effect so filed, and only those persons, shall be entitled to vote the
shares but only in accordance therewith.

         Section 3.11.  Voting by Corporations.

         (a) Voting by corporate shareholders. Any corporation that is a
shareholder of this corporation may vote at the meetings of shareholders of this
corporation by any of its officers or agents, or by proxy appointed by any
officer or agent, unless some other person, by resolution of the board of
directors of the other corporation or a provision of its articles or bylaws, a
copy of which resolution or provision certified to be correct by one of its
officers has been filed with the secretary of this corporation, is appointed its
general or special proxy in which case that person shall be entitled to vote the
shares.

         (b) Controlled shares. Shares of the corporation owned, directly or
indirectly, by it and controlled, directly or indirectly, by the board of
directors of this corporation, as such, shall not be voted at any meeting and
shall not be counted in determining the total number of outstanding shares for
voting purposes at any given time.

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         Section 3.12.  Determination of Shareholders of Record.

         (a) Fixing record date. The board of directors may fix a time prior to
the date of any meeting of shareholders as a record date for the determination
of the shareholders entitled to notice of, or to vote at, any such meeting,
which time, except in the case of an adjourned meeting, shall be not more than
90 days prior to the date of the meeting of shareholders. Only shareholders of
record on the date so fixed shall be so entitled notwithstanding any transfer of
any shares on the books of the corporation after any such record date fixed as
provided in this subsection. The board of directors may similarly fix a record
date for the determination of shareholders of record for any other purpose. When
a determination of shareholders of record has been made as provided in this
section for purposes of a meeting, the determination shall apply to any
adjournment thereof unless the board fixes a new record date for the adjourned
meeting.

         (b) Determination when a record date is not fixed.  If a record date
is not fixed:

                  (1) The record date for determining shareholders entitled to
         notice of or to vote at a meeting of shareholders shall be at the close
         of business on the day next preceding the day on which notice is given.

                  (2) The record date for determining shareholders for any other
         purpose shall be at the close of business on the day on which the board
         of directors adopts the resolution relating thereto.

         (c) Certification by nominee. The board of directors may adopt a
procedure whereby a shareholder of the corporation may certify in writing to the
corporation that all or a portion of the shares registered in the name of the
shareholder are held for the account of a specified person or persons. Upon
receipt by the corporation of a certification complying with the procedure, the
persons specified in the certification shall be deemed, for the purposes set
forth in the certification, to be the holders of record of the number of shares
specified in the place of the shareholder making the certification.

         Section 3.13.  Voting Lists.

         (a) General rule. The officer or agent having charge of the transfer
books for shares of the corporation shall make a complete list of the
shareholders entitled to vote at any meeting of shareholders, arranged in
alphabetical order, with the address of and the number of shares held by each.
The list shall be produced and kept open at the time and place of the meeting,
and shall be subject to the inspection of any shareholder during the whole time
of the meeting for the purposes thereof except that, if the corporation has
5,000 or more shareholders, in lieu of the making of the list of the corporation
may make the information therein available at the meeting by any other means.

         (b) Effect of list. Failure to comply with the requirements of this
section shall not affect the validity of any action taken at a meeting prior to
a demand at the meeting by any shareholder entitled to vote thereat to examine
the list. The original transfer book, or a duplicate thereof kept in
Pennsylvania, shall be prima facie evidence as to who are the shareholders
entitled to examine the list or transfer records or to vote at any meeting of
shareholders.

         Section 3.14.  Judges of Election.

         (a) Appointment. In advance of any meeting of shareholders of the
corporation, the board of directors may appoint judges of election, who need not
be shareholders, to act at such meeting or any adjournment thereof. If judges of
election are not so appointed, the presiding officer of any such meeting may,
and upon the demand of any shareholder shall, appoint judges of election at the
meeting. The number of judges shall be either one or three, as determined, in
the case of judges appointed upon demand of a shareholder, by shareholders
present entitled to cast a majority of the votes which all shareholders present
are entitled to cast thereon. No person who is a candidate for office to be
filled at the meeting shall act as a judge.

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         (b) Vacancies. In case any person appointed as judge fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
board of directors in advance of the convening of the meeting, or at the meeting
by the presiding officer thereof.

         (c) Duties. The judges of election shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the authenticity, validity and effect of proxies,
receive votes or ballots, hear and determine all challenges and questions in any
way arising in connection with the nominations by shareholders or the right to
vote, count and tabulate all votes, determine the result, and do such acts as
may be proper to conduct the election or vote with fairness to all shareholders.
The judges of election shall perform their duties impartially, in good faith, to
the best of their ability and as expeditiously as is practical. If there are
three judges of election, the decision, act or certificate of a majority shall
be effective in all respects as the decision, act or certificate of all.

         (d) Report. On request of the presiding officer of the meeting, the
judges shall make a report in writing of any challenge or question or matter
determined by them, and execute a certificate of any fact found by them. Any
report or certificate made by them shall be prima facie evidence of the facts
stated therein.

         Section 3.15. Consent of Shareholders in Lieu of Meeting. Any action
required or permitted to be taken at a meeting of the shareholders or of a class
of shareholders of the corporation may be taken without a meeting only upon the
unanimous written consent of all the shareholders who would be entitled to vote
thereon at a meeting of the shareholders called to consider the matter.

         Section 3.16. Minors as Security Holders. The corporation may treat a
minor who holds shares or obligations of the corporation as having capacity to
receive and to empower others to receive dividends, interest, principal and
other payments or distributions, to vote or express consent or dissent and to
make elections and exercise rights relating to such shares or obligations
unless, in the case of payments or distributions on shares, the corporate
officer responsible for maintaining the list of shareholders or the transfer
agent of the corporation or, in the case of payments or distributions on
obligations, the treasurer or paying officer or agent has received written
notice that the holder is a minor.

         Section 3.17. Business to be Transacted at Shareholder Meetings. No
business may be transacted at an annual meeting of shareholders, other than
business that is either (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the board of directors (or
any duly authorized committee thereof), (b) otherwise properly brought before
the annual meeting by or at the direction of the board of directors (or any duly
authorized committee thereof) or (c) otherwise properly brought before the
annual meeting by any shareholder of the corporation (i) who is a shareholder of
record on the date of the giving of notice provided for in Section 3.17 and on
the record date for the determination of shareholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth in
this Section 3.17. In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a shareholder, such
shareholder must have given timely notice thereof in proper written form to the
secretary of the corporation.

         To be timely, a shareholder's notice must be delivered to or mailed and
received at the principal executive offices of the corporation not less than 90
days nor more than 120 days prior to the anniversary date of the immediately
preceding annual meeting of shareholders; provided, however, that in the event
that the annual meeting is called for a date that is not within 30 days before
or after such anniversary date, notice by the shareholder, in order to be
timely, must be so received not later than the close of business on the tenth
day following the day on which such notice of the date of the annual meeting was
first mailed.

         To be in proper written form, a shareholder's notice to the secretary
must set forth as to each matter such shareholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such shareholder, (iii) the
class or series and number of shares of capital stock of the corporation which
are owned beneficially or of record by such shareholder, (iv) a description of
all arrangements or understandings between such shareholder and any other person
or persons (including their names) in connection with the proposal of such
business by such shareholder and any material interest of such shareholder in
such business and (v) a representation that such shareholder intends to appear
in person or by proxy at the annual meeting to bring such business before the
meeting.

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         No business shall be conducted at the annual meeting of shareholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 3.17; provided, however, that once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 3.17 shall be deemed to preclude discussion
by any shareholder of any such business. If the chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.

         At a special meeting of shareholders, only such business shall be
conducted as shall have been set forth in the notice relating to the meeting. At
any meeting, matters incident to the conduct of this meeting may be voted upon
or otherwise disposed of as the presiding officer of the meeting shall determine
to be appropriate.

                                   ARTICLE IV

                               Board of Directors

         Section 4.01.  Powers; Personal Liability.

         (a) General rule. Unless otherwise provided by statute, all powers
vested by law in the corporation shall be exercised by or under the authority
of, and the business and affairs of the corporation shall be managed under the
direction of, the board of directors.

         (b) Personal liability of directors. A director of the corporation
shall not be personally liable for monetary damages, as such, for any action
taken, or any failure to take any action, unless the director has breached or
failed to perform the duties of his or her office under 42 Pa.C.S. Section 8363
[now a reference to 15 Pa.C.S. Subch. 17B] and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness. The provisions of
this subsection shall not apply to the responsibility or liability of a director
pursuant to any criminal statute, or the liability of a director for the payment
of taxes pursuant to local, state or Federal law. The provisions of this
subsection shall be effective January 27, 1987, but shall not apply to any
action filed prior to that date nor any breach of performance of duty or failure
of performance of duty by a director occurring prior to that date.

         (c) Notation of dissent. A director of the corporation who is present
at a meeting of the board of directors, or of a committee of the board, at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken on which the director is generally competent to act unless his
or her dissent is entered in the minutes of the meeting or unless the director
files his or her written dissent to the action with the secretary of the meeting
before the adjournment thereof or transmits the dissent in writing to the
secretary of the corporation immediately after the adjournment of the meeting.
The right to dissent shall not apply to a director who voted in favor of the
action. Nothing in this section shall bar a director from asserting that minutes
of the meeting incorrectly omitted his or her dissent if, promptly upon receipt
of a copy of such minutes, the director notifies the secretary, in writing, of
the asserted omission or inaccuracy.

         Section 4.02.  Qualification and Election of Directors.

         (a) Qualifications. Each director of the corporation shall be a natural
person of full age, who need not be a resident of Pennsylvania or a shareholder
of the corporation. No person shall be appointed or elected as a director
unless:

                  (1) such person is elected to fill a vacancy in the board of
         directors (including any vacancy resulting from any accordance with
         section 4.04(a); or

                  (2) the name of such person, together with such consents and
         information as may be required by the board of directors or by the
         provisions of section 4.13(b) shall have been filed with the secretary
         of the corporation.

         (b) Election of directors. Except as otherwise provided in the articles
or these bylaws, directors of the corporation shall be elected by the
shareholders. In elections for directors, voting need not be by ballot, except
upon demand made by a shareholder entitled to vote at the election and before
the voting begins. The candidates receiving the highest number of votes from


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each class or group of classes, if any, entitled to elect directors separately
up to the number of directors to be elected by the class or group of classes
shall be elected. If at any meeting of shareholders, directors of more than one
class are to be elected, each class of directors shall be elected in a separate
election.

         Section 4.03. Number and Term of Office.

         (a) Number. The board of directors shall consist of such number of
directors as may be determined from time to time by resolution of the board
adopted by a vote of three quarters of the entire board of directors.

         (b) Term of office. Each director shall hold office until the
expiration of the term for which he or she was selected and until a successor
shall have been elected and qualified, or until his or her death, resignation or
removal. A decrease in the number of directors shall not have the effect of
shortening the term of any incumbent director.

         (c) Resignations. Any director may resign at any time by giving written
notice to the corporation. Such resignation shall take effect on the date of the
receipt by the corporation of such notice or at any later time specified
therein.

         (d) Classified board of directors. The directors shall be classified in
respect of the time for which they shall severally hold office as follows:

                  (1) Each class shall be as nearly equal in number as possible.

                  (2) The term of office of at least one class shall expire in
                      each year.

                  (3) The members of each class shall be elected for a period of
                      three years.

         Section 4.04.  Vacancies.

         (a) General rule. Vacancies in the board of directors, including
vacancies resulting from an increase in the number of directors, may be filled
by a vote of a majority of the entire board of directors, or by sole remaining
director, and such person so elected shall hold office until the election of the
class for which such directors shall have been elected and until a successor
shall have been elected and qualified, or until their death, resignation or
removal.

         (b) Action by resigned directors. When one or more directors resign
from the board effective at a future date, the directors then in office,
including those who have so resigned, shall have power by the applicable vote to
fill the vacancies, the vote thereon to take effect when the resignations become
effective.

         Section 4.05.  Removal of Directors.

         (a) Removal by the directors. At any special meeting called for the
purpose of removing or electing directors, the entire board of directors, or any
class of the board, where the board is classified with respect to the power to
elect directors, or any individual director may be removed from office without
assigning any cause, as provided in the articles. In case the board or such
class of the board or any one or more directors be so removed, new directors may
be elected at the same meeting.

         (b) Removal by the board. The board of directors may declare vacant the
office of a director who has been judicially declared of unsound mind or who has
been convicted of an offense punishable by imprisonment for a term of more than
one year or if within 60 days after notice of his or her selection, the director
does not accept the office either in writing or by attending a meeting of the
board of directors.

         Section 4.06. Place of Meeting. The board of directors may hold its
meetings at such place or places within the Commonwealth of Pennsylvania, or
elsewhere as the board of directors may from time to time appoint, or as may be
designated in the notice calling the meeting.

         Section 4.07. Organization Meeting. At every meeting of the board of
directors, the chairman of the board, if there be one, or, in the case of a


                                       9
<PAGE>

vacancy in the office or absence of the chairman of the board, one of the
following officers present in the order stated: the vice chairman of the board,
if there be one, the president, the vice presidents in their order of rank and
seniority, or a person chosen by a majority of the directors present, shall act
as chairman of the meeting. The secretary, or, in the absence of the secretary,
an assistant secretary, or in the absence of the secretary and assistant
secretaries, any person appointed by the chairman of the meeting, shall act as
secretary of the meeting.

         Section 4.08. Regular Meetings. Regular meetings of the board of
directors shall be held at such time and place as shall be designated from time
to time by resolution of the board of directors.

         Section 4.09. Special Meetings. Special meetings of the board of
directors shall be held whenever called by the chairman or by two or more of the
directors.

         Section 4.10.  Quorum of and Action by Directors.

         (a) General rule. A majority of the directors in office shall be
necessary to constitute a quorum for the transaction of business and, except as
otherwise provided in the articles or these bylaws, the acts of a majority of
the directors present and voting at a meeting at which a quorum is present shall
be the acts of the board of directors.

         (b) Action by written consent. Any action required or permitted to be
taken at a meeting of the directors may be taken without a meeting if, prior or
subsequent to the action, a consent or consents thereto by all of the directors
in office is filed with the secretary of the corporation.

         Section 4.11.  Executive and Other Committees.

         (a) Establishment and powers. The board of directors may, by resolution
adopted by a majority of the directors in office, establish one or more
committees, to consist of one or more directors of the corporation. Any
committee, to the extent provided in the resolution of the board of directors,
shall have and may exercise all of the powers and authority of the board of
directors except that a committee shall not have the power or authority as to
the following:

                  (1) The submission to shareholders of any action requiring
         approval of shareholders under the Business Corporation Law.

                  (2) The creation or filling of vacancies in the board of
         directors.

                  (3) The adoption, amendment or repeal of these bylaws.

                  (4) The amendment or repeal of any resolution of the board
         that by its terms is amendable or repealable only by the board.

                  (5) Action on matters committed by a resolution of the board
         of directors to another committee of the board.

         (b) Alternate committee members. The board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee or for the purpose of any
written action by the committee. In the absence or disqualification of a member
and the alternate member or members of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another director to act at the
meeting in the place of the absent or disqualified member.

         (c) Term.  Each committee of the board shall serve at the pleasure of
the board.

         (d) Committee procedures. The term Aboard of directors or Aboard, when
used in any provision of these bylaws relating to the organization or procedures
of or the manner of taking action by the board of directors, shall be construed
to include and refer to any executive or other committee of the board.

                                       10
<PAGE>


         Section 4.12. Compensation. The board of directors shall have the
authority to fix the compensation of directors for their services as directors
and a director may be a salaried officer of the corporation.

         Section 4.13.  Nomination of Directors.

         (a) Notice required. Nominations for election of directors may be made
by any shareholder entitled to vote for the election of directors, provided that
written notice (the Notice) of such shareholder's intent to nominate a director
at the meeting is given by the shareholder and received by the secretary of the
corporation in the manner and within the time specified herein. The Notice shall
be delivered to the secretary of the corporation not less than 14 days nor more
than 50 days prior to any meeting of the shareholders called for the election of
directors; provided, however, that if less than 21 days notice of the meeting is
given to shareholders, the Notice shall be delivered to the secretary of the
corporation not later than the earlier of the seventh day following the day on
which notice of the meeting was first mailed to shareholders or the fourth day
prior to the meeting. In lieu of delivery to the secretary of the corporation,
the Notice may be mailed to the secretary of the corporation by certified mail,
return receipt requested, but shall be deemed to have been given only upon
actual receipt by the secretary of the corporation.

         (b) Contents of notice.  The notice shall be in writing and shall
contain or be accompanied by:

                  (1) the name and residence of such shareholder;

                  (2) a representation that the shareholder is a holder of
         record of the corporation's voting stock and intends to appear in
         person or by proxy at the meeting to nominate the person or persons
         specified in the Notice;

                  (3) such information regarding each nominee as would have been
         required to be included in a proxy statement filed pursuant to
         Regulation 14A of the rules and regulations established by the
         Securities and Exchange Commission under the Securities Exchange Act of
         1934 (or pursuant to any successor act or regulation) had proxies been
         solicited with respect to such nominee by the management or board of
         directors of the corporation;

                  (4) a description of all arrangements or understandings among
         the shareholder and each nominee and any other person or persons
         (naming such person or persons) pursuant to which such nomination or
         nominations are to be made by the shareholder; and

                  (5) the consent of each nominee to serve as director of the
         corporation if so elected.

         (c) Determination of compliance. If a judge or judges of election shall
not have been appointed pursuant to these bylaws, the chairman of the meeting
may, if the facts warrant, determine and declare to the meeting that any
nomination made at the meeting was not made in accordance with the foregoing
procedures and, in such event, the nomination shall be disregarded. Any decision
by the chairman of the meeting shall be conclusive and binding upon all
shareholders of the corporation for any purpose.

         (d) Exception. The above procedures of this section shall not apply to
nominations with respect to which proxies shall have been solicited pursuant to
a proxy statement filed pursuant to Regulation 14A of the rules and regulations
adopted by the Securities and Exchange Commission under the Securities Exchange
Act of 1934, or pursuant to any successor act or regulation.

                                    ARTICLE V

                                    Officers

         Section 5.01.  Officers Generally.

         (a) Number, qualifications and designation. The officers of the
corporation shall be a president, one or more vice presidents, a secretary, a
treasurer, and such other officers as may be elected in accordance with the

                                       11
<PAGE>

provisions of Section 5.03. Officers may, but need not be, directors or
shareholders of the corporation. The president and secretary shall be natural
persons of full age. The treasurer may be a corporation, but if a natural person
shall be of full age. The board of directors may elect from among the members of
the board a chairman of the board and a vice chairman of the board who shall be
officers of the corporation. Any number of offices may be held by the same
person.

         (b) Resignations. Any officer may resign at any time by giving written
notice to the corporation. Any such resignation shall be effective at the date
of the receipt thereof by the corporation or at any later time specified
therein.

         (c)  Bonding. The corporation may secure the fidelity of any or all of
its officers by bond or otherwise.

         (d) Standard of care. In lieu of the standards of conduct otherwise
provided by law, officers of the corporation shall be subject to the same
standards of conduct, including standards of care and loyalty and rights of
justifiable reliance, as shall at the time be applicable to directors of the
corporation. An officer of the corporation shall not be personally liable, as
such, to the corporation or its shareholders for monetary damages (including,
without limitation, any judgment, amount paid in settlement, penalty, punitive
damages or expense of any nature (including, without limitation, attorneys fees
and disbursements) for any action taken, or any failure to take any action,
unless the officer has breached or failed to perform the duties of his or her
office under the articles, these bylaws, or the applicable provisions of law and
the breach or failure to perform constitutes self-dealing, willful misconduct or
recklessness. The provisions of this subsection shall not apply to the
responsibility or liability of an officer pursuant to any criminal statute or
for the payment of taxes pursuant to local, state or federal law.

         Section 5.02. Election and Term of Office. The officers of the
corporation, except those elected by delegated authority pursuant to Section
5.03, shall be elected annually by the board of directors, and each such officer
shall hold office for a term of one year and until a successor shall have been
duly chosen and qualified, or until his or her death, resignation, or removal.

         Section 5.03. Subordinate Officers, Committees and Agents. The board of
directors may from time to time elect such other officers and appoint such
committees, employees or other agents as the business of the corporation may
require, including one or more assistant secretaries, and one or more assistant
treasurers, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these bylaws, or as the board of
directors may from time to time determine. The board of directors may delegate
to any officer or committee the power to elect subordinate officers and to
retain or appoint employees or other agents, or committees thereof, and to
prescribe the authority and duties of such subordinate officers, committees,
employees or other agents. Any delegation by the board of directors of the power
to elect, retain or appoint subordinate officers, committees, employees or other
agents, shall be deemed to include the power to remove such subordinate.

         Section 5.04. Removal of Officers and Agents. Any officer or agent of
the corporation may be removed by the board with or without cause. The removal
shall be without prejudice to the contract rights, if any, of any person so
removed. Election or appointment of an officer or agent shall not of itself
create contract rights.

         Section 5.05. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause, may be filled by the
board of directors or by the officer or committee to which the power to fill
such office has been delegated pursuant to Section 5.03, as the case may be, and
if the office is one for which these bylaws prescribe a term, shall be filled
for the unexpired portion of the term.

         Section 5.06. Authority. All officers of the corporation as between
themselves and the corporation, shall have such authority and perform such
duties in the management of the corporation as may be provided by or pursuant to
resolutions or orders of the board of directors, or, in the absence of
controlling provisions in the resolutions or orders of the board of directors,
as may be determined by or pursuant to these bylaws.

         Section 5.07. The Chairman and Vice Chairman of the Board. The chairman
of the board, or, in the absence of the chairman, the vice chairman of the
board, shall preside at all meetings of shareholders and of the board of
directors, and shall perform such other duties as may from time to time be
requested by the board of directors.

                                       12
<PAGE>


         Section 5.08. The President. The president shall be the chief executive
officer of the corporation and shall have general supervision over the business
and operations of the corporation, subject, however, to the control of the board
of directors. The president shall sign, execute, and acknowledge, in the name of
the corporation, deeds, mortgages, bonds, contracts or other instruments
authorized by the board of directors, except in cases where the signing and
execution thereof shall be expressly delegated by the board of directors or
these bylaws, to some other officer or agent of the corporation; and, in
general, shall perform all duties incident to the office of president and such
other duties as from time to time may be assigned by the board of directors.

         Section 5.09. The Vice Presidents. The vice presidents shall perform
the duties of the president in the absence of the president and such other
duties as may from time to time be assigned to them by the board of directors or
the president.

         Section 5.10. The Secretary. The secretary or an assistant secretary
shall attend all meetings of the shareholders and of the board of directors and
all committees thereof and shall record all the votes of the shareholders and of
the directors and the minutes of the meetings of the shareholders and of the
board of directors and of committees of the board in a book or books to be kept
for that purpose; shall see that notices are given and records and reports
properly kept and filed by the corporation as required by law; shall be the
custodian of the seal of the corporation and see that it is affixed to all
documents to be executed on behalf of the corporation under its seal; and, in
general, shall perform all duties incident to the office of secretary, and such
other duties as may from time to time be assigned by the board of directors, the
chairman or the president.

         Section 5.11. The Treasurer. The treasurer or an assistant treasurer
shall have or provide for the custody of the funds or other property of the
corporation; shall collect and receive or provide for the collection and receipt
of moneys earned by or in any manner due to or received by the corporation;
shall deposit all funds in his or her custody as treasurer in such banks or
other places of deposit as the board of directors may from time to time
designate; shall, whenever so required by the board of directors, render an
account showing all transactions as treasurer, and the financial condition of
the corporation; and, in general, shall discharge such other duties as may from
time to time be assigned by the board of directors or the president.

         Section 5.12. Salaries. The salaries of the officers elected by the
board of directors shall be fixed from time to time by the board of directors or
by such officer as may be designated by resolution of the board. The salaries or
other compensation of any other officers, employees and other agents shall be
fixed from time to time by the officer or committee to which the power to elect
such officers or to retain or appoint such employees or other agents has been
delegated pursuant to Section 5.03. No officer shall be prevented from receiving
such salary or other compensation by reason of the fact that the officer is also
a director of the corporation.

                                   ARTICLE VI

                      Certificates of Stock, Transfer, Etc.

     Section 6.01. Share Certificates. Certificates for shares of the
corporation shall be in such form as approved by the board of directors, and
shall state that the corporation is incorporated under the laws of the
Commonwealth of Pennsylvania, the name of the person to whom issued, and the
number and class of shares and the designation of the series (if any) that the
certificate represents. The share transfer records and the blank share
certificates shall be kept by the secretary or by any transfer agency or
registrar designated by the board of directors for that purpose.

     Section 6.02. Issuance. The share certificates of the corporation shall be
numbered and registered in the share register or transfer books of the
corporation as they are issued. They shall be signed by the president or a vice
president and by the secretary or an assistant secretary or the treasurer or an
assistant treasurer, and shall bear the corporate seal, which may be a
facsimile, engraved or printed; but where such certificate is signed by a
transfer agent or a registrar the signature of any corporate officer upon such
certificate may be a facsimile, engraved or printed. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon any share certificate shall have ceased to be such officer,
transfer agent or registrar because of death, resignation or otherwise, before
the certificate is issued, it may be issued with the same effect as if the
officer, transfer agent or registrar had not ceased to be such at the date of


                                       13
<PAGE>

its issue. The provisions of this Section 6.02 shall be subject to any
inconsistent or contrary agreement in effect at the time between the corporation
and any transfer agent or registrar.

         Section 6.03. Transfer. Transfers of shares shall be made on the share
register or transfer books of the corporation upon surrender of the certificate
therefor, endorsed by the person named in the certificate or by an attorney
lawfully constituted in writing. No transfer shall be made inconsistent with the
provisions of the Uniform Commercial Code, 13 Pa.C.S. " 8101 et seq., and its
amendments and supplements.

         Section 6.04. Record Holder of Shares. The corporation shall be
entitled to treat the person in whose name any share or shares of the
corporation stand on the books of the corporation as the absolute owner thereof,
and shall not be bound to recognize any equitable or other claim to, or interest
in, such share or shares on the part of any other person.

         Section 6.05. Lost, Destroyed or Mutilated Certificates. The holder of
any shares of the corporation shall immediately notify the corporation of any
loss, destruction or mutilation of the certificate therefor, and the board of
directors may, in its discretion, cause a new certificate or certificates to be
issued to such holder, in case of mutilation of the certificate, upon the
surrender of the mutilated certificate, or, in case of loss or destruction of
the certificate, upon satisfactory proof of such loss or destruction, and, if
the board of directors shall so determine, the deposit of a bond in such form
and in such sum, and with such surety or sureties, as it may direct.

         Section 6.06. Rights Agreement. Rights issued pursuant to the Rights
Agreement, dated February 19, 1988, between the corporation and Mellon Bank
(East) N.A. (the "Rights Agreement") may be transferred by an Acquiring Person
or an Associate or Affiliate of an Acquiring Person (as such terms are defined
in the Rights Agreement) only in accordance with the terms of, and subject to
the restrictions contained in, the Rights Agreement.


                                   ARTICLE VII

                  Indemnification of Directors, Officers, Etc.

         Section 7.01.  Scope of Indemnification.

         (a) The corporation shall indemnify an indemnified representative
against any liability incurred in connection with any proceeding in which the
indemnified representative may be involved as a party or otherwise, by reason of
the fact that such person is or was serving in an indemnified capacity,
including without limitation liabilities resulting from any actual or alleged
breach or neglect of duty, error, misstatement or misleading statement,
negligence, gross negligence or act giving rise to strict or products liability,
except where such indemnification is expressly prohibited by applicable law or
where the conduct of the indemnified representative has been determined pursuant
to Section 7.06 to constitute willful misconduct or recklessness within the
meaning of 42 Pa. C.S. Section 8365(b) [now a reference to 15 Pa.C.S. Section
1746(b)] or any superseding provision of the law, sufficient in the
circumstances to bar indemnification against liabilities arising from the
conduct.

         (b) If an indemnified representative is entitled to indemnification in
respect of a portion, but not all, of any liabilities to which such person may
be subject, the corporation shall indemnify such indemnified representative to
the maximum extent for such portion of the liabilities.

         (c) The termination of a proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the indemnified representative is not entitled
to indemnification.

         (d)  For purposes of this Article:

                  (1) "indemnified capacity" shall mean any and all past,
         present and future service by an indemnified representative in one or
         more capacities as a director, officer, employee or agent of the
         corporation, or, at the request of the corporation, as a director,
         officer, employee, agent, fiduciary or trustee of another corporation,
         partnership, joint venture, trust, employee benefit plan or other
         entity or enterprise;


                                       14
<PAGE>


                  (2) "indemnified representative" shall mean any and all
         directors and officers of the corporation and any other person
         specifically designated as an indemnified representative by the board
         of directors of the corporation under these bylaws (which may, but need
         not, include any person serving at the request of the corporation, as a
         director, officer, employee, agent, fiduciary or trustee of another
         corporation, partnership, joint venture, trust, employee benefit plan
         or other entity or enterprise);

                  (3) "liability" means any damage, judgment, amount paid in
         settlement, fine, penalty, punitive damages, excise tax assessed with
         respect to an employee benefit plan, or cost or expense of any nature
         (including, without limitation, attorney's fees and disbursements); and

                  (4) "proceeding" means any threatened, pending or completed
         action, suit, appeal or other proceeding of any nature, whether civil,
         criminal, administrative or investigative, whether formal or informal,
         and whether brought by or in the right of the corporation, a class of
         its security holders or otherwise.

         Section 7.02. Proceedings Initiated by Indemnified Representatives.
Notwithstanding any other provisions of this Article, the corporation shall not
indemnify under this Article an indemnified representative for any liability
incurred in a proceeding initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an intervenor or
amicus curiae by the person seeking indemnification unless such initiation of or
participation in the proceedings is authorized, either before or after its
commencement, by the affirmative vote of a majority of the directors in office.
This section does not apply to reimbursement of expenses incurred in
successfully prosecuting or defending an arbitration under Section 7.06 of this
Article or otherwise successfully prosecuting or defending the rights of an
indemnified representative granted by or pursuant to this Article.

         Section 7.03. Advancing Expenses. The corporation shall pay the
expenses (including attorney's fees and disbursements) incurred in good faith by
an indemnified representative in advance of the final disposition of a
proceeding described in Section 7.01 or 7.02 of this Article upon receipt of an
undertaking by or on behalf of the indemnified representative to repay such
amount if it shall ultimately be determined pursuant to Section 7.06 of this
Article that such person is not entitled to be indemnified by the corporation
pursuant to this Article. The financial ability of an indemnified representative
to repay in advance shall not be a prerequisite to the making of such advance.

         Section 7.04. Securing of Indemnification Obligations. To further
effect, satisfy or secure the indemnification obligations provided herein or
otherwise, the corporation may maintain insurance, obtain a letter of credit,
act as self-insurer, create a reserve, trust, escrow, cash collateral or other
fund or account, enter into indemnification agreements, pledge or grant a
security interest in any assets or properties of the corporation, or use any
other mechanism or arrangement whatsoever in such amounts, at such costs, and
upon such other terms and conditions as the board of directors shall deem
appropriate. Absent fraud, the determination of the board of directors with
respect to such amounts, costs, terms and conditions shall be conclusive against
all security holders, officers and directors and shall not be subject to
voidability.

         Section 7.05. Payment of Indemnification. An indemnified representative
shall be entitled to indemnification within 30 days after a written request for
indemnification has been delivered to the secretary of the corporation.

         Section 7.06. Arbitration. Any dispute related to the right of
indemnification, contribution or advancement of expenses as provided under this
Article, except with respect to indemnification for liabilities arising under
the Securities Act of 1933 that the corporation has undertaken to submit to a
court for adjudication, shall be decided only by arbitration in the metropolitan
area in which the corporation's executive offices are located, in accordance
with the commercial arbitration rules then in effect of the American Arbitration
Association before a panel of three arbitrators, one of whom shall be selected
by the corporation, the second of whom shall be selected by the indemnified
representative and the third of whom shall be selected by the other two
arbitrators. In the absence of the American Arbitration Association or if for
any reason arbitration under the arbitration rules of the American Arbitration
Association cannot be initiated, or if the arbitrators selected by the
corporation and the indemnified representative cannot agree on the selection of
a third arbitrator within 30 days after such time as the corporation and the
indemnified representative have each been notified of the selection of the
others' arbitrator, the necessary arbitrator or arbitrators shall be selected by


                                       15
<PAGE>

the presiding judge of the court of general jurisdiction in such metropolitan
area. Each arbitrator selected as provided herein is required to be or have been
a director or executive officer or a corporation whose shares of common stock
were listed during at least one year of such service on the New York Stock
Exchange or the American Stock Exchange or quoted on the National Association of
Securities Dealers Automated Quotation System. The party or parties challenging
the right of an indemnified representative to the benefits of this Article shall
have the burden of proof. The corporation shall reimburse an indemnified
representative for the expenses (including attorney's fees and disbursements)
incurred in successfully prosecuting or defending such arbitration. Any award
entered by the arbitrators shall be final, binding and nonappealable and
judgment may be entered thereon by any party in accordance with applicable law
in any court of competent jurisdiction. This arbitration provision shall be
specifically enforceable.

         Section 7.07. Contribution. If the indemnification provided for in this
Article or otherwise is unavailable for any reason, the corporation shall
contribute to the liabilities to which the indemnified representative may be
subject in such proportion as is appropriate to reflect the intent of this
Article or otherwise.

         Section 7.08. Discharge of Duty. An indemnified representative shall be
deemed to have discharged such person's duty to the corporation if he or she has
relied in good faith on information, opinions, reports or statements, including
financial statements and other financial data, in each case prepared or
presented by any of the following:

                  (1) one or more officers or employees of the corporation whom
         the indemnified representative reasonably believes to be reliable and
         competent with respect to the matter presented;

                  (2) legal counsel, public accountants or other persons as to
         matters that the indemnified representative reasonably believes are
         within the person's professional or expert competence; or

                  (3) a committee of the board of directors on which he or she
         does not serve as to matters within its area of designated authority,
         which committee he or she reasonably believes to merit confidence.

         Section 7.09. Contract Rights; Amendment or Repeal. All rights to
indemnification, contribution and advancement of expense under this Article
shall be deemed a contract between the corporation and the indemnified
representative pursuant to which the corporation and each indemnified
representative intend to be legally bound. Any repeal, amendment or modification
hereof shall be prospective only and shall not affect any rights or obligations
then existing.

         Section 7.10. Scope of Articles. The rights granted by this Article
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expense may be entitled under any statute,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in an indemnified capacity and as to action in any other capacity. The
indemnification and advancement of expenses provided by or granted pursuant to
this Article shall continue as to a person who has ceased to be an indemnified
representative in respect to matters arising prior to such time, and shall inure
to the benefit of the heirs, executors, administrators and personal
representatives of such a person.

         Section 7.11. Reliance of Provisions. Each person who shall act as an
indemnified representative of the corporation shall be deemed to be doing so in
reliance upon the rights provided by this Article.

         Section 7.12. Interpretation. The provisions of this Article have been
approved and ratified by the shareholders of this corporation and are intended
to constitute bylaws authorized by Section 410F of the Pennsylvania Business
Corporation Law and 42 Pa. C.S. Section 8365 [now references to 15 Pa.C.S.
Section 1746 and 1750].


                                       16
<PAGE>


                                  ARTICLE VIII

                                  Miscellaneous

         Section 8.01. Corporate Seal. The corporation shall have a corporate
seal in the form of a circle containing the name of the corporation, the year of
incorporation and such other details as may be approved by the board of
directors.

         Section 8.02. Checks. All checks, notes, bills of exchange or other
orders in writing shall be signed by such person or persons as the board of
directors or any person authorized by resolution of the board of directors may
from time to time designate.

         Section 8.03.  Contracts.

         (a) General rule. Except as otherwise provided in the Business
Corporation Law in the case of transactions that require action by the
shareholders, the board of directors may authorize any officer or officers,
agent or agents, to enter into any contract or to execute or deliver any
instrument on behalf of the corporation, and such authority may be general or
confined to specific instances.

         (b) Statutory form of execution of instruments. Any note, mortgage,
evidence of indebtedness, contract or other document, or any assignment or
endorsement thereof, executed or entered into between the corporation and any
other person, when signed by the chairman, the president or vice president and
secretary or assistant secretary or treasurer or assistant treasurer of the
corporation, shall be held to have been properly executed for and in behalf of
the corporation, without prejudice to the rights of the corporation against any
person who shall have executed the instrument in excess of his or her actual
authority.

         Section 8.04.  Interested Directors or Officers; Quorum.

         (a) General rule. A contract or transaction between the corporation and
one or more of its directors or officers or between the corporation and any
other corporation, partnership, joint venture, trust, or other enterprise in
which one or more of its directors or officers are directors or officers, or
have a financial or other interest, shall not be void or voidable solely for
that reason, or solely because the director or officer is present at or
participates in the meeting of the board of directors which authorizes the
contract or transaction, or solely because his, her or their votes are counted
for such purpose, if:

                  (1) The material facts as to the relationship or interest and
         as to the contract or transaction are disclosed or are known to the
         board of directors and the board authorizes the contract or transaction
         by the affirmative votes of a majority of the disinterested directors
         even though the disinterested directors are less than a quorum; or

                  (2) The material facts as to his or her relationship or
         interest and as to the contract or transaction are disclosed or are
         known to the shareholders entitled to vote thereon, and the contract or
         transaction is specifically approved in good faith by vote of those
         shareholders; or

                  (3) The contract or transaction is fair as to the corporation
         as of the time it is authorized, approved or ratified, by the board of
         directors or the shareholders.

         (b) Quorum. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of directors
which authorizes a contract or transaction specified in subsection (a).

         Section 8.05. Deposits. All funds of the corporation shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies, or other depositaries as the board of directors may approve or
designate, and all such funds shall be withdrawn only upon checks signed by such
one or more officers or employees as the board of directors shall from time to
time designate.


                                       17
<PAGE>

         Section 8.06.  Corporate Records.

         (a) Required records. The corporation shall keep complete and accurate
books and records of accounts, minutes of the proceedings of the incorporators,
shareholders and directors and a share register giving the names and addresses
of all shareholders and the number and class of shares held by each. The share
register shall be kept at the registered office of the corporation in the
Commonwealth of Pennsylvania or at its principal place of business wherever
situated or at the office of its registrar or transfer agent. Any books, minutes
or other records may be in written form or any other form capable of being
converted into written form within a reasonable time.

         (b) Right of inspection. Every shareholder shall, upon written verified
demand stating the purpose thereof, have a right to examine, in person or by
agent or attorney, during the usual hours for business, for any proper purpose,
the share register, books and records of account, and records of the proceedings
of the incorporators, shareholders and directors and to make copies or extracts
therefrom. A proper purpose shall mean a purpose reasonably related to the
interest of the person as a shareholder. In every instance where an attorney or
other agent is the person who seeks the right of inspection, the demand shall be
accompanied by a verified power of attorney or such other writing that
authorizes the attorney or other agent to so act on behalf of the shareholder.
The demand shall be directed to the corporation at its registered office in the
Commonwealth of Pennsylvania or at its principal place of business, wherever
situated.

         Section 8.07. Amendment of Bylaws. These bylaws may be amended or
repealed, or new bylaws may be adopted, either (i) by vote of the shareholders
in accordance with the articles at any duly organized annual or special meeting
of shareholders, or (ii), with respect to those matters that are not by statute
committed expressly to the shareholders and regardless of whether the
shareholders have previously adopted or approved the bylaw being amended or
repealed, by vote of majority of the board of directors of the corporation in
office at any regular or special meeting of directors. Any change in these
bylaws shall take effect when adopted unless otherwise provided in the
resolution effecting the change. See Section 2.03(b) (relating to notice of
action by shareholders on bylaws).



                                       18

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>EXHIBIT 5.1
<TEXT>


<PAGE>
                                                                    Exhibit 5.1



August 3, 2000


Philadelphia Suburban Corporation
762 Lancaster Avenue
Bryn Mawr, Pennsylvania  19010

Re:               Philadelphia Suburban Corporation - Registration
                  Statement on Form S-3
                  ---------------------

Ladies and Gentlemen:

We have acted as counsel to Philadelphia Suburban Corporation, a Pennsylvania
corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-3 (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the issuance, in a public offering by the Company of up
to 1,150,000 shares (the "Shares") of the Company's common stock, par value $.50
per share. We have examined such records, documents, statutes and decisions as
we have deemed relevant in rendering this opinion.

Our opinion set forth below is limited to the Business Corporation Law of 1988,
as amended, of the Commonwealth of Pennsylvania.

In our opinion, the Shares, when issued and sold as described in the
Registration Statement, will be legally issued, fully paid and non-assessable.

We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to our firm under the heading "Legal Matters"
contained in the Registration Statement. In giving such opinion, we do not
thereby admit that we are acting within the category of persons whose consent is
required under Section 7 of the Act or the rules or regulations of the
Securities and Exchange Commission thereunder.

Very truly yours,



Morgan, Lewis & Bockius LLP






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>


<PAGE>
                                                                  Exhibit 23.2


The Board of Directors
Philadelphia Suburban Corporation


We consent to incorporation by reference in this Registration Statement on Form
S-3 of Philadelphia Suburban Corporation of our report dated January 31, 2000,
relating to the consolidated balance sheets and statements of capitalization of
Philadelphia Suburban Corporation and subsidiaries as of December 31, 1999 and
1998 and the related consolidated statements of income and comprehensive income
and cash flow for each of the years in the three-year period ended December 31,
1999, which report is included in the December 31, 1999 Annual Report on Form
10-K of Philadelphia Suburban Corporation which is incorporated by reference in
this registration statement on Form S-3.

We also consent to the reference to our firm under the heading "Experts"
appearing in this registration statement on Form S-3.


/s/ KPMG LLP
Philadelphia, Pennsylvania


August 3, 2000



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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