SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

[Amendment No. ............................]

Filed by the Registrant / /
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

PHILADELPHIA SUBURBAN CORPORATION
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(Name of Registrant as Specified in Its Charter)

Roy H. Stahl
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(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).

/ / $500 per each  party to the  controversy  pursuant  to  Exchange  Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*

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4) Proposed maximum aggregate value of transaction:

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*Set forth the amount on which the filing fee is calculated and state how it
was determined.

/X/ Check box if any part of the fee is offset as  provided  by  Exchange  Act
Rule  0-11(a)(2)  and identify the filing for which the  offsetting  fee was
paid  previously.  Identify the previous  filing by  registration  statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid: $125
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2) Form Schedule or Registration Statement No.: Preliminary Proxy
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3) Filing Party: Philadelphia Suburban Corporation
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4) Date Filed: March 8, 1996
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PHILADELPHIA SUBURBAN CORPORATION 
762 W. Lancaster Avenue 
Bryn Mawr, Pennsylvania 19010 

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

Notice of Annual Meeting of Shareholders 
To Be Held May 16, 1996 

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

TO THE SHAREHOLDERS OF 
PHILADELPHIA SUBURBAN CORPORATION: 

Notice is hereby given that the Annual Meeting of Shareholders of 
PHILADELPHIA SUBURBAN CORPORATION will be held at the Company's principal 
offices, 762 W. Lancaster Avenue, Bryn Mawr, Pennsylvania 19010, at 10:00 
A.M., local time, on Thursday, May 16, 1996, for the following purposes: 

1. To elect three directors; 
2. To approve the adoption by the Board of Directors of Amendment 
1994-2 to the Company's 1994 Equity Compensation Plan; 
3. To approve the amendment to the Company's Amended and Restated 
Articles of Incorporation to increase the number of shares of the 
Company's Common Stock authorized for issuance from 20,000,000 to 
40,000,000; and 
4. To transact such other business as may properly come before the 
meeting or any adjournments thereof. 

Only shareholders of record at the close of business on March 18, 1996 
will be entitled to notice of, and to vote at, the Annual Meeting and at any 
adjournments thereof. 

By order of the Board of Directors, 

PATRICIA M. MYCEK 
Secretary 

April 1, 1996

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REGARDLESS OF WHETHER OR NOT THEY PLAN TO ATTEND THE MEETING, SHAREHOLDERS ARE
URGED TO COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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PHILADELPHIA SUBURBAN CORPORATION 
762 W. Lancaster Avenue 
Bryn Mawr, Pennsylvania 19010 

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

PROXY STATEMENT

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

This proxy statement is furnished in connection with the solicitation of 
proxies by the Board of Directors of Philadelphia Suburban Corporation (the 
"Company") to be used at the Annual Meeting of Shareholders to be held May 
16, 1996 and at any adjournments thereof. This proxy statement and the 
enclosed proxy are being mailed to shareholders on or about April 1, 1996. 

The cost of soliciting proxies will be paid by the Company, which has 
arranged for reimbursement, at the rate suggested by the New York Stock 
Exchange, of brokerage houses, nominees, custodians and fiduciaries for the 
forwarding of proxy materials to the beneficial owners of shares held of 
record. In addition, the Company has retained the firm of Corporate Investor 
Communications, Inc. to assist in the solicitation of proxies from (i) 
brokers, bank nominees and other institutional holders, and (ii) individual 
holders of record. The fee to Corporate Investor Communications, Inc. for 
normal proxy solicitation is $4,000 plus expenses, which will be paid by the 
Company. Directors, officers and regular employees of the Company may also 
solicit proxies, although no additional compensation will be paid by the 
Company for such efforts. 

The Annual Report to Shareholders for the year ended December 31, 1995, 
including financial statements and other information with respect to the 
Company and its subsidiaries, was mailed with this proxy statement by 
combined first class bulk mailing to shareholders of record as of March 18, 
1996. Additional copies of the Annual Report may be obtained by writing to 
the Company. KPMG Peat Marwick, the Company's independent certified public 
accountants, has been selected by the Board of Directors to continue in such 
capacity for the current year. Representatives of that firm are expected to 
be present at the meeting and will be available to respond to appropriate 
questions. 

PURPOSES OF THE MEETING 

As the meeting is the Annual Meeting of Shareholders, the shareholders of 
the Company will be requested to elect three directors to hold office as 
provided by law and the Company's Bylaws. The shareholders will also be 
requested to approve the adoption by the Board of Directors of Amendment 
1994-2 to the 1994 Equity Compensation Plan and to approve the amendment to 
the Company's Amended and Restated Articles of Incorporation, which would 
increase the number of shares of the Company's common stock ("Common Stock") 
authorized for issuance from 20,000,000 to 40,000,000. 

1 

VOTING AT THE MEETING 

Holders of shares of the Company's Common Stock of record at the close of 
business on March 18, 1996 are entitled to vote at the meeting. As of that 
date, there were 12,348,049 shares of Common Stock outstanding and entitled 
to be voted at the meeting. Each shareholder entitled to vote shall have the 
right to one vote on each matter presented at the meeting for each share of 
Common Stock outstanding in such shareholder's name. The presence in person 
or by proxy of shareholders entitled to cast a majority of all votes entitled 
to be cast will constitute a quorum at the meeting. 

The holders of a majority of the shares entitled to vote, present in 
person or represented by proxy, constitute a quorum. Directors are to be 
elected by a plurality of the votes cast at the meeting. The affirmative vote 
of the holders of a majority of the shares present in person or represented 
by proxy entitled to vote at the meeting is required to approve Proposals 2 
and 3 or to take action with respect to any other matter that may properly be 
brought before the meeting. Shares cannot be voted at the meeting unless the 
holder of record is present in person or by proxy. The enclosed proxy card is 
a means by which a shareholder may authorize the voting of his or her shares 
at the meeting. The shares of Common Stock represented by each properly 
executed proxy card will be voted at the meeting in accordance with each 
shareholder's direction. Shareholders are urged to specify their choices by 
marking the appropriate boxes on the enclosed proxy card; if no choice has 
been specified, the shares will be voted as recommended by the Board of 
Directors. If any other matters are properly presented to the meeting for 
action, the proxy holders will vote the proxies (which confer discretionary 
authority to vote on such matters) in accordance with their best judgment. 

With regard to the election of directors, votes may be cast in favor or 
withheld; votes that are withheld will be excluded entirely from the vote and 
will have no effect, other than for purposes of determining the presence of a 
quorum. Abstentions may be specified on Proposals 2 and 3 (but not for the 
election of directors). Abstentions will be considered present and entitled 
to vote at the meeting, but will not be considered a vote cast on Proposals 2 
and 3 and, therefore, will have no effect on the vote on such Proposals. 
Brokers that are member firms of the New York Stock Exchange ("NYSE") and who 
hold shares in street name for customers, but have not received instructions 
from a beneficial owner, have the authority under the rules of the NYSE to 
vote those shares with respect to the election of directors, but not with 
respect to Proposals 2 and 3. Such shares which are not voted by brokers will 
be considered present and entitled to vote at the meeting, but will not be 
considered a vote cast on Proposals 2 and 3 and, therefore, will have no 
effect on the vote on such Proposals. 

Execution of the accompanying proxy will not affect a shareholder's right 
to attend the meeting and vote in person. Any shareholder giving a proxy has 
the right to revoke it by giving written notice of revocation to the 
Secretary of the Company at any time before the proxy is voted by executing a 
proxy bearing a later date, which is voted, at the meeting, or by attending 
the meeting and voting in person. 

Your proxy vote is important. Accordingly, you are asked to complete, sign 
and return the accompanying proxy card regardless of whether or not you plan 
to attend the meeting. 

Employees will not receive a separate proxy for shares owned (subject to 
vesting) under the Company's Thrift Plan, as the trustee for the Thrift Plan 
will vote the shares of Common Stock held thereunder. 

2 

(PROPOSAL NO. 1) 

ELECTION OF DIRECTORS 

VOTING ON PROPOSAL NO. 1. 

The Board of Directors is divided into three classes. One class is elected 
each year to hold office for a three-year term and until successors of such 
class are duly elected and qualified, except in the event of death, 
resignation or removal. Therefore, only Messrs. Boyer, DeBenedictis and 
DiBona, who are current directors and whose terms expire in 1996, are being 
nominated for election as directors at the Annual Meeting for terms expiring 
in 1999. 

Three directors are to be elected by a plurality of the votes cast at the 
Annual Meeting, and seven directors will continue to serve in accordance with 
their prior election. At the meeting, proxies in the accompanying form, 
properly executed, will be voted for the election of the three nominees 
listed below, unless authority to do so has been withheld in the manner 
specified in the instruction on the proxy card. Discretionary authority is 
reserved to cast votes for the election of a substitute should any nominee be 
unable or unwilling to serve as a director. Each nominee has stated his 
willingness to serve and the Company believes that all of the nominees will 
be available to serve. 

The Board of Directors recommends that the shareholders vote FOR the 
election of Messrs. Boyer, DeBenedictis and DiBona as directors. 

GENERAL INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES 

The Board of Directors held six meetings in 1995. The Company's Bylaws
provide that the Board of Directors, by resolution adopted by a majority of the
whole Board, may designate an Executive Committee and one or more other
committees, with each such committee to consist of two or more directors. The
Board of Directors annually elects from its members the Executive, Audit,
Executive Compensation and Employee Benefits, Nominating, and Pension
Committees. Each incumbent director, for the period served in 1995, attended at
least 75% of the aggregate of all meetings of the Board and the Committees on
which he or she served, with the exception of Mr. Elia who was unable to attend
a Board and Committee meeting due to a death in his family.

Executive Committee. The Company's Bylaws provide that the Executive 
Committee shall have and exercise all of the authority of the Board in the 
management of the business and affairs of the Company, with certain 
exceptions. The Executive Committee is intended to serve in the event that 
action by the Board of Directors is necessary or desirable between regular 
meetings of the Board, or at a time when convening a meeting of the entire 
Board is not practical, and to make recommendations to the entire Board with 
respect to various matters. The Executive Committee did not meet in 1995. The 
Executive Committee currently has six members, and the Chairman of the 
Company serves as Chairman of the Executive Committee. 

3

Audit Committee. The Audit Committee is composed of four directors who are 
not officers of the Company or any of its subsidiaries. It meets periodically 
with the Company's financial officers and independent certified public 
accountants to review the scope of auditing procedures and the policies 
relating to the Company's accounting procedures and controls. The Committee 
also provides general oversight with respect to the accounting principles 
employed in the Company's financial reporting. The Audit Committee held two 
meetings in 1995. 

Executive Compensation and Employee Benefits Committee. The Executive 
Compensation and Employee Benefits Committee is composed of three members of 
the Board who are not officers of the Company or any of its subsidiaries. The 
Executive Compensation and Employee Benefits Committee has the power to 
administer the Company's 1982 and 1988 Stock Option Plans and to administer 
and make awards of stock options, dividend equivalents and restricted stock 
under the Company's 1994 Equity Compensation Plan. In addition, the Executive 
Compensation and Employee Benefits Committee reviews the recommendations of 
the Company's Chief Executive Officer as to appropriate compensation of the 
Company's officers (other than the Chief Executive Officer) and key personnel 
and recommends to the Board the compensation of such officers and the 
Company's Chief Executive Officer for the ensuing year. The Executive 
Compensation and Employee Benefits Committee held three meetings in 1995. 

Nominating Committee. The Nominating Committee reviews and makes 
recommendations to the Board of Directors with respect to candidates for 
director of the Company. The Nominating Committee has three members and held 
two meetings during 1995. It is the present policy of the Nominating 
Committee to consider nominees who are recommended by shareholders as 
additional members of the Board or to fill vacancies on the Board. 
Shareholders desiring to submit the names of, and any pertinent data with 
respect to, such nominees should send this information in writing to the 
Chairman of the Nominating Committee in care of the Company. See 
"Requirements for Advance Notifications of Nominations." 

Pension Committee. The Pension Committee serves as the Plan Administrator 
for the Company's qualified benefit plans. The Committee reviews and 
recommends to the Board any actions to be taken by the Board in the discharge 
of the Board's fiduciary responsibilities under the Company's qualified 
benefit plans and meets periodically with the Company's financial, legal, 
actuarial, and investment advisors. The Committee consists of four members 
and met four times in 1995. 

The current members of the Committees of the Board of Directors are as 
follows: 

Executive Compensation and                 Audit 
Executive Committee         Employee Benefits Committee              Committee 
- ----------------------      ----------------------------     -------------------------

Nicholas DeBenedictis*      John F. McCaughan*                John H. Austin, Jr.* 
John H. Austin, Jr.         G. Fred DiBona, Jr.               John W. Boyer, Jr. 
John W. Boyer, Jr.          Joseph C. Ladd                    Richard H. Glanton, Esq 
G. Fred DiBona, Jr.                                           Harvey J. Wilson 
Joseph C. Ladd 
John F. McCaughan 

4

Pension Committee         Nominating Committee 
-------------------------   -------------------------       
Joseph C. Ladd*             G. Fred DiBona, Jr.* 
John W. Boyer, Jr.          Mary C. Carroll 
Nicholas DeBenedictis       Nicholas DeBenedictis 
Claudio Elia 

- ---------- 
*Chairman 

REQUIREMENTS FOR ADVANCE NOTIFICATION OF NOMINATIONS 

Nominations for election of directors may be made at the Annual Meeting by 
any shareholder entitled to vote for the election of directors, provided that 
written notice (the "Notice") of the shareholder's intent to nominate a 
director at the meeting is filed with the Secretary of the Company prior to 
the Annual Meeting in accordance with provisions of the Company's Amended and 
Restated Articles of Incorporation and Bylaws. 

Section 4.13 of the Company's Bylaws requires the Notice to be received by 
the Secretary of the Company not less than 14 days nor more than 50 days 
prior to any meeting of the shareholders called for the election of 
directors, with certain exceptions. These notice requirements do not apply to 
nominations for which proxies are solicited under applicable regulations of 
the Securities and Exchange Commission ("SEC"). The Notice must contain or be 
accompanied by the following information: 

(1) the name and residence of the shareholder who intends to make the 
nomination; 

(2) a representation that the shareholder is a holder of record of 
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 the SEC's proxy 
rules had each nominee been nominated, or intended to be nominated, by the 
management or the Board of Directors of the Company; 

(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 the nomination or nominations are to 
be made by the shareholder; and 

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

Pursuant to the above requirements, appropriate Notices in respect of 
nominations for directors must be received by the Secretary of the Company no 
later than May 2, 1996. 

INFORMATION REGARDING NOMINEES AND DIRECTORS 

For the three nominees for election as directors at the 1996 Annual 
Meeting and the seven directors whose terms of office expire either at the 
1997 Annual Meeting or the 1998 Annual Meeting, there follows information as 
to the positions and offices with the Company held by each, the principal 
occupation of each during the past five years, and certain directorships of 
public companies and other organizations held by each. 

5

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NOMINEES FOR ELECTION AT ANNUAL MEETING 
- ----------------------------------------------------------------------------- 

John W. Boyer, Jr........   Mr. Boyer retired as Chairman of the Company on May 20, 1993, having served in that capacity 
St. Davids, PA              since the restructuring of the Company on July 1, 1981. Mr. Boyer also served as the 
Director since 1981         Company's Chief Executive Officer from July 1, 1981 to July 1, 1992. Mr. Boyer is a director 
of Betz Laboratories, Inc., Gilbert Associates, Inc. and Rittenhouse Trust Company. Age:  67.  

Nicholas DeBenedictis....   Mr. DeBenedictis has served as Chairman of the Company since May 20, 1993. Mr. DeBenedictis 
Ardmore, PA                 also continues to serve as the Company's Chief Executive Officer and President, the positions 
Director since 1992         he has held since joining the Company in July 1992. He also serves as Chairman, Chief 
Executive Officer and President of the Company's principal subsidiary, Philadelphia Suburban 
Water Company. Between April 1989 and June 1992, he served as Senior Vice President for 
Corporate Affairs of PECO Energy Company. From December 1986 to April 1989, he served 
as President of the Greater Philadelphia Chamber of Commerce and from 1983 to 1986 he 
served as the Secretary of the Pennsylvania Department of Environmental Resources. Mr. 
DeBenedictis is a director of Provident Mutual Life Insurance Company of Philadelphia, 
Air & Water Technologies Corporation and P.H. Glatfelter Company, and a member of the 
PNC Bank, N.A. Philadelphia Advisory Board. Age: 50.

G. Fred DiBona, Jr. ....    Mr. DiBona has served since 1990 as President and Chief Executive Officer of Independence 
Bryn Mawr, PA               Blue Cross, the Delaware Valley region's largest health insurer. He also serves as Chairman 
Director since 1993         of Independence Blue Cross' subsidiaries and affiliates. Between 1987 and 1990, Mr. DiBona 
served as President and Chief Executive Officer for Pennsylvania Blue Shield's holding 
company, Keystone Ventures, Inc. Mr. DiBona is also a director of Independence Blue Cross 
and its subsidiaries, Pennsylvania Savings Bank, Magellan Health Services, Inc., and various 
civic and charitable organizations. Age: 45. 

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DIRECTORS CONTINUING IN OFFICE WITH TERMS EXPIRING IN 1997 
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John H. Austin, Jr. ....   Mr. Austin retired as President of Philadelphia Electric Company (now known as PECO 
Berwyn, PA                 Energy Company), a public utility, in 1988. Mr. Austin served as President of PECO 
Director since 1981        Energy Company from 1982 to 1988. He is also a director of Selas Corporation of America. 
Age: 67. 

6

John F. McCaughan.......  Mr. McCaughan is Chairman of Betz Laboratories, Inc., which provides engineered chemical 
Doylestown, PA            treatment of water, wastewater and process systems. Mr. McCaughan was Chairman and 
Director since 1984       Chief Executive Officer of Betz Laboratories from 1982 to 1994. He is also a director 
of Betz Laboratories, Inc. and Penn Mutual Life Insurance Company. Age: 60. 

Harvey J. Wilson.......   Mr. Wilson is President and CEO of Integrated Healthcare Solutions, a healthcare 
Delray Beach, FL          information systems company. Mr. Wilson was a co-founder of Shared Medical Systems 
Director since 1983       Corporation. He is a director of FPA Medical Management, RMSC of West Palm Beach, 
and Enterprise Application Systems, Inc. Age: 57. 

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DIRECTORS CONTINUING IN OFFICE WITH TERMS EXPIRING IN 1998 
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Mary C. Carroll..........     Ms. Carroll is a consultant, a community volunteer and an advisor to nonprofit corporations, 
Bryn Mawr, PA                 businesses and government agencies. Between 1992 and 1993 she served as President of Hospitality 
Director since 1981           Philadelphia Style. She is Vice Chairman of Ft. Mifflin on the Delaware and is a founder, 
director or trustee of various civic and charitable organizations, including Preservation 
Action, the National Parks Mid-Atlantic Council, the Friends of Independence National 
Historical Park, the Urban Affairs Coalition and the Metropolitan YMCA. Age: 55.

Claudio Elia.............     Mr. Elia has served since June 1994 as Chairman and CEO of Air & Water Technologies Corporation, 
Greenwich, CT                 an environmental services company, and since September, 1988 as President and Chief Executive 
Director since 1992           Officer of Anjou International Company, the U.S. holding company of Compagnie Generale 
des Eaux, a diversified international service company providing a broad range of water, 
power, heating and urban maintenance services. He has also served as President and Chief 
Executive Officer of Limbach Holdings, a construction and service company, and President 
of Montenay International Co., a waste-to-energy company, both of which are affiliates 
of Compagnie Generale des Eaux. Mr. Elia is also a director of Air & Water Technologies 
Corporation, Consumers Water Company, Anjou International Company, Limbach Holdings and 
Montenay International Co. Age: 53. 

Joseph C. Ladd ..........     Mr. Ladd is the retired Chairman, President and Chief Executive Officer of The Fidelity 
Rosemont, PA                  Mutual Life Insurance Company, serving in those capacities from July, 1971 to January, 
Director since 1983           1992. He is currently a director of PECO Energy Company. Age: 69. 

7 

Richard H. Glanton, Esq...    Mr. Glanton has been a partner in the law firm of Reed, Smith, Shaw & McClay in Philadelphia 
Philadelphia, PA              since 1986. Mr. Glanton is a director of General Accident Insurance Company of North America, 
Director since 1995           PECO Energy Company and numerous civic and charitable organizations. Age: 49 

OWNERSHIP OF COMMON STOCK 

The following table sets forth certain information as of January 31, 1996, 
with respect to shares of Common Stock of the Company beneficially owned by 
each director and executive officer and by all directors and executive 
officers of the Company as a group. This information has been provided by 
each of the directors and officers at the request of the Company. Beneficial 
ownership of securities as shown below has been determined in accordance with 
applicable guidelines issued by the Securities and Exchange Commission 
("SEC") and includes the possession, directly or indirectly, through any 
formal or informal arrangement, either individually or in a group, of voting 
power (which includes the power to vote, or to direct the voting of, such 
security) and/or investment power (which includes the power to dispose of, or 
to direct the disposition of, such security). 

Sole voting          Shared voting             Total and 
and/or sole          and/or shared          percent of class 
Beneficial Owner                              investment power   investment power(1)(2)      outstanding(3) 
-----------------------                           ----------------   ----------------------    ----------------- 

John H. Austin, Jr.  ...........................         1,200                  --                   1,200 
John W. Boyer, Jr.  ............................        58,703                  --                  58,703 
Mary C. Carroll  ...............................         1,200                 447                   1,647 
Morrison Coulter  ..............................        20,099               6,403(4)               26,502 
Nicholas DeBenedictis  .........................        60,202               8,638(5)               68,840 
G. Fred DiBona, Jr.  ...........................         1,000                  --                   1,000 
Claudio Elia (6)  ..............................         1,000(7)               --                   1,000   
Richard H. Glanton, Esq.  ......................           772                  --                     772 
Michael P. Graham  .............................         8,999               9,829                  18,828 
Joseph C. Ladd  ................................         2,651                  --                   2,651 
John F. McCaughan  .............................         3,200                  --                   3,200 
Richard R. Riegler  ............................        17,158                 931                  18,089 
Roy H. Stahl  ..................................        14,499              12,995                  27,494 
Harvey J. Wilson  ..............................         6,700                  --                   6,700 
All directors and executive officers as a group 
(14 persons) .................................       197,383(8)           39,243(9)              236,626(1.94%) 

- ------ 
(1)  The shareholdings indicated include 1,452 shares held in the Company's 
Dividend Reinvestment Program. 

(2) Under the Company's Thrift Plan, participants do not have any present 
voting power with respect to shares allocated to their accounts. Such 
shares have been included in this column. 

8 

(3) Percentages for each person or group are based on the aggregate of the 
shares of Common Stock outstanding as of January 31, 1996 (12,200,647 
shares) and all shares issuable to such person or group upon the exercise 
of outstanding stock options exercisable within 60 days of that date. 
Percentage ownership of less than 1% of the class then outstanding as of 
January 31, 1996 has not been shown. 

(4) The shareholdings indicated include 1,280 shares owned of record by Mr. 
Coulter's wife. Mr. Coulter disclaims beneficial ownership as to such 
shares. 

(5) The shareholdings indicated include 400 shares owned of record by Mr. 
DeBenedictis' wife and 3,595 shares owned of record by Mr. DeBenedictis' 
son. Mr. DeBenedictis disclaims beneficial ownership as to such shares. 

(6) As Chief Executive Officer of Anjou International Company, Mr. Elia 
oversees Compagnie Generale des Eaux's interests in the United States, 
including its share ownership in Philadelphia Suburban Corporation. 
Consequently, he may be deemed to share voting and dispositive power for 
the shares held by Compagnie Generale des Eaux.

(7) Includes 600 shares purchased in February 1996. 

(8) The shareholdings indicated include 105,277 shares exercisable under the 
1988 Stock Option Plan and the 1994 Equity Compensation Plan on or before 
April 1, 1996. 

(9) The shareholdings indicated include 24,734 shares (i) held in joint 
ownership with spouses, (ii) held as custodian for minor children or 
(iii) owned by family members. 

The following table sets forth certain information as of February 29, 
1996, except as otherwise indicated, with respect to the ownership of shares 
of Common Stock of the Company by certain beneficial owners of 5% or more of 
the Company's total outstanding shares. 

Percent of 
Amount and Nature            Outstanding 
Beneficial Owner             of Beneficial Ownership           Shares 
---------------------------   --------------------------------   ------------- 
Compagnie Generale des Eaux    Sole voting and dispositive power 
52 Rue D'Anjou 75384          over 1,750,600 shares (1) 
Paris, France                                                       14.3% 

- --------- 
(1) Based on the Form 4 of Compagnie General des Eaux dated December 8, 1995. 

9 

EXECUTIVE COMPENSATION 

REPORT OF THE EXECUTIVE COMPENSATION AND EMPLOYEE BENEFITS COMMITTEE 

OVERALL OBJECTIVES 

Philadelphia Suburban Corporation's executive compensation program is 
designed to motivate its senior executives to achieve the Company's goals of 
providing its customers with cost-effective, reliable water services and 
providing the Company's shareholders with a market-based return on their 
investment. 

Toward that end, the program: 

o  Provides compensation levels that are competitive with those provided 
by companies with which the Company may compete for executive talent. 

o  Motivates key senior executives to achieve strategic business 
initiatives and rewards them for their achievement. 

o  Creates a strong link between stockholder and financial performance and 
the compensation of the Company's senior executives. 

In administering the executive compensation program, the Executive 
Compensation and Employee Benefits Committee (the "Committee") attempts to 
strike an appropriate balance among the above-mentioned objectives, each of 
which is discussed in greater detail below. 

At present, the executive compensation program is comprised of three 
components: base salary, annual cash incentive opportunities and equity 
incentive opportunities. In determining the relative weighting of 
compensation components and the target level of compensation for the 
Company's executives, the Committee considers compensation programs of a peer 
group of companies. Because of the limited number of investor-owned water 
utilities from which comparable compensation data is available, the Committee 
utilizes survey data from a composite market ("Composite Market") compiled by 
a nationally recognized compensation consulting firm in assessing the 
competitiveness of the components of the Company's compensation program. The 
Composite Market for the base salary and annual cash incentive elements of 
the program consists of 50% water utilities, 25% other utilities and 25% 
general industrial businesses. There are seventeen water utilities in the 
Composite Market, twelve of which are included in the Edward Jones Water 
Utility Index used for the stock performance chart contained herein. 
Competitive compensation levels are targeted at the median of the third 
quartile range of compensation levels in the Composite Market, except for 
equity incentives, which are targeted at the 50th percentile of the 
compensation consulting firm's data base of general industrial organizations, 
including utilities, that have long term incentive programs. 

COMPENSATION COMPONENTS 

BASE SALARY 

To ensure that its pay levels are competitive, the Company regularly 
compares its executive compensation levels with those of other companies and 
sets its salary structure in line with competitive data from the Composite 

10 

Market. Individual salaries are considered for adjustment annually and any
adjustments are based on general movement in external salary levels, individual
performance, and changes in individual duties and responsibilities.

CASH INCENTIVE AWARDS 

The annual cash incentive plan is based on target incentive awards for 
each executive, which are stated as a percentage of their base salaries. 
Annual incentive awards for executive officers are calculated by a formula 
that multiplies the executive's target incentive percentage times a Company 
rating factor based on the Company's overall financial performance and an 
individual rating factor based on the executive's performance against 
established objectives. These factors can range from 0% to 125% for the 
Company rating factor and 0% to 150% for the individual rating factor. Each 
of these percentages are correlated with defined objectives and approved by 
the Committee each year. Regardless of the Company's financial performance, 
the Committee retains the authority to determine the final Company rating 
factor, and the actual payment and amount of any bonus is always subject to 
the discretion of the Committee. 

EQUITY INCENTIVES 

As part of its review of the total compensation package for the Company's 
officers, the Committee, with the assistance of a nationally-recognized 
compensation consulting firm, reviewed the Company's equity incentive 
compensation program. Given the importance of dividends to a utility 
investor, the consultant recommended using a combination of stock options 
with dividend equivalents to best link executive long-term incentives to 
corporate performance and shareholder interests. 

Under the terms of the Company's Equity Compensation Plan, which was 
approved by the shareholders at the 1994 Annual Meeting, the Committee and 
the Board of Directors may grant stock options, dividend equivalents and 
restricted stock to officers and key employees, and stock options to key 
consultants of the Company and its subsidiaries who are in a position to 
contribute materially to the successful operation of the business of the 
Company. The purpose of the Plan is to help align executive compensation with 
shareholder interests by providing the participants with a long-term equity 
interest in the Company. The Plan also provides a means through which the 
Company can attract and retain employees of significant abilities. 

SUMMARY OF ACTIONS TAKEN BY THE COMMITTEE 

SALARY INCREASE 

Under the Company's salary program, the base salary budget is based on 
salary levels for comparable positions in the Composite Market. The projected 
overall annual increase is based on annual salary budget increase data 
reported by published surveys. Under these guidelines, actual salary 
increases are determined based on a combination of an assessment of the 
individual's performance and the individual's salary compared to the market. 
In the case of executive officers named in this Proxy Statement, the 
determination of salary levels is made by the Committee, subject to approval 
by the Board of Directors. 

11 

Mr. DeBenedictis' salary for 1995 was consistent with the target level for 
the CEO position within the Composite Market. Mr. DeBenedictis' salary for 
1996, which was approved by the Board of Directors on February 6, 1996 and 
effective on April 1, 1996, is consistent with published salary survey 
information on salary levels and projected annual salary increases for 1996 
and is based on the Committee's favorable assessment of his and the Company's 
performance. 

ANNUAL INCENTIVE AWARD 

At its February 5, 1996 meeting, the Committee determined the annual cash 
incentive awards to be made to the participants in the annual incentive plan. 
The awards were based on the Company's performance compared to its financial 
goal for 1995 as well as the participants' achievement of their individual 
objectives. The incentive awards to the Company's officers were approved by 
the Board of Directors on February 6, 1996. Mr. DeBenedictis' annual 
incentive compensation for 1995, was based on the Company's earnings and the 
Committee's assessment of Mr. DeBenedictis' individual performance. Mr. 
DeBenedictis' achievements in 1995 included increasing revenues and net 
income to record levels, reducing controllable operating expenses and 
interest costs, increasing customer growth through acquisitions, improving 
return on equity and implementing other management initiatives intended to 
control costs, enhance customer satisfaction and increase shareholder value. 
It was the Committee's assessment that Mr. DeBenedictis met or exceeded all 
of his 1995 objectives. 

EQUITY INCENTIVES 

At its March 4, 1996 meeting, the Committee approved the grant of 
incentive stock options and dividend equivalents under the Company's 1994 
Equity Compensation Plan to its executive officers at the fair market value 
on the date of grant for such stock options of $22.375. The options are 
exercisable in installments of one- third each year starting on the first 
anniversary of the date of grant and expire at the end of 10 years from the 
date of grant. The dividend equivalents will accumulate dividends over a 
period of four years. Mr. DeBenedictis received a grant of 20,000 options and 
dividend equivalents on March 4, 1996 at the grant price stated above. In 
addition, at its February 5, 1996 meeting, the Committee considered and 
approved a recommendation from management to increase the number of shares 
available for issuance under the 1994 Equity Compensation Plan. The Committee 
reviewed the number of stock option awards being made annually under the 
Plan, which it felt was reasonable and effective in providing the recipients, 
both executive officers and other employees, with a long-term interest in the 
Company. The Committee recommended to the Board of Directors that the number 
of shares available under the Plan be increased by 500,000 and the Board 
approved this increase at its meeting on February 6, 1996, subject to 
approval by the shareholders at the Annual Meeting as set forth in Proposal 
No. 2 on pages 20 to 21 of this Proxy Statement. 

Respectfully submitted, 

John F. McCaughan 
G. Fred DiBona, Jr. 
Joseph C. Ladd 

12 

The foregoing report of the Executive Compensation and Employee Benefits 
Committee shall not be deemed incorporated by reference by any general 
statement incorporating by reference this proxy statement into any filing 
under the Securities Act of 1933 or Securities Exchange Act of 1934, except 
to the extent that the Company specifically incorporates this information by 
reference, and shall not otherwise be deemed filed under such Acts. 

SUMMARY COMPENSATION TABLE 

The following Summary Compensation Table shows compensation paid by the 
Company for services rendered during the years 1995, 1994 and 1993, or for 
the year in which the individual was an executive officer, if shorter, for 
the Company's Chief Executive Officer and the other four most highly 
compensated executive officers of the Company. 

SUMMARY COMPENSATION TABLE 

Long Term Compensation 
---------------------------------------- 
Annual Compensation                       Awards                 Payouts 
----------------------------------------    ----------------------------    --------- 
Securities   
Other       Restricted       Under-                    All Other 
Annual         Stock          lying           LTIP       Compen- 
Name and                             Salary                      Compen-        Award(s)      Options/        Payouts     sation 
Principal Position        Year       ($)(1)      Bonus ($)(2)  sation($)(3)      ($)(4)       SAR's (#)         ($)       ($)(5) 
- ------------------       ------   -----------  --------------  ------------   -----------   ------------    ---------   --------- 

N. DeBenedictis  .....    1995      252,372        229,281        4,666           --           20,000            --        55,505 
CEO                       1994      241,027        157,697        4,620         174,375        15,000            --        30,240 
1993      231,751        145,454        2,698           --            9,000            --        21,840 

R. Stahl  ............    1995      155,766         62,330        4,620           --            4,000            --         7,958 
Sr. V.P. & Gen. Cnsl.     1994      151,775         57,682        4,453           --            3,500            --         1,960 
1993      144,200         54,545        4,326           --            5,000            --          -- 

R. Riegler (6)  ......    1995      140,548         47,389        4,216           --            4,000            --         8,234 
Sr. V.P.-Operations       1994      135,624         36,973        2,910           --            3,500            --         1,960 

M. Graham  ...........    1995      129,501         52,078        3,885           --            4,000            --         8,157 
Sr. V.P.-Finance          1994      122,554         43,812        3,677           --            3,500            --         1,960 
1993      112,651         43,157        3,379           --            5,000            --          -- 

M. Coulter (7)  ......    1995      125,818         34,925        3,468          --            4,000             --         9,245 
Sr. V.P.-Production   

- ------ 
(1) Salary deferred at the discretion of the executive and contributed to the 
Company's Thrift Plan or Executive Deferral Plan is included in this 
Column. 

(2) Includes cash bonuses for services rendered during the specified year, 
regardless of when paid. 

(3) Company matching contributions pursuant to the Company's Thrift Plan and 
Executive Deferral Plan are included in this column. 

13 

(4) Mr. DeBenedictis was awarded a grant of 10,000 shares of restricted stock 
under the Company's 1994 Equity Compensation Plan on May 19, 1994 at a 
fair market value on the date of grant of $17.94 per share, less the $.50 
par value per share paid by Mr. DeBenedictis. One-third of the restricted 
stock under this grant will be released to Mr. DeBenedictis each year 
starting on May 19, 1995 and he is entitled to receive the dividends on 
the restricted shares pending their release. At year-end 1995, the value 
of the 6,667 shares still subject to restrictions was $138,340 based on a 
closing price for the stock of $20.75. 

(5) Includes: (a) the dollar value, on a term loan approach, of the benefit 
of the whole-life portion of the premiums for a split dollar life 
insurance policy on Mr. DeBenedictis maintained by the Company, projected 
on an actuarial basis ($9,709); (b) Company payments on behalf of Mr. 
DeBenedictis to cover the premium attributable to the term life insurance 
portion of the split dollar life insurance policy ($8,897); and (c) the 
amounts accrued for the named executive's accounts in 1995 in connection 
with the dividend equivalent awards made in 1994 and 1995 (Messrs. 
DeBenedictis $34,300; Stahl $7,430; Graham $7,430; Riegler $7,430; and 
Coulter $7,430). The Company will be reimbursed for the amount of the 
premiums paid under the split dollar program for Mr. DeBenedictis upon 
his death or repaid such premiums by Mr. DeBenedictis if he leaves the 
Company. 

(6) Mr. Riegler is Senior Vice President of the registrant's principal 
subsidiary and was designated as an executive officer of the registrant 
in 1994 by the Board of Directors. 

(7) Mr. Coulter is Senior Vice President of the registrant's principal 
subsidiary and was designated as an executive officer of the registrant 
in 1995 by the Board of Directors. 

COMPARATIVE STOCK PERFORMANCE 

The graph below compares the cumulative total shareholder return on the 
Common Stock of the Company for the last five years with the weighted average 
cumulative total return of a peer group of companies represented by the 
Edward Jones ("EJ") Water Utility Industry Index (adjusted for total market 
capitalization) and the cumulative total return on the S&P 500 over the same 
period, assuming a $100 investment on January 1, 1990 and the reinvestment of 
all dividends. The EJ Water Utility Industry Index consists of the following 
companies: American Water Works Company, Inc.; Aquarion Company; California 
Water Service Company; Connecticut Water Service Company; Consumers Water 
Company; Dominguez Services Corporation; E'town Corporation; IWC Resources 
Corporation; Middlesex Water Company; Philadelphia Suburban Corporation; SJW 
Corporation; Southern California Water Company; Southwest Water Company; and 
United Water Resources, Inc. 

14 

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN 
AMONG PSC, S&P 500 AND EJ WATER UTILITY AVERAGE 

250 |------------------------------------------------------------------| 
|                                                             *    |
|                                                                  |
|                                                                  | 
225 |------------------------------------------------------------------| 
|                                                                  |
|                                                                  | 
|                                                             &#   | 
200 |------------------------------------------------------------------|  
|                                                 *                |
|                                     *                            |
|                                     &                            |
175 |------------------------------------------------------------------| 
|                                                 &                |
|                         &                       #                |
|                         *           #                            | 
150 |------------------------------------------------------------------| 
|               &                                                  |
|               *         #                                        | 
|               #                                                  | 
125 |------------------------------------------------------------------| 
|                                                                  |
|                                                                  |
|                                                                  | 
100 |---*&#------------------------------------------------------------| 
|                                                                  |
|                                                                  |
|                                                                  | 
75 |----|----------|---------|-----------|-----------|-----------|----| 
1990       1991      1992        1993        1994        1995

* = PSC                                        & = EJ WEIGHTED AVG.
# = S&P 500

COMPARISON OF FIVE YEAR COUMULATIVE TOTAL RETURN
AMONG PSC, S&P 500 AND EJ WATER UTILITY AVERAGE

Five Year Cumulative Return
----------------------------------------------------------

1990      1991      1992       1993       1994       1995
------    ------    ------     ------     ------     ------
PSC   *     100.00    139.40    151.60     184.59     193.17     235.20
EJ WEIGHTED AVG   &     100.00    142.79    158.14     180.18     167.86     211.18
S&P 500   #     100.00    130.34    140.26     154.33     156.43     214.99

The foregoing comparative stock performance graph shall not be deemed 
incorporated by reference by any general statement incorporating by reference 
this proxy statement into any filing under the Securities Act of 1933, as 
amended, or the Securities Exchange Act of 1934, as amended, except to the 
extent that the Company specifically incorporates this information by 
reference, and shall not otherwise be deemed filed under such Acts. 

15 

STOCK OPTION GRANTS IN 1995 

The following table sets forth information concerning individual grants of 
stock options under the Company's 1994 Equity Compensation Plan during 1995 
to each executive officer identified in the Summary Compensation Table who 
received options during the period. 

OPTION GRANTS IN LAST FISCAL YEAR 

Grant Date 
Individual Grants                            Value 
-------------------------------------------------------------   ------------ 
% of 
Number of          Total 
Securities      Options/SAR's     Exercise 
Underlying        Granted to       or Base                     Grant Date 
Options/SAR's      Employees         Price      Expiration       Present 
Name                 Granted (#)(1)   in Fiscal Year    ($/Sh)(2)       Date         Value ($)(3) 
- --------            ---------------   --------------    ----------   ------------   ------------ 

N. DeBenedictis ..      20,000            16.6%          17.8125       3/6/05          39,000 
R. Stahl  ........       4,000             3.3%          17.8125       3/6/05           7,800 
R. Riegler  ......       4,000             3.3%          17.8125       3/6/05           7,800 
M. Graham  .......       4,000             3.3%          17.8125       3/6/05           7,800 
M. Coulter  ......       4,000             3.3%          17.8125       3/6/05           7,800 

- ------ 
(1) The options listed in this column are qualified stock options granted at 
an exercise price equal to the fair market value of the Company's common 
stock on the date of grant under the Company's 1994 Equity Compensation 
Plan. Grants become exercisable in installments of one-third per year 
commencing on the first anniversary of the grant date. An equal number of 
dividend equivalents, with a four year accumulation period, were awarded 
to the named individuals under the 1994 Equity Compensation Plan. The 
accrued value of the dividend equivalent awards for 1994 and 1995 is 
shown on the Summary Compensation Table. 

(2) The exercise price for options granted is equal to the mean of the high 
and low sale prices of the Company's common stock on the New York Stock 
Exchange composite tape on the date the option is granted. 

(3)  The values in this column were determined using Black-Scholes Option 
Pricing Model. The actual value of stock options, if any, that may be 
realized will depend on the difference between the exercise price and the 
market price on the date of exercise. The estimated values under the 
Black-Scholes model are based on assumptions as to such variables as 
interest rates, stock price volatility and dividend yield. The key 
assumptions used in the Black-Scholes model valuation of the stock 
options are (i) an assumed dividend yield of 5.8%, (ii) a risk free rate 
of return of 7.4%, (iii) a beta coefficient of 1, (iv) an exercise date 
of 10 years from the date of grant, and (v) no reduction in values to 
reflect non-transferability or other restrictions on the options. 
These assumptions are not a forecast of future dividend yield, stock 
performance or volatility. 

16 

STOCK OPTION EXERCISES IN 1995 AND VALUE OF OPTIONS AT YEAR-END 1995 

The following table sets forth information concerning the number of stock 
options exercised under the Company's 1982 and 1988 Stock Option Plans and 
the 1994 Equity Compensation Plan during 1995 by each executive officer 
listed below and the number and value of unexercised options as of December 
31, 1995, indicating in each case the number and value of those options that 
were exercisable and unexercisable as of that date. 

AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR 
AND YEAR-END OPTION/SAR VALUES 

Number of Securities              Value of Unexercised 
Underlying Unexercised                 In-the-Money 
Options/SAR's at                  Options/SAR's at 
Shares                            Fiscal Year-End (#)              Fiscal Year-End ($)(1) 
Acquired         Value       --------------------------------  -------------------------------- 
Name                on Exercise(#)   Realized($)     Exercisable     Unexercisable     Exercisable     Unexercisable 
- -----               --------------   -----------    -------------   ---------------   -------------   --------------- 

N. DeBenedictis           --              --           38,600            55,400          218,363           233,950 
R. Stahl  .......         --              --           11,166            11,334           52,654            40,189 
R. Riegler  .....         --              --           11,681            10,534           69,390            35,789 
M. Graham  ......       6,500           41,750          5,666            12,334           24,279            47,752 
M.Coulter  ......         --              --           16,866            11,134           99,754            39,089 

- ------ 
(1) Based on the closing price on the New York Stock Exchange-Composite 
Transactions of the Company's Common Stock on December 29, 1995 ($20.75) 

CERTAIN COMPENSATION PLANS 

RETIREMENT PLAN 

The Retirement Plan for Employees of the Company (the "Retirement Plan") 
is a defined benefit pension plan. In general, participants are eligible for 
normal pension benefits upon retirement at age 65 and are eligible for early 
retirement benefits upon retirement at age 55 with ten years of credited 
service. Under the terms of the Retirement Plan, a participant becomes fully 
vested in his or her accrued pension benefit after five years of credited 
service. Benefits payable to employees under the Retirement Plan are based 
upon "final average compensation", which is defined as the average cash 
compensation through the five highest consecutive years of the last ten full 
years preceding retirement. 

The Employee Retirement Income Security Act of 1974, as amended, ("ERISA") 
imposes maximum limitations on the annual amount of pension benefits that may 
be paid under, and the amount of compensation that may be taken into account 
in calculating benefits under, a qualified, funded defined benefit pension 
plan such as the Retirement Plan. The Retirement Plan complies with these 
ERISA limitations. Effective December 1, 1989, the Board of Directors adopted 
an Excess Benefits Plan for Salaried Employees (the "Excess Plan"). The 
Excess Plan is a nonqualified, unfunded pension benefit plan that is intended 
to provide an additional pension benefit to participants in the Retirement 
Plan and their beneficiaries whose benefits under the Retirement Plan are 

17 

adversely affected by these ERISA limitations. The benefit under the Excess Plan
is equal to the difference between (i) the amount of the benefit the participant
would have been entitled to under the Retirement Plan absent such ERISA
limitations, and (ii) the amount of the benefit actually payable under the
Retirement Plan.

The following tabulation shows the estimated annual pension payable 
pursuant to the Retirement Plan and the Excess Plan to employees, including 
employees who are directors or officers of the Company, upon retirement after 
selected periods of service. This table is provided for illustrative purposes 
only and does not reflect pension benefits presently due under the Retirement 
Plan or Excess Plan. 

PENSION TABLE 

Average Salary               Estimated Annual Pension Based on Service of 
During Five Years     --------------------------------------------------------------- 
Preceding Retirement    15 Years     20 Years      25 Years     30 Years     35 Years 
- --------------------   ----------   ----------    ----------   ----------   ---------- 

$100,000         $ 25,300     $ 33,700      $ 42,100     $ 44,600     $ 47,100 
125,000           32,000       42,700        53,300       56,500       59,600 
150,000           38,800       51,700        64,600       68,300       72,100 
175,000           45,500       60,700        75,800       80,200       84,600 
200,000           52,300       69,700        87,100       92,100       97,100 
225,000           59,000       78,700        98,300      104,000      109,600 
250,000           65,800       87,700       109,600      115,800      122,100 
300,000           79,300      105,700       132,100      139,600      147,100 
350,000           92,800      123,700       154,600      163,300      172,100 
400,000          106,300      141,700       177,100      187,100      197,100 
450,000          119,800      159,700       199,600      210,800      222,100 
500,000          133,300      177,700       222,100      234,600      247,100 

The Company's contributions to the Retirement Plan are computed on the 
basis of straight life annuities. The following executive officers listed in 
Summary Compensation Table have the indicated number of completed years of 
service under the Retirement Plan, and would, upon retirement at age 65 on 
March 31, 1995, be entitled to a pension based on the remuneration level 
listed in the following table: 

Completed 
Covered           Years of 
Name             Remuneration    Credited Service 
-----------         --------------   ---------------- 
Nicholas DeBenedictis        $297,310              4 
Roy H. Stahl  .........      $181,445             14 
Richard R. Riegler  ...      $153,941             26 
Michael P. Graham  ....      $143,788             19 
Morrison Coulter  .....      $134,834             35 

A Supplemental Executive Retirement Plan or SERP has been established for 
Mr. DeBenedictis. This Plan, which is nonqualified and unfunded, was approved 
by the Board of Directors and is intended to provide Mr. DeBenedictis with 

18 

a total retirement benefit, in combination with the Retirement Plan and Excess
Plan, that is commensurate with the retirement benefits for the chief executive
officers of other companies. Under the terms of the SERP, Mr. DeBenedictis will
be eligible to receive a benefit at normal retirement equal to the difference
between (i) the benefit to which he would otherwise be entitled under the
Retirement Plan assuming he had 25 years of service and absent the ERISA
limitations referred to above, and (ii) the benefit payable to him under the
Retirement Plan and the Excess Plan. Under the terms of Mr. DeBenedictis' SERP,
if his employment is terminated for any reason prior to age 65, he is entitled
to receive a supplemental retirement benefit equal to the difference between (i)
the benefit to which he would otherwise be entitled under the Retirement Plan
assuming he was credited with two years of service for each of his first seven
years of credited service and (ii) the benefit payable to him under the
Retirement Plan and the Excess Plan. If Mr. DeBenedictis retires from the
Company at age 65, the SERP is projected to provide an annual benefit of
$87,000.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL 
ARRANGEMENTS 

Under the terms of Mr. DeBenedictis' employment arrangement, if his 
employment is terminated by the Company for any reason other than his 
disability, death or for cause, he will be entitled to receive a severance 
payment equal to twelve months of his base compensation paid in twelve equal 
monthly installments without offset. Under the terms of the 1994 Equity 
Compensation Plan approved by the shareholders, outstanding stock options 
will become immediately exercisable, dividend equivalents will become 
immediately payable and the restrictions on restricted stock grants shall 
immediately lapse upon certain change in control events. 

COMPENSATION OF DIRECTORS 

Directors who are full-time employees of the Company do not receive a 
retainer or fees for service on the Board of Directors or Committees of the 
Board. In 1995, members of the Board of Directors who were not full-time 
employees of the Company or any of its subsidiaries ("Non-employee Directors")
received an annual retainer fee of $12,000, plus an annual grant of 200 
shares of the Company's common stock pursuant to Amendment 1994-1 to the 
Company's 1994 Equity Compensation Plan approved by the shareholders at the 
1995 Annual Meeting. Directors also receive a fee of $750 for attendance at 
each meeting of the Board of Directors of the Company and meeting fees of 
$750 for attendance at each Committee meeting of the Board. In addition, each 
Committee Chairman, who is a Non-employee Director, received an annual retainer 
fee of $2,000. All directors are reimbursed for reasonable expenses incurred 
in connection with attendance at Board or Committee meetings. 

CERTAIN TRANSACTIONS 

Richard H. Glanton, a director, is a partner in the law firm of Reed Smith 
Shaw & McClay, which firm has provided legal services to the Company in 1995. 

19

(PROPOSAL NO. 2) 

PROPOSAL TO APPROVE AMENDMENT 1994-2 TO THE 
1994 PHILADELPHIA SUBURBAN CORPORATION 
EQUITY COMPENSATION PLAN 

THE PROPOSAL 

At the Annual Meeting, there will be presented to the shareholders a 
proposal to approve and ratify Amendment 1994-2 (the "Amendment") to the 1994 
Philadelphia Suburban Corporation Equity Compensation Plan (the "Plan"). 
Under the proposal, Section 4 of the Plan will be amended to increase the 
number of shares of Common Stock available for issuance under the Plan by 
500,000 shares to an aggregate of 950,000 shares. On February 6, 1996, the 
Board of Directors adopted the Amendment, subject to shareholder approval at 
the Annual Meeting. The Amendment will not be effective unless or until 
shareholder approval is obtained. 

VOTE REQUIRED FOR APPROVAL OF AMENDMENT 

The proposal to approve the Amendment requires the affirmative vote of a 
majority of the votes cast by those shareholders present in person or 
represented by proxy at the Annual Meeting for its approval. Abstentions may 
be specified on the proposal and will be considered present at the Annual 
Meeting, but will not be counted as votes cast. Similarly, broker non-votes 
will also be considered present at the Annual Meeting, but will not be 
counted as votes cast. Accordingly, abstentions and broker non-votes will 
have no effect on the vote on the approval of the Amendment. 

The Board of Directors recommends that all shareholders vote FOR the 
approval of Amendment 1994-2 to the 1994 Equity Compensation Plan. 

DESCRIPTION OF THE PLAN 

The Amendment is set forth as Exhibit A to this Proxy Statement, and the 
description of the Plan contained herein is qualified in its entirety by 
reference to the Plan document. 

General. In May 1994, the shareholders of the Company approved the Plan. 
The Plan provides for the grant to officers and other key employees of, and 
key consultants to, the Company and its subsidiaries of incentive 
compensation in the form of incentive stock options, nonqualified stock 
options, restricted stock and dividend equivalents. The Plan permits the 
grant of incentive stock options ("ISOs") and nonqualified stock options 
("NQSOs") with respect to an aggregate of 450,000 options (less the number of 
restricted stock grants), of which options with respect to 361,000 shares 
have been granted. The shareholders in 1995 approved an amendment to the Plan 
to provide for annual grants of 200 shares of restricted stock to 
Non-employee Directors on the first day of the month following the Company's 
Annual Meeting of Shareholders. The Plan permits restricted stock grants of 
up to 25,000 shares, 11,800 shares of which have been granted. 

20 

A Board committee (the "Committee") or the entire Board may select the 
persons to receive grants under the Plan (the "Grantees") from among the 
persons who may participate in the Plan and, subject to the terms of the 
Plan, may determine the number of shares of Common Stock subject to a 
particular grant and terms of each grant. As of March 5, 1996, there are 
approximately 70 key employees and no consultants anticipated to be eligible 
to participate in the Plan. 

The exercise price of Common Stock subject to an ISO or NQSO is the fair 
market value of such stock on the date the stock option is granted. The 
exercise period for an ISO may not exceed ten years from the date of grant 
and the exercise period for a NQSO may not exceed ten years and one day from 
the date of grant. Each dividend equivalent represents the right to receive 
an amount equal to the dividend payable on a share of Common Stock of the 
Company during an accumulation period established for each grant by the 
Committee. The Company will credit to an account maintained for the Grantee 
on its books and records an amount that is equal to the dividend equivalents 
subject to the grant during the accumulation period designated by the 
Committee. The dividend equivalents will generally be paid at the end of a 
performance period which may depend in part on performance criteria for the 
Grantee established by the Committee. 

Proposed Amendment. The Board of Directors has amended the Plan, subject 
to shareholder approval, to increase the number of shares available for 
issuance under the Plan by 500,000 shares to an aggregate of 950,000 shares. 

SUMMARY OF BENEFITS UNDER THE 1994 EQUITY COMPENSATION PLAN 

The only change proposed by the Amendment is an increase in the number of 
authorized shares under the Plan and the Amendment does not alter the 
considerations of the Executive Compensation and Employee Benefits Committee 
with respect to grants under the Plan. For information with respect to grants 
to certain executive officers during the year ended December 31, 1995 under 
the Plan, see the table captioned "Option Grants in Last Fiscal Year" on page 
16 and for information with respect to grants to the Company's Non-employee 
Directors, see page 19 above. 

21 

(PROPOSAL NO. 3) 

PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S AMENDED 
AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER 
OF SHARES OF THE COMPANY'S COMMON STOCK 

The Board of Directors has approved and recommended for submission to the 
shareholders an amendment to the Company's Amended and Restated Articles of 
Incorporation, which would increase the number of shares of the Company's 
Common Stock authorized for issuance from 20,000,000 to 40,000,000. The 
proposed amendment would change the first sentence of Article IV of the 
Amended and Restated Articles of Incorporation to increase the total number 
of shares which the Company is authorized to issue to 41,770,819 and to 
provide 40,000,000 of such shares shall be shares of Common Stock. 

The Board of Directors recommends the proposed increase in the number of
shares of authorized Common Stock to ensure that Common Stock will be available
as needed for issuance in connection with raising additional capital, completing
acquisitions, effecting stock distributions and stock splits, and other
corporate purposes, all of which alternatives the Company continually evaluates.

If the recommended amendment to the Amended and Restated Articles of 
Incorporation is approved, the Company's Board of Directors will have the 
authority to issue the additional shares of authorized Common Stock or any 
part thereof without further action by the shareholders except as required by 
applicable laws or regulations. The Company's Board of Directors believes 
that the availability of the additional shares of Common Stock for the 
purposes stated without delay or the necessity for a special shareholders' 
meeting would be beneficial to the Company. 

The issuance of additional shares of Common Stock in certain transactions 
and under certain circumstances could have the effect of discouraging an 
unfriendly attempt to acquire control of the Company. For example, additional 
shares of Common Stock could be sold to persons, groups or entities known to 
be favorable toward the Company's vision and direction. The issuance of 
additional shares of Common Stock, directly or as part of the Company's 
Shareholders Rights Plan, could also be used to dilute the stock ownership of 
a person or entity seeking to obtain control of the Company should the Board 
of Directors consider the action of such person or entity not to be in the 
best interest of the shareholders and the Company. The Company's Board of 
Directors is not aware of any present effort by any person or entity to 
accumulate the Company's securities or to obtain control of the Company. 

Except as referred to above and as set forth below, the Company does not now
contemplate any such transaction, or have any commitments, arrangements or
understandings which would require the issuance of additional shares of Common
Stock. As of March 5, 1996, 12,244,470 shares of Common Stock were issued and 
outstanding. An additional 622,311 shares of Common Stock have been reserved for
issuance pursuant to options outstanding at such date. The shareholders are 
also being asked to approve at the Annual Meeting an increase in the number of 
shares that may be issued upon exercise of options granted under the 1994 Equity
Compensation Plan. See "Amendments to 1994 Equity Compensation Plan."

22 

Each additional share of Common Stock authorized by the proposed amendment 
will have the same rights and privileges as each share of Common Stock 
currently authorized or outstanding. Stockholders will have no preemptive 
rights to receive or purchase any of the Common Stock authorized by this 
proposed amendment. 

As soon as practicable after such affirmative vote has been taken, the 
amendment will be filed with the Secretary of State of the Commonwealth of 
Pennsylvania. 

The Board of Directors recommends a vote FOR approval of the amendment to the
Amended and Restated Articles of Incorporation.

SHAREHOLDER SUGGESTIONS AND PROPOSALS FOR 1997 ANNUAL MEETING 

Consideration of certain matters is required at the Annual Meeting of 
Shareholders, such as the election of directors. In addition, pursuant to 
applicable regulations of the Securities and Exchange Commission, 
shareholders may present resolutions, which are proper subjects for inclusion 
in the proxy statement and for consideration at the Annual Meeting, by 
submitting their proposals to the Company on a timely basis. In order to be 
included for the 1997 Annual Meeting, resolutions must be received by 
December 2, 1996. 

The Company receives many shareholder suggestions which are not in the 
form of resolutions. All are given careful consideration. We welcome and 
encourage your comments and suggestions. Your correspondence should be 
addressed as follows: 

Patricia M. Mycek 
Secretary 
Philadelphia Suburban Corporation 
762 W. Lancaster Avenue 
Bryn Mawr, PA 19010 

ADDITIONAL INFORMATION 

The Company will provide without charge, upon written request, a copy of 
the Company's Annual Report on Form 10-K for 1995. Please direct your 
requests to Patricia M. Mycek, Secretary, Philadelphia Suburban Corporation, 
762 W. Lancaster Avenue, Bryn Mawr, PA 19010. 

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT 

Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires 
the Company's officers and directors, and persons who own more than 10% of a 
registered class of the Company's equity securities (a 10% Shareholder), to 
file reports of ownership and changes in ownership with the Securities and 
Exchange Commission ("SEC"). Officers, directors and 10% Shareholders are 
required by the SEC regulations to furnish the Company with copies of all 
Section 16(a) forms they file. 

Based solely on its review of the copies of such forms received by it, or 
a written representation from certain reporting persons that no Form 5's were 
required for those persons, the Company believes that, during the period

23 

January 1, 1995 through December 31, 1995, all filing requirements applicable to
its officers, directors and 10% Shareholders have been complied with, except
that one transaction in May, 1995 by Mr. DiBona, a director, was filed late on
August 15, 1995.

OTHER MATTERS 

The Board of Directors is not aware of any other matters which may come 
before the meeting. However, if any further business should properly come 
before the meeting, the persons named in the enclosed proxy will vote upon 
such business in accordance with their judgment. 

By Order of the Board of Directors, 

PATRICIA M. MYCEK 
Secretary 

April 1, 1996

24 

EXHIBIT A 

AMENDMENT 1994-2 
TO THE 1994 PHILADELPHIA SUBURBAN CORPORATION
EQUITY COMPENSATION PLAN

1. Section 4 of the Plan is amended to read, in its entirety, as follows: 

"Subject to adjustment as provided in Section 15, the maximum aggregate 
number of shares of the Common Stock of the Corporation that may be issued or 
transferred under the Plan shall be 950,000 shares. The maximum number of 
shares of Common Stock that may be issued or transferred under the Plan 
subject to restricted stock grants is 25,000 shares of Common Stock. Shares 
deliverable under the Plan may be authorized and unissued shares or treasury 
shares, as the Committee may from time to time determine. Shares of Common 
Stock related to the unexercised or undistributed portion of any terminated, 
expired or forfeited Grant for which no material benefit was received by a 
grantee also may be made available for distribution in connection with future 
Grants under the Plan." 

25 

PHILADELPHIA SUBURBAN CORPORATION

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PHILADELPHIA SUBURBAN CORPORATION

Proxy for Annual Meeting of Shareholders, May 16, 1996

The undersigned hereby appoints Michael P. Graham, Roy H. Stahl and Patricia
M. Mycek, or a majority of them or any one of them acting singly in the absence
of the others, with full power of substitution, the proxy or proxies of the
undersigned, to attend the Annual Meeting of Shareholders of Philadelphia
Suburban Corporation, to be held at 762 W. Lancaster Avenue, Bryn Mawr,
Pennsylvania, 19010, at 10:00 a.m., on Thursday, May 16, 1996 and any
adjournments thereof, and, with all powers the undersigned would possess if
present, to vote all shares of Common Stock of the undersigned in Philadelphia
Suburban Corporation, including any shares held in the Dividend Reinvestment
Plan of Philadelphia Suburban Corporation, as designated on the reverse side.

This proxy when properly executed will be voted in the manner directed
herein by the undersigned. If the proxy is signed, but no vote is specified,
this proxy will be voted FOR the nominees listed in item 1 on the reverse side;
FOR the approval of Amendment 1994-2 to the 1994 Equity Compensation Plan as set
forth in item 2; FOR the approval of the Amendment to the Company's Amended and
Restated Articles of Incorporation to increase the number of shares of the
Common Stock authorized for issuance from 20,000,000 to 40,000,000 as set forth
in item 3; and in accordance with the proxies' best judgment upon other matters
properly coming before the meeting and any adjournments thereof.

PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD USING THE ENCLOSED
ENVELOPE.

(continued on reverse side)

FOLD AND DETACH HERE

1. Election of Directors. The Board of Directors recommends that you vote
FOR all nominees: John W. Boyer, Jr., Nicholas DeBenedictis, 
G. Fred DiBona, Jr.

VOTE FOR      WITHHOLD     To withhold authority to vote for any individual
all nominees    AUTHORITY    nominee while voting for the remainder, write
listed (except   to vote for  that nominee's name in the space provided below:
as marked to      all
the contrary)   nominees     ------------------------------------------------
/ /           / /

2. Adoption of Amendment 1994-2 to the 1994 Equity Compensation Plan. The
Board of Directors recommends that you vote FOR approval of the adoption
of Amendment 1994-2.

FOR         AGAINST     ABSTAIN
/ /           / /          / /

3. Adoption of Amendment to the Amended and Restated Articles of Incorporation
to increase the authorized shares of Common Stock from 20,000,000 to
40,000,000. The Board of Directors recommends that you vote FOR approval
of the adoption of the Amendment.

FOR         AGAINST     ABSTAIN
/ /           / /          / /

4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.

Dated:                                                             , 1996
-------------------------------------------------------------

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Signature

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Signature (if held jointly)

THIS PROXY MUST BE SIGNED EXACTLY AS NAME APPEARS HEREIN.
Executors, Administrators, Trustees, etc. should give full title as such. If
the signer is a corporation, please sign full corporate name by duly
authorized officer.

FOLD AND DETACH HERE

PSC LOGO

Dear Shareholder:

Enclosed are materials relating to Philadelphia Suburban Corporation's
1996 Annual Meeting of Shareholders. The Notice of the Meeting and Proxy
Statement describe the formal business to be transacted at the meeting.

Your vote is important to us. Please complete, sign and return the attached
proxy card in the accompanying postage-paid envelope whether or not you expect
to attend the meeting.

Nicholas DeBenedictis
Chairman & President