EXHIBIT 10.3



                             SAN JOSE WATER COMPANY

                     EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN




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                                TABLE OF CONTENTS

            SAN JOSE WATER COMPANY EXECUTIVE SUPPLEMENTAL RETIREMENT

ARTICLE I    - DEFINITION

ARTICLE II   - PARTICIPATION

ARTICLE III  - RETIREMENT BENEFIT

ARTICLE IV   - VESTING

ARTICLE V    - FUNDING NATURE OF THE PLAN

ARTICLE VI   - ADMINISTRATION OF THE PLAN

ARTICLE VII  - AMENDMENTS AND TERMINATION

ARTICLE VIII - MISCELLANEOUS


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THE SAN JOSE WATER COMPANY EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

On July 22,  1992 the Board of  Directors  of the San Jose  Water  Company  (the
"Company") adopted the San Jose Water Company Executive Supplemental  Retirement
Plan (the "Plan"). The Plan is designed to supplement the retirement income of a
designated  select group of management and or highly  compensated  executives of
the San  Jose  Water  Company  (the  "Company").  The Plan is  intended  to be a
nonqualified,  unfunded  retirement  plan. The purpose of the Plan is to improve
the  ability  of  the  Company  to  attract,   retain  and  motivate  management
individuals.  The Plan is hereby  adopted in its entirety  effective  January 1,
1992.

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                                    ARTICLE I

DEFINITIONS

Wherever used herein the following terms have the meanings indicated:


1.1      "Actuarially  Equivalent"  has the  meaning  set  forth in the San Jose
         Water Company Retirement Plan.


1.2      "Beneficiary"  means  the  person  or  persons  entitled  to  receive a
         Participant's retirement benefits as provided in Section 3.4.


1.3      "Benefit  Commencement  Date" means the date on which benefits commence
         to be payable  under this  Plan.  In the case of a retired  Participant
         such date shall be the later of: (i) his Early  Retirement  Date;  (ii)
         his  Normal  Retirement  Date;  or (iii)  the date of  separation  from
         service.


1.4      "Board of  Directors"  means the Board of  Directors  of San Jose Water
         Company.


1.5      "Committee"  means the  committee  established  pursuant  to  Article V
         hereof, as it shall be constituted from time to time.


1.6      "Company"  means San Jose Water  Company and any  successor to all or a
         major portion of the assets or business of the San Jose Water Company.


1.7      "Compensation"  has the meaning set forth in the San Jose Water Company
         Retirement Plan.


1.8      "Credited  Service"  has the  meaning  set forth in the San Jose  Water
         Company Retirement Plan.

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1.9      "Early  Retirement  Date"  means the first day of the month  coinciding
         with or next following the date when a Participant has attained the age
         of fifty-five  (55) years and  completed  twenty (20) years of Credited
         Service with the Company.


1.10     "Employee" means a person who is employed by the Company.


1.11     "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
         amended from time to time.


1.12     "Eligible  Employee"  means any  officer  of the  Company  or  Employee
         selected by the Committee,  unless the Committee  determines  that such
         officer or Employee does not fall within ERISA's definition of a select
         group of management or highly compensated employees.


1.13     "Final Average  Compensation"  means a  Participant's  average  monthly
         Compensation   during  the  thirty-six  (36)  calendar  months  of  the
         Participant's  employment  with the  Company  for  which  such  average
         Compensation is the highest.


1.14     "Normal  Retirement  Date"  means the first day of the  calendar  month
         coinciding  with or next following the date when a Participant  attains
         sixty-five (65) years of age.


1.15     "Participant"  means an  Eligible  Employee  who has  received  written
         notification  from  the  Company  that  he  has  been  designated  as a
         Participant of the Plan by the Committee following  satisfaction of the
         eligibility requirements described in Section 2.1.


1.16     "Plan"  means  the  San  Jose  Water  Company  Executive   Supplemental
         Retirement  Plan as set forth in this  document  and in any  amendments
         from time to time made hereto.


1.17     "Qualified Joint and Survivor Annuity" has the meaning set forth in the
         San Jose Water Company Retirement Plan.


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1.18     "Retirement  Benefit"  means  the  benefit  payable  under  this  Plan,
         calculated for in accordance with Article IV.


1.19     "San Jose  Water  Company  Retirement  Plan"  means the San Jose  Water
         Company  Retirement  Plan,  adopted  November  1, 1950,  as it has been
         amended and restated from time to time.


1.20     "Single  Life  Annuity" has the meaning set forth in the San Jose Water
         Company Retirement Plan.


1.21     "Ten Year Certain and Life Option" has the meaning set forth in Section
         3.4.


1.22     "Year of  Service"  has the  meaning  set  forth in the San Jose  Water
         Company Retirement Plan.

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                                   ARTICLE II

PARTICIPATION

2.1      Each Eligible  Employee  shall become a Participant on the first day of
         the  month  coincident  with  the  day he  first  becomes  an  Eligible
         Employee.


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                                   ARTICLE III

RETIREMENT BENEFIT

3.1      The retirement benefits under this Plan to which a Participant shall be
         entitled,  shall be an amount equal to the difference,  if any, between
         (a) and (b) below:


         (a)      Two  percent  (2 %) of the  Final  Average  Compensation  of a
                  Participant  multiplied by the Participant's  Years of Service
                  (not to exceed  twenty (20)  years);  (ii) one percent (1%) of
                  the Final Average Compensation multiplied by the Participant's
                  Years of  Service  in excess of twenty  (20) (not to exceed an
                  additional ten (10) years); and (iii) Mr. John Weinhardt shall
                  receive an additional  three quarters of one percent (.75%) of
                  Final  Average  Compensation  for  each  year  of  service  as
                  President and Chief Executive Officer of the Company; less


         (b)      Benefits  payable to the  Participant  from the San Jose Water
                  Company Retirement Plan.


The amount of the offset in subsection (b) shall be Actuarially  Equivalent to a
single life annuity commencing on the Participant's Normal Retirement Date.



3.2      A Participant  who qualifies for an Early  Retirement Date may elect to
         receive a retirement  benefit based on his accrued  benefits under this
         Article, but reduced in accordance with the early retirement provisions
         set forth in the San Jose Water Company  Retirement Plan on the Benefit
         Commencement Date.


3.3      A Participant may elect to receive his retirement  benefits in the form
         of a Straight  Life Annuity or a Ten Year  Certain and Life  Option.  A
         Participant  who is married on his Benefit  Commencement  Date may also
         elect to receive  his  retirement  benefit  in the form of a  Qualified
         Joint and Survivor  Annuity.  The benefit election of a Participant who
         is married on such date is not subject to spousal consent.


3.4      A  Participant  who elects the Ten Year  Certain and Life Option  shall
         receive his retirement  benefits in the form of a

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         monthly annuity over his lifetime.  If the Participant  dies before one
         hundred and twenty (120) monthly payments  (hereinafter  referred to as
         the  "period  certain")  have  been made the  Participant's  designated
         Beneficiary or Beneficiaries  shall be entitled to share equally in the
         Participant's  monthly  retirement  benefit for the  remainder  of such
         period  certain.  A  Participant  electing  to receive  his  retirement
         benefits in such form must designate,  as described in Section 3.5, one
         or more  Beneficiaries to receive any remaining payments under the Plan
         after his death. If the  Participant and the designated  Beneficiary or
         Beneficiaries  die within the period  certain,  the remaining  payments
         shall be made to the  estate  of the  designated  Beneficiary  who last
         received a payment under this Section 3.4.


3.5      The Beneficiary  designation of a Participant who elects to receive his
         retirement  benefit in the form of a Ten Year  Certain  and Life Option
         shall be made on a form  prepared by, and  delivered  to, the Committee
         prior to the  expiration of the period  certain.  The  Participant  may
         revoke or change this  designation  at any time prior to the expiration
         of the period certain by delivering a subsequent form to the committee.


3.6   The  amount  of all  benefit  forms  specified  in  Section  3.3  shall be
      determined in accordance  with the provision in the San Jose Water Company
      Retirement Plan.


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                                   ARTICLE IV

VESTING


4.1      A  Participant  shall vest in a  percentage  of his accrued  retirement
         benefit derived from Employer  Contributions,  upon completion of Years
         of Service as follows:



         Years of Service                      Vested Percentage
         ----------------                      -----------------


         Less than 20                                None


         20 or More                                  100%


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                                   ARTICLE V

FUNDING NATURE OF THE PLAN

5.1      The funds  used for  payment  of  benefits  under  this Plan and of the
         expenses  incurred  in the  administration  thereof  shall,  until such
         actual  payment,  continue  to be a part of the  general  funds  of the
         Company and no person other than the Company  shall,  by virtue of this
         Plan,  have any interest in any such funds.  Nothing  contained  herein
         shall be deemed to create a trust of any kind or create  any  fiduciary
         relationship. To the extent that any person acquires a right to receive
         payments  from the  Company  under  this Plan,  such right  shall be no
         greater  than  the  right  of any  unsecured  general  creditor  of the
         Company.

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                                   ARTICLE VI

ADMINISTRATION OF THE PLAN

6.1      The Plan  shall  be  administered  by a  Committee  ("Committee"),  the
         membership of which will be selected from time to time by the President
         and Chief  Executive  Officer of the Company.  The Committee shall have
         the  exclusive   authority  and   responsibility  for  all  matters  in
         connection  with the  operation  and  administration  of the Plan.  The
         Committee's  powers and duties shall include,  but shall not be limited
         to,  the  following:   (a)   responsibility  for  the  compilation  and
         maintenance of all records  necessary in connection  with the Plan; (b)
         authorizing the payment of all benefits and expense of the Plan as they
         become payable under the Plan;  (c) reduce or otherwise  adjust amounts
         payable under the Plan if payments are made in error; and (d) authority
         to engage such legal accounting and other  professional  services as it
         may deem proper.  Decisions by the Committee shall be final and binding
         upon all parties.


6.2      The  Committee,  from time to time,  may allocate to one or more of its
         members or to any other person or persons or  organizations  any of its
         rights,   powers,   and  duties  with  respect  to  the  operation  and
         administration  of the Plan. Any such allocation shall be reviewed from
         time to time by the Committee and shall be terminable  upon such notice
         as the Committee, in its sole discretion,  deems reasonable and prudent
         under the circumstances.


6.3      The members of the Committee shall serve without compensation,  but all
         benefits payable under the Plan and all expenses  properly  incurred in
         the  administration  of  the  Plan,  including  all  expenses  properly
         incurred by the  Committee  in  exercising  its duties  under the Plan,
         shall be borne by the Company.



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                                   ARTICLE VII

AMENDMENTS AND TERMINATION

7.1      The Board of Directors reserves the power at any time to terminate this
         Plan and to  otherwise  amend any  portion  of the Plan other than this
         Article Vl;  provided,  however,  that no such action  shall  adversely
         affect  the right of any  Participant  or  beneficiary  to a benefit to
         which he has become entitled pursuant to this Plan.


7.2      Notice of  termination  or amendment  of the Plan,  pursuant to Section
         6.1, shall be given in writing to each Participant and beneficiary of a
         deceased Participant.


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                                  ARTICLE VIII

MISCELLANEOUS

8.1      The  headings  and  subheadings  of this  instrument  are  inserted for
         convenience  of  reference  only  and are not to be  considered  in the
         construction  of this  Plan.  Wherever  appropriate,  words used in the
         singular may include the plural, plural may be read as the singular and
         the masculine may include the feminine.


8.2      The instrument creating the Plan shall be construed,  administered, and
         governed in all  respects in  accordance  with the laws of the State of
         California  to the extent not  preempted by ERISA.  If any provision of
         this  Plan  shall be held by a court of  competent  jurisdiction  to be
         invalid or unenforceable, the remaining provisions shall continue to be
         fully effective.


8.3      Participation  in this Plan shall not give to any employee the right to
         be  retained  in the employ of the Company nor any right or interest in
         this Plan other than is herein specifically provided.


8.4      Any payment to a Participant or beneficiary or the legal representative
         of  either,  in  accordance  with the terms of this  Plan  shall to the
         extent  thereof be in full  satisfaction  of all claims such person may
         have against the Company hereunder,  which may require such payee, as a
         condition to such payment,  to execute a receipt and release  therefore
         in such form as shall be determined by the Company.


8.5      This Plan is intended to qualify for exemption  from Parts II, III, and
         IV of ERISA, as amended,  as an unfunded plan maintained  primarily for
         the purpose of providing  deferred  compensation  for a select group of
         management  or highly  compensated  employees  under  Sections  201(2),
         301(a)(3) and 401(a)(1) of such Act, and shall be so interpreted.


8.6      Benefits  under  this Plan  shall  not be  alienated,  hypothecated  or
         otherwise  encumbered,  and to the maximum extent permitted by law such
         benefits  shall  not in any way be

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         subject to claim of  creditors  or liable to  attachment,  execution or
         other process of law.


8.7      If an individual  entitled to receive retirement benefits is determined
         by the Committee or is adjudged to be legally incapable of giving valid
         receipt and discharge for such benefits, they shall be paid to the duly
         appointed  and acting  guardian,  if any,  and if no such  guardian  is
         appointed and acting,  to such person as the  Committee may  designate.
         Such payment shall, to the extent made, be deemed a complete  discharge
         for such payments under this Plan.


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8.8      If the Committee is unable to make the  determinations  required  under
         this Plan in  sufficient  time for  payments  to be made when due,  the
         Committee   shall  make  the  payments  upon  the  completion  of  such
         determinations with interest at a reasonable rate from the due date and
         may, at its option, make provisional  payments,  subject to adjustment,
         pending such determination.


8.9      For purposes of this Plan, actuarial equivalents shall be determined on
         the basis of  mortality  tables  and  interest  factors  most  recently
         employed for the purpose of the San Jose Water Company Retirement Plan.



IN WITNESS WHEREOF, San Jose Water Company has caused its authorized officers to
execute this instrument in its name and on its behalf.



                                                   SAN JOSE WATER COMPANY







___________________________                        By_______________________

          (Date)


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