ex10_7.htm


    
      

    

    EXHIBIT
10.7


    SAN
JOSE WATER COMPANY

     

     

    EXECUTIVE
SUPPLEMENTAL

     

    RETIREMENT
PLAN

     

     

    (As
Amended and Restated Effective January 1, 2008)

     

    
      
        
           


        

        
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              TABLE OF
      CONTENTS

            	 	
              Page

            
	 	 	 
	
              I.

            	 	
              DEFINITIONS

            	 	
              2

            
	 	 	 	 	
               

            
	
              II.

            	 	
              PARTICIPATION

            	 	
              5

            
	 	 	 	 	 
	
              III.

            	 	
              RETIREMENT
      BENEFIT

            	 	
              5

            
	 	 	 	 	 
	
              IV.

            	 	
              VESTING

            	 	
              11

            
	 	 	 	 	 
	
              V.

            	 	
              FUNDING
      NATURE OF THE PLAN

            	 	
              11

            
	 	 	 	 	 
	
              VI.

            	 	
              ADMINISTRATION
      OF THE PLAN

            	 	
              11

            
	 	 	 	 	 
	
              VII.

            	 	
              AMENDMENTS
      AND TERMINATION

            	 	
              12

            
	 	 	 	 	 
	
              VIII.

            	 	
              MISCELLANEOUS

            	 	
              12

            


    

    

      
        
           


        

        
          ii

          
            

          

        

        
           


        

      

    

     

    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 Company.  The Plan has been amended on a number of occasions since
its adoption and is hereby further amended and restated, effective January 1,
2008, to conform the provisions of the plan document to the applicable
requirements of Section 409A of the Internal Revenue Code and the Treasury
Regulations issued thereunder. The Plan as so amended and restated shall
continue to function solely as a so-called “top hat” plan of deferred
compensation subject to the provisions of the Employee Retirement Income
Security Act of 1974 (as amended from time to time) applicable to such a
plan.

    


    
      	
              I.

            	
              DEFINITIONS

            


    

     

    Wherever
used herein the following terms have the meanings indicated:

     

    1.1           “Accrued
Benefit” means, at any
time, the benefit computed in accordance with Section 3.1 (as adjusted, if
applicable, pursuant to Section 3.11).

     

    1.2           “Actuarial
Equivalent” has the meaning set forth in the San Jose Water Company
Retirement Plan.

     

    1.3            “Affiliated
Company” means
(i) the Company and (ii) each of the other members of the controlled group that
includes the Company, as determined in accordance with Sections 414(b) and (c)
of the Code.

     

    1.4           “Beneficiary”
means the person or persons entitled, pursuant to Section 3.6, to receive the
Participant’s retirement benefit following his or her death.

     

    1.5           “Benefit
Commencement Date” means the date on which the payment of a Participant's
retirement benefit is to commence pursuant to Section 3.2; provided,
however, that a Participant who wishes to have his or her retirement
benefit commence on a Deferred Benefit Commencement Date following his or her
Separation from Service must comply with the applicable election procedures set
forth in Section 3.3.

     

    1.6           “Board of
Directors” means the Board of Directors of San Jose Water
Company.

     

    1.7           “Change in
Control” means a transaction
involving a change in ownership or control of SJW Corp. which constitutes a
Change in Control, as such term is defined at the relevant time in the Executive
Severance Plan (or any successor plan) or, if the Executive Severance Plan
ceases to exist and is not succeeded by another similar plan, as it was last
defined in the Executive Severance Plan.

     

    
      
        
           


        

        
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    1.8           “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.

     

    1.9           “Committee”
means the Executive Compensation Committee of the SJW Corp. Board of Directors
which shall administer the Plan in accordance with the provisions of Article V
hereof.

     

    1.10         “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.

     

    1.11         “Compensation”
means, for any calendar month, a Participant's salary for such month plus any
annual cash performance bonus paid to such Participant in that
month.  No other bonus or special compensation will be included,
except to the extent expressly provided otherwise, in accordance with the
applicable provisions of Code Section 409A, by the Committee administering this
Plan.

     

    1.12         “Credited
Service” has the meaning set forth in the San Jose Water Company
Retirement Plan.

     

    1.13         “Death
Benefit”
has the meaning set forth in Section 3.10 of the Plan.

     

    1.14         “Deferred
Benefit
Commencement Date” means a date, later than the normal Benefit
Commencement Date determined under Section 3.2, on which the Participant’s
retirement benefit under Article III is to commence pursuant to a timely
deferral election made by such Participant pursuant to Section 3.3 of the
Plan.

     

    1.15         “Early
Retirement Date” means the first day of the month coinciding with or next
following the date when a Participant has both attained the age of fifty-five
(55) years and completed at least ten (10) years of Credited Service with the
Company.

     

    1.16         “Eligible
Employee” means any officer of the Company or any other Employee who is
part of a select group of management or an otherwise highly compensated
employee, as determined by the Committee in accordance with applicable ERISA
standards.

     

    1.17         “Employee”
means an individual for so long as he or she is in the employ of at least one
member of the Employer Group, subject to the control and direction of the
employer entity as to both the work to be performed and the manner and method of
performance.

     

    1.18         “Employer
Group” means (i) the Company and (ii) each of the other members of the
controlled group that includes the Company, as determined in accordance with
Sections 414(b) and (c) of the Code, except that in applying Sections 1563(1),
(2) and (3) for purposes of determining the controlled group of corporations
under Section 414(b), the phrase “at least 50 percent” shall be used instead of
“at least 80 percent” each place the latter phrase appears in such sections and
in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of
determining trades or businesses that are under common control for purposes of
Section 414(c), the phrase “at least 50 percent” shall be used instead of “at
least 80 percent” each place the latter phrase appears in
Section  1.4.14(c)-2 of the Treasury Regulations.

     

    
      
        
        

      

      
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    1.19         “Executive
Severance Plan” means SJW. Corp Executive Severance Plan, as amended from
time to time.

     

    1.20         “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

     

    1.21         “Final
Average Compensation” means, on any date, a Participant’s average monthly
Compensation for that consecutive thirty-six (36) calendar month period within
the last one hundred twenty (120) consecutive calendar months ending on or
immediately prior to such measurement date during which such average
Compensation is the highest.

     

    1.22         “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.

     

    1.23         “Participant”
means an Eligible Employee selected by the Committee to participate in the Plan;
provided,
however, that such individual shall not commence actual participation in
the Plan until the date determined under Article II.

     

    1.2          
“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.

     

    1.25         “Qualified
Joint and Survivor Annuity” has the meaning set forth in the San
Jose Water Company Retirement Plan.

     

    1.26         “Retirement
Benefit” means the monthly retirement benefit payable under this Plan,
calculated in accordance with Article III.

     

    1.27        
“San Jose
Water Company Retirement Plan” means the San Jose Water Company
Retirement Plan, a tax-qualified defined benefit pension plan under Code Section
401(a) which was adopted November 1, 1950, as such plan may be amended and
restated from time to time.

     

    1.28        
“Single
Life Annuity” has the meaning set forth in the San Jose Water Company
Retirement Plan.

     

    1.29         “Separation
from Service” means the Participant’s cessation of Employee status by
reason of his or her death, retirement or termination of
employment.  The Participant shall be deemed to have terminated
employment for such purpose at such time as the level of his or her bona fide
services to be performed as an Employee (or non-employee consultant) permanently
decreases to a level that is not more than twenty percent (20%) of the average
level of services he or she rendered as an Employee during the immediately
preceding thirty-six (36) months (or such shorter period for which he or she may
have rendered such service). Any such determination as to Separation from
Service, however, shall be made in accordance with the applicable standards of
the Treasury Regulations issued under Code Section 409A. In addition to the
foregoing, a Separation from Service will not be deemed to have occurred while
an Employee is on military leave, sick leave or other bona fide leave of absence
if the period of such leave does not exceed six (6) months or any longer period
for which such Employee’s right to reemployment with one or more members of the
Employer Group is provided either by statute or contract; provided,
however, that in the event of an Employee’s leave of absence due to any
medically determinable physical or mental impairment that can be expected to
result in death or to last for a continuous period of not less than six (6)
months and that causes such individual to be unable to perform his or her duties
as an Employee, no Separation from Service shall be deemed to occur during the
first twenty-nine (29) months of such leave.  If the period of leave
exceeds six (6) months (or twenty-nine (29) months in the event of disability as
indicated above) and the Employee’s right to reemployment is not provided either
by statute or contract, then such Employee will be deemed to have a Separation
from Service on the first day immediately following the expiration of such six
(6)-month or twenty-nine (29)-month period.

     

    
      
        
           


        

        
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    1.30         “SJW
Corp.”
means SJW Corp., a California corporation which is the corporate parent of the
Company, or any successor to all or a major portion of the assets or business of
the SJW Corp.

     

    1.31         “Specified
Employee” means a “key employee” (within the meaning of that term under
Code Section 416(i)), as determined by the Executive Compensation Committee of
SJW Corp. in accordance with the applicable standards of Code Section 409A and
the Treasury Regulations thereunder and applied on a consistent basis to all
non-qualified deferred compensation plans of the Employer Group subject to Code
Section 409A.  The Specified Employees shall be identified on December
31 of each calendar year and shall have that status or the twelve (12)-month
period beginning on April 1 of the following calendar year.

     

    1.32         “Ten Year
Certain and Life Option” has the meaning set forth in Section
3.5.

     

    1.33     
   “Year of
Service” has the meaning set forth in the San Jose Water Company
Retirement Plan.

     

    
      	
              II.

            	
              PARTICIPATION

            


    

     

    Each
Eligible Employee selected by the Committee for participation in the Plan shall
be promptly notified by the Company in writing of such selection and shall
become a Participant in the Plan on the first day of the first calendar month
next following the date of his or her selection for participation by the
Committee or such later date as the Committee shall specify, as set forth in the
notification from the Company.

     

    
      	
              III.

            	
              RETIREMENT
      BENEFIT

            


    

     

    3.1           Retirement Benefit
Formula. The actual Retirement Benefit to be paid under this Plan to a
vested Participant beginning on his or her Benefit Commencement Date determined
in accordance with Section 3.2 shall be calculated on the basis of the following
formula for determining a Participant’s normal retirement benefit and shall be
adjusted so that it is the Actuarial Equivalent of such normal retirement
benefit after taking into account any Benefit Commencement Date prior to the
Participant’s Normal Retirement Date and/or any form of payment other than a
Single Life Annuity for the Participant:

     

    
      
        
           


        

        
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    -           The
normal retirement benefit is a Single Life Annuity for the Participant
commencing on his or her Normal Retirement Date in a monthly  dollar
amount equal to two and two tenths percent (2.2%) of the Final Average
Compensation of such Participant multiplied by his or her Years of Service (not
to exceed twenty (20) years) plus one and one-tenth percent (1.1%) of the Final
Average Compensation of such Participant multiplied by his or her Years of
Service in excess of 20 years (not to exceed an additional ten (10) years), up
to a total not to exceed fifty-five percent (55%) of such Participant’s Final
Average Compensation; less the monthly retirement benefit payable to such
Participant from the San Jose Water Company Retirement Plan. The one and
one-tenth percent (1.1%) and fifty-five percent (55%) of Final Average
Compensation percentages stated above shall be increased to one and six tenths
percent (1.6%) and sixty percent (60%) respectively for Participants who are
credited with an Hour of Service, as defined in the San Jose Water Company
Retirement Plan, on or after November 1, 1999.  The amount of the
offset for the monthly retirement benefit paid from the San Jose Water Company
Retirement Plan shall be calculated on the basis of the single life monthly
annuity under such Plan commencing on the Participant’s Normal Retirement Date
which is the Actuarial Equivalent of his or her normal retirement benefit under
such plan.

     

    3.2           Benefit Commencement
Date.  The following provisions shall govern the date on which
a vested Participant’s Retirement Benefit as calculated under Section 3.1 shall
commence, subject to the elective deferral provisions of Section 3.3 and the
mandatory deferral provisions of Section 3.12.  In the absence of any
deferral effected pursuant to Section 3.3 or 3.12, such date shall constitute
the Participant’s Benefit Commencement Date under the Plan.

     

    (a)           The
Benefit Commencement Date for a vested Participant whose Separation from Service
occurs on or after satisfying the requirements for a Normal Retirement Date shall be the first day
of the first calendar month following such Separation of Service. The monthly
retirement benefit which shall commence at that time shall be in the amount
calculated under Section 3.1 and payable in the form of a Single Life Annuity.
There shall be no actuarial increase to the dollar amount of the Participant’s
monthly retirement benefit should the Benefit Commencement Date occur after his
or her Normal Retirement Date.

     

    (b)           The
Benefit Commencement Date for a vested Participant whose Separation from Service
occurs on or after satisfying the requirements for an Early Retirement Date but
before his or her Normal Retirement Date shall be the first day of the first
calendar month following such Separation from Service. The monthly retirement
benefit which shall commence at that time under Section 3.1 shall be payable in
the form of a Single Life Annuity.  However, the dollar amount of that
monthly retirement benefit as calculated pursuant to Section 3.1 shall be
reduced for the commencement of such benefit before the Participant’s Normal
Retirement Date in accordance with the early retirement reduction factors set
forth in the San Jose Water Company Retirement Plan as in effect on the Benefit
Commencement Date.

     

    (c)           The
Benefit Commencement Date for a vested Participant whose Separation from Service
occurs before satisfying the requirements for an Early Retirement Date or a
Normal Retirement Date shall
be the first date of the first calendar month on which he or she satisfies the
requirements for an Early Retirement Date or (if earlier) a Normal Retirement
Date. The monthly retirement benefit which shall commence at that time under
Section 3.1 shall be payable in the form of a Single Life Annuity. However, the
dollar amount of that monthly retirement benefit as calculated pursuant to
Section 3.1 shall be reduced, in accordance with the early retirement reduction
factors set forth in the San Jose Water Company Retirement Plan as in effect on
the Benefit Commencement Date, should such retirement benefit commence before
the Participant’s Normal Retirement Date.

     

    
      
        
           


        

        
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    3.3           Election of Deferred Benefit
Commencement Date. The following provisions shall govern any election by
a Participant to receive his or her Retirement Benefit on a Deferred Benefit
Commencement Date that is later than the date on which his or her Retirement
Benefit would otherwise commence in accordance with Section 3.2:

     

    (i)             An
Eligible Employee participating in the Plan during the 2007 calendar year may
elect a Deferred Benefit Commencement Date at any time on or before December 31,
2007 by filing the appropriate deferral election form with the
Committee.

    


    (ii)            An
Eligible Employee who is first selected for participation in the Plan after
December 31, 2007 may elect a Deferred Benefit Commencement Date by filing the
appropriate election form with the Committee at any time prior to the date his
or her  participation in the Plan becomes effective.

    


    (iii)           Should
a Participant wish at any time after December 31, 2008  to change the
Benefit Commencement Date in effect for him or her pursuant to Section 3.2 (or
any  Deferred Benefit Commencement Date in effect for him or her at
that time under this Section 3.3) to a later Deferred Benefit Commencement Date,
then such Participant must file the appropriate deferral election form with the
Committee at least twelve (12) months prior to the Benefit Commencement Date or
Deferred Benefit Commencement Date in effect at the time for the Participant,
and the deferral election shall in no event become effective or otherwise have
any force or applicability until the expiration of the twelve (12)-month period
measured from the date such election is filed with the Committee. Accordingly,
the new deferral election shall become null and void should the Participant’s
pre-existing Benefit Commencement Date or Deferred Commencement Date occur
within that twelve (12)-month period. The new Deferred Benefit Commencement Date
elected by the Participant must be a date that is at least five (5) years later
than the date on which the Participant’s Retirement Benefit would have otherwise
commenced in the absence of the new deferral election.

    


    3.4           Alternative Form of Benefit
Payment.  In lieu of the Single Life Annuity in which a
Participant is to receive as his or her Retirement Benefit, the Participant may
elect an alternative form of benefit payment in accordance with the following
requirements:

     

    (i)            
A Participant who is married on his or her Benefit Commencement Date (or any
Deferred Benefit Commencement Date in effect for him or her in accordance with
the provisions of Section 3.3) may elect to receive his or her Retirement
Benefit in the form of the Qualified Joint and Survivor Annuity, provided such
election is made in accordance with the applicable requirements of subparagraph
(iii) below.

     

    
      
        
           


        

        
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    (ii)           A
Participant, whether or not married on his or her Benefit Commencement Date (or
any Deferred Benefit Commencement Date in effect for him or her in accordance
with the provisions of Section 3.3), may elect to receive his or her Retirement
Benefit in the form of the Ten Year Certain and Life Option, provided such
election is made in accordance with the applicable requirements of subparagraph
(iii) below.

     

    (iii)          Provided
the Qualified Joint and Survivor Annuity and the Ten Year Certain and Life
Option are each the Actuarial Equivalent of the Single Life Annuity payable to
the Participant hereunder, the Participant may elect either alternative form of
payment by filing the appropriate election form with the Committee at any time
prior to the Benefit Commencement Date or Deferred Benefit Commencement Date in
effect for such Participant. In the event that either the Qualified Joint and
Survivor Annuity or the Ten Year Certain and Life Option is not the Actuarial
Equivalent of the Single Life Annuity payable to the Participant hereunder, then
the Participant’s election of the form of payment which is not such an Actuarial
Equivalent shall be subject to the following limitations:

     

     -           
Participant must elect the alternative form of benefit by filing the appropriate
benefit election form with the Committee at least twelve (12) months prior to
the Benefit Commencement Date or Deferred Benefit Commencement Date in effect at
the time for the Participant, and the benefit election shall in no event become
effective or otherwise have any force or applicability until the expiration of
the twelve (12)-month period measured from the date such election is filed with
the Committee. Accordingly, the benefit election shall become null and void
should the Participant’s Benefit Commencement Date or Deferred Commencement Date
occur within that twelve (12)-month period.  As part of the benefit
election process, the Participant must designate a new Benefit Commencement Date
that is at least five (5) years later than the date on which the Participant’s
Retirement Benefit would have otherwise commenced in accordance with the Benefit
Commencement Date or Deferred Benefit Commencement Date in effect for the
Participant immediately prior to the filing of his or her benefit
election.

    


    (iv)         For
purposes of determining whether the Qualified Joint and Survivor Annuity is the
Actuarial Equivalent of the Single Life Annuity payable to the Participant, any
subsidy provided with respect to the Qualified Joint and Survivor Annuity shall
not be taken into account, provided the annual lifetime benefit payable
thereunder to the Participant is not greater than his or her annual lifetime
benefit under the Single Life Annuity, and the annual lifetime benefit payable
to the survivor is not greater than the annual lifetime benefit payable to the
Participant under such Qualified Joint and Survivor Annuity.  In no
event will the Qualified Joint and Survivor Annuity or the Ten Year Certain and
Life Option be deemed for purposes of subparagraph (iii) above to be the
Actuarial Equivalent of the Single Life Annuity payable to the Participant
hereunder, if the scheduled date for the first annuity payment under such
alternative form of payment is other than the Benefit Commencement Date or
Deferred Benefit Commencement Date in effect at the time for the
Participant.

     

    (v)           A
benefit election made under this Paragraph 3.4 by a Participant who is married
on such date is not subject to spousal consent.

     

    
      
        
           


        

        
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    3.5           Ten Year Certain and Life
Option.  A Participant who elects the Ten Year Certain and Life
Option shall receive his or her Retirement Benefit in the form of a monthly
annuity over his or her 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 or her Retirement Benefit in such form must
designate, as described in Section 3.6, one or more Beneficiaries to receive any
remaining payments under the Plan after his or her 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
3.5.

     

    3.6           Beneficiary
Designation.  The Beneficiary designation of a Participant who
elects to receive his or her 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 Benefit Commencement Date or Deferred Benefit
Commencement Date in effect for that benefit. The Participant may revoke or
change the designation at any time prior to the applicable Benefit Commencement
Date by delivering a subsequent form to the Committee.

     

    3.7           Calculation of Alternative
Forms of Benefits.  The amount of all benefit payment forms
specified in Section 3.4 shall be determined in accordance with the provisions
of the San Jose Water Company Retirement Plan.

     

    3.8           Retiree
Increases.

     

    (a)           1998
Retiree Benefit Increase. Subject to a ten percent (10%) maximum benefit
increase, the monthly pension of each Participant (or Beneficiary in the case of
a deceased Participant) shall be increased 0.138889% for each month or partial
month which has elapsed from the date of the initial payment of retirement
benefits to each Participant (or Beneficiary), up to and including February 28,
1998.

     

    (b)           2002
Retiree Benefit Increase.  Subject to a ten percent (10%) maximum
benefit increase, the monthly pension of each Participant (or Beneficiary in the
case of a deceased Participant) shall be increased 0.212766% for each month or
partial month which has elapsed from (i) the later of the date of the initial
payment of benefits or March 1, 1998 to (ii)
January 31, 2002.

     

    3.9           Qualified Preretirement
Survivor Annuity.  If a married Participant dies after his or
her Retirement Benefit has vested but before the Benefit Commencement Date or
Deferred Benefit Commencement Date in effect for such benefit, then the
Participant's surviving spouse will be entitled to a Qualified Preretirement
Survivor Annuity in accordance with this Section 3.9.

     

    (a)           The
Qualified Preretirement Survivor Annuity will become payable on the later of
(1) the first day of the month coinciding with or next following the
Participant's death or (2) the earliest date on which the Participant would have
been eligible to receive a Qualified Joint and Survivor Annuity under the Plan
(disregarding any Deferred Benefit Commencement Date election the Participant
may have outstanding under Section 3.3 at the time of his or her
death).

     

    
      
        
        

      

      
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    (b)           The
Qualified Preretirement Survivor Annuity will be in a dollar amount equal to
fifty percent (50%) of the amount the Participant would have received had his or
her Separation from Service occurred on the day before his or her death and he
or she had elected the Qualified Joint and Survivor Annuity as his or her form
of benefit payment. In the case of a vested Participant who dies on or before
the earliest date on which he or she would have been eligible to receive a
Qualified Joint and Survivor Annuity, the amount of the Qualified Preretirement
Survivor Annuity will be computed as though the Participant had survived until
he or she was first eligible to receive a Qualified Joint and Survivor Annuity,
retired at that time with an immediate Qualified Joint and Survivor Annuity, and
died the next day.

     

    3.10           Death
Benefit.  If a Participant who is unmarried at the time dies
after his or her Retirement Benefit has vested but before the Benefit
Commencement Date or Deferred Benefit Commencement Date in effect for such
benefit, then such Participant's Beneficiary shall be entitled to a Death
Benefit in accordance with this Section 3.10.

     

    (a)           The
Death Benefit will become payable on the later of
(1) the first day of the month coinciding with or next following the
Participant's death or (2) the earliest date on which the Participant would have
been eligible to receive his or her Retirement Benefit (disregarding any
Deferred Benefit Commencement Date election the Participant may have outstanding
under Section 3.4 at the time of his or her death).

     

    (b)           The
Death Benefit will be in a monthly dollar amount equal to the monthly retirement
benefit the Participant would have received under the Plan had his or her
Separation from Service occurred on the day before the Participant's death and
he or she had elected to receive the optional form of benefit described in
Section 3.5 of the Plan. In the case of a vested Participant who dies on or
before the earliest date that such Participant would have been eligible to
receive his or her Retirement Benefit, the amount of the Death Benefit will be
computed as though the Participant had survived until he or she was first
eligible to receive a retirement benefit, retired at that time and elected to
receive the optional form of benefit described in Section 3.5 of the Plan, and
died the next day.

     

    3.11          Adjustments to
Benefits. The benefit calculated in accordance with the provisions of
this Article III shall, with respect to each Participant referenced in Exhibit
A, be subject to the specific adjustments set forth in Exhibit A with respect to
that Participant.

     

    3.12
        Mandatory Deferral of
Payments. Notwithstanding any
provision to the contrary in this Article III or any other article in the Plan,
a vested Participant’s Retirement Benefit shall not commence under this Plan
prior to the earlier of
(i) the first day of the seventh (7th) month following the date of his or her
Separation from Service or (ii) the date of his or her death, if  the
Participant is deemed at the time of such Separation from Service to be a
Specified Employee and such
delayed commencement is otherwise required in order to avoid a prohibited
distribution under Code Section 409A(a)(2). Upon the expiration of the
applicable deferral period, all monthly retirement payments deferred pursuant to
this Section 3.12 shall be paid in a lump sum to the Participant, and the
remaining monthly retirement payments due under the Plan shall be paid in
accordance with the normal payment dates specified for them herein.

     

    
      
        
           


        

        
          9

          
            

          

        

        
           


        

      

    

     

    
      	
              IV.

            	
              VESTING

            


    

     

    4.1           Normal
Vesting.  A Participant shall vest in his or her Accrued
Benefit upon completion of Years of Service as follows:

     

    


    
      	
              Years of
      Service

            	
              Vested
      Percentage

            
	 	 
	
              Less
      than 10

            	
              None

            
	 	 
	
              10
      or More

            	
              100%

            


    

    


     

    4.2           Change in Control Severance
Vesting.  Notwithstanding Section 4.1, a Participant’s Accrued
Benefit shall immediately become 100% vested if such Participant becomes
entitled to a severance benefit under the Executive Severance Plan by reason of
a qualifying termination of his or her Employee status thereunder.

     

    
      	
              V.

            	
              FUNDING
      NATURE OF THE PLAN

            


    

     

    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.  The foregoing notwithstanding, the Company may fund the Plan
with Board approval at any time, and the Company shall in the event of a Change
in Control arrange for the funding, immediately before the effective date of
that Change in Control, of all the Accrued Benefits under the Plan through a
trust which satisfies the requirements of Revenue Procedure 92-64 and/or such
other statutory or regulatory requirements as are necessary to assure that
Participants are not subject to Federal income taxation on either their Accrued
Benefits or amounts contributed to such trust before their receipt of such
benefits or assets.

     

    
      	
              VI.

            	
              ADMINISTRATION
      OF THE PLAN

            


    

     

    6.1           The
Plan shall be administered by the Committee.  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) selecting the Eligible Employees who are to
participate in the Plan, (b) responsibility for the compilation and maintenance
of all records necessary in connection with the Plan; (c) determining the amount
(if any) of the benefits payable under the Plan to a Participant or his or her
spouse or Beneficiary and authorizing the payment of all benefits under the Plan
as they become due and payable under the Plan; (d) reducing or otherwise
adjusting amounts payable under the Plan if payments are made in error; and (e)
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.

     

    
      
        
           


        

        
          10

          
            

          

        

        
           


        

      

    

     

    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.

     

    
      	
            	
              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 VII; provided,
however, that no such action shall (i) reduce any Accrued Benefit (or any
benefit hereunder based thereon) as of the date of such action or (ii) adversely
affect a Participant's right to continue to vest in such Accrued Benefit in
accordance with the terms of the Plan in effect immediately prior to such
action.

     

    7.2           Notice
of termination or amendment of the Plan, pursuant to Section 7.1, shall be given
in writing to each Participant and beneficiary of a deceased
Participant.

     

    7.3           No
amendment or termination of the Plan shall affect or modify the benefit
commencement date provisions or form of payment provisions in effect under
Article III immediately prior to such amendment or termination, and such
amendment or termination shall not result in any accelerated payment
of  the retirement benefits accrued under the Plan.

     

    
      	
            	
              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.

     

    
      
        
           


        

        
          11

          
            

          

        

        
           


        

      

    

     

    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 therefor in such form as shall be determined by the
Company.

     

    8.5           This
Plan is intended to qualify for exemption from Articles 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
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.

     

    8.8           If
the Committee is unable due to unforeseen circumstances to make the
determinations required under this Plan in sufficient time for payments to be
made when due, the Committee shall make the payments immediately 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

            
	 
      	 	 
      	 
      
	
               

            	,
      2007	
              By:

            	 
      
	 
      	 	 
      	 
      
	 
      	 	
              Title:

            	 
      


    

     

    
      
        
           


        

        
          12

          
            

          

        

        
           


        

      

    

    


    EXHIBIT
A

     

    TO

     

    THE
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

     

    (a)           In
computing John Weinhardt's benefit under Section 3.1 of the Plan, he shall
receive an additional eight and one quarter tenths of one percent (0.825%) of
Final Average Compensation for each year of service as President and Chief
Executive Officer of the Company. In addition, Mr. Weinhardt shall be entitled
to a supplemental benefit of payment of $225,000, which shall be fully vested
upon his retirement and payable in equal monthly installments over the
thirty-six (36) month period beginning August 1, 2002 and ending July 31,
2005.

     

    (b)           If
Barbara Y. Nilsen retires on March 1, 1998, then the benefit to which she is
entitled under Sections 3.1 and 3.2 of the Plan shall be increased by $40,000 in
the first year, $30,000 in the second year, and $20,000 in the third year of
retirement.

     

    (c)           In
computing Frederick Meyer's benefit under Sections 3.1 and 3.2 of the Plan, he
shall receive an additional two and one-half (2 1/2) Years of Service credit and
shall be deemed to be 2 1/2 years of age older at the time he
retires.

     

    (d)           In
computing the benefits under Article III for any Participant who becomes
entitled to a severance benefit under the Executive Severance Plan by reason of
a qualifying termination of Employee status after a Change in Control, such
Participant shall be credited with an additional number of Years of Service and
years of age equal to the number of years of cash severance benefits to which
such Participant is entitled under the Severance Plan (or if the severance
benefit is paid in a lump sum, the number of years of salary or compensation on
which such lump sum severance payment is based).  In no event,
however, shall any benefit be payable hereunder earlier than it otherwise would
have been paid in the absence of such additional Years of Service and age
credits.

     

    (e)           If
W. Richard Roth terminates Employee status before his Normal Retirement Date,
the benefit to which he is entitled under Section 3.2 of the Plan shall be the
full annual amount computed in accordance with Section 3.1 of the Plan, without
any reduction for early commencement of benefits In addition, in computing Mr.
Roth’s Final Average Compensation for purposes of computing his benefit under
Article III, his actual annual bonus for each year on and after 2003 shall be
deemed to be the greater of such actual bonus or his target bonus for such
year.  If Mr. Roth becomes entitled to a severance benefit under the
Executive Severance Plan by reason of a qualifying termination of Employee
status after a Change in Control, he shall be credited with such additional
service and years of age, if any, as is necessary, after application of
paragraph (d) above, to qualify him for benefits that would be payable had he
terminated Employee status after qualifying for an Early Retirement Date,
provided that no benefit shall be payable before his actual 55th
birthday.

     

    (f)           If
Jim Johansson retires March 12, 2004 then the benefit to which he is entitled
under Sections 3.1 and 3.2 of the Plan shall be calculated with an additional
one and one half years of service credit and one and one half years of age
credit.

     

    
      
        
           


        

        
          13

          
            

          

        

        
           


        

      

    

     

    (g)           If
Robert Loehr retires on December 07, 2004, then the benefit to which he is
entitled under Sections 3.1 and 3.2 of the Plan shall be calculated with an
additional 2 years of age credit.

     

    (h)           When
George Belhumeur retires, the benefit to which he is entitled under Sections 3.1
and 3.2 of the Plan shall be determined by increasing his Final Average
Compensation (as defined in Section 1.11) by the dollar amount obtained by
dividing the accrued vacation and termination payments made to him in connection
with his retirement by 36; provided, however that in determining his normal
retirement benefit under Section 3.1 or his early retirement benefit under
Section 3.2, his Accrued Benefit shall in no event be less than his Accrued
Benefit as of February 28, 2004.

     

    (i)           If
Richard Balocco retires before February 28, 2007, then the benefit to which he
is entitled under Sections 3.1 and 3.2 of the Plan shall be calculated with an
additional two and one half years of age credit.

     

    (j)           If
Richard Pardini retires June 15, 2007, then the benefit to which he is entitled
under Sections 3.1 and 3.2 of the Plan shall be calculated with an additional
three years of service credit.

     

     

    14