Document:

EXxhibit 10.39

                         CALIFORNIA WATER SERVICE GROUP
                                OUTSIDE DIRECTOR
                            STOCK OPTION GRANT NOTICE
                              EQUITY INCENTIVE PLAN

California Water Service Group (the "Company"), pursuant to its Equity Incentive
Plan (the "Plan"),  hereby grants to  Optionholder,  an Outside  Director of the
Company,  an option to  purchase  the number of shares of the  Company's  Common
Stock set forth below ("Shares"). This option is subject to all of the terms and
conditions as set forth herein and in the Stock Option  Agreement,  the Plan and
the Notice of Exercise, all of which are attached hereto and incorporated herein
in their entirety.

Optionholder:
                                        ----------------------------------------

Date of Grant:
                                        ----------------------------------------

Vesting Commencement Date:
                                        ----------------------------------------

Number of Shares Subject to Option:
                                        ----------------------------------------

Exercise Price (Per Share):
                                        ----------------------------------------

Total Exercise Price:
                                        ----------------------------------------

Expiration Date:
                                        ----------------------------------------

Type of Grant:                       Nonstatutory Stock Option

Exercise Schedule:         Vested Shares exercisable only  after  termination of
                           Continuous  Service,  subject to  the  exercise  term
                           specified in the Stock Option Agreement

Vesting Schedule:   [ ]    100% of the Shares vest ___ years after the Vesting
                           Commencement Date

                    [ ]    The Shares vest annually over ___ years after the
                           Vesting Commencement Date

                    [ ]    The Shares vest quarterly over ___ years after the
                           Vesting Commencement Date

                    [ ]    The Shares vest monthly over ___ years after the
                           Vesting Commencement Date

                    [ ]    ___% of the Shares vest on the first anniversary of
                           the Vesting Commencement Date; thereafter, the Shares
                           vest [ ] monthly  [ ] quarterly
                           [ ] annually, over ___ years

               Vesting is contingent  upon  completion  of  Continuous  Service;
               annual, quarterly or monthly vesting is at an equal rate over the
               vesting period.

Payment:      By one or a combination of the following  items  (described in the
              Stock Option Agreement):  (i) by cash or check, (ii) pursuant to a
              Regulation  T Program  if the  Shares  are  publicly,  or (iii) by
              delivery of already-owned shares if the Shares are publicly traded

Additional  Terms/Acknowledgements:  The undersigned  Optionholder  acknowledges
receipt of, and understands  and agrees to, this Grant Notice,  the Stock Option
Agreement and the Plan. Optionholder further acknowledges that as of the Date of
Grant, this Grant Notice,  the Stock Option Agreement and the Plan set forth the
entire  understanding   between  Optionholder  and  the  Company  regarding  the
acquisition  of stock in the  Company and  supersede  all prior oral and written
agreements on that subject with the exception of (i) options  previously granted
and delivered to Optionholder under the Plan, and (ii) the following  agreements
only:

         OTHER AGREEMENTS:

CALIFORNIA WATER SERVICE GROUP             OPTIONHOLDER:

By:
   ---------------------------------       -------------------------------------
              Signature                               Signature

Title:                                 Date:
   ---------------------------------       -------------------------------------

Date:
   ---------------------------------

ATTACHMENTS:  Stock  Option  Agreement,  Equity  Incentive  Plan,  and Notice of
ExerciseExhibit 10.40

                         CALIFORNIA WATER SERVICE GROUP
                            STOCK OPTION GRANT NOTICE
                              EQUITY INCENTIVE PLAN

California Water Service Group (the "Company"), pursuant to its Equity Incentive
Plan (the  "Plan"),  hereby  grants to  Optionholder  an option to purchase  the
number of shares of the Company's Common Stock set forth below ("Shares").  This
option is subject to all of the terms and  conditions as set forth herein and in
the Stock Option  Agreement,  the Plan and the Notice of Exercise,  all of which
are attached hereto and incorporated herein in their entirety.

Optionholder:
                                           -------------------------------------
Date of Grant:
                                           -------------------------------------

Vesting Commencement Date:
                                           -------------------------------------
Number of Shares Subject to Option:
                                           -------------------------------------
Exercise Price (Per Share):
                                           -------------------------------------
Total Exercise Price:
                                           -------------------------------------
Expiration Date:
                                           -------------------------------------

Type of Grant:     [ ]  Incentive Stock Option(1)
                   [ ]  Nonstatutory Stock Option

Exercise Schedule:      Same as Vesting Schedule

Vesting Schedule:  [ ]  100% of the Shares vest ___ years after the
                        Vesting Commencement Date

                   [ ]  The Shares vest annually over ___ years after the
                        Vesting Commencement Date

                   [ ]  The Shares vest quarterly over ___ years after the
                        Vesting Commencement Date

                   [ ]  The Shares vest monthly over ___ years after the
                        Vesting Commencement Date

                   [ ]  ___% of the Shares vest on the first anniversary of
                        the Vesting Commencement Date; thereafter, the Shares
                        vest  monthly  quarterly  annually, over ___ years

               Vesting is contingent  upon  completion  of  Continuous  Service;
               annual, quarterly or monthly vesting is at an equal rate over the
               vesting period.

Payment:      By one or a combination of the following  items  (described in the
              Stock Option Agreement):  (i) by cash or check, (ii) pursuant to a
              Regulation  T Program  if the  Shares  are  publicly,  or (iii) by
              delivery of already-owned shares if the Shares are publicly traded

Additional  Terms/Acknowledgements:  The undersigned  Optionholder  acknowledges
receipt of, and understands  and agrees to, this Grant Notice,  the Stock Option
Agreement and the Plan. Optionholder further acknowledges that as of the Date of
Grant, this Grant Notice,  the Stock Option Agreement and the Plan set forth the
entire  understanding   between  Optionholder  and  the  Company  regarding  the
acquisition  of stock in the  Company and  supersede  all prior oral and written
agreements on that subject with the exception of (i) options  previously granted
and delivered to Optionholder under the Plan, and (ii) the following  agreements
only:

         OTHER AGREEMENTS:

CALIFORNIA WATER SERVICE GROUP                            OPTIONHOLDER:

By:
   -----------------------------------       -----------------------------------
          Signature                                      Signature

Title:                                  Date:
   -----------------------------------       -----------------------------------
Date:

ATTACHMENTS:  Stock  Option  Agreement,  Equity  Incentive  Plan,  and Notice of
Exercise

--------------------
(1) If this is an  incentive  stock  option,  it (plus  your  other  outstanding
incentive stock options)  cannot be first  exercisable for more than $100,000 in
any calendar year. Any excess over $100,000 is a nonstatutory stock option.EXHIBIT 10.41

                         CALIFORNIA WATER SERVICE GROUP

                              EQUITY INCENTIVE PLAN

                             STOCK OPTION AGREEMENT
              (INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

     Pursuant to your Stock Option Grant Notice ("Grant  Notice") and this Stock
Option Agreement, California Water Service Group (the "Company") has granted you
an option under its Equity Incentive Plan (the "Plan") to purchase the number of
shares of the  Company's  Common  Stock  indicated  in your Grant  Notice at the
exercise  price  indicated in your Grant Notice.  Defined  terms not  explicitly
defined in this Stock  Option  Agreement  but  defined in the Plan have the same
definitions as in the Plan.

     The details of your option are as follows:

     1. VESTING.  Subject to the limitations  contained herein, your option will
vest as provided in your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.

     2.  NUMBER OF SHARES  AND  EXERCISE  PRICE.  The number of shares of Common
Stock  subject to your option and your  exercise  price per share  referenced in
your  Grant  Notice  may be  adjusted  from  time  to  time  for  Capitalization
Adjustments.

     3. METHOD OF  PAYMENT.  Payment of the  exercise  price is due in full upon
exercise of all or any part of your option. You may elect to make payment of the
exercise  price in cash or by check or in any  other  manner  permitted  by your
Grant Notice, which may include one or more of the following:

          a) In the  Company's  sole  discretion  at the  time  your  option  is
     exercised  and  provided  that at the time of exercise  the Common Stock is
     publicly traded and quoted  regularly in The Wall Street Journal,  pursuant
     to a program  developed  under  Regulation T as  promulgated by the Federal
     Reserve  Board  that,  prior to the  issuance of Common  Stock,  results in
     either  the  receipt of cash (or  check) by the  Company or the  receipt of
     irrevocable instructions to pay the aggregate exercise price to the Company
     from the sales proceeds.

          b) Provided  that at the time of exercise the Common Stock is publicly
     traded and quoted  regularly  in The Wall  Street  Journal,  by delivery of
     already-owned  shares of  Common  Stock  either  that you have held for the
     period  required  to  avoid a charge  to the  Company's  reported  earnings
     (generally six months) or that you did not acquire,  directly or indirectly
     from the  Company,  that are  owned  free and clear of any  liens,  claims,
     encumbrances  or  security  interests,  and that are valued at Fair  Market
     Value on the date of exercise.  "Delivery" for these purposes,  in the sole
     discretion  of the Company at the time you exercise  your  option,  include
     delivery to the Company of your  attestation of ownership of such shares of
     Common  Stock  in a form  approved  by  the  Company.  Notwithstanding  the
     foregoing,  you may not  exercise  your  option by tender to the Company of
     Common Stock to the extent such tender would violate the  provisions of any
     law,  regulation or agreement  restricting  the redemption of the Company's
     stock.

<PAGE>

     4. WHOLE  SHARES.  You may  exercise  your option only for whole  shares of
Common Stock.

     5.  SECURITIES  LAW  COMPLIANCE.  Notwithstanding  anything to the contrary
contained  herein,  you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then  registered  under the Securities Act
or, if such shares of Common Stock are not then so  registered,  the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option also must comply
with other  applicable laws and regulations  governing your option,  and you may
not exercise your option if the Company  determines that such exercise would not
be in material compliance with such laws and regulations.

     6. TERM.  You may not exercise your option before the  commencement  of its
term or after its term expires. The term of your option commences on the Date of
Grant and expires upon the earliest of the following:

          a) 30 days after the  termination of your  Continuous  Service for any
     reason other than death, Disability or Normal Retirement,  provided that if
     during any part of such  30-month  period you may not exercise  your option
     solely  because  of the  condition  set  forth in the  preceding  paragraph
     relating to "Securities Law Compliance,"  your option will not expire until
     the earlier of the Expiration Date or until it has been  exercisable for an
     aggregate  period of three months after the  termination of your Continuous
     Service;

          b) five years after the termination of your Continuous  Service due to
     your death, Disability or Normal Retirement;

          c) the Expiration Date indicated in your Grant Notice; or

          d) the day before the 10th anniversary of the Date of Grant.

     If your option is an Incentive Stock Option, in order to obtain the federal
income tax  advantages  associated  with an  Incentive  Stock  Option,  the Code
requires  that at all times  beginning  on the date of grant of your  option and
ending on the day three months  before the date of your option's  exercise,  you
must be an employee of the Company or an Affiliate,  except in the event of your
death or your permanent and total disability, as defined in Section 22(e) of the
Code. The Company has provided for extended  exercisability of your option under
certain  circumstances  for your benefit but cannot  guarantee  that your option
will  necessarily  be treated as an  Incentive  Stock  Option if you continue to
provide  services to the Company or an  Affiliate  as a  Consultant  or Director
after your employment  terminates or if you otherwise  exercise your option more
than  three  months  after  the date  your  employment  with the  Company  or an
Affiliate terminates.

     7. EXERCISE.

          a) You may exercise the vested  portion of your option during its term
     by  delivering a Notice of Exercise (in a form  designated  by the Company)
     together  with the exercise  price to the  Secretary of the Company,  or to
     such other person as the Company may  designate,  during  regular  business
     hours,  together  with such  additional  documents  as the Company may then
     require.

<PAGE>

          b) By  exercising  your option you agree that,  as a condition  to any
     exercise  of your  option,  the  Company  may  require you to enter into an
     arrangement  providing  for the  payment  by you to the  Company of any tax
     withholding obligation of the Company arising by reason of (1) the exercise
     of your option,  (2) the lapse of any  substantial  risk of  forfeiture  to
     which the shares of Common  Stock are subject at the time of  exercise,  or
     (3) the disposition of shares of Common Stock acquired upon such exercise.

          c) If your option is an Incentive  Stock Option,  by  exercising  your
     option you agree that you will notify the Company in writing within 15 days
     after the date of any  disposition of any of the shares of the Common Stock
     issued upon  exercise of your option that occurs within two years after the
     date of your  option  grant or within one year after such  shares of Common
     Stock are transferred upon exercise of your option.

     8. TRANSFERABILITY.

          a) If your option is an  Incentive  Stock  Option,  your option is not
     transferable,  except by will or by the laws of descent  and  distribution,
     and is  exercisable  during  your  life  only by you.  Notwithstanding  the
     foregoing,  by  delivering  written  notice  to  the  Company,  in  a  form
     satisfactory  to the Company,  you may  designate a third party who, in the
     event of your death, will thereafter be entitled to exercise your option.

          b) If your option is a Nonstatutory  Stock Option,  your option is not
     transferable,   except  (i)  by  will  or  by  the  laws  of  descent   and
     distribution,  (ii) with the prior  written  approval  of the  Company,  by
     instrument to an inter vivos or  testamentary  trust, in a form accepted by
     the Company,  in which the option is to be passed to beneficiaries upon the
     death of the trustor (settlor) and (iii) with the prior written approval of
     the Company,  by gift,  in a form  accepted by the Company,  to a permitted
     transferee under Rule 701 of the Securities Act.

     9.  OPTION NOT A SERVICE  CONTRACT.  Your  option is not an  employment  or
service contract, and nothing in your option will be deemed to create in any way
whatsoever  any obligation on your part to continue in the employ of the Company
or an Affiliate,  or of the Company or an Affiliate to continue your employment.
In addition,  nothing in your option will  obligate the Company or an Affiliate,
their  respective  stockholders,  Boards of Directors,  Officers or Employees to
continue any  relationship  that you might have as a Director or Consultant  for
the Company or an Affiliate.

     10. WITHHOLDING OBLIGATIONS.

          a) At the time you exercise  your option,  in whole or in part,  or at
     any time  thereafter  as  requested by the  Company,  you hereby  authorize
     withholding  from  payroll  and any  other  amounts  payable  to  you,  and
     otherwise  agree to make  adequate  provision as  instructed by the Company
     (including  by  means  of a  "cashless  exercise"  pursuant  to  a  program
     developed under Regulation T as promulgated by the Federal Reserve Board to

<PAGE>

     the extent instructed by the Company), for any sums required to satisfy the
     federal,  state,  local and  foreign  tax  withholding  obligations  of the
     Company  or an  Affiliate,  if any,  which  arise  in  connection  with the
     exercise of your option.

          b) The Company may, in its sole discretion, and in compliance with any
     applicable  legal  conditions or  restrictions,  withhold from fully vested
     shares of Common Stock otherwise  issuable to you upon the exercise of your
     option a number of whole shares of Common Stock having a Fair Market Value,
     determined by the Company as of the date of exercise,  not in excess of the
     minimum  amount of tax required to be withheld by law (or such lower amount
     as may be  necessary  to avoid  variable  award  accounting).  Any  adverse
     consequences  to you  arising in  connection  with such  share  withholding
     procedure will be your sole responsibility.

          c) You  may not  exercise  your  option  unless  the  tax  withholding
     obligations of the Company and/or any Affiliate are satisfied. Accordingly,
     you may not be able to exercise  your option when  desired even though your
     option  is  vested,  and the  Company  will have no  obligation  to issue a
     certificate  for such  shares of Common  Stock or  release  such  shares of
     Common Stock from any escrow  provided for herein  unless such  obligations
     are satisfied.

     11.  NOTICES.  Any notices  provided for in your option or the Plan will be
given in writing and will be deemed  effectively  given upon  receipt or, in the
case of notices delivered by mail by the Company to you, five days after deposit
in the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.

     12.  GOVERNING PLAN DOCUMENT.  Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option,  and
is further subject to all  interpretations,  amendments,  rules and regulations,
which may from time to time be promulgated and adopted  pursuant to the Plan. In
the event of any conflict between the provisions of your option and those of the
Plan, the provisions of the Plan will control.

<PAGE>

                               NOTICE OF EXERCISE

California Water Service Group
c/o California Water Service Company
1720 N. First St.
San Jose, CA 95112                                 Date of Exercise: ___________

Ladies and Gentlemen:

     This constitutes  notice that I elect to exercise my stock option under the
California Water Service Group Equity Incentive Plan by purchasing the number of
shares for the price set forth below.

Type of option (check one):             Incentive [ ]          Nonstatutory [ ]

Stock option dated:                    _________________       _________________
Number of shares as to which option
is exercised ("Shares"):
                                       _________________       _________________
Certificates to be issued in
name of:                               _________________       _________________

Total exercise price:                 $_________________      $_________________
Cash payment delivered herewith:
                                      $_________________      $_________________
Value of _____ shares of California
Water Service Group common stock
delivered herewith(2):
                                      $_________________      $_________________

     By this exercise,  I agree (i) to provide such additional  documents as you
may require  pursuant to the terms of the California  Water Service Group Equity
Incentive  Plan,  (ii) to  provide  for the  payment by me to you (in the manner
designated  by you) of your  withholding  obligation,  if any,  relating  to the
exercise of this  option,  and (iii) if this  exercise  relates to an  incentive
stock  option,  to notify  you in  writing  within 15 days after the date of any
disposition  of any of the shares of Common Stock  issued upon  exercise of this
option  that  occurs  within two years after the date of grant of this option or
within one year after such shares of Common  Stock are issued  upon  exercise of
this option.

                                           Very truly yours,

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

(2) Shares must meet the public  trading  requirements  set forth in the option.
Shares  must be  valued  in  accordance  with  the  terms  of the  option  being
exercised,  must have been owned for the minimum period  required in the option,
and must be owned free and clear of any liens, claims,  encumbrances or security
interests.   Certificates  must  be  endorsed  or  accompanied  by  an  executed
assignment separate from certificate.

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