AQUA AMERICA INC
EXHIBIT 10.30 CASH INCENTIVE COMPENSATION PLAN
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<DESCRIPTION>EXHIBIT 10.30 CASH INCENTIVE COMPENSATION PLAN
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                                                              Exhibit 10.30




                               AQUA AMERICA, INC.
                                and SUBSIDIARIES
                  2004 ANNUAL CASH INCENTIVE COMPENSATION PLAN


BACKGROUND

o        In 1989, the Company and its compensation consultant conducted a
         feasibility study to determine whether the Company should implement an
         incentive compensation plan. The study was prompted by the positive
         experience of other investor-owned water companies with incentive
         compensation.

o        The study included interviews with executives and an analysis of
         competitive compensation levels. Based on the results, the compensation
         consultant recommended that the Company's objectives and competitive
         practice supported the adoption of an annual incentive plan (the
         "Plan"). The Company has had a cash incentive compensation plan in
         place since 1990 and management and the Board of Directors believe it
         has had a positive effect on the Company's operations, aiding
         employees, shareholders (higher earnings) and customers (better service
         and controlling expenses).

o        The Plan has two components - a Management Incentive Program and an
         Employee Recognition ("Chairman's Award") Program.

o        The Plan is designed to provide an appropriate incentive to the
         officers, managers and certain other key employees of the Company. The
         2004 Management Incentive Program will cover officers, managers and
         certain key employees of Aqua America, Inc., and its subsidiaries that
         adopt the Plan.

o        The plan is periodically reviewed by the Company's outside compensation
         consultant and the target bonus percentages are reviewed and approved
         each year as part of the compensation consultant's annual review of the
         Company's total compensation plan.



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MANAGEMENT INCENTIVE PROGRAM

o        Performance Measures

         --       Annual incentive bonus awards are calculated by multiplying an
                  individual's Target Bonus by a Company Rating Factor based on
                  the applicable company's performance and an Individual Rating
                  Factor based on the individual employee's performance.

                  The approach of having a plan tied to the applicable company's
                  income performance is appropriate as the participants' assume
                  some of the same risks and rewards as the shareholders who are
                  investing in the company and making its capital construction
                  and acquisition programs possible. Customers also benefit from
                  the participants' ?individual objectives being met, as
                  improvements in performance are accomplished by controlling
                  costs, improving efficiencies and enhancing customer service.
                  For these reasons, future rate relief should be lessened and
                  less frequent, which directly benefits all customers.

         --       The applicable company's actual after-tax net income from
                  continuing operations or earnings before interest, taxes and
                  depreciation ("EBITD") relative to its annual budget will be
                  the primary measure for the company's performance. The
                  measurement to be used as the Company Factor for each
                  participant will be proposed by the Chairman of the Company
                  and approved by the Executive Compensation Committee. Each
                  year a "Target Net Income or EBITD" level will be established.
                  Starting in 2000, portions of the Company Rating Factor may be
                  tied to the financial targets of more than one company for
                  some participants. For purposes of the Plan, the Target Net
                  Income or EBITD may differ from the budgeted net income or
                  EBITD level. For 2004, the Target Net Income or EBITD will
                  exclude the impact of any unbudgeted extraordinary gains or
                  losses as a result of changes in accounting principles.

         --       Based on a review of historic performance, the minimum or
                  threshold level of performance is set at 90 percent of the
                  Target Net Income or EBITD. That is, no bonus awards will be
                  made if actual net income is less than 90 percent of the
                  Target or EBITD for the year. No additional bonus will be
                  earned for results exceeding 110 percent of the Target Net
                  Income or EBITD.

         --       Each individual's performance and achievement of his or her
                  objectives will also be evaluated and factored into the bonus
                  calculation (the "Individual Factor"). Performance objectives
                  for each participant are established at the beginning of the
                  year and are primarily directed toward controlling costs,
                  improving efficiencies and productivity, enhancing customer
                  service and growing the company's customer base. Each
                  objective has specific performance measures that are used to
                  determine the level of achievement for each objective. A
                  participant's target Individual Factor should be no more than
                  90 points, with the possibility of additional points being
                  awarded for measurable performance above the participant's
                  targeted performance level. Participants must achieve at least
                  70 points for their Individual Factor to be eligible for a
                  bonus award under the Plan.

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o        Participation

         --       Eligible participants consist of officers, managers and
                  certain key employees.

         --       Participation in the Management Incentive Program will be
                  determined each year. Each participant will be assigned a
                  "Target Bonus Percentage" ranging from 5 to 60 percent
                  depending on duties and responsibilities.

         --       For each company, the Target Bonus Percentage for all the
                  participants within that company will be applied to either
                  their base salary or their salary grade midpoint as designated
                  by the Company's chairman, subject to the approval of the
                  Executive Compensation and Employee Benefits Committee.

         --       Actual bonuses may range from 0, if the company's financial
                  results fall below the minimum threshold or the participant
                  does not make sufficient progress toward achieving his or her
                  objectives (i.e. performance measure points totaling less than
                  70 points), to 187.5 percent if performance -- both Company
                  and individual -- is rated at the maximum.

         --       New employees who are hired into a position that is eligible
                  to participate in the Management Incentive Plan, will normally
                  be eligible to receive a portion of the bonus calculated in
                  accordance with this Plan that is pro-rated based on the
                  number of full calendar months between the new employee's hire
                  date and the end of the calendar year.

         --       Employees who would otherwise be eligible to participate in
                  this Management Incentive Plan, but who leave employment with
                  the company either voluntarily, involuntarily or as a result
                  of retirement, will not receive a bonus for the year in which
                  their employment terminates. If an employee who would
                  otherwise be eligible to participate in this Management
                  Incentive Plan dies, the company will pay the deceased
                  employee's estate a portion of the bonus the deceased employee
                  would otherwise have been entitled to assuming a 100%
                  Individual Rating Factor, but pro-rated for the number of full
                  calendar months the employee completed before his or her
                  death.


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o        Company Performance

         -- Company performance will be measured on the following schedule:

                                                  Percent of     Company
                                                    Target        Rating
                                                    ------        ------

                  Threshold..............             90%            0%
                                                      90             50
                                                      92             65
                                                      95             80
                                                      96             85
                                                      97             90
                                                      98             94
                                                      99             97
                  Plan...................            100            100
                                                     105            110
                                                     110            125

         --       The actual Company Factor should be calculated by
                  interpolation between the points shown in the table above.

         --       Regardless of the Company rating resulting from this Schedule,
                  the Executive Compensation and Employee Benefits Committee
                  retains the authority to determine the final Company Rating
                  for purposes of this Plan.

o        Individual Performance

         --       Individual performance will be measured on the following
                  scale:

                  Performance Measure                        Individual
                        Points                              Rating Factor
                        ------                              -------------

                        0 - 69                                     0%
                          70                                      70%
                          80                                      80%
                          90                                      90%
                         100                                     100%
                         110                                     110%

         --       In addition, up to 40 additional points and additional
                  percentage points may be awarded to a participant at the
                  discretion of the Chief Executive Officer for exemplary
                  performance. Individual performance points for the Chief
                  Executive Officer are determined by the Executive Compensation
                  and Employee Benefits Committee.


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Sample Calculations

o        Example 1

                  Salary or midpoint         $70,000
                  Target Bonus               10 percent ($7,000)
                  Company Rating             100 percent
                  Individual Rating          90 percent

                  Calculation:

                                       Company     Individual
         Target Bonus  x  Rating   x   Rating   =  Bonus Earned
         ------------     ------       ------      ------------

               $7,000  x    100%   x     90%    =   $6,300
                                                    ======

o        Example 2

         --       Using the same salary and target bonus, but assuming Company
                  performance was less than 90 percent of Target EBITD, there
                  would be no bonus earned.

                  Calculation:

         $7,000  x   0   x   90%  =   0

o        Example 3

         --       Similarly, if the Individual Factor is rated below 70 points,
                  no bonus would be earned regardless of the Company Factor.

                  Calculation:

         $7,000  x  100% x   0   =   0





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o        Example 4

         --       If the Company Rating Factor is allocated between two
                  companies, the bonus will be calculated separately based on
                  the allocation.

                  Calculation:

<TABLE>
<CAPTION>
                          Company          Company           Individual
Target Bonus x            Rating x         Allocation x      Rating             = Bonus Earned
-------------             ------           ----------        ------
<S>      <C>               <C>                 <C>            <C>                 <C>
         $7,000   x        100%     x          20%    x       90%               = $1,260

         $7,000   x        110%     x          80%    x       90%               = $5,544
                                                                                  ------

         Total Bonus                                                            = $6,804
</TABLE>

o        Example 5

         --       It is also possible that one portion of the applicable Company
                  Rating Factor is zero, for which there would be no bonus,
                  regardless of the participant's Individual Rating Factor.

                  Calculation:

<TABLE>
<CAPTION>
                          Company          Company           Individual
Target Bonus x            Rating x         Allocation x      Rating             = Bonus Earned
-------------             ------           ----------        ------
<S>      <C>               <C>                 <C>            <C>                 <C>
         $7,000   x         0%      x          20%    x       90%               = $0

         $7,000   x        110%     x          80%    x       90%               = $5,544
                                                                                  ------

         Total Bonus                                                            = $5,544

</TABLE>

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EMPLOYEE RECOGNITION ("CHAIRMAN'S AWARD") PROGRAM

1.       In addition to the Management Incentive Program, the Company maintains
         an Employee Recognition Program known as the Chairman's Award program
         to reward non-union employees not eligible for the management bonus
         plan for superior performance that contains costs, improves efficiency
         and productivity of the workforce and better serves our customers.
         Awards may also be made for a special action or heroic deed, or for a
         project that positively impacts the performance or image of the
         Company.

2.       Awards will be made from an annual pool designated by the Chairman of
         Aqua America with the approval of the Executive Compensation and
         Employee Benefits Committee. Unused funds will not be carried over to
         the next year. If financial performance warrants, management may
         request permission from the Executive Compensation and Employee
         Benefits Committee for special awards under the program.

3.       In general, Chairman's Awards will not be made to employees of a
         company that does not achieve at least 90% of its net income objective
         for the year.

4.       Awards may be made throughout the year, however, no more than one-third
         of a company's Chairman's Award pool may be awarded until the company's
         final net income for the year is determined.

5.       Nominations for employees to receive Chairman's Awards will be made to
         the applicable officer and should include documentation on the reasons
         for the recommendations. The applicable officer will review the
         nominations and forward their recommendations to the Chairman of Aqua
         America.

6.       The Chairman will determine the individuals to actually receive a bonus
         and the amount. The maximum award to any one employee is $5,000.



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