Exhibit 10.16


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

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

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