EXHIBIT 10.1

AMERICAN STATES WATER COMPANY
2000 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT

     THIS NONQUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”) by and
between AMERICAN STATES WATER COMPANY, a California corporation (the
“Corporation”), and                          (the “Participant”) evidences the
nonqualified stock option (the “Option”) granted by the Corporation to the
Participant as to the number of shares of the Corporation’s common shares, no
par value (the “Common Shares”), first set forth below.

             
Number of Common Shares:1
      Award Date:    

           
 
           
Exercise Price per Share:1
      Expiration Date:1,2    

           

         
% Vesting
  Date of Vesting 1,2    
 
       
________%
  ______________________    
________%
  ______________________    
________%
  ______________________    

     The Option is granted under the American States Water Company 2000 Stock
Incentive Plan, as amended (the “Plan”) and subject to the Terms and Conditions
of Option (the “Terms”) attached to this Option Agreement (incorporated herein
by this reference) and to the Plan. The Option has been granted to the
Participant in addition to, and not in lieu of, any other form of compensation
otherwise payable or to be paid to the Participant. The Option is not and shall
not be deemed to be an incentive stock option within the meaning of Section 422
of the Code. Capitalized terms are defined in the Plan if not defined herein.
The parties agree to the terms of the Option set forth herein, and the
Participant acknowledges receipt of a copy of the Terms and the Plan.

          “PARTICIPANT”
    AMERICAN STATES WATER COMPANY,
a California corporation
 
       
 
       
Signature
       
 
  By:    
 
       
Print Name
       
 
  Its:    
 
       
Address
       
 
       
 
       
City, State, Zip Code
       

CONSENT OF SPOUSE

     In consideration of the Corporation’s execution of this Option Agreement,
the undersigned spouse of the Participant agrees to be bound by all of the terms
and provisions hereof and of the Plan.

                   
 
               
Signature of Spouse
          Date    

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1   Subject to adjustment under Section 4.2 of the Plan. 2   Subject to early
termination under Section 4.2 of the Plan.

 

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TERMS AND CONDITIONS OF OPTION

1.   Vesting; Limits on Exercise.

     As set forth in the Option Agreement, the Option shall vest and become
exercisable in percentage installments of the aggregate number of Common Shares
subject to the Option. The Option may be exercised only to the extent the Option
is vested and exercisable.

  •   Cumulative Exercisability. To the extent that the Option is vested and
exercisable, the Participant has the right to exercise the Option (to the extent
not previously exercised), and such right shall continue, until the expiration
or earlier termination of the Option.     •   No Fractional Shares. Fractional
share interests shall be disregarded, but may be cumulated.     •   Minimum
Exercise. No fewer than 1001 Common Shares may be purchased at any one time,
unless the number purchased is the total number at the time exercisable under
the Option.

2.   Continuance of Employment Required; No Employment Commitment.

     The vesting schedule does not require continued service through each
applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option
Agreement.

     Nothing contained in this Option Agreement or the Plan constitutes an
employment commitment by the Company, affects the Participant’s status as an
employee at will who is subject to termination without cause, confers upon the
Participant any right to remain employed by the Company or any Subsidiary,
interferes in any way with the right of the Company or any Subsidiary at any
time to terminate such employment, or affects the right of the Company or any
Subsidiary to increase or decrease the Participant’s other compensation.

3.   Method of Exercise of Option.

     The Option shall be exercisable by the delivery to the Secretary of the
Corporation of a written notice stating the number of Common Shares to be
purchased pursuant to the Option and accompanied by:

  •   delivery of an executed Exercise Agreement in substantially the form
attached hereto as Exhibit A or such other form as from time to time may be
required by the Committee (the “Exercise Agreement”);     •   payment in full
for the Exercise Price of the shares to be purchased, by check or electronic
funds transfer to the Corporation, subject to such specific procedures or
directions as the Committee may establish;     •   satisfaction of the tax
withholding provisions of Section 4.5 of the Plan; and     •   any written
statements or agreements required pursuant to Section 4.4 of the Plan.

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     The Committee also may but is not required to authorize a non-cash payment
alternative specified below at or prior to the time of exercise, in which case,
the Exercise Price and/or applicable withholding taxes, to the extent so
authorized, may be paid in full or in part by Common Shares already owned by the
Participant, valued at their Fair Market Value on the exercise date; provided,
however, that any shares acquired upon exercise of a stock option or otherwise
directly from the Corporation must have been owned by the Participant for at
least six (6) months before the date of such exercise.

4.   Early Termination of Option.

     The Option, to the extent not previously exercised, and all other rights
hereunder, whether vested and exercisable or not, shall terminate and become
null and void prior to the Expiration Date in the event of the termination of
the Option pursuant to Section 4.2 of the Plan. The provisions of subsections
(a), (b) and (c) of Section 2.6 of the Plan are not applicable to this Option.

     Your Options will terminate immediately if you are terminated by the
Company or one of its Subsidiaries for “Cause”.

5.   Non-Transferability and Other Restrictions.

     The Option and any other rights of the Participant under this Option
Agreement or the Plan are nontransferable and exercisable only by the
Participant, except as set forth in Section 1.9 of the Plan.

6.   Notices.

     Any notice to be given under the terms of this Option Agreement or the
Exercise Agreement shall be in writing and addressed to the Corporation at its
principal office to the attention of the Secretary, and to the Participant at
the address given beneath the Participant’s signature hereto, or at such other
address as either party may hereafter designate in writing to the other. Any
such notice shall be given only when received, but if the Participant is no
longer an Eligible Employee, shall be deemed to have been duly given when
enclosed in a properly sealed envelope addressed as aforesaid, registered or
certified, and deposited (postage and registry or certification fee prepaid) in
a post office or branch post office regularly maintained by the United States
Government.

7.   Plan.

     The Option and all rights of the Participant under this Option Agreement
are subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Participant acknowledges receipt of a copy of the Plan and agrees to be
bound by the terms thereof. The Participant acknowledges reading and
understanding the Plan. Unless otherwise expressly provided in other sections of
this Option Agreement, provisions of the Plan that confer discretionary
authority on the Board or the Committee do not and shall not be deemed to create
any rights in the Participant unless such rights are expressly set forth herein
or are otherwise in the sole discretion of the Board or the Committee so
conferred by appropriate action of the Board or the Committee under the Plan
after the date hereof.

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8.   Entire Agreement.

     This Option Agreement (together with the form of Exercise Agreement
attached hereto) and the Plan together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The Plan, this Option
Agreement and the Exercise Agreement may be amended pursuant to Section 4.6 of
the Plan. Such amendment must be in writing and signed by the Corporation. The
Corporation may, however, unilaterally waive any provision hereof or of the
Exercise Agreement in writing to the extent such waiver does not adversely
affect the interests of the Participant hereunder, but no such waiver shall
operate as or be construed to be a subsequent waiver of the same provision or a
waiver of any other provision hereof.

9.   Governing Law; Limited Rights.

     9.1. California Law. This Option Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California
without regard to conflict of law principles thereunder.

     9.2. Limited Rights. The Participant has no rights as a shareholder of the
Corporation with respect to the Option as set forth in Section 4.7 of the Plan.
The Option does not place any limit on the corporate authority of the
Corporation as set forth in Section 4.14 of the Plan.

(Remainder of Page Intentionally Left Blank)

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EXHIBIT A

AMERICAN STATES WATER COMPANY
2000 STOCK INCENTIVE PLAN
OPTION EXERCISE AGREEMENT

     The undersigned (the “Purchaser”) hereby irrevocably elects to exercise
his/her right, evidenced by that certain Nonqualified Stock Option Agreement
dated as of ____________ (the “Option Agreement”) under the American States
Water Company 2000 Stock Incentive Plan, as amended (the “Plan”), as follows:

  •   the Purchaser hereby irrevocably elects to purchase _________ shares of
Common Shares (the “Shares”), of American States Water Company (the
“Corporation”), and     •   such purchase shall be at the price of $  per share,
for an aggregate amount of $______ (subject to applicable withholding taxes
pursuant to Section 4.5 of the Plan).

     Capitalized terms are defined in the Plan if not defined herein.

     Delivery of Shares. The Purchaser requests that (1) a certificate
representing the Common Shares be registered to Purchaser and delivered to:
_______________________or (2) that the Common Shares be registered in the
Purchaser’s name and electronically delivered
to:____________________________________________________________________________________________.

     Plan and Option Agreement. The Purchaser acknowledges that all of his/her
rights are subject to, and the Purchaser agrees to be bound by, all of the terms
and conditions of the Plan and the Option Agreement, both of which are
incorporated herein by this reference. If a conflict or inconsistency between
the terms and conditions of this Exercise Agreement and of the Plan or the
Option Agreement shall arise, the terms and conditions of the Plan and/or the
Option Agreement shall govern. The Purchaser acknowledges receipt of a copy of
all documents referenced herein and acknowledges reading and understanding these
documents and having an opportunity to ask any questions that he/she may have
had about them.

“PURCHASER”

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Signature
 

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Print Name
 

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Address
 

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City, State, Zip Code

ACCEPTED BY:
AMERICAN STATES WATER COMPANY,
a California corporation

     
By:
   

   

     
Print Name:
   

   

     
Title:
   

   

(To be completed by the Corporation after the price (including applicable
withholding taxes), value (if applicable) and receipt of funds is verified.)