Exhibit 10.1


AMERICAN STATES WATER
COMPANY

THREE YEAR DIVIDEND EQUIVALENT
RIGHT CERTIFICATE

STATEMENT OF TERMS AND CONDITIONS


1.                    Crediting of Dividend Equivalents. We will maintain a
bookkeeping account in your name (your “Account”). As of each date (after the
date of grant of this award and in respect of applicable record dates occurring
prior to the third anniversary of such grant date, unless your employment by us
or one of our subsidiaries is terminated for cause as defined in the 2004 Stock
Incentive Plan) that we pay a cash dividend or make a cash distribution on our
common stock, we will credit your Account with a cash amount equal to the cash
dividends or cash distribution that would be payable on that date on a number
of shares of our common stock equal to the number of shares that were subject
to the portion of your Corresponding Option that was outstanding and
unexercised at the start of business on the corresponding record date for the
dividend payment or other distribution. The cash amount so credited to your
account is referred to as a “dividend equivalent.” No interest or other
earnings will be credited with respect to your Account. No dividend equivalents
will be credited: (1) with respect to any portion of the Corresponding Option
that has been exercised, expired, or otherwise terminated; (2) if your
employment by us or one of our subsidiaries terminates for cause as defined in
the 2004 Stock Incentive Plan; (3) to the extent that such dividend equivalent
would duplicate benefits conferred or preserved under the Corresponding Option
by an adjustment in the number of shares or exercise price thereof or the
property subject thereto made pursuant to the adjustment provisions set forth
in the applicable option agreement or option plan; (4) with respect to any
non-cash dividends or distributions on our common stock, or (5) in respect of
dividend or distribution record dates occurring after the third anniversary of
the date of grant of this award.


2.                    Payment. The dividend
equivalents credited to your Account with respect to a share subject to the
Corresponding Option will become payable (in an equal amount of cash) on the
date that the cash dividend or distribution is paid on the class of shares
corresponding to such share. We will reduce your Account by the amount of
dividend equivalents that are paid. You may not elect any accelerated payments
or other payment dates. No interest or other charge will accrue on amounts
payable.


Notwithstanding the foregoing, if we determine in
good faith that there is a reasonable likelihood that any benefits paid to you
for a taxable year would not be deductible by us or one of our affiliates
solely by reason of the limitation under Section 162(m) of the Internal Revenue
Code of 1986, as amended, then to the extent reasonably deemed necessary by us
to ensure that the entire amount of any payment to you pursuant to this
agreement is deductible, we may defer all or any portion of a payment under
this agreement. The amounts so deferred shall be paid (without interest) at the
earliest possible date, as determined by us in good faith, on which the
deductibility of compensation paid or payable to you for the taxable year in
which the payment is made will not be limited by Section 162(m).


3.                    No Employment/Service Commitment. Nothing contained in this agreement
constitutes an employment or service commitment by us or our affiliates,
affects your status, if you are an employee, as an employee at will who is
subject to termination without cause (subject to any express written employment
agreement, other than this agreement, to the contrary), confers upon you any
right to remain employed by or in service to us or our affiliates, interferes
in any way with any right that we or our affiliates may have at any time to
terminate your employment or service, or affects our right and our affiliates
rights to increase or decrease your other compensation.


4.                    Procedure for Exercise. You should not have to take any affirmative
steps to exercise this award — your dividend equivalents should be paid to you
as described above in Section 2. However, if you believe that you have not
received a payment to which you are entitled, you should promptly contact the
Company’s Chief Financial Officer’s office at 630 East Foothill Boulevard, San
Dimas, California 91773 (telephone number 909-394-3600).


5.                    Tax Withholding. You will be solely responsible for all income
and employment taxes arising in connection with this agreement and the payment
of benefits hereunder. We may satisfy any state or federal employment tax or
income tax withholding obligation arising from the crediting of dividend 



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equivalents and/or the payment of cash in respect of
this agreement by deducting such amount(s) from any amount of compensation
otherwise payable to you by us or any of our affiliates, by deducting such
amount from your Account, and/or by deducting such amount(s) from any amount
otherwise payable to you pursuant to this agreement.


6.                    Non-Transferability and Other
Restrictions.
Your dividend equivalents
and other benefits under this agreement are not assignable or transferable and
any purported transfer, assignment, pledge or other encumbrance or attachment
of any payments or benefits under this agreement, or any interest therein will
not be permitted or recognized. Notwithstanding the foregoing, your benefits
may be assigned, in full or in part, pursuant to a domestic relations order of
a court of competent jurisdiction or, following your death, paid as described
in Section 7.


7.                    Payments in the Event of Your
Death or Incapacity.
In the event of your death,
any dividend equivalents that may become payable under this agreement upon or
after your death will be paid to the duly appointed and currently acting
personal representative of your estate. In any case where there is no such personal
representative of your estate duly appointed and acting in that capacity within
90 days after your death (or such extended period as we may determine to be
reasonably necessary to allow such personal representative to be appointed, but
not to exceed 180 days after your death), then we will make payment to any
person or persons who can verify by affidavit or court order to our
satisfaction that they are legally entitled to receive the benefits specified
hereunder. In the event any amount is payable under this agreement to a minor,
payment will not be made to the minor, but instead be paid (a) to that person’s
living parent(s) to act as custodian, (b) if that person’s parents are then
divorced, and one parent is the sole custodial parent, to such custodial
parent, or (c) if no parent of that person is then living, to a custodian
selected by us to hold the funds for the minor under the Uniform Transfers or
Gifts to Minors Act in effect in the jurisdiction in which the minor resides.
If no parent is living and we decide not to select another custodian to hold
the funds for the minor, then payment will be made to the duly appointed and
currently acting guardian of the estate for the minor or, if no guardian of the
estate for the minor is duly appointed and currently acting within 60 days
after the date the amount becomes payable, payment will be deposited with the
court having jurisdiction over the estate of the minor. In the event that any
amount becomes payable to a person who, in our sole judgment, is considered by
reason of physical or mental condition to be unable to give a valid receipt
therefore, we may make such payment to any person found by us, in our sole
judgment, to have assumed the care of such person. Any payment made pursuant to
such determination shall constitute a full release and discharge of our
obligations under this agreement with respect to the corresponding dividend
equivalents.


8.                    Adjustments. We reserve the
right to make adjustments to this award and the dividend equivalents credited or
to be credited to your Account, in the event of any change in the outstanding
shares of our common stock by reason of a stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change.


9.                    Compliance With Law; Governing
Law.
This agreement and/or the
payment of money under this agreement are subject to compliance with all
applicable federal and state laws, rules and regulations. This agreement shall
be construed, governed and administered in accordance with the laws of the
State of California. If any provisions of this instrument shall be held by a
court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.


10.             Limited Rights. Your Account will be a memorandum account on
our books. Your dividend equivalents credited to your Account will not be
treated as property or as a trust fund of any kind. You have no rights as a
Company shareholder with respect to this award. Your rights with respect to
this award are merely those of a general unsecured creditor of the Company to
receive payment as described herein subject to the terms and conditions set
forth herein. You and your heirs, successors, and assigns have no legal or equitable
rights, claims, or interest in any specific property or assets of the Company
or any of our affiliates. No assets of the Company or any of our affiliates
will be held under any trust or held in any way as collateral security for the
fulfilling our obligations under this agreement.



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AMERICAN STATES WATER
COMPANY

THREE YEAR DIVIDEND EQUIVALENT
RIGHT CERTIFICATE


American States Water Company, a California corporation (“we” or the “Company”),
has granted to you, the award recipient identified below, dividend equivalent
rights on the terms and conditions set forth in the attached Statement of Terms
and Conditions with respect to the stock option identified below (the “Corresponding
Option”).


	
  Award Recipient

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant of this Award

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Corresponding Option Information —

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Shares

  	
   

  	
   *

  



 


Your
acceptance of this Certificate constitutes your acknowledgement of and
agreement to be bound by the terms and conditions set forth herein and in the
attached Statement of Terms and Conditions. The Statement of Terms and
Conditions is incorporated herein by this reference. You are not required to
accept this award. If you choose not to accept this award or if you do not
agree to the terms and conditions of this award, you should, no later than ten
business days after the date of grant of this award set forth above, notify the
Company’s Chief Financial Officer at 630 East Foothill Boulevard, San Dimas,
California 91773 (telephone number 909-394-3600) that you do not accept this
award and return this Certificate to the Chief Financial Officer at that
address. This award is granted as a matter of a separate incentive and is not
in lieu of salary or any other compensation for services.


IN WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this Dividend Equivalent Right Certificate as of the date of
grant of this award first set forth above.


AMERICAN
STATES WATER COMPANY,
a California corporation


	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
  Floyd E. Wicks

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its

  	
   

  	
  President and Chief Executive Officer

  	
   

  



 






*                    Subject
to adjustment for stock splits and similar events in accordance with the
applicable award agreement and option plan.