Exhibit
10.1


AMERICAN STATES WATER COMPANY

(“Company”)


NONQUALIFIED STOCK OPTION AGREEMENT

(Non-Employee Director Grant)


THIS OPTION
AGREEMENT is between the Company and the Optionee named below and evidences the
Company’s grant to the Optionee of a Nonqualified Stock Option to purchase
authorized but unissued shares of the Company’s Common Shares.  The Option is granted pursuant to and subject
to the Company’s 2003 Non-Employee Directors Stock Plan (the “Plan”) and the Terms and Conditions for Nonqualified Stock
Options Granted Under the 2003 Non-Employee Directors Stock Plan (the “Terms”), incorporated herein by this reference.


	
  Optionee:

  	
   

  	
   

  	
   

  	
  Exercise Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Per Share:

  	
  $_______1

  
	
  Number of Shares:

  	
   

  	
  3,0001

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
  _____________ , ____

  	
   

  	
  Expires: 

  	
  ____________,_____2

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  100% Vested on the Grant Date

  	
   

  	
   

  	
   

  



 


Optionee has been
elected, and has agreed, to serve as a director of the Company for an
additional year.  Optionee accepts the
Option and agrees to (and acknowledges receipt of a copy of) the Plan and the
Terms.


	
  AMERICAN STATES WATER COMPANY

  	
   

  	
  AGREED AND ACKNOWLEDGED:

  
	
  (a California corporation)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  (Optionee’s Signature)

  
	
  Its:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Address)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (City, State, Zip Code)

  







1                     Subject
to adjustment under Section 6 of the Plan.


2                     Subject to
early termination if the Optionee’s service is terminated for Cause (as defined
in Section 2 of the Plan).



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CONSENT OF SPOUSE


In consideration of the execution of the foregoing
Stock Option Agreement by the Company, I, the spouse of the Optionee named
above, join with my spouse in executing this Agreement and agree to be bound by
all of the terms and provisions of this Agreement and of the Plan.


	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature of
  Spouse

  



 



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TERMS AND CONDITIONS FOR

NONQUALIFIED STOCK OPTIONS

GRANTED UNDER THE

2003 NON-EMPLOYEE DIRECTORS STOCK PLAN


1.             Exercisability of Option.  The Option shall be fully vested and
exercisable on the Grant Date set forth on the facing page of this Option
Agreement.  During the Optionee’s
lifetime, the Option may be exercised only by the Optionee, with limited
exception pursuant to Section 10.3 of the Plan.


(a)           Cumulative Exercisability.  To the extent the Optionee does not in any
year purchase all the shares that the Optionee may then exercise, the Optionee
has the right thereafter to purchase such remaining shares until the Option
terminates or expires.


(b)           No Fractional Shares.  Fractional share interests shall be
disregarded, but may be cumulated.


(c)           Minimum Exercise.  No fewer than 100 shares may be purchased at
any one time, unless the number purchased is the total number at the time
exercisable under the Option.


2.             Method of Exercise of Option.  The Option may be exercised by the Optionee’s
delivery to the Company of a properly completed and executed exercise form as
from time to time approved by the Committee stating the number of shares to be
purchased pursuant to the Option and accompanied by payment in the full amount
of the purchase price of the shares in one or a combination of the following
methods:


(a)           by cash, electronic funds transfer or
by check payable to the order of the Company; and


(b)           by the delivery of shares that have
been held by the Optionee for at least six months, in accordance with Section
4.3 of the Plan.


3.             Effect of Termination of Directorship.  If the Optionee’s services as a director
terminate for any reason other than Cause as determined under Section 304 of
the California Corporations Code or any successor thereof, then the Option
shall remain exercisable for the period of time set forth on the face of this
Agreement.


4.             Optionee not a Shareholder.  Neither the Optionee nor any other person
entitled to exercise the Option shall have any of the rights or privileges of a
shareholder of the Company as to any Common Shares until the issuance and
delivery to him or her of the shares acquired upon exercise of the Option.  No adjustment will be made for dividends or
other rights as to a shareholder for which a record date is prior to such date
of delivery.


5.             Notices.  Any notice to be given shall be in writing
and addressed to the Company at its principal office, to the attention of the
Corporate Secretary, and to the Optionee at his or her



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last address of record, or at such other address as
either party may hereafter designate in writing to the other for purposes of
notices in respect of the Option.


6.             Effect of Award Agreement.  The Option Agreement shall be binding upon
and inure to the benefit of any successor or successors of the Company, except
to the extent the Committee determines otherwise.


7.             Choice of Law.  The constructive interpretation, performance
and enforcement of the Option Agreement and the Option shall be governed by the
laws of the State of California.


8.             Defined Terms.  Capitalized terms used herein and not
otherwise defined herein shall have the meaning assigned by the Plan.


9.             Plan.  The Option and all rights of Optionee
thereunder are subject to, and the Optionee agrees to be bound by, all of the
terms and conditions of the provisions of the Plan.  Unless otherwise expressly provided in these
Terms and Conditions, provisions of the Plan that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any
additional rights in the Optionee not expressly set forth in the Optionee’s
Option Agreement or in a written amendment thereto.  If there is any 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 complete copy of the Plan and
agrees to be bound by its terms.



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AMERICAN STATES WATER COMPANY

2003 NON-EMPLOYEE DIRECTORS STOCK 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
2003 Non-Employee Directors Stock 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 $__________________.


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”

  	
   

  	
  ACCEPTED BY:

  AMERICAN STATES WATER COMPANY,

  a California corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  City,
  State, Zip Code

  	
   

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