Document:

CONVERTIBLE
PROMISSORY NOTE

    $600,000
PLUS INTEREST DUE & PAYABLE

    DOCUMENT
B-03262010a

    

    THIS NOTE
AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE SHARES ISSUABLE
UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE
EXEMPTION OR SAFE HARBOR PROVISION.

    

    FOR VALUE
RECEIVED, on the Effective Date, as defined below on the signature page, MedClean Technologies, Inc as
Obligor ("Borrower,” or “Obligor”), hereby promises to pay to the Lender
(“Lender” or “ Holder”), as defined below on the signature page, the Principal
Sum, as defined below, along with the Interest Rate, as defined below, according
to the terms herein.

    

    

    
      	
               

              The
      "Lender" shall be:

            	 	
               

              JMJ
      Financial / Its Principal, or Its Assignees

            
	
               

              The
      "Principal Sum" shall be:

            	 	
               

              $600,000
      (six hundred thousand US Dollars): Subject to the following: accrued,
      unpaid interest shall be added to the Principal Sum.

            
	
               

              The
      “Consideration” shall be:

               

            	 	
               

              $600,000
      (six hundred thousand US Dollars) in the form of the Secured &
      Collateralized Promissory Note Document C-03262010a (including Security
      & Collateral Agreement).

            
	
               

              The
      "Interest Rate" shall be:

            	 	
               

              6%
      one-time interest charge on the Principal Sum.   No
      interest or principal payments are required until the Maturity Date, but
      both principal and interest may be included in conversion prior to
      maturity date.

            
	
               

              The
      "Conversion Price" shall be the following price:

            	 	
               

              As
      applied to the Conversion Formula set forth in 2.2, 70% (seventy percent)
      of the lowest closing price in the 20 trading days previous to the
      conversion; as applies to MedClean Technologies, Inc. voting common
      stock.

            
	
               

              The
      "Maturity Date" is the date upon which the Principal Sum of this Note, as
      well as any unpaid interest shall be due and payable, and that date shall
      be:

               

            	 	
               

              3
      (three) years from the Effective Date, as defined below on the signature
      page.

            
	
               

              The
      “Prepayment Terms” shall be:

            	 	
               

              Prepayment
      is not permitted, unless approved by Holder in writing.

               

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ARTICLE
1 PAYMENT-RELATED PROVISIONS

    

    
      	
              1.1  

            	
              Interest
      Rate. Subject to the Holder's right to convert, interest payable on this
      Note will accrue interest at the Interest Rate and shall be applied to the
      Principal Sum.

            

    

    

    
      	
              1.2  

            	
              Payable
      on Demand.  This Note is payable on demand in an amount not to
      exceed the cash amount paid in towards Document
    C-02262010a.

            

    

    

    ARTICLE
2 CONVERSION RIGHTS

    

    The Holder will have the right to
convert the Principal Sum and accrued interest under this Note into Shares of
the Borrower's Common Stock as set forth below.

    

    2.1 Conversion Rights and Cashless
Exercise. Subject to the terms set forth in Section 2.7, the Holder will have
the right at its election from and after the Effective Date, and then at any
time, to convert all or part of the outstanding and unpaid Principal Sum and
accrued interest into shares of fully paid and nonassessable shares of common
stock of MedClean Technologies, Inc. (as such stock exists on the date of
issuance of this Note, or any shares of capital stock of MedClean Technologies,
Inc.  into which such stock is hereafter changed or reclassified, the
"Common Stock") as per the Conversion Formula set forth in Section 2.2. Any such
conversion shall be cashless, and shall not require further payment from
Holder.  Unless otherwise agreed in writing by both the Borrower and
the Holder, at no time will the Holder convert any amount of the Note into
common stock that would result in the Holder owning more than 4.99% of the
common stock outstanding of MedClean Technologies, Inc.   Shares
from any such conversion will be delivered to Holder by 2:30pm EST within 2
(two) business days of conversion notice delivery (see 3.1) by “DWAC/FAST”
electronic transfer (see “Share Delivery” attachment).

    

    2.2.
Conversion Formula. The number of shares issued through conversion is the
conversion amount divided by the conversion price.

    

    # Shares
= Conversion
Amount

         Conversion
Price

    

    2.3. This
section 2.3 intentionally left blank.

    

    2.4. This
section 2.4 intentionally left blank.

    

    2.5
Reservation of Shares. As of the issuance date of this Note and for the
remaining period during which the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the full conversion of
this Note. The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. The Borrower agrees that its
issuance of this Note constitutes full authority to its officers, agents and
transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.

    

    2.6.
Delivery of Conversion Shares.  Shares from any such conversion will
be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion
notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share
Delivery” attachment).  If those shares are not delivered in
accordance with this timeframe stated in this Section 2.6, at any time for any
reason prior to offering those shares for sale in a private transaction or in
the public market through its broker, Holder may rescind that particular
conversion to have the conversion amount returned to the note balance with the
conversion shares returned to the Borrower. The Company will
make its best efforts to deliver shares to Holder same day / next
day.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    2.6.1.
Conversion Delay Penalties.  Holder may assess penalties or liquidated
damages (both referred to herein as “penalties”) as follows.  For each
conversion, in the event that shares are not delivered by the third business day
(inclusive of the day of the conversion), a penalty of $2,000 per day will be
assessed for each day after the third business day (inclusive of the day of the
conversion) until share delivery is made; and such penalty will be added to the
principal balance of the Note (under Holder and Borrower’s expectation that any
penalty amounts will tack back to the original date of the
note).  Borrower
will not be subjected to any penalties once its transfer agent processes the
shares to the DWAC system.

    

    2.7.
Discharge By Payment.  Conversions under this Convertible Promissory
Note Document B-03262010a are available only after the Conversion Amount
described herein is discharged by payment of equal or greater value from the
Secured & Collateralized Promissory Note Document C-03262010a by either, at
the Holder’s choice, cash payment, or surrender of security/collateral, or other
negotiated form of payment mutually agreed to in writing.

    

    ARTICLE
3 MISCELLANEOUS

    

    3.1. Notices. Any notice required or
permitted hereunder must be in writing and either personally served, sent by
facsimile or email transmission, or sent by overnight
courier.  Notices will be deemed effectively delivered at the time of
transmission if by facsimile or email, and if by overnight courier the business
day after such notice is deposited with the courier service for
delivery.

    

    3.2. Amendment Provision. The term
"Note" and all reference thereto, as used throughout this instrument, means this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

    

    3.3. Assignability. This Note will be
binding upon the Borrower and its successors and permitted assigns, and will
inure to the benefit of the Holder and its successors and permitted assigns, and
may be assigned by the Holder.

    

    3.4.
Governing Law. This Note will be governed by, and construed and enforced in
accordance, with the laws of the State of Florida, without regard to the
conflict of laws principles thereof.  Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of Florida or in the federal
courts located in Miami-Dade County, in the State of Florida.  Both
parties and the individuals signing this Agreement agree to submit to the
jurisdiction of such courts.

    

    3.5. Maximum Payments. Nothing
contained herein may be deemed to establish or require the payment of a rate of
interest or other charges in excess of the maximum permitted by applicable law.
In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum permitted by such law, any payments in excess of
such maximum will be credited against amounts owed by the Borrower to the Holder
and thus refunded to the Borrower.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.6.
Attorney Fees. In the event any attorney is employed by either party to this
Note with regard to any legal or equitable action, arbitration or other
proceeding brought by such party for the enforcement of this Note or because of
an alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Note, the prevailing party in such proceeding will be
entitled to recover from the other party reasonable attorneys' fees and other
costs and expenses incurred, in addition to any other relief to which the
prevailing party may be entitled.

    

    3.7. No
Public Announcement. Except as required by securities law, no public
announcement may be made regarding this Note, payments, or conversions without
written permission by both Borrower and Holder.

    

    3.8.
Opinion of Counsel. In the event that an opinion of counsel is needed for any
matter related to this Note, Holder has the right to have any such opinion
provided by its counsel.  Holder also has the right to have any such
opinion provided by Borrower’s counsel.

    

    3.9.
Effective Date.  This Note will become effective only upon occurrence
of the two following events: execution by both parties, and delivery of valid
payment by the Lender in the form of the Secured & Collateralized Promissory
Note Document C-03262010a (including Security & Collateral
Agreement).

    

    3.10.
Director’s Resolution.  Once effective, Borrower will execute and
deliver to Holder a copy of a Board of Director’s resolution resolving that this
note is validly issued, paid, and effective.

    

    3.11. No Shorting.  Holder agrees
that so long as any Notes from Borrower to Holder remain
outstanding, Holder will not enter into or effect any “short sales” of the
common stock or hedging transaction which establishes a net short position with
respect to the common stock of MedClean Technologies, Inc.  Borrower
acknowledges and agrees that upon submission of conversion notice as set forth
in Section 3.1 (up to the amount of cash paid in under the Notes), Holder
immediately owns the common shares described in the conversion notice and any
sale of those shares issuable under such conversion notice would not be
considered short sales.

     

     

     

     

    Signature Page to Follow

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BORROWER[S]:                                                                                     

    

    

    

    
      	
              /s/
      David Laky

            	 
      	
              /s/
      Cheryl Sadowski

            
	
              David
      Laky

              CEO

              MedClean
      Technologies, Inc.

            	 
      	
              Cheryl
      Sadowski

              CFO

              MedClean
      Technologies, Inc.

            

    

    

    

    

    LENDER/HOLDER:

    

    

    
      	
              /s/
      JMJ Financial

            
	
              JMJ
      Financial / Its Principal

            

    

    

    

    EFFECTIVE
DATE AS EXECUTED BY LENDER/HOLDER: ________________________

    

    

    NOTARY
FOR SIGNATURE BY LENDER/HOLDER:

    

     

    

    

    

    

    

    

    SAMPLE

    

    NOTICE OF
CONVERSION

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (To be
executed by the Holder in order to convert the Note)

    

    The
undersigned hereby elects to convert a portion of the Note issued by MedClean
Technologies, Inc. into Shares of Common Stock of MedClean Technologies, Inc.
according to the conditions set forth in such Note, as of the date written
below.

    

    Date of
Conversion:________________________________________________

    

    Conversion
Amount:__________________________________________________

    

    Conversion
Price:__________________________________________________

    

    Shares To
Be Delivered:_____________________________________________

    

    Signature:________________________________________________________

    

    Print
Name:______________________________________________________

    

    Address:________________________________________________________

    

    _______________________________________________________________

    

     _______________________________________________________________

    

    

    

    

    Shares
from any such conversion will be delivered to Holder by 2:30pm EST within 2
(two) business days of conversion notice by “DWAC/FAST” electronic transfer in
accordance with Section
2.6.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     SHARE
DELIVERY ATTACHMENT

    

    EXAMPLE

    

    2.6.
Delivery of Conversion Shares.  Shares from any such conversion will
be delivered to Holder by 2:30pm EST within 2 (two) business days of conversion
notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share
Delivery” attachment).  If those shares are not delivered in
accordance with this timeframe stated in this Section 2.6, at any time for any
reason prior to offering those shares for sale in a private transaction or in
the public market through its broker, Holder may rescind that particular
conversion to have the conversion amount returned to the note balance with the
conversion shares returned to the Borrower. The Company will
make its best efforts to deliver shares to Holder same day / next
day.

    

    Example:

    

    Holder delivers conversion notice to
Borrower at 5:15pm eastern time on Monday January 1st.

    

    Borrower’s
transfer agent must deliver shares to Holder’s broker via “DWAC/FAST” electronic
transfer by no later than 10:30am eastern time on Wednesday January
3rd.Exhibit 10.1
    

    

    

    

    

    
      AMERICAN STATES WATER
      COMPANY
    

    
      2010 SHORT-TERM INCENTIVE
      PROGRAM 
    

    

    

    
      1.        Purpose
      of 2010 Short-Term Incentive Program
    

    
      American States Water
      Company, a California corporation, (the “Corporation”)
      has adopted the American States Water Company Performance Incentive Plan
      (the “Plan”)
      to promote the success of the Corporation by (a) motivating executives
      selected to participate in the Plan to maximize the performance of the
      Corporation both from a financial perspective and in serving its
      customers and (b) rewarding them with cash Objective Bonuses directly
      related to such performance.  The Corporation’s board of directors
      recognizes that the ability of the Corporation and its subsidiaries to
      attract capital at a low cost is based on its financial performance and
      that the Corporation’s customers benefit through its ability to attract
      low cost capital.  This 2010 Short-Term Incentive Program (the “2010
      STIP”) sets forth
      the names of the individuals selected to be Participants who are
      eligible to earn Objective Bonuses under the Plan for the 2010 calendar
      year and the applicable Business Criteria, Performance Targets, and
      Payout Percentages for the 2010 calendar year.  The 2010 STIP also
      provides for Discretionary Bonuses, which when added to the Objective
      Bonuses under the Plan, equal the Aggregate Bonuses payable under the
      2010 STIP for the 2010 calendar year.
    

    
      2.       
      Term of 2010 STIP
    

    
      The Performance Period
      covered by the 2010 STIP (the “Term”)
      began on January 1, 2010 and will end on December 31, 2010.
    

    
      3.       
      Relationship to
      American States Water Company Performance Incentive Plan
    

    
      The Objective Bonuses payable
      under Awards granted under the 2010 STIP are granted under the authority
      of the Plan and are subject to all of the terms and conditions of the
      Plan, as it may be amended from time to time, and any rules adopted by
      the Committee in accordance with the terms of the Plan, as such rules
      are in effect from time to time.  The Discretionary Bonuses are granted
      under the general authority of the Compensation Committee to determine
      the compensation payable to Executives.  
    

    
      4.      
       Definitions
    

    
      Capitalized terms used and
      not otherwise defined herein have the meanings set forth in the
      Plan.  In addition, the following phrases shall have the meanings
      specified below:
    

    
      “Adjusted
      EPS-ASUS” means
      the EPS of ASUS for 2010 adjusted to remove the general office
      allocation to ASUS related to (a) settlement charges and outside
      expenses associated with the CPUC subpoena regarding the capital
      projects contracting matter and (b) any transaction fees and/or gain or
      loss on sale recognized in the financial statements in 2010 associated
      with a sale of any of the Corporation’s business units.
    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    
      “Adjusted
      EPS-AWR Consolidated”
      means the Corporation’s EPS for 2010 adjusted to remove (a) settlement
      charges and outside expenses associated with the CPUC subpoena regarding
      the capital projects contracting matter and (b) any transaction fees
      and/or gain or loss on sale recognized in the financial statements in
      2010 associated with a sale of any of the Corporation’s business units.
    

    
      “Adjusted
      EPS-Regulated Utilities”
      means the sum of the EPS of each of the Regulated Utilities for 2010
      adjusted to remove (a) the portion of the settlement charges and outside
      expenses associated with the CPUC subpoena regarding the capital
      projects contracting matter and (b) any transaction fees and/or gain or
      loss on sale recognized in the financial statements in 2010 associated
      with a sale of any of the Corporation’s business units.
    

    
      “Aggregate
      Bonus” means the
      combination of a Participant’s Objective Bonus and his or her
      Discretionary Bonus.  
    

    
      “Andrews
      Price Redetermination”
      means the execution, during calendar year 2010, of an agreement with the
      U.S. government that provides for an interim or permanent increase in
      the monthly fees payable to Terrapin Utility Services, Inc. of at least
      16% for operations and maintenance with respect to its operations at
      Andrews AFB.  
    

    
      “Award
      Agreement” means a
      written agreement setting forth the material terms and conditions of the
      Award as determined by the Committee consistent with the express
      limitations of the Plan and the 2010 STIP.  
    

    
      “Base
      Salary” means the
      Participant’s rate of annual base pay on the date the Committee approves
      the Business Criteria and Performance Targets.  
    

    
      “Board
      of Directors”
      means the Corporation’s board of directors.
    

    
      “Budget”
      or “Budgeted”
      means (a) in the case of Adjusted EPS for the Corporation, the Regulated
      Utilities or ASUS, as the case may be, the projected Adjusted EPS for
      2010 as set forth in the Operating Budget, and (b) in the case of
      Capital Expenditures, the projected capital expenditures as set forth in
      the Capital Budget.
    

    
      “Business
      Criteria” means
      Adjusted EPS-AWR Consolidated, Adjusted EPS- Regulated Utilities,
      Adjusted EPS-ASUS, Relative Stock Price, Customer Complaints to DPH,
      Customer Complaint Standards, Capital Expenditures, SOX
      Deficiencies-Regulated Utilities, SOX Deficiencies-ASUS, Andrews Price
      Redetermination, Fort Bragg ICU Contract Modification, Fort Jackson
      Equitable Adjustment, Customer Satisfaction and Virginia Bases Price
      Redetermination.
    

    
      “CAB”
      means the CPUC Consumer Affairs Branch.
    

    
      Capital Budget
      means the Company’s capital budget for 2010 as approved by the Audit and
      Finance Committee of the Board of Directors at its meeting on
      October 26, 2009.  The Capital Budget excludes those items footnoted as
      “Project is being litigated with DRA.”
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
      “Capital
      Expenditures”
      means the dollar amount of capital expenditures for 2010 for the
      Regulated Utilities.
    

    
      “Compensation
      Committee” means
      the Compensation Committee of the Board of Directors.  
    

    
      “CPUC”
      means the California Public Utilities Commission.
    

    
      “Customer
      Complaint Standards”
      means the number of complaints on all matters on Golden State Water
      Company received by CAB in 2010 divided by the average number of
      customers served by Golden State Water Company during 2010.
    

    
      “Customer
      Complaints to DPH”
      means the number of water quality, pressure and service complaints
      received from customers by Golden State Water Company (GSWC) during 2010
      that are reported to the California Department of Public Health by GSWC.
    

    
      “Customer
      Satisfaction”
      means meeting the small business utilization targets in four of the six
      categories for the commercial subcontracting plan.  The six categories
      include 1) Service Disabled Veteran-owned, Small Business, 2)
      Veteran-owned Small Business, 3) Historically Underutilized Business
      Zones, 4) Women-owned small business, 5) Small Disadvantaged Business
      and 6) Small Business.
    

    
      “Discretionary
      Bonus” means a
      bonus payable to a Participant based on that Participant’s Individual
      Performance Measures.
    

    
      “EPS”
      means fully diluted earnings per share as reported in the Corporation’s
      consolidated financial statements for 2010.
    

    
       “Fort
      Bragg ICU Contract Modification”
      means the execution, during calendar year 2010, of a modification of the
      contract at Fort Bragg to better the prospects of earnings as a result
      of changes to the schedule and work plans for the original Initial
      Capital Upgrade projects.
    

    
      “Fort
      Jackson Equitable Adjustment”
      means the execution, during calendar year 2010, of an agreement with the
      U.S. government that provides funding of at least $650,000 for the
      Longstreet sewer system overflow at Fort Jackson that occurred in 2008.
    

    
      “Individual
      Performance Measures”
      means the criteria or goals utilized to determine the amounts of each
      Participant’s Discretionary Bonus.
    

    
      “Objective
      Bonus” means a
      bonus based on the degree of achievement of the Performance Targets for
      the Business Criteria.  
    

    
      “Operating
      Budget” means the
      Company’s operating budget for 2010 as presented to the Board of
      Directors in October 2009 and February 2010 and finalized through an
      email by Robert Sprowls to the Board of Directors on March 17, 2010.
    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    
      “Payout
      Percentage” means
      the percentage of a Participant’s Target Aggregate Bonus that is payable
      based on the degree of satisfaction of a Performance Target or the
      Individual Performance Measures.
    

    
       “Performance
      Measures” means
      the Business Criteria and Individual Performance Measures.  
    

    
      “Performance
      Target” means a
      specific goal established by the Committee with respect to the Business
      Criteria as set forth in Section 6.
    

    
      “Relative
      Stock Price” means
      the Corporation’s total shareholder return as compared to the total
      shareholder return of each of the following 12 companies for 2010:  UIL
      Holdings, South Jersey Industries, Aqua America, MGE Energy, Empire
      District Electric, ITC Holdings, California Water Service, Central
      Vermont Public Service, Unitil, Chesapeake Utilities, Southwest Water
      and SJW Corp.  For this purpose, total shareholder return for the
      Corporation and each of the other 12 companies shall be calculated using
      the Securities and Exchange Commission guidelines for reporting
      financial performance.  If the stock of any of the 12 companies is no
      longer traded or is suspended from trading as of December 31, 2010, that
      company shall not be included in the calculation of Relative Stock
      Price, but the exclusion of such company shall not affect the
      Performance Targets for Relative Stock Price set forth in Section A of
      Exhibit A.
    

    
      “SOX”
      means the Sarbanes-Oxley Act of 2002.
    

    
      “SOX
      Deficiencies-ASUS”
      means the number of “control deficiencies” (each a “CD”),
      “significant deficiencies” (each an “SD”)
      and “material weaknesses” (each a “MW”)
      reported for ASUS in the independent auditor’s report for 2010 pursuant
      to Section 404 of SOX.
    

    
      “SOX
      Deficiencies-Regulated Utilities”
      means the number of CDs, SDs and MWs reported for the Regulated
      Utilities in the independent auditor’s report for 2010 pursuant to
      Section 404 of SOX.
    

    
      “Target
      Aggregate Bonus”
      means the amount of bonus that would be payable if each of the
      Performance Targets were met at the targeted level and the Participant’s
      Individual Performance Measures were met at the targeted level.
    

    
      “Virginia
      Bases Price Redetermination”
      means the execution, during calendar year 2010, of an agreement with the
      U.S. government that provides for a permanent increase in the monthly
      fees payable to the Company of at least 16% for operations and
      maintenance with respect to its operations under Old Dominion Utility
      Services (Forts Lee, Story, Eustis and Monroe).  
    

    
      5.        Participation
      and Individual Awards
    

    
      The individuals who have been
      selected as Participants in the 2010 STIP are set forth below together
      with the amount of their Target Aggregate Bonuses as a percentage of
      Base Salary:
    

    
      
        

        

      

      
        
          4
        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          Participant
        	
          Target
Aggregate Bonus
        
	
           
        	
          GSWC Officers
        	
           
        
	
          Administrative and General
        	
          Robert J. Sprowls
        	
          30%
        
	
          Eva G. Tang
        	
          20%
        
	
          Gladys M. Farrow
        	
          15%
        
	
          Diane D. Rentfrow
        	
          15%
        
	
          Bryan K. Switzer (Keith)
        	
          15%
        
	
          Operations
        	
          Denise L. Kruger
        	
          20%
        
	
          Patrick R. Scanlon
        	
          15%
        
	
          William C. Gedney
        	
          15%
        
	
          Shengder D. Chang (David)
        	
          15%
        
	
          Roland S. Tanner
        	
          15%
        
	
           
        	
          ASUS Officers
        	
           
        
	
           
        	
          McClellan Harris III (Bud)
        	
          20%
        
	
           
        	
          Granville R. Hodges, Jr. (Rusty)
        	
          15%
        
	
           
        	
          James B. Gallagher
        	
          15%
        
	
           
        	
          Gregory S. Thomas
        	
          15%
        

    

    
      For purposes of this 2010 STIP, the GSWC officers will be divided into
      (1) Administrative and General Officers and (2) Operations Officers.
    

    
      The Corporation will enter into an Award Agreement with each Participant
      that (a) describes his or her Individual Performance Measures and sets
      forth his or her Target Aggregate Bonus, (b) sets forth his or her
      threshold, target and maximum Performance Targets and (c) incorporates
      the terms and conditions of the Plan and this 2010 STIP by
      reference.  The Target Aggregate Bonus amount set forth in each
      Participant’s Award Agreement shall represent the aggregate amount of
      two separate bonuses:  an Objective Bonus (under the Plan) and a
      Discretionary Bonus.  
    

    
      6.        Performance
      Targets for Objective Bonuses
    

    
      The threshold, target and maximum Performance Targets for the 2010 STIP
      are set forth in Exhibit A to this 2010 STIP.
    

    
      7.        Determination
      of Participants’ Aggregate Bonuses
    

    
      The Aggregate Bonus payable to each Participant shall be determined on
      the basis of the extent to which the Performance Targets for the
      Business Criteria and that Participant’s Individual Performance Measures
      are achieved.  The amount of Aggregate Bonus payable is equal to the
      amount of the Target Aggregate Bonus multiplied by the sum of the Payout
      Percentages for each of the Performance Measures as determined pursuant
      to the tables in (a) Section B of Exhibit A for Participants that are
      Administrative and General Officers employed by GSWC, (b) Section C for
      Participants that are Operations Officers employed by GSWC and (c)
      Section D for Participants employed by ASUS.
    

    
      
        

        

      

      
        
          5
        

        
          

        

      

      
        

        

      

    

    
      As soon as practicable following the end of the Term of the 2010 STIP
      and the completion of the independent auditor’s report for 2010, the
      Committee shall determine the extent to which the Performance Targets
      for the Business Criteria are achieved and the extent to which the
      Individual Performance Measures are achieved, and determine the Payout
      Percentage for each of the Performance Measures.  In order for a
      Participant to receive any payment with respect to the Participant’s
      Discretionary Bonus, the Participant must meet the standards established
      for the Participant’s position, which standards shall be one of the
      components of the Participant’s Individual Performance Measures.  The
      determination of whether the standards established for the Participant’s
      position are achieved shall be made by the Committee, which (other than
      for the Company’s President and Chief Executive Officer) determination
      shall be based on the recommendations of the President and Chief
      Executive Officer or other direct supervisor of the Participant.
    

    
      For levels of achievement between threshold and maximum, the Committee
      shall determine the Payout Percentage by interpolation.  Subject to
      Section 8 below, the Aggregate Bonus for each Participant shall be the
      sum of the Payout Percentages determined with respect to each
      Performance Measure multiplied by the amount of Participant’s Target
      Aggregate Bonus.  
    

    
      8.        Payment
      of Accounts
    

    
      At the time the Committee makes the determinations described in Section
      7, it shall certify, in accordance with Section 4.8 of the Plan, the
      amounts of the Objective Bonuses payable to Participants.  The Committee
      shall, at the same time, determine the amount of the Discretionary Bonus
      payable to Participants.  Payment of such bonuses (the Aggregate
      Bonuses) shall be made as soon as practicable following the Committee’s
      determination and certification, but in no event later than December 31,
      2011.
    

    
      Notwithstanding the foregoing, any Objective Bonus otherwise payable to
      any Participant under this 2010 STIP shall be subject to the
      adjustments, limitations (including the dollar limitation under
      Section 4.3 of the Plan), Committee’s discretionary authority to make
      downward adjustments and other terms and conditions set forth in the
      Plan.  Any Discretionary Bonus otherwise payable under this 2010 STIP
      shall be subject to any adjustments, limitations, upward or downward
      adjustments in amounts and any other terms or conditions that the
      Committee may impose in its sole discretion.  
    

    
      9.        Effect
      of Termination of Employment
    

    
      Except as otherwise provided in an employment agreement, memorandum of
      understanding, other contract between a Participant and the Corporation
      or one of its Subsidiaries, or by the Committee in its sole discretion,
      the bonuses payable under a Participant’s Award will be forfeited, and
      the Participant will not be entitled to any bonus payments with respect
      to such Award if the Participant ceases to be employed by the
      Corporation or one of its Subsidiaries for any reason prior to the date
      the bonuses payments under the 2010 STIP are paid to Participants.
    

    
      
        

        

      

      
        
          6
        

        
          

        

      

      
        

        

      

    

    
      10.       Recoupment of Bonuses
    

    
                Any payment of an Objective Bonus, Discretionary Bonus or
      Aggregate Bonus under this 2010 STIP is subject to recoupment pursuant
      to the Corporation’s Policy Regarding the Recoupment of Certain
      Performance-Based Compensation Payments as in effect from time to time,
      and a Participant shall promptly make any reimbursement requested by the
      Board of Directors or the Committee pursuant to such policy with respect
      to any such bonuses.  Further, each Participant shall agree, by
      accepting an Award under the 2010 STIP and executing an Award Agreement,
      that the Corporation and/or any of its affiliates may deduct from any
      amounts it may owe the Participant from time to time (such as wages or
      other compensation) any and all amounts the Participant is required to
      reimburse the Corporation pursuant to such policy with respect to the
      Award.
    

    
      

      

      

    

    
      
        

        

      

      
        
          7
        

        
          

        

      

      
        

        

      

    

    

    

    
      EXHIBIT A
    

    

    

    
      2010 STIP
PERFORMANCE TARGETS AND PAYOUT PERCENTAGES
    

    

    

    

    

    
      A.        PERFORMANCE TARGETS FOR OBJECTIVE BONUSES
    

    
    	
          Performance 
Measure
        	
          Performance Targets
        
	
          Threshold
        	
          Target
        	
          Maximum
        
	
          Adjusted EPS - AWR Consolidated
        	
          80% Budget
        	
          100% Budget
        	
          120% Budget
        
	
          Adjusted EPS - Regulated Utilities
        	
          80% Budget
        	
          100% Budget
        	
          120% Budget
        
	
          Adjusted EPS - ASUS
        	
          80% Budget
        	
          100% Budget
        	
          120% Budget
        
	
          Relative Stock Price
        	
          Equal to or greater than 3 companies
        	
          Equal to or greater than 6 companies
        	
          Equal to or greater than 9 companies
        
	
          Customer Complaints to DPH
        	
          735 or fewer
        	
          677 or fewer
        	
          643 or fewer
        
	
          Customer Complaint Standards
        	
          Rate of Complaints to the CAB ≤ 0.1%;
        	
          Rate of Complaints to the CAB ≤ 0.07%;
        	
          Rate of Complaints to the CAB ≤ 0.05%;
        
	
          Capital Expenditures
        	
          80% Budget
        	
          100% Budget
        	
          120% Budget
        
	
          SOX -- RU
        	
          No MW &

          
            1 SD
          

        	
          No MW &

          
            No SD
          

        	
          No MW,

          
            No SD &
          

          
            No more than
          

          
            11 CDs
          

        
	
          SOX -- ASUS
        	
          No MW &

          
            1 SD
          

        	
          No MW &

          
            No SD
          

        	
          No MW,

          
            No SD &
          

          
            No more than
          

          
            6 CDs
          

        
	
          Andrews Price Redetermination
        	
          N/A
        	
          ≥ 16% increase

          
            in monthly fees
          

        	
          N/A
        
	
          Fort Bragg ICU Contract Modification
        	
          N/A
        	
          Completed
        	
          N/A
        
	
          Fort Jackson Equitable Adjustment
        	
          N/A
        	
          Funding of at least $650,000
        	
          N/A
        
	
          Virginia Bases Price Redetermination
        	
          N/A
        	
          ≥ 16% increase

          
            in monthly fees
          

        	
          N/A
        
	
          Customer Satisfaction
        	
          N/A
        	
          At least 4 categories
        	
          N/A
        

    

    

    

    
      
        

        

      

      
        
          A-1
        

        
          

        

      

      
        

        

      

    

    

    

    
      B.        PAYOUT PERCENTAGES FOR PERFORMANCE MEASURES - GSWC
      ADMINISTRATIVE AND GENERAL OFFICERS
    

    
    	
          Performance 
Measure
        	
          Payout Percentage
        
	
          Threshold
        	
          Target
        	
          Maximum
        
	
          Adjusted EPS - AWR Consolidated
        	
          10%
        	
          20%
        	
          30%
        
	
          Relative Stock Price
        	
          5%
        	
          15%
        	
          20%
        
	
          Adjusted EPS - RU
        	
          7.5%
        	
          15%
        	
          22.5%
        
	
          Customer Complaints to DPH
        	
          1.25%
        	
          2.5%
        	
          3.75%
        
	
          Customer Complaint Standards
        	
          1.25%
        	
          2.5%
        	
          3.75%
        
	
          Capital Expenditures
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          SOX - RU
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          Adjusted EPS-ASUS
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          SOX - ASUS
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          Objective Bonus Total
        	
          35%
        	
          75%
        	
          110%
        
	
          Individual Performance Measure
(Discretionary Bonus)
        	
          15%
        	
          25%
        	
          40%
        
	
          Aggregate Bonus
        	
          50%
        	
          100%
        	
          150%
        

    

    
      
        

        

      

      
        
          A-2
        

        
          

        

      

      
        

        

      

    

    

    

    
      C.        PAYOUT PERCENTAGES FOR PERFORMANCE MEASURES - GSWC
      OPERATIONS OFFICERS
    

    
    	
          Performance 
Measure
        	
          Payout Percentage
        
	
          Threshold
        	
          Target
        	
          Maximum
        
	
          Adjusted EPS - AWR Consolidated
        	
          10%
        	
          20%
        	
          30%
        
	
          Relative Stock Price
        	
          5%
        	
          10%
        	
          15%
        
	
          Adjusted EPS - RU
        	
          10%
        	
          20%
        	
          30%
        
	
          Customer Complaints to DPH
        	
          1.25%
        	
          2.5%
        	
          3.75%
        
	
          Customer Complaint Standards
        	
          1.25%
        	
          2.5%
        	
          3.75%
        
	
          Capital Expenditures
        	
          2.5%
        	
          10%
        	
          12.5%
        
	
          SOX - RU
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          Adjusted EPS-ASUS
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          Objective Bonus Total
        	
          35%
        	
          75%
        	
          110%
        
	
          Individual Performance Measure
(Discretionary Bonus)
        	
          15%
        	
          25%
        	
          40%
        
	
          Aggregate Bonus
        	
          50%
        	
          100%
        	
          150%
        

    

    

    

    

    

    
      
        

        

      

      
        
          A-3
        

        
          

        

      

      
        

        

      

    

    

    

    
      D.        PAYOUT PERCENTAGES FOR PERFORMANCE MEASURES - ASUS
    

    
    	
          Performance 
Measure
        	
          Payout Percentage
        
	
          Threshold
        	
          Target
        	
          Maximum
        
	
          Adjusted EPS - AWR Consolidated
        	
          10%
        	
          20%
        	
          30%
        
	
          Relative Stock Price
        	
          5%
        	
          10%
        	
          15%
        
	
          Adjusted EPS - RU
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          Adjusted EPS - ASUS
        	
          15%
        	
          20%
        	
          35%
        
	
          Andrews Price Redetermination
        	
          N/A
        	
          3%
        	
          3%
        
	
          Fort Bragg ICU Contract Modification
        	
          N/A
        	
          4%
        	
          4%
        
	
          Fort Jackson Equitable Adjustment
        	
          N/A
        	
          3.5%
        	
          3.5%
        
	
          Virginia Bases Price Redetermination
        	
          N/A
        	
          3.5%
        	
          3.5%
        
	
          Customer Satisfaction
        	
          N/A
        	
          1%
        	
          1%
        
	
          SOX - ASUS
        	
          2.5%
        	
          5%
        	
          7.5%
        
	
          Objective Bonus Total
        	
          35%
        	
          75%
        	
          110%
        
	
          Individual Performance Measure
(Discretionary Bonus)
        	
          15%
        	
          25%
        	
          40%
        
	
          Aggregate Bonus
        	
          50%
        	
          100%
        	
          150%
        

    

    

    

    
      A-4

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