RESIGNATION AND GENERAL RELEASE AGREEMENT

This RESIGNATION AND GENERAL RELEASE AGREEMENT (“ Agreement ”), made this 19 ^th day of September 2008, by and between Michael Patrick George (“ Executive ”), an individual, and American States Water Company (“ Company ”), a California corporation, is a resignation and general release of claims.

WHEREAS , Executive became an employee of the Company on February 12, 2007 pursuant to the terms of an employment letter, dated February 8, 2007, between the Company and the Executive (the “ Employment Letter ”);

WHEREAS , Executive desires to resign from Company; and

WHEREAS , Executive and the Company want to mutually resolve and settle any and all claims, asserted or unasserted, that one may have against the other, to the extent provided in this Agreement, arising out of or in any way connected with his employment relationship with the Company.

NOW, THEREFORE , in consideration of the covenants undertaken in this Agreement,  Executive and Company agree as follows:

1.   Resignation .  Executive hereby voluntarily resigns from his position as Executive Vice President of Corporate Development and as an employee of Company in any other capacity by executing Exhibit A attached hereto, such resignation to be effective September 26, 2008 (the “ Effective Date ”).

2.   No Violations .  Company and Executive each expressly denies any violation of any of the Company’s policies, procedures, state or federal laws or regulations.  Accordingly, while this Agreement resolves the issues, if any, between Company and Executive relating to any alleged violation of Company’s policies or procedures or any state or federal law or regulation, this Agreement does not constitute an adjudication or finding on the merits and it is not, and shall not be construed as, an admission by Company or Executive of any violation of the Company’s policies, procedures, or any state or federal laws or regulations.  Moreover, neither this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in any proceeding as evidence of an admission by Company or Executive of any violation of the Company’s policies, procedures, or any state or federal regulations.  This Agreement may be introduced. however, in any proceeding to enforce this Agreement.

3.   Release of all Claims .  Except for those obligations of the Company created by or arising out of Section 7 or 8 of this Agreement, Executive agrees to release the Company and any parent, subsidiary, affiliated and related entities, including their past, present, or future managers, directors, administrators, officers, employees, agents, insurance companies, attorneys, representatives, predecessors and assigns, and each of them (collectively, “Company Released Parties”) from any and all claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which he now owns or holds or he has at any time heretofore owned or held or may in the future hold as against the Company Released Parties, arising out of or in any way connected with Executive’s employment relationship with Company, the Employment Letter or his voluntary resignation from employment or any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of the Company Released Parties, or any of them, committed or omitted prior to the date of this Agreement.  Except for those obligations of the Executive created by or arising out of this Agreement, Company agrees to release the Executive and any affiliated and related entities, including his relatives, beneficiaries, dependents, agents, insurance companies, attorneys, representatives and assigns, and each of them (collectively, “Executive Released Parties”) from any and all claims, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which Company now owns or holds or has at any time heretofore owned or held as against the Executive Released Parties, arising out of or in any way connected with Executive’s employment relationship with Company, the Employment Letter or his voluntary resignation from employment or any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of the Executive Released Parties, or any of them, committed or omitted prior to the date of this Agreement provided , however , that such release of Executive and Executive Released Parties shall not extend to any claims, known or unknown, suspected or unsuspected, against Executive or any Executive Released Parties which arise out of facts which are finally judged by a court of competent jurisdiction to be a crime under any federal, state, or local statute law, ordinance or regulation.

4.   Identification of Certain Claims Released by Executive .  The claims that Executive is releasing include, but are not limited to all: (a) claims arising out of his employment with the Company and his resignation from the Company; (b) claims arising under the Employment Letter or the Company’s policies, plans, or practices, including without limitation, promotion, compensation, bonuses, stock options, severance pay, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit, workers’ compensation or disability benefits; (c) claims for breach of express or implied contract or covenant of good faith and fair dealing; (d) all claims for violation of public policy; (e) claims for constructive discharge; (f) claims for wrongful discharge; (g) claims for retaliation; (h) claims for violation of state or federal common law or statutory law, including without limitation, all claims arising under the California Fair Employment and Housing Act, the California Labor Code §132a, Title VII of the Civil Rights Act of 1964, as amended, the Fair Labor Standards Act, the Employee Retirement Income Security Act, the National Labor Relations Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Sarbanes-Oxley Act of 2002, or other federal, state, or local laws relating to employment or separation from employment or benefits associated with employment or separation from employment; (i) claims for harassment; (j) claims for emotional distress, mental anguish, humiliation, personal injury; and (k) claims that may be asserted on Executive’s behalf by others, as well as any and all claims that were asserted or that could have been asserted by Executive.  Excluded from this release are claims that cannot be waived or released by law and the payments and benefits to be provided to Executive by Company pursuant to Sections 7 and 8.

5.   Representation of No Action Filed and Agreement Not to Sue .  Executive agrees not to sue any of the Company Released Parties regarding any claim that has been released in this Agreement.  Executive represents and warrants that he has not initiated, and will not initiate any claim, charge, lawsuit, or other action against any of the Company Released Parties (and that he has not transferred or assigned that right to any other person or entity).  Executive warrants and represents that Executive has not heretofore assigned or transferred to any person not a party to this Agreement any released matter or any part or portion thereof and Executive shall defend, indemnify and hold harmless Company from and against any claim (including the payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) based on or in connection with or arising out of any such assignment or transfer made, purported or claimed.  Company agrees not to sue any of the Executive Released Parties regarding any claim that has been released in this Agreement.  Company represents and warrants that it has not initiated, and will not initiate any such claim, charge, lawsuit, or other action against any of the Executive Released Parties (and that it has not transferred or assigned that right to any other person or entity).  Company warrants and represents that Company has not heretofore assigned or transferred to any person not a party to this Agreement any released matter or any part or portion thereof and Company shall defend, indemnify and hold harmless Executive from and against any claim (including the payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) based on or in connection with or arising out of any such assignment or transfer made, purported or claimed.

6.   No Further Recovery .  Executive understands and agrees that the Company and the Company Released Parties shall neither make nor cause to be made any additional relief to Executive, his beneficiaries or dependents, or otherwise on his behalf, except as specifically referenced in this Agreement.  Should any third party, including any state or federal agency, bring any action or claim against the Company on Executive’s behalf, either collectively or individually, Executive acknowledges and agrees that this Agreement provides him with full relief and he will not accept any other relief.  In addition, except to the extent such agreement is prohibited by applicable law, Executive agrees that if he attempts to avoid or set aside the terms of this Agreement, he will first return any and all benefits received pursuant to this Agreement and that he shall be liable for reimbursing the Company for the reasonable costs and attorneys’ fees in defending against such action.

7.   Release Payment .  Provided that the Agreement is not revoked by Executive pursuant to its terms, Company shall pay to Executive at or about September 29, 2008   an amount equal to his current rate of pay for the period from September 19, 2008 through March 31, 2009, plus an amount equal to 4.5% of the portion of that amount that is attributable to the Company match under the Company’s 401(k) Plan that he would have received had he remained an employee through March 31, 2009 (for a total of $206,811.82), less standard withholding and other authorized deductions).  Such payment shall not be considered compensation under any of the Company's benefit plans (including without limitation the 401(k) plan).  Executive shall also be entitled to any salary that is earned through September 19, 2009, but unpaid as of the Effective Date, and to any other accrued vested benefits to which Executive is entitled as of the Effective Date.  Executive shall not be entitled to any bonus for 2008 or thereafter.

8.   Additional Benefits .  Provided that this Agreement is not revoked by Executive pursuant to its terms, Executive shall be entitled to receive the following additional benefits:

(a)           Company shall pay Executive a monthly retirement benefit in the amount of $1,832.28 commencing on the last day of the month in which he attains age 65 and ending as of the first day of the calendar month in which his death occurs.  If, however, Executive is married at the time his benefit payments under this Agreement commence, his benefits shall instead be paid in the form of an annuity for the life of Executive and a survivor annuity for the life of his spouse that is 50% of the amount of the benefit payable during the joint lives of Executive and his spouse and which is the actuarial equivalent of the single life annuity otherwise payable to Executive under this Agreement (a “Joint and 50% Annuity”).  For purposes of determining the amount payable during the joint lives of Executive and his spouse under the preceding sentence, the actuarial assumptions under the Golden State Water Company Pension Plan or its successor (the “Pension Plan”) for purposes of calculating actuarially equivalent benefits shall be used.  Notwithstanding the foregoing, Executive and his spouse may elect that the benefit be paid in the form of any other life annuity then offered under the Pension Plan and that is “actuarially equivalent” (within the meaning of Treasury Regulation Section 1.409A-2(b)(2)(ii)(A)) to the benefits otherwise payable under this Agreement. If Executive dies on or before the date on which he would have attained age 65, his surviving spouse shall receive a survivor benefit equal to the survivor benefit that she would have received if he had (i) lived until age 65, (ii) elected the Joint and 50% Annuity described above and (iii) died on the day after the day on which he would have attained age 65.

(b)           Executive shall have the right to obtain career transition services from Lee Hecht Harrison from August 25, 2008 through February 24, 2009 for $9,500 to be paid by the Company;

(c)           Executive shall have the right to receive an amount not to exceed $2,500 for a cancellation of his residential apartment lease payable within thirty (30) days after receipt of documentation satisfactory to the Company of the amount Executive paid to cancel this lease;

(d)           Executive shall have the right to receive an amount not to exceed $5,500 for moving his personal property to Marin County from La Verne, California payable within thirty (30) days after receipt of documentation satisfactory to the Company of the amount of such payment; and

(e)           Company will provide COBRA coverage to Executive and his eligible dependents until the earlier of (i) eighteen (18) months from the Effective Date, and (ii) the first date on which Executive is covered under another employer’s substantially similar health benefit program without exclusion for any pre-existing medical condition.  Company shall reimburse Executive for the costs of such coverage promptly upon receipt of proof of payment of each premium.

9.   Equity Compensation .  Executive hereby waives the rights, if any, which he may have under the terms of his Employment Letter to any further grants of equity compensation.  Executive further acknowledges that he shall have only the rights under the terms of any awards granted to him pursuant to the terms of the Company’s 2000 Stock Incentive Plan as exist pursuant to the existing standard grant agreements therefor, as amended by Amendment No. 1 to each of such agreements (copies of which are attached).

10.   Executive’s Participation in Litigation .

(a)           Except to the extent prohibited by applicable law, Executive agrees that (i) he will not persuade, support, or convince others to raise claims against the Company or any Company Released Party; (ii) he will not participate in any litigation or proxy contest involving the Company or any of the Company Released Parties except, in respect of litigation, at the request of the Company or unless he is compelled by subpoena, court order or other requirement of law to participate in a legal proceeding or as may be necessary to protect his rights under this Agreement; and (iii) if he should be compelled to participate in litigation, he will notify the Company immediately by contacting the Vice President of Human Capital Management and will cooperate by making himself reasonably available to discuss the subject of any testimony with the Company and its counsel.  The service upon Executive of process requiring his appearance to testify, or to produce writings or other items, at any trial, deposition, administrative hearing, grand jury proceeding or before any other legislative, administrative or judicial body shall be deemed a requirement of law; provided, however, that prior to any testimony or production, Executive shall promptly have notified Company of the service of process received and shall have cooperated with Company’s efforts to obtain a protective order or other restriction respecting the disclosure of the information sought.  Nothing in this Agreement shall waive or diminish any privilege or other defense or objection to the production or disclosure of information that may otherwise be available to the Company or any other person or entity.

(b)           Executive further agrees to make himself available upon reasonable notice by the Company to assist with any litigation matters involving the Company.  In connection therewith, Company shall reimburse Executive for his reasonable documented out-of-pocket expenses and pay Executive an hourly fee of $250 for the time during which actual assistance is provided to the Company, excluding, among other things, time required for meals and overnight stays.

11.   No Further Obligations of the Company .  Executive acknowledges that the  consideration provided to him under this Agreement is provided to him in full and complete satisfaction and discharge of any and all obligations that the Company and/or any Company Released Party has or may have to him on or before the date hereof, other than obligations arising after the date of this Agreement under the express terms of this Agreement, and that, upon receipt of the payment called for under paragraph 7, he will have been paid all the wages, bonuses and benefits that are due to him.  Notwithstanding the foregoing, Executive shall continue to enjoy rights to indemnification as set forth in Article VIII of the Company’s Amended and Restated Bylaws and any standard form Indemnification Agreement between the Executive and the Company with respect to his service as an officer of the Company.

12.   Acknowledgments .  Executive expressly acknowledges and agrees that, by entering into this Agreement, he is waiving any and all rights or claims that he may have arising under the Age Discrimination in Employment Act of 1967, as amended, which have arisen on or before the date of execution of this Agreement.  Executive further expressly acknowledges and agrees that:

(a)           In return for this Agreement, he will receive compensation beyond that which he was already entitled to receive before entering into this Agreement;

(b)           Company does not make and has not made any representations regarding the taxability of the payment and benefits provided to him, and he has not relied upon any representation by Company on that subject;

(c)           He was orally advised by Company and is hereby advised in writing by this Agreement to consult with an attorney before signing this Agreement;

(d)           He was given a copy of this Agreement on September 18, 2008, and informed that he had 21 days within which to consider this Agreement;

(e)           He was informed that he has seven (7) days following the date of execution of the Agreement in which to revoke this Agreement; and

(f)           He was informed that the Company is required to disclose the terms and conditions of this Agreement in accordance with Federal securities laws.

13.   Confidential Information .  Executive acknowledges that by reason of his position with Company he has been given access to strategic plans, annual business plans, lists of customers, prices, engineering plans and similar confidential or proprietary materials or information respecting Company’s business affairs (“ Confidential Information ”).  The term Confidential Information shall not include any information which (i) at the time of disclosure or thereafter was or is generally available to the public; (ii) was or is availabl