AMERICAN STATES WATER COMPANY 2008 STOCK INCENTIVE PLAN RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “ Agreement ”) is dated as of [___________] by and between American States Water Company, a California corporation (the “ Corporation ”), and [ ______________ ] (the “ Participant ”).

WHEREAS , pursuant to the American States Water Company 2008 Stock Incentive Plan, as amended (the “ Plan ”), the Corporation has granted to the Participant effective as of the date hereof (the “ Award Date ”), an award of restricted stock units under the Plan (the “ Award ”), upon the terms and conditions set forth herein and in the Plan.

NOW THEREFORE , in consideration of services rendered and to be rendered by the Participant, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

1.        Defined Terms .  Capitalized terms used herein and not otherwise defined herein shall have the meaning assigned to such terms in the Plan.

2.        Grant .  Subject to the terms of this Agreement, the Corporation hereby grants to the Participant an Award with respect to an aggregate of [_________] stock units (subject to adjustment as provided in Section 5.2 of the Plan) (the “ Stock Units ”).  As used herein, the term “stock unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Corporation’s Common Shares (subject to adjustment as provided in Section 5.2 of the Plan) solely for purposes of the Plan and this Agreement.  The Corporation will maintain a Stock Unit bookkeeping account for the Participant (the “ Account ”).  The Stock Units granted to the Participant under this Agreement will be credited to the Participant’s Account as of the Award Date.  The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to the Participant if such Stock Units vest pursuant to Section 3.  The Stock Units shall not be treated as property or as a trust fund of any kind.

3.        Vesting .

(a)            General .  The Award shall vest and become nonforfeitable with respect to [  ] percent ([  ]%) of the total number of Stock Units on [   ], [  ] ([  ]%) of the total number of Stock Units on [  ] and [   ] percent ([  ]%) of the total number of Stock Units on [  ] (each, an “ Installment Vesting Date ”) (subject to adjustment under Section 5.2 of the Plan), provided the Participant is still employed by the Corporation or a Subsidiary on the applicable Installment Vesting Date, subject to earlier termination as provided herein or in the Plan.

(b)            Termination of Employment Prior to Vesting .   Notwithstanding Section 3(a), the Participant’s Stock Units (and any Stock Units credited as dividend equivalents) shall terminate to the extent such Stock Units have not become vested prior to the first date the Participant is no longer employed by the Corporation or one of its Subsidiaries, regardless of the reason for the termination of the Participant’s employment with the Corporation or a Subsidiary; provided , however , that if the Participant’s employment is terminated by the Corporation or a Subsidiary as a result of the Participant’s death or Total Disability, the Participant’s Stock Units, to the extent such units are not then vested, shall become fully vested as of the date of termination of the Participant’s employment.  If the Participant is employed by a Subsidiary and that entity ceases to be a Subsidiary, such event shall be deemed to be a termination of employment of the Participant for purposes of this Agreement (unless the Participant otherwise continues to be employed by the Corporation or another of its Subsidiaries following such event).  If any unvested Stock Units are terminated hereunder, such Stock Units (and any Stock Units credited as dividend equivalents) shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Participant, or the Participant’s beneficiary or personal representative, as the case may be.

(c)            Early Vesting Upon Change in Control .  Notwithstanding Section 3(a), the Participant’s Stock Units (and any Stock Units credited as dividend equivalents), to the extent such Stock Units are not then vested, shall become fully vested upon the occurrence of a Change in Control, as defined in the Plan.

4.        Continuance of Employment .  The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement.  Partial employment or service, even if substantial, during any vesting period will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 3(b) or under the Plan.

Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, 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 or in service to the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or services, or affects the right of the Corporation or any Subsidiary to increase or decrease the Participant’s other compensation or benefits.  Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant without his consent thereto.

5.        Dividend and Voting Rights .

(a)            Limitation on Rights Associated with Units .   The Participant shall have no rights as a shareholder of the Corporation, no dividend rights (except as expressly provided in Section 5(b) with respect to dividend equivalent rights) and no voting rights, with respect to the Stock Units and any Common Shares underlying or issuable in respect of such Stock Units until such Common Shares are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate.

(b)            Dividend Equivalents .  The Participant shall be entitled to receive dividend equivalents in the form of additional Stock Units with respect to the Stock Units credited to his or her Account as the Corporation declares and pays dividends on its Common Shares in the form of cash.  The number of Stock Units to be credited to the Participant’s Account as a dividend equivalent will equal (1) the per share cash dividend to be paid by the Corporation on its Common Shares multiplied by the number of Stock Units then credited to the Participant’s Account on the record date for that dividend divided by (2) the Fair Market Value of the