under the group life insurance policy. The accidental death and dismemberment insurance pays additional benefits if an employee suffers a covered accidental loss resulting in death, dismemberment or paralysis.
⁽²⁾ The value is based on an estimate of the aggregate incremental costs incurred by the company for the personal use of company-provided automobiles by each of the named executive officers. In addition, we allocated one–third of the premium of $6,793 (three year premium) for coverage under a blanket accident insurance policy that covers our directors and executive officers. The cost is equally allocated among each of the board members and executive officers. Furthermore, Mr. Gallagher was reimbursed $1,093 in toll road expenses in 2008.
⁽³⁾ The cash payments to each executive officer in connection with dividend equivalent rights relate to options granted prior to 2006.
⁽⁴⁾ We reimbursed Mr. George for his temporary housing expenses in the San Dimas area as well as commuting expenses from his residence in Ross, California to our offices in San Dimas, California. These expenses included a gross-up for income taxes. In addition, we also reimbursed Ms. Kruger for her relocation to Southern California at the request of the company. We reimbursed Mr. Sprowls for his relocating to Southern California from Illinois in connection with his employment by the company.
⁽⁵⁾ All employees are entitled to a cash payment for their unused accrued vacation days based on their then current salary upon termination of employment. Mr. Wicks and Mr. George received $210,514 and $27,897, respectively, upon termination of their employment in 2008. Mr. George also received severance benefits pursuant to the terms of a separation agreement that were paid in 2008. The company agreed to pay Mr. George in 2009 an aggregate of $3,167 for transition services and an aggregate of $19,855 for COBRA premium payments for medical, dental and vision coverage for a period of an additional 15 months.
⁽⁶⁾ We paid a holiday bonus of $156 to each of our employees, including our executive officers. In addition, we paid Mr. Wicks $822 on his 20^th anniversary with the company pursuant to our anniversary grant program for all employees and $230 for expenses of his spouse who attended certain company functions. We paid Mr. Harris an additional $1,800 to reimburse him for health club expenses and $101 for expenses of his spouse who attended certain company functions.
____________________

Equity Compensation

     An executive officer has the right to exercise all vested stock options until the end of a period of ten years following the date of grant, provided he or she remains employed by us. An executive also has the right to exercise his or her options for three months following the date of termination of employment, unless the executive is terminated for cause. If the executive’s employment is terminated as a result of death, total disability or retirement when the executive is at least 55 and the sum of the executive’s age and years of employment is equal to or greater than 75, the options will be vested and will be exercisable by the executive (or, in the case of death, his or her personal representative) during the term of the options on the vesting schedule set forth in the option agreement. Mr. George’s options also continue to vest following his resignation from the company and are exercisable for a period of ten years following the date of grant on the vesting schedule set forth in his option agreements. All other options which we have granted vest over a period of three years during employment with the company.

     We also granted restricted stock units to each of our executive officers in 2008, which vest over a three year period. If the executive’s employment is terminated or the executive voluntarily terminates his or her employment, other than as a result of death or disability, the executive will forfeit all restricted stock units that have not vested on the severance date. If an executive terminates employment as a result of death or disability, the restricted stock units will vest on the date of death or the date that the executive is determined to be disabled. If there is a change in control, the restricted stock units will vest when the change in control occurs. If the executive is at least 55 and the sum of the executive’s age and years of employment is equal to or greater than 75, the restricted stock units will vest on the date on which these conditions are satisfied. Mr. George’s restricted stock units vested on the date of his separation from the company as provided in his separation agreement.

     Generally, each executive officer is entitled to receive common shares in an amount equal to the number of his or her restricted stock units vested on each installment vesting date set forth in the award agreement. However, if the executive’s employment terminates as a result of death or disability, all of his or her restricted stock units vest on his or her termination date, and the common shares will be delivered to the executive or his or her beneficiary within 60 days following termination of employment. If an executive’s restricted stock units vest as a result of a change in control or as a result of satisfying the age and service conditions of the stock award agreement, the executive’s common shares will be delivered in accordance with the installment vesting schedule in the stock award agreement or, if earlier, within 60

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days following termination of employment, subject to any required delay for specified employees under Section 409A of the Internal Revenue Code. All of the named executive officers are specified employees for this purpose.

     Each of the options granted to the named executive officers in 2008 vest at the rate of 33% one year after the date of grant, 33% two years after the date of grant and 34% three years after the date of grant. Each of the restricted stock units awarded to the named executive officers in 2008 are payable at the rate of 33% one year after the grant date, 33% two years after the date of the grant and 34% three years after the date of the grant. All of the stock awards made to Mr. Wicks, Mr. George and Mr. Harris vested in 2008 or, in the case of Mr. Wicks, had previously vested when he satisfied the age and service conditions of the awards.

     We also awarded each of our executive officers restricted stock units in 2008 in an amount equal to the quarterly cash dividends payable on our common shares times the number of restricted stock units granted to the executive officer divided by the closing price of our common shares on the dividend payment date as provided in the 2000 and 2008 plans. The value of the restricted stock units is included in the “Stock Awards” column in the Summary Compensation Table. These restricted stock units vest and are payable on the same basis as the underlying restricted units on which these restricted stock units were earned.

Other Compensation

     We have a 401(k) plan under which employees may invest a percentage of their pay, up to a maximum amount prescribed by law. We provide matching contributions for each of our employees who participate in the plan of 100% up to the first 3% of eligible compensation deferred and 50% of the next 3% of eligible compensation deferred. Each of our executive officers is entitled to participate in this plan on the same basis as other employees, subject to the limits imposed by the Internal Revenue Code.

     We provide all active full-time employees with medical, dental and vision benefits and life insurance coverage. All employees are required to pay 15% of the company’s premiums for the medical, dental and vision benefits except for certain employees at subsidiaries of American States Utility Services, Inc. We pay all premiums for life insurance coverage in the amount of $50,000 for all employees and their families, plus additional benefits if any employee suffers a covered accidental loss resulting in death, dismemberment or paralysis. We also have an employee assistance, an anniversary grant and holiday bonus programs. Each of our executive officers is entitled to these benefits on the same basis as other employees.

     All active full-time employees receive time off with pay for vacation and sick leave in accordance with company policy. Executives, other than Mr. Sprowls and Mr. George, received vacation accrual on the basis of the number of continuous months of service, with 1 to 60 months of service equating to 20 days per year of vacation; 61 to 120 months of continuous service equating to 25 days of vacation per year and 121 months of continuous service and over equating to 26 days of vacation per year. Executives, other than Mr. Sprowls and Mr. George, receive sick leave benefits on the same basis as all other employees. In 2008, Mr. Sprowls and Mr. George were each entitled to 26 days of vacation per year and received sick benefits based upon their number of years of service in the water or utility industry. Any vacation days not used in any year are carried over to the next year. All employees are entitled to a cash payment, based on their then current salary, for any accrued, but unused vacation days upon termination of employment. Mr. Wicks and Mr. George received $210,514 and $27,897, respectively, upon termination of employment in 2008 for accrued, but unused vacation days. Pursuant to Section 162(m) of the Internal Revenue Code, the company will not be permitted to deduct approximately $55,000 of Mr. Wicks' compensation in 2008 because his total compensation for tax purposes in 2008 exceeded $1,000,000 as a result of the payment to Mr. Wicks for his accrued, but unused vacation days.

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     Each of our executive officers is entitled to the benefits of a travel insurance policy provided by the company and the use of a company-owned car. The company also reimburses each executive officer up to $150 per month for a single membership at a health club. Mr. Harris is the only named executive officer that was reimbursed for health club expenses in 2008.

     The company generally has agreed to pay the relocation expenses of executive officers if that executive officer is requested to move by the company or it is necessary for the executive officer to move in order to become an executive officer of the company. In 2008, we agreed to reimburse Ms. Kruger for up to $30,800 of her expenses in order to induce her to relocate from Sacramento, California to southern California at the request of the company.

Total Compensation

     The proportion of salary and bonus to total compensation in 2008 for Mr. Wicks, Mr. Sprowls, Mr. George, Ms. Tang, Mr. Harris, Ms. Kruger and Mr. Gallagher was 48%, 71%, 30%, 58%, 46%, 59% and 54% of total compensation, respectively. This is not a factor considered by the compensation committee in determining the amount of salary and bonus to be paid to an executive officer.

What plan-based awards did we make to these executive officers in 2008?

     Each of the named executive officers received a grant of stock options and restricted stock units in 2008 as more particularly described below. We did not have any equity or non-equity incentive plans in 2008.

GRANTS OF PLAN-BASED AWARDS IN 2008

				All Option
			All Stock	Awards:		Grant Date
			Awards:	Number of	Exercise or	Fair Value
			Number of	Securities	Base Price	of Stock
			Shares of Stock	Underlying	of Option	and Option
	Grant	Award	or Units	Options	Awards	Awards
Name	Date(1)	Date(2)	(#)	(#)	($/Share)	($)(3)
Floyd E. Wicks	1/28/08	1/28/08	2,941.0			$100,318
	1/28/08	1/28/08		14,728	$34.11	99,856
	3/1/08	2/8/08	44.6			1,452
	6/1/08	5/12/08	43.4			1,463
	9/1/08	8/8/08	37.3			1,474
	12/1/08	11/12/08	46.5			1,483
Robert J. Sprowls	1/28/08	1/28/08	1,838.0			62,694
	1/28/08	1/28/08		6,652	34.11	45,101
	3/1/08	2/8/08	25.1			818
	6/1/08	5/12/08	24.4			824
	9/1/08	8/8/08	21.0			830
	12/1/08	11/12/08	26.2			836
Eva G. Tang	1/28/08	1/28/08	882			30,085
	1/28/08	1/28/08		2,887	34.11	19,574
	3/1/08	2/08/08	13.4			436
	6/1/08	5/12/08	13.0			439
	9/1/08	8/8/08	11.2			442
	10/30/08	10/30/08		184		1,248
	10/30/08	10/30/08	37.0		32.93	1,218
	12/1/08	11/12/08	14.3			454
Michael P. George	1/28/08	1/28/08	1,838.0			62,694
	1/28/08	1/28/08		9,205	34.11	62,410
	3/1/08	2/8/08	22.6			734
	6/1/08	5/12/08	21.9			740
	9/1/08	8/08/08	18.9			746
	12/1/08	11/12/08	23.5			750

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				All Option
			All Stock	Awards:		Grant Date
			Awards:	Number of	Exercise or	Fair Value
			Number of	Securities	Base Price	of Stock
			Shares of Stock	Underlying	of Option	and Option
	Grant	Award	or Units	Options	Awards	Awards
Name	Date (1)	Date(2)	(#)	(#)	($/Share)	($)(3)
McClellan Harris III	1/28/08	1/28/08	1,103.0			37,623
	1/28/08	1/28/08		3,609	34.11	24,469
	3/1/08	2/8/08	16.7			545
	6/1/08	5/12/08	16.3			549
	9/1/08	8/08/08	14.0			553
	12/1/08	11/12/08	17.5			557
Denise L. Kruger	1/28/08	1/28/08	1,103.0			37,623
	1/28/08	1/28/08		3,609	34.11	24,469
	3/1/08	2/08/08	16.7			545
	6/1/08	5/12/08	16.3			549
	9/1/08	8/08/08	14.0			553
	12/1/08	11/12/08	17.5			557
James B. Gallagher	1/28/08	1/28/08	882.0			30,085
	1/28/08	1/28/08		2,887	34.11	19,574
	3/1/08	2/08/08	13.4			436
	6/1/08	5/12/08	13.0			439
	9/1/08	8/08/08	11.2			442
	12/1/08	11/12/08	14.0			445

⁽¹⁾ Pursuant to the terms of the 2000 and 2008 plans, the effective date of the grant of restricted stock units pursuant to dividend equivalent rights on restricted stock units is the dividend payment date for our common shares set by the board of directors.
⁽²⁾ Pursuant to the terms of the 2000 and 2008 plans, the award date of restricted stock units pursuant to dividend equivalent rights is the date that the board declares the payment of a dividend on our common shares.
⁽³⁾ We provide information regarding the assumptions used to calculate the value of all awards made to executive officers pursuant to the 2000 and 2008 plans in Note 12 to our financial statements in our Form 10-K for the year ended December 31, 2008. The values included in this table are for the full grant date fair value of the awards made in 2008 without regard to the three year vesting conditions described above.
____________________
 
     The proportion of equity compensation to total compensation for Mr. Wicks, Mr. Sprowls, Mr. George, Ms. Tang, Mr. Harris, Ms. Kruger and Mr. Gallagher was 14%, 16%, 30%, 13%, 23%, 13% and 12%, respectively. This is not a factor considered by the compensation committee in determining the amount of equity compensation to be paid to an executive officer.

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What equity awards granted to these executive officers were outstanding at the end of the year?

     Each named executive officer had the stock option and restricted stock unit awards outstanding at December 31, 2008 described in the table below. Certain of the stock awards made to Mr. Wicks, Mr. George and Mr. Harris have vested, but are not yet payable. Information regarding the installment payment dates for these awards is provided in the footnotes on the next table.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2008

	Option Awards				Stock Awards
	Number of	Number of
	Securities	Securities			Number of	Market Value
	Underlying	Underlying			Shares or	of Shares or
	Unexercised	Unexercised	Option	Option	Units That	Units That
	Options (#)	Options (#)	Exercise	Expiration	Have Not	Have Not
Name	Exercisable	Unexercisable	Price ($)	Date	Vested (#)	Vested ($) (1)
Floyd E. Wicks	6,172		$25.92	1/2/2015
	4,752	4,895(2)	33.73	1/29/2016
	4,733	9,608(3)	38.62	1/1/2017
		14,728(4)	34.11	1/27/2018
Robert J. Sprowls	4,105		23.24	6/29/2014
	8,090		25.92	1/2/2015
	2,376	2,447(2)	33.73	1/29/2016
	2,366	4,805(5)	38.62	1/1/2017
		6,652(6)	34.11	1/27/2018
					3,368(14)	$111,077
Eva G. Tang	3,200		23.15	12/31/2012
	9,075		25.55	2/1/2014
	9,075		25.92	1/2/2015
	2,852	1,468(2)	33.73	1/29/2016
	1,420	2,882(7)	38.62	1/1/2017
		2,887(8)	34.11	1/27/2018
		184(9)	32.93	10/29/2018
					1,831(15)	60,386
Michael P. George	2,132	4,329(10)	39.04	2/14/2017
		9,205(11)	34.11	1/27/2018
McClellan Harris III	4,105		25.92	1/2/2015
	1,782	1,836(2)	33.73	1/29/2016
	1,775	3,603(12)	38.62	1/1/2017
		3,609(13)	34.11	1/27/2018
Denise L. Kruger	12,075		25.55	2/1/2014
	12,075		25.92	1/2/2015
	3,564	1,836(2)	33.73	1/29/2016
	1,775	3,603(12)	38.62	1/1/2017
		3,609(13)	34.11	1/27/2018
					2,243(16)	79,974
James B. Gallagher	1,650		23.43	2/3/2012
	9,075		25.55	2/1/2014
	9,075		25.92	1/2/2015
	2,852	1,468(2)	33.73	1/29/2016
	1,420	2,882(7)	38.62	1/1/2017
		2,887(8)	34.11	1/27/2018
					1,794(17)	59,166

⁽¹⁾ We determine the market value of restricted stock units that have not vested by multiplying the number of unvested restricted stock units outstanding on December 31, 2008 by the closing price of our common shares on December 31, 2008 as reported on The Wall Street Journal website (www.online.wsj.com). The closing price of our common shares on December 31, 2008 as reported was $32.98.
⁽²⁾ These options vested on January 29, 2009.
⁽³⁾ Of this amount, 4,733 options vested on January 1, 2009 and the remainder will vest on January 1, 2010.
⁽⁴⁾ Of this amount, 4,860 options vested on January 27, 2009, 4,860 options will vest on January 27, 2010 and the remainder will vest on January 27, 2011.
⁽⁵⁾ Of this amount, 2,366 options vested on January 1, 2009 and the remainder will vest on January 1, 2010.

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⁽⁶⁾ Of this amount, 2,195 options vested on January 27, 2009, 2,195 options will vest on January 27, 2010 and the remainder will vest on January 27, 2011.
⁽⁷⁾ Of this amount, 1,420 options vested on January 1, 2009 and the remainder will vest on January 1, 2010.
⁽⁸⁾ Of this amount, 953 options vested on January 27, 2009, 953 options will vest on January 27, 2010 and the remainder will vest on January 27, 2011.
⁽⁹⁾ Of this amount, 61 will vest on October 29, 2009, 61 options will vest on October 29, 2010 and the remainder will vest on October 29, 2011.
⁽¹⁰⁾ Of this amount, 2,132 options vested on February 14, 2009 and the remainder will vest on February 14, 2010.
⁽¹¹⁾ Of this amount, 3,038 options vested on January 27, 2009, 3,038 vested on January 27, 2010 and the remainder will vest on January 27, 2011.
⁽¹²⁾ Of this amount, 1,775 options vested on January 1, 2009 and the remainder will vest on January 1, 2010.
⁽¹³⁾ Of this amount, 1,191 options vested on January 27, 2009, 1,191 vested on January 27, 2010, and the remainder will vest on January 27, 2011.
⁽¹⁴⁾ Of this amount, 458 restricted stock units vested on January 1, 2009, 624 vested on January 27, 2009, 545 vested on January 29, 2009, 472 will vest on January 1, 2010, 624 will vest on January 27, 2010 and the remainder will vest on January 27, 2011.
⁽¹⁵⁾ Of this amount, 275 restricted stock units vested on January 1, 2009, 311 vested on January 27, 2009, 327 vested on January 29, 2009, 283 will vest on January 1, 2010, 312 will vest on January 27, 2010 and the remainder will vest on January 29, 2010.
⁽¹⁶⁾ Of this amount, 344 restricted stock units vested on January 1, 2009, 374 vested on January 27, 2009, 409 vested on January 29, 2009, 354 will vest on January 1, 2010, 375 will vest on January 27, 2010 and the remainder will vest on January 27, 2011.
⁽¹⁷⁾ Of this amount, 275 restricted stock units vested on January 1, 2009, 299 vested on January 27, 2009, 327 vested on January 29, 2009, 284 will vest on January 1, 2010 and the remainder will vest on January 4, 2010, of which 300 and 309 restricted stock units will be payable on January 27, 2010 and January 27, 2011, respectively.
____________________

     None of our named executive officers has any outstanding equity incentive awards.

Did any of these executive officers exercise options or have restricted stock or restricted stock units vest in 2008?

     Some of our named executive officers exercised stock options in 2008. All of our named executive officers had outstanding awards of restricted stock units vest in 2008.

OPTION EXERCISES AND STOCK VESTED IN 2008

	Option Exercises		Stock Awards
	No. of Shares		No. of Shares
	Acquired on	Value Realized on	Acquired on		Value Realized on
Name	Exercise (#)	Exercise ($) (1)	Vesting (#)		Vesting ($) (2)
Floyd E. Wicks	2,548	$40,743	4,945 (3)		$68,474
Robert J. Sprowls	-	-	958		34,220
Eva G. Tang	-	-	574		20,501
Michael P. George	-	-	3,565 (4)		17,653
McClellan Harris III	-	-	2,962 (5)		25,645
Denise L. Kruger	18,150	311,636	718		25,645
James B. Gallagher	-	-	574		20,501

⁽¹⁾ We determined the value realized on exercise of an option by determining the difference between the closing market price of our common shares at the time of exercise as reported on The Wall Street Journal website (www.online.wsj.com), and the exercise price of the option.
⁽²⁾ We determined the value realized on vesting of restricted stock units based on the closing market price of our common shares on the date of vesting as reported on The Wall Street Journal website (www.online.wsj.com).
⁽³⁾ Mr. Wicks acquired 1,917 shares of restricted stock units with a market value of $68,474 on the date of acquisition in 2008. Mr. Wicks has the right to acquire 3,028 common shares six months after separation of service from the company as a result of the vesting of 3,028 restricted stock units in 2008. Mr. Wicks has the right to acquire an additional 2,952 common shares six months after his separation of service from the company as a result of the vesting of 2,952 restricted stock units in prior years.
⁽⁴⁾ Mr. George acquired 541 shares of restricted stock units upon the pay-out of restricted stock units with a market value of $17,653 in 2008. Mr. George is entitled to acquire 3,024 common shares as a result of the vesting of 3,024 restricted stock units in 2008. Mr. George acquired 624 of these common shares on January 28, 2009 with a market value on the date of acquisition of $21,122 and 557 of these common shares on February 15, 2009 with a market value on the date of acquisition of $20,420 as a result of the vesting of 1,181 restricted stock units in 2008. Mr. George has the right to acquire 624 common shares on

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January 28, 2010, 575 common shares on Feb 15, 2010, and 624 common shares on January 28, 2011 as the result of the vesting of 1,843 restricted stock units in 2008.
⁽⁵⁾ Mr. Harris acquired 718 common shares upon the pay-out of restricted stock units with a market value of $25,645 on the date of acquisition. Mr. Harris is entitled to acquire 2,244 common shares as a result of the vesting of 2,244 common shares in 2008. Mr. Harris acquired 344 common shares on January 2, 2009 with a market value of $11,345 on the date of acquisition, 374 common shares on January 28, 2009 with a market value of $12,660 on the date of acquisition, and 409 common shares on January 30, 2009 with a market value of $14,315 as a result of the vesting of 1,127 restricted stock units in 2008. Mr. Harris has the right to acquire 355 common shares on January 2, 2010, 375 common shares on January 28, 2010, and 387 common shares on January 28, 2011 as a result of vesting 1,117 of restricted stock units in 2008.
____________________

What pension benefits are payable to these executive officers?

     We provide information in the table below reflecting the present value of the accumulated retirement benefits provided to each of our named executive officers as of December 31, 2008.

PENSION BENEFITS

		Number of Years	Present Value of
		of Credited Service	Accumulated Benefit
Name	Plan Name	(#)	($)(6)
Floyd E Wicks(1)	Pension Plan	20	$919,821
	Other Retirement Benefit	20	2,656,502
Robert J. Sprowls(2)	Other Retirement Benefit	4	194,489
Eva G. Tang(4)	Pension Plan	12	305,914
	Supplemental Retirement Plan	12	95,524
Michael P. George(3)	Other Retirement Benefit	2	153,790
McClellan Harris III(4)(5)	Pension Plan	18	671,004
	Supplemental Retirement Plan	18	310,417
Denise L. Kruger(4)	Pension Plan	16	283,895
	Supplemental Retirement Plan	16	124,403
James B. Gallagher(4)	Pension Plan	21	595,890
	Supplemental Retirement Plan	21	131,128

⁽¹⁾ The present value of the accumulated benefit for Mr. Wicks is based on his age at December 31, 2008, which is 65. Mr. Wicks retired from the company on December 31, 2008.
⁽²⁾ The present value of the accumulated benefit is based on the age of 63 and 10 months for Mr. Sprowls. Mr. Sprowls has the right to receive benefits upon retirement equivalent to benefits he would have been entitled to receive as a participant in the supplemental retirement plan if the supplemental retirement plan had been amended to provide for five years of credited service with the company, for vesting but not for benefit purposes, under the terms of a separate agreement. If we had assumed that Mr. Sprowls would retire at age 65, the present value of the accumulated benefit under the terms of the separate agreement would be $176,403.
⁽³⁾ The present value of the accumulated benefit is based on the age of 65 for Mr. George. Mr. George has the right to receive benefits upon retirement equivalent to benefits he would have been entitled to receive as a participant in the supplemental retirement plan if the supplemental retirement plan had been amended to provide for five years of credited service with the company, for vesting but not for benefit purposes, under the terms of separate agreements. At age 65, Mr. George will receive a monthly benefit of $1,832. The present value of the accumulated benefit under the terms of his separate agreement is $153,790.
⁽⁴⁾ The present value of the accumulated benefit for Ms. Tang, Mr. Harris, Ms. Kruger and Mr. Gallagher, is based on the age when he or she would be eligible to retire with full benefits, which is at 62. If we had assumed that each of them would retire at age 65, the normal retirement age under each of these plans, the present value of the accumulated benefit under the pension plan would instead be $241,558, $526,018, $224,496, and $467,627 for Ms. Tang, Mr. Harris, Ms. Kruger and Mr. Gallagher, respectively, and the present value of the accumulated benefit under the supplemental retirement plan would be $74,963, $241,356, $97,624 and $101,954 for Ms. Tang, Mr. Harris, Ms. Kruger and Mr. Gallagher, respectively.
⁽⁵⁾ Mr. Harris was eligible to retire with a 37.1% reduction in benefits at December 31, 2008. If we had assumed that Mr. Harris retired at December 31, 2008, the present value of his accumulated benefit for the pension plan and the supplemental retirement plan would instead be $591,890 and $277,885, respectively.
⁽⁶⁾ We used the same assumptions to calculate the change in pension value in Note 11 to our financial statements in our Form 10-K for the year ended December, 31 2008, except that retirement age is assumed to be the earliest date on which an executive officer may retire under the plan without any benefit reduction due to age. We ignored for the purpose of this calculation what actuaries refer to as pre-retirement decrements.
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     Each of our executive officers is a participant in the pension plan. This plan is a defined benefit pension plan available to all eligible employees who are 21 years or older and have completed 1,000 hours of service in the first year of employment or in any subsequent plan year. The normal retirement benefit is 2% of an employee’s five highest consecutive years’ average earnings multiplied by the number of years of credited service, up to a maximum of 40 years, reduced by a percentage of primary social security benefits. Normal retirement age is 65. An employee must have five years of service in order to receive benefits under this plan. For purposes of this plan, compensation includes an executive’s salary and all other reportable compensation received by the executive, except bonuses, the imputed value of the personal use of company-owned vehicles, unused vacation pay, severance pay and long-term incentive program payments, up to the maximum amount permitted under the Internal Revenue Code (which was $245,000 at January 1, 2009).

     We also provide each of our executive officers additional pension benefits under the supplemental retirement plan. Each executive, other than Mr. Wicks, Mr. Sprowls and Mr. George, has the right to receive a benefit under the terms of this plan equal to the sum of 2% of compensation for each year of service before 2006 plus 3% of compensation for each year of service after 2005, up to a combined maximum of 60% of compensation, less a percentage of primary social security benefits and amounts payable to the executive under the pension plan. For participants who were employed by the company on January 1, 2006, the benefit is the greater of the benefit under the formula described in the previous sentence or the benefit under the previous formula. Under the previous formula, each executive was entitled to receive a benefit equal to the sum of 2% of compensation for each year of service, up to a maximum of 40 years, less a percentage of primary social security benefits and amounts payable to the executive under the pension plan.

     Mr. Wicks retired on December 31, 2008. Mr. Wicks has the right to receive a benefit under the supplemental retirement plan equal to 60% of his compensation, less a percentage of primary social security benefits and amounts payable to him under the pension plan. For the purpose of this calculation, compensation includes all compensation paid to Mr. Wicks, including amounts paid pursuant to a “cash pay” annual performance incentive plan (other than an extraordinary bonus, such as a holiday, year end, anniversary or signing bonus) and dividend equivalents paid in cash to him in connection with awards made under the 2000 plan prior to 2006 and without regard to Internal Revenue Code limits. Mr. Sprowls has the right to receive benefits upon retirement equivalent to benefits he would have been entitled to receive as a participant in the supplemental retirement plan if the plan had been amended to provide him with five years of credited service with the company for vesting, but not benefit purposes, under the terms of a separate agreement. Mr. George has the right to receive $1,832 per month commencing on the last day of the month in which he attains the age of 65, which may, depending on the circumstances, be in the form of a single life or joint life annuity under the terms of a separate agreement.

     Under the terms of each of the plans, an employee who is vested may retire and receive benefits at age 55 with a reduction in benefits of 50%. An employee, who retires after age 55, but prior to age 65, will receive a lesser reduction in benefits depending upon the age at which the executive retires, unless the sum of the executive’s age and years of service equals 80. Mr. Harris is currently eligible to retire with a benefit reduction of 37.1%. Under the terms of the supplemental retirement plan, an employee who is vested will begin receiving benefits within 60 days following the later of separation from service, age 55 or an age over 55 elected by the employee in 2008, subject to any delay required under Section 409A of the Internal Revenue Code.

     We did not make any payments to any named executive officer under either of our pension plans or any of the separate retirement arrangements during the last year.

     We also provide a Medicare supplement insurance policy for each employee who we hired prior to February 1, 1995 and his or her spouse at or after age 65. Each of our named executive officers has a right to this benefit after reaching age 65, other than Mr. Sprowls, Mr. George and Ms. Tang, who we hired after February 1, 1995.

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Are any of these executive officers participants in a non-qualified deferred compensation plan?

     None of our named executive officers are participants in a defined contribution or non-qualified deferred compensation plan, other than our 401(k) Investment Incentive Program, which is a tax-qualified defined contribution plan available to our employees generally, and the supplemental retirement plan and arrangements described above.

What are the terms of our consulting agreement with Mr. Wicks?

     Mr. Wicks has agreed to serve as a consultant to the company commencing January 1, 2009 until June 30, 2009. We have agreed to pay Mr. Wicks $23,542 monthly for his services, plus $250 per hour for each hour in excess of 40 hours per month that he provides consulting services to the company. We have also agreed to reimburse him for any expenses that he may incur in connection with providing such services in accordance with the same reimbursement policies that are applicable to other employees of the company.

What are the terms of severance arrangements with executive officers?

     Each of our executive officers is entitled to receive benefits under the terms of our pension plan described under “What pension benefits are payable to executive officers?” and a cash payment for any accrued, but unpaid vacation as described under “How were certain of our executive officers compensated in 2008?-Other Compensation” following termination of employment.

     Mr. Wicks received a cash payment in 2008 of $210,514 upon termination of his employment for accrued but unpaid vacation. He will be entitled to begin to receive his pension benefits six months after his separation from service with the company.

     Mr. George is entitled to receive up to $273,535, consisting of $206,812 received in 2008 for a release of any claims that he might have against the company, $27,897 received in 2008 for accrued, but unused vacation, $23,826 for COBRA premium payments for medical, dental and vision coverage for a period of 18 months, $9,500 for transition services and up to $5,500 for reimbursement of moving expenses as a result of his termination of employment with the company in September 2008. In addition, Mr. George will be entitled to begin collecting his retirement benefits when he reaches the age of 65.

     We do not have any other severance arrangements with our named executive officers.

What are the terms of change in control agreements with executive officers?

     Each of our named executive officers is a party to a change in control agreement which provides for certain benefits in the event of a change in control of the company if the executive officer’s employment is terminated other than for cause or disability or the executive terminates employment for good reason. A change in control under these agreements will generally include:

• any sale or other change in ownership of substantially all of our assets, unless our business is continued by another entity in which the holders of our voting securities immediately before the event own more than 55% of the continuing entity’s voting securities,

• any reorganization or merger, unless the holders of our voting securities immediately before the event own more than 55% of the continuing entity’s securities and at least a majority of the members of the board of directors of the surviving entity were members of our board of directors at the time of execution of the agreement or approval by our board of directors,

• an acquisition by any person, entity or group acting in concert of more than 55% of our voting securities, unless the holders of our voting securities immediately before the event own more than 55% of the acquirer’s voting securities immediately after the acquisition,

• a tender offer or exchange offer by any person, entity or group which results in such person, entity or group owning more than 25% of our voting securities, unless the tender offer is

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approved by a majority of the members of our board of directors who were in office at the beginning of the 12-month period preceding the commencement of the tender offer,

• a change of one-half or more of the members of our board of directors within a 12-month period, unless at least two-thirds of the directors then still in office at the beginning of the 12- month period approved the election or nomination for election of the new directors, or

• any failure by any successor to assume the change in control agreement.

     In addition, an acquisition by a person or group acting in concert of more than 45% of our voting securities will be a change in control unless the holders of our voting securities immediately before the event own more than 55% of our voting securities after the event.

     Each executive may terminate his or her employment for good reason if following the change in control:

• the executive is assigned duties inconsistent in any respect with the executive’s position or the executive is not re-appointed to the same position,

• the executive’s salary or benefits are reduced (including the elimination of any cash incentive or other cash bonus plan, without providing adequate substitutes), or

• the executive is located at an office that increases the distance from the executive’s home by more than 35 miles.

     In addition, all unvested options and restricted stock units will vest on the earlier of the change in control date or the date on which the executive’s employment is terminated. For each of the executive officers, a change in control will occur under the same circumstances described in his or her change in control agreement.

     Each of these executives also has coverage under our health and welfare benefit plans for a period of two years after termination (three years for Mr. Sprowls and Ms. Tang). Each executive will also receive a gross-up payment if the executive officer is required to pay an excise tax under Section 4999 of the Internal Revenue Code.

     If we are unable to deduct any payments we make under a change in control agreement, due to the limitations imposed by Section 162(m) of the Internal Revenue Code, we will defer such payments to the extent necessary to enable us to deduct the payments. In no event will we make any deferred payments until six months following the date of termination of the executive’s separation from service. Each executive will be entitled to interest on any deferred payments at the applicable federal tax rate under the Internal Revenue Code (which changes monthly). Under Section 162(m) of the Internal Revenue Code, we may generally not deduct for federal income tax purposes annual compensation in excess of $1,000,000 paid to any named executive officer in any year in which the named executive officer is an executive officer, unless it qualifies as “performance-based.”

What do we estimate we will pay each of these executive officers in the event his or her employment is terminated as a result of a change in control?

     Assuming that the employment of each of our executives, other than Mr. Wicks and Mr. George, was terminated on December 31, 2008, a change in control occurred on that date under the change in control agreements and the 2000 and 2008 plans and based on the assumptions set forth in the footnotes below, we estimate that we would have made the following payments to our named executive officers:

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CHANGE IN CONTROL BENEFITS ⁽¹⁾

	Robert J.	Eva G.	McClellan	Denise L.	James B.
Payments and Benefits	Sprowls	Tang	Harris III	Kruger	Gallagher
Payments
Base Salary Benefit	$1,141,433	$777,400	$904,445	$920,920	$739,696
Bonus Benefit	43,521	39,588	37,297	52,564	18,019
Dividend Equivalent Rights Benefit	37,846	39,749	57,579	53,970	44,169
Excess Supplemental Executive	102,714	78,269	179,444	60,854	89,319
Retirement Plan or Other
Retirement Benefit(2)
Benefits
Welfare and Fringe Benefits(3)	41,964	41,964	20,868	27,976	27,976
Purchase of Automobile Benefit(4)	4,535	5,485	6,875	5,485	5,325
Stock Options Benefit(5)	-	9	-	-	-
Restricted Stock Units Benefit(6)	112,084	60,911	74,621	74,621	59,676
Tax Gross Up Payment(7)	566,786	416,572	-	-	-
Total	$2,050,883	$1,459,947	$1,281,129	$1,196,390	$984,180

⁽¹⁾ We have assumed, for purposes of preparing this table, that we make all change in control payments to each executive officer in July 2009. We have excluded for the purpose of this calculation, amounts paid to each executive officer for accrued, but unpaid base salary and vacation pay payable within ten days after termination of employment.
⁽²⁾ In calculating the single sum actuarial equivalent, we used an interest rate equal to 6%, and the mortality table named and described in detail in Section A.1 of the pension plan, after reduction, if any, of the benefit using the “Regular Factors” under Section A.4 of the pension plan, each executive officer’s age at December 31, 2008, less a percentage of primary social security benefits.
⁽³⁾ Welfare benefits cover 85% of dental, medical and vision insurance premiums paid by the company for each named executive officer, under the insurance plans currently offered by the company, and each named executive officer’s pro rata share of the group term life insurance and accidental death and dismemberment premiums based on premiums currently paid by the company for a period of three years after termination of the employment of Mr. Sprowls and Ms. Tang and two years after termination of employment for each of the other named executive officers.
⁽⁴⁾ We have estimated the value of this benefit as the difference between (i) the wholesale value of the company car which the executive officer has the right to purchase at the wholesale value, and (ii) the retail value of the car as shown in a national auto research publication.
⁽⁵⁾ We measured the fair value of options which were not vested at December 31, 2008 using the difference between the exercise prices of the option grants and the price of our common shares on the date of each executive’s termination of employment, which we assumed was December 31, 2008. The closing price of our common shares as reported on The Wall Street Journal website (www.wsjonline.wsj.com) on December 31, 2008 was $32.98.
⁽⁶⁾ We measured the fair value of restricted stock units which were not vested at December 31, 2008 assuming the price of our common shares on the date of each executive’s termination of employment was $32.98.
⁽⁷⁾ We used 1.63% as the interest rate for determining the present value of the accelerated vesting of stock options and restricted stock units. As prescribed by the applicable regulations under Section 280G, this rate is equal to 120% of the applicable federal tax rate (compounded semiannually) for short-term periods for December 31, 2008 as set forth in Revenue Ruling 2008-53. If we make change in control payments to any executive officer that is in excess of three times his or her average taxable income from the company, then a 20% excise tax will be imposed under Section 4999 of the Internal Revenue Code on a portion of those payments, i.e., the excess parachute payments. In that event, we will make a tax gross up payment to the executive officer such that the executive officer will receive an amount (after payment of income and excise taxes) equal to the amount as if the executive officer did not have to pay the 20% excise tax on the excess parachute payments. We assumed that the executive officers would have a marginal combined federal and state income tax rate of 44.2467% for payments over $1 million and 43.5577% for under $1 million.
____________________

     Mr. George was not employed by the company on December 31, 2008. Therefore he was not entitled to any change in control benefits. Mr. Wicks was not entitled to a change in control agreement under the terms of his retention agreement since his employment with the company terminated on December 31, 2008.

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PROPOSAL 2: RATIFICATION OF AUDITORS PROPOSAL

     The audit and finance committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ended December 31, 2009, subject to reconsideration if our shareholders do not ratify this appointment. We expect representatives of PricewaterhouseCoopers LLP to attend the 2009 annual meeting. They will have an opportunity to make a statement at the 2009 annual meeting, if they desire to do so. They will also be available to respond to appropriate questions from you if you attend the 2009 annual meeting.

What are the audit and finance committee’s pre-approval policies and procedures?

     The audit and finance committee adopted a policy statement on February 2, 2004 regarding the approval of audit, audit-related, tax and other services provided by our registered public accounting firm. This policy statement specifies guidelines and procedures we will use to assist us in maintaining the independence of our registered public accounting firm and complying with Sections 201 and 202 of the Sarbanes-Oxley Act of 2002 and the related rules and regulations promulgated by the Securities and Exchange Commission. The audit and finance committee administers this policy statement. The policy statement established the four categories of permitted services described below, the reporting procedure for each category of permitted services, prohibited services and the pre-approval process we use for each category of permitted service.

     The audit and finance committee has reviewed the advisability and acceptability of utilizing our external auditor, PricewaterhouseCoopers LLP, for non-audit services. In reviewing this matter, the committee focused on the ability of our external auditor to maintain its independence. Based on input from management and the committee’s review of procedures established by PricewaterhouseCoopers LLP, the committee finds that it is both advisable and acceptable to employ our external auditor for certain limited non-audit services from time-to-time.

Principal Accounting Fees and Services

     We have estimated the aggregate fees billed or fees we expect to be billed to us by PricewaterhouseCoopers LLP for the years ended December 31, 2008 and 2007 as follows:

Type of Fee	2007	2008
Audit Fees	$1,203,147	$1,141,536
Audit-Related Fees	-	-
Tax Fees	350,846	146,471
All Other Fees	-	-
Total	$1,553,993	$1,288,007

Audit Fees

     Audit fees represent the aggregate fees billed, or fees we expect to be billed, for professional services rendered in connection with the audit of our annual financial statements, a review of our financial statements included in our Form 10-Qs filed with the Securities and Exchange Commission and services normally provided by our accountants in connection with statutory or regulatory filings and engagements. In 2008, audit fees also included $411,536 for attestation services rendered in connection with the Sarbanes-Oxley Act of 2002 and out-of-pocket expenses incurred in providing audit services.

Audit-Related Fees

     Audit-related fees represent the aggregate fees billed, or fees we expect to be billed, for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and are not included in audit fees. On a quarterly basis, the audit and finance committee pre-approves a specific quarterly limit on the amount of audit-related fees for non-audit services.

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Management is also required to report the specific engagements to the committee and obtain specific pre-approval from the committee. All fees listed above have been pre-approved by the audit and finance committee.

     Tax Fees

     Tax fees represent the aggregate fees billed, or fees we expect to be billed, for professional services for tax compliance, tax advice and tax planning, including tax return review, review of tax laws and regulations and cases and other support in connection with complying with federal and state tax reporting and payment requirements.

     All Other Fees

     We have not been billed and do not expect to be billed for other products or services not included in the categories discussed above.

OTHER MATTERS

     Our management knows of no business, other than that mentioned above, to be transacted at the 2009 annual meeting. Unless otherwise instructed, the named proxies intend to vote in accordance with their judgment on any other matter that may properly come before the 2009 annual meeting.

OBTAINING ADDITIONAL INFORMATION FROM US

     This proxy statement incorporates by reference certain information from our financial statement footnotes in our Form 10-K for the year ended December 31, 2008. We undertake, on written or oral request, to provide you (or a beneficial owner of our securities entitled to vote), without charge, a copy of our annual report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission, including our financial statements and schedules. You should address your requests to the corporate secretary at American States Water Company, 630 East Foothill Boulevard, San Dimas, California 91773, telephone number 909-394-3600.

     Unless we have been instructed otherwise, we are delivering only one proxy statement to multiple security holders sharing the same address. We will however, deliver promptly a separate copy of this proxy statement to a security holder at a shared address to which a single copy of this proxy statement was delivered, upon written or oral request. You may direct this request to us at the address or telephone number listed above. If you share an address with another shareholder and wish to receive a single copy of this proxy statement, instead of multiple copies, you may direct this request to us at the address or telephone number listed above.

     If you would like to reduce the costs incurred by the company in mailing proxy materials to you, you can consent to receiving future proxy materials, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions on your proxy card to vote by using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

     You may also visit our website at http://www.aswater.com to view the charters of our audit and finance committee, nominating and governance committee and compensation committee. We also provide a copy of our code of conduct and guidelines on significant governance issues on this website. You can find this information on our website by clicking on “Investors” and then clicking on “Governance”. You may also request a copy of our code of conduct and guidelines on significant governance issues and the charters of our audit and finance committee, nominating and governance committee and compensation committee from us at the address set forth above.

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AMERICAN STATES WATER COMPANY OFFICE OF THE TREASURER 630 EAST FOOTHILL BOULEVARD SAN DIMAS, CA 91773

VOTE BY INTERNET - www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:	M12325		KEEP THIS PORTION FOR YOUR RECORDS
			DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

AMERICAN STATES WATER COMPANY								For	Withhold	For All
								All	All	Except
	The Board of Directors recommends that you vote "FOR" the following.
	1.	Election of Directors						o	o	o
		Nominees:
		01)	James L. Anderson
		02)	Diana M. Bontá
		03)	Anne M. Holloway
		04)	Robert J. Sprowls

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

				For	Against	Abstain
	The Board of Directors recommends that you vote "FOR" the following Proposals.
	2.	To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm.		o	o	o
	3.	To transact any other business that may properly come before the meeting or any adjournment thereof.		o	o	o

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

	For address changes and/or comments, please check this box and write them on the back where indicated.			o
	Please indicate if you plan to attend this meeting.	o	o
		Yes	No

	Signature [PLEASE SIGN WITHIN BOX]	Date			Signature (Joint Owners)	Date

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Directions for Attending the 2009 Annual Meeting

We will hold the 2009 annual meeting at the Pasadena Hilton,
168 South Los Robles Avenue, Pasadena, California 91101.

       For shareholders of record, the detachable portion of your proxy card is your ticket to the 2009 annual meeting. Please present your ticket when you reach the registration area at the 2009 annual meeting.

       For shareholders who hold shares through a brokerage firm, bank or other holder of record, your admission ticket is the copy of the latest account statement showing the investment in our common shares. Please present the account statement to one of our representatives at the 2009 annual meeting. You cannot vote the shares at the 2009 annual meeting unless you have obtained a legal proxy from your broker, bank or other shareholder of record. A copy of the account statement is not sufficient for this purpose.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.

M12326

AMERICAN STATES WATER COMPANY
2009 ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 2009

The undersigned hereby appoints Lloyd E. Ross and N.P. Dodge, Jr., and each or any of them, proxies of the undersigned, each with full power of substitution, to vote in their discretion at the Annual Meeting of Shareholders of the Company (the “Annual Meeting”) and any adjournments thereof. The Annual Meeting will be held on Tuesday, May 19, 2009 at 10:00 a.m., Pacific Time at the Hilton Pasadena, 168 South Los Robles Avenue, Pasadena, California 91101.

This proxy, when properly executed, will be voted in the manner described herein by the undersigned shareholder(s) and the named proxies will, in their sole discretion, vote such shares on any other matters that may properly come before the meeting or any adjournments thereof. If no direction is made, this proxy will be voted FOR the listed Nominees and FOR the Proposals. Further, if cumulative voting rights for the election of directors (Item 1) are exercised at the meeting, the proxies will cumulatively vote the shares as provided in the proxy statement. If a proposal is made to adjourn the meeting in order to enable management to continue to solicit proxies in favor of the proposal, the proxies will be voted in favor of adjournment, unless otherwise directed.

Address Changes/Comments:

(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side

 

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