Document

American States Water Company, a California corporation, (the “Corporation”) has adopted this 2023 Short-Term Incentive Program (the “2023 STIP”) to promote the success of the Corporation by (a) motivating Executives selected to participate in the 2023 STIP 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 2023 STIP sets forth the names of the individuals selected to be Participants who are eligible to earn Objective Bonuses under the 2023 STIP and the applicable Business Criteria, Performance Targets and Payout Percentages for the 2023 calendar year. The 2023 STIP also provides for Discretionary Bonuses, which when added to the Objective Bonuses under the Plan, equal the Aggregate Bonuses payable under the 2023 STIP for the 2023 calendar year.

The Committee shall have the authority to construe and interpret the 2023 STIP and any agreement or document referring to any Awards under the 2023 STIP, may adopt rules and regulations governing the administration of the 2023 STIP and shall exercise all other duties and powers conferred under the 2023 STIP or are incidental or ancillary thereto.

Except as otherwise expressly provided or the context otherwise requires, financial and accounting terms in the 2023 STIP are used as defined for purposes of, and shall be determined in accordance with, generally accepted accounting principles, as from time to time in effect, as applied and included in the consolidated financial statements of the Corporation, prepared in the ordinary course of business. In addition, the following terms shall have the meanings specified below, unless a different meaning is plainly required by the context:

“Adjusted EPS - ASUS” means the EPS of ASUS for 2023 adjusted to remove (1) the general office allocation to ASUS related to any transaction fees and/or gain or loss on sale recognized in the financial statements in 2023 associated with a sale of any of the Corporation’s business units or the acquisition of any new businesses, (2) the general office allocation to ASUS related to new business development at Regulated Utilities, (3) the continued impact of the Coronavirus (COVID-19) on the EPS of ASUS for 2023 as an extraordinary or non-recurring item determined in accordance with generally accepted accounting principles or another objective method of measurement, and (4) any other applicable adjustment required to be made under Section 7.

“Adjusted EPS - AWR Consolidated” means the Corporation’s EPS for 2023 adjusted to remove (1) any write-offs associated with the CPUC’s 2023 procurement audit of GSWC arising out of the settlement of claims approved by the CPUC in December 2011 related to the capital projects contracting matter, (2) expenses associated with new business development at Regulated Utilities, (3) the performance of the Rabbi Trust assets to support retirement benefits, (4) the continued impact of the Coronavirus (COVID-19) on the EPS of AWR Consolidated for 2023 as an extraordinary or nonrecurring item determined in accordance with generally accepted accounting principles or another objective method of measurement, and (5) any other applicable adjustment required to be made under Section 7.

“Adjusted EPS - Regulated Utilities” means the sum of the EPS of each of the Regulated Utilities for 2023 adjusted to remove (1) any write-offs associated with the CPUC’s 2023 procurement audit of GSWC arising out of the settlement of claims approved by the CPUC in December 2011 related to the capital projects contracting matter, (2) expenses associated with new business development, (3) the performance of the Rabbi Trust assets to support retirement benefits, (4) the continued impact of the Coronavirus (COVID-19) on the EPS of Regulated Utilities for 2023 as an extraordinary or nonrecurring item determined in accordance with generally accepted accounting principles or another objective method of measurement, and (5) any other applicable adjustment required to made under Section 7.

“Adjusted EPS - Regulated Water Utility” means the EPS of the Regulated Water Utility for 2023 adjusted to remove (1) any write-offs associated with the CPUC’s 2023 procurement audit of GSWC arising out of the settlement of claims approved by the CPUC in December 2011 related to the capital projects contracting matter, (2) expenses associated with new business development, (3) the performance of the Rabbi Trust assets to support retirement benefits, (4) the continued impact of the Coronavirus (COVID-19) on the EPS of the Regulated Water Utility for 2023 as an extraordinary or nonrecurring item determined in accordance with generally accepted accounting principles or another objective method of measurement, and (5) any other applicable adjustment required to be made under Section 7.

“Budget” or “Budgeted” means, in the case of Adjusted EPS for the Corporation, the Regulated Utilities, the Regulated Water Utility or ASUS, as the case may be, the projected Adjusted EPS for 2023 as set forth in the Operating Budget and for Expense Optimization – ASUS, Direct Construction Margin – ASUS and Direct Operating Margin – ASUS, the amounts included for these metrics in the Operating Budget.

“Business Criteria” means Adjusted EPS - AWR Consolidated, Adjusted EPS - Regulated Utilities, Adjusted EPS - Regulated Water Utility, Adjusted EPS - ASUS, Capital Expenditures - RU, Capital Expenditures - RWU, Customer Complaints - RWU, Direct Construction Margin - ASUS, Direct Operating Margin - ASUS, Expense Optimization - ASUS, SOX Deficiencies - RU, SOX Deficiencies - ASUS, Safety - Recordable Incident Rate - ASUS, Safety - Recordable Incident Rate - RWU, Supplier Diversity - RU and Supplier Diversity - RWU.

“Direct Construction Margin – ASUS” means a percentage determined by dividing total construction revenues less ASUS construction costs (reported as expenses in the Corporation’s Form 10-K for 2023 filed with the Securities and Exchange Commission) by total construction revenues. Construction revenues and construction costs for this purpose shall exclude (i) the construction revenues and construction costs of any new base, (ii) the continued impact of the Coronavirus (COVID-19) on the Direct Construction Margin as an extraordinary or nonrecurring item determined in accordance with generally accepted accounting principles or another objective method of measurement, and (iii) any other applicable adjustment required to be made under Section 7.

“Direct Operating Margin – ASUS” means a percentage determined by dividing total operations and maintenance revenues less direct operations expense by total operations and maintenance revenues as recorded in the Corporation’s Form 10-K. Total operations and maintenance revenues for this purpose shall exclude revenues of any new base awards received in 2023. Direct operations expense for this purpose shall include other operation, administration and general, depreciation and amortization, and property and other taxes as reflected in the Corporation’s Form 10-K, but shall exclude (i) expenses of any new base awarded during 2023, (ii) expenses of ASUS administration and centralized functions, (iii) general office expenses of GSWC approved by the CPUC to be allocated to ASUS, (iv) property and other taxes allocable to construction activities, (v) non-labor related maintenance expenses, (vi) pre-contract expenses associated with construction activities, (vii) the continued impact of the Coronavirus (COVID-19) on the Direct Operating Margin as an extraordinary or nonrecurring item determined in accordance with generally accepted accounting principles or another objective

“Expense Optimization – ASUS” means the sum of other operations, maintenance and administrative and general expenses of ASUS in 2023 (as reflected in the Corporation’s 10-K) excluding (i) non-labor related maintenance expenses, (ii) expenses of ASUS incurred in connection with any new base awards during 2023, (iii) general office expenses of GSWC approved by the CPUC to be allocated to ASUS, (iv) expenses incurred in connection with ASUS’s new business development cost center, (v) expenses included in the Corporation’s Form 10-K for awards recorded under the 2023 STIP and the 2016 Stock Incentive Plan, (vi) expenses related to the continued impact of the Coronavirus (COVID-19) as an extraordinary or nonrecurring item determined in accordance with generally accepted accounting principles or another objective method of measurement, and (vii) other applicable adjustments required to be made under Section 7.

“Operating Budget” means the Corporation’s operating budget for 2023 as presented to the Board of Directors at its February 7, 2023 meeting, as adjusted for the impact of the final decision by the CPUC on GSWC’s general rate case to set rates for 2022-2024, and other decisions of the CPUC and adjustments allowed to be made under Section 7.

“OSHA Violation” means an intentional or willful violation of the rules and regulations of the Occupational Health and Safety Administration which results in a serious injury, serious illness or death and arises out of a situation that the employer knew or should have known could result in serious injury, serious illness or death, provided that the situation could have reasonably been remedied by the employer.

“Safety - Recordable Incident Rate – ASUS” means the number of employees per 100 full time employees that have been involved in a Recordable Work Incident, calculated by (i) multiplying the total number of Recordable Work Incidents by 200,000, and (ii) dividing that result by the number of actual hours worked by ASUS employees during 2023.

“Safety - Recordable Incident Rate – RWU” means the number of employees per 100 full time employees that have been involved in a Recordable Work Incident, calculated by (i) multiplying the total number of Recordable Work Incidents by 200,000, and (ii) dividing that result by the number of actual hours worked by GSWC employees during 2023.

“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 2023 pursuant to Section 404 of SOX.

“Supplier Diversity - RU” means the percentage reported by the Regulated Utilities to the CPUC annually by March 1 in their General Order 156 Compliance Filings. The percentage is calculated by taking the Regulated Utilities’ total procurement dollars for the reporting period with CPUC qualified women-owned, minority-owned, disabled veteran-owned, and lesbian, gay, bisexual and transgender-owned business enterprises divided by the Regulated Utilities’ total procurement dollars (net of exclusions allowed under the General Order 156 Compliance Filing for the reporting period, such as payments for purchased water, purchased power, pump taxes, income taxes, franchise fees, and postage).

“Supplier Diversity - RWU” means the percentage reported by the Regulated Water Utility to the CPUC annually by March 1 in its General Order 156 Compliance Filing. The percentage is calculated by taking the Regulated Water Utility’s total procurement dollars for the reporting period with CPUC qualified women-owned, minority-owned, disabled veteran-owned, and lesbian, gay, bisexual and transgender-owned business enterprises divided by the Regulated Water Utility’s total procurement dollars (net of exclusions allowed under the General Order 156


	Participant	Target Aggregate Bonus
GSWC Officers
Administrative and General	Robert J. Sprowls	100.00%
	Eva G. Tang	37.10%
	Gladys M. Farrow	31.20%
Operations	Paul J. Rowley	37.10%
	Sunil K. Pillai	31.20%
	Patrick M. Kubiak	31.20%
	Jon G. Pierotti	31.20%
	David R. Schickling	31.20%
ASUS Officers
	Christopher H. Connor	45.00%
	Susan P. Miller	31.20%

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 this 2023 STIP by reference. The Target Aggregate Bonus amount set forth above shall represent the aggregate amount of up to two separate bonuses: an Objective Bonus under the 2023 STIP and a Discretionary Bonus.

To preserve the intended incentives and benefits of an Award, the Committee shall adjust the Performance Targets to eliminate the effects of the following: (i) the gain, loss, income or expense resulting from (x) changes in accounting principles or tax law, (y) California Public Utilities Commission actions, delays, rules, regulations or decisions, or (z) any other actions, delays, rules, laws, regulations, decisions or provisions of any governmental agency affecting reported results that became effective during the Performance Period, (ii) any transaction fees and/or gain or loss on sale recognized in the financial statements associated with a sale or restructuring of any of the Corporation’s business units or the acquisition of any new businesses, (iii) the impairment of tangible or intangible assets, (iv) derivative gains or losses attributable to fixed-price purchase contracts, (v) the impact of market conditions on pension expenses, (vi) gains or losses from all or certain claims and/or litigation and all or certain insurance recoveries relating to the Performance Period, (vii) the impact of any other extraordinary or non-recurring item or expense determined in accordance with generally accepted accounting principles or another objective method of measurement; and (viii) the impact of other unusual and unforeseen matters or events as determined by the Committee in its sole discretion.

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. In the case of the death or Total Disability of an Executive, the Aggregate Bonus payable shall be prorated based on the number of days in the Performance Period that the Executive was employed prior to his or her death or Total Disability divided by the number of days in the Performance Period.

As soon as practicable following December 31, 2023 and the completion of the independent auditor’s report for 2023, 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 another 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 9 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. Notwithstanding the fact that the Performance Targets have been attained, the Corporation may pay a Bonus to a Participant that is less than the amount determined by the formula or standard established pursuant to his or her Award Agreement or may pay no Bonus at all, as determined by the Committee in its sole discretion. In no event may the Committee pay a Bonus to any Participant in excess of the maximum amount set forth in that Participant’s Award Agreement.

At the time the Committee makes the determinations described in Section 8, it shall certify the amounts of the Objective Bonuses payable to Participants by resolution or other appropriate writing evidencing that the amount has been accurately determined in accordance with the terms and limitations of the 2023 STIP and that the Performance Targets and any other material terms previously established by the Committee pursuant to the 2023 STIP have been satisfied. The Committee shall, at the same time, determine the amount of the Discretionary Bonus payable to Participants. Any such payment shall be made in cash, subject to applicable withholding requirements and the provisions of Section 11. 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, 2024.

Except in the event of the death or Total Disability of the Participant or 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 bonus payments under the 2023 STIP are paid to Participants.

Any payment of an Objective Bonus and/or Discretionary Bonus under this 2023 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, or as otherwise may be required by law or the New York Stock Exchange 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 2023 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.

This 2023 STIP shall be interpreted in a manner such that the payment of an Objective Bonus, Discretionary Bonus or Aggregate Bonus contemplated hereby will either (i) comply with Section 409A or (ii) be exempt from the requirements of Section 409A as a “short-term deferral” under Section 409A, including Treasury Regulations Section 1.409A-1(b)(4). It is intended that the terms of this 2023 STIP will not result in the imposition of any tax liability pursuant to Section 409A, and shall be construed and interpreted consistent with that intent.

No Award made to any Participant under the 2023 STIP shall be construed to confer any legal right to be continued in the employ of the Corporation or any of its subsidiaries. The Corporation expressly reserves any and all rights for it or any of its subsidiaries to discharge an Executive in its or their sole discretion, without liability of any person, entity or the Committee. Nothing in this Section 13, however, is intended to adversely affect any express independent right to any person under a separate employment agreement. Notwithstanding any other provision hereof and the fact that the Performance Targets have been obtained, the Corporation

Any decision made or action taken by the Committee arising out of or in connection with the construction, administration, interpretation and effect of the 2023 STIP shall be within the absolute discretion of the Committee and shall be conclusive and binding upon all persons. No member of the Committee shall have any liability for actions taken or omitted under the 2023 STIP by the member or any other person.

The Corporation shall not be required to fund or otherwise segregate any cash or any other assets which may at any time be paid to the Participants under the 2023 STIP. The 2023 STIP shall constitute an “unfunded plan” of the Corporation. The Corporation shall not, by any provision of the 2023 STIP, be deemed to be a trustee of any property and any rights of any Participant or former Participant shall be no greater than those of a general unsecured creditor or shareholder of the Corporation, as the case may be.

Except as expressly provided by the Committee, no benefit payable under the 2023 STIP shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action shall be void and no such benefit shall be in any manner liable for or subject to debts, contracts, liabilities, engagements or torts of any Participant. This Section 16 shall not apply to any assignment of a contingency or payment due (i) after the death of a Participant to the deceased Participant’s legal representative or beneficiary or (ii) the disability of a Participant to the disabled Participant’s personal representative.


Performance Measure	Performance Targets
	Threshold	Target	Maximum
Adjusted EPS - AWR Consolidated	80% Budget	100% Budget	120% Budget
Adjusted EPS - Regulated Utilities (RU)	80% Budget	100% Budget	120% Budget
Adjusted EPS - Regulated Water Utility (RWU)	80% Budget	100% Budget	120% Budget
Adjusted EPS - ASUS	80% Budget	100% Budget	130% Budget
Capital Expenditures - RU	> $130 million	> $145 million	> $170 million
Capital Expenditures - RWU	> $125 million	> $135 million	> $155 million
Customer Complaints - RWU	≤ 0.11%	≤ 0.065%	≤ 0.03%
Supplier Diversity - RU	> 26.5%	>30.5%	>34.5%
Supplier Diversity - RWU	> 26.0%	> 30.0%	> 34.0%
Safety - Recordable Incident Rate - RWU	≤ 4.0	≤ 3.3	≤ 2.6
SOX Deficiencies - RU	No MW, No SD & No more than 3 CDs	No MW, No SD & No more than 1 CD	No MW, No SD & No CD
SOX Deficiencies - ASUS	No MW, No SD & No more than 1 CD	No MW, No SD & No CD	N/A
Expense Optimization - ASUS	< 101% of Budget	< 99% of Budget	< 97% of Budget
Direct Construction Margin - ASUS	> Budget less 200 basis points	> Budget	> Budget plus 200 basis points
Direct Operating Margin - ASUS	> Budget less 100 basis points	> Budget	> Budget plus 100 basis points
Safety - Recordable Incident Rate - ASUS	≤ 3.4	≤ 2.9	≤ 2.4


Performance Measure	Payout Percentage
	Threshold	Target	Maximum
Adjusted EPS - AWR Consolidated	10.0%	20.0%	35.0%
Adjusted EPS - Regulated Utilities (RU)	11.5%	20.0%	30.0%
Adjusted EPS - ASUS	5.0%	10.0%	15.0%
Capital Expenditures - RU	5.0%	10.0%	15.0%
Customer Complaints - Regulated Water Utility (RWU)	1.5%	5.0%	7.0%
Supplier Diversity - RU	1.5%	5.0%	7.0%
SOX Deficiencies - RU	1.5%	5.0%	6.0%
SOX Deficiencies - ASUS	1.5%	5.0%	5.0%
Objective Bonus Total	37.5%	80.0%	120.0%
Individual Performance Measure (Discretionary Bonus)	12.5%	20.0%	35.0%
Aggregate Bonus	50.0%	100.0%	155.0%


Performance Measure	Payout Percentage
	Threshold	Target	Maximum
Adjusted EPS - Regulated Water Utility (RWU)	20.0%	40.0%	60.0%
Capital Expenditures - RWU	8.0%	16.0%	24.0%
Customer Complaints - RWU	2.5%	6.0%	8.0%
Supplier Diversity - RWU	2.5%	6.0%	8.0%
Safety - Recordable Incident Rate - RWU	2.5%	6.0%	8.0%
SOX Deficiencies - RU	2.0%	6.0%	7.0%
Objective Bonus Total	37.5%	80.0%	115.0%
Individual Performance Measure (Discretionary Bonus)	12.5%	20.0%	35.0%
Aggregate Bonus	50.0%	100.0%	150.0%


Performance Measure	Payout Percentage
	Threshold	Target	Maximum
Adjusted EPS - ASUS	15.0%	40.0%	70.0%
Direct Operating Margin - ASUS	7.0%	12.5%	22.0%
Direct Construction Margin - ASUS	7.0%	12.5%	22.0%
Expense Optimization - ASUS	4.0%	6.0%	10.0%
Safety – Recordable Incident Rate - ASUS	2.5%	4.0%	6.0%
SOX Deficiencies - ASUS	2.0%	5.0%	5.0%
Objective Bonus Total	37.5%	80.0%	135.0%
Individual Performance Measure (Discretionary Bonus)	12.5%	20.0%	35.0%
Aggregate Bonus	50.0%	100.0%	170.0%