Equity Plans

Common Stock

SJW Corp. has a Long-Term Stock Incentive Plan (the “Plan”), which has 1,800,000 shares of common stock reserved for issuance. The Plan was initially adopted by the Board of Directors on March 6, 2002. The Plan was subsequently amended, and the amended and restated Plan was adopted by the Board on January 30, 2013 and became effective on April 24, 2013. The Plan allows SJW Corp. to provide employees, non-employee Board members or the board of directors of any parent or subsidiary, consultants, and other independent advisors who provide services to the Company or any parent or subsidiary the opportunity to acquire an equity interest in SJW Corp.

A participant in the Plan generally may not receive Plan awards covering an aggregate of more than 600,000 shares of common stock in any calendar year. Additionally, awards granted under the Plan may be conditioned upon the attainment of specified Company performance goals. The types of awards included in the Plan are restricted stock awards, restricted stock units, performance shares, or other share-based awards. In addition, shares are issued to employees under the Employee Stock Purchase Plan (“ESPP”). SJW Corp. also has a Dividend Reinvestment and Stock Purchase Plan (“DRSPP”) which allows eligible participants to buy shares and reinvest cash dividends in SJW Corp. common stock.

As of December 31, 2013, 2012 and 2011, 341,941, 287,534 and 235,473 shares have been issued pursuant to the Plan, and 307,919, 327,093 and 363,700 shares are issuable upon the exercise of outstanding options, restricted stock units, and deferred restricted stock units for the years ended 2013, 2012 and 2011, respectively. The remaining shares available for issuance under the Plan are 1,150,167, 1,185,373 and 1,200,827 for the years ended 2013, 2012 and 2011, respectively. The compensation costs charged to income is recognized on a straight-line basis over the requisite service period. A summary of compensation costs charged to income, proceeds from the exercise of stock options and similar instruments and the tax benefit realized from stock options and similar instruments exercised, that are recorded to additional paid-in capital and common stock, by award type, are presented below for the years ended December 31:



	2013			2012	2011
Compensation costs charged to income:
ESPP	$	128		104	92
Restricted stock and deferred restricted stock	784			460	559
Total compensation costs charged to income	$	912		564	651
Proceeds from the exercise of stock options and similar instruments:
Stock options	$	198		318	—
ESPP	722			588	525
DRSPP	84			83	39
Total proceeds from the exercise of stock options and similar instruments	$	1,004		989	564
Excess tax benefits realized from share options exercised and stock issuance:
Stock options	$	(69	)	61	—
Restricted stock and deferred restricted stock	97			36	7
Total excess tax benefits realized from share options exercised and stock issuance	$	28		97	7

Stock Options

SJW Corp. applies FASB ASC Topic 718—“Compensation—Stock Compensation,” for all existing and new share-based compensation plans. To estimate the fair value of options at grant date as the basis for the share-based compensation awards, SJW Corp. utilizes the Black-Scholes option-pricing model, which requires the use of subjective assumptions. Further, as required under ASC Topic 718, SJW Corp. estimates forfeitures for the share-based awards that are not expected to vest. Changes in these inputs and assumptions can affect the measure of estimated fair value of our share-based compensation and the amount and timing of expense recognition.

Awards in the form of stock options under the Plan allow executives to purchase common shares at a specified price. Options are granted at an exercise price that is not less than the per share market price on the date of the grant. Options vest at a 25% rate on each annual date over four years and have a contractual term of 10 years.

As of December 31, 2013, all outstanding options were fully vested. A summary of SJW Corp.'s stock option awards as of December 31, 2013, and changes during the year ended December 31, 2013, is presented below:



	Shares		Weighted- Average Exercise Price		Weighted Average Remaining Life in Years	Aggregate Intrinsic Value
Outstanding as of January 1, 2013	64,544		$	19.24	1.92	$	490
Granted	—		—		—	—
Exercised	(13,330	)	14.85		—	179
Forfeited or expired	—		—		—	—
Outstanding as of December 31, 2013	51,214		$	20.38	1.16	$	482
Options exercisable at December 31, 2013	51,214		$	20.38	1.16	$	482

The total intrinsic value of options exercised during the years ended December 31, 2013, 2012 and 2011, was $179, $210, and $0, respectively.

As of December 31, 2013, there are no unrecognized compensation costs related to stock options.

Restricted Stock and Deferred Restricted Stock

In October 2013, the Board of Directors approved adoption under the Plan of a Formulaic Equity Award Program for non-employee Board members. Under this program, at the close of business on the date of each annual shareholder meeting, beginning with the 2014 annual shareholder meeting, each individual who is elected or re-elected to serve as a non-employee Board member will automatically be granted restricted stock units covering that number of shares of common stock determined by dividing $35 by the fair market value per share on such date. Each restricted unit awarded shall entitle the non-employee Board member to one share of common stock on the applicable vesting date of that unit. Each restricted stock unit award shall vest in full upon the non-employee Board member's continuation in Board service through the day immediately preceding the date of the first annual shareholder meeting following the annual shareholder meeting at which that restricted stock unit award was made, subject to accelerated vesting under certain prescribed circumstances.

Under SJW Corp.'s Amended and Restated Deferred Restricted Stock Program (the “Deferred Restricted Stock Program”), SJW Corp. granted deferred restricted stock units to non-employee Board members. This program was amended effective January 1, 2008. As a result of that amendment, no new awards of deferred restricted stock units will be made under the Deferred Restricted Stock Program with respect to Board service after December 31, 2007.

A summary of SJW Corp.'s restricted and deferred restricted stock awards as of December 31, 2013, and changes during the year ended December 31, 2013, is presented below:



	Units		Weighted Average Grant- Date Fair Value
Outstanding as of January 1, 2013	229,022		$	16.65
Issued	38,370		$	25.60
Exercised	(38,480	)	$	23.64
Forfeited or expired	(8,548	)	$	23.47
Outstanding as of December 31, 2013	220,364		$	17.67
Shares vested as of December 31, 2013	142,978		$	18.30

A summary of the status of SJW Corp.'s nonvested restricted and deferred restricted stock awards as of December 31, 2013, and changes during the year ended December 31, 2013, is presented below:



	Units		Weighted Average Grant- Date Fair Value
Nonvested as of January 1, 2013	76,213		$	15.45
Granted	38,370		$	25.60
Vested	(28,649	)	$	23.82
Forfeited	(8,548	)	$	23.47
Nonvested as of December 31, 2013	77,386		$	16.49

As of December 31, 2013, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $618. This cost is expected to be recognized over a weighted-average period of 1.22 years.

Dividend Equivalent Rights

Under the Plan, certain holders of options, restricted stock and deferred restricted stock awards may have the right to receive dividend equivalent rights (“DERs”) each time a dividend is paid on common stock after the grant date. Stock compensation on DERs is recognized as a liability and recorded against retained earnings on the date dividends are issued.

The Deferred Restricted Stock and Deferral Election Programs for non-employee Board members were amended effective January 1, 2008, to allow the DERs' with respect to the deferred shares to remain in effect only through December 31, 2017. Accordingly, the last DERs' conversion into deferred restricted stock units will occur on the first business day in January 2018. Previously, no such time limitation was placed in the Deferred Restricted Stock and Deferral Election Program.

As of December 31, 2013, 2012 and 2011, a cumulative of 61,733, 56,349 and 50,888 dividend equivalent rights were converted, since inception, to deferred restricted stock awards, respectively. For the years ended December 31, 2013, 2012 and 2011, $128, $128 and $129 related to dividend equivalent rights were recorded against retained earnings and were accrued as a liability.

Employee Stock Purchase Plan

The ESPP allows eligible employees to purchase shares of SJW Corp.'s common stock at 85% of the fair value of shares on the purchase date. Under the ESPP, employees can designate up to a maximum of 10% of their base compensation for the purchase of shares of common stock, subject to certain restrictions. A total of 270,400 shares of common stock have been reserved for issuance under the ESPP.

Since its inception, there have been fifteen purchase intervals. As of December 31, 2013, 2012 and 2011, a total of 30,869, 29,468 and 25,712 shares, respectively, have been issued under the ESPP. The ESPP has no look-back provisions. As of December 31, 2013, 2012 and 2011, cash received from employees towards the ESPP amounted to $796, $627 and $548, respectively.

After considering estimated employee terminations or withdrawals from the plan before the purchase date, for the years ended December 31, 2013, 2012 and 2011, SJW Corp.'s recorded expenses were $140, $110 and $96 related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ends January 31, 2014 for the ESPP is approximately $65. This cost is expected to be recognized during the first quarter of 2014.

Dividend Reinvestment and Stock Purchase Plan

SJW Corp. adopted the DRSPP effective April 19, 2011. The DRSPP offers shareholders the ability to reinvest cash dividends in SJW Corp. common stock and also purchase additional shares of SJW Corp. common stock. A total of 3,000,000 shares of common stock have been reserved for issuance under the DRSPP. For the years ended December 31, 2013, 2012 and 2011, 3,111, 3,487 and 1,679 shares, respectively, have been issued under the DRSPP.