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 were issued to employees under the Employee Stock Purchase Plan (“ESPP”). The last offering period under the ESPP ended on July 31, 2014. A 2014 Employee Stock Purchase Plan (“2014 ESPP”) was approved by Company shareholders in April 2014. The initial offering period under the 2014 ESPP commenced on August 1, 2014 with a January 30, 2015 purchase date. No shares were issued under the 2014 ESPP in 2014. SJW Corp. also had a Dividend Reinvestment and Stock Purchase Plan (“DRSPP”) which allowed eligible participants to buy shares and reinvest cash dividends in SJW Corp. common stock. The DRSPP was terminated effective as of April 14, 2014.

As of December 31, 2014, 2013 and 2012, 429,352, 341,914 and 287,534 shares have been issued pursuant to the Plan, and 296,831, 307,919 and 327,093 shares are issuable upon the exercise of outstanding options, restricted stock units, and deferred restricted stock units for the years ended 2014, 2013 and 2012, respectively. The remaining shares available for issuance under the Plan are 1,073,817 as of December 31, 2014. 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:



	2014		2013		2012
Compensation costs charged to income:
ESPP	$	148	128		104
Restricted stock and deferred restricted stock	883		784		460
Total compensation costs charged to income	$	1,031	912		564
Proceeds from the exercise of stock options and similar instruments:
Stock options	$	1,044	198		318
ESPP	839		722		588
DRSPP	34		84		83
Total proceeds from the exercise of stock options and similar instruments	$	1,917	1,004		989
Excess tax benefits realized from share options exercised and stock issuance:
Stock options	$	213	(69	)	61
Restricted stock and deferred restricted stock	249		97		36
Total excess tax benefits realized from share options exercised and stock issuance	$	462	28		97

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, 2014, there are no outstanding options. A summary of SJW Corp.'s stock option awards as of December 31, 2014, and changes during the year ended December 31, 2014, is presented below:



	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Life in Years	Aggregate Intrinsic Value
Outstanding as of January 1, 2014	51,214		$	20.38	1.16	$	482
Granted	—		—		—	—
Exercised	(51,214	)	20.38		—	581
Forfeited or expired	—		—		—	—
Outstanding as of December 31, 2014	—		$	—	—	$	—
Options exercisable at December 31, 2014	—		$	—	—	$	—

The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012, was $581, $179, and $210, respectively.

As of December 31, 2014, there are no unrecognized compensation costs related to stock options.

Restricted Stock and Deferred Restricted Stock

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.

On August 4, 2014, a total of 36,988 restricted stock units were granted to a key employee of SJW Corp. which includes performance-based restricted stock units covering a target number of shares of SJW Corp.'s common stock equal to 19,917 that will convert, if earned, between August 4, 2014 and December 31, 2017, based on the terms of the award. The number of shares issuable under the award, ranging between 0% and 200% of the target number of shares, is based on the level of actual attainment of specified performance goals. These units do not include dividend equivalent rights. The fair value of the performance-based restricted awards was estimated utilizing the Monte Carlo valuation model, using the fair value of SJW Corp.'s common stock with the effect of market condition and no dividend yield on the date of grant, and assumes the performance goals will be attained. Share-based compensation expense is recognized at $26.81 per unit. If such goals are not met and requisite service is not rendered, no compensation cost will be recognized and any recognized compensation cost will be reversed. The remainder of restricted stock units granted, 17,071 units, will vest in three equal successive installments upon completion of each year of service, beginning from January 1, 2015, with no dividend equivalent rights. Share-based compensation expense based on a grant date fair value of $24.14 per unit is being recognized over the service period beginning in 2015.

A summary of SJW Corp.'s restricted and deferred restricted stock awards as of December 31, 2014, and changes during the year ended December 31, 2014, is presented below:



	Units		Weighted- Average Grant- Date Fair Value
Outstanding as of January 1, 2014	220,364		$	16.31
Issued	71,625		$	26.11
Exercised	(32,182	)	$	26.88
Forfeited or expired	—		$	—
Outstanding as of December 31, 2014	259,807		$	18.56
Shares vested as of December 31, 2014	129,340		$	16.35

A summary of the status of SJW Corp.'s nonvested restricted and deferred restricted stock awards as of December 31, 2014, and changes during the year ended December 31, 2014, is presented below:



	Units		Weighted- Average Grant- Date Fair Value
Nonvested as of January 1, 2014	77,386		$	16.49
Granted	71,625		$	26.11
Vested	(18,544	)	$	23.65
Forfeited	—		$	—
Nonvested as of December 31, 2014	130,467		$	20.75

As of December 31, 2014, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $1,606. This cost is expected to be recognized over a weighted-average period of 1.36 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, 2014, 2013 and 2012, a cumulative of 66,458, 61,733 and 56,349 dividend equivalent rights were converted, since inception, to deferred restricted stock awards, respectively. For the years ended December 31, 2014, 2013 and 2012, $122, $128 and $128, respectively, related to dividend equivalent rights were recorded against retained earnings and were accrued as a liability.

Employee Stock Purchase Plan

On April 30, 2014, SJW Corp.'s shareholders approved the 2014 ESPP. Under the 2014 ESPP, 400,000 shares of SJW Corp.'s common stock were reserved for issuance. The remaining available shares for issuance from the predecessor ESPP were not transferred to the 2014 ESPP. The first offering period for the 2014 ESPP commenced on August 1, 2014.

The 2014 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 2014 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.

Since its inception, the ESPP had seventeen purchase intervals. As of December 31, 2014, 2013 and 2012, a total of 35,682, 30,869 and 29,468 shares, respectively, were issued under the ESPP. The ESPP and 2014 ESPP have no look-back provisions. As of December 31, 2014, 2013 and 2012, cash received from employees towards the ESPP and 2014 ESPP amounted to $854, $796 and $627, respectively.

After considering estimated employee terminations or withdrawals from the plan before the purchase date, for the years ended December 31, 2014, 2013 and 2012, SJW Corp.'s recorded expenses were $151, $140 and $110 related to the ESPP and 2014 ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ends January 30, 2015 for the 2014 ESPP is approximately $68. This cost is expected to be recognized during the first quarter of 2015.

Dividend Reinvestment and Stock Purchase Plan

SJW Corp. adopted the DRSPP effective April 19, 2011. The DRSPP offered 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 were reserved for issuance under the DRSPP. For the years ended December 31, 2014, 2013 and 2012, 829, 3,487 and 1,679 shares, respectively, were issued under the DRSPP.

SJW Corp. terminated the DRSPP effective as of April 14, 2014. On April 16, 2014, SJW Corp. filed a Post-Effective Amendment No. 1 to the registration statement on Form S-3 (file no. 333-172048) with the SEC to deregister the 2,993,744 remaining shares of SJW Corp.'s common stock that were available for issuance under the DRSPP at the time of its termination.