Equity Plans

SJW Corp. accounts for share-based compensation based on the grant date fair value of the awards issued to employees in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 718 - “Compensation - Stock Compensation,” which requires the measurement and recognition of compensation expense based on the estimated fair value for all share-based payment awards.

The Incentive 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. The types of awards included in the Incentive Plan are restricted stock awards, restricted stock units, performance shares, or other share-based awards. As of March 31, 2015, the remaining shares available for issuance under the Incentive Plan were 1,047,422, and 257,917 shares were issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units. In addition, shares are issued to employees under the ESPP. 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.

Stock compensation costs charged to income are 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 were recorded to additional paid-in capital and common stock, by award type, are presented below for the three months ended March 31, 2015 and 2014.



	Three months ended March 31,
	2015		2014
Adjustments to additional paid-in capital and common stock for:
Compensation costs charged to income:
ESPP	$	76	72
Restricted stock and deferred restricted stock	323		172
Total compensation costs charged to income	$	399	244
Excess tax benefits realized from share options exercised and stock issuance:
Stock options	$	—	59
Restricted stock and deferred restricted stock	526		221
Total excess tax benefits realized from share options exercised and stock issuance	$	526	280
Proceeds from the exercise of stock options and similar instruments:
Stock options	$	—	44
DRSPP	—		26
ESPP	433		406
Total proceeds from the exercise of stock options and similar instruments	$	433	476

Stock, Restricted Stock and Deferred Restricted Stock

On January 2, 2015, restricted stock units covering an aggregate of 12,271 shares of common stock of SJW Corp. were granted to certain executives of SJW Corp. and its subsidiaries. The units vest in three equal successive installments upon completion of each year of service with no dividend equivalent rights. Share-based compensation expense based on a grant date fair value of $29.83 per unit is being recognized over the service period beginning in 2015.

On January 27, 2015, certain executives of SJW Corp. were granted performance-based restricted stock units covering a target number of SJW Corp.'s common stock equal to 3,252 units which will vest based on the actual attainment of specified performance goals measured for the 2015 calendar year and continued service through December 31, 2015. The number of shares issuable under the awards, ranging between 0% to 150% of the target number of shares, are based on the level of actual attainment of specified performance goals. The units do not include dividend equivalent rights. The awards have no market conditions and the share-based compensation expense based on a grant date fair value of $34.36 per unit is being recognized assuming the performance goals will be attained.

On January 27, 2015, a key employee of SJW Corp. was granted performance-based restricted stock units covering a number of SJW Corp.'s common stock equal to 6,639 units which will vest based on the actual attainment of a specified performance goal measured over the 2015 calendar year and continued service through December 31, 2015. The units do not include dividend equivalent rights. The award has no market conditions and the share-based compensation expense based on a grant date fair value of $34.36 per unit is being recognized assuming the performance goals will be attained.

As of March 31, 2015, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $1,988. This cost is expected to be recognized over a remaining weighted-average period of 1.22 years.

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 400,000 shares of common stock have been reserved for issuance under the ESPP.

After considering estimated employee terminations or withdrawals from the plan before the purchase date, SJW Corp.'s recorded expenses were $39 and $36 for the three months ended March 31, 2015 and 2014, respectively, related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ends July 31, 2015 for the ESPP is approximately $51. This cost is expected to be recognized during the second and third quarters of 2015.

Dividend Reinvestment and Stock Purchase Plan

SJW Corp. adopted a 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 three months ended March 31, 2014, 875 shares 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.