SJW CORP (Form: 10-K, Received: 02/29/2012 15:23:55)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K



ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-8966

SJW CORP.

(Exact name of registrant as specified in its charter)



California		77-0066628
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

110 West Taylor Street, San Jose, California		95110
(Address of principal executive offices)		(Zip Code)

408-279-7800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



	Title of each class		Name of each exchange on which registered
	Common Stock, $0.521 par value per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ý Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

As of June 30, 2011, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $340 million based on the closing sale price as reported on the New York Stock Exchange.

Indicate the number of shares outstanding of registrant’s common stock, as of the latest practicable date.



	Class		Outstanding at February 8, 2012
	Common Stock, $0.521 par value per share		18,618,265

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement relating to the registrant’s Annual Meeting of Shareholders, to be held on April 25, 2012, are incorporated by reference into Part III of this Form 10-K where indicated.

TABLE OF CONTENTS



		Page
PART I

Forward-Looking Statements		3
Item 1.	Business	3
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	14
Item 2.	Properties	15
Item 3.	Legal Proceedings	15
Item 4.	Removed and Reserved	15

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 6.	Selected Financial Data	17
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 8.	Financial Statements and Supplementary Data	33
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	65
Item 9A.	Controls and Procedures	65
Item 9B.	Other Information	66

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	66
Item 11.	Executive Compensation	66
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	66
Item 13.	Certain Relationships and Related Transactions, and Director Independence	66
Item 14.	Principal Accountant Fees and Services	66

PART IV

Item 15.	Exhibits and Financial Statement Schedules	67

Exhibit Index		68

Signatures		72

PART I

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws relating to future events and future results of SJW Corp. and its subsidiaries that are based on current expectations, estimates, forecasts, and projections about SJW Corp. and its subsidiaries and the industries in which SJW Corp. and its subsidiaries operate and the beliefs and assumptions of the management of SJW Corp. Such forward-looking statements are identified by words including “expect”, “estimate”, “anticipate”, “intends”, “seeks”, “plans”, “projects”, “may”, “should”, “will”, and variation of such words, and similar expressions. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Important factors that could cause or contribute to such differences include, but are not limited to, those discussed in this report under Item 1A, “Risk Factors,” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere, and in other reports SJW Corp. files with the Securities and Exchange Commission (the “SEC”), specifically the most recent report on Form 10-Q and reports on Form 8-K filed with the SEC, each as it may be amended from time to time.

SJW Corp. undertakes no obligation to update or revise the information contained in this report, including the forward-looking statements, to reflect any event or circumstance that may arise after the date of this report.


Item 1.	Business

General Development of Business

SJW Corp. was incorporated in California on February 8, 1985. SJW Corp. is a holding company with four subsidiaries:

•

San Jose Water Company, a wholly owned subsidiary of SJW Corp., with its headquarters located at 110 West Taylor Street in San Jose, California 95110, was originally incorporated under the laws of the State of California in 1866. As part of a reorganization on February 8, 1985, San Jose Water Company became a wholly owned subsidiary of SJW Corp. San Jose Water Company is a public utility in the business of providing water service to approximately 226,000 connections that serve a population of approximately one million people in an area comprising approximately 138 square miles in the metropolitan San Jose, California area. San Jose Water Company’s web site can be accessed via the Internet at http://www.sjwater.com .

•

SJWTX, Inc., a wholly owned subsidiary of SJW Corp., was incorporated in the State of Texas in 2005. SJWTX, Inc. is doing business as Canyon Lake Water Service Company (“CLWSC”). CLWSC is a public utility in the business of providing water service to approximately 10,000 connections that serve approximately 36,000 people. CLWSC’s service area comprises more than 243 square miles in western Comal County and southern Blanco County in the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation. The water supply corporation has been determined to be a variable interest entity within the scope of Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 810—“Consolidation” with SJWTX, Inc. as the primary beneficiary, and as a result, it has been consolidated with SJWTX, Inc.


•	SJW Land Company, a wholly owned subsidiary of SJW Corp., was incorporated in 1985. SJW Land Company owns undeveloped land in the states of California and Tennessee, owns and operates commercial buildings in the states of California, Florida, Connecticut, Texas, Arizona and Tennessee, and has a 70% limited partnership interest in 444 West Santa Clara Street, L.P.


•	Texas Water Alliance Limited (“TWA”), a wholly owned subsidiary of SJW Corp., is undertaking activities that are necessary to develop a water supply project in Texas.

Together, San Jose Water Company, CLWSC and TWA are referred to as “Water Utility Services.”

Regulation and Rates

San Jose Water Company’s rates, service and other matters affecting its business are subject to regulation by the California Public Utilities Commission (“CPUC”).

Ordinarily, there are three types of rate adjustments that affect San Jose Water Company’s revenue collection: general rate adjustments, cost of capital adjustments, and offset rate adjustments. General rate adjustments are authorized in general rate case decisions, which usually authorize an initial rate adjustment followed by two annual escalation adjustments designed to maintain the authorized return on equity over a three-year period. General rate applications are normally filed and processed during the last year covered by the most recent rate case as required by the CPUC so that regulatory lag is avoided.

Cost of capital adjustments are rate adjustments resulting from the CPUC’s tri-annual establishment of a reasonable rate of return for San Jose Water Company’s capital investments.

The purpose of an offset rate adjustment is to compensate utilities for changes in specific pre-authorized offsettable capital investments or expenses, primarily for purchased water, groundwater extraction charges and purchased power. Pursuant to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for each expense item for which such revenue offsets have been authorized. The purpose of a balancing account is to track the under-collection or over-collection associated with expense changes.

On November 20, 2009, the CPUC approved the most recent general rate increase for San Jose Water Company. In summary, the decision authorizes a rate increase designed to increase revenue by $18.6 million, or 9.24%, in 2010. In accordance with CPUC rules, the subsequent increases for the years 2011 and 2012 are based upon the consumer price indices published in October of the preceding year. The CPUC approved a 2011 general rate increase of $7.3 million, or 3.32%, and a 2012 general rate increase of $10.7 million, or 4.53%. These rate changes, which were designed to produce a return on common equity of 10.20%, became effective on January 1, 2011 and 2012, respectively. The stated revenue increases for 2011 and 2012 do not include additional authorized increases associated with scheduled expense and rate base offset filings, rate recovery of planned upgrades to the Montevina Treatment Plant, and the potential supplemental filings for rate recovery for investments in alternative energy projects.

On June 2, 2010, San Jose Water Company filed an advice letter with the CPUC requesting authorization to increase revenues by $5.7 million, or approximately 2.61%, of authorized revenue at the time of the filing. This increase was intended to recover the accumulated balance in the Mandatory Conservation Revenue Adjustment Memorandum Account (“MCRAM”), which was in effect from August 3, 2009 to May 1, 2010. The CPUC-authorized MCRAM was intended to track the revenue impact of mandatory conservation upon San Jose Water Company’s quantity revenue resulting from mandatory conservation instituted by the Santa Clara Valley Water District (“SCVWD”). As directed by the CPUC’s Division of Water and Audits, the MCRAM would be recovered via a surcharge on the existing quantity rate for a period of 12 months following final approval by the CPUC. Resolution W-4885 authorizing the recovery was adopted by the Commission on December 15, 2011. The surcharge to begin recovering the balance was subsequently implemented on December 27, 2011. All revenue was recognized immediately upon final approval by the CPUC.

On September 30, 2010, San Jose Water Company, in compliance with Commission Decision 09-11-032, requested the CPUC’s approval of upgrades to San Jose Water Company’s 40-year old Montevina Water Treatment Plant (“MWTP”). The MWTP treats surface water from the local watershed by direct media filtration and chlorine disinfection. Over the past 40 years, state and federal drinking water regulations have changed significantly in areas that the MWTP was not designed to address. The MWTP has aging infrastructure and many of its components are at the end of their useful lives, or they do not meet current structural and seismic requirements. The total planned project cost is $73.7 million, over five years, with the project commencing in late 2011. San Jose Water Company’s application requested revenue increases of $0.5 million, or 0.22% in 2011, $1.9 million, or 0.85% in 2012, $7.7 million, or 3.50% in 2013, $3.5 million, or 1.61% in 2014 and $0.8 million, or 0.38% in 2015 (all at the current authorized rate of return). A decision on the application is expected in the second half of 2012.

On May 2, 2011, San Jose Water Company filed Application No. 11-05-002 with the CPUC seeking authorization of an updated Cost of Capital (“COC”) for the period from January 1, 2012 through December 31, 2014. For 2012, San Jose Water Company is seeking CPUC approval of a return on equity of 11.50%, a long-term cost of debt of 6.68% and a rate of return of 9.14%. San Jose Water Company's application was subsequently consolidated with the COC application of three other Class A water companies (California Water Service Company, California American Water and Golden State Water Company). A pre-hearing conference was held on June 14, 2011. A scoping memo was issued on September 13, 2011. The CPUC's Division of Ratepayer Advocates issued testimony on August 31, 2011 and San Jose Water Company issued rebuttal testimony on September 21, 2011. An all-party settlement agreement was announced by the CPUC on October 17, 2011 that would provide San Jose Water Company a return on equity of 9.99% and a rate of return of 8.38%. On November 28, 2011, the Administrative Law Judge in the proceeding issued a ruling requiring evidentiary hearings to provide additional development of the evidentiary record. These evidentiary hearings were held in January 2012. A CPUC decision on this application is expected during the second quarter of 2012.

On May 31, 2011, San Jose Water Company filed an advice letter with the CPUC requesting authorization to increase revenues by $9.2 million, or approximately 4.04%. This revenue increase was intended to offset the SCVWD's increases to purchased water and groundwater extraction charges. This revenue increase was not intended to provide San Jose Water Company an increase in earnings. This advice letter was approved by the CPUC and the revenue increase went into effect July 1, 2011.

On June 23, 2011, the CPUC approved Resolution L-411A. The resolution ordered many regulated utilities, including

San Jose Water Company, to establish memorandum accounts to reflect the impacts of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, and offsetting reinvestment, if any, in utility plant. The Act provides for between 50% and 100% bonus depreciation on qualifying assets placed in service between 2010 and 2012. The bonus depreciation taken generates current tax savings and deferred tax liabilities associated with such assets and, as a result, reduces utility rate base below that originally contemplated for rate setting purposes. Under L-411A, the memorandum account will track the impact of this rate base reduction as well as the impact of newly constructed qualifying assets on the Company's authorized revenue. On August 1, 2011, San Jose Water Company filed an advice letter with the CPUC requesting authorization of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 memorandum account. The memorandum account was subsequently approved on August 18, 2011, with an effective date of April 14, 2011.

On January 3, 2012, San Jose Water Company filed a General Rate Case application requesting rate increases of $47.4 million, or 21.51% in 2013, $13.0 million, or 4.87% in 2014 and $34.8 million, or 12.59% in 2015. This General Rate Case filing also includes several “special requests”, including but not limited to: (1) recovery of the under-collected balance of $2.6 million in the balancing account, (2) disbursement of the over-collected balance of $0.7 million accrued in various memorandum accounts and (3) implementation of a full revenue decoupling Water Revenue Adjustment Mechanism and associated Modified Cost Balancing Account. A General Rate Case is a year-long proceeding before the CPUC that involves a discovery phase led by the CPUC's Division of Ratepayer Advocates, settlement meetings, as well as possible evidentiary hearings. A final decision in this proceeding is likely to occur in the second half of 2012 with new rates becoming effective at the beginning of 2013. If a decision is not reached by the end of 2012, the CPUC has mechanisms in place that will allow San Jose Water Company to request interim rates, effective January 1, 2013, until a decision is adopted.

CLWSC is subject to regulation by the Texas Commission on Environmental Quality (“TCEQ”). The TCEQ authorizes rate increases after the filing of an Application for a Rate/Tariff Change. Such filings may be filed anytime but not sooner than 12 months following acceptance by the TCEQ of the previous filing.

On August 27, 2010, CLWSC filed a rate case with the TCEQ. The filing contained a request for an immediate increase in revenue of 38% and a total increase of 71%. The new rates (38%) became effective on October 27, 2010. CLWSC is also requesting the TCEQ for a rate base determination. A rate base determination entails verification of plant to be included in rate base by TCEQ staff. An evidentiary hearing on these matters has been scheduled for March 2012, and a TCEQ decision is expected sometime in the second quarter of 2012. Until final approval by the TCEQ, the 38% rate increase in October 2010 is subject to adjustment and refund.

Please also see Item 1A, “Risk Factors,” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Financial Information about Industry Segments

See Note 12 of Notes to Consolidated Financial Statements for information regarding SJW Corp.’s business segments.

Description of Business

General

The principal business of Water Utility Services consists of the production, purchase, storage, purification, distribution, wholesale, and retail sale of water. San Jose Water Company provides water service to approximately 226,000 connections that serve customers in portions of the cities of Cupertino and San Jose and in the cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos, and adjacent unincorporated territories, all in the County of Santa Clara in the State of California. San Jose Water Company distributes water to customers in accordance with accepted water utility methods. CLWSC provides water service to approximately 10,000 connections that serve approximately 36,000 people in a service area comprising more than 243 square miles in the growing region between San Antonio and Austin, Texas.

San Jose Water Company also provides non-tariffed services under agreements with municipalities and other utilities. These non-tariffed services include water system operations, maintenance agreements and antenna leases.

In October 1997, San Jose Water Company commenced operation of the City of Cupertino municipal water system under the terms of a 25-year lease. The system is adjacent to the San Jose Water Company service area and has approximately 4,500 service connections. Under the terms of the lease, San Jose Water Company paid an up-front $6.8 million concession fee to the City of Cupertino that is amortized over the contract term. San Jose Water Company is responsible for all aspects of system operation including capital improvements.

The operating results from the water business fluctuate according to the demand for water, which is often influenced by seasonal conditions, such as summer temperatures or the amount and timing of precipitation in Water Utility Services’ service areas. Revenue, production costs and income are affected by the changes in water sales and availability of surface water supply.

Overhead costs, such as payroll and benefits, depreciation, interest on long-term debt, and property taxes, remain fairly constant despite variations in the amount of water sold. As a result, earnings are highest in the higher demand, warm summer months and lowest in the cool winter months.

Water Supply

San Jose Water Company’s water supply consists of groundwater from wells, surface water from watershed run-off and diversion, and imported water purchased from the SCVWD under the terms of a master contract with SCVWD expiring in 2051. Purchased water provides approximately 40% to 45% of San Jose Water Company’s annual production. San Jose Water Company pumps approximately 40% to 50% of its water supply from the underground basin and pays a groundwater extraction charge to SCVWD. Surface supply, which during a year of normal rainfall satisfies about 6% to 8% of San Jose Water Company’s annual needs, provides approximately 1% of its water supply in a dry year and approximately 14% in a wet year. In dry years, the decrease in water from surface run-off and diversion, and the corresponding increase in purchased and pumped water, increases production costs substantially.

The pumps and motors at San Jose Water Company’s groundwater production facilities are propelled by electric power. Over the last few years, San Jose Water Company has installed standby power generators at 32 of its strategic water production sites. In addition, the commercial office and operations control centers are outfitted with standby power equipment that allow critical distribution and customer service operations to continue during a power outage. SCVWD has informed San Jose Water Company that its filter plants, which deliver purchased water to San Jose Water Company, are also equipped with standby generators. In the event of a power outage, San Jose Water Company believes it will be able to prevent an interruption of service to customers for a limited period by pumping water with its standby generators and by using purchased water from SCVWD.

In 2011, the level of water in the Santa Clara Valley groundwater basin, which is managed by the SCVWD, remained comparable to the 30-year average level. On January 1, 2012, SCVWD’s 10 reservoirs were 44.3% full with 74,797 acre-feet of water in storage. As reported by SCVWD, the rainfall was approximately 33% of the seasonal average for the first six months of the rainfall season that commenced on July 1, 2011 and ends on June 30, 2012. As of December 31, 2011, San Jose Water Company’s Lake Elsman contained 111 million gallons. In addition, the rainfall at San Jose Water Company’s Lake Elsman was measured at 5.02 inches for the period from July 1, 2011 through December 31, 2011, which is 34% of the five-year average. Local surface water is a less costly source of water than groundwater or purchased water and its availability significantly impacts San Jose Water Company’s results of operations. San Jose Water Company believes that its various sources of water supply will be sufficient to meet customer demand in 2012.

On December 15, 2008, the U.S. Fish and Wildlife Service issued a Biological Opinion (“BiOp”) and Incidental Take Statement for the Central Valley Project (“CVP”) and the State Water Project (“SWP”) on the Delta smelt. The BiOp prescribes a range of operational criteria that are determined based on hydrology, fish distribution, abundance and other factors. Under a “most likely” scenario, the California Department of Water Resources and United States Bureau of Reclamation estimate that SWP and CVP supplies to SCVWD could be reduced by approximately 17% to 18% of the supply amount they currently receive. Under a “worst case” BiOp scenario, SWP and CVP supplies to SCVWD could be reduced by approximately 32% to 33% of the current supply amount they receive. In addition, while there is some overlap with the California Fish & Game Commission’s restrictions to protect longfin smelt, the longfin pumping restrictions, if triggered, could cause significant supply impacts beyond those estimated to comply with Delta smelt requirements.

On March 24, 2009, the SCVWD board of directors passed a resolution calling for a mandatory 15% reduction in water use for the remainder of the calendar year 2009. On December 8, 2009, this call for conservation was further extended through June 2010. To effect water restrictions, SCVWD worked with other political subdivisions that possess the authority to enact and enforce drought ordinances in order to effect such restrictions. San Jose Water Company worked with the CPUC to develop its water conservation plan to comply with the call for a 15% reduction in water use. The CPUC approved the plan, which became effective on August 12, 2009 and remained in effect through June 2010.

On July 13, 2010, the SCVWD board of directors passed a resolution calling for a three-month, 10% mandatory water conservation through September 30, 2010. On August 31, 2010, the SCVWD board of directors held a special work study session, which included retailers and municipalities, to discuss tiered rates and the effect on water conservation.

On September 28, 2010, the SCVWD board of directors voted to end mandatory conservation, but continued to request voluntary 10% conservation through June 30, 2011. Upon expiration, the request for voluntary conservation was not renewed by the SCVWD board of directors.

Except for a few isolated cases when service had been interrupted or curtailed because of power or equipment failures, construction shutdowns, or other operating difficulties, San Jose Water Company has not had any interrupted or imposed

mandatory curtailment of service to any type or class of customer with the exception of the summer of 1989 through March 1993, when rationing was imposed intermittently on customers at the request of SCVWD.

California faces long-term water supply challenges. San Jose Water Company actively works with SCVWD to meet the challenges by continuing to educate customers on responsible water use practices and to conduct long-range water supply planning.

CLWSC’s water supply consists of groundwater from wells and purchased raw water from the Guadalupe-Blanco River Authority (“GBRA”). CLWSC has long-term agreements with GBRA, which expire in 2040, 2044 and 2050. The agreements provide CLWSC with 6,700 acre-feet of water per year from Canyon Lake and other sources at prices to be adjusted periodically by GBRA.

Please also see further discussion under Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Franchises

Franchises granted by local jurisdictions permit Water Utility Services to construct, maintain, and operate a water distribution system within the streets and other public properties of a given jurisdiction. San Jose Water Company holds the necessary franchises to provide water in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno and Saratoga, the Town of Los Gatos and the unincorporated areas of Santa Clara County. None of the franchises have a termination date, other than the franchise for the unincorporated areas of Santa Clara County, which terminates in 2020.

Seasonal Factors

Water sales are seasonal in nature and influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Demand for water is generally lower during the cooler and rainy winter months. Demand increases in the spring when the temperature rises and rain diminishes.

Competition

San Jose Water Company and CLWSC are public utilities regulated by the CPUC and TCEQ, respectively, and operate within a service area approved by the regulators. The statutory laws provide that no other investor-owned public utility may operate in the public utilities’ service areas without first obtaining from the regulator a certificate of public convenience and necessity. Past experience shows such a certificate will be issued only after demonstrating that service in such area is inadequate.

California law also provides that whenever a public agency constructs facilities to extend utility service to the service area of a privately-owned public utility, like San Jose Water Company, such an act constitutes the taking of property and is conditioned upon payment of just compensation to the private utility.

Under the California law, municipalities, water districts and other public agencies have been authorized to engage in the ownership and operation of water systems. Such agencies are empowered to condemn properties operated by privately-owned public utilities upon payment of just compensation and are further authorized to issue bonds (including revenue bonds) for the purpose of acquiring or constructing water systems. To the Company’s knowledge, no municipality, water district or other public agency has pending any action to condemn any part of its water systems.

Environmental Matters

Water Utility Services’ procedures produce potable water in accordance with all applicable county, state and federal environmental rules and regulations. Additionally, public utilities are subject to environmental regulation by various other state and local governmental authorities.

Water Utility Services is currently in compliance with all of the United States Environmental Protection Agency’s (the “EPA”) surface water treatment performance standards, drinking water standards for disinfection by-products and primary maximum contaminant levels. These standards have been adopted and are enforced by the California Department of Public Health and the TCEQ for San Jose Water Company and CLWSC, respectively.

Other state and local environmental regulations apply to our Water Utility Services’ operations and facilities. These regulations relate primarily to the handling, storage and disposal of hazardous materials and discharges to the environment. As part of routine replacement of infrastructure, San Jose Water Company identified legacy equipment containing mercury which was released into the surrounding soil. San Jose Water Company has determined there is no risk of contamination to the water supply, notified the appropriate authorities and remediated the affected area. San Jose Water Company also identified ten other potentially affected sites and will be assessing the mercury impacts, if any, in conjunction with its infrastructure replacement

program. SJW Corp. believes there will be no material financial impact related to this matter. When operating conditions allowed it, backwash water from Saratoga Water Treatment Plant was discharged to Saratoga Creek as authorized under the Region Wide General National Pollutant Discharge Elimination System Permit for Discharges from Surface Water Treatment Facilities for Potable Supply (Order R2-2003-0062 prior to March 1, 2010 and Order R2-2009-0033 effective March 1, 2010). San Jose Water Company monitored physical and chemical properties of the effluent in accordance with the permit requirements. The Regional Water Quality Control Board requires these results to be submitted by November 15 ^th of each year in an annual self-monitoring report. In preparation of the 2010 report, staff determined that San Jose Water Company exceeded the prescribed limits for total suspended solids and for zinc. San Jose Water Company had suspended discharging under this permit at that time and there is no on-going violation. As of December 31, 2011, the Regional Water Quality Control Board has not taken any action related to this matter, and SJW Corp. believes there will be no material financial impact related to this matter.

San Jose Water Company is currently in compliance with all state and local regulations governing hazardous materials, point and non-point source discharges and the warning provisions of the California Safe Drinking Water and Toxic Enforcement Act of 1986. Please also see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Employees

As of December 31, 2011, SJW Corp. had 385 employees, of whom 347 were San Jose Water Company employees and 38 were CLWSC employees. At San Jose Water Company, 105 were executive, administrative or supervisory personnel, and 242 were members of unions. On November 23, 2010, San Jose Water Company reached a three-year collective bargaining agreement with the Utility Workers of America, representing the majority of all employees, and the International Union of Operating Engineers, representing certain employees in the engineering department, covering the period from January 1, 2011 through December 31, 2013. The agreements include a 2% wage increase in 2011, 2% in 2012 and 3% in 2013 for union workers as well as increases in medical co-pays and dental deductibles. As of December 31, 2011, CLWSC had 38 employees, of whom 9 were exempt and 29 were non-exempt employees. Non-exempt employees are subject to overtime but are not union represented.

Officers of the Registrant



Name	Age	Offices and Experience
G.J. Belhumeur	65	San Jose Water Company—Senior Vice President, Operations. Mr. Belhumeur has served as Senior Vice President of Operations since 2004. From 1996 to 2003, Mr. Belhumeur was Vice President of Operations. Mr. Belhumeur has been with San Jose Water Company since 1970.
D.R. Drysdale	56	San Jose Water Company—Vice President, Information Systems. Mr. Drysdale has served as Vice President of Information Systems since 2000. From 1998 to 1999, Mr. Drysdale was Director of Information Systems. From 1994 to 1998, Mr. Drysdale was Data Processing Manager. Mr. Drysdale joined San Jose Water Company in 1992.
C.S. Giordano	55	San Jose Water Company—Officer, Chief Engineer. Mr. Giordano has served as Chief Engineer since June 2007. From August 2000 to June 2007, Mr. Giordano was Director of Engineering and Construction. From January 1994 to August 2000, Mr. Giordano was Assistant Chief Engineer. Mr. Giordano has been with San Jose Water Company since 1994.
P. L. Jensen	52	San Jose Water Company—Senior Vice President, Regulatory Affairs. Mr. Jensen has served as Senior Vice President of Regulatory Affairs since October 2011. From July 2007 to October 2011, Mr. Jensen was Vice President of Regulatory Affairs. From 1995 to July 2007, Mr. Jensen was Director of Regulatory Affairs. Mr. Jensen has been with San Jose Water Company since 1995.
J.P. Lynch	52	SJW Corp.—Chief Financial Officer and Treasurer. Mr. Lynch has served as Chief Financial Officer and Treasurer since October 2010. He is also Chief Financial Officer and Treasurer of San Jose Water Company, SJW Land Company, SJWTX, Inc. and Texas Water Alliance Limited. Prior to joining the Corporation, Mr. Lynch was an Audit Partner with KPMG LLP. Mr. Lynch was with KPMG LLP for 26 years. Mr. Lynch is a certified public accountant.
S. Papazian	36	SJW Corp.—Corporate Secretary and Attorney. Ms. Papazian has served as Corporate Secretary and Attorney for SJW Corp. and San Jose Water Company since February 2005. She is also Corporate Secretary of SJW Land Company, SJWTX, Inc. and Texas Water Alliance Limited. She was admitted to the California State Bar in January 2000 and thereafter was an Associate Attorney at The Corporate Law Group from March 2000 until February 2005.
W.R. Roth	59	SJW Corp.—President and Chief Executive Officer of SJW Corp., San Jose Water Company, SJW Land Company, SJWTX, Inc. and Texas Water Alliance Limited. Mr. Roth was appointed Chief Executive Officer of SJW Corp. in 1999 and President in 1996. Mr. Roth has been with San Jose Water Company since 1990.
W.L. Avila-Walker	48	San Jose Water Company—Controller. Ms. Avila-Walker has served as Controller since September 2009. From August 2008 to September 2009, Ms. Avila-Walker served as Director of Compliance. From May 2005 to May 2008, Ms. Avila-Walker served as Director of Reporting and Finance.
R.S. Yoo	61	San Jose Water Company—Chief Operating Officer. Mr. Yoo has served as Chief Operating Officer since July 2005. From April 2003 to July 2005, Mr. Yoo was Senior Vice President of Administration. From April 1996 to April 2003, Mr. Yoo was Vice President of Water Quality. Mr. Yoo has served as President of Crystal Choice Water Service LLC from January 2001 to August 2005 and Manager from January 2001 to January 2007. Mr. Yoo was appointed Vice President of SJWTX, Inc. from September 2005 to April 2008. Mr. Yoo has been with San Jose Water Company since 1985.

Financial Information about Foreign and Domestic Operations and Export Sales

SJW Corp.’s revenue and expense are derived substantially from Water Utility Services’ operations located in the County of Santa Clara in the State of California and Comal County in the State of Texas.

Available Information

SJW Corp.’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports, are made available free of charge through SJW Corp.’s website at http://www.sjwcorp.com , as soon as reasonably practicable, after SJW Corp. electronically files such material with, or furnishs such material to, the SEC. The content of SJW Corp.’s website is not incorporated by reference to or part of this report.

You may also obtain a copy of any of these reports directly from the SEC. You may read and copy any material we file or furnish with the SEC at their Public Reference Room, located at 100 F Street N.E., Washington, D.C. 20549. The phone number for information about the operation of the Public Reference Room is 1-800-732-0330. Because we electronically file our reports, you may also obtain this information from the SEC internet website at http://www.sec.gov .


Item 1A.	Risk Factors

Investors should carefully consider the following risk factors and warnings before making an investment decision. The risks described below are not the only ones facing SJW Corp. Additional risks that SJW Corp. does not yet know of or that it currently thinks are immaterial may also impair its business operations. If any of the following risks actually occur, SJW Corp.’s business, operating results or financial condition could be materially harmed. In such case, the trading price of SJW Corp.’s common stock could decline and you may lose all or part of your investment. Investors should also refer to the other information set forth in this Form 10-K, including the consolidated financial statements and the notes thereto.

Our business is regulated and may be adversely affected by changes to the regulatory environment.

San Jose Water Company and CLWSC are regulated public utilities. The operating revenue of San Jose Water Company and CLWSC result primarily from the sale of water at rates authorized by the CPUC and the TCEQ, respectively. The CPUC and TCEQ set rates that are intended to provide revenues sufficient to recover normal operating expenses, provide funds for replacement of water infrastructure and produce a fair and reasonable return on shareholder common equity. Please refer to Part I, Item 1, “Regulation and Rates” for a discussion of the most recent rate cases for San Jose Water Company, which has authorized rates for 2010 through 2012, and for CLWSC. In our applications for rate approvals, we rely upon estimates and forecasts to propose rates for approval by the CPUC or TCEQ. No assurance can be given that our estimates and forecasts will be correct or that the CPUC or TCEQ will agree with our estimates and forecasts and approve our proposed rates. To the extent our authorized rates may be too low, revenues may be insufficient to cover Water Utility Services’ operating expenses, capital requirements and SJW Corp.’s historical dividend rate. In addition, delays in approving rate increases may negatively affect our operating results.

In addition, policies and regulations promulgated by the regulators govern the recovery of capital expenditures, the treatment of gains from the sale of real property, the offset of production and operating costs, the recovery of the cost of debt, the optimal equity structure, and the financial and operational flexibility to engage in non-tariffed operations. If the regulators implement policies and regulations that will not allow San Jose Water Company and CLWSC to accomplish some or all of the items listed above, Water Utility Services’ future operating results may be adversely affected. Further, from time to time, the commissioners at the CPUC and the TCEQ change. For example, in California, the Governor appointed three new commissioners to the CPUC in 2011. Such changes could lead to changes in policies and regulations. There can be no assurance that the resulting changes in policies and regulation will not adversely affect our operating results or financial condition.

Recovery of regulatory assets is subject to adjustment by the regulatory agency and could impact the operating results of Water Utility Services.

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as permitted by FASB ASC Topic 980—“Regulated Operations.” In accordance with ASC Topic 980, Water Utility Services record deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be recovered in the ratemaking process in a period different from when the costs and credits were incurred. Please refer to Note 1 of the Notes to Consolidated Financial Statements for a summary of net regulatory assets. If the assessment of the probability of recovery in the ratemaking process is incorrect and the applicable ratemaking body determines that a deferred cost is not recoverable through future rate increases, the regulatory assets or liabilities would need to be adjusted, which could have an adverse effect on our financial results.

Changes in water supply, water supply costs or the mix of water supply could adversely affect the operating results and business of Water Utility Services.

San Jose Water Company’s supply of water primarily relies upon three main sources: water purchased from SCVWD, surface water from its Santa Cruz Mountains watershed, and pumped underground water. Changes and variations in quantities from each of these three sources affect the overall mix of the water supply, thereby affecting the cost of the water supply. Surface water is the least costly source of water. If there is an adverse change to the mix of water supply and San Jose Water Company is not allowed by the CPUC to recover the additional or increased water supply costs, its operating results may be adversely affected.

SCVWD receives an allotment of water from state and federal water projects. If San Jose Water Company has difficulties obtaining a high quality water supply from SCVWD due to availability, environmental, legal or other restrictions (see also Part I, Item 1, “Water Supply”), it may not be able to fully satisfy customer demand in its service area and its operating results and business may be adversely affected. Additionally, the availability of water from San Jose Water Company’s Santa Cruz Mountains watershed depends on the weather and fluctuates with each season. In a normal year, surface water supply provides 6% to 8% of the total water supply of the system. In a season with little rainfall, water supply from surface water sources may be low, thereby causing San Jose Water Company to increase the amount of water purchased from outside sources at a higher cost than surface water, thus increasing water production costs.

In addition, San Jose Water Company’s ability to use surface water is subject to regulations regarding water quality and volume limitations. If new regulations are imposed or existing regulations are changed or given new interpretations, the availability of surface water may be materially reduced. A reduction in surface water could result in the need to procure more costly water from other sources, thereby increasing overall water production costs and adversely affecting the operating results of San Jose Water Company.

Because the extraction of water from the groundwater basin and the operation of the water distribution system require a significant amount of energy, increases in energy prices could increase operating expenses of San Jose Water Company. In the aftermath of the attempt to deregulate the California energy market, energy costs in California continue to be in flux, and therefore San Jose Water Company cannot be certain that it will be able to contain energy costs into the future.

San Jose Water Company continues to utilize Pacific Gas & Electric’s time of use rate schedules to minimize its overall energy costs primarily for groundwater pumping. Optimization and energy management efficiency is achieved through the implementation of Supervisory Control and Data Acquisition system software applications that control pumps based on demand and cost of energy. An increase in demand or a reduction in the availability of surface water or import water could result in the need to pump more water during peak hours adversely affecting the operating results of San Jose Water Company.

CLWSC’s primary water supply is 6,700 acre-feet of water which is pumped from Canyon Lake at two lake intakes and other sources, in accordance with the terms of its contracts with the GBRA, which are long-term take-or-pay contracts. This supply is supplemented by groundwater pumped from wells. Texas, similar to California, faces similar operating challenges as described above and long-term water supply constraints. (See also Part I, Item 1, “Water Supply”)

Fluctuations in customer demand for water due to seasonality, restrictions of use, weather, and lifestyle can adversely affect operating results.

Water Utility Services’ operations are seasonal, thus quarterly fluctuation in results of operations may be significant. Rainfall and other weather conditions also affect the operations of Water Utility Services. Most water consumption occurs during the third quarter of each year when weather tends to be warm and dry. In drought seasons, if customers are encouraged or required to conserve water due to a shortage of water supply or restriction of use, revenue tends to be lower. Similarly, in unusually wet seasons, water supply tends to be higher and customer demand tends to be lower, again resulting in lower revenues. Furthermore, certain lifestyle choices made by customers can affect demand for water. For example, a significant portion of residential water use is for outside irrigation of lawns and landscaping. If there is a decreased desire by customers to maintain landscaping for their homes, residential water demand could decrease, which may result in lower revenues. Conservation efforts and construction codes, which require the use of low-flow plumbing fixtures, could diminish water consumption and result in reduced revenue. (See also Part I, Item 1, “Water Supply”)

A contamination event or other decline in source water quality could affect the water supply of Water Utility Services and therefore adversely affect our business and operating results.

Water Utility Services is required under environmental regulations to comply with water quality requirements. Through water quality compliance programs, Water Utility Services continually monitors for contamination and pollution of its sources of water. In addition, a watershed management program provides a proactive approach to minimize potential contamination activities. There can be no assurance that SJW Corp. will continue to comply with all applicable water quality requirements. In

the event a contamination is detected, Water Utility Services must either commence treatment to remove the contaminant or procure water from an alternative source. Either of these results may be costly, may increase future capital expenditures and there can be no assurance that the regulators would approve a rate increase to enable us to recover the costs arising from these remedies. In addition, we could be held liable for consequences arising from hazardous substances in our water supplies or other environmental damages. Our insurance policies may not be sufficient to cover the costs of these claims.

Water Utility Services is subject to litigation risks concerning water quality and contamination.

Although Water Utility Services has not been and is not a party to any environmental and product-related lawsuits, such lawsuits against other water utilities have increased in frequency in recent years. If Water Utility Services is subject to an environmental or product-related lawsuit, they might incur significant legal costs and it is uncertain whether it would be able to recover the legal costs from ratepayers or other third parties. Although Water Utility Services has liability insurance coverage for bodily injury and property damage, product liability is excluded from this coverage. Our pollution liability policy extends coverage for product liability, but is subject to exclusions and limitations built into the policy. Costs for defense are included within the limit of insurance on the pollution liability policy.

New or more stringent environmental regulations could increase Water Utility Services’ operating costs and affect its business.

Stringent environmental and water quality regulations could increase Water Utility Services’ water quality compliance costs, hamper Water Utility Services’ available water supplies, and increase future capital expenditure.

Under the federal Safe Drinking Water Act, Water Utility Services is subject to regulation by the EPA of the quality of water it sells and treatment techniques it uses to make the water potable. The EPA promulgates nationally applicable standards, including maximum contaminant levels for drinking water. Water Utility Services is currently in compliance with all of the primary maximum contaminant levels promulgated to date. Additional or more stringent requirements may be adopted by each state. There can be no assurance that Water Utility Services will be able to continue to comply with all water quality requirements.

Water Utility Services has implemented monitoring activities and installed specific water treatment improvements enabling it to comply with existing maximum contaminant levels and plan for compliance with future drinking water regulations. However, the EPA and the respective state agencies have continuing authority to issue additional regulations under the Safe Drinking Water Act. It is possible that new or more stringent environmental standards could be imposed that will raise Water Utility Services’ operating costs. Future drinking water regulations may require increased monitoring, additional treatment of underground water supplies, fluoridation of all supplies, more stringent performance standards for treatment plants and procedures to further reduce levels of disinfection by-products. Water Utility Services continues to seek mechanisms for recovery of government-mandated environmental compliance costs. There are currently limited regulatory mechanisms and procedures available to the Company for the recovery of such costs and there can be no assurance that such costs will be fully recovered.

Water Utility Services rely on information technology and systems that are key to business operations. A system malfunction or security breach could adversely affect business operations.

Information technology is key to the operation of Water Utility Services, including but not limited to payroll, general ledger activities, bill remittance processing, providing customer service and the use of Supervisory Control and Data Acquisition systems to operate our distribution system. Among other things, system malfunctions and security breaches could prevent us from operating or monitoring our facilities, billing accurately and timely analysis of financial results. Our profitability and cash flow could be affected negatively in the event these systems do not operate effectively or are circumvented.

The water utility business requires significant capital expenditures that are dependent on our ability to secure appropriate funding. If SJW Corp. is unable to obtain sufficient capital or if the rates at which we borrow increase, there would be a negative impact on our results of operations.

The water utility business is capital-intensive. SJW Corp. funds capital expenditures through a variety of sources, including cash received from operations, funds received from developers as contributions or advances and borrowing. We cannot provide any assurance that the historical sources of funds for capital expenditures will continue to be adequate or that the cost of funds will remain at levels permitting us to earn a reasonable rate of return. A significant change in any of the funding sources could impair the ability of Water Utility Services to fund its capital expenditures, which could impact our ability to grow our utility asset base and earnings. Any increase in the cost of capital through higher interest rates or otherwise

could adversely affect our results of operations.

Our ability to borrow funds may be affected by the ongoing national and international financial crisis. Disruptions in the capital and credit markets or further deteriorations in the strength of financial institutions could adversely affect SJW Corp.’s ability to draw on its line of credit or issue long-term debt. In addition, government policies, the state of the credit markets and other factors could result in increased interest rates, which would increase SJW Corp.’s cost of capital.

We operate in areas subject to natural disasters or that may be the target of terrorist activities.

We operate in areas that are prone to earthquakes, fires and other natural disasters. A significant seismic event in northern California, where the majority of our operations are concentrated, or other natural disaster in northern California or Texas could adversely impact our ability to deliver water to our customers and our costs of operations. A major disaster could damage or destroy substantial capital assets. The CPUC and TCEQ have historically allowed utilities to establish catastrophic event memorandum accounts as a possible mechanism to recover costs. However, we can give no assurance that the CPUC, TCEQ, or any other commission would allow any such cost recovery mechanism in the future.

In light of the threats to the nation’s health and security since the September 11, 2001 terrorist attacks, we have taken steps to increase security measures at our facilities and heighten employee awareness of threats to our water supply. We have also tightened our security measures regarding the delivery and handling of certain chemicals used in our business. We have and will continue to bear increased costs for security precautions to protect our facilities, operations and supplies. These costs may be significant. While some of these costs are likely to be recovered in the form of higher rates, there can be no assurance that the CPUC will approve a rate increase to recover all or part of such costs and, as a result, the Company’s operating results and business may be adversely affected. Further, despite these tightened security measures, we may not be in a position to control the outcome of terrorist events should they occur.

A failure of our reservoirs, storage tanks, mains or distribution networks could result in losses and damages that may affect our financial condition and reputation.

We distribute water through an extensive network of mains and store water in reservoirs and storage tanks located across our service areas. A failure of major mains, reservoirs, or tanks could result in injuries and damage to residential and/or commercial property for which we may be responsible, in whole or in part. The failure of major mains, reservoirs or tanks may also result in the need to shut down some facilities or parts of our water distribution network in order to conduct repairs. Such failures and shutdowns may limit our ability to supply water in sufficient quantities to our customers and to meet the water delivery requirements prescribed by governmental regulators, which could adversely affect our financial condition, results of operations, cash flow, liquidity and reputation. Any business interruption or other losses might not be covered by insurance policies or be recoverable in rates, and such losses may make it difficult for us to secure insurance in the future at acceptable rates.

SJW Land Company has a significant real estate portfolio.

SJW Land Company owns a diversified real estate portfolio in multiple states. The risks in investing directly in real estate vary depending on the investment strategy and investment objective and include the following risks.


•	Liquidity risk—real estate investment is illiquid. The lag time to build or reduce its portfolio is long.


•	Obsolescence risk—real estate property is location specific. Location obsolescence can occur due to a decline of a particular sub-market or neighborhood. Functional obsolescence can also occur from physical depreciation, wear and tear, and other architectural and physical features which could be curable or incurable.

•

Market and general economic risks—real estate investment is tied to overall domestic economic growth and, therefore, carries market risk which cannot be eliminated by diversification. Generally, all property types benefit from national economic growth, though the benefits range according to local factors, such as local supply and demand and job creation. Because real estate leases are typically staggered and last for multiple years, there is generally a delayed effect in the performance of real estate in relation to the overall economy. This delayed effect can insulate or deteriorate the financial impact to SJW Land Company in a downturn or an improved economic environment.

Vacancy rates can climb and market rents can be impacted and weakened by general economic forces, therefore affecting income to SJW Land Company.

The value of real estate can drop materially due to a deflationary market, decline in rental income, market cycle of supply and demand, long lag time in real estate development, legislative and governmental actions, environmental concerns, increases in rates of returns demanded by investors, and fluctuation of interest rates, eroding any unrealized capital appreciation and, potentially, invested capital.

A drop in the value of a real estate property or increase in vacancy could result in reduced future cash flows to amounts below the property’s current carrying value and could result in an impairment charge.


•	Concentration/Credit risk—the risk of a tenant declaring bankruptcy and seeking relief from its contractual rental obligation could affect the income and the financial results of SJW Land Company. Diversification of many tenants across many properties may mitigate the risk, but can never eliminate it. This risk is most prevalent in a recessionary environment.

The success of SJW Land Company’s real estate investment strategy depends largely on ongoing local, state and federal land use development activities and regulations, future economic conditions, the development and fluctuations in the sale of the undeveloped properties, the ability to identify the developer/potential buyer of the available-for-sale real estate, the timing of the transaction, favorable tax law, the ability to identify and acquire high quality, relatively low risk replacement property at reasonable terms and conditions, and the ability to maintain and manage the replacement property.

There can be no assurance that we will continue to pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends.

Dividends on our common stock will only be paid if and when declared by our Board of Directors. Our earnings, financial condition, capital requirements, applicable regulations and other factors, including the timeliness and adequacy of rate increases, will determine both our ability to pay dividends on common stock and the amount of the dividends declared by our Board of Directors. There can be no assurance that we will continue to pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends.

Our business strategy, which includes acquiring water systems, developing and investing in real estate and expanding nonregulated contract services, will expose us to new risks which could have a material adverse effect on our business.

Our business strategy focuses on the following: (1) regional regulated water utility operations, (2) regional nonregulated water utility related services provided in accordance with the guidelines established by the CPUC in California and the TCEQ in Texas, and (3) out-of-region water and utility related services, primarily in the Western United States. The execution of our business strategy will expose us to different risks than those associated with the current utility operations. Costs are incurred in connection with the execution of our business strategy and risks are involved in potential integration of acquired businesses/properties which could require significant costs and cause diversion of management’s time and resources. Any future acquisition we decide to undertake may involve risks and have a material adverse effect on our core business, impact our ability to finance our business and affect our compliance with regulatory requirements. Any businesses we acquire may not achieve sales, customer growth and projected profitability that would justify the investment. Any difficulties we encounter in the integration process, including the integration of controls necessary for internal control and financial reporting, could interfere with our operations, reduce our operating margins and adversely affect our internal controls.

Adverse investment returns and other factors may increase our pension costs and pension plan funding requirements.

A substantial number of our employees are covered by a defined benefit pension plan. Our pension costs and the funded status of the plan are affected by a number of factors including the discount rate, mortality rates of plan participants, investment returns on plan assets, and pension reform legislation. Any change in such factors could result in an increase in future pension costs and an increase in our pension liability, requiring an increase in plan contributions. In 2012, we expect that our net pension costs will increase to approximately $10.3 million, which is approximately $2.2 million more than 2011. We also expect to make approximately $10.3 million in contributions to our pension plan in 2012, which is approximately $2.6 million more than we made in 2011.

Other factors that could affect operating results.

Other factors that could adversely affect our operating results include the following:


•	The level of labor and non-labor operating and maintenance expenses as affected by inflationary forces and collective bargaining power could adversely affect our operating and maintenance expenses.


•	The City of Cupertino lease operation could be adversely affected by: (1) the level of capital requirements, (2) the ability of San Jose Water Company to raise rates through the Cupertino City Council, and (3) the level of operating and maintenance expenses.


Item 1B.	Unresolved Staff Comments

None.


Item 2.	Properties

The properties of San Jose Water Company consist of a unified water production system located in the County of Santa Clara in the State of California. In general, the property is comprised of franchise rights, water rights, necessary rights-of-way, approximately 7,000 acres of land held in fee (which is primarily non-developable watershed), impounding reservoirs with a capacity of approximately 2.256 billion gallons, diversion facilities, wells, distribution storage of approximately 265 million gallons, and all water facilities, equipment, office buildings and other property necessary to supply its customers.

San Jose Water Company maintains all of its properties in good operating condition in accordance with customary practice for a water utility. San Jose Water Company’s groundwater pumping stations have a production capacity of approximately 270 million gallons per day and the present capacity for taking purchased water is approximately 179 million gallons per day. The surface water collection system has a physical delivery capacity of approximately 35 million gallons per day. During 2011, a maximum and average of 168 million gallons and 118 million gallons of water per day, respectively, were delivered to the system.

CLWSC maintains a service area that covers approximately 243 square miles located in the southern region of the Texas hill country in Comal and Blanco counties. Our service area surrounds an 8,200 surface acre reservoir (Canyon Lake). Production wells are located in an unregulated portion of the Trinity aquifer and have the ability to pump a combined 2.8 billion gallons annually. CLWSC has contracts for 1.9 billion gallons of untreated surface water and 235 million gallons of treated surface water from the GBRA annually. CLWSC owns and operates two surface water treatment plants with a combined production capacity of 6.5 million gallons per day. CLWSC has 495 miles of transmission and distribution mains and maintains 65 storage tanks with a total storage capacity of 6.2 million gallons.

Water Utility Services hold all of its principal properties in fee, subject to current tax and assessment liens, rights-of-way, easements, and certain minor defects in title which do not materially affect their use.

SJW Land Company owns approximately 93 acres of property in the states of Connecticut, Florida, Texas, Arizona and Tennessee and approximately five undeveloped acres of land and two acres of land with commercial properties primarily in the San Jose metropolitan area. SJW Land Company owns a 70% limited partnership interest in 444 West Santa Clara Street, L.P. One of our California properties is owned by such partnership. SJW Land Company consolidates its limited partnership interest in 444 West Santa Clara Street, L.P. as a variable interest entity within the scope of ASC Topic 810. The following table is a summary of SJW Land Company properties described above:



				Percentage as of December 31, 2011 of SJW Land Company
Description	Location	Acreage	Square Footage	Revenue		Expense
2 Commercial buildings	San Jose, California	2	28,000	14	%	12	%
Warehouse building	Windsor, Connecticut	17	170,000	17	%	12	%
Warehouse building	Orlando, Florida	8	147,000	10	%	7	%
Retail building	El Paso, Texas	2	14,000	7	%	2	%
Warehouse building	Phoenix, Arizona	11	176,000	18	%	11	%
Warehouse building	Knoxville, Tennessee	30	361,500	N/A		13	%
Commercial building	Knoxville, Tennessee	15	135,000	34	%	43	%
Undeveloped land	Knoxville, Tennessee	10	N/A	N/A		N/A
Undeveloped land	San Jose, California	5	N/A	N/A		N/A


Item 3.	Legal Proceedings

SJW Corp. is subject to ordinary routine litigation incidental to its business. There are no pending legal proceedings to which SJW Corp. or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a material effect on SJW Corp.’s business, financial position, results of operations or cash flows.


Item 4.	Removed and Reserved

PART II


Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

SJW Corp.’s common stock is traded on the New York Stock Exchange under the symbol SJW. Information as to the high and low sales prices for SJW Corp.’s common stock for each quarter in the 2011 and 2010 fiscal years is contained in the section captioned “Market price range of stock” in the tables set forth in Note 15 of “Notes to Consolidated Financial Statements” in Part II, Item 8.

As of December 31, 2011 , there were 468 record holders of SJW Corp.’s common stock.

Dividends

Dividends have been paid on SJW Corp.’s and its predecessor’s common stock for 273 consecutive quarters and the annual dividend amount has increased in each of the last 44 years. Additional information as to the cash dividends paid on common stock in 2011 and 2010 is contained in the section captioned “Dividend per share” in the tables set forth in Note 15 of “Notes to Consolidated Financial Statements” in Part II, Item 8. Future dividends will be determined by the Board of Directors after consideration of various financial, economic and business factors.

Five-Year Performance Graph

The following performance graph compares the changes in the cumulative shareholder return on SJW Corp.’s common stock with the cumulative total return on a Water Utility Index and the Standard & Poor’s 500 Index during the last five years ended December 31, 2011 . The comparison assumes $100 was invested on December 31, 2006 in SJW Corp.’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.

The following descriptive data is supplied in accordance with Rule 304(d) of Regulation S-T:



	2006	2007	2008	2009	2010	2011
SJW Corp.	100	91	81	62	75	69
Water Utility Index	100	94	90	86	99	109
S&P 500	100	106	66	84	97	99

The Water Utility Index is the 10 water company Water Utility Index prepared by Wells Fargo Securities, LLC.


Item 6.	Selected Financial Data

FIVE YEAR STATISTICAL REVIEW

SJW Corp. and Subsidiaries



	2011			2010	2009		2008*		2007*
CONSOLIDATED RESULTS OF OPERATIONS (in thousands)
Operating revenue	$	238,955		215,638	216,097		220,347		206,601
Operating expense:
Purchased water	54,317			43,557	45,317		48,291		48,596
Power	5,394			6,429	6,582		7,559		7,532
Groundwater extraction charges	20,997			26,614	31,635		34,368		30,141
Other production costs	11,345			10,702	10,074		9,871		9,256
Administrative and general	39,136			38,184	35,445		30,207		27,985
Maintenance	13,261			12,242	13,172		13,123		11,628
Property taxes and other non-income taxes	8,921			7,907	8,549		6,793		6,307
Depreciation and amortization	31,193			28,331	25,643		24,043		22,854
Impairment on real estate investment	—			3,597	—		—		—
Total operating expense	184,564			177,563	176,417		174,255		164,299
Operating income	54,391			38,075	39,680		46,092		42,302
Interest expense, other income and deductions	(18,947		)	3,071	(14,229	)	(10,597	)	(10,430	)
Income before income taxes	35,444			41,146	25,451		35,495		31,872
Provision for income taxes	14,566			16,740	10,280		14,034		12,549
Net income	20,878			24,406	15,171		21,461		19,323
Dividends paid	12,823			12,603	12,202		11,875		11,089
CONSOLIDATED PER SHARE DATA (BASIC)
Net income	1.12			1.32	0.82		1.17		1.05
Dividends paid	0.69			0.68	0.66		0.65		0.60
Shareholders’ equity at year-end	14.21			13.76	13.67		13.81		12.92
CONSOLIDATED BALANCE SHEET (in thousands)
Utility plant and intangible assets	$	1,112,127		1,036,909	944,026		878,743		816,310
Less accumulated depreciation and amortization	355,914			322,102	298,921		272,562		255,025
Net utility plant	756,213			714,807	645,105		606,181		561,285
Net real estate investment	78,542			80,089	80,812		82,489		84,195
Total assets	1,038,810			935,362	878,474		850,877		767,326
Capitalization:
Shareholders’ equity	264,004			255,032	252,756		254,326		236,934
Long-term debt, less current portion	343,848			295,704	246,879		216,613		216,312
Total capitalization	$	607,852		550,736	499,635		470,939		453,246
OTHER STATISTICS—WATER UTILITY SERVICES
Average revenue per connection	$	1,010		916	920		914		860
Investment in utility plant per connection	$	4,702		4,407	4,019		3,751		3,499
Connections at year-end	236,500			235,300	234,900		234,300		233,300
Miles of main at year-end	2,915			2,883	2,881		2,814		2,743
Water production (million gallons)	46,033			45,493	47,900		51,961		51,922
Maximum daily production (million gallons)	181			196	192		204		205
Population served (estimate)	1,066,000			1,060,600	1,058,800		1,056,100		1,051,600

____________________

* The Company has made reclassifications to certain previously reported balances in the consolidated results of operations to conform to current year presentation. See Note 1 of Notes to Consolidated Financial Statements for further information.


Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Dollar amounts in thousands, except where otherwise noted)

Description of Business

SJW Corp. is a publicly traded company and is a holding company with four subsidiaries:

San Jose Water Company, a wholly owned subsidiary, is a public utility in the business of providing water service to approximately 226,000 connections that serve a population of approximately one million people in an area comprising approximately 138 square miles in the metropolitan San Jose, California area.

SJWTX, Inc., a wholly owned subsidiary of SJW Corp., doing business as Canyon Lake Water Service Company, is a public utility in the business of providing water service to approximately 10,000 connections that serve approximately 36,000 people. CLWSC’s service area comprises more than 243 square miles in western Comal County and southern Blanco County in the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation. The water supply corporation has been determined to be a variable interest entity within the scope of ASC Topic 810 with SJWTX, Inc. as the primary beneficiary, and as a result, it has been consolidated with SJWTX, Inc.

The United States water utility industry is largely fragmented and is dominated by municipal-owned water systems. The water industry is regulated, and provides a life-sustaining product. This makes water utilities subject to lower business cycle risks than nonregulated industries.

SJW Land Company, a wholly owned subsidiary, owns undeveloped land in the states of California and Tennessee, owns and operates commercial buildings in the states of California, Florida, Connecticut, Texas, Arizona and Tennessee and has a 70% limited partnership interest in 444 West Santa Clara Street, L.P.

Texas Water Alliance Limited, a wholly owned subsidiary of SJW Corp., is undertaking activities that are necessary to develop a water supply project in Texas.

Business Strategy

SJW Corp. focuses its business initiatives in three strategic areas:


(1)	Regional regulated water utility operations.


(2)	Regional nonregulated water utility related services provided in accordance with the guidelines established by the CPUC in California and the TCEQ in Texas.


(3)	Out-of-region water and utility related services, primarily in the Western United States.

Regional Regulated Activities

SJW Corp.’s regulated utility operation is conducted through San Jose Water Company and CLWSC. SJW Corp. plans and applies a diligent and disciplined approach to maintaining and improving its water system infrastructure. It also seeks to acquire regulated water systems adjacent to or near its existing service territory.

Regional Nonregulated Activities

Operating in accordance with guidelines established by the CPUC, San Jose Water Company provides nonregulated services, such as water system operations, maintenance agreements and antenna leases, under agreements with municipalities and other utilities. CLWSC provides nonregulated wholesale water service to adjacent utilities.

San Jose Water Company also seeks appropriate nonregulated business opportunities that complement its existing operations or that allow it to extend its core competencies beyond existing operations. San Jose Water Company seeks opportunities to fully utilize its capabilities and existing capacity by providing services to other regional water systems, which also will benefit its existing regional customers.

Out-of-Region Opportunities

SJW Corp. also from time to time pursues opportunities to participate in out-of-region water and utility related services, particularly regulated water businesses, in the Western United States. SJW Corp. evaluates out-of-region and out-of-state opportunities that meet SJW Corp.’s risk and return profile.

The factors SJW Corp. considers in evaluating such opportunities include:


•	potential profitability;


•	regulatory environment;


•	additional growth opportunities within the region;


•	water supply, water quality and environmental issues;


•	capital requirements;


•	general economic conditions; and


•	synergy potential.

As part of its pursuit of the above three strategic areas, the Company considers from time to time opportunities to acquire businesses and assets. However, SJW Corp. cannot be certain it will be successful in identifying and consummating any strategic business acquisitions relating to such opportunities. In addition, any transaction will involve numerous risks, including the possibility of incurring more costs than benefits derived from the acquisition, the assumption of certain known and unknown liabilities related to the acquired assets, the diversion of management’s attention from day-to-day operations of the business, the potential for a negative impact on SJW Corp.’s financial position and operating results, entering markets in which SJW Corp. has no or limited direct prior experience and the potential loss of key employees of any acquired company. SJW Corp. cannot be certain that any transaction will be successful and will not materially harm its operating results or financial condition.

SJW Corp.’s real estate investment activity is conducted through SJW Land Company. SJW Land Company owns undeveloped land and owns and operates a portfolio of commercial buildings in the states of California, Florida, Connecticut, Texas, Arizona and Tennessee. SJW Land Company also owns a limited partnership interest in 444 West Santa Clara Street, L.P. The partnership owns a commercial building in San Jose, California. SJW Land Company implements its investment strategy by acquiring properties or exchanging properties for similar investments in tax-free exchanges. SJW Land Company’s real estate investments diversify SJW Corp.’s asset base.

Critical Accounting Policies

SJW Corp. has identified accounting policies delineated below as the policies critical to its business operations and the understanding of the results of operations. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the reporting period. SJW Corp. bases its estimates on historical experience and other assumptions that are believed to be reasonable under the circumstances. For a detailed discussion on the application of these and other accounting policies, see Note 1 of “Notes to Consolidated Financial Statements.” SJW Corp.’s critical accounting policies are as follows:

Revenue Recognition

SJW Corp. recognizes its regulated and nonregulated revenue when services have been rendered, in accordance with FASB ASC Topic 605—“Revenue Recognition.”

Metered revenue of Water Utility Services includes billing to customers based on meter readings plus an estimate of water used between the customers’ last meter reading and the end of the accounting period. Water Utility Services read the majority of its customers’ meters on a bi-monthly basis and records its revenue based on its meter reading results. Unbilled revenue from the last meter reading date to the end of the accounting period is estimated based on the most recent usage patterns, production records and the effective tariff rates. Actual results could differ from those estimates, which may result in an adjustment to the operating revenue in the period which the revision to Water Utility Services’ estimates is determined.

Revenues also include a surcharge collected from regulated customers that is paid to the CPUC. This surcharge is recorded both in operating revenues and administrative and general expenses.

SJW Corp. recognizes its nonregulated revenue based on the nature of the nonregulated business activities. Revenue from San Jose Water Company’s nonregulated utility operations, maintenance agreements or antenna leases are recognized when services have been rendered. Revenue from SJW Land Company properties is generally recognized ratably over the term of the leases.

Recognition of Regulatory Assets and Liabilities

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as permitted by ASC Topic 980. In accordance with ASC Topic 980, Water Utility Services, to the extent applicable, records deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be recognized in the ratemaking process in a period different from when the costs and credits are incurred. Accounting for such costs and credits is based on management’s judgment and prior historical ratemaking practices, and it occurs when management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility Services through the ratemaking process. The regulatory assets and liabilities recorded by Water Utility Services, in particular, San Jose Water Company, primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting purposes and the postretirement pension benefits, medical costs, accrued benefits for vacation and asset retirement obligations

that have not been passed through in rates. The disallowance of any asset in future ratemaking, including deferred regulatory assets, would require San Jose Water Company to immediately recognize the impact of the costs for financial reporting purposes. No disallowances were recognized for the years ending December 31, 2011 , 2010 and 2009 .

Pension Plan Accounting

San Jose Water Company offers a Pension Plan, an Executive Supplemental Retirement Plan and certain postretirement benefits other than pensions to employees retiring with a minimum level of service. Accounting for pensions and other postretirement benefits requires an extensive use of assumptions about the discount rate applied to expected benefit obligations, expected return on plan assets, the rate of future compensation increases expected to be received by the employees, mortality, turnover and medical costs. Plan assets are marked to market at each measurement date. See assumptions and disclosures detailed in Note 10 of “Notes to Consolidated Financial Statements.”

Income Taxes

SJW Corp. estimates its federal and state income taxes as part of the process of preparing consolidated financial statements. The process involves estimating the actual current tax exposure together with assessing temporary differences resulting from different treatment of items for tax and accounting purposes, including the evaluation of the treatment acceptable in the water utility industry and regulatory environment. These differences result in deferred tax assets and liabilities, which are included on the balance sheet. If actual results, due to changes in the regulatory treatment, or significant changes in tax-related estimates or assumptions or changes in law, differ materially from these estimates, the provision for income taxes will be materially impacted.

Balancing and Memorandum Accounts

The purpose of a balancing account is to track the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. Pursuant to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for expense items for which revenue offsets have been authorized.

Balancing accounts are currently being maintained for the following items: purchased water, purchased power and groundwater extraction charges. The amount in the balancing account varies with the seasonality of the water utility business such that, during the summer months when the demand for water is at its peak, the account tends to reflect an under-collection while, during the winter months when demand for water is relatively lower, the account tends to reflect an over-collection. In addition, San Jose Water Company maintains balancing accounts for pensions and other approved activities.

Since the amounts in the balancing accounts must be approved by the CPUC before they can be incorporated into rates, San Jose Water Company does not recognize balancing accounts in its revenue until the CPUC approval occurs. It is typical for the CPUC to incorporate any over-collected and/or under-collected balances in balancing accounts into customer rates at the time rate decisions are made as part of the Company’s general rate case proceedings by assessing temporary surcredits and/or surcharges.

The Company also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency and any revenue requirement impact of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Rate recovery for these memorandum accounts are generally allowed in the next general rate cases.

In the case where the Company’s balancing or memorandum-type accounts that have been authorized by the CPUC reach certain thresholds or have termination dates, the Company can request the CPUC to recognize the amounts in such accounts in customer rates prior to the next regular general rate case proceeding by filing an advice letter. If such amounts are authorized for inclusion into customer rates, revenue would be recognized at the time authorization is received pursuant to ASC Topic 605 and Sub-topic 980-605.

If the balancing or memorandum-type accounts had been recognized in San Jose Water Company’s financial statements, San Jose Water Company’s earnings and retained earnings would be decreased by the amount of surcredits in the case of over-collection or increased by the surcharges in the case of under-collection, less applicable taxes.

Factors Affecting Our Results of Operations

SJW Corp.’s financial condition and results of operations are influenced by a variety of factors including the following:


•	economic utility regulation;


•	weather;


•	water usage per customer;


•	production costs;


•	infrastructure investment;


•	compliance with environmental, health and safety standards; and


•	customer growth.

Economic Utility Regulation

Water Utility Services is generally subject to economic regulation by their respective state commissions overseeing public utilities. Regulatory policies vary from state to state and may change over time. In addition, there may be regulatory lag between the time a capital investment is made, a consumption decrease occurs, or an operating expense increases and when those items are adjusted in utility rates.

San Jose Water Company employs a forward-looking test year and has been authorized to use several mechanisms to mitigate risks faced due to regulatory lag and new and changing legislation, policies and regulation. These include memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency and any revenue requirement impact of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Rate recovery for the balances in these memorandum accounts are generally allowed in the next general rate cases. San Jose Water Company also maintains balancing accounts to track changes in purchased water, purchased power, groundwater extraction charges and pension costs for later recovery.

Regulatory risk is mitigated by use of a forward-looking test year which allows the return on and return of utility plant on a forecasted basis as it is placed in service and interim rate relief is allowed in the event of regulatory lag.

Pursuant to Texas regulation, CLWSC employs a historical test year but requested rates can be placed into effect after sixty days, which may alleviate regulatory lag. Additionally, rate cases may be filed as necessary but not more often than once every 12 months.

Infrastructure Investment

The water utility business is capital-intensive. In 2011 and 2010 , Company-funded capital improvements were $ 62,439 and $ 95,536 , respectively, for additions to, or replacements of, property, plant and equipment for our Water Utility Services. We plan to spend approximately $105,344 in 2012 and $652,500 over the next five years, subject to CPUC and TCEQ approval. Included in these amounts is approximately $73,500 related to upgrades to San Jose Water Company's 40-year old Montevina Water Treatment Plant. SJW Corp. funds these expenditures through a variety of sources, including cash received from operations, funds received from developers as contributions or advances, equity issuances and borrowings. SJW Corp. relies upon a line of credit, which will expire on June 1, 2012, to fund capital expenditures in the short term and has historically issued long-term debt to refinance our short-term debt. In the second quarter of 2011, SJW Corp. sold $50,000 in senior notes to the Prudential Insurance Company of America. While our ability to obtain financing will continue to be a key risk, we believe that based on our 2011 activities, which were at a time of difficult credit markets, we will have access to the external funding sources necessary to implement our on-going capital investment programs in the future.

Compliance with Environmental, Health and Safety Standards

Water Utility Services’ operations are subject to water quality and pollution control regulations issued by the EPA and environmental laws and regulations administered by the respective states and local regulatory agencies. Under the federal Safe Drinking Water Act, Water Utility Services is subject to regulation by the EPA of the quality of water it sells and treatment techniques it uses to make the water potable. The EPA promulgates nationally applicable standards, including maximum contaminant levels for drinking water. Water Utility Services has implemented monitoring activities and installed specific water treatment improvements enabling it to comply with existing maximum contaminant levels and plan for compliance with future drinking water regulations. However, the EPA and the respective state agencies have continuing authority to issue additional regulations under the Safe Drinking Water Act. We incur substantial costs associated with compliance with environmental, health and safety and water quality regulation to which our Water Utility Services is subject.

Environmental, health and safety and water quality regulations are complex and change frequently, and the overall trend has been that they have become more stringent over time. It is possible that new or more stringent environmental standards and water quality regulations could be imposed that will increase Water Utility Services’ water quality compliance costs, hamper Water Utility Services’ available water supplies, and increase future capital expenditures. Future drinking water regulations may require increased monitoring, additional treatment of underground water supplies, fluoridation of all supplies, more stringent performance standards for treatment plants and procedures to further reduce levels of disinfection by-products. In the past, Water Utility Services has generally been able to recover expenses associated with compliance related to environmental, health and safety standards, but future recoveries could be affected by regulatory lag and the corresponding uncertainties surrounding rate recovery.

Production Costs

Water Utility Services’ operations require significant production inputs which result in significant production costs. These costs include power, which is used to operate pumps and other equipment, purchased water and groundwater extraction charges. For 2011 , production costs accounted for approximately 49.9% of our total operating expenses. Price increases associated with these production inputs would adversely impact our results of operations until rate relief is granted.

Customer Growth

Customer growth in our Water Utility Services is driven by (i) organic population growth within our authorized service areas and (ii) the addition of new customers to our regulated customer base by acquiring regulated water systems adjacent to or near our existing service territory. During 2011 , 2010 and 2009 , we had cash outflows of $ 4,040 , $ 3,504 and $ 6,436 , respectively, for acquisitions and water rights which will allow us to expand our regulated customer base. Before entering new regulated markets, we evaluate the regulatory environment to ensure that we will have the opportunity to achieve an appropriate rate of return on our investment while maintaining our high standards for quality, reliability and compliance with environmental, health and safety and water quality standards.

Change in Water Usage Per Customer

Fluctuations in customer demand for water could be due to seasonality, restrictions of use, weather or lifestyle choices, all of which could affect Water Utility Services’ results of operations. San Jose Water Company residential usage increased 2.3% and decreased 4.9% from 2010 to 2011 and 2009 to 2010, respectively. San Jose Water Company business usage decreased 1.2% and 3.2% from 2010 to 2011 and 2009 to 2010, respectively. In addition, 2011 residential and business usage was 11.6% and 6.8%, respectively, lower than the amount authorized in our 2010-2012 general rate case. Residential and business usage in 2010 was 13.5% and 5.6%, respectively, lower than the amount authorized in our 2010-2012 general rate case. CLWSC residential and business usage increased 23.2% and decreased 6.8% from 2010 to 2011 and 2009 to 2010, respectively.

Water Supply

Our ability to meet the existing and future water demands of our customers depends on an adequate supply of water. Drought, governmental restrictions, overuse of sources of water, the protection of threatened species or habitats or other factors may limit the availability of ground and surface water. Also, customer usage of water is affected by weather conditions, in particular during the warmer months. Our water systems experience higher demand in the summer due to the warmer temperatures and increased usage by customers for outside irrigation of lawns and landscaping. In drought seasons, if customers are encouraged and required to conserve water due to a shortage of water supply or restriction of use, revenue tends to be lower. Similarly, in unusually wet seasons, water supply tends to be higher and customer demand tends to be lower, again resulting in lower revenues. These restrictions may be imposed at a regional or state level and may affect our service areas regardless of our readiness to meet unrestricted customer demands. San Jose Water Company believes that its various sources of water supply, which consists of groundwater from wells, surface water from watershed run-off and diversion, and imported water purchased from the SCVWD, will be sufficient to meet customer demand for 2012. In addition, San Jose Water Company actively works with the SCVWD to address California’s long-term water supply challenges by continuing to educate customers on responsible water use practices and to conduct long-range water supply planning. CLWSC believes that they will be able to meet current and future customer water demands with their water supply which consists of groundwater from wells and purchased raw water from the GBRA.

Results of Operations

Water sales are seasonal in nature and influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Revenue is generally higher in the warm, dry summer months when water usage and sales are greater and lower in the winter months when cooler temperatures and increased rainfall curtail water usage and sales.

The Company reclassified $10,702 and $10,074 of costs incurred to support the delivery of water from other operating expense to production costs and $8,050 and $7,787 from other operating expense to administrative and general related to customer service costs for the years ended December 31, 2010 and 2009, respectively. In addition, the Company reclassified income taxes out of operating expense and changed the presentation of other (expense) income items from a net to gross basis. These reclassifications were made to conform to the current year presentation and impacted total production costs, total operating expense and operating income. The Company believes these reclassifications provide investors with better operating information and are in line with current practices of other water companies and CPUC guidance.

Overview

SJW Corp.’s consolidated net income for the year ended December 31, 2011 was $ 20,878 , compared to $ 24,406 for the same period in 2010 . This represents a decrease of $3,528, or 14%, from 2010 . The decrease is primarily attributable to the gain on sale of California Water Service Group stock that occurred in 2010 that did not reoccur in 2011, offset by our 2010 real estate impairment loss. This decrease was further offset by higher revenues in 2011 due to cumulative rate increases and the recognition of our MCRAM account recovery for $5,740. In addition, the Company experienced an increase in depreciation expense due to increased depreciable assets and an increase in interest expense due to the issuance of a $50,000 SJW Corp. senior note in June 2011 and a full year of interest expense on our California Pollution Control Financing Authority revenue bonds which were issued in June 2010.

SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P., which operates commercial building rentals, are collectively referred to as “Real Estate Services.”

Operating Revenue

Operating revenue by segment was as follows:

Operating Revenue



	2011		2010	2009
Water Utility Services	$	234,346	212,078	212,270
Real Estate Services	4,609		3,560	3,827
	$	238,955	215,638	216,097

The change in consolidated operating revenues was due to the following factors:



	2011 vs. 2010 Increase/(decrease)				2010 vs. 2009 Increase/(decrease)
Water Utility Services:
Consumption changes	$	3,429	2	%	$	(5,504	)	(3	)%
New customers increase	706		—		354			—
Rate increases	12,393		6	%	4,958			3	%
MCRAM	5,740		3	%	—			—	%
Real Estate Services	1,049		—		(267		)	—	%
	$	23,317	11	%	$	(459	)	—	%

2011 vs. 2010

The revenue increase consists of $22,268 from Water Utility Services and $1,049 from Real Estate Services.

The revenue increase for Water Utility Services primarily consists of increases in rates approved by the CPUC for an escalation increase in our 2010-2012 general rate case and an increase intended to offset the SCVWD's increases to purchased water and groundwater extraction charges as well as a rate increase for CLWSC. The Company also recognized $5,740 in revenue related to a Mandatory Conservation Revenue Adjustment Memorandum account upon CPUC approval in December 2011. In addition, customer consumption increased primarily due to a drier 2011 compared to 2010.

The revenue increase for Real Estate Services was primarily the result of increased rental income from our Tennessee property. The tenant has leased the office building for the full year in 2011, compared to only three months in 2010.

2010 vs. 2009

The revenue decrease consists of $192 from Water Utility Services and $267 from Real Estate Services.

The revenue decrease for Water Utility Services is primarily the result of a decrease in consumption due to a wetter 2010 compared to 2009, offset by increases in rates approved by the CPUC in the 2010-2012 general rate case.

The revenue decrease for Real Estate Services was primarily the result of lower rental income from our Tennessee properties and SJW Land Company’s 70% limited partnership interest in 444 West Santa Clara Street. The former tenant which

leased SJW Land Company’s office and distribution buildings in Knoxville, Tennessee under triple net leases had paid through May 2009. The new tenant had leased only a portion of the office building beginning in the fourth quarter of 2010. The international real estate firm that occupies the building in which SJW Land Company has a 70% limited partnership interest renegotiated the lease terms during 2010 which lowered the monthly rental payments but extended the term an additional seven years.

Water Utility Services’ Operating Revenue and Customer Counts

The following tables present operating revenues and number of customers by customer group of Water Utility Services:

Operating Revenue by Customer Group



	2011		2010	2009
Residential and business	$	216,747	195,431	195,762
Industrial	1,086		1,031	924
Public authorities	10,008		9,306	9,968
Others	6,505		6,310	5,616
	$	234,346	212,078	212,270

During the fourth quarter of 2011 the CPUC approved the revenue related to the MCRAM. Included in the amounts above is $5,344 in residential and business, $23 in industrial, $333 in public authorities and $40 in others related to the MCRAM.

Number of Customers



	2011	2010	2009
Residential and business	230,622	229,933	229,496
Industrial	79	75	77
Public authorities	1,419	1,447	1,496
Others	3,880	3,845	3,831
	236,000	235,300	234,900

Operating Expense

Operating expense by segment was as follows:

Operating Expense



	2011		2010	2009
Water Utility Services	$	179,293	168,115	170,093
Real Estate Services	3,240		6,858	4,372
All Other	2,031		2,590	1,952
	$	184,564	177,563	176,417

The change in consolidated operating expenses was due to the following factors:



	2011 vs. 2010 Increase/(decrease)					2010 vs. 2009 Increase/(decrease)
Water production costs:
Change in surface water supply	$	265		—	%	$	(2,964	)	(2	)%
Change in usage and new customers	743			1	%	(4,624		)	(2	)%
Purchased water and groundwater extraction charge and energy price increase	3,743			2	%	1,282			—	%
Total water production costs	4,751			3	%	(6,306		)	(4	)%
Administrative and general	952			—	%	2,739			2	%
Maintenance	1,019			1	%	(930		)	(1	)%
Property taxes and other non-income taxes	1,014			1	%	(642		)	—	%
Depreciation and amortization	2,862			1	%	2,688			2	%
Impairment on real estate investment	(3,597		)	(2	)%	3,597			2	%
	$	7,001		4	%	$	1,146		1	%

Sources of Water Supply

San Jose Water Company's water supply consists of groundwater from wells, surface water from watershed run-off and diversion, reclaimed water and imported water purchased from the SCVWD under the terms of a master contract with SCVWD expiring in 2051.

CLWSC's water supply consists of groundwater from wells and purchased raw water from the GBRA. CLWSC has long-term agreements with GBRA, which expire in 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with 6,700 acre-feet of water per year from Canyon Lake and other sources at prices to be adjusted periodically by GBRA.

Surface water is the least expensive source of water. The following table presents the change in sources of water supply for Water Utility Services:



	Source of Water Supply
	2011		2010	2009
	(million gallons) (MG)
Purchased water	27,549		22,767	23,588
Groundwater	13,029		17,125	20,277
Surface water	5,059		5,203	3,613
Reclaimed water	396		398	422
	46,033		45,493	47,900
Average water production cost per MG	$	2,000	1,919	1,954

Water production in 2011 for Water Utility Services increased 540 million gallons from 2010. Water production in 2010 decreased 2,407 million gallons from 2009. The changes are primarily attributable to changes in consumption by customers and are consistent with the related water production changes.

The contract water rates for San Jose Water Company are determined by SCVWD. These rates are adjusted periodically and coincide with SCVWD’s fiscal year, which ends annually on June 30. The contract water rate for SCVWD’s fiscal years 2012, 2011 and 2010 was $2,053, $1,903 and $1,903 per million gallons, respectively. The contractual cost of the groundwater extraction charge for water pumped from the ground basin was $1,746, $1,596 and $1,596 per million gallons for SCVWD's fiscal years 2012, 2011 and 2010.

Unaccounted-for water for 2011 and 2010 approximated 6.8% and 7.2%, respectively, as a percentage of production. The estimate is based on the results of past experience, the trend and efforts in reducing Water Utility Services’ unaccounted-for water through main replacements and lost water reduction programs.

The various components of operating expenses are discussed below.

Water production costs

2011 vs. 2010

Water production costs increased due to $3,743 in net higher per unit costs paid for purchased water, groundwater extraction and energy charges, an increase in customer usage of $743 and $265 in increased surface water supply costs due to decreased availability of surface water supply in 2011 compared to 2010.

2010 vs. 2009

Water production costs decreased due to a decrease in customer usage of $4,624 and $2,964 in decreased surface water supply costs due to increased availability of surface water supply in 2010 compared to 2009, offset by $1,282 in net higher per unit costs paid for purchased water, groundwater extraction charge and energy.

Administrative and General Expense

Administrative and general expenses include payroll related to administrative and general functions, all employee benefits charged to expense accounts, insurance expenses, legal fees, regulatory utility commissions’ expenses, expenses associated with being a public company, and general corporate expenses.

2011 vs. 2010

Administrative and general expense increased $952 in 2011, or 2%, in comparison to 2010. The increase consisted primarily of: (1) $806 in contracted work primarily due to water conservation efforts related to the recycled water retrofit program, (2) $551 in regulatory fees primarily due to an increase in rate case filings, (3) $511 due to the increased cost of health insurance, (4) $315 due to new hires and salary increases as a result of the three-year collective bargaining agreements reached with our unions in 2010, offset by (5) $806 decrease in pension and retirement expenses, (6) $256 decrease in legal expenses and (7) $169 decrease in miscellaneous expenses. SJW Corp. anticipates an increase in pension and retirement expenses in 2012 primarily due to a decreasing discount rate coupled with the decline in return on pension plan assets. In addition, as a result of the three-year collective bargaining agreements signed in 2010 with the Utility Workers of America, representing the majority of all employees, and the International Union of Operating Engineers, representing certain employees in the engineering department, salaries are expected to increase 2% in 2012 and 3% in 2013 for union workers as well as increases in medical co-pays and dental deductibles.

2010 vs. 2009

Administrative and general expense increased $2,739 in 2010, or 8%, in comparison to 2009. The increase consisted primarily of: (1) $1,797 in pension and retirement expenses, of which approximately $970 was due to San Jose Water Company updating its expected return on plan assets assumption, (2) $465 due to salary increases and new hires, (3) $360 due to the increased cost of health insurance and (4) $117 in miscellaneous expenses. San Jose Water Company updated its discount rate and expected return on pension plan investment assets assumptions in November 2010 to reflect the approved redistribution of investments held between equity and fixed income securities in its pension plan investment portfolio.

Maintenance Expense

Maintenance expense increased $1,019 in 2011, or 8%, in comparison to 2010, and decreased $930 in 2010, or 7%, in comparison to 2009. The increase in 2011 consisted primarily of: (1) $673 increase in contracted work, paving, and materials and supplies as a result of an increase in main leak repairs, (2) $596 due to salary increases and a decrease in time charged to capital projects and (3) $250 decrease in miscellaneous expenses. The decrease in 2010 consisted primarily of: (1) $498 in salaries due to a decrease in overtime and an increase in time charged to capital projects, (2) $415 decrease in contracted work, paving, and materials and supplies as a result of a decrease in main leak repairs and (3) $17 decrease in miscellaneous expenses. In addition, the level of maintenance expense varies with the level of public work projects instituted by local government agencies, weather conditions and the timing and nature of general maintenance as needed for SJW Corp.’s facilities.

Property Taxes and Other Non-income Taxes

Property taxes and other non-income taxes for 2011 and 2010 increased $1,014 and decreased $642, respectively. The increase in 2011 was primarily a result of increased utility plant. The decrease in 2010 was primarily due to a reduction in property taxes for the Tennessee properties.

Depreciation and Amortization

Depreciation and amortization expense increased $2,862 in 2011, or 10%, in comparison to 2010, and increased $2,688 in 2010, or 10%, in comparison to 2009. The increase in both years was due to increases in utility plant.

Impairment on Real Estate Investment

In connection with the execution of an option agreement in 2010, SJW Land Company determined that a change in circumstances had occurred requiring a recoverability test on one of its real estate investments in Tennessee. As a result of the recoverability test and subsequent assessment of fair value, we determined that the property was impaired. SJW Land Company recorded a pre-tax impairment of $3,597 on the real estate investment during the year ended December 31, 2010. No impairments occurred during the same period in 2011 and 2009. Please refer to Note 14, “Impairment of Tennessee Distribution Facility,” of Notes to Consolidated Financial Statements for further information.

Other Income and Expense

Interest expense, including interest on long-term debt and mortgages, increased $1,992, or 11%, in 2011 compared to 2010. In June 2011, SJW Corp. entered into a note agreement with the Prudential Insurance Company of America, pursuant to which the Company sold an aggregate principal amount of $50,000 of its 4.35% senior notes. In addition, San Jose Water Company incurred a full year of interest on its California Pollution Control Financing Authority revenue bonds which were issued in June 2010.

Interest expense, including interest on long-term debt and mortgages, increased $1,713, or 11%, in 2010 compared to 2009. In June 2010, San Jose Water Company entered into a loan agreement with the California Pollution Control Financing Authority, under which the proceeds from the issuance by the California Pollution Control Financing Authority of its 5.10% fixed rate revenue bonds in an aggregate principal amount of $50,000 have been loaned to San Jose Water Company. In addition, San Jose Water Company incurred a full year of interest on Series J and Series K senior notes which were issued in February 2009 and May 2009, respectively.

SJW Corp.’s consolidated weighted-average cost of long-term debt, including the mortgages and the amortization of debt issuance costs was 6.3%, 6.6% and 6.9% for the years ended December 31, 2011 , 2010 and 2009 , respectively.

Provision for Income Taxes

Income tax expense for 2011 was $ 14,566 , compared to $ 16,740 in 2010 . The effective consolidated income tax rates for 2011 , 2010 and 2009 were 41%, 41% and 40%, respectively. Please refer to Note 5, “Income Taxes,” of Notes to Consolidated Financial Statements for the reconciliation of actual to expected income tax expense.

Other Comprehensive Loss

Other comprehensive loss in 2011 was $85, net of tax, due to a decrease in the market value of the investment in California Water Service Group. Other comprehensive loss in 2010 was $10,828, net of tax, due to a change in the market value of the investment in California Water Service Group of $44,000 and the recognition of unrealized holding gains of $10,784 that was reclassified out of accumulated other comprehensive income due to the sale of California Water Service Group stock during 2010.

Liquidity and Capital Resources

Water Utility Services’ business derives the majority of its revenue directly from residential and business customers. Water Utility Services bills the majority of its customers’ on a bi-monthly basis. Payments from customers are impacted by the general economic conditions in the areas where SJW Corp. operates. The current United States recession and related high unemployment rate may have the effect of increasing payment delinquencies. However, such delinquencies are mitigated by service interruptions due to non-payment and the related customer policies. Because California is a high cost of living state, it is possible that Californians may migrate to other states with a lower cost of living during this recessionary environment. As of December 31, 2011 , the change in the number of customers has been minimal and write-offs for uncollectible accounts have been less than 1% of total revenue, unchanged from the prior year. Management believes it can continue to collect its accounts receivable balances at its historical collection rate.

Funds collected from Water Utility Services’ customers are used to pay for water production costs, in addition to all costs associated with general operations. Funds are also generated by the issuance of new debt. From these amounts, SJW Corp. paid cash dividends of approximately $ 12,823 and funded its working capital in 2011 . The remaining amount is available to fund SJW Corp.’s capital expenditure program.

The condition of the capital and credit markets or the strength of financial institutions could impact SJW Corp.’s ability to draw on its line of credit or issue long-term debt. In addition, government policies, the state of the credit markets and other factors could result in increased interest rates, which would increase SJW Corp.’s cost of capital. While our ability to obtain financing will continue to be a key risk, we believe that based on our 2011 activities, which were at a time of difficult credit markets, we will have access to the external funding sources necessary to implement our on-going capital investment programs in the future.

In 2011 , the common dividends declared and paid on SJW Corp.’s common stock represented 61% of net income for 2011 . Dividends have been paid on SJW Corp.’s and its predecessor’s common stock for 273 consecutive quarters and the annual dividend amount has increased in each of the last 44 years. While historically SJW Corp. has paid dividends equal to approximately 50% to 60% of its net income, SJW Corp. cannot guarantee that trend will continue in the future.

Cash Flow from Operations

In 2011, SJW Corp. generated cash flow from operations of approximately $64,200, compared to $37,200 in 2010 and $54,500 in 2009. Cash flow from operations is primarily generated by net income from its revenue producing activities, adjusted for non-cash expenses for depreciation and amortization, deferred income taxes, gains on the sale of assets, impairment on real estate investments and changes in working capital. Cash flow from operations increased in 2011 by approximately $27,000. This increase was caused by a combination of the following factors: (1) net income adjusted for non-cash items and gains and losses from asset activity increased $23,000, (2) net collection of taxes receivable was $7,400 more than the prior year, (3) net payments for postretirement benefits drove an increase of $2,500, (4) other current asset representing the MCRAM unbilled revenue drove a decrease of 5,700 and (5) general working capital changes caused a $200 decrease. The decrease in 2010 of cash flow from operations of approximately $17,300 was affected by a combination of the following factors: (1) net income adjusted for non-cash items and gains and losses from asset activity decreased $1,700, (2) general working capital changes caused a $4,400 increase, (3) an increase in rates which resulted in a higher accounts receivable balance drove a decrease in working capital of $3,900, (4) taxes paid were $10,500 greater than the prior year and (5) net payments for postretirement benefits drove a decrease of $5,600.

Cash Flow from Investing Activities

In 2011, SJW Corp. used approximately $62,400 of cash for Company funded capital expenditures, $7,300 for developer funded capital expenditures, and $4,000 for acquisitions which primarily related to the accelerated closing of our asset acquisition from Bexar Metropolitan Water District and rights to provide water service. In 2010, SJW Corp. used approximately $95,500 of cash for Company funded capital expenditures, $4,400 for developer funded capital expenditures, $4,500 for real estate investments which relate to the leasehold improvement additions for the office building located in Knoxville, Tennessee, and $3,500 for acquisitions. These uses were offset by proceeds of $33,900 related to the sale of California Water Service Group stock. In 2009, SJW Corp. used approximately $55,800 of cash for Company funded capital expenditures, $1,500 for developer funded capital expenditures and $6,400 for acquisitions, of which $5,000 was paid for the acquisition of the Bulverde service area and rights to provide water service and $1,400 was paid for the acquisition of certain assets from Bexar Metropolitan Water District.

Water Utility Services budgeted capital expenditures for 2012, exclusive of capital expenditures financed by customer contributions and advances is as follows:



	Budgeted Capital Expenditures 2012
Water treatment	$	4,668	4	%
Source of supply	6,051		6	%
Reservoirs and tanks	13,182		13	%
Pump stations and equipment	6,875		7	%
Equipment and other	10,563		10	%
Recycled water	5,118		5	%
Distribution system	58,887		55	%
	$	105,344	100	%

The 2012 capital expenditures budget is concentrated in main replacements. Included in the distribution system budgeted capital expenditures of $58,887 is approximately $30,817 that is planned to be spent to replace Water Utility Services’ pipes and mains. Historically, amounts have been carried over from previous years’ budgets. Approximately $8,929 has been carried over from prior years’ budgets and is included in the table above. In addition, $11,506 is included in the table above related to reinvestment in utility plant associated with CPUC Resolution L-411A.

Water Utility Services’ capital expenditures are incurred in connection with normal upgrading and expansion of existing facilities and to comply with environmental regulations. Over the next five years, Water Utility Services expects to incur approximately $579,000 in capital expenditures, which includes replacement of pipes and mains, and maintaining water

systems. This amount is subject to CPUC and TCEQ approval. In addition, San Jose Water Company requested the CPUC's approval of upgrades to San Jose Water Company's 40-year old Montevina Water Treatment Plant. The total planned project cost is $73,500 over the next four years. A decision on the application is expected in the second half of 2012. Capital expenditures have the effect of increasing utility plant on which Water Utility Services earns a return. Water Utility Services actual capital expenditures may vary from their projections due to changes in the expected demand for services, weather patterns, actions by governmental agencies and general economic conditions. Total additions to utility plant normally exceed Company-financed additions as a result of new facilities construction funded with advances from developers and contributions in aid of construction.

A substantial portion of San Jose Water Company’s distribution system was constructed during the period from 1945 to 1980. Expenditure levels for renewal and modernization of this part of the system will grow at an increasing rate as these components reach the end of their useful lives. In most cases, replacement cost will significantly exceed the original installation cost of the retired assets due to increases in the costs of goods and services and increased regulation.

Cash Flow from Financing Activities

Net cash provided by financing activities for the year ended December 31, 2011 decreased by approximately $1,400 from the same period in the prior year. As the Company has increased its capital expenditures, funding for these has been made possible, in part, from additional long-term borrowings which are used to pay down borrowings from the line of credit. Long-term borrowings during the year ended December 31, 2011, consists of $50,000 in SJW Corp. unsecured senior notes. During the prior year, San Jose Water Company issued $50,000 in California Pollution Control Financing Authority Revenue Bonds. SJW Corp.’s cash management policy is to issue long-term debt to pay down borrowings on the lines of credit. As such, when long-term borrowings are high, borrowings on the line of credit tend to be low and when long-term borrowings are low, borrowings on the line of credit tend to be high.

SJW Corp., SJW Land Company and San Jose Water Company have lines of credit totaling $85,000, of which $3,000 has been set aside as security for its SDWSRF loans as of December 31, 2011 . Our drawdowns on our lines of credit are restricted by our funded debt not exceeding a percent of total capitalization as defined in our debt covenants. SJW Corp. expects to periodically draw down on the lines of credit as dictated by our funding needs and subsequently repay such borrowings with cash from operations and issuance of long-term debt or equity. See also “Sources of Capital—Water Utility Services” below.

Sources of Capital

Water Utility Services

San Jose Water Company’s ability to finance future construction programs and sustain dividend payments depends on its ability to maintain or increase internally generated funds and attract external financing. The level of future earnings and the related cash flow from operations is dependent, in large part, upon the timing and outcome of regulatory proceedings.

San Jose Water Company’s financing activity is designed to achieve a capital structure consistent with regulatory guidelines of approximately 48% debt and 52% equity. The average borrowing rate of San Jose Water Company’s long-term debt is 6.6%.

Company internally-generated funds, which include allowances for depreciation and deferred income taxes, have provided approximately 50% of the cash requirements for San Jose Water Company’s capital expenditure. Funding for its future capital expenditure program is expected to be provided primarily through internally-generated funds, the issuance of new long-term debt, the issuance of equity or the sale of all or part of our investment in California Water Service Group, all of which will be consistent with the regulator’s guidelines.

On June 30, 2011, SJW Corp. entered into a note agreement with the Prudential Insurance Company of America (the “Purchaser”), pursuant to which the Company sold on the same date an aggregate principal amount of $50,000 of its 4.35% senior notes to the Purchaser. The senior notes are unsecured obligations of the Company, due on June 30, 2021. Interest is payable semi-annually in arrears on December 30th and June 30th of each year. SJW Corp.’s unsecured senior note agreement has terms and conditions that restrict SJW Corp. from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW Corp. becomes less than $175,000 plus 30% of Water Utility Services cumulative net income, since June 30, 2011. As of December 31, 2011 , SJW Corp. is not restricted from issuing future indebtedness as a result of these terms and conditions.

San Jose Water Company has outstanding $200,000 of unsecured senior notes as of December 31, 2011 . The senior note agreements of San Jose Water Company generally have terms and conditions that restrict the Company from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2011 , San

Jose Water Company’s funded debt was 53% of total capitalization and the net income available for interest charges was 328% of interest charges. As of December 31, 2011 , San Jose Water Company is not restricted from issuing future indebtedness as a result of these terms and conditions.

San Jose Water Company has outstanding $50,000 in California Pollution Control Financing Authority revenue bonds as of December 31, 2011 . The loan agreement for the revenue bonds contains affirmative and negative covenants customary for a loan agreement relating to revenue bonds, including, among other things, complying with certain disclosure obligations and covenants relating to the tax exempt status of the interest on the bonds and limitations and prohibitions relating to the transfer of the projects funded by the loan proceeds and the assignment of the loan agreement. As of December 31, 2011 , San Jose Water Company was in compliance with all such covenants.

San Jose Water Company has received two loans in the aggregate principal amount of $3,076 from the California Department of Water Resources’ Safe Drinking Water State Revolving Fund (“SDWSRF”) for the retrofit of San Jose Water Company’s water treatment plants. Terms of these loans require semi-annual payments over 20 years of principal and interest at an annual rate of 2.39% and 2.60% . The outstanding balance as of December 31, 2011 is $2,464 .

SJWTX, Inc., doing business as Canyon Lake Water Service Company, has outstanding $15,000 of senior notes as of December 31, 2011 . The senior note agreement has terms and conditions that restrict the Company from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar month period would be less than 175% of interest charges. As of December 31, 2011 , SJWTX, Inc. is in compliance with all terms and conditions. In addition, SJW Corp. is a guarantor of SJWTX, Inc.’s senior note which has terms and conditions that restrict SJW Corp. from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW Corp. becomes less than $125,000 plus 30% of Water Utility Services cumulative net income, since December 31, 2005. As of December 31, 2011 , SJW Corp. is not restricted from issuing future indebtedness as a result of these terms and conditions.

Real Estate Services

As of December 31, 2011 , SJW Land Company’s outstanding balance of mortgages related to acquiring properties in various states totaled $23,974. The mortgages have various payments, interest and amortization terms and all are secured by the respective properties. The average borrowing rate of SJW Land Company mortgages is 5.79%.

As of December 31, 2011 , SJW Land Company also had an outstanding mortgage loan in the amount of $3,248 borrowed by its subsidiary, 444 West Santa Clara Street, L.P. The mortgage loan was refinanced in March 2011. The new loan required a cash call from the partnership of approximately $500, of which SJW Land Company contributed 70%, or approximately $350. Monthly payments are being made in accordance with a 20-year amortization schedule at a fixed interest rate of 5.68%, with a balloon payment required in 2021. The mortgage loan is secured by the partnership’s real property and is non-recourse to SJW Land Company.

SJW Corp. and its Subsidiaries

SJW Corp. and its subsidiaries consolidated long-term debt was 57% of total capitalization as of December 31, 2011 . Management believes that SJW Corp. is capable of obtaining future long-term capital to fund regulated and nonregulated growth opportunities and capital expenditure requirements.

As of December 31, 2011 , SJW Corp. and its subsidiaries had unsecured bank lines of credit, allowing aggregate short-term borrowings of up to $85,000, of which $10,000 was available to SJW Corp. and SJW Land Company under a single line of credit and $75,000 was available to San Jose Water Company under another line of credit. $3,000 under the San Jose Water Company line of credit is set aside as security for its SDWSRF loans. At December 31, 2011 , SJW Corp. and its subsidiaries had available unused short-term bank lines of credit of $82,000. These lines of credit bear interest at variable rates. They will expire on June 1, 2012. The cost of borrowing on SJW Corp.’s short-term credit facilities averaged 1.64% for 2011 . SJW Corp., on a consolidated basis, has the following affirmative covenants on its unsecured bank line of credit: (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges. As of December 31, 2011 , SJW Corp’s funded debt was 57% of total capitalization and the net income available for interest charges was 280% of interest charges. As such, as of December 31, 2011 , SJW Corp. was in compliance with all covenants. San Jose Water Company’s unsecured bank line of credit has the following affirmative covenants: (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges. As of December 31, 2011 , San Jose Water Company was in compliance with all covenants.

On February 3, 2011, SJW Corp. filed with the SEC a Form S-3 to provide stockholders the opportunity to participate in SJW Corp.’s Dividend Reinvestment and Stock Purchase Plan. Such filing became effective on April 19, 2011.

Off-Balance Sheet Arrangement/Contractual Obligations

SJW Corp. has no significant contractual obligations not fully recorded on its Consolidated Balance Sheet or not fully disclosed in the Notes to Consolidated Financial Statements.

SJW Corp.’s contractual obligation and commitments as of December 31, 2011 are as follows:



	Total		Contractual Obligations Due in
	Total		Less than 1 Year	1-3 Years	3-5 Years	After 5 Years
Senior notes, Water Utility Services	$	215,000	—	—	—	215,000
SJW Land Company mortgages	23,974		607	8,362	3,645	11,360
Advances for construction, San Jose Water Company	67,333		2,245	4,487	4,487	56,114
SDWSRF loan, San Jose Water Company	2,464		136	283	297	1,748
444 West Santa Clara Street, L.P. long-term debt (non-recourse to SJW Land Company)	3,248		95	206	231	2,716
California Pollution Control Financing Authority Revenue Bonds, San Jose Water Company	50,000		—	—	—	50,000
Senior note, SJW Corp.	50,000		—	—	—	50,000
Total contractual cash obligation	$	412,019	3,083	13,338	8,660	386,938
Total interest on contractual obligations	$	367,540	21,215	41,597	41,213	263,515

In addition to the obligations listed above, San Jose Water Company issued two standby letters of credit with a commercial bank in the amounts of $2,000 and $1,000 in support of its $1,546 and $918 SDWSRF loans which were funded in 2005 and 2008. The letters of credit automatically renew for one year each December and the amount of coverage can be reduced as the loan principal balance decreases.

In regards to uncertain tax positions, we are unable to predict the timing of tax settlements as tax audits can involve complex issues and the resolution of those issues may span multiple years, particularly if subject to negotiation or litigation.

San Jose Water Company purchases water from SCVWD under terms of a master contract expiring in 2051. Delivery schedules for purchased water are based on a contract year beginning July 1, and are negotiated every three years under terms of the master contract with SCVWD. For the years ended December 31, 2011, 2010 and 2009, San Jose Water Company purchased from SCVWD 21,900 million gallons ($43,500), 21,200 million gallons ($40,300) and 22,100 million gallons ($42,100), respectively, of contract water. Based on current prices and estimated deliveries, San Jose Water Company expects to purchase from SCVWD a minimum of 90% of the delivery schedule, or 20,700 million gallons ($42,500) of water at the current contract water rate of $2,053 per million gallons in the year ending December 31, 2012. Additionally, San Jose Water Company purchases non-contract water from SCVWD on an “as needed” basis if the water supply is available. The contract water rates for San Jose Water Company are determined by SCVWD. These rates are adjusted periodically and coincide with SCVWD’s fiscal year, which ends annually on June 30. The contract water rate for SCVWD’s fiscal years 2012, 2011 and 2010 was $2,053, $1,903 and $1,903 per million gallons, respectively.

San Jose Water Company also pumps water from the local groundwater basin. There are no delivery schedules or contractual obligations associated with the purchase of groundwater. SCVWD determines the groundwater extraction charge and it is applied on a per unit basis. In addition to the SCVWD groundwater extraction charge, San Jose Water Company also incurs power costs to pump the groundwater from the basin.

San Jose Water Company sponsors a noncontributory defined benefit pension plan and provides health care and life insurance benefits for retired employees. In 2011 , San Jose Water Company contributed $7,469 and $567 to the pension plan and other post retirement benefit plan, respectively. In 2012, San Jose Water Company expects to make required and discretionary cash contributions of up to $10,300 to the pension plan and other post retirement benefit plan. The amount of required contributions for years thereafter is not actuarially determinable.

San Jose Water Company’s other benefit obligations include employees’ and directors’ postretirement contracts, an Executive Supplemental Retirement Plan and a Special Deferral Election Plan. Under these benefit plans, San Jose Water Company is committed to pay approximately $390 annually to former officers and directors. Future payments may fluctuate depending on the life span of the retirees and as current officers and executives retire.

CLWSC purchases water from GBRA under terms of agreements expiring in 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with 6,700 acre-feet per year of water supply from GBRA. The water rate may be adjusted by GBRA at any time, provided they give CLWSC a 60 day written notice on the proposed adjustment.

444 West Santa Clara Street, L.P.

SJW Land Company owns a 70% limited partnership interest in 444 West Santa Clara Street, L.P., a real estate limited partnership. A real estate development firm, which is partially owned by the Chairman of the Board of SJW Corp., owns the remaining 30% limited partnership interest. A commercial building was constructed on the property of 444 West Santa Clara Street, L.P. and is leased to an international real estate firm. The lease expires in August 2019. SJW Land Company consolidates its limited partnership interest in 444 West Santa Clara Street, L.P. as a variable interest entity within the scope of ASC Topic 810.

Impact of Recent Accounting Pronouncements

In May 2011, the FASB amended its guidance, to converge fair value measurement and disclosure guidance about fair value measurement under U.S. GAAP with International Financial Reporting Standards. The amendment changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendment to result in a change in the application of the requirements in the current authoritative guidance. The amendment becomes effective prospectively for our interim reporting period ending March 31, 2012. Early application is not permitted. We do not expect the amendment to have a material impact on the Company's financial position, results of operations or cash flows.

In December 2011, the FASB issued Accounting Standards Update 2011-12 that defers the effective date of the requirement to present separate line items on the income statement for reclassification adjustments of items out of accumulated other comprehensive income into net income. The deferral is temporary until the Board reconsiders the operational concerns and needs of financial statement users. The Board has not yet established a timeline for its reconsideration. The Company is currently in compliance with existing requirements, therefore, deferral of the new guidance is not expected to have a material impact on the Company's financial position, results of operations or cash flows.


Item 7A.	Quantitative and Qualitative Disclosures About Market Risk

SJW Corp. is subject to market risks in the normal course of business, including changes in interest rates, pension plan asset values and equity prices. The exposure to changes in interest rates can result from the issuance of debt and short-term funds obtained through the Company’s variable rate lines of credit. SJW Corp. also owns 385,120 shares of common stock of California Water Service Group as of December 31, 2011 , which is listed on the New York Stock Exchange, and is therefore exposed to the risk of fluctuations and changes in equity prices.

SJW Corp. has no derivative financial instruments, financial instruments with significant off-balance sheet risks, or financial instruments with concentrations of credit risk. There is no material sensitivity to changes in market rates and prices.


Item 8.	Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Shareholders and Board of Directors

SJW Corp.:

We have audited the accompanying consolidated balance sheets of SJW Corp. and subsidiaries (the Company) as of December 31, 2011 and 2010, and the related consolidated statements of income and comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2011. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule. We also have audited SJW Corp.’s internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of SJW Corp. is responsible for these consolidated financial statements and financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of SJW Corp. and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. In our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also in our opinion, SJW Corp. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the COSO.

/s/ KPMG LLP

Santa Clara, California

February 29, 2012

SJW Corp. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)



	December 31,
	2011		2010
Assets
Utility plant:
Land	$	8,852	8,579
Depreciable plant and equipment	1,070,016		1,004,689
Construction in progress	18,527		10,103
Intangible assets	14,732		13,538
	1,112,127		1,036,909
Less accumulated depreciation and amortization	355,914		322,102
	756,213		714,807
Real estate investment	89,099		88,943
Less accumulated depreciation and amortization	10,557		8,854
	78,542		80,089
Current assets:
Cash and cash equivalents	26,734		1,730
Accounts receivable:
Customers, net of allowances for uncollectible accounts of $225 in 2011 and $235 in 2010	12,541		12,491
Income tax	5,248		7,634
Other	746		993
Accrued unbilled utility revenue	15,318		12,717
Materials and supplies	991		989
Prepaid expenses	1,598		1,473
Other current asset	5,739		—
	68,915		38,027
Other assets:
Investment in California Water Service Group	7,032		7,177
Unamortized debt issuance, broker and reacquisition costs	4,865		4,308
Regulatory assets, net	119,248		87,721
Other	3,995		3,233
	135,140		102,439
	$	1,038,810	935,362

See Accompanying Notes to Consolidated Financial Statements.

SJW Corp. and Subsidiaries

CONSOLIDATED BALANCE SHEETS (Continued)

(in thousands, except share and per share data)



	December 31,
	2011		2010
Capitalization and Liabilities
Capitalization:
Shareholders’ equity:
Common stock, $0.521 par value; authorized 36,000,000 shares; issued and outstanding 18,592,827 shares in 2011 and 18,551,540 shares in 2010	$	9,684	9,662
Additional paid-in capital	24,552		23,443
Retained earnings	227,494		219,568
Accumulated other comprehensive income	2,274		2,359
Total shareholders’ equity	264,004		255,032
Long-term debt, less current portion	343,848		295,704
	607,852		550,736
Current liabilities:
Line of credit	—		4,000
Current portion of long-term debt	838		1,133
Accrued groundwater extraction charges and purchased water	5,789		4,359
Purchased power	423		495
Accounts payable	7,417		5,487
Accrued interest	5,376		5,244
Accrued property taxes and other non-income taxes	1,298		1,288
Accrued payroll	2,744		2,720
Other current liabilities	4,403		4,429
	28,288		29,155
Deferred income taxes	133,541		106,406
Unamortized investment tax credits	1,495		1,555
Advances for construction	67,333		68,352
Contributions in aid of construction	123,335		121,803
Deferred revenue	1,070		1,100
Postretirement benefit plans	68,855		50,213
Other noncurrent liabilities	7,041		6,042
Commitments and contingencies	—		—
	$	1,038,810	935,362

See Accompanying Notes to Consolidated Financial Statements.

SJW Corp. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Years ended December 31 (in thousands, except share and per share data)



	2011			2010		2009
Operating revenue	$	238,955		215,638		216,097
Operating expense:
Production Costs:
Purchased water	54,317			43,557		45,317
Power	5,394			6,429		6,582
Groundwater extraction charges	20,997			26,614		31,635
Other production costs	11,345			10,702		10,074
Total production costs	92,053			87,302		93,608
Administrative and general	39,136			38,184		35,445
Maintenance	13,261			12,242		13,172
Property taxes and other non-income taxes	8,921			7,907		8,549
Depreciation and amortization	31,193			28,331		25,643
Impairment on real estate investment	—			3,597		—
Total operating expense	184,564			177,563		176,417
Operating income	54,391			38,075		39,680
Other (expense) income:
Interest on long-term debt	(17,799		)	(15,676	)	(13,996	)
Mortgage and other interest expense	(1,876		)	(2,007	)	(1,974	)
Loss on sale of utility property	(23		)	—		—
Gain on sale of California Water Service Group stock	—			18,966		—
Dividend income	238			1,185		1,298
Other, net	513			603		443
Income before income taxes	35,444			41,146		25,451
Provision for income taxes	14,566			16,740		10,280
Net income	$	20,878		24,406		15,171
Other comprehensive loss:
Unrealized loss on investment, net of taxes of $59 in 2011, $30 in 2010 and $4,334 in 2009	(85		)	(44	)	(6,236	)
Reclassification adjustment for gain realized on investment, net of tax of $7,494 in 2010	—			(10,784	)	—
Comprehensive income	$	20,793		13,578		8,935
Earnings per share
—Basic	$	1.12		1.32		0.82
—Diluted	$	1.11		1.30		0.81
Weighted average shares outstanding
—Basic	18,581,762			18,531,458		18,486,536
—Diluted	18,794,066			18,742,315		18,680,458

See Accompanying Notes to Consolidated Financial Statements.

SJW Corp. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except share and per share data)



	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Shareholders’ Equity
	Number of Shares	Amount	Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Shareholders’ Equity
Balances, December 31, 2008	18,452,447	9,611	20,548		204,744		19,423		254,326
Net income	—	—	—		15,171		—		15,171
Unrealized loss on investment, net of tax effect of $4,334	—	—	—		—		(6,236	)	(6,236	)
Share-based compensation	—	—	897		(122	)	—		775
Exercise of stock options and similar instruments	22,481	11	102		—		—		113
Employee stock purchase plan	24,674	13	499		—		—		512
Adjustment to equity interest in CLWSC	—	—	—		297		—		297
Dividends paid ($0.66 per share)	—	—	—		(12,202	)	—		(12,202	)
Balances, December 31, 2009	18,499,602	9,635	22,046		207,888		13,187		252,756
Net income	—	—	—		24,406		—		24,406
Unrealized loss on investment, net of tax effect of $30	—	—	—		—		(44	)	(44	)
Reclassification adjustment for gain realized on investment, net of tax effect of $7,494	—	—	—		—		(10,784	)	(10,784	)
Share-based compensation	—	—	812		(123	)	—		689
Exercise of stock options and similar instruments	26,078	14	86		—		—		100
Employee stock purchase plan	25,860	13	499		—		—		512
Dividends paid ($0.68 per share)	—	—	—		(12,603	)	—		(12,603	)
Balances, December 31, 2010	18,551,540	9,662	23,443		219,568		2,359		255,032
Net income	—	—	—		20,878		—		20,878
Unrealized loss on investment, net of tax effect of $59	—	—	—		—		(85	)	(85	)
Share-based compensation	—	—	651		(129	)	—		522
Exercise of stock options and similar instruments	13,896	7	(91	)	—		—		(84	)
Employee stock purchase plan	25,712	14	511		—		—		525
Dividend reinvestment and stock purchase plan	1,679	1	38		—		—		39
Dividends paid ($0.69 per share)	—	—	—		(12,823	)	—		(12,823	)
Balances, December 31, 2011	18,592,827	9,684	24,552		227,494		2,274		264,004

See Accompanying Notes to Consolidated Financial Statements.

SJW Corp. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31 (in thousands)



	2011			2010		2009
Operating activities:
Net income	$	20,878		24,406		15,171
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32,709			29,756		27,017
Deferred income taxes	16,458			8,077		6,305
Share-based compensation	651			812		897
Gain on sale of California Water Service Group stock	—			(18,966	)	—
Impairment of real estate investment	—			3,597		—
Loss on sale of utility property	23			—		—
Changes in operating assets and liabilities:
Accounts receivable and accrued unbilled utility revenue	(2,470		)	(2,197	)	1,670
Accounts payable, purchased power and other current liabilities	(133		)	887		(464	)
Accrued groundwater extraction charges and purchased water	1,430			(137	)	(761	)
Tax receivable and accrued taxes	(1,102		)	(8,528	)	2,011
Accrued interest	132			265		413
Accrued payroll	49			316		(962	)
Prepaid expenses and materials and supplies	(127		)	128		(365	)
Postretirement benefits	(37		)	(2,566	)	3,034
Other current asset	(5,740		)	—		—
Other noncurrent assets and noncurrent liabilities	1,855			1,166		398
Other changes, net	(372		)	151		182
Net cash provided by operating activities	64,204			37,167		54,546
Investing activities:
Additions to utility plant:
Company-funded	(62,439		)	(95,536	)	(55,803	)
Contributions in aid of construction	(7,311		)	(4,364	)	(1,457	)
Additions to real estate investment	(156		)	(4,540	)	—
Cost to retire utility plant, net of salvage	(1,816		)	(757	)	(459	)
Payments for business/asset acquisition and water rights	(4,040		)	(3,504	)	(6,436	)
Proceeds from sale of California Water Service Group stock	—			33,938		—
Proceeds from sale of utility property	43			—		—
Net cash used in investing activities	(75,719		)	(74,763	)	(64,155	)
Financing activities:
Borrowings from line of credit	17,600			62,300		14,100
Repayments of line of credit	(21,600		)	(64,100	)	(26,700	)
Long-term borrowings	50,000			50,000		30,000
Repayments of long-term borrowings	(1,094		)	(790	)	(749	)
Debt issuance costs	(87		)	(856	)	—
Dividends paid	(12,823		)	(12,603	)	(12,202	)
Exercise of stock options and similar instruments	564			692		551
Tax benefits realized from share options exercised	7			41		74
Receipts of advances and contributions in aid of construction	6,149			5,428		4,846
Refunds of advances for construction	(2,197		)	(2,202	)	(2,301	)
Net cash provided by financing activities	36,519			37,910		7,619
Net change in cash and cash equivalents	25,004			314		(1,990	)
Cash and cash equivalents, beginning of year	1,730			1,416		3,406
Cash and cash equivalents, end of year	$	26,734		1,730		1,416
Cash paid (received) during the year for:
Interest	$	20,307		18,070		15,609
Income taxes	$	(2,930	)	15,326		2,255
Supplemental disclosure of non-cash activities:
(Decrease) increase in accrued payables	$	1,971		(1,389	)	1,142
Utility property installed by developers	$	567		341		1,457
Obligations (relieved) incurred related to acquisition of certain water service assets	$	(726	)	—		1,389

See Accompanying Notes to Consolidated Financial Statements.

SJW CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2011 , 2010 and 2009

(Dollars in thousands, except share data)


Note 1.	Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the accounts of SJW Corp., its wholly owned subsidiaries, and two entities in which SJW Corp. is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

SJW Corp.’s principal subsidiary, San Jose Water Company, is a regulated California water utility providing water service to the greater metropolitan San Jose area. San Jose Water Company’s accounting policies comply with the applicable uniform system of accounts prescribed by the CPUC and conform to generally accepted accounting principles for rate-regulated public utilities. Approximately 93% of San Jose Water Company’s revenues are derived from the sale of water to residential and business customers.

SJWTX, Inc., a wholly owned subsidiary of SJW Corp., was incorporated in the State of Texas in 2005. SJWTX, Inc. is doing business as Canyon Lake Water Service Company. On May 31, 2006, CLWSC purchased substantially all the assets of Canyon Lake Water Supply Corporation. CLWSC is a public utility in the business of providing water service to approximately 10,000 connections that serve approximately 36,000 people. CLWSC’s service area comprises more than 243 square miles in western Comal County and southern Blanco County in the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation. The water supply corporation has been determined to be a variable interest entity within the scope of ASC Topic 810 with SJWTX, Inc. as the primary beneficiary, and as a result, it has been consolidated with SJWTX, Inc.

SJW Land Company owns commercial properties, several undeveloped real estate properties, and warehouse properties in the states of California, Florida, Connecticut, Arizona, Texas and Tennessee and holds a 70% limited partnership interest in 444 West Santa Clara Street, L.P., which is accounted for under ASC Topic 810 (see Note 9).

Texas Water Alliance Limited (“TWA”), a wholly owned subsidiary of SJW Corp., is undertaking activities that are necessary to develop a water supply project in Texas.

Reclassifications

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Utility Plant

The cost of additions, replacements and betterments to utility plant is capitalized. The amount of interest capitalized in 2011, 2010 and 2009 was $699, $555 and $300, respectively. Construction in progress was $ 18,527 and $ 10,103 at December 31, 2011 and 2010 , respectively.

The major components of depreciable plant and equipment as of December 31, 2011 and 2010 are as follows:



	2011		2010
Equipment	$	202,181	192,202
Transmission and distribution	811,332		758,353
Office buildings and other structures	56,503		54,134
Total depreciable plant and equipment	$	1,070,016	1,004,689

Depreciation is computed using the straight-line method over the estimated service lives of the assets, ranging from 5 to 75 years. The estimated service lives of depreciable plant and equipment are as follows:



	Useful Lives
Equipment	5 to 35 years
Transmission and distribution plant	35 to 75 years
Office buildings and other structures	7 to 50 years

For the years 2011 , 2010 and 2009 , depreciation expense was approximately 3.5%, 3.5% and 3.4%, respectively, of the beginning of the year balance of depreciable plant for all years. A portion of depreciation expense is allocated to administrative and general expense. For the years 2011 , 2010 and 2009 , the amounts allocated to administrative and general expense were $1,516, $1,425 and $1,374, respectively. Depreciation expense for utility plant for the years ended December 31, 2011 , 2010 and 2009 was $29,141 $26,331 and $23,655, respectively. The cost of utility plant retired, including retirement costs (less salvage), is charged to accumulated depreciation and no gain or loss is recognized.

Utility Plant Intangible Assets

All intangible assets are recorded at cost and are amortized using the straight-line method over the legal or estimated economic life of the asset, ranging from 5 to 70 years (see Note 6).

Real Estate Investments

Real estate investments are recorded at cost and consist primarily of land and buildings. Net gains and losses from the sale of real estate investments are recorded as a component of other (expense) income in the Consolidated Statements of Income and Comprehensive Income. Nonutility property in Water Utility Services is also classified in real estate investments and not separately disclosed on the balance sheet based on the immateriality of the amount. Nonutility property is property that is neither used nor useful in providing water utility services to customers and is excluded from the rate base for rate-setting purposes. San Jose Water Company recognizes gain/loss on disposition of nonutility property in accordance with CPUC Code Section 790. There is no depreciation associated with nonutility property as it is all land. The major components of real estate investments as of December 31, 2011 and 2010 are as follows:



	2011		2010
Land	$	21,312	21,312
Buildings and improvements	67,487		67,281
Intangibles	300		350
Total real estate investment	$	89,099	88,943

Depreciation on real estate investments is computed using the straight-line method over the estimated useful lives of the assets, ranging from 5 to 39 years.

Land, buildings and improvements of $87,704 and $87,559 as of December 31, 2011 and 2010 , respectively, represent assets that are leased or available for lease. The following schedule shows the future minimum rental payments to be received from third parties under operating leases that have remaining noncancelable lease terms in excess of one year as of December 31, 2011 :



Year ending December 31:	Rental Revenue
2012	$	4,541
2013	4,564
2014	4,588
2015	4,664
2016	4,780
Thereafter	27,688

Impairment of Long-Lived Assets

In accordance with the requirements of FASB ASC Topic 360—“Property, Plant and Equipment,” the long-lived assets of SJW Corp. are reviewed for impairment when changes in circumstances or events require adjustments to the carrying values of the assets. When such changes in circumstances or events occur, the Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. To the extent an impairment exists, the asset is written down to its estimated fair value with a corresponding charge to operations in the period in which the impairment is identified. Long-lived assets consist primarily of utility plant in service, real estate investments, intangible assets, and regulatory assets. See Note 14 for a discussion of a recorded impairment as of December 31, 2010 .

Financial Instruments

The carrying amount of SJW Corp.’s cash and cash equivalents, accounts receivable and accounts payable approximates fair value as of the dates presented because of the short-term maturity of the instruments. The fair value of long-term debt is discussed in Note 4, pension plan assets in Note 10, investment in California Water Service Group in Note 13 and fair value measurement related to certain long-lived assets in Note 14.

Other Current Asset

Other current asset represents the remaining amount to be billed to customers in the next twelve months associated with the Mandatory Conservation Revenue Adjustment Memorandum account. San Jose Water Company filed an advice letter on June 2, 2010, with the CPUC requesting authorization to increase revenues by $5,740, or approximately 2.61%, of authorized revenue at the time of the filing. This increase was intended to recover the accumulated balance in the MCRAM, which was in effect from August 3, 2009 to May 1, 2010. The CPUC-authorized MCRAM was intended to track the revenue impact of mandatory conservation upon San Jose Water Company’s quantity revenue resulting from mandatory conservation instituted by the SCVWD. As directed by the CPUC’s Division of Water and Audits, the MCRAM would be recovered via a surcharge on the existing quantity rate for a period of 12 months following final approval by the CPUC. Resolution W-4885 authorizing the recovery was adopted by the Commission on December 15, 2011. The surcharge to begin recovering the balance was subsequently implemented on December 27, 2011. All revenue was recognized immediately upon final approval by the CPUC.

Investment in California Water Service Group

SJW Corp.’s investment in California Water Service Group is accounted for under FASB ASC Topic 320—“Investments—Debt and Equity Securities,” as an available-for-sale marketable security. The investment is recorded on the Consolidated Balance Sheet at its quoted market price with the change in unrealized gain or loss reported, net of tax, as a component of other comprehensive income (loss) (see Note 13).

Other Assets

Debt reacquisition costs are amortized over the term of the related debt. Debt issuance costs are amortized to interest expense in the Consolidated Statements of Income and Comprehensive Income.

Regulatory Assets and Liabilities

will be recognized in the ratemaking process in a period different from when the costs and credits are incurred. Accounting for such costs and credits is based on management's judgment and prior historical ratemaking practices, and it occurs when management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility Services through the ratemaking process. The regulatory assets and liabilities recorded by Water Utility Services, in particular, San Jose Water Company, primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting purposes and the postretirement pension benefits, medical costs, accrued benefits for vacation and asset retirement obligations that have not been passed through in rates. The Company expects to recover the income tax temporary differences over average plant depreciation lives of 5 to 75 years.

Rate-regulated enterprises are required to charge a regulatory asset to earnings if and when that asset no longer meets the criteria for being recorded as a regulatory asset. San Jose Water Company continually evaluates the recoverability of regulatory assets by assessing whether the amortization of the balance over the remaining life can be recovered through expected and undiscounted future cash flows.

Regulatory liabilities reflect temporary differences provided at higher than the current tax rate, which will flow through to future ratepayers, and unamortized investment tax credits.

Regulatory assets and liabilities are comprised of the following as of December 31:



	2011		2010
Regulatory assets:
Income tax temporary differences	$	9,295	9,705
Postretirement pensions and other medical benefits	105,988		74,096
Other	4,676		4,631
Total regulatory assets	$	119,959	88,432
Regulatory liabilities:
Future tax benefits to ratepayers	$	711	711
Net regulatory assets included in Consolidated Balance Sheets	$	119,248	87,721

Regulatory Rate Filings

On January 3, 2012, San Jose Water Company filed a General Rate Case application requesting rate increases of $47,400, or 21.51% in 2013, $13,000, or 4.87% in 2014 and $34,800, or 12.59% in 2015. This General Rate Case filing also includes several “special requests”, including but not limited to: (1) recovery of the under-collected balance of $2,600 in the balancing account, (2) disbursement of the over-collected balance of $700 accrued in various memorandum accounts and (3) implementation of a full revenue decoupling Water Revenue Adjustment Mechanism and associated Modified Cost Balancing Account. A final decision in this proceeding is likely to occur in the second half of 2012 with new rates becoming effective at the beginning of 2013. If a decision is not reached by the end of 2012, the CPUC has mechanisms in place that will allow San Jose Water Company to request interim rates, effective January 1, 2013, until a decision is adopted.

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the effect of temporary differences between financial and tax reporting. Deferred tax assets and liabilities are measured using current tax rates in effect. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

To the extent permitted by the CPUC, investment tax credits resulting from utility plant additions are deferred and amortized over the estimated useful lives of the related property.

Advances for Construction and Contributions in Aid of Construction

In California, advances for construction received after 1981 are refunded ratably over 40 years. Estimated refunds for the next five years and thereafter are shown below:



	Estimated Refunds
2012	$	2,245
2013	2,243
2014	2,244
2015	2,243
2016	2,244
Thereafter	56,114

Contributions in aid of construction represent funds received from developers that are not refundable under applicable regulations. Depreciation applicable to utility plant constructed with these contributions is charged to contributions in aid of construction.

Customer advances and contributions in aid of construction received subsequent to 1986 and prior to June 12, 1996 generally must be included in federal taxable income. Taxes paid relating to advances and contributions are recorded as deferred tax assets for financial reporting purposes and are amortized over 40 years for advances, and over the tax depreciable life of the related asset for contributions. Receipts subsequent to June 12, 1996 are generally exempt from federal taxable income, unless specifically prescribed under treasury regulations.

Advances and contributions received subsequent to 1991 and prior to 1997 are included in state taxable income.

Asset Retirement Obligation

SJW Corp.’s asset retirement obligation is recorded as a liability included in other non-current liabilities. It reflects principally the retirement costs of wells and other anticipated clean-up costs, which by law, must be remediated upon retirement. Retirement costs have historically been recovered through rates at the time of retirement. As a result, the liability is offset by a regulatory asset. For the years ended December 31, 2011 and 2010 , the asset retirement obligation is as follows:



	2011			2010
Retirement obligation	$	4,296		4,253
Discount rate	6		%	6	%
Present value, recorded as a liability	1,481			1,430
Deferred tax	1,019			984
Regulatory asset	$	2,500		2,414

Revenue

SJW Corp. recognizes its regulated and nonregulated revenue when services have been rendered, in accordance with ASC Topic 605.

Revenues also include a surcharge collected from regulated customers that is paid to the CPUC. This surcharge is recorded both in operating revenues and administrative and general expenses. For the years ended December 31, 2011 , 2010 and 2009 , the surcharge was $3,272, $3,046 and $3,303 respectively.

Revenue from San Jose Water Company’s nonregulated utility operations, maintenance agreements or antenna leases are recognized when services have been rendered. Nonregulated operating revenue in 2011 , 2010 and 2009 includes $4,935,

$4,646 and $4,563, respectively, from the operation of the City of Cupertino municipal water system. Revenue from SJW Land Company is recognized ratably over the term of the leases.

Balancing and Memorandum Accounts

For California, the CPUC has established a balancing account mechanism for the purpose of tracking the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. Since the amounts in the balancing accounts must be approved by the CPUC before they can be incorporated into rates, San Jose Water Company does not recognize balancing accounts in its revenue until the CPUC authorizes a change in customers’ rates related to any balancing account. As of December 31, 2011, the total balance in San Jose Water Company’s balancing accounts, including interest, was an under-collection of $3,686.

Share-Based Payment

SJW Corp. utilizes the Black-Scholes option-pricing model, which requires the use of subjective assumptions, to compute the fair value of options at the grant date, the fair value of options granted and as the basis for the share-based compensation for financial reporting purposes. In addition, SJW Corp. estimates forfeitures for share-based awards that are not expected to vest.

SJW Corp. utilizes the Monte Carlo valuation model, which requires the use of subjective assumptions, to compute the fair value of market performance-vesting restricted stock units.

The compensation cost charged to income is recognized on a straight-line basis over the requisite service period, which is the vesting period.

Maintenance Expense

Planned major maintenance projects are charged to expense as incurred. SJW Corp. does not accrue maintenance costs prior to periods in which they are incurred.

Earnings per Share

Basic earnings per share is calculated using income available to common shareholders, divided by the weighted average number of shares outstanding during the year. The two-class method in computing basic earnings per share is not used because the number of participating securities as defined in FASB ASC Topic 260—“Earnings Per Share” is not significant. (The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security.) Diluted earnings per share is calculated using income available to common shareholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with stock options, deferred restricted common stock awards under SJW Corp.’s Long-Term Incentive Plan and shares potentially issuable under the Employee Stock Purchase Plan. Anti-dilutive restricted common stock units and stock options of 4,243, 3,201 and 5,851 as of December 31, 2011 , 2010 and 2009 , respectively, were excluded from the dilutive earnings per share calculation.


Note 2.	Capitalization

SJW Corp. is authorized to issue 36,000,000 shares of common stock of $0.521 par value per share. At December 31, 2011 and 2010 , 18,592,827 and 18,551,540, respectively, shares of common stock were issued and outstanding.

At December 31, 2011 and 2010 , 176,407 shares of preferred stock of $25 par value per share were authorized and none were outstanding.


Note 3.	Lines of Credit

On July 1, 2011, SJW Corp., SJW Land Company and Wells Fargo Bank, National Association entered into an amendment to their credit agreement dated May 27, 2010, as amended on December 16, 2010, to decrease the maximum principal amount available under the line of credit from $45,000 to $10,000 and to modify the covenants regarding SJW Corp.'s funded debt to capitalization ratio and earnings before interest and taxes coverage ratio.

On July 1, 2011, San Jose Water Company and Wells Fargo Bank, National Association entered into an amendment to

their credit agreement dated May 27, 2010, as amended December 16, 2010, to increase the maximum principal amount available under the line of credit from $50,000 to $75,000 and to modify the earnings before interest and taxes coverage ratio covenant.

As of December 31, 2011 , SJW Corp. and its subsidiaries had unsecured bank lines of credit, allowing aggregate short-term borrowings of up to $85,000. San Jose Water Company issued two standby letters of credit with a commercial bank in the amount of $3,000 in support of its SDWSRF loans which were funded in 2005 and 2008. The letters of credit automatically renew for one year each December unless the issuing bank elects not to renew it, and the amount of coverage can be reduced as the loan principal balance decreases. As of December 31, 2011 , $3,000 under the San Jose Water Company line of credit is set aside as security for its SDWSRF loans. These lines of credit bear interest at variable rates and expire on June 1, 2012. As of December 31, 2011 and 2010 , SJW Corp. has an outstanding balance on the lines of credit of $0 and $4,000 , respectively. Cost of borrowing on the lines of credit averaged 1.64% and 1.98% as of December 31, 2011 and 2010 , respectively.


Note 4.	Long-Term Debt

Long-term debt as of December 31 was as follows:



Description	Due Date	2011		2010
Senior notes, San Jose Water Company:
Series A 8.58%	2022	$	20,000	20,000
Series B 7.37%	2024	30,000		30,000
Series C 9.45%	2020	10,000		10,000
Series D 7.15%	2026	15,000		15,000
Series E 6.81%	2028	15,000		15,000
Series F 7.20%	2031	20,000		20,000
Series G 5.93%	2033	20,000		20,000
Series H 5.71%	2037	20,000		20,000
Series I 5.93%	2037	20,000		20,000
Series J 6.54%	2024	10,000		10,000
Series K 6.75%	2039	20,000		20,000
SJWTX, Inc. Series A 6.27%	2036	15,000		15,000
SJW Corp. Series A 4.35%	2021	50,000		—
Total senior notes		$	265,000	215,000
Mortgage loans 5.61% - 6.09%	2013	7,973		8,252
	2016	3,407		3,495
	2017	12,594		12,802
Bexar Metropolitan Water District obligation 6.50% imputed interest, SJWTX, Inc.	2013	—		1,057
444 West Santa Clara Street, L.P. 5.68% (non-recourse to SJW Land Company)	2021	3,248		3,678
California Pollution Control Financing Authority Revenue Bonds 5.10%, San Jose Water Company	2040	50,000		50,000
SDWSRF loans 2.39% and 2.60%, San Jose Water Company	2027	2,464		2,553
Total debt		$	344,686	296,837
Less: Current portion		838		1,133
Total long-term debt, less current portion		$	343,848	295,704

Senior notes held by institutional investors are unsecured obligations of San Jose Water Company and SJWTX, Inc. and require interest-only payments until maturity. To minimize issuance costs, all of the companies’ debt has historically been placed privately.

The senior note agreements of San Jose Water Company generally have terms and conditions that restrict the Company from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges. As of December 31, 2011 , San Jose Water Company is not restricted from issuing future indebtedness as a result of these terms and conditions.

The senior note agreement of SJWTX, Inc. has terms and conditions that restrict SJWTX, Inc. from issuing additional funded debt if: (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest charges for the trailing 12-calendar month period would be less than 175% of interest charges. As of December 31, 2011 , SJWTX, Inc. is in compliance with all terms and conditions. In addition, SJW Corp. is a guarantor of SJWTX, Inc.’s senior note which has terms and conditions that restrict SJW Corp. from issuing additional funded debt if: (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW Corp. becomes less than $125,000 plus 30% of Water Utility Services cumulative net income, since December 31, 2005. As of December 31, 2011 , SJW Corp. is not restricted from issuing future indebtedness as a result of these terms and conditions.

The mortgage loans, which are the obligations of SJW Land Company, are due in 2013, 2016 and 2017. These loans amortize over 25 years, are secured by four leased properties and carry a fixed interest rate with 120 monthly principal and interest payments. The loan agreements generally restrict the Company from prepayment in the first three years and require submission of periodic financial reports as part of the loan covenants. An amortization schedule of the mortgage loans is as follows:



	Amortization Schedule
Year	Total Payment	Interest	Principal
2012	1,992	1,385	607
2013	9,096	1,086	8,010
2014	1,229	877	352
2015	1,229	856	373
2016	4,034	762	3,272
Thereafter	11,470	110	11,360

In 2009, SJWTX, Inc. became obligated to purchase certain assets from Bexar Metropolitan Water District in a phased-purchase transaction. As a result of this obligation, SJWTX, Inc. recorded a liability totaling $1,472. The phased asset purchase originally required SJWTX, Inc. to complete the acquisition over a 4-year period and to make quarterly payments with an imputed borrowing rate of 6.5%. At the end of the 4-year period, SJWTX, Inc. was to file with the TCEQ for permission to purchase from Bexar Metropolitan Water District four public utility water distribution systems, including 12 well sites, one wastewater system, and associated real and personal property, all located in Comal County, Texas. Following the satisfaction of certain closing conditions, including obtaining TCEQ approval, SJWTX, Inc. was to purchase such additional assets and Bexar Metropolitan Water District’s remaining interest in the assets for approximately $1,243 plus an amount per retail potable water and wastewater customer connection then active in each of the four public utility water distribution systems. In May 2011, the purchase agreement was amended to provide for, among other things, an accelerated closing. In December 2011, the transaction closed and the obligation was settled for approximately $1,800.

444 West Santa Clara Street, L.P., in which SJW Land Company owns a 70% limited partnership interest, has a mortgage loan in the outstanding amount of $3,248 as of December 31, 2011 . The mortgage loan was refinanced in March 2011. The new loan required a cash call from the partnership of approximately $500, of which SJW Land Company contributed 70%, or approximately $350. Monthly payments are being made in accordance with a 20-year amortization schedule at a fixed interest rate of 5.68%, with a balloon payment required in 2021. The mortgage loan is secured by the partnership’s real property and is non-recourse to SJW Land Company. An amortization schedule of the mortgage loan with 444 West Santa Clara Street, L.P. is as follows:



	Amortization Schedule
Year	Total Payment	Interest	Principal
2012	276	181	95
2013	276	176	100
2014	276	170	106
2015	276	164	112
2016	276	157	119
Thereafter	3,311	595	2,716

San Jose Water Company has two loans from the SDWSRF at a rate of 2.39% and 2.60% . The outstanding loan balances as of December 31, 2011 is $2,464 . San Jose Water Company issued standby letters of credit with a commercial bank in the amount of $3,000 in support of these loans. The letters of credit automatically renew for one year each December unless the issuing bank elects not to renew it. The amount of coverage can be reduced as the principal balances decrease. An amortization schedule of the SDWSRF loans is as follows:



	Amortization Schedule
Year	Total Payment	Interest	Principal
2012	196	60	136
2013	196	56	140
2014	196	53	143
2015	196	49	147
2016	196	46	150
Thereafter	1,983	235	1,748

The fair value of long-term debt as of December 31, 2011 and 2010 was approximately $433,873 and $344,105, respectively, and was determined using a discounted cash flow analysis, based on the current rates for similar financial instruments of the same duration and creditworthiness of the Company.


Note 5.	Income Taxes

The components of income tax expense were:



	2011			2010		2009
Current:
Federal	$	(4,894	)	3,738		717
State	3,002			4,925		3,258
Deferred:
Federal	16,560			10,694		7,140
State	(102		)	(2,617	)	(835	)
	$	14,566		16,740		10,280

The following table reconciles income tax expense to the amount computed by applying the federal statutory rate to income before income taxes of $35,444 , $41,146 and $25,451 in 2011 , 2010 and 2009 :



	2011			2010		2009
“Expected” federal income tax	$	12,405		14,026		8,653
Increase (decrease) in taxes attributable to:
State taxes, net of federal income tax benefit	1,934			2,397		1,710
Dividend received deduction	(58		)	(282	)	(309	)
Other items, net	285			599		226
	$	14,566		16,740		10,280

The components of the net deferred tax liability as of December 31 was as follows:



	2011		2010
Deferred tax assets:
Advances and contributions	$	14,954	15,311
Unamortized investment tax credit	805		837
Pensions and postretirement benefits	4,644		4,665
California franchise tax	1,429		774
Net operating loss	2,495		—
Other	1,181		1,053
Total deferred tax assets	$	25,508	22,640
Deferred tax liabilities:
Utility plant	$	96,349	79,532
Pension and postretirement benefits	43,199		30,200
Investment in stock	2,488		2,548
Deferred gain and other-property related	15,287		15,212
Debt reacquisition costs	595		644
Other	1,131		910
Total deferred tax liabilities	$	159,049	129,046
Net deferred tax liabilities	$	133,541	106,406

Management evaluates the realizability of our deferred tax assets based on all available evidence, both positive and negative. The realization of deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods in which the deferred tax assets are expected to reverse. Based on all available evidence, management believes it is more likely than not that SJW Corp. will realize the benefits of these deferred tax assets.

As of December 31, 2011 , the Company has a federal net operating loss carry forward of $7,129, which will expire in fiscal year 2031.

The total amount of unrecognized tax benefits, before the impact of deductions for state taxes, excluding interest and penalties was $1,874 and $1,166 as of December 31, 2011 and 2010 , respectively. The amount of tax benefits, net of any federal benefits for state taxes and inclusive of interest that would impact the effective rate, if recognized, is approximately $61 and $615 as of December 31, 2011 and 2010 , respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



Balance at December 31, 2010	$	1,254
Additions based on tax position related to the current year, including interest	997
Reductions related to tax positions taken in a prior year, including interest	(273		)
Balance at December 31, 2011	$	1,978

SJW Corp.’s policy is to classify interest and penalties associated with unrecognized tax benefits, if any, in tax expense. Accrued interest expense, net of the benefit of tax deductions which would be available on the payment of such interest, is approximately $61 as of December 31, 2011 . SJW Corp. has not accrued any penalties for unrecognized tax benefits.

SJW Corp. anticipates that its unrecognized tax benefits balance will change within the next 12 months following December 31, 2011 due to lapsing statutes of limitations. This change is not expected to be material to the consolidated financial statements. Through December 31, 2011 , since the adoption of FASB ASC Topic 740—“Income Taxes”, a cumulative reduction of $1,247 was recorded to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations.

The Company is currently undergoing an income tax examination by the Internal Revenue Service for its fiscal years 2008 and 2009. While management believes that the Company has adequately provided for all tax positions, amounts asserted by tax authorities could be greater or less than the Company's current position. Accordingly, the Company's provisions on federal tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved. The Company does not expect its unrecognized tax benefits to change materially over the next 12 months.

SJW Corp. files U.S. federal income tax returns and income tax returns in various states. The open tax years for the jurisdictions in which SJW Corp. files are as follows:



Jurisdiction	Years Open
Federal	2008 - 2010
California	2007 - 2010
Arizona	2007 - 2010
Connecticut	2008 - 2010
Florida	2008 - 2010
Tennessee	2008 - 2010
Texas	2007 - 2010


Note 6.	Intangible Assets

Intangible assets consist of a concession fee paid to the City of Cupertino of $6,800 for operating the City of Cupertino municipal water system and other intangibles of $7,932 . Other intangibles consists of $6,533 which was paid for service area and water rights related to our subsidiaries in Texas, $1,040 incurred in conjunction with Santa Clara Valley Water District water contracts related to the operation of San Jose Water Company and $359 in other miscellaneous intangibles. All intangible assets are recorded at cost and are amortized using the straight-line method over the legal or estimated economic life of the asset ranging from 5 to 70 years.

Amortization expense for the intangible assets was $340 for the year ended December 31, 2011 , $335 for the year ended December 31, 2010 and $311 for the year ended December 31, 2009 . Amortization expense for 2012, 2013, 2014, 2015 and 2016 is anticipated to be $340 per year.

The costs of intangible assets as of December 31, 2011 and 2010 are as follows:



	2011		2010
Concession fees	$	6,800	6,800
Other intangibles	7,932		6,738
Intangible assets	14,732		13,538
Less: Accumulated amortization
Concession fees	3,876		3,604
Other intangibles	643		575
Net intangible assets	$	10,213	9,359


Note 7.	Commitments

In 1997, San Jose Water Company entered into a 25-year contract agreement with the City of Cupertino to operate the City’s municipal water system. San Jose Water Company paid a one-time, up-front concession fee of $6,800 to the City of Cupertino which is amortized over the contract term. Under the terms of the contract agreement, San Jose Water Company assumed responsibility for all maintenance, operating and capital costs, while receiving all payments for water service. Water service rates are subject to approval by the Cupertino City Council.

CLWSC has long-term contracts with the GBRA. The terms of the agreements expire in 2040, 2044 and 2050. The agreements, which are take-or-pay contracts, provide CLWSC with 6,700 acre-feet per year of water supply from Canyon Lake and other sources. The water rate may be adjusted by GBRA at any time, provided they give CLWSC a 60 day written notice on the proposed adjustment.

As of December 31, 2011 , San Jose Water Company had 347 employees, of whom 105 were executive, administrative or supervisory personnel, and of whom 242 were members of unions. On November 23, 2010, San Jose Water Company reached a three-year collective bargaining agreement with the Utility Workers of America, representing the majority of all employees, and the International Union of Operating Engineers, representing certain employees in the engineering department, covering the period from January 1, 2011 through December 31, 2013. The agreements include a 2% wage increase in 2011, 2% in 2012 and 3% in 2013 for union workers as well as increases in medical co-pays and dental deductibles.


Note 8.	Contingencies


Note 9.	Partnership Interest

In September 1999, SJW Land Company formed 444 West Santa Clara Street, L.P., a limited partnership, with a real estate development firm whereby SJW Land Company contributed real property in exchange for a 70% limited partnership interest. The real estate development firm is partially owned by an individual who also serves as the Chairman of the Board of SJW Corp. A commercial building was constructed on the partnership property and is leased to an unrelated international real estate firm under a long-term lease expiring in August 2019.

The consolidated financial statements of SJW Corp. at December 31, 2011 and 2010 include the operating results of 444

West Santa Clara Street, L.P. Intercompany balances and transactions have been eliminated. Results of operations and balances of the non-controlling interest are not material to the consolidated financial statements.


Note 10.	Benefit Plans

Pension Plans

San Jose Water Company sponsors a noncontributory defined benefit pension plan (the “Pension Plan”) for its employees. Employees hired before March 31, 2008 are entitled to receive benefits under the Pension Plan using a benefit formula based on the employee’s three highest years of compensation (whether or not consecutive). For employees hired on or after March 31, 2008, benefits under the Pension Plan are determined using a cash balance formula based upon compensation credits and interest credits for each employee.

The Pension Plan is administered by a committee that is composed of an equal number of Company and union representatives (the “Committee”). The Committee has retained an investment consultant, presently Wells Fargo Advisors, LLC, to assist it with, among other things, asset allocation strategy, investment policy advice, performance monitoring, and manager due diligence. Investment decisions have been delegated by the Committee to investment managers. Investment guidelines provided in the Investment Policy Statement require that at least 25% of plan assets be invested in fixed income securities. As of December 31, 2011 , the plan assets consist of approximately 42% bonds, 6% cash equivalents, and 52% equities. Furthermore, equities are to be diversified by industry groups and selected to achieve a balance of long-term growth and income combined with a goal of long-term preservation of capital. Except as provided for in the prospectus of any co-mingled investments, investment managers may not invest in commodities and futures contracts, private placements, options, letter stock, speculative securities, nor may they hold more than 5% of assets of any one private corporation. Except as provided for in the prospectus of any co-mingled investments, fixed income assets may only be invested in bonds, commercial paper, and money market funds with acceptable ratings by Moody’s or Standard & Poor’s as defined by the Investment Policy Statement. The investment manager performance is reviewed regularly by the investment consultant who provides quarterly reports to the Committee for review.

Plan assets are marked to market at each measurement date, resulting in unrealized actuarial gains or losses. Unrealized actuarial gains and losses on pension assets are amortized over the expected future working lifetime of participants of 12.37 years for actuarial expense calculation purposes. Market gains in 2010 and 2009 decreased pension expense by approximately $303 and $709 in 2011 and 2010, respectively.

Since the Pension Plan’s inception in 1984, the plan has achieved an 11.1% return on its investments while the applicable benchmark was 10.3% for the same period. The applicable benchmark is a weighted-average of returns for those benchmarks shown in the table below. For the 2011 fiscal year, the investment managers, following the required investment guidelines, achieved a 0.4% return on their investments, while the applicable benchmark was 0.9% for the same period.

Generally, it is expected of the investment managers that the performance of the assets held in the Pension Plan, computed on a total annual rate of return basis, should meet or exceed specific performance standards over a three-to-five-year period and/or full market cycle. These standards include a specific absolute and risk-adjusted performance standards over a three-to-five-year period and/or full market cycle.

San Jose Water Company calculates the market-related value of our defined benefit pension plan assets, which is defined under FASB ASC Topic 715—“Compensation—Retirement Benefits” as a balance used to calculate the expected return on plan assets, using fair value. Fair value for San Jose Water Company is based on quoted prices in active markets for identical assets and significant observable inputs.

San Jose Water Company has an Executive Supplemental Retirement Plan, which is a defined benefit plan under which San Jose Water Company will pay supplemental pension benefits to key executives in addition to the amounts received under the retirement plan. The annual cost of this plan has been included in the determination of the net periodic benefit cost shown below. The plan, which is unfunded, had a projected benefit obligation of $11,726 and $10,432 as of December 31, 2011 and 2010 , respectively, and net periodic pension cost of $1,241, $1,209 and $808 for 2011 , 2010 and 2009 , respectively.

Other Postretirement Benefits

In addition to providing pension and savings benefits, San Jose Water Company provides health care and life insurance benefits for retired employees. The plan is a flat dollar plan which is unaffected by variations in health care costs.

Flexible Spending Plan

Effective February 1, 2004, San Jose Water Company established a Flexible Spending Account for its employees for the purpose of providing eligible employees with the opportunity to choose from among the fringe benefits available under the plan. The flexible spending plan is intended to qualify as a cafeteria plan under the provisions of the Internal Revenue Code Section 125. The flexible spending plan allows employees to save pre-tax income in a Health Care Spending Account (“HCSA”) and/or a Dependent Care Spending Account (“DCSA”) to help defray the cost of out-of-pocket medical and dependent care expenses. The annual maximum limit under the HCSA and DCSA plans is $2.5 and $5, respectively.

Medicare

In December 2003, federal legislation was passed reforming Medicare and introducing the Medicare Part D prescription drug program. San Jose Water Company determined that the new legislation has no impact on its postretirement benefit plan under ASC Topic 715. Because San Jose Water Company has a union contract with its employees whereby San Jose Water Company provides medical benefits at a fixed cost to its retirees, San Jose Water Company’s medical costs for postretirement benefits would not be affected by cost fluctuations resulting from the Medicare Part D prescription drug program.

Deferral Plan

San Jose Water Company sponsors a salary deferral plan that allows employees to defer and contribute a portion of their earnings to the plan. Contributions, not to exceed set limits, are matched by San Jose Water Company. San Jose Water Company contributions were $1,001, $962 and $974 in 2011 , 2010 and 2009 , respectively.

Special Deferral Election Plan and Deferral Election Program

SJW Corp. maintains a Special Deferral Election Plan allowing certain executives and a Deferral Election Program allowing certain directors to defer a portion of their earnings each year and to realize an investment return on those funds during the deferral period. Executives and directors have to make an election on the distribution and payment method of the deferrals before services are rendered. San Jose Water Company records the investment return on the deferred funds as compensation expense once the deferrals are made. Executives and directors had deferred $2,306, $2,103 and $1,890 to the plan as of December 31, 2011 , 2010 and 2009 , respectively. San Jose Water Company recorded an investment return of $117, $98 and $76 as of December 31, 2011 , 2010 and 2009 , respectively, on the deferred funds as compensation expense.

Assumptions Utilized on Actuarial Calculations

Net periodic cost for the defined benefit plans and other postretirement benefits was calculated using the following weighted-average assumptions:



	Pension Benefits				Other Benefits
	2011	2010		2009	2011	2010	2009
	%	%		%	%	%	%
Discount rate	5.48	5.92/5.51	*	6.06	5.40	5.83	6.20
Expected return on plan assets	7.00	8.00/7.00	*	8.00	7.00	8.00	8.00
Rate of compensation increase	4.00	4.00		4.00	N/A	N/A	N/A

* San Jose Water Company updated its expected return on plan assets assumption in November 2010 to reflect the approved redistribution of investments held between equity and fixed income securities in the plan asset portfolio. As a result, San Jose Water Company remeasured the plan assets and benefit obligation as of that date and the discount rate applied was updated accordingly.

The expected rate of return on plan assets was determined based on a review of historical returns, both for this Pension Plan and for medium- to large-sized defined benefit pension funds with similar asset allocations. This review generated separate expected returns for each asset class. These expected future returns were then blended based on this Pension Plan's target asset allocation.

Benefit obligations for the defined benefit plans and other postretirement benefits were calculated using the following weighted-average assumptions as of December 31:



	Pension Benefits		Other Benefits
	2011	2010	2011	2010
	%	%	%	%
Discount rate	4.34	5.48	4.25	5.40
Rate of compensation increase	4.00	4.00	N/A	N/A

San Jose Water Company utilized each plan's projected benefit stream in conjunction with the Citigroup Pension Discount Curve in determining the discount rate used in calculating the pension and other postretirement benefits liabilities at the measurement date.

Net Periodic Pension Costs

Net periodic costs for the defined benefit plans and other postretirement benefits for the years ended December 31 was as follows:



	Pension Benefits							Other Benefits
	2011			2010		2009		2011			2010		2009
Components of net periodic benefit cost
Service cost	$	3,516		3,171		2,500		$	273		229		213
Interest cost	5,313			5,231		4,548		467			433		403
Expected return on assets	(4,289		)	(3,599	)	(2,945	)	(129		)	(130	)	(115	)
Amortization of transition obligation	—			—		—		57			57		57
Amortization of prior service cost	450			470		449		197			197		197
Recognized actuarial loss	2,147			2,129		1,903		96			48		8
Net periodic benefit cost	$	7,137		7,402		6,455		$	961		834		763

Reconciliation of Funded Status

For the defined benefit plans and other postretirement benefits, the benefit obligation is the projected benefit obligation and the accumulated benefit obligation, respectively. The actuarial present value of benefit obligations and the funded status of San Jose Water Company’s defined benefit pension and other postretirement plans as of December 31 were as follows:



	Pension Benefits					Other Benefits
	2011			2010		2011			2010
Change in benefit obligation
Benefit obligation at beginning of year	$	102,783		87,145		$	8,731		7,531
Service cost	3,516			3,171		273			229
Interest cost	5,313			5,231		467			433
Amendments	—			167		—			—
Actuarial loss	15,732			10,000		1,641			821
Benefits paid	(3,440		)	(2,931	)	(316		)	(283	)
Benefit obligation at end of year	$	123,904		102,783		$	10,796		8,731
Change in plan assets
Fair value of assets at beginning of year	$	58,761		45,056		$	1,993		1,597
Actual return on plan assets	(27		)	5,610		(20		)	135
Employer contributions	7,469			11,026		567			499
Benefits paid	(3,440		)	(2,931	)	(219		)	(238	)
Fair value of plan assets at end of year	62,763			58,761		2,321			1,993
Funded status at end of year	$	(61,141	)	(44,022	)	$	(8,475	)	(6,738	)

The amounts recognized on the balance sheet as of December 31 were as follows:



	Pension Benefits			Other Benefits
	2011		2010	2011		2010
Current liabilities	$	705	494	$	56	53
Noncurrent liabilities	60,436		43,528	8,419		6,685
	$	61,141	44,022	$	8,475	6,738

Upon implementation of ASC Topic 715, San Jose Water Company recorded a regulatory asset, including a gross-up for taxes, on the projected benefit obligation of the postretirement benefit plans. The following table summarizes the change in regulatory assets:



	2011			2010
Funded status of obligation	$	69,616		50,760
Accrued benefit cost	(6,827		)	(6,864	)
Amount to be recovered in future rates	62,789			43,896
Tax gross-up	43,199			30,200
Regulatory asset	$	105,988		74,096

The estimated amortization for the year ended December 31, 2012 is as follows:



	Pension Benefits		Other Benefits
Amortization of prior service cost	$	414	197
Amortization of loss	3,642		199
Total	$	4,056	396

Plan Assets

Plan assets for the years ended December 31 were as follows:



	Pension Benefits					Other Benefits
	2011			2010		2011			2010
Fair value of assets at end of year:
Debt securities	$	26,271		21,333		$	938		785
	42		%	36	%	40		%	39	%
Equity securities	32,653			24,985		921			828
	52		%	43	%	40		%	42	%
Cash and equivalents	3,839			12,443		462			380
	6		%	21	%	20		%	19	%
Total	$	62,763		58,761		$	2,321		1,993

The following tables summarize the fair values of plan assets by major categories as of December 31, 2011 and 2010 :



				Fair Value Measurements at December 31, 2011
Asset Category	Benchmark	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents		$	4,301	$	4,301	$	—	$	—
Actively Managed (a):
U.S. Large Cap Equity	Russell 1000 Growth	3,716		3,716		—		—
U.S. Small Mid Cap Equity	Russell 2500	1,814		1,814		—		—
U.S. Small Cap Equity	Russell 2000	6,303		6,303
Emerging Market Equity	MSCI Emerging Markets Net	3,547		3,547
Non-U.S. Large Cap Equity	MSCI EAFE Net	4,271		4,271		—		—
Passive Index Fund ETFs (b):
U.S. Large Cap Equity	S&P 500/Russell 1000 Growth	5,525		5,525		—		—
U.S. Mid Cap Equity	Russell Mid Cap	69		69
U.S. Small Mid Cap Equity	Russell 2500	617		617		—		—
U.S. Small Cap Equity	Russell 2000	143		143		—		—
Non-U.S. Large Cap Equity	MSCI EAFE Net	4,356		4,356		—		—
REIT	Nareit—Equity REITS	3,213		—		3,213		—
Fixed Income (c)	(c)	27,209		—		27,209		—
Total		$	65,084	$	34,662	$	30,422	$	—

___________________________________

The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in a diversified array of fixed income securities to provide preservation of capital plus generation of income.


(a)	Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.


(b)	Open-ended fund of securities with the goal to track the stated benchmark performance.


(c)	Actively managed portfolio of fixed income securities with the goal to exceed the Barclays Capital Aggregate Bond, Barclays Capital 1-3 Year Government/Credit, Citigroup World Government Bond Index, and Merrill Lynch High Yield Master II performance.



				Fair Value Measurements at December 31, 2010
Asset Category	Benchmark	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents		$	12,823	$	12,823	$	—	$	—
Actively Managed (a):
U.S. Large Cap Equity	Russell 1000 Growth	3,822		3,822		—		—
U.S. Small Mid Cap Equity	Russell 2500	1,850		1,850		—		—
U.S. Small Cap Equity	Russell 2000	5,961		5,961		—		—
Emerging Market Equity	MSCI Emerging Markets Net	62		62		—		—
Non-U.S. Large Cap Equity	MSCI EAFE Net	101		101		—		—
Passive Index Fund ETFs (b):
U.S. Large Cap Equity	S&P 500/Russell 1000 Growth	5,597		5,597		—		—
U.S. Mid Cap Equity	Russell Mid Cap	63		63		—		—
U.S. Small Mid Cap Equity	Russell 2500	625		625		—		—
U.S. Small Cap Equity	Russell 2000	128		128		—		—
Non-U.S. Large Cap Equity	MSCI EAFE Net	4,617		4,617		—		—
REIT	Nareit—Equity REITS	2,987		—		2,987		—
Fixed Income (c)	(c)	22,118		—		22,118		—
Total		$	60,754	$	35,649	$	25,105	$	—

___________________________________


(a)	Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.


(b)	Open-ended fund of securities with the goal to track the stated benchmark performance.


(c)	Actively managed portfolio of fixed income securities with the goal to exceed the Barclays Capital Aggregate Bond, Barclays Capital 1-3 Year Government/Credit, and Merrill Lynch High Yield Master II performance.

In 2012, San Jose Water Company expects to make required and discretionary cash contributions of up to $10,300 to the pension plan and other post retirement benefit plan.

Benefits expected to be paid in the next five years and in the aggregate for the five years thereafter are:



	Pension Plan		Other Postretirement Benefit Plan
2012	$	4,075	$	376
2013	4,332		411
2014	4,573		436
2015	4,853		469
2016	5,187		505
2017 – 2021	31,273		3,021


Note 11.	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, 2008 and became effective on April 30, 2008. 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, 2011 , 2010 and 2009 , 235,473, 213,207 and 178,759 shares have been issued pursuant to the Plan, and 363,700, 378,903 and 352,012 shares are issuable upon the exercise of outstanding options, restricted stock units, and deferred restricted stock units for the years ended 2011 , 2010 and 2009 , respectively. The remaining shares available for issuance under the Plan are 1,200,827, 1,207,890 and 1,269,229 for the years ended 2011 , 2010 and 2009 , 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:



	2011		2010	2009
Compensation costs charged to income:
Stock options	$	—	—	11
ESPP	92		90	90
Restricted stock and deferred restricted stock	559		722	796
Total compensation costs charged to income	$	651	812	897
Proceeds from the exercise of stock options and similar instruments:
Stock options	$	—	180	29
ESPP	525		512	512
Restricted stock and deferred restricted stock	—		—	10
DRSPP	39		—	—
Other	—		—	—
Total proceeds from the exercise of stock options and similar instruments	$	564	692	551
Excess tax benefits realized from share options exercised and stock issuance:
Stock options	$	—	41	3
Restricted stock and deferred restricted stock	7		—	71
Total excess tax benefits realized from share options exercised and stock issuance	$	7	41	74

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 are exercisable over a 10 year period.

As of December 31, 2011 , all outstanding options were fully vested. A summary of SJW Corp.’s stock option awards as of December 31, 2011 , and changes during the year ended December 31, 2011 , is presented below:



	Shares	Weighted- Average Exercise Price		Weighted Average Remaining Life in Years	Aggregate Intrinsic Value
Outstanding as of January 1, 2011	85,526	$	18.24	3.73	$	721
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited or expired	—	—		—	—
Outstanding as of December 31, 2011	85,526	$	18.24	2.73	$	518
Options exercisable at December 31, 2011	85,526	$	18.24	2.73	$	518

The total intrinsic value of options exercised during the years ended December 31, 2011 , 2010 and 2009 , was $0, $133, and $13, respectively.

As of December 31, 2011 , 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 January 3, 2011, restricted stock units covering an aggregate of 13,631 shares of common stock of SJW Corp. were granted to several executives of SJW Corp. and its subsidiaries. The units vest in four equal successive installments upon completion of each year of service with no dividend equivalent rights. Share-based compensation expense is being recognized at grant date fair value of $23.70 per unit over the vesting period beginning in 2011.

On January 25, 2011, market performance-vesting restricted stock units granted to a key executive of SJW Corp. on April 30, 2008 covering 7,000 shares of common stock of SJW Corp. were canceled because the market performance objective was not attained. However, since the requisite service over the three-year service period of the award was rendered, even though the market condition was not achieved, compensation cost recognized over the three-year requisite service period was not reversed.

On April 25, 2011, a total of 149 shares of common stock were distributed to a retired member of SJW Corp.'s Board of Directors. There was no excess tax benefit realized from this stock issuance.

On June 30, 2011, an executive of SJW Corp. retired from the Company and as a result, a total of 4,725 unvested restricted shares were forfeited. Compensation costs of $22 previously recognized relating to these unvested shares was reversed during the second quarter of 2011.

On October 4, 2011, a total of 759 shares of common stock were distributed to a key employee of SJW Corp. There was no excess tax benefit realized from this stock issuance.

A summary of SJW Corp.'s restricted and deferred restricted stock awards as of December 31, 2011 , and changes during the year ended December 31, 2011 , is presented below:



	Units		Weighted Average Grant- Date Fair Value
Outstanding as of January 1, 2011	268,266		$	16.39
Issued	13,631		$	23.70
Exercised	(22,255	)	$	24.64
Forfeited or expired	(11,725	)	$	16.59
Outstanding as of December 31, 2011	247,917		$	16.04
Shares vested as of December 31, 2011	162,649		$	16.09

A summary of the status of SJW Corp.’s nonvested restricted and deferred restricted stock awards as of December 31, 2011 , and changes during the year ended December 31, 2011 , is presented below:



	Units		Weighted Grant- Date Fair Value
Nonvested as of January 1, 2011	105,479		$	16.82
Granted	13,631		$	23.70
Vested	(22,117	)	$	24.55
Forfeited	(11,725	)	$	16.59
Nonvested as of December 31, 2011	85,268		$	15.95

As of December 31, 2011 , the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $717. This cost is expected to be recognized over a weighted-average period of 1.45 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, 2011 , 2010 and 2009 , a cumulative of 50,888, 45,731 and 40,318 dividend equivalent rights were converted, since inception, to deferred restricted stock awards, respectively. For the years ended December 31, 2011 , 2010 and 2009 , $129, $123 and $122 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 eleven purchase intervals. As of December 31, 2011 , 2010 and 2009 , a total of 25,712, 25,860 and 24,674 shares, respectively, have been issued under the ESPP. The ESPP has no look-back provisions. As of December 31, 2011 , 2010 and 2009 , cash received from employees towards the ESPP amounted to $548, $512 and $537, respectively.

After considering estimated employee terminations or withdrawals from the plan before the purchase date, for the years ended December 31, 2011 , 2010 and 2009 , SJW Corp.’s recorded expenses were $96, $90 and $90 related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ends January 31, 2012 for the ESPP is approximately $8. This cost is expected to be recognized during the first quarter of 2012.


Note 12.	Segment and Nonregulated Businesses Reporting

SJW Corp. is a holding company with four subsidiaries: (i) San Jose Water Company, a water utility operation with both regulated and nonregulated businesses, (ii) SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P., operate commercial building rentals, (iii) SJWTX, Inc. which is doing business as Canyon Lake Water Service Company, a regulated water utility located in Canyon Lake, Texas, and its consolidated nonregulated variable interest entity, Acequia Water Supply Corporation, and (iv) Texas Water Alliance Limited, a nonregulated water utility operation which is undertaking activities that are necessary to develop a water supply project in Texas. In accordance with FASB ASC Topic 280—“Segment Reporting,” SJW Corp. has determined that it has two reportable business segments. The first segment is that of providing water utility and utility-related services to its customers through SJW Corp.’s subsidiaries, San Jose Water Company, Canyon Lake Water Service Company and Texas Water Alliance, together referred to as “Water Utility Services”. The second segment is property management and investment activity conducted by SJW Land Company, referred to as “Real Estate

Services.”

SJW Corp.’s reportable segments have been determined based on information used by the chief operating decision maker. SJW Corp.’s chief operating decision maker is its President and Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a consolidated basis that is accompanied by disaggregated information about operating revenue, net income and total assets, by subsidiaries.

The tables below set forth information relating to SJW Corp.’s reportable segments and distribution of regulated and nonregulated business activities within the reportable segments. Certain allocated assets, revenue and expenses have been included in the reportable segment amounts. Other business activity of SJW Corp. not included in the reportable segments is included in the “All Other” category.



	For year ended December 31, 2011
	Water Utility Services		Real Estate Services		All Other (1)		SJW Corp.
	Regulated	Non regulated	Non regulated		Non regulated		Regulated	Non regulated		Total
Operating revenue	229,411	4,935	4,609		—		229,411	9,544		238,955
Operating expense	175,812	3,481	3,240		2,031		175,812	8,752		184,564
Operating income (loss)	53,599	1,454	1,369		(2,031	)	53,599	792		54,391
Net income (loss)	21,970	765	(407	)	(1,450	)	21,970	(1,092	)	20,878
Depreciation and amortization	29,136	360	1,697		—		29,136	2,057		31,193
Senior note, mortgage and other interest expense	16,741	—	1,833		1,101		16,741	2,934		19,675
Income tax expense (benefit) in net income	15,387	571	(296	)	(1,096	)	15,387	(821	)	14,566
Assets	917,580	11,668	80,097		29,465		917,580	121,230		1,038,810



	For year ended December 31, 2010
	Water Utility Services		Real Estate Services (2)		All Other (1)		SJW Corp.
	Regulated	Non regulated	Non regulated		Non regulated		Regulated	Non regulated		Total
Operating revenue	207,432	4,646	3,560		—		207,432	8,206		215,638
Operating expense	164,976	3,139	6,858		2,590		164,976	12,587		177,563
Operating income (loss)	42,456	1,507	(3,298	)	(2,590	)	42,456	(4,381	)	38,075
Net income (loss)	16,818	846	(3,166	)	9,908		16,818	7,588		24,406
Depreciation and amortization	26,319	347	1,665		—		26,319	2,012		28,331
Senior note, mortgage and other interest expense	15,917	—	1,760		6		15,917	1,766		17,683
Income tax expense (benefit) in net income	11,496	600	(2,176	)	6,820		11,496	5,244		16,740
Assets	844,364	9,849	81,361		(212	)	844,364	90,998		935,362



	For year ended December 31, 2009
	Water Utility Services		Real Estate Services		All Other (1)		SJW Corp.
	Regulated	Non regulated	Non regulated		Non regulated		Regulated	Non regulated		Total
Operating revenue	207,707	4,563	3,827		—		207,707	8,390		216,097
Operating expense	166,950	3,143	4,372		1,952		166,950	9,467		176,417
Operating income (loss)	40,757	1,420	(545	)	(1,952	)	40,757	(1,077	)	39,680
Net income (loss)	15,973	841	(1,424	)	(219	)	15,973	(802	)	15,171
Depreciation and amortization	23,622	344	1,677		—		23,622	2,021		25,643
Senior note, mortgage and other interest expense	14,118	—	1,826		26		14,118	1,852		15,970
Income tax expense (benefit) in net income	11,459	578	(1,139	)	(618	)	11,459	(1,179	)	10,280
Assets	750,194	6,569	81,177		40,534		750,194	128,280		878,474

____________________

(1) The “All Other” category is SJW Corp., on a stand-alone basis.

(2) For the year ended December 31, 2010, an impairment on real estate investment of $3,597 is included in operating expense. Taxes of $1,466 is included in net income. No impairments occurred during the same period in 2011 and 2009.


Note 13.	Sale of California Water Service Group Stock

During the year ended December 31, 2010, SJW Corp. sold 907,392 shares of California Water Service Group for $33,938, before fees of $273. SJW Corp. recognized a gross gain on the sale of the stock of approximately $18,966, tax expense of approximately $7,776, for a net gain of $11,190. The unrealized holding gain associated with the shares sold, that was reclassified out of accumulated other comprehensive income was $10,784 and was based on the fair value of the stock as of June 30, 2010 and September 30, 2010. No sales of California Water Service Group stock occurred during the same period in 2011.

SJW Corp. classifies its investment in California Water Service Group as available-for-sale. The stock is carried at the quoted market price with the changes in unrealized gain or loss reported, net of tax, as a component of other comprehensive income. As of December 31, 2011 , SJW Corp. held 385,120 shares of California Water Service Group. The increase in shares from the prior year was due to a two-for-one stock split during the year of California Water Service Group's common stock. The following table summarizes the fair value of our investment in California Water Service Group as of December 31, 2011 and 2010 :



	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Investment in California Water Service Group	$	7,032	$	7,032	—	—
	Balance as of December 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Investment in California Water Service Group	$	7,177	$	7,177	—	—


Note 14.	Impairment of Tennessee Distribution Facility

On December 3, 2010, SJW Land Company granted an option to a third-party for the sale of one of its nonregulated real estate investments, a distribution facility located in Knoxville, Tennessee and approximately 30 acres of land on which the facility is located for $16,500. The Company determined that signing the option agreement represented a change in circumstances in the intended use of such facility and land and since the option price was below its current carrying value, impairment indicators existed. Accordingly, the Company performed a recoverability test of estimated future cash flows from the facility in accordance with ASC Topic 360. The Company determined that the carrying value was not recoverable through estimated future cash flows from the exercise of the option.

The Company measured the fair value using a combination of the income approach and the market approach. The market approach included the use of prices and other relevant information generated by market transactions involving identical or comparable assets. The income approach included the use of a discounted cash flow model, which required the use of unobservable inputs, including assumptions of projected revenue, expenses, and other costs, a terminal value as well as a discount rate of 9% based on a risk free borrowing rate, adjusted for risk. We also used the purchase option price as it represented a strong, observable market indicator of fair value defined in FASB ASC Topic 820—“Fair Value Measurements and Disclosures” as the price that would be received to sell an asset in an orderly transaction between market participants. The Company then applied a probability weighting on potential outcomes of the above three valuation methods, applying a weighting of 35% for the average result of the income and market approaches and 65% for the option price, to determine fair value. These measurements are classified as Level 3, as we used unobservable inputs to the valuation methodologies that were significant to the fair value measurements, and the valuations required management judgment due to the absence of quoted market prices. As a result, SJW Land Company recognized a pre-tax impairment loss on the building and land in the fourth quarter of 2010 of approximately $3,597. On January 14, 2011, SJW Land Company was notified by the optionee that they were terminating the option agreement.

The following table presents the long-lived asset that was measured and recorded at fair value on a non-recurring basis during the year ended December 31, 2010, and the loss recorded during that same period. No impairments occurred during 2011 or 2009.



			Fair Value Measured and Recorded Using
	Net Carrying Value as of Dec. 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)		Total Loss for Year Ended Dec. 31, 2010
Assets:
Tennessee distribution facility	$	15,181	—	—	$	15,181	$	3,597


Note 15.	Unaudited Quarterly Financial Data

Summarized quarterly financial data is as follows:



	2011 Quarter Ended
	March		June	September	December
Operating revenue	$	43,696	59,007	73,914	62,338
Operating income	5,601		13,784	18,486	16,520
Net income	610		5,451	8,215	6,602
Comprehensive income	599		5,479	7,988	6,727
Earnings per share:
—Basic	0.03		0.29	0.44	0.36
—Diluted	0.03		0.29	0.44	0.35
Market price range of stock:
—High	26.40		24.24	24.80	24.93
—Low	22.48		21.99	21.16	21.10
Dividend per share	0.17		0.17	0.17	0.17

	2010 Quarter Ended
	March		June	September	December
Operating revenue	$	40,411	54,128	70,347	50,752
Operating income	5,337		11,345	17,922	3,471
Net income	985		4,516	10,787	8,118
Comprehensive income	1,498		3,276	8,906	(102	)
Earnings per share:
—Basic	0.05		0.24	0.58	0.45
—Diluted	0.05		0.24	0.58	0.43
Market price range of stock:
—High	26.12		28.23	26.20	27.88
—Low	21.76		22.78	22.57	23.88
Dividend per share	0.17		0.17	0.17	0.17

SJW CORP.

FINANCIAL STATEMENT SCHEDULE

Schedule II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

Years ended December 31, 2011 , 2010 and 2009

(in thousands)



Description	2011			2010		2009
Allowance for doubtful accounts:
Balance, beginning of period	$	235		285		279
Charged to expense	327			301		475
Accounts written off	(422		)	(472	)	(577	)
Recoveries of accounts written off	85			121		108
Balance, end of period	$	225		235		285
Reserve for litigation and claims:
Balance, beginning of period	$	449		417		668
Charged to expense	121			538		429
Revision to accrual, due to settlements	(182		)	(245	)	(280	)
Payments	(148		)	(261	)	(400	)
Balance, end of period	$	240		449		417


Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.


Item 9A.	Controls and Procedures

Evaluation of Disclosure Control and Procedures

SJW Corp.’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of SJW Corp.’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, the “Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that SJW Corp.’s disclosure controls and procedures as of the end of the period covered by this report have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by SJW Corp. in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. SJW Corp. believes that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Report on Internal Control over Financial Reporting

SJW Corp.’s management is responsible for establishing and maintaining an adequate internal control structure over financial reporting and for an assessment of the effectiveness of internal control over financial reporting, as such items are defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Management has utilized the criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of internal control over financial reporting.

SJW Corp.’s management has performed an assessment of the effectiveness of internal control over financial reporting as of December 31, 2011 . Based on this assessment, management has concluded SJW Corp.’s internal control over financial reporting as of December 31, 2011 is effective.

KPMG LLP has audited the effectiveness of the Company’s internal control over financial reporting as of December 31,

2011 . Its report is included in Item 8 of this report.

Changes in Internal Controls

There has been no change in internal control over financial reporting during the fourth fiscal quarter of 2011 that has materially affected, or is reasonably likely to materially affect, the internal controls over financial reporting of SJW Corp.


Item 9B.	Other Information

None.

PART III


Item 10.	Directors, Executive Officers and Corporate Governance

The information required by this item is contained in part under the caption “Officers of the Registrant” in Part I, Item 1, of this report, and in SJW Corp.’s Proxy Statement for its 2012 Annual Meeting of Shareholders to be held on April 25, 2012 (the “2012 Proxy Statement”) under the captions “Proposal 1—Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference.

Code of Ethics

SJW Corp. has adopted a code of ethics that applies to SJW Corp.’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The text of the code of ethics is available, free of charge, at the Company’s website at http://www.sjwcorp.com . SJW Corp. intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, a provision of its code of ethics by posting such information on its website.

Corporate Governance Guidelines and Board Committee Charters

The Corporate Governance Guidelines and the charters for the board committees—the Audit Committee, Executive Compensation Committee, Real Estate Committee, and Nominating & Governance Committee—are available at the Company’s website at http://www.sjwcorp.com . Shareholders may also request a free hard copy of the Corporate Governance Guidelines and the charters from the following address and phone number:

SJW Corp.

110 West Taylor Street

San Jose, CA 95110

Attn: Corporate Secretary

Phone: 800-250-5147


Item 11.	Executive Compensation

The information required by this item is contained in the 2012 Proxy Statemen t under the captions “Compensation of Directors,” “Executive Compensation and Related Information,” “Compensation Committee Interlocks and Insider Participation,” and “Committee Reports” and is incorpor ated herein by reference.


Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is contained in the 2012 Proxy Statement under the ca ptions “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance under Equity Compensation Plans” and is incorporated herein by reference.


Item 13.	Certain Relationships and Related Transaction, and Director Independence

The information required by this item is contained in the 2012 Proxy Statement under the cap tion “Certain Relationships and Related Transactions” and “Independent Directors” and is incorporated her ein by reference.


Item 14.	Principal Accountant Fees and Services

The information required by this item is contained in the 2012 Proxy Statement under the cap tion “Principal Independent Accountants’ Fees and Services” and is inc orporated herein by reference.

PART IV


Item 15.	Exhibits and Financial Statement Schedules



	Page
(a)(1) Financial Statements

Report of Independent Registered Public Accounting Firm	33

Consolidated Balance Sheets as of December 31, 2011 and 2010	34

Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2011, 2010 and 2009	36

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2011, 2010 and 2009	37

Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009	38

Notes to Consolidated Financial Statements	39

(a)(2) Financial Statement Schedule

Valuation and Qualifying Accounts and Reserves, Years ended December 31, 2011, 2010 and 2009	65

All other schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

(a)(3) Exhibits required to be filed by Item 601 of Regulation S-K.

See Exhibit Index located immediately following this Item 15.

The exhibits filed herewith are attached hereto (except as noted) and those indicated on the Exhibit Index which are not filed herewith were previously filed with the Securities and Exchange Commission as indicated.

EXHIBIT INDEX



Exhibit No.		Description
3.1		Restated Articles of Incorporation of SJW Corp. Incorporated by reference to Exhibit 3.1 to Form 10-K for year ended December 31, 2001.

3.2		Certificate of Amendment of the Restated Articles of Incorporation of SJW Corp., as filed with the Secretary of State of the State of California on February 22, 2006. Incorporated by reference to Exhibit 3.1 to Form 8-K filed on February 27, 2006.

3.3		By-Laws of SJW Corp., as amended on July 28, 2010. Incorporated by reference to Exhibit 3.1 to Form 8-K filed on July 29, 2010.

4		Instruments Defining the Rights of Security Holders, including Indentures: No current issue of the registrant’s long-term debt exceeds 10 percent of its total assets. SJW Corp. hereby agrees to furnish upon request to the Commission a copy of each instrument defining the rights of holders of unregistered senior and subordinated debt of the Company.

4.1		Indenture dated as of June 1, 2010 between San Jose Water Company and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 2010.

4.2		4.35% Senior Notes due June 30, 2021. SJW Corp. agrees to furnish a copy of such Senior Notes to the Commission upon request.

10.1		Water Supply Contract dated January 27, 1981, between San Jose Water Works and the Santa Clara Valley Water District, as amended. Incorporated by reference to Exhibit 10.1 to Form 10-K for the year ended December 31, 2001.

10.2		Limited Partnership Agreement of 444 West Santa Clara Street, L.P., entered into as of September 2, 1999, between SJW Land Company and Toeniskoetter & Breeding, Inc. Development. Incorporated by reference to Exhibit 10.18 to Form 10-Q for the quarter ended September 30, 1999.

10.3		Asset Purchase Agreement by and between SJWTX, Inc. to purchase the assets of Canyon Lake Water Supply Corporation, a Texas nonprofit water supply corporation, dated October 4, 2005. Incorporated by reference to Exhibit 10.1 to Form 10-Q for quarter ending September 30, 2005.

10.4		Credit Agreement dated as of May 27, 2010 by and between SJW Corp., SJW Land Company and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on May 28, 2010.

10.5		First Amendment to Credit Agreement by and between SJW Corp., SJW Land Company and Wells Fargo Bank, National Association dated December 16, 2010 and First Modification to Promissory Note dated December 16, 2010. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 17, 2010.

10.6		Second Amendment to Credit Agreement by and between SJW Corp., SJW Land Company and Wells Fargo Bank, National Association dated July 1, 2011 and Second Modification to Promissory Note dated July 1, 2011. Incorporated by reference as Exhibit 10.1 to Form 8-K filed on July 7, 2011.

10.7		Third Modification to Promissory Note dated August 1, 2011 by and between SJW Corp., SJW Land Company and Wells Fargo Bank, National Association. Incorporated by reference as Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2011.

10.8		Credit Agreement dated as of May 27, 2010 by and between San Jose Water Company and Wells Fargo Bank, National Association. Incorporated by reference to Exhibit 10.2 to Form 8-K filed on May 28, 2010.

10.9		First Amendment to Credit Agreement by and between San Jose Water Company and Wells Fargo Bank, National Association dated December 16, 2010 and First Modification to Promissory Note dated December 16, 2010. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 17, 2010.

10.10		Second Amendment to Credit Agreement by and between San Jose Water Company and Wells Fargo Bank, National Association dated July 1, 2011 and Second Modification to Promissory Note dated July 1, 2011. Incorporated by reference as Exhibit 10.2 to Form 8-K filed on July 7, 2011.

10.11		Third Modification to Promissory Note dated July 27, 2011 by and between San Jose Water Company and Wells Fargo Bank, National Association. Incorporated by reference as Exhibit 10.4 to Form 10-Q for the quarter ended September 30, 2011.



10.12		Loan Agreement dated as of June 1, 2010 between the California Pollution Control Financing Authority and San Jose Water Company. Incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended June 30, 2010.

10.13		Bond Purchase agreement dated June 9, 2010 among Goldman, Sachs & Co., the Treasurer of the State of California and the California Pollution Control Financing Authority and approved by San Jose Water Company. Incorporated by reference to Exhibit 10.4 to Form 10-Q for the quarter ended June 30, 2010.

10.14		Note Agreement between SJW Corp. and the Prudential Insurance Company of America, dated June 30, 2011. Incorporated by reference as Exhibit 10.3 to Form 8-K filed on July 7, 2011.

10.15		Form of Letter Amendment to SJW Corp. Director Pension Plan. Incorporated by reference as Exhibit 10.25 to Form 10-K for the year ended December 31, 2007. (2)

10.16		San Jose Water Company Executive Supplemental Retirement Plan, as amended and restated effective October 28, 2009. Incorporated by reference to Exhibit 10.5 to Form 10-K for the year ended December 31, 2009. (2)

10.17		Plan Amendment No. 1 to San Jose Water Company Executive Supplemental Retirement Plan as amended and restated effective October 28, 2009. Incorporated by reference as Exhibit 10.1 to Form 8-K filed on January 29, 2010. (2)

10.18		Amended and Restated Exhibit A to SJW Corp. Executive Supplemental Retirement Plan effective January 26, 2011. Incorporated by reference as Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2011. (2)

10.19		Plan Amendment to San Jose Water Company Executive Supplemental Retirement Plan effective January 1, 2011. Incorporated by reference as Exhibit 10.5 to Form 10-Q for the quarter ended September 30, 2011. (2)

10.20		San Jose Water Company Executive Supplemental Retirement Plan, as amended and restated effective January 1, 2012. (1) (2)

10.21		San Jose Water Company Cash Balance Executive Supplemental Retirement Plan, dated July 29, 2009. Incorporated by reference as Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2009. (2)

10.22		Amendment to the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan, effective as of January 1, 2011. Incorporated by reference to Exhibit 10.2 to Form 8-K filed on October 1, 2010. (2)

10.23		San Jose Water Company Cash Balance Executive Supplemental Retirement Plan as amended and restated effective January 1, 2012. (1) (2)

10.24		SJW Corp. Long-Term Incentive Plan, as amended and restated January 30, 2008. Incorporated by reference as Exhibit 10.1 to Form 8-K filed on May 1, 2008. (2)

10.25		Chief Executive Officer Employment Agreement amended and restated, effective January 1, 2008. Incorporated by reference to Exhibit 10.9 to Form 10-K for the year ended December 31, 2008. (2)

10.26		First Amendment, effective as of January 1, 2010, to the Chief Executive Officer Employment Agreement amended and restated effective January 1, 2008. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 18, 2009. (2)

10.27		Second Amendment dated January 26, 2010 to the Chief Executive Officer Employment Agreement amended and restated effective January 1, 2008. Incorporated by reference to Exhibit 10.11 to Form 10-K for the year ended December 31, 2009. (2)

10.28		Offer Letter to Mr. James P. Lynch dated September 22, 2010 and accepted September 27, 2010. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on October 1, 2010. (2)

10.29		Standard Form of Stock Option Agreement, as adopted by SJW Corp. Board of Directors on April 29, 2003. Incorporated by reference to Exhibit 10.22 to Form 10-Q for the quarter ended June 30, 2003. (2)

10.30		SJW Corp. Executive Officer Short-Term Incentive Plan, effective as of April 30, 2008. Incorporated by reference to Exhibit 10.2 to Form 8-K filed on May 1, 2008. (2)

10.31		SJW Corp. Executive Severance Plan, as amended and restated, effective January 1, 2010 and amended effective October 26, 2010. Incorporated by reference as Exhibit 10.23 to Form 10-K for the year ended December 31, 2010. (2)



10.32		San Jose Water Company Special Deferral Election Plan, as amended and restated, effective January 1, 2008. Incorporated by reference as Exhibit 10.14 to Form 10-K for the year ended December 31, 2008. (2)

10.33		San Jose Water Company Special Deferral Election Plan, as amended and restated, effective January 1, 2012. (1) (2)

10.34		SJW Corp. Amended and Restated Deferred Restricted Stock Program, effective January 1, 2008. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2008. (2)

10.35		SJW Corp. Deferral Election Program for Non-Employee Board Members, as amended and restated, effective January 1, 2008. Incorporated by reference as Exhibit 10.22 to Form 10-K for the year ended December 31, 2007. (2)

10.36		SJW Corp. Director Compensation and Expense Reimbursement Policies, amended and restated, effective as of July 29, 2009. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2009. (2)

10.37		Form of Stock Option Dividend Equivalent Rights Agreement, effective as of January 1, 2008. Incorporated by reference as Exhibit 10.18 to Form 10-K for the year ended December 31, 2008. (2)

10.38		Chief Operating Officer Stock Option Dividend Equivalent Rights Agreement, as amended and restated effective as of January 1, 2008. Incorporated by reference as Exhibit 10.19 to Form 10-K for the year ended December 31, 2008. (2)

10.39		Restricted Stock Unit Issuance Agreement, amended and restated, effective as of July 1, 2008. Incorporated by reference as Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2008. (2)

10.40		Deferred Restricted Stock Award Agreement, amended and restated, as of October 22, 2008. Incorporated by reference as Exhibit 10.21 to Form 10-K for the year ended December 31, 2008. (2)

10.41		Chief Executive Officer Restricted Stock Unit Issuance Agreement, amended and restated effective October 22, 2008. Incorporated by reference as Exhibit 10.22 to Form 10-K for the year ended December 31, 2008. (2)

10.42		Chief Executive Officer Restricted Stock Unit Issuance Agreement, amended and restated effective October 22, 2008. Incorporated by reference as Exhibit 10.23 to Form 10-K for the year ended December 31, 2008. (2)

10.43		Chief Executive Officer Restricted Stock Unit Issuance Agreement, amended and restated, effective October 22, 2008. Incorporated by reference as Exhibit 10.24 to Form 10-K for the year ended December 31, 2008. (2)

10.44		Chief Executive Officer Restricted Stock Unit Issuance Agreement, amended and restated effective October 22, 2008. Incorporated by reference as Exhibit 10.25 to Form 10-K for the year ended December 31, 2008. (2)

10.45		Chief Executive Officer Restricted Stock Unit Issuance Agreement, amended and restated, effective October 22, 2008. Incorporated by reference as Exhibit 10.26 to Form 10-K for the year ended December 31, 2008. (2)

10.46		Chief Executive Officer Restricted Stock Unit Issuance Agreement, amended and restated, effective October 22, 2008. Incorporated by reference as Exhibit 10.27 to Form 10-K for the year ended December 31, 2008. (2)

10.47		Form of Chief Executive Officer Restricted Stock Unit Issuance Agreement. Incorporated by reference as Exhibit 10.30 to Form 10-K for the year ended December 31, 2009. (2)

10.48		Form of Chief Executive Officer Restricted Stock Unit Issuance Agreement. Incorporated by reference as Exhibit 10.31 to Form 10-K for the year ended December 31, 2009. (2)

10.49		Form of Chief Executive Officer Restricted Stock Unit Issuance Agreement. (1) (2)


10.50		Form of Restricted Stock Unit Issuance Agreement Award, amended and restated, effective October 22, 2008. Incorporated by reference as Exhibit 10.28 to Form 10-K for the year ended December 31, 2008. (2)

10.51		Form of Restricted Stock Unit Issuance Agreement, amended and restated, effective October 22, 2008. Incorporated by reference as Exhibit 10.29 to Form 10-K for the year ended December 31, 2008. (2)



10.52		Form of Restricted Stock Unit Issuance Agreement. Incorporated by reference as Exhibit 10.34 to Form 10-K for the year ended December 31, 2009. (2)

10.53		Form of Restricted Stock Unit Issuance Agreement. (1) (2)
10.54		Performance Goals for the Chief Executive Officer 2009 Fiscal Year Bonus. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2009. (2)

10.55		Performance Goals for the Chief Executive Officer 2010 Fiscal Year Bonus. Incorporated by reference as Exhibit 10.36 to Form 10-K for the year ended December 31, 2009. (2)

10.56		Performance Goals for the Chief Executive Officer 2011 Fiscal Year Bonus. Incorporated by reference as Exhibit 10.45 to Form 10-K for the year ended December 31, 2010. (2)

10.57		Performance Goals for the Chief Executive Officer 2012 Fiscal Year Bonus. (1) (2)

10.58		Form of Indemnification Agreement between SJW Corp. and officers. Incorporated by reference as Exhibit 10.37 to Form 10-K for the year ended December 31, 2009. (2)

10.59		Form of Indemnification Agreement between SJW Corp. and Board members. Incorporated by reference as Exhibit 10.38 to Form 10-K for the year ended December 31, 2009. (2)

10.60		Form of Separation Agreement and Release by and between Angela Yip and San Jose Water Company. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on December 10, 2010. (2)

10.61		Form of Separation Agreement and Release dated September 30, 2010 by and between David A. Green and San Jose Water Company. Incorporated by reference as Exhibit 10.49 to Form 10-K for the year ended December 31, 2010. (2)

21.1		Subsidiaries of SJW Corp. filed as Exhibit 21.1 to Form 10-K for the year ended December 31, 2009.

23		Consent of Independent Registered Public Accounting Firm. (1)

31.1		Certification Pursuant to Rule 13a-14(a)/15d-14(a) by President and Chief Executive Officer. (1)

31.2		Certification Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial Officer and Treasurer. (1)

32.1		Certification Pursuant to 18 U.S.C. Section 1350 by President and Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)

32.2		Certification Pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer and Treasurer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)


(1)	Filed currently herewith.


(2)	Management contract or compensatory plan or agreement.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		SJW CORP.

Date:	February 29, 2012	By	/s/ Charles J. Toeniskoetter
			CHARLES J. TOENISKOETTER, Chairman, Board of Directors
			CHARLES J. TOENISKOETTER, Chairman, Board of Directors

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



Date:	February 29, 2012	By	/s/ W. Richard Roth
			W. RICHARD ROTH, President, Chief Executive Officer and Member, Board of Directors (Principal executive officer)



Date:	February 29, 2012	By	/s/ James P. Lynch
			JAMES P. LYNCH, Chief Financial Officer and Treasurer (Principal financial officer)


Date:	February 29, 2012	By	/s/ Wendy Avila-Walker
			WENDY AVILA-WALKER, Controller (Principal accounting officer)


Date:	February 29, 2012	By	/s/ Katharine Armstrong
			KATHARINE ARMSTRONG, Member, Board of Directors
			KATHARINE ARMSTRONG, Member, Board of Directors

Date:	February 29, 2012	By	/s/ Mark L. Cali
			MARK L. CALI, Member, Board of Directors
			MARK L. CALI, Member, Board of Directors

Date:	February 29, 2012	By	/s/ J. Philip DiNapoli
			J. PHILIP DINAPOLI, Member, Board of Directors
			J. PHILIP DINAPOLI, Member, Board of Directors

Date:	February 29, 2012	By	/s/ Douglas R. King
			DOUGLAS R. KING, Member, Board of Directors
			DOUGLAS R. KING, Member, Board of Directors

Date:	February 29, 2012	By	/s/ Norman Y. Mineta
			NORMAN Y. MINETA, Member, Board of Directors
			NORMAN Y. MINETA, Member, Board of Directors

Date:	February 29, 2012	By	/s/ Ronald B. Moskovitz
			RONALD B. MOSKOVITZ, Member, Board of Directors
			RONALD B. MOSKOVITZ, Member, Board of Directors



Date:	February 29, 2012	By	/s/ George E. Moss
			GEORGE E. MOSS, Member, Board of Directors
			GEORGE E. MOSS, Member, Board of Directors

Date:	February 29, 2012	By	/s/ Charles J. Toeniskoetter
			CHARLES J. TOENISKOETTER, Member, Board of Directors
			CHARLES J. TOENISKOETTER, Member, Board of Directors

Date:	February 29, 2012	By	/s/ Robert A. Van Valer
			ROBERT A. VAN VALER, Member, Board of Directors
			ROBERT A. VAN VALER, Member, Board of Directors

EXHIBIT 10.20

SAN JOSE WATER COMPANY

EXECUTIVE SUPPLEMENTAL

RETIREMENT PLAN

As Amended and Restated on January 25, 2012

Effective as of January 1, 2012

TABLE OF CONTENTS



		PAGE

I.	DEFINITIONS	3

II.	PARTICIPATION	7

III.	RETIREMENT BENEFIT	7

IV.	VESTING	13

V.	FUNDING NATURE OF THE PLAN	13

VI.	ADMINISTRATION OF THE PLAN	14

VII.	BENEFIT CLAIMS	15

VIII.	AMENDMENTS AND TERMINATION	16

IX.	MISCELLANEOUS	16

THE SAN JOSE WATER COMPANY

EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

On July 22, 1992 the Board of Directors of the San Jose Water Company (the “Company”) adopted the San Jose Water Company Executive Supplemental Retirement Plan (the “Plan”). The Plan is designed to supplement the retirement income of a designated select group of management and/or highly compensated executives of the Company. The Plan has been amended on a number of occasions since its adoption and was further amended and restated, effective January 1, 2008, to conform the provisions of the plan document to the applicable requirements of Section 409A of the Internal Revenue Code and the Treasury Regulations issued thereunder.

The Plan was amended in July 2009 to revise the definition of Compensation in Section 1.11 below and was amended and restated in October 2009 to provide an additional joint and survivor annuity form of payment for a married participant, to clarify the benefit commencement date provisions of the plan with respect to vested participants who separate from service prior to age 55 and to increase the monthly retirement benefit payable to a select group of currently retired participants.

The Plan was amended in January 2010 to (i) clarify the definition of Year of Service for purposes of applying the benefit formula, and (ii) increase, for each participant credited with an hour of service on or after January 1, 2010, the one and six tenths percent (1.6%) component of the such benefit formula to two and two tenths percent (2.2%) of his or her Final Average Compensation for each Year of Service, whether completed on or before January 1, 2010, in excess of 20 years (but not to exceed in total the additional number of Years of Service necessary to reach the maximum 60% of Final Average Compensation retirement benefit).

The Plan was amended effective January 1, 2011 to set forth the actuarial equivalency factors that will be applied to any participant who elects to receive his or her accrued benefit under such plan in the form of the ten year term certain and life annuity option. Exhibit A to the Plan was also amended effective January 26, 2011 to provide Angela Yip with an additional Year of Service credit under the Plan.

The Plan was further amended and restated on January 25, 2012, effective as of January 1, 2012, to (i) permit the Executive Compensation Committee as the administrator of the Plan to delegate one or more of the day-to-day administrative functions under the Plan to either a plan administrative committee comprised of two or more employees of the Company or a third-party administrator, (ii) provide the Executive Compensation Committee with the authority to appoint the initial members of any such plan administrative committee and further empower the Executive Compensation Committee or the Company’s Chief Executive Officer with the authority to replace members of the plan administrative committee from time to time, (iii) establish a formal claims review process under the Plan and (iv) incorporate into the new restatement the series of individual amendments made to the Plan since the date of the most recent restatement of the Plan.

The Plan as so amended and restated shall continue to function solely as a so-called “top hat” plan of deferred compensation subject to the provisions of the Employee Retirement Income Security Act of 1974 (as amended from time to time) applicable to such a plan.


I.	DEFINITIONS

Wherever used herein the following terms have the meanings indicated:

1.1 “ Accrued Benefit ” means, at any time, the benefit computed in accordance with Section 3.1 (as adjusted, if applicable, pursuant to Section 3.11).

1.2 “ Actuarial Equivalent ” has the meaning set forth in the San Jose Water Company Retirement Plan.

1.3 “ Affiliated Company ” means (i) the Company and (ii) each of the other members of the controlled group that includes the Company, as determined in accordance with Sections 414(b) and (c) of the Code.

1.4 “ Beneficiary ” means the person or persons entitled, pursuant to Section 3.6, to receive the Participant’s retirement benefit following his or her death.

1.5 “ Benefit Commencement Date ” means the date on which the payment of a Participant's retirement benefit is to commence pursuant to Section 3.2; provided, however , that a Participant who wishes to have his or her retirement benefit commence on a Deferred Benefit Commencement Date following his or her Separation from Service must comply with the applicable election procedures set forth in Section 3.3.

1.6 “ Board of Directors ” means the Board of Directors of San Jose Water Company.

1.7 “ Change in Control ” means a transaction involving a change in ownership or control of SJW Corp. which constitutes a Change in Control, as such term is defined at the relevant time in the Executive Severance Plan (or any successor plan) or, if the Executive Severance Plan ceases to exist and is not succeeded by another similar plan, as it was last defined in the Executive Severance Plan.

1.8 “ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

1.9 “ Committee ” means the entity or entities which administer the Plan in accordance with the provisions of Article V hereof.

1.10 “ Company ” means San Jose Water Company and any successor to all or a major portion of the assets or business of the San Jose Water Company.

1.11 “ Compensation ” means, for any calendar month, the salary earned by a Participant for such month, whether or not actually paid in that month, plus any annual cash performance bonus that is paid to the Participant in such month plus any portion of such bonus that would have been paid in such month in the absence of the Participant’s deferral election or other deferred payment provision applicable to such compensation. Any deferred cash performance bonus taken into account as Compensation for the month in which such bonus would have been paid in the absence of a deferral provision or election shall not again be taken into account as Compensation in the month in which that deferred bonus is actually paid. No other bonus or special compensation will be included, except to the extent expressly provided otherwise, in accordance with the applicable provisions of Code Section 409A, by the Committee administering this Plan.

1.12 “ Credited Service ” has the meaning set forth in the San Jose Water Company Retirement Plan.

1.13 “ Death Benefit ” has the meaning set forth in Section 3.10 of the Plan.

1.14 “ Deferred Benefit Commencement Date ” means a date, later than the normal Benefit Commencement Date determined under Section 3.2, on which the Participant’s retirement benefit under Article III is to commence pursuant to a timely deferral election made by such Participant pursuant to Section 3.3 of the Plan.

1.15 “ Early Retirement Date ” means the first day of the month coinciding with or next following the date when a Participant has both attained the age of fifty-five (55) years and completed at least ten (10) years of Credited Service with the Company.

1.16 “ Eligible Employee ” means any officer of the Company or any other Employee who:

(a) first commenced status as an Employee before March 31, 2008; and

(b) is part of a select group of management or an otherwise highly compensated employee, as determined by the Committee in accordance with applicable ERISA standards.

1.17 “ Employee ” means an individual for so long as he or she is in the employ of at least one member of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

1.18 “ Employer Group ” means (i) the Company and (ii) each of the other members of the controlled group that includes the Company, as determined in accordance with Sections 414(b) and (c) of the Code, except that in applying Sections 1563(1), (2) and (3) for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations.

1.19 “ Executive Severance Plan ” means SJW Corp. Executive Severance Plan, as amended from time to time.

1.20 “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

1.21 “ Final Average Compensation ” means, on any date, a Participant’s average monthly Compensation (as such Compensation is determined for each month in accordance with Section 1.11 above) for that consecutive thirty-six (36) calendar month period within the last one hundred twenty (120) consecutive calendar months ending on or immediately prior to such measurement date during which such average Compensation is the highest.

1.22 “ Normal Retirement Date ” means the first day of the calendar month coinciding with or next following the date when a Participant attains sixty-five (65) years of age.

1.23 “ Participant ” means an Eligible Employee selected by the Committee to participate in the Plan; provided, however, that such individual shall not commence actual participation in the Plan or otherwise accrue benefits under the Plan until the date determined under Article II.

1.24 “ Plan ” means the San Jose Water Company Executive Supplemental Retirement Plan, as set forth in this document and in any amendments from time to time made hereto.

1.25 “ Qualified Joint and Survivor Annuity ” has the meaning set forth in Section 9.01 of the San Jose Water Company Retirement Plan.

1.26 “ Qualified Preretirement Survivor Annuity ” means the annuity benefit payable to the surviving spouse of a deceased Participant in accordance with the terms and conditions of Section 3.9 of the Plan.

1.27 “ Retirement Benefit ” means the monthly retirement benefit payable under this Plan, calculated in accordance with Article III.

1.28 “ San Jose Water Company Retirement Plan ” means the San Jose Water Company Retirement Plan, a tax-qualified defined benefit pension plan under Code Section 401(a) which was adopted November 1, 1950, as such plan may be amended and restated from time to time.

1.29 “ Single Life Annuity ” has the meaning set forth in the San Jose Water Company Retirement Plan.

1.30 “ Separation from Service ” means the Participant’s cessation of Employee status by reason of his or her death, retirement or termination of employment. The Participant shall be deemed to have terminated employment for such purpose at such time as the level of his or her bona fide services to be performed as an Employee (or non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services he or she rendered as an Employee during the immediately preceding thirty-six (36) months (or such shorter period for which he or she may have rendered such service). Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Code Section 409A. In addition to the foregoing, a Separation from Service will not be deemed to have occurred while an Employee is on military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six (6) months or any longer period for which such Employee’s right to reemployment with one or more members of the Employer Group is provided either by statute or contract; provided, however, that in the event of an Employee’s leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and that causes such individual to be unable to perform his or her duties as an Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29) months of such leave. If the period of leave exceeds six (6) months (or twenty-nine (29) months in the event of disability as indicated above) and the Employee’s right to reemployment is not provided either by statute or contract, then such Employee will be deemed to have a Separation from Service on the first day immediately following the expiration of such six (6)-month or twenty-nine (29)-month period.

1.31 “ SJW Corp . ” means SJW Corp., a California corporation which is the corporate parent of the Company, or any successor to all or a major portion of the assets or business of the SJW Corp.

1.32 “ Specified Employee ” means a “key employee” (within the meaning of that term under Code Section 416(i)), as determined by the Executive Compensation Committee of SJW Corp. in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis to all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A. The Specified Employees shall be identified on December 31 of each calendar year and shall have that status or the twelve (12)-month period beginning on April 1 of the following calendar year.

1.33 “ Ten Year Certain and Life Option ” has the meaning set forth in Section 3.5.

1.34 “ Year of Service ” means a Year of Credited Service, as defined and calculated in accordance with Section 2.74 of the March 31, 2008 restatement of the San Jose Water Company Retirement Plan (or any predecessor version of such plan).


II.	PARTICIPATION

Each Eligible Employee selected by the Committee for participation in the Plan shall be promptly notified by the Company in writing of such selection and shall become a Participant in the Plan on the first day of the first calendar month next following the date of his or her selection for participation by the Committee or such later date as the Committee shall specify, as set forth in the notification from the Company.


III.	RETIREMENT BENEFIT

3.1 Retirement Benefit Formula . The actual Retirement Benefit to be paid under this Plan to a vested Participant beginning on his or her Benefit Commencement Date determined in accordance with Section 3.2 shall be calculated on the basis of the following formula for determining a Participant’s normal retirement benefit and shall be adjusted so that it is the Actuarial Equivalent of such normal retirement benefit after taking into account any Benefit Commencement Date prior to the Participant’s Normal Retirement Date and/or any form of payment other than a Single Life Annuity for the Participant:

- The normal retirement benefit is a Single Life Annuity for the Participant commencing on his or her Normal Retirement Date in a monthly dollar amount equal to two and two tenths percent (2.2%) of the Final Average Compensation of such Participant multiplied by his or her Years of Service (including any partial Year of Service determined in accordance with Section 2.74 of the San Jose Water Company Retirement Plan, but not to exceed twenty (20) Years of Service in total) plus one and one-tenth percent (1.1%) of the Final Average Compensation of such Participant multiplied by his or her Years of Service in excess of 20 years (including any partial Year of Service determined in accordance with Section 2.74 of the San Jose Water Company Retirement Plan, but not to exceed an additional ten (10) years in total), up to a total not to exceed fifty-five percent (55%) of such Participant’s Final Average Compensation; less the monthly retirement benefit payable to such Participant from the San Jose Water Company Retirement Plan. However, the following percentage increases shall be in effect with respect to such benefit formula:

(a) The one and one-tenth percent (1.1%) and fifty-five percent (55%) of Final Average Compensation percentages of such formula shall be increased to one and six tenths percent (1.6%) and sixty percent (60%) of Final Average Compensation respectively for Participants who are credited with an Hour of Service, as defined in the San Jose Water Company Retirement Plan, on or after November 1, 1999.

(b) For each Participant credited with an Hour of Service, as defined in the San Jose Water Company Retirement Plan, on or after January 1, 2010, the one and six tenths percent (1.6%) component of the revised benefit formula in subparagraph (a) above shall be further increased to two and two tenths percent (2.2%) of Final Average Compensation for each Year of Service, whether completed on or before January 1, 2010, in excess of 20 years

(including any partial Year of Service determined in accordance with Section 2.74 of the San Jose Water Company Retirement Plan, but not to exceed in total the additional number of Years of Service necessary to reach the maximum 60% of Final Average Compensation retirement benefit). Accordingly, the maximum retirement benefit for any such Participant under the Plan shall continue to be limited to sixty percent (60%) of his or her Final Average Compensation.

The amount of the offset for the monthly retirement benefit paid from the San Jose Water Company Retirement Plan shall be calculated on the basis of the single life monthly annuity under such Plan commencing on the Participant’s Normal Retirement Date which is the Actuarial Equivalent of his or her normal retirement benefit under such plan.

3.2 Benefit Commencement Date . The following provisions shall govern the date on which a vested Participant’s Retirement Benefit as calculated under Section 3.1 shall commence, subject to the elective deferral provisions of Section 3.3 and the mandatory deferral provisions of Section 3.12. In the absence of any deferral effected pursuant to Section 3.3 or 3.12, such date shall constitute the Participant’s Benefit Commencement Date under the Plan.

(a) The Benefit Commencement Date for a vested Participant whose Separation from Service occurs on or after satisfying the requirements for a Normal Retirement Date shall be the first day of the first calendar month following such Separation of Service. The monthly retirement benefit which shall commence at that time shall be in the amount calculated under Section 3.1 and payable in the form of a Single Life Annuity. There shall be no actuarial increase to the dollar amount of the Participant’s monthly retirement benefit should the Benefit Commencement Date occur after his or her Normal Retirement Date.

(b) The Benefit Commencement Date for a vested Participant whose Separation from Service occurs on or after satisfying the requirements for an Early Retirement Date but before his or her Normal Retirement Date shall be the first day of the first calendar month following such Separation from Service. The monthly retirement benefit which shall commence at that time under Section 3.1 shall be payable in the form of a Single Life Annuity. However, the dollar amount of that monthly retirement benefit as calculated pursuant to Section 3.1 shall be reduced for the commencement of such benefit before the Participant’s Normal Retirement Date in accordance with the early retirement reduction factors set forth in the San Jose Water Company Retirement Plan as in effect on the Benefit Commencement Date.

(c) The Benefit Commencement Date for a vested Participant whose Separation from Service occurs before satisfying the requirements for an Early Retirement Date shall be the first day of the first calendar month following the later of (i) such Participant’s attainment of age fifty five (55) or (ii) the date of his or her Separation from Service. The monthly retirement benefit which shall commence at that time under Section 3.1 shall be payable in the form of a Single Life Annuity. However, the dollar amount of that monthly retirement benefit as calculated pursuant to Section 3.1 shall be reduced, in accordance with the early retirement reduction factors set forth in the San Jose Water Company Retirement Plan as in effect on the Benefit Commencement Date, should such retirement benefit commence before the Participant’s Normal Retirement Date.

3.3 Election of Deferred Benefit Commencement Date . The following provisions shall govern any election by a Participant to receive his or her Retirement Benefit on a Deferred Benefit Commencement Date that is later than the date on which his or her Retirement Benefit would otherwise commence in accordance with Section 3.2:

(i) An Eligible Employee participating in the Plan during the 2007 calendar year may elect a Deferred Benefit Commencement Date at any time on or before December 31, 2007 by filing the appropriate deferral election form with the Committee.

(ii) An Eligible Employee who is first selected for participation in the Plan after December 31, 2007 may elect a Deferred Benefit Commencement Date by filing the appropriate election form with the Committee at any time prior to the date his or her participation in the Plan becomes effective, but in no event later than thirty (30) days after his or her selection date.

(iii) Should a Participant wish at any time after December 31, 2008 to change the Benefit Commencement Date in effect for him or her pursuant to Section 3.2 (or any Deferred Benefit Commencement Date in effect for him or her at that time under this Section 3.3) to a later Deferred Benefit Commencement Date, then such Participant must file the appropriate deferral election form with the Committee at least twelve (12) months prior to the Benefit Commencement Date or Deferred Benefit Commencement Date in effect at the time for the Participant, and the deferral election shall in no event become effective or otherwise have any force or applicability until the expiration of the twelve (12)-month period measured from the date such election is filed with the Committee. Accordingly, the new deferral election shall become null and void should the Participant’s pre-existing Benefit Commencement Date or Deferred Commencement Date occur within that twelve (12)-month period. The new Deferred Benefit Commencement Date elected by the Participant must be a date that is at least five (5) years later than the date on which the Participant’s Retirement Benefit would have otherwise commenced in the absence of the new deferral election.

3.4 Alternative Form of Benefit Payment . In lieu of the Single Life Annuity in which a Participant is to receive as his or her Retirement Benefit, the Participant may elect an alternative form of benefit payment in accordance with the following requirements:

(i) A Participant who is married on his or her Benefit Commencement Date (or any Deferred Benefit Commencement Date in effect for him or her in accordance with the provisions of Section 3.3) may elect to receive his or her Retirement Benefit in the form of the Qualified Joint and Survivor Annuity, provided such election is made in accordance with the applicable requirements of subparagraph (iv) below.

(ii) A Participant who is married on his or her Benefit Commencement Date (or any Deferred Benefit Commencement Date in effect for him or her in accordance with the provisions of Section 3.3) may elect to receive his or her Retirement Benefit in the form of a reduced joint and survivor annuity that provides an annuity for the life of the Participant and a survivor annuity for the life of his or her spouse that is equal to 75% of the amount of the annuity payable during the Participant’s lifetime (the “Joint and 75% Survivor Annuity”), provided such election is made in accordance with the applicable requirements of subparagraph (iv) below.

(iii) A Participant, whether or not married on his or her Benefit Commencement Date (or any Deferred Benefit Commencement Date in effect for him or her in accordance with the provisions of Section 3.3), may elect to receive his or her Retirement Benefit in the form of the Ten Year Certain and Life Option, provided such election is made in accordance with the applicable requirements of subparagraph (iv) below.

(iv) Provided the Qualified Joint and Survivor Annuity, the Joint and 75% Survivor Annuity and the Ten Year Certain and Life Option are each the Actuarial Equivalent of the Single Life Annuity payable to the Participant hereunder, the Participant may elect any of those alternative forms of payment by filing the appropriate election form with the Committee at any time prior to the Benefit Commencement Date or Deferred Benefit Commencement Date in effect for such Participant. In the event that the Qualified Joint and Survivor Annuity, the Joint and 75% Survivor Annuity or the Ten Year Certain and Life Option is not the Actuarial Equivalent of the Single Life Annuity payable to the Participant hereunder, then the Participant’s election of the alternative form of payment which is not such an Actuarial Equivalent shall be subject to the following limitations:

- Participant must elect the alternative form of benefit by filing the appropriate benefit election form with the Committee at least twelve (12) months prior to the Benefit Commencement Date or Deferred Benefit Commencement Date in effect at the time for the Participant, and the benefit election shall in no event become effective or otherwise have any force or applicability until the expiration of the twelve (12)-month period measured from the date such election is filed with the Committee. Accordingly, the benefit election shall become null and void should the Participant’s Benefit Commencement Date or Deferred Commencement Date occur within that twelve (12)-month period. As part of the benefit election process, the Participant must designate a new Benefit Commencement Date that is at least five (5) years later than the date on which the Participant’s Retirement Benefit would have otherwise commenced in accordance with the Benefit Commencement Date or Deferred Benefit Commencement Date in effect for the Participant immediately prior to the filing of his or her benefit election.

(v) For purposes of determining whether the Qualified Joint and Survivor Annuity or the Joint and 75% Survivor Annuity is the Actuarial Equivalent of the Single Life Annuity payable to the Participant, any subsidy provided with respect to the Qualified Joint and Survivor Annuity or the Joint and 75% Survivor Annuity shall not be taken into account, provided the annual lifetime benefit payable thereunder to the Participant is not greater than his or her annual lifetime benefit under the Single Life Annuity, and the annual lifetime benefit payable to the survivor is not greater than the annual lifetime benefit payable to the Participant under such Qualified Joint and Survivor Annuity or the Joint and 75% Survivor Annuity. For purposes of determining whether the Ten Year Term Certain and Life Option is the Actuarial Equivalent of the Single Life Annuity Payable to the Participant, the actuarial reduction factors set forth in attached Schedule I shall be utilized, with the appropriate factor (with any requisite interpolation) for the Participant’s age at the time such Ten Year Term Certain and Life Option commences to be applied to the dollar amount of the monthly pension that would otherwise be payable to the Participant at that time in the form of the Single Life Annuity. In no event,

however, will the Qualified Joint and Survivor Annuity, the Joint and 75% Survivor Annuity or the Ten Year Certain and Life Option be deemed for purposes of subparagraph (iv) above to be the Actuarial Equivalent of the Single Life Annuity payable to the Participant hereunder, if the scheduled date for the first annuity payment under such alternative form of payment is other than the Benefit Commencement Date or Deferred Benefit Commencement Date in effect at the time for the Participant.

(vi) A benefit election made under this Paragraph 3.4 by a Participant who is married on such date is not subject to spousal consent.

3.5 Ten Year Certain and Life Option . A Participant who elects the Ten Year Certain and Life Option shall receive his or her Retirement Benefit in the form of a monthly annuity over his or her lifetime. If the Participant dies before one hundred and twenty (120) monthly payments (hereinafter referred to as the “period certain”) have been made, the Participant’s designated Beneficiary or Beneficiaries shall be entitled to share equally in the Participant’s monthly retirement benefit for the remainder of such period certain. A Participant electing to receive his or her Retirement Benefit in such form must designate, as described in Section 3.6, one or more Beneficiaries to receive any remaining payments under the Plan after his or her death. If the Participant and the designated Beneficiary or Beneficiaries die within the period certain, the remaining payments shall be made to the estate of the designated Beneficiary who last received a payment under this Section 3.5.

3.6 Beneficiary Designation . The Beneficiary designation of a Participant who elects to receive his or her Retirement Benefit in the form of a Ten Year Certain and Life Option shall be made on a form prepared by, and delivered to, the Committee prior to the Benefit Commencement Date or Deferred Benefit Commencement Date in effect for that benefit. The Participant may revoke or change the designation at any time prior to the applicable Benefit Commencement Date by delivering a subsequent form to the Committee.

3.7 Calculation of Alternative Forms of Benefits . The amount of all benefit payment forms specified in Section 3.4 shall be determined in accordance with the provisions of the San Jose Water Company Retirement Plan and, to the extent applicable, the actuarial equivalency factors set forth in attached Schedule I for any benefit paid in the form of the Ten Year Certain and Life Annuity Option.

3.8 Retiree Increases .

(a) 1998 Retiree Benefit Increase. Subject to a ten percent (10%) maximum benefit increase, the monthly pension of each Participant (or Beneficiary in the case of a deceased Participant) shall be increased 0.138889% for each month or partial month which has elapsed from the date of the initial payment of retirement benefits to each Participant (or Beneficiary), up to and including February 28, 1998.

(b) 2002 Retiree Benefit Increase. Subject to a ten percent (10%) maximum benefit increase, the monthly pension of each Participant (or Beneficiary in the case of a deceased Participant) shall be increased 0.212766% for each month or partial month which has elapsed from (i) the later of the date of the initial payment of benefits or March 1, 1998 to (ii) January 31, 2002.

3.9 Qualified Preretirement Survivor Annuity . If a married Participant dies after his or her Retirement Benefit has vested but before the Benefit Commencement Date or Deferred Benefit Commencement Date in effect for such benefit, then the Participant's surviving spouse will be entitled to a Qualified Preretirement Survivor Annuity in accordance with this Section 3.9.

(a) The Qualified Preretirement Survivor Annuity will become payable on the later of (1) the first day of the month coinciding with or next following the Participant's death or (2) the earliest date on which the Participant would have been eligible to receive a Qualified Joint and Survivor Annuity under the Plan (disregarding any Deferred Benefit Commencement Date election the Participant may have outstanding under Section 3.3 at the time of his or her death).

(b) The Qualified Preretirement Survivor Annuity will be in a dollar amount equal to fifty percent (50%) of the amount the Participant would have received had his or her Separation from Service occurred on the day before his or her death and he or she had elected the Qualified Joint and Survivor Annuity as his or her form of benefit payment. In the case of a vested Participant who dies on or before the earliest date on which he or she would have been eligible to receive a Qualified Joint and Survivor Annuity, the amount of the Qualified Preretirement Survivor Annuity will be computed as though the Participant had survived until he or she was first eligible to receive a Qualified Joint and Survivor Annuity, retired at that time with an immediate Qualified Joint and Survivor Annuity, and died the next day.

3.10 Death Benefit . If a Participant who is unmarried at the time dies after his or her Retirement Benefit has vested but before the Benefit Commencement Date or Deferred Benefit Commencement Date in effect for such benefit, then such Participant's Beneficiary shall be entitled to a Death Benefit in accordance with this Section 3.10.

(a) The Death Benefit will become payable on the later of (1) the first day of the month coinciding with or next following the Participant's death or (2) the earliest date on which the Participant would have been eligible to receive his or her Retirement Benefit (disregarding any Deferred Benefit Commencement Date election the Participant may have outstanding under Section 3.4 at the time of his or her death).

(b) The Death Benefit will be in a monthly dollar amount equal to the monthly retirement benefit the Participant would have received under the Plan had his or her Separation from Service occurred on the day before the Participant's death and he or she had elected to receive the optional form of benefit described in Section 3.5 of the Plan. In the case of a vested Participant who dies on or before the earliest date that such Participant would have been eligible to receive his or her Retirement Benefit, the amount of the Death Benefit will be computed as though the Participant had survived until he or she was first eligible to receive a

retirement benefit, retired at that time and elected to receive the optional form of benefit described in Section 3.5 of the Plan, and died the next day.

3.11 Adjustments to Benefits . The benefit calculated in accordance with the provisions of this Article III shall, with respect to each Participant referenced in Exhibit A, be subject to the specific adjustments set forth in Exhibit A with respect to that Participant.

3.12 Mandatory Deferral of Payments . Notwithstanding any provision to the contrary in this Article III or any other article in the Plan, a vested Participant’s Retirement Benefit shall not commence under this Plan prior to the earlier of (i) the first day of the seventh (7th) month following the date of his or her Separation from Service or (ii) the date of his or her death, if the Participant is deemed at the time of such Separation from Service to be a Specified Employee and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable deferral period, all monthly retirement payments deferred pursuant to this Section 3.12 shall be paid in a lump sum to the Participant, and the remaining monthly retirement payments due under the Plan shall be paid in accordance with the normal payment dates specified for them herein.


IV.	VESTING

4.1 Normal Vesting . A Participant shall vest in his or her Accrued Benefit upon completion of Years of Service as follows:



Years of Service	Vested Percentage
Less than 10	None
10 or More	100%

4.2 Change in Control Severance Vesting . Notwithstanding Section 4.1, a Participant’s Accrued Benefit shall immediately become 100% vested if such Participant becomes entitled to a severance benefit under the Executive Severance Plan by reason of a qualifying termination of his or her Employee status thereunder.


V.	FUNDING NATURE OF THE PLAN

The funds used for payment of benefits under this Plan and of the expenses incurred in the administration thereof shall, until such actual payment, continue to be a part of the general funds of the Company, and no person other than the Company shall, by virtue of this Plan, have any interest in any such funds. Nothing contained herein shall be deemed to create a trust of any kind or create any fiduciary relationship. To the extent that any person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. The foregoing notwithstanding, the Company may fund the Plan with Board approval at any time, and the Company shall in the event of a Change in Control arrange for the funding, immediately before the effective date of that Change in Control, of all the Accrued Benefits under the Plan through a trust which satisfies the requirements of Revenue Procedure 92-64 and/or such other statutory or regulatory requirements as are necessary to assure that Participants are not subject to Federal income

taxation on either their Accrued Benefits or amounts contributed to such trust before their receipt of such benefits or assets.


VI.	ADMINISTRATION OF THE PLAN

6.1 The Plan shall be administered by the Executive Compensation Committee of the Board of Directors of SJW Corp. The Executive Compensation Committee may delegate one or more of its administrative duties and responsibilities under the Plan to (i) a plan administrative committee comprised of two or more employees of the Company (the “Designated Plan Committee”) appointed to the Designated Plan Committee by the Executive Compensation Committee or (ii) a third-party plan administrator selected by the Executive Compensation Committee. If the Designated Plan Committee is delegated authority under the Plan, the members of that Designated Plan Committee may thereafter be comprised of employees of the Company appointed by either the Executive Compensation Committee or the Company’s Chief Executive Officer. The Executive Compensation Committee, the Designated Plan Committee and any third-party administrator shall each, in carrying out the respective administrative duties and responsibilities delegated to them under the Plan, be referred to in this document as the Committee and each may, to the extent such authority is within the scope of the respective duties and responsibilities delegated to it under the Plan, have full and complete authority to administer the Plan, including (without limitation) the following:

(a) selecting the Eligible Employees who are to participate in the Plan,

(b) compiling and maintaining all records necessary in connection with the Plan;

(c) determining the amount (if any) of the benefits payable under the Plan to a Participant or his or her spouse or Beneficiary;

(d) authorizing the payment of all benefits under the Plan as they become due and payable under the Plan;

(e) reducing or otherwise adjusting amounts payable under the Plan if payments are made in error;

(f) performing any administrative duties or responsibilities under any grantor trust agreement for the Plan;

(g) administering the benefit claims process under the Plan; and

(h) engaging such legal accounting and other professional services as it may deem proper.

6.2 Decisions by the Committee shall be final and binding upon all parties.

6.3 The members of the Executive Compensation Committee or the Designated Plan Committee shall serve without compensation, but all benefits payable under the Plan and all expenses properly incurred in the administration of the Plan, including all expenses properly incurred by the Executive Compensation Committee or the Designated Plan Committee in exercising its duties under the Plan, shall be borne by the Company.


VII.	BENEFIT CLAIMS

7.1 Claims Procedure . No application is required for the payment of benefits under the Plan. However, if any Participant (or spouse or Beneficiary) believes he or she is entitled to a benefit from the Plan which differs from the benefit determined by the Committee, then such individual may file a written claim for benefits with the Committee. Each claim shall be acted upon and approved or disapproved within ninety (90) days following receipt by the Committee.

7.2 Denial of Benefits . In the event any claim for benefits is denied, in whole or in part, the Committee shall notify the claimant in writing of such denial and of his or her right to a review by the Committee and shall set forth, in a manner calculated to be understood by the claimant, specific reasons for such denial, specific references to pertinent provisions of the Plan on which the denial is based, a description of any additional material or information necessary to perfect the claim, an explanation of why such material or information is necessary, and an explanation of the review procedure.

7.3 Review .

(a) Any person whose claim for benefits is denied in whole or in part may appeal to the Committee for a full and fair review of the decision by submitting to the Committee, within ninety (90) days after receiving written notice from the Committee of such denial, a written statement:

a. requesting a review by the Committee of his or her claim for benefits;

b. setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and

c. setting forth any issues or comments which the claimant deems pertinent to his or her claim.

(b) The Committee shall act upon each such appeal within sixty (60) days after receipt of the claimant’s request for review by the Committee, unless special circumstances require an extension of time for processing. If such an extension is required, written notice of the extension shall be furnished to the claimant within the initial sixty (60)-day period, and a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the initial request for review. The Committee shall make a full and fair review of each such appeal and any written materials submitted by the claimant or the Company in connection therewith and may require the Company or the claimant to submit such additional facts, documents or other evidence as the Committee may, in its sole discretion, deem

necessary or advisable in making such a review. On the basis of its review, the Committee shall make an independent determination of the claimant’s eligibility for benefits under the Plan. The decision of the Committee on any benefit claim shall be final and conclusive upon all persons.

(c) Should the Committee deny an appeal in whole or in part, the Committee shall give written notice of such decision to the claimant, setting forth in a manner calculated to be understood by the claimant the specific reasons for such denial and specific reference to the pertinent Plan provisions on which the decision was based. The notice shall also include a statement that the claimant has a right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974 (as amended from time to time).


VIII.	AMENDMENTS AND TERMINATION

8.1 The Board of Directors reserves the power at any time to terminate this Plan and to otherwise amend any portion of the Plan other than this Article VII; provided, however, that no such action shall (i) reduce any Accrued Benefit (or any benefit hereunder based thereon) as of the date of such action or (ii) adversely affect a Participant's right to continue to vest in such Accrued Benefit in accordance with the terms of the Plan in effect immediately prior to such action.

8.2 Notice of termination or amendment of the Plan, pursuant to Section 8.1, shall be given in writing to each Participant and beneficiary of a deceased Participant.

8.3 No amendment or termination of the Plan shall affect or modify the benefit commencement date provisions or form of payment provisions in effect under Article III immediately prior to such amendment or termination, and such amendment or termination shall not result in any accelerated payment of the retirement benefits accrued under the Plan.


IX.	MISCELLANEOUS

9.1 The headings and subheadings of this instrument are inserted for convenience of reference only and are not to be considered in the construction of this Plan. Wherever appropriate, words used in the singular may include the plural, plural may be read as the singular and the masculine may include the feminine.

9.2 The instrument creating the Plan shall be construed, administered, and governed in all respects in accordance with the laws of the State of California to the extent not preempted by ERISA. If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall continue to be fully effective.

9.3 Participation in this Plan shall not give to any employee the right to be retained in the employ of the Company nor any right or interest in this Plan other than is herein specifically provided.

9.4 Any payment to a Participant or beneficiary or the legal representative of either, in accordance with the terms of this Plan shall to the extent thereof be in full satisfaction of all claims such person may have against the Company hereunder, which may require such payee, as a condition to such payment, to execute a receipt and release therefor in such form as shall be determined by the Company.

9.5 This Plan is intended to qualify for exemption from Articles II, III, and IV of ERISA, as amended, as an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of such Act, and shall be so interpreted.

9.6 Benefits under this Plan shall not be alienated, hypothecated or otherwise encumbered, and to the maximum extent permitted by law such benefits shall not in any way be subject to claim of creditors or liable to attachment, execution or other process of law.

9.7 If an individual entitled to receive retirement benefits is determined by the Committee or is adjudged to be legally incapable of giving valid receipt and discharge for such benefits, they shall be paid to the duly appointed and acting guardian, if any, and if no such guardian is appointed and acting, to such person as the Committee may designate. Such payment shall, to the extent made, be deemed a complete discharge for such payments under this Plan.

9.8 If the Committee is unable due to unforeseen circumstances to make the determinations required under this Plan in sufficient time for the Company to make payments when due hereunder, the Company shall make the payments immediately upon the completion of the Committee’s determinations, with interest at a reasonable rate from the due date, and may, at its option, make provisional payments, subject to adjustment, pending such determination.

9.9 For purposes of this Plan, actuarial equivalents shall be determined on the basis of mortality tables and interest factors most recently employed for the purpose of the San Jose Water Company Retirement Plan.

IN WITNESS WHEREOF, San Jose Water Company has caused its authorized officers to execute this instrument in its name and on its behalf.

SAN JOSE WATER COMPANY



	By: /s/W. Richard Roth W. Richard Roth
	Title: President and Chief Executive Officer
	Dated: January 27, 2012

EXHIBIT A

THE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

AS AMENDED AND RESTATED ON JANUARY 25, 2012

EFFECTIVE AS OF JANUARY 1, 2012

(a) In computing John Weinhardt's benefit under Section 3.1 of the Plan, he shall receive an additional eight and one quarter tenths of one percent (0.825%) of Final Average Compensation for each year of service as President and Chief Executive Officer of the Company. In addition, Mr. Weinhardt shall be entitled to a supplemental benefit of payment of $225,000, which shall be fully vested upon his retirement and payable in equal monthly installments over the thirty-six (36) month period beginning August 1, 2002 and ending July 31, 2005.

(b) If Barbara Y. Nilsen retires on March 1, 1998, then the benefit to which she is entitled under Sections 3.1 and 3.2 of the Plan shall be increased by $40,000 in the first year, $30,000 in the second year, and $20,000 in the third year of retirement.

(c) In computing Frederick Meyer's benefit under Sections 3.1 and 3.2 of the Plan, he shall receive an additional two and one-half (2 1/2) Years of Service credit and shall be deemed to be 2 1/2 years of age older at the time he retires.

(d) In computing the benefits under Article III for any Participant who becomes entitled to a severance benefit under the Executive Severance Plan by reason of a qualifying termination of Employee status after a Change in Control, such Participant shall be credited with an additional number of Years of Service and years of age equal to the number of years of cash severance benefits to which such Participant is entitled under the Severance Plan (or if the severance benefit is paid in a lump sum, the number of years of salary or compensation on which such lump sum severance payment is based). In no event, however, shall any benefit be payable hereunder earlier than it otherwise would have been paid in the absence of such additional Years of Service and age credits.

(e) If W. Richard Roth terminates Employee status before his Normal Retirement Date, the benefit to which he is entitled under Section 3.2 of the Plan shall be the full annual amount computed in accordance with Section 3.1 of the Plan, without any reduction for early commencement of benefits. In addition, in computing Mr. Roth’s Final Average Compensation for purposes of computing his benefit under Article III, the amount of his annual cash performance bonus for each year on and after 2003 shall be deemed to be the greater of his actual bonus for that year or his target bonus for such year, with the applicable amount to be taken into account as Compensation in the month in which the bonus for that year is paid to him or would have been paid to him in the absence of his deferral election or other deferred payment provision applicable to such compensation. Any deferred portion of the bonus shall not again be taken into account as Compensation in the month in which that deferred portion is actually paid. If Mr. Roth becomes entitled to a severance benefit under the Executive Severance Plan by

reason of a qualifying termination of Employee status after a Change in Control, he shall be credited with such additional service and years of age, if any, as is necessary, after application of paragraph (d) above, to qualify him for benefits that would be payable had he terminated Employee status after qualifying for an Early Retirement Date, provided that no benefit shall be payable before his actual 55 ^th birthday.

(f) If Jim Johansson retires March 12, 2004 then the benefit to which he is entitled under Sections 3.1 and 3.2 of the Plan shall be calculated with an additional one and one half years of service credit and one and one half years of age credit.

(g) If Robert Loehr retires on December 07, 2004, then the benefit to which he is entitled under Sections 3.1 and 3.2 of the Plan shall be calculated with an additional 2 years of age credit.

(h) When George Belhumeur retires, the benefit to which he is entitled under Sections 3.1 and 3.2 of the Plan shall be determined by increasing his Final Average Compensation (as defined in Section 1.11) by the dollar amount obtained by dividing the accrued vacation and termination payments made to him in connection with his retirement by 36; provided, however that in determining his normal retirement benefit under Section 3.1 or his early retirement benefit under Section 3.2, his Accrued Benefit shall in no event be less than his Accrued Benefit as of February 28, 2004.

(i) If Richard Balocco retires before February 28, 2007, then the benefit to which he is entitled under Sections 3.1 and 3.2 of the Plan shall be calculated with an additional two and one half years of age credit.

(j) If Richard Pardini retires June 15, 2007, then the benefit to which he is entitled under Sections 3.1 and 3.2 of the Plan shall be calculated with an additional three years of service credit.

(k) Effective January 1, 2010, the monthly pension benefit payable under the Plan to each of the following retired individuals shall be increased by 4%:

George Clements

Jim Johansson

Robert A. Loehr

Frederick R. Meyer

Barbara Y. Nilsen

Paul Schrieber

John W. Weinhardt

(l) In computing her normal retirement benefit under Section 3.1 of the Plan, Angela Yip shall be entitled to an additional Years of Service credit to the extent necessary to bring her total Years of Service to 27.28 years (with her maximum normal retirement benefit under Section 3.1 of the Plan to be limited to sixty percent (60%) of her Final Average Compensation), provided Ms. Yip (i) retires from the Company during the period beginning June 1, 2011 and ending July 31, 2011 and (ii) delivers an effective and enforceable general release in

accordance with the form Separation Agreement and Release approved by the Executive Compensation Committee of the Board of Directors of SJW Corp. for purposes of her special retirement benefit package. The Years of Service credit so provided Ms. Yip shall not result in any change to the Benefit Commencement Date of her retirement benefit or the form in which that benefit is to be paid under the Plan.

SCHEDULE I

Actuarial Equivalency Factors

For

10 Year Term Certain and Life Annuity Option



Age	Factor*
55	0.9888
56	0.9871
57	0.9852
58	0.9829
59	0.9803
60	0.9773
61	0.9739
62	0.9701
63	0.9659
64	0.9612
65	0.9559
66	0.9501
67	0.9436
68	0.9363
69	0.9281
70	0.9188

Based on RP-2000 table (Unisex), and 5% interest

* If the benefit commencement date for a participant is at an age and month that is not an exact age integer in the above table, the appropriate conversion factor will be interpolated on a straight line monthly basis between the factor for the age integer in the above table most recently attained by the participant and the next age integer thereafter in such table.

EXHIBIT 10.23

SAN JOSE WATER COMPANY

CASH BALANCE
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

Amended and Restated on January 25, 2012

Effective as of January 1, 2012

TABLE OF CONTENTS

Page



I.	DEFINITIONS		1
	1.1	Account	1
	1.2	Accrued Benefit	1
	1.3	Beneficiary	1
	1.4	Benefit Payment Date	1
	1.5	Board of Directors	1
	1.6	Change in Control	1
	1.7	Code	1
	1.8	Committee	2
	1.9	Company	2
	1.10	Compensation	2
	1.11	Compensation Credits	2
	1.12	Credited Service	2
	1.13	Death Benefit	2
	1.14	Eligible Employee	2
	1.15	Employee	2
	1.16	Employer Group	2
	1.17	Executive Severance Plan	3
	1.18	ERISA	3
	1.19	Interest Credit	3
	1.20	Participant	3
	1.21	Plan	3
	1.22	Plan Quarter	3
	1.23	Plan Year	3
	1.24	Retirement Benefit	3
	1.25	Retirement Plan	3
	1.26	Separation from Service	4
	1.27	SJW Corp	4
	1.28	Year of Service	4
	1.29	Years of Service	4
II.	PARTICIPATION		4
III.	RETIREMENT BENEFIT		5
	3.1	Retirement Benefit Formula	5
	3.2	Credits to Accounts	5
	3.3	Time and Form of Payment	7
	3.4	Beneficiary Designation	7
	3.5	Death Benefit	7
IV.	VESTING		7
	4.1	Normal Vesting	7
	4.2	Change in Control Severance Vesting	8



V.	FUNDING NATURE OF THE PLAN		8
VI.	ADMINISTRATION OF THE PLAN		8
	6.1	Administration	8
	6.2	Special Provisions for Designated Participant	9
	6.3	Compensation of the Committee	10
VII.	BENEFIT CLAIMS		10
	7.1	Claims Procedure	10
	7.2	Denial of Benefits	10
	7.3	Review	10
VIII.	AMENDMENTS AND TERMINATION		11
	8.1	Reservation of Power	11
	8.2	Notice	11
	8.3	Affect of Amendment or Termination	12
IX.	MISCELLANEOUS		12
	9.1	Headings	12
	9.2	Choice of Law	12
	9.3	No Right to Employment	12
	9.4	Satisfaction of Claims	12
	9.5	Top Hat Status	12
	9.6	Alienation of Benefits	12
	9.7	Incapacity	12
	9.8	Timing of Determinations	13

THE SAN JOSE WATER COMPANY

CASH BALANCE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN

On July 23, 2008, the Board of Directors of the San Jose Water Company (the “Company”) adopted the San Jose Water Company Cash Balance Supplemental Executive Retirement Plan (the “Plan”). The Plan is designed to supplement the retirement income of a designated select group of management and/or highly compensated executives of the Company and is therefore intended to function solely as a so-called “top hat” plan of deferred compensation subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), which are applicable to such a plan. In addition, the Plan is intended to comply with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations issued thereunder.

The Plan was amended and restated in July 2009 to revise the definition of compensation in Article I of the Plan so that any deferred portion of a bonus award will be included as compensation in the month such bonus would have been paid in the absence of the deferral and not in the month it is actually paid following the deferral period.

The Plan was amended and restated on January 25, 2012, effective as of January 1, 2012, to (i) permit the Executive Compensation Committee as the administrator of the Plan to delegate one or more of the day-to-day administrative functions under the Plan to either a plan administrative committee comprised of two or more employees of the Company or a third-party administrator, (ii) provide the Executive Compensation Committee with the authority to appoint the initial members of any such plan administrative committee and further empower the Executive Compensation Committee or the Company’s Chief Executive Officer with the authority to replace members of the plan administrative committee from time to time, (iii) establish a formal claims review process under the Plan and (iv) incorporate into the new restatement the amendments made to the Plan since the date of its original adoption.


I.	DEFINITIONS

Wherever used herein the following terms have the meanings indicated:

1.1 Account . The term “Account” means the account maintained with respect to a Participant, which is established and maintained hereunder for bookkeeping purposes only and shall not be construed as creating for any Employee a right to specific assets of the Plan.

1.2 Accrued Benefit . The term “Accrued Benefit” means, at any time, the value of a Participant’s Account, as computed in accordance with Section 3.1.

1.3 Beneficiary . The term “Beneficiary” means the person or persons entitled, pursuant to Section 3.4, to receive the Participant’s Retirement Benefit following his or her death; provided, however , that in the case of a married Participant, the Participant’s spouse shall be deemed to be the Participant’s Beneficiary, unless such spouse otherwise consents, in a form and manner designated by the Committee, to the designation of an alternate Beneficiary.

1.4 Benefit Payment Date . The term “Benefit Payment Date” means the date on which the payment of a Participant’s Retirement Benefit is to be paid pursuant to Section 3.3.

1.5 Board of Directors . The term “Board of Directors” means the Board of Directors of San Jose Water Company.

1.6 Change in Control . The term “Change in Control” means a transaction involving a change in ownership or control of SJW Corp. which constitutes a Change in Control, as such term is defined at the relevant time in the Executive Severance Plan (or any successor plan) or, if the Executive Severance Plan ceases to exist and is not succeeded by another similar plan, as it was last defined in the Executive Severance Plan.

1.7 Code . The term “Code” means the Internal Revenue Code of 1986, as amended from time to time.

1.8 Committee . The term “Committee” means the entity or entities which administer the Plan in accordance with the provisions of Article VI hereof.

1.9 Company . The term “Company” means San Jose Water Company and any successor to all or a major portion of the assets or business of the San Jose Water Company.

1.10 Compensation . The term “Compensation” means the salary earned by a Participant during a Plan Quarter or other relevant period under the Plan, whether or not actually paid in that Plan Quarter or period, plus any annual cash performance bonus that is paid to such Participant during such Plan Quarter or other relevant period plus any portion of such bonus that would have been paid in such Plan Quarter or period in the absence of the Participant’s deferral election or other deferred payment provision applicable to such compensation. Any deferred cash performance bonus taken into account as Compensation for the Plan Quarter or other relevant period in which such bonus would have been paid in the absence of a deferral provision or election shall not again be taken into account as Compensation in the Plan Quarter or other relevant period in which that deferred bonus is actually paid. No other bonus or special compensation will be included, except to the extent expressly provided otherwise, in accordance with the applicable provisions of Code Section 409A, by the Committee administering this Plan.

1.11 Compensation Credits . The term “Compensation Credits” means the dollar credits, if any, credited to a Participant’s Account in accordance with Section 3.2 below.

1.12 Credited Service . The term “Credited Service” has the meaning set forth in the Retirement Plan.

1.13 Death Benefit . The term “Death Benefit” has the meaning set forth in Section 3.5 of the Plan.

1.14 Eligible Employee . The term “Eligible Employee” means any officer of the Company or any other Employee who:

(a) first commences status as an Employee on or after March 31, 2008.

(b) is part of a select group of management or an otherwise highly compensated employee, as determined by the Committee in accordance with applicable ERISA standards, and

1.15 Employee . The term “Employee” means an individual for so long as he or she is in the employ of at least one member of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

1.16 Employer Group . The term “Employer Group” means:

(a) the Company and

(b) each of the other members of the controlled group that includes the Company, as determined in accordance with Sections 414(b) and (c) of the Code; provided, however, that in applying Sections 1563(1), (2) and (3) of the Code, for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections, and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations.

1.17 Executive Severance Plan . The term “Executive Severance Plan” means SJW Corp. Executive Severance Plan, as amended from time to time.

1.18 ERISA . The term “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

1.19 Interest Credit . The term “Interest Credit” means the dollar credit, if any, credited to a Participant’s Account in accordance with Section 3.2(b) below.

1.20 Participant . The term “Participant” means an Eligible Employee selected by the Committee to participate in the Plan; provided, however, that such individual shall not commence actual participation in the Plan or otherwise accrue benefits under the Plan until the date determined under Article II.

1.21 Plan . The term “Plan” means the San Jose Water Company Cash Balance Executive Supplemental Retirement Plan, as set forth in this document and in any amendments from time to time made hereto.

1.22 Plan Quarter . The term “Plan Quarter” means the period commencing initially on July 23, 2008, and ending September 30, 2008, and thereafter, the period commencing on the first day of each calendar quarter and ending on the day immediately preceding the first day of the next calendar quarter.

1.23 Plan Year . The term “Plan Year” means the period commencing initially on July 23, 2008, and ending December 31, 2008, and thereafter, the period commencing on January 1 of each year and ending on the December 31 following.

1.24 Retirement Benefit . The term “Retirement Benefit” means the retirement benefit payable under this Plan, calculated in accordance with Article III.

1.25 Retirement Plan . The term “Retirement Plan” means the San Jose Water Company Retirement Plan, a tax-qualified defined benefit pension plan under Code Section 401(a) which was adopted November 1, 1950, as such plan may be amended and restated from time to time.

1.26 Separation from Service . The term “Separation from Service” means the Participant’s cessation of Employee status by reason of his or her death, retirement or termination of employment. The Participant shall be deemed to have terminated employment for such purpose at such time as the level of his or her bona fide services to be performed as an Employee (or non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services he or she rendered as an Employee during the immediately preceding thirty-six (36) months (or such shorter period for which he or she may have rendered such service). Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Code Section 409A. In addition to the foregoing, a Separation from Service will not be deemed to have occurred while an Employee is on military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six (6) months or any longer period for which such Employee is provided with a right to reemployment with one or more members of the Employer Group either by statute or by contract; provided, however, that in the event of an Employee’s leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and that causes such individual to be unable to perform his or her duties as an Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29) months of such leave. If the period of leave exceeds six (6) months (or twenty-nine (29) months in the event of disability as indicated above) and the Employee is not provided a right to reemployment either by statute or by contract, then such Employee will be deemed to have a Separation from Service on the first day immediately following the expiration of such six (6)-month or twenty-nine (29)-month period.

1.27 SJW Corp . The term “SJW Corp.” means SJW Corp., a California corporation which is the corporate parent of the Company, or any successor to all or a major portion of the assets or business of the SJW Corp.

1.28 Year of Service . The term “Year of Service” has the meaning set forth in the San Jose Water Company Retirement Plan.

1.29 Years of Service . The term “Years of Service” means more than one Year of Service.


II.	PARTICIPATION

Each Eligible Employee selected by the Committee for participation in the Plan shall be promptly notified by the Company in writing of such selection and shall become a Participant in the Plan on the first day of the first Plan Quarter coincident with or next following the date of his or her selection for participation by the Committee or such later date as the Committee shall specify, as set forth in the notification from the Company.


III.	RETIREMENT BENEFIT

3.1 Retirement Benefit Formula .

(a) Subject to Section 3.1(b) below, the value of the Retirement Benefit payable to a vested Participant under this Plan shall be equal to the excess of:

(i) the amount of the balance of the Participant’s Account under this Plan on the last day of the Plan Quarter coincident with or immediately preceding the Participant’s Benefit Payment Date, based upon the sum of the Compensation Credits and Interest Credits that have been made in accordance with the provisions of Section 3.2(a) and Section 3.2(b) below, over

(ii) the amount by which (A) exceeds (B), where:

(A) is the greater of the balance credited to the Participant’s account under the Retirement Plan on:

(I) the last day of the Plan Quarter coincident with or immediately preceding the Participant’s Benefit Payment Date under this Plan, based upon the sum of the compensation credits and interest credits that have been made to such account through the last day of such Plan Quarter in accordance with the applicable provisions of such Retirement Plan, and

(II) the last day of the Plan Quarter that immediately precedes the Plan Quarter described in Section 3.1(a)(ii)(A)(I) above, based upon the sum of the compensation credits and interest credits that have been made to such account through the last day of such Plan Quarter in accordance with the applicable provisions of such Retirement Plan.

(B) is the balance credited to the Participant’s account under the Retirement Plan on the first day of the Plan Quarter coincident with or next following the date that the Participant first becomes eligible for this Plan.

(b) Notwithstanding Section 3.1(a) above, if a Participant in this Plan ceases to be eligible for any reason and later becomes eligible once again, the balance credited to

the Participant’s account under the Retirement Plan during such period of ineligibility, as determined by the Committee, in its sole and absolute discretion, shall be disregarded in determining the amount of the offset described in Section 3.1(a)(ii) above.

3.2 Credits to Accounts . For each Plan Quarter that the Participant remains an Eligible Employee who is participating in this Plan, such Participant’s Account shall be eligible to receive one or more of the following credits:

(a) Compensation Credits . Compensation Credits shall be made to each Participant’s Account in an amount determined under the following chart on the basis of:

(i) the Participant’s Compensation taken into account, in accordance with Section 1.10 above, for the period beginning with the start of the Plan Quarter and ending with the earliest of:

(A) the last day of the Plan Quarter,

(B) the first day of the calendar month that is coincident with or precedes the Participant’s Separation from Service,

(C) the first day of the calendar month that is coincident with or precedes the date on which a Participant ceases to qualify as an Eligible Employee; and

(ii) the number of years of Credited Service completed as of the earliest of:

(A) the last day of the Plan Quarter,

(B) the first day of the calendar month that is coincident with or precedes the Participant’s Separation from Service, and

(C) the first day of the calendar month that is coincident with or precedes the date on which a Participant ceases to qualify as an Eligible Employee:



Years of Credited Service	Percent of Compensation
Less than 5	10.00%
5 but less than 10	11.00%
10 but less than 15	12.00%
15 but less than 20	14.00%
20 or more	16.00%

(b) Interest Credits . An Interest Credit shall be made to each Participant’s Account in an amount determined by multiplying:

(i) the balance of the Participant’s Account as of the earlier of

(A) the last day of the Plan Quarter, and

(B) first day of the first calendar month on which all events have occurred that entitle a Participant, or Beneficiary, as the case may be, to a benefit pursuant to the terms of this Plan, by

(ii) the lesser of:

(A) one and one half percent (1.5%), and

(B) the greater of:

(I) three-fourths of one percent (.75%), or

(II) one quarter of the annual yield on 30-year Treasury bonds, determined as of the month of October preceding the first day of the Plan Year.

3.3 Time and Form of Payment . A vested Participant’s Retirement Benefit shall be paid in a single lump sum amount and the Benefit Payment Date associated with such Participant’s Retirement Benefit shall be the first day of the seventh calendar month following the Participant’s Separation from Service.

3.4 Beneficiary Designation . The Beneficiary designation of a Participant shall be made on a form prepared by, and delivered to, the Committee prior to the Benefit Payment Date. The Participant may revoke or change the designation at any time prior to the applicable Benefit Payment Date by delivering a subsequent form to the Committee.

3.5 Death Benefit . If a Participant dies after his or her Retirement Benefit has vested but before the Benefit Payment Date, then such Participant’s Beneficiary shall be entitled to a Death Benefit that is:

(a) payable on the first day of the month coinciding with or next following the Participant’s death, or as soon thereafter as administratively practicable, but in no event after the later of:

(i) the close of the calendar year in which the Participant’s death occurs, or

(ii) the fifteenth day of the third calendar month following the date of the Participant’s death, and

(b) paid in a single lump sum amount, equal to the Retirement Benefit the Participant would have received under the Plan had his or her Separation from Service occurred on the day before the Participant’s death.


IV.	VESTING

4.1 Normal Vesting . A Participant shall vest in his or her Accrued Benefit upon completion of Years of Service as follows:



Years of Service	Vested Percentage
Less than 10	None
10 or More	100.00%

4.2 Change in Control Severance Vesting . Notwithstanding Section 4.1 above, a Participant’s Accrued Benefit shall immediately become 100% vested if such Participant becomes entitled to a severance benefit under the Executive Severance Plan by reason of a qualifying termination of his or her Employee status thereunder.


V.	FUNDING NATURE OF THE PLAN


VI.	ADMINISTRATION OF THE PLAN

6.1 Administration .

(a) The Plan shall be administered by the Executive Compensation Committee of the Board of Directors of SJW Corp. The Executive Compensation Committee may delegate one or more of its administrative duties and responsibilities under the Plan to (i) a plan administrative committee comprised of two or more employees of the Company (the “Designated Plan Committee”) appointed to the Designated Plan Committee by the Executive Compensation Committee or (ii) a third-party plan administrator selected by the Executive Compensation Committee. If the Designated Plan Committee is delegated authority under the Plan, the members of that Designated Plan Committee may thereafter be comprised of employees of the Company appointed by either the Executive Compensation Committee or the Company’s Chief Executive Officer. The Executive Compensation Committee, the Designated Plan

Committee and any third-party administrator shall each, in carrying out the respective administrative duties and responsibilities delegated to them under the Plan, be referred to in this document as the Committee and each may, to the extent such authority is within the scope of the respective duties and responsibilities delegated to it under the Plan, have full and complete authority to administer the Plan, including (without limitation) the following:

(i) selecting the Eligible Employees who are to participate in the Plan,

(ii) compiling and maintaining all records necessary in connection with the Plan;

(iii) determining the amount (if any) of the benefits payable under the Plan to a Participant or his or her Beneficiary;

(iv) authorizing the payment of all benefits under the Plan as they become due and payable under the Plan;

(v) reducing or otherwise adjusting amounts payable under the Plan if payments are made in error;

(vi) performing any administrative duties or responsibilities under any grantor trust agreement for the Plan:

(vii) administering the benefit claims process under the Plan; and

(viii) engaging such legal accounting and other professional services as it may deem proper.

(b) Decisions by the Committee shall be final and binding upon all parties.

6.2 Special Provisions for Designated Participant . The participation in the Plan by James P. Lynch (the “ Executive ”) shall be subject to the following modifications of the terms and provisions otherwise in effect for all other Participants in the Plan and shall, accordingly, apply to and govern his Compensation Credits under the Plan and the vesting of his Accrued Benefit thereunder:

(a) For each Plan Quarter that the Executive remains an Eligible Employee participating in the Plan, Compensation Credits shall be made to such Executive’s Account in an amount determined in accordance with the provisions of Section 3.2(a) of the Plan but based on the following chart in lieu of the chart that otherwise appears in such Section 3.2(a):



Years of Credited Service	Percent of Compensation
Less than 20	15.00%
20 or more	16.00%

(b) Notwithstanding anything to the contrary in Section 4.1 of the Plan, the Executive shall vest in his Accrued Benefit under the Plan upon his completion of Years of Service as follows:



Years of Service Completed	Vested Percentage
Less than 3	None
3 or More	100.00%

(c) Except as expressly modified by this Plan Amendment, all the terms and provisions of the Plan shall apply to the Executive and shall govern his participation in the Plan and his accrual of a Retirement Benefit thereunder.

(d) This Plan Amendment shall not apply to any Participant in the Plan other than the Executive and shall have no effect or impact on any such other Participant’s benefit entitlement or benefit accrual under the Plan.

6.3 Compensation of the Committee . The members of the Executive Compensation Committee or any Designated Plan Committee shall serve without compensation, but all benefits payable under the Plan and all expenses properly incurred in the administration of the Plan, including all expenses properly incurred by the Executive Compensation Committee or the Designated Plan Committee in exercising its duties under the Plan, shall be borne by the Company.


VII.	BENEFIT CLAIMS

7.1 Claims Procedure . No application is required for the payment of benefits under the Plan. However, if any Participant (or Beneficiary) believes he or she is entitled to a benefit from the Plan which differs from the benefit determined by the Committee, then such individual may file a written claim for benefits with the Committee. Each claim shall be acted upon and approved or disapproved within ninety (90) days following receipt by the Committee.

7.3 Review .

(i) requesting a review by the Committee of his or her claim for benefits;

(ii) setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and

(iii) setting forth any issues or comments which the claimant deems pertinent to his or her claim.


VIII.	AMENDMENTS AND TERMINATION

8.1 Reservation of Power . The Board of Directors reserves the power at any time to terminate this Plan and to otherwise amend any portion of the Plan other than this Article VII; provided, however, that no such action shall:

(a) reduce any Accrued Benefit (or any benefit hereunder based thereon) as of the date of such action or

(b) adversely affect a Participant’s right to continue to vest in such Accrued Benefit in accordance with the terms of the Plan in effect immediately prior to such action.

8.2 Notice . Notice of termination or amendment of the Plan, pursuant to Section 8.1, shall be given in writing to each Participant and Beneficiary of a deceased Participant.

8.3 Affect of Amendment or Termination . No amendment or termination of the Plan shall affect or modify the Benefit Payment Date provisions or form of payment provisions in effect under Article III immediately prior to such amendment or termination, and such amendment or termination shall not result in any accelerated payment of the Retirement Benefits accrued under the Plan.


IX.	MISCELLANEOUS

9.1 Headings . The headings and subheadings of this instrument are inserted for convenience of reference only and are not to be considered in the construction of this Plan. Wherever appropriate, words used in the singular may include the plural, plural may be read as the singular and the masculine may include the feminine.

9.2 Choice of Law . The instrument creating the Plan shall be construed, administered, and governed in all respects in accordance with the laws of the State of California to the extent not preempted by ERISA. If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall continue to be fully effective.

9.3 No Right to Employment . Participation in this Plan shall not give to any employee the right to be retained in the employ of the Company nor any right or interest in this Plan other than is herein specifically provided.

9.4 Satisfaction of Claims . Any payment to a Participant or Beneficiary or the legal representative of either, in accordance with the terms of this Plan shall to the extent thereof be in full satisfaction of all claims such person may have against the Company hereunder, which may require such payee, as a condition to such payment, to execute a receipt and release therefor in such form as shall be determined by the Company.

9.5 Top Hat Status . This Plan is intended to qualify for exemption from Articles II, III, and IV of ERISA, as amended, as an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of such Act, and shall be so interpreted.

9.6 Alienation of Benefits . Benefits under this Plan shall not be alienated, hypothecated or otherwise encumbered, and to the maximum extent permitted by law such benefits shall not in any way be subject to claim of creditors or liable to attachment, execution or other process of law.

9.7 Incapacity . If an individual entitled to receive a Retirement Benefit is determined by the Committee or is adjudged to be legally incapable of giving valid receipt and discharge for such benefits, they shall be paid to the duly appointed and acting guardian, if any, and if no such guardian is appointed and acting, to such person as the Committee may designate. Such payment shall, to the extent made, be deemed a complete discharge for such payments under this Plan.

9.8 Timing of Determinations . If the Committee is unable due to unforeseen circumstances to make the determinations required under this Plan in sufficient time for the Company to make payments when due hereunder, the Company shall make the payments immediately upon the completion of the Committee determinations, with interest at a reasonable rate from the due date, and may, at its option, make provisional payments, subject to adjustment, pending such determination.

IN WITNESS WHEREOF, San Jose Water Company has caused its authorized officers to execute this instrument in its name and on its behalf.

SAN JOSE WATER COMPANY



January 27, , 2012	By: /s/W. Richard Roth W. Richard Roth, President and Chief Executive Officer

EXHIBIT 10.33

SAN JOSE WATER COMPANY

SPECIAL DEFERRAL ELECTION PLAN

JANUARY 25, 2012 AMENDMENT AND RESTATEMENT

EFFECTIVE AS OF JANUARY 1, 2012

ARTICLE I

NAME AND PURPOSE

1.01 Purpose . San Jose Water Company, a corporation duly organized and existing under the laws of State of California (the “Corporation”), established the Special Deferral Election Plan (the “Plan”), effective as of January 1, 2005, in order to provide a select group of the management personnel and other highly compensated employees of one or more participating employers with an opportunity to defer a portion of their earnings each year and to realize an investment return on those funds during the deferral period. The Plan was amended and restated by the Executive Compensation Committee of the Board of Directors of SJW Corp. (the Corporation’s parent company) on October 22, 2008, effective as of January 1, 2008, to conform the provisions of the plan document to the applicable requirements of Section 409A of the Internal Revenue Code and the Treasury Regulations issued thereunder. The Plan as so amended and restated shall continue to function solely as a so-called “top hat” plan of deferred compensation subject to the provisions of the Employee Retirement Income Security Act of 1974 (as amended from time to time) applicable to such a plan. The provisions of the Plan and its various amendments in effect prior to this amendment and restatement were intended to comply with the proposed Treasury Regulations under Internal Revenue Code Section 409A and the regulatory guidance provided by the U.S. Treasury and the Internal Revenue Service with respect to Section 409A compliance and transitional relief. This January 2012 amendment and restatement of the Plan was adopted by the Executive Compensation Committee of the Board of Directors of SJW Corp. on January 25, 2012, effective as of January 1, 2012, to provide for the delegation of authority over the day-to-day administration of the Plan to either a plan administrative committee comprised of two (2) or more employees of the Corporation or a third-party plan administrator.

1.02 General . The benefits provided under the Plan shall be paid, as they become due, either directly from the Participating Employer’s general assets or through a grantor trust arrangement established in accordance with the provisions of Article VIII. The interest of each participant (and his or her beneficiary) in any benefits that become payable under the Plan shall be no greater than that of an unsecured creditor of the Participating Employer.

ARTICLE II

ADMINISTRATION OF THE PLAN

2.01 Plan Administrator . The Plan shall be administered by the Executive Compensation Committee of the Board of Directors of SJW Corp. The Executive Compensation Committee may delegate one or more of its administrative duties and responsibilities under the Plan to (i) a plan administrative committee comprised of two or more employees of the Corporation (the “Designated Plan Committee”) appointed to the Designated Plan Committee by the Executive Compensation Committee or (ii) a third-party plan administrator selected by the Executive Compensation Committee. If the Designated Plan Committee is delegated authority under the Plan, the members of the Designated Plan Committee may thereafter be comprised of employees of the Corporation appointed by either the Executive Compensation Committee or the Corporation’s Chief Executive Officer. The Executive Compensation Committee, the Designated Plan Committee and any third-party administrator shall each, in carrying out the respective administrative duties and responsibilities delegated to them under the Plan, be referred to in this document as the Plan Administrator and each may, to the extent such authority is within the scope of the respective duties and responsibilities delegated to it under the Plan, have full and complete authority to administer the Plan, select the eligible employees who are to participate in the Plan, determine the benefit entitlement of each participant under the Plan and his or her vested status, authorize the payment of all benefits that become due and payable under the Plan, perform any administrative duties or responsibilities under any grantor trust agreement for the Plan and administer the benefit claims process under the Plan.

2.02 Authority . The interpretation and construction of any provision of the Plan and the adoption of rules and regulations for plan administration shall be made by the Plan Administrator. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan, including (without limitation) all decisions relating to an individual’s eligibility for participation in the Plan, his or her entitlement to benefits hereunder and the amount of any such benefit entitlement.

ARTICLE III

DEFINITIONS

3.01 “ Account ” shall mean the account maintained for each Participant on the books and records of the Participating Employer to which there shall be credited the Eligible Earnings deferred by such Participant pursuant to his or her Deferral Elections under the Plan.

The Participant’s Account will be divided into a series of subaccounts, and there will accordingly be a separate Deferral Election Subaccount for each year the Participant defers a portion of his or her Eligible Earnings. There shall also be established a separate Deferral Election Subaccount with respect to the March 2005 bonus payment which the Participant may have elected in whole or in part to defer under the Plan in accordance with the provisions of the Plan as in effect at that time.

3.02 “ Affiliated Company ” shall mean (i) the Corporation and (ii) any other member of the group of commonly controlled corporations or other businesses that include the Corporation, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder.

3.03 “ Board ” shall mean the Corporation’s Board of Directors.

3.04 “ Change in Control ” shall mean a change in ownership or control of the Corporation or a change in ownership or control of SJW Corp., a California corporation (“SJW Corp.) which occurs while SJW Corp. is the beneficial owner (as determined pursuant to Rule 13d-3 of the 1934 Act) of securities that possess more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding voting securities.

A Change in Control of the Corporation shall be deemed to occur if:

(i) any one person or more than one person acting as a group (other than the Corporation or any entity that directly or indirectly controls, is controlled by or is under common control with, the Corporation) acquires beneficial ownership (as determined pursuant to Rule 13d-3 of the 1934 Act) of securities that, together with any other securities beneficially owned by such person or group, possess more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding voting securities;

(ii) a merger, reorganization, consolidation or other similar transaction to which the Corporation in a party, unless (A) securities possessing more than fifty percent (50%) of the total combined voting power of the surviving entity or the parent thereof are, immediately after such transaction, owned beneficially, directly or indirectly, by the person or persons who beneficially owned the Corporation’s outstanding voting securities immediately before such transaction or (B) the other party to the merger, reorganization or other transaction is an entity that directly or indirectly controls, is controlled by or is under common control with, the Corporation;

(iii) a majority of the Board members is replaced over a twelve (12)- month period by Board members whose appointment or election is not endorsed by a majority of those individuals serving as Board members immediately prior to the date of such appointment or election; or

(iv) the Corporation sells all or substantially all of its assets in connection with the liquidation or dissolution of the Corporation (other than to an entity that directly or indirectly controls, is controlled by or is under common control with, the Corporation), unless securities possessing more than fifty percent (50%) of the total combined voting power of the entity acquiring such assets or the parent thereof are, immediately after such sale, owned beneficially, directly or indirectly, by the person or persons who beneficially owned the Corporation’s outstanding voting securities immediately before such sale.

A Change in Control of SJW Corp. shall be deemed to occur upon the closing of any of the following transactions:

(i) The acquisition, directly or indirectly by any person or related group of persons (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than SJW Corp. or a person that directly or indirectly controls, is controlled by, or is under, control with SJW Corp. or an employee benefit plan maintained by any such entity, of beneficial ownership (as defined in Rule 13d-3 of the 1934 Act) of securities of SJW Corp. which, when aggregated with any other acquisition of such securities by such person or group within the twelve (12)-month period ending with the date of the latest such acquisition, results in such person or related group of persons beneficially owning securities representing thirty percent (30%) or more of the combined voting power of the then-outstanding securities of SJW Corp.;

(ii) A merger, recapitalization, consolidation, or other similar transaction to which SJW Corp. is a party, unless securities representing more than fifty percent (50%) of the combined voting power of the then-outstanding securities of the surviving entity or a parent thereof are immediately thereafter beneficially owned, directly or indirectly, by the persons who beneficially owned the outstanding voting securities of SJW Corp. immediately before the transaction;

(iii) A sale, transfer or disposition of all or substantially all of the assets of SJW Corp., unless securities representing more than fifty percent (50%) of the combined voting power of the then-outstanding securities of the entity acquiring the SJW Corp. assets or the parent of such acquiring entity are immediately thereafter beneficially owned, directly or indirectly, by the persons who beneficially owned the outstanding voting securities of SJW Corp. immediately before the transaction;

(iv) A change in the composition of the Board of Directors of SJW Corp. over a twelve (12)-month period such that a majority of those Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (a) have been Board members since the beginning of such period or (b) have been elected or nominated for election as Board members during such period by at least a majority of the Board members who were described in clause (a) or who were previously so elected or approved and who were still in office at the time the Board approved such election or nomination;

provided, however, that no Change in Control of SJW Corp. shall be deemed to occur if the result of the transaction is to give more ownership or control of SJW Corp. to any person or related group of persons who held securities representing more than thirty percent (30%) of the combined voting power of the outstanding securities of SJW Corp. as of March 3, 2003.

3.05 “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time.

3.06 “ Corporation ” shall mean San Jose Water Company and any successor or assignee corporation, whether by way of merger, acquisition or other reorganization.

3.07 “ Deferral Election ” shall mean the irrevocable election filed by the Participant under Article V of this Plan pursuant to which a portion of his or her Eligible Earnings for the Plan Year is to be deferred in accordance with the provisions of the Plan.

3.08 “ Eligible Earnings ” shall mean any direct and current cash compensation, including salary, bonuses and other incentive-type compensation, earned by the Participant for service as an Employee during the Plan Year. Eligible Earnings shall also include any bonus earned by the Participant for service as an Employee during the period commencing January 1, 2004 and continuing through March 31, 2005 and otherwise payable to such Participant in March 2005 in the absence of a Deferral Election under the Plan (the “March 2005 Bonus Payment”). In no event, however, shall a Participant’s Eligible Earnings include, for purposes of the Plan:

(i) any item of compensation (other than the March 2005 Bonus Payment) earned for a period of service rendered prior to the effective date of the Deferral Election which the Participant filed with respect to that item, or

(ii) any item of compensation paid or distributed to the Participant after a period of deferral, whether under this Plan or any other program of deferred compensation maintained by the Corporation or any Affiliated Company.

3.09 “ Eligible Employee ” shall mean any Employee who is either a highly compensated employee of his or her Participating Employer or part of its management personnel, as determined pursuant to guidelines established from time to time by the Plan Administrator. In no event shall any of the following individuals be deemed to be Eligible Employees:

(i) an Employee who is not resident in the United States,

(ii) any individual classified as an independent contractor or consultant or as a temporary employee, or

(iii) any individual who has ceased Employee status, whether by reason of Retirement or otherwise.

3.10 “ Employee ” shall mean an individual for so long as he or she is in the employ of at least one member of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

3.11 “ Employer Group ” means the (i) Corporation and (ii) any other member of the group of commonly controlled corporations or other businesses that include the Corporation, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for

purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations.

3.12 “ Extended Deferral Election ” shall mean a Participant’s election, made in accordance with the terms and conditions of Section 7.02 of this Plan, to defer the distribution of his or her Deferral Election Subaccount for an additional period of at least five (5) years measured from the January 31 date (or the date of any other specified event) on which that particular subaccount was scheduled to first become due and payable under the Plan.

3.13 “ 1934 Act ” shall mean the Securities Exchange Act of 1934, as amended from time to time.

3.14 “ Participant ” shall mean each Eligible Employee who participates in the Plan through one or more Deferral Elections under Article V.

3.15 “ Participating Employer ” shall mean, with respect to each Participant, the Affiliated Company employing that individual which has, with the consent of the Plan Administrator, adopted this Plan as a deferred compensation program for one or more of its Eligible Employees. The Participating Employers for the 2007 Plan Year are set forth in attached Schedule I. Any additional Affiliated Companies which may from time to time become Participating Employers shall be listed in revised Schedule I.

3.16 “ Plan Year ” shall mean each calendar year the Plan continues in effect, beginning with the 2005 calendar year.

3.17 “ Separation from Service ” shall mean the Participant’s cessation of Employee status by reason of his or her death, retirement or termination of employment. The Participant shall be deemed to have terminated employment for such purpose at such time as the level of his or her bona fide services to be performed as an Employee (or non-employee consultant) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services he or she rendered as an Employee during the immediately preceding thirty-six (36) months (or such shorter period for which he or she may have rendered such Employee service). Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Code Section 409A. In addition to the foregoing, a Separation from Service will not be deemed to have occurred while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six (6) months or any longer period for which such Participant’s right to reemployment with one or more members of the Employer Group is provided either by statute or contract; provided, however, that in the event of a Participant’s leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and that causes such individual to be unable to perform his or her duties as an Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29) months of such leave. If the period of leave exceeds six (6) months (or twenty-nine (29) months in the event of disability as indicated above) and the Participant’s right to reemployment is not

provided either by statute or contract, then such Employee will be deemed to have a Separation from Service on the first day immediately following the expiration of such six (6)-month or twenty-nine (29)-month period.

3.18 “ Specified Employee ” shall mean any employee of the Employer Group who is, pursuant to procedures established by the Plan Administrator in accordance with the applicable standards of Code Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A, deemed at the time of his or her Separation from Service to be a “specified employee” under Code Section 409A. The Specified Employees shall be identified on December 31 of each calendar year and shall include each employee who is a “key employee” (within the meaning of that term under Code Section 416(i)) of the Employer Group at any time during the twelve (12)-month period ending with such date. An individual who is so identified as a Specified Employee will have that status for the twelve (12)-month period beginning on April 1 of the following calendar year.

3.19 “ Valuation Date ” shall mean any date as of which the balance credited to each of the Participant’s Deferral Election Subaccounts under the Plan is to be determined. If the date in question is coincident with a date on which the U.S. financial markets are open for business, then the Valuation Date shall be that same date; otherwise, the Valuation Date shall be first date immediately preceding the date in question on which the U.S. financial markets are open for business.

ARTICLE IV

PARTICIPATION

4.01 Eligibility Rules . The Plan Administrator shall have absolute discretion in selecting the Eligible Employees who are to participate in the Plan for each Plan Year. An Eligible Employee selected for participation for any Plan Year must, in order to participate in the Plan for that year, file his or her Deferral Election on or before the last day of the immediately preceding Plan Year. However, an Eligible Employee who is first selected for participation in the Plan after the start of a Plan Year and who has not otherwise been eligible for participation in any other non-qualified elective account balance plan subject to Code Section 409A and maintained by one or more Affiliated Companies will have until the thirtieth (30th) day following the date he or she is so selected in which to file his or her Deferral Election for that Plan Year.

4.02 Cessation of Participation . Every Eligible Employee who becomes a Participant may continue to file Deferral Elections under the Plan for one or more subsequent Plan Years until the earliest of (i) his or her exclusion from the Plan upon written notice from the Plan Administrator, (ii) his or her cessation of Employee status or (iii) the termination of the Plan. The Plan Administrator shall have complete discretion to exclude one or more individuals from Participant status for one or more Plan Years as the Plan Administrator deems appropriate, including the entire period the Participant continues in Employee status following such

exclusion. However, no such exclusion authorized by the Plan Administrator shall become effective until the first day of the first Plan Year next following the date of the Plan Administrator resolution authorizing such exclusion. If any individual is excluded from Participant status for one or more Plan Years, then such individual shall not be entitled to defer any part of his or her Eligible Earnings for those Plan Years.

ARTICLE V

DEFERRAL ELECTION

5.01 Annual Election . Each Participant shall have the right to file a Deferral Election to defer a portion of his or her Eligible Earnings for each Plan Year for which he or she is to be or remain a Participant.

5.02 Election Procedure . Each Deferral Election shall be made in compliance with all of the following requirements and shall not be effective unless such requirements are met:

A. The Deferral Election must be exercised by means of a written notice filed with the Plan Administrator or its designate. The notice shall be substantially in the form of the Deferral Election attached as Exhibit A and must be filed on or before the last day of the calendar year immediately preceding the start of the Plan Year for which the Eligible Earnings subject to that election are to be earned. However, an Eligible Employee who is first selected for participation in the Plan after the start of a Plan Year and who has not otherwise been eligible for participation in any other non-qualified elective account balance plan subject to Code Section 409A and maintained by one or more Affiliated Companies must file his or her initial Deferral Election no later than thirty (30) days after the date he or she is so selected. Such Deferral Election shall only be effective for Eligible Earnings attributable to Employee service for the period commencing with the first day of the first calendar month coincident with or next following the filing of such Deferral Election and ending with the close of such Plan Year.

B. The percentage of Eligible Earnings which a Participant may elect to defer each Plan Year pursuant to his or her Deferral Election must comply with the following guidelines:

(i) To the extent the Participant’s base salary is the subject of the Deferral Election, the amount to be deferred pursuant to such election must not be less than five percent (5%), nor more than fifty percent (50%), of the portion of such base salary included within his or her Eligible Earnings for such Plan Year.

(ii) To the extent the Participant’s bonus or other incentive compensation is the subject of the Deferral Election, the amount to be deferred pursuant to such election must be a multiple of five percent (5%), up to

one hundred percent (100%) of the portion of such bonus or other incentive compensation included in his or her Eligible Earnings for such Plan Year.

C. The Participant must also specify in the Deferral Election the event or date which shall serve as the commencement date for the distribution of the Deferral Election Subaccount attributable to that election. The following commencement dates shall be permissible:

- January 31 of any calendar year which is at least five (5) calendar years after the calendar year in which the Eligible Earnings credited to such subaccount were earned,

- January 31 of the calendar year following the calendar year in which occurs the Participant’s Separation from Service,

- the earlier of (i) January 31 of any calendar year which is at least five (5) calendar years after the calendar year in which the Eligible Earnings credited to such subaccount were earned or (ii) January 31 of the calendar year following the calendar year in which occurs the Participant’s Separation from Service, or

- the closing of a Change in Control transaction.

- the earliest of (i) January 31 of any calendar year which is at least five (5) calendar years after the calendar year in which the Eligible Earnings credited to such subaccount were earned, (ii) January 31 of the calendar year following the calendar year in which occurs the Participant’s Separation from Service or (iii) the closing of a Change in Control transaction, or

- any other combination of the foregoing.

D. The Participant shall also specify in the Deferral Election the manner in which the Deferral Election Subaccount attributable to that election shall be distributed. The following methods of distribution shall be permissible:

- lump sum payment,

- annual installments over five (5)-year term, or

- annual installments over ten (10)-year term

For purposes of Sections 7.02 and 7.08, an installment distribution shall be treated as a single aggregate payment, and not as a series of individual installment payments.

E. The Deferral Election for a particular Plan Year shall become irrevocable as of the first day of that Plan Year (or any later day the Deferral Election for such Plan Year may be filed under Section 5.02 by a newly-eligible Participant), and no subsequent changes may be made to that Deferral Election once it becomes irrevocable.

5.03 Deferral Election Subaccounts . A separate Deferral Election Subaccount shall be established for each Plan Year for which the Participant defers a portion of his or her Eligible Earnings under the Plan. Such subaccount shall be credited with the Eligible Earnings subject to the Deferral Election in effect for that Plan Year, as and when those Eligible Earnings would have otherwise become due and payable to the Participant in the absence of such Deferral Election. A separate Deferral Election Subaccount shall also be maintained for any portion of the March 2005 Bonus Payment which the Participant may have elected to defer under the Plan. The Participant shall at all times be fully vested in the balance credited to each of his or her Deferral Election Subaccounts.

5.04 Withholding Taxes . The Participant shall be responsible for the satisfaction of all federal, state and local employment and other payroll taxes (including FICA taxes) which are required to be withheld on the Eligible Earnings deferred under the Plan and shall accordingly pay such taxes as and when they become due under applicable law, either by separate check payable to the Participating Employer or through the Participating Employer’s withholding of those taxes from other wages and earnings payable to the Participant. Accordingly, the Participant’s Deferral Election shall be deemed to authorize such tax withholding by the Participating Employer in the absence of any other arrangement made by the Participant to satisfy his or her withholding tax liability.

5.05 Subsequent Distribution . The Deferral Election Subaccounts shall be distributed in accordance with the provisions of Article VII of the Plan.

ARTICLE VI

INVESTMENT RETURN

6.01 Investment Return for 2005 Calendar Year . For the period from January 1, 2005 to December 31, 2005 (the “2005 Investment Year”), each of the Participant’s outstanding Deferral Election Subaccounts was adjusted periodically to reflect the earnings, gains and losses equal to the actual investment experience realized for the period by one or more of the investment funds selected by the Participant from the investment alternatives available under the Plan for the 2005 Investment Year. At the close of the 2005 Investment Year, each of the Participant’s outstanding Deferral Election Subaccounts was valued in accordance with the valuation procedures set forth in Section 6.05, and the balance shall thereafter be credited with a fixed rate of interest in accordance with the applicable provisions of Sections 6.02 and 6.03.

6.02 Investment Return for 2006 Calendar Year . For the period from January 1, 2006 to December 31, 2006 (the “2006 Investment Year”), each of the Participant’s outstanding Deferral Election Subaccounts was credited with a fixed rate of interest, compounded semi-annually, equal to the 30-year long-term borrowing cost of funds to the Corporation (or the equivalent thereof), as measured as of the start of the 2006 Investment Year. Following the close of the 2006 Investment Year, the Deferral Election Subaccounts shall be credited with a fixed rate of interest in accordance with the applicable provisions of Section 6.03.

6.03 Investment Return for Subsequent Calendar Years . Commencing January 1, 2007 and continuing throughout the period there remains an outstanding balance credited to such subaccount, each of the Participant’s Deferral Election Subaccounts shall be credited with a fixed rate of interest, compounded semi-annually and periodically reset in accordance with the following procedures:

- For each Plan Year, beginning with the 2007 Plan Year, the fixed rate of interest shall be equal to the lower of (i) the then current 30-year long-term borrowing cost of funds to the Corporation (or the equivalent thereof), as measured as of the start of such Plan Year, or (ii) 120% of the long-term Applicable Federal Rate determined as of the start of such Plan Year and based on semi-annual compounding.

6.04 Charges to Account . Each of the Participant’s Deferral Election Subaccounts shall be charged with its allocable share of the costs and expenses incurred in connection with the administration of the investment return provisions of this Article VI, except to the extent one or more Participating Employers elect in their sole discretion to pay all or a portion of those costs and expenses.

6.05 Account Value . The value of each of the Participant’s Deferral Election Subaccounts on any Valuation Date in question shall be equal to the balance credited to that subaccount as of the close of business on that date, including the appropriate adjustments for (i) any deferred Eligible Earnings or investment gains or earnings or interest return credited to such subaccount as of such date and (ii) any distributions, hardship withdrawals or investment losses charged against the subaccount as of such date.

6.06 Account Statements . Following the close of each calendar quarter, each Participant shall receive a written statement of the value of each of his or her Deferral Election Subaccounts as of the last Valuation Date in that quarter.

ARTICLE VII

DISTRIBUTION OF BENEFITS

7.01 Normal Distribution . The Participant’s Deferral Election Subaccount for a particular Plan Year shall become due and payable in accordance with the commencement date and method of distribution designated by the Participant in his or her Deferral Election for that

Plan Year, and such distribution shall be made or begin on the designated commencement date or event or as soon as administratively practicable thereafter, but in no event later than the later of (i) the close of the calendar year in which the designated commencement date or event occurs or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the occurrence of such commencement date or event.

7.02 Extended Deferral Election . A Participant may make an Extended Deferral Election with respect to any Deferral Election Subaccount maintained for him or her under the Plan, provided the Participant remains at the time of such election a highly compensated Employee or member of the management group of an Affiliated Company (as determined pursuant to guidelines established by the Plan Administrator). However, only one Extended Deferral Election may be made per Deferral Election Subaccount. The Extended Deferral Election must be made by filing an appropriate election form with the Plan Administrator at least twelve (12) months prior to the date the Deferral Election Subaccount subject to such election is scheduled to become payable pursuant to Section 7.01, and the Extended Deferral Election for that subaccount shall in no event become effective or otherwise have any force or applicability until the expiration of the twelve (12)-month period measured from the date such election is filed with the Plan Administrator. Accordingly, the Extended Deferral Election shall become null and void should the Participant’s pre-existing specified commencement date or event occur within that twelve (12)-month period. The Extended Deferral Election must also specify a January 31 commencement date in a Plan Year which is at least five (5) Plan Years later than the Plan Year in which the distribution of that subaccount would have otherwise been made or commenced in the absence of the Extended Deferral Election. As part of the Extended Deferral Election, the Participant may also elect a different method of distribution, provided the selected method complies with one of the forms of distribution specified in Section 5.02E. Once the Extended Deferral Election becomes effective in accordance with the foregoing provisions of this Paragraph 7.02, such election shall remain in effect, whether or not the Participant continues in Employee status; provided, however, that in the event of the Participant’s death, the provisions of Paragraph 7.05 shall apply.

7.03 Special Distribution Election in 2007 . Notwithstanding the limitations and restrictions of Section 7.02, Participants may make a special election to change the time and form of the distribution of one or more of their Deferral Election Subaccounts, provided that the distribution election is made at least twelve months in advance of the newly elected distribution date, and the election is made no later than December 31, 2007. An election made pursuant to this Section 7.03 shall be treated as an initial distribution election and shall be subject to any special administrative rules imposed by the Plan Administrator, including rules intended to comply with Section 409A of the Code. No election under this Section 7.03 shall (i) change the payment date of any distribution otherwise scheduled to be paid in 2007 or cause a payment to be made in 2007 that was otherwise scheduled for payment in a later year or (ii) be permitted after December 31, 2007.

7.04 Hardship Withdrawal . If a Participant (A) incurs a severe financial hardship as a result of (i) a sudden and unexpected illness or accident involving the Participant or his or her spouse or any dependent (as determined pursuant to Section 152(a) of the Code), (ii) a casualty loss involving the Participant’s property or (iii) other similar extraordinary and

unforeseeable event beyond the Participant’s control and (B) does not have any other resources available, whether through reimbursement or compensation (by insurance or otherwise), liquidation of existing assets (to the extent such liquidation would not itself result in financial hardship) or cancellation of his or her existing Deferral Election under the Plan, to satisfy such financial emergency, then the Participant may apply to the Plan Administrator for an immediate distribution from his or her Account in an amount necessary to satisfy such financial hardship and the tax liability attributable to such distribution. The Plan Administrator shall have complete discretion to accept or reject the request and shall in no event authorize a distribution in an amount in excess of that reasonably required to meet such financial hardship and the tax liability attributable to that distribution.

7.05 Death Before Full Distribution . If the Participant dies before the entire balance of his or her Account is distributed, then the unpaid balance shall be paid in a lump sum to his or her designated beneficiary(ies) under the Plan. Such payment shall be made within sixty (60) days after the date of the Participant’s death or as soon as administratively practical following the Participant’s death, but in no event later than the later of (i) the end of the calendar year in which the Participant’s death occurs or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the date of the Participant’s death. The Participant may designate one or more such beneficiaries, or may revoke his or her existing beneficiary designation and make a new designation, by filing a properly completed Beneficiary Designation, in substantially the form of attached Exhibit B, with the Plan Administrator or its designate. Should the Participant die without a valid beneficiary designation in effect or after the death of his or her designated beneficiary(ies), then any amounts due him or her under the Plan shall be paid to the personal representative of his or her estate.

7.06 Valuation . The amount to be distributed from any Deferral Election Subaccount pursuant to this Article VII shall be determined on the basis of the balance credited to that subaccount as of the most recent practicable Valuation Date (as determined by the Committee or its designate) preceding the date of the actual distribution. For a Participant who has elected an installment distribution for any Deferral Election Subaccount, such distribution shall be effected through a series of substantially equal payments (as adjusted for investment gains or losses), and the amount of each such annual installment shall accordingly be determined by dividing the balance credited to that subaccount as of the most recent practicable Valuation Date (as determined by the Plan Administrator) preceding the date of the actual distribution of that installment by the number of installments (including the current installment) remaining in the selected five (5) or ten (10)-year distribution period.

7.07 Withholding . All payments made under the Plan shall be subject to the Participating Employer’s withholding of all required federal, state and local income and employment/payroll taxes, and all such payments shall be net of such tax withholding.

7.08 Small Account Balances.

A. If the aggregate balance of the Participant’s Account is not greater than the applicable dollar amount in effect under Code Section 402(g)(1)(B) at the time of the Participant’s Separation from Service and the Participant is not otherwise at that time

participating in any other non-qualified elective account balance plan subject to Code Section 409A and maintained by one or more members of the Affiliated Group, then that balance shall be distributed to the Participant in a lump sum distribution on the date of such Separation from Service or as soon as administratively practical thereafter, whether or not the Participant elected that form of distribution or distribution event, but in no event shall such lump sum distribution be made later than the later of (i) the end of the calendar year in which such Separation from Service occurs or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the date of such Separation from Service.

B. Should the aggregate present value of all of the remaining unpaid installments due to a Participant who is receiving one or more installment distributions under the Plan fall below Twenty-Five Thousand Dollars ($25,000), then those unpaid installments shall be paid to the Participant in a single lump sum within thirty (30) days thereafter.

7.09 Mandatory Deferral of Distribution . Notwithstanding any provision to the contrary in this Article VII or any other article in the Plan, no distribution which becomes due and payable by reason of a Participant’s Separation from Service shall be made to such Participant prior to the earlier of (i) the first day of the seventh (7th) month following the date of the Participant’s Separation from Service or (ii) the date of his or her death, if the Participant is deemed at the time of such Separation from Service to be a Specified Employee and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable deferral period, all payments deferred pursuant to this Section 7.09 (whether they would have otherwise been payable in a single sum or in installments in the absence of such deferral) shall be paid in a lump sum to the Participant, and any remaining payments due under the Plan shall be paid in accordance with the normal payment dates specified for them herein. During such deferral period, the Participant’s Account shall continue to be subject to the investment return provisions of Article VI.

ARTICLE VIII

MISCELLANEOUS

8.01 Benefits Not Funded . The obligation to pay the vested balance of each Participant’s Deferral Election Subaccounts hereunder shall at all times be an unfunded and unsecured obligation of the Participating Employer. Except to the extent the Corporation or any Participating Employer may in its sole discretion elect to implement a grantor trust to hold funds for the payment of any benefits which become due and payable hereunder, neither the Corporation nor any Participating Employer shall have any obligation to establish any trust, escrow arrangement or other fiduciary relationship for the purpose of segregating funds for the payment of the balances credited to such subaccounts, nor shall the Corporation or any Participating Employer be under any obligation to invest any portion of its general assets in mutual funds, stocks, bonds, securities or other similar investments in order to accumulate funds for the satisfaction of its obligations under the Plan.

8.02 General Creditor Status . The Participant (or his or her beneficiary) shall look solely and exclusively to the general assets of the Participating Employer for the payment of the Deferral Election Subaccounts maintained on the Participant’s behalf under the Plan. Payments from any grantor trust established by the Corporation or any Participating Employer under the Plan shall be made as and when benefits become payable to Participants in accordance with the distribution provisions of Article VII of the Plan, with any remaining balance due the Participants to be paid out of the general assets of the Participating Employer.

8.03 No Employment Right . Neither the action of the Corporation or the Participating Employer in establishing or maintaining the Plan, nor any action taken under the Plan by the Committee, nor any provision of the Plan itself shall be construed so as to grant any person the right to remain in the employ of the Participating Employer or any other Affiliated Company for any period of specific duration, and the Participant may be discharged at any time, with or without cause.

8.04 Amendment/Termination . The Executive Compensation Committee of the Board of Directors of SJW Corp. may at any time amend the provisions of the Plan to any extent and in any manner the Executive Compensation Committee shall deem advisable, and such amendment shall become effective at the time of such action by the Executive Compensation Committee. Without limiting the generality of the foregoing, the Executive Compensation Committee may amend the Plan to impose such restrictions upon (i) the timing, filing and effectiveness of Deferral Elections or Extended Deferral Elections and (ii) the distribution provisions of Article VII which the Executive Compensation Committee deems appropriate or advisable in order to avoid the current income taxation of amounts deferred under the Plan which might otherwise occur as a result of changes to the tax laws and regulations governing deferred compensation arrangements such as the Plan. The Executive Compensation Committee may also at any time terminate the Plan in whole or in part. Except for such modifications, limitations or restrictions as may otherwise be required to avoid current income taxation or other adverse tax consequences to Participants as a result of changes to the tax laws and regulations applicable to the Plan, no such plan amendment or plan termination authorized by the Executive Compensation Committee shall adversely affect the benefits of Participants accrued to date under the Plan or otherwise reduce the then outstanding balances credited to their Deferral Election Subaccounts or otherwise adversely affect the distribution provisions in effect for those subaccounts, and all amounts deferred prior to the date of any such plan amendment or termination shall, subject to the foregoing exception, continue to become due and payable in accordance with the distribution provisions of Article VII as in effect immediately prior to such amendment or termination.

8.05 Applicable Law . The Plan is intended to constitute an unfunded deferred compensation arrangement for a select group of management and other highly compensated persons, and all rights hereunder shall be construed, administered and governed in all respects in accordance with the provisions of the Employee Retirement Income Security Act of 1974 (as amended from time to time) applicable to such an arrangement and, to the extent not pre-empted thereby, by the laws of the State of California without resort to its conflict-of-laws provisions. If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of the Plan shall continue in full force and effect.

8.06 Satisfaction of Claims . Any payment made to a Participant or his or her legal representative or beneficiary in accordance with the terms of this Plan shall to the extent thereof be in full satisfaction of all claims with respect to that payment which such person may have against the Plan, the Plan Administrator (or its designate), the Corporation, the Participating Employer and all other Affiliated Companies, any of whom may require the Participant or his or her legal representative or beneficiary, as a condition precedent to such payment, to execute a receipt and release in such form as shall be determined by the Plan Administrator.

8.07 Alienation of Benefits . No person entitled to any benefits under the Plan shall have the right to alienate, pledge, hypothecate or otherwise encumber his or her interest in such benefits, and those benefits shall not, to the maximum extent permissible by law, be subject to claim of his or her creditors or liable to attachment, execution or other process of law. Notwithstanding the foregoing, any benefits in which the Participant has a vested right under the Plan may instead be distributed to one or more third parties (including, without limitation, the Participant’s former spouse) to the extent such distribution is required by a domestic relations order or other order or directive of a court with jurisdiction over the Participant and his or her benefits hereunder, and the Participant shall cease to have any right, interest or entitlement to any benefits to be distributed pursuant to such order or directive.

8.08 Expenses . In addition to the expenses and costs set forth in Section 6.03, each Participant’s Account shall also be charged with its allocable share of all other costs and expenses incurred in the operation and administration of the Plan, except to the extent one or more Participating Employers elect in their sole discretion to pay all or a portion of those costs and expenses.

8.09 Successors and Assigns . The obligation of each Participating Employer to make the payments required hereunder shall be binding upon the successors and assigns of that Participating Employer, whether by merger, consolidation, acquisition or other reorganization. Except for such modifications, limitations or restrictions as may otherwise be required to avoid current income taxation or other adverse tax consequences to Participants as a result of changes to the tax laws and regulations applicable to the Plan, no amendment or termination of the Plan by any such successor or assign shall adversely affect or otherwise impair the rights of Participants to receive benefit payments hereunder, to the extent attributable to amounts deferred prior to the date of such amendment or termination, in accordance with the applicable distribution provisions of Article VII hereof as in effect immediately prior to such amendment or termination.

8.10 Compliance with Code Section 409A . To the extent there is any ambiguity as to whether any provision of this Plan would otherwise contravene one or more requirements or limitations of Code Section 409A, such provision shall be interpreted and applied in a manner that does not result in a violation of the applicable requirements or limitations of Code Section 409A and the Treasury Regulations thereunder.

ARTICLE IX

BENEFIT CLAIMS

9.01 Claims Procedure . No application is required for the payment of benefits under the Plan. However, if any Participant (or beneficiary) believes he or she is entitled to a benefit from the Plan which differs from the benefit determined by the Plan Administrator, then such individual may file a written claim for benefits with the Plan Administrator. Each claim shall be acted upon and approved or disapproved within ninety (90) days following receipt by the Plan Administrator.

9.02 Denial of Benefits . In the event any claim for benefits is denied, in whole or in part, the Plan Administrator shall notify the claimant in writing of such denial and of his or her right to a review by the Plan Administrator and shall set forth, in a manner calculated to be understood by the claimant, specific reasons for such denial, specific references to pertinent provisions of the Plan on which the denial is based, a description of any additional material or information necessary to perfect the claim, an explanation of why such material or information is necessary, and an explanation of the review procedure.

9.03 Review .

A. Any person whose claim for benefits is denied in whole or in part may appeal to the Plan Administrator for a full and fair review of the decision by submitting to the Plan Administrator, within ninety (90) days after receiving written notice from the Plan Administrator of such denial, a written statement:

(i) requesting a review by the Plan Administrator of his or her claim for benefits;

(ii) setting forth all of the grounds upon which the request for review is based and any facts in support thereof; and

(iii) setting forth any issues or comments which the claimant deems pertinent to his or her claim.

B. The Plan Administrator shall act upon each such appeal within sixty (60) days after receipt of the claimant’s request for review by the Plan Administrator, unless special circumstances require an extension of time for processing. If such an extension is required, written notice of the extension shall be furnished to the claimant within the initial sixty (60)-day period, and a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the initial request for review. The Plan Administrator shall make a full and fair review of each such appeal and any written materials submitted by the claimant or the Participating Employer in connection therewith and may require the Participating Employer or the claimant to submit such additional facts, documents or other evidence as the

Plan Administrator may, in its sole discretion, deem necessary or advisable in making such a review. On the basis of its review, the Plan Administrator shall make an independent determination of the claimant’s eligibility for benefits under the Plan. The decision of the Plan Administrator on any benefit claim shall be final and conclusive upon all persons.

C. Should the Plan Administrator deny an appeal in whole or in part, the Plan Administrator shall give written notice of such decision to the claimant, setting forth in a manner calculated to be understood by the claimant the specific reasons for such denial and specific reference to the pertinent Plan provisions on which the decision was based. The notice shall also include a statement that the claimant has a right to bring a right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974 (as amended from time to time).

SCHEDULE I

LIST OF PARTICIPATING EMPLOYERS

San Jose Water Company

EXHIBIT A

SPECIAL DEFERRAL ELECTION PLAN

DEFERRAL ELECTION FORM

200__ PLAN YEAR

Please check the applicable boxes and complete form as appropriate.


[ ]	A. I hereby elect to participate in the Special Deferral Election Plan (the “Plan”) for the 200__ plan year.

I hereby elect to defer payment of a portion of my eligible earnings for services rendered in the 200__

plan year, in the dollar amount determined in accordance with the following elections:

Base Salary: ____% (in increments of one percent, with a minimum of 5% and a maximum of 50%) of my base salary earned for service rendered during the 200__ plan year.

Bonus/Incentive Compensation: ____% (in increments of 5%, up to a maximum of 100%) of any cash bonus or other cash incentive compensation earned for service rendered during the 200__ plan year.


[ ]	B. I hereby elect the following commencement date for the distribution of my deferral election

subaccount for the 200__ plan year:

____ January 31 of calendar year _______________ (must be at least five (5) calendar years after the 200__ calendar year).

____ January 31 of the calendar year following the calendar year in which my separation from service occurs.

_____ the closing of a Change in Control (as such term is defined in the Plan).

____ the earlier of (i) January 31 of calendar year _________ (a calendar year which is at least five (5) calendar years after the 200__ calendar year) or (ii) January 31 of the calendar year following the calendar year in which my separation from service occurs.

____ the earlier of (i) January 31 of the calendar year following the calendar year in which my separation from service occurs or (ii) the closing of a Change in Control.

_____ the earlier of (i) January 31 of calendar year ___________ (a calendar year which is at least five (5) calendar years after the 200__ calendar year) or (ii) the closing of a Change in Control.

_____ the earliest of (i) January 31 of calendar year ___________ (a calendar year which is at least five (5) calendar years after the 200__ calendar year), (ii) January 31 of the calendar year following the calendar year in which my separation from service occurs or (iii) the closing of a Change in Control.


[ ]	C. I hereby elect the following method of distribution for my deferral election

subaccount for the 200__ plan year:

___ lump sum payment

___ annual installments over five (5)-year term, or

___ annual installments over ten (10)-year term

I understand that no distribution shall be made or commence, in connection with my separation from service, prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of such separation from service or (ii) the date of my death, if I am deemed at the time of such separation from service to be a “specified employee” within the meaning of that term under Code Section 409A and the applicable regulations thereunder.

As required by the Federal tax laws, my deferral election shall become irrevocable on the first day of the 200___ plan year and cannot be changed or modified under any circumstances after that day.

To the extent my rights under law to the earnings deferred pursuant to this election are greater than the rights of a general unsecured creditor of my Participating Employer, I hereby waive those rights and agree that I shall have only the rights of a general unsecured creditor with respect to the payment of my deferred earnings.

I understand I am responsible for the satisfaction of all federal, state and local employment and other payroll taxes (including FICA taxes) which are required to be withheld on the compensation I defer under the Plan, and I shall pay such taxes as and when they become due under applicable law, either by separate check payable to my Participating Employer or through my Participating Employer's withholding of those taxes from other wages and earnings payable to me. Accordingly, this deferral election shall be deemed to authorize such tax withholding by my Participating Employer in the absence of any other arrangement made by me to satisfy such withholding tax liability.


[ ]	D. I hereby elect not to defer any portion of my base salary for the 200__ Plan Year under the Plan.


[ ]	E. I hereby elect not to defer any portion of my bonus or other incentive compensation for the 200__ Plan Year under the Plan.

[ ]

F. I hereby elect to have the deferral elections specified in Sections A through C above continue for each subsequent plan year, until I change my deferral elections in accordance with the provisions of the Plan. Any such change shall become effective for a particular plan year only if the new deferral election is filed not later than the December 31 immediately prior to the start of that plan year.

Printed Name: ________________________________

Signature: ___________________________________

Dated: _______________________, 200___________

EXHIBIT B

SPECIAL DEFERRAL ELECTION PLAN

DESIGNATION OF BENEFICIARY

I hereby designate the following individual or individuals as the beneficiary or beneficiaries of all my right, title and interest in and to the unpaid vested balance credited to my account under the Special Deferral Election Plan at the time of my death, hereby revoking any prior designation of beneficiaries made by me under such Plan:



	Name	Relationship	Percent of Total

(1)	_________________________	___________________________________	__________________
(2)	_________________________	___________________________________	__________________
(3)	_________________________	___________________________________	__________________
(4)	_________________________	______________________________________	__________________

The beneficiary must survive me; otherwise, his or her designated share is to be divided equally among the beneficiaries who do survive me.

Signature: ________________________________

Name: ___________________________________

Date: _______________________, 20__________

EXHIBIT 10.49

SJW Corp.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT

RECITALS

A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees of the Corporation (or any Parent or Subsidiary).

B. Participant is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s issuance of an equity incentive award under the Plan designed to retain Participant’s continued service.

C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.

NOW, THEREFORE , it is hereby agreed as follows:

1. Grant of Restricted Stock Units . The Corporation hereby awards to Participant, as of the Award Date, Restricted Stock Units under the Plan. Each Restricted Stock Unit which vests during Participant’s period of Service shall entitle Participant to receive one share of Common Stock on the applicable issuance date. The number of shares of Common Stock subject to the awarded Restricted Stock Units, the applicable vesting schedule for those shares, the applicable date or dates on which those vested shares shall become issuable to Participant and the remaining terms and conditions governing the award (the “Award”) shall be as set forth in this Agreement.



Participant:		________________________________

Award Date :		________________________________

Number of Shares
Subject to Award :		________shares of Common Stock (the “Shares”)

Vesting Schedule :		The Shares shall vest in a series of _______ (___) successive equal annual installments upon Participant’s completion of each year of Service over the _____ (___)-year period measured from the Award Date (the “Normal Vesting Schedule”). However, the Shares may be subject to accelerated vesting in accordance with the provisions of Paragraphs 4 and 6 below.

Issuance Schedule:

The Shares in which the Participant vests on an annual basis in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporation’s collection of all applicable Withholding Taxes, on the applicable annual vesting date (the “Issuance Date”) or as soon thereafter as administratively practicable, but in no event later than the close of the calendar year in which such annual vesting date occurs or (if later) the fifteenth day of the third calendar month following such vesting date. The Shares which vest pursuant to Paragraph 4 or Paragraph 6 of this Agreement shall be issued in accordance with the provisions of the applicable Paragraph. The applicable Withholding Taxes are to be collected pursuant to the procedure set forth in Paragraph 8 of this Agreement

2. Limited Transferability . Prior to actual receipt of the Shares which vest and become issuable hereunder, Participant may not transfer any interest in the Award or the underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time of Participant’s death may be transferred pursuant to the provisions of Participant’s will or the laws of inheritance or to Participant’s designated beneficiary or beneficiaries of this Award. Participant may also direct the Corporation to re-issue the stock certificates for any Shares which in fact vest and become issuable under the Award during his lifetime to one or more designated family members or a trust established for Participant and/or his family members. Participant may make such a beneficiary designation or certificate directive at any time by filing the appropriate form with the Plan Administrator or its designee.

3. Cessation of Service . Except as otherwise provided in Paragraph 4 or Paragraph 6 below, should Participant cease Service for any reason prior to vesting in one or more Shares subject to this Award, then the Award shall be immediately cancelled with respect to those unvested Shares, and the number of Restricted Stock Units will be reduced accordingly. Participant shall thereupon cease to have any right or entitlement to receive any Shares under those cancelled units.

4. Accelerated Vesting .

A. Upon (i) the Participant’s cessation of Employee status by reason of death or Permanent Disability, (ii) the Participant’s resignation from Employee status for Good Reason or (iii) the Corporation’s termination of the Participant’s Employee status other than for Good Cause, all the Restricted Stock Units at the time subject to this Award, together with the underlying Shares, shall immediately vest.

B. The Shares to which the Participant becomes entitled pursuant to the vesting provisions of Paragraph 4.A shall be issued on the date of his Separation from Service due to such cessation of Employee status or as soon as administratively practicable thereafter, subject to the Corporation’s collection of the applicable Withholding Taxes, but in no event later than the close of the calendar year in which such Separation from Service occurs or (if later) the fifteenth (15th) day of the third (3rd) calendar month following the date of such Separation from Service.

C. The accelerated vesting provisions of this Paragraph 4 shall apply and be effective whether such cessation or termination of Employee status occurs before or after the consummation of a Change in Control transaction.

5. Stockholder Rights . Participant shall not have any stockholder rights, including voting, dividend or liquidation rights, with respect to the Shares subject to the Award until the Shares vest and Participant becomes the record holder of those Shares upon their actual issuance following the Company’s collection of the applicable Withholding Taxes.

6. Change in Control .

A. Any Restricted Stock Units subject to this Award at the time of a Change in Control may be assumed by the successor entity or otherwise continued in full force and effect or may be replaced with a cash retention program of the successor entity which preserves the Fair Market Value of the underlying Shares at the time of the Change in Control and provides for the subsequent vesting and payout of that value in accordance with the same vesting and payout provisions that would be applicable to those Shares in the absence of such Change in Control. In the event of such assumption or continuation of the Award or such replacement of the Award with a cash retention program, no accelerated vesting of the Restricted Stock Units shall occur at the time of the Change in Control.

B. In the event the Award is assumed or otherwise continued in effect, the Restricted Stock Units subject to the Award will be adjusted immediately after the consummation of the Change in Control so as to apply to the number and class of securities into which the Shares subject to those units immediately prior to the Change in Control would have been converted in consummation of that Change in Control had those Shares actually been issued and outstanding at that time. To the extent the actual holders of the outstanding Common Stock receive cash consideration for the Common Stock in consummation of the Change in Control, the successor corporation may, in connection with the assumption or continuation of the Restricted Stock Units subject to the Award at that time, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in the Change in Control transaction, provided such shares are registered under the federal securities laws and readily tradable on an established securities exchange.

C. If the Restricted Stock Units subject to this Award at the time of the Change in Control are not assumed or otherwise continued in effect or replaced with a cash retention program in accordance with Paragraph 6.A above, then those units shall vest immediately prior to the closing of the Change in Control. The Shares subject to those vested units shall be converted into the right to receive the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of that Change in Control, and such consideration per Share shall be distributed to Participant upon the tenth (10th) business day following the earliest to occur of (i) the Issuance Date determined for that Share in accordance with the Normal Vesting Schedule, (ii) the date of Participant’s Separation from Service or (iii) the first date following a Qualifying Change in Control on which the distribution can be made without contravention of any applicable provisions of Code Section 409A. Such distribution shall be subject to the Corporation’s collection of the applicable Withholding Taxes pursuant to the provisions of Paragraph 8.

D. This Agreement shall not in any way affect the right of the Corporation to adjust, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

7. Adjustment in Shares . Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction, extraordinary dividend or distribution or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, or should the value of outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any merger, consolidation or other reorganization, then equitable adjustments shall be made by the Plan Administrator to the total number and/or class of securities issuable pursuant to this Award in order to reflect such change and thereby prevent a dilution or enlargement of benefits hereunder. The determination of the Plan Administrator shall be final, binding and conclusive. In the event of a Change in Control, the adjustments (if any) shall be made in accordance with the provisions of Paragraph 6.

8. Issuance of Shares/Collection of Withholding Taxes .

A. On each applicable Issuance Date (or any earlier date on which the Shares are to be issued in accordance with the terms of this Agreement), the Corporation shall issue to or on behalf of the Participant a certificate (which may be in electronic form) for the applicable number of shares of Common Stock, subject, however, to the Corporation’s collection of the applicable Withholding Taxes.

B. The Corporation shall collect the applicable Withholding Taxes with respect to the Shares which vest and become issuable hereunder through an automatic share withholding procedure pursuant to which the Corporation will withhold, at the time of such issuance, a portion of the Shares with a Fair Market Value (measured as of the applicable issuance date) equal to the amount of those taxes; provided, however , that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the Corporation‘s required tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes that are applicable to supplemental taxable income. In the event payment is to be made in a form other than the Shares, then the Corporation shall collect from the Participant the applicable Withholding Taxes pursuant to such procedures as the Corporation deems appropriate under the circumstances.

calendar year in which the Shares or other amounts vest, deliver to the Corporation a check payable to its order in the dollar amount equal to the Employment Taxes required to be withheld with respect to those Shares or other amounts. The provisions of this Paragraph 8.C shall be applicable only to the extent necessary to comply with the applicable tax withholding requirements of Code Section 3121(v).

D. Except as otherwise provided in Paragraph 6 and Paragraph 8.B, the settlement of all Restricted Stock Units which vest under the Award shall be made solely in shares of Common Stock. In no event, however, shall any fractional shares be issued. Accordingly, the total number of shares of Common Stock to be issued pursuant to this Award shall, to the extent necessary, be rounded down to the next whole share in order to avoid the issuance of a fractional share.

9. Deferred Issuance Date . Notwithstanding any provision to the contrary in this Agreement, no Shares or other amounts which become issuable or distributable by reason of Participant’s Separation from Service shall actually be issued or distributed to Participant prior to the earlier of (i) the first day of the seventh (7th) month following the date of such Separation from Service or (ii) the date of Participant’s death, if Participant is deemed at the time of such Separation from Service to be a specified employee under Section 1.409A-1(i) of the Treasury Regulations issued under Code Section 409A, as determined by the Plan Administrator in accordance with consistent and uniform standards applied to all other Code Section 409A arrangements of the Corporation, and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). The deferred Shares or other distributable amount shall be issued or distributed in a lump sum on the first day of the seventh (7th) month following the date of Participant’s Separation from Service or, if earlier, the first day of the month immediately following the date the Corporation receives proof of Participant’s death.

10. Benefit Limit. The benefit limitation of this Paragraph 10 shall apply only to the extent Participant is not otherwise entitled to a Code Section 4999 tax gross-up, pursuant to the terms of the Corporation’s Executive Severance Plan (or any successor plan), with respect to the Shares that vest on an accelerated basis in connection with a Change in Control or subsequent cessation of Employee status:

In the event the vesting and issuance of the Shares subject to this Award would otherwise constitute a parachute payment under Code Section 280G, then the vesting and issuance of those Shares shall be subject to reduction to the extent necessary to assure that the number of Shares which vest and are issued under this Award will be limited to the greater of (i) the number of Shares which can vest and be issued without triggering a parachute payment under Code Section 280G or (ii) the maximum number of Shares which can vest and be issued under this Award so as to provide the Participant with the greatest after-tax amount of such vested and issued Shares after taking into account any excise tax the Participant may incur under Code Section 4999 with respect to those Shares and any other benefits or payments to which the Participant may be entitled in connection with any change in control or ownership of the Corporation or the subsequent termination of the Participant’s Service.

11. Compliance with Laws and Regulations . The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with all applicable requirements of law relating thereto and with all applicable regulations of any Stock Exchange on which the Common Stock may be listed for trading at the time of such issuance.

12. Notices . Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or delivered to Participant shall be in writing and addressed to Participant at the address indicated below Participant’s signature line on this Agreement. All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

13. Successors and Assigns . Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Participant, Participant’s assigns, the legal representatives, heirs and legatees of Participant’s estate and any beneficiaries of the Award designated by Participant.

14. Construction . This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award. To the extent there is any ambiguity as to whether any provision of this Agreement would otherwise contravene one or more requirements or limitations of Code Section 409A and the Treasury Regulations thereunder, such provision shall be interpreted and applied in a manner that complies with the applicable requirements of Code Section 409A and the Treasury Regulations thereunder.

15. Governing Law . The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules.

16. Employment at Will . Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Participant) or of Participant, which rights are hereby expressly reserved by each, to terminate Participant’s Service at any time for any reason, with or without cause.

IN WITNESS WHEREOF , the parties have executed this Restricted Stock Unit Issuance Agreement on the respective dates indicated below.



SJW CORP.

By:	____________________________
Title:	____________________________
Dated:	____________________________


[NAME OF PARTICIPANT]

Signature:	____________________________
Address:	____________________________

Dated:	____________________________

APPENDIX A

DEFINITIONS

The following definitions shall be in effect under the Agreement:

A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.

B. Award shall mean the award of Restricted Stock Units made to Participant pursuant to the terms of the Agreement.

C. Award Date shall mean the date the Restricted Stock Units are awarded to Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.

D. Board shall mean the Corporation’s Board of Directors.

E. Change in Control shall mean any change in control or ownership of the Corporation which occurs by reason of one or more of the following events:

(i) the acquisition, directly or indirectly by any person or related group of persons (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under control with, the Corporation or an employee benefit plan maintained by any such entity, of beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of securities of the Corporation that results in such person or related group owning thirty percent (30%) or more of the total combined voting power of the Corporation’s then-outstanding securities;

(ii) a merger, recapitalization, consolidation, or other similar transaction to which the Corporation is a party, unless securities representing at least 50% of the combined voting power of the then-outstanding securities of the surviving entity or a parent thereof are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation’s outstanding voting securities immediately before the transaction;

(iii) a sale, transfer or disposition of all or substantially all of the Corporation’s assets, unless securities representing at least 50% of the combined voting power of the then-outstanding securities of the entity acquiring the Corporation’s assets or parent thereof are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation’s outstanding voting securities immediately before the transaction;

(iv) a merger, recapitalization, consolidation, or other transaction to which the Corporation is a party or the sale, transfer, or other disposition of all or substantially all of the Corporation’s assets if, in either case, the members of the Board immediately prior to consummation of the transaction do not, upon consummation of the transaction, constitute at least a majority of the board of directors of the surviving entity or the entity acquiring the Corporation’s assets, as the case may be, or a parent thereof (for this purpose, any change in the composition of the board of directors that is anticipated or pursuant to an understanding or agreement in connection with a transaction will be deemed to have occurred at the time of the transaction); or

(v) a change in the composition of the Board over a period of thirty-six 36) consecutive months or less such that a majority of the Board members ceases by reason of one or more contested elections for Board membership, to be comprised of individuals who either (a) have been Board members since the beginning of such period or (b) have been elected or nominated for election as Board members during such period by at least a majority of the Board members who were described in clause (a) or who were previously so elected or approved and who were still in office at the time the Board approved such election or nomination; provided, however, that solely for purposes of determining whether a permissible Section 409A distribution can be made under Paragraph 6.C in connection with such Change in Control event, the period for measuring a change in the composition of the Board shall be limited to a period of twelve (12) consecutive months or less;

provided however, that no Change in Control shall occur if the result of the transaction is to give more ownership or control of the Corporation to any person or related group of persons who held securities representing more than thirty percent (30%) of the combined voting power of the Corporation's outstanding securities as of March 3, 2003.

F. Code shall mean the Internal Revenue Code of 1986, as amended.

G. Common Stock shall mean the shares of the Corporation’s common stock.

H. Corporation shall mean SJW Corp., a California corporation, and any successor corporation to all or substantially all of the assets or voting stock of SJW Corp. which shall by appropriate action adopt the Plan and/or assume the Award.

I. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance; provided, however, that solely for purposes of determining whether Participant has incurred a Separation from Service, the term “Employee” shall have the meaning assigned to such term in the Separation from Service definition set forth in this Appendix.

J. Fair Market Value per share of Common Stock on any relevant date shall be the closing selling price per share on the date in question on the Stock Exchange on which the Common Stock is at that time primarily traded, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no reported sale of Common Stock on such Stock Exchange on the date in question, then the Fair Market Value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists.

K. Good Cause shall be deemed to exist if, and only if: (i) Participant engages in acts or omissions that result in substantial harm to the business or property of the Corporation or any Parent or Subsidiary and that constitute dishonesty, intentional breach of fiduciary obligation or intentional wrongdoing or (ii) Participant is convicted of a criminal violation involving fraud or dishonesty.

The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss Participant or any other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan or this Agreement, to constitute grounds for termination for Good Cause.

L. Good Reason shall mean the occurrence of any of the following events without Participant’s express written consent: (i) his removal from any of the following positions: President and Chief Executive Officer of the Corporation, President and Chief Executive Officer of San Jose Water Company and President and Chief Executive Officer of SJW Land Company, or any other significantly adverse change in the nature or the scope of his authority or overall working environment; (ii) the assignment to Participant of duties materially inconsistent with his duties, responsibilities and status as President and Chief Executive Officer of the Corporation, President and Chief Executive Officer of San Jose Water Company and President and Chief Executive Officer of SJW Land Company; (iii) a reduction in Participant’s rate of base salary or target annual bonus, other than a reduction in an amount not in excess of fifteen percent (15%) of either his base salary or the sum of his base salary and target annual bonus pursuant to a uniform reduction in the base salary or target bonus payable to all senior executives of the Corporation to which Participant and the Executive Compensation Committee have mutually agreed and which occurs prior to a Change in Control; (iv) a change by the Corporation by fifty-five (55) miles or more of the principal location at which Participant is required to perform Participant’s services hereunder or (v) a material breach by the Corporation of any of its obligations under its restated employment agreement with the Participant dated December 9, 2008 (as amended from time to time or any successor agreement) which remains uncured for more than thirty (30) days following Participant’s written notice to the Board in which Participant specifically identifies the material breach which has occurred.

M. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

N. Participant shall mean the person to whom the Award is made pursuant to the Agreement.

O. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

P. Permanent Disability shall mean the Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more.

Q. Plan shall mean the Corporation’s Long Term Incentive Plan.

R. Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as administrator of the Plan.

S. Restricted Stock Unit shall mean each unit subject to the Award which shall entitle Participant to receive one (1) share of Common Stock upon the vesting of that unit.

T. Qualifying Change in Control shall mean the date on which there occurs a Change in Control that also qualifies as: (i) a change in the ownership of the Corporation, as determined in accordance with Section 1.409A-3(i)((5)(v) of the Treasury Regulations, (ii) a change in the effective control of the Corporation, as determined in accordance with Section 1.409A-3(i)((5)(vi) of the Treasury Regulations, or (iii) a change in the ownership of a substantial portion of the assets of the Corporation, as determined in accordance with Section 1.409A-3(i)((5)(vii) of the Treasury Regulations.

U. Separation from Service shall mean the Participant’s cessation of Employee status by reason of his death, retirement or termination of employment. The Participant shall be deemed to have terminated employment for such purpose at such time as the level of his bona fide services to be performed as an Employee (or as a consultant or independent contractor) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services he rendered as an Employee during the immediately preceding thirty-six (36) months. Solely for purposes of determining when a Separation from Service occurs, Participant will be deemed to continue in “Employee” status for so long as he remains in the employ of one or more members of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. “Employer Group” means the Corporation and any Parent or Subsidiary and any other corporation or business controlled by, controlling or under common control with, the Corporation, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) of the Code for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50

percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations. Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Section 409A of the Code.

V. Service shall mean Participant’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the Board or a consultant or independent advisor. Participant shall be deemed to cease Service immediately upon the occurrence of either of the following events: (i) Participant no longer performs services in any of the foregoing capacities for the Corporation (or any Parent or Subsidiary) or (ii) the entity for which Participant performs such services ceases to remain a Parent or Subsidiary of the Corporation, even though Participant may subsequently continue to perform services for that entity. Service as an Employee shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Corporation; provided, however , that the following special provisions shall be in effect for any such leave:

(i) Should the period of such leave (other than a disability leave) exceed six (6) months, then Participant shall be deemed to cease Service and to incur a Separation from Service upon the expiration of the initial six (6)- month period of that leave, unless Participant retains a right to re-employment under applicable law or by contract with the Corporation (or any Parent or Subsidiary).

(ii) Should the period of a disability leave exceed twenty-nine (29) months, then Participant shall be deemed to cease Service and to incur a Separation from Service upon the expiration of the initial twenty-nine (29)-month period of that leave, unless Participant retains a right to re-employment under applicable law or by contract with the Corporation (or any Parent or Subsidiary). For such purpose, a disability leave shall be a leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and causes Participant to be unable to perform the duties of his position of employment with the Corporation (or any Parent or Subsidiary) or any substantially similar position of employment.

(iii) Except to the extent otherwise required by law or expressly authorized by the Plan Administrator or by the Corporation’s written policy on leaves of absence, no Service credit shall be given for vesting purposes for any period Participant is on a leave of absence.

W. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.

X. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

Y. Withholding Taxes shall mean (i) the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting of the shares of Common Stock (or any other property) under the Award and (ii) the federal, state and local income taxes required to be withheld by the Corporation in connection with the issuance of those vested shares (or any other property).

EXHIBIT 10.53

SJW CORP.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT

RECITALS

A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees of the Corporation (or any Parent or Subsidiary).

C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.

NOW, THEREFORE , it is hereby agreed as follows:

1. Grant of Restricted Stock Units . The Corporation hereby awards to Participant, as of the Award Date, Restricted Stock Units under the Plan. Each Restricted Stock Unit which vests during Participant’s period of Service shall entitle Participant to receive one share of Common Stock on the applicable issuance date for that share. The number of shares of Common Stock subject to the awarded Restricted Stock Units, the applicable vesting schedule for those shares, the applicable date or dates on which those vested shares shall become issuable to Participant and the remaining terms and conditions governing the award (the “Award”) shall be as set forth in this Agreement.



Participant:	______________________

Award Date :	______________________

Number of Shares
Subject to Award :	________ shares of Common Stock (the “Shares”)

Vesting Schedule :	The Shares shall vest in a series of _____ (___) successive equal annual installments upon Participant's completion of each year of Service over the _____ (___)-year period measured from the Award Date (the “Normal Vesting Schedule”). However, the Shares may be subject to accelerated vesting in accordance with the provisions of Paragraphs 4 and 6 below.

Issuance Schedule :

2. Limited Transferability . Prior to actual receipt of the Shares which vest and become issuable hereunder, Participant may not transfer any interest in the Award or the underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time of Participant’s death may be transferred pursuant to the provisions of Participant’s will or the laws of inheritance or to Participant’s designated beneficiary or beneficiaries of this Award. Participant may also direct the Corporation to re-issue the stock certificates for any Shares which in fact vest and become issuable under the Award during his or her lifetime to one or more designated family members or a trust established for Participant and/or his or her family members. Participant may make such a beneficiary designation or certificate directive at any time by filing the appropriate form with the Plan Administrator or its designee.

4. Accelerated Vesting . Should Participant cease Employee status by reason of death or Disability, then all of the Shares at the time subject to this Award shall immediately vest and shall be issued on the date of the Participant’s Separation from Service due to such death or Disability or as soon as administratively practicable thereafter, subject to the Corporation’s collection of the applicable Withholding Taxes, but in no event later than the close of the calendar year in which such Separation from Service occurs or (if later) the fifteenth (15th) day of the third (3rd) calendar month following the date of such Separation from Service.

6. Change in Control .

C. Should either of the following events occur during the period commencing with the earlier of (i) the execution date of any definitive agreement for a Change in Control transaction or (ii) the actual occurrence of a Change in Control and ending with the earlier of (x) the expiration of the twenty-four (24)-month period measured from the effective date of the Change in Control or, to the extent applicable, (y) the date the definitive agreement for the Change in Control transaction is terminated or cancelled without the consummation of the contemplated Change in Control transaction:

(i) Participant’s Employee status is terminated other than for Good Cause, or

(ii) Participant resigns from Employee status for Good Reason,

then all of the Shares at the time subject to this Award shall immediately vest, and those vested Shares shall be issued on the date of the Participant’s Separation from Service in connection with such cessation of Employee status or as soon as administratively practicable thereafter, subject to the Corporation’s collection of the applicable Withholding Taxes, but in no event later than the close of the calendar year in which such Separation from Service occurs or (if later) the fifteenth (15th) day of the third (3rd) calendar month following the date of such Separation from Service, unless a further deferral is required under Paragraph 9.

D. If the Restricted Stock Units subject to this Award at the time of the Change in Control are not assumed or otherwise continued in effect or replaced with a cash retention program in accordance with Paragraph 6.A above, then those units shall vest immediately prior to the closing of the Change in Control. The Shares subject to those vested units shall be converted into the right to receive the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of that Change in Control, and such consideration per Share shall be distributed to Participant upon the tenth (10th) business day following the earliest to occur of (i) the Issuance Date determined for that Share in accordance with the Normal Vesting Schedule, (ii) the date of Participant’s Separation from Service or (iii) the first date following a Qualifying Change in Control on which the distribution can be made without contravention of any applicable provisions of Code Section 409A. Such distribution shall be subject to the Corporation’s collection of the applicable Withholding Taxes pursuant to the provisions of Paragraph 8.

E. This Agreement shall not in any way affect the right of the Corporation to adjust, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

8. Issuance of Shares/Collection of Withholding Taxes .

tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes that are applicable to supplemental taxable income. In the event payment is to be made in a form other than the Shares, then the Corporation shall collect from the Participant the applicable Withholding Taxes pursuant to such procedures as the Corporation deems appropriate under the circumstances.

C. Notwithstanding the foregoing provisions of Paragraph 8.B, the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting of the Shares or any other amounts hereunder (the “Employment Taxes”) shall in all events be collected from the Participant no later than the last business day of the calendar year in which the Shares or other amounts vest hereunder. Accordingly, to the extent one or more vested Shares are issued, or other amounts are distributed, in a year subsequent to the calendar year in which those Shares or other amounts vest, the Participant shall, on or before the last business day of the calendar year in which the Shares or other amounts vest, deliver to the Corporation a check payable to its order in the dollar amount equal to the Employment Taxes required to be withheld with respect to those Shares or other amounts. The provisions of this Paragraph 8.C shall be applicable only to the extent necessary to comply with the applicable tax withholding requirements of Code Section 3121(v).

10. Benefit Limit. The benefit limitation of this Paragraph 10 shall apply only to the extent Participant is not otherwise entitled to a Code Section 4999 tax gross-up under the Corporation’s Executive Severance Plan (or any successor plan) with respect to the Shares that vest on an accelerated basis in connection with a Change in Control or subsequent cessation of Employee status:

14. Construction . This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award. For purposes of Code Section 409A, each installment distribution of Shares (or other installment distribution hereunder) shall be treated as a separate payment, and Participant’s right to receive each such installment of Shares (or other installment distribution hereunder) shall accordingly be treated as a right to receive a series of separate payments.

15. Governing Law . The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules.

IN WITNESS WHEREOF , the parties have executed this Restricted Stock Unit Issuance Agreement on the respective dates indicated below.



SJW CORP.

By:	__________________________
Title:	__________________________
Dated:	__________________________

[NAME OF PARTICIPANT]

Signature:	__________________________
Address:	__________________________
Dated:	__________________________

APPENDIX A

DEFINITIONS

The following definitions shall be in effect under the Agreement:

A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.

B. Award shall mean the award of Restricted Stock Units made to Participant pursuant to the terms of the Agreement.

C. Award Date shall mean the date the Restricted Stock Units are awarded to Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.

D. Board shall mean the Corporation’s Board of Directors.

E. Change in Control shall mean any change in control or ownership of the Corporation which occurs by reason of one or more of the following events:

(i) the acquisition, directly or indirectly by any person or related group of persons (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under control with, the Corporation or an employee benefit plan maintained by any such entity, of beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of securities of the Corporation that results in such person or related group of persons beneficially owning thirty percent (30%) or more of the total combined voting power of the Corporation’s then-outstanding securities;

(v) a change in the composition of the Board over a period of thirty-six (36) consecutive months or less such that a majority of the Board members ceases by reason of one or more contested elections for Board membership, to be comprised of individuals who either (a) have been Board members since the beginning of such period or (b) have been elected or nominated for election as Board members during such period by at least a majority of the Board members who were described in clause (a) or who were previously so elected or approved and who were still in office at the time the Board approved such election or nomination; provided, however, that solely for purposes of determining whether a permissible Section 409A distribution can be made under Paragraph 6.D in connection with such Change in Control event, the period for measuring a change in the composition of the Board shall be limited to a period of twelve (12) consecutive months or less;

provided, however , that no Change in Control shall occur if the result of the transaction is to give more ownership or control of the Corporation to any person or related group of persons who held securities representing more than thirty percent (30%) of the combined voting power of the Corporation's outstanding securities as of March 3, 2003.

F. Code shall mean the Internal Revenue Code of 1986, as amended.

G. Common Stock shall mean the shares of the Corporation’s common stock.

I. Disability shall mean the Participant’s permanent and total disability as determined pursuant to Section 22(e)(3) of the Code.

J. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance; provided, however, that

solely for purposes of determining whether Participant has incurred a Separation from Service, the term “Employee” shall have the meaning assigned to such term in the Separation from Service definition set forth in this Appendix.

K. Fair Market Value per share of Common Stock on any relevant date shall be the closing selling price per share on the date in question on the Stock Exchange on which the Common Stock is at that time primarily traded, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no reported sale of Common Stock on such Stock Exchange on the date in question, then the Fair Market Value shall be the closing selling price on the exchange on the last preceding date for which such quotation exists.

L. Good Cause shall mean:

(i) Any act or omission by Participant that results in substantial harm to the business or property of the Corporation (or any Parent or Subsidiary) and that constitutes dishonesty, intentional breach of fiduciary obligation or intentional wrongdoing,

(ii) Participant’s conviction of a criminal violation involving fraud or dishonesty, or

(iii) Participant’s intentional and knowing participation in the preparation or release of false or materially misleading financial statements relating to the operations and financial condition of the Corporation (or any Parent or Subsidiary) or Participant’s intentional and knowing submission of any false or erroneous certification required of him or her under the Sarbanes-Oxley Act of 2002 or any securities exchange on which the Common Stock is at the time listed for trading.

M. Good Reason shall be deemed to exist with respect to Participant if and only if, without Participant’s express written consent:

(i) there is a significantly adverse change in the nature or the scope of Participant’s authority or in his or her overall working environment;

(ii) Participant is assigned duties materially inconsistent with his or her present duties, responsibilities and status;

(iii) there is a reduction in the sum of Participant’s rate of base salary and target bonus; or

(iv) the Corporation changes by fifty-five (55) miles or more the principal location in which Participant is required to perform services;

provided, however , that, before Participant may resign for any Good Reason event or transaction, Participant must first provide written notice to the Corporation (or the Parent or Subsidiary employing Participant) identifying such Good Reason event or transaction within ninety (90) days after the occurrence of such event or transaction and the Corporation (or the Parent or Subsidiary employing Participant) shall have failed to cure such event or transaction within thirty (30) days after receipt of such written notice.

N. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

O. Participant shall mean the person to whom the Award is made pursuant to the Agreement.

P. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

Q. Plan shall mean the Corporation’s Long Term Incentive Plan.

R. Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as administrator of the Plan.

S. Qualifying Change in Control shall mean a transaction effecting a change in control or ownership of the Corporation that also qualifies as: (i) a change in the ownership of the Corporation, as determined in accordance with Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the effective control of the Corporation, as determined in accordance with Section 1.409A-3(i)(5)(vi) of the Treasury Regulations, or (iii) a change in the ownership of a substantial portion of the assets of the Corporation, as determined in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury Regulations.

T. Restricted Stock Unit shall mean each unit subject to the Award which shall entitle Participant to receive one (1) share of Common Stock upon the vesting of that unit.

U. Separation from Service shall mean the Participant’s cessation of Employee status by reason of his or her death, retirement or termination of employment. The Participant shall be deemed to have terminated employment for such purpose at such time as the level of his or her bona fide services to be performed as an Employee (or as a consultant or independent contractor) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services he or she rendered as an Employee during the immediately preceding thirty-six (36) months (or such shorter period for which he or she may have rendered such services). Solely for purposes of determining when a Separation from Service occurs, Participant will be deemed to continue in “Employee” status for so long as he or she remains in the employ of one or more members of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance. “Employer Group” means the Corporation and any Parent or Subsidiary and any other corporation or business controlled by, controlling or under common control with, the

Corporation, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) of the Code for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations. Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Section 409A of the Code.

(i) Should the period of such leave (other than a disability leave) exceed six (6) months, then Participant shall be deemed to cease Service and to incur a Separation from Service upon the expiration of the initial six (6) - month period of that leave, unless Participant retains a right to re-employment under applicable law or by contract with the Corporation (or any Parent or Subsidiary).

(ii) Should the period of a disability leave exceed twenty-nine (29) months, then Participant shall be deemed to cease Service and to incur a Separation from Service upon the expiration of the initial twenty-nine (29)-month period of that leave, unless Participant retains a right to re-employment under applicable law or by contract with the Corporation (or any Parent or Subsidiary). For such purpose, a disability leave shall be a leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and causes Participant to be unable to perform the duties of his or her position of employment with the Corporation (or any Parent or Subsidiary) or any substantially similar position of employment.

W. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.

EXHIBIT 10.57

2012 PERFORMANCE GOALS FOR

CEO SHORT-TERM INCENTIVE BONUS



Performance Criteria	Goals and Minimum and Maximum Thresholds	Allocation of Target Amount ($) (1)
San Jose Water Company Return on Equity for the 2012 Fiscal Year	Target Goal: 10.00% Minimum Threshold: 7.00% Maximum Goal: At least 11.00%	$52,084
Compliance (Environmental) (2)	Maximum Goal: No material water quality or environmental violations (Goal and Minimum Threshold are not applicable).	$52,083
San Jose Water Company Operational Goals (3)	Target Goal: Achieve 80% of identified key water industry objectives measured primarily in terms of service, reliability and efficiency. Minimum Threshold: Achieve 70% of identified water industry objectives. Maximum Goal: Achieve 90% of identified key water industry objectives.	$52,083

The target 2012 annual cash bonus amount is equal to $156,250, which is 25 percent of Mr. Roth’s 2012 base salary per his employment agreement. The actual bonus attributable to each performance goal may range from 0 to 150 percent of the portion of the target bonus amount allocated to that goal. Based on the Executive Compensation Committee’s determination of the level of achievement of each performance goal, the amount payable with respect to that goal will be as follows:


•	If the goal is attained at target level, 100 percent of the allocated amount will be paid.


•	If the goal is only attained at the minimum level, then 50 percent of the allocated amount will be paid.


•	If the goal is attained at or above maximum level, then 150 percent of the allocated amount will be paid.


•	Should the actual level of attainment of any such performance goal be between two of the designated levels, then the bonus potential with respect to that goal will be interpolated on a straight-line basis.

“No material water quality or environmental violations” means the absence of citations with material fines issued by state or federal environmental regulators in the performance year in connection with violations which occurred in the performance year. A material fine will be deemed to occur if the amount of the fine exceeds $25,000 in any one instance or $100,000 in the aggregate for the year.


3)	The key water industry objectives will be established by March 30, 2012.

Exhibit 23

Consent of Independent Registered Public Accounting Firm

The Shareholders and Board of Directors

SJW Corp.:

We consent to the incorporation by reference in the registration statements (Nos. 333-105010 and 333-127383) on Form S-8 and in the registration statement (No. 333-172048) on Form S-3 of SJW Corp. of our report dated February 29, 2012, with respect to the consolidated balance sheets of SJW Corp. and subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2011, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2011, which report appears in the December 31, 2011 annual report on Form 10-K of SJW Corp.

/ s / KPMG LLP

Santa Clara, California

February 29, 2012

Exhibit 31.1

CERTIFICATIONS

I, W. Richard Roth, certify that:

1. I have reviewed this Annual Report on Form 10-K of SJW Corp. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	February 29, 2012	/s/ W. Richard Roth
		W. RICHARD ROTH
		President and Chief Executive Officer
		(Principal executive officer)

Exhibit 31.2

CERTIFICATIONS

I, James P. Lynch, certify that:

1. I have reviewed this Annual Report on Form 10-K of SJW Corp. (the “registrant”);

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	February 29, 2012	/s/ James P. Lynch
		JAMES P. LYNCH
		Chief Financial Officer and Treasurer
		(Principal financial officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of SJW Corp. (the “Company”) on Form 10-K for the year ended December 31, 2011 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, W. Richard Roth, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge on the date hereof:


(1)	the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ W. Richard Roth

W. RICHARD ROTH

President and Chief Executive Officer

(Principal executive officer)

February 29, 2012

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of SJW Corp. (the “Company”) on Form 10-K for the year ended December 31, 2011 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James P. Lynch, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge on the date hereof:


(1)	the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James P. Lynch

JAMES P. LYNCH

Chief Financial Officer and Treasurer

(Principal financial officer)

February 29, 2012