STOCK

6 Months Ended

Jun. 30, 2011

STOCK-BASED COMPENSATION [Abstract]

STOCK

2. STOCK-BASED COMPENSATION PLANS:

The following table summarizes the sjg nonvested restricted stock awards pertaining to SJG outstanding at June 30, 2011, and the assumptions used to estimate the fair value of the awards:

Grant Date	Shares Outstanding		Fair Value Per Share		Expected Volatility			Risk-Free Interest Rate
Jan. 2009		8,318	$	39.350		28.6	%		1.20	%
Jan. 2010		10,024	$	39.020		29.0	%		1.65	%
Jan. 2011		7,544	$	50.940		27.5	%		1.01	%

Expected volatility is based on the actual volatility of sjg's share price over the preceding 3-year period as of the valuation date. The risk-free interest rate is based on the zero-coupon U.S. Treasury Bond, with a term equal to the 3-year term of the restricted shares. As notional dividend equivalents are credited to the holders, which are reinvested during the 3-year service period, no reduction to the fair value of the award is required.

The cost for restricted stock awards during 2011 and 2010 is approximately $0.1 million per quarter.

As of June 30, 2011, there was $0.6 million of total unrecognized compensation cost related to nonvested share-based compensation awards granted under the restricted stock plans. That cost is expected to be recognized over a weighted average period of 2.0 years.

The following table summarizes information regarding restricted stock award activity during the six months ended June 30, 2011, excluding accrued dividend equivalents:

	Shares		Weighted Average Grant Date Fair Value
Nonvested Shares Outstanding, January 1, 2011		18,342	$	39.170
Granted		7,544	$	50.940
Nonvested Shares Outstanding, June 30, 2011		25,886	$	42.600

During the six months ended June 30, 2011, SJG awarded 15,186 shares that had vested at December 31, 2010, to its officers at a market value of $0.8 million. During the six months ended June 2010, SJG awarded 14,400 shares at a market value of $0.5 million. SJG has a policy of making cash payments to sjg to satisfy its obligations under this plan. Cash payments to sjg during both the six months ended June 30, 2011 and 2010 were approximately $0.3 million relating to stock awards. Additionally, a change in control could result in the nonvested shares becoming nonforfeitable or immediately payable in cash.