Equity Incentive Plan

In May 2015, the Company granted to directors and employees a total of 419,000 restricted shares, and 1,090,000 stock options to purchase Company stock. These shares and options were issued out of the 2014 Equity Incentive Plan (2014 EIP), which allows the Company to grant common stock or options to purchase common stock at specific prices to directors and employees of the Company. The 2014 EIP provides for the issuance or delivery of up to 4,978,249 shares (1,422,357 restricted shares and 3,555,892 stock options) of Northfield Bancorp, Inc. common stock subject to certain plan limitations. All stock options and restricted stock granted to date vest in equal installments over a five-year period beginning one year from the date of grant. The vesting of options and restricted stock awards may accelerate in accordance with terms of the 2014 EIP. Stock options were granted at an exercise price equal to the fair value of the Company’s common stock on the grant date based on quoted market prices and all have an expiration period of ten years. The fair value of stock options granted on May 27, 2015, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.5 years, risk-free rate of return of 1.67%, volatility of 32.06% and a dividend yield of 1.90%. As of December 31, 2015, 43,877 restricted shares and 54,332 stock options remain available for issuance under the 2014 EIP .

In 2014, the Company granted to directors and employees a total of 1,001,200 restricted shares, and 2,502,600 stock options to purchase Company stock. These shares and options were issued out of the 2014 EIP. All stock options and restricted stock granted to date vest in equal installments over a five-year period beginning one year from the date of grant. The vesting of options and restricted stock awards may accelerate in accordance with terms of the 2014 EIP. Stock options were granted at an exercise price equal to the fair value of the Company’s common stock on the grant date based on quoted market prices and all have an expiration period of ten years. The fair value of stock options granted on June 11, 2014, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.5 years, risk-free rate of return of 1.92%, volatility of 33.83% and a dividend yield of 1.83%. The fair value of stock options granted on December 8, 2014, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.5 years, risk-free rate of return of 1.81%, volatility of 32.92% and a dividend yield of 1.68%.

The Company also maintains the Northfield Bancorp, Inc. 2008 Equity Incentive Plan (2008 EIP) to grant common stock or options to purchase common stock at specific prices to directors and employees of the Company. The 2008 EIP provides for the issuance or delivery of up to 4,311,796 shares of Northfield Bancorp, Inc. common stock subject to certain plan limitations. As of December 31, 2015, 60,085 restricted shares and 151,445 stock options remain available for issuance under the 2008 EIP. All stock options and restricted stock granted to date vest in equal installments over a five-year period beginning one year from the date of grant. The vesting of options and restricted stock awards may accelerate in accordance with terms of the 2008 EIP. Stock options were granted at an exercise price equal to the fair value of the Company’s common stock on the grant date based on quoted market prices and all have an expiration period of ten years. The fair value of stock options granted on January 30, 2009, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.5 years utilizing the simplified method, risk-free rate of return of 2.17%, volatility of 35.33% and a dividend yield of 1.61%. The fair value of stock options granted on May 29, 2009, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.5 years utilizing the simplified method, risk-free rate of return of 2.88%, volatility of 38.39% and a dividend yield of 1.50%. The fair value of stock options granted on January 30, 2010, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.5 years utilizing the simplified method, risk-free rate of return of 2.90%, volatility of 38.29% and a dividend yield of 1.81%. The fair value of stock options granted on July 26, 2013, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.5 years utilizing the simplified method, risk-free rate of return of 1.39%, volatility of 35.33% and a dividend yield of 1.98%. The Company is expensing the grant date fair value of all employee and director share-based compensation over the requisite service periods on a straight-line basis.

During the years ended December 31, 2015, 2014, and 2013, the Company recorded, $6.8 million, $2.8 million, and $3.2 million of stock-based compensation.

The following table is a summary of the Company’s non-vested stock options as of December 31, 2015, and changes therein during the year then ended:



	Number of Stock Options		Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Contractual Life (years)
Outstanding- December 31, 2013	2,800,305		$	2.30	$	7.13	5.16
Granted	2,502,600		3.91		13.13		9.45
Forfeited	(18,000	)	3.91		13.13		—
Exercised	(146,833	)	2.30		7.11		—
Outstanding- December 31, 2014	5,138,072		3.08		10.04		7.44
Granted	1,090,000		4.07		14.76		9.41
Forfeited	(73,040	)	3.91		13.13		—
Exercised	(143,171	)	2.33		7.22		—
Outstanding- December 31, 2015	6,011,861		3.30		10.93		6.41
Exercisable- December 31, 2015	2,973,603		$	2.57	$	8.08	3.97

Expected future stock option expense related to the non-vested options outstanding as of December 31, 2015, is $10.2 million over an average period of 3.80 years.

The following is a summary of the status of the Company’s restricted shares as of December 31, 2015, and changes therein during the year then ended:



	Number of Shares Awarded		Weighted Average Grant Date Fair Value
Non-vested at December 31, 2013	240,083		$	7.29
Granted	1,001,200		13.13
Vested	(228,209	)	7.16
Forfeited	(10,000	)	13.13
Non-vested at December 31, 2014	1,003,074		13.11
Granted	419,000		14.76
Vested	(196,492	)	13.09
Forfeited	(31,720	)	13.13
Non-vested at December 31, 2015	1,193,862		$	13.70

Expected future stock award expense related to the non-vested restricted awards as of December 31, 2015, is $13.9 million over an average period of 3.80 years.

Upon the exercise of stock options, management expects to utilize treasury stock as the source of issuance for these shares.