Note 11 – Stock-Based Compensation

Stock Incentive Plan

We adopted the Trinity Place Holdings Inc. 2015 Stock Incentive Plan (the “SIP”), effective September 9, 2015. Prior to the adoption of the SIP, we granted restricted stock units (“RSUs”) to our executive officers and employees pursuant to individual agreements. The SIP, which has a ten year term, authorizes (i) stock options that do not qualify as incentive stock options under Section 422 of the Code, or NQSOs, (ii) stock appreciation rights, (iii) shares of restricted and unrestricted common stock, and (iv) RSUs. The exercise price of stock options will be determined by the compensation committee, but may not be less than 100% of the fair market value of the shares of common stock on the date of grant. The SIP authorizes the issuance of up to 800,000 shares of our common stock. Our SIP activity was as follows:

	Three Months Ended March 31, 2018				Year Ended December 31, 2017
	Number of Shares		Weighted Average Fair Value at Grant Date		Number of Shares		Weighted Average Fair Value at Grant Date

Balance available, beginning of period		541,319		-		614,500		-
Granted to employees		(146,000)	$	6.95		(48,600)	$	7.34
Granted to non-employee directors		-		-		(18,938)	$	6.88
Deferred under non-employee director's deferral program		-		-		(5,643)	$	6.88
Balance available, end of period		395,319		-		541,319		-

Restricted Stock Units

We grant RSUs to certain employees and executive officers as part of compensation. These grants have vesting dates ranging from immediate vest at grant date to five years, with a distribution of shares at various dates ranging from the time of vesting up to seven years after vesting.

During the three months ended March 31, 2018, we granted 146,000 RSUs to certain employees. These RSUs vest and settle at various times over a two year period, subject to each employee’s continued employment. Approximately $190,000 in compensation expense related to these shares was amortized during the three months ended March 31, 2018, of which approximately $76,000 was capitalized into real estate under development.

Stock-based compensation expense recognized during the three months ended March 31, 2018 and March 31, 2017 totaled $351,000 and $311,000, respectively, which is net of $189,000 and $667,000 capitalized as part of real estate under development, respectively.

Our RSU activity for the three months ended March 31, 2018 was as follows:

	Three Months Ended March 31, 2018
	Number of Shares		Weighted Average Fair Value at Grant Date

Non-vested at beginning of period		677,734	$	6.44
Granted RSUs		146,000	$	6.95
Vested		(193,142)	$	6.59
Non-vested at end of period		630,592	$	6.40

As of March 31, 2018, there was approximately $2.0 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized through December 2020.

During the three months ended March 31, 2018, we issued 181,535 shares of common stock to employees and executive officers to settle vested RSUs from previous RSU grants. In connection with those transactions, we repurchased 78,688 shares to provide for the employees’ withholding tax liabilities.

Director Deferred Compensation Program

We adopted our Non-Employee Director’s Deferral Program (the “Deferral Program”) on November 2, 2016. Under the Deferral Program, our non-employee directors may elect to defer receipt of their annual equity compensation. The non-employee directors’ annual equity compensation, and any deferred amounts, are paid under the SIP. Compensation deferred under the Deferral Program is reflected by the grant of stock units under the SIP equal to the number of shares that would have been received absent a deferral election. The stock units, which are fully vested at grant, generally will be settled for an equal number of shares of common stock within 10 days after the participant ceases to be a director. In the event that we distribute dividends, each participant shall receive a number of additional stock units (including fractional stock units) equal to the quotient of (i) the aggregate amount of the dividend that the participant would have received had all outstanding stock units been shares of common stock divided by (ii) the closing price of a share of common stock on the date the dividend was issued.

As of March 31, 2018, 5,643 stock units were deferred under the Deferral Program.