15. STOCK-BASED COMPENSATION PLANS

The Bridge Bancorp, Inc. 2012 Stock-Based Incentive Plan (the “2012 SBIP”) provides for the grant of stock-based and other incentive awards to officers, employees and directors of the Company. The 2012 SBIP plan superseded the Bridge Bancorp, Inc. 2006 Stock-Based Incentive Plan. The number of shares of common stock of Bridge Bancorp, Inc. available for stock-based awards under the 2012 SBIP is 525,000 plus 278,385 shares that were remaining under the 2006 Stock-Based Incentive Plan. Of the total 803,385 shares of common stock approved for issuance under the 2012 SBIP, 282,737 shares remain available for issuance at December 31, 2018, including shares that may be granted in the form of stock options, RSAs or restricted stock units (“RSUs”).

The Compensation Committee of the Board of Directors determines awards under the 2012 SBIP. The Company accounts for the 2012 SBIP under FASB ASC No. 718.

Stock Options

Stock options may be either incentive stock options, which bestow certain tax benefits on the optionee, or non-qualified stock options, not qualifying for such benefits. All options have an exercise price that is not less than the market value of the Company's common stock on the date of the grant.

The fair value of each option granted is estimated on the date of the grant using the Black-Scholes option-pricing model. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the Company's common stock as of the exercise or reporting date.

During the year ended December 31, 2018, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 47,393 stock options with an exercise price set to equal a 10.0% premium over the grant date stock price. All of the stock options granted vest ratably over three years. The estimated weighted-average grant-date fair value of all stock options granted in the year ended December 31, 2018 was $6.52 per stock option, using the Black-Scholes option-pricing model with assumptions as follows: dividend yield of 2.80%; expected volatility rate of 27.53%; risk-free interest rate of 2.67%; and expected option life of 6.5 years. No new grants of stock options were awarded during the years ended December 31, 2017 and 2016. There were no stock options outstanding as of December 31, 2017 and 2016.

Compensation expense attributable to stock options was $91 thousand for the year ended December 31, 2018. There was no compensation expense attributable to stock options for the years ended December 31, 2017 and 2016 because all stock options were vested. As of December 31, 2018, there was $218 thousand of total unrecognized compensation cost related to unvested stock options. The cost is expected to be recognized over a weighted-average period of 2.1 years.

The following table summarizes the status of the Company's stock options:


				Weighted
		Weighted		Average
	Number	Average		Remaining			Aggregate
	of	Exercise		Contractual			Intrinsic
(Dollars in thousands, except per share amounts)	Options	Price		Life			Value
Outstanding, January 1, 2018	—	$	—
Granted	47,393		36.19
Outstanding, December 31, 2018	47,393		36.19		9.1	years	$	—
Vested and Exercisable, December 31, 2018	—		—		—			—


		Weighted
	Number of	Average
Range of Exercise Prices	Options	Exercise Price
$36.19	47,393	$	36.19
	47,393		36.19

The following table summarizes stock option exercise activity:


	Year Ended December 31,
(In thousands)	2018		2017		2016
Intrinsic value of options exercised	$	—	$	__	$	115
Cash received from options exercised		__		__		62
Tax benefit realized from options exercised		—		—		—

Restricted Stock Awards

The Company's RSAs are shares of the Company's common stock that are forfeitable and are subject to restrictions on transfer prior to the vesting date. RSAs are forfeited if the award holder departs the Company before vesting. RSAs carry dividend and voting rights from the date of grant. The vesting of time-vested RSAs depends upon the award holder continuing to render services to the Company. The Company's performance-based RSAs vest subject to the achievement of the Company's 2018 corporate goals.

The following table summarizes the unvested RSA activity for the year ended December 31, 2018:


		Weighted
		Average Grant-Date
	Shares	Fair Value
Unvested, January 1, 2018	317,692	$	27.16
Granted	83,782		32.99
Vested	(61,367)		24.15
Forfeited	(15,225)		29.43
Unvested, December 31, 2018	324,882		29.13

During the year ended December 31, 2018, the Company granted a total of 83,782 RSAs. Of the 83,782 RSAs granted, 44,750 time-vested RSAs vest ratably over five years, 13,915 time-vested RSAs vest ratably over three years and 25,117 performance-based RSAs vest ratably over two years, subject to the achievement of the Company’s 2018 corporate goals. During the year ended December 31, 2017, the Company granted RSAs of 71,781 shares. Of the 71,781 shares granted, 31,860 shares vest over seven years with a third vesting after years five, six and seven, 25,396 shares vest over five years with a third vesting after years three, four and five, and 11,070 shares vest ratably over three years and 3,455 shares vest ratably over nine months. During the year ended December 31, 2016, the Company RSAs of 69,309 shares. Of the 69,309 shares granted, 36,000 shares vest over seven years with a third vesting after years five, six and seven, 27,709 shares vest over five years with a third vesting after years three, four and five, 5,600 shares vest ratably over three years. As of December 31, 2018, there were 324,882 unvested RSAs consisting of 301,250 time-vested RSAs and 23,632 performance-based RSAs.

Compensation expense attributable to RSAs was $2.4 million, $1.7 million and $1.5 million for the years ended December 31, 2018, 2017 and 2016, respectively. The total fair value of shares vested during the years ended December 31, 2018, 2017 and 2016, was $1.5 million, $1.1 million and $935 thousand, respectively. As of December 31, 2018, there was $5.0 million of total unrecognized compensation costs related to non-vested restricted stock awards granted under the 2012 SBIP and the 2006 Equity Incentive Plan. The cost is expected to be recognized over a weighted-average period of 3.3 years.

Restricted Stock Units

Long Term Incentive Plan

RSUs represent an obligation to deliver shares to an employee at a future date if certain vesting conditions are met. RSUs are subject to a time-based vesting schedule, or the satisfaction of performance conditions, and are settled in shares of the Company's common stock. RSUs do not provide voting rights and RSUs may provide dividend equivalent rights from the date of grant.

During the year ended December 31, 2018 in accordance with the LTI plan for NEOs, the Company granted 21,693 RSUs. Of the 21,693 RSUs granted, 12,522 time-vested RSUs vest ratably over five years and 9,171 performance-based RSUs vest subject to the achievement of the Company’s three-year corporate goal for the three-year period ending December 31, 2020.

The following table summarizes the unvested NEO RSU activity for the year ended December 31, 2018:


		Weighted
		Average Grant-Date
	Shares	Fair Value
Unvested, January 1, 2018	68,776	$	24.46
Granted	21,693		33.23
Reinvested dividends	2,103		26.73
Forfeited	(13,334)		21.85
Unvested, December 31, 2018	79,238		27.36

Compensation expense attributable to LTI plan RSUs was $462 thousand, $309 thousand and $193 thousand in connection with these awards for the years ended December 31, 2018, 2017 and 2016, respectively. As of December 31, 2018, there was $1.3 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 3.0 years.

Directors Plan

In April 2009, the Company adopted a Directors Deferred Compensation Plan (“Directors Plan”). Under the Directors Plan, independent directors may elect to defer all or a portion of their annual retainer fee in the form of RSUs. In addition, directors receive a non-election retainer in the form of RSUs. These RSUs vest ratably over one year and have dividend rights but no voting rights. In connection with the Directors Plan, the Company recorded expense of $560 thousand, $530 thousand and $493 thousand for the years ended December 31, 2018, 2017 and 2016 respectively.

Employee Stock Purchase Plan

In May 2018, the Board of Directors adopted, and stockholders approved the Employee Stock Purchase Plan (“ESPP”). A total of 1,000,000 shares of the Company’s common stock have been initially authorized for issuance under the ESPP. Subject to any plan limitations, the ESPP allows eligible employees to contribute, normally through payroll deductions, up to $25 thousand for the purchase of the Company’s common stock at a discounted price per share for any calendar year. The initial offering period was from July 1, 2018 through December 15, 2018.

During the year ended December 31, 2018, 3,758 shares of common stock were purchased under the ESPP. No expense was recorded related to ESPP for year ended December 31, 2018.