STOCK BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2018

STOCK BASED COMPENSATION PLANS

STOCK BASED COMPENSATION PLANS

3. STOCK BASED COMPENSATION PLANS

The Bridge Bancorp, Inc. 2012 Stock-Based Incentive Plan (“2012 SBIP”) provides for the grant of stock-based and other incentive awards to officers, employees and directors of the Company. The 2012 SBIP superseded the Bridge Bancorp, Inc. 2006 Equity Incentive Plan.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 Equity Incentive Plan. Of the total 803,385 shares of common stock approved for issuance under the 2012 SBIP, 290,494 shares remain available for issuance at March 31, 2018, including shares that may be granted in the form of stock options, restricted stock awards (“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 three months ended March 31, 2018, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 47,393 stock options. 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 three months ended March 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. There were no stock options granted during the three months ended March 31, 2017.

Compensation expense attributable to stock options was $13 thousand for the three months ended March 31, 2018. There was no compensation expense attributable to stock options for the three months ended March 31, 2017 because there were no stock options outstanding as of March 31, 2017 and December 31, 2016. As of March 31, 2018, there was $296 thousand of total unrecognized compensation cost related to unvested stock options. The cost is expected to be recognized over a weighted-average period of 2.9 years.

The following table summarizes the status of the Company’s stock options as of and for the three months ended March 31, 2018:

					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, March 31, 2018		47,393	$	36.19		9.9 years	$	-
Vested and Exercisable, March 31, 2018		-	$	-	$	-	$	-

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

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 three months ended March 31, 2018:

				Weighted
				Average Grant-Date
	Shares			Fair Value
Unvested, January 1, 2018		317,692		$	27.16
Granted		77,682			33.03
Vested		(47,916	)		23.26
Forfeited		(650	)		31.06
Unvested, March 31, 2018		346,808		$	29.01

During the three months ended March 31, 2018, the Company granted a total of 77,682 RSAs. Of the 77,682 RSAs granted, 39,750 time-vested RSAs vest ratably over five years, 12,815 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.

Compensation expense attributable to RSAs was $536 thousand and $413 thousand for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there was $7.0 million of total unrecognized compensation cost related to non-vested RSAs. The cost is expected to be recognized over a weighted-average period of 3.7 years.

Restricted Stock Units

Long Term Incentive Plan

During the three months ended March 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 years 2018, 2019 and 2020.

The following table summarizes the unvested NEO RSU activity for the three months ended March 31, 2018:

				Weighted
				Average Grant-Date
	Shares			Fair Value
Unvested, January 1, 2018		68,776		$	24.46
Granted		21,693			33.23
Reinvested dividends		460			24.46
Forfeited		(13,333	)		21.85
Unvested, March 31, 2018		77,596		$	27.36

Compensation expense attributable to LTI Plan RSUs was $101 thousand and $69 thousand for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there was $1.6 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 2.4 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 $135 thousand and $128 thousand in connection with these RSUs for the three months ended March 31 2018 and 2017, respectively.