STOCK BASED COMPENSATION PLANS

On October 3, 2000, the shareholders of the Company approved the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 (the “ISOP”) for its officers and employees, which provided for the issuance of up to 1,012,500 shares of common stock. The purchase price of the stock covered by each option must be at least 100% of the trading value on the date such option was granted. Vesting terms ranged from three to seven years. According to the ISOP no option shall be granted after October 3, 2010, ten years after the effective date of the ISOP.

On May 19, 2015, the shareholders of the Company approved the adoption of the 2015 Bar Harbor Bankshares and Subsidiaries Equity Incentive Plan (the “2015 Plan”) for employees and directors of the Company and its subsidiaries. Subject to adjustment for stock splits, stock dividends, and similar events, the total number of shares of common stock that can be issued under the 2015 Plan over the 10 year period in which the plan will be in place is 420,000 shares of common stock. The 2015 Plan is administered by the Company’s Compensation Committee. All employees and directors of the Company and its subsidiaries are eligible to participate in the 2015 Plan, subject to the discretion of the administrator and the terms of the 2015 Plan. The maximum stock award granted to one individual may not exceed 30,000 shares of common stock (subject to adjustment for stock splits, and similar events) for any calendar year. No grants were made after May 19, 2019 pursuant to this plan.

On May 21, 2019 the shareholders of the Company approved the adoption of the 2019 Bar Harbor Bankshares and Subsidiaries Equity Incentive Plan (the “2019 Plan”) for employees and directors of the Company and its subsidiaries. Subject to adjustment for stock splits, stock dividends, and similar events, the total number of shares of common stock that can be issued under the 2019 Plan over the 10 year period in which the plan will be in place is 500,000 shares of common stock. The 2019 Plan is administered by the Company’s Compensation Committee. All employees and directors of the Company and its subsidiaries are eligible to participate in the 2019 Plan, subject to the discretion of the administrator and the terms of the 2019 Plan. As of December 31, 2019 there were 467,616 shares available for grant under this plan.

In April of 2013, the Board of Directors approved a Long Term Incentive Program for senior management members. The program is designed to be made up of a series of three year rolling plans utilizing the shares made available through the approved equity plans. Grants may be given in time vested restricted stock awards, time vested restricted stock units or performance vested restricted stock units, or a combination of these types of grants.

Compensation expense recognized in connection with the stock based compensation plans are presented in the following table for the years ended December 31, 2019, 2018, and 2017:



(in thousands)	2019		2018		2017
Stock options and restricted stock awards	$	328	$	350	$	399
Performance stock units	170		237		290
Restricted stock units	854		711		585
Total compensation expense	$	1,352	$	1,298	$	1,274

The total tax benefit recognized associated with stock options and restricted stock awards for the years ended 2019, 2018 and 2017 was $78 thousand, $81 thousand and $308 thousand, respectively. The total tax benefit recognized associated with restricted stock units and performance stock units for the years ended 2019, 2018 and 2017 was $244 thousand, $221 thousand and $423 thousand, respectively.

Stock Option and Restricted Stock Awards Activity: A summary combined status of the stock option and restricted stock awards as of December 31, 2019 and 2018, and changes during the year then ended is presented below:



Stock Options	Number of Stock Options Outstanding		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2019	121,637		$	19.96
Granted	—		—
Exercised	(13,853	)	18.44
Forfeited	—		—
Outstanding at December 31, 2019	107,784		$	20.15	$	565

Ending vested and expected to vest December 31, 2019	107,784		$	20.15	$	565
Exercisable at December 31, 2019	98,460		20.48		483



Stock Options	Number of Stock Options Outstanding		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2018	169,921		$	18.95
Granted	—		—
Exercised	(47,534	)	16.32
Forfeited	(750	)	22.16
Outstanding at December 31, 2018	121,637		$	19.96	$	313

Ending vested and expected to vest December 31, 2018	121,637		$	19.96	$	313
Exercisable at December 31, 2018	101,554		20.66		192

There were no restricted stock awards granted in 2019.



Restricted Stock Awards	Number of Restricted Stock Awards Outstanding		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2018	—		$	—
Awarded	12,420		24.14
Vested	(12,420	)	24.14
Forfeited	—		—
Outstanding at December 31, 2018	—		$	—

The intrinsic value of the options exercised under both plans for the years ended December 31, 2019, 2018, and 2017, was approximately $98 thousand, $760 thousand and $708 thousand, respectively.

As of December 31, 2019, there was approximately $14 thousand of unrecognized compensation cost related to unvested stock option awards, net of estimated forfeitures. This amount is expected to be recognized as expense over the next six years, with a weighted average recognition period of 0.56 years.

Performance Stock Units

During 2019, performance stock unit awards were granted to certain executive officers providing the opportunity to earn shares of common stock of the Company collectively ranging from zero to 26,952 shares, based on the Company’s performance compared to peers. The performance stock units granted will vest only if the performance measures are achieved. Failure to achieve the performance measures will result in all or a portion of shares being forfeited. The performance shares granted had a weighted average fair value of $23.24 at the date of grant, and will be earned over a three year performance period.

During 2018, performance stock unit awards were granted to certain executive officers providing the opportunity to earn shares of common stock of the Company collectively ranging from zero to 19,973 shares, based on the Company’s performance compared to peers. The performance stock units granted will vest only if the performance measures are achieved. Failure to achieve the performance measures will result in all or a portion of shares being forfeited. The performance shares granted had a weighted average fair value of $26.30 at the date of grant, and will be earned over a three year performance period.

The following table summarizes performance units at target as of December 31, 2019 and 2018:



Performance Stock Units	Number of Performance Stock Units Outstanding		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2019	37,865		$	26.77
Awarded	17,968		23.24
Vested and exercised	(11,801	)	23.92
Forfeited	(974	)	28.78
Nonvested at December 31, 2019	43,058		$	26.01



Performance Stock Units	Number of Performance Stock Units Outstanding		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2018	33,627		$	25.21
Awarded	23,011		26.30
Vested and exercised	(15,017	)	22.25
Forfeited	(3,756	)	27.94
Nonvested at December 31, 2018	37,865		$	26.77

The intrinsic value of the performance stock units vested and exercised for the years ended December 31, 2019, 2018 and 2017, was $376 thousand, $337 thousand and $285 thousand, respectively.

Restricted Stock Units

During 2019 and 2018, restricted stock units were granted to certain executive officers and senior vice presidents. The restricted shares granted were valued between $22.07 and $24.67 for 2019 and between $24.85 and $30.19 for 2018 the fair market value at the date of grant and vest annually over three years.

The following table summarizes restricted stock units activity in 2019 and 2018:



Restricted Stock Units	Number of Restricted Stock Units Outstanding		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019	80,740		$	28.24
Granted	50,352		22.45
Vested and exercised	(19,411	)	26.11
Forfeited	(5,129	)	29.28
Outstanding at December 31, 2019	106,552		$	25.82



Restricted Stock Units	Number of Restricted Stock Units Outstanding		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2018	74,168		$	26.60
Granted	46,743		28.66
Vested and exercised	(26,489	)	24.36
Forfeited	(13,682	)	28.28
Outstanding at December 31, 2018	80,740		$	28.24

The intrinsic value of the restricted stock units vested and exercised for the years ended December 31, 2019, 2018 and 2017, was $493 thousand, $594 thousand and $272 thousand, respectively.

As of December 31, 2019, there was $549 thousand of total unrecognized compensation cost related to nonvested restricted stock units and performance stock units granted under the Plans. That cost is expected to be recognized over a weighted average period of 1.65 years.