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STOCK BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

NOTE 14. 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 could be issued under the 2015 Plan over the 10 year period in which the plan is in place was 420,000 shares of common stock. The 2015 Plan was administered by the Company’s Compensation Committee. All employees and directors of the Company and its subsidiaries were 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 did 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, 2020 there were 330,188 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, 2020, 2019, and 2018:


(in thousands)	2020		2019		2018
Stock options and restricted stock awards	$	287	$	328	$	350
Performance stock units		385		170		237
Restricted stock units		1,258		854		711
Total compensation expense	$	1,930	$	1,352	$	1,298

The total tax benefit recognized associated with stock options and restricted stock awards for the years ended 2020, 2019 and 2018 was $67 thousand, $78 thousand and $81 thousand, respectively. The total tax benefit recognized associated with restricted stock units and performance stock units for the years ended 2020, 2019 and 2018 was $383 thousand, $244 thousand and $221 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, 2020 and 2019, and changes during the year then ended is presented below:


	Number of	Weighted		Aggregate
	Stock Options	Average		Intrinsic Value
Stock Options	Outstanding	Exercise Price		(in thousands)
Outstanding at January 1, 2020	107,784	$	20.15
Granted	—		—
Exercised	(9,860)		18.42
Forfeited	(483)		16.96
Expired	(2,875)		21.90
Outstanding at December 31, 2020	94,566	$	20.29	$	226

Ending vested and expected to vest December 31, 2020	94,566	$	20.29	$	226
Exercisable at December 31, 2020	92,956		20.35		217


	Number of	Weighted		Aggregate
	Stock Options	Average		Intrinsic Value
Stock Options	Outstanding	Exercise Price		(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


	Number of
	Restricted Stock	Weighted Average
	Awards	Grant Date Fair
Restricted Stock Awards	Outstanding	Value
Outstanding at January 1, 2020	—	$	—
Awarded	39,565		23.59
Vested	(39,565)		23.59
Forfeited	—		—
Outstanding at December 31, 2020	—	$	—

There were no restricted stock awards granted in 2019.

The intrinsic value of the options exercised under both plans for the years ended December 31, 2020, 2019, and 2018, was approximately $48 thousand, $98 thousand and $760 thousand, respectively. As of December 31, 2020, there was no unrecognized compensation cost related to unvested stock option awards, net of estimated forfeitures.

Performance Stock Units

During 2020, 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 37,562 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 $25.07 at the date of grant, and will be earned over a three year performance period.

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 26,956 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.

The following table summarizes performance units at target as of December 31, 2020 and 2019:


	Number of	Weighted Average
	Performance Stock	Grant Date Fair
Performance Stock Units	Units Outstanding	Value
Nonvested at January 1, 2020	43,058	$	26.01
Awarded	25,041		25.07
Vested and exercised	(10,369)		18.51
Forfeited	(1,402)		29.13
Nonvested at December 31, 2020	56,328	$	24.98


	Number of	Weighted Average
	Performance Stock	Grant Date Fair
Performance Stock Units	Units Outstanding	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

The intrinsic value of the performance stock units vested and exercised for the years ended December 31, 2020, 2019 and 2018, was $174 thousand, $376 thousand and $337 thousand, respectively.

Restricted Stock Units

During 2020 and 2019, restricted stock units were granted to certain executive officers and senior vice presidents. The restricted shares granted were valued between $20.44 and $25.07 for 2020 and between $22.07 and $24.67 for 2019 the fair market value at the date of grant and vest annually over three years.

The following table summarizes restricted stock units activity in 2020 and 2019:


	Number of	Weighted Average
	Restricted Stock	Grant Date Fair
	Units Outstanding	Value
Outstanding at January 1, 2020	106,552	$	25.82
Granted	63,667		21.98
Vested and exercised	(31,565)		27.38
Forfeited	(7,256)		25.60
Outstanding at December 31, 2020	131,398	$	23.57


	Number of	Weighted Average
	Restricted Stock	Grant Date Fair
	Units Outstanding	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

The intrinsic value of the restricted stock units vested and exercised for the years ended December 31, 2020, 2019 and 2018, was $600 thousand, $493 thousand and $594 thousand, respectively.

As of December 31, 2020, there was $2.2 million 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 1.62 years.