The following table sets forth information regarding the value realized by our NEOs on option exercises and stock awards vested during the year ended December 31,
2018. | | | | | | | | | |
| | Option Awards | | Stock Awards |
| | Number of Shares | | | | Number of Shares | | | |
| | acquired on | | Value realized on | | acquired on vesting | | Value realized on |
Name | | exercise (#) | | exercise ($) | | (#) | | vesting ($)(1) |
K. O’Connor | | — | | — | | 10,701 | | $ | 363,299 |
H. Nolan | | — | | — | | 5,152 | | $ | 174,910 |
K. Santacroce | | — | | — | | 4,794 | | $ | 162,756 |
J. McCaffery | | — | | — | | 1,569 | | $ | 53,268 |
J. Manseau | | — | | — | | 4,794 | | $ | 162,756 |
2021.
| Kevin M. O’Connor | | | — | | | — | | | 17,733 | | | $450,596 | |
| Stuart H. Lubow | | | — | | | — | | | — | | | — | |
| Avinash Reddy | | | — | | | — | | | — | | | — | |
| Conrad J. Gunther | | | — | | | — | | | — | | | — | |
| Patricia M. Schaubeck | | | — | | | — | | | — | | | — | |
| Howard H. Nolan | | | 29,346 | | | $73,603 | | | 6,190 | | | $157,288 | |
| John M. McCaffery | | | — | | | — | | | 16,096 | | | $494,884 | |
(1)
| Based on the closing price of our common stock on the respective vesting dates.OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information pertaining to outstanding equity awards held by the NEOs as of December 31, 2018.
| | | | | | | | | | | | | | | | | | | | | Option Awards | | | | | | Stock Awards | | | | | | | | | | | | | | | | | | | Equity Incentive | | | | | | | | | | | | | | | | Equity Incentive | | | Plan Awards: | | | Number of | | Number of | | | | | | Number of | | | | | Plan Awards: | | | Market or | | | securities | | securities | | | | | | shares or | | Market Value | | Number of | | | payout value of | | | underlying | | underlying | | | | | | units of | | of shares or | | unearned shares, | | | unearned shares, | | | unexercised | | unexercised | | Option | | Option | | stock that | | units of stock | | units or other | | | units or other | | | options | | options | | exercise | | expiration | | have not | | that have not | | rights that have | | | rights that have | Name | | exercisable | | unexercisable | | price | | date | | vested | | vested(1) ($) | | not vested | | | not vested(1) ($) | K. O’Connor | | — | | 17,255 | | 36.19 | | 2/13/2028 | | 2,334 | (2) | $ | 59,494 | | | | | | | | | | | | | | | | 4,500 | (3) | $ | 114,705 | | | | | | | | | | | | | | | | 1,376 | (4) | $ | 35,074 | | | | | | | | | | | | | | | | 8,000 | (5) | $ | 203,920 | | | | | | | | | | | | | | | | 3,380 | (6) | $ | 86,156 | | | | | | | | | | | | | | | | 5,558 | (7) | $ | 141,673 | | | | | | | | | | | | | | | | 5,597 | (8) | $ | 142,668 | | | | | | | | | | | | | | | | 1,923 | (9) | $ | 49,017 | | | | | | | | | | | | | | | | 3,443 | (10) | $ | 87,757 | | | | | | | | | | | | | | | | 3,731 | (11) | $ | 95,093 | | | | | | | | | | | | | | | | | | | | | 5,567 | (12) | $ | 141,910 | | | | | | | | | | | 2,996 | (13) | $ | 76,359 | | | | | | | | | | | | | | | | | | | | | 4,671 | (14) | $ | 119,069 | | | | | | | | | | | | | | | | 3,410 | (15) | $ | 86,913 | | | | | | | | | | | 4,656 | (16) | $ | 118,669 | | | | | | | | | | | | | | | | | | | | | | | | | H. Nolan | | — | | 7,822 | | 36.19 | | 2/13/2028 | | 1,167 | (2) | $ | 29,747 | | | | | | | | | | | | | | | | 2,167 | (3) | $ | 55,237 | | | | | | | | | | | | | | | | 644 | (4) | $ | 16,416 | | | | | | | | | | | | | | | | 3,500 | (5) | $ | 89,215 | | | | | | | | | | | | | | | | 1,578 | (6) | $ | 40,223 | | | | | | | | | | | | | | | | 2,414 | (7) | $ | 61,533 | | | | | | | | | | | | | | | | 2,052 | (8) | $ | 52,305 | | | | | |
| | | | | | | | | | 930 | (9) | $ | 23,706 | | | | | | | | | | | | | | | | 1,477 | (10) | $ | 37,655 | | | | | | | | | | | | | | | | 1,757 | (11) | $ | 44,779 | | | | | | | | | | | | | | | | | | | | | 2,621 | (12) | $ | 66,810 | | | | | | | | | | | 1,356 | (13) | $ | 34,585 | | | | | | | | | | | | | | | | | | | | | 2,116 | (14) | $ | 53,935 | | | | | | | | | | | | | | | | 1,546 | (15) | $ | 39,409 | | | | | | | | | | | 2,111 | (16) | $ | 53,803 | | | | | | | | | | | | | | | | | | | | | | | | | K. Santacroce | | — | | 7,592 | | 36.19 | | 2/13/2028 | | 1,167 | (2) | $ | 29,747 | | | | | | | | | | | | | | | | 2,167 | (3) | $ | 55,237 | | | | | | | | | | | | | | | | 540 | (4) | $ | 13,765 | | | | | | | | | | | | | | | | 3,500 | (5) | $ | 89,215 | | | | | | | | | | | | | | | | 1,332 | (6) | $ | 33,953 | | | | | | | | | | | | | | | | 2,158 | (7) | $ | 55,007 | | | | | | | | | | | | | | | | 1,959 | (8) | $ | 49,935 | | | | | | | | | | | | | | | | 678 | (9) | $ | 17,282 | | | | | | | | | | | | | | | | 1,477 | (10) | $ | 37,655 | | | | | | | | | | | | | | | | 1,757 | (11) | $ | 44,779 | | | | | | | | | | | | | | | | | | | | | 2,621 | (12) | $ | 66,810 | | | | | | | | | | | 1,295 | (13) | $ | 33,008 | | | | | | | | | | | | | | | | | | | | | 2,019 | (14) | $ | 51,476 | | | | | | | | | | | | | | | | 1,500 | (15) | $ | 38,237 | | | | | | | | | | | 2,048 | (16) | $ | 52,215 | | | | | | | | | | | | | | | | | | | | | | | | | J. McCaffery | | — | | 7,592 | | 36.19 | | 2/13/2028 | | 1,334 | (3) | $ | 34,004 | | | | | | | | | | | | | | | | 147 | (4) | $ | 3,747 | | | | | | | | | | | | | | | | 2,500 | (5) | $ | 63,725 | | | | | | | | | | | | | | | | 1,281 | (6) | $ | 32,653 | | | | | | | | | | | | | | | | 2050 | (7) | $ | 52,255 | | | | | | | | | | | | | | | | 1,896 | (8) | $ | 48,329 | | | | | | | | | | | | | | | | 903 | (9) | $ | 23,017 | | | | | | | | | | | | | | | | 1,477 | (10) | $ | 37,655 | | | | | | | | | | | | | | | | 1,757 | (11) | $ | 44,779 | | | | | | | | | | | | | | | | | | | | | 2,621 | (12) | $ | 66,810 | | | | | | | | | | | 1,295 | (13) | $ | 33,008 | | | | | | | | | | | | | | | | | | | | | 2,019 | (14) | $ | 51,476 | | | | | | | | | | | | | | | | 1,500 | (15) | $ | 38,237 | | | | | | | | | | | 2,048 | (16) | $ | 52,215 | | | | | | | | | | | | | | | | | | | | | | | | | J. Manseau | | — | | 7,132 | | 36.19 | | 2/13/2028 | | 1,167 | (2) | $ | 29,747 | | | | | | | | | | | | | | | | 2,167 | (3) | $ | 55,237 | | | | | | | | | | | | | | | | 540 | (4) | $ | 13,765 | | | | | | | | | | | | | | | | 3,500 | (5) | $ | 89,215 | | | | | | | | | | | | | | | | 1,332 | (6) | $ | 33,953 | | | | | | | | | | | | | | | | 2,050 | (7) | $ | 52,255 | | | | | | | | | | | | | | | | 1,866 | (8) | $ | 47,564 | | | | | | | | | | | | | | | | 848 | (9) | $ | 21,616 | | | | | | | | | | | | | | | | 1,477 | (10) | $ | 37,655 | | | | | | | | | | | | | | | | 1,757 | (11) | $ | 44,779 | | | | | | | | | | | | | | | | | | | | | 2,621 | (12) | $ | 66,810 | | | | | | | | | | | 1,234 | (13) | $ | 31,458 | | | | | | | | | | | | | | | | | | | | | 1,923 | (14) | $ | 49,017 | | | | | | | | | | | | | | | | 1,409 | (15) | $ | 35,920 | | | | | | | | | | | 1,924 | (16) | $ | 49,040 | | | | | | | | | | | | | | | | | | | | | | | | |
| (1)
| | Amounts based on closing price of our Common Stock as of December 31, 2018 ($25.49), as reportedcommon stock on the NASDAQ®. respective vesting dates. |
| (2)
| | Vests over seven years; one third in each year commencing in 2017 through 2019.
|
| (3)
| | Vests over seven years; one third in each year commencing in 2018 through 2020.
|
| (4)
| | Vests over five years; one third in each year commencing in 2017 through 2019.
|
| (5)
| | Vests over seven years; one third in each year commencing in 2019 through 2021.
|
| (6)
| | Vests over five years; one third in each year commencing in 2018 through 2020.
|
| (7)
| | Vests over five years; one third in each year commencing in 2019 through 2021.
|
| (8)
| | Vests over five years; one third in each year commencing in 2020 through 2022.
|
| (9)
| | Vests over three years; one third in each year commencing in 2019 through 2021.
|
| (10)
| | Five year cliff vesting with two year holding restriction after vesting in 2020.
|
| (11)
| | Five year cliff vesting with two year holding restriction after vesting in 2021.
|
| (12)
| | Five year cliff vesting with performance requirement and two year holding restriction after vesting in 2021.
|
| (13)
| | Five year cliff vesting with two year holding restriction after vesting in 2022.
|
| (14)
| | Five year cliff vesting with performance requirement and two year holding restriction after vesting in 2022.
|
| (15)
| | Three year cliff vest with performance requirement in 2021.
|
| (16)
| | Vests ratably over five years commencing in 2019.
|
PENSION BENEFITS On October 28, 2021, Dime Community Bank adopted the Dime Community Bank Supplemental Executive Retirement Plan (the “SERP”), which is a non-qualified deferred compensation plan, to provide benefits for certain executives and officers. The SERP is designed to compensate for the benefits reduced under the Dime Community Bank 401(k) Plan (the “401(k) Plan”) and the legacy BNB Bank Pension Plan (the “Pension Plan”) due to the application of the compensation dollar limits and annual benefit limits under the Internal Revenue Code of 1986, as amended (the “Code”). The SERP’s effective date is October 1, 2021. Under the terms of the SERP, the amount of a participant’s annual 401(k) credit and/or annual pension credit is generally equal to the excess of the annual benefit to which the participant would have been entitled under the 401(k) Plan and/or the Pension Plan if the compensation dollar limits under the Code did not apply for each plan year. A participant’s account balance will be fully vested at all times. Messrs. O’Connor and Lubow are the only NEO’s that participate in the Pension Plan benefit under the SERP. The following table sets forth certain information pertaining to the present value of accumulated benefits payable to each of the NEOs, including the number of years of service credited to each such NEO, under the Pension PlanMessrs. O’Connor and the Supplemental Executive Retirement Plan.Lubow. The amounts reflected have been determined using interest rate and mortality rate assumptions consistent with those used in the Company’sDime’s financial statements. | Kevin M. O’Connor | | | SERP | | | 1 | | | $246,142 | | | — | | | Stuart H. Lubow | | | SERP | | | 1 | | | $198,956 | | | — | |
TABLE OF CONTENTS | | | | | | | | | | | | | | Number of years | | Present value of | | Payments during | | | Plan Name | | credited service (#) | | accumulated benefit | | Last Fiscal Year ($) | K. O’Connor | | BNB Bank Pension Plan | | 10.17 | | $ | 332,304 | | — | | | Supplemental Executive Retirement Plan | | 10.17 | | $ | 1,026,615 | | — | H. Nolan | | BNB Bank Pension Plan | | 11.50 | | $ | 406,658 | | — | | | Supplemental Executive Retirement Plan | | 11.50 | | $ | 455,341 | | — | K. Santacroce | | BNB Bank Pension Plan | | 21.25 | | $ | 542,046 | | — | J. McCaffery | | BNB Bank Pension Plan | | 5.92 | | $ | 179,388 | | — | J. Manseau | | BNB Bank Pension Plan | | 9.75 | | $ | 311,103 | | — |
NONQUALIFIED DEFERRED COMPENSATION | Kevin M. O’Connor | | | — | | | $81,892 | | | — | | | — | | | — | | | Stuart H. Lubow | | | — | | | $52,440 | | | — | | | — | | | — | | | Avinash Reddy | | | — | | | $29,437 | | | — | | | — | | | — | | | Conrad J. Gunther | | | — | | | $26,607 | | | — | | | — | | | — | | | Patricia M. Schaubeck | | | — | | | $10,430 | | | — | | | — | | | — | | | Howard H. Nolan | | | — | | | — | | | — | | | — | | | — | | | John M. McCaffery | | | — | | | — | | | — | | | — | | | — | |
(1)
| Contributions included in the “Registrant Contributions in Last Fiscal Year” column are included as compensation for the NEO in the Summary Compensation Table. |
As previously disclosed, under the Bank maintains a SERP for the benefit of Messrs. O’Connor and Nolan. Balances in the defined contribution componentterms of the SERP, are credited with earningsthe amount of a participant’s annual 401(k) credit and/or annual pension credit is generally equal to the excess of the annual benefit to which the participant would have been entitled under the 401(k) Plan and/or the Pension Plan if the compensation dollar limits under the Code did not apply for each year in the same percentages as theplan year. A participant’s account earned under the Bank’s 401(k) Plan.Payments under both the defined contribution and defined benefit pension plan component of the SERP begin six months after the participant separates from service with the Bank. In the event of a change in control of the Bank, the SERPbalance will be terminated and amounts will be paid to participants in a single lump sum payment on the date of the change in control.
Thefully vested balances under the defined benefit pension plan component of the SERP are included in the Pension Benefits table (above). The following table shows, as of December 31, 2018, Bank contributions and earnings, and the aggregate vested account balances of Messrs. O’Connor and Nolan under the defined contribution component of the SERP.
Aggregate earnings in this table have not been reported in the Summary Compensation Table for 2018, 2017, and 2016, respectively, as they are not “preferential” or “above market” as defined in SEC regulations. at all times.NONQUALIFIED DEFERRED COMPENSATION
| | | | | | | | | | | | | | | | Executive | | Registrant | | Aggregate | | Aggregate | | Aggregate Balance | | | Contributions in | | Contributions in | | Earnings in Last | | Withdrawals/ | | at Last Fiscal | Name | | Last Fiscal Year | | Last Fiscal Year | | Fiscal Year | | Distributions | | Year End | K. O’Connor | | — | | $ | 31,501 | | $ | (22,229) | | — | | $ | 228,095 | H. Nolan | | — | | $ | 11,913 | | $ | (6,237) | | — | | $ | 99,482 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table showshows estimated payments that would be made to the NEOs, other than Messrs. Nolan and McCaffery, upon specified events, assuming such events occurred on December 31, 2018,2021, pursuant to each NEO’s employment agreement, equity awards, and other benefit plans or arrangements under the various circumstances presented. In addition, the NEOs are entitled to certain retirement benefits under plans maintained by the Bank or the Company that are not conditioned on a termination of employment or a change in control of the Bank or the Company. Messrs. O’Connor and NolanThe NEOs are participants in a SERP, as described above in the Pension Benefits and Nonqualified Deferred Compensation section of this proxy. DetailsProxy Statement, and details regarding their vested benefits in the SERP are disclosed in the Pension Benefits table and the Nonqualified Deferred Compensation table of this proxy. The actual amountsProxy Statement. Since Messrs. Nolan and McCaffery terminated employment during 2021, the payments made to be paid out can only be determined at the time of such NEO’s separation from service with the Company.two executives are provided below. | Kevin M. O’Connor | | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | | $3,477,112(3) | | | $3,477,112(3) | | | $3,477,112(3) | | | Employment Agreement | | | $5,745,190(1) | | | $6,420,190(4) | | | $675,000(5) | | | $675,000(5) | | | Stuart H. Lubow | | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | | $2,135,548(3) | | | $2,135,548(3) | | | $2,135,548(3) | | | Employment Agreement | | | $3,693,147(1) | | | $4,865,022(4) | | | $309,375(5) | | | $309,375(5) | | | Avinash Reddy | | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | | $1,067,739(3) | | | $1,067,739(3) | | | $1,067,739(3) | | | Employment Agreement | | | $2,508,888(1) | | | $2,551,074(4) | | | $210,938(5) | | | $210,938(5) | | | Conrad J. Gunther | | | | | | | | | | | | | | | Stock Based Incentive Plans | | | �� | | | $1,039,225(3) | | | $1,039,225(3) | | | $1,039,225(3) | | | Employment Agreement | | | $2,418,230(1) | | | $2,418,230(4) | | | $210,000(5) | | | $210,000(5) | | | Patricia M. Schaubeck | | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | | $612,487(3) | | | $612,487(3) | | | $612,487(3) | | | Change in Control Employment Agreement | | | $1,671,153(2) | | | $1,671,153(2) | | | $127,970(5) | | | $127,970(5) | |
| | | | | | | | | | | | | | | | | Involuntary | | Involuntary Termination | | | | | | | | Name | | Termination | | after Change in Control | | Disability | | Death | | K. O’Connor | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | $ | 1,559,023 | (1) | $ | 1,559,023 | (1) | $ | 1,559,023 | (1) | Employment Agreement | | $ | 1,291,544 | (2) | $ | 6,534,236 | (3) | $ | 1,291,544 | (5) | | — | | | | | | | | | | | | | | | | H. Nolan | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | $ | 700,721 | (1) | $ | 700,721 | (1) | $ | 700,721 | (1) | Employment Agreement | | $ | 742,401 | (2) | $ | 1,553,101 | (4) | $ | 742,401 | (5) | | — | | | | | | | | | | | | | | | | K. Santacroce | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | $ | 669,689 | (1) | $ | 669,689 | (1) | $ | 669,689 | (1) | Employment Agreement | | $ | 762,852 | (2) | $ | 1,563,858 | (4) | $ | 762,852 | (5) | | — | | | | | | | | | | | | | | | | J. McCaffery | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | $ | 583,277 | (1) | $ | 583,277 | (1) | $ | 583,277 | (1) | Employment Agreement | | $ | 762,852 | (2) | $ | 1,544,538 | (4) | $ | 762,852 | (5) | | — | | | | | | | | | | | | | | | | J. Manseau | | | | | | | | | | | | | | Stock Based Incentive Plans | | | — | | $ | 659,331 | (1) | $ | 659,331 | (1) | $ | 659,331 | (1) | Employment Agreement | | $ | 700,800 | (2) | $ | 1,450,800 | (4) | $ | 700,800 | (5) | | — | |
43
TABLE OF CONTENTS (1)
| (1) This amount represents the sum of (i) an amount equal to the product of (a) the executive’s Recent Bonus and (b) a fraction, the numerator of which is the number of days in the current fiscal year through the date of termination, and the denominator of which is 365; (ii) the amount equal to the product of (a) three and (b) the sum of (c) executive’s base salary and (d) the Recent Bonus; (iii) an amount equal to the Company and its affiliates contributions under the tax-qualified defined contribution plan and any excess or supplemental defined contribution plans sponsored by the Company or its affiliates, in which executive participates as of immediately prior to the date of termination that executive would receive if executive’s employment continued for the Benefits Period; and (iv) an amount equal to the product of (a) 150% of the monthly premiums for coverage under the Company’s or and its affiliates health care plans and life insurance plans for purposes of continuation coverage under Section 4980B of the Code with respect to the maximum level of coverage in effect for executive and his or her spouse and dependents as of immediately prior to the date of termination, and (b) the number of months in the Benefits Period. |
(2)
| This amount represents the sum of (1) the executive’s Pro Rata Bonus; (2) the amount equal to the product of (a) three and (b) the sum of (c) executive’s base salary and (d) the Recent Bonus; (3) an amount equal to the Company and its affiliates contributions under the tax-qualified defined contribution plan and any excess or supplemental defined contribution plans sponsored by the Company or its affiliates, in which the executive participates as of immediately prior to the date of termination that she would receive for the Benefits Period; and (4) an amount equal to the product of (a) 150% of the monthly premiums for coverage under the Company’s or and its affiliates health care plans and life insurance plans for purposes of continuation coverage under Section 4980B of the Code with respect to the maximum level of coverage in effect for the executive and her spouse and dependents as of immediately prior to the date of termination, and (b) the number of months in the Benefits Period. In the event that payments to the executive become subject to Sections 280G and 4999 of the Code, such payments would be reduced if such reduction would leave the executive officer better off on an after-tax basis. |
(3)
| This amount represents the value of unvested restricted stock units and restricted stock awards, subject to time-based and performance-based vesting, that become fully vested upon certain events, including death, disability and change in controla qualifying termination of the Bank or Company. |
| (2)
| | This amount represents the sum of (i) two times base salary, and (ii) the value of continued health and medical insurance coverage for two years. Amounts payable by the Bank on an event of termination or a voluntary resignation are subject to a one year non-compete restriction and the executive’s agreement not to disclose any confidential information.
|
| (3)
| | In the event ofemployment following a change in control, Mr. O’Connor is entitled to receive a lump sum payment equal to three times the executive’s annual compensation for the year immediately preceding the year of the change in control. The amount shown includes the value of the employer cost for continued health care coverage for a period of 36 months, and an excise tax indemnification payment of approximately $2,387,160.
|
(4)
| (4)
| | In the event of an involuntary termination after a change in control, Messrs. Nolan, Santacroce, Manseau, and McCaffery are entitled to receive a lump sum payment equal to three timesthis amount represents the sum of (i) an amount equal to the product of (a) the executive’s annualRecent Bonus and (b) a fraction, the numerator of which is the number of days in the current fiscal year through the date of termination, and the denominator of which is 365; (ii) the amount equal to the product of (a) three and (b) the sum of (c) executive’s base salary and (d) the highest annual bonusgreater of the Annual Cash Bonus (at target) in the year of a Change in Control or the average of the Annual Cash Bonus earned by Executive during the three years prior three years. Additionally, each executive is entitledto a Change in Control (including the full value of the Annual Cash Bonus, whether payable in cash or another form); (iii) an amount equal to the |
value Company and its affiliates contributions under the tax-qualified defined contribution plan and any excess or supplemental defined contribution plans sponsored by the Company or its affiliates, in which executive participates as of continued health and medical insurance for three years pursuantimmediately prior to the terms date of termination that executive would receive if executive’s employment continued for the Benefits Period; and (iv) an amount equal to the product of (a) 150%of the executives employment agreements. The executives’ cash severance will be reduced tomonthly premiums for coverage under the limitationCompany’s or and its affiliates health care plans and life insurance plans for purposes of continuation coverage under Section 280G4980B of the Code only if this will resultwith respect to the maximum level of coverage in effect for executive and his or her spouse and dependents as of immediately prior to the date of termination, and (b) the number of months in the executive receiving a greater total payment measured on an after-tax basis. The amounts shown were reducedBenefits Period. In consideration for the foregoing payments and benefits, each employment agreement contains restrictive covenants concerning nondisclosure of confidential information, mutual non-disparagement of either party and non-competition and non-solicitation restrictions, which shall apply for the period of time mutually to be agreed to by the parties, and in no event shall the time period be less than six months or exceed two years. In the event that payments to the limitation under Sectionexecutive become subject to Sections 280G and 4999 of the Code, sincesuch payments shall be reduced if such reduction would not result inleave the executive receiving a greater total payment measuredofficer better off on an after-tax basis, for each executive except Mr. McCaffery. and accordingly, the amount shown in this column may be reduced. |
(5)
| (5)
| | In the event of disability, Messrs. O’Connor, Nolan, Santacroce, Manseau, and McCaffery will receive their after-tax base salary, less amounts payable under any disability programs, and continued health and medical coverage for 2 years. This amount represents the estimated total paymentsRecent Bonus paid by Legacy Bridge to Mr. O’Connor and benefits thatby Legacy Dime to Messrs. O’Connor, Nolan, Santacroce, Manseau,Lubow, Reddy, Gunther and McCaffery would receive for such 2‑year period, without reduction for taxes or amounts payable under any disability programs. Ms. Schaubeck. |
In connection with the Merger, Mr. Nolan terminated employment on February 1, 2021 and Mr. Nolan entered into a: (i) Non-Competition and Consulting Agreement under which Mr. Nolan was paid $50,000 per month, pro-rated for a partial month, in exchange for Mr. Nolan providing consulting services up to 160 hours per month, commencing February 2, 2021 and ending June 30, 2021, and Mr. Nolan became subject to non-competition and non-solicitation restrictions for thirteen (13) months, commencing on February 1, 2021, and a (ii) Settlement and Release Agreement under which Mr. Nolan’s employment agreement was terminated and Mr. Nolan was paid $2,343,264, less required withholding, in full satisfaction of the payment obligations under Mr. Nolan’s employment agreement and in exchange for a legal release of claims. In addition, pursuant to the terms of Mr. Nolan’s SERP, Mr. Nolan was paid his vested account balances of $1,439,000 and $159,533 and Mr. Nolan’s non-vested equity awards were accelerated on February 1, 2021 with a value of $157,317. Mr. Nolan received full ownership of his automobile with a value of $38,600. The Company and Mr. McCaffery were parties to an Employment Agreement and a Retention and Award Agreement, both dated October 16, 2020, which provided for certain payments upon a qualifying termination of Mr. McCaffery’s employment. Mr. McCaffery’s departure on June 14, 2021 was a termination without Cause under the Employment Agreement. The Company and Mr. McCaffery have entered into an Agreement and General Release (the “Agreement”), pursuant to which the Company paid Mr. McCaffery $1,625,086, less legally required withholdings, in full satisfaction of the Company’s obligations under the Employment Agreement and the Retention and Award Agreement, in a lump sum after a seven day revocation period lapsed. In addition, Mr. McCaffery was engaged as a consultant for a transition period of four months and received $250,000 for his consultation services. The Agreement includes non-disparagement, non-solicitation, and non-competition provisions and a full release of claims by Mr. McCaffery. TABLE OF CONTENTS CEO PAY RATIO In accordance with the applicable provisions of
Pursuant to Section 953 (b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402 (u) of Regulation S-K, we are providing the following information about the relationship of the median of the annual total compensation of all employees of our Companymedian compensated employee and the annual total compensation of our President and CEO. For 2018, our median2021, annual total compensation for all employeesof our median employee other than our CEO was $57,554. The$82,249 and the annual total compensation for our CEO as reported in the 2021 Summary Compensation Table was $9,674,312. Based on this information, for 2021 we estimate the same period was $1,460,095. The ratio of our CEO’s annual total compensation to the annual total compensation of our median employee’s compensationemployee was 25.4118 to 1. We
On February 1, 2021, we completed the Merger and we identified our median employee using our entire workforce, as of December 31, 2018, of approximately 4632021, including all full-time and part-time employees.employees of Legacy Dime and Legacy Bridge. We used wages from our payroll records as reported to the Internal Revenue Service on Form W‑2W-2 for fiscal 2018. We2021. We annualized compensation for full-timefull-time and part-time permanent employees who were employed on December 31, 2018,2021, but did not work for us the entire year. No full-time equivalent adjustments were made for part-time employees. We determined the annual total compensation for our median employee by calculating total compensation for such employee in accordance with the requirements of Item 402 (c)(2)(x) of Regulation S-K. With regard to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 20182021 Summary Compensation Table, which is included in this Proxy Statement. SEC If the cash transaction bonus of $750,000 and other Merger-related compensation of $3,701,828, as shown on the Summary Compensation Table, is excluded from the CEO’s total compensation, the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee would be 63:1.
The SEC’s rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and various assumptions and, as a result, the pay ratio reported by Bridge Bancorpthe Company may not be comparable to the pay ratio reported by other companies. DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS Our common stockCommon Stock is registered pursuant to Section 12(b) of the Securities Exchange Act of 1934. The officers and directors of the Company and beneficial owners of greater than 10% of our shares of common stock (“10% beneficial owners”) are required to file reports on Forms 3, 4 and 5 with the SEC disclosing beneficial ownership and changes in beneficial ownership. SEC rules require disclosure in our Proxy Statement and Annual Report on Form 10‑K10-K of the failure of an officer, director or 10% beneficial owner of the shares of common stock to file a Form 3, 4 or 5 on a timely basis. Based solely on our review of such ownership reports and representations made by the directors and executive officers, two Form 4 reports for the year ended December 31, 2018, one Form 5 report was filed for Director Rubin in February 2019 with respect to three sale transactions that were not reported on Form 4, and an entity related to Director Lindenbaum filed a late Form 3 relatedCompany’s Chief Risk Officer, each relating to one acquisition transaction.transaction, were inadvertently filed late. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Sarbanes-Oxley Act of 2002 allows for loans made by the Bank, as an FDIC insured institution, to our executive officers and directors in compliance with federal banking regulations. Federal banking regulations allow for loans made to executive officers or directors under a benefit program maintained by the Bank that is generally available to all other employees and that does not give preference to any executive officer or director over any other employee. TheThrough June 30, 2021 the Bank offersoffered its employees interest rate discounts of up to 100 basis points, based on years of service, for residential mortgage loans on their primary residence. Commencing July 1, 2021, this program was revised to provide that employees and directors with at least six months of service with the Bank are eligible to receive a credit of 1.00% to be applied towards costs or a reduction in the interest rate. Except for thisthe interest rate discount with respect to loans to executive officers,or credit applied towards costs, loans to our directors and executive officers (and their immediate family members and companies in which they are principal owners), are made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to, and do not involve more than the normal risk of collectability or present other unfavorable features. During the year ended December 31, 2018,2021, the Bank had two residential mortgage loans to two directors, two residential mortgage loans to two executive officers, and one executive officer, Howard H. Nolan,commercial real estate loan to an entity controlled by one of our directors. The residential mortgage loans were made with the interest rate discount under the program available to all employees. The loan was a residential mortgage loanemployees described in the immediately preceding paragraph. All five loans were made in the ordinary course of business, on his primary residences and; (i)substantially the largest aggregate balance outstanding over the disclosure period was $292,301; (ii)same terms, including the interest rate on(other than the discounted interest rate under the employee discount rate program described above) and collateral, as those prevailing at the time for comparable loans was 3.4%; (iii) principal balance at December 31, 2018 was $279,202;with persons not related to the Bank, and (iv) principal and interest paiddid not involve more than the normal risk of collectability or present other unfavorable features. TABLE OF CONTENTS Additionally, during the year ended December 31, 2018 was $13,0992021, Mr. Mahon received a transaction bonus of $750,000 in connection with the completion of the Merger pursuant to an Executive Chairman and $9,674. Separation Agreement. The Board (excluding any director involved in the transaction) reviews and approves all transactions between the Company or the Bank and any director or executive officer that would require proxy statement disclosure pursuant to Item 404(a). DIRECTOR COMPENSATION
Cash Compensation Paid to Board Members
All members of the Board of Directors of the Company also serve on the Board of the Bank. For the period from January 1, 2018 to December 31, 2018, each outside (non-employee) Director received an annual retainer fee of $30,000 from the Bank. The Chairperson of the Board of Directors receives an additional annual fee of $40,000. The Chairpersons of the Audit, Compensation, Corporate Governance, and Loan Approval Committee receive an additional annual fee of $10,000. All outside Directors are compensated $1,200 for each Board meeting. Outside Directors who are members of Board Committees are compensated $1,000 per meeting attended.
Equity Awards Program
In addition, all non-employee Directors receive an annual non-elective retainer in the form of restricted stock units in the amount of $30,000.
Deferred Compensation Plan
The Directors Deferred Compensation Plan, effective April 1, 2009, is a nonqualified deferred compensation plan, which allows a Director to defer his or her annual retainer earned from May 1 to April 30 (the “Plan Year”) and to have such amounts invested in restricted stock units. The value of a restricted stock unit will be determined based on the fair market value of a share of Common Stock, with fair market value determined based on the trailing 10‑day average. Directors who elect to defer will be deemed to defer their annual retainer as of the first day of each Plan Year, or May 1. With respect to each Plan Year’s deferral, a Director will vest pro-rata during such Plan Year and will become fully vested after twelve months of service, except a Director will be fully vested upon disability, death or retirement. All deferrals will be credited to a Director’s account as restricted stock units and distributions from the Plan will be made in shares of Common Stock. The restricted stock units do not have any voting rights. There are no preferential earnings on amounts deferred. Dividends will be paid on restricted stock units, in the same amount as dividends paid on the Common Stock, and will accrue as additional restricted stock units. At the time a Director elects to make a deferral election, he or she will also elect the time that the amounts credited to his or her account will be distributed and whether such amounts will be paid in a lump sum or installments. Such payment shall be made at the time elected by the Director, which shall be the earlier of the Director’s cessation of service, a change in control of the Company or a specified date.
Director Summary Compensation Table
The following table sets forth information pertaining to the compensation paid by the Company to non-employee Directors for the fiscal year ended December 31, 2018:
| | | | | | | | | | | | Fees Earned or | | Stock | | | | Name(1) | | Paid in Cash | | Awards | | Total | Marcia Z. Hefter(2) | | $ | 106,800 | | $ | 30,000 | | $ | 136,800 | | | | | | | | | | | Dennis A. Suskind | | $ | 74,800 | | $ | 30,000 | | $ | 104,800 | | | | | | | | | | | Emanuel Arturi(2) | | $ | 86,600 | | $ | 30,000 | | $ | 116,600 | | | | | | | | | | | Charles I. Massoud | | $ | 80,600 | | $ | 30,000 | | $ | 110,600 | | | | | | | | | | | Albert E. McCoy, Jr.(2) | | $ | 72,800 | | $ | 30,000 | | $ | 102,800 | | | | | | | | | | | Rudolph J. Santoro(2) | | $ | 88,600 | | $ | 30,000 | | $ | 118,600 | | | | | | | | | | | Thomas J. Tobin | | $ | 66,600 | | $ | 30,000 | | $ | 96,600 | | | | | | | | | | | Raymond A. Nielsen(2) | | $ | 77,600 | | $ | 30,000 | | $ | 107,600 | | | | | | | | | | | Daniel Rubin | | $ | 67,600 | | $ | 30,000 | | $ | 97,600 | | | | | | | | | | | Christian C. Yegen(2) | | $ | 64,600 | | $ | 30,000 | | $ | 94,600 | | | | | | | | | | | Matthew Lindenbaum(3) | | $ | 42,300 | | $ | 30,000 | | $ | 72,300 |
| (1)
| | Kevin M. O’Connor, the Company’s President and CEO, and Howard H. Nolan, the Company’s Senior Executive Vice President and COO, are not included in this table as they are Named Executive Officers of the Company and did not receive additional compensation as a director.
|
TABLE OF CONTENTS | (2)
| | Directors Hefter, Arturi, McCoy, Jr., Santoro, Nielsen and Yegen have elected to defer their annual elective retainer fee in the form of deferred RSUs pursuant to the Directors Deferred Compensation Plan.
|
| (3)
| | Director Lindenbaum was elected as a director on May 4, 2018.
|
PROPOSAL II – ADVISORY NON-BINDING VOTE TO APPROVE EXECUTIVE COMPENSATIONThe Board believes that the Company’s compensation programs and policies are centered on a pay for performance culture and are strongly aligned with the long-term interests of shareholders.
In accordance with Section 14A of the Exchange Act, we are asking shareholders to vote in an advisory, non-binding manner to approve the compensation paid to our Named Executive Officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K (including the Compensation Discussion and Analysis, compensation tables and accompanying narrative discussion). Item 402 of Regulation S-K is the SEC regulation that sets forth the disclosure companies must include in their proxy statement as to executive compensation. At the 2018 Annual Meeting of Shareholders, the Board of Directors recommended, and the shareholders approved, a non-binding vote in favor of holding an annual advisory vote on executive compensation. As a result, the Board of Directors determined that the Company would hold an annual advisory vote to approve executive compensation.
This proposal, commonly known as a “Say on Pay” proposal, gives you as a shareholder the opportunity to vote on our executive pay program. The Board of Directors is requesting shareholders to cast a non-binding advisory vote on the following resolution:
“Resolved, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
Because this vote is advisory, it will not be binding upon the Board. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL
PROPOSAL III: APPROVAL OF THE BRIDGE BANCORP, INC. 2019 EQUITY INCENTIVE PLAN
The Board of Directors has adopted, subject to shareholder approval, the Bridge Bancorp, Inc. 2019 Equity Incentive Plan (the “2019 Equity Incentive Plan”) to provide additional incentives for our officers, employees and directors to promote our growth and performance and to further align their interests with those of our shareholders. By approving the 2019 Equity Incentive Plan, shareholders will give us the flexibility we need to continue to attract, motivate and retain highly qualified officers, employees and directors by offering a competitive compensation program that is linked to the performance of our common stock. If the 2019 Equity Incentive Plan is approved by shareholders, no further grants will be made under the Bridge Bancorp, Inc. 2012 Stock-Based Incentive Plan (the “2012 Equity Incentive Plan”). Currently outstanding grants under the 2012 Equity Incentive Plan will not be affected.
Why We Are Seeking Approval of the 2019 Equity Incentive Plan
| ·
| | We Have Limited Capacity to Make Awards under our Existing Equity Plan. We have only 163,076 shares available for grant on the Record Date under the 2012 Equity Incentive Plan. Accordingly, we have no meaningful way to provide tailored equity-based compensation grants to attract, retain and reward qualified personnel and management. Once the 2019 Equity Incentive Plan is approved by our shareholders, we will discontinue making any grants under the 2012 Equity Incentive Plan.
|
| ·
| | Our Competitors Offer Equity-Based Compensation. We believe thatmost of institutions with which we compete have the ability to attract and retain employees and management with equity-based compensation programs. Without the 2019 Equity Incentive Plan, we may be at a significant disadvantage.
|
| ·
| | Required Stockholder Approval. As a Nasdaq Stock Exchange listed company, we are required to obtain the approval of our stockholders before implementing an equity compensation plan, such as the 2019 Equity Incentive Plan. For these purposes, the 2019 Equity Incentive Plan must be approved by a majority of the votes cast at the meeting. Stockholder approval will also exempt the awards from the short-swing profit trading rules of Section 16(b) of the Securities Exchange Act of 1934.
|
Highlights of the 2019 Equity Incentive Plan
| ·
| | Minimum Vesting Requirements. The 2019 Equity Incentive Plan requires a one-year minimum vesting period for at least 95% of the awards granted under the 2019 Equity Incentive Plan.
|
| ·
| | Retirement. Vesting is not automatically accelerated upon retirement.
|
| ·
| | Share Reserve. The maximum number of shares of stock, in the aggregate, that may be granted under the 2019 Equity Incentive Plan as stock options, restricted stock or restricted stock units is 370,000plus the number of shares of stock which have been reserved but not issued under the 2012 Equity Incentive Plan and any awards that are forfeited under the 2012 Equity Incentive Plan after the effective date of the 2019 Equity Incentive Plan (the “Share Limit”).
|
| ·
| | No Single-Trigger for Time-Based Awards Upon a Change in Control. The 2019 Equity Incentive Plan does not provide for vesting of equity awards based solely on the occurrence of a change in control without an accompanying involuntary termination of service (including a termination for good reason). Upon the occurrence of a change in control in which the Company is not the surviving entity, equity awards will become fully vested in the event the successor entity does not assume the equity awards. In each event, performance awards will vest, if at all, at the higher of (i) the target level of performance, on a pro-rata basis for time elapsed during the performance period, or (ii) the actual level of achievement of the performance measures that have been achieved.
|
| ·
| | Awards Subject to Clawback. Awards granted under the 2019 Equity Incentive Plan are subject to clawback if the Company is required to prepare an accounting restatement due to material noncompliance of the Company, as a result of misconduct with any financial reporting requirement under the federal securities laws and the forfeiture provisions of the Sarbanes-Oxley Act of 2002 apply. Awards may also be subject to clawback under any other clawback policy adopted by the Company from time to time.
|
| ·
| | No Cash-Out or Repricing of Underwater Options. Under no circumstances will any underwater stock options be bought back by the Company. In addition, neither the Compensation Committee nor the Board of Director share the authority to reduce the exercise price of a previously granted stock option under the plan through amendment, replacement or exchange for a cash payment in excess of the stock options in-the-money value.
|
Material Features of the 2019 Equity Incentive Plan
The following is a summary of the material features of the 2019 Equity Incentive Plan, which is qualified in its entirety by reference to the provisions of the 2019 Equity Incentive Plan, attached hereto as Appendix A.
Shares Reserved; Overall Limits on Types of Grants; Share Counting Methodology
| ·
| | Subject to permitted adjustments for certain corporate transactions, the 2019 Equity Incentive Plan authorizes the issuance or delivery to participants of up to 370,000shares of the Company’s common stock plus the number of shares of stock which have been reserved but not issued under the 2012 Equity Incentive Plan and any awards that are forfeited under the 2012 Equity Incentive Plan after the effective date of the 2019 Equity Incentive Plan pursuant to grants of restricted stock, restricted stock units, stock options, including incentive stock options and non-qualified stock options, any of which may vest based either on the passage of time or achievement of performance, or a combination of each.
|
| ·
| | Upon shareholder approval of the 2019 Equity Incentive Plan, no new grants shall be made under the 2012 Equity Incentive Plan. Any forfeitures of outstanding awards under the 2012 Equity Incentive Plan shall be added to the shares available to be issued under the 2019 Equity Incentive Plan.
|
| ·
| | The rights and benefits with respect to an award will be subject to reduction, cancellation, forfeiture or recoupment upon termination of employment for cause.
|
| ·
| | To the extent any shares of stock covered by an award (including restricted stock awards and restricted stock units) under the 2019 Equity Incentive Plan are not delivered to a participant or beneficiary because the award is forfeited or canceled or because a stock option is not exercised, then such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery under the 2019 Equity Incentive Plan; and
|
| ·
| | In the event of a corporate transaction involving the stock of the Company, such as a stock dividend or a stock split, the share limitations and all outstanding awards will be adjusted proportionally and uniformly to reflect such event.
|
The following table sets forth information regarding compensation plans (all of which have been approved by shareholders) under which equity securities of the Company are authorized for issuance:
| | | | | | | | | | Number of securities to | | Weighted average | | | | Equity compensation | | be issued upon exercise | | exercise price with | | Number of securities | | plan approved by | | of outstanding options | | respect to outstanding | | remaining available for | | stockholders | | and awards | | stock options | | issuance under the plan | | 2006 Equity Incentive Plan | | 19,928 | | — | | — | | 2012 Equity Incentive Plan | | 209,867 | | $ 36.19 | | 282,737 | (1) | Employee Stock Purchase Plan | | — | | — | | 996,242 | | Total | | 229,795 | | $ 36.19 | | 1,278,979 | |
| (1)
| | As of the Record Date, 163,076 shares of common stock remain available for issuance under this plan.
|
Eligibility
Officers, employees and directors of the Company or its subsidiaries are eligible to receive awards under the 2019 Equity Incentive Plan, except that non-employees may not be granted incentive stock options.
Types of Awards
The Compensation Committee may determine the type and terms and conditions of awards under the 2019 Equity Incentive Plan, which shall be set forth in an award agreement delivered to each participant. Each award shall be subject to conditions established by the Compensation Committee that are set forth in the recipient’s award agreement and shall be subject to vesting conditions and restrictions as determined by the Compensation Committee. Awards may be granted as incentive and non-qualified stock options, restricted stock awards or restricted stock units any of which may vest based either on the passage of time or achievement of performance, as follows:
Stock Options. A stock option is the right to purchase shares of common stock at a specified price for a specified period of time.
| ·
| | In the event of a corporate transaction involving the stock of the Company, such as a stock dividend or a stock split, the share limitations and all outstanding awards will be adjusted proportionally and uniformly to reflect such event.
|
| ·
| | The exercise price may not be less than the fair market value of a share of our common stock (which is defined as the closing sales price on the exchange on which the stock is traded) on the date the stock option is granted.
|
| ·
| | The Compensation Committee may not grant a stock option with a term that is longer than 10 years.
|
| ·
| | Stock options are either “incentive” stock options or “non-qualified” stock options. Incentive stock options have certain tax advantages that are not available to non-qualified stock options and must comply with the requirements of Section 422 of the Code. Only officers and employees are eligible to receive incentive stock options. Outside (non-employee) directors providers may only receive non-qualified stock options under the 2019 Equity Incentive Plan.
|
| ·
| | Shares of common stock purchased upon the exercise of a stock option must be paid for at the time of exercise either (i) by tendering, either actually or constructively by attestation, shares of stock valued at fair market value as of the date of exercise; (ii) by irrevocably authorizing a third party, acceptable to the Compensation Committee, to sell shares of stock (or a sufficient portion of the shares) acquired upon exercise of the stock option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise; (iii) by a net settlement of the stock option, using a portion of the shares obtained on exercise in payment of the exercise price of the stock option (and if applicable, any required tax withholding); (iv) by personal, certified or cashier’s check; (v) by other property deemed acceptable by the Compensation Committee; or (vi) by any combination thereof.
|
| ·
| | The Compensation Committee may automatically exercise in-the-money stock options that are exercisable but unexercised as of the day immediately before the 10th anniversary of the date of grant, using net settlement as the method of exercising such options.
|
| ·
| | Under no circumstances will the Company buy back underwater stock options granted under the 2019 Equity Incentive Plan without shareholder approval.
|
| ·
| | The 2019 Equity Incentive Plan expressly prohibits repricing of stock options without shareholder approval.
|
Restricted Stock. A restricted stock award is a grant of shares of our common stock to a participant for no consideration or such minimum consideration as may be required by applicable law.
| ·
| | Restricted stock awards may be granted only in whole shares of common stock.
|
| ·
| | Prior to vesting, recipients of a restricted stock award are entitled to vote the shares of restricted stock during the restricted period.
|
| ·
| | Dividends on unvested restricted stock awards, whether subject to a time-based vesting schedule or performance-based vesting conditions, may be paid to the participant that has been granted the restricted stock award from and after the date of grant and prior to the vesting date.
|
Restricted Stock Units. Restricted stock units may be denominated in shares of common stock and are similar to restricted stock awards except that no shares of common stock are actually issued to the award recipient at the time of grant of a restricted stock unit.
| ·
| | Restricted stock units granted under the 2019 Equity Incentive Plan may be settled in shares of our common stock, or in the sole discretion of the Committee determined at the time of final settlement in cash or a combination of cash and our common stock, subject to vesting conditions and other restrictions set forth in the 2019 Equity Incentive Plan or the award agreement.
|
| ·
| | Participants have no voting rights with respect to any restricted stock units granted under the 2019 Equity Incentive Plan.
|
| ·
| | In the sole discretion of the Compensation Committee, exercised at the time of grant, dividend equivalent rights may be paid on restricted stock units. Dividend equivalent rights may be paid to the participant that has been granted the dividend equivalent right from and after the date of grant and prior to the vesting date.
|
Performance Awards. A performance award is an award, the vesting of which is subject to the achievement of one or more performance conditions specified by the Compensation Committee and set forth in the 2019 Equity Incentive Plan. A performance award may be denominated in shares of restricted stock or restricted stock units. The performance measures that may be used for such awards can include, but are not limited to: book value or tangible book value per share; basic earnings per share (e.g., earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization; or earnings per share); basic cash earnings per share; diluted earnings per share; return on equity; net income or net income before taxes; net interest income; non-interest income; non-interest expense to average assets ratio; cash general and administrative expense to average assets ratio; efficiency ratio; cash efficiency ratio; financial return ratios; adjusted earnings, capital; increase in revenue; total shareholder return; net operating income, operating income; net interest margin or net interest rate spread; stock price; assets, growth in assets, loans or deposits, asset quality level, charge offs, loan reserves, non-performing assets, loans, deposits, growth of loans, loan production volume, non-performing loans, deposits or assets; regulatory compliance or safety and soundness; achievement of balance sheet or income statement objectives and strategic business objectives, or any combination of these or other measures.
Performance measures may be based on the performance of the Company as a whole or of any one or more subsidiaries or business units. Performance goals may be measured relative to a peer group, an index or a business plan and may be
considered as absolute measures or changes in measures. In establishing the performance measures, the Compensation Committee may provide for the inclusion or exclusion of certain items.
Vesting of Awards
| ·
| | The Compensation Committee shall specify the vesting schedule or conditions of each award.
|
| ·
| | At least 95% of all awards made under the 2019 Equity Incentive Plan shall be subject to a vesting requirement of at least one year of service following the grant of the award.
|
| ·
| | Vesting of awards may be accelerated upon death, “disability”, “change in control” (each as defined in the 2019 Equity Incentive Plan) or at the discretion of the Compensation Committee.
|
| ·
| | Vesting is not automatically accelerated upon “retirement” (as defined in the 2019 Equity Incentive Plan).
|
Change in Control
The Plan uses a double trigger change in control feature, providing for an acceleration of vesting only upon an involuntary termination of service following a change in control (including a termination for good reason). Upon the occurrence of a change in control in which the Company is not the surviving entity, equity awards will become fully vested in the event the successor entity does not assume the equity awards.
| ·
| | At the time of an involuntary termination following a change in control, all stock options then held by the participant shall become fully earned and exercisable (subject to the expiration provisions otherwise applicable to the stock option). All stock options may be exercised for a period of one year following the participant’s involuntary termination, provided, however, that no stock option shall be eligible for treatment as an incentive stock option in the event such stock option is exercised more than three months following involuntary termination.
|
| ·
| | At the time of an involuntary termination following a change in control, awards of restricted stock and restricted stock units shall become earned and fully vested immediately, and any performance measure attached to a performance award shall be deemed satisfied at the greater of (i) the target level of performance on a pro-rata basis for time elapsed in the performance period or (ii) the actual level of performance.
|
Awards Subject to Clawback Policy
Awards granted under the 2019 Equity Incentive Plan are subject to clawback if the Company is required to prepare an accounting restatement due to material noncompliance of the Company, as a result of misconduct with any financial reporting requirement under the federal securities laws and the forfeiture provisions of the Sarbanes-Oxley Act of 2002 apply. Awards may also be subject to clawback under any other clawback policy adopted by the Company from time to time.
Plan Administration
The 2019 Equity Incentive Plan will be administered by the Compensation Committee, all of whom are “Disinterested Board Members,” as defined in the 2019 Equity Incentive Plan. The Compensation Committee has power within the limitations set forth in the 2019 Equity Incentive Plan to make all decisions and determinations regarding the selection of participants and the granting of awards; establishing the terms and conditions relating to each award; adopting rules and regulations for carrying out the 2019 Equity Incentive Plan’s purposes; and interpreting and otherwise construing the 2019 Equity Incentive Plan. The Board of Directors (or those members of the Board of Directors who are “independent directors” under the corporate governance statutes or rules of any national securities exchange on which we list our securities) may, in its discretion, take any action and exercise any power, privilege or discretion conferred on the Compensation Committee under the 2019 Equity Incentive Plan as if done or exercised by the Compensation Committee. The 2019 Equity Incentive Plan also permits the Compensation Committee to delegate to one or more persons, including directors who do not qualify as “non-employee directors” within the meaning of Rule 16b-3, the power to: (i) designate officers and employees who will receive awards; and (ii) determine the number of awards to be received by them, provided that such delegation is not prohibited by applicable law or the rules of the stock exchange on which our common stock is traded.
The Compensation Committee does not have the authority to reduce, eliminate or accelerate any restrictions or vesting requirements applicable to an Award to avoid the one-year minimum vesting requirement for ninety-five percent (95%) of the Awards except in the event of a change in control, death or disability.
Approval of the 2019 Equity Incentive Plan by the shareholders authorizes the Compensation Committee to determine the number of shares to be granted to non-employee directors.
Amendment and Termination
The Board of Directors may, as permitted by law, at any time, amend or terminate the 2019 Equity Incentive Plan or any award granted under the 2019 Equity Incentive Plan. However, except as provided in the 2019 Equity Incentive Plan, no amendment or termination may adversely impair the rights of an outstanding award without the participant’s (or affected beneficiary’s) written consent. The Board of Directors may not amend the 2019 Equity Incentive Plan to allow repricing of a stock option, materially increase the aggregate number of securities that may be issued under the 2019 Equity Incentive Plan (other than as provided in the 2019 Equity Incentive Plan), materially increase the benefits accruing to a participant, or materially modify the requirements for participation in the 2019 Equity Incentive Plan, without approval of shareholders. Notwithstanding the foregoing, the Board may, without shareholder approval, amend the 2019 Equity Incentive Plan at any time, retroactively or otherwise, to ensure that the 2019 Equity Incentive Plan complies with current or future law and the Board of Directors may unilaterally amend the 2019 Equity Incentive Plan and any outstanding award, without participant consent, in order to conform to any changes in the law or any accounting pronouncement or interpretation thereof.
Duration of 2019 Equity Incentive Plan
The 2019 Equity Incentive Plan will become effective upon approval by the shareholders at this meeting. The 2019 Equity Incentive Plan will remain in effect as long as any awards under it are outstanding; however, no awards may be granted under the 2019 Equity Incentive Plan on or after the day immediately prior to the 10-year anniversary of the effective date of the 2019 Equity Incentive Plan. At any time, the Board of Directors may terminate the 2019 Equity Incentive Plan. However, any termination of the 2019 Equity Incentive Plan will not affect outstanding awards.
Federal Income Tax Considerations
The following is a summary of the federal income tax consequences that may arise in conjunction with participation in the 2019 Equity Incentive Plan.
Non-Qualified Stock Options. The grant of a non-qualified stock option will not result in taxable income to the participant. Except as described below, the participant will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired over the exercise price for those shares, and we will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise.
Incentive Stock Options. The grant of an incentive stock option will not result in taxable income to the participant. The exercise of an incentive stock option will not result in taxable income to the participant provided the participant was, without a break in service, an employee of the Company or a subsidiary during the period beginning on the date of the grant of the option and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant is disabled, as that term is defined in the Code). We will not be entitled to a tax deduction upon the exercise of an incentive stock option.
The excess of the fair market value of the shares at the time of the exercise of an incentive stock option over the exercise price is an adjustment that is included in the calculation of the participant’s alternative minimum taxable income for the tax year in which the incentive stock option is exercised. For purposes of determining the participant’s alternative minimum tax liability for the year of disposition of the shares acquired pursuant to the incentive stock option exercise, the participant will have a basis in those shares equal to the fair market value of the shares at the time of exercise.
If the participant does not sell or otherwise dispose of the shares within two years from the date of the grant of the incentive stock option or within one year after the exercise of such stock option, then, upon disposition of such shares, any amount realized in excess of the exercise price will be taxed as a capital gain. A capital loss will be recognized to the extent that the amount realized is less than the exercise price. If the foregoing holding period requirements are not met, the participant will generally recognize ordinary income at the time of the disposition of the shares in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price, and we will be entitled to a corresponding deduction. If the amount realized exceeds the fair market value of the shares on the date of exercise, any additional amount will be a capital gain. If the amount realized at the time of disposition is less than the exercise price, the participant will recognize no income, and a capital loss will be recognized equal to the excess of the exercise price over the amount realized upon the disposition of the shares.
Restricted Stock. A participant who has been granted a restricted stock award will not realize taxable income at the time of grant, provided that the stock subject to the award is not delivered at the time of grant, or if the stock is delivered, it is subject to restrictions that constitute a “substantial risk of forfeiture” for federal income tax purposes. Upon the later of delivery or vesting of shares subject to an award, the holder will realize ordinary income in an amount equal to the then fair market value of those shares and we will be entitled to a corresponding deduction for tax purposes. Gains or losses realized by the participant upon disposition of such shares will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of delivery or vesting. Dividends paid to the holder will also be compensation income to the participant and we will be entitled to a corresponding deduction for tax purposes. A participant who makes an election under Code Section 83(b) will include the full fair market value of the restricted stock award (or portion of the award subject to such election) in taxable income in the year of grant at the grant date fair market value. The Compensation Committee has the right to prohibit participants from making Code Section 83(b) elections.
Restricted Stock Units. A participant who has been granted a restricted stock unit will not realize taxable income at the time of grant and will not be entitled to make an election under Code Section 83(b) since no stock is actually transferred to the recipient on the date of grant. At the time a restricted stock unit vests, assuming the award is distributed at that time, the recipient will recognize ordinary income in an amount equal to the fair market value of the common stock or the amount of cash received. If the restricted stock unit is not distributed at the time it vests, no income will be recognized at that time and taxation will be deferred until the value of the restricted stock unit is distributed. At the time the recipient recognizes taxable income on a restricted stock unit, we will be entitled to a corresponding tax deduction in the same amount recognized by the award recipient.
Withholding of Taxes. We may withhold amounts from participants to satisfy withholding tax requirements. Except as otherwise provided by the Compensation Committee, participants may have shares withheld from awards to satisfy tax withholding requirements up to an amount that will not trigger adverse accounting for the Company.
Change in Control. Any acceleration of the vesting or payment of awards under the 2019 Equity Incentive Plan in the event of a change in control may cause part or all of the consideration involved to be treated as an “excess parachute payment” under the Code Section 280G, which may subject the participant to a 20% excise tax and preclude deduction by the Company.
Deduction Limits. Code Section 162(m) generally limits our ability to deduct for tax purposes compensation in excess of $1.0 million per year for each of our chief executive officer, our chief financial officer and three other executive officers named in the summary compensation table (each, a “covered employee”) of our annual proxy statement. Compensation resulting from awards under the 2019 Equity Incentive Plan will be counted toward the $1.0 million limit.
Tax Advice. The preceding discussion is based on federal tax laws and regulations presently in effect, which are subject to change, and the discussion does not purport to be a complete description of the federal income tax aspects of the 2019 Equity Incentive Plan. A participant may also be subject to state and local taxes in connection with the grant of awards under the 2019 Equity Incentive Plan.
Accounting Treatment. Under Accounting Standards Codification (“ASC”) 718, Compensation-Stock Compensation and ASC 505-50, Equity Based Payment to Non-Employees, the Company is required to recognize compensation expense on its income statement over the requisite service period based on the grant date fair value of equity-based compensation (such as restricted stock and restricted stock units).
Awards to be Granted
The Board has adopted the 2019 Equity Incentive Plan. If the 2019 Equity Incentive Plan is approved by shareholders, the Compensation Committee intends to meet after such approval to determine the specific terms of the awards, including the allocation of awards to executive officers, employees and non-employee directors. At the present time, no specific determination has been made as to the allocation of awards.
Required Vote and Recommendation of the Board of Directors
In order to approve the 2019 Equity Incentive Plan, the proposal must receive the affirmative vote of at least a majority of the votes cast at the annual meeting, either in person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE BRIDGE BANCORP, INC. 2019 EQUITY INCENTIVE PLAN.
PROPOSAL IV-2. — RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Crowe LLP (“Crowe”) was the Independent Registered Public Accounting Firmindependent registered public accounting firm of the Company for the year ended December 31, 2018,2021, and has been selected to serve as the Company’s Independent Registered Public Accounting Firmindependent registered public accounting firm for 2019.the year ending 2022. Representatives of Crowe are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and are expected to be available to respond to appropriate questions from shareholders.Shareholder ratification of the selection of Crowe is not required by the Company’s bylawsBylaws or otherwise. However, the Board is submitting the selection of the Independent Registered Public Accounting Firmindependent registered public accounting firm to the shareholders for ratification as a matter of good corporate practice. If the shareholders fail to ratify the selection of Crowe, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different Independent Registered Public Accounting Firmindependent registered public accounting firm at any time during the year if it determines that such change is in the best interests of the Company and its shareholders. The following table presents fees for professional audit services rendered by Crowe for the audit of our annual financial statements and other professional services provided for the years ended December 31, 20182021 and 2017. | | | | | | | Type of Fees | | 2018 | | 2017 | Audit Fees (1) | | $ | 348,500 | | $ | 335,000 | Audit Related Fees(2) | | | 37,600 | | | 36,000 | Tax Fees (3) | | | — | | | — | All Other Fees (4) | | | — | | | 36,005 | Total Fees | | $ | 386,100 | | $ | 407,005 |
2020.
| Audit Fees (1) | | | $870,000 | | | $660,000 | | | Audit Related Fees(2) | | | $488,725 | | | $133,100 | | | Tax Fees (3) | | | $106,211 | | | $98,723 | | | All Other Fees (4) | | | $21,617 | | | $237,606 | | | Total Fees | | | $1,486,553 | | | $1,129,430 | |
(1)
| (1)
| | Audit fees for 20182021 and 20172020 consist of professional services rendered for the annual audit of our financial statements and audit of internal controls over financial reporting, along with the review of financial statements included in our quarterly reports. |
(2)
| (2)
| | Audit-related fees for 2018in the case of 2021 consist of consultationservices provided in connection with the Merger, the adoption of ASU 2016-13, “Financial Instruments: Credit Losses,” and procedures related to critical accounting matters. Audit-related fees in the implementationcase of 2020 consist of services provided in connection with the adoption of ASU 2016-012016-13, “Financial Instruments: Recognition and measurementCredit Losses.” Additionally, both years consist of financial assets and financial liabilities,” ASU 2014-09 “Revenue from contracts with customers,” and procedures for Form S-8 consent related to Employee Stock Purchase |
Plan. Audit relatedaudit-related fees for 2017employee benefit plan audits and Uniform Single Audit Program for Mortgage Bankers (USAP) procedures.
|
(3)
| Tax compliance services are services rendered based upon facts already in existence or transactions that have already occurred to document, compute, or obtain government approval for amounts to be included in tax filings and consisted of: |
Federal, state and local income tax return assistance Sales and use, property and other tax return assistance Research & Development tax credit documentation and analysis for purposes of filing amended returns Requests for technical advice from taxing authorities (4)
| All other fees consist of consultation andservices for consent procedures related to the implementation of new revenue recognition procedures, Tax Cuts and Jobs Act, branch rationalization, and Allowance for Loan and Lease Losses methodology enhancements. |
| (3)
| | Crowe did not provide any services to the Company relating to tax compliance, tax advice and tax planning during the fiscal years ended December 31, 2018 and 2017.
|
| (4)
| | Other fees for 2017 consist of consulting services related to the Company’s non-financial compliance function (Quality Assurance Review). Crowe did not provide anyregulatory filings or other services towhich may include SEC matters, and in the Company during the fiscal year ended December 31, 2018. case of 2020 includes fees related services for Legacy Dime’s issuance of preferred stock. |
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of the Independent Registered Public Accounting Firm The Audit Committee has adopted policies and procedures for the pre-approval of the above fees. All requests for services to be provided by Crowe are submitted to the director of internal audit, who subsequently requests pre-approval frompre-approved by the Audit Committee Chairperson.Committee. A schedule of approved services is then reviewed and approved by the entire Audit Committee at the next Audit Committee meeting. In order to ratify the selection of Crowe as the Company’s Independent Registered Public Accounting Firmindependent registered public accounting firm for the 20192022 fiscal year, the proposal must receive the affirmative vote of at least a majority of the votes cast at the Annual Meeting, either in person or by proxy. | | | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF CROWE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. |
TABLE OF DIRECTORS UNANIMOUSLY RECOMMENDS ACONTENTS PROPOSAL 3. — ADVISORY NON-BINDING VOTE “FOR” THE RATIFICATIONTO APPROVE EXECUTIVE COMPENSATION The Board believes that the Company’s compensation programs and policies are centered on a pay for performance culture and are strongly aligned with the long-term interests of shareholders. In accordance with Section 14A of the Exchange Act, we are asking shareholders to vote in an advisory, non-binding manner to approve the compensation paid to our Named Executive Officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K (including the Compensation Discussion and Analysis, compensation tables and accompanying narrative discussion). Item 402 of Regulation S-K is the SEC regulation that sets forth the disclosure companies must include in their proxy statement as to executive compensation. At the 2017 Annual Meeting of Shareholders, the Board of Directors recommended, and the shareholders approved, a non-binding vote in favor of holding an annual advisory vote on executive compensation. As a result, the Board of Directors determined that Bridge would hold an annual advisory vote to approve executive compensation. This proposal, commonly known as a “Say on Pay” proposal, gives you as a shareholder the opportunity to vote on our executive pay program. The Board of Directors is requesting shareholders to cast a non-binding advisory vote on the following resolution: “Resolved, that the compensation paid to Dime’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.” Because this vote is advisory, it will not be binding upon the Board. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements. | | | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THIS PROPOSAL. |
TABLE OF CROWE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.CONTENTS SHAREHOLDER PROPOSALS UNDER SEC RULE 14a‑8InRULES
Under SEC Rule 14a-8, in order to be eligible for inclusion in the proxy materials for next year’s Annual Meeting of Shareholders, under SEC Rule 14a‑8, any shareholder proposal to take action at such meeting must be received at the Company’s executive office, 2200 Montauk898 Veterans Memorial Highway, P.O. Box 3005, Bridgehampton,Suite 560 Hauppauge, New York 11932,11788, no later than December 3, 2019.15, 2022. Any such proposals shall be subject to the requirements of the proxy rules adopted under the Exchange Act. Additionally, under SEC Rule 14a-19, a stockholder intending to engage in a director election contest at next year’s Annual Meeting of Shareholders must give the Company notice of its intent to solicit proxies by providing the names of its nominees and certain other information by March 27, 2023. ADVANCE NOTICE OF BUSINESS OR NOMINATIONS TO BE BROUGHT BEFORE AN ANNUAL MEETING The Company’s Bylaws provide an advance notice procedure for certain business, or nominations to the Board of Directors, to be brought before an annual meeting of shareholders. In order for a shareholder to properly nominate persons for election to the Board of Directors or bring business before an annual meeting, the shareholder must give written notice to the Corporate Secretary not less than 90 days prior to the date of the Company’s proxy materials for the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the shareholder to be timely must be so delivered not later than the close of business on the tenth day following the day on which public announcement of the date of such annual meeting is first made. The Bylaws require that the notice must include, among other things, the shareholder’s name, record address, and number of shares owned, describe briefly the proposed business, the reasons for bringing the business before the annual meeting, and any material interest of the shareholder in the proposed business. Nothing in this paragraph shall be deemed to require the Company to include in its annual meeting proxy statement under SEC Rule 14a‑814a-8 any shareholder proposal that does not meet all of the requirements for inclusion established by the SEC in effect at the time such proposal is received.received, or to include in a universal proxy card the names of shareholder nominees for which the shareholder did not provide proper notice under SEC Rule 14a-19. In accordance with the foregoing, advance notice for certain business or nominations to the Board of Directors to be brought before next year’s Annual Meeting of Shareholders must be given to the Company by December 31, 2019.January 16, 2023. The Board of Directors is not aware of any business to come before the Annual Meeting other than the matters described above in this proxy statement.Proxy Statement. However, if any matters should properly come before the Annual Meeting, it is intended that holders of the proxies will act in accordance with their best judgment. Whether you intend to be present at this meeting or not, you are urged to return your signed proxy promptly. For your convenience, you may also cast your vote electronically. If you receive proxy materials by mail, unless you have provided us contrary instructions, we have sent a single copy of these proxy materials to any household at which one or more shareholders reside if we believe the shareholders are members of the same household. Each stockholder in the household will receive a separate Proxy Card. This process, known as “householding,” reduces the volume of duplicate information received by you and helps reduce our expenses.the cost and environmental impact of providing these materials. If you would like to receive your own set of proxy materials, please follow these instructions: If your shares are registered in your own name, contact our transfer agent, Computershare, and inform them of your request to revoke householding by calling 1-800-368-5948, or by writing them at Computershare, PO Box 505000 Louisville, KY 40233, Attention: Householding Department. If a bank, broker or other nominee holds your shares, contact your bank, broker or other nominee directly. TABLE OF CONTENTS | ·
| | If your shares are registered in your own name, contact our transfer agent, Computershare, and inform them of your request to revoke householding by calling 1‑800‑368‑5948 , or by writing them at Computershare, PO Box 30170 College Station, TX 77842, Attention: Householding Department.
|
| ·
| | If a bank, broker or other nominee holds your shares, contact your bank, broker or other nominee directly.
|
AN ADDITIONAL COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10‑K FOR THE YEAR ENDED DECEMBERA copy of the Annual Report to shareholders for the period ended December 31, 2018, WILL BE FURNISHED WITHOUT CHARGE TO SHAREHOLDERS AS OF THE RECORD DATE UPON WRITTEN OR TELEPHONE REQUEST TO HOWARD H. NOLAN, SENIOR EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER AND CORPORATE SECRETARY, 2200 MONTAUK HIGHWAY, P.O. BOX 3005, BRIDGEHAMPTON, NEW YORK 119322021, including the consolidated financial statements prepared in conformity with U.S. GAAP for the year ended December 31, 2021, accompanies this Proxy Statement. The consolidated financial statements for the year ended December 31, 2021 have been audited by Crowe LLP, whose report appears in the Annual Report. Shareholders may obtain, free of charge, a copy of the Annual Report on Form 10-K filed with the SEC (without exhibits) by writing to Corporate Secretary, Dime Community Bancshares, Inc., OR CALL 898 Veterans Memorial Highway, Suite 560, Hauppauge, New York 11788, or by calling (631) 537‑1001, EXT. 7255.537-1000, or by accessing the Company’s Investor Relations website http://investors.dime.com/inforequest. By Order of the Board of Directors Howard H. Nolan
Senior Executive Vice President, Chief Operating Officer and
Patricia M. Schaubeck
Corporate Secretary Bridgehampton,
- 45 - TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
50
Appendix A
BRIDGE BANCORP, INC.
2019 EQUITY INCENTIVE PLAN
ARTICLE 1 - GENERAL
Section 1.1Purpose, Effective Date and Term. The purpose of this Bridge Bancorp, Inc. 2019 Equity Incentive Plan (the “Plan”) is to promote the long-term financial success of Bridge Bancorp, Inc. (the “Company”), and its Subsidiaries, including BNB Bank (the “Bank”) by providing a means to attract, retain and reward individuals who contribute to such success and to further align their interests with those of the Company’s stockholders through the ownership of Company common stock. The “Effective Date” of the Plan is May 3, 2019, which is the expected date of the approval of the Plan by the Company’s stockholders. The Plan shall remain in effect as long as any awards under it are outstanding; provided, however, that no Awards may be granted under the Plan after the day immediately prior to the ten-year anniversary of the Effective Date.
Section 1.2Administration. The Plan shall be administered by the Compensation Committee of the Company’s Board of Directors (the “Committee”), in accordance with Section 5.1.
Section 1.3Participation. Each Employee or Director of, or service provider to, the Company or any Subsidiary of the Company who is granted an Award in accordance with the terms of the Plan shall be a “Participant” in the Plan. The grant of Awards under the Plan shall be limited to Employees and Directors of, and service providers to, the Company or any Subsidiary.
Section 1.4Definitions. Capitalized terms used in the Plan are defined in Article 8 and elsewhere in the Plan.
ARTICLE 2 - AWARDS
Section 2.1General. Any Award under the Plan may be granted singularly, or in combination with another Award (or Awards). Each Award under the Plan shall be subject to the terms and conditions of the Plan and such additional terms, conditions, limitations and restrictions as the Committee shall provide with respect to such Award and as evidenced in the Award Agreement. Every Award under the Plan shall require a written Award Agreement. Subject to the provisions of Section 2.6, an Award may be granted as an alternative to or replacement (subject to Section 2.7) of an existing award under the Plan or any other plan of the Company or any Subsidiary (provided, however, that no reload Awards shall be granted hereunder) or as the form of payment for grants or rights earned or due under any other compensation plan or arrangement of the Company or its Subsidiaries, including without limitation the plan of any entity acquired by the Company or any Subsidiary. The types of Awards that may be granted under the Plan include:
(a)Stock Options. A Stock Option means a grant under Section 2.2 that represents the right to purchase shares of Stock at an Exercise Price established by the Committee. Any Stock Option may be either an Incentive Stock Option (an “ISO”) that is intended to satisfy the requirements applicable to an “incentive stock option” described in Code Section 422(b), or a Non-Qualified Stock Option (a “Non-Qualified Option”) that is not intended to be an ISO, provided, however, that no ISOs may be granted : (i) after the ten-year anniversary of the Effective Date or the date the Plan is approved by the Board, whichever is earlier, or; or (ii) to a non-employee. Unless otherwise specifically provided by its terms, any Stock Option granted under the Plan shall be a Non-Qualified Option. Any ISO granted under this Plan that does not qualify as an ISO for any reason (whether at the time of grant or as the result of a subsequent event) shall be deemed to be a Non-Qualified Option. In addition, any ISO granted under this Plan may be unilaterally modified by the Committee to disqualify such Stock Option from ISO treatment such that it shall become a Non-Qualified Option; provided however, that any such modification shall be ineffective if it causes the Award to be subject to Code Section 409A (unless, as modified, the Award complies with Code Section 409A).
(b)Restricted Stock Awards. A Restricted Stock Award means a grant of shares of Stock under Section 2.3 for no consideration or for such minimum consideration as may be required by applicable law, either alone or in addition to other Awards granted under the Plan, subject to a time-based vesting schedule or the satisfaction of market conditions or performance conditions.
(c)Restricted Stock Units. A Restricted Stock Unit means a grant under Section 2.4 denominated in shares of Stock that is similar to a Restricted Stock Award except no shares of Stock are actually awarded on the date of grant of a Restricted Stock Unit. A Restricted Stock Unit is subject to a time-based vesting schedule or the satisfaction of market conditions or performance conditions and shall be settled in shares of Stock; provided, however, that in the sole discretion of the Committee, determined at the time of settlement, a Restricted Stock Unit may be settled in cash based on the Fair Market Value of a share of the Company’s Stock multiplied by the number of Restricted Stock Units being settled.
(d)Performance Awards. A Performance Award means an Award under Sections 2.2, 2.3 or 2.4 that vests upon the achievement of one or more specified performance measures, as further set forth in Section 8.1(bb).
Section 2.2Stock Options.
(a)Grant of Stock Options. Each Stock Option shall be evidenced by an Award Agreement that shall: (i) specify the number of Stock Options covered by the Award; (ii) specify the date of grant of the Stock Option; (iii) specify the vesting period or conditions to vesting; and (iv) contain such other terms and conditions not inconsistent with the Plan, including the effect of termination of a Participant’s employment or Service with the Company as the Committee may, in its discretion, prescribe. Stock Options may be granted as a Performance Award.
(b)Terms and Conditions. A Stock Option shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Committee. In no event, however, shall a Stock Option expire later than ten (10) years after the date of its grant (or five (5) years with respect to an ISO granted to an Employee who is a 10% Stockholder). The “Exercise Price” of each Stock Option shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant (or, if greater, the par value of a share of Stock); provided, however, that the Exercise Price of an ISO shall not be less than 110% of Fair Market Value of a share of Stock on the date of grant if granted to a 10% Stockholder; further, provided, that the Exercise Price may be higher or lower in the case of Stock Options granted or exchanged in replacement of existing Awards held by an Employee or Director of or service provider to an acquired entity. The payment of the Exercise Price of a Stock Option shall be by cash or, subject to limitations imposed by applicable law, by such other means as the Committee may from time to time permit, including: (i) by tendering, either actually or constructively by attestation, shares of Stock valued at Fair Market Value as of the date of exercise; (ii) by irrevocably authorizing a third party, acceptable to the Committee, to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Stock Option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise; (iii) by net settlement of the Stock Option, using a portion of the shares obtained on exercise in payment of the Exercise Price of the Stock Option (and if applicable, tax withholding); (iv) by personal, certified or cashier’s check; (v) by other property deemed acceptable by the Committee; or (vi) by any combination thereof. The total number of shares that may be acquired upon the exercise of a Stock Option shall be rounded down to the nearest whole share, with cash-in-lieu paid by the Company, at its discretion, for the value of any fractional share.
(c)Prohibition on Cash Buy-Outs of Underwater Stock Options. Under no circumstances will any underwater Stock Options which were granted under the Plan be bought back by the Company without shareholder approval.
Section 2.3. Restricted Stock Awards.
(a) Grant of Restricted Stock. Each Restricted Stock Award shall be evidenced by an Award Agreement, that shall: (i) specify the number of shares of Stock covered by the Restricted Stock Award; (ii) specify the date of grant of the Restricted Stock Award; (iii) specify the vesting period; and (iv) contain such other terms and conditions not inconsistent with the Plan, including the effect of termination of Participant’s employment or Service with the Company.
TABLE OF CONTENTS ![](https://files.docoh.com/DEF 14A/0001140361-22-014734/ny20002248x3_pc01.jpg) Restricted Stock Awards may be granted as Performance Awards. All Restricted Stock Awards shall be in the form of issued and outstanding shares of Stock that, at the discretion of the Committee, shall be either: (x) registered in the name of the Participant and held or on behalf of the Company, together with a stock power executed by the Participant in favor of the Company, pending the vesting or forfeiture of the Restricted Stock; or (y) registered in the name of, and delivered to, the Participant. In any event, the certificates evidencing the Restricted Stock Award shall at all times prior to the applicable vesting date bear the following legend:
The Stock evidenced hereby is subject to the terms of an Award Agreement between Bridge Bancorp, Inc. and [Name of Participant] dated [Date], made pursuant to the terms of the Bridge Bancorp, Inc. 2019 Equity Incentive Plan, copies of which are on file at the executive offices of Bridge Bancorp, Inc., and may not be sold, encumbered, hypothecated or otherwise transferred except in accordance with the terms of such Plan and Award Agreement.
or such other restrictive legend as the Committee, in its discretion, may specify. Notwithstanding the foregoing, the Company may in its sole discretion issue Restricted Stock in any other approved format (e.g., electronically) in order to facilitate the paperless transfer of such Awards. In the event Restricted Stock that is not issued in certificate form, the Company and the transfer agent shall maintain appropriate bookkeeping entries that evidence Participants’ ownership of such Awards. Restricted Stock that is not issued in certificate form shall be subject to the same terms and conditions of the Plan as certificated shares, including the restrictions on transferability and the provision of a stock power executed by the Participant in favor of the Company, until the satisfaction of the conditions to which the Restricted Stock Award is subject.
(b) Terms and Conditions. Each Restricted Stock Award shall be subject to the following terms and conditions:
(i) Treatment of Dividends. Participants are entitled to all cash dividends and other distributions declared and paid on all shares of Stock subject to a Restricted Stock Award, from and after the date such shares are awarded or from and after such later date as may be specified by the Committee in an Award Agreement, and the Participant shall not be required to return any such dividends or other distributions to the Company in the event of forfeiture of the Restricted Stock Award.
(ii) Voting Rights. Unless the Committee determines otherwise with respect to any Restricted Stock Award and specifies such determination in the relevant Award Agreement, a Participant shall have voting rights related to the unvested, non-forfeited Restricted Stock Award and such voting rights shall be exercised by the Participant in his or her discretion.
(iii) Tender Offers and Merger Elections. Each Participant to whom a Restricted Stock Award is granted shall have the right to respond, or to direct the response, with respect to the related shares of Restricted Stock, to any tender offer, exchange offer, cash/stock merger consideration election or other offer made to, or elections made by, the holders of shares of Stock. Such a direction for any such shares of Restricted Stock shall be given by proxy or ballot (if the Participant is the beneficial owner of the shares of Restricted Stock for voting purposes) or by completing and filing, with the inspector of elections, the trustee or such other person who shall be independent of the Company as the Committee shall designate in the direction (if the Participant is not such a beneficial owner), a written direction in the form and manner prescribed by the Committee. If no such direction is given, then the shares of Restricted Stock shall not be tendered.
Section 2.4 Restricted Stock Units.
(a) Grant of Restricted Stock Unit Awards. Each Restricted Stock Unit shall be evidenced by an Award Agreement which shall: (i) specify the number of Restricted Stock Units covered by the Award; (ii) specify the date of grant of the Restricted Stock Units; (iii) specify the vesting period or market conditions or performance conditions that must be satisfied in order to vest in the Award; and (iv) contain such other terms and conditions not inconsistent with the Plan, including the effect of termination of a Participant’s employment or Services with the Company. Restricted Stock
Unit Awards shall be paid in shares of Stock, or in the sole discretion of the Committee determined at the time of settlement, in cash or a combination of cash and shares of Stock.
(b) Terms and Conditions. Each Restricted Stock Unit Award shall be subject to the following terms and conditions:
(i) A Restricted Stock Unit Award shall be similar to a Restricted Stock Award except that no shares of Stock are actually awarded to the recipient on the date of grant. Each Restricted Stock Unit shall be evidenced by an Award Agreement that shall specify the Restriction Period (defined below), the number of Restricted Stock Units granted, and such other provisions, including the effect of termination of a Participant’s employment or Service with the Company, as the Committee shall determine. The Committee shall impose such other conditions and/or restrictions on any Restricted Stock Unit Award granted pursuant to the Plan as it may deem advisable including, without limitation, a requirement that Participants pay a stipulated purchase price for each Restricted Stock Unit, time-based restrictions and vesting following the attainment of performance measures, restrictions under applicable laws or under the requirements of any Exchange or market upon which such shares may be listed, or holding requirements or sale restrictions placed by the Company upon vesting of such Restricted Stock Units. The Committee may make grants of Restricted Stock Units upon such terms and conditions as it may determine, which may include, but is not limited, to deferring receipt of the underlying Stock provided such deferral complies with Section 409A of the Code and applicable provisions of the Plan and issuing Restricted Stock Units to the Company’s Directors Deferred Compensation Plan.
(ii) Restricted Stock Units may be granted as Performance Awards.
(iii) Subject to the provisions of the Plan and the applicable Award Agreement, during the period, if any, set by the Committee, commencing with the date of such Restricted Stock Unit for which such Participant’s continued Service is required (the “Restriction Period”), and until the later of (A) the expiration of the Restriction Period and (B) the date the applicable performance measures (if any) are satisfied, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber Restricted Stock Units.
(iv) A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder.
(v) No dividends shall be paid on Restricted Stock Units unless, and in the sole discretion of the Committee exercised at the time of grant, Dividend Equivalent Rights may be paid on Restricted Stock Units at the same time as specified in Section 2.3(b)(i) of the Plan. Dividends and other distributions may be reinvested in additional Restricted Stock Units, as determined by the Committee in its sole discretion.
Section 2.5Vesting of Awards. The Committee shall specify the vesting schedule or conditions of each Award. At least ninety-five percent (95%) of all Awards under the Plan shall be subject to a vesting requirement of at least one year of Service following the grant of the Award and evidenced in the Award Agreement, subject to acceleration of vesting, to the extent authorized by the Committee or set forth in the Award Agreement, upon the Participant’s death, Disability or in connection with a Change in Control as set forth in Article IV.
Section 2.6Deferred Compensation. If any Award would be considered “deferred compensation” as defined under Code Section 409A (“Deferred Compensation”), the Committee reserves the absolute right (including the right to delegate such right) to unilaterally amend the Plan or the Award Agreement, without the consent of the Participant, to maintain exemption from, or to comply with, Code Section 409A. Any amendment by the Committee to the Plan or an Award Agreement pursuant to this Section shall maintain, to the extent practicable, the original intent of the applicable provision without violating Code Section 409A. A Participant’s acceptance of any Award under the Plan constitutes acknowledgement and consent to such rights of the Committee, without further consideration or action. Any discretionary authority retained by the Committee pursuant to the terms of this Plan or pursuant to an Award Agreement shall not be applicable to an Award which is determined to constitute Deferred Compensation, if such discretionary authority would contravene Code Section 409A. Unless otherwise provided in a valid election form intended to comply with Code Section
TABLE OF CONTENTS ![](https://files.docoh.com/DEF 14A/0001140361-22-014734/ny20002248x3_pc02.jpg) 409A, all Awards that are considered Deferred Compensation hereunder shall settle and be paid in no event later than 2 ½ months following the end of the calendar year with respect to which the Award’s substantial risk of forfeiture lapsed.
Section 2.7Prohibition Against Option Repricing. Except for adjustments pursuant to Section 3.3, and reductions of the Exercise Price approved by the Company’s stockholders, neither the Committee nor the Board shall have the right or authority to make any adjustment or amendment that reduces or would have the effect of reducing the Exercise Price of a Stock Option previously granted under the Plan, whether through amendment, cancellation (including cancellation in exchange for a cash payment in excess of the Stock Option’s in-the-money value or in exchange for Stock Options or other Awards) or replacement grants, or other means.
Section 2.8.Effect of Termination of Service on Awards. The Committee shall establish the effect of a Termination of Service on the continuation of rights and benefits available under an Award and, in so doing, may make distinctions based upon, among other things, the cause of Termination of Service and type of Award. Unless otherwise specified by the Committee and set forth in an Award Agreement, the following provisions shall apply to each Award granted under this Plan:
(a) Upon the Participant’s Termination of Service for any reason other than due to Disability, death or Termination for Cause, Stock Options shall be exercisable only as to those shares that were immediately exercisable by such Participant at the date of termination, and may be exercised only for a period of three (3) months following termination, and any Restricted Stock or Restricted Stock Units that have not vested as of the date of Termination of Service shall expire and be forfeited.
(b) In the event of a Termination of Service for Cause, all Stock Options granted to a Participant that have not been exercised and all Restricted Stock Awards, and Restricted Stock Units granted to a Participant that have not vested shall expire and be forfeited.
(c) Upon Termination of Service for reason of Disability or death, all Stock Options shall be exercisable as to all shares subject to an outstanding Award whether or not then exercisable, all Restricted Stock Awards and Restricted Stock Units shall vest as to all shares subject to an outstanding Award, whether or not otherwise immediately vested, at the date of Termination of Service. Stock Options may be exercised for a period of one year following Termination of Service due to death or Disability, or the remaining unexpired term of the Stock Option, if less, provided, however, in order to obtain ISO treatment for Stock Options exercised by heirs or devisees of an optionee, the optionee’s death must have occurred while employed or within three (3) months after Termination of Service. In the event of Termination of Service due to Retirement, a Participant’s vested Stock Options shall be exercisable for one year following Termination of Service, provided that no Stock Option shall be eligible for treatment as an ISO in the event such Stock Option is exercised more than three months following Termination of Service due to Retirement and any Stock Option, Restricted Stock Award or Restricted Stock Unit that has not vested as of the date of Termination of Service shall expire and be forfeited.
(d) Notwithstanding anything herein to the contrary, no Stock Option shall be exercisable beyond the last day of the original term of such Stock Option.
(e) Notwithstanding the provisions of this Section 2.8, the effect of a Change in Control on the vesting/exercisability of Stock Options, Restricted Stock Awards, Restricted Stock Units and Performance Awards is as set forth in Article 4.
ARTICLE 3 - Shares Subject to Plan
Section 3.1Available Shares. The shares of Stock with respect to which Awards may be made under the Plan shall be shares currently authorized but unissued, currently held or, to the extent permitted by applicable law, subsequently acquired by the Company, including shares purchased in the open market or in private transactions.
Section 3.2Share Limitations.
(a)Share Reserve. Subject to the following provisions of this Section 3.2, the maximum number of shares of Stock that may be delivered to Participants and their beneficiaries under the Plan shall be equal to: (i) 370,000 shares of Stock, plus (ii) the number of shares of Stock which have been reserved but not issued under the Company’s 2012 Stock-Based Incentive Plan, which is estimated to be 163,076 on March 18, 2019, plus (iii) any shares of Stock returned to the Company’s 2012 Stock-Based Incentive Plan after the effective date of this Plan as a result of expiration, cancellation, or forfeiture of awards issued under such plan, and shall be subject to adjustment as provided herein. Subject to the limitations set forth in this Section 3.2, Awards under the Plan may be made in any combination of shares of Restricted Stock Awards, Restricted Stock Units, or Stock Options and all Awards may be granted as either Restricted Stock Awards, Restricted Stock Units or Stock Options, in the discretion of the Committee, and all Stock Options may be granted as Incentive Stock Options. The aggregate number of shares available for grant under this Plan and the number of shares of Stock subject to outstanding awards shall be subject to adjustment as provided in Section 3.3.
(b)Computation of Shares Available. For purposes of this Section 3.2 the number of shares of Stock available for the grant of Stock Options, Restricted Stock Awards and Restricted Stock Units shall be reduced by the number of shares of Stock previously granted, subject to the following.
(1) To the extent any shares of Stock covered by an Award (including Restricted Stock Awards and Restricted Stock Units) under the Plan are not delivered to a Participant or beneficiary for any reason, including because the Award is forfeited or canceled, or because a Stock Option is not exercised, then such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan.
(2) Shares that are exchanged by a Participant or withheld by the Company as full or partial payment in connection with any Award under the Plan, as well as any shares exchanged by a Participant or withheld by the Company to satisfy the tax withholding obligations related to any Award under the Plan, shall be available for subsequent Awards under the Plan.
(c)Adjustment. The aggregate number of shares available for grant under this Plan and the number of shares subject to outstanding Awards, including the limit on the number of Awards available for grant under this Plan described in this Section 3.3, shall be subject to adjustment as provided in Section 3.3.
Section 3.3Corporate Transactions.
(a)General. If the shares of Stock are changed into or exchanged for a different number of kind of shares or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares for which grants of Stock Options, Restricted Stock and Restricted Stock Unit Awards may be made under the Plan shall be adjusted proportionately and accordingly by the Committee, so that the proportionate interest of the grantee immediately following such event shall, to the extent practicable, be the same as immediately before such event. Any such adjustment in outstanding Stock Options shall not change the aggregate purchase price payable with respect to shares that are subject to the unexercised portion of the Stock Option outstanding but shall include a corresponding proportionate adjustment in the purchase price per share. In addition, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Stock Options, Restricted Stock Awards and Restricted Stock Units (including, without limitation, cancellation of Stock Options, Restricted Stock Awards and Restricted Stock Units in exchange for the in-the-money value, if any, of the vested portion thereof, or substitution or exchange of Stock Options, Restricted Stock Awards and Restricted Stock Units using stock of a successor or other entity) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence) affecting the Company or any parent or Subsidiary or the financial statements of the Company or any parent or Subsidiary, or in response to changes in applicable laws, regulations, or accounting principles.
TABLE OF CONTENTS ![](https://files.docoh.com/DEF 14A/0001140361-22-014734/ny20002248x3_pc03.jpg) (b) Merger in which Company is Not Surviving Entity. In the event of any merger, consolidation, or other business reorganization (including, but not limited to, a Change in Control) in which the Company is not the surviving entity, unless otherwise set forth in the agreement relating to the consummation of such merger, consolidation or other business reorganization, any Stock Options granted under the Plan which are outstanding immediately prior to such merger, consolidation or other business combination shall be converted into Stock Options to purchase voting common equity securities of the business entity which survives such merger, consolidation or other business reorganization having substantially the same terms and conditions as the outstanding Stock Options under this Plan and reflecting the same economic benefit (as measured by the difference between the aggregate Exercise Price and the value exchanged for outstanding shares of Stock in such merger, consolidation or other business reorganization), all as determined by the Committee prior to the consummation of such merger. The Committee may, at any time prior to the consummation of such merger, consolidation or other business reorganization, direct that all, but not less than all, outstanding Stock Options be canceled as of the effective date of such merger, consolidation or other business reorganization in exchange for a cash (or acquirer stock) payment per share of Stock equal to the excess (if any) of the value exchanged for an outstanding share of Stock in such merger, consolidation or other business reorganization over the Exercise Price of the Stock Option being canceled; provided, further, that in the event the Exercise Price of outstanding Stock Options exceed the value to be exchanged for an outstanding share of Stock (an “Underwater Stock Option”) in such merger, consolidation or other business reorganization, the Committee may, in its discretion, cancel and terminate such Underwater Stock Options without the consent of the holder of the Stock Option and without any payment to such holder.
Section 3.4Delivery of Shares. Delivery of shares of Stock or other amounts under the Plan shall be subject to the following:
(a)Compliance with Applicable Laws. Notwithstanding any other provision of the Plan, the Company shall have no obligation to deliver any shares of Stock or make any other distribution of benefits under the Plan unless such delivery or distribution complies with all applicable laws (including, the requirements of the Securities Act), and the applicable requirements of any Exchange or similar entity.
(b)Certificates. To the extent that the Plan provides for the issuance of shares of Stock, the issuance may be made on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any Exchange.
ARTICLE 4 - CHANGE IN CONTROL
Section 4.1Consequence of a Change in Control. Subject to the provisions of Section 3.3 (relating to the adjustment of shares and cancellation of Stock Options in exchange for a cash or stock payment of the in-the-money value) and except as otherwise provided in the Plan and unless the Committee determines otherwise:
(a) Upon an Involuntary Termination following a Change in Control, all Stock Options then held by the Participant shall become fully earned and exercisable (subject to the expiration provisions otherwise applicable to the Stock Option). All Stock Options may be exercised for a period of one year following an Involuntary Termination following a Change in Control, provided, however, that no Stock Option shall be eligible for treatment as an ISO in the event such Stock Option is exercised more than three (3) months following a termination of employment.
(b) Upon an Involuntary Termination following a Change in Control, all Awards of Restricted Stock Awards and Restricted Stock Units, shall be fully earned and vested immediately.
(c) Upon an Involuntary Termination following a Change in Control, all Performance Awards shall vest at the higher of the actual level of the performance measures that have been achieved, or pro-rata assuming the performance measures have been achieved at “target.”
(d) Notwithstanding anything in the Plan to the contrary, in the event of a Change in Control in which the Company is not the surviving entity, any Awards granted under the Plan which are outstanding immediately prior to
such Change in Control shall become fully vested in the event the successor entity does not assume the Awards granted under the Plan and Performance Awards shall vest at the rate specified in Section 4.1(c) of the Plan.
Section 4.2Definition of Change in Control. For purposes of the Plan, unless otherwise provided in an Award Agreement, a “Change in Control” shall be deemed to have occurred upon the earliest to occur of the following:
(a) A change in ownership occurs on the date that any one person, or more than one person acting as a group (as defined in Treasury regulation section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Bank or Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation.
(b) A change in the effective control of the Bank or Company occurs on the date that either (i) any one person, or more than one person acting as a group (as defined in Treasury regulation section 1.409A-3(i)(5)(v)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Bank or Company possessing 30% or more of the total voting power of the stock of the Bank or Company, or (ii) a majority of the members of the Bank’s or Company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Bank’s or Company’s board of directors prior to the date of the appointment or election, provided that this sub-section “(ii)” is inapplicable where a majority shareholder of the Bank or Company is another corporation.
(c) A change in a substantial portion of the Bank’s or Company’s assets occurs on the date that any one person or more than one person acting as a group (as defined in Treasury regulation section 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Bank or Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of (i) all of the assets of the Bank or Company, or (ii) the value of the assets being disposed of, either of which is determined without regard to any liabilities associated with such assets. For all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury regulation section 1.409A-3(g)(5).
ARTICLE 5 - COMMITTEE
Section 5.1Administration. The Plan shall be administered by the members of the Compensation Committee of the Company who are Disinterested Board Members. If the Committee consists of fewer than two Disinterested Board Members, then the Board shall appoint to the Committee such additional Disinterested Board Members as shall be necessary to provide for a Committee consisting of at least two Disinterested Board Members. Any members of the Committee who do not qualify as Disinterested Board Members shall abstain from participating in any discussion or decision to make or administer Awards that are made to Participants who at the time of consideration for such Award are persons subject to the short-swing profit rules of Section 16 of the Exchange Act. The Board (or if necessary to maintain compliance with the applicable listing standards, those members of the Board who are “independent directors” under the corporate governance statutes or rules of any national Exchange on which the Company lists, or has listed or seeks to list its securities, may, in its discretion, take any action and exercise any power, privilege or discretion conferred on the Committee under the Plan with the same force and effect under the Plan as if done or exercised by the Committee.
Section 5.2Powers of Committee. The Committee’s administration of the Plan shall be subject to the following:
(a) The Committee will have the authority and discretion to select from among the Company’s and its Subsidiaries’ Employees, Directors and service providers those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, features, (including automatic exercise in accordance with Section 7.18) performance criteria, restrictions (including without limitation, provisions relating to non-competition, non-solicitation and confidentiality), and other provisions of such Awards, to cancel or suspend Awards (subject to the restrictions imposed by Article 6) and to reduce, eliminate or accelerate any restrictions applicable to an Award at any time after the grant of the Award (other than
TABLE OF CONTENTS ![](https://files.docoh.com/DEF 14A/0001140361-22-014734/ny20002248x3_pc04.jpg) in connection with a Change in Control, which is subject to the provisions set forth in Section 4.1 hereof), or to extend the time period to exercise a Stock Option, provided that such extension is consistent with Code Section 409A. Notwithstanding the foregoing, the Committee will not have the authority or discretion to accelerate the vesting requirements applicable to an Award to avoid the one-year minimum vesting requirement pursuant to Section 2.5 except in the event of a Change in Control as provided under Section 4.1 of the Plan and in the event of termination due to death or Disability.
(b) The Committee will have the authority and discretion to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.
(c) The Committee will have the authority to define terms not otherwise defined herein.
(d) Any interpretation of the Plan by the Committee and any decision made by it under the Plan are final and binding on all persons.
(e) In controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms to the certificate of incorporation and bylaws of the Company and applicable state corporate law.
(f) The Committee will have the authority to (i) suspend a Participant’s right to exercise a stock option during a blackout period (or similar restricted period) that is necessary or in the best interests of the Company in order to comply with the securities laws and regulations issued by the SEC (the “Blackout Period”), and (ii) to extend the period to exercise a Stock Option by a period of time equal to the Blackout Period, provided that such extension does not violate Section 409A of the Code, the incentive stock option requirements or applicable laws and regulations.
Section 5.3Delegation by Committee. Except to the extent prohibited by applicable law, the applicable rules of an Exchange upon which the Company lists its shares or the Plan, or as necessary to comply with the exemptive provisions of Rule 16b-3 promulgated under the Exchange Act, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it, including (a) delegating to a committee of one or more members of the Board who are not “Disinterested Board Members,” the authority to grant Awards under the Plan to eligible persons who are not then subject to Section 16 of the Exchange Act; or (b) delegating to a committee of one or more members of the Board who would be eligible to serve on the Compensation Committee of the Company pursuant to the listing requirements imposed by any national securities Exchange on which the Company lists, has listed or seeks to list its securities, the authority to grant awards under the Plan. The acts of such delegates shall be treated hereunder as acts of the Committee and such delegates shall report regularly to the Committee regarding the delegated duties and responsibilities and any awards so granted. Any such allocation or delegation may be revoked by the Committee at any time.
Section 5.4Information to be Furnished to Committee. As may be permitted by applicable law, the Company and its Subsidiaries shall furnish the Committee with such data and information as it determines may be required for it to discharge its duties. The records of the Company and its Subsidiaries as to a Participant’s employment, termination of employment, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined by the Committee to be manifestly incorrect. Subject to applicable law, Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan.
Section 5.5Committee Action. The Committee shall hold such meetings, and may make such administrative rules and regulations, as it may deem proper. A majority of the members of the Committee shall constitute a quorum, and the action of a majority of the members of the Committee present at a meeting at which a quorum is present, as well as actions taken pursuant to the unanimous written consent of all of the members of the Committee without holding a meeting, shall be deemed to be actions of the Committee. Subject to Section 5.1, all actions of the Committee shall be final and conclusive and shall be binding upon the Company, Participants and all other interested parties. Any person dealing with
the Committee shall be fully protected in relying upon any written notice, instruction, direction or other communication signed by a member of the Committee or by a representative of the Committee authorized to sign the same in its behalf.
ARTICLE 6 - AMENDMENT AND TERMINATION
Section 6.1General. The Board may, as permitted by law, at any time, amend or terminate the Plan, and may, at any time, amend any Award Agreement, provided that no amendment or termination (except as provided in Section 2.6, Section 3.3 and Section 6.2) may cause the Award to violate Code Section 409A, may cause the repricing of a Stock Option, or, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely impair the rights of any Participant or beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board; provided, however, that, no amendment may (a) materially increase the benefits accruing to Participants under the Plan; (b) materially increase the aggregate number of securities that may be issued under the Plan, other than pursuant to Section 3.3, or (c) materially modify the requirements for participation in the Plan, unless the amendment under (a), (b) or (c) above is approved by the Company’s stockholders.
Section 6.2Amendment to Conform to Law and Accounting Changes. Notwithstanding any provision in this Plan or any Award Agreement to the contrary, the Committee may amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of (i) conforming the Plan or the Award Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Code Section 409A), or (ii) avoiding an accounting treatment resulting from an accounting pronouncement or interpretation thereof issued by the SEC or Financial Accounting Standards Board subsequent to the adoption of the Plan or the making of the Award affected thereby, which in the sole discretion of the Committee, may materially and adversely affect the financial condition or results of operations of the Company. By accepting an Award under this Plan, each Participant agrees and consents to any amendment made pursuant to this Section 6.2 or Section 2.6 to any Award granted under the Plan without further consideration or action.
ARTICLE 7 - GENERAL TERMS
Section 7.1No Implied Rights.
(a)No Rights to Specific Assets. Neither a Participant nor any other person shall by reason of participation in the Plan acquire any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including any specific funds, assets, or other property which the Company or any Subsidiary, in its sole discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the shares of Stock or amounts, if any, payable or distributable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.
(b)No Contractual Right to Employment or Future Awards. The Plan does not constitute a contract of employment, and selection as a Participant will not give any participating Employee the right to be retained in the employ of the Company or any Subsidiary or any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. No individual shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to receive a future Award under the Plan.
(c)No Rights as a Stockholder. Except as otherwise provided in the Plan or in an Award Agreement, no Award under the Plan shall confer upon the holder thereof any rights as a stockholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights.
Section 7.2Transferability. Except as otherwise so provided by the Committee, ISOs under the Plan are not transferable except (i) as designated by the Participant by will or by the laws of descent and distribution; (ii) to a trust established by the Participant, if under Code Section 671 and applicable state law, the Participant is considered the sole beneficial owner of the Stock Option while held in trust, or (iii) between spouses incident to a divorce or pursuant to a
domestic relations order, provided, however, in the case of a transfer within the meaning of this Section 7.2(iii), the Stock Option shall not qualify as an ISO as of the day of such transfer. The Committee shall have the discretion to permit the transfer of vested Stock Options (other than ISOs) under the Plan; provided, however, that such transfers shall be limited to Immediate Family Members of Participants, trusts and partnerships established for the primary benefit of such family members or to charitable organizations, and; provided, further, that such transfers are not made for consideration to the Participant.
Restricted Stock Awards shall not be transferable prior to the time that such Awards vest in the Participant. A Restricted Stock Unit Award is not transferable, except in the event of death, prior to the time that the Restricted Stock Unit Award vests and is earned and the property in which the Restricted Stock Unit is denominated is distributed to the Participant or the Participant’s beneficiary.
Section 7.3Designation of Beneficiaries. A Participant hereunder may file with the Company a written designation of a beneficiary or beneficiaries under this Plan and may from time to time revoke or amend any such designation (“Beneficiary Designation”). Any designation of beneficiary under this Plan shall be controlling over any other disposition, testamentary or otherwise (unless such disposition is pursuant to a domestic relations order); provided, however, that if the Committee is in doubt as to the entitlement of any such beneficiary to any Award, the Committee may determine to recognize only the legal representative of the Participant in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.
Section 7.4Non-Exclusivity. Neither the adoption of this Plan by the Board nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including, without limitation, the granting of Restricted Stock Awards, Restricted Stock Units or Stock Options otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
Section 7.5Award Agreement. Each Award granted under the Plan shall be evidenced by an Award Agreement. A copy of the Award Agreement, in any medium chosen by the Committee, shall be provided (or made available electronically) to the Participant, and the Committee may, but need not require, that the Participant sign a copy of the Award Agreement. In the absence of a specific provision in the Award Agreement, the terms of the Plan shall control.
Section 7.6Form and Time of Elections; Notification Under Code Section 83(b). Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification, or revocation thereof, shall be filed with the Company at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require. Notwithstanding anything herein to the contrary, the Committee may, on the date of grant or at a later date, as applicable, prohibit an individual from making an election under Code Section 83(b). If the Committee has not prohibited an individual from making this election, an individual who makes this election shall notify the Committee of the election within ten (10) days of filing notice of the election with the Internal Revenue Service. This requirement is in addition to any filing and notification required under the regulations issued under the authority of Code Section 83(b).
Section 7.7Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information upon which the person is acting considers pertinent and reliable, and signed, made or presented by the proper party or parties.
Section 7.8Tax Withholding. Where a Participant is entitled to receive shares of Stock upon the vesting or exercise of an Award, the Company shall have the right to require such Participant to pay to the Company the amount of any tax that the Company is required to withhold with respect to such vesting or exercise, or, in lieu thereof, to retain, or to sell without notice, a sufficient number of shares of Stock to cover the minimum amount required to be withheld. To the extent determined by the Committee or specified in an Award Agreement and no adverse accounting consequences are triggered under FASB ASC Topic 718 or its successor, a Participant shall have the right to direct the Company to satisfy up to his or her highest marginal tax rate of required federal, state and local tax withholding by, (i) with respect to a Stock
Option, reducing the number of shares of Stock subject to the Stock Option (without issuance of such shares of Stock to the Stock Option holder) by a number equal to the quotient of (a) the total maximum amount of tax withholding divided by (b) the excess of the Fair Market Value of a share of Stock on the exercise date over the Exercise Price per share of Stock; and (ii) with respect to Restricted Stock Awards and Restricted Stock Units, withholding a number of shares (based on the Fair Market Value on the vesting date) otherwise vesting that would satisfy the maximum amount of tax withholding. Provided there are no adverse accounting consequences to the Company (a requirement to have liability classification of an award under FASB ASC Topic 718 is an adverse consequence), a Participant who is not required to have taxes withheld may require the Company to withhold in accordance with the preceding sentence as if the Award up to the Participant’s highest marginal tax rate.
Section 7.9Action by Company or Subsidiary. Any action required or permitted to be taken by the Company or any Subsidiary shall be by resolution of its Board of Directors, or by action of one or more members of the Board (including a committee of the Board) who are duly authorized to act for the Board, or (except to the extent prohibited by applicable law or applicable rules of the Exchange on which the Company lists its securities) by a duly authorized officer of the Company or such Subsidiary.
Section 7.10Successors. All obligations of the Company under this Plan shall be binding upon and inure to the benefit of any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business, stock, and/or assets of the Company.
Section 7.11Indemnification. To the fullest extent permitted by law and the Company’s governing documents, each person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority was delegated in accordance with Section 5.3, or an Employee of the Company shall be indemnified and held harmless by the Company (i) against and from any loss (including amounts paid in settlement), cost, liability or expense (including reasonable attorneys’ fees) that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan; and (ii) against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of his or her own willful misconduct or except as expressly provided by statute or regulation. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s charter or bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. The foregoing right to indemnification shall include the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition, provided, however, that, if required by applicable law, an advancement of expenses shall be made only upon delivery to the Company of an undertaking by or on behalf of such persons to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified for such expenses.
Section 7.12No Fractional Shares. Unless otherwise permitted by the Committee, no fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated by rounding down.
Section 7.13Governing Law. The Plan, all awards granted hereunder, and all actions taken in connection herewith shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws, except as superseded by applicable federal law. The federal and state courts located in Suffolk County, New York shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of the Plan. By accepting any award under this Plan, each Participant, and any other person claiming any rights under the Plan, agrees to submit himself or herself, and any legal action that the Participant brings under the Plan, to the sole jurisdiction of such courts for the adjudication and resolution of any such disputes.
Section 7.14Benefits Under Other Plans. Except as otherwise provided by the Committee or as set forth in a Qualified Retirement Plan, Awards to a Participant (including the grant and the receipt of benefits) under the Plan shall be disregarded for purposes of determining the Participant’s benefits under, or contributions to, any Qualified Retirement Plan, non-qualified plan and any other benefit plans maintained by the Participant’s employer. The term “Qualified Retirement Plan” means any plan of the Company or a Subsidiary that is intended to be qualified under Code Section 401(a).
Section 7.15Validity. If any provision of this Plan is determined to be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision has never been included herein.
Section 7.16Notice. Unless otherwise provided in an Award Agreement, all written notices and all other written communications to the Company provided for in the Plan, or in any Award Agreement, shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid (provided that international mail shall be sent via overnight or two-day delivery), or sent by facsimile, email or prepaid overnight courier to the Company at its principal executive office. Such notices, demands, claims and other communications shall be deemed given:
(a) in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery;
(b) in the case of certified or registered U.S. mail, five (5) days after deposit in the U.S. mail; or
(c) in the case of facsimile or email, the date upon which the transmitting party received confirmation of receipt;
provided, however, that in no event shall any such communications be deemed to be given later than the date they are actually received, provided they are actually received. In the event a communication is not received, it shall only be deemed received upon the showing of an original of the applicable receipt, registration or confirmation from the applicable delivery service. Communications that are to be delivered by the U.S. mail or by overnight service to the Company shall be directed to the attention of the Company’s Chief Operating Officer and to the Corporate Secretary, unless otherwise provided in the Participant’s Award Agreement.
Section 7.17Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events include, but are not limited to, termination of employment for Cause, termination of the Participant’s provision of Services to the Company or any Subsidiary, violation of material Company or Subsidiary policies, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct of the Participant that is detrimental to the business or reputation of the Company or any Subsidiary.
Section 7.18Automatic Exercise. In the sole discretion of the Committee exercised in accordance with Section 5.2(a) above, any Stock Options that are exercisable but unexercised as of the day immediately before the tenth anniversary of the date of grant may be automatically exercised, in accordance with procedures established for this purpose by the Committee, but only if the exercise price is less than the Fair Market Value of a share of Stock on such date and the automatic exercise will result in the issuance of at least one (1) whole share of Stock to the Participant after payment of the exercise price and any applicable minimum tax withholding requirements. Payment of the exercise price and any applicable tax withholding requirements shall be made by a net settlement of the Stock Option whereby the number of shares of Stock to be issued upon exercise are reduced by a number of shares having a Fair Market Value on the date of exercise equal to the exercise price and any applicable minimum tax withholding.
Section 7.19Regulatory Requirements. The grant and settlement of Awards under this Plan shall be conditioned upon and subject to compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(k), and the rules and regulations promulgated thereunder.
Section 7.20.Awards Subject to Clawback.
(a) If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the federal securities laws, and the automatic forfeiture provisions under Section 304 of the Sarbanes-Oxley Act of 2002 apply as a result, any Participant who was an executive officer of the Company at the time of grant or at the time of restatement shall be subject to “clawback” as if such person was subject to Section 304 of the Sarbanes-Oxley Act of 2002.
(b) Awards granted hereunder are subject to any clawback policy that may be adopted by the Company from time to time, whether pursuant to the provisions of Section 954 of the Dodd-Frank Act, implementing regulations thereunder, or otherwise.
ARTICLE 8 - DEFINED TERMS; CONSTRUCTION
Section 8.1 In addition to the other definitions contained herein, unless otherwise specifically provided in an Award Agreement, the following definitions shall apply:
(a) “10% Stockholder” means an individual who, at the time of grant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company.
(b)“Award” means any Stock Option, Restricted Stock, Restricted Stock Unit, or any or all of them, or any other right or interest relating to stock or cash, granted to a Participant under the Plan.
(c) “Award Agreement” means the document (in whatever medium prescribed by the Committee) which evidences the terms and conditions of an award under the Plan. Such document is referred to as an agreement regardless of whether Participant signature is required.
(d) “Board” means the Board of Directors of the Company.
(e) If the Participant is subject to a written employment agreement (or other similar written agreement) with the Company or a Subsidiary that provides a definition of termination for “cause,” then, for purposes of this Plan, the term “Cause” shall have meaning set forth in such agreement. In the absence of such a definition, “Cause” means (i) the conviction of the Participant of a felony or of any lesser criminal offense involving moral turpitude; (ii) the willful commission by the Participant of a criminal or other act that, in the judgment of the Board will likely cause substantial economic damage to the Company or any Subsidiary or substantial injury to the business reputation of the Company or any Subsidiary; (iii) the commission by the Participant of an act of fraud in the performance of his duties on behalf of the Company or any Subsidiary; (iv) the continuing willful failure of the Participant to perform his duties to the Company or any Subsidiary (other than any such failure resulting from the Participant’s incapacity due to physical or mental illness) after written notice thereof; or (v) an order of a federal or state regulatory agency or a court of competent jurisdiction requiring the termination of the Participant’s Service with the Company.
(f) “Change in Control” has the meaning ascribed to it in Section 4.2.
(g) “Code” means the Internal Revenue Code of 1986, as amended, and any rules, regulations and guidance promulgated thereunder, as modified from time to time.
(h) “Code Section 409A” means the provisions of Section 409A of the Code and any rules, regulations and guidance promulgated thereunder, as modified from time to time.
(i) “Committee” means the Committee acting under Article 5.
(j) [Intentionally blank]
(k) “Director” means a member of the Board of Directors of the Company or a Subsidiary.
(l)“Disability.” If the Participant is subject to a written employment agreement (or other similar written agreement) with the Company or a Subsidiary that provides a definition of “Disability” or “Disabled,” then, for purposes of this Plan, the terms “Disability” or “Disabled” shall have meaning set forth in such agreement. In the absence of such a definition, “Disability” shall be defined in accordance with the Bank’s long-term disability plan. To the extent that an Award hereunder is subject to Code Section 409A, “Disability” or “Disabled” shall mean that a Participant: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Employees. Except to the extent prohibited under Code Section 409A, if applicable, the Committee shall have discretion to determine if a termination due to Disability has occurred.
(m) “Disinterested Board Member” means a member of the Board who: (a) is not a current Employee of the Company or a Subsidiary, (b) does not receive remuneration from the Company or a Subsidiary, either directly or indirectly, for services rendered as a consultant or in any capacity other than as a Director, except in an amount for which disclosure would not be required pursuant to Item 404 of SEC Regulation S-K in accordance with the proxy solicitation rules of the SEC, as amended or any successor provision thereto, and (c) does not possess an interest in any other transaction, and is not engaged in a business relationship, for which disclosure would be required pursuant to Item 404(a) of SEC Regulation S-K under the proxy solicitation rules of the SEC, as amended or any successor provision thereto. The term Disinterested Board Member shall be interpreted in such manner as shall be necessary to conform to the requirements of a “Non-Employee Directors” under Rule 16b-3 promulgated under the Exchange Act and the corporate governance standards imposed on compensation committees under the listing requirements imposed by any national securities exchange on which the Company lists or seeks to list its securities.
(n)“Dividend Equivalent Rights” means the right, associated with a Restricted Stock Unit, to receive a payment, in cash or stock, as applicable, equal to the amount of dividends paid on a share of the Company’s Stock, as specified in the Award Agreement.
(o) “Employee” means any person employed by the Company or any Subsidiary. Directors who are also employed by the Company or a Subsidiary shall be considered Employees under the Plan.
(p)“Exchange” means any national securities exchange on which the Stock may from time to time be listed or traded.
(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
(r) “Excluded Transaction” means a plan of reorganization, merger, consolidation or similar transaction that would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving corporation or any parent thereof) at least 50% of the combined voting power of the Voting Securities of the entity surviving the plan of reorganization, merger, consolidation or similar transaction (or the parent of such surviving entity) immediately after such plan of reorganization, merger, consolidation or similar transaction.
(s) “Exercise Price” means the price established with respect to an option pursuant to Section 2.2.
(t)“Fair Market Value” on any date, means (i) if the Stock is listed on an Exchange, the closing sales price on such Exchange or over such system on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the Stock is not listed on a securities exchange, “Fair Market Value” shall mean a price determined by the Committee in good faith on the basis of objective criteria consistent with the requirements of Code Section 422 and applicable provisions of Section 409A.
(u) A termination of employment by an Employee Participant shall be deemed a termination of employment for “Good Reason” as a result of the Participant’s resignation from the employ of the Company or any Subsidiary upon the occurrence of any of the following events:
(i) a material diminution in Participant’s base salary or base compensation;
(ii) a material diminution in Participant’s authority, duties or responsibilities;
(iii) a change in the geographic location at which Participant must perform his duties that is more than thirty (30) miles from the location of Participant’s principal workplace on the date of this Agreement; or
(iv) in the event a Participant is a party to an employment or change in control agreement that provides a definition for “Good Reason” or a substantially similar term, then the occurrence of any event set forth in such definition.
(v)“Immediate Family Member” means with respect to any Participant: (a) any of the Participant’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouses, former spouses, siblings, nieces, nephews, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law or sisters-in-law, including relationships created by adoption; (b) any natural person sharing the Participant’s household (other than as a tenant or employee, directly or indirectly, of the Participant); (c) a trust in which any combination of the Participant and persons described in section (a) and (b) above own more than fifty percent (50%) of the beneficial interests; (d) a foundation in which any combination of the Participant and persons described in sections (a) and (b) above control management of the assets; or (e) any other corporation, partnership, limited liability company or other entity in which any combination of the Participant and persons described in sections (a) and (b) above control more than fifty percent (50%) of the voting interests.
(w) “Incumbent Directors” means:
(1) the individuals who, on the date hereof, constitute the Board; and
(2) any new Director whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended: (a) by the vote of at least two-thirds (2/3) of the Whole Board, with at least two-thirds of the Incumbent Directors then in office voting in favor of such approval or recommendation; or (b) by a Nominating Committee of the Board whose members were appointed by the vote of at least two-thirds (2/3) of the Whole Board, with at least two-thirds of the Incumbent Directors then in office voting in favor of such appointments
(x) “Involuntary Termination” means the Termination of Service by the Company or Subsidiary other than a termination for Cause, or termination of employment by an Employee Participant for Good Reason.
(y) “ISO” has the meaning ascribed to it in Section 2.1(a).
(z)“Non-Qualified Option” means the right to purchase shares of Stock that is either (i) granted to a Participant who is not an Employee, or (ii) granted to an Employee and either is not designated by the Committee to be an ISO or does not satisfy the requirements of Section 422 of the Code.
(aa) “Participant” means any individual who has received, and currently holds, an outstanding award under the Plan.
(bb)“Performance Award” means an Award that vests in whole or in part upon the achievement of one or more specified performance measures, as determined by the Committee. Regardless of whether an Award is subject to the attainment of one or more performance measures, the Committee may also condition the vesting thereof upon the continued Service of the Participant. The conditions for grant or vesting and the other provisions of a Performance Award (including without limitation any applicable performance measures) need not be the same with respect to each recipient.
A Performance Award shall vest, or as to Restricted Stock Units be settled, after the Committee has determined that the performance goals have been satisfied.
Performance measures can include, but are not limited to: book value or tangible book value per share; basic earnings per share (e.g., earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization; or earnings per share); basic cash earnings per share; diluted earnings per share; return on equity; net income or net income before taxes; net interest income; non-interest income; non-interest expense to average assets ratio; cash general and administrative expense to average assets ratio; efficiency ratio; cash efficiency ratio; financial return ratios; adjusted earnings, capital; increase in revenue; total shareholder return; net operating income, operating income; net interest margin or net interest rate spread; stock price; assets, growth in assets, loans or deposits, asset quality level, charge offs, loan reserves, non-performing assets, loans, deposits, growth of loans, loan production volume, non-performing loans, deposits or assets; regulatory compliance or safety and soundness; achievement of balance sheet or income statement objectives and strategic business objectives, or any combination of these or other measures.
Performance measures may be based on the performance of the Company as a whole or on any one or more Subsidiaries or business units of the Company or a Subsidiary and may be measured relative to a peer group, an index or a business plan and may be considered as absolute measures or changes in measures. The terms of an Award may provide that partial achievement of performance measures may result in partial payment or vesting of the award or that the achievement of the performance measures may be measured over more than one period or fiscal year. In establishing any performance measures, the Committee may provide for the exclusion of the effects of the following items, to the extent the exclusion is set forth in the Participant’s Award Agreement and identified in the audited financial statements of the Company, including footnotes, or in the Management’s Discussion and Analysis section of the Company’s annual report or in the Compensation Discussion and Analysis Section, if any, of the Company’s annual proxy statement: (i) extraordinary, unusual, and/or nonrecurring items of gain or loss; (ii) gains or losses on the disposition of a business; (iii) dividends declared on the Company’s stock; (iv) changes in tax or accounting principles, regulations or laws; or (v) expenses incurred in connection with a merger, branch acquisition or similar transaction. Subject to the preceding sentence, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or its Subsidiaries conducts its business or other events or circumstances render current performance measures to be unsuitable, the Committee may modify such performance measures, in whole or in part, as the Committee deems appropriate. Notwithstanding anything to the contrary herein, performance measures relating to any Award hereunder will be modified, to the extent applicable, to reflect a change in the outstanding shares of Stock of the Company by reason of any stock dividend or stock split, or a corporate transaction, such as a merger of the Company into another corporation, any separation of a corporation or any partial or complete liquidation by the Company or a Subsidiary. If a Participant is promoted, demoted or transferred to a different business unit during a performance period, the Committee may determine that the selected performance measures or applicable performance period are no longer appropriate, in which case, the Committee, in its sole discretion, may: (i) adjust, change or eliminate the performance measures or change the applicable performance period; or (ii) cause to be made a cash payment to the Participant in an amount determined by the Committee.
(cc)“Restricted Stock” or “Restricted Stock Award” has the meaning ascribed to it in Sections 2.1(b) and 2.3.
(dd)“Restricted Stock Unit” has the meaning ascribed to it in Sections 2.1(c) and 2.4.
(ee)“Restriction Period” has the meaning set forth in Section 2.4(b)(iii).
(ff) “Retirement” means termination of employment after attainment of age 65 (other than termination for Cause) with 5 years of continuous Service, or discontinuance of service as a Director following attainment of age 72 (unless otherwise provided in an Award Agreement). An Employee who is also a Director shall not be deemed to have terminated due to Retirement for purposes of vesting of Awards and exercise of Stock Options until both Service as an Employee and Service as a Director has ceased. A non-employee Director will be deemed to have terminated due to Retirement under the provisions of this Plan only if the non-employee Director has terminated Service on the Board(s) of
Directors of the Company and any Subsidiary or affiliate in accordance with applicable Company policy, following the provision of written notice to such Board(s) of Directors of the non-employee Director’s intention to retire.
(gg)“SEC” means the United States Securities and Exchange Commission.
(hh) “Securities Act” means the Securities Act of 1933, as amended from time to time.
(ii)“Service” means service as an Employee, consultant or non-employee Director of the Company or a Subsidiary, as the case may be, and shall include service as a director emeritus or advisory director. Service shall not be deemed interrupted in the case of sick leave, military leave or any other absence approved by the Company or a Subsidiary, in the case of transferees between payroll locations or between the Company, a Subsidiary or a successor.
(jj) “Stock” means the common stock of the Company, $0.01 par value per share.
(kk) “Stock Option” has the meaning ascribed to it in Sections 2.1(a) and 2.2.
(ll) “Subsidiary” means any corporation, affiliate, bank or other entity which would be a subsidiary corporation with respect to the Company as defined in Code Section 424(f) and, other than with respect to an ISO, shall also mean any partnership or joint venture in which the Company and/or other Subsidiary owns more than fifty percent (50%) of the capital or profits interests.
(mm) “Termination of Service” means the first day occurring on or after a grant date on which the Participant ceases to be an Employee or Director of, or service provider to, the Company or any Subsidiary, regardless of the reason for such cessation, subject to the following:
(1) The Participant’s cessation as an Employee or service provider shall not be deemed to occur by reason of the transfer of the Participant between the Company and a Subsidiary or between two Subsidiaries.
(2) The Participant’s cessation as an Employee or service provider shall not be deemed to occur by reason of the Participant’s being on a leave of absence from the Company or a Subsidiary approved by the Company or Subsidiary otherwise receiving the Participant’s Services provided such leave of absence does not exceed six months, or if longer, so long as the Employee retains a right to reemployment with the Company or Subsidiary under an applicable statute or by contract. For these purposes, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform Services for the Company or Subsidiary. If the period of leave exceeds six months and the Employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such six month period. For purposes of this sub-section, to the extent applicable, an Employee’s leave of absence shall be interpreted by the Committee in a manner consistent with Treasury Regulation Section 1.409A-1(h)(1).
(3) If, as a result of a sale or other transaction, the Subsidiary for whom Participant is employed (or to whom the Participant is providing services) ceases to be a Subsidiary, and the Participant is not, following the transaction, an Employee of or service provider to the Company or an entity that is then a Subsidiary, then the occurrence of such transaction shall be treated as the Participant’s Termination of Service caused by the Participant being discharged by the entity for whom the Participant is employed or to whom the Participant is providing Services.
(4) Except to the extent Section 409A of the Code may be applicable to an Award, and subject to the foregoing paragraphs of this sub-section, the Committee shall have discretion to determine if a Termination of Service has occurred and the date on which it occurred. In the event that any Award under the Plan constitutes Deferred Compensation (as defined in Section 2.6), the term Termination of Service shall be interpreted by the Committee in a manner consistent with the definition of “Separation from Service” as defined under Code Section 409A and under Treasury Regulation Section 1.409A-1(h)(ii). For purposes of this Plan, a “Separation from Service” shall have occurred if the Bank and Participant reasonably anticipate that no further Services will be performed by the Participant after the date of the Termination of Service (whether as an employee or as an independent contractor) or the level of further Services performed will be less than 50% of the average level of bona fide Services in the 36 months immediately preceding the Termination of Service. If a Participant is a “Specified Employee,” as defined in Code Section 409A and any payment to
be made hereunder shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be delayed and shall be paid on the first day of the seventh month following Participant’s Separation from Service.
(5) With respect to a Participant who is a director, a Termination of Service as a Director will not be deemed to have occurred if the Participant continues as a director emeritus or advisory director. With respect to a Participant who is both an Employee and a Director, termination of employment as an Employee shall not constitute a Termination of Service for purposes of the Plan so long as the Participant continues to provide Service as a Director or director emeritus or advisory director.
(nn) “Voting Securities” means any securities which ordinarily possess the power to vote in the election of directors without the happening of any pre-condition or contingency.
(oo) “Whole Board” means the total number of Directors that the Company would have if there were no vacancies on the Board at the time the relevant action or matter is presented to the Board for approval.
(pp)“Immediate Family Member” means with respect to any Participant: (a) any of the Participant’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouses, former spouses, siblings, nieces, nephews, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law or sisters-in-law, including relationships created by adoption; (b) any natural person sharing the Participant’s household (other than as a tenant or employee, directly or indirectly, of the Participant); (c) a trust in which any combination of the Participant and persons described in section (a) and (b) above own more than fifty percent (50%) of the beneficial interests; (d) a foundation in which any combination of the Participant and persons described in sections (a) and (b) above control management of the assets; or (e) any other corporation, partnership, limited liability company or other entity in which any combination of the Participant and persons described in sections (a) and (b) above control more than fifty percent (50%) of the voting interests.
Section 8.2 In this Plan, unless otherwise stated or the context otherwise requires, the following uses apply:
(a) Actions permitted under this Plan may be taken at any time and from time to time in the actor’s reasonable discretion;
(b) References to a statute shall refer to the statute and any successor statute, and to all regulations promulgated under or implementing the statute or its successor, as in effect at the relevant time;
(c) In computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”;
(d) References to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of the agency, authority or instrumentality;
(e) Indications of time of day mean New York time;
(f) The word “including” means “including, but not limited to”;
(g) All references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Plan unless otherwise specified;
(h) All words used in this Plan will be construed to be of such gender or number as the circumstances and context require;
(i) The captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Plan have been inserted solely for convenience of reference and shall not be considered a part of this Plan nor shall any of them affect the meaning or interpretation of this Plan or any of its provisions;
(j) Any reference to a document or set of documents in this Plan, and the rights and obligations of the parties under any such documents, shall mean such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof; and
(k) All accounting terms not specifically defined herein shall be construed in accordance with GAAP.
![0314ZB_zero_0314zb_zero_page_1.gif](https://files.docoh.com/DEF 14A/0000846617-19-000021/bdge20190503xdef14a003.gif)
| Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. Election of Directors: The election of four Directors to the Company’s Board of Directors, to hold office for a term of three years, and until their successors are elected and qualified. For Withhold For Withhold For Withhold 01 - Marcia Z. Hefter Class B (term expiring in 2022) 04 - Daniel Rubin Class B (term expiring in 2022) 02 - Emanuel Arturi Class B (term expiring in 2022) 03 - Rudolph J. Santoro Class B (term expiring in 2022) ForAgainst Abstain ForAgainst Abstain 2. An advisory (non-binding) vote to approve our executive compensation as described in the proxy statement. 3. The approval of the Bridge Bancorp, Inc. 2019 Equity Incentive Plan. 4. The ratification of the appointment of Crowe LLP as the Independent Registered Public Accounting Firm for the Company for the year ending December 31, 2019. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. + 1 U P X 0314ZB B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2 – 4. 2019 Annual Meeting Proxy Card
|
![0314ZB_zero_0314zb_zero_page_2.gif](https://files.docoh.com/DEF 14A/0000846617-19-000021/bdge20190503xdef14a004.gif)
| q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Notice of 2019 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — May 3, 2019 The undersigned shareholder of Bridge Bancorp, Inc. (the “Company”), hereby appoints the full Board of Directors, with full powers of substitution, as attorneys in fact and agents for and in the name of the undersigned, to vote such shares as the undersigned may be entitled to vote at the Annual Meeting of Shareholders of the Company to be held at the offices of the Company’s subsidiary, BNB Bank, 2200 Montauk Highway, Bridgehampton, New York 11932, on Friday, May 3, 2019 at 11:00 a.m. local time, and at any and all adjournments thereof. This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, an executed proxy will be voted “FOR” each of the nominees listed in Item 1, and “FOR” Items 2, 3 and 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) Bridge Bancorp, Inc.
|
![0314YB_zero_0314yb_zero_page_1.gif](https://files.docoh.com/DEF 14A/0000846617-19-000021/bdge20190503xdef14a005.gif)
| Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be received by 11:59 pm, EDT, on May 2, 2019 Online Go to www.investorvote.com/BDGE or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/BDGE Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. Election of Directors: The election of four Directors to the Company’s Board of Directors, to hold office for a term of three years, and until their successors are elected and qualified. For Withhold For Withhold For Withhold 01 - Marcia Z. Hefter Class B (term expiring in 2022) 04 - Daniel Rubin Class B (term expiring in 2022) 02 - Emanuel Arturi Class B (term expiring in 2022) 03 - Rudolph J. Santoro Class B (term expiring in 2022) ForAgainst Abstain ForAgainst Abstain 2. An advisory (non-binding) vote to approve our executive compensation as described in the proxy statement. 3. The approval of the Bridge Bancorp, Inc. 2019 Equity Incentive Plan. 4. The ratification of the appointment of Crowe LLP as the Independent Registered Public Accounting Firm for the Company for the year ending December 31, 2019. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. + 4 3 D V 0314YB B Authorized Signatures — This section must be completed for your vote to count. Please date and sign below. A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2 – 4. 2019 Annual Meeting Proxy Card
|
![0314YB_zero_0314yb_zero_page_2.gif](https://files.docoh.com/DEF 14A/0000846617-19-000021/bdge20190503xdef14a006.gif)
| q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + Notice of 2019 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — May 3, 2019 The undersigned shareholder of Bridge Bancorp, Inc. (the “Company”), hereby appoints the full Board of Directors, with full powers of substitution, as attorneys in fact and agents for and in the name of the undersigned, to vote such shares as the undersigned may be entitled to vote at the Annual Meeting of Shareholders of the Company to be held at the offices of the Company’s subsidiary, BNB Bank, 2200 Montauk Highway, Bridgehampton, New York 11932, on Friday, May 3, 2019 at 11:00 a.m. local time, and at any and all adjournments thereof. This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, an executed proxy will be voted “FOR” each of the nominees listed in Item 1, and “FOR” Items 2, 3 and 4. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting. + C Non-Voting Items Bridge Bancorp, Inc. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/BDGE
|
|