6.	ACCOUNTING FOR STOCK BASED COMPENSATION

During the three-month periods ended March 31, 2017 and 2016, the Company maintained the Dime Community Bancshares, Inc. 2001 Stock Option Plan for Outside Directors, Officers and Employees, the 2004 Stock Incentive Plan and the 2013 Equity and Incentive Plan (“2013 Equity Plan”) (collectively, the "Stock Plans"), which are discussed more fully in Note 15 to the Company's audited consolidated financial statements for the year ended December 31, 2016, and which are subject to the accounting requirements of ASC 505-50 and ASC 718.

Stock Option Awards

The following table presents a summary of activity related to stock options granted under the Stock Plans, and changes during the three-month period then ended:

	Number of Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Years		Aggregate Intrinsic Value
Options outstanding at January 1, 2017		209,254		$	15.48
Options granted		-			-
Options exercised		(42,062	)		14.87
Options outstanding at March 31, 2017		167,192		$	15.64		2.3	$	779
Options vested and exercisable at March 31, 2017		167,192		$	15.64		2.3	$	779

Information related to stock options during each period is as follows:

	At or for the Three Months Ended March 31,
	2017		2016
Cash received for option exercise cost	$	624	$	-
Income tax benefit recognized on stock option exercises⁽¹⁾		69		-
Intrinsic value of options exercised		275		-

⁽¹⁾	Effective January 1, 2017, income tax benefits were recognized as discrete items in income tax expense in accordance to ASU 2016-09. Prior to January, 1, 2017, income tax benefits were recognized through additional paid in capital.

There were no grants of stock options during the three-month periods ended March 31, 2017 or 2016. All stock options are fully vested as of March 31, 2017 and 2016.

Restricted Stock Awards

The Company has made restricted stock award grants to outside Directors and certain officers under the 2004 Stock Incentive Plan or 2013 Equity and Incentive Plan. Typically, awards to outside Directors fully vest on the first anniversary of the grant date, while awards to officers vest in equal annual installments over a four-year period.

The following table presents a summary of activity related to the restricted stock awards granted, and changes during the three-month period then ended:

	Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested allocated shares outstanding at January 1, 2017		152,409		$	16.56
Shares granted		17,316			20.50
Shares vested		(1,840	)		18.11
Shares forfeited		(13,591	)		16.84
Unvested allocated shares at March 31, 2017		154,294		$	16.96

All awards were made at the fair value of the Holding Company’s common stock (i.e., the closing price on the NASDAQ market as of the close of business) on the award date. Compensation expense is based upon the fair value of the shares on the respective dates of the grant.

Information related to restricted stock awards during each period is as follows:

	At or for the Three Months Ended March 31,
	2017		2016
Compensation expense recognized	$	297	$	438
Income tax benefit recognized on vesting of restricted stock awards⁽¹⁾		2		-

⁽¹⁾	Effective January 1, 2017, income tax benefits were recognized as discrete items in income tax expense in accordance to ASU 2016-09. Prior to January, 1, 2017, income tax benefits were recognized through additional paid in capital.

As of March 31, 2017, unrecognized compensation cost relating to unvested restricted shares totaled $1,389. This amount will be recognized over a remaining weighted average period of 1.6 years.

Performance Based Equity Awards

The Company established the LTIP, a long term incentive award program for certain officers, that meets the criteria for equity-based accounting. For each award, threshold (50% of target), target (100% of target) and maximum (150% of target) opportunities are eligible to be earned over a three-year performance period based on the Company's relative performance on certain goals that were established at the onset of the performance period and cannot be altered subsequently. Shares of the Holding Company’s common stock are issued on the grant date and held as unvested stock awards until the end of the performance period. They are issued at the maximum opportunity in order to ensure that an adequate number of shares are allocated for shares expected to vest at the end of the performance period.

The following table presents a summary of activity related to performance based equity awards, and changes during the three-month period then ended:

	Number of Shares			Weighted- Average Grant- Date Fair Value
Maximum aggregate share payout at January 1, 2017		24,730		$	17.35
Shares granted		71,976			19.75
Shares forfeited		(4,268	)		17.35
Maximum aggregate share payout at March 31, 2017		92,438		$	19.22
Minimum aggregate share payout		-			-
Likely aggregate share payout		79,657		$	19.52

Compensation expense recorded for performance based equity awards was $97 and $27 for the three-month periods ended March 31, 2017 and 2016, respectively.