The Company currently has one active stock incentive plan: The Enterprise Bancorp, Inc. 2016 Stock Incentive Plan, as amended.

The Company's stock-based compensation expense related to these plans includes stock options and stock awards to officers and other employees included in salary and benefits expense, and stock awards and stock compensation in lieu of cash fees to non-employee directors both included in other operating expenses.

Total stock-based compensation expense was $2.3 million for each of the years ended December 31, 2024, 2023 and 2022. The total tax benefit recognized related to the stock-based compensation expense was $649 thousand, $637 thousand, and $651 thousand for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company recorded a tax expense associated with employee exercises and vesting of stock compensation amounting to $60 thousand for the year ended December 31, 2024 compared to a tax benefit of $108 thousand and $147 thousand for the years ended December 31, 2023, and 2022, respectively.

Stock options granted generally vest 50% in year two and 50% in year four, on or about the anniversary date of the awards. Under the terms of the plans, stock options may not be granted at less than 100% of the fair market value of the shares on the date of grant and may not have a term of more than 10 years.

The Company utilizes the Black-Scholes option valuation model in order to determine the per share grant date fair value of stock option grants.

The expected volatility is the anticipated variability in the Company's share price over the expected life of the stock option and is based on the Company's historical volatility.

The expected dividend yield is the Company's projected dividends based on historical annualized dividend yield to coincide with volatility divided by its share price at the date of grant.

The expected life represents the period of time that the stock option is expected to be outstanding. The Company utilized the simplified method, under which the expected term equals the vesting term plus the contractual term divided by two.

The risk-free interest rate is based on the U.S. Department of the Treasury rate in effect at the time of grant for a period equivalent to the expected life of the stock option.


(Dollars in thousands, except per share data)	Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Life in Years	Aggregate Intrinsic Value
Outstanding December 31, 2023	162,539	$	28.07	4.2	$	824
Granted	—	—
Exercised	36,094	22.65
Forfeited/Expired	632	35.81
Outstanding December 31, 2024	125,813	$	29.58	3.9	$	1,253

Vested and Exercisable at December 31, 2024	112,802	$	28.89	3.6	$	1,201

The intrinsic value of stock options vested and exercisable represents the total pretax value that would have been received by the stock option holders had all in-the-money vested stock option holders exercised their options on December 31, 2024. At December 31, 2024, 112,802 of the vested and exercisable stock options were in-the money.

Cash received from stock option exercises amounted to $363 thousand, $180 thousand, and $118 thousand during the years ended December 31, 2024, 2023 and 2022, respectively. The total intrinsic value of stock options exercised amounted to $337 thousand, $563 thousand and $93 thousand during the years ended December 31, 2024, 2023 and 2022, respectively. Cash paid

by the Company for the net settlement of stock options to cover employee tax obligations amounted to $62 thousand, $153 thousand and $8 thousand during the years ended December 31, 2024, 2023 and 2022, respectively.


Unvested Options	Options	Weighted Average Grant Date Fair Value
Unvested December 31, 2023	36,378	$	11.94
Granted	—	—
Vested	22,735	11.21
Forfeited	632	35.81
Unvested December 31, 2024	13,011	$	13.15

The total fair value of stock options vested (based on grant date fair value) during the years ended December 31, 2024, 2023 and 2022 was $255 thousand, $204 thousand, and $186 thousand, respectively.

Compensation expense recognized in association with the stock option awards amounted to $130 thousand, $175 thousand and $206 thousand for the years ended December 31, 2024, 2023 and 2022, respectively. The total tax benefit recognized related to the stock option expense was $36 thousand, $49 thousand and $58 thousand for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, there was $64 thousand of unrecognized stock-based compensation expense related to non-vested stock options. That cost is expected to be recognized over the remaining weighted average vesting period of 1.1 years.

Restricted stock awards are granted at the market price of the Company's common stock on the date of the grant. Employee restricted stock awards generally vest over four years in equal portions beginning on or about the first anniversary date of the restricted stock award or are performance based restricted stock awards that vest upon the Company achieving certain predefined performance objectives. Non-employee director restricted stock awards generally vest over two years in equal portions beginning on or about the first anniversary date of the restricted stock award.


Restricted Stock Awards (number of underlying shares)	2024		2023		2022
Two-year vesting	17,122		9,915		8,823
Four-year vesting	78,582		32,719		22,147
Performance-based vesting	26,338		31,270		22,254
Total restricted stock awards	122,042		73,904		53,224

Weighted average grant date fair value	$	24.68	$	32.04	$	38.57

The restricted stock awards allow for the non-forfeitable receipt of dividends, and the voting of all shares, whether or not vested, throughout the vesting periods at the same proportional level as common shares outstanding.

Upon vesting, restricted stock awards may be net settled to cover payment for employee tax obligations, resulting in shares of common stock being reacquired by the Company. During the years ended December 31, 2024, 2023 and 2022 the Company paid $347 thousand, $294 thousand and $425 thousand, respectively, to net settle the vesting of restricted stock awards to cover employee tax obligations.

Any shares that are returned to the Company prior to vesting or as payment for employee tax obligations upon vesting shall remain available for issuance under such plan, while the plan is still effective.


	Restricted Stock	Weighted Average Grant Price Per Share
Unvested December 31, 2023	130,039	$	33.75
Granted	122,042	24.68
Vested/released	58,542	33.67
Forfeited	16,968	28.21
Unvested December 31, 2024	176,571	$	28.04

Stock-based compensation expense recognized in association with the restricted stock awards amounted to $2.0 million for the year ended December 31, 2024 and $1.9 million for both of the years ended December 31, 2023 and 2022. The total tax benefit recognized related to restricted stock award compensation expense was $559 thousand, $527 thousand and $522 thousand for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, there remained $3.1 million of unrecognized compensation expense related to the restricted stock awards. That cost is expected to be recognized over the remaining weighted average vesting period of 2.3 years.

The total fair value of restricted stock awards vested (based on grant date fair value) during the years ended December 31, 2024, 2023 and 2022 was $2.0 million, $1.6 million and $1.8 million, respectively.

In addition to the restricted stock awards discussed above, non-employee members of the Company's Board may opt to receive newly issued shares of the Company's common in stock in lieu of cash compensation for attendance at Board and Board Committee meetings. These shares are valued based on the Company's average quarterly close price and are issued in January of the following year.

Stock in lieu of directors' fees expense was $190 thousand for the year ended December 31, 2024, which represented 6,515 shares issued in January of 2025, $218 thousand for the year ended December 31, 2023, which represented 7,224 shares issued in January of 2024, and $254 thousand for the year ended December 31, 2022, which represented 7,265 shares issued in January of 2023. The total tax benefit recognized related to the stock in lieu of directors' fees for meeting attendance was $54 thousand, $61 thousand and $71 thousand for the years ended December 31, 2024, 2023 and 2022, respectively.