Postretirement benefits are provided for part of the annual expense of health insurance premiums for certain retired employees and their dependents. No contributions are made by the Company to invest in assets allocated for the purpose of funding this benefit obligation. The following table presents the change in plan assets and change in benefit obligation:



	Year Ended December 31,
	2019			2018			2017
	(In Thousands)
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—		$	—
Employer contributions	32			31			19
Benefits paid	(32		)	(31		)	(19		)
Fair value of plan assets at end of year	$	—		$	—		$	—
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,490		$	1,534		$	1,135
Service cost	54			70			49
Interest cost	60			59			43
Estimated benefits paid	(32		)	(31		)	(19		)
Actuarial loss (gain)	185			(142		)	326
Benefit obligation at end of year	$	1,757		$	1,490		$	1,534
Funded status at end of year	$	1,757		$	1,490		$	1,534
Accumulated benefit obligation at end of year	$	1,757		$	1,490		$	1,534

The following table presents the components of net periodic postretirement benefit cost and other amounts recognized in other comprehensive income:



	Year Ended December 31,
	2019			2018			2017
	(In Thousands)
Net periodic benefit expense:
Service cost	$	54		$	70		$	49
Interest cost	60			59			43
Prior service credit	(21		)	(21		)	(21		)
Actuarial gain	(27		)	—			(47		)
Net periodic benefit expense	$	66		$	108		$	24
Changes in postretirement benefit obligation recognized in other comprehensive income:
Net actuarial (loss) gain	(206		)	$	142		$	(401	)
Prior service credit	(21		)	(21		)	(21		)
Total pre-tax changes in postretirement benefit obligation recognized in other comprehensive income	$	(227	)	$	121		$	(422	)

The discount rate used to determine the actuarial present value of projected postretirement benefit obligations was 3.19% in 2019, 4.22% in 2018 and 3.62% in 2017. The estimated prior service credit that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2020 is $100 thousand.

The actual health care trend used to measure the accumulated postretirement benefit obligation in 2019 for plan participants below age 65 and for plan participants over age 65 was 13.3% and 1.2%, respectively. In 2018, the rate for plan participants below age 65 and for plan participants over age 65 was 3.1% and 2.4%, respectively. The health care trend rates for 2018 and 2019 are based on actual changes in medical premium rates for those years. The rates to be used in 2020 through 2024 are expected to be in the range of 5.9% to 5.1% and to decline gradually thereafter to 4.5%. Assumed health care trend rates may have a significant effect on the amounts reported for the postretirement benefit plan. A 1% change in assumed health care cost trend rates would have the following effects:



	Year Ended December 31, 2019
	1% Increase		1% Decrease
	(In Thousands)
Effect on total service and interest cost components of net periodic postretirement benefit costs	$	25	$	(20	)
Effect on the accumulated postretirement benefit obligation	365		(289		)

The Company administers one 401(k) plan, which is a qualified, tax-exempt profit-sharing plan with a salary deferral feature under Section 401(k) of the Internal Revenue Code. Each employee, excluding temporary employees, who has attained the age of 21 is eligible to participate in the 401(k) plan by making voluntary contributions, subject to certain limits based on federal tax laws. The Company makes a matching contribution of the amount contributed by eligible employees, up to 5% of the employee's yearly compensation. Expenses associated with the plans were $3.1 million in 2019, $3.2 million in 2018, and $2.6 million in 2017.

The Company also maintains a Nonqualified Deferred Compensation Plan (the "Nonqualified Plan") under which certain participants may contribute the amounts they are precluded from contributing to the Company's 401(k) plan because of the qualified plan limitations, and additional compensation deferrals that may be advantageous for personal income tax or other planning reasons. Expenses associated with the Nonqualified Plan in 2019, 2018 and 2017 were $236.2 thousand, $181.1 thousand, and $128.5 thousand, respectively. Accrued liabilities associated with the Nonqualified Plan in 2019, 2018, and 2017 were $5.5 thousand, $5.5 thousand, and $80.2 thousand, respectively.

The Company acquired two Supplemental Executive Retirement Plans (the "SERPs") as part of its acquisition of BankRI. The Company maintains the SERPs for certain senior executives who are entitled to an annual retirement benefit. As of December 31, 2019, there were 13 participants in the SERPs. The Company funded a Rabbi Trust to provide a partial funding source for the Company's liabilities under the SERPs. In 2016, a portion of the Company's BOLI assets were transferred into the Rabbi Trust as a replacement for the funds previously held in the Rabbi Trust. The Company records the liability for the SERPs based on an actuarial calculation in accordance with GAAP, and no actuarial gains and losses are recognized.

Total expenses for benefits payable under the SERPs for the years ended December 31, 2019, and 2018 were $1.1 million and $0.5 million, respectively. Aggregate benefits payable included in accrued expenses and other liabilities as of December 31, 2019 and 2018 were $12.8 million and $12.1 million, respectively.

Brookline Bank established an Employee Stock Ownership Plan ("ESOP") on November 1, 1997. The Company's ESOP loan to Brookline Bank to purchase 546,986 shares of Company common stock is payable in quarterly installments over 30 years, bears interest at 8.50% per annum, matures December 31, 2021, and can be prepaid without penalty. The loan is repaid to the Company in the form of cash contributions from Brookline Bank, subject to federal tax law limits. The outstanding balance of the loan as of December 31, 2019 and 2018, was $0.8 million and $1.0 million, respectively, and is eliminated in consolidation.

Shares of common stock used as collateral to secure the loan are released and available for allocation to eligible employees as the principal and interest on the loan is paid. The ESOP was amended in 2015 to permit all eligible participants in the ESOP as of July 1, 2015 or any eligible participants after July 1, 2015 to be fully vested in the ESOP upon the date of eligibility.

Dividends on released shares are credited to the participants' ESOP accounts. Dividends on unallocated shares of common stock are generally applied towards payment of the loan. ESOP shares committed to be released are considered outstanding in determining earnings per share.

As of December 31, 2019 and 2018, the ESOP held 79,548 and 109,950 unallocated shares, respectively at an aggregate cost of $0.4 million and $0.6 million, respectively. The market value of such shares as of December 31, 2019 and 2018 was $1.3 million and $1.5 million, respectively. Compensation and employee benefits expense related to the ESOP was $0.5 million in 2019, $0.5 million in 2018 and $0.5 million in 2017, based on the commitment to release to eligible employees 30,402 shares in 2019, 32,382 shares in 2018 and 34,356 shares in 2017.

Under the Brookline Bancorp, Inc. 2014 Equity Incentive Plan (the “2014 Plan”), approved by stockholders on May 7, 2014, the Company may award stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards, dividend equivalent rights and cash-based awards to officers, employees, non-employee directors and consultants of the Company. The maximum number of shares that may be issued under the 2014 Plan is 1,750,000.

Under the Brookline Bancorp, Inc. 2011 Restricted Stock Plan (the “2011 Plan”), approved by stockholders on April 20, 2011, the Company may grant shares of restricted stock to employees and directors. The maximum number of shares that may be issued under the 2011 Plan is 500,000.

Of the awarded shares, generally 50% vest ratably over three years with one-third of such shares vesting at each of the first, second and third anniversary dates of the awards. The remaining 50% of each award has a cliff vesting schedule and vest three years after the award date based on the level of the Company's achievement of identified performance targets in comparison to the level of achievement of such identified performance targets by a defined peer group comprised of 17 financial institutions. The specific performance measure targets are approved by annually by the Compensation Committee and are discussed in the Company's Proxy Statement. If a grantee leaves the Company prior to the third anniversary date of an award, any unvested shares are forfeited. Dividends declared with respect to shares awarded will be held by the Company and paid to the grantee only when the shares vest.

Shares issued upon vesting may be either authorized but unissued shares or reacquired shares held by the Company as treasury shares. Any shares not issued because vesting requirements are not met will be retired back to treasury and be made available again for issuance under the Plans.

Total expense for the 2014 Plan and the 2011 Plan was $2.4 million in 2019, $2.5 million in 2018 and $2.3 million in 2017, respectively. Total income tax benefits on vested awards was $0.1 million in 2019, $1.2 million in 2018, and $0.7 million in 2017. Dividends paid on unvested awards under the 2014 Plan and the 2011 Plan, which are recognized as compensation expense, were $0.1 million in 2019, $0.2 million in 2018, and $0.1 million in 2017.

The following table presents information about the Company's restricted stock awards as of and for the year ending December 31, 2019:



	Restricted Stock Awards Outstanding		Weighted Average Price per Share
	(Dollars in Thousands, Except Per Share Amounts)
Restricted Stock Awards:
Outstanding at December 31, 2018	390,635		$	15.21
Granted	212,461		14.25
Vested	(175,160	)	14.46
Forfeited / Canceled	(21,486	)	11.78
Outstanding at December 31, 2019	406,450		$	15.21
Unrecognized compensation cost					$	3,964
Weighted average remaining recognition period (months)					24

Shares issued upon the exercise of a stock option may be either authorized but unissued shares or reacquired shares held by the Company as treasury shares. Any shares subject to an award which expire or are terminated unexercised will again be available for issuance under the plans.

The exercise price of options awarded is the fair market value of the common stock of the Company on the date the award is made. Certain of the options include a reload feature whereby an optionee exercising an option by delivery of shares of common stock would automatically be granted an additional option at the fair market value of stock when such additional option is granted equal to the number of shares so delivered. If an individual to whom a stock option was granted ceases to maintain continuous service by reason of normal retirement, death or disability, or following a change in control, all options and rights granted and not fully exercisable become exercisable in full upon the happening of such an event and shall remain exercisable for a period ranging from 3 months to 5 years.

No options were granted in 2019, 2018, or 2017. There was no expense for the stock option plans in 2019, 2018, and 2017. The following table presents a summary of the status of the Company's stock options outstanding as of and for the year ending December 31, 2019:



	Options Outstanding	Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value		Weighted Average Contractual Term (In Years)
	(Dollars in Thousands, Except Per Share Amounts)
Employee Stock Options⁽¹⁾:
Outstanding at December 31, 2018	5,000	$	9.90
Granted	—	—
Exercised	—	—
Forfeited / Canceled	—	—
Outstanding at December 31, 2019	5,000	$	9.90	$	33	0.8
Exercisable at December 31, 2019	5,000	$	9.90	$	33	0.8

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