Bridgewater Bancshares, Inc. Annual Report

Bridgewater Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements (dollars in thousands, except share data)

As of December 31, 2019, there was $2,738 of total unrecognized compensation cost related to nonvested stock options granted under the 2017 Plan, 2012 Plan and 2019 EIP that is expected to be recognized over a weighted-average period of 4.9 years. The following presents an analysis of nonvested options to purchase shares of the Company’s stock issued and outstanding for the year ended December 31, 2019:

Weighted Number of Average Grant Shares Date Fair Value

Nonvested Options at December 31, 2018 . . . . . . . . . . . . . . . . . . . . 1,086,000 $ Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238,000 Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (346,200) Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,200) Nonvested Options at December 31, 2019 . . . . . . . . . . . . . . . . . . . . 969,600 $

2.78 3.46 2.41 3.40 3.08

Restricted Stock Awards In 2019, the Company granted 132,960 restricted stock awards with a grant date fair value of $12.92. These awards were granted out of the 2019 EIP and vest in equal annual installments on the first four anniversaries of the date of the grant. Nonvested restricted stock awards are classified as outstanding shares with voting and forefeitable dividend rights. Compensation expense associated with the restricted stock awards is recognized on a straight-line basis over the period that the restrictions associated with the awards lapse based on the total cost of the award at the grant date. For the year ended December 31, 2019, the Company recognized compensation expense for restricted stock awards of $31. No compensation expense was recognized for restricted stock awards for the years ended December 31, 2018 and 2017. As of December 31, 2019, there was $1,687 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the 2019 EIP that is expected to be recognized over a period of four years. No restricted stock awards vested during 2019. Note 18: Profit Sharing Plan The Company has a combined profit sharing 401(k) plan which provides that an annual contribution, up to 100% of each participating employee’s total pay, may be contributed to the plan. Employees are eligible to participate after meeting certain eligibility requirements as defined in the plan and are allowed to make pre-tax contributions up to the maximum amount allowed by the Internal Revenue Service. The terms of the 401(k) plan require employer match contributions equal to 100% of the employee contributions up to 4% of pay. In addition, the terms of the plan allow for discretionary contributions as determined by the Company and approved by the Board of Directors. The employer match contributions for the 401(k) plan were $603, $483, and $304 for the years ended December 31, 2019, 2018 and 2017, respectively. The total employer profit sharing contributions to the plan were $473, $328, and $250 for the years ended December 31, 2019, 2018 and 2017, respectively. Note 19: Deferred Compensation Plan In 2013, the Company implemented a deferred compensation plan for certain employees which allows the Company to make a discretionary contribution to the account of any employee designated as a participant in the plan based upon the participant’s performance for the calendar year. Company contributions to the plan vest on the fourth anniversary

114