Share-based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

In 2011, the Company adopted the Patriot National Bancorp, Inc. 2012 Stock Plan (the “2012 Plan”). The 2012 Plan was amended in 2020 and renamed as the Patriot National Bancorp, Inc. 2020 Restricted Stock Award Plan (the “2020 Plan”). A copy of the 2020 Plan was filed as Exhibit 10.1 to the Company’s Amendment No. 1 to Annual Report on Form 10-K/A for the year ended December 31, 2020 filed on April 30, 2021. The 2020 Plan provides an incentive to directors and employees of the Company by the grant of restricted stock awards (“RSA”).

On November 10, 2022, the Board of Directors approved the Amendment and Restatement of the 2020 Plan (the “Amended and Restated 2020 Plan”), which was approved and ratified by shareholders of the Company on December 14, 2022.

The 2020 Plan was amended primarily to (i) reduce the total number of shares authorized for issuance thereunder from 3,000,000 shares to 400,000 shares; and (ii) limit the maximum number of shares of Company’s Common Stock granted during a single fiscal year to any non-employee director, together with any cash fees paid to such director, to be no more than a total value of $300,000. As of December 31, 2022, 224,731 shares of stock are available for issuance under the Plan. In accordance with the terms of the Plan, the vesting of RSAs may be accelerated at the discretion of the Compensation Committee of the Board of Directors. The Compensation Committee sets the terms and conditions applicable to the vesting of RSAs. RSAs granted to directors and employees generally vest in quarterly or annual installments over a three, four or five year period from the date of grant.

The following is a summary of the status of the Company’s restricted share awards as of and for each of the years in the three-year period ended December 31, 2022.


	Number of Shares Awarded	Weighted Average Grant Date Fair Value
Unvested at December 31, 2019	21,470	$	12.91
Granted	12,484	$	6.12
Vested	(12,903)	$	13.82
Forfeited	(2,553)	$	15.86
Unvested at December 31, 2020	18,498	$	7.29
Granted	20,476	$	10.48
Vested	(12,920)	$	12.95
Forfeited	(4,586)	$	9.39
Unvested at December 31, 2021	21,468	$	6.48
Granted	9,886	$	11.94
Vested	(8,694)	$	11.05
Unvested at December 31, 2022	22,660	$	7.11

The Company recognizes compensation expense for all director and employee share-based compensation awards on a straight-line basis over the requisite service period, which is equal to the vesting schedule of each award, for each vesting portion of an award equal to its grant date fair value. For the years ended December 31, 2022, 2021 and 2020, the Company recognized share-based compensation expense of $86,000, $150,000, and $159,000, respectively.

For the years ended December 31, 2022, 2021 and 2020, share-based compensation attributable to employees of Patriot amounted to $32,000, $90,000, and $80,000, respectively.

The share-based compensation expense attributable to Patriot’s external Directors for the years ended December 31, 2022, 2021, and 2020 was $54,000, $60,000, and $79,000, respectively. For each of those years, the Directors received total compensation of $248,000, $325,000, and $429,000, respectively, which amounts are included in Other Operating Expenses in the consolidated statements of operations.

Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of December 31, 2022 amounted to $236,000, which amount is expected to be recognized over the weighted average remaining life of the awards of 2.78 years.