PATRIOT NATIONAL BANCORP INCPNBK
PATRIOT NATIONAL BANCORP INC Stock Compensation Disclosure
Share-based Compensation
On November 10, 2022, the Board of Directors approved the Amended and Restated 2020 Plan (the “Amended and Restated 2020 Plan”), which was approved and ratified by shareholders of the Company on December 14, 2022. The Amended and Restated 2020 Plan terminated on December 31, 2025. Additional information regarding the Amended and Restated 2020 Plan’s background and original terms is included in Note 15 to the consolidated financial statements in the Company’s Form 10-K for the year ended December 31, 2024. In March 2025, the Company’s Board of Directors approved the 2025 Omnibus Equity Incentive Plan (the “2025 Plan”). The shareholders of the Company ratified the 2025 Plan on June 26, 2025. Details of the 2025 Plan are as described below.
2025 Omnibus Equity Incentive Plan
In connection with the Private Placement, the Company’s Board of Directors has approved the 2025 Plan in March 2025. The 2025 Plan received shareholder approval at the shareholders' meeting on June 26, 2025, and became effective on that date. The 2025 Plan is designed to provide the Company with a competitive advantage in attracting, retaining, and motivating officers,
employees, directors, and consultants by offering incentives directly linked to shareholder value. The Compensation Committee of the Board will administer the Plan.
Under the 2025 Plan, various types of awards can be issued, including Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units (RSUs), Performance Units, and Other Stock-Based Awards, as defined within the 2025 Plan. The maximum number of shares of Common Stock, Options, and/or Stock Appreciation Rights that may be granted under the 2025 Plan is capped at twenty percent (20%) of the total outstanding shares of Common Stock, including both voting and non-voting shares, with a minimum threshold of 10,000,000 shares.
Below table summarizes the Company’s share-based compensation activity for the three-year period ended December 31, 2025.
| Amended and Restated 2020 Plan | 2025 Plan | ||||||||||||||||||||||
| Number of Shares | Weighted average grant date fair value | Number of Shares | Weighted average grant date fair value | ||||||||||||||||||||
| Unvested at December 31, 2022 | 22,660 | $7.11 | |||||||||||||||||||||
| Granted | 5,733 | $8.76 | |||||||||||||||||||||
| Vested | (10,887) | $9.63 | |||||||||||||||||||||
| Unvested at December 31, 2023 | 17,506 | $6.09 | |||||||||||||||||||||
| Granted | 144,458 | $2.98 | |||||||||||||||||||||
| Vested | (15,779) | $7.46 | |||||||||||||||||||||
| Forfeited | 0 | $— | |||||||||||||||||||||
| Unvested at December 31, 2024 | 146,185 | $2.87 | — | $— | |||||||||||||||||||
| Granted | 0 | $— | 11,678,361 | $1.13 | |||||||||||||||||||
| Vested | (10,758) | $6.22 | 3,633,749 | $1.06 | |||||||||||||||||||
| Forfeited | (127,298) | $3.09 | — | $— | |||||||||||||||||||
| Unvested at December 31, 2025 | 8,129 | $4.37 | 8,044,611 | $1.16 | |||||||||||||||||||
Awards granted under the 2025 Plan are in the form of Restricted Stock Units (RSUs). The share amounts presented in the table above reflect the number of RSUs granted and vested, where vested amounts represent RSUs for which the vesting conditions were satisfied during the period; no RSUs granted under the 2025 Plan settled into shares of Common Stock during the year ended December 31, 2025.
The Company recognizes share based compensation expense on a straight-line basis over 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, 2025, 2024, and 2023, the Company recognized total share-based compensation expense of $5.2 million, $184 thousand, and $105 thousand, respectively.
The share-based compensation expense attributable to the Company’s Directors totaled $516 thousand, $48 thousand, and $49 thousand for the years ended December 31, 2025, 2024, and 2023, respectively. For each of those years, the Directors received total compensation of $1.6 million, $214 thousand, and $259 thousand, respectively, and these amounts are included in Other Operating Expenses in the Consolidated Statements of Operations.
For the years ended December 31, 2025, 2024, and 2023, share-based compensation expense attributable to employees of Patriot was $4.7 million, $136 thousand, and $56 thousand, respectively.
Unrecognized compensation expense attributable to the unvested restricted shares outstanding as of December 31, 2025 amounted to $8.1 million, which amount is expected to be recognized over the weighted average remaining life of the awards of 1.8 years.
Stock Options
On June 26, 2025, the Company granted stock options to purchase 400,000 shares of Common Stock at an exercise price of $1.40 per share. The options vest and become exercisable starting on the grant date, subject to the terms and conditions outlined in the 2025 Plan and award agreement, including any applicable acceleration provisions.
The total estimated compensation expense related to these stock options for the year ended December 31, 2025 was $44 thousand. The expense is recorded in employee compensation costs on the Consolidated Statements of Operations.
The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation—Stock Compensation." The fair value of the stock options granted is estimated on the grant date using an appropriate valuation model, such as the Black-Scholes model, and is recognized as an expense over the vesting period. Key assumptions used in estimating the fair value of the options include the expected volatility of the Company's stock, the risk-free interest rate, the expected dividend yield, and the expected term of the options. These assumptions are based on historical data and market conditions at the time of the grant.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 29, 2023 | |
| 2021 | Mar 24, 2022 | |
| 2020 | Mar 30, 2021 | |
| 2019 | Apr 29, 2020 | |
| 2018 | Apr 1, 2019 | |
| 2017 | Mar 30, 2018 | |
| 2016 | Mar 31, 2017 | |
| 2015 | Mar 31, 2016 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.