XML 56 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
Share-Based Compensation
 9 Months Ended
Sep. 30, 2012
Share-Based Compensation [Abstract]  
Share-Based Compensation

Note 5: Share-Based Compensation

The Company maintains the Patriot National Bancorp, Inc. 2012 Stock Plan to provide an incentive by the grant of options, restricted stock awards or phantom stock units to directors and employees of the Company. The Plan provides for the issuance of up to 3,000,000 shares of the Company’s common stock subject to certain Plan limitations. 2,045,654 shares of stock remain available for issuance under the Plan as of September 30, 2012. The vesting of options and restricted stock awards may accelerate in accordance with terms of the plan. The Compensation Committee shall make terms and conditions applicable to the vesting of restricted stock awards and stock options. Restricted stock grants vest in quarterly installments over a four year period from the date of grant. The Compensation Committee accelerated the vesting of the initial grant of restricted stock, whereby the first year of the tranche vested immediately. During the third quarter, four Bank directors retired and the Compensation Committee voted to fully vest their remaining shares of restricted stock immediately which resulted in compensation expense of approximately $43,000. Stock options were granted at an exercise price equal to $2.20 based on a price determined by the Compensation Committee and all have an expiration period of 10 years. The fair value of stock options granted on January 24, 2012, was estimated utilizing the Black-Scholes option pricing model using the following assumptions: an expected life of 6.28 years utilizing the simplified method, risk-free rate of return of 1.28%, volatility of 61.29% and no dividend yield. The Company is expensing the grant date fair value of all share-based compensation over the requisite vesting periods on a straight-line basis.

During the three and nine months ended September 30, 2012, the Company recorded $103,010 and $236,138 of total stock-based compensation, respectively.

 

The following table is a summary of the Company’s non-vested stock options as of September 30, 2012, and changes therein during the period then ended:

 

                                 
    Number of
Stock Options		     Weighted
Average Grant
Date Fair Value		     Weighted
Average
Exercise
Price		     Weighted
Average
Contractual
Life (years)		  

Outstanding - December 31, 2011

     —       $ —       $ —         —    

Granted

     850,000       0.90       2.20       10  

Exercised

     —         —         —         —    
   

 

 

                          

Outstanding - September 30, 2012

     850,000     $ 0.90     $ 2.20       10  
   

 

 

                          

Exercisable - September 30, 2012

     —       $ —       $ —         —    
   

 

 

                          

Expected future stock option expense related to the non-vested options outstanding as of September 30, 2012, is $623,116 over an average period of 2.16 years.

The following is a summary of the status of the Company’s restricted shares as of September 30, 2012, and changes therein during the period then ended.

 

                 
    Number of
Shares
Awarded		     Weighted
Average Grant
Date Fair Value		  

Non-vested at December 31, 2011

     —       $ —    

Granted

     152,169       1.69  

Vested

     (68,386 )      1.65  

Forfeited

     (34,782 )      1.73  
   

 

 

          

Non-vested at September 30, 2012

     49,001     $ 1.73  
   

 

 

          

Expected future stock award expense related to the non-vested restricted awards as of September 30, 2012, is $84,772 over an average period of 2.86 years.