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Share-Based Compensation
 12 Months Ended
Dec. 31, 2012
Share-Based Compensation [Abstract]  
Share-Based Compensation

Note 13. Share-Based Compensation

The Company maintains the Patriot National Bancorp, Inc. 2012 Stock Plan to provide an incentive to directors and employees of the Company by the grant of options, restricted stock awards or phantom stock units. The Plan provides for the issuance of up to 3,000,000 shares of the Company’s common stock subject to certain Plan limitations. 2,032,613 shares of stock remain available for issuance under the Plan as of December 31, 2012. The vesting of restricted stock awards and options may be accelerated 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 are available only to directors and 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.

For the year ended December 31, 2012 and 2011, the Company recorded $306,421 and $0 of total stock-based compensation, respectively. During 2012, there were no options exercised and 117,387 shares of restricted stock were issued to directors in payment of directors’ fees in the amount of $120,397. There were no awards in 2011.

The following table is a summary of the Company’s non-vested stock options as of December 31, 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—December 31, 2012

     850,000     $ 0.90     $ 2.20       10  
   

 

 

                          

Exercisable—December 31, 2012

     207,500     $ —       $ —         —    
   

 

 

                          

There is no future stock option expense related to the non-vested options outstanding as of December 31, 2012, due to the subsequent event described in Note 23.

The following is a summary of the status of the Company’s restricted shares as of December 31, 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

     (72,821 )      1.65  

Forfeited

     (34,782 )      1.73  
   

 

 

          

Non-vested at December 31, 2012

     44,566     $ 1.73  
   

 

 

          

Expected future stock award expense related to the non-vested restricted awards as of December 31, 2012, is $76,876 over an average period of 2.61 years.