Share-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Note 5: 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 2,658,733 shares of stock remain available for issuance under the Plan as of September 30, 2013. 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 to directors and officers of the Company, or any subsidiary of the Company, and vest in quarterly or annual installments. The Compensation Committee accelerated the vesting of the initial grant of restricted stock in 2012, whereby the first year of the tranche vested immediately. The initial grant, which was awarded to the directors of the Board and accelerated, was deemed as compensation for past services. 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 months ended September 30, 2013 and September 30, 2012, the Company recorded $55,330 and $103,010 of total stock-based compensation, respectively. During the nine months ended September 30, 2013 and September 30, 2012, the Company recorded $70,541 and $236,138 of total stock-based compensation, respectively. During the nine months ended September 30, 2013, there were 223,880 shares of restricted stock granted under the 2012 Stock Plan.

The following table is a summary of the Company’s non-vested stock options as of September 30, 2013, 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, 2012		850,000		$	0.90	$	2.20		10
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited		(850,000	)		0.90		2.20		10

Outstanding—September 30, 2013		—		$	—	$	—		—

Exercisable—September 30, 2013		—		$	—	$	—		—

The following is a summary of the status of the Company’s restricted shares as of September 30, 2013, and changes therein during the period then ended.


	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2012		44,566		$	1.73
Granted		223,880			1.34
Vested		(13,314	)		1.73

Non-vested at September 30, 2013		255,132		$	1.39

Expected future stock award expense related to the non-vested restricted awards as of September 30, 2013, is $311,410 over an average period of 2.20 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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