Note

Share-Based Compensation and Employee Benefit Plan

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

Stock Plan (the

“2020

Plan”). A copy of the

2020

Plan was filed as Exhibit

10.1

to the Company's Amendment

No.

on Form

-K/A 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”).

The

2020

Plan authorizes

3,000,000

shares of the Company's Common Stock for issuance. As of

March 31, 2021,

2,850,507

shares of stock are available for issuance under the Plan. In accordance with the terms of the Plan, the vesting of RSAs and options

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 and stock option grants. RSAs granted to directors and employees generally vest in quarterly or annual installments over a

three

four

five

year period from the date of grant.

The following is a summary of the status of the Company's restricted shares and changes for the

three

months ended

March 31, 2021

and

2020:

Three months ended March 31, 2021:	Number of Shares Awarded			Weighted Average Grant Date Fair Value
Unvested at December 31, 2020		18,498		$	7.29
Vested		(700	)	$	17.85
Unvested at March 31, 2021		17,798		$	6.88

Three months ended March 31, 2020:
Unvested at December 31, 2019		21,470		$	12.91
Vested		(2,172	)	$	14.56
Unvested at March 31, 2020		19,298		$	12.73

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

three

months ended

March 31, 2021

and

2020,

the Company recognized total share-based compensation expense of

$34,000

and

$43,000,

respectively. The share-based compensation attributable to employees of Patriot amounted to

$15,000

and

$25,000,

respectively. Included in share-based compensation expense were

$19,000

and

$18,000

attributable to Patriot's external directors, who received total compensation of

$94,000

and

$117,000

for each of those periods, 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

March 31, 2021

amounted to

$149,000,

which amount is expected to be recognized over the weighted average remaining life of the awards of

1.71

years.

Dividends

The Company has

not

paid any dividends since

2020

and has temporarily suspended dividend payments pending resolution of the economic uncertainties associated with the Coronavirus pandemic.

Retirement Plan

The Company offers a

401K

retirement plan (the

“401K”

), which provides for tax-deferred salary deductions for eligible employees. Employees

may

choose to make voluntary contributions to the

401K,

limited to an annual maximum amount as set forth periodically by the Internal Revenue Service. The Company matches

50%

of such contributions, up to a maximum of

six

percent of an employee's annual compensation. During the

three

months ended

March 31, 2021

and

2020,

compensation expense under the

401K

aggregated

$48,000

and

$89,000,

respectively.