Company: PNBK
Filing Date: 2025-05-27
Form Type: DEF 14A
Source: 0001140361-25-020413
Chunk: 41

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-05-27
Form: DEF 14A
Chunk 41
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, ordinary income generally is required to be recognized on the date the nonqualified stock option or SAR is exercised. In general, the amount of ordinary income required to be recognized is (i) in the case of a nonqualified stock option an amount equal to the excess, if any, of the fair market value of the shares on the exercise date over the aggregate exercise price and (ii) in the case of a SAR, the amount of cash and/or the fair market value of any shares received upon exercise. Restricted Stock Unless a participant who receives an award of restricted stock makes an election under Section 83(b) of Code, as amended, as described below, the participant generally is not required to recognize ordinary income on the award of restricted stock. Instead, on the date the restrictions lapse and the shares vest (that is, become transferable and no longer subject to forfeiture), the participant will be required to recognize ordinary income in an amount equal to the excess, if any, of the fair market value of the vesting shares on that date over the amount paid, if any, for those shares. If a participant makes a Section 83(b) election to recognize ordinary income on the date the shares are awarded, the amount of ordinary income required to be recognized is an amount equal to the excess, if any, of the fair market value of the shares on the date of award over the amount paid, if any, for those shares. In that case, the participant will not be required to recognize additional ordinary income when the restrictions lapse and the shares vest. RSUs A participant generally is not required to recognize income on the grant of an RSU. In general, on the date the RSUs vest and the underlying shares are distributed, the participant will be required to recognize ordinary income in an amount equal to the fair market value of the stock deliverable on the vesting date. Gain or Loss on Sale or Exchange of Shares In general, gain or loss from the sale or exchange of shares granted under the Omnibus Equity Incentive Plan will be treated as capital gain or loss. Gain or loss will be long-term capital gain or loss for shares held for more than one year. Deductibility by the Company The Company generally is not allowed a deduction in connection with the grant or exercise of an ISO. However, subject to the limitations of Section 162(m) of the Code, if a participant is required to recognize income as a result of a disqualifying disposition, the Company will be entitled to a deduction equal to the amount of ordinary