Company: PNBK
Filing Date: 2025-05-27
Form Type: DEF 14A
Source: 0001140361-25-020413
Chunk: 42

Company: PATRIOT NATIONAL BANCORP INC
Filing Date: 2025-05-27
Form: DEF 14A
Chunk 42
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 income so recognized. In the case of a nonqualified stock option (including an ISO that is treated as a nonqualified stock option), a SAR, or restricted stock or RSU, in general, subject to the limitations of Section 162(m) of the Code, the Company will be allowed a deduction in an amount equal to the amount of ordinary income recognized by a participant, provided that certain income tax reporting requirements are satisfied. Certain Change in Control Payments Under Section 280G of the Code, the vesting or accelerated exercisability of options or the vesting and payments of other awards in connection with a change of control of a corporation may be required to be valued and taken into account in determining whether participants have received compensatory payments, contingent on the change in control, in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of awards, may be subject to an additional 20% federal tax and may be non-deductible to the Company. 31

New Plan Benefits Patriot and Mr. Sugarman entered into an employment agreement, effective as of March 20, 2025 (the “Employment Agreement”). RSUs were granted to Mr. Sugarman pursuant to the Employment Agreement on March 20, 2025. RSUs vest in twelve equal monthly installments commencing on March 20, 2025 and have a restricted period of one year expiring on March 20, 2026. Vested RSUs represent the right to be settled on the date of the expiration of the restricted period, provided, however, that if: (i) the Omnibus Equity Incentive Plan is not approved by the shareholders at the Annual Meeting, each vested RSU will be settled in cash equal to the fair market value of one share of common stock as of March 20, 2026; or (ii) the Omnibus Equity Incentive Plan is approved by the shareholders at the Annual Meeting, each vested RSU will be settled in one share of common stock, up to 4,049,593 shares of common stock, in the aggregate, and there will be no cash settlement option, subject to the limitation that Mr. Sugarman does not have the right to become, directly or indirectly, the beneficial owner (as determined under Rule 13d-3 under the Exchange Act) of more than 9.99% of the number of shares of Patriot’s voting securities