At the 2023 Annual Meeting of Shareholders, the Company's shareholders approved the Hawthorn Bancshares, Inc. Equity Incentive Plan (the “Equity Plan”), which was previously approved by the Company's Board of Directors. The purpose of the Equity Plan is to allow eligible participants of the Company and its subsidiaries to acquire or increase a proprietary and vested interest in the growth and performance of the Company. The Equity Plan is designed to assist the Company with attracting and retaining selected service providers by providing them with the opportunity to participate in the success and profitability of the Company. The terms of the Equity Plan provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, other equity-based awards and cash awards. Subject to certain adjustments, the maximum number of shares of the Company's common stock that may be delivered pursuant to awards under the Equity Plan is 203,000 shares. Eligible participants under the Equity Plan include all employees, non-employee directors and consultants of the Company or its subsidiaries. The Equity Plan is currently administered by the Compensation Committee of the Board of Directors.

The Compensation Committee adopted a form of restricted stock unit award agreement (service-based vesting). The Company issues restricted share units (“RSUs”) to provide additional incentives to key officers, employees, and non-employee directors. Awards are granted as determined by the Compensation Committee. The service-based RSUs vest, and shares of common stock are issued, in equal installments on the first, second, and third anniversaries of the date of grant.


	Six Months Ended June 30,
	2026			2025
	Quantity	Weighted-Average Grant Date Fair Value Per share		Quantity	Weighted-Average Grant Date Fair Value Per share
Non-vested at beginning of period	39,037	$	26.64	35,336	$	22.84
Granted	14,849	34.99		11,174	29.18


Vested	11,534	22.43		7,809	28.48
Forfeited	667	32.01		—	—
Non-vested at end of period	41,685	$	30.69	38,701	$	21.91

The fair value of the RSUs is determined using the Company’s stock price on the date of grant. Total share-based compensation expense recognized for these RSUs was $0.2 million and $0.3 million for the three and six months ended June 30, 2026, respectively, compared to $0.1 million and $0.2 million for the three and six months ended June 30, 2025, respectively. Forfeitures will be recognized as they occur.