NOTE 14 – EQUITY INCENTIVE PLANS

Equity Incentive Plans

2024 Omnibus Equity Incentive Plan

The Company’s shareholders approved the Company’s 2024 Omnibus Equity Incentive Plan (“2024 Plan”) in June 2024. The 2024 Plan provides for the grant of equity incentive awards to employees and directors (including emeritus and advisory directors) of the Company and its subsidiaries. The 2024 Plan permits the granting of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance shares and performance units.  Factors generally considered by the Board in awarding equity incentives to employees include the performance of the Company, the employee’s job performance, the importance of his or her position, and his or her contribution to the organization’s goals for the award period.

Generally, awards under the 2024 Plan are subject to a minimum vesting period of one year (at least three years for full vesting for the chief executive officer), provided that awards for up to 5% of the maximum shares available under the 2024 Plan (for any participant other than the chief executive officer) may provide for a shorter vesting period. Subject to adjustment as provided in the 2024 Plan, the maximum number of shares of common stock available for issuance under the 2024 Plan is 500,000, and awards granted under the 2024 Plan to any one participant in any one calendar year are subject to the following limitations: (i) aggregate grants of stock options or stock appreciation rights to any one participant are subject to an annual limit of the lesser of 100,000 shares or $2.0 million in fair market value as of the date of grant; (ii) aggregate grants of restricted stock or restricted stock units to any one participant are subject to an annual limit of the lesser of 50,000 shares or $2.0 million in fair market value as of the date of grant; and (iii) aggregate grants of performance shares or performance units to any one participant are subject to an annual limit of the lesser of 50,000 shares or $2.0 million in fair market value as of the date of grant.  In addition, subject to adjustment as provided in the 2024 Plan, the maximum aggregate number of shares that may be covered by awards granted under the 2024 Plan to any non-employee director in any one calendar year is 25,000 shares. As of September 30, 2026, a total of 337,992 shares were available for future issuance under the 2024 Plan.

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Restricted Stock Awards

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The following table provides the restricted stock grant activity for the periods indicated:

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In July 2026, the Company vested 47,205 shares of restricted stock awards totaling approximately $1.2 million in connection with the previously announced departures of three senior executives, in accordance with the terms of the applicable award agreements.

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The compensation expense recorded for restricted stock awards was $148,000 and $1.5 million for the three and nine months ended September 30, 2026, respectively. Unrecognized stock-compensation expense related to restricted stock awards was $777,000 at September 30, 2026. As of September 30, 2026, the cost is expected to be recognized over the remaining weighted-average vesting period of approximately 2.3 years.

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Performance Stock Units

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The Company grants performance stock units ("PSUs"), which become “Banked PSUs” when the volume-weighted average price per share of the Company's common stock equals or exceeds a specified threshold price for twenty (20) consecutive trading days (the “Market Vesting Condition”) over a three-year measurement period from the grant date. Banked PSUs will vest on the third anniversary of the grant date, subject to continued service. Each unit represents the right to receive one-half of one share of the Company's common stock, no par value, and a cash payment equal to the fair market value of one-half of one share of common stock on the applicable settlement date. For the stock component, compensation cost is measured at the grant date fair value and is recognized on a straight-line basis over the requisite service period, regardless of whether the Market Vesting Condition is achieved. For the cash component, which is classified as a liability, fair value is remeasured at each reporting date until settlement, and compensation cost equals the proportionate amount of the award attributable to service rendered to date. The fair value of the PSUs at grant date, and of the cash component at each period-end prior to achievement of the Market Vesting Condition, is calculated based on a Monte Carlo simulation. The Company accounts for forfeitures as they occur.

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The following table provides performance stock units activity for the periods indicated:

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The compensation expense recorded for PSUs was $226,000 for both the three and nine months ended September 30, 2026. Such amounts are included in "Salaries and employee benefits" on the consolidated statements of operations. At September 30, 2026, the cash component liability is $101,000 and included in “Interest payable and other liabilities” on the consolidated balance sheet. Unrecognized stock-compensation expense related to PSUs was $3.6 million at September 30, 2026. As of September 30, 2026, these costs were expected to be recognized over approximately 2.8 years.