Share Based Compensation

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock Option Plan

Share-Based Compensation

The Park National Corporation 2017 Long-Term Incentive Plan for Employees (the "2017 Employees LTIP") was adopted by the Board of Directors of Park on January 23, 2017 and was approved by Park's shareholders at the Annual Meeting of Shareholders on April 24, 2017. The 2017 Employees LTIP makes equity-based awards and cash-based awards available for grant to employee participants in the form of incentive stock options, nonqualified stock options, SARs, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards and cash-based awards. Under the 2017 Employees LTIP, 750,000 common shares are authorized to be delivered in connection with grants under the 2017 Employees LTIP. The common shares to be delivered under the 2017 Employees LTIP are to consist of either common shares currently held or common shares subsequently acquired by Park as treasury shares, including common shares purchased in the open market or in private transactions. At December 31, 2023, 300,000 common shares were available for future grants under the 2017 Employee LTIP.

The Park National Corporation 2017 Long-Term Incentive Plan for Non-Employee Directors (the "2017 Non-Employee Directors LTIP") was adopted by the Board of Directors of Park on January 23, 2017 and was approved by Park's shareholders at the Annual Meeting of Shareholders on April 24, 2017. The 2017 Non-Employee Directors LTIP makes equity-based awards and cash-based awards available for grant to non-employee director participants in the form of nonqualified stock options, SARs, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, and cash-based awards. Under the 2017 Non-Employee Directors LTIP, 150,000 common shares are authorized to be delivered in connection with grants under the 2017 Non-Employee Directors LTIP. The common shares to be delivered under the 2017 Non-Employee Directors LTIP are to consist of either common shares currently held or common shares subsequently acquired by Park as treasury shares, including common shares purchased in the open market or in private transactions. At December 31, 2023, 60,000 common shares were available for future grants under the 2017 Non-Employee Directors LTIP.

During 2023, 2022 and 2021, Park granted 13,054, 9,789 and 13,400 common shares, respectively, to directors of Park and to directors of PNB (and its divisions) under the 2017 Non-Employee Directors LTIP. The common shares granted to directors were not subject to a vesting period and resulted in expense of $1.2 million, $1.3 million, and $1.7 million in 2023, 2022, and 2021, respectively, which is included in "Professional fees and services" on the Consolidated Statements of Income. 

During 2023, 2022 and 2021, the Compensation Committee of the Board of Directors of Park granted awards of PBRSUs, under the 2017 Employees LTIP, covering an aggregate of 54,698, 52,335 and 61,890 common shares, respectively, to certain employees of Park and its subsidiaries. As of December 31, 2023, Park reported 186,936 nonvested PBRSUs. The number of PBRSUs earned or settled will depend on the level of achievement with respect to certain performance criteria and will also be subject to subsequent service-based vesting.

A summary of changes in the common shares subject to nonvested PBRSUs for the years ended December 31, 2023 and 2022 follows:

	Common shares subject to PBRSUs
Nonvested at January 1, 2022	211,819
Granted	52,335
Vested	(55,464)
Forfeited	(8,406)
Adjustment for performance conditions of PBRSUs (1)	(634)
Nonvested at January 1, 2023	199,650
Granted	54,698
Vested	(62,815)
Forfeited	(4,597)
Adjustment for performance conditions of PBRSUs (1)	—
Nonvested at December 31, 2023 (2)	186,936

(1) The number of PBRSUs earned depends on the level of achievement with respect to certain performance criteria. Adjustment herein represents the difference between the maximum number of common shares which could be earned and the actual number earned for those PBRSUs as to which the performance period was completed.

(2) Nonvested amount herein represents the maximum number of nonvested PBRSUs. As of December 31, 2023, an aggregate of 184,199 PBRSUs are expected to vest.

A summary of awards that vested during the twelve months ended December 31, 2023 and 2022 follows:

	Twelve Months Ended December 31,
	2023	2022
PBRSU and TBRSU vested	62,815	55,464
Common shares withheld to satisfy employee income tax withholding obligations	23,973	21,219
Net common shares issued	38,842	34,245

Share-based compensation expense of $6.8 million, $5.9 million and $6.3 million was recognized for the years ended December 31, 2023, 2022 and 2021, respectively, related to PBRSU and TBRSU awards to employees. The following table details expected additional share-based compensation expense related to PBRSUs outstanding at December 31, 2023:

(In thousands)
2024	$	4,393
2025	2,885
2026	1,206
2027	194
Total	$	8,678