Stock Incentive Plans |
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Stock Incentive Plans | Note 9. Stock Incentive Plans At the Annual Shareholders Meeting on June 23, 2022, shareholders approved the Virginia National Bankshares Corporation 2022 Stock Incentive Plan. The 2022 Plan made available up to 150,000 shares of the Company’s common stock to be issued to plan participants. The 2014 Plan made available up to 275,625 shares of the Company’s common stock, as adjusted by prior issued stock dividends, to be issued to plan participants. The 2022 Plan and the 2014 Plan provide for granting of both incentive and nonqualified stock options, as well as restricted stock, unrestricted stock and other stock based awards. No new grants can be issued under the 2005 Stock Incentive Plan as this plan has expired. For the 2022 Plan, the option price for any stock options cannot be less that the fair value of the Company’s stock on the grant date. In addition, 95% of the common stock authorized for issuance must have a vesting or exercise schedule of at least one year. For the 2014 Plan and the 2005 Plan, the option price of incentive stock options cannot be less than the fair value of the stock at the time an option is granted and nonqualified stock options may be granted at prices established by the Board of Directors, including prices less than the fair value on the date of grant. Outstanding stock options generally expire ten years from the grant date. Stock options generally vest by the fourth or fifth anniversary of the date of the grant. A summary of the shares issued and available under each of the Plans is shown below as of September 30, 2022. Share data and exercise price range per share have been adjusted to reflect prior issued stock dividends. Although the 2005 Plan has expired and no new grants will be issued under this plan, there were options issued before the plan expired that are still outstanding as shown below. No grants have been issued under the 2022 Plan.
The Company accounts for all of its stock incentive plans under recognition and measurement accounting principles which require that the compensation cost relating to stock-based payment transactions be recognized in the financial statements. Stock-based compensation arrangements include stock options and restricted stock. All stock-based payments to employees are required to be valued at a fair value on the date of grant and expensed based on that fair value over the applicable vesting period. Stock Options Changes in the stock options outstanding related to the Plans are summarized below (dollars in thousands except per share data):
For the three months ended September 30, 2022 and 2021, the Company recognized $42 thousand and $31 thousand, respectively, in compensation expense for stock options. For the nine months ended September 30, 2022 and 2021, the Company recognized $125 thousand and $96 thousand, respectively, in compensation expense for stock options. As of September 30, 2022, there was $262 thousand in unrecognized compensation expense remaining to be recognized in future reporting periods through 2026. The fair value of any stock option grant is estimated at the grant date using the Black-Scholes pricing model. There were no stock option grants issued during the three and nine months ended September 30, 2022 and 2021. Summary information pertaining to options outstanding at September 30, 2022 is shown below. Share and per share data have been adjusted to reflect the prior stock dividends issued.
Stock Grants Unrestricted stock grant - During the nine months ended September 30, 2022, 100 shares of unrestricted stock were granted to an employee for a total expense of $4 thousand. No unrestricted stock grants were awarded during the three months ended September 30, 2022 or during the year ended December 31, 2021. Restricted stock grants – During the nine months ended September 30, 2022, 5,580 and 12,856 restricted shares, were granted to employees and non-employee directors, respectively, vesting over a four-year or five-year period. (Note that all such shares were granted during the first quarter of 2022 with no shares granted during the second or third quarter of 2022.) During the three and nine months ended September 30, 2021, 5,730 and 19,233 restricted shares, respectively, were granted. For the three and nine months ended September 30, 2022, $184 thousand and $398 thousand, respectively, was expensed as a result of restricted stock grants. As of September 30, 2022, there was $1.1 million in unrecognized compensation expense for all restricted stock grants remaining to be recognized in future reporting periods through 2027. Changes in the restricted stock grants outstanding during the nine months ended September 30, 2022 are summarized below (dollars in thousands except per share data):
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