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Stock Incentive Plans
9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
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.

 

 

 

2022 Plan

 

 

2014 Plan

 

 

2005 Plan

 

Aggregate shares issuable

 

 

150,000

 

 

 

275,625

 

 

 

253,575

 

Options issued, net of forfeited and expired
   options

 

 

 

 

 

(170,106

)

 

 

(59,870

)

Unrestricted stock issued

 

 

 

 

 

(11,635

)

 

 

 

Restricted stock grants issued, net of forfeited

 

 

 

 

 

(65,853

)

 

 

 

Cancelled due to Plan expiration

 

 

 

 

 

 

 

 

(193,705

)

Remaining available for grant

 

 

150,000

 

 

 

28,031

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Stock grants issued and outstanding:

 

 

 

 

 

 

 

 

 

Total vested and unvested shares

 

 

 

 

 

77,488

 

 

 

 

Fully vested shares

 

 

 

 

 

35,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Option grants issued and outstanding:

 

 

 

 

 

 

 

 

 

Total vested and unvested shares

 

 

 

 

 

166,901

 

 

 

1,379

 

Fully vested shares

 

 

 

 

 

87,548

 

 

 

1,379

 

 

 

 

 

 

 

 

 

 

 

Exercise price range

 

 

 

 

$23.75 to $42.62

 

 

$13.69

 

 

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):

 

 

 

September 30, 2022

 

 

 

Number of Options

 

 

Weighted
Average
Exercise Price

 

 

Aggregate
Intrinsic Value

 

Outstanding at January 1, 2022

 

 

169,280

 

 

$

33.89

 

 

$

962

 

Issued

 

 

 

 

 

 

 

 

 

Exercised

 

 

(1,000

)

 

 

(23.75

)

 

 

 

Expired

 

 

 

 

 

 

 

 

 

Outstanding at September 30, 2022

 

 

168,280

 

 

$

33.95

 

 

$

532

 

 

 

 

 

 

 

 

 

 

 

Options exercisable at September 30, 2022

 

 

88,927

 

 

$

36.18

 

 

$

223

 

 

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.

 

 

 

Options Outstanding

 

 

Options Exercisable

 

Exercise Price

 

Number of
Options
Outstanding

 

 

Weighted-
Average
Remaining
Contractual Life

 

Weighted-
Average
Exercise
Price

 

 

Number of
Options
Exercisable

 

 

Weighted-
Average
Exercise
Price

 

$13.69 to $20.00

 

 

1,379

 

 

0.4 Years

 

$

13.69

 

 

 

1,379

 

 

$

13.69

 

$20.01 to $30.00

 

 

65,000

 

 

7.8 Years

 

 

24.65

 

 

 

25,400

 

 

 

24.67

 

$30.01 to $40.00

 

 

44,420

 

 

7.8 Years

 

 

36.97

 

 

 

16,172

 

 

 

37.87

 

$40.01 to $42.62

 

 

57,481

 

 

5.6 Years

 

 

42.62

 

 

 

45,976

 

 

 

42.62

 

Total

 

 

168,280

 

 

7.0 Years

 

$

33.95

 

 

 

88,927

 

 

$

36.18

 

 

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):

 

 

September 30, 2022

 

 

 

Number of
Shares

 

 

Weighted
Average
Grant Date
Fair Value
Per Share

 

 

Aggregate
Intrinsic Value

 

Nonvested as of January 1, 2022

 

 

37,011

 

 

$

28.98

 

 

$

1,165

 

Issued

 

 

18,536

 

 

 

35.62

 

 

601

 

Vested

 

 

(13,183

)

 

 

(29.04

)

 

 

(392

)

Forfeited

 

 

(600

)

 

 

(33.74

)

 

 

(19

)

Nonvested at September 30, 2022

 

 

41,764

 

 

$

31.82

 

 

$

1,355