Stock Compensation Plans

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Note 23. Stock Compensation Plans

On May 13, 2014, the Company’s shareholders approved the First National Corporation 2014 Stock Incentive Plan, which makes available up to 240,000 shares of common stock for the granting of stock options, restricted stock awards, stock appreciation rights and other stock-based awards. Awards are made at the discretion of the Board of Directors and compensation cost equal to the fair value of the award is recognized over the vesting period.

Stock Awards

Whenever the Company deems it appropriate to grant a stock award, the recipient receives a specified number of unrestricted shares of employer stock. Stock awards may be made by the Company at its discretion without cash consideration and may be granted as settlement of a performance-based compensation award.

During 2015, the Company granted and issued 960 shares of common stock to employees for their service during the recent branch acquisition and 2,440 shares of common stock to members of the Board of Directors for their dedicated service and support over the past several years. Compensation expense related to the awards totaled $28 thousand for the year ended December 31, 2015.

Restricted Stock Units

Restricted stock units are an award of units that correspond in number and value to a specified number of shares of employer stock which the recipient receives according to a vesting plan and distribution schedule after achieving required performance milestones or upon remaining with the employer for a particular length of time. Each restricted stock unit that vests entitles the recipient to receive one share of common stock on a specified issuance date.

In 2015, 12,546 restricted stock units were granted to employees, with 4,182 units vesting immediately and 8,364 units subject to a two year vesting schedule with one half of the units vesting each year on the grant date anniversary. The recipient does not have any stockholder rights, including voting, dividend or liquidation rights, with respect to the shares underlying awarded restricted stock units until vesting has occurred and the recipient becomes the record holder of those shares. The unvested restricted stock units will vest on the established schedule if the employees remain employed by the Company on future vesting dates.

A summary of the activity for the Company’s restricted stock units for the period indicated is presented in the following table:


	2015
	Shares			Weighted Average Grant Date Fair Value
Balance at January 1, 2015		—		$	—
Granted		12,546			9.00
Vested		(4,182	)		9.00
Forfeited		—			—

Balance at December 31, 2015		8,364		$	9.00

At December 31, 2015, based on restricted stock unit awards outstanding at that time, the total unrecognized pre-tax compensation expense related to unvested restricted stock unit awards was $42 thousand. This expense is expected to be recognized through 2017. Compensation expense related to restricted stock unit awards recognized for the year ended December 31, 2015 totaled $71 thousand. As of December 31, 2015, the Company does not expect the forfeiture of any unvested restricted stock units.