Note 8 - Share-based Compensation

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note 8. Share-Based Compensation

The Parkway Acquisition Corp. 2020 Equity Incentive Plan (the “Plan”) was adopted by the Board of Directors of the Company on March 17, 2020 and approved by the Company’s shareholders on August 18, 2020 (the “Effective Date”). The Plan permits the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, and stock awards to key employees and non-employee directors of the Company or its subsidiaries.

The purpose of the Plan is to promote the success of the Company and its subsidiaries by providing incentives to key employees and non-employee directors that will promote the identification of their personal interests with the long-term financial success of the Company and with growth in shareholder value, consistent with the Company’s risk management practices. The Plan is designed to provide flexibility to the Company, including its subsidiaries, in its ability to attract, retain the services of, and motivate key employees and non-employee directors upon whose judgment, interest, and special effort the successful conduct of its operation is largely dependent.

The Plan was effective on the Effective Date, and no Award may be granted under the plan after March 16, 2030. Awards outstanding on such date shall remain valid in accordance with their terms. The Board of Directors shall have the right to terminate the Plan at any time pursuant to the terms of the Plan. The Compensation Committee of the Board of Directors has been appointed to administer the Plan. The maximum aggregate number of shares that may be issued pursuant to awards made under the Plan shall not exceed 300,000 shares of common stock. No awards were issued or exercised in 2020 and there were no Awards outstanding at December 31, 2020.

On March 31, 2021, 14,500 restricted stock awards were issued at a price of $11.30 per share. These awards vest 25% on December 31, 2021, 25% on December 31, 2022, 25% on December 31, 2023, and 25% on December 31, 2024. For the nine month and three month periods ended September 30, 2021, $28 thousand and $14 thousand, respectively was recognized as compensation expense related to share-based compensation. As of September 30, 2021, the unrecognized compensation expense related to unvested restricted stock awards was $137 thousand. The unrecognized compensation expense is expected to be recognized over a weighted average period of 3.25 years. The following table presents the activity for restricted stock:

					Grant Date
					Fair Value of
					Restricted
					Stock that
			Weighted		Vested During
	Number of		Average Grant		The Year
	Shares		Date Fair Value		(in thousands)
Unvested as of December 31, 2020		-	$	-
Granted		14,500		11.30
Vested		-		-	$	-
Forfeited		-		-
Unvested as of September 30, 2021		14,500	$	11.30