14. Employee Benefits

CTBI maintains two separate retirement savings plans, a 401(k) Plan and an Employee Stock Ownership Plan ("ESOP").

The 401(k) Plan is available to all employees (age 21 and over) with one year of service and who work at least 1,000 hours per year. Participants in the plan have the option to contribute from 1% to 20% of their annual compensation. CTBI matches 50% of participant contributions up to 4% of gross pay. CTBI may at its discretion, contribute an additional percentage of covered employees' compensation. CTBI's matching contributions were $1.0 million for the years ended December 31, 2014, 2013, and 2012. The 401(k) Plan owned 503,082, 487,330, and 551,527 shares of CTBI's common stock at December 31, 2014, 2013, and 2012, respectively. Substantially all shares owned by the 401(k) were allocated to employee accounts on those dates. The market price of the shares at the date of allocation is essentially the same as the market price at the date of purchase.

The ESOP Plan has the same entrance requirements as the 401(k) Plan above. CTBI currently contributes 4% of covered employees' gross compensation to the ESOP. The ESOP uses the contributions to acquire shares of CTBI's common stock. CTBI's contributions to the ESOP were $1.5 million for the years ended December 31, 2014 and 2013 and $1.4 million for the year ended 2012. The ESOP owned 752,710, 746,260, and 748,674 shares of CTBI's common stock at December 31, 2014, 2013, and 2012, respectively. Substantially all shares owned by the ESOP were allocated to employee accounts on those dates. The market price of the shares at the date of allocation is essentially the same as the market price at the date of purchase.

Stock-Based Compensation:

CTBI currently maintains one active and one inactive incentive stock option plan covering key employees. The 2006 Stock Ownership Incentive Plan ("2006 Plan") was approved by the Board of Directors and the Shareholders in 2006. The 1998 Stock Option Plan ("1998 Plan") was approved by the Board of Directors and the Shareholders in 1998. The 1998 Plan was rendered inactive as of April 26, 2006. The 2006 Plan had 1,650,000 shares authorized, 1,345,876 of which were available at December 31, 2014 for future grants. In addition, any shares reserved for issuance under the 1998 Stock Option Plan ("1998 Plan") in excess of the number of shares as to which options or other benefits are awarded thereunder, plus any shares as to which options or other benefits granted under the 1998 Plan may lapse, expire, terminate or be canceled, shall also be reserved and available for issuance or reissuance under the 2006 Plan. As of December 31, 2014, the 1998 Plan had 1,151,514 shares authorized, 217,826 of which were transferred to the 2006 Plan. The total shares available for issuance under the 2006 Plan as of December 31, 2014 was 1,563,702. The following table provides detail of the number of shares to be issued upon exercise of outstanding stock-based awards and remaining shares available for future issuance under all of CTBI's equity compensation plans as of December 31, 2014:

Plan Category (shares in thousands)	Number of Shares to Be Issued Upon Exercise	Weighted Average Price	Shares Available for Future Issuance
Equity compensation plans approved by shareholders:
Stock options	143	$31.47	1,564 (a)
Restricted stock	(c)	(b)	(a)
Performance units	(d)	(b)	(a)
Stock appreciation rights ("SARs")	(e)	(b)	(a)
Total			1,564

(a)

Under the 2006 Plan, 1.65 million shares (plus any shares reserved for issuance under the 1998 Stock Option Plan) were authorized for issuance as nonqualified and incentive stock options, SARS, restricted stock and performance units. As of December 31, 2014, the above shares remained available for issuance.

(b)	Not applicable

(c)	The maximum number of shares of restricted stock that may be granted is 440,000 shares, and the maximum that may be granted to a participant during any calendar year is 44,000 shares.

(d)	No performance units payable in stock had been issued as of December 31, 2014. The maximum payment that can be made pursuant to performance units granted to any one participant in any calendar year shall be $250,000.

(e)	No SARS have been issued. The maximum number of shares with respect to which SARs may be granted to a participant during any calendar year shall be 110,000 shares.

The following table details the shares available for future issuance under the 2006 Plan at December 31, 2014.

Plan Category	Shares Available for Future Issuance
Shares available at January 1, 2014	1,573,980
1998 Plan forfeitures in 2014	0
2006 Plan stock option issuances for 2014	(10,000)
2006 Plan restricted stock issuances in 2014	(4,561)
2006 Plan forfeitures in 2014	4,283
Shares available for future issuance	1,563,702

CTBI uses a Black-Scholes option pricing model with the following weighted average assumptions, which are evaluated and revised as necessary, in estimating the grant-date fair value of each option grant for the year end:

	2014	2013	2012
Expected option life (in years)	7.0	7.5	--
Expected volatility	30.77%	39.11%	--
Expected dividend yield	3.40%	3.74%	--
Risk-free interest rate	2.01%	1.33%	--

The expected option life is derived from the "safe-harbor" rules for estimating option life in ASC 718, Share-Based Payment. The expected volatility is based on historical volatility of the stock using a historical look back that approximates the expected life of the option grant. The interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. CTBI's stock-based compensation expense for the years 2014, 2013, and 2012 was $0.9 million, $0.7 million, and $0.6 million, respectively. Included in stock-based compensation expense were dividends paid on restricted stock shares in the amount of $121 thousand, $124 thousand, and $121 thousand, respectively, for the same periods.

CTBI's stock option activity for the 2006 Plan for the years ended December 31, 2014, 2013, and 2012 is summarized as follows:

December 31	2014					2013					2012
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		97,047		$	32.29		163,524		$	31.56		167,828		$	31.43
Granted		10,000			34.75		1,650			30.64		0			--
Exercised		(5,757	)		34.62		(68,127	)		30.52		(3,507	)		25.92
Forfeited/expired		(2,469	)		34.29		0			--		(797	)		--
Outstanding at end of year		98,821		$	32.35		97,047		$	32.29		163,524		$	31.56

Exercisable at end of year		86,264		$	32.25		92,997		$	32.56		112,555		$	34.26

A summary of the status of CTBI's 2006 Plan for nonvested options as of December 31, 2014, and changes during the year ended December 31, 2014, is presented as follows:

Nonvested Options	Options			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2014		4,051		$	6.87
Granted		10,000			7.76
Vested		(1,274	)		6.68
Forfeited		(220	)		5.94
Nonvested at December 31, 2014		12,557		$	7.61

The weighted average remaining contractual term in years of the shares outstanding at December 31, 2014 was 3.35 years.

The weighted-average fair value of options granted from the 2006 Plan during the year 2014 was $0.08 million, or $7.76 per share. The weighted-average fair value of options granted from the 2006 Plan during the year 2013 was $0.01 million or $8.23 per share. No stock options were granted during 2012.

The following table shows the intrinsic values of options exercised, exercisable, and outstanding for the 2006 Plan for the years ended December 31, 2014, 2013, and 2012:

(in thousands)	2014		2013		2012
Options exercised	$	11	$	477	$	22
Options exercisable		376		790		88
Outstanding options		421		849		388

The following table shows restricted stock activity for the years ended December 31, 2014, 2013, and 2012:

December 31	2014					2013					2012
	Grants			Weighted Average Fair Value at Grant		Grants			Weighted Average Fair Value at Grant		Grants		Weighted Average Fair Value at Grant
Outstanding at beginning of year		107,511		$	25.91		106,561		$	25.38		106,197	$	25.37
Granted		4,561			37.85		11,904			30.64		364		28.11
Vested		(8,949	)		28.35		(10,954	)		25.87		0		--
Forfeited		(1,814	)		28.38		0			--		0		--
Outstanding at end of year		101,309		$	26.19		107,511		$	25.91		106,561	$	25.38

CTBI's stock option activity for the 1998 Plan for the years ended December 31, 2014, 2013, and 2012 is summarized as follows:

December 31	2014					2013					2012
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		78,066		$	28.91		195,279		$	28.08		353,694		$	24.41
Granted		0			--		0			--		0			--
Exercised		(34,106	)		28.25		(117,213	)		27.54		(158,305	)		19.85
Forfeited/expired		0			--		0			--		(110	)		29.49
Outstanding at end of year		43,960		$	29.43		78,066		$	28.91		195,279		$	28.08

Exercisable at end of year		43,960		$	29.43		78,066		$	28.91		195,279		$	28.08

The weighted average remaining contractual term in years of the shares outstanding at December 31, 2014 was 1.03 years.

The following table shows the intrinsic values of options exercised, exercisable, and outstanding for the 1998 Plan for the years ended December 31, 2014, 2013, and 2012:

(in thousands)	2014		2013		2012
Options exercised	$	270	$	1,175	$	690
Options exercisable		316		948		1,517
Outstanding options		316		948		1,517

There were no nonvested options in the 1998 Plan shares as of December 31, 2014 and December 31, 2013.

The following table shows the unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans at December 31, 2014, 2013, and 2012 and the total grant-date fair value of shares vested, cash received from option exercises under all share-based payment arrangements, and the actual tax benefit realized for the tax deductions from option exercises of the share-based payment arrangements for the years ended December 31, 2014, 2013, and 2012.

(in thousands)	2014		2013		2012
Unrecognized compensation cost of unvested share-based compensation arrangements granted under the plan at year-end	$	861	$	1,366	$	1,133
Grant date fair value of shares vested for the year		343		521		34
Cash received from option exercises under all share-based payment arrangements for the year		1,163		5,306		3,137
Tax benefit realized for the tax deductions from option exercises of the share-based payment arrangements for the year		93		303		496

The unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans at December 31, 2014 is expected to be recognized over a weighted-average period of 1.9 years.