Note 10

STOCK-BASED COMPENSATION

As of December 31, 2013, the Company had three stock-based compensation plans, consisting of the 2011 Associate Incentive Plan (“AIP”), the 2011 Associate Stock Purchase Plan (“ASPP”), and the 2011 Director Stock Purchase Plan (“DSPP”).  These plans, which were approved by the shareowners in April 2011, replaced substantially similar plans approved by the shareowners in 2004. Total compensation expense associated with these plans for 2011 through 2013 was $0.1 million, $0.5 million, and $1.4 million, respectively.

AIP.  The AIP allows the Company's Board of Directors to award key associates various forms of equity-based incentive compensation.  Under the 2011 AIP there were 875,000 shares reserved for issuance. In 2013, the Company, pursuant to the terms and conditions of the AIP, created the 2013 Incentive Plan (“2013 Plan”), under which all participants in the 2013 Plan were eligible to earn performance shares. Awards under the 2013 Plan were tied to internally established earnings goals. At base level targets, the grant-date fair value of the shares eligible to be awarded in 2013 was approximately $0.7 million.  In addition, each plan participant is eligible to receive from the Company a tax supplement bonus equal to 31% of the stock award value at the time of issuance. For 2013, a total of 56,326 shares were eligible for issuance, but additional shares could be earned if performance exceeded established goals. A total of 63,037 shares were earned for 2013 reflective of goal achievement that exceeded the base level targets. The Company recognized expense of $965,000 and $255,000 for 2013 and 2012, respectively. There was no expense for this plan in 2011.

Executive Long-Term Incentive Plan (“LTIP”). Prior to 2007, the Company maintained a stock option program for a key executive officer (William G. Smith, Jr. - Chairman, President and CEO, CCBG). The status of the options granted under this arrangement is detailed in the table provided below. In 2007, the Company replaced its practice of entering into an annual stock option arrangement by establishing a Performance Share Unit Plan under the provisions of the AIP that allows the executive to earn shares based on the compound annual growth rate in diluted earnings per share over a three-year period. The Company recognized $0.3 million in expense for 2013 under the executive’s LTIP. There was no expense for years 2012 and 2011.

A summary of the status of the Company’s option shares is presented below:

DSPP.  The Company’s DSPP allows the directors to purchase the Company’s common stock at a price equal to 90% of the closing price on the date of purchase.  Stock purchases under the DSPP are limited to the amount of the directors' annual retainer and meeting fees.  Under the 2011 DSPP there were 150,000 shares reserved for issuance.  For 2013, the Company issued 13,348 shares under the DSPP and recognized approximately $15,000 in expense related to this plan.  For 2012, the Company issued 25,864 shares and recognized approximately $21,000 in expense related to the DSPP.  For 2011, the Company issued 21,872 shares and recognized approximately $23,000 in expense under the DSPP.

ASPP.  Under the Company’s ASPP, substantially all associates may purchase the Company’s common stock through payroll deductions at a price equal to 90% of the lower of the fair market value at the beginning or end of each six-month offering period.  Stock purchases under the ASPP are limited to 10% of an associate's eligible compensation, up to a maximum of $25,000 (fair market value on each enrollment date) in any plan year.  Under the 2011 ASPP there were 593,750 shares of common stock reserved for issuance.  For 2013, 31,597 shares were acquired under the ASPP and approximately $69,000 in expense was recognized related to this plan. For 2012, 75,257 shares were acquired and approximately $119,000 in expense was recognized related to the ASPP. For 2011, 38,210 shares were acquired and approximately $72,000 in expense was recognized under the ASPP.

Based on the Black-Scholes option pricing model, the weighted average estimated fair value of each of the purchase rights granted under the ASPP was $2.21 for 2013.  For 2012 and 2011, the weighted average fair value purchase right granted was $1.61 and $1.74, respectively.  In calculating compensation, the fair value of each stock purchase right was estimated on the date of grant using the following weighted average assumptions: