15. 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, 2015, 2014, and 2013. The 401(k) Plan owned 515,062, 503,082, and 487,330 shares of CTBI's common stock at December 31, 2015, 2014, and 2013, 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, 2015, 2014, and 2013. The ESOP owned 765,630, 752,710, and 746,260 shares of CTBI's common stock at December 31, 2015, 2014, and 2013, 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:

As of December 31, 2015, CTBI maintained one active and two inactive incentive stock ownership plans covering key employees. The 2015 Stock Ownership Incentive Plan ("2015 Plan") was approved by the Board of Directors and the Shareholders in 2015. The 2006 Stock Ownership Incentive Plan ("2006 Plan") was approved by the Board of Directors and the Shareholders in 2006. The 2006 Plan was rendered inactive as of April 28, 2015. 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 2015 Plan has 550,000 shares authorized, all of which were available at December 31, 2015. Shares issuable pursuant to awards which were granted under the prior plans on or before their respective expiration or termination dates will be issued from the remaining shares reserved for issuance under the prior plans. The shares of common stock reserved for issuance under the prior plans in excess of the number of shares as to which options or other benefits are awarded thereunder, and any shares as to which options or other benefits granted under the prior plans may lapse, expire, terminate or be canceled, will not be reserved and available for issuance or reissuance under the 2015 Plan. The 2006 Plan had 1,650,000 shares authorized, 1,533,794 available for issuance on December 31, 2015 related to awards issued prior to its termination. In January 2016, 18,069 shares were issued under the terms of the 2015 Plan pursuant to awards granted and earned under the 2006 Plan. Accordingly, this issuance did not reduce the shares available under the 2015 Plan. Additional shares will not be issued under the 2015 Plan pursuant to awards granted under the 2006 Plan. 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, 2015:

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	122	$32.29	568	(a)
Restricted stock	(c)	(b)	(a)
Performance units	(d)	(b)	(a)
Stock appreciation rights ("SARs")	(e)	(b)	(a)
Total			568

(a)

Under the 2015 Plan, 550,000 shares are authorized for issuance, none have been issued. 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, 2015, 1.5 million shares were available for issuance pursuant to awards granted prior to the termination of the plan on April 28, 2015. In January of 2016, 18,069 restricted stock shares were issued pursuant to these awards. Additional shares will not be issued pursuant to awards granted from prior plans.

(b)	Not applicable

(c)	The maximum number of shares of restricted stock that may be granted is 550,000 shares, and the maximum that may be granted to a participant during any calendar year is 75,000 shares.

(d)	No performance units payable in stock had been issued as of December 31, 2015. The maximum payment that can be made pursuant to performance units granted to any one participant in any calendar year shall be $1,000,000.

(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 100,000 shares.

The following table details the shares available for future issuance under the 2006 Plan at December 31, 2015; however as discussed above, the 2006 Plan terminated in April 2015 and only 18,069 shares will be issued in 2016 relative to awards granted and earned under the 2006 Plan.

Plan Category	Shares Available for Future Issuance
Shares available at January 1, 2015		1,563,702
1998 Plan forfeitures in 2015		0
2006 Plan stock option issuances for 2015		(20,000	)
2006 Plan restricted stock issuances in 2015		(10,582	)
2006 Plan forfeitures in 2015		674
2006 Plan shares canceled at plan termination		(1,515,725	)
Shares available for future issuance		18,069

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:

	2015	2014	2013
Expected option life (in years)	7.0	7.0	7.5
Expected volatility	30.77%	30.77%	39.11%
Expected dividend yield	3.72%	3.40%	3.74%
Risk-free interest rate	1.54%	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 2015, 2014, and 2013 was $0.8 million, $0.9 million, and $0.7 million, respectively. Included in stock-based compensation expense were dividends paid on restricted stock shares in the amount of $80 thousand, $121 thousand, and $124 thousand, respectively, for the same periods.

CTBI's stock option activity for the 2006 Plan for the years ended December 31, 2015, 2014, and 2013 is summarized as follows:

December 31	2015					2014					2013
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		98,821		$	32.35		97,047		$	32.29		163,524		$	31.56
Granted		20,000			32.27		10,000			34.75		1,650			30.64
Exercised		(247	)		24.12		(5,757	)		34.62		(68,127	)		30.52
Forfeited/expired		0			--		(2,469	)		34.29		0			--
Outstanding at end of year		118,574		$	32.36		98,821		$	32.35		97,047		$	32.29

Exercisable at end of year		87,749		$	32.12		86,264		$	32.25		92,997		$	32.56

A summary of the status of CTBI's 2006 Plan for nonvested options as of December 31, 2015, and changes during the year ended December 31, 2015, is presented as follows:

Nonvested Options	Options			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2015		12,557		$	7.61
Granted		20,000			6.60
Vested		(1,732	)		6.48
Forfeited		0			--
Nonvested at December 31, 2015		30,825		$	7.02

The weighted average remaining contractual term in years of the options outstanding at December 31, 2015 was 3.5 years.

The weighted-average fair value of options granted from the 2006 Plan during the year 2015 was $0.13 million, or $6.60 per share. The weighted-average fair value of options granted from the 2006 Plan during the years 2014 and 2013 were $0.08 million or $7.76 per share and $0.01 million or $8.23 per share; respectively.

The following table shows the intrinsic values of options exercised, exercisable, and outstanding for the 2006 Plan for the years ended December 31, 2015, 2014, and 2013:

(in thousands)	2015		2014		2013
Options exercised	$	3	$	11	$	477
Options exercisable		275		376		790
Outstanding options		334		421		849

The following table shows restricted stock activity for the years ended December 31, 2015, 2014, and 2013:

December 31	2015					2014					2013
	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		101,309		$	26.19		107,511		$	25.91		106,561		$	25.38
Granted		10,582			32.27		4,561			37.85		11,904			30.64
Vested		(46,482	)		23.66		(8,949	)		28.35		(10,954	)		25.87
Forfeited		(674	)		33.31		(1,814	)		28.38		0			--
Outstanding at end of year		64,735		$	28.92		101,309		$	26.19		107,511		$	25.91

CTBI's stock option activity for the 1998 Plan for the years ended December 31, 2015, 2014, and 2013 is summarized as follows:

December 31	2015					2014					2013
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		43,960		$	29.43		78,066		$	28.91		195,279		$	28.08
Granted		0			--		0			--		0			--
Exercised		(40,980	)		29.42		(34,106	)		28.25		(117,213	)		27.54
Forfeited/expired		0			--		0			--		0			--
Outstanding at end of year		2,980		$	29.49		43,960		$	29.43		78,066		$	28.91

Exercisable at end of year		2,980		$	29.49		43,960		$	29.43		78,066		$	28.91

The weighted average remaining contractual term in years of the shares outstanding at December 31, 2015 was 0.07 years.

The following table shows the intrinsic values of options exercised, exercisable, and outstanding for the 1998 Plan for the years ended December 31, 2015, 2014, and 2013:

(in thousands)	2015		2014		2013
Options exercised	$	241	$	270	$	1,175
Options exercisable		16		316		948
Outstanding options		16		316		948

There were no nonvested options in the 1998 Plan shares as of December 31, 2015 and December 31, 2014.

The following table shows the unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans at December 31, 2015, 2014, and 2013 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, 2015, 2014, and 2013.

(in thousands)	2015		2014		2013
Unrecognized compensation cost of unvested share-based compensation arrangements granted under the plan at year-end	$	495	$	861	$	1,366
Grant date fair value of shares vested for the year		1,111		343		521
Cash received from option exercises under all share-based payment arrangements for the year		1,212		1,163		5,306
Tax benefit realized for the tax deductions from option exercises of the share-based payment arrangements for the year		82		93		303

The unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plans at December 31, 2015 is expected to be recognized over a weighted-average period of 2.5 years.