Note 10 — Employee Benefit Plans

Stock-Based Compensation Plans

We have two stock-based compensation plans: the 1995 Long-Term Incentive Plan, as amended (the “1995 Incentive Plan”) and the 2005 Long-Term Incentive Plan, as amended and restated effective May 9, 2012 (the “2005 Incentive Plan”). As of March 31, 2014, there were 6.5 million shares available for issuance under the 2005 Incentive Plan, which includes a maximum of 2.0 million shares that may be granted as incentive stock options. There were no stock option grants in the three-month periods ended March 31, 2014 and 2013. During the three-month period ended March 31, 2014, the following grants of other share-based awards were made to executive officers and non-employee members of our Board of Directors under the 2005 Incentive Plan:


Date of Grant	Shares		Grant Date Fair Value Per Share	Vesting Period

January 2, 2014 (1)	73,609	$	23.18	33% per year over three years
January 2, 2014 (2)	73,609		26.79	100% on January 1, 2017
January 2, 2014 (3)	2,724		23.18	100% on January 1, 2016

(1) Reflects the grant of restricted shares to our executive officers.

(2) Reflects the grant of performance share units (“PSUs”) to our executive officers. The estimated fair value of the PSUs on grant date was determined using a Monte Carlo simulation model. The PSUs provide for an award based on the performance of our common stock over a three-year period with the maximum award being 200% of the original awarded PSUs and the minimum amount being zero. The vested PSUs will be settled in an equivalent number of shares of our common stock unless the Compensation Committee of our Board of Directors elects to pay in cash.

(3) Reflects the grant of restricted shares to certain members of our Board of Directors who have made an election to take their quarterly fees in stock in lieu of cash.

Compensation cost is recognized over the respective vesting periods on a straight-line basis. For the three-month periods ended March 31, 2014 and 2013, $1.7 million and $3.4 million, respectively, were recognized as stock-based compensation expense related to share-based awards. Additionally, for the three-month period ended March 31, 2013, $1.3 million of stock-based compensation expense was included in our discontinued operations.

Long-Term Incentive Cash Plan

The 2005 Incentive Plan and the 2009 Long-Term Incentive Cash Plan (the “LTI Plans”) provide long-term cash-based compensation to eligible employees. Cash awards historically have been both fixed sum amounts payable (for non-executive management only) as well as cash awards indexed to our common stock with the payment amount at each vesting date fluctuating based on the performance of our common stock (for both executive and non-executive management). These are measured based on the performance of our stock price over the applicable award period compared to a base price determined by the Compensation Committee of our Board of Directors at the time of the award. Cash award payments under the LTI Plans are made each year on the anniversary date of the award. Cash awards granted prior to 2012 have a vesting period of five years and cash awards granted in 2014, 2013 and 2012 have a vesting period of three years. The LTI Plans are considered liability plans and as such are re-measured to fair value each reporting period with corresponding changes in the liability amount being reflected in our results of operations.

The cash awards under the LTI Plans to our executive officers and selected management employees totaled $8.9 million in 2014 and $8.4 million in 2013. Total compensation expense associated with the cash awards issued pursuant to the LTI Plans was $1.7 million ($0.9 million related to our executive officers) and $2.5 million ($1.6 million related to our executive officers) for the three-month periods ended March 31, 2014 and 2013, respectively. The liability balance for the cash awards issued under the LTI Plans was $7.4 million at March 31, 2014 and $14.8 million at December 31, 2013, including $5.3 million at March 31, 2014 and $11.1 million at December 31, 2013 associated with the cash awards issued to our executive officers under the LTI plans.

Employee Stock Purchase Plan

In May 2012, our shareholders approved the Helix Energy Solutions Group, Inc. Employee Stock Purchase Plan (the “ESPP”). The ESPP has 1.5 million shares authorized for issuance, of which 1.3 million shares were available for issuance as of March 31, 2014. Eligible employees who participate in the ESPP may purchase shares of our common stock through payroll deductions on an after-tax basis over a four-month period beginning on January 1, May 1, and September 1 of each year during the term of the ESPP, subject to certain restrictions and limitations established by the Compensation Committee of our Board of Directors and Section 423 of the Internal Revenue Code. The per share price of common stock purchased under the ESPP is equal to 85% of the lesser of (i) its fair market value on the first trading day of the purchase period or (ii) its fair market value on the last trading day of the purchase period. The total value of the ESPP awards is calculated using the component approach where each award is computed as the sum of 15% of a share of non-vested stock, a call option on 85% of a share of non-vested stock, and a put option on 15% of a share of non-vested stock. Share-based compensation expense with respect to the ESPP was $0.2 million for the three-month periods ended March 31, 2014 and 2013.

For more information regarding our employee benefit plans, including our stock-based compensation plans, our long-term incentive cash plan and our employee stock purchase plan, see Note 9 to our 2013 Form 10-K.