EMPLOYEE AND DIRECTOR BENEFIT PLANS

The 2006 Omnibus Stock Ownership and Long-Term Incentive Plan (the "2006 Stock Plan") authorized the issuance of awards to directors of the Company and its subsidiaries, as well as eligible employees. The awards may be issued in the form of incentive stock option grants, nonstatutory stock option grants, restricted stock grants, long-term incentive compensation units or stock appreciation rights. In the event the number of shares of common stock that remain available for future issuance under the 2006 Stock Plan as of the last day of each calendar year is less than 1.5 percent of the total number of shares of common stock issued and outstanding as of such date, then the pool of awards shall be increased by the difference between 1.5 percent of the total number of shares of common stock issued and outstanding and the number of awards still remaining in the 2006 Stock Plan pool.

Vesting provisions for granted stock options are at the discretion of the Compensation Committee of the Board of Directors. As of December 31, 2012, all outstanding options were granted with a three-year vesting schedule, with 25 percent vesting at the date of grant and additional 25 percent vesting at each of the next three grant date anniversaries.

The share-based awards granted under the aforementioned plan have similar characteristics, except that some awards have been granted in stock options and certain awards have been granted in restricted stock. Therefore, the following disclosures have been disaggregated for the stock option and restricted stock awards. Vesting provisions for granted restricted stock awards are at the discretion of the Compensation Committee of the Board of Directors. As of December 31, 2012, all outstanding restricted stock awards vest in full at either the three year or five year anniversary date of the grant. The Company funds the option shares and restricted stock from authorized but unissued shares.

In addition to option grants pursuant to the 2006 Stock Plan, the Company has assumed outstanding stock options that had been granted under the stock option plans of acquired companies. Of the total options outstanding as of December 31, 2012, 186,580 acquired options remain exercisable at a weighted average exercise price of $4.96 per share. As of December 31, 2012, there were 37,121 options granted under the 2006 Stock Plan that were exercisable at a weighted average exercise price of $8.56 per share, and 260,786 shares remained available for future issuance under the 2006 Stock Plan. The following tables present a summary of all shares to be issued upon exercise of outstanding stock options.

Stock Options

A summary of the Company’s stock option plans as of and for the year ended December 31, 2012 is as follows:



	Outstanding Options			Exercisable Options
	Number	Weighted Average Option Price		Number	Weighted Average Option Price
Predecessor Company
Options outstanding, December 31, 2011	281,667	$	5.81	275,292	$	5.86
Granted/vested	—	—		—	—
Exercised	—	—		—	—
Expired	725	3.94		725	3.94
Forfeited	37,183	7.34		32,933	7.34
Options outstanding, January 31, 2012	243,759	$	5.57	241,634	$	5.60

Successor Company
Options outstanding, February 1, 2012	243,759	$	5.57	241,634	$	5.60
Granted/vested	—	—		—	—
Exercised	8,835	3.68		8,835	3.68
Expired	1,616	4.63		1,616	4.63
Forfeited	9,607	8.08		7,482	8.08
Options outstanding, December 31, 2012	223,701	$	5.55	223,701	$	5.55

The weighted average remaining life of options outstanding and options exercisable as of December 31, 2012 was 2.06 years. The weighted average remaining life of options outstanding and options exercisable as of December 31, 2011 were 3.36 years and 3.25 years, respectively.

The following table provides the range of exercise prices for options outstanding and exercisable as of December 31, 2012:



Range of Exercise Prices	Stock Options Outstanding	Stock Options Exercisable

$3.01 - $6.00	182,182	182,182
$6.01 - $9.00	18,192	18,192
$9.01 - $12.00	10,705	10,705
$12.01 - $12.71	12,622	12,622
	223,701	223,701

The fair market value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The risk-free interest rate is based upon a U.S. Treasury instrument with a life that is similar to the expected life of the option grant. Expected volatility is based upon the historical volatility of the Company’s stock price based upon the previous three years trading history. The expected term of the options is based upon the average life of previously issued stock options.

There were no stock options granted in 2012 or 2011. Compensation cost charged to earnings related to stock options was $0 and $2, respectively, for the 2012 Predecessor Period and the 2012 Successor Period and $16 for the year ended December 31, 2011. There were no options exercised in the year ended December 31, 2011.

The aggregate intrinsic value of total options outstanding and exercisable options as of December 31, 2012 was $70. As of December 31, 2012, there was no unrecognized compensation cost related to stock options as all options had fully vested.

Restricted Stock

A summary of the status of the Company’s non-vested restricted stock awards as of December 31, 2012 and 2011 and changes during the periods then ended is presented below:



	Shares	Weighted average grant date fair value
Predecessor Company
Non-vested – December 31, 2010	82,669	$	6.98
Granted	—	—
Vested	11,094	10.71
Forfeited	17,000	4.19
Non-vested – December 31, 2011	54,575	$	7.10
Granted	—	—
Vested	3,575	12.64
Forfeited	16,750	7.38
Non-vested – January 31, 2012	34,250	$	6.38

Successor Company
Non-vested – February 1, 2012	34,250	$	6.38
Granted	—	—
Vested	—	—
Forfeited	16,750	6.22
Non-vested – December 31, 2012	17,500	$	6.54

The total fair value of restricted stock grants vested during the year ended December 31, 2012 was $11. There were no restricted stock grants during the year ended December 31, 2012.

As of December 31, 2012, there was $15 of unrecognized compensation cost related to the nonvested stock award plan. That cost is expected to be recognized over a weighted average period of 1.12 years.

Defined Contribution Plan

The Company sponsors a contributory profit-sharing plan which provides for participation by substantially all employees. Participants may make voluntary contributions resulting in salary deferrals in accordance with Section 401(k) of the Internal Revenue Code. The plans provide for employee contributions up to $16.5 of the participant's annual salary and an employer contribution of 100 percent matching of the first 6 percent of pre-tax salary contributed by each participant. Anyone who turned 50 years old in 2012 could also add a catch-up contribution of $5.5 above the normal limit bringing the maximum contribution to $22 for those employees. The Company may make additional discretionary profit sharing contributions to the plan on behalf of all participants, which amounts would be in addition to the 6 percent pre-tax salary match. There were no discretionary contributions for 2012 or 2011. Amounts deferred above the first 6 percent of salary are not matched by the Company. Expense related to this plan for the 2012 Successor period and 2012 Predecessor period was $41 and $617, respectively, and for the year ended December 31, 2011 was $99.

Piedmont Stock Warrants

Certain directors and management of the Company were granted warrants for Piedmont common stock in 2010 and 2011. Many of these employees and directors perform services for the Company as well as Piedmont and compensation cost is allocated to each entity based on the proportion of each individual's contribution to the respective entity. Compensation cost recorded in non-interest expense related to these stock warrants in the 2012 Successor Period was $822.

All Piedmont stock warrants had an initial contractual term of ten years. Stock warrants issued in 2010 were granted to two of Piedmont's directors with 25 percent vesting on the grant date and 25 percent vesting on each of the first, second and third anniversaries of the grant date. Stock warrants issued in 2011 were granted with 25 percent vesting on each of the first, second, third and fourth anniversaries of the grant date. The initial exercise price of each grant equaled the price of the respective equity offering and increases at an 8 percent annual rate until a required investment return is achieved, at which time the exercise price adjusts to the initial exercise price. The required investment return is achieved when, and if, Piedmont's Board of Directors determines that the initial investors have realized a return of 100 percent of the capital each initial investor invested in Piedmont plus a cumulative, non-compounded annual return of at least 8 percent.

The fair value of each stock warrant award is determined with a Monte Carlo-based option pricing model. The model assumes that the stock warrants will be exercised at the mid-point of the time to achieve the performance condition and contractual term of ten years, weighted by the probability of a change in control event. The weighted average per share fair value of stock warrants granted in 2011 and 2010 was $33.47 and $36.41, respectively.

Piedmont stock warrants outstanding as of both December 31, 2012 and 2011 were 146,666. No grants of Piedmont's stock warrants were made during 2012.