Stock Options, Stock Appreciation Rights and Restricted Shares (Tables)

9 Months Ended

Sep. 30, 2015

Stock Options, Stock Appreciation Rights and Restricted Shares [Abstract]

Summary of Stock Option and Stock Appreciation Rights Activity

A summary of the stock option and stock appreciation rights activity within the equity incentive plans during the nine months ended September 30, 2015 and information regarding expected vesting, contractual terms remaining, intrinsic values and other matters is as follows:

	Number			Weighted- Average Exercise Price		Weighted- Average Contractual Remaining Term (in years)		Aggregate Intrinsic Value (000's)
Outstanding at December 31, 2014		698,488		$	26.89		1.90	$	9,071	⁽¹⁾
Options acquired upon acquisition of CapitalMark		858,143
Granted		-
Exercised		(205,091	)
Stock appreciation rights exercised⁽³⁾		(1,230	)
Forfeited		(5	)
Outstanding at September 30, 2015		1,350,305		$	21.24		2.90	$	36,610	⁽²⁾
Options and stock appreciation rights exercisable at September 30, 2015		1,350,305		$	21.24		2.90	$	36,610	⁽²⁾

(1)

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted closing price of Pinnacle Financial common stock of $39.54 per common share at December 31, 2014 for the 698,488 options and stock appreciation rights that were in-the-money at December 31, 2014.

(2)

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted closing price of Pinnacle Financial common stock of $49.41 per common share at September 30, 2015 for the 1,350,305 options and stock appreciation rights that were in-the-money at September 30, 2015.

(3)	1,230 SARS were converted into 537 common shares upon exercise.

Summary of Activity for Unvested Restricted Share Awards

A summary of activity for unvested restricted share awards for the nine months ended September 30, 2015 is as follows:

	Number			Grant Date Weighted-Average Cost
Unvested at December 31, 2014		849,198		$	24.26
Shares awarded		222,335			45.41
Conversion of restricted share units to restricted share awards		43,711			34.50
Restrictions lapsed and shares released to associates/directors		(234,607	)		23.04
Shares forfeited⁽¹⁾		(14,850	)		28.63
Unvested at September 30, 2015		865,787		$	30.47

(1)	Represents shares forfeited due to employee termination and/or retirement. No shares were forfeited due to failure to meet performance targets.

Pinnacle Financial has granted restricted share awards to associates, executive management and outside directors with a combination of time and, in the case of executive management, performance vesting criteria. The following table outlines restricted stock grants that were made, grouped by similar vesting criteria, during the nine months ended September 30, 2015:

Grant Year	Group⁽¹⁾	Vesting Period in years	Shares awarded	Restrictions Lapsed and shares released to participants	Shares Forfeited by participants⁽⁷⁾	Shares Unvested
Time Based Awards
2015	Associates⁽²⁾	5	181,359	13	3,396	177,950
2015	Leadership team⁽³⁾	5	16,605	-	-	16,605
Performance Based Awards
2015	Leadership team⁽⁴⁾	5	43,711	-	-	43,711
2015	Leadership team⁽⁵⁾	3	11,302	-	-	11,302
Outside Director Awards⁽⁶⁾
2015	Outside directors	1	13,069	905	-	12,164

(1)

Groups include employees (referred to as associates above), the leadership team which includes our named executive officers and other key senior leadership members, and outside directors. When the restricted shares are awarded, a participant receives voting rights and forfeitable dividend rights with respect to the shares, but is not able to transfer the shares until the restrictions have lapsed. Once the restrictions lapse, the participant is taxed on the value of the award and may elect to sell some shares to pay the applicable income taxes associated with the award. For time-based restricted share awards, dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by the Company at the time of termination. For performance-based awards, dividends are placed into escrow until the forfeiture restrictions on such shares lapse.

(2)	The forfeiture restrictions on these restricted share awards lapse in equal annual installments on the anniversary date of the grant.

(3)	These shares were awarded to individuals joining the leadership team upon acquisition of Magna. The forfeiture restrictions on these restricted share awards lapse in equal installments on the anniversary date of the grant.

(4)	The forfeiture restrictions on these restricted share awards lapse in separate equal installments should Pinnacle Financial achieve certain earnings and soundness targets over each year of the subsequent vesting period.

(5)

These share were awarded to individuals joining the leadership team upon acquisition of CapitalMark. The forfeiture restrictions on these restricted share awards lapse in separate equal installments should Pinnacle Financial achieve certain earnings targets over each year of the vesting period and should the recipient thereafter remain employed by Pinnacle Financial for a subsequent vesting period.

(6)

Restricted share awards are issued to the outside members of the board of directors in accordance with their board compensation plan. Restrictions lapse on the one year anniversary date of the award based on each individual board member meeting their attendance goals for the various board and board committee meetings to which each member was scheduled to attend.

(7)	These shares represent forfeitures resulting from recipients for when employment terminated during the year-to-date period ended September 30, 2015. Any dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by the Company at the time of termination.