At Pinnacle Financial's annual shareholders' meeting on April 17, 2018, the shareholders of Pinnacle Financial approved the 2018 Omnibus Incentive Plan (the "2018 Plan"). The 2018 Plan subsumed the then existing Pinnacle Financial Partners, Inc. 2014 Equity Incentive Plan including the approximately 500,000 shares in the aggregate that remained available for issuance thereunder on the date the 2018 Plan was approved by shareholders and increased the maximum number of shares of common stock that may be be issued to associates, directors and contractors of Pinnacle Financial and Pinnacle Bank by an additional 1.2 million shares. The 2018 Plan permits Pinnacle Financial to reissue outstanding awards that are subsequently forfeited, settled in cash, withheld by Pinnacle Financial to cover withholding taxes or expire unexercised and returned to the 2018 Plan. At December 31, 2019, there were approximately 1.2 million shares available for issuance under the 2018 Plan.

The BNC Bancorp 2013 Amended and Restated Omnibus Stock Incentive Plan (the "BNC Plan") was assumed by Pinnacle Financial in connection with the BNC Merger. As of December 31, 2019, the BNC Plan had approximately 8,000 shares remaining available for issuance to existing associates that were previously BNC associates in future periods. No new awards may be granted under plans other than the 2018 Plan except for shares remaining available for issuance to the former BNC associates pursuant to the BNC Plan.

Upon the acquisition of CapitalMark, Pinnacle Financial assumed approximately 858,000 stock options under the CapitalMark Option Plan. No further shares remain available for issuance under the CapitalMark Option Plan. At December 31, 2019, all of the remaining options outstanding were granted under the CapitalMark Option Plan.

As of December 31, 2019, of the 119,274 stock options outstanding, approximately 47,560 options were granted with the intention to be incentive stock options qualifying under Section 422 of the Internal Revenue Code for favorable tax treatment to the option holder while approximately 71,714 options would be deemed non-qualified stock options and thus not subject to favorable tax treatment to the option holder. Favorable treatment generally refers to the recipient of the award not having to report ordinary income at the date of exercise assuming certain conditions are met. All stock options granted under the CapitalMark Plan were fully vested at the date of the CapitalMark merger.

A summary of stock option activity within the equity incentive plans during each of the years in the three-year period ended December 31, 2019 and information regarding expected vesting, contractual terms remaining, intrinsic values and other matters was as follows:


	Number	Weighted- Average Exercise Price		Weighted- Average Contractual Remaining Term (in years)	Aggregate Intrinsic Value ⁽¹⁾ (000's)
Outstanding at December 31, 2016	552,372	$	20.75
Granted	—	—
Stock options exercised⁽²⁾	(275,904)	20.09
Forfeited	—	—
Outstanding at December 31, 2017	276,468	$	21.40
Granted	—	—
Stock options exercised	(97,877)	18.91
Forfeited	—	—
Outstanding at December 31, 2018	178,591	$	22.77
Granted	—	—
Stock options exercised	(59,317)	21.40
Forfeited	—	—
Outstanding at December 31, 2019	119,274	$	23.45	2.85	$	4,837
Options exercisable at December 31, 2019	119,274	$	23.45	2.85	$	4,837

(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of Pinnacle Financial Common Stock of $64.00 per common share at December 31, 2019 for the 119,274 options that were in-the-money at December 31, 2019.

During 2019, 2018 and 2017, the aggregate intrinsic value of stock options exercised under Pinnacle Financial's equity incentive plans was $2.3 million, $2.7 million and $12.7 million, respectively, determined as of the date of option exercise.

There have been no options granted by Pinnacle Financial since 2008. All stock option awards granted by Pinnacle Financial were fully vested during 2013. Stock options granted under the CapitalMark Plan were fully vested at the time of acquisition. As such, there was no impact on the results of operations for stock-based compensation related to stock options for any year in the three-year period ended December 31, 2019, except for tax benefits recorded as a component of income tax expense upon exercise.


	Number	Grant Date Weighted-Average Cost
Unvested at December 31, 2016	820,539	$	36.47
Shares awarded	261,942	67.14
Conversion of previously awarded restricted share units to restricted share awards	43,680	69.40
Shares assumed in connection with acquisition of BNC	136,890	67.25
Restrictions lapsed and shares released to associates/directors	(292,896)	37.59
Shares forfeited	(34,020)	54.71
Unvested at December 31, 2017	936,135	$	50.08
Shares awarded	180,450	62.40
Conversion of previously awarded restricted share units to restricted share awards	6,200	67.85
Restrictions lapsed and shares released to associates/directors	(400,820)	46.33
Shares forfeited	(29,159)	59.51
Unvested at December 31, 2018	692,806	$	55.19
Shares awarded	245,845	55.25
Restrictions lapsed and shares released to associates/directors	(348,145)	40.47
Shares forfeited	(35,210)	58.22
Unvested at December 31, 2019	555,296	$	57.04

Pinnacle Financial grants restricted share awards to associates (including members of executive management) and outside directors with a combination of time and, in the case of the annual leadership team award, performance vesting criteria. The following tables outline restricted stock grants that were made by grant year, grouped by similar vesting criteria, during the three-year period ended December 31, 2019. The table below reflects the life-to-date activity for these awards:


Grant Year	Group ⁽¹⁾	Vesting Period in years				Shares awarded	Restrictions Lapsed and shares released to participants	Shares Withheld for taxes by participants	Shares Forfeited by participants ⁽⁶⁾	Shares Unvested
Time Based Awards
2017	Associates ⁽²⁾	3	—	5	248,265	76,923	31,355	37,904	102,083
2017	Associates^{(2) (3)}	3	—	5	136,890	128,176	3,840	1,659	3,215
2018	Associates ⁽²⁾	3	—	5	147,601	20,527	7,460	9,375	110,239
2018	Associates^{(2) (3)}	3	—	5	16,777	3,484	1,948	942	10,403
2019	Associates ⁽²⁾	3	—	5	229,296	168	106	13,787	215,235
Performance Based Awards
2017	Leadership team⁽⁴⁾	3				43,680	15,054	28,626	—	—
2018	Leadership team ⁽⁴⁾	3				6,200	4,340	1,860	—	—
Outside Director Awards ⁽⁵⁾
2017	Outside directors	1				13,677	12,139	1,538	—	—
2018	Outside directors	1				16,072	12,783	3,289	—	—
2019	Outside directors	1				16,549	—	—	—	16,549

(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 (or have Pinnacle Financial withhold some shares) to pay the applicable income taxes associated with the vested portion of the award. For time-based vesting restricted share awards, dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination. For performance-based vesting awards and time-based vesting awards to Pinnacle Financial's executive officers, dividends are placed into escrow until the forfeiture restrictions on such shares lapse.

(3)Restricted share awards issued to associates that were former associates of BNC and to Pinnacle Financial's Chairman of the Carolinas and Virginia pursuant to legacy BNC incentive plans assumed by Pinnacle Financial.

(4)Reflects conversion of restricted share units issued in prior years to restricted share awards. The forfeiture restrictions on these restricted share awards lapse should Pinnacle Financial achieve certain soundness targets at the end of the fifth year following the grant date. See further details of these awards under the caption "Restricted Share Units" below.

(5)Restricted share awards are issued to the outside members of the board of directors in accordance with their board compensation plan. Restrictions on those awards granted in 2019 lapse on February 29, 2020 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.

(6)These shares represent forfeitures resulting from recipients whose employment or board membership is terminated during each of the years in the three-year period ended December 31, 2019 or for which the performance criteria applicable to the award are not achieved. Any dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination or will not be distributed from escrow, as applicable.

Compensation expense associated with the performance-based vesting restricted share awards is recognized over the time period that the restrictions associated with the awards are anticipated to lapse based on a graded vesting schedule such that each tranche is amortized separately. Compensation expense associated with the time-based vesting restricted share awards is recognized over the time period that the restrictions associated with the awards lapse on a straight-line basis based on the total cost of the award.


	Units Awarded							Applicable Performance Periods associated with each tranche (fiscal year)	Service period per tranche (in years)	Subsequent holding period per tranche (in years)	Period in which units to be settled into shares of common stock ⁽²⁾
Grant year		Named Executive Officers (NEOs) ⁽¹⁾					Leadership Team other than NEOs
2019	166,211	—	249,343	52,244	2019	2	3	2024
					2020	2	2	2024
					2021	2	1	2024
2018	96,878	—	145,339	25,990	2018	2	3	2023
					2019	2	2	2023
					2020	2	1	2023
2017	72,537	—	109,339	24,916	2017	2	3	2022
					2018	2	2	2022
					2019	2	1	2022
2016	73,474	—	110,223	26,683	2016	2	3	2021
					2017	2	2	2021
					2018	2	1	2021
2015	58,200	—	101,850	28,378	2015	2	3	2020
					2016	2	2	2020
					2017	2	1	2020

(2)Restricted share unit awards granted in 2019, 2018, 2017, 2016 and 2015, if earned, will be settled in shares of Pinnacle Financial Common Stock in the periods noted in the table, if Pinnacle Bank's ratio of non-performing assets to its loans plus ORE is less than amounts established in the applicable award agreement.

A summary of stock compensation expense, net of the impact of income taxes, related to restricted share awards and restricted share units for the three-year period ended December 31, 2019, follows (in thousands):