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Stock Options and Restricted Shares (Tables)
3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Summary of Stock Option Activity
A summary of the stock option activity within the equity incentive plans during the three months ended March 31, 2020 and information regarding expected vesting, contractual terms remaining, intrinsic values and other matters is as follows:
 NumberWeighted-Average
Exercise
Price
Weighted-Average
Contractual
Remaining Term
(in years)
Aggregate
Intrinsic
Value
(000's)
 
Outstanding at December 31, 2019119,274  $23.45  2.85$4,837  
(1)
Granted—     
 
Exercised(200)    
 
Forfeited—     
 
Outstanding at March 31, 2020119,074  $23.44  2.60$1,678  
(2)
Options exercisable at March 31, 2020119,074  $23.44  2.60$1,678  
(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 $64.00 per common share at December 31, 2019 for the 119,274 options that were in-the-money at December 31, 2019.
(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 $37.54 per common share at March 31, 2020 for the 119,074 options that were in-the-money at March 31, 2020.
Summary of Activity for Unvested Restricted Share Awards
A summary of activity for unvested restricted share awards for the three months ended March 31, 2020 is as follows:
 NumberGrant Date
Weighted-Average Cost
Unvested at December 31, 2019555,296  $57.04  
Shares awarded207,370  62.61
Restrictions lapsed and shares released to associates/directors(119,773) 53.81
Shares forfeited (1)
(8,904) 59.79
Unvested at March 31, 2020633,989  $59.44  
(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 and outside directors with a time-based vesting criteria. Compensation expense associated with 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. The following table outlines restricted stock grants that were made, grouped by similar vesting criteria, during the three months ended March 31, 2020. The table 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 Forfeited by participants (4)
Shares Unvested
Time Based Awards      
2020
Associates (2)
3 -5190,270   2,013  188,250  
Outside Director Awards (3)
      
2020Outside directors117,100  —  —  17,100  

(1)Groups include employees (referred to as associates above) 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 award. Alternatively, the recipient can pay the withholding taxes in cash. 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 to Pinnacle Financial's directors, 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)Restricted share awards are issued to the outside members of the board of directors in accordance with their board compensation plan. Restrictions lapse on February 28, 2021 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.
(4)These shares represent forfeitures resulting from recipients whose employment or board membership was terminated during the year-to-date period ended March 31, 2020. 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.
Summary of Restricted Share Unit awards
The following table details the performance-based vesting restricted stock unit awards outstanding at March 31, 2020:
 Units Awarded    
Grant year
Named Executive Officers
(NEOs) (1)
Leadership Team other than NEOsApplicable 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)
2020136,137204,220  59,648  2020232025
2021222025
2022212025
2019166,211-249,343  52,244  2019232024
2020222024
2021212024
201896,878-145,339  25,990  2018232023
2019222023
2020212023
201772,537-109,339  24,916  2017232022
   2018222022
   2019212022
201673,474-110,223  26,683  2016232021
   2017222021
   2018212021
(1)The named executive officers are awarded a range of awards that may be earned based on attainment of goals between a target level of performance and a maximum level of performance.
(2)Restricted share unit awards, 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.