The Company has various types of share-based compensation plans that permit the granting of awards in the form of stock options, restricted stock, restricted share units, and phantom stock. These plans are administered by the Compensation Committee of the Board of Directors, which selects persons eligible to receive awards and determines the terms, conditions and other provisions of the awards. At December 31, 2019, awards of 3,205,153 shares could be made under approved incentive compensation plans. The Company issues shares to fulfill stock option exercises and restricted share units and restricted stock awards vesting from available authorized common shares. At December 31, 2019, the Company believes there were adequate authorized shares to satisfy anticipated stock option exercises and restricted share unit and restricted stock award vesting.

The Company issues stock options under various plans to directors, officers and other key employees. The option exercise price cannot be less than the fair value of the underlying common stock as of the date of the option grant and the maximum option term cannot exceed ten years.



	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contract Life (in years)
Outstanding options, December 31, 2016	721,538		$	55.38
Granted	80,557		84.78
Exercised	(85,221	)	55.45		$	2,098
Forfeited or expired	(30,508	)	68.46
Outstanding options, December 31, 2017	686,366		$	58.24
Granted	97,620		82.02
Exercised	(42,047	)	53.07		1,242
Forfeited or expired	(27,519	)	68.30
Outstanding options, December 31, 2018	714,420		$	61.41
Granted	127,090		70.34
Exercised	(122,143	)	54.39		2,575
Forfeited or expired	(13,570	)	72.52
Outstanding options, December 31, 2019	705,797		$	64.02	$	8,926	5.4

Exercisable options, December 31, 2017	455,010		$	55.77
Exercisable options, December 31, 2018	501,815		56.75
Exercisable options, December 31, 2019	463,595		59.13		$	7,796	3.9

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock option awards. The following weighted-average assumptions were used for option awards issued during the years ended December 31:



	2019			2018			2017
Expected dividends	2.3		%	1.8		%	1.7		%
Expected volatility	24.5		%	24.3		%	25.0		%
Risk-free interest rate	2.5		%	2.7		%	2.1		%
Expected term (in years)	5.7			5.8			5.8
Weighted-average grant-date fair value	$	14.44		$	18.48		$	18.86

The assumptions above are based on multiple factors, including historical stock option exercise patterns and post-vesting employment termination behaviors, expected future exercise patterns and the expected volatility of the Company’s stock price.

The following table represents the compensation expense that is included in non-interest expense and related income tax benefits in the accompanying consolidated statements of comprehensive income related to stock options for the years ended December 31:

At December 31, 2019, there was $2.1 million of unrecognized compensation expense related to stock options that is expected to be recognized over a weighted-average period of 2.6 years.

The Company issues restricted stock under various plans for certain officers and directors. The restricted stock awards may not be sold or otherwise transferred until certain restrictions have lapsed. The holders of the restricted stock receive dividends and have the right to vote the shares. The compensation expense for these awards is determined based on the market price of the Company's common stock at the date of grant applied to the total number of shares granted and is recognized over the vesting period (generally three to five years). As of December 31, 2019 and 2018, unrecognized share-based compensation expense associated with these awards totaled $27.5 million and $27.1 million, respectively. The unrecognized compensation expense related to restricted stock awards at December 31, 2019 is expected to be recognized over a weighted-average period of 1.1 years.

In connection with the merger agreement with First Horizon, the Compensation Committee of the Board of Directors accelerated the vesting of the performance-based restricted stock awards previously awarded as a special acquisition incentive, held by certain executive officers, such that the restricted stock awards became fully vested upon the execution of the merger agreement. The value of these shares at the merger execution date was $7.3 million. In addition, 123,274 restricted stock awards were granted to certain executive officers on November 18, 2019 in connection with the merger agreement. These awards do not have any performance criteria attached to them.

The Company issues restricted share units to certain of its executive officers. Restricted share units vest after the end of a three year performance period, based on satisfaction of the market and performance conditions set forth in the restricted share unit agreements. Recipients do not possess voting or investment power over the common stock underlying such units until vesting. The grant date fair value of these restricted share units is the same as the value of the corresponding number of shares of common stock, adjusted for assumptions surrounding the market-based conditions contained in the respective agreements. See Note 1, Summary of Significant Accounting Policies, for further discussion of restricted share units with market or performance conditions.

The following table represents the compensation expense that was included in non-interest expense and related income tax benefits in the accompanying consolidated statements of comprehensive income related to restricted stock awards and restricted share units for the years ended December 31:



(in thousands)	2019		2018		2017
Compensation expense related to restricted stock awards and restricted share units	$	23,176	$	18,998	$	14,966
Income tax benefit related to restricted stock awards and restricted share units	4,395		3,990		2,809



	2019		2018		2017
Number of shares at beginning of period	700,628		738,187		543,261
Granted	344,018		231,064		421,198
Forfeited	(21,656	)	(72,217	)	(31,699	)
Vested	(342,077	)	(196,406	)	(194,573	)
Number of shares at end of period	680,913		700,628		738,187

The weighted average grant date fair value of restricted stock awards and restricted share units granted was $71.81, $80.98, and $82.49 for the years ended December 31, 2019, 2018, and 2017, respectively. The total fair value of restricted stock awards and restricted share units vested during the years ended December 31, 2019, 2018, and 2017 was $28.5 million, $16.3 million, and $16.4 million, respectively.

The Company issues phantom stock awards to certain key officers and employees. The awards are subject to a vesting period of five years and are paid out in cash upon vesting. The amount paid per vesting period is calculated as the number of vested “share equivalents” multiplied by the closing market price of a share of the Company’s common stock on the vesting date. Share equivalents are calculated on the date of grant as the total award’s dollar value divided by the closing market price of a share of the Company’s common stock on the grant date.

The following table represents compensation expense recorded for phantom stock based on the number of share equivalents vested at December 31 of the years indicated and the current market price of the Company’s stock at that time:



(in thousands)	Number of share equivalents ⁽¹⁾		Value of share equivalents ⁽²⁾
Balance, December 31, 2016	472,830		$	39,600
Granted	118,408		9,177
Forfeited share equivalents	(34,968	)	2,710
Vested share equivalents	(162,426	)	13,515
Balance, December 31, 2017	393,844		$	30,523
Granted	157,044		10,095
Forfeited share equivalents	(63,276	)	4,067
Vested share equivalents	(134,205	)	11,156
Balance, December 31, 2018	353,407		$	22,717
Granted	192,524		14,407
Forfeited share equivalents	(34,362	)	2,571
Vested share equivalents	(112,052	)	34,566
Balance, December 31, 2019	399,517		$	29,896

The Company has a 401(k) Profit Sharing Plan covering substantially all of its employees. Annual employer contributions to the Plan are set by the Board of Directors. The Company made contributions of $4.0 million, $3.7 million, and $3.5 million for the years ended December 31, 2019, 2018, and 2017, respectively. The Plan provides, among other things, that participants in the Plan be able to direct the investment of their account balances within the Profit Sharing Plan into alternative investment funds. Participant deferrals under the salary reduction election may be matched by the employer based on a percentage to be determined annually by the employer.