CHFC 2018 Annual Report

stock. In addition, the Black-Scholes model was designed to approximate value for types of options that are very different from those issued by the Corporation. In spite of any theoretical value that may be placed on a stock option grant, no value is possible under options issued by the Corporation without an increase in the market price per share of the Corporation's common stock over the market price per share of the Corporation's common stock at the date of grant. Restricted Stock Units The Corporation grants Performance-Based Restricted Stock Units ("PRSUs") and Time-Based Restricted Stock Units ("TRSUs") (collectively referred to as RSUs) to certain officers from time to time. The PRSUs vest based on the Corporation achieving certain performance target levels and the grantee completing the requisite service period. The PRSUs are eligible to vest from 0.5x to 1.5x the number of units originally granted depending on which, if any, of the performance target levels are met. However, if the minimum performance target levels are not achieved, no shares will become vested or be issued for that respective year's PRSUs. The TRSUs vest upon satisfaction of a service condition. Upon achievement of the performance target level and/ or satisfaction of a service condition, as applicable, the RSUs are converted into shares of the Corporation's common stock on a one-to-one basis. Compensation expense related to RSUs is recognized over the expected requisite performance or service period, as applicable. A summary of the activity for RSUs during the year ended December 31, 2018 is presented below: Number of units Weighted-average grant date fair value per unit Outstanding at December 31, 2017 380,940 $ 41.29 Granted 321,043 54.15 Converted into shares of common stock (102,553) 34.77 Forfeited/expired (22,940) 47.87 Outstanding at December 31, 2018 576,490 $ 49.35 At December 31, 2018, unrecognized compensation expense related to RSUs totaled $16.4 million and is expected to be recognized over a remaining weighted average period of 3.1 years. Restricted Stock Awards The Corporation assumed restricted stock awards in the merger with Talmer that vest upon completion of future service requirements. The fair value of these awards is equal to the market price of the Corporation's common stock at the date the awards were assumed with the portion of the fair value related to post-combination service. The Corporation recognizes stock-based compensation expense over the vesting period, using the straight-lined method, based upon the number of shares of restricted stock ultimately expected to vest. If an individual that has been awarded restricted stock awards terminates their employment prior to the end of the vesting period, the unvested portion of the stock is forfeited, with certain exceptions. The following table provides information regarding nonvested restricted stock awards: Nonvested restricted stock awards Number of awards Weighted-average acquisition-date fair value Nonvested at January 1, 2018 83,228 $ 46.23 Vested (41,784) 46.23 Forfeited (592) 46.23 Nonvested at December 31, 2018 40,852 $ 46.23 At December 31, 2018, unrecognized compensation expense related to nonvested restricted stock awards totaled $0.3 million and is expected to be recognized over a remaining weighted average period of 0.2 years. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 152