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## COMSTOCK RESOURCES, INC. AND SUBSIDIARIES 

## NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 

The per share weighted average fair value of restricted stock grants in 2011, 2012 and 2013 was $18.31, $15.49 and $16.44, respectively. Total unrecognized compensation cost related to unvested restricted stock of $9.5 million as of December 31, 2013 is expected to be recognized over a period of 1.8 years. The fair value of restricted stock which vested in 2011, 2012 and 2013 was $9.3 million, $6.7 million and $7.0 million, respectively. 

## Performance Share Units 

The Company issues PSUs as part of its long-term equity incentive compensation. PSU awards can result in the issuance of common stock to the holder if certain performance criteria is met during a performance period. The performance periods consist of one year, two years and three years, respectively. The performance criteria for the PSUs are based on the Company’s annualized total stockholder return (“TSR”) for the performance period as compared with the TSR of certain peer companies for the performance period. The costs associated with PSUs are recognized as general and administrative expense over the performance periods of the awards. 

The fair value of PSUs was measured at the grant date using a stochastic process method utilizing the Geometric Brownian Motion Model (“GBM Model”). A stochastic process is a mathematically defined equation that can create a series of outcomes over time. These outcomes are not deterministic in nature, which means that by iterating the equations multiple times, different results will be obtained for those iterations. In the case of the Company’s PSUs, the Company cannot predict with certainty the path its stock price or the stock prices of its peers will take over the future performance periods. By using a stochastic simulation, the Company can create multiple prospective total return pathways, statistically analyze these simulations, and ultimately make inferences to the most likely path the total return will take. As such, because future stock returns are stochastic, or probabilistic with some direction in nature, the stochastic method, specifically the GBM Model, is deemed an appropriate method by which to determine the fair value of the PSUs. Significant assumptions used in this simulation include the Company’s expected volatility and a risk-free interest rate based on U.S. Treasury yield curve rates with maturities consistent with the vesting periods, as well as the volatilities for each of the Company’s peers. For the PSUs granted in 2012, the valuation inputs included a risk-free interest rate of 0.4% and a range of volatilities of 29% to 70%. 

In 2012 the Company granted 254,133 PSUs with a grant date fair value of $5.4 million, or $21.14 per unit. No PSUs were awarded in 2013. The fair value of PSUs is amortized over the vesting period of one to three years, using the straight-line method. Total compensation expense recognized for PSUs was $0.2 million and $3.0 million for the years ended December 31, 2012 and 2013, respectively. 

A summary of PSU activity for the year ended December 31, 2013 is presented below: 

<img src='content_image/167212.jpg'>

The number of awards assumes a one multiplier. The final number of shares of common stock issued may vary depending upon the performance multiplier, and can result in the issuance of zero to 

