STOCK-BASED COMPENSATION

The Company's Board of Directors has granted stock incentive awards to certain employees and board members pursuant to a long term incentive plan which was approved by the Company's stockholders in May 2005 and in May 2015. Employees have been awarded non-vested stock units with performance conditions, non-vested stock units with market conditions and non-vested restricted stock. The restrictions on the non-vested restricted stock awards lapse at the end of a specified service period, which is typically three years from the date of grant. Restrictions could lapse sooner upon a business combination, death, disability or after an employee qualifies for retirement. The non-vested stock units will be converted into a number of shares of Company stock depending on performance and market conditions at the end of a specified service period, lasting approximately three years. The performance condition awards will be converted into a number of shares of Company stock based on the Company's average return on invested capital during the service period. Similarly, the market condition awards will be converted into a number of shares depending on the appreciation of the Company's stock compared to the NASDAQ Transportation Index. Board members were granted time-based awards with vesting periods of approximately six or twelve months. The Company expects to settle all of the stock unit awards by issuing new shares of stock. The table below summarizes award activity.



	Year Ended December 31
	2018				2017				2016
	Number of Awards		Weighted average grant-date fair value		Number of Awards		Weighted average grant-date fair value		Number of Awards		Weighted average grant-date fair value
Outstanding at beginning of period	873,849		$	12.30	1,040,569		$	9.97	1,157,659		$	7.52
Granted	304,795		24.18		243,940		17.52		314,060		15.47
Converted	(205,616	)	12.74		(320,810	)	9.47		(329,200	)	7.32
Expired	(500	)	28.38		(82,050	)	9.22		(92,750	)	7.44
Forfeited	(2,600	)	26.76		(7,800	)	13.55		(9,200	)	10.23
Outstanding at end of period	969,928		$	15.89	873,849		$	12.30	1,040,569		$	9.97
Vested	463,422		$	10.25	441,424		$	7.61	472,294		$	6.60

The average grant-date fair value of each performance condition award, non-vested restricted stock award and time-based award granted by the Company was $25.15, $16.72 and $14.39 for 2018, 2017 and 2016, respectively, the fair value of the Company’s stock on the date of grant. The average grant-date fair value of each market condition award granted was $31.60, $20.18 and $19.65 for 2018, 2017 and 2016, respectively. The market condition awards were valued using a Monte Carlo simulation technique based on volatility over three years for the awards granted in 2018, 2017 and 2016 using daily stock prices and using the following variables:



	2018	2017	2016
Risk-free interest rate	2.4%	1.7%	1.1%
Volatility	33.8%	34.7%	36.9%

For the years ended December 31, 2018, 2017 and 2016, the Company recorded expense of $5.0 million, $3.6 million and $3.2 million, respectively, for stock incentive awards. At December 31, 2018, there was $6.5 million of unrecognized expense related to the stock incentive awards that is expected to be recognized over a weighted-average period of 1.5 years. As of December 31, 2018, none of the awards were convertible, 326,928 units of the Board members' time-based awards had vested and none of the outstanding shares of the restricted stock had vested. These awards could result in a maximum number of 1,204,978 additional outstanding shares of the Company’s common stock depending on service, performance and market results through December 31, 2020.