14.	Share-based Compensation

2018

Omnibus Incentive Plan

June 2018,

the Board approved the

2018

Omnibus Incentive Plan (the “Incentive Plan”) to become effective in connection with the offering. The Company has reserved an aggregate of

3.2

million shares of its Class A common stock for issuance of awards under the Incentive Plan. Participants in the Incentive Plan will be selected by the Compensation Committee from the executive officers, directors, employees and consultants of the Company. Awards under the Incentive Plan

may

be made in the form of stock options, stock appreciation rights, stock awards, restricted stock units, performance awards, performance units, and any other form established by the Compensation Committee pursuant to the Incentive Plan.

The following is a summary of the Incentive Plan restricted stock and restricted stock unit activity from

June 13, 2018

December 31, 2018:

			Weighted
	Number of		Average Grant
	Units		Date Fair Value

Unvested at June 13, 2018		-		-
Granted		287,232	$	14.30
Forfeited '		16,490		16.00
Unvested at December 31, 2018		270,742	$	14.20

The restricted stock grants vest over periods of

one

four

years. The Company recognized compensation expense of

$1.0

million during

2018.

December 31, 2018,

the Company had

$2.8

million in unrecognized compensation expense related to the above restricted stock awards which is expected to be recognized over a period of approximately

3.3

years.

The following is a summary of the Incentive Plan stock option activity from

June 13, 2018

December 31, 2018:

			Weighted
	Number of		Average Grant
	Units		Date Fair Value

Unvested at June 13, 2018		-		-
Granted		192,203	$	6.09
Forfeited		14,943	$	6.09
Unvested at December 31, 2018		177,260	$	6.09

The stock options vest over a period of

four

years and expire

ten

years from the date of grant. The Company recognized compensation expense of

$0.3

million during

2018.

The fair value of the stock option grant was estimated using the Black-Scholes method as of the grant date using the following assumptions:

Strike price	$	16.00
Risk-free interest rate		2.91	%
Expected dividend yield		0	%
Expected volatility		32.67	%
Expected term (in years)		6.25

December 31, 2018,

the Company had

$0.8

million in unrecognized compensation expense related to the stock option awards which is expected to be recognized over a period of approximately

3.5

years.

Stock Appreciation Rights

June

2015,

the Company approved the

2015

Stock Appreciation Rights Plan. The purpose of the plan was to attract and retain the best available personnel for positions of substantial responsibility and to provide incentive to employees to promote the success of the Company’s business. Each holder of an award had the right to receive a cash payment amounting to the difference between the grant price and the fair market value of the Company’s Class A common stock on the exercise date. These awards were subject to time-based and performance-based vesting conditions. For each grant, the number of shares awarded was determined based on a performance condition relating to certain financial results of the Company. Awards granted vested ratably over a service period of

years. The awards were accounted for as liability classified compensatory awards under ASC

710

and valued using the intrinsic value method, as permitted by ASC

718

for nonpublic entities, with changes to the value recognized as compensation expense during each reporting period.

In conjunction with the offering, the Company vested all remaining stock appreciation rights (“SARS”) and settled the resulting liabilities related thereto. As a result, the Company recorded additional compensation expense in the amount of

$3.2

million in the

second

quarter of

2018.

The following is a summary of the Company’s SARS activity for

2018,

2017

and

2016:

	Number of		Grant Date
	Units		Exercise Price

Outstanding at December 31, 2015		76,125	$	9.95
Granted		-		-
Exercised		1,450		9.95
Canceled or expired		2,175		9.95
Outstanding at December 31, 2016		72,500		9.95
Granted		-		-
Exercised		2,175		9.95
Canceled or expired		5,075		9.95
Outstanding at December 31, 2017		65,250		9.95
Granted		-		-
Exercised		63,250		9.95
Canceled or expired		2,000		9.95
Outstanding at December 31, 2018		-		-

The Company recognized compensation expense of

$3.4

million,

$0.3

million and

$0.2

million during

2018,

2017

and

2016,

respectively.

Restricted Stock Units

August

2008,

the U.S. Xpress Enterprises board approved the

2008

Restricted Stock Plan that provided for restricted membership unit awards in New Mountain Lake in order to compensate the Company’s employees and to promote the success of the Company’s business.

Redeemable restricted units were subject to certain put rights at the option of the holder or upon the occurrence of an event that was

not

solely under the control of the Company. Under the terms of the stock plan, a portion of the units held by employees of the Company for at least

nine

months could be put back to the Company at the option of the holder during a specified period each year and under certain circumstances after termination. These equity instruments were redeemable at fair value and were classified as temporary equity on the

2017

consolidated balance sheets in accordance with ASC

480.

As part of the Reorganization (see Note

), all of the redeemable restricted units of New Mountain Lake were converted into restricted stock units of the Company, with the same vesting schedules. Therefore, we refer to redeemable restricted units issued prior to the Reorganization as restricted stock units. At the time of conversion, the restricted stock unit amounts were reclassified to additional paid in capital. The following is a summary of the Company’s restricted stock unit activity for

2018,

2017

and

2016:

	Number of		Weighted
	Units		Average

Unvested at December 31, 2015		277,992	$	6.73
Granted		20,000		9.96
Vested		55,492		8.97
Forfeited		5,000		9.30
Unvested at December 31, 2016		237,500		6.79
Granted		292,500		10.37
Vested		69,333		6.62
Forfeited		14,667		7.69
Unvested at December 31, 2017		446,000	$	9.14
Granted		-		-
Vested-pre IPO		105,307		7.74
Forfeited-pre IPO		6,667		7.52
Unvested at June 13, 2018		334,026		9.62
Conversion in connection with IPO		4.6666667
Unvested post-IPO		1,558,787		2.06
Vested-post IPO		144,667		2.67
Forfeited post IPO		12,446		1.99
Unvested at December 31, 2018		1,401,674	$	2.00

The vesting schedule for these restricted unit grants range from

years. The Company recognized compensation expense of

$0.9

million,

$0.7

million and

$0.5

million during

2018,

2017

and

2016,

respectively. At

December

31,

2018,

the Company had approximately

$2.2

million in unrecognized compensation expense related to restricted units, which is expected to be recognized over a period of approximately

4.1

years. The fair value of the restricted units and corresponding compensation expense was determined using the income approach.