Share-based Compensation

12 Months Ended

Dec. 31, 2022

Share-based Compensation

Share-based Compensation

12.        Share-based Compensation

2018 Omnibus Incentive Plan

In June 2018, the Board approved the 2018 Omnibus Incentive Plan (the “Incentive Plan”) to become effective in connection with the initial public offering. The Company had reserved an aggregate of 3.2 million shares of its Class A common stock for issuance of awards under the Incentive Plan. In May 2020, the stockholders approved the Amended and Restated Omnibus Plan which, among other things, increased the number of shares remaining to issue to 5.8 million shares. 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 award activity for the year ended December 31, 2022:

		Weighted
	Number of	Average Grant
	Units	Date Fair Value
Unvested at December 31, 2021	1,790,769	$	7.91
Granted	2,268,487		3.76
Vested	(539,094)		8.41
Forfeited	(1,081,177)		5.54
Unvested at December 31, 2022	2,438,985	$	4.99

Service based restricted stock grants vest over periods of one to five years and account for 2,274,328 of the unvested shares. Performance based awards account for 164,657 of the unvested shares and vest based upon achievement of certain performance goals, as defined by the Company. The Company recognized compensation expense related to service based awards of $4.2 million, $4.9 million and $2.8 million during 2022, 2021 and 2020, respectively. The Company recognized compensation expense of ($.1) million, $0.2 million and $0.6 million related to performance awards during 2022, 2021 and 2020, respectively. At December 31, 2022, the Company had $7.8 million in unrecognized compensation expense related to the service based restricted stock awards which is expected to be recognized over a weighted average period of approximately 2.6 years.

The following is a summary of the Incentive Plan stock option activity for the year ended December 31, 2022:

		Weighted
	Number of	Average Grant
	Units	Date Fair Value
Unvested at December 31, 2021	124,783	$	4.86
Vested	(78,976)		5.12
Unvested at December 31, 2022	45,807	$	4.41

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 $0.2 million, $0.3 million and $0.3 million during 2022, 2021 and 2020, respectively.

As of December 31, 2022, the Company had $0.1 million in unrecognized compensation expense related to the stock option awards which is expected to be recognized over a period of approximately 0.2 year. As of December 31, 2022, 270,091 options were exercisable with a weighted exercise price of $12.64 and a weighted remaining contractual life of 5.8 years.

Restricted Stock Units

In 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 1), 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 the year ended December 31, 2022:

	Number of	Weighted
	Units	Average
Unvested at December 31, 2021	460,040	$	2.15
Vested	(153,323)		2.15
Unvested at December 31, 2022	306,717	$	2.15

The vesting schedule for these restricted unit grants is 7 years. The Company recognized compensation expense of $0.3 million, $0.3 million and $0.4 million during 2022, 2021 and 2020, respectively. As of December 31, 2022, the Company had approximately $0.4 million in unrecognized compensation expense related to restricted units, which is expected to be recognized over a period of approximately 1.2 years. The fair value of the restricted units and corresponding compensation expense was determined using the income approach.

Employee Stock Purchase Plan

In June 2018, our Employee Stock Purchase Plan (the “ESPP”) became effective. The Company has reserved an aggregate of 2.3 million shares of its Class A common stock for issuance under the ESPP. Eligible employees may elect to purchase shares of our Class A common stock through payroll deductions up to 15% of eligible compensation. The purchase price of the shares during each offering period will be 85% of the lower of the fair market value of our Class A common stock on the first trading day of each offering period or the last trading day of the offering period. The common stock will be purchased in January and July of each year. The first offering period commenced on January 1, 2019, and we recognized compensation expense of $0.7 million, $0.5 million and $0.3 million during 2022, 2021 and 2020, respectively, associated with the plan. The employees purchased 409,319 and 241,443 shares of the Company’s Class A common stock during 2022 and 2021, respectively.