STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2018

NOTE 12 - STOCK-BASED COMPENSATION

Restricted Stock

Under the equity incentive plans approved by our shareholders, directors, consultants and employees may be awarded shares of DXP's common stock. The shares of restricted stock and restricted stock units granted to employees and that are outstanding as of March 31, 2018 vest (or have forfeiture restrictions that lapse) in accordance with one of the following vesting schedules: 100% one year after date of grant; 33.3% each year for three years after date of grant; 20% each year for five years after date of grant; or 10% each year for ten years after date of grant. The shares of restricted stock granted to non-employee directors of DXP vest one year after the grant date. The fair value of restricted stock awards is measured based upon the closing prices of DXP's common stock on the grant dates and is recognized as compensation expense over the vesting period of the awards. Shares of our common stock are issued and outstanding upon the grant of awards of restricted stock. Once restricted stock units vest, new shares of the Company's stock are issued. At March 31, 2018, 288,899 shares were available for future grant.

Changes in restricted stock for the three months ended March 31, 2018 were as follows:

	Number of Shares			Weighted Average Grant Price
Non-vested at December 31, 2017		77,901		$	30.36
Granted		114,724		$	30.94
Forfeited		(2,400	)	$	46.68
Vested		(10,699	)	$	55.90
Non-vested at March 31, 2018		179,526		$	28.99

Compensation expense, associated with restricted stock, recognized in the three months ended March 31, 2018 and 2017 was $446 thousand and $0.5 million, respectively. Related income tax benefits recognized in earnings for the three months ended March 31, 2018 and 2017 were approximately $0.2 million and $0.2 million, respectively. Unrecognized compensation expense under the Restricted Stock Plan at March 31, 2018 and December 31, 2017 was $4.5 million and $1.6 million, respectively. As of March 31, 2018, the weighted average period over which the unrecognized compensation expense is expected to be recognized is 26.7 months.