STOCK OWNERSHIP AND BENEFIT PLANS

Our stock-based compensation expense results from restricted stock awards, restricted stock units and stock issued under the Employee Stock Purchase Plan. The following table sets forth the total stock-based compensation expense included in the Consolidated Statements of Operations:



	2016		2015			2014
Cost of products sold	$	235	$	243		$	309
General and administrative expenses	1,755		2,240			2,995
Selling and distribution expenses	336		343			284
Restructuring expense	74		—			—
Stock-based compensation expense before income taxes and discontinued operations	2,400		3,362			3,588
Income tax benefit	—		(915		)	(990		)
Stock-based compensation expense before discontinued operations, net of income taxes	2,400		2,447			2,598

Discontinued operations	—		—			112
Income tax benefit	—		—			(38		)
Stock-based compensation expense in discontinued operations, net of income taxes	—		—			74

Stock-based compensation expense, net of income taxes	2,400		2,447			2,672

Earnings per share impact - Basic:
Continuing operations	$	0.17	$	0.18		$	0.19
Discontinued operations	$	—	$	—		$	0.10
Net income	$	0.17	$	0.18		$	0.29
Earnings per share impact - Diluted:
Continuing operations	$	0.17	$	0.18		$	0.19
Discontinued operations	$	—	$	—		$	0.01
Net income	$	0.17	$	0.18		$	0.20

On November 4, 2016, our stockholders approved the 2016 Omnibus Incentive Plan (“2016 Plan”). The 2016 Plan provides for the grant of various types of equity-based incentives, including stock options, restricted stock, restricted stock units, stock appreciation rights, performance shares, performance units, other stock-based awards, and cash-based awards. Our stockholders approved a total of 5,000,000 shares available for grant under the 2016 Plan, less the number of awards outstanding under the 2006 Stock Incentive Plan ("2006 Plan") on September 21, 2016, which was the expiration date of the 2006 Plan. As of September 21, 2016, we had granted an aggregate of 1,639,881 shares of restricted stock and restricted stock units under the 2006 Plan, leaving 3,360,119 shares available for grant under the 2016 Plan.

Historically, restricted stock awards and restricted stock units are granted to employees and non-employee directors based on time-vesting and/or performance conditions. Stock awards or restricted stock units with time-vesting generally vest in one-third increments on the first, second, and third anniversary of the grant date. For currently outstanding stock awards or restricted stock units with time and performance conditions, one-quarter of the shares vest on each of the first and second anniversaries of the grant date. On the third anniversary, all or a portion of the remaining one-half of the shares will vest based on a formula that takes into account the Company’s achievement of Adjusted EBITDA compared to a target amount and the relative total return to the Company’s stockholders in comparison to the total stockholder return of the Company’s peer group of public companies. The fair value of restricted stock and restricted stock unit awards granted to employees and non-employee directors is based on the fair value of DMC’s stock on the grant date. Stock awards granted to employees are amortized to compensation expense over the vesting period on a straight-line basis. Stock awards granted to non-employee directors are amortized to compensation expense over one year, which represents the term of their appointment.

A summary of the activity of our nonvested shares of restricted stock awards issued under the 2006 Plan for the years ended December 31, 2016, 2015, and 2014 is as follows:



	Shares		Weighted Average Grant Date Fair Value
Balance at December 31, 2013	187,113		$	17.63
Granted	157,680		21.31
Vested	(81,823	)	18.55
Forfeited	(250	)	22.05

Balance at December 31, 2014	262,720		$	19.55
Granted	148,972		14.65
Vested	(157,673	)	18.81
Forfeited	(12,332	)	18.82

Balance at December 31, 2015	241,687		$	17.04
Granted	228,532		8.07
Vested	(144,008	)	15.08
Forfeited	(42,634	)	10.82

Balance at December 31, 2016	283,577		$	11.74

A summary of the activity of our nonvested restricted stock units issued under the 2006 Plan for the years ended December 31, 2016, 2015, and 2014 is as follows:



	Share Units		Weighted Average Grant Date Fair Value
Balance at December 31, 2013	99,345		$	17.59
Granted	33,895		21.25
Vested	(48,674	)	18.87
Forfeited	—		—

Balance at December 31, 2014	84,566		$	18.33
Granted	50,167		13.90
Vested	(38,405	)	17.58
Forfeited	(9,166	)	14.23

Balance at December 31, 2015	87,162		$	16.54
Granted	48,855		6.88
Vested	(40,836	)	16.24
Forfeited	—		—

Balance at December 31, 2016	95,181		$	11.71

As of December 31, 2016, there was $1,307 and $489 of total unrecognized stock-based compensation related to unvested restricted stock awards and restricted stock units, respectively. The cost is expected to be recognized over a weighted average period of 1.27 and 1.5 years for the restricted stock awards and restricted stock units, respectively.

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan (“ESPP”) which is authorized to issue up to 600,000 shares of which 35,984 shares remain available for future purchases. The offerings begin on the first day following each previous offering (“Offering Date”) and end six months from the Offering Date (“Purchase Date”). The ESPP provides that full time employees may authorize DMC to withhold up to 15% of their earnings, subject to certain limitations, to be used to purchase common stock of DMC at the lesser of 85% of the fair market value of DMC’s common stock on the Offering Date or the Purchase Date. In connection with the ESPP, 45,888, 33,346, and 20,148 shares of our stock were purchased during the years ended December 31, 2016, 2015, and 2014, respectively. Our total stock-based compensation expense for 2016, 2015, and 2014 includes $54, $86, and $92 respectively, in compensation expense associated with the ESPP.

401(k) Plan

We offer a contributory 401(k) plan to our employees. We make matching contributions equal to 100% of each employee’s contribution up to 3% of qualified compensation and 50% of the next 2% of qualified compensation contributed by each employee. Total DMC contributions were $455, $526, and $523 for the years ended December 31, 2016, 2015 and 2014, respectively.

Defined Benefit Plans

We have defined benefit pension plans at certain foreign subsidiaries for which we have recorded an unfunded pension obligation of $1,197 and $1,009 as of December 31, 2016 and 2015, respectively, which is included in other long-term liabilities in the Consolidated Balance Sheets. All necessary adjustments to the obligation are based upon actuarial calculations and are recorded directly to the statement of operations. We recognized net adjustments of $235, $(16) and $349 for the years ended December 31, 2016, 2015 and 2014, respectively.