Our stock-based compensation expense results from restricted stock awards ("RSAs"), restricted stock units ("RSUs"), performance share units ("PSUs"), 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 for the years ended December 31:


	2022		2021		2020
Cost of products sold	$	506	$	604	$	652
General and administrative expenses	8,304		5,360		4,408
Selling and distribution expenses	1,248		610		615
Stock-based compensation expense	10,058		6,574		5,675
Income tax benefit	(1,716)		(1,342)		(1,313)
Stock-based compensation expense, net of income taxes	8,342		5,232		4,362

Earnings per share impact


Basic	$	0.43	$	0.30	$	0.29



Diluted	$	0.43	$	0.30	$	0.29

On November 4, 2016, our stockholders approved the 2016 Omnibus Incentive Plan (“2016 Plan”). The 2016 Plan provides for the granting of various types of equity-based incentives, including stock options, RSAs, RSUs, 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 1,639,881 of RSAs and RSUs previously granted under the 2006 Stock Incentive Plan ("2006 Plan") as of the 2006 Plan's expiration of September 21, 2016. As of the inception of the 2016 Plan on September 21, 2016, 3,360,119 shares were available for grant under the 2016 Plan. As of December 31, 2022, there are 1,979,627 shares available for future grant.

RSAs and RSUs are granted to employees and non-employee directors based on time-vesting. For RSAs or RSUs granted to employees, vesting typically occurs in one-third increments on the first, second, and third anniversary of the grant date. For RSAs or RSUs granted to non-employee directors, vesting occurs on the first anniversary of the grant date. Each RSA represents a restricted share of common stock that has voting and dividend rights and becomes fully unrestricted upon vesting. Each RSU represents the right to receive one share of stock upon vesting.

The fair value of RSAs and RSUs granted to employees and non-employee directors is based on the fair value of DMC’s stock on the grant date. RSAs and RSUs granted to employees and non-employee directors are amortized to compensation expense over the vesting period on a straight-line basis. Our policy is to recognize forfeitures of RSAs and RSUs as they occur.

PSUs are granted to employees with vesting based on performance and market conditions. Each PSU represents the right to receive stock upon the achievement of certain conditions. A target number of PSUs is awarded on the grant date, and the recipient is eligible to earn shares of common stock between 0% and 200% of the number of targeted PSUs awarded. A portion of an employee's grant is based on actual performance against a target Adjusted EBITDA goal while the remainder is based on relative total shareholder return ("TSR") performance compared to our peer group disclosed in our Proxy Statement. For awards granted in 2020 through 2022, 25% of the grant was based on the achievement of targeted Adjusted EBITDA and 75% of the grant was based on the achievement of relative TSR performance. For PSUs granted prior to 2020, 50% of the grant was based on the achievement of target Adjusted EBITDA and 50% of the grant was based on the achievement of relative TSR performance. The PSUs earned, if any, cliff vest at the end of the third year following the year of grant based on the degree of satisfaction of the PSUs performance and market conditions.

The fair value of PSUs with target Adjusted EBITDA performance conditions is based on the fair value of DMC’s stock on the grant date, and the value is amortized to compensation expense over the vesting period and is adjusted based on the estimated probable satisfaction of the performance condition at the end of each reporting period. The fair value of PSUs with TSR performance conditions is based on a third-party valuation simulating a range of possible TSR outcomes over the performance period, and the resulting fair value is amortized to compensation expense over the vesting period on a straight-line basis. Our policy is to recognize forfeitures of PSUs as they occur.

In December 2022, we recorded a nonrecurring expense of $1,959 associated with the retirement of the former president of Arcadia. Expense recorded includes $859 of accelerated stock-based compensation, with the remainder representing cash compensation to be paid in the future in accordance with the terms of the executive's pre-existing employment agreement.


	2016 Plan
	Shares	Weighted Average Grant Date Fair Value
Balance at December 31, 2020	249,565	$	27.81
Granted	120,872	50.48
Vested	(140,537)	26.96
Forfeited	(250)	45.47
Balance at December 31, 2021	229,650	$	40.26
Granted	196,955	26.43
Vested	(151,828)	36.01
Forfeited	(1,000)	29.77
Balance at December 31, 2022	273,777	$	32.71

A summary of the activity of our unvested RSUs issued under the 2016 Plan is as follows:


	2016 Plan
	Shares	Weighted Average Grant Date Fair Value
Balance at December 31, 2020	71,440	$	31.65
Granted	12,989	67.78
Vested	(32,131)	29.95
Forfeited	—	—
Balance at December 31, 2021	52,298	$	41.67
Granted	27,397	28.59
Vested	(35,101)	34.29
Forfeited	(73)	25.81
Balance at December 31, 2022	44,521	$	39.47

A summary of the activity of our unvested PSUs issued under the 2016 Plan is as follows:


	Shares	Weighted Average Grant Date Fair Value
Balance at December 31, 2020	56,110	$	57.63
Granted	44,861	59.65
Vested	(40,000)	26.47

Balance at December 31, 2021	60,971	$	79.56
Granted	84,165	31.45
Vested	(404)	48.23

Balance at December 31, 2022	144,732	$	51.67

As of December 31, 2022, total unrecognized stock-based compensation related to unvested awards was as follows:


	Unrecognized stock compensation		Weighted-average recognition period
Unvested RSAs	$	5,275	1.4 years
Unvested RSUs	$	930	1.5 years
Unvested PSUs	$	2,485	1.1 years

We have an Employee Stock Purchase Plan (“ESPP”) pursuant to which we are authorized to issue up to 850,000 shares of DMC common stock, of which 181,955 shares remain available for future purchase as of December 31, 2022. 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 stock at the lesser of 85% of the fair market value of the stock on the Offering Date or the Purchase Date. In connection with the ESPP, 12,975, 12,120, and 18,462 shares of our stock were purchased during the years ended December 31, 2022, 2021, and 2020, respectively. Our total stock-based compensation expense for 2022, 2021, and 2020 includes $67, $121, and $133, respectively, in compensation expense associated with the ESPP.

On May 3, 2021, the Company announced a registered public offering (“Offering”) of its stock under an automatic shelf registration statement on Form S-3ASR filed on May 3, 2021. The Company entered into an underwriting agreement with KeyBanc Capital Markets Inc. (“KeyBanc”), as representative of the underwriters (collectively, the “Underwriters”), pursuant to which the Company agreed to sell 2,500,000 shares of its $0.05 par value common stock to the Underwriters. In addition, the Underwriters were granted an option, exercisable within 30 days, to purchase up to an additional 375,000 shares of common stock to cover over-allotments, if any, on the same terms and conditions.

On May 7, 2021, DMC issued a total of 2,875,000 shares of its common stock, which included the exercise of the over-allotment option, at a market price of $45 per share resulting in gross proceeds of $129,375. Net proceeds from the offering were $123,461, after deducting underwriter fees and other expenses of $5,914. The net proceeds from the offering were primarily used in the acquisition of Arcadia. Between the offering date and the acquisition date, we invested the proceeds from the offering in highly liquid marketable securities, including commercial paper and U.S. Treasury securities.

On October 22, 2020, the Company commenced an at-the-market ("ATM") equity program under a shelf registration statement filed on May 12, 2020, which allows it to sell and issue up to $75 million in shares of its common stock from time to time. The Company entered into an Equity Distribution Agreement on October 22, 2020 with KeyBanc relating to the issuance and sale of shares of common stock pursuant to the program. KeyBanc is not required to sell any specific amount of securities but will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between KeyBanc and us. KeyBanc is entitled to compensation for shares sold pursuant to the program in an amount up to 1.5% of the gross proceeds of any shares of common stock sold under the Equity Distribution Agreement. The Company may at any time suspend solicitation and offers under the Equity Distribution Agreement, and the Equity Distribution Agreement may be terminated by either KeyBanc or us at any time upon three days' written notice or automatically upon the issuance and sale of all shares subject to the ATM equity program.

During the twelve months ended December 31, 2020, the Company sold 608,360 shares of common stock through its ATM program for gross proceeds of $26,132 at a weighted average price per share of $42.95. Net proceeds from such sales were $25,740, after deducting commissions paid to the sales agents of approximately $392.

During the twelve months ended December 31, 2021, the Company sold 397,820 shares of common stock through its ATM equity program for gross proceeds of $25,647 at a weighted average price per share of $64.47. Net proceeds from such sales were $25,262, after deducting commissions paid to the sales agents of approximately $385.