STOCK OWNERSHIP AND BENEFIT PLANS

On September 21, 2006, our stockholders approved, and we adopted, the 2006 Stock Incentive Plan (“2006 Plan”). On May 23, 2013, our stockholders approved an amendment to the 2006 Plan to increase the number of shares of common stock that may be issued under the 2006 Plan. The 2006 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 and other stock-based awards. There are a total of 1,617,500 shares available for grant under the 2006 Plan. As of December 31, 2015, we have granted an aggregate of 1,416,360 shares of restricted stock and restricted stock units under the 2006 Plan, leaving 201,140 shares available for future grant.

The following table sets forth the total stock-based compensation expense included in the Consolidated Statements of Operations:



	2015			2014			2013
Cost of products sold	$	243		$	309		$	304
General and administrative expenses	2,240			2,995			2,913
Selling and distribution expenses	343			284			184
Restructuring expense	536			—			—
Stock-based compensation expense before income taxes and discontinued operations	3,362			3,588			3,401
Income tax benefit	(915		)	(970		)	(990		)
Stock-based compensation expense before discontinued operations, net of income taxes	2,447			2,618			2,411

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	2,447			2,692			2,411

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

Our stock-based compensation expense results from restricted stock awards, restricted stock units and stock issued under the Employee Stock Purchase Plan. During the first quarter of 2013 and, as a result of Board actions taken in January 2013, we recorded a one-time expense of $2,965 associated with the retirements of our former President and Chief Executive Officer and another senior executive. This expense included $894 of stock-based compensation, with the remainder representing cash payments.

Restricted Stock Awards and Units: 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 with time-vesting only generally vest in one-third increments on the first, second, and third anniversary of the grant date. For stock awards with 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, 2015, 2014, and 2013 is as follows:



	Shares		Weighted Average Grant Date Fair Value
Balance at December 31, 2012	242,385		$	27.75
Granted	163,579		16.37
Vested	(216,851	)	27.95
Forfeited	(2,000	)	22.05

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

A summary of the activity of our nonvested restricted stock units for the years ended December 31, 2015, 2014, and 2013 is as follows:



	Share Units		Weighted Average Grant Date Fair Value
Balance at December 31, 2012	80,429		$	20.41
Granted	56,217		15.67
Vested	(35,001	)	20.88
Forfeited	(2,300	)	19.01

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

As of December 31, 2015, there was $1,558 and $670 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 81,872 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, 33,346; 20,148; and 22,689 shares of our stock were purchased during the years ended December 31, 2015, 2014, and 2013, respectively. Our total stock-based compensation expense for 2015, 2014, and 2013 includes $86, $92, and $76 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 $526, $523, and $485 for the years ended December 31, 2015, 2014 and 2013, respectively.

Defined Benefit Plans

We have defined benefit pension plans at certain foreign subsidiaries for which we have recorded an unfunded pension obligation of $1,009 and $1,143 as of December 31, 2015 and 2014, 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 are recorded directly to the statement of operations. We recognized net adjustments of $(16), $349 and $67, respectively, for the years ended December 31, 2015, 2014 and 2013.