STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2016

NOTE 11 - STOCK-BASED COMPENSATION

Restricted Stock

Under the restricted stock plan approved by our shareholders (the “Restricted Stock Plan”), directors, consultants and employees were awarded shares of DXP’s common stock. The shares of restricted stock granted to employees and that are outstanding as of March 31, 2016 vest 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 the grant date; or 10% each year for ten years after the grant date. The Restricted Stock Plan provided that on each July 1 during the term of the plan each non-employee director of DXP would be granted the number of whole shares calculated by dividing $75 thousand by the closing price of the common stock on such July 1. 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 was 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. Once restricted stock vests, new shares of the Company’s stock are issued. The Restricted Stock Plan expired in July of 2015.

The following table provides certain information regarding the shares authorized and outstanding under the Restricted Stock Plan at March 31, 2016:

Number of shares authorized for grants		800,000
Number of shares granted		(873,199	)
Number of shares forfeited		165,997
Number of shares available for future grants		-⁽¹⁾
Weighted-average grant price of granted shares	$	28.40

(1) The Restricted Stock Plan expired in July of 2015.

Changes in restricted stock for the three months ended March 31, 2016 were as follows:

	Number of Shares			Weighted Average Grant Price
Non-vested at December 31, 2015		137,507		$	54.58
Granted		-		$	-
Forfeited		(22,121	)	$	83.75
Vested		(38,721	)	$	50.11
Non-vested at March 31, 2016		76,665		$	48.41

Compensation expense, associated with restricted stock, recognized in the three months ended March 31, 2016 and 2015 was $0.8 million and $0.8 million, respectively. Related income tax losses recognized in earnings for the three months ended March 31, 2016 were approximately $0.5 million. Unrecognized compensation expense under the Restricted Stock Plan at March 31, 2016 and December 31, 2015 was $3.3 million and $4.0 million, respectively. As of March 31, 2016, the weighted average period over which the unrecognized compensation expense is expected to be recognized is 20.22 months.