Stock Based Compensation

The Company has a Long Term Equity Incentive Plan (the “2006 Plan”), as approved by the Company’s stockholders in May 2006. This 2006 Plan replaced the Long Term Equity Incentive Plan (the “Original Plan”) as originally approved by the stockholders in May 1997 and as amended in May 2000. The 2006 Plan allows for grants to directors and employees of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, performance shares, performance units and other incentive awards (“Stock Awards”) up to an aggregate of 3,000,000 awards, each representing a right to buy a share of Core Molding Technologies common stock. Stock Awards can be granted under the 2006 Plan through the earlier of December 31, 2015, or the date the maximum number of available awards under the 2006 Plan have been granted.

The options that have been granted under the 2006 Plan have vesting schedules of five or nine and one-half years from the date of grant, or immediately upon change in ownership, are not exercisable after ten years from the date of grant, and were granted at prices which equal or exceed the fair market value of Core Molding Technologies common stock at the date of grant. Restricted stock granted under the 2006 Plan require the individuals receiving the grants to maintain certain common stock ownership thresholds and vest over three years or upon the date of the participants' sixty-fifth birthday, death, disability or change in control.

Core Molding Technologies follows the provisions of FASB ASC 718 requiring that compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity award). Core Molding Technologies adopted FASB ASC 718 using the modified prospective method. Under this method, FASB ASC 718 applies to all awards granted or modified after the date of adoption. In addition, compensation expense has been recognized for any unvested stock option awards outstanding as of the date of adoption on a straight-line basis over the remaining vesting period.

Stock Options

There were no grants of options in the years ended December 31, 2014, 2013 and 2012. Total compensation cost related to incentive stock options was $0 for the year ended December 31, 2014 and $5,000 for each of the years ended December 31, 2013 and 2012. Compensation expense from incentive stock options is included in selling, general, and administrative expenses. There was no tax benefit recorded for this compensation cost as the expense relates to incentive stock options that do not qualify for a tax deduction until, and only if, a disqualifying disposition occurs.

During the years ended December 31, 2014, 2013 and 2012 Core Molding Technologies received approximately $328,000, $410,000 and $81,000, respectively, in cash from the exercise of stock options. The aggregate intrinsic value of these options was approximately $915,000, $825,000 and $144,000, respectively, in each of those years. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.

Tax benefit received as a result of disqualified dispositions related to stock options was $311,000, for the year ended December 31, 2014, which was recorded as a credit to income tax expense of $84,000 and a credit to additional paid in capital of $227,000. For the years ended December 31, 2013 and 2012 the tax benefit received as a result of disqualified dispositions related to stock options was $300,000 and $52,000, respectively, which was recorded as a credit to additional paid in capital.

The following summarizes the activity relating to stock options under the plans mentioned above for the years ended December 31:



	2014				2013				2012
	Number of Options		Wtd. Avg. Exercise Price		Number of Options		Wtd. Avg. Exercise Price		Number of Options		Wtd. Avg. Exercise Price
Outstanding - beginning of year	227,750		$	3.57	374,875		$	3.37	400,650		$	3.35
Granted	—		—		—		—		—		—
Exercised	(224,750	)	3.53		(132,725	)	3.09		(25,775	)	3.14
Forfeited	—		—		(14,400	)	2.75		—		—
Outstanding - end of year	3,000		$	6.40	227,750		$	3.57	374,875		$	3.37
Exercisable at December 31	3,000		$	6.40	227,750		$	3.57	360,475		$	3.39
Vested or expected to vest at December 31	3,000		$	6.40	227,750		$	3.57	374,875		$	3.37

As of December 31, 2014, outstanding options had an aggregate intrinsic value of approximately $42,000 and a weighted average remaining contractual term of less than one year.

The following summarizes the status of, and changes to, unvested options during the years ended December 31:



	Number of Options		Wtd. Avg. Exercise Price
Unvested at January 1, 2012	20,100		$	2.75
Granted	—		—
Vested	(5,700	)	2.75
Forfeited	—		—
Unvested at December 31, 2012	14,400		2.75
Granted	—		—
Vested	—		—
Forfeited	(14,400	)	2.75
Unvested at December 31, 2013	—		—
Granted	—		—
Vested	—		—
Forfeited	—		—
Unvested at December 31, 2014	—		$	—

At December 31, 2014, there were no unvested stock options and no unrecognized compensation cost related to stock options granted under the Original Plan.

The following table summarizes information about stock options outstanding and exercisable as of December 31, 2014:



		Options Outstanding and Exercisable
Range of Exercise Prices		Number of Options	Wtd. Avg. Contractual Life in Years
$	6.40	3,000	0.84

Restricted Stock

In 2006, the Company began granting shares of its common stock to certain directors, officers, and key managers in the form of unvested stock (“Restricted Stock”). These awards are recorded at the market value of Core Molding Technologies’ common stock on the date of issuance and amortized ratably as compensation expense over the applicable vesting period.

The following summarizes the status of Restricted Stock and changes during the years ended December 31:



	2014				2013				2012
	Number of Shares		Wtd. Avg. Grant Date Fair Value		Number of Shares		Wtd. Avg. Grant Date Fair Value		Number of Shares		Wtd. Avg. Grant Date Fair Value
Unvested - beginning of year	98,281		$	8.91	139,730		$	6.77	173,556		$	5.21
Granted	81,763		12.04		63,876		9.32		59,070		7.93
Vested	(75,976	)	10.03		(91,573	)	5.95		(88,415	)	4.44
Forfeited	—		—		(13,752	)	8.74		(4,481	)	7.68
Unvested - end of year	104,068		$	10.79	98,281		$	8.91	139,730		$	6.77

At December 31, 2014 and 2013, there was $775,000 and $571,000, respectively, of total unrecognized compensation expense related to Restricted Stock granted under the 2006 Plan. That cost is expected to be recognized over the weighted-average period of 1.6 years. Total compensation expense related to restricted stock grants for the years ended December 31, 2014, 2013 and 2012 was $744,000, $408,000 and $405,000, respectively, and is recorded as selling, general and administrative expense.

Compensation expense for restricted stock is recorded at the fair market value at the time of the grant over vesting period of the restricted stock grant. The Company does not receive a tax deduction for restricted stock until the restricted stock vests. The tax deduction for restricted stock is based on the fair market value on the vesting date. Tax benefits received for vested restricted stock in excess of the fair market value at grant date amounted to $84,000, $109,000 and $111,000 for the years ended December 31, 2014, 2013 and 2012, respectively.