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. 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, 2025, or the date the maximum number of available awards under the 2006 Plan have been granted. The number of shares remaining available for future issuance is 1,542,615.

The options that were granted under the 2006 Plan had vesting schedules of five or nine and one-half years from the date of grant, or immediately upon change in ownership, were 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, 2015, 2014 and 2013. Total compensation cost related to incentive stock options was $0 for the years ended December 31, 2015 and 2014, and $5,000 for the year ended December 31, 2013. 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, 2015, 2014 and 2013 Core Molding Technologies received approximately $19,000, $328,000 and $410,000, respectively, in cash from the exercise of stock options. The aggregate intrinsic value of these options was approximately $26,000, $915,000 and $825,000, 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 $9,000, for the year ended December 31, 2015, which was recorded as a credit to income tax expense of $6,000 and a credit to additional paid in capital of $3,000. For the year ended December 31, 2014 the tax benefit received as a result of disqualified dispositions related to stock options was $311,000, 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 year ended December 31, 2013 the tax benefit received as a result of disqualified dispositions related to stock options was $300,000, 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:



	2015				2014				2013
	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	3,000		$	6.40	227,750		$	3.57	374,875		$	3.37
Granted	—		—		—		—		—		—
Exercised	(3,000	)	6.40		(224,750	)	3.53		(132,725	)	3.09
Forfeited	—		—		—		—		(14,400	)	2.75
Outstanding - end of year	—		$	—	3,000		$	6.40	227,750		$	3.57
Exercisable at December 31	—		$	—	3,000		$	6.40	227,750		$	3.57
Vested or expected to vest at December 31	—		$	—	3,000		$	6.40	227,750		$	3.57

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, 2013	14,400		$	2.75
Granted	—		—
Vested	—		—
Forfeited	(14,400	)	2.75
Unvested at December 31, 2013	—		—

All options fully vested during 2013. There was no unvested stock options and no unrecognized compensation cost related to stock options during 2014 and 2015.

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:



	2015				2014				2013
	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	104,068		$	10.79	98,281		$	8.91	139,730		$	6.77
Granted	56,662		24.39		81,763		12.04		63,876		9.32
Vested	(46,629	)	11.82		(75,976	)	10.03		(91,573	)	5.95
Forfeited	(1,194	)	24.39		—		—		(13,752	)	8.74
Unvested - end of year	112,907		$	16.86	104,068		$	10.79	98,281		$	8.91

At December 31, 2015 and 2014, there was $1,263,000 and $775,000, 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, 2015, 2014 and 2013 was $785,000, $744,000 and $408,000, 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 $202,000, $84,000 and $109,000 for the years ended December 31, 2015, 2014 and 2013, respectively.

During 2015 and 2014, employees surrendered 12,141 and 21,797 shares, respectfully, of the Company's common stock to satisfy income tax withholding obligations in connection with the vesting of restricted stock.