Share 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.

Stock Options

The following summarizes the activity relating to stock options under the plans mentioned above for the nine months ended September 30, 2014:



	Number of Options		Weighted Average Exercise Price
Outstanding at December 31, 2013	227,750		$	3.57
Exercised	(224,050	)	3.54
Granted	—		—
Forfeited	—		—
Outstanding at September 30, 2014	3,700		$	5.71
Exercisable at September 30, 2014	3,700		$	5.71

During the nine months ended September 30, 2014 employees surrendered 38,690 options as part of a net settlement transaction to cover the strike price of option exercises. The surrendered options are included in the amount of options exercised above. Total compensation cost related to incentive stock options was $0 and $5,000 for the nine months ended September 30, 2014 and 2013, respectively, which was included in selling, general and administrative expenses.

Tax benefits received as a result of disqualified dispositions related to stock options were $311,000 during the nine months ended September 30, 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. There were no disqualified dispositions for the nine months ended September 30, 2013.

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 nine months ended September 30, 2014:



	Number of Shares		Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2013	98,281		$	8.91
Granted	81,763		12.04
Vested	(53,884	)	9.81
Forfeited	—		—
Unvested balance at September 30, 2014	126,160		$	10.75

At September 30, 2014 and 2013, there was $1,080,000 and $594,000, 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 cost related to restricted stock grants for the three months ended September 30, 2014 and 2013 was $135,000 and $86,000, respectively, all of which was recorded to selling, general and administrative expense. Compensation cost related to restricted stock grants for the nine months ended September 30, 2014 and 2013 was $439,000 and $324,000, respectively, all of which was recorded to selling, general and administrative expense.

Compensation expense for restricted stock is recorded at the fair market value at the time of the grant over the 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 as of the vesting date. Tax benefits received for vested restricted stock in excess of the fair market value as of the grant date was $58,000 for the nine months ended September 30, 2014 and was recorded as a credit to additional paid in capital. There were no tax benefits for vested restricted stock recorded for the nine month ended September 30, 2013.

During the nine months ended September 30, 2014 and 2013, employees surrendered 14,429 and 36,329 shares, respectively, of the Company’s common stock to satisfy income tax withholding obligations in connection with the vesting of restricted stock.