Stock Based Compensation

12 Months Ended

Dec. 31, 2020

Stock Based Compensation

Stock Based Compensation

10. 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

514,823

.

Restricted stock granted under the 2006 Plan 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 requi ring 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).

Restricted Stock

The Company grants shares of its common stock to certain directors, officers, and key employees 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 duri ng the years ended December

31:

2020

2019

2018

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

343,919

$

9.37

349,885

$

10.62

141,095

$

16.79

Granted

292,886

4.70

135,268

7.65

315,429

11.32

Vested

(107,145)

10.21

(117,828)

13.81

(82,067)

16.57

Forfeited

(21,825)

9.86

(23,406)

15.02

(24,572)

16.91

Unvested - end of year

507,835

$

6.35

343,919

$

9.37

349,885

$

10.62

At December

31, 2020 and 2019, there was $

1,614,000

 and $

1,923,000

, 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

1.9

 years. Total compensation expense related to restricted stock grants for the years ended December

31, 2020, 2019 and 2018

was $

1,254,000

, $

1,369,000

, and $

1,774,000

, respectively, and is recorded as selling, general and administrative expense.

Tax deficiencies in connection with payment of taxes upon the vesting of restricted stock previously issued to employees for the

years ended December

31, 2020, 2019 and 2018 were a tax deficiency of $

97,000

, $

98,000

, and $

110,000

, respectively.

During 2020, 2019 and 2018, employees surrendered

4,574

,

16,047

 and

17,180

 shares, respectfully, of the Company's common

stock to satisfy income tax withholding obligations in connection with the vesting of restricted stock.

Stock Appreciation Rights

As part of the Company's 2019 annual grant, Stock Appreciation Rights (SARs) were granted with a grant price of $10. These

awards have a contractual term of five years and vest ratably over a period of three years or immediately vest if the recipient is

over 65 years of age. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company's stock appreciation rights activity for the years ended December

31, 2020 and 2019 is as follows:

2020

2019

Number

of

Shares

Wtd. Avg.

Grant Date 

Fair Value

Number

of

Shares

Wtd. Avg.

Grant Date

Fair Value

Outstanding - beginning of year

222,112

$

2.57

—

$

—

Granted

—

—

226,021

2.57

Vested

—

—

—

—

Forfeited

(41,187)

2.57

(3,909)

2.57

Outstanding - end of year

180,925

$

2.57

222,112

$

2.57

Exercisable - end of year

73,888

$

2.57

29,028

$

2.57

The average remaining contractual term for SARs outstanding at December

31, 2020 is

3.3

 years, with $

114,000

 aggregate

intrinsic value. At December

31, 2020 and 2019, there was $

179,000

 and $

386,000

, respectively, of total unrecognized

compensation expense, net of estimated forfeitures, related to SARs. That cost is expected to be recognized over the weighted-

average period of

1.3

 years.

Total compensation cost related to SARs for the twelve months ended December

31, 2020 and 2019 was $

101,000

 and $

185,000

,

respectively, all of which was recorded to selling, general and administrative expense.