Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

7. Stock-Based Compensation

Under the Westlake Chemical Corporation 2004 Omnibus Incentive Plan (the "2004 Plan"), all employees and nonemployee directors of the Company, as well as certain individuals who have agreed to become the Company's employees, are eligible for awards. Shares of common stock may be issued as authorized in the 2004 Plan. At the discretion of the administrator of the 2004 Plan, employees and nonemployee directors may be granted awards in the form of stock options, stock appreciation rights, stock awards or cash awards (any of which may be a performance award). Total stock-based compensation expense related to the 2004 Plan was $1,636 and $1,587 for the three months ended September 30, 2011 and 2010, respectively, and $4,762 and $4,566 for the nine months ended September 30, 2011 and 2010, respectively.

Option activity and changes during the nine months ended September 30, 2011 were as follows:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2010		1,314,524		$	20.81
Granted		99,380			45.83
Exercised		(273,577	)		19.47
Cancelled		(3,069	)		42.74
Outstanding at September 30, 2011		1,137,258		$	23.26		6.7	$	13,711
Exercisable at September 30, 2011		505,125		$	18.72		6.1	$	7,887

For options outstanding at September 30, 2011, the options had the following range of exercise prices:

Range of Prices	Options Outstanding		Weighted Average Remaining Contractual Life (Years)
$14.24—$19.29		507,625		6.4
$20.53—$27.24		259,723		7.8
$30.07—$45.83		369,910		6.4

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company's closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2011. This amount changes based on the fair market value of the Company's common stock. The total intrinsic value of options exercised was $355 for the three months ended September 30, 2010, and $8,147 and $758 for the nine months ended September 30, 2011 and 2010, respectively. There were no options exercised during the three months ended September 30, 2011.

As of September 30, 2011, $3,636 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.3 years. Income tax benefit realized from the exercise of stock options was $44 for the three months ended September 30, 2010, and $2,148 and $135 for the nine months ended September 30, 2011 and 2010, respectively.

The Company uses the Black-Scholes option pricing model to value its options. The table below presents the weighted average value and assumptions used in determining the fair value for each option granted during the nine months ended September 30, 2011 and 2010. There were no options granted during the three months ended September 30, 2011 and 2010. Volatility was calculated using historical trends of the Company's common stock price.

		(143,121)		(143,121)
	Stock Option Grants
	Nine Months Ended September 30,
	2011		2010
Weighted average fair value	$	19.22	$	8.19
Risk-free interest rate		2.8%		2.9%
Expected life in years		6		6
Expected volatility		41.9%		41.8%
Expected dividend yield		0.5%		1.1%

Non-vested restricted stock awards as of September 30, 2011 and changes during the nine months ended September 30, 2011 were as follows:

		(143,121)			(143,121)
	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2010		654,241		$	19.97
Granted		78,828			45.03
Vested		(143,121	)		19.64
Forfeited		(5,807	)		20.33
Non-vested at September 30, 2011		584,141		$	23.43

As of September 30, 2011, there was $5,721 of unrecognized stock-based compensation expense related to non-vested restricted stock awards. This cost is expected to be recognized over a weighted-average period of 1.3 years. The total fair value of shares of restricted stock that vested was $374 and $168 for the three months ended September 30, 2011 and 2010, respectively. The total fair value of shares of restricted stock that vested was $6,214 and $1,354 for the nine months ended September 30, 2011 and 2010, respectively.