Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

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 $1,651 and $1,503 for the three months ended March 31, 2012 and 2011, respectively.

Option activity and changes during the three months ended March 31, 2012 were as follows:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2011		1,133,147		$	23.26
Granted		115,340			60.09
Exercised		(19,430	)		24.75
Cancelled		—			—
Outstanding at March 31, 2012		1,229,057		$	26.70		6.6	$	46,820
Exercisable at March 31, 2012		850,834		$	20.64		6.0	$	37,570

For options outstanding at March 31, 2012, the options had the following range of exercise prices:

Range of Prices	Options Outstanding		Weighted Average Remaining Contractual Life (Years)
$14.24—$19.29		498,745		5.9
$20.53—$27.24		253,746		7.3
$30.07—$36.10		264,200		4.8
$45.83—$60.11		212,366		9.4

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 March 31, 2012. This amount changes based on the fair market value of the Company's common stock. The total intrinsic value of options exercised was $677 and $7,204 for the three months ended March 31, 2012 and 2011, respectively.

As of March 31, 2012, $4,845 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.2 years. Income tax benefit realized from the exercise of stock options was $147 and $1,862 for the three months ended March 31, 2012 and 2011, 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 three months ended March 31, 2012 and 2011. Volatility was calculated using historical trends of the Company's common stock price.

	Stock Option Grants
	Three Months Ended March  31,
	2012			2011
Weighted average fair value	$	23.39		$	19.22
Risk-free interest rate		1.0	%		2.8	%
Expected life in years		5			6
Expected volatility		45.7	%		41.9	%
Expected dividend yield		0.5	%		0.5	%

Non-vested restricted stock awards as of March 31, 2012 and changes during the three months ended March 31, 2012 were as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2011		582,013		$	23.43
Granted		68,715			60.11
Vested		(298,151	)		17.51
Forfeited		(2,060	)		27.64
Non-vested at March 31, 2012		350,517		$	35.64

As of March 31, 2012, there was $7,564 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 2.1 years. The total fair value of shares of restricted stock that vested was $17,692 and $5,805 for the three months ended March 31, 2012 and 2011, respectively.