Stock-Based Compensation

Under the Westlake Chemical Corporation 2013 Omnibus Incentive Plan (as amended and restated, the "2013 Plan"), all employees and non-employee 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 2013 Plan. At the discretion of the administrator of the 2013 Plan, employees and non-employee directors may be granted awards in the form of stock options, stock appreciation rights, stock awards, restricted stock units or cash awards (any of which may be a performance award). Outstanding stock option awards have a 10-year term and vest either (1) ratably on an annual basis over a three-year period, (2) at the end of a five-year period or (3) in one-half increments on the five-year and 9.5-year anniversaries of the award date. Current outstanding restricted stock awards also vest either (1) ratably on an annual basis over a three-year period, (2) at the end of a three-year period or (3) in one-half increments on the five-year and 9.5-year anniversaries of the award date. Outstanding restricted stock units vest either (1) ratably on an annual basis over a three-year period or (2) at the end of a two to six-year period. In accordance with accounting guidance related to share-based payments, stock-based compensation expense for all stock-based compensation awards is based on estimated grant-date fair value. The Company recognizes these stock-based compensation costs net of a forfeiture rate and on a straight-line basis over the requisite service period of the award for only those shares expected to vest. For the years ended December 31, 2014, 2013 and 2012, the total recognized stock-based compensation expense related to the 2013 Plan was $9,261, $6,966 and $6,127, respectively.

Option activity and changes during the year ended December 31, 2014 were as follows:



	Options		Weighted Average Exercise Price		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2013	1,317,230		$	18.99
Granted	172,768		64.86
Exercised	(257,588	)	21.44
Cancelled	(53,008	)	25.19
Outstanding at December 31, 2014	1,179,402		$	24.89	5.4	$	43,331
Exercisable at December 31, 2014	703,110		$	14.34	4.7	$	32,867

For options outstanding at December 31, 2014, the options had the following range of exercise prices:



Range of Prices	Options Outstanding	Weighted Average Remaining Contractual Life (Years)
$7.12 - $9.65	304,200	3.7
$10.26 - $18.05	384,466	3.5
$22.92 - $30.05	211,360	6.7
$40.38 - $45.70	110,609	8.1
$63.98 - $68.18	168,767	9.3

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 year 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 December 31, 2014. This amount changes based on the fair market value of the Company's common stock. For the years ended December 31, 2014, 2013 and 2012, the total intrinsic value of options exercised was $14,534, $7,656 and $23,991, respectively.

As of December 31, 2014, $3,571 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.5 years. Income tax benefits of $4,512, $2,224 and $7,009 were realized from the exercise of stock options during the years ended December 31, 2014, 2013 and 2012, respectively.

The Company used the Black-Scholes option pricing model to value its options. The table below presents the weighted average value and assumptions used in determining each option's fair value. Volatility was calculated using historical trends of the Company's common stock price.



	Stock Option Grants
	Year Ended December 31,
	2014			2013			2012
Weighted average fair value	$	20.49		$	17.03		$	11.70
Risk-free interest rate	1.6		%	0.9		%	1.0		%
Expected life in years	5			5			5
Expected volatility	35.7		%	44.5		%	45.7		%
Expected dividend yield	0.7		%	0.6		%	0.5		%

Non-vested restricted stock awards as of December 31, 2014 and changes during the year ended December 31, 2014 were as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested at December 31, 2013	363,012		$	23.74
Vested	(132,246	)	23.17
Forfeited	(25,710	)	20.38
Non-vested at December 31, 2014	205,056		$	24.52

As of December 31, 2014, there was $556 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 0.7 years. The total fair value of shares of restricted stock that vested during the years ended December 31, 2014, 2013 and 2012 was $8,831, $12,480 and $18,408, respectively.

Non-vested restricted stock unit as of December 31, 2014 and changes during the year ended December 31, 2014 were as follows:



	Number of Units		Weighted Average Grant Date Fair Value
Non-vested at December 31, 2013	336,902		$	51.39
Granted	101,938		69.48
Vested	(4,145	)	50.68
Forfeited	(12,695	)	51.85
Non-vested at December 31, 2014	422,000		$	55.75

As of December 31, 2014, there was $15,931 of unrecognized stock-based compensation expense related to non-vested restricted stock units. This cost is expected to be recognized over a weighted-average period of 3.5 years. The total fair value of restricted stock units that vested during the years ended December 31, 2014 and 2013 was $371 and $14, respectively.

Westlake Chemical Partners LP Awards

Our wholly-owned subsidiary and the general partner of Westlake Chemical Partners LP ("Westlake Partners"), Westlake Chemical Partners GP LLC ("WLKPGP"), maintains a unit-based compensation plan for directors and employees of WLKPGP and Westlake Partners.

The Westlake Partners 2014 Long-term Incentive Plan ("Westlake Partners 2014 Plan") permits various types of equity awards including but not limited to grants of phantom units and restricted units. Awards granted under the Westlake Partners 2014 Plan may be settled with Westlake Partners units or in cash or a combination thereof. Compensation expense for these awards was not material to our consolidated financial statements for the year ended December 31, 2014.