STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2012

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

13. STOCK-BASED COMPENSATION

        On May 17, 2011, our shareholders approved the Georgia Gulf Corporation 2011 Equity and Performance Incentive Plan (the "2011 Plan"). Under the 2011 Plan, we are authorized to grant various stock-based compensation awards for up to 1,800,000 shares of our common stock to officers, employees and non-employee directors, among others. We have granted various types of share-based payment awards to participants, including restricted stock unit awards and stock option grants. Our policy is to issue new shares upon the exercise of stock options and the vesting of restricted stock units. As of June 30, 2012, there were 1,219,736 shares available for future grant to participants under our 2011 Plan. In connection with our adoption and shareholder approval of the 2011 Plan, we agreed to not grant additional stock-based compensation awards under our other equity compensation plans.

        Total after-tax share-based compensation expense by type of award was as follows:

	Six Months Ended June 30,
(In thousands)	2012			2011
Restricted and deferred stock units expense	$	6,054		$	4,151
Stock options expense		22			154
Before-tax share-based compensation expense		6,076			4,305
Income tax benefit		(1,986	)		(1,388	)
After-tax share-based compensation expense	$	4,090		$	2,917

        The amount of share-based compensation expense capitalized in periods presented was not material.

        As of June 30, 2012 and 2011, we had approximately $11.5 million and $8.6 million, respectively, of total unrecognized compensation cost related to nonvested share-based compensation, which we will record in our statements of income over a weighted average recognition period of approximately one year. The total fair value of shares vested during the six months ended June 30, 2012 and 2011 was $2.0 million and $1.9 million, respectively.

        Stock Options.    A summary of stock option activity under all plans as of and for the six months ended June 30, 2012 is as follows:

	Shares		Weighted Average Remaining Contractual Terms (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
							(In thousands)
Outstanding on January 1, 2012		132,664			$	297.41
Exercised		—
Expired		3,626				583.75
Forfeited		—
Outstanding on June 30, 2012		129,038		5.3	$	289.37	$	225
Exercisable as of June 30, 2012		128,572		5.3	$	290.38	$	217
Vested or expected to vest as of June 30, 2012		129,038		5.3	$	289.37	$	225

        During the three and six months ended June 30, 2012 and 2011, we granted no options to purchase shares. Option exercise prices are equal to the closing price of our common stock on the date of grant. Options vest over a three-year period from the date of grant and expire no more than ten years after the date of grant. The intrinsic value is calculated as the difference between the market value at period end and the exercise price of the shares. There were no significant options exercised during the three and six months ended June 30, 2011.

        Stock-Based Compensation Assumptions related to Stock Options.    The fair value of stock options granted has been estimated as of the date of grant using the Black-Scholes option-pricing model. The use of a valuation model requires us to make certain assumptions with respect to selected model inputs. The use of different assumptions could result in materially different valuations. We use the historical volatility for our stock, as we believe that historical volatility is more representative than implied volatility. The expected life of the awards is based on historical and other economic data trended into the future. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of our awards. The dividend yield assumption is based on our dividend paying history and expectation of future dividend payments.

        Restricted Stock Units.    A summary of restricted stock unit activity under all plans as of and for the six months ended June 30, 2012 is as follows:

	Shares		Weighted Average Remaining Contractual Terms (Years)		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
							(In thousands)
Outstanding on January 1, 2012		792,815			$	17.00
Granted		373,531				30.44
Vested and released		54,467				24.08
Forfeited		4,557				19.30
Outstanding on June 30, 2012		1,107,322		1.1	$	21.18	$	28,425
Vested or expected to vest as of June 30, 2012		1,100,543		1.0	$	21.13	$	28,251

        During the six months ended June 30, 2012 and 2011, we granted 373,531 and 289,003 restricted stock units, respectively. The restricted stock units normally vest over a one or three-year period. The weighted average grant date fair value per share of restricted stock units granted during the six months ended June 30, 2012 and 2011, was $30.44 and $27.55, respectively, which is based on the stock price as of the date of grant or, in the case of the performance restricted stock units ("PRSUs"), the fair value was estimated using a Monte Carlo simulation model. The total intrinsic value of restricted stock units that vested during the six months ended June 30, 2012 and 2011 was $1.7 million and $0.3 million, respectively.

        In May 2012 and 2011, we granted PRSUs, which are a form of restricted stock unit in which the number of shares ultimately earned depends on our stock price performance measured against specified performance targets. Following each vesting period, the number of PRSUs subject to award is determined by multiplying the target award by a percentage ranging from 0 percent to 150 percent. The percentage is based on predetermined performance metrics related to our stock price for the stated period. The PRSUs are included with all restricted stock units in all calculations.