STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2013

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

12. STOCK-BASED COMPENSATION

On May 17, 2011, our shareholders approved the Axiall Corporation 2011 Equity and Performance Incentive Plan (the "2011 Plan"). In January 2013, our shareholders approved an amendment to the 2011 Plan to increase the number of shares available under the plan by 1.8 million shares. Under the 2011 Plan as it existed at June 30, 2013, we were authorized to grant various stock-based compensation awards for up to 3.6 million 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, 2013, there were approximately 2.6 million 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 previously existing equity compensation plans.

Total after-tax share-based compensation cost by type of program was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2013			2012			2013			2012
Restricted stock units expense	$	2.2		$	5.0		$	3.8		$	6.1
Stock options expense		0.4			-			0.7			-
Before-tax share-based compensation expense		2.6			5.0			4.5			6.1
Income tax benefit		(0.9	)		(1.7	)		(1.5	)		(2.0	)
After-tax share-based compensation expense	$	1.7		$	3.3		$	3.0		$	4.1

The amount of share-based compensation cost capitalized in the periods presented was not material during both the three and six months ended June 30, 2013 and 2012.

As of June 30, 2013 and 2012, we had approximately $26.6 million and $11.5 million, respectively, of total unrecognized compensation costs related to nonvested share-based compensation, which we will record in our condensed consolidated statements of income over a weighted average recognition period of approximately two years. The total fair value of shares vested during the six months ended June 30, 2013 and 2012 was approximately $2.8 million and $2.0 million, respectively.

Stock Options.    A summary of stock option activity under all plans as of and for the six months ended June 30, 2013 is as follows:

	Shares			Weighted Average Remaining Contractual Terms (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value (In millions)
Outstanding on January 1, 2013		125,564				$	292.76
Granted		188,330					33.72
Exercised		(3,304	)				21.25
Expired		(6,188	)				533.04
Outstanding on June 30, 2013		304,402			6.7 years	$	130.56	$	2.6
Exercisable as of June 30, 2013		116,072			4.4 years	$	287.68	$	0.9
Vested or expected to vest as of June 30, 2013		178,373			8.2 years	$	33.72	$	1.6

During the six months ended June 30, 2013, we granted options to purchase shares primarily to replace unvested awards of former employees of the Merged Business who became Axiall employees, in connection with the Merger (the "Replacement Options"). In 2012, we granted no options to purchase shares. The fair value of stock options when granted has been estimated as of the date of grant using the Black-Scholes option pricing model. With the exception of the Replacement Options, option exercise prices are equal to the closing price of our common stock on the date of grant. The exercise price utilized for the Replacement Options resulted in the Replacement Options having a spread value equal to that of the PPG Options being replaced, as measured at the closing date of the Merger. Options generally 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 six months ended June 30, 2012.

Restricted Stock Units.    A summary of restricted stock unit activity under all plans as of and for the six months ended June 30, 2013 is as follows:

	Shares			Weighted Average Remaining Contractual Terms (Years)		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding on January 1, 2013		716,907				$	27.86
Granted		424,378					46.03
Vested and released		(103,850	)				27.04
Forfeited		(8,825	)				28.41
Outstanding on June 30, 2013		1,028,610			1.5 Years	$	35.43	$	43.8
Vested or expected to vest as of June 30, 2013		978,092			1.5 Years	$	35.72	$	41.6

Our restricted stock units granted during the six months ended June 30, 2013, include grants to replace unvested awards of former employees of the Merged Business who became Axiall employees, in connection with the Merger and grants in May 2013 to certain of our officers, employees and directors. 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 is based on the stock price as of the date of grant or, in the case of certain 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, 2013 and 2012 was $5.1 million and $1.7 million, respectively.