XML 14 R12.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Stock-Based Compensation
 6 Months Ended
Jun. 30, 2011
Stock-Based Compensation  
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 $1,623 and $1,589 for the three months ended June 30, 2011 and 2010, respectively, and $3,127 and $2,979 for the six months ended June 30, 2011 and 2010, respectively.

Option activity and changes during the six months ended June 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

      (289)          36.10         
  

 

 

           

Outstanding at June 30, 2011

        1,140,038         $ 23.31                 7.0               $ 32,596    
  

 

 

     

 

 

     

 

 

     

 

 

  

Exercisable at June 30, 2011

      493,985         $ 18.62                 6.3               $ 16,441    
  

 

 

     

 

 

     

 

 

     

 

 

  

For options outstanding at June 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          6.7     

$20.53 - $27.24

      259,723          8.0     

$30.07 - $36.10

      270,530          5.6     

$43.43 - $45.83

      102,160          9.6     

 

 

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 June 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 $943 and $240 for the three months ended June 30, 2011 and 2010, respectively, and $8,147 and $404 for the six months ended June 30, 2011 and 2010, respectively.

As of June 30, 2011, $4,327 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.6 years. Income tax benefit realized from the exercise of stock options was $286 and $50 for the three months ended June 30, 2011 and 2010, respectively, and $2,148 and $91 for the six months ended June 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 three months ended June 30, 2010 and the six months ended June 30, 2011 and 2010. There were no options granted during the three months ended June 30, 2011. Volatility was calculated using historical trends of the Company's common stock price.

 

     Stock Option Grants  
     Three Months Ended
June 30,		      Six Months Ended
June 30,		  
             2011              2010              2011                      2010          

Weighted average fair value

    $ —           $       11.28        $ 19.22        $       8.19    

Risk-free interest rate

      —             3.3%         2.8%         2.9%   

Expected life in years

      —             6          6          6    

Expected volatility

      —             41.9%         41.9%         41.8%   

Expected dividend yield

      —             0.8%         0.5%         1.1%   

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

 

         Number of    
Shares		      Weighted
Average
    Grant Date    
    Fair Value    		  

Non-vested at December 31, 2010

      654,241        $     19.97    

Granted

      69,808          45.83    

Vested

      (133,631)         19.33    

Forfeited

      (3,368)         17.15    
           

Non-vested at June 30, 2011

      587,050        $ 23.21    
                 

As of June 30, 2011, there was $6,375 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 1.5 years. The total fair value of shares of restricted stock that vested was $35 for the three months ended June 30, 2011 and $5,840 and $1,186 for the six months ended June 30, 2011 and 2010, respectively. No shares of restricted stock vested during the three months ended June 30, 2010.