9. 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 non-employee 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). Outstanding stock option awards have a ten-year term and vest either (1) ratably on an annual basis over a three to five-year period or (2) in one-half increments on the five-year and nine and one-half-year anniversaries of the award date. Current outstanding restricted stock awards also vest either (1) ratably on an annual basis over a three or five-year period, (2) at the end of a three-year period or (3) in one-half increments on the five-year and nine and one-half-year anniversaries of the award date. 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, 2011, 2010 and 2009, the total recognized stock-based compensation expense related to the 2004 Plan was $6,391, $6,164 and $5,638, respectively.

Option activity and changes during the year ended December 31, 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		(274,872	)		19.44
Cancelled		(5,885	)		34.41

Outstanding at December 31, 2011		1,133,147		$	23.26		6.5	$	19,788

Exercisable at December 31, 2011		503,830		$	18.74		5.8	$	10,835

For options outstanding at December 31, 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		505,268		6.2
$20.53 – $27.24		258,767		7.5
$30.07 – $45.83		369,112		6.2

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, 2011. This amount changes based on the fair market value of the Company's common stock. For the years ended December 31, 2011, 2010 and 2009, the total intrinsic value of options exercised was $8,185, $1,835 and $485, respectively.

As of December 31, 2011, $2,989 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.1 years. Income tax benefits of $2,160, $214 and $155 were realized from the exercise of stock options during the years ended December 31, 2011, 2010 and 2009, 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,
	2011		2010		2009
Weighted average fair value	$	19.22	$	8.31	$	5.67
Risk-free interest rate		2.8%		2.9%		2.8%
Expected life in years		6		6		6 – 7
Expected volatility		41.9%		41.8%		42.5%
Expected dividend yield		0.5%		1.1%		1.5%

Non-vested restricted stock awards as of December 31, 2011 and changes during the year ended December 31, 2011 were as follows:


	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2010		654,241		$	19.97
Granted		78,828			45.03
Vested		(143,121	)		19.64
Forfeited		(7,935	)		20.48

Non-vested at December 31, 2011		582,013		$	23.43

As of December 31, 2011, there was $4,740 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 1.0 years. The total fair value of shares of restricted stock that vested during the years ended December 31, 2011, 2010 and 2009 was $6,214, $1,427 and $246, respectively.