12. STOCK-BASED COMPENSATION

On May 17, 2011, our shareholders approved the Axiall Corporation 2011 Equity and Performance Incentive Plan (the "2011 Plan"). Under the 2011 Plan as it existed at December 31, 2012, we were 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 December 31, 2012, there were 1,193,782 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:

	Years Ended December 31,

*(In thousands)*	2012			2011			2010
Restricted stock units expense	$	9,050		$	6,433		$	2,784
Stock options expense		23			225			703

Before-tax share-based compensation expense		9,073			6,658			3,487
Income tax benefit		(2,785	)		(1,755	)		(943	)

After-tax share-based compensation expense	$	6,288		$	4,903		$	2,544

The amount of share-based compensation cost capitalized in 2012, 2011 and 2010 was not material.

As of December 31, 2012 and 2011, we had approximately $8.9 million and $6.3 million, respectively, of total unrecognized compensation costs related to nonvested share-based compensation, which we will record in our Consolidated Statements of Income over a weighted average recognition period of approximately one year. The total fair values of shares vested as of December 31, 2012, 2011 and 2010 were approximately $5.3 million, $5.3 million and $7.0 million, respectively.

Stock Options. A summary of stock option activity under all plans during 2012 is as follows:

	Year Ended December 31, 2012

	Shares			Weighted Average Remaining Contractual Terms	Weighted Average Exercise Price		Aggregate Intrinsic Value *(In thousands)*
Outstanding on January 1, 2012		132,664			$	297.41
Exercised		(2,320	)			21.40
Expired		(4,780	)			553.59

Outstanding on December 31, 2012		125,564		4.7 years	$	292.76	$	931

Exercisable as of December 31, 2012		125,564		4.7 years	$	292.76	$	931
Vested or expected to vest as of December 31, 2012		125,564		4.7 years	$	292.76	$	931

During the years ended December 31, 2012 and 2011, 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. 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 10 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 years ended December 31, 2011 and 2010. The following table summarizes information about stock options outstanding at December 31, 2012:

	Outstanding and Exercisable

Range of Exercise Prices	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms
$8.75 to $41.50		50,148	$	22.73	6.2 years
$90.50 to $476.00		32,483		212.67	4.5 years
$510.75 to $1,334.50		42,933		668.77	3.3 years

Total $8.75 to $1,334.50		125,564	$	292.76	4.7 years

Restricted Stock Units. A summary of restricted stock units activity under all plans during 2012 is as follows:

	Year Ended December 31, 2012

	Shares			Weighted Average Remaining Contractual Terms	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value *(In thousands)*
Outstanding on January 1, 2012		792,815			$	17.00
Granted		409,351				30.18
Vested and released		(460,804	)			11.35
Forfeited		(24,455	)			25.86

Outstanding on December 31, 2012		716,907		1.6 Years	$	27.86	$	29,594

Vested or expected to vest as of December 31, 2012		710,894		1.5 Years	$	27.84	$	29,346

During 2012, 2011 and 2010, we granted 409,351, 290,003 and 154,048 restricted stock units, respectively, to certain key employees and non-employee 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 granted during 2012, 2011 and 2010, was $30.18, $27.55 and $16.37, 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 years ended December 31, 2012, 2011 and 2010 was $15.8 million, $8.1 million and $5.6 million, respectively. Restricted stock surrendered in satisfaction of required minimum tax withholding obligations was 152,759, 126,934 and 128,654 shares during 2012, 2011 and 2010, respectively.

In May 2012 and 2011, we granted PRSUs, which are a form of restricted stock units 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.

Stock-Based Compensation Assumptions Related to PRSUs. The fair value of PRSUs granted has been estimated as of the date of grant using the Monte Carlo simulation 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 average of the high and low of the implied and historical volatility for our stock and the expected life of the awards is based on vesting period. 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. The weighted average assumptions used in the Monte Carlo simulation model are as follows:

	PRSU Grants Years Ended December 31,

	2012	2011
Assumptions:
Risk-free interest rate	0.44%	0.95%
Expected life	3.0 years	3.0 years
Expected volatility	45%	45%
Expected dividend yield	1.07%	-%

Nonvested shares. A summary of the status of the nonvested share activity under all plans during 2012 is as follows:

	Year Ended December 31, 2012

	Shares			Weighted Average Grant Date Fair Value
Nonvested on January 1, 2012		798,710		$	16.81
Granted		409,351		$	30.18
Vested		(487,515	)	$	11.76
Forfeited and expired		(24,455	)	$	25.86

Nonvested on December 31, 2012		696,091		$	27.90