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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2013
STOCK-BASED COMPENSATION |
STOCK-BASED COMPENSATION | 11. 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 December 31, 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 December 31, 2013, there were approximately 2.5 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:
|  | Year Ended December 31, |
--- | --- | --- | ---
(In millions) |  | 2013 |  | 2012 |  | 2011 |
Restricted stock units expense |  | $ | 10.6 |  | $ | 9.1 |  | $ | 6.4 |
Stock options expense |  |  | 1.0 |  |  | - |  |  | 0.2 |
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Before-tax share-based compensation expense |  |  | 11.6 |  |  | 9.1 |  |  | 6.6 |
Income tax benefit |  |  | (3.9 | ) |  | (2.8 | ) |  | (1.7 | )
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After-tax share-based compensation expense |  | $ | 7.7 |  | $ | 6.3 |  | $ | 4.9 |
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The amount of share-based compensation cost capitalized in the years ended December 31, 2013, 2012 and 2011 was not material. As of December 31, 2013 and 2012, we had approximately $18.5 million and $8.9 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 value of shares vested during the year ended December 31, 2013, 2012 and 2011 was approximately $3.3 million, $5.3 million and $5.3 million, respectively. Stock Options. A summary of stock option activity under all plans as of and for the year ended December 31, 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 |  |  | (7,656 | ) |  |  |  | 554.13 |  |  |  |
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Outstanding on December 31, 2013 |  |  | 302,934 |  | 6.3 years |  | $ | 128.08 |  | $ | 3.7 |
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Exercisable as of December 31, 2013 |  |  | 114,604 |  | 3.9 years |  | $ | 283.13 |  | $ | 1.2 |
Vested or expected to vest as of December 31, 2013 |  |  | 298,956 |  | 6.3 years |  | $ | 130.67 |  | $ | 3.7 |
During the year ended December 31, 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 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. 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 stock 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 years ended December 31, 2012. The following table summarizes information about stock options outstanding at December 31, 2013:
|  | Outstanding |  | Exercisable |
--- | --- | --- | --- | --- | ---
Range of Exercise Prices |  | Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life |  | Shares |  | Weighted Average Exercise Price |
$8.75 to $21.25 |  |  | 41,444 |  | $ | 20.83 |  | 5.2 years |  |  | 41,444 |  | $ | 20.83 |
$28.75 to $41.50 |  |  | 193,730 |  |  | 33.85 |  | 7.6 years |  |  | 5,400 |  |  | 38.19 |
$90.50 to $476.00 |  |  | 27,158 |  |  | 171.93 |  | 4.1 years |  |  | 27,158 |  |  | 171.93 |
$510.75 to $1,334.50 |  |  | 40,602 |  |  | 657.82 |  | 2.3 years |  |  | 40,602 |  |  | 657.82 |
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$8.75 to $1,334.50 |  |  | 302,934 |  | $ | 128.08 |  | 6.25 years |  |  | 114,604 |  | $ | 283.13 |
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Restricted Stock Units. A summary of restricted stock unit activity under all plans as of and for the year ended December 31, 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 |  |  | 450,169 |  |  |  |  | 45.20 |  |  |  |
Vested and released |  |  | (128,340 | ) |  |  |  | 25.69 |  |  |  |
Forfeited |  |  | (29,433 | ) |  |  |  | 34.12 |  |  |  |
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Outstanding on December 31, 2013 |  |  | 1,009,303 |  | 1.0 Years |  | $ | 35.68 |  | $ | 47.9 |
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Vested or expected to vest as of December 31, 2013 |  |  | 1,003,454 |  | 1.0 Years |  | $ | 35.64 |  | $ | 47.6 |
Our restricted stock units granted during the year ended December 31, 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. During 2012 and 2011, we granted 409,351 and 290,003 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 2013, 2012 and 2011 was $45.20, $30.18 and $27.55, respectively, which 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 year ended December 31, 2013, 2012 and 2011 was $6.1 million and $15.8 million and $8.1 million, respectively. Restricted stock surrendered in satisfaction of required minimum tax withholding obligations was 36,846, 152,759 and 126,934 shares during 2013, 2012 and 2011, 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 certain PRSUs granted in the years ended December 31, 2012 and 2011 has been estimated as of the date of grant using the Monte Carlo simulation model. There were no similar PRSUs issued in the year ended December 31, 2013. 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 Year 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% |  | -%

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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