Exhibit 10.3

March 15, 2006

[Name]

[Title}

 

Re:   WESTLAKE CHEMICAL CORPORATION   NONQUALIFIED STOCK OPTION AWARD

Dear                     :

Westlake Chemical Corporation (the ”Company”) is pleased to notify you that you
have been granted a nonqualified stock option (“Option”), effective March 15,
2006 (the “Award Date”), to purchase                      shares of common stock
of the Company (“Common Stock”) in accordance with the Westlake Chemical
Corporation 2004 Omnibus Incentive Plan (the “Plan”). Your award is more fully
described in the attached Appendix A, Terms and Conditions of Nonqualified Stock
Option Award.

The price at which you may purchase the shares of Common Stock covered by the
Option is $             (the “Grant Price”). Unless otherwise provided in the
attached Appendix A, your Option will expire on the tenth anniversary of the
Award Date (the “Expiration Date”), and will become exercisable in installments
as follows (the “Schedule”):

 

1. Period Beginning

 

2. Per Cent of Shares Purchasable

March 15, 2007

March 15, 2008

March 15, 2009

March 15, 2010

 

25%

25%

25%

25%

You must be in continuous employment with the Company or one of its Subsidiaries
(as defined in the Plan) from the Award Date through each date on which your
Option becomes exercisable in order for your Option to become exercisable on
such date. Fractional shares will be rounded for purposes of vesting in
accordance with Plan policy.

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Your Award is subject to the terms and conditions set forth in the Plan and in
the Prospectus for the Plan, both of which have been previously provided to you.
Your Award is also subject to any additional terms and conditions set forth in
the attached Appendix A and any rules and regulations adopted by the Plan’s
Administrator (as defined in the Plan). In conjunction with this award we are
also required to provide you with the most current relevant SEC filings by the
Company; therefore, we refer you to the SEC Filings section of our web page,
www.westlakechemical.com.

This award letter and the attachment contain the formal terms and conditions of
your award and accordingly should be retained in your files for future
reference. If you have any questions regarding this award, you may contact
Mr. David Hansen, Sr. Vice President, Administration, at 713-960-9111.

 

Very truly yours,

/s/ Albert Chao

Albert Chao President and Chief Executive Officer

Attachment

Appendix A

to Award Letter

dated

 

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March 15, 2006

Terms and Conditions of

Employee Nonqualified Stock Option Award

The nonqualified stock option (the “Option”) granted to you by Westlake Chemical
Corporation (the ”Company”) to purchase common stock of the Company (“Common
Stock”) is subject to the terms and conditions set forth in the Westlake
Chemical Corporation 2004 Omnibus Incentive Plan (the “Plan”), any rules and
regulations adopted by the Administrator (as defined in the Plan), and any
additional terms and conditions set forth in this Appendix A which forms a part
of the attached award letter to you (the “Award Letter”). Any terms used in this
Appendix A and not defined in the Award Letter or this Appendix A have the
meanings set forth in the Plan. In the event there is an inconsistency between
the terms of the Plan and this Appendix A, the terms of the Plan will control.

 

3. Grant Price

You may purchase the shares of Common Stock covered by the Option for the Grant
Price stated in your Award Letter.

 

4. Term of Option

Your Option expires on the Expiration Date stated in your Award Letter. However,
your Option will terminate prior to the Expiration Date as provided in Paragraph
6 of this Appendix A upon the occurrence of one of the events described in that
paragraph. Regardless of the provisions of Paragraph 6, in no event can your
Option be exercised after the Expiration Date.

 

5. Earn-out of Option

 

  (a) Unless it becomes vested and exercisable on an earlier date as provided in
Paragraph 6 below, your Option will become vested and exercisable in cumulative
installments as set forth in the Schedule in your Award Letter.

 

  (b) To the extent your Option has become vested and exercisable, you may
exercise the Option as to all or any part of the shares covered by the Option,
at any time on or before the date the Option expires or terminates, subject to
any limitations imposed by law or by Company policy regarding transactions in
Common Stock.

 

6. Exercise of Option

Subject to the limitations and the terms set forth in this Appendix A and the
Plan, your Option may be exercised from time to time in accordance with the
administrative procedures established by the Company in effect at the time of
your exercise. In addition, if you have been notified by the Company that you
may be subject to certain exercise restrictions, your Option may only be
exercised by written notice signed and delivered by you or another person
entitled to exercise the Option to the General Counsel

 

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of the Company at its principal executive office in Houston, Texas, or as it may
hereafter be located, as set forth below. Such written notice shall (a) state
the number of shares of Common Stock with respect to which your Option is being
exercised and (b) subject to approval of your request to exercise, be
accompanied by a wire transfer, cashier’s check, cash, money order or other form
of payment deemed acceptable by the Administrator or its designee and made
payable to Westlake Chemical Corporation in the full amount of the Grant Price
for any shares of Common Stock being acquired and any appropriate withholding
taxes (as provided in Paragraph 7 of this Appendix A), or by other consideration
in the form and manner approved by the Administrator or its designee pursuant to
Paragraphs 5 and 7 of this Appendix A. In the alternative, the Administrator or
its designee may prescribe other procedures for exercise of your Option. If any
law or regulation requires the Company to take any action with respect to the
shares specified in such notice, the time for delivery thereof, which would
otherwise be as promptly as possible, shall be postponed for the period of time
necessary to take such action. You shall have no rights of a shareholder with
respect to shares of Common Stock subject to your Option unless and until such
time as your Option has been exercised and ownership of such shares of Common
Stock has been transferred to you.

 

7. Satisfaction of Grant Price

 

  (a) Payment of Cash or Common Stock. Your Option may be exercised by payment
in cash (including check, bank draft, money order or wire transfer payable to
the Company), in Common Stock, in a combination of cash and Common Stock or in
such other manner as the Administrator in its discretion may provide. Payment in
Common Stock shall only be permitted if and to the extent authorized by the
Administrator.

 

  (b) Payment of Common Stock. The Fair Market Value of any shares of Common
Stock tendered as all or part of the Grant Price shall be determined as provided
in the Plan. The certificates evidencing shares of Common Stock tendered must be
duly endorsed or accompanied by appropriate stock powers. Only stock
certificates issued solely in your name may be tendered in exercise of your
Option. Fractional shares may not be tendered in satisfaction of the Grant
Price; any portion of the Grant Price which is in excess of the aggregate Fair
Market Value of the number of whole shares tendered must be paid in cash. If a
certificate tendered in exercise of the Option evidences more shares than are
required pursuant to the immediately preceding sentence for satisfaction of the
portion of the Grant Price being paid in Common Stock, an appropriate
replacement certificate will be issued to you for the number of excess shares.

 

  (c) Broker-Assisted Exercise. At your request or the request of another person
entitled to exercise this Option, and to the extent permitted by applicable law,
the Administrator in its discretion may selectively approve “cashless exercise”
arrangements with a brokerage firm under which such brokerage firm, on behalf of
you or such other person exercising the Option, shall pay to the Company or its
designee the Grant Price of the Option or of the portion being exercised, and
the Company or its designee, pursuant to an irrevocable notice from you or such
other person exercising the Option, shall promptly deliver the shares being
purchased to such firm.

 

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8. Termination of Employment

 

  (a) General. The following rules apply to your Option in the event of your
death, disability or other termination of employment.

 

  (i) Involuntary Termination Without Cause. If your employment with the Company
or a Subsidiary is terminated by the Company or any such Subsidiary without
Cause, your Option shall be exercisable to the extent vested on the date of your
termination and shall become exercisable with respect to a portion of the
previously unexercisable shares that were scheduled to become exercisable on the
next vesting date, prorated for the number of full months you were employed from
the most recent vesting date until the date of your termination. With respect to
all vested shares, regardless whether vested as a result of your termination of
employment or vested prior thereto, your Option shall remain exercisable for the
longer of (i) 30 days following your termination date or (ii) the period during
which you receive salary continuation under any separation agreement, policy,
plan or other arrangement with the Company or any of its Subsidiaries, but not
to exceed 180 days following your termination date; provided, however, that in
no event shall the Option be exercisable after the Expiration Date. Upon
expiration of the foregoing period, your Option shall terminate in all respects.

 

  (ii) Voluntary Termination. If you voluntarily terminate employment with the
Company or a Subsidiary, including, without limitation, termination of
employment due to retirement, your Option shall be exercisable to the extent
vested on the date of your termination. With respect to all vested shares, your
Option shall remain exercisable until the first to occur of (i) 30 days
following your termination date, or (ii) the Expiration Date. Upon expiration of
the foregoing period, your Option shall terminate in all respects.

 

  (iii) Termination with Cause. If your employment with the Company or a
Subsidiary is terminated for Cause, your Option shall immediately terminate and
shall no longer be exercisable.

 

  (iv) Termination by Reason of Death. If your employment terminates by reason
of death, your Option will become fully vested and exercisable and will remain
exercisable until the first to occur of (i) one year after the date of your
termination, or (ii) the Expiration Date.

 

  (v) Termination by Reason of Disability. If your employment terminates by
reason of total and permanent disability (as determined by the Administrator),
your Option will be exercisable to the extent vested on the

 

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date of your termination, and will remain exercisable until the first to occur
of (i) 180 days after the date of your termination, or (ii) the Expiration Date.
Upon expiration of the foregoing period, your Option shall terminate in all
respects.

 

  (vi) Adjustments by the Administrator. The Administrator may, in its sole
discretion, exercised before or after your termination of employment, declare
all or any portion of your Option immediately vested and exercisable and/or
permit all or any part of your Option to remain exercisable for such period
designated by it after the time when the Option would have otherwise terminated
as provided in the applicable portion of this Paragraph 6(a), but not beyond the
Expiration Date of your Option.

 

  (b) Administrator Determinations. The Administrator shall have absolute
discretion to determine the date and circumstances of termination of your
employment, and its determination shall be final, conclusive and binding upon
you.

 

  (c) Cause. For purposes of this Appendix A, Cause shall mean any of the
following:

 

  (i) your conviction by a court of competent jurisdiction of any felony or a
crime involving moral turpitude;

 

  (ii) your knowing failure or refusal to follow reasonable instructions given
to you on behalf of the Company or reasonable policies, standards and
regulations of the Company or any Subsidiary;

 

  (iii) your continued failure or refusal to faithfully and diligently perform
the usual, customary duties of your employment with the Company or any
Subsidiary;

 

  (iv) continuously conducting yourself in an unprofessional, unethical or
immoral manner; or

 

  (v) any fraudulent conduct or conduct which discredits the Company or any
Subsidiary or is detrimental to the reputation, character and standing of the
Company or any Subsidiary.

 

9. Tax Consequences and Withholding

 

  (a) You should consult the Plan Prospectus for a general summary of the
federal income tax consequences of your Option based on currently applicable
provisions of the Internal Revenue Code (the “Code”) and related regulations.
The summary does not discuss state and local tax laws, which may differ from the
federal tax law. For these reasons, you are urged to consult your own tax
advisor regarding the application of the tax laws to your particular situation.

 

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  (b) The Option is not intended to be an “incentive stock option,” as defined
in Section 422 of the Code.

 

  (c) You must make arrangements satisfactory to the Company to satisfy any
applicable federal, state or local withholding tax liability arising from the
grant or exercise of your Option. You can either make a cash payment to the
Company of the required amount or you can elect to satisfy your withholding
obligation by having the Company retain shares of Common Stock having a Fair
Market Value (as prescribed by the Plan) equal to the amount of your withholding
obligation from the shares otherwise deliverable to you upon the exercise of
your Option. You may not elect to have the Company withhold shares of Common
Stock having a Fair Market Value in excess of the minimum statutory withholding
tax liability.

 

10. Restrictions on Resale

There are no restrictions imposed by the Plan on the resale of shares of Common
Stock acquired under the Plan. However, under the provisions of the Securities
Act of 1933 (the ”Securities Act”) and the rules and regulations of the
Securities and Exchange Commission (the “SEC”), resales of shares acquired under
the Plan by certain officers and directors of the Company who may be deemed to
be “affiliates” of the Company must be made pursuant to an appropriate effective
registration statement filed with the SEC, pursuant to the provisions of Rule
144 issued under the Securities Act, or pursuant to another exemption from
registration provided in the Securities Act. At the present time, the Company
does not have a currently effective registration statement pursuant to which
such resales may be made by affiliates. There are no restrictions imposed by the
SEC on the resale of shares acquired under the Plan by persons who are not
affiliates of the Company. However, the timing of sales of shares may be
restricted by applicable law, and the Company may, from time to time, adopt
policies regarding timing of sales of shares by employees.

 

11. Effect on Other Benefits

Income recognized by you as a result of exercise of the Option will not be
included in the formula for calculating benefits under any of the Company’s
retirement and disability plans or any other benefit plans.

If you have any questions regarding your Option or would like to obtain
additional information about the Plan or the Administrator, please contact the
Senior Vice President, Administration or the General Counsel of the Company,
Westlake Chemical Corporation, 2801 Post Oak Boulevard, Suite 600, Houston,
Texas 77056 (telephone (713) 960-9111). Your Award Letter and this Appendix A
contain the formal terms and conditions of your award and accordingly should be
retained in your files for future reference.

 

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