Stock-Based Compensation

The Company has a stock based incentive plan, the 2007 BBCN Bancorp Equity Incentive Plan ("2007 Plan"). The 2007 Plan, which was approved by our stockholders on May 31, 2007 as amended and restated on July 25, 2007 and again on December 1, 2011, provides for grants of stock options, stock appreciation rights ("SARs"), restricted stock, performance shares and performance units (sometimes referred to individually or collectively as "awards") to non-employee directors, officers, employees and consultants of the Company. Stock options may be either "incentive stock options" ("ISOs"), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified stock options ("NQSOs").

The 2007 Plan gives the Company flexibility to (i) attract and retain qualified non-employee directors, executives and other key employees and consultants with appropriate equity-based awards, (ii) motivate high levels of performance, (iii) recognize employee contributions to the Company's success, and (iv) align the interests of Plan participants with those of the Company's stockholders. The exercise price for shares under an ISO may not be less than 100% of fair market value ("FMV") on the date the award is granted under Code Section 422. Similarly, under the terms of the 2007 Plan the exercise price for SARs and NQSOs may not be less than 100% of FMV on the date of grant. Performance units are awarded to a participant at the market price of the Company's common stock on the date of award (after the lapse of the restriction period and the attainment of the performance criteria). No minimum exercise price is prescribed for performance shares and restricted stock awarded under the 2007 Plan.

ISOs, SARs and NQSOs have vesting periods of three to five years and have 10-year contractual terms. Restricted stock, performance shares, and performance units will be granted with a restriction period of not less than one year from the grant date for performance-based awards and not more than three years from the grant date for time-based vesting of grants. Compensation expense for awards is recorded over the vesting period.

Upon the merger with Center Financial Corporation effective November 30, 2011, the former Center's stock based incentive plan the Center Financial Corporation 2006 Stock Incentive Plan, adopted April 12, 2006, as amended and restated June 13, 2007 ("2006 Plan") converted the outstanding share awards of 585,860 shares and 2,443,513 shares available for future grants at November 30, 2011 at an exchange ratio of 0.7805.

The 2006 Plan provides for the granting of incentive stock options to officers and employees, and non-qualified stock options and restricted stock awards to employees (including officers) and non-employee directors. The options prices of all options granted under the 2006 Plan must be not less than 100% of the fair market value at the date of grant. All options granted generally vest at the rate of 20% per year except that the options granted to the non-employee directors vest at the rate of 33 1/3% per year. All options not exercised generally expire ten years after the date of grant.

From both 2006 and 2007 plans, 2,637,000 shares were available for future grants as of March 31, 2012.

The total shares reserved for issuance will serve as the underlying value for all equity awards under the 2007 Plan and the 2006 Plan. With the exception of the shares underlying stock options and restricted stock awards, the board of directors may choose to settle the awards by paying the equivalent cash value or by delivering the appropriate number of shares.

The following is a summary of stock option activity under the Plan for the three months ended March 31, 2012:


	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding - January 1, 2012		830,011		$	16.35
Granted		0			0
Exercised		(12,139	)		7.07
Forfeited		0			0

Outstanding - March 31, 2012		817,872		$	16.49		6.07	$	707,000

Options exercisable - March 31, 2012		787,588		$	16.33		5.93	$	707,000
Unvested options expected to vest after March 31, 2012		30,284		$	20.73		9.67	$	0

The following is a summary of restricted and performance unit activity under the Plan for the three months ended March 31, 2012:


	Number of Shares		Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (Years)
Outstanding - January 1, 2012		52,480	$	7.42
Granted		490,710		10.42
Vested		0		0
Forfeited		0		0

Outstanding - March 31, 2012		543,190	$	10.20		9.76

The total fair value of performance units vested for the three months ending March 31, 2012 and 2011 was $0 and $79 thousand, respectively.

The amount charged against income, before income tax benefit of $169 thousand and $11 thousand, in relation to the stock-based payment arrangements, was $398 thousand and $27 thousand for the three months ending March 31, 2012 and 2011, respectively. At March 31, 2012, unrecognized compensation expense related to non-vested stock option grants and restricted and performance units aggregated $5.0 million, and is expected to be recognized over a remaining weighted average vesting period of 1.7 years.

The estimated annual stock-based compensation expense as of March 31, 2012 for each of the succeeding years is indicated in the table below:


	Stock Based Compensation Expense
	(In thousands)
Remainder of 2012	$	2,235
For the year ended December 31:
2013		1,404
2014		651
2015		630
2016		86

Total	$	5,006