Stock-Based Compensation

The Company has a stock-based incentive plan, the 2007 BBCN Bancorp Equity Incentive Plan (the “2007 Plan”). The 2007 Plan, approved by the Company’s stockholders on May 31, 2007, was amended and restated on July 25, 2007 and again on December 1, 2011. The 2007 Plan 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 the 2007 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 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 fair market value 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 recognized over the vesting period.

The Company has another stock-based incentive plan, the 2006 Stock Incentive Plan, adopted April 12, 2006, as amended and restated June 13, 2007 (the “2006 Plan”). 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 option prices of all options granted under the 2006 Plan may not be 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% per year. All options not exercised generally expire ten years after the date of grant.

Under the 2007 Plan and 2006 Plan, 2,589,428 shares were available for future grants as of March 31, 2016.

The total shares reserved for issuance will serve as the underlying value for all equity awards under the 2007 Plan and 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 2007 Plan and 2006 Plan for the three months ended March 31, 2016:



	Number of Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding - January 1, 2016	457,851		$	19.29
Granted	—		—
Exercised	—		—
Expired	(23,415	)	18.99
Forfeited	—		—
Outstanding - March 31, 2016	434,436		$	19.30	2.19	$	480
Options exercisable - March 31, 2016	296,436		$	20.92	2.19	$	480

The following is a summary of restricted stock and performance unit activity under the 2007 Plan and 2006 Plan for the three months ended March 31, 2016:



	Number of Shares		Weighted- Average Grant Date Fair Value
Outstanding - January 1, 2016	107,049		$	13.72
Granted	—		—
Vested	(34,086	)	11.12
Forfeited	(2,163	)	10.42
Outstanding - March 31, 2016	70,800		$	15.07

The total fair value of restricted performance units vested for the three months ended March 31, 2016 and 2015 was $492 thousand and $575 thousand, respectively.

The amount charged against income related to stock-based payment arrangements was $22 thousand and $235 thousand for the three months ended March 31, 2016 and 2015, respectively.

The income tax benefit recognized was $9 thousand and $83 thousand for the three months ended March 31, 2016 and 2015, respectively.

At March 31, 2016, the unrecognized compensation expense related to non-vested stock option grants was $309 thousand which is expected to be recognized over a weighted average vesting period of 3.06 years. At March 31, 2016, the unrecognized compensation expense related to non-vested restricted units and performance units was $855 thousand which is expected to be recognized over a weighted average vesting period of 3.07 years.