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Stock-Based Compensation
3 Months Ended
Mar. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
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 our 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 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 recognized over the vesting period. 
The Company has another stock-based incentive plan, the Center Financial Corporation 2006 Stock Incentive Plan, adopted April 12, 2006, as amended and restated June 13, 2007 (the "2006 Plan"), which was assumed by the Company during the merger with Center Bank.
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 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% per year. All options not exercised generally expire ten years after the date of grant.
Under the 2007 and 2006 Plans 2,649,025 shares were available for future grants as of March 31, 2013.
The total shares reserved for issuance will serve as the underlying value for all equity awards under the 2007 and 2006 Plans. 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 and 2006 Plans for the three months ended March 31, 2013:
 
 
Number of
Shares
 
Weighted-
Average
Exercise
Price Per
Share
 
Weighted-
Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
Outstanding - January 1, 2013
797,805

 
$
16.70

 
 
 
 
Granted

 

 
 
 
 
Exercised
(48,000
)
 
8.64

 
 
 
 
Forfeited

 

 
 
 
 
Outstanding - March 31, 2013
749,805

 
$
17.21

 
2.56
 
$
856,000

Options exercisable - March 31, 2013
741,805

 
$
17.31

 
2.48
 
$
820,000

Unvested options expected to vest after March 31, 2013
8,000

 
$
8.64

 
9.51
 
$
36,000



The following is a summary of restricted and performance unit activity under the 2007 and 2006 Plans for the three months ended March 31, 2013:
 
 
Number of
Shares
 
Weighted-
Average
Grant
Date Fair
Value
 
Weighted-
Average
Remaining
Contractual
Life (Years)
Outstanding - January 1, 2013
512,183

 
$
9.78

 
 
Granted
5,000

 
13.15

 
 
Vested
(58,740
)
 
9.40

 
 
Forfeited
(16,650
)
 
10.42

 
 
Outstanding - March 31, 2013
441,793

 
$
9.84

 
8.81


The total fair value of performance units vested for the three months ended March 31, 2013 and 2012 was $718 thousand and $0, respectively.
The amount charged against income related to stock-based payment arrangements was $709 thousand and $398 thousand, before income tax benefit of $67 thousand and $169 thousand, for the three months ended March 31, 2013 and 2012, respectively. At March 31, 2013, unrecognized compensation expense related to non-vested stock option grants and restricted and performance units aggregated $2.0 million, and is expected to be recognized over a remaining weighted average vesting period of 1.83 years.
The estimated annual stock-based compensation expense as of March 31, 2013 for each of the succeeding years is indicated in the table below:
 
 
Stock Based
Compensation Expense
 
(In thousands)
Remainder of 2013
$
651

For the year ended December 31:
 
2014
610

2015
589

2016
96

2017
7

Total
$
1,953