Equity Incentive Plans

12 Months Ended

Dec. 31, 2011

Equity Incentive Plans [Abstract]

Equity Incentive Plans

19. Equity Incentive Plans

In 1998, the Board adopted the Cathay Bancorp, Inc. Equity Incentive Plan. Under the Equity Incentive Plan, as amended in September, 2003, directors and eligible employees may be granted incentive or non-statutory stock options and/or restricted stock units, or awarded non-vested stock, for up to 7,000,000 shares of the Company's common stock on a split adjusted basis. In May 2005, the stockholders of the Company approved the 2005 Incentive Plan which provides that 3,131,854 shares of the Company's common stock may be granted as incentive or non-statutory stock options, or as restricted stock, or as restricted stock units. In conjunction with the approval of the 2005 Incentive Plan, the Bancorp agreed to cease granting awards under the Equity Incentive Plan. As of December 31, 2011, the only options granted by the Company under the 2005 Incentive Plan were non-statutory stock options to selected bank officers and non-employee directors at exercise prices equal to the fair market value of a share of the Company's common stock on the date of grant. Such options have a maximum ten-year term and vest in 20% annual increments (subject to early termination in certain events) except certain options granted to the Chief Executive Officer of the Company in 2005 and 2008. If such options expire or terminate without having been exercised, any shares not purchased will again be available for future grants or awards. Stock options are typically granted in the first quarter of the year. There were no options granted in 2009, in 2010, or in 2011. The Company expects to issue new shares to satisfy stock option exercises and the vesting of restricted stock units.

Cash received from exercises of stock options totaled $1.3 million for 86,860 shares in 2011 compared to $13,000 for 1,280 shares in 2009. No options were exercised in 2010. The fair value of stock options vested in 2011 was $2.6 million compared to $4.9 million in 2010. Aggregate intrinsic value for options exercised was $172,000 in 2011 compared to $8,000 in 2009.

A summary of stock option activity for 2011, 2010, and 2009 follows:

	Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Balance, December 31, 2008		5,206,374		$	27.72		5.6	$	6,220
Exercised		(1,280	)		10.63
Forfeited		(35,441	)		29.58
Balance, December 31, 2009		5,169,653		$	27.71		4.6	$	—
Forfeited		(222,305	)		23.23
Balance, December 31, 2010		4,947,348			27.93		3.7	$	334
Exercised		(86,860	)	$	15.05
Forfeited		(503,503	)		22.72
Balance, December 31, 2011		4,356,985			28.86		3.0	$	37
Exercisable, December 31, 2011		4,139,531		$	29.15		2.9	$	37

At December 31, 2011, 2,202,587 shares were available under the 2005 Incentive Plan for future grants. The following table shows stock options outstanding and exercisable as of December 31, 2011, the corresponding exercise prices, and the weighted-average contractual life remaining:

	Outstanding
Exercise Price	Shares		Weighted-Average Remaining Contractual Life (in Years)	Exercisable Shares
11.34		10,240	1.0		10,240
16.28		154,376	0.1		154,376
17.29		10,240	0.0		10,240
19.93		336,164	1.1		336,164
23.37		654,495	6.1		437,041
24.80		884,056	1.8		884,056
28.70		477,000	2.1		477,000
32.26		10,000	2.5		10,000
32.47		245,060	3.2		245,060
33.54		264,694	3.4		264,694
37.00		610,800	3.0		610,800
38.38		15,000	2.9		15,000
36.90		258,630	3.8		258,630
36.24		414,230	4.1		414,230
38.26		12,000	4.3		12,000
		4,356,985	3.0		4,139,531

In addition to stock options, the Company also grants restricted stock units to eligible employees. On February 21, 2008, restricted stock units for 82,291 shares were granted. Upon vesting of restricted stock units, the Company issued 15,006 shares of common stock at the closing price of $9.64 per share on February 21, 2010, and 12,633 shares of common stock at the closing price of $18.79 per share on February 21, 2011. Restricted stock units granted in 2008 have a maximum term of five years and vest in approximately 20% annual increments subject to continued employment with the Company.

In March 2011, the Company granted restricted stock units for 65,243 shares. The closing price of the Company's common stock on the date of the grant was $16.14 for the 15,069 restricted stock units granted on March 15, 2011 and $16.15 for the 50,174 restricted stock units granted on March 23, 2011. These restricted stock units granted in March 2011 are scheduled to vest in March 2013. On December 15, 2011, the Company granted restricted stock units for 77,404 shares at the closing price of the Company's common stock of $13.69. These restricted stock units granted in December 2011 are scheduled to vest in December 2013.

The following table presents restricted stock unit activity for 2011, 2010, and 2009:

	Units
Balance at December 31, 2008		79,537
Vested		(12,963	)
Cancelled or forfeited		(6,553	)
Balance at December 31, 2009		60,021
Vested		(15,006	)
Cancelled or forfeited		(6,055	)
Balance at December 31, 2010		38,960
Granted		142,647
Vested		(12,633	)
Cancelled or forfeited		(2,578	)
Balance at December 31, 2011		166,396

The compensation expense recorded related to the restricted stock units above was $758,000 in 2011, $327,000 in 2010, and $327,000 in 2009. Unrecognized stock-based compensation expense related to restricted stock units was $2.1 million at December 31, 2011, and is expected to be recognized over the next 1.6 years.

The following table summarizes the tax benefit from options exercised:

	2011			2010			2009
	(In thousands)
(Short-fall)/benefit of tax deductions in excess of grant-date fair value.	$	(290	)	$	(539	)	$	(196	)
Benefit of tax deductions on grant-date fair value.		362			539			198
Total benefit of tax deductions	$	72		$	—		$	2