Exhibit 10.1

 

PACWEST BANCORP 2003 STOCK INCENTIVE PLAN

 

as amended and restated, March 25, 2009

 

1.               Purpose of the Plan.    The purpose of this PacWest Bancorp
2003 Stock Incentive Plan is to offer certain Employees, Non-Employee Directors,
and Consultants the opportunity to acquire a proprietary interest in the
Company. Through the Plan, the Company and its subsidiaries seek to attract,
motivate, and retain highly competent persons. The success of the Company and
its affiliates are dependent upon the efforts of these persons. The Plan
provides for the grant of options, restricted stock awards, performance stock
awards, and stock appreciation rights. An option granted under the Plan may be a
Non-Statutory Stock Option or an Incentive Stock Option, as determined by the
Administrator.

 

2.               Definitions.    As used herein, the following definitions shall
apply.

 

“2003 Plan” shall mean PacWest Bancorp 2003 Stock Incentive Plan, originally
adopted as of April 18, 2003, and as amended and restated hereby.

 

“Act” shall mean the Securities Act of 1933, as amended.

 

“Administrator” shall mean the Board or any one of the Committees.

 

“Affiliate” shall mean any parent or subsidiary (as defined in Sections
424(e) and (f) of the Code) of the Company.

 

“APB 25” shall mean Opinion 25 of the Accounting Principles Board, as amended,
and any successor thereof.

 

“Award” shall mean an Option, Stock Award, or a SAR.

 

“Board” shall mean the Board of Directors of the Company.

 

“Cause” shall have the meaning given to it under the Participant’s employment
agreement with the Company or Affiliate, or a policy of the Company or an
Affiliate. If the Participant does not have an employment agreement or the
employment agreement does not define this term, or the Company or an Affiliate
does not have a policy that defines this term, then Cause shall include
malfeasance or gross misfeasance in the performance of duties or conviction of
illegal activity in connection therewith or any conduct detrimental to the
interests of the Company or an Affiliate which results in termination of the
Participant’s service with the Company or an Affiliate, as determined by the
Administrator.

 

“Change in Control” shall mean:

 

(i)                       the consummation of a plan of dissolution or
liquidation of the Company;

 

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(ii)                    the individuals who, as of the effective date hereof,
are members of the Board (“Incumbent Board”), cease for any reason to constitute
at least two-thirds of the members of the Board; provided, however, that if the
election, or nomination for election by the Company’s stockholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Plan, be considered as a member of
the Incumbent Board; provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened “election contest” or other
actual or threatened solicitation of proxies or consents by or on behalf of an
individual, entity or group (within the meaning of Section 13(d) or 14(d) of the
Exchange Act)(a “Person”) other than the Board (a “Proxy Contest”) including by
reason of any agreement intended to avoid or settle any election contest or
Proxy Contest;

 

(iii)       the consummation of a plan of reorganization, merger or
consolidation involving the Company, except for a reorganization, merger or
consolidation where (A) the stockholders of the Company immediately prior to
such reorganization, merger or consolidation own directly or indirectly at least
70% of the combined voting power of the outstanding voting securities of the
company resulting from such reorganization, merger or consolidation (the
“Surviving Company”) in substantially the same proportion as their ownership of
voting securities of the Company immediately prior to such reorganization,
merger or consolidation, and (B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such reorganization, merger or consolidation constitute at least two-thirds
of the members of the board of directors of the Surviving Company, or of a
company beneficially owning, directly or indirectly, a majority of the voting
securities of the Surviving Company;

 

(iv)                the sale of all or substantially all the assets of the
Company to another person; or

 

(v)                   the acquisition by another Person of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of stock
representing more than fifty percent (50%) of the voting power of the Company
then outstanding by another Person.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Committee” shall mean a committee appointed by the Board in accordance with
Section 3 below.

 

“Common Stock” shall mean the common stock of the Company, no par value.

 

“Company” shall mean PacWest Bancorp, a Delaware corporation.

 

“Consultant” shall mean any natural person who performs bona fide services for
the Company or an Affiliate as a consultant or advisor, excluding Employees and
Non-Employee Directors.

 

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“Date of Grant” shall mean the effective date as of which the Administrator
grants an Option to an Optionee, a Stock Award to a Grantee, or a SAR to an
Optionee.

 

“Disability” shall mean total and permanent disability as defined in
Section 22(e)(3) of the Code.

 

“Employee” shall mean any individual who is a common-law employee of the Company
or an Affiliate.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Exercise Price,” in the case of an Option, shall mean the exercise price of a
share of Optioned Stock. “Exercise Price,” in the case of a SAR, shall be
determined by the Administrator but shall not be less than 100% of the Fair
Market Value of a Share on the Date of Grant of such SAR.

 

“Fair Market Value” shall mean, as of any date, the value of Common Stock
determined as follows:

 

(i)                       If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation, the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

 

(ii)                    If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
quoted by such recognized securities dealer on the last market trading day prior
to the day of determination; or

 

(iii)                 In the absence of an established market for the Common
Stock, its Fair Market Value shall be determined, in good faith, by the
Administrator.

 

“FASB” shall mean the Financial Accounting Standards Board.

 

“Granted Stock” shall mean the shares of Common Stock that were granted pursuant
to a Stock Award.

 

“Grantee” shall mean any person who is granted a Stock Award.

 

“Incentive Stock Option” shall mean an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

 

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“Mature Shares” shall mean Shares that had been held by the Participant for a
meaningful period of time such as six months or such other period of time that
is consistent with FASB’s interpretation of APB 25.

 

“Non-Employee Director” shall mean a non-employee member of the Board.

 

“Non-Statutory Stock Option” shall mean an Option not intended to qualify as an
Incentive Stock Option.

 

“Notice of Stock Appreciation Rights Grant” shall mean the notice delivered by
the Company to the Optionee evidencing the grant of an SAR.

 

“Notice of Stock Option Grant” shall mean the notice delivered by the Company to
the Optionee evidencing the grant of an Option.

 

“Option” shall mean a stock option granted pursuant to the Plan.

 

“Option Agreement” shall mean a written agreement that evidences an Option in
such form as the Administrator shall approve from time to time.

 

“Optioned Stock” shall mean the Common Stock subject to an Option.

 

“Optionee” shall mean any person who receives an Option or a SAR.

 

“Participant” shall mean an Optionee or a Grantee.

 

“Performance Stock Award” shall mean an Award granted pursuant to Section 9 of
the Plan.

 

“Plan” shall mean this PacWest Bancorp 2003 Stock Incentive Plan, as amended and
restated to date.

 

“Qualified Note” shall mean a recourse note, with a market rate of interest,
that may, at the discretion of the Administrator, be secured by the Optioned
Stock or otherwise.

 

“Restricted Stock Award” shall mean an Award granted pursuant to Section 8 of
the Plan.

 

“Risk of Forfeiture” shall mean the Grantee’s risk that the Granted Stock may be
forfeited and returned to the Company in accordance with Section 8 or 9 of the
Plan.

 

“Rule 16b-3” shall mean Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3.

 

“SAR” or “Stock Appreciation Right” shall mean a stock appreciation right
granted pursuant to the Plan.

 

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“SAR Agreement” shall mean a written agreement that evidences a SAR in such form
as the Administrator shall approve from time to time.

 

“Service” shall mean the performance of services for the Company (or any
Affiliate) by an Employee, Non-Employee Director, or Consultant, as determined
by the Administrator in its sole discretion. Service shall not be considered
interrupted in the case of: (i) a change of status (i.e., from Employee to
Consultant, Non-Employee Director to Consultant, or any other combination);
(ii) transfers between locations of the Company or between the Company and any
Affiliate; or (iii) a leave of absence approved by the Company or an Affiliate.
A leave of absence approved by the Company or an Affiliate shall include sick
leave, military leave, or any other personal leave approved by an authorized
representative of the Company or an Affiliate.

 

“Service Provider” shall mean an Employee, Non-Employee Director, or Consultant.

 

“Share” shall mean a share of Common Stock.

 

“Stock Award” shall mean a Restricted Stock Award or a Performance Stock Award.

 

“Stock Award Agreement” shall mean a written agreement that evidences a
Restricted Stock Award or Performance Stock Award in such form as the
Administrator shall approve from time to time.

 

“Tax” or “Taxes” shall mean the federal, state, and local income, employment and
excise tax liabilities incurred by the Participant in connection with his/her
Awards.

 

“10% Stockholder” shall mean the owner of stock (as determined under
Section 424(d) of the Code) possessing more than 10% of the total combined
voting power of all classes of stock of the Company (or any Affiliate).

 

“Termination Date” shall mean the date on which a Participant’s Service
terminates, as determined by the Administrator in its sole discretion.

 

“Vesting Event” shall mean the earlier of: (i) the occurrence of a Change in
Control; (ii) the termination of a Participant’s Service (other than for Cause)
following the approval by the stockholders of the Company of any matter, plan or
transaction which would constitute a Change in Control; (iii) the death of the
Participant, for all Stock Awards granted with an effective date of November 2,
2005 and afterward.

 

3.               Administration of the Plan.

 

(a)          Except as otherwise provided for below, the Plan shall be
administered by (i) the Board or (ii) a Committee, which Committee shall be
constituted to satisfy applicable laws.

 

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(i)                       Section 162(m).    To the extent that the
Administrator determines that it is desirable to qualify Awards as
“performance-based compensation” within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee comprised solely of two or
more “outside directors” within the meaning of Section 162(m) of the Code.

 

(ii)                    Rule 16b-3.    To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

 

(b)         Powers of the Administrator.    Subject to the provisions of the
Plan and in the case of specific duties delegated by the Administrator, and
subject to the approval of relevant authorities, including the approval, if
required, of any stock exchange or national market system upon which the Common
Stock is then listed, the Administrator shall have the authority, in its sole
discretion:

 

(i)                       to determine the Fair Market Value of the Common
Stock;

 

(ii)                    to select the Service Providers to whom Awards may, from
time to time, be granted under the Plan;

 

(iii)                 to determine whether and to what extent Awards are granted
under the Plan;

 

(iv)                to determine the number of Shares that pertain to each
Award;

 

(v)                   to approve the terms of the Option Agreements, Stock Award
Agreements, and SAR Agreements;

 

(vi)                to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Award. Such terms and conditions may include, but
are not limited to, the Exercise Price, the status of an Option (Non-Statutory
Stock Option or Incentive Stock Option), the time or times when Awards may be
exercised, any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Award or the Shares relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;

 

(vii)             to determine the method of payment of the Exercise Price;

 

(viii)          to reduce the Exercise Price of any Option to the then current
Fair Market Value if the Fair Market Value of the Optioned Stock has declined
since the Date of Grant of such Option, except as otherwise would cause an
Option to be deemed to provide for a deferral of compensation within the meaning
of Section 409A of the Code;

 

(ix)                  to delegate to others responsibilities to assist in
administering the Plan;

 

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(x)                     to construe and interpret the terms of the Plan, Option
Agreements, Stock Award Agreements, SAR Agreements and any other documents
related to the Awards;

 

(xi)                  to interpret and administer the terms of the Plan to
comply with all Tax rules and regulations; and

 

(xii)               to adopt, alter and repeal such administrative rules,
guidelines and practices governing the operation of the Plan as it shall from
time to time deem advisable.

 

(c)          Effect of Administrator’s Decision.    All decisions,
determinations, and interpretations of the Administrator shall be final and
binding on all Participants and any other holders of any Awards. The
Administrator’s decisions and determinations under the Plan need not be uniform
and may be made selectively among Participants whether or not such Participants
are similarly situated.

 

(d)         Liability.    No member of the Committee shall be personally liable
by reason of any contract or other instrument executed by such member or on
his/her behalf in his/her capacity as a member of the Committee for any mistake
of judgment made in good faith, and the Company shall indemnify and hold
harmless each member of the Committee and each other employee, officer or
director of the Company to whom any duty or power relating to the administration
or interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim) arising out of any act or omission to act in connection
with the Plan unless arising out of such person’s own fraud or bad faith. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power the Company may have to indemnify them or hold them harmless.

 

4.               Stock Subject To The Plan.

 

(a)          Basic Limitation.    The total number of Options, Stock Awards, and
SARs that may be awarded under the Plan may not exceed 5,000,000, subject to the
adjustments provided for in Section 11 of the Plan.

 

(b)         Additional Shares.    In the event that any outstanding Award
expires or is canceled or otherwise terminated, the Shares that pertain to the
unexercised Award shall again be available for the purposes of the Plan. In the
event that Shares issued under the Plan are reacquired by the Company at their
original purchase price, such Shares shall again be available for the purposes
of the Plan, except that the aggregate number of Shares which may be issued upon
the exercise of Incentive Stock Options shall in no event exceed 5,000,000
Shares, subject to the adjustments provided for in Section 11 of the Plan.

 

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5.               Eligibility.    The persons eligible to participate in the Plan
shall be limited to Employees, Non-Employee Directors, and Consultants who have
the potential to impact the long-term success of the Company and/or its
Affiliates and who have been selected by the Administrator to participate in the
Plan.

 

6.               Option Terms.    Each Option shall be evidenced by an Option
Agreement, in the form approved by the Administrator and may contain such
provisions as the Administrator deems appropriate; provided, however, that each
Option Agreement shall comply with the terms specified below. No person may be
granted (in any calendar year) Options to purchase more than 250,000 Shares,
subject to the adjustments provided for in Section 11 of the Plan. Each Option
Agreement evidencing an Incentive Stock Option shall, in addition, be subject to
Section 7 below.

 

(a)          Exercise Price.

 

(i)                       The Exercise Price of an Option shall be determined by
the Administrator but shall not be less than 100% of the Fair Market Value of a
Share on the Date of Grant of such Option.

 

(ii)                    Notwithstanding the foregoing, where the outstanding
shares of stock of another corporation are changed into or exchanged for shares
of Common Stock without monetary consideration to that other corporation, then,
subject to the approval of the Board, Options may be granted in exchange for
unexercised, unexpired stock options of the other corporation and the exercise
price of the Optioned Shares subject to each Option so granted may be fixed at a
price less than 100% of the Fair Market Value of the Common Stock at the time
such Option is granted if said exercise price has been computed to be not less
than the exercise price set forth in the stock option of the other corporation,
with appropriate adjustment to reflect the exchange ratio of the shares of stock
of the other corporation into the shares of Common Stock of the Company.

 

(iii)                 The consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by the Administrator and may consist entirely of (A) cash, (B) check, (C) Mature
Shares, (D) Qualified Note, or (e) any combination of the foregoing methods of
payment. The Administrator may also permit Optionees, either on a selective or
aggregate basis, to simultaneously exercise Options and sell the shares of
Common Stock thereby acquired, pursuant to a brokerage or similar arrangement,
approved in advance by the Administrator, and use the proceeds from such sale as
payment of part or all of the exercise price of such shares. Notwithstanding the
foregoing, a method of payment may not be used if it causes the Company to:
(i) recognize compensation expense for financial reporting purposes;
(ii) violate Section 402 of the Sarbanes-Oxley Act of 2002 or any regulations
adopted pursuant thereto; or (iii) violate Regulation O, promulgated by the
Board of Governors of the Federal Reserve System, as determined by the
Administrator in its sole discretion.

 

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(b)   Vesting.    Any Option granted hereunder shall be exercisable and shall
vest at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement, but in the case of an Optionee who is not
an officer of the Company, a Non-Employee Director, or a Consultant, an Option
or Shares purchased thereunder shall vest at a rate of at least 20% per year. An
Option may not be exercised for a fraction of a Share. Notwithstanding anything
herein to the contrary, upon the occurrence of a Vesting Event, all Options that
are outstanding on the date of the Vesting Event shall become exercisable on
such date (whether or not previously vested).

 

(c)   Term of Options.    No Option shall have a term in excess of 10 years
measured from the Date of Grant of such Option.

 

(d)   Procedure for Exercise.    An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Administrator in
accordance with the terms of the Option Agreement by the person entitled to
exercise the Option and full payment of the applicable Exercise Price for the
Share being exercised has been received by the Administrator. Full payment may,
as authorized by the Administrator, consist of any consideration and method of
payment allowable under Subsection (a)(iii) above. In the event of a cashless
exercise, the broker shall not be deemed to be an agent of the Administrator.

 

(e)   Effect of Termination of Service.

 

(i)        Termination of Service.    Upon termination of an Optionee’s Service,
other than due to death, Disability, or Cause, the Optionee may exercise his/her
Option, but only on or prior to the date that is three months following the
Optionee’s Termination Date, and only to the extent that the Optionee was
entitled to exercise such Option on the Termination Date (but in no event later
than the expiration of the term of such Option, as set forth in the Notice of
Stock Option Grant to the Option Agreement). If, on the Termination Date, the
Optionee is not entitled to exercise the Optionee’s entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination of Service, the Optionee does not exercise his/her Option
within the time specified herein, the Option shall terminate, and the Optioned
Stock shall revert to the Plan.

 

(ii)       Disability of Optionee.    In the event of termination of an
Optionee’s Service due to his/her Disability, the Optionee may exercise his/her
Option, but only on or prior to the date that is twelve months following the
Termination Date, and only to the extent that the Optionee was entitled to
exercise such Option on the Termination Date (but in no event later than the
expiration date of the term of his/her Option, as set forth in the Notice of
Stock Option Grant to the Option Agreement). To the extent the Optionee is not
entitled to exercise the Option on the Termination Date, or if the Optionee does
not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate, and the Optioned Stock shall revert to the
Plan.

 

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(iii)      Death of Optionee.    In the event that an Optionee should die while
in Service, the Optionee’s Option may be exercised by the Optionee’s estate or
by a person who has acquired the right to exercise the Option by bequest or
inheritance, but only on or prior to the date that is twelve months following
the date of death, and only to the extent that the Optionee was entitled to
exercise the Option at the date of death (but in no event later than the
expiration date of the term of his/her Option, as set forth in the Notice of
Stock Option Grant to the Option Agreement). If, at the time of death, the
Optionee was not entitled to exercise his/her entire Option, the Shares covered
by the unexercisable portion of the Option shall immediately revert to the Plan.
If after death, the Optionee’s estate or a person who acquires the right to
exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate, and the Optioned
Stock shall revert to the Plan.

 

(iv)     Cause.    In the event of termination of an Optionee’s Service due to
Cause, the Optionee’s Options shall terminate on the Termination Date.

 

(v)      To the extend that the Company does not violate Section 409A of the
Code or any regulations adopted, Section 402 of the Sarbanes-Oxley Act of 2002
or any regulations adopted pursuant thereto or Regulation O, promulgated by the
Board of Governors of the Federal Reserve System (as determined by the
Administrator in its sole discretion), the Administrator shall have complete
discretion, exercisable either at the time an Option or SAR is granted or at any
time while the Option or SAR remains outstanding, to:

 

(A)  extend the period of time for which the Option or SAR is to remain
exercisable following the Optionee’s cessation of Service from the limited
exercise period otherwise in effect for that Option or SAR to such greater
period of time as the Administrator shall deem appropriate, but in no event
beyond the expiration of the Option or SAR term; and/or

 

(B)  permit the Option or SAR to be exercised, during the applicable
post-Service exercise period, not only with respect to the number of vested
Shares for which such Option or SAR is exercisable at the time of the Optionee’s
cessation of Service but also with respect to one or more additional
installments in which the Optionee would have vested had the Optionee continued
in Service.

 

(f)    Stockholder Rights.    Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such certificate promptly upon
exercise of the Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 11 below.

 

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(g)   Non-transferability of Options.    Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. Notwithstanding the immediately
preceding sentence, the Administrator may permit an Optionee to transfer any
Award which is not an Incentive Stock Option to one or more of the Optionee’s
immediate family members or to trusts established in whole or in part for the
benefit of the Optionee and/or one or more of such immediate family members. For
purposes of the Plan, (i) the term “immediate family” shall mean the Optionee’s
spouse and issue (including adopted and step children) and (ii) the phrase
“immediate family members or to trusts established in whole or in part for the
benefit of the Optionee and/or one or more of such immediate family members”
shall be further limited, if necessary, so that neither the transfer of an Award
other than an Incentive Stock Option to such immediate family member or trust,
nor the ability of a Optionee to make such a transfer shall have adverse
consequences to the Company or the Optionee by reason of Section 162(m) of the
Code.

 

7.     Incentive Stock Options.    The terms specified below shall be applicable
to all Incentive Stock Options, and these terms shall, as to such Incentive
Stock Options, supercede any conflicting terms in Section 6 above. Options which
are specifically designated as Non-Statutory Stock Options when issued under the
Plan shall not be subject to the terms of this Section.

 

(a)   Eligibility.    Incentive Stock Options may only be granted to Employees.

 

(b)   Exercise Price.    The Exercise Price of an Incentive Stock Option shall
not be less than 100% of the Fair Market Value of a Share on the Date of Grant
of such Option, except as otherwise provided for in Subsection (d) below.

 

(c)   Dollar Limitation.    In the case of an Incentive Stock Option, the
aggregate Fair Market Value of the Optioned Stock (determined as of the Date of
Grant of each Option) with respect to Options granted to any Employee under the
Plan (or any other option plan of the Company or any Affiliate) that may for the
first time become exercisable as Incentive Stock Options during any one calendar
year shall not exceed the sum of $100,000. To the extent the Employee holds two
or more such Options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such Options as
Incentive Stock Options shall be applied on the basis of the order in which such
Options are granted. Any Options in excess of such limitation shall
automatically be treated as Non-Statutory Stock Options.

 

(d)   10% Stockholder.    If any Employee to whom an Incentive Stock Option is
granted is a 10% Stockholder, then the Exercise Price shall not be less than
110% of the Fair Market Value of a Share on the Date of Grant of such Option,
and the Option term shall not exceed five years measured from the Date of Grant
of such Option.

 

(e)   Change in Status.    In the event of an Optionee’s change of status from
Employee to Consultant or to Non-Employee Director, an Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Non-Statutory Stock Option three months
and one day following such change of status.

 

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(f)    Approved Leave of Absence.    If an Optionee is on an approved leave of
absence, and the Optionee’s reemployment upon expiration of such leave is not
guaranteed by statute or contract, including Company policies, then on the 91st
day of such leave any Incentive Stock Option held by the Optionee shall cease to
be treated as an Incentive Stock Option and shall be treated for tax purposes as
a Non-Statutory Stock Option.

 

8.     Restricted Stock Award.    Each Restricted Stock Award shall be evidenced
by a Stock Award Agreement, in the form approved by the Administrator and may
contain such provisions as the Administrator deems appropriate; provided,
however, such Stock Award Agreement shall comply with the terms specified below.

 

(a)   Risk of Forfeiture.

 

(i)        General Rule.    Shares issued pursuant to a Restricted Stock Award
shall initially be subject to a Risk of Forfeiture. The Risk of Forfeiture shall
be set forth in the Stock Award Agreement, and shall comply with the terms
specified below.

 

(ii)       Lapse of Risk of Forfeiture.    The Risk of Forfeiture shall lapse as
the Grantee vests in the Granted Stock. The Grantee shall vest in the Granted
Stock at such times and under such conditions as determined by the Administrator
and set forth in the Stock Award Agreement. Notwithstanding the foregoing, upon
the occurrence of a Vesting Event, the Grantee shall become 100% vested in those
shares of Granted Stock that are outstanding on the date of the Vesting Event.

 

(iii)      Forfeiture of Granted Stock.    Except as otherwise determined by the
Administrator in its discretion, the Granted Stock that is subject to a Risk of
Forfeiture shall automatically be forfeited and immediately returned to the
Company on the Grantee’s Termination Date or the date on which the Administrator
determines that any other conditions to the vesting of the Restricted Stock were
not satisfied during the designated period of time.

 

(b)   Rights as a Stockholder.    Upon vesting of a Restricted Stock Award, the
Grantee shall have the rights of a stockholder with respect to the voting of the
vested shares of Granted Stock, subject to the conditions contained in the Stock
Award Agreement.

 

(c)   Dividends.    The Stock Award Agreement may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on the
Granted Stock.

 

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(d)   Non-transferability of Restricted Stock Award.    Except as otherwise
provided for in Section 12 of the Plan, Restricted Stock Awards may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent and distribution and may be exercised,
during the lifetime of the Grantee, only by the Grantee. Notwithstanding the
immediately preceding sentence, the Administrator may permit a Grantee to
transfer any Award which is not an Incentive Stock Option to one or more of the
Grantee’s immediate family members or to trusts established in whole or in part
for the benefit of the Grantee and/or one or more of such immediate family
members. For purposes of the Plan, (i) the term “immediate family” shall mean
the Grantee’s spouse and issue (including adopted and step children) and
(ii) the phrase “immediate family members or to trusts established in whole or
in part for the benefit of the Grantee and/or one or more of such immediate
family members” shall be further limited, if necessary, so that neither the
transfer of an Award other than an Incentive Stock Option to such immediate
family member or trust, nor the ability of a Grantee to make such a transfer
shall have adverse consequences to the Company or the Grantee by reason of
Section 162(m) of the Code.

 

9.     Performance Stock Award.    Each Performance Stock Award shall be
evidenced by a Stock Award Agreement, in the form approved by the Administrator,
and may contain such provisions as the Administrator deems appropriate;
provided, however, such Stock Award Agreement shall comply with the terms
specified below.

 

(a)   Risk of Forfeiture.

 

(i)        General Rule.    Shares issued pursuant to a Performance Stock Award
shall initially be subject to a Risk of Forfeiture. The Risk of Forfeiture shall
be set forth in the Stock Award Agreement, and shall comply with the terms
specified below.

 

(ii)       Lapse of Risk of Forfeiture.    The Risk of Forfeiture shall lapse as
the Grantee vests in the Granted Stock. The Grantee shall vest in or accelerate
vesting in the Granted Stock, in whole or in part, if certain goals established
by the Administrator are achieved over a designated period of time, but not in
any event more than 10 years.  At the discretion of the Administrator, the goals
may be based upon the attainment of one or more of the following business
criteria (determined either in absolute terms or relative to the performance of
one or more similarly situated companies or a published index covering the
performance of a number of companies): net income; return on average assets
(“ROA”); cash  ROA; cash ROA; return on average equity (“ROE”); cash ROE;
earnings per share (“EPS”); cash EPS; stock price; and efficiency ratio. 
Performance goals may be established on a Company-wide basis or with respect to
one or more business units or divisions. When establishing performance goals,
the Administrator may exclude any or all “extraordinary items” as determined
under U.S. generally accepted accounting principles including, without
limitation, the charges or costs associated with restructurings of the Company,
discontinued operations, other unusual or non-recurring items, and the
cumulative effects of

 

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accounting changes. The Administrator may also adjust the performance goals for
any performance cycle as it deems equitable in recognition of unusual or
non-recurring events affecting the Company, changes in applicable tax laws or
accounting principles, or such other factors as the Administrator deems
appropriate.   Notwithstanding the foregoing, upon the occurrence of a Vesting
Event, the Grantee shall become 100% vested in those shares of Granted Stock
that are outstanding on the date of the Vesting Event.

 

(iii)      Forfeiture of Granted Stock.    The Granted Stock that is subject to
a Risk of Forfeiture shall automatically be forfeited and immediately returned
to the Company on the Grantee’s Termination Date or the date on which the
Administrator determines that any other conditions to the vesting of the
Performance Stock Award, including performance goals, were not satisfied during
the designated period of time.

 

(b)   Rights as a Stockholder.    Upon vesting of a Performance Stock Award, the
Grantee shall have the rights of a stockholder with respect to the voting of the
vested shares of Granted Stock, subject to the conditions contained in the Stock
Award Agreement.

 

(c)   Dividends.    The Stock Award Agreement may require or permit the
immediate payment, waiver, deferral or investment of dividends paid on Granted
Stock.

 

(d)   Non-transferability of Performance Stock Award.    Except as otherwise
provided for in Section 12 of the Plan, Performance Stock Awards may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent and distribution and may be
exercised, during the lifetime of the Grantee, only by the Grantee.
Notwithstanding the immediately preceding sentence, the Administrator may permit
a Grantee to transfer any Award which is not an Incentive Stock Option to one or
more of the Grantee’s immediate family members or to trusts established in whole
or in part for the benefit of the Grantee and/or one or more of such immediate
family members. For purposes of the Plan, (i) the term “immediate family” shall
mean the Grantee’s spouse and issue (including adopted and step children) and
(ii) the phrase “immediate family members or to trusts established in whole or
in part for the benefit of the Grantee and/or one or more of such immediate
family members” shall be further limited, if necessary, so that neither the
transfer of an Award other than an Incentive Stock Option to such immediate
family member or trust, nor the ability of a Grantee to make such a transfer
shall have adverse consequences to the Company or the Grantee by reason of
Section 162(m) of the Code.

 

10.   Stock Appreciation Rights.    Each SAR shall be evidenced by a SAR
Agreement, in the form approved by the Administrator and may contain such
provisions as the Administrator deems appropriate; provided, however, that each
SAR Agreement shall comply with the terms specified below. No person may be
granted (in any calendar year) SARs that pertain to more than 250,000 Shares,
subject to the adjustments provided for in Section 11 of the Plan.

 

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(a)   Exercise Price.    The Exercise Price of a SAR shall be determined by the
Administrator but shall not be less than 100% of the Fair Market Value of a
Share on the Date of Grant of such SAR.

 

(b)   Vesting.    Any SAR granted hereunder shall be exercisable and shall vest
at such times and under such conditions as determined by the Administrator and
set forth in the SAR Agreement. Notwithstanding anything herein to the contrary,
upon the occurrence of a Vesting Event, all SARs that are outstanding on the
date of the Vesting Event shall become exercisable on such date (whether or not
previously vested).

 

(c)   Term of SARs.    No SAR shall have a term in excess of 10 years measured
from the Date of Grant of such SAR.

 

(d)   Non-transferability of SARs.    SARs may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent and distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee. Notwithstanding the immediately preceding
sentence, the Administrator may permit an Optionee to transfer any Award which
is not an Incentive Stock Option to one or more of the Optionee’s immediate
family members or to trusts established in whole or in part for the benefit of
the Optionee and/or one or more of such immediate family members. For purposes
of the Plan, (i) the term “immediate family” shall mean the Optionee’s spouse
and issue (including adopted and step children) and (ii) the phrase “immediate
family members or to trusts established in whole or in part for the benefit of
the Optionee and/or one or more of such immediate family members” shall be
further limited, if necessary, so that neither the transfer of an Award other
than an Incentive Stock Option to such immediate family member or trust, nor the
ability of a Optionee to make such a transfer shall have adverse consequences to
the Company or the Optionee by reason of Section 162(m) of the Code.

 

(e)   Procedure for Exercise.    A SAR shall be deemed to be exercised when
written notice of such exercise has been given to the Administrator in
accordance with the terms of the SAR Agreement by the person entitled to
exercise the SAR. Upon exercise of a SAR, the Optionee (or any person having the
right to exercise the SAR after his or her death) shall receive an amount equal
to the amount by which the Fair Market Value (on the date of surrender) of a
Share exceeds the Exercise Price of such SAR. The Company shall pay this amount
in the form of: (i) Common Stock; (ii) cash; or (iii) a combination of Common
Stock and cash, as determined by the Administrator.

 

(f)    Effect of Termination of Service.

 

(i)        Termination of Service.    Upon termination of an Optionee’s Service,
other than due to death, Disability, or Cause, the Optionee may exercise his/her
SARs, but only on or prior to the date that is three months following the
Optionee’s Termination Date, and only to the extent that the Optionee was
entitled to exercise such SARs on the Termination Date (but in no event later
than the expiration of the term of such SAR, as set forth in the Notice of Stock

 

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Appreciation Rights Grant to the SAR Agreement). If, on the Termination Date,
the Optionee is not entitled to exercise all of the Optionee’s SARs, then the
Shares that pertain to the unexercisable SARs shall revert to the Plan. If,
after termination of Service, the Optionee does not exercise his/her SARs within
the time specified herein, the SARs shall terminate, and the Shares that pertain
to the SARs shall revert to the Plan.

 

(ii)       Disability of Optionee.    In the event of termination of an
Optionee’s Service due to his/her Disability, the Optionee may exercise his/her
SARs, but only on or prior to the date that is twelve months following the
Termination Date, and only to the extent that the Optionee was entitled to
exercise such SARs on the Termination Date (but in no event later than the
expiration date of the term of his/her SAR, as set forth in the Notice of Stock
Appreciation Rights Grant to the SAR Agreement). To the extent the Optionee is
not entitled to exercise the SARs on the Termination Date, or if the Optionee
does not exercise the SARs to the extent so entitled within the time specified
herein, the SARs shall terminate, and the Shares that pertain to the SARs shall
revert to the Plan.

 

(iii)      Death of Optionee.    In the event that an Optionee should die while
in Service, the Optionee’s SARs may be exercised by the Optionee’s estate or by
a person who has acquired the right to exercise the SARs by bequest or
inheritance, but only on or prior to the date that is twelve months following
the date of death, and only to the extent that the Optionee was entitled to
exercise the SARs at the date of death (but in no event later than the
expiration date of the term of his/her SAR, as set forth in the Notice of Stock
Appreciation Rights Grant to the SAR Agreement). If, at the time of death, the
Optionee was not entitled to exercise all of his/her SARs, the Shares that
pertain to the unexercisable SARs shall immediately revert to the Plan. If after
death, the Optionee’s estate or a person who acquires the right to exercise the
SARs by bequest or inheritance does not exercise the SARs to the extent so
entitled within the time specified herein, the SARs shall terminate, and the
Shares that pertain to the SARs shall revert to the Plan.

 

(iv)     Cause.    In the event of termination of an Optionee’s Service due to
Cause, the Optionee’s SARs shall terminate on the Termination Date.

 

11.   Adjustments Upon Changes in Capitalization.

 

(a)   Changes in Capitalization.    The limitations set forth in Sections 4, 6,
and 10 of the Plan, the number of Shares that pertain to each outstanding Award,
and the Exercise Price of each Option and SAR shall be proportionately adjusted
for any increase or decrease in the number of issued and outstanding Shares
resulting from a stock split, reverse stock split, stock dividend,
recapitalization, combination or reclassification of the Common Stock, or any
other increase or decrease in the number of issued and outstanding Shares,
effected without the receipt of consideration by the Company. Such adjustment
shall be made by the Administrator, to the extent possible, so that the

 

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adjustment shall not result in an accounting consequence under APB 25 and FASB
Interpretation No. 44, as amended, and so that the adjustment shall not result
in any taxes to the Company or the Participant. The Administrator’s
determination with respect to the adjustment shall be final, binding, and
conclusive.

 

(b)   Dissolution or Liquidation.    In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as
soon as practicable prior to the effective date of such proposed transaction. In
such event, the Administrator, in its discretion, may provide for a Participant
to fully vest in his/her Option and SAR, and the Right of Forfeiture to lapse on
his/her Granted Stock. To the extent it has not been previously exercised, an
Award will terminate upon termination or liquidation of the Company.

 

12.    Deferral of Stock Awards and SARs.    The Administrator, in its sole
discretion, may permit a Grantee to defer his/her Stock Awards, and an Optionee
to defer his/her SARs pursuant to the terms and conditions provided for in the
PacWest Bancorp Directors Deferred Compensation Plan.   Notwithstanding the
foregoing, to the extent an Award is determined to constitute a “deferral of
compensation” within the meaning of Section 409A, any such subsequent deferral
shall be made in accordance with the terms of Code Section 409A(a)(4) and the
regulations promulgated thereunder.

 

13.   Cancellation and Regrant of Awards.    The Administrator shall have the
authority to effect, at any time and from time to time, with the consent of the
affected Optionee, the cancellation of any or all outstanding Options or SARs
and to grant in substitution new Options or SARs covering the same or a
different number of Shares but with an Exercise Price per Share based on the
Fair Market Value per Share on the new Date of Grant of the Option or SAR. The
Administrator shall also have the authority to effect, at any time and from time
to time, with the consent of the affected Grantee, the cancellation of any or
all outstanding Stock Awards and to grant in substitution new Stock Awards
covering the same or a different number of Shares. Notwithstanding the foregoing
or anything in this Plan to the contrary, the Administrator may not take any
action which would constitute a “repricing” of Options or other Awards without
recommending that such repricing be subject to the approval of the Company’s
stockholders prior to effectiveness.   For purposes of Section 4 hereof, Shares
underlying any Award cancelled by the Company in such exchange shall be
available for issuance under the Plan; furthermore, except with respect to a
Participant subject to Section 162(m) of the Code, a grant of any Award to a
Participant pursuant to such exchange shall be disregarded for purposes of
determining whether such Participant has exceeded any limitations hereunder
limiting the amount of any type of Award or aggregate amount of Awards that may
be granted to a Participant (except to the extent the number of Shares
underlying such Awards exceeds the number of Shares underlying the Participant’s
cancelled Awards).

 

14.   Share Escrow/Legends.    Unvested Shares issued under the Plan may, in the
Administrator’s discretion, be held in escrow by the Company until the
Participant’s interest in such Shares vests or may be issued directly to the
Participant with restrictive legends on the certificates evidencing those
unvested Shares.

 

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15.   Tax Withholding.

 

(a)   For corporate purposes, the Company’s obligation to deliver Shares upon
the exercise of Options, deliver Shares or cash upon the exercise of SARs, or
deliver Shares or remove any restrictive legends upon vesting of such Shares
under the Plan shall be subject to the satisfaction of all applicable federal,
state and local income and employment tax withholding requirements.

 

(b)   To the extent permitted under Section 402 of the Sarbanes-Oxley Act of
2002 and the regulations adopted pursuant thereto, the Administrator may, in its
discretion, provide any or all holders of Non-Statutory Stock Options or SARS,
or unvested Shares under the Plan with the right to use previously vested Shares
in satisfaction of all or part of the Taxes incurred by such holders in
connection with the exercise of their Non-Statutory Stock Options or SARs, or
the vesting of their Shares; provided, however, that this form of payment shall
be limited to the withholding amount calculated using the minimum statutory
rates. Such right may be provided to any such holder in either or both of the
following formats:

 

(i)        Stock Withholding:    The election to have the Company withhold, from
the Shares otherwise issuable upon the exercise of such Non-Statutory Stock
Option or SAR, or the vesting of such Shares, a portion of those Shares with an
aggregate Fair Market Value equal to the Taxes calculated using the minimum
statutory withholding rates interpreted in accordance with APB 25 and FASB
Interpretation No. 44.

 

(ii)       Stock Delivery:    The election to deliver to the Company, at the
time the Non-Statutory Stock Option or SAR is exercised or the Shares vest, one
or more Shares previously acquired by such holder (other than in connection with
the Option or SAR exercise, or Share vesting triggering the Taxes) with an
aggregate Fair Market Value equal to the Taxes calculated using the minimum
statutory rates interpreted in accordance with APB 25 and FASB Interpretation
No. 44.

 

16.   Effective Date and Term of the Plan.    The Plan, as an amendment and
restatement of the 2003 Plan, was last approved by the Board on March 25, 2009
and shall become effective upon stockholder approval.  Unless sooner terminated
by the Administrator, the Plan shall continue until May 31, 2015. When the Plan
terminates, no Awards shall be granted under the Plan thereafter. The
termination of the Plan shall not affect any Shares previously issued or any
Award previously granted under the Plan.

 

17.   Time of Granting Awards.    The Date of Grant of an Award shall, for all
purposes, be the date on which the Administrator makes the determination to
grant such Award, or such other date as determined by the Administrator;
provided, however, that any Award granted prior to the date on which the Plan is
approved by the Company’s stockholders shall be subject to stockholder approval
of the Plan. Notice of the determination shall be given to each Service Provider
to whom an Award is so granted within a reasonable period of time after the date
of such grant.

 

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18.   Amendment and Termination of the Plan.

 

(a)   Amendment and Termination.    The Board may at any time amend, alter,
suspend, or discontinue the Plan, but no amendment, alteration, suspension, or
discontinuation shall be made which would impair the rights of any Participant
under any grant theretofore made without his/her consent. In addition, to the
extent necessary and desirable to comply with Section 422 of the Code (or any
other applicable law or regulation, including the requirements of any stock
exchange or national market system upon which the Common Stock is then listed),
the Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required.

 

(b)   Effect of Amendment and Termination.    Any such amendment or termination
of the Plan shall not affect Awards already granted, and such Awards shall
remain in full force and effect as if this Plan had not been amended or
terminated, unless mutually agreed otherwise between the Participant and the
Board, which agreement must be in writing and signed by the Participant and the
Company.

 

19.   Regulatory Approvals.

 

(a)   The implementation of the Plan, the granting of any Awards and the
issuance of any Shares upon the exercise of any granted Awards shall be subject
to the Company’s procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the Awards granted under it, and
the Shares issued pursuant to it.

 

(b)   No Shares or other assets shall be issued or delivered under the Plan
unless and until there shall have been compliance with all applicable
requirements of federal and state securities laws, including the filing and
effectiveness of the Form S-8 registration statement (if required) for the
Shares issuable under the Plan, and all applicable listing requirements of any
stock exchange (or the Nasdaq Stock Market, if applicable) on which the Common
Stock is then listed for trading (if any).

 

20.   No Employment/Service Rights.    Nothing in the Plan shall confer upon the
Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Company (or
any Affiliate employing or retaining such person) or of the Participant, which
rights are hereby expressly reserved by each, to terminate such person’s Service
at any time for any reason, with or without cause.

 

21.   Governing Law.    This Plan shall be governed by California law, applied
without regard to conflict of laws principles.

 

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22.   Code Section 409A.  Awards under this Plan are intended to be exempt from
Section 409A of the Code.  Notwithstanding foregoing, to the extent (x) an Award
constitutes a “deferral of compensation” within the meaning of Section 409A of
the Code, (y) the Grantee or Optionee is a “specified employee” as determined
pursuant to Section 409A of the Code as of the date of his or her “separation
from service” (within the meaning of Treasury Regulation 1.409A-1(h)), and
(z) any such Award cannot be settled or paid without subjecting the Grantee or
Optionee to “additional tax”, interest or penalties under Section 409A of the
Code, then any such settlement or payment that is payable during the first six
months following the Grantee’s or Optionee’s “separation from service” shall be
paid or provided to the Grantee or Optionee on the first business day of the
seventh calendar month following the month in which his or her “separation from
service” occurs or, if earlier, at his or her death.  In addition, any
settlement or payment of an Award that is subject to Section 409A of the Code
upon a termination of Service that represents a “deferral of compensation”
within the meaning of Section 409A of the Code shall only be settled or paid
upon a “separation from service”.

 

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