Exhibit 10.1

 

PACWEST BANCORP 2003 STOCK INCENTIVE PLAN

 

as amended and restated, February 10, 2016

 

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.

 

“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.

 

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“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.

 

“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.

 

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“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.

 

“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.

 

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“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, for all Awards granted with an effective date prior to December 11,
2014; (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, for all Awards granted
with an effective date prior to December 11, 2014; (iii) the termination of a
Participant’s Service by the Company or any successor entity thereto without
Cause or by the Participant for Good Reason (as defined in the Award Agreement,
if applicable) within twenty-four months following the occurrence of a Change in
Control, for all Awards granted with an effective date of December 11, 2014 or
afterward; and (iv) the death of a Participant, for all Awards granted with an
effective date of November 2, 2005 or 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.

 

(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.

 

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

 

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

 

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

 

(xi)                              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.

 

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(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 9 million, 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 9 million Shares, subject to the adjustments provided for in
Section 11 of the Plan.

 

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.

 

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(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.

 

(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.  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.

 

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(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.

 

(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 extent 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:

 

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(A)                               extent 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.

 

(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.

 

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(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.

 

(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 or units 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.

 

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(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.

 

(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.  No person may be granted (in any
calendar year) Performance Stock Awards that pertain to more than 250,000
Shares, subject to the adjustments provided for in Section 11 of the Plan.

 

(a)                                 Risk of Forfeiture.

 

(i)                                     General Rule.  Shares or units 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.

 

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(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; return on average equity (“ROE”); cash ROE;
diluted or basic earnings per share (“EPS”); cash EPS; stock price; total
shareholder return; net charge-offs/total assets; non-performing assets/total
assets; classified assets/(Tier I Capital + ALLL); net interest margin (tax
equivalent); return on average tangible common equity; 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 accounting changes.  When establishing performance goals,
the Administrator may mandate that the performance goals be adjusted 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,
provided, however, that in the event of the death of a Participant, any
outstanding Performance Awards (1) shall be deemed earned at the target level
with respect to all open performance period if death occurs during the
performance period, and (2) shall be deemed earned at the actual performance
level achieved if death occurs after the end of the performance period.

 

(iii)                               Certification of Performance.  Following the
completion of each performance period, the Administrator will determine whether
the applicable performance goals have been met with respect to a given Grantee
and, if they have, will so certify in writing and ascertain the amount of the
applicable Performance Stock Award.  No Performance Stock Awards will be paid
for such performance period until such certification is made by the
Administrator.

 

(iv)                              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.

 

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(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.

 

(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

 

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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 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

 

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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, any extraordinary cash dividend, 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 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.

 

(c)                                  Change in Control.  This
Section 11(c) shall apply to Awards granted with an effective date of
December 11, 2014 or after.

 

(i)                                     Unless otherwise determined by the
Committee (or unless otherwise set forth in an employment agreement or a
severance agreement or plan applicable to a Participant), if a Participant’s
Service is terminated by the Company or any successor entity thereto without
Cause or by the Participant for Good Reason (as defined in the Award Agreement,
if applicable), in each case upon or within twenty-four months after a Change in
Control, each Award granted to such Participant prior to such Change in Control
shall become fully vested (including the lapsing of all restrictions and
conditions) and, as applicable, exercisable as of the date of such termination
of Service.   As of the Change in Control date, any outstanding Performance
Stock Awards shall (1) for awards that have a separate target and maximum
performance level (x) be deemed earned at the target level with respect to all
open performance periods if a Change in Control occurs within six months after
the date of grant or (y) be deemed earned at the actual performance level as of
the date of the Change in Control if a Change in Control

 

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occurs more than six months after the date of grant, and (2) for awards that do
not have a separate target and maximum performance level, be deemed earned at
the maximum performance level, and in all cases, the Performance Stock Awards
will cease to be subject to any further performance conditions (and the number
of Performance Stock Awards earned under this provision will be treated as the
number of shares of Granted Stock that are outstanding, including for purposes
of a subsequent Vesting Event) but will continue to be subject to time-based
service vesting following the Change in Control in accordance with the original
performance period.

 

(ii)                                  Notwithstanding the foregoing, in the
event of a Change in Control, a Participant’s Award may be treated, to the
extent determined by the Committee to be permitted under Section 409A of the
Code, in accordance with one of the following methods as determined by the
Committee in its sole discretion: (i) provide for the issuance of substitute
awards that will substantially preserve the otherwise applicable terms of any
affected Award previously granted under the Plan, as determined by the Committee
in its sole discretion; (ii) cancel such Award for fair value (as determined in
the sole discretion of the Committee) which, in the case of Options and SARs,
may equal the excess, if any, of the value of the consideration to be paid in
the Change in Control transaction to holders of the same number of shares of
Common Stock subject to such Options or SARs over the aggregate Exercise Price
of such Options or SARs, as the case may be; or (iii) provide that for a period
of at least 20 days prior to the Change in Control, any Options or SARs will be
exercisable as to all shares of Common Stock subject thereto (but any such
exercise will be contingent upon and subject to the occurrence of the Change in
Control and if the Change in Control does not take place within a specified
period after giving such notice for any reason whatsoever, the exercise will be
null and void) and that any Options or SARs not exercised prior to the
consummation of the Change in Control will terminate and be of no further force
and effect as of the consummation of the Change in Control.  For the avoidance
of doubt, in the event of a Change in Control, the Committee may, in its sole
discretion, terminate any Option or SAR for which the Exercise Price is equal to
or exceeds the per share value of the consideration to be paid in the Change in
Control transaction without payment of consideration therefor.

 

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 any deferred compensation plan of the Company as in
effect from time to time.  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.                               No Repricings or Reloads.  The Administrator
may not take any action which would constitute a “repricing” of Options or other
Awards (or cash buyback of underwater Options or other Awards) without the
approval of the Company’s stockholders prior to effectiveness.  The
Administrator may not grant any Awards with automatic reload features.

 

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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.

 

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 approved by the
Board on February 10, 2016 and shall become effective upon stockholder approval
of the Plan at the Company’s annual stockholder’s meeting in 2016.  In the event
that the Plan is not approved by stockholders at the Company’s annual
stockholder’s meeting in  2016, then the PacWest Bancorp 2003 Stock Incentive
Plan as Amended and Restated as of January 13, 2014 will remain in effect
pursuant to its terms.  Unless sooner terminated by the Administrator, the Plan
shall continue until the tenth anniversary of the date the Plan was approved by
stockholders.  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.

 

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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.

 

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”.

 

23.                               Limits on Awards to Non-Employee Directors. 
No Non-Employee Director may be granted (in any calendar year) compensation with
a value in excess of $1,000,000, with the value of any equity-based awards based
on the accounting grant date value of such award.

 

24.                               Repayment if Conditions Not Met.  If the
Administrator determines that all terms and conditions of the Plan and a
Grantee’s Stock Award Agreement were not satisfied, and that the failure to
satisfy such terms and conditions is material, then the Grantee will be
obligated to pay the Company immediately upon demand therefor, (i) with respect
to an Option or SAR, an amount equal to the excess of the Fair Market Value
(determined at the time of exercise) of the Shares that were delivered in
respect of such exercised Option or SAR, as applicable, over the exercise price
paid therefor, (ii) with respect to Restricted Stock Awards, an amount equal to
the Fair Market Value (determined at the time such shares became vested) of such
Restricted Stock Awards, in each case with respect to clauses (i) and (ii) of
this Section 24, without reduction for any amount applied to satisfy withholding
tax or other obligations in respect of such Award.

 

25.                               Right of Offset.  The Company will have the
right to offset against its obligation to deliver Shares (or other property or
cash) under the Plan or any Stock Award Agreement any outstanding amounts
(including, without limitation, travel and entertainment or advance account
balances, loans, repayment obligations under any Awards, or amounts repayable to
the Company pursuant to tax equalization, housing, automobile or other employee
programs) that the Grantee then owes to the Company and any amounts the
Administrator otherwise deems appropriate pursuant to any tax equalization
policy or agreement.  Notwithstanding the foregoing, if an Award provides for
the deferral of compensation within the meaning of Section 409A of the Code, the
Administrator will have no right to offset against its obligation to deliver
Shares (or other property or cash) under the Plan or any Stock Award Agreement
if such offset could subject the Grantee to the additional tax imposed under
Section 409A of the Code in respect of an outstanding Award.

 

26.                               Clawback/Recapture Policy.  Awards under the
Plan will be subject to any clawback or recapture policy that the Company may
adopt from time to time to the extent provided in such policy and, in accordance
with such policy, may be subject to the requirement that the Awards be repaid to
the Company after they have been distributed to the Grantee.

 

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27.                               No Liability With Respect to Tax Qualification
or Adverse Tax Treatment. Notwithstanding anything to the contrary contained
herein, in no event will the Company be liable to a Grantee on account of an
Award’s failure to (a) qualify for favorable United States or foreign tax
treatment or (b) avoid adverse tax treatment under United States or foreign law,
including, without limitation, Section 409A.

 

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