Document:

Exhibit
4.6

 

EXECUTION COPY

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

 

by and among

 

 

IMCLONE SYSTEMS INCORPORATED

 

as Issuer,

 

and

 

MORGAN STANLEY & CO. INCORPORATED

 

and

 

UBS
SECURITIES LLC

 

as the Initial Purchasers

 

 

 

 

 

 

Dated as of
May 7, 2004

 

THIS REGISTRATION
RIGHTS AGREEMENT is made and entered into as of May 7, 2004, by and among ImClone Systems Incorporated, a
Delaware corporation (the “Company”), and Morgan Stanley & Co.
Incorporated and UBS Securities LLC (together, the “Initial Purchasers”), pursuant to the
Purchase Agreement dated May 3, 2004 (the “Purchase Agreement”) among the Company and
the Initial Purchasers.  In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement.  The execution of this Agreement is a
condition to the closing under the Purchase Agreement.

The Company agrees
with the Initial Purchasers, (i) for their benefit as Initial Purchasers and
(ii) for the benefit of the beneficial owners (including the Initial
Purchasers) from time to time of the Notes (as defined herein) and the
beneficial owners from time to time of the Underlying Common Stock (as defined
herein) issued upon conversion of the Notes (each of the foregoing a “Holder”
and together the “Holders”), as follows:

Section 1. 
Definitions.  Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement.  As used in this Agreement,
the following terms shall have the following meanings:

                “Additional Interest” has the
meaning set forth in Section 2(e) hereof.

                “Additional Interest Accrual Period”
has the meaning set forth in Section 2(e) hereof.

                “Additional Interest Payment Date”
means each May 15 and November 15.

“Affiliate”
means with respect to any specified person, an “affiliate,” as defined in Rule
144, of such person.

“Amendment
Effectiveness Deadline Date” has the meaning set forth in Section
2(d) hereof.

“Applicable
Conversion Price”  as of any
date of determination means the Conversion Price in effect as of such date of
determination or, if no Notes are then outstanding, the Conversion Price that
would be in effect were Notes then outstanding.

“Business Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York are authorized or obligated
by law or executive order to close.

“Common Stock”
means the shares of common stock, par value $.001 per share, of the Company and
any other shares of common stock as may constitute “Common Stock” for purposes
of the Indenture, including the Underlying Common Stock.

“Conversion
Price” has the meaning assigned such term in the Indenture.

“Deferral
Notice” has the meaning set forth in Section 3(i) hereof.

“Deferral
Period” has the meaning set forth in Section 3(i) hereof.

“Effectiveness
Deadline Date” has the meaning set forth in Section 2(a) hereof.

“Effectiveness
Period” means the period commencing on the date hereof and ending on
the date that all Registrable Securities have ceased to be Registrable
Securities.

 

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“Event”
has the meaning set forth in Section 2(e) hereof.

“Event Date”
has the meaning set forth in Section 2(e) hereof.

“Event
Termination Date” has the meaning set forth in Section 2(e) hereof.

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

“Filing
Deadline Date” has the meaning set forth in Section 2(a) hereof.

“Holder”
has the meaning set forth in the second paragraph of this Agreement.

“Indenture”
means the Indenture, dated as of the Closing Date, between the Company and The
Bank of New York, as trustee, pursuant to which the Notes are being issued.

“Initial
Purchasers” means Morgan Stanley & Co. Incorporated and UBS
Securities LLC.

“Initial
Shelf Registration Statement” has the meaning set forth in Section
2(a) hereof.

“Issue Date”
means the first date of original issuance of the Notes.

“Losses”
has the meaning set forth in Section 6 hereof.

“Material
Event” has the meaning set forth in Section 3(i) hereof.

“Notes”
means the 1-3/8%
Convertible Notes due 2024 of the Company to be purchased pursuant to the
Purchase Agreement.

“Notice and
Questionnaire” means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated May 3, 2004 relating to the Notes.

“Notice
Holder” means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

“Prospectus”
means the prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

“Purchase
Agreement” has the meaning set forth in the preamble hereof.

“Record
Holder” means (i) with respect to any Additional Interest Payment
Date relating to any Notes as to which any Additional Interest has accrued, the
holder of record of such Note on the record date with respect to the interest
payment date under the Indenture on which such Additional Interest Payment Date
shall occur and (ii) with respect to any Additional Interest Payment Date
relating to the Underlying Common Stock as to which any such Additional
Interest has accrued, the registered holder of such Underlying Common Stock
fifteen (15) days prior to such Additional Interest Payment Date.

“Registrable
Securities” means the Notes until such Notes have been converted
into or exchanged for the Underlying Common Stock and, at all times subsequent
to any such 

 

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conversion or
exchange the Underlying Common Stock and any securities into or for which such
Underlying Common Stock has been converted or exchanged, and any security
issued with respect thereto upon any stock dividend, split or similar event
until, in the case of any such security, (A) the earliest of (i) its effective
registration under the Securities Act and resale in accordance with the
Registration Statement covering it, (ii) expiration of the holding period that
would be applicable thereto under Rule 144(k) or (iii) its sale to the public
pursuant to Rule 144 (or any similar provision then in force, but not Rule
144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legend with respect to transfer restrictions required under the Indenture are
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be.

“Registration
Expenses” has the meaning set forth in Section 5 hereof.

“Registration
Statement” means any registration statement of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

“Restricted
Securities” means “Restricted Securities” as defined in Rule 144.

“Rule 144”
means Rule 144 under the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the SEC.

“Rule 144A”
means Rule 144A under the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the SEC.

“SEC”
means the Securities and Exchange Commission.

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.

“Shelf
Registration Statement” has the meaning set forth in Section 2(a)
hereof.

“Special
Counsel” means Cravath, Swaine & Moore LLP or such other
successor counsel as shall be specified by the Holders of a majority of the
Registrable Securities, but which may, with the written consent of the Initial
Purchasers (which shall not be unreasonably withheld), be another nationally
recognized law firm experienced in securities law matters designated by the
Company, the reasonable fees and expenses of which will be paid by the Company
pursuant to Section 5 hereof.  Throughout this
Agreement, for purposes of determining the holders of a majority of Registrable
Securities in this definition, Holders of Notes shall be deemed to be the
Holders of the number of shares of Underlying Common Stock into which such
Notes are or would be convertible as of the date the consent is requested.

“Subsequent
Shelf Registration Statement” has the meaning set forth in Section
2(b) hereof.

“TIA”
means the Trust Indenture Act of 1939, as amended.

“Trustee”
means The Bank of New York, the Trustee under the Indenture.

“Underlying
Common Stock” means the Common Stock into which the Notes are
convertible or issued upon any such conversion.

 

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Section 2. 
Shelf
Registration.  (a) The Company shall use its reasonable
efforts to prepare and file or cause to be prepared and filed with the SEC, as
soon as practicable but in any event by the date (the “Filing Deadline Date”) ninety
(90) days after the Issue Date, a Registration Statement for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act (a “Shelf
Registration Statement”, which term shall include the Initial Shelf
Registration Statement and each Subsequent Shelf Registration Statement)
registering the resale from time to time by Holders thereof of all of the
Registrable Securities (the “Initial Shelf Registration Statement”).  The Initial Shelf Registration Statement
shall be on Form S-3 or another appropriate form permitting registration of
such Registrable Securities for resale by such Holders in accordance with the
methods of distribution elected by the Holders and set forth in the Initial
Shelf Registration Statement.  The
Company shall use its reasonable best efforts to cause the Initial Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as is practicable but in any event by the date (the “Effectiveness
Deadline Date”) that is one hundred and eighty (180) days after the
Issue Date, and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement, as defined below) continuously
effective under the Securities Act until the expiration of the Effectiveness
Period.  At the time the Initial Shelf
Registration Statement is declared effective, each Holder that became a Notice
Holder on or prior to the date ten (10) Business Days prior to such time of
effectiveness shall be named as a selling securityholder in the Initial Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of Registrable Securities
in accordance with applicable law. Except for the piggyback registration rights
granted to (i) Merck KGaA under its Development and License Agreement dated
December 14, 1998 with the Company and (ii) Bristol-Myers Squibb Company (“BMS”)
under its Stockholder Agreement dated September 19, 2001 with the Company, for
each of which the Company will use its reasonable efforts to obtain a waiver or
offer to each of Merck KGaA and BMS a separate shelf registration statement,
none of the Company’s security holders (other than the Holders of Registrable
Securities) shall have the right to include the Company’s securities  in the Shelf Registration Statement.

                (b)  If the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement ceases to be effective for any reason at any time
during the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent Shelf Registration Statement”).  If a Subsequent Shelf Registration Statement
is filed, the Company shall use its reasonable efforts to cause the Subsequent
Shelf Registration Statement to become effective as promptly as is practicable
after such filing and to keep such Subsequent Shelf Registration Statement
continuously effective until the end of the Effectiveness Period.

                (c)  The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as 

 

5

 

reasonably
requested by the Initial Purchasers or by the Trustee on behalf of the Holders
of the Registrable Securities covered by such Shelf Registration Statement.

                (d)  Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this
Section 2(d) and Section 3(i).  Each
Holder of Registrable Securities wishing to sell Registrable Securities
pursuant to a Shelf Registration Statement and related Prospectus agrees to
deliver a Notice and Questionnaire to the Company at least three (3) Business
Days prior to any intended distribution of Registrable Securities under the
Shelf Registration Statement.  From and
after the date the Initial Shelf Registration Statement is declared effective,
the Company shall (x) at the end of each calendar quarter or (y) if a Deferral
Period is in effect at the end of such calendar quarter, no later than fifteen
(15) Business Days after the expiration of such Deferral Period, (i) if
required by applicable law, file with the SEC a post-effective amendment to the
Shelf Registration Statement or prepare and, if required by applicable law,
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
(including a Subsequent Shelf Registration Statement) so that the Holder
delivering a Notice and Questionnaire during such calendar quarter is named as
a selling securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement or shall file a Subsequent Shelf Registration Statement,
use its reasonable efforts to cause such post-effective amendment or Subsequent
Shelf Registration Statement to be declared effective under the Securities Act
as promptly as is practicable, but in any event by the date (the “Amendment
Effectiveness Deadline Date”) that is forty-five (45) days after the
date such post-effective amendment is required by this clause to be filed; (ii)
provide such Holder copies of any documents filed pursuant to Section 2(d)(i);
and (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(d)(i); provided, that if such Notice and Questionnaire is delivered
during a Deferral Period, the Company shall so inform the Holder delivering
such Notice and Questionnaire and shall take the actions set forth in clauses
(i), (ii) and (iii) above upon expiration of the Deferral Period in accordance
with Section 3(i).  Notwithstanding
anything contained herein to the contrary, (i) the Company shall be under no
obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Registration Statement or related Prospectus and (ii) the
Amendment Effectiveness Deadline Date shall be extended by up to ten (10)
Business Days from the expiration of a Deferral Period (and the Company shall
incur no obligation to pay Additional Interest during such extension) if such
Deferral Period shall be in effect on the Amendment Effectiveness Deadline
Date.

                (e)  The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf
Registration Statement has not been filed on or prior to the Filing Deadline
Date, (ii) the Initial Shelf Registration Statement has not been declared
effective under the Securities Act on or prior to the Effectiveness Deadline
Date, (iii) the Company has failed to perform its obligations set forth in
Section 2(d) within the time period required therein, (iv) any post-effective
amendment to a Shelf Registration Statement or any Subsequent Shelf
Registration Statement filed pursuant to Section 2(d)(i) has not become
effective under the Securities Act on or prior to the Amendment Effectiveness
Deadline Date, (v) the aggregate 

 

6

 

duration of
Deferral Periods in any period exceeds the number of days permitted in respect
of such period pursuant to Section 3(i) hereof or (vi) the number of Deferral
Periods in any period exceeds the number permitted in respect of such period
pursuant to Section 3(i) hereof (each of the events of a type described in any
of the foregoing clauses (i) through (vi) are individually referred to herein
as an “Event,”
and the Filing Deadline Date in the case of clause (i), the Effectiveness
Deadline Date in the case of clause (ii), the date by which the Company is
required to perform its obligations set forth in Section 2(d) in the case of
clause (iii), the Amendment Effectiveness Deadline Date in the case of clause
(iv), the date on which the aggregate duration of Deferral Periods in any
period exceeds the number of days permitted by Section 3(i) hereof in the case
of clause (v), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods in any period under Section
3(i) hereof to be exceeded in the case of clause (vi), being referred to herein
as an “Event
Date”).  Events shall be
deemed to continue until the “Event Termination Date,” which shall be the
following dates with respect to the respective types of Events:  the date the Initial Shelf Registration
Statement is filed in the case of an Event of the type described in clause (i),
the date the Initial Shelf Registration Statement is declared effective under
the Securities Act in the case of an Event of the type described in clause
(ii), the date the Company performs its obligations set forth in Section 2(d)
in the case of an Event of the type described in clause (iii) the date the
applicable post-effective amendment to a Shelf Registration Statement or
Subsequent Shelf Registration Statement becomes effective under the Securities
Act in the case of an Event of the type described in clause (iv), termination
of the Deferral Period that caused the limit on the aggregate duration of
Deferral Periods in a period set forth in Section 3(i) to be exceeded in the
case of the commencement of an Event of the type described in clause (v), and
termination of the Deferral Period the commencement of which caused the number
of Deferral Periods in a period permitted by Section 3(i) to be exceeded in the
case of an Event of the type described in clause (vi).

Accordingly,
commencing on (and including) any Event Date and ending on (but excluding) the
next date on which there are no Events that have occurred and are continuing
(an “Additional
Interest Accrual Period”), the Company agrees to pay, as additional
interest and not as a penalty, an amount (the “Additional Interest”),
payable on the Additional Interest Payment Dates to Record Holders of Notes
that are Registrable Securities and of shares of Underlying Common Stock issued
upon conversion of Notes that are Registrable Securities, as the case may be,
accruing, for each portion of such Additional Interest Accrual Period beginning
on and including an Additional Interest Payment Date (or, in respect of the
first time that the Additional Interest is to be paid to Holders on an
Additional Interest Payment Date as a result of the occurrence of any
particular Event, from the Event Date) and ending on but excluding the first to
occur of (A) the date of the end of the Additional Interest Accrual Period or
(B) the next Additional Interest Payment Date, at a rate per annum equal to
one-quarter of one percent (0.25%) of the outstanding principal amount of such
Notes for the first 90 days after the occurrence of the event and one-half of
one percent (0.5%) of the outstanding principal amount of such Notes after the
first 90 days or, in the case of Notes that have been converted into or exchanged
for Underlying Common Stock, the Applicable Conversion Price of such shares of
Underlying Common Stock, as the case may be, in each case determined as of the
Business Day immediately preceding the next Additional Interest Payment Date; provided,
that in the case of an Additional Interest Accrual Period that is in effect
solely as a result of an Event of the type described in clause (iii) of the
immediately preceding paragraph, such Additional Interest shall be paid only to
the Holders that have delivered Notice and Questionnaires that caused the 

 

7

 

Company to incur
the obligations set forth in Section 2(d) the non-performance of which is the
basis of such Event,  provided further, that any
Additional Interest accrued with respect to any Note or portion thereof called
for redemption on a redemption date or converted into Underlying Common Stock
on a conversion date prior to the Additional Interest Payment Date, shall, in
any such event, be paid instead to the Holder who submitted such Note or
portion thereof for redemption or conversion on the applicable redemption date
or conversion date, as the case may be, on such date (or promptly following the
conversion date, in the case of conversion). 
In calculating the Additional Interest on any date on which no Notes
are outstanding, the Conversion Price and the Additional Interest payable with
respect to shares of Common Stock which are Registrable Securities, shall be
calculated as if the Notes were still outstanding.  Notwithstanding the foregoing, no Additional Interest shall accrue
as to any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the
Effectiveness Period.  The rate of
accrual of the Additional Interest with respect to any period shall not exceed
the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events.  Following
the cure of all Events requiring the payment by the Company of Additional
Interest to the Holders of Registrable Securities pursuant to this Section, the
accrual of Additional Interest will cease (without in any way limiting the
effect of any subsequent Event requiring the payment of Additional Interest by
the Company).

The Trustee shall
be entitled, on behalf of Holders of Notes or Underlying Common Stock, to seek
any available remedy for the enforcement of this Agreement, including for the
payment of any Additional Interest.  Notwithstanding
the foregoing, the parties agree that the sole damages payable for a violation
of the terms of this Agreement with respect to which Additional Interest is
expressly provided shall be such Additional Interest.  Nothing shall preclude a Notice Holder or Holder of Registrable
Securities from pursuing or obtaining specific performance or other equitable
relief with respect to this Agreement.

All of the
Company’s obligations set forth in this Section 2(e) that are outstanding with
respect to any Registrable Security at the time such security ceases to be a
Registrable Security shall survive until such time as all such obligations with
respect to such security have been satisfied in full (notwithstanding
termination of this Agreement pursuant to Section 8(k)).

The parties hereto
agree that the Additional Interest provided for in this Section 2(e) constitute
a reasonable estimate of the damages that may be incurred by Holders of
Registrable Securities by reason of the failure of the Shelf Registration
Statement to be filed or declared effective or available for effecting resales
of Registrable Securities in accordance with the provisions hereof.

Section 3. 
Registration
Procedures.  In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:

(a)           Prepare and file with the SEC a
Registration Statement or Registration Statements on any appropriate form under
the Securities Act available for the sale of the Registrable Securities by the
Holders thereof in accordance with the intended method or methods of
distribution thereof, and use its reasonable efforts to cause each such
Registration Statement to become effective and remain effective as provided
herein; provided,
that before filing any Registration Statement or Prospectus or any amendments
or supplements thereto with the SEC, furnish to the Initial Purchasers and the
Special Counsel copies of all such documents proposed to be filed and use its
reasonable efforts to reflect in each such document when so filed with the 

 

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SEC such comments
as the Special Counsel reasonably shall propose within five (5) Business Days
of the delivery of such copies to the Initial Purchasers and the Special
Counsel.

(b)           Prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement continuously effective for the
applicable period specified in Section 2(a); cause the related Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force) under
the Securities Act;  and use its
reasonable efforts to comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all securities covered by
such Registration Statement during the Effectiveness Period in accordance with
the intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or such Prospectus as so supplemented.

(c)           As promptly as practicable give notice
to the Notice Holders, the Initial Purchasers and the Special Counsel (i) when
any Prospectus, prospectus supplement, Registration Statement or post-effective
amendment to a Registration Statement has been filed with the SEC and, with
respect to a Registration Statement or any post-effective amendment, when the
same has been declared effective, (ii) of any request, following the
effectiveness of the Initial Shelf Registration Statement under the Securities
Act, by the SEC or any other federal or state governmental authority for
amendments or supplements to any Registration Statement or related Prospectus
or for additional information, (iii) of the issuance by the SEC or any other federal
or state governmental authority of any stop order suspending the effectiveness
of any Registration Statement or the initiation or threatening of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of (but not the nature of or details concerning)
a Material Event and (vi) of the determination by the Company that a
post-effective amendment to a Registration Statement will be filed with the
SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3 (i)), state that it constitutes a Deferral Notice, in
which event the provisions of Section 3(i) shall apply.

(d)           Use reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in either case at the
earliest possible moment, and provide prompt notice to each Notice Holder and
the Initial Purchasers of the withdrawal of any such order.

(e)           If reasonably requested by an Initial
Purchaser or any Notice Holder, as promptly as practicable incorporate in a
Prospectus supplement or post-effective amendment to a Registration Statement
such information as the Initial Purchaser, the Special Counsel or such Notice
Holder shall, on the basis of a written opinion of nationally-recognized
counsel experienced in such matters, determine to be required to be included
therein by applicable law and make any required filings of such Prospectus
supplement or such post-effective amendment.

(f)            As promptly as practicable furnish to
each Notice Holder, the Special Counsel and the Initial Purchasers, without
charge, at least one (1) conformed copy of the Registration 

 

 

9

 

Statement and any
amendment thereto, including financial statements but excluding schedules, all
documents incorporated or deemed to be incorporated therein by reference and
all exhibits (unless requested in writing to the Company by such Notice Holder,
Special Counsel, counsel or Initial Purchaser).

(g)           During the Effectiveness Period,
deliver to each Notice Holder, the Special Counsel and the Initial Purchasers,
in connection with any sale of Registrable Securities pursuant to a
Registration Statement, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each
preliminary prospectus) and any amendment or supplement thereto as such Notice
Holder may reasonably request; and the Company hereby consents (except during
such periods that a Deferral Notice is outstanding and has not been revoked) to
the use of such Prospectus or each amendment or supplement thereto by each
Notice Holder, in connection with any offering and sale of the Registrable
Securities covered by such Prospectus or any amendment or supplement thereto in
the manner set forth therein.

(h)           Prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, register
or qualify or cooperate with the Notice Holders in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Notice Holder reasonably requests in writing (which request may be included
in the Notice and Questionnaire); prior to any public offering of the Registrable
Securities pursuant to the Shelf Registration Statement, keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period in connection with such Notice Holder’s offer and sale of
Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant Registration
Statement and the related Prospectus; provided, that the Company will not be
required to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to qualify but for
this Agreement or (ii) take any action that would subject it to general service
of process in suits or to taxation in any such jurisdiction where it is not
then so subject.

(i)            Upon (A) the issuance by the SEC of
a stop order suspending the effectiveness of the Shelf Registration Statement
or the initiation of proceedings with respect to the Shelf Registration
Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence
of any event or the existence of any fact (a “Material Event”) as a result
of which any Registration Statement shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or any Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (C) the occurrence or existence of any pending corporate
development that, in the reasonable discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related Prospectus, (i) in the case of clause (B) above, subject to the next
sentence, as promptly as practicable prepare and file, if necessary pursuant to
applicable law, a post-effective amendment to such Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated 

 

10

 

by reference into
such Registration Statement and Prospectus so that such Registration Statement
does not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading (except for any such untrue statement or omission made
in reliance on and in conformity with information relating to any Notice Holder
furnished to the Company in writing by such Notice Holder expressly for use
therein), and such Prospectus does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (except for any such untrue
statement or omission made in reliance on and in conformity with information
relating to any Notice Holder furnished to the Company in writing by such
Notice Holder expressly for use therein), as thereafter delivered to the
purchasers of the Registrable Securities being sold thereunder, and, in the
case of a post-effective amendment to a Registration Statement, subject to the
next sentence, use its reasonable efforts to cause it to be declared effective
as promptly as is practicable, and (ii) give notice to the Notice Holders, and
the Special Counsel, if any, that the availability of the Shelf Registration
Statement is suspended (a “Deferral Notice”) and, upon receipt of any
Deferral Notice, each Notice Holder agrees not to sell any Registrable
Securities pursuant to the Registration Statement until such Notice Holder’s
receipt of copies of the supplemented or amended Prospectus provided for in
clause (i) above, or until it is advised in writing by the Company that the
Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus.  The Company will
use all reasonable efforts to ensure that the use of the Prospectus may be
resumed (x) in the case of clause (A) above, as promptly as is practicable, (y)
in the case of clause (B) above, as soon as, in the sole judgment of the Company,
public disclosure of such Material Event would not be prejudicial to or
contrary to the interests of the Company or, if necessary to avoid unreasonable
burden or expense, as soon as practicable thereafter and (z) in the case of
clause (C) above, as soon as, in the discretion of the Company, such suspension
is no longer appropriate.  The Company
shall be entitled to exercise its right under this Section 3(i) to suspend the
availability of the Shelf Registration Statement or any Prospectus, without
incurring or accruing any obligation to pay Additional Interest pursuant to
Section 2(e), no more than one (1) time in any three month period or three (3)
times in any twelve month period, and any such period during which the
availability of the Registration Statement and any Prospectus is suspended (the
“Deferral
Period”) shall, without incurring any obligation to pay Additional
Interest pursuant to Section 2(e), not exceed 30 days; provided, that in the case
of a Material Event relating to an acquisition or a probable acquisition or
financing, recapitalization, business combination or other similar transaction,
the Company may, without incurring any obligation to pay Additional Interest
pursuant to Section 2(e), deliver to Notice Holders a second notice to the effect
set forth above, which shall have the effect of extending the Deferral Period
by up to an additional 30 days, or such shorter period of time as is specified
in such second notice, provided, that the aggregate duration of
any Deferral Periods shall not, without incurring any obligation to pay
Additional Interest pursuant to Section 2(e), exceed 30 days in any three month
period (or 60 days in any three month period in the event of a Material Event
pursuant to which the Company has delivered a second notice as required above)
or 90 days in any twelve (12) month period.

(j)            If requested in writing in connection
with a disposition of Registrable Securities pursuant to a Registration
Statement, make reasonably available for inspection during normal business
hours by a representative for the Notice Holders of such Registrable
Securities, and any 

 

11

 

managing
underwriter, broker-dealers, attorneys and accountants retained by such Notice
Holders, all relevant financial and other records and pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
appropriate officers, directors and employees of the Company and its
subsidiaries to make reasonably available for inspection during normal business
hours on reasonable notice all relevant information reasonably requested by
such representative for the Notice Holders, or any such managing underwriter,
broker-dealers, attorneys or accountants in connection with such disposition,
in each case as is customary for similar “due diligence” examinations; provided,
however,
that such persons shall first agree in writing with the Company that any
information that is reasonably and in good faith designated by the Company in
writing as confidential at the time of delivery of such information shall be
kept confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Registration Statement
or the use of any Prospectus referred to in this Agreement), (iii) such
information becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement, and provided,
that the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of all the Notice Holders and the
other parties entitled thereto by the counsel referred to in Section 5 and provided
further, that the Company shall not be required to disclose any
information subject to the attorney-client or attorney work product privilege
if and to the extent such disclosure would constitute a waiver of such
privilege.

(k)           Use all reasonable efforts to comply
with all applicable rules and regulations of the SEC and make generally
available to its securityholders earning statements (which need not be audited)
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 3-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) commencing on the first
day of the first fiscal quarter of the Company commencing after the effective
date of a Registration Statement, which statements shall cover said periods.

                    (l)    Cooperate
with each Notice Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities sold or to be sold pursuant to
a Registration Statement, which certificates shall not bear any restrictive
legends, and cause such Registrable Securities to be in such denominations as
are permitted by the Indenture and registered in such names as such Notice
Holder may request in writing at least two (2) Business Days prior to any sale
of such Registrable Securities.

                  (m)    Provide
a CUSIP number for all Registrable Securities covered by each Registration
Statement not later than the effective date of such Registration Statement and
provide the Trustee and the transfer agent for the Common Stock with printed
certificates for the Registrable Securities that are in a form eligible for
deposit with The Depository Trust Company.

                   (n)    Cooperate
and assist in any filings required to be made with the National Association of
Securities Dealers, Inc.

 

12

 

 

                   (o)    Upon
(i) the filing of the Initial Shelf Registration Statement and (ii) the
effectiveness of the Initial Shelf Registration Statement and any Subsequent
Shelf Registration Statement, announce the same, in each case by release to
Reuters Economic Services and Bloomberg Business News.

Section 4. 
Holder’s
Obligations.  Each Holder agrees, by acquisition of the
Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next
sentence.  Each Notice Holder agrees
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Notice
Holder not misleading and any other information regarding such Notice Holder
and the distribution of such Registrable Securities as the Company may from
time to time reasonably request.  Any
sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to
such Holder and its plan of distribution is as set forth in the Prospectus
delivered by such Holder in connection with such disposition, that such
Prospectus does not as of the time of such sale contain any untrue statement of
a material fact relating to or provided by such Holder or its plan of
distribution and that such Prospectus does not as of the time of such sale omit
to state any material fact relating to or provided by such Holder or its plan
of distribution necessary to make the statements in such Prospectus, in the
light of the circumstances under which they were made, not misleading.

Section 5. 
Registration
Expenses.  The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any
Registration Statement is declared effective. 
Such fees and expenses shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the National Association
of Securities Dealers, Inc. and (y) of compliance with federal and state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of the Special Counsel in connection with Blue Sky qualifications
of the Registrable Securities under the laws of such jurisdictions as the
Notice Holders of a majority of the Registrable Securities being sold pursuant
to a Registration Statement may designate), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable
Securities in a form eligible for deposit with The Depository Trust Company,
(iii) duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) fees and disbursements
of counsel for the Company and the Special Counsel in connection with the Shelf
Registration Statement (provided that the Company shall not be liable for the
fees and expenses of more than one separate firm for all parties participating
in any transaction hereunder), (v) reasonable fees and disbursements of the
Trustee and its counsel and of the registrar and transfer agent for the Common
Stock and (vi) any Securities Act liability insurance obtained by the Company
in its sole discretion.  In addition,
the Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing
legal or accounting duties), the expense of any annual audit, the fees and
expenses incurred in connection with the listing by the Company of the
Registrable Securities on any securities exchange on which similar securities
of the Company are then listed and the fees and expenses of any person,
including special experts, retained by the Company.  

 

13

 

Notwithstanding
the provisions of this Section 5, each seller of Registrable Securities shall
pay selling expenses and all registration expenses to the extent required by
applicable law.

Section 6. 
Indemnification.

                   (a)    Indemnification
by the Company.  The Company
shall indemnify and hold harmless each Notice Holder and each person, if any,
who controls any Notice Holder (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) from and against any losses,
liabilities, claims, damages and expenses (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (collectively, “Losses”), arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, provided,
however, that the Company shall not be liable in any such case to
the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement contained in or omission or alleged
omission from any of such documents in reliance upon and conformity with any of
the information relating to the Holders furnished to the Company in writing by
a Holder expressly for use therein; provided further, that the indemnification
contained in this paragraph shall not inure to the benefit of any Holder of
Registrable Securities (or to the benefit of any person controlling such
Holder) on account of any such Losses arising out of or based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus provided in each case the Company has performed its
obligations under Section 3(a) hereof if either (A) (i) such Holder failed to
send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale by such Holder to the person asserting the
claim from which such Losses arise and (ii) the Prospectus would have corrected
such untrue statement or alleged untrue statement or such omission or alleged omission,
or (B) (x) such untrue statement or alleged untrue statement, omission or
alleged omission is corrected in an amendment or supplement to the Prospectus
and (y) having previously been furnished by or on behalf of the Company with
copies of the Prospectus as so amended or supplemented, such Holder thereafter
fails to deliver such Prospectus as so amended or supplemented, with or prior
to the delivery of written confirmation of the sale of a Registrable Security
to the person asserting the claim from which such Losses arise.

                (b)  Indemnification by Holders of Registrable Securities.  Each Holder agrees severally and not jointly
to indemnify and hold harmless the Company and its respective directors and
officers, and each person, if any, who controls the Company (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act)
or any other Holder, from and against all Losses arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with information furnished to the Company by such Holder
expressly for use in such Registration Statement or Prospectus or amendment or
supplement thereto.  In no event shall
the liability of any selling Holder of Registrable Securities 

 

14

 

hereunder be
greater in amount than the dollar amount of the proceeds received by such
Holder upon the sale of the Registrable Securities pursuant to the Registration
Statement giving rise to such indemnification obligation.

                (c)  Conduct of Indemnification Proceedings.  In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to either of the two preceding
paragraphs, such person (the “indemnified party”) shall promptly notify
the person against whom such indemnity may be sought (the “indemnifying party”) in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding.  In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them.  It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all indemnified parties,
and that all such fees and expenses shall be reimbursed as they are
incurred.  Such separate firm shall be
designated in writing by, in the case of parties indemnified pursuant to
Section 6(a), the Holders of a majority (with Holders of Notes deemed to be the
Holders, for purposes of determining such majority, of the number of shares of
Underlying Common Stock into which such Notes are or would be convertible or
exchangeable as of the date on which such designation is made) of the
Registrable Securities covered by the Registration Statement held by Holders
that are indemnified parties pursuant to Section 6(a) and, in the case of
parties indemnified pursuant to Section 6(b), the Company.  The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.

                (d)  Contribution.  To the
extent that the indemnification provided for in this Section 6 is unavailable
to an indemnified party under Section 6(a) or 6(b) hereof in respect of any
Losses or is insufficient to hold such indemnified party harmless, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such Losses (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the indemnifying

 

15

 

party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations.  Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the initial placement pursuant to the Purchase
Agreement (before deducting expenses) of the Registrable Securities to which
such Losses relate.  Benefits received
by any Holder shall be deemed to be equal to the value of receiving Registrable
Securities that are registered under the Securities Act.  The relative fault of the Holders on the one
hand and the Company on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Holders or by the Company, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. 
The Holders’ respective obligations to contribute pursuant to this
Section 6(d) are several in proportion to the respective number of Registrable
Securities they have sold pursuant to a Registration Statement, and not joint.

The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 6(d) were determined by pro  rata allocation or by any
other method or allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an indemnified
party as a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim.  Notwithstanding this Section
6(d), an indemnifying party that is a selling Holder of Registrable Securities
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Registrable Securities sold by such indemnifying
party and distributed to the public were offered to the public exceeds the
amount of any damages that such indemnifying party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

                (e)  The indemnity, contribution and expense reimbursement obligations
of the parties hereunder shall be in addition to any liability any indemnified
party may otherwise have hereunder, under the Purchase Agreement or otherwise.

                (f)  The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder or any person controlling any Holder, or the Company, or the
Company’s officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Securities by any Holder.

Section 7. 
Information
Requirements.  (a)  The Company covenants that, if at any time
before the end of the Effectiveness Period the Company is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder
of Registrable Securities and take such further reasonable action as any Holder
of Registrable Securities may reasonably request in writing (including, without
limitation, making such reasonable representations as any such Holder may
reasonably request), all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A under the Securities Act and 

 

16

 

customarily taken
in connection with sales pursuant to such exemptions.  Upon the written request of any Holder of Registrable Securities,
the Company shall deliver to such Holder a written statement as to whether it
has complied with such filing requirements, unless such a statement has been
included in the Company’s most recent report filed pursuant to Section 13 or
Section 15(d) of Exchange Act. 
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed
to require the Company to register any of its securities (other than the Common
Stock) under any section of the Exchange Act.

                (b)  The Company shall file the reports required to be filed by it
under the Exchange Act and shall comply with all other requirements set forth
in the instructions to Form S-3 in order to allow the Company to be eligible to
file registration statements on Form S-3.

Section 8. 
Miscellaneous.

                (a)  No Conflicting Agreements. 
Except for the piggyback registration rights granted to (i) Merck
KGaA under its Development and License Agreement dated December 14, 1998 with
the Company and (ii) BMS under its Stockholder Agreement dated September
19, 2001 with the Company, for each of which the Company will use its
reasonable efforts to obtain a waiver or offer to each of Merck KGaA and BMS a
separate shelf registration statement:

(i)                                     The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement.

(ii)                                  The Company represents and warrants that
the rights granted to the Holders of Registrable Securities hereunder do not in
any way conflict with the rights granted to the holders of the Company’s
securities under any other agreements.

                (b)  Amendments and Waivers.  The
provisions of this Agreement, including the provisions of this sentence, may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company has obtained
the written consent of Holders of a majority of the then outstanding Underlying
Common Stock constituting Registrable Securities (with Holders of Notes deemed
to be the Holders, for purposes of this Section, of the number of outstanding
shares of Underlying Common Stock into which such Notes are or would be
convertible or exchangeable as of the date on which such consent is requested).  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement; provided, that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.  Notwithstanding the
foregoing sentence, (i) this Agreement may be amended by written agreement
signed by the Company and the Initial Purchasers, without the consent of the
Holders of Registrable Securities, to cure any ambiguity or to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provision contained herein, or to make such other provisions in
regard to matters or questions arising under this Agreement that shall not
adversely affect the interests of the 

 

17

 

Holders of Registrable Securities. 
Each Holder of
Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant
to this Section 8(b), whether or not any notice, writing or marking indicating
such amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

                (c)  Notices.  All notices
and other communications provided for or permitted hereunder shall be made in
writing by hand delivery, by telecopier, by courier guaranteeing overnight
delivery or by first-class mail, return receipt requested, and shall be deemed
given (i) when made, if made by hand delivery, (ii) upon confirmation, if made
by telecopier, (iii) one (1) Business Day after being deposited with such
courier, if made by overnight courier or (iv) on the date indicated on the
notice of receipt, if made by first-class mail, to the parties as follows:

	
   

  	
  (w)

  	
   

  	
  if to a Holder of Registrable Securities, at the
  most current address given by such Holder to the Company in a Notice and
  Questionnaire or any amendment thereto;

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (x)

  	
   

  	
  if to the Company, to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ImClone Systems 
  Incorporated

  
	
   

  	
   

  	
   

  	
  180 Varick Street, 7th Floor

  
	
   

  	
   

  	
   

  	
  New York, NY 10014

  
	
   

  	
   

  	
   

  	
  Attention: 
  General Counsel

  
	
   

  	
   

  	
   

  	
  Telecopy No.: 
  (212) 645-2054

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Davis Polk & Wardwell

  
	
   

  	
   

  	
   

  	
  450 Lexington Avenue

  
	
   

  	
   

  	
   

  	
  New York, NY 10017

  
	
   

  	
   

  	
   

  	
  Attention:  Richard A. Drucker, Esq.

  
	
   

  	
   

  	
   

  	
  Telecopy No.: (212) 450-4800

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (y)

  	
   

  	
  if to the Initial Purchasers, to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Morgan Stanley & Co. Incorporated

  
	
   

  	
   

  	
   

  	
  1585 Broadway

  
	
   

  	
   

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
   

  	
  Attention: 
  Equity Capital Markets

  
	
   

  	
   

  	
   

  	
  Telecopy No.: (212) 761-0538

  

 

or to such other
address as such person may have furnished to the other persons identified in
this Section 8(c) in writing in accordance herewith.

 

18

 

                (d)  Approval of Holders. 
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) (other than the Initial Purchasers or subsequent Holders of
Registrable Securities if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

                (e)  Successors and Assigns.  Any
person who purchases any Registrable Securities from the Initial Purchasers
shall be deemed, for purposes of this Agreement, to be an assignee of the
Initial Purchasers.  This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities,  provided that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Indenture.  If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities,
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such person shall
be entitled to receive the benefits hereof.

                (f)  Counterparts.  This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be original and all of which taken together shall constitute one and the
same agreement.

                (g)  Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

                (h)  Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

                (i)  Severability.  If any
term provision, covenant or restriction of this Agreement is held to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereby, and the parties hereto shall use their best efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction, it being
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

                (j)  Entire Agreement. 
This Agreement is intended by the parties as a final expression of their
agreement and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and the registration rights granted by the Company with
respect to the Registrable Securities. 
Except as provided in the Purchase Agreement, there are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with
respect to the Registrable Securities. 
This Agreement supersedes all prior agreements and undertakings among the
parties with respect to such registration rights.  No party hereto shall have any rights, duties or obligations
other than those specifically set forth in this Agreement.  In no event will such methods of distribution
take the 

 

19

 

 

form of an underwritten
offering of the Registrable Securities without the prior agreement of the
Company.

                (k)  Termination.  This
Agreement and the obligations of the parties hereunder shall terminate upon the
end of the Effectiveness Period, except for any liabilities or obligations
under Section 4, 5 or 6 hereof and the obligations to make payments of and
provide for Additional Interest under Section 2(e) hereof to the extent such
damages accrue prior to the end of the Effectiveness Period, each of which
shall remain in effect in accordance with its terms.

 

 

 

 

 

 

 

20

 

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first written
above.

 

	
   

  	
   

  	
  IMCLONE SYSTEMS INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
  Confirmed and accepted as of the 

  date first above written:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MORGAN STANLEY & CO. INCORPORATED

  	
   

  	
   

  
	
  UBS SECURITIES LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:  Morgan
  Stanley & Co. Incorporated

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

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 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.1    
    

 
  FIRST COMMUNITY BANCORP 2003 STOCK INCENTIVE PLAN
  (as amended and restated April 21, 2004)    
    

        1.     Purpose of the Plan. The purpose of this First Community 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. This Plan amends and restates the 2003 Plan. 

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

        "2003
Plan" shall mean the First Community 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; 

        (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 shareholders, 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
shareholders 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 First Community Bancorp, a California 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. 

        "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. 

2

 

        "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. 

        "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 First Community 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 

3

 

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%
Shareholder" 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; or (ii) the termination of a Participant's Service (other than for Cause) following
the approval by the shareholders of the Company of any matter, plan or transaction which would constitute a Change in Control. 

        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. 

        (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, 

4

 

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; 

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

        (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
2,500,000, 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 2,500,000 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 

5

 

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. 

        (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 

6

 

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. 

        (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 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 

7

 

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)    Shareholder 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 shareholder 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. 

        (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. 

8

 

        (d)   10% Shareholder. If any Employee to whom an Incentive Stock Option is granted is a 10% Shareholder, 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 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 exercise of a Restricted Stock Award, the Grantee shall have the rights of a stockholder
with respect to the voting of the 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 

9

 

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 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 exercise of a Performance Stock Award, the Grantee shall have the rights of a stockholder
with respect to the voting of the 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, 

10

 

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 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 

11

 

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 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 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 

12

 

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 First Community Bancorp Directors Deferred Compensation Plan. 

        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. The Administrator may also, in its sole discretion and at any time, take any action, including any action that may be considered a "repricing" under any applicable
accounting, stock exchange or other rule or regulation, to effect an offer to exchange outstanding Awards for cash or any other type of Award permitted hereunder. 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. 

        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 

13

 

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 adopted by the Board
on April 21, 2004, and shall become effective on the date of its approval by the Company's shareholders. Unless sooner terminated by the Administrator, the Plan shall continue until
April 17, 2010. 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 shareholders shall be subject to the shareholder's 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 shareholder 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 

14

 

the
Shares issuable under the Plan, and all applicable listing requirements of any stock exchange (or the Nasdaq National 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. 

15

QuickLinks

Exhibit 10.1

FIRST COMMUNITY BANCORP 2003 STOCK INCENTIVE PLAN (as amended and restated April 21, 2004)

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