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Exhibit 10.7    
  

 
 

FOURTH AMENDMENT AND WAIVER
  TO REVOLVING CREDIT AGREEMENT
  AND THIRD AMENDMENT TO PLEDGE AGREEMENT    

        THIS
AMENDMENT (this "Amendment"), dated as of February 11, 2003, is entered into between FIRST COMMUNITY BANCORP, a California
corporation (the "Borrower"), and THE NORTHERN TRUST COMPANY, an Illinois banking corporation having its principal office at 50 South LaSalle
Street, Chicago, Illinois 60675 (the "Lender"). 

 
 

RECITALS:    

        A.    The
Borrower and the Lender have entered into a Revolving Credit Agreement dated as of June 26, 2000, as amended by a First Amendment thereto dated as of
January 12, 2001, a Second Amendment and Waiver thereto dated as of June 25, 2001 and a Third Amendment and Waiver thereto dated as of February 12, 2002 (said Revolving Credit
Agreement, as so amended, shall hereinafter be referred to as the "Agreement"; the terms defined in the Agreement and not otherwise defined herein shall
be used herein as defined in the Agreement). 

        B.    The
Borrower and the Lender have entered into a Pledge Agreement dated as of June 26, 2000, as amended by a First Amendment thereto dated as of January 12,
2001 and a Second Amendment thereto dated as of February 12, 2002 (said Pledge Agreement, as so amended, shall hereinafter be referred to as the "Pledge
Agreement"). 

        C.    The
Borrower and the Lender wish to (1) amend the Agreement to extend the Maturity Date, modify certain covenants and to otherwise amend certain other provisions
of the Agreement and (2) waive the Borrower's non-compliance with Section 5.1 of the Agreement. 

        D.    The
Borrower and the Lender wish to amend the Pledge Agreement to amend the definition of "Pledged Shares" appearing
therein. 

        E.    Therefore,
the parties hereto agree as follows: 

1.    AMENDMENTS TO THE AGREEMENT.  

        1.1.    Section 1.1 of the Agreement.    Section 1.1 of
the Agreement is hereby amended as of the date hereof by deleting the date "February 11, 2003" appearing therein and substituting the date "February 10, 2004" therefor. 

        1.2.    Section 4.15 of the Agreement.    Section 4.15
of the Agreement is hereby deleted in its entirety as of the date hereof and the following substituted therefor: 

        "SECTION 4.15.    PLEDGED SHARES.    The Pledged Shares (as
hereinafter defined) constitute 100% of the issued and outstanding capital stock of (a) First National Bank, and (b) Pacific Western National Bank, and all have been duly authorized and
validly issued and are fully paid and non-assessable. Borrower owns the Pledged Shares free and clear of all other interest, liens or encumbrances of any nature whatsoever, other than liens in favor
of Lender. On or before February 11, 2003, First National Bank was merged into Rancho Santa Fe National Bank with the latter being the surviving corporation. On or before February 11,
2003, the name of the surviving corporation was changed to First National Bank. Other than First National Bank and Pacific Western National Bank, Borrower has no other Subsidiary Banks." 

        1.3.    Section 5.4(f) of the
Agreement.    Section 5.4(f) of the Agreement is hereby deleted in its entirety as of the date hereof and the
following substituted therefor: 

        "(f)    Minimum Tier 1 Capital.    Borrower shall maintain a consolidated minimum Tier 1 Capital equal
to at least $125,000,000 at all times." 

 

        1.4.    Section 5.4(e) of the
Agreement.    Section 5.4(e) of the Agreement is hereby deleted in its entirety as of the date hereof and the
following substituted therefor: 

        "(e)    Loan Loss Reserve Ratio.    Each Subsidiary Bank shall maintain at all times on a consolidated basis a ratio
of loan loss reserves to non-performing loans of not less than one hundred percent (100%)." 

        1.5.    Section 5.11 of the Agreement.    Section 5.11
of the Agreement is hereby deleted in its entirety as of the date hereof and the following substituted therefor: 

        "SECTION 5.11.    COLLATERAL.    Borrower shall execute and deliver to
Lender a pledge agreement dated even date herewith, substantially in the form of Exhibit B, with appropriate insertions (as the same may be
amended from time to time, herein called the "Pledge Agreement"), pursuant to which Borrower shall pledge to Lender all of the issued and outstanding
shares of the capital stock owned by Borrower (herein collectively called the "Pledged Shares") of (a) First National Bank (formerly known as
Rancho Santa Fe National Bank) ("FNB") and (b) Pacific Western National Bank. On or before April 30, 2003, Borrower shall deliver to
Lender such replacement stock certificate(s) evidencing its equity ownership interest in FNB, together with stock powers, duly executed, in blank. Failure by Borrower to deliver such documents on or
before April 30, 2003 shall automatically constitute an Event of Default." 

        1.6.    Section 7.1(e) of the
Agreement.    Section 7.1(e) of the Agreement is hereby deleted in its entirety as of the date hereof and the
following substituted therefor: 

        "(e) Any
guaranty of or pledge of collateral security for the Loans shall be repudiated or become unenforceable or incapable of performance or Borrower shall fail to pledge
and deliver to Lender any share certificate of (i) First National Bank or (ii) Pacific Western National Bank as provided in  Section 3(c) of the Pledge Agreement;" 

        1.7.    Exhibit C of the Agreement.    Exhibit C of the
Agreement is hereby amended as of the date hereof to be in the form of Exhibit C hereto. The Borrower represents and warrants that  Exhibit C is a
correct and complete list of all Subsidiaries of the Borrower. 

2.    AMENDMENT TO THE PLEDGE AGREEMENT.  

        2.1.    Section 1 of the Pledge Agreement.    The definition of "Pledged Shares" in  Section 1 of the Pledge Agreement is
hereby deleted in its entirety as of the date hereof and the following substituted therefor: 

        '
"Pledged Shares" shall mean 100% of the issued and outstanding shares of capital stock of (a) First National Bank (formerly known
as Rancho Santa Fe National Bank) owned by the Pledgor, (b) Pacific Western National Bank owned by the Pledgor, and (c) otherwise held from time to time by the Pledgor and pledged to the
Pledgee.' 

3.    WAIVER.    The Lender hereby waives any non-compliance with Section 5.1
(Existence; Mergers, Etc.) of the Agreement as a result of the merger of Rancho Santa Fe National Bank into First National Bank with Rancho Santa Fe National Bank being the surviving corporation (the
"Merger"). Subject to the terms and conditions of this Amendment, and upon delivery of the FNB stock certificate(s), the Lender hereby waives compliance
by the Borrower with Section 5.1 of the Agreement with respect to the Merger. The Lender's waiver of compliance with Section 5.1 of the Agreement is limited to the Merger and shall not
be deemed a waiver of or consent to any other failure to comply with the terms of Section 5.1 of the Agreement or any other provisions of the Agreement. Such waiver shall not prejudice any
right or remedies which the Lender may have or be entitled to with respect to any such other breach of Section 5.1 or any other breach or any provision of the Agreement. 

2

 

4.    WARRANTIES.    To induce the Lender to enter into this Amendment, the Borrower
warrants that: 

        4.1.    Authorization.    The Borrower is duly authorized to execute and deliver this Amendment and is and will
continue to be duly authorized to borrow monies under the Agreement, as amended hereby, and to perform its obligations under the Agreement and the Pledge Agreement, each as amended hereby. 

        4.2.    No Conflicts.    The execution and delivery of this Amendment, and the performance by the Borrower of its
obligations under the Agreement and the Pledge Agreement, each as amended hereby, do not
and will not conflict with any provision of law or of the charter or by-laws of the Borrower or of any agreement binding upon the Borrower. 

        4.3.    Validity and Binding Effect.    The Agreement and the Pledge Agreement, each as amended hereby, are legal,
valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws
of general application affecting the enforcement of creditors' rights or by general principles of equity limiting the availability of equitable remedies. 

5.    CONDITIONS PRECEDENT TO AMENDMENTS.    The amendments contemplated by  Sections 1 and 2 and the waiver contemplated by Section 3  hereof are subject to the satisfaction of each of the following conditions precedent:

        5.1.    Documentation.    The Borrower shall have delivered to the Lender all of the following, each duly executed and
dated the date hereof or other date satisfactory to the Lender, in form and substance satisfactory to the Lender: 

        (a)    Resolutions.    A copy, duly certified by the secretary or an assistant secretary of the Borrower, of
(i) resolutions of the Borrower's Board of Directors authorizing or ratifying the execution and delivery of this Amendment, authorizing the borrowings under the Agreement, as amended hereby,
and the pledge of the Pledged Shares; (ii) all documents evidencing other necessary corporate action; and (iii) all approvals or consents, if any, with respect to this Amendment. 

        (b)    Incumbency Certificate.    A certificate of the secretary or an assistant secretary of the Borrower certifying
the names of the Borrower's officers authorized to sign this Amendment and all other documents or certificates to be delivered hereunder, together with the true signatures of such officers. 

        (c)    Opinion.    An opinion of counsel for the Borrower, addressed to the Lender, in substantially the form of  Exhibit D hereto.

        (d)    Certificate.    A certificate of the chief financial officer of the Borrower as to the matters set out in  Sections 5.2
and 5.3 hereof. 

        (e)    Pledged Shares.    The replacement FNB stock certificate(s) together with stock powers executed in blank
replacing the Rancho Santa Fe National Bank stock certificates previously delivered to the Lender. 

        (f)    Amendment of Financing Statements.    Duly authorized UCC-3 financing statements amending existing financing
statements and such other documents and actions as may be necessary to establish and perfect the Lender's security interest in the Pledged Shares. 

        (g)    Other.    Such other documents as the Lender may reasonably request. 

        5.2.    No Default.    After giving effect to the waiver in  Section 3 of this Amendment, no Event of Default or Unmatured Event
of Default under the Agreement shall have occurred and be continuing. 

3

 

        5.3.    Warranties.    After giving effect to the waiver in Section 3  of this Amendment, the warranties in Section 4 of the Agreement and in Section 4 of this Amendment shall be true
and correct as though made on such date, except for such changes as are specifically permitted under the Agreement. 

6.    GENERAL.  

        6.1.    Expenses.    The Borrower agrees to pay the Lender upon demand for all reasonable expenses, including
reasonable attorneys' and legal assistants' fees (which attorneys and legal assistants may be employees of the Lender), incurred by the Lender in connection with the preparation, negotiation and
execution of this Amendment and any document required to be furnished therewith. 

        6.2.    Law.    THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS. 

        6.3.    Successors.    This Amendment shall be binding upon the Borrower and the Lender and their respective
successors and assigns, and shall inure to the benefit of the Borrower and the Lender and the successors and assigns of the Lender. 

        6.4.    Confirmation of the Agreement.    The Agreement, as amended hereby, shall remain in full force and effect and
is hereby ratified and confirmed in all respects. 

        6.5.    References to the Agreement.    Each reference in the Agreement and the Pledge Agreement to "this Agreement,"
"hereunder," "hereof," or words of similar import in instruments or documents provided for in the Agreement and in the Pledge Agreement or delivered or to be delivered thereunder or in connection
therewith, shall, except where the context otherwise requires, be deemed, respectively, a reference to the Agreement and the Pledge Agreement, each as amended hereby. 

        6.6.    Counterparts.    This Amendment may be executed in any number of counterparts, each of which shall be deemed
to be an original and all of which, taken together, shall constitute but one and the same Amendment. 

[Signature page follows.]

4

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed at Chicago, Illinois by their respective officers thereunto duly authorized as of the date first written
above. 

	 	 	FIRST COMMUNITY BANCORP
	

 	
 	

By:	

/s/  LYNN M. HOPKINS      

	 	 	 	Name:	Lynn M. Hopkins
	

 	
 	

 	

Title:	

EVP, Chief Financial Officer
	

 	
 	
THE NORTHERN TRUST COMPANY
	

 	
 	

By:	

/s/  THOMAS E. BERNHARDT      

	 	 	 	Name:	Thomas E. Bernhardt
	

 	
 	

 	

Title:	

Vice President

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Exhibit 10.7

FOURTH AMENDMENT AND WAIVER TO REVOLVING CREDIT AGREEMENT AND THIRD AMENDMENT TO PLEDGE AGREEMENT

RECITALSQuickLinks
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Exhibit 10.16    
  

 
 

FIRST COMMUNITY BANCORP
  EXECUTIVE SEVERANCE PAY PLAN    
    
    ARTICLE I
  DEFINITIONS    
  

1.1  Definitions  

        Whenever used in this Plan, the following capitalized terms shall have the meanings set forth in this Section 1.1, certain other capitalized terms being
defined elsewhere in this Plan: 

	(a)
	"Board"
means the Board of Directors of the Company.

	(b)
	"Change
in Control" shall mean the occurrence of any of the following: 

          (i)  Any
"Person" or "Group" (as such terms are defined in Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations
promulgated thereunder) is or becomes the "Beneficial Owner" (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company, or of
any entity resulting from a merger or consolidation involving the Company, representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of the Company or
such entity. 

        (ii)  The
individuals who, as of the date hereof, are members of the Board (the "Existing Directors"), cease, for any reason, to constitute more than fifty percent (50%) of
the number of authorized directors of the Company as determined in the manner prescribed in the Company's Articles of Incorporation and Bylaws;  provided, however, that if the election, or nomination for election, by the Company's stockholders of
any new director was approved by a vote of at least fifty percent (50%) of the Existing Directors, such a new director shall be considered an Existing Director;  provided, further, however, that no individual shall be
considered an Existing Director if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies by or on behalf of anyone 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 (x) a merger, consolidation or reorganization to which the Company is a party, whether or not the Company is the person surviving or
resulting therefrom, or (y) a sale, assignment, lease, conveyance or other disposition of all or substantially all of the assets of the Company, in one transaction or a series of related
transactions, to any Person other than the Company, where any such transaction or series of related transactions as is referred to in clause (x) or clause (y) above in this subparagraph
(iii) (a "Transaction") does not otherwise result in a "Change in Control" pursuant to subparagraph (i) of this definition of "Change in Control";  provided, however, that no such Transaction shall constitute a "Change in Control" under this
subparagraph (iii) if the persons who were the Shareholders of the Company immediately before the consummation of such Transaction are the Beneficial Owners, immediately following the
consummation of such Transaction, of fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Person surviving or resulting from any merger,
consolidation or reorganization referred to in clause (x) above in this subparagraph (iii) or the Person to whom the assets of the Company are sold, assigned, leased, conveyed or
disposed of in any transaction or series of related transactions referred in clause (y) above in this subparagraph (iii). 

 

	(c)
	"Code"
means the Internal Revenue Code of 1986, as amended.

	(d)
	"Company"
means First Community Bancorp, a California corporation, and any successor or assignee as provided in Article V.

	(e)
	"Compensation"
means your highest annual compensation for any calendar year in the three calendar years ending with the calendar year which includes the date of your termination of
employment with the Company and its Subsidiaries, with your compensation for any such calendar year
in which you do not complete twelve (12) months or service being annualized on the basis of a twelve (12) month year. For purposes of determining your "Compensation", your annual
compensation for any calendar year or portion thereof shall be limited to your base salary, your nonaccountable automobile and other expense allowances, and your bonus attributable to such calendar
year regardless of when paid (or, if you did not receive a bonus for a calendar year, your target bonus), before reductions for any amounts excludable from your gross income for federal income tax
purposes pursuant to Section 125 or Section 401(k) of the Code or under any nonqualified deferred compensation plan. "Compensation" shall not include your income from the grant or
vesting of restricted stock, or from the grant, vesting, or exercise of stock options.

	(f)
	"Disability"
means a physical or mental infirmity which substantially impairs your ability to perform your material duties for a period of at least one hundred eighty
(180) consecutive calendar days, and, as a result of such Disability, you have not returned to your full-time regular employment prior to termination.

	(g)
	"Employee
Grade" means the grade within the compensation system to which you are assigned by the Company.

	(h)
	"Executive"
means a regular full-time salaried or hourly employee of the Company or its Subsidiaries in Employee Grades 1, 2, 3, A or B who does not have an individual
agreement with the Company or its Subsidiaries regarding severance payments.

	(i)
	"ERISA"
means Employee Retirement Income Security Act of 1974, as amended.

	(j)
	"Good
Reason" means any of the following events, provided that you give the Company or its Subsidiary at least thirty (30) days prior written notice of your termination with
the Company or its Subsidiary: 

          (i)  a
reduction by the Employer in the your base salary as in effect immediately before such reduction; or 

        (ii)  a
diminution in your duties and responsibilities, as in effect immediately before the Change in Control, or an adverse change, after the occurrence of a Change in
Control, in your place in the Company's organization chart or in the seniority of the individual to whom you report; or 

        (iii)  a
material reduction in the your annual target bonus opportunity (if any) (for this purpose, a reduction for any year of over ten percent (10%) of your annual target
bonus opportunity (if any) measured by the preceding year shall be considered "material"); or 

        (iv)  a
material reduction in your Welfare Benefits (for this purpose, a reduction for any one year of over ten percent (10%) of aggregate Welfare Benefits shall be
considered "material"); or 

        (v)  the
failure by the Company or its Subsidiaries to provide and credit you with the number of accrued annual leave days to which you are entitled in accordance with the
Company's normal annual leave policy as in effect immediately before the Change in Control; or 

2

 

        (vi)  the
Employer's requiring you to be based more than twenty five (25) miles from the location of your place of employment immediately before the Change in Control,
except for normal business travel in connection with your duties with the Company or its Subsidiaries. 

	(k)
	"Just
Cause" means: 

          (i)  the
willful and continued failure by you to perform substantially your duties with the Company and its Subsidiaries, and such willful and continued failure continues
after a demand for substantial performance is delivered to you by the Company or its Subsidiaries which specifically identifies the manner in which you have not substantially performed your duties; or 

        (ii)  the
willful engaging by you in conduct which is materially and demonstrably injurious to the business or reputation of the Company or its Subsidiaries. 

For
purposes of determining whether "Just Cause" exists, no act or failure to act on your part shall be considered "willful" unless done, or omitted to be done, by you in bad faith and without
reasonable belief that the action or omission was in, or not opposed to, the best interests of the Company and its Subsidiaries. 

	(l)
	"Multiplier"
for each Employee Grade shall be the number set forth opposite such Employee grade below: 

	Employee Grade
 
	 	Multiplier

	Grade One	 	3
	Grade Two	 	2
	Grade Three	 	2
	Grade A	 	2
	Grade B	 	1

	(m)
	"Person"
shall have the meaning set forth in the definition of "Change in Control".

	(n)
	"Release"
means the Separation and General Release Agreement in the form attached hereto as Exhibit "A".

	(o)
	"Severance
Payment" means the payment of severance compensation as provided in Article III.

	(p)
	"Severance
Period" means the number of whole months equal to the product of 12 multiplied by the Multiplier for your Employee Grade, beginning on the date of your termination of
employment with the Company and its Subsidiaries.

	(q)
	"Subsidiary"
means any corporation or other Person, a majority of the voting power, equity securities or equity interest of which is owned directly or indirectly by the Company.

	(r)
	"WARN"
means Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.

	(s)
	"Welfare
Benefits" means the medical, dental, disability and life insurance coverages (including coverage under self-insured arrangements or plans) which the Company or
its Subsidiaries provide to you or your dependents immediately before a Change in Control. 

 
 

ARTICLE II
  INDEMNIFICATION AND GROSS-UP FOR EXCISE TAXES    
  

2.1  Indemnification and Gross-Up  

        The Company hereby indemnifies you and holds you harmless from and against any and all liabilities, costs and expenses (including, without limitation, attorney's
fees and costs) you may incur as a result of the excise tax imposed by Section 4999 of the Code or any similar provision of state or local 

3

 

income tax law (the "Excise Tax"), to the end that you shall be placed in the same tax position with respect to the Severance Payment under this Plan and all other payments from the Company to you in
the nature of compensation as you would have been in if the Excise Tax had never been enacted. In furtherance of such indemnification, the Company shall pay to you a payment (the "Gross-Up
Payment") in an amount such that, after payment by you of all taxes, including income taxes and Excise Tax imposed on the Gross-Up Payment and any interest or penalties (other than
interest and penalties imposed by reason of your failure to file timely tax returns or to pay taxes shown due on such returns and any tax liability, including interest and penalties, unrelated to the
Excise Tax or the Gross-Up Amount), you shall be placed in the same tax position with respect to the Severance Payment under this Plan and all other payments from the Company to you in the
nature of compensation as you would have been in if the Excise Tax had never been enacted. At such time or times necessary to carry out the purposes of this Article II in view of the
withholding requirements of Section 4999 (c) (1) of the Code, the Company shall pay to you one or more Gross-Up Payments for the Severance Payment and any other payments in
the nature of compensation which the Company determines are "excess parachute payments" under Section 280G(b) (1) of the Code ("Excess Parachute Payments"). If, through a local taxing
authority (a "Taxing Authority"), or a judgement of any court, you become liable for an amount of Excise Tax not covered by the Gross-Up Payment payable pursuant to the preceding sentence,
the Company shall pay you an additional Gross-Up Payment to make you whole for such additional Excise Tax; provided,  however, that, pursuant to
Section 2.3, the Company shall have the right to require you to protest, contest, or appeal any such determination or
judgement. For purposes of this Article II, any amount which the Company is required to withhold under Sections 3402 or 4999 of the Code or under any other provision of law shall be deemed to
have been paid for you. 

2.2  Reporting  

        Upon payment to you of a Gross-Up Payment, the Company shall provide you with a written statement showing the Company's computation of such
Gross-Up Payment and the Excess Parachute Payments and Excise Tax to which it relates, and setting forth the Company's determination of the amount of gross income you are required to
recognize as a result of such payments and your liability for the Excise Tax. You shall cause your federal, state and local income tax returns for the period in which you receive such
Gross-Up Payment to be prepared and filed in accordance with such statement, and, upon
such fling, you shall certify in writing to the Company that such returns have been so prepared and filed. At your request, the Company shall furnish to you, at no cost to you, assistance in preparing
your federal, state and local income tax returns for the period in which you receive such Gross-Up Payment in accordance with such statement. Notwithstanding the provisions of
Section 2.1, the Company shall not be obligated to indemnify you from and against any tax liability, cost or expenses (including, without limitation, any liability for the Excise Tax or
attorney's fees or costs) to the extent such tax liability, cost or expense is attributable to your failure to comply with the provisions if this Section 2.2. 

2.3  Controversies  

        If any controversy arises between you and a Taxing Authority with respect to the treatment on any return of the Gross-Up Amount, or of any payment you
receive from the Company as an excess Parachute Payment, or with respect to Excess Parachute Payment, including, without limitation, any audit, protest to an appeals authority of a Taxing Authority or
litigation (a "Controversy"), the Company shall have the right to participate with you in the handling of such Controversy. The Company shall have the right, solely with respect to a Controversy, to
direct you to protest or contest any proposed adjustment or deficiency, initiate an appeals procedure within any Taxing Authority, commence any judicial proceeding, make any settlement agreement, or
file a claim for refund of tax, and you shall not take any of such steps without the prior written approval of the Company, which the Company shall not unreasonably withhold. If the Company
elects, you shall be represented in any 

4

 

Controversy by attorneys, accountants, and other advisors selected by the Company, and the Company shall pay the fees, costs and expenses of such attorneys, accountants, or advisors, and any tax
liability you may incur as a result of such payment. You shall promptly notify the Company of any communication with a Taxing Authority, and you shall promptly furnish to the Company copies of any
written correspondence, notices or documents received from a Taxing Authority relating to a Controversy. You shall cooperate fully with the Company in the handling of any Controversy;  provided,
however, that you shall not be obligated to furnish to the Company copies of any portion of
your tax returns which do not bear upon, and are not affected by, the Controversy. 

2.4  Refunds  

        You shall pay over to the Company, within ten (10) days after your receipt thereof, any refund you receive from any Taxing Authority of all or any portion
of the gross-Up Payment or the Excise Tax, together with any interest you receive from such Taxing Authority on such refund. For purposes of this Section 2.4, a reduction in your
tax liability attributable to the previous payment of the Gross-Up Amount or the Excise Tax shall be deemed to be a refund. If you would have received a refund of all or any portion of the
Gross-Up Payment or the Excise Tax, except that a Taxing Authority offset the amount of such a refund against other tax liabilities, interest, or penalties, you shall pay the amount of
such offset over to the Company, together with the amount of interest you would have received from the Taxing Authority if such offset had been an actual refund, within ten (10) days after
receipt of notice from the Taxing Authority of such offset. 

 
 

ARTICLE III
  SEVERANCE PAYMENTS    
  

3.1  Right to Severance Payment; Release  

        Conditioned on the execution and delivery by you (or your beneficiary or personal representative, if applicable) of the Release, you shall be entitled to receive
a Severance Payment from the Company in the amount provided in Section 3.2 if (a) you are an Executive, and (b) within twenty four (24) months after the occurrence of a
Change of Control, your employment with the Company and its Subsidiaries terminates for any reason other than: 

	(a)
	Death,

	(b)
	Disability,

	(c)
	Termination
by the Company or its Subsidiaries for Just Cause,

	(d)
	Retirement
in accordance with the normal retirement policy of the Company,

	(e)
	Voluntary
termination by you for other than Good Reason, or

	(f)
	The
sale by the Company of the Subsidiary which employed you before such sale, if you have been offered employment with the purchaser of such Subsidiary on substantially the same
terms and conditions under which such you worked for the Subsidiary before the sale. 

If
your employment with the Company or its Subsidiaries terminates before the occurrence of a Change in Control for any reason other than one of those enumerated immediately above, your employment 

5

  

will be deemed to have terminated on the day after the occurrence of the Change in Control if (i) your employment terminates within ninety (90) days before a Change in Control actually
occurs, or (ii) you reasonably demonstrate that the Company or its Subsidiaries involuntarily terminated your employment, or gave you Good Reason, at the request of a Person (other than the
Company or its Subsidiaries) who has indicated an intention or taken steps reasonably calculated to effect a Change in Control, or otherwise in connection with, or in anticipation of, a Change in
Control which actually occurs. 

3.2  Amount of Severance Payment  

        If you become entitled to a Severance Payment under this Plan, the amount of your Severance Payment, when added to any payments which the Company or its
Subsidiaries are required to make to you under WARN, shall equal the product of your Compensation multiplied by the Multiplier for your Employee Grade. 

3.3  No Mitigation  

        The Company acknowledges and agrees that you shall be entitled to receive your entire Severance Payment regardless of any income, which you may receive from other
sources following your termination on or after the Effective Time. 

3.4  Payment of Severance Payment  

        The Severance Payment to which you are entitled shall be paid to you, in cash and in full, not later than eight (8) calendar days after the execution and
delivery by you (or your beneficiary or personal representative, if applicable) of the Release Agreement, but in no event before the date on which such Release becomes effective. If you should die
before all amounts payable to you have been paid, such unpaid amounts shall be paid to your beneficiary under this Plan or, if you have not designated such a beneficiary in writing to the Company, to
the personal representative(s) of your estate. 

3.5  Welfare Benefits  

        If you are entitled to receive a Severance Payment under Section 3.1, you will also be entitled to receive continued Welfare benefits on the same basis,
including required employee contributions, if any, as in effect for similarly-situated Executives in the employ of the Company or its Subsidiaries, for your Severance Period. Notwithstanding the
foregoing, your right to any particular type of Welfare Benefit shall be subject to cancellation by the Company if you or your dependents obtain alternative coverage of a similar type during the
Severance Period; period, however, that if any such alternative group health coverage excludes any pre-existing condition that you or your dependents may have when coverage under such
group health plan would otherwise begin, coverage under this Section 3.5 shall continue (but not beyond the Severance Period) with respect to such pre-existing condition until such
exclusion under such other group health plan lapses or expires. You shall be obligated to notify the Company's Human Resources Department of any such alternative coverage within thirty
(30) days of its first becoming applicable to you or your dependents. In the event you are required to make an election under Sections 601 through 607 of ERISA (commonly known as COBRA) to
qualify for continuing health benefits coverage described in this Section 3.5, the obligations of the Company and its Subsidiaries under this Section 3.5 to continue your health benefits
coverage shall be conditioned upon your timely making such an election. 

3.6  Automobile  

        If you become entitled to receive a Severance Payment under Section 3.1, and you then have the use of an automobile that is provided to you at the expense
of the Company or any Subsidiary, you shall have the right, for ninety (90) days following your termination of employment, (a) to continue 

6

 

your use of the automobile on the same basis on which you used it immediately before your termination of employment, or (b) to purchase the automobile from the Company or Subsidiary for its
low wholesale bluebook value, or, if the Company or Subsidiary has leased the automobile, to assume the lease, or (c) to take the actions described in clause (a) and (b) of this
sentence. 

3.7  Outplacement Services  

        If you become entitled to Severance Payment under Section 3.1, you will also become entitled to receive outplacement services in accordance with the
Company's usual practice for Executives. 

3.8  Withholding of Taxes  

        The Company may withhold from any amounts payable under this Plan all federal, state, city or other taxes required by applicable law to be withheld by the
Company. 

 
 

ARTICLE IV
  OTHER RIGHTS AND BENEFITS NOT AFFECTED    
  

4.1  Other Benefits  

        This Plan does not provide a pension for you, nor shall any payment hereunder be characterized as deferred compensation. Except as set forth in
Section 4.2, neither the provisions of this Plan nor the Severance Payment provided for hereunder shall reduce any amounts otherwise payable, or in any way diminish your rights as an employee,
whether existing now or hereafter, under any written benefit, incentive, retirement, stock option, stock bonus or stock purchase plan or any written employment agreement or other written plan or
arrangement not related to severance. 

4.2  Other Severance Plans Superseded  

        As of the Effective Time, this Plan will supersede any and all other severance plans of the Company or its Subsidiaries to the extent they apply to Executives
(except for any individual severance agreement between you and the Company and its Subsidiaries), and your participation in any other severance plan of the Company and its Subsidiaries will be hereby
terminated. 

4.3  Employment Status  

        This Plan does not constitute a contract of employment or impose on you any obligation to remain in the employ of the Company, nor does it impose on the Company
or any of its Subsidiaries any obligation to retain you in your present or any other position, nor does it change the status of your employment as an employee at will. Nothing in this Plan shall in
any way affect the right of the Company or any of its Subsidiaries in its absolute discretion to change or reduce your compensation at any time, or to change at any time one or more benefit plans,
dental plans, health care plans, savings plans, bonus plans, vacation pay plans, disability plans, and the like. 

 
 

ARTICLE V
  SUCCESSOR TO THE COMPANY    
  

        The Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Company, expressly
and unconditionally to assume and agree to perform the Company's obligations under this Plan, in the same manner and to the same extent that the Company would be required to perform if no succession
or assignment had taken place. In such event, the term "Company", as used in this Plan, shall mean (from and after, but not before, the occurrence of such event) the Company as herein 

7

 

before defined and any successor or assignee to the business or assets which by reason hereof becomes bound by the terms and provisions of this Plan. 

 
 

ARTICLE VI
  CONFIDENTIALITY    
  

6.1  Nondisclosure of Confidential Material  

        In the performance of your duties, you have previously had, and may in the future have, access to confidential records and information, including, but not limited
to, development, marketing, purchasing, organizational, strategic, financial, managerial, administrative, manufacturing, production, distribution and sales information, data, specifications and
processes presently owned or at any time hereafter developed by the Company or its agents or consultants or used presently or at any time hereafter in the course of its business, that are not
otherwise part of the public domain (collectively, the "Confidential Material"). All such Confidential Material is considered secret and has been and/or will be disclosed to you in confidence. By your
acceptance of your Severance Payment under this Plan, you shall be deemed to have acknowledged that the Confidential Material constitutes propriety information of the Company which draws independent
economic value, actual or potential, from not being generally known to the public or to other persons who could obtain economic value from its disclosure or use, and that the Company has taken efforts
reasonable under the circumstances, of which this Section 6.1 is an example, to maintain its secrecy. Except in the performance of your duties to the Company, you shall not, directly or
indirectly for any reason whatsoever, disclose or use any such Confidential Material that (i) has been publicly disclosed or was within your possession prior to its being furnished to you by
the Company or becomes available to you on a nonconfidential basis from a third party (in any of such cases, not due to a breach by you or your obligations to the Company or by breach of any other
person of a confidential, fiduciary or confidential obligation, the breach of which you know or reasonably should know), (ii) is required to be disclosed by you pursuant to applicable law, and
you provide notice to the Company of such requirement as promptly as possible, or (iii) was independently acquired or developed by you without violating any of the obligations under this Plan
and without relying on Confidential Material of the Company. All records, files, drawings, documents, equipment and other tangible items, wherever located, relating in any way to the Confidential
Material or otherwise to the Company's business, which you have prepared, used or encountered or shall in the future prepare, use or encounter, shall be and remain the Company's sole and exclusive
property and shall be included in the Confidential Material. Upon your termination of employment with the Company, or whenever requested by the Company, you shall promptly deliver to the Company any
and all of the Confidential Material and copies thereof, not previously delivered to the Company, that may be, or at any previous time has been, in your possession or under your control. 

6.2  Nonsolicitation or Employees  

        By your acceptance of your Severance Payment under this Plan, you agree that, for a period of two (2) years following your termination of employment with
the Company or its Subsidiaries, neither you nor any Person or entity in which you have an interest shall solicit any person who was employed on the date of your termination of employment by the
Company or any of its Subsidiaries, to leave the employ of the Company or any of its Subsidiaries. Nothing in this Section 6.2, however, shall prohibit you or any Person or entity in which you
have an interest from placing advertisements in periodicals of general circulation soliciting applications for employment, or from employing any person who answers any such advertisement. For purposes
of this Section 6.2, you shall not be deemed to have an interest in any corporation whose stock is publicly traded merely because you are the owner of not more than two percent (2%) of the
outstanding shares of any class of stock of such corporation, provided you have no active participation in the business of such corporation (other than voting your stock) and you 

8

 

do not provide services to such corporation in any capacity (whether as an employee, an independent contractor or consultant, a board member, or otherwise). 

6.3  Equitable Relief  

        By your acceptance of your Severance Payment under this Plan, you shall be deemed to have acknowledged that violation of Sections 6.1 or 6.2 would cause the
Company irreparable damage for which the Company can not be reasonably compensated in damages in an action at law, and that therefore in the event of any breach by you of Sections 6.1 or 6.2, the
Company shall be entitled to make application to a court of competent jurisdiction for equitable relief by way of injunction or otherwise (without being required to post a bond). This provision shall
not, however, be construed as a waiver of any of the rights which the Company may have for damages under this Plan or otherwise, and, except as limited in Article VII, all of the Company's
rights and remedies shall be unrestricted. 

 
 

ARTICLE VII
  ARBITRATION    
  

        Except for equitable relief as provided in Section 6.3, arbitration in accordance with the then most applicable rules of the American Arbitration
Association shall be the exclusive remedy for resolving any dispute or controversy between you and the Company or any of its Subsidiaries, including, but not limited to, any dispute regarding your
employment or he termination of your employment or any dispute regarding the application, interpretation or validity of this Plan not otherwise resolved through claims procedure set forth in
Section 8.10. The arbitrator shall be empowered to grant only such relief as would be available in a court of law. In the event of any conflict between this Plan and the rules of the American
Arbitration Association, the provisions of this Plan shall be determinative. If the parties are unable to agree upon an arbitrator, they shall select a single arbitrator from a list designated by the
office of the American Arbitrator Association having responsibility for the city in which you primarily performed services for the Company or its Subsidiaries immediately before your termination of
employment of seven arbitrators, all of whom shall be retired judges who are actively involved in hearing private cases or members of the National Academy of Arbitrators, and who, in either event, are
residents of the area in which you primarily performed services for the Company or its Subsidiaries immediately before your termination of employment. If the parties are unable to agree upon an
arbitrator from such list, they shall each strike names alternatively from the list, with the first to strike being determined by lot. After each party has used three strikes, the remaining name on
the list shall be the arbitrator. The fees and expenses of the arbitrator shall initially be responsible for the fees and expenses of its own representatives and witnesses. Unless mutually agreed
otherwise by the parties, any arbitration shall be conducted at a location within fifty (50) miles from the location in which you primarily performed services for the Company or any of its
Subsidiaries immediately before your termination of employment. If the parties cannot agree upon a location for the arbitration, the arbitrator shall determine the location within such fifty
(50) mile radius. Judgement may be entered on the award of the arbitrator in any court having jurisdiction. The prevailing party in the arbitration proceeding, as determined by the arbitrator,
and in any enforcement or other court proceedings, shall be entitled to the extent provided by law to reimbursement from the other party for all of the prevailing party's costs (including but not
limited to the arbitrator's compensation), expenses and reasonable attorney's fees. 

9

 

 
 

ARTICLE VIII
  MISCELLANEOUS    
  

8.1  Applicable law  

        To the extent not preempted by the laws of the United States, the laws of the State of California shall be the controlling law in all matters relating to this
Plan, regardless of the choice-of-law rules of the State of California or any other jurisdiction. 

8.2  Construction  

        No term or provision of this Plan shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any
provisions of this Plan and any present or future statute law, ordinance, or regulation, the latter shall prevail, but in such event the affected provision of this Plan shall be curtailed and limited
only to the extent necessary to bring such provision with the requirements of the law. 

8.3  Severability  

        If a provision of this Plan shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan and this Plan shall
be construed and enforced as if the illegal or invalid provision had not been included. 

8.4  Headings  

        The Section headings in this Plan are inserted only as a matter of convenience, and in no way define, limit, or extend or interpret the scope of this Plan or of
any particular Section. 

8.5  Assignability  

        Your rights or interests under this Plan shall not be assignable or transferrable (whether by pledge, grant of a security interest, or otherwise) by you, your
beneficiaries or legal representatives, except by will or by the laws of descent and distribution. 

8.6  Term  

        This Plan shall continue in full force and effect until its terms and provisions are completely carried out, unless terminated by the Board with at least a
two-thirds majority before the occurrence of a Change in Control; provided, however, that no termination of this Plan shall be effective if made while the Company (or any Person acting on
the Company's behalf) is conducting negotiations to effect a Change in Control, or within ninety (90) days before the Company (or any Person acting on its behalf) executes a letter of intent
(whether or not binding) or a definitive agreement to effect a Change in Control. 

8.7  Amendment  

        This Plan may be amended in any respect by resolution adopted by the Board with at least a two-thirds majority until a Change in Control occurs;
provided, however, that this Section 8.7 shall not be amended, and no amendment shall be effective if made while the Company (or any Person acting on the Company's behalf) is conducting
negotiations to effect a Change in Control, or within ninety (90) days before the Company (or any Person acting on its behalf) executes a letter of intent (whether
or not binding) or a definitive agreement to effect a Change in Control. After a Change in Control occurs, this Plan shall no longer be subject to amendment, change, substitution, deletion, revocation
or termination in any respect whatsoever. No agreement or representations written or oral, express or implied, with respect to the subject matter hereof, have been made by the Company which are not
expressly set forth in this Plan. 

10

 

8.8  Notices  

        For purposes of this Plan, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when
personally delivered, telecopied, or sent by certified or overnight mail, return receipt requested, postage prepaid, addressed to the respective addresses, or sent to the respective telecopier
numbers, last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board of Directors with a copy to the General Counsel. All notices
and communications shall be deemed to have been received on the date of delivery thereof if personally delivered, upon return confirmation if telecopied, on the third business day after the mailing
thereof, or on the date after sending by overnight mail, except that notice of change of address shall be effective only upon actual receipt. No objection to the method of delivery may be made if the
written notice or other communication is actually received. 

8.9  Administration  

        This Plan constitutes a welfare benefit plan within the meaning of Section 3 (1) of ERISA. This letter constitutes the governing document of the
Plan and the Summary Plan Description under ERISA. The Administrator of the Plan, within the meaning of Section 3(16) of ERISA, and the Named Fiduciary thereof, within the meaning of
Section 402 of ERISA, is the Company. Attached hereto as Exhibit "B" is a statement of your rights under ERISA. 

8.10 Claims  

        If you believe you are entitled to a benefit under this Plan, you may make a claim for such benefit by filing with the Company a written statement setting forth
the amount and type of payment so claimed. The statement shall also set forth the facts supporting the claim. The claim may be filed by mailing or delivering it to the Secretary of the Company. 

        Within
sixty (60) calendar days after receipt of such a claim, the Company shall notify you in writing of its action on such claim and if such claim is not allowed in full, shall
state the following in a manner calculated to be understood by you: 

	(a)
	The
specific reason or reasons for the denial;

	(b)
	Specific
reference to pertinent provisions of this Plan on which the denial is based;

	(c)
	A
description of any additional material or information necessary for you to be entitled to the benefits that have been denied and an explanation of why such material or information
is necessary; and

	(d)
	An
explanation of this Plan's claim review procedure. 

        If
you disagree with the action taken by the Company, you or your duly authorized representative may apply to the Company for a review of such action. Such application shall be made
within one hundred twenty (120) calendar days after receipt by you of the notice of the Company's action on your claim. The application for review shall be filed in the same manner as the claim
for benefits. In connection with such review, you may inspect any documents or records pertinent to the matter and may submit issues and comments in writing to the Company. A decision by the Company
shall be communicated to you within sixty (60) calendar days after receipt of the application. The decision on review shall be in writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by you, and specific references to the pertinent provisions of this Plan on which the decision is based. 

Dated:
October 30, 2002 

11

QuickLinks

Exhibit 10.16

FIRST COMMUNITY BANCORP EXECUTIVE SEVERANCE PAY PLAN ARTICLE I DEFINITIONS

ARTICLE II INDEMNIFICATION AND GROSS-UP FOR EXCISE TAXES

ARTICLE III SEVERANCE PAYMENTS

ARTICLE IV OTHER RIGHTS AND BENEFITS NOT AFFECTED

ARTICLE V SUCCESSOR TO THE COMPANY

ARTICLE VI CONFIDENTIALITY

ARTICLE VII ARBITRATION

ARTICLE VIII MISCELLANEOUS

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