10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 00-30747

FIRST COMMUNITY BANCORP
(Exact Name of Registrant as Specified in Its Charter)

California (State or Other Jurisdiction of Incorporation or Organization)	33-0885320 (I.R.S. Employer Identification Number)
6110 El Tordo P.O. Box 2388 Rancho Santa Fe, California (Address of Principal Executive Offices)	92067 (Zip Code)
Registrant's telephone number, including area code: (858) 756-3023

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common stock, no par value

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the act). Yes ý    No o

        The aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by reference to the average bid and asked prices on the Nasdaq National Market as of the close of business on June 30, 2003 was approximately $475.3 million. Registrant does not have any nonvoting common equities.

        As of March 1, 2004, there were 15,456,474 shares of registrant's common stock outstanding, excluding 470,000 shares of restricted stock.

DOCUMENTS INCORPORATED BY REFERENCE

        The information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K will be found in the Company's definitive Proxy Statement for the 2004 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and such information is incorporated herein by this reference.

PART I
	ITEM 1.	Business	3
		General	3
		Strategic Evolution and Acquisition Strategy	4
		Banking Business	7
		Certain Business Risks	10
		Financial and Statistical Disclosure	14
		Supervision and Regulation	14
		Available Information	19
		Forward Looking Information	20
	ITEM 2.	Properties	21
	ITEM 3.	Legal Proceedings	21
	ITEM 4.	Submission of Matters to a Vote of Security Holders	21
PART II
	ITEM 5.	Market For Registrant's Common Equity and Related Stockholder Matters	22
		Marketplace Designation and Sales Price Information	22
		Dividends	22
	ITEM 6.	Selected Financial Data	26
	ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
		Overview	27
		Critical Accounting Policies	29
		Results of Operations	31
		Financial Condition	39
		Borrowings	44
		Capital Resources	44
		Liquidity	45
		Contractual Obligations	46
		Off Balance Sheet Arrangements	46
		Recent Accounting Pronouncements	46
	ITEM 7A.	Qualitative and Quantitative Disclosure About Market Risk	46
	ITEM 8.	Financial Statements and Supplementary Data	52
		Contents	52
		Independent Auditors' Report	53
		Consolidated Balance Sheets as of December 31, 2003 and 2002	54
		Consolidated Statements of Earnings for the years ended December 31, 2003, 2002 and 2001	55
		Consolidated Statements of Shareholders' Equity and Comprehensive Income for the years ended December 31, 2003, 2002 and 2001	56
		Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001	57
		Notes to Consolidated Financial Statements	58
	ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	98
	ITEM 9A.	Controls and Procedures	98
PART III
	ITEM 10.	Directors and Executive Officers of the Registrant	99
	ITEM 11.	Executive Compensation	99
	ITEM 12.	Security Ownership of Certain Beneficial Owners and Management	99
	ITEM 13.	Certain Relationships and Related Transactions	99
	ITEM 14.	Controls and Procedures	99
PART IV
	ITEM 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	100
SIGNATURES			103
CERTIFICATIONS			105

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PART I

ITEM 1. BUSINESS

General

        We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as a holding company for our banking subsidiaries. As of December 31, 2003, those subsidiaries were First National Bank, which we refer to as First National, and Pacific Western National Bank, or Pacific Western. On January 9, 2003, we acquired Bank of Coronado and merged Bank of Coronado into First National. On August 22, 2003, we acquired Verdugo Banking Company and merged Verdugo Banking Company into Pacific Western. We refer to Pacific Western and First National herein as the "Banks" and when we say "we", "our" or the "Company", we mean the Company on a consolidated basis with the Banks. When we refer to "First Community" or to the holding company, we are referring to the parent company on a standalone basis. Discussions about the Company and the Banks as of and for the year ended December 31, 2002 do not include Bank of Coronado or Verdugo Banking Company.

        On March 1, 2004, we acquired First Community Financial Corp., or FC Financial, and established FC Financial as a wholly-owned operating subsidiary of First National. On December 1, 2003, we announced the acquisition of Harbor National Bank, or Harbor National, and our intention to merge Harbor National into Pacific Western. The Harbor National acquisition is currently expected to close in the second quarter of 2004. Discussions about the Company and the Banks as of and for the year ended December 31, 2003 do not include FC Financial or Harbor National.

        The Banks are full-service community banks offering a broad range of banking products and services including: accepting time and demand deposits, originating commercial loans, including asset-based lending and factoring of accounts receivable, real estate and construction loans, Small Business Administration guaranteed loans, or SBA loans, consumer loans, mortgage loans, international loans for trade finance and other business-oriented products. At December 31, 2003, the gross loans of the Banks totaled $1,600.6 million of which approximately 30% consisted of commercial loans, 67% consisted of commercial real estate loans, including construction loans, and 3% consisted of consumer and other loans. These percentages include some foreign loans, primarily to individuals or entities with business in Mexico representing 5% of total loans. Special services and requests beyond the lending limits of the Banks can be arranged through correspondent banks.

        We derive our income primarily from interest received on commercial real estate loans, commercial loans and consumer loans and, to a lesser extent, on fees from the sale of SBA loans and certain foreign loans originated by the Banks, interest on investment securities, fees received in connection with deposit services as well as loans and other services offered, including foreign exchange services. Our major operating expenses are the interest paid by the Banks on deposits and borrowings, salaries and general operating expenses. The Banks rely on a foundation of locally generated deposits. Our Banks have a relatively low cost of funds due to a high percentage of low cost and noninterest bearing deposits. Our operations, like those of other financial institutions operating in Southern California, are significantly influenced by economic conditions in Southern California, including the strength of the real estate market, and the fiscal and regulatory policies of the federal and state government and the regulatory authorities that govern financial institutions. See "—Supervision and Regulation."

        We are committed to maintaining premier, relationship-based community banks in Southern California which serve the needs of small to medium-sized businesses and the owners and employees of those businesses, as well as to serve the needs of growing businesses that may not yet meet the credit standards of the Banks through tightly controlled asset-based lending and factoring of accounts receivable. The strategy for serving our target markets is the delivery of a finely-focused set of value-

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added products and services that satisfy the primary needs of our customers, emphasizing superior service and relationships as opposed to transaction volume.

        Through the holding company structure, First Community attempts to create operating efficiencies for the Banks by consolidating core administrative, operational and financial functions that serve both of the Banks. These centralized functions include finance and accounting, legal and compliance, human resources, operations and systems, and credit administration. The most senior level oversight of these functions is performed at the holding company level for the benefit of the Banks, though each function may have a limited number of Bank employees performing such functions. By consolidating these activities at the holding company and negotiating with vendors for services on behalf of the Company as a whole, we believe the Company is better able to integrate systems and manage consistently across the organization as well as provide such services for lower cost than if the Banks were to obtain or perform such services directly. The Banks are charged reasonable fees by the holding company for the services performed on their behalf, pursuant to an expense allocation agreement, which we believe are substantially lower than the Banks would incur absent the holding company structure.

        As of December 31, 2003, our assets totaled approximately $2,422.3 million. As of March 1, 2004, we have two wholly-owned banking subsidiaries, First National with 13 branches located in San Diego County, and Pacific Western with 19 branches located in Los Angeles, Orange, Riverside, and San Bernardino Counties. All branches of our Banks are located in California. First National's business includes the asset-based lending and factoring operations of its wholly-owned subsidiary FC Financial, based in Phoenix, Arizona, with lending production offices in Houston and Dallas, Texas and Los Angeles and Orange, California.

        We operate in one business segment: banking.

Strategic Evolution and Acquisition Strategy

        The Company was organized on October 22, 1999 as a California corporation for the purpose of becoming a bank holding company and to acquire all the outstanding capital stock of Rancho Santa Fe National Bank, First National's predecessor.

        We have grown rapidly through a series of acquisitions. The following chart summarizes the acquisitions since our inception, which are described in more detail below and in Note 2 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

Date	Institution/Company Acquired
May 2000	Rancho Santa Fe National Bank
May 2000	First Community Bank of the Desert
January 2001	Professional Bancorp
October 2001	First Charter Bank
January 2002	Pacific Western National Bank
March 2002	W.H.E.C., Inc.
August 2002	Upland Bank
August 2002	Marathon Bancorp
September 2002	First National Bank
January 2003	Bank of Coronado
August 2003	Verdugo Banking Company
March 2004	First Community Financial Corporation
To be completed*	Harbor National Bank
*    Announced December 1, 2003 and currently expected to close in the second quarter of 2004.

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        We have financed our acquisitions, in part, with cash raised from the sale of our common stock or from the issuance of subordinated debentures. In January 2002, we raised $23.0 million in a private placement from the sale, via a rights offering, of 1.2 million shares of our common stock. The proceeds of the rights offering were used to help fund the acquisition of Pacific Western National Bank. In July 2002, we raised $89.3 million via the sale of 3.9 million shares of our common stock in a registered public offering, which we refer to as the 2002 offering. The proceeds of the 2002 offering were used to help fund the acquisitions of Upland Bank, Marathon Bancorp and First National Bank. As of March 1, 2004 we have issued and have outstanding a total of $121.6 million in subordinated debentures, of which $8.2 million was issued in 2000, $20.6 million was issued in the fourth quarter of 2001, $10.3 million was issued in June 2002, $20.6 million was issued in the third quarter of 2003 and $61.9 million was issued in February 2004. The proceeds from this most recent issuance were used to help fund the FC Financial acquisition and will be used in part to fund the Harbor National acquisition. See Note 9 of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data." As described in more detail below, we have also financed the acquisitions with the exchange of our common stock for the stock of the target company.

First Community Bank of the Desert Acquisition

        On May 31, 2000, we completed the Company's formation whereby the former Rancho Santa Fe National Bank and First Community Bank of the Desert became our wholly-owned subsidiaries and operated under their own names. The merger created a $340 million bank holding company operating in the California markets of Northern San Diego County and the desert communities of the Coachella Valley and Morongo Basin. Shareholders for both banks approved the transaction at their respective shareholder meetings held on May 31, 2000. Under the terms of the merger agreement, each shareholder of First Community Bank of the Desert received 0.30 shares of our common stock for each share of First Community Bank of the Desert common stock. Each Rancho Santa Fe National Bank share was exchanged for one share of our common stock. Upon completion of the merger, our common stock was listed on NASDAQ under the symbol FCBP. The Company accounted for the merger as a "pooling-of-interests."

Professional Bancorp Acquisition

        On January 16, 2001, we acquired Professional Bancorp, Inc., which we refer to as Professional, and its wholly-owned subsidiary, First Professional Bank, N.A., which we refer to as First Professional. Shareholders of Professional had the option to choose either $8.00 in cash or 0.55 shares of our common stock in exchange for each share of Professional common stock. We issued 504,747 shares of our common stock and $8.4 million in cash in exchange for all of the outstanding shares of Professional. The aggregate purchase price for Professional totaled approximately $16.3 million. Following the acquisition, First Professional became a third stand alone subsidiary of the Company.

First Charter Acquisition

        On October 8, 2001, we acquired First Charter Bank, N.A., which we refer to as First Charter. Shareholders of First Charter received 0.008635 of a share of our common stock for each share of First Charter common stock. Approximately 661,609 shares were issued in this acquisition, resulting in a total purchase price of approximately $14.2 million. First Charter was merged into First Professional with First Professional as the surviving entity.

Pacific Western Acquisition

        On January 31, 2002, we acquired Pacific Western National Bank. References to Pacific Western National Bank refer to the bank acquired on January 31, 2002. The shareholders and option holders of Pacific Western National Bank were paid approximately $36.6 million in cash. Upon completion of the acquisition, Pacific Western National Bank and First Community Bank of the Desert were merged into

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First Professional. The resulting bank was renamed Pacific Western National Bank and is headquartered in Santa Monica, California. When we refer to Pacific Western, we are referring to the surviving bank formed through the merger of Pacific Western National Bank, First Community Bank of the Desert and First Professional.

W.H.E.C., Inc. Acquisition

        On March 7, 2002, we acquired W.H.E.C., Inc., the holding company of Capital Bank of North County, which we refer to as Capital Bank. We issued 1,043,799 shares of our common stock in exchange for all of the outstanding common shares and options of W.H.E.C., Inc. The aggregate purchase price for W.H.E.C., Inc. totaled approximately $24.5 million. At the time of the merger, Capital Bank was merged into Rancho Santa Fe National Bank, with the surviving bank retaining the name Rancho Santa Fe National Bank.

Upland Bank Acquisition

        On August 22, 2002, we acquired Upland Bank. We issued 419,059 shares of our common stock and $6.8 million in cash in exchange for all of the outstanding shares and options of Upland Bank. The aggregate purchase price of Upland Bank amounted to approximately $19.5 million. At the time of the merger, Upland Bank was merged into Pacific Western.

Marathon Bancorp Acquisition

        On August 23, 2002, we acquired Marathon Bancorp, the holding company of Marathon Bank. We issued 537,770 shares of our common stock and $6.7 million in cash in exchange for all of the outstanding shares and options of Marathon Bancorp. The aggregate purchase price of Marathon Bancorp amounted to approximately $22.8 million. At the time of the merger, Marathon Bank was merged into Pacific Western.

First National Bank Acquisition

        On September 10, 2002, we acquired First National Bank. We issued 2,762,540 shares of our common stock, representing approximately 18% of the then outstanding shares of First Community common stock, and $74.5 million in cash in exchange for all of the outstanding preferred shares, common shares, warrants and options of First National Bank. The aggregate purchase price of First National Bank amounted to approximately $155.6 million. At the time of the merger, First National Bank was merged into Rancho Santa Fe National Bank and the resulting bank was renamed First National Bank. References to First National Bank refer to the bank acquired on September 10, 2002. When we refer to First National, we are referring to the surviving bank formed through the merger of First National Bank and Rancho Santa Fe which is headquartered in San Diego, California.

Bank of Coronado Acquisition

        On January 9, 2003, we acquired Bank of Coronado. We paid approximately $11.6 million in cash for all of the outstanding options and shares of common stock of Bank of Coronado. Upon completion of the acquisition, Bank of Coronado was merged into First National.

Verdugo Banking Company Acquisition

        On August 22, 2003, we acquired Verdugo Banking Company. We paid approximately $34.3 million in cash for all of the outstanding shares of common stock and options. At the time of the merger, Verdugo Banking Company was merged into Pacific Western.

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First Community Financial Corporation

        On March 1, 2004, we acquired FC Financial. We paid $40.0 million in cash for all of the outstanding common stock and options of FC Financial, a privately-held commercial finance company based in Phoenix, Arizona. At the time of the acquisition FC Financial became a wholly-owned subsidiary of First National.

Harbor National Bank Acquisition

        On December 1, 2003, we announced the signing of a definitive agreement to acquire all of the outstanding commons stock and options of Harbor National Bank for $35.5 million in cash. We currently expect the acquisition to close in the second quarter of 2004. Upon the closing of the acquisition, Harbor National will be merged with and into Pacific Western.

Banking Business

        The Banks are full-service community banks that offer a broad range of banking products and services, including many types of business and personal savings and checking accounts and other commercial and consumer banking services, including foreign exchange services. We derive our income primarily from the interest received on the various loan products, interest on investment securities and to a lesser extent from fees, providing deposit services, foreign exchange services and extending credit. The Banks originate several types of loans, including secured and unsecured commercial and consumer loans, commercial real estate mortgage loans, SBA loans and construction loans. We extend credit to customers located primarily in the counties we serve and through certain programs at First National, we also extend credit and make commercial and real estate loans to businesses located in Mexico. The Banks' loans are primarily short-term with adjustable rates. Special services, including international banking services, multi-state deposit services and investment services, or requests beyond the lending limits of the Banks can be arranged through correspondent banks. The Banks issue ATM and debit cards as well as have a network of ATMs and offer access to ATM networks through other major service providers. Through the Banks, we provide banking and other financial services throughout Southern California to small and medium-sized businesses and the owners and employees of those businesses. We also provide asset-based lending and factoring of accounts receivable to small businesses located throughout the southwestern United States through FC Financial's office in Phoenix, Arizona, and its employees located in Houston and Dallas, Texas and Los Angeles and Orange, California.

        Through the Banks, the Company concentrates its lending activities in three principal areas:

        (1)    Real Estate Loans.    Real estate loans are comprised of construction loans, miniperm loans collateralized by first or junior deeds of trust on specific commercial properties and equity lines of credit. The properties collateralizing real estate loans are principally located in our primary market areas of Los Angeles, Orange, San Bernardino, Riverside and San Diego counties in California and the contiguous communities. Construction loans are comprised of loans on commercial, residential and income producing properties that generally have terms of less than two years and typically bear an interest rate that floats with the Bank's base rate, prime rate or another established index. Miniperm loans finance the purchase and/or ownership of commercial properties, including owner-occupied and income producing properties. Miniperm loans are generally made with an amortization schedule ranging from 15 to 25 years with a lump sum balloon payment due in one to ten years. Equity lines of credit are revolving lines of credit collateralized by junior deeds of trust on residential real properties. They generally bear a rate of interest that floats with the Banks' base rate or the prime rate and have maturities of five years. From time to time, we purchase participation interests in loans made by other financial institutions. These loans are subject to the same underwriting criteria and approval process as loans made directly by us.

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        The Banks' real estate portfolio is subject to certain risks, including (i) a possible downturn in the Southern California economy, (ii) interest rate increases, (iii) reduction in real estate values in Southern California, (iv) increased competition in pricing and loan structure, and (v) environmental risks, including natural disasters. We strive to reduce the exposure to such risks by (a) reviewing each loan request and renewal individually, (b) using a dual signature approval system for the approval of each loan request for loans over a certain dollar amount, (c) adherence to written loan policies, including, among other factors, minimum collateral requirements, maximum loan-to-value ratio requirements, cash flow requirements and personal guarantees, (d) secondary appraisals, (e) external independent credit review, and (f) conducting environmental reviews, where appropriate. We review each loan request on the basis of our ability to recover both principal and interest in view of the inherent risks.

        (2)    Commercial Loans.    Commercial loans are made to finance operations, to provide working capital or for specific purposes, such as to finance the purchase of assets, equipment or inventory. Since a borrower's cash flow from operations is generally the primary source of repayment, our policies provide specific guidelines regarding required debt coverage and other important financial ratios. Commercial loans include lines of credit and commercial term loans. Lines of credit are extended to businesses or individuals based on the financial strength and integrity of the borrower and generally (with some exceptions) are collateralized by short-term assets such as accounts receivable, inventory, equipment or real estate and have a maturity of one year or less. Such lines of credit bear an interest rate that floats with the Banks' base rate, the prime rate, LIBOR or another established index. Commercial term loans are typically made to finance the acquisition of fixed assets, refinance short-term debt originally used to purchase fixed assets or, in rare cases, to finance the purchase of businesses. Commercial term loans generally have terms from one to five years. They may be collateralized by the asset being acquired or other available assets and bear interest rates which either floats with the Bank's base rate, the prime rate, LIBOR or another established index or is fixed for the term of the loan.

        The Banks' portfolio of commercial loans is subject to certain risks, including (i) a possible downturn in the Southern California economy, (ii) interest rate increases, (iii) deterioration of the value of the underlying collateral, and (vi) the deterioration of a borrower's or guarantor's financial capabilities. We strive to reduce the exposure to such risks through (a) reviewing each loan request and renewal individually, (b) using a dual signature approval system, (c) adherence to written loan policies, (d) external independent credit review, and (e) in the case of certain commercial loans to Mexican or foreign entities, third party insurance which limits our exposure to anywhere from 20 to 30 percent of the underlying loan. In addition, loans based on short-term asset values and factoring arrangements are monitored on a daily, weekly, monthly or quarterly basis and may include lockbox or control account arrangements. In general, the Banks receive and review financial statements and other documents of borrowing customers on an ongoing basis during the term of the relationship and respond to any deterioration noted.

        (3)    Consumer Loans.    Consumer loans include personal loans, auto loans, boat loans, home improvement loans, equipment loans, revolving lines of credit and other loans typically made by banks to individual borrowers. The Banks' consumer loan portfolio is subject to certain risks, including (i) amount of credit offered to consumers in the market, (ii) interest rate increases and (iii) consumer bankruptcy laws which allow consumers to discharge certain debts. We strive to reduce the exposure to such risks through the direct approval of all consumer loans by (a) reviewing each loan request and renewal individually, (b) using a dual signature approval system, (c) adherence to written credit policies, and (d) external independent credit review.

        As part of our efforts to achieve long-term stable profitability and respond to a changing economic environment in Southern California and in other areas where we operate, we constantly evaluate a variety of options to augment our traditional focus by broadening the services and products we provide.

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Possible avenues of growth include more branch locations, expanded days and hours of operation and new types of loan products. To date, we have not expanded into areas of brokerage, annuity, insurance or similar investment products and services and have concentrated primarily on the core businesses of accepting deposits, making loans and extending credit.

Business Concentrations

        No individual or single group of related accounts is considered material in relation to our total assets or to the assets or deposits of either of the Banks, or in relation to the overall business of the Company. However, approximately 67% of our loan portfolio held for investment at December 31, 2003 consisted of real estate-related loans, including construction loans, miniperm loans, commercial real estate mortgage loans and commercial loans secured by commercial real estate. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Loans." Moreover, our business activities are currently focused primarily in Southern California, with the majority of our business concentrated in Los Angeles, Riverside, Orange, San Bernardino and San Diego Counties. Consequently, our results of operations and financial condition are dependent upon the general trends in the Southern California economies and, in particular, the residential and commercial real estate markets. In addition, the concentration of our operations in Southern California exposes us to greater risk than other banking companies with a wider geographic base in the event of catastrophes, such as earthquakes, fires and floods in this region. We conduct foreign lending activities through First National, including commercial and real estate lending, consisting predominantly of loans to individuals or entities located in Mexico. All of our foreign loans are denominated in U.S. dollars and most are collateralized by assets located in the United States or guaranteed or insured by businesses located in the United States. Through its operating subsidiary FC Financial, First National also conducts asset-based lending and factoring of accounts receivable in the states of Arizona, California and Texas.

Competition

        The banking business in California, specifically in the Banks' primary service areas, is highly competitive with respect to originating both loans and deposits as well as other banking and mortgage banking services. The market is dominated by a relatively small number of major banks with a large number of offices and full-service operations over a wide geographic area. Among the advantages such major banks have in comparison to the Banks are their ability to finance and engage in wide-ranging advertising campaigns and to allocate their investment assets to regions of higher yield and demand. These competitors offer certain services which we do not offer directly. In addition, by virtue of their greater total capitalization, such banks have substantially higher lending limits than we offer. Other entities, in both the public and private sectors, seeking to raise capital through the issuance and sale of debt or equity securities also compete with us for the acquisition of deposits. To obtain deposits, we compete with money market funds and other money market instruments which are not subject to interest rate ceilings. In recent years, increased competition has also developed from specialized finance and non-finance companies that offer wholesale finance, credit card and other consumer finance services (including on-line banking services and personal financial software). Competition for deposit and loan products remains strong from both banking and non-banking firms and this competition directly affects the rates of those products and the terms on which they are offered to consumers.

        Technological innovation continues to contribute to greater competition in domestic and international financial services markets. Technological innovation has, for example, made it possible for non-depository institutions to offer customers automated transfer payment services previously limited to traditional banking products. In addition, customers now expect a choice of several delivery systems and channels, including telephone, mail, home computer, ATMs, self-service branches and in-store branches.

        Mergers between financial institutions have placed additional pressure on banks within the industry to consolidate their operations, reduce expenses and increase revenues to remain competitive. In

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addition, competition has intensified due to federal and state interstate banking laws, which permit banking organizations to expand geographically with fewer restrictions than in the past. These laws allow banks to merge with other banks across state lines, thereby enabling banks to establish or expand banking operations in our most significant markets. The competitive environment is also significantly impacted by federal and state legislation which make it easier for non-bank financial institutions to compete with us.

        Economic factors, along with legislative and technological changes, will have an ongoing impact on the competitive environment within the financial services industry. As an active participant in financial markets, we strive to anticipate and adapt to dynamic competitive conditions, but we can make no assurance as to the effectiveness of these efforts on our future business or results of operations or as to our continued ability to anticipate and adapt to changing conditions. In order to compete with other financial services providers in their primary service areas, we attempt to use, to the fullest extent possible, the flexibility which our independent status permits, including an emphasis on specialized services, local promotional activity and personal contacts. Each of our Banks strives to offer highly personalized banking services. In addition, we intend to continue improving our services and banking products and to cross-market services and banking products provided by one of our Banks but not the other. We believe that through the cross-marketing of products, our Banks can distinguish themselves from other community banks with which they compete based on the range of services provided and products offered. However, we can provide no assurance that we will be able to sufficiently improve our services and/or banking products or successfully compete in our primary service areas.

        First National has received a draft informal memorandum of understanding from the Office of the Comptroller of the Currency, or the OCC, which is limited in scope to enhancing the Company's Bank Secrecy Act program and procedures. Management has committed to resolving the issues addressed in the informal memorandum as promptly as possible. See "—Supervision and Regulation—USA Patriot Act" below.

Employees

        As of March 1, 2004, First National had 213 full time equivalent employees, Pacific Western had 236 full time equivalent employees, and First Community had 86 full time equivalent employees.

Certain Business Risks

        Ownership of our common stock involves risk. You should carefully consider, in addition to the other information set forth herein, the following risk factors.

•

Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance.

Changes in the interest rate environment may reduce our profits. It is expected that we will continue to realize income from the differential or "spread" between the interest earned on loans, securities and other interest-earning assets, and interest paid on deposits, borrowings and other interest-bearing liabilities. Net interest spreads are affected by the difference between the maturities and repricing characteristics of interest-earning assets and interest-bearing liabilities. In addition, loan volume and yields are affected by market interest rates on loans, and rising interest rates generally are associated with a lower volume of loan originations. We cannot assure you that we can minimize our interest rate risk. In addition, an increase in the general level of interest rates may adversely affect the ability of certain borrowers with variable rate loans to pay the interest on and principal of their obligations. Accordingly, changes in levels of market interest rates could materially and adversely affect our net interest spread, asset quality, loan origination volume and overall profitability.

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•

We face strong competition from financial service companies and other companies that offer banking services which could negatively affect our business.

We conduct our banking operations primarily in Southern California. Increased competition in our market may result in reduced loans and deposits. Ultimately, we may not be able to compete successfully against current and future competitors. Many competitors offer the same banking services that we offer in our service area. These competitors include national banks, regional banks and other community banks. We also face competition from many other types of financial institutions, including without limitation, savings and loan institutions, finance companies, brokerage firms, insurance companies, credit unions, mortgage banks and other financial intermediaries. In particular, our competitors include several major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous banking locations and ATMs and conduct extensive promotional and advertising campaigns.

Additionally, banks and other financial institutions with larger capitalization and financial intermediaries not subject to bank regulatory restrictions have larger lending limits and are thereby able to serve the credit needs of larger customers. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits, and range and quality of products and services provided, including new technology-driven products and services. Technological innovation continues to contribute to greater competition in domestic and international financial services markets as technological advances enable more companies to provide financial services. We also face competition from out-of-state financial intermediaries that have opened low-end production offices or that solicit deposits in our market areas. If we are unable to attract and retain banking customers, we may be unable to continue our loan growth and level of deposits and our results of operations and financial condition may otherwise be adversely affected.

•

Changes in economic conditions, in particular an economic slowdown in Southern California, could materially and negatively affect our business.

Our business is directly impacted by factors such as economic, political and market conditions, broad trends in industry and finance, legislative and regulatory changes, changes in government monetary and fiscal policies and inflation, all of which are beyond our control. A deterioration in economic conditions, whether caused by national concerns or local concerns, in particular an economic slowdown in Southern California, could result in the following consequences, any of which could hurt our business materially: loan delinquencies may increase; problem assets and foreclosures may increase; demand for our products and services may decline; low cost or noninterest bearing deposits may decrease; and collateral for loans made by us, especially real estate, may decline in value, in turn reducing customers' borrowing power, and reducing the value of assets and collateral associated with our existing loans. On March 2, 2004, California voters approved certain ballot measures, including a one-time bond issue of up to $15 billion to pay off the State's accumulated general fund deficit. The State of California continues to face fiscal challenges, the long-term impact of which on the State's economy cannot be predicted.

•

A downturn in the real estate market could negatively affect our business.

A downturn in the real estate market could negatively affect our business because many of our loans are secured by real estate. Our ability to recover on defaulted loans by selling the real estate collateral would then be diminished, and we would be more likely to suffer losses on defaulted loans.

        Substantially all of our real property collateral is located in Southern California. If there is a significant decline in real estate values, especially in Southern California, the collateral for our loans will provide less security. Real estate values could be affected by, among other things, an economic slowdown, an increase in interest rates, earthquakes and other natural disasters particular to California.

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•

We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects.

We currently depend heavily on the services of our chairman, John Eggemeyer, our chief executive officer, Matthew Wagner, and a number of other key management personnel. The loss of Mr. Eggemeyer's or Mr. Wagner's services or that of other key personnel could materially and adversely affect our results of operations and financial condition. Our success will also depend in part on our ability to attract and retain additional qualified management personnel. Competition for such personnel is strong in the banking industry and we may not be successful in attracting or retaining the personnel we require.

•

We are subject to extensive regulation which could adversely affect our business.

Our operations are subject to extensive regulation by federal, state and local governmental authorities and are subject to various laws and judicial and administrative decisions imposing requirements and restrictions on part or all of our operations. Because our business is highly regulated, the laws, rules and regulations applicable to us are subject to regular modification and change. There are currently proposed laws, rules and regulations that, if adopted, would impact our operations. There can be no assurance that these proposed laws, rules and regulations, or any other laws, rules or regulations, will not be adopted in the future, which could (i) make compliance much more difficult or expensive, (ii) restrict our ability to originate, broker or sell loans or accept deposits, (iii) further limit or restrict the amount of commissions, interest or other charges earned on loans originated or sold by us, or (iv) otherwise adversely affect our business or prospects for business. See "—Supervision and Regulation" below.

•

We are exposed to transactional, currency and legal risk related to our foreign loans that is in addition to risks we face on loans to U.S.-based borrowers.

A portion of our loan portfolio is represented by credit we extend and loans we make to businesses located outside the United States, predominantly in Mexico. These loans, which include commercial loans, real estate loans and credit extensions for the financing of international trade, are subject to risks in addition to risks we face with our loans to businesses located in the United States including, but not limited to, currency risk, transaction risk, country risk and legal risk. While these loans are denominated in U.S. dollars, the ability of the borrower to repay may be affected by fluctuations in the borrower's home country currency relative to the U.S. dollar. Additionally, while most of our foreign loans are insured by U.S.-based institutions, guaranteed by a U.S.-based entity, or collateralized with U.S.-based assets or real property, our ability to collect in the event of default is subject to a number of conditions and we may not be successful in obtaining partial or full repayment. Furthermore, foreign laws may restrict our ability to foreclose on, take a security interest in, or seize collateral located in the foreign country.

•

We are exposed to risk of environmental liabilities with respect to properties to which we take title.

In the course of our business, we may own or foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or may be required to investigate or clean up hazardous or toxic substances, or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. In addition, as the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity and results of operations could be materially and adversely affected.

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•

Our ability to pay dividends is restricted by law and contractual arrangements and depends on capital distributions from the Banks which are subject to regulatory limits.

Our ability to pay dividends to our shareholders is subject to the restrictions set forth in California law. In addition, our ability to pay dividends to our shareholders is restricted in specified circumstances under indentures governing the trust preferred securities we have issued and under the revolving credit agreements to which we are a party. See "Item 5. Market for Registrant's Common Equity and Related Stockholder Matters—Dividends" for more information on these restrictions. We cannot assure you that we will meet the criteria specified under California law or under these agreements in the future, in which case we may reduce or stop paying dividends on our common stock.

•

The primary source of our income from which we pay dividends is the receipt of dividends from our Banks.

The availability of dividends from the Banks is limited by various statutes and regulations. It is possible, depending upon the financial condition of the bank in question, and other factors, that the Board of Governors of the Federal Reserve System, and/or the Office of the Comptroller of the Currency could assert that payment of dividends or other payments is an unsafe or unsound practice. In the event our subsidiaries were unable to pay dividends to us, we in turn would likely have to reduce or stop paying dividends on our common stock. Our failure to pay dividends on our common stock could have a material adverse effect on the market price of our common stock. See "—Supervision and Regulation" for additional information on the regulatory restrictions to which we and our Banks are subject.

•

Only a limited trading market exists for our common stock which could lead to price volatility.

Our common stock was designated for quotation on the Nasdaq National Market in June 2000 and trading volumes since that time have been modest. The limited trading market for our common stock may cause fluctuations in the market value of our common stock to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market of our common stock. In addition, even if a more active market in our common stock develops, we cannot assure you that such a market will continue or that shareholders will be able to sell their shares.

•

Our allowance for loan losses may not be adequate to cover actual losses.

Like all financial institutions, we maintain an allowance for loan losses to provide for loan defaults and non-performance. Our allowance for loan losses may not be adequate to cover actual loan losses, and future provisions for loan losses could materially and adversely affect our operating results. Our allowance for loan losses is based on prior experience, as well as an evaluation of the risks in the current portfolio. The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond our control, and these losses may exceed current estimates. Federal regulatory agencies, as an integral part of their examination process, review our loans and allowance for loan losses. While we believe that our allowance for loan losses is adequate to cover current losses, we cannot assure you that we will not further increase the allowance for loan losses or that regulators will not require us to increase this allowance. Either of these occurrences could materially adversely affect our earnings. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations."

•

Concentrated ownership of our common stock creates a risk of sudden changes in our share price.

As of March 1, 2004, directors and members of our executive management team owned or controlled approximately 16.2% of our common stock, excluding shares that may be issued to executive officers upon payment of restricted and performance stock awards and exercise of stock options. Investors who purchase our common stock may be subject to certain risks due to the concentrated ownership of our common stock. The sale by any of our large shareholders of a significant portion of

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that shareholder's holdings could have a material adverse affect on the market price of our common stock. In addition, the registration of any significant amount of additional shares of our common stock will have the immediate effect of increasing the public float of our common stock and any such increase may cause the market price of our common stock to decline or fluctuate significantly.

•

Our largest shareholder is a registered bank holding company and the activities and regulation of such shareholder may affect the permissible activities of the Company.

Castle Creek Capital, LLC, which we refer to as Castle Creek, is controlled by our chairman, John M. Eggemeyer, and beneficially owned approximately 13% of the Company as of March 1, 2004. Castle Creek is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and is regulated by the Board of Governors of the Federal Reserve System, or FRB. Under FRB guidelines, holding companies must be a "source of strength" for their subsidiaries. See "—Supervision and Regulation—Bank Holding Company Regulation". Regulation of Castle Creek by the FRB may adversely affect the activities and strategic plans of the Company should the FRB determine that Castle Creek or any other company in which Castle Creek has invested has engaged in any unsafe or unsound banking practices or activities. While we have no reason to believe that the FRB is proposing to take any action with respect to Castle Creek that would adversely affect the Company, we remain subject to such risk.

Financial and Statistical Disclosure

        Certain of our statistical information is presented within "Item 6. Selected Financial Data," "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 7A. Qualitative and Quantitative Disclosure About Market Risk." This information should be read in conjunction with the consolidated financial statements contained in "Item 8. Financial Statements and Supplementary Data."

Supervision and Regulation

General

        The banking and financial services business in which we engage is highly regulated. Such regulation is intended, among other things, to protect depositors insured by the Federal Deposit Insurance Corporation, or FDIC, and the entire banking system. The commercial banking business is also influenced by the monetary and fiscal policies of the federal government and the policies of the Board of Governors of the Federal Reserve System, also known as the FRB. The FRB implements national monetary policies (with objectives such as curbing inflation and combating recession) by its open-market operations in United States Government securities, by adjusting the required level of reserves for financial intermediaries subject to its reserve requirements and by varying the discount rates applicable to borrowings by depository institutions. The actions of the FRB in these areas influence the growth of bank loans, investments and deposits and also affects interest rates charged on loans and paid on deposits. Indirectly such actions may also impact the ability of non-bank financial institutions to compete with the Banks. The nature and impact of any future changes in monetary policies cannot be predicted.

The laws, regulations and policies affecting financial services businesses are continuously under review by Congress and state legislatures and federal and state regulatory agencies. From time to time, legislation is enacted which has the effect of increasing the cost of doing business, limiting or expanding permissible activities or affecting the competitive balance between banks and other financial intermediaries. Proposals to change the laws and regulations governing the operations and taxation of banks, bank holding companies and other financial intermediaries are frequently made in Congress, in the California legislature and by various bank regulatory agencies and other professional agencies. Changes in the laws, regulations or policies that impact us cannot necessarily be predicted, but they may have a material effect on our business and earnings.

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Bank Holding Company Regulation

        As a bank holding company, First Community is registered with and subject to regulation by the FRB under the Bank Holding Company Act of 1956, as amended, or the BHCA. In accordance with FRB policy, First Community is expected to act as a source of financial strength to the Banks and to commit resources to support the Banks in circumstances where it might not otherwise do so. Similarly, under the cross-guarantee provisions of the Federal Deposit Insurance Act ("FDIA"), the FDIC can hold any FDIC-insured depository institution liable for any loss suffered or anticipated by the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to such a commonly controlled institution. Because Castle Creek Capital is a holding company for us as well as for a bank in Texas, in the event of a "default" at, or assistance to, the Texas bank, our Banks could have liability even though we have no control over the Texas bank. Under the BHCA, we are subject to periodic examination by the FRB. We are also required to file with the FRB periodic reports of our operations and such additional information regarding the Company and its subsidiaries as the FRB may require. Pursuant to the BHCA, we are required to obtain the prior approval of the FRB before we acquire all or substantially all of the assets of any bank or ownership or control of voting shares of any bank if, after giving effect to such acquisition, we would own or control, directly or indirectly, more than 5 percent of such bank.

Under the BHCA, we may not engage in any business other than managing or controlling banks or furnishing services to its subsidiaries that the FRB deems to be so closely related to banking as "to be a proper incident thereto." We are also prohibited, with certain exceptions, from acquiring direct or indirect ownership or control of more than 5 percent of the voting shares of any company unless the company is engaged in banking activities or the FRB determines that the activity is so closely related to banking to be a proper incident to banking. The FRB's approval must be obtained before the shares of any such company can be acquired and, in certain cases, before any approved company can open new offices.

Additionally, bank holding companies that meet certain eligibility requirements prescribed by the BHCA and elect to operate as financial holding companies may engage in, or own shares in companies engaged in, a wider range of nonbanking activities, including securities and insurance activities and any other activity that the FRB, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature, incidental to any such financial activity or complementary to any such financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. The BHCA generally does not place territorial restrictions on the domestic activities of non-bank subsidiaries of bank holding companies. As of the date of this filing, we do not operate as a financial holding company.

The BHCA and regulations of the FRB also impose certain constraints on the redemption or purchase by a bank holding company of its own shares of stock.

Our earnings and activities are affected by legislation, by regulations and by local legislative and administrative bodies and decisions of courts in the jurisdictions in which we and the Banks conduct business. For example, these include limitations on the ability of the Banks to pay dividends to us and our ability to pay dividends to our shareholders. It is the policy of the FRB that bank holding companies should pay cash dividends on common stock only out of income available over the past year and only if prospective earnings retention is consistent with the organization's expected future needs and financial condition. The policy provides that bank holding companies should not maintain a level of cash dividends that undermines the bank holding company's ability to serve as a source of strength to its banking subsidiaries. Various federal and state statutory provisions limit the amount of dividends that subsidiary banks and savings associations can pay to their holding companies without regulatory approval. In addition to these explicit limitations, the federal regulatory agencies have general authority to prohibit a banking subsidiary or bank holding company from engaging in an unsafe or unsound banking practice. Depending upon the circumstances, the agencies could take the position that paying a dividend would constitute an unsafe or unsound banking practice.

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        In addition, banking subsidiaries of bank holding companies are subject to certain restrictions imposed by federal law in dealings with their holding companies and other affiliates. Subject to certain exceptions set forth in the Federal Reserve Act, a bank can make a loan or extend credit to an affiliate, purchase or invest in the securities of an affiliate, purchase assets from an affiliate, accept securities of an affiliate as collateral for a loan or extension of credit to any person or company, issue a guarantee or accept letters of credit on behalf of an affiliate only if the aggregate amount of the above transactions of such subsidiary does not exceed 10 percent of such subsidiary's capital stock and surplus on an individual basis or 20 percent of such subsidiary's capital stock and surplus on an aggregate basis. Such transactions must be on terms and conditions that are consistent with safe and sound banking practices. A bank and its subsidiaries generally may not purchase a "low-quality asset," as that term is defined in the Federal Reserve Act, from an affiliate. Such restrictions also prevent a holding company and its other affiliates from borrowing from a banking subsidiary of the holding company unless the loans are secured by collateral.

        The FRB has cease and desist powers over parent bank holding companies and non-banking subsidiaries where the action of a parent bank holding company or its non-financial institutions represent an unsafe or unsound practice or violation of law. The FRB has the authority to regulate debt obligations, other than commercial paper, issued by bank holding companies by imposing interest ceilings and reserve requirements on such debt obligations.

Regulation of the Banks

        The Banks are extensively regulated under both federal and state law.

        The Banks are insured by the FDIC, which currently insures deposits of each member bank to a maximum of $100,000 per depositor. For this protection, the Banks, as is the case with all insured banks, pay a semi-annual statutory assessment and are subject to the rules and regulations of the FDIC. First Community is a member of the Federal Reserve System and is subject to primary regulation by the FRB. First National and Pacific Western are national banks and therefore regulated primarily by the Office of the Comptroller of the Currency, or OCC.

        Various requirements and restrictions under the laws of the State of California and the United States affect the operations of the Banks. State and federal statutes and regulations relate to many aspects of the Banks' operations, including standards for safety and soundness, reserves against deposits, interest rates payable on deposits and loans, investments, mergers and acquisitions, borrowings, dividends, locations of branch offices, fair lending requirements, Community Reinvestment Act activities and loans to affiliates. Further, the Banks are required to maintain certain levels of capital. The following are the regulatory capital guidelines and the actual capitalization levels for First National, Pacific Western and the Company as of December 31, 2003:

	Adequately Capitalized		Well Capitalized		First National		Pacific Western		Company Consolidated
	(greater than or equal to)
Tier 1 leverage capital ratio	4.00	%	5.00	%	8.63	%	8.23	%	8.23	%
Tier 1 risk-based capital ratio	4.00	%	6.00	%	10.42	%	9.79	%	9.83	%
Total risk-based capital	8.00	%	10.00	%	11.68	%	10.95	%	11.08	%

Prompt Corrective Action

        The Federal Deposit Insurance Corporation Improvement Act, or FDICIA, requires each federal banking agency to take prompt corrective action to resolve the problems of insured depository institutions, including but not limited to those that fall below one or more prescribed minimum capital ratios. Pursuant to FDICIA, the OCC promulgated regulations defining the following five categories in which an insured depository institution will be placed, based on the level of its capital ratios: well

16

capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Under the prompt corrective action provisions of FDICIA, an insured depository institution generally will be classified as undercapitalized if its total risk-based capital is less than 8% or its Tier 1 risk-based capital or leverage ratio is less than 4%. An institution that, based upon its capital levels, is classified as "well capitalized," "adequately capitalized" or "undercapitalized" may be treated as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition or an unsafe or unsound practice warrants such treatment. At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth, prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits. Furthermore, if a bank is classified in one of the undercapitalized categories, it is required to submit a capital restoration plan to the federal bank regulator, and the holding company must guarantee the performance of that plan.

        In addition to measures taken under the prompt corrective action provisions, commercial banking organizations may be subject to potential enforcement actions by the federal banking agencies for unsafe or unsound practices in conducting their businesses or for violations of any law, rule, regulation or any condition imposed in writing by the agency or any written agreement with the agency. Enforcement actions may include the imposition of a conservator or receiver, the issuance of a cease-and-desist order that can be judicially enforced, the termination of insurance of deposits (in the case of a depository institution), the imposition of civil money penalties, the issuance of directives to increase capital, the issuance of formal and informal agreements, the issuance of removal and prohibition orders against institution-affiliated parties. The enforcement of such actions through injunctions or restraining orders may be based upon a judicial determination that the agency would be harmed if such equitable relief was not granted.

Hazardous Waste Clean-Up

        Since we are not involved in any business that manufactures, uses or transports chemicals, waste, pollutants or toxins that might have a material adverse effect on the environment, our primary exposure to environmental laws is through our lending activities and through properties or businesses we may own, lease or acquire. Based on a general survey of the loan portfolios of the Banks, conversations with local appraisers and the type of lending currently and historically done by the Banks, we are not aware of any potential liability for hazardous waste contamination that would be reasonably likely to have a material adverse effect on the Company as of March 1, 2004.

Sarbanes-Oxley Act

        On July 30, 2002, the President signed into law the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act aims to restore the credibility lost as a result of recent high profile corporate scandals by addressing, among other issues, corporate governance, auditing and accounting, executive compensation and enhanced and timely disclosure of corporate information. The Nasdaq National Market has adopted corporate governance rules intended to allow shareholders to more easily and effectively monitor the performance of companies and directors. The principal provisions of the Sarbanes-Oxley Act, many of which have been interpreted through regulations released in 2003, provide for and include, among other things: (i) the creation of an independent accounting oversight board; (ii) auditor independence provisions that restrict non-audit services that accountants may provide to their audit clients; (iii) additional corporate governance and responsibility measures, including the requirement that the chief executive officer and chief financial officer of a public company certify financial statements; (iv) the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer's securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement; (v) an increase in the oversight

17

of, and enhancement of certain requirements relating to, audit committees of public companies and how they interact with the Company's independent auditors; (vi) requirements that audit committee members must be independent and are barred from accepting consulting, advisory or other compensatory fees from the issuer; (vii) requirements that companies disclose whether at least one member of the audit committee is a 'financial expert' (as such term is defined by the SEC) and if not discussed, why the audit committee does not have a financial expert; (viii) expanded disclosure requirements for corporate insiders, including accelerated reporting of stock transactions by insiders and a prohibition on insider trading during pension blackout periods; (ix) a prohibition on personal loans to directors and officers, except certain loans made by insured financial institutions on nonpreferential terms and in compliance with other bank regulatory requirements; (x) disclosure of a code of ethics and filing a Form 8-K for a change or waiver of such code; and (xi) a range of enhanced penalties for fraud and other violations.

        We cannot be certain of the affect, if any, of the foregoing legislation on our business. Future changes in the laws, regulation, or policies that impact us cannot necessarily be predicted and may have a material affect on our business and earnings.

USA Patriot Act

        The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "Patriot Act"), designed to deny terrorists and others the ability to obtain access to the United States financial system, has significant implications for depository institutions, brokers, dealers and other businesses involved in the transfer of money. The Patriot Act, as implemented by various federal regulatory agencies, requires financial institutions, including the Company, to implement new policies and procedures or amend existing policies and procedures with respect to, among other matters, anti-money laundering, compliance, suspicious activity and currency transaction reporting and due diligence on customers. The Patriot Act and its underlying regulations also permit information sharing for counter-terrorist purposes between federal law enforcement agencies and financial institutions, as well as among financial institutions, subject to certain conditions, and require FRB, the OCC and other federal banking agencies to evaluate the effectiveness of an applicant in combating money laundering activities when considering applications filed under Section 3 of the BHCA or the Bank Merger Act. The Company has augmented its systems and procedures to accomplish this. We believe that the cost of compliance with the Patriot Act is not likely to be material to the Company.

        First National has received a draft informal memorandum of understanding from the OCC, with respect to First National's compliance with Bank Secrecy Act/Anti-Money Laundering ("BSA/AML") regulations pursuant to the Patriot Act. Management expects that the final informal memorandum will require us to evaluate and strengthen our BSA/AML program and processes. Based on discussions with the OCC, management believes the informal memorandum is limited in scope to addressing BSA/AML issues and that it will have no material impact on our operating results or financial condition and that, unless we fail to adequately address the concerns of the OCC, the informal memorandum will not constrain our business. Management has committed to resolving the issues addressed in the informal memorandum as promptly as possible.

Federal Deposit Insurance

        Because of favorable loss experience and a healthy reserve ratio in the Bank Insurance Fund, or the BIF, of the FDIC, well-capitalized and well-managed banks, including the Banks, have in recent years paid minimal premiums for FDIC insurance. While we have no expectation of increased premiums, the amount of any future premiums will depend on the BIF loss experience, legislation or regulatory initiatives and other factors, none of which we are in position to predict at this time.

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Community Reinvestment Act

        The Community Reinvestment Act ("CRA") generally requires insured depository institutions to identify the communities they serve and to make loans and investments and provide services that meet the credit needs of these communities. Furthermore, the CRA requires the OCC to evaluate the performance of each of the Banks in helping to meet the credit needs of their communities. As a part of the CRA program, the Banks are subject to periodic examinations by the OCC, and must maintain comprehensive records of their CRA activities for this purpose. During these examinations, the OCC rates such institutions' compliance with CRA as "Outstanding," "Satisfactory," "Needs to Improve" or "Substantial Noncompliance." Failure of an institution to receive at least a "Satisfactory" rating could inhibit such institution or its holding company from undertaking certain activities. The OCC must take into account the record of performance of banks in meeting the credit needs of the entire community served, including low-and moderate-income neighborhoods. Both of the Banks have a CRA rating of "Satisfactory."

Customer Information Security

        The FRB, the OCC and other bank regulatory agencies have adopted final guidelines (the "Guidelines") for safeguarding confidential, personal customer information. The Guidelines require each financial institution, under the supervision and ongoing oversight of its board of directors or an appropriate committee thereof, to create, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, protect against any anticipated threats or hazard to the security or integrity of such information and protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer. We have adopted a customer information security program that has been approved by our board of directors.

Privacy

        The Gramm-Leach-Bliley Act of 1999 (the "GLBA") requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to non-affiliated third parties. In general, the statute requires explanations to consumers on policies and procedures regarding the disclosure of such nonpublic personal information, and, except as otherwise required by law, prohibits disclosing such information except as provided in the Banks, policies and procedures. The Banks have implemented privacy policies which are distributed regularly to all existing and new customers of the Banks.

Available Information

        We maintain an Internet website at www.firstcommunitybancorp.com, and a website for each of our Banks at www.banksandiego.com and www.pacificwesternbank.com. At www.firstcommunitybancorp.com and via the "Investor Relations" link at each of the Banks' websites, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available, free of charge, as soon as reasonably practicable after such forms are electronically filed with the SEC. Copies of the Company's filings with the SEC may also be obtained directly from the SEC's website at www.sec.gov. These documents may also be obtained in print upon request by our shareholders to our Investor Relations Department.

        We have adopted a written code of ethics that applies to all directors, officers and employees of the Company, including our principal executive officer and senior financial officers, in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange Commission promulgated thereunder. The code of ethics, which we call our Code of Business Conduct

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and Ethics, is available on our corporate web site, www.firstcommunitybancorp.com in the section entitled "Corporate Governance." In the event that we make changes in, or provide waivers from, the provisions of this code of ethics that the SEC requires us to disclose, we intend to disclose these events on our corporate web site in such section. In the Corporate Governance section of our corporate web site, we have also posted the charters for our Audit Committee and our Compensation, Nominating and Governance Committee, as well as our Corporate Governance Guidelines. In addition, information concerning purchases and sales of our equity securities by our executive officers and directors is posted on our web site.

        Our Investor Relations Department can be contacted at First Community Bancorp, 275 N. Brea Blvd., Brea, CA 92821, Attention: Investor Relations, telephone 714-671-6800, e-mail:
investor-relations@firstcommunitybancorp.com.

Forward-Looking Information

        This Annual Report on Form 10-K contains certain forward-looking information about First Community Bancorp and its subsidiaries, and the combined company after completion of the acquisitions mentioned herein, which statements are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of First Community Bancorp. First Community Bancorp cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to:

•

planned acquisitions and relative cost savings cannot be realized or realized within the expected time frame;



•

revenues are lower than expected;



•

credit quality deterioration which could cause an increase in the provision for loan losses;



•

competitive pressure among depository institutions increases significantly;



•

the integration of acquired businesses costs more, takes longer or is less successful than expected;



•

the possibility that personnel changes will not proceed as planned;



•

the cost of additional capital is more than expected;



•

a change in the interest rate environment reduces interest margins;



•

asset/liability repricing risks and liquidity risks;



•

general economic conditions, either nationally or in the market areas in which First Community Bancorp does or anticipates doing business, are less favorable than expected;



•

the economic and regulatory effects of the continuing war on terrorism and other events of war, including the war in Iraq;



•

legislative or regulatory requirements or changes adversely affect First Community Bancorp's business;



•

changes in the securities markets;



•

First Community Bancorp's ability to consummate the acquisition of Harbor National, to successfully integrate the operations of FC Financial and Harbor National, or to achieve expected synergies and operating efficiencies within expected time-frames or at all; and

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•

regulatory approvals for announced or future acquisitions cannot be obtained on the terms expected or on the anticipated schedule.

        If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, First Community Bancorp's results could differ materially from those expressed in, implied or projected by, such forward-looking statements. First Community Bancorp assumes no obligation to update such forward-looking statements. For additional information concerning risk and uncertainties related to us and our operations, please refer to Items 1 through 7A of this Annual Report.

ITEM 2. PROPERTIES

        As of March 1, 2004, we had a total of 51 properties consisting of 32 branch offices, 3 annex offices, 3 operations centers and 13 other properties of which 8 are subleased. We own 4 locations and the remaining properties are leased. All properties are located in southern California except 2 of the annex offices used by FC Financial, which are located in Phoenix, Arizona and Aledo, Texas. Pacific Western operates through 19 branches and its principal office is located at 120 Wilshire Blvd., Santa Monica, California 90401. First National operates through 13 branches and its principal office is located at 401 West "A" Street, San Diego, California 92101.

        For additional information regarding properties of the Company and of the Banks, see "Item 8. Financial Statements and Supplementary Data."

ITEM 3. LEGAL PROCEEDINGS

        From time to time, we are party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates the Company's and/or the Banks' exposure to the cases individually and in the aggregate and provides for potential losses on such litigation if the amount of the loss is estimable and the loss is probable.

        We believe that there are no material litigation matters at the current time. However, litigation is inherently uncertain and no assurance can be given that any current or future litigation will not result in any loss which might be material to us.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to the shareholders of the Company, through the solicitation of proxies or otherwise, during the fourth quarter of the year ended December 31, 2003.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Marketplace Designation, Sales Price Information and Holders

        On June 1, 2000, our common stock was designated for quotation on the Nasdaq National Market® and trades under the symbol "FCBP." The following table summarizes the high and low bid prices for each quarterly period ended since January 1, 2002 for our common stock, as traded on and reported by the Nasdaq National Market:

		Approximate Bid Prices
		High		Low
Quarter Ended
2002:
	First quarter	$	26.30	$	19.25
	Second quarter	$	28.96	$	23.21
	Third quarter	$	31.50	$	23.74
	Fourth quarter	$	34.00	$	28.02
2003:
	First quarter	$	32.29	$	28.05
	Second quarter	$	31.75	$	28.86
	Third quarter	$	34.45	$	30.13
	Fourth quarter	$	37.13	$	34.55

        As of March 5, 2004, the closing price of our common stock on Nasdaq was $39.95 per share. As of that date, we believe, based on the records of our transfer agent, that there were approximately 1,374 record holders of our common stock.

Dividends

        Our ability to pay dividends to our shareholders is subject to the restrictions set forth in the California General Corporation Law, or the CGCL. The CGCL provides that a corporation may make a distribution to its shareholders if the corporation's retained earnings equal at least the amount of the proposed distribution. The CGCL further provides that, in the event that sufficient retained earnings are not available for the proposed distribution, a corporation may nevertheless make a distribution to its shareholders if it meets two conditions: (i) the corporation's assets equal at least 1¹/4 times its liabilities and (ii) the corporation's current assets equal at least its current liabilities or, alternatively, if the average of the corporation's earnings before taxes on income and interest expense for the two preceding fiscal years was less than the average of the corporation's interest expense for such fiscal years, the corporation's current assets equal at least 1¹/4 times its current liabilities. Our ability to pay dividends is also subject to certain other limitations. See "Item 1. Business—Supervision and Regulation."

        Our primary source of income is the receipt of dividends from the Banks. The availability of dividends from the Banks is limited by various statutes and regulations. It is possible, depending upon the financial condition of the bank in question, and other factors, that the FRB and/or the Office of the Comptroller of the Currency could assert that payment of dividends or other payments is an unsafe or unsound practice. In addition, our ability to pay dividends is limited by the Amended and Restated Revolving Credit Agreement, dated as of August 15, 2003 between the Company and The Northern Trust Company and by the Revolving Credit Agreement dated as of August 15, 2003 between the Company and U.S. Bank, NA. Both agreements provide that we may not declare or pay any dividend,

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other than dividends payable on the Company's common stock or in the ordinary course of business exceeding 50% of net earnings per fiscal quarter of the Company before goodwill or intangibles amortization and any restructuring charges incurred in connection with any merger, consolidation or other restructuring contemplated by transactions similar to a merger. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity" and Note 19 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

        Our ability to pay dividends is also limited by certain covenants contained in the indentures governing trust preferred securities that we have issued, and the debentures underlying the trust preferred securities. The indentures provide that if an Event of Default (as defined in the indentures) has occurred and is continuing, or if we are in default with respect to any obligations under our guarantee agreement which covers payments of the obligations on the trust preferred securities, or if we give notice of any intention to defer payments of interest on the debentures underlying the trust preferred securities, then we may not, among other restrictions, declare or pay any dividends (other than a dividend payable by the Banks to the holding company) with respect to our common stock. See Note 9 of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

        Holders of our common stock are entitled to receive dividends declared by our Board of Directors out of funds legally available under the laws of the State of California, subject to the rights of holders of any preferred stock of the Company that may be issued in the future. Since January 1, 2002 we have declared the following quarterly dividends:

Record Date	Pay Date	Amount per Share
March 5, 2002	March 15, 2002	$0.09
May 15, 2002	May 31, 2002	$0.15
August 15, 2002	August 30, 2002	$0.15
November 15, 2002	November 29, 2002	$0.15
February 14, 2003	February 28, 2003	$0.15
May 16, 2003	May 30, 2003	$0.15
August 15, 2003	August 29, 2003	$0.1875
November 22, 2003	November 26, 2003	$0.1875
February 13, 2004	February 27, 2004	$0.1875

        We believe that the Company will be able to continue paying quarterly dividends however we can provide no assurance that we will continue to declare dividends on a quarterly basis or otherwise. The declaration of dividends by the Company is subject to the discretion of our Board of Directors. Our Board of Directors will take into account such matters as general business conditions, our financial results, capital requirements, contractual, legal and regulatory restrictions on the payment of dividends by us to our shareholders or by our subsidiaries to the holding company, and such other factors as our Board of Directors may deem relevant. See "Business—Regulation and Supervision" in Part I, Item 1 of this Annual Report on Form 10-K for a discussion of potential regulatory limitations on our receipt of funds from our regulated subsidiaries.

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Equity Compensation Plans

        The following table provides information as of December 31, 2003, regarding securities issued and to be issued under our equity compensation plans that were in effect during fiscal 2003:

	Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
		(a)		(b)		(c)
Equity compensation plans approved by security holders	The First Community Bancorp 2003 Stock Incentive Plan(1)	1,055,354	(2)	$	18.10	570,773	(3)(4)
Equity compensation plans not approved by security holders	None	—			—	—
Total		1,055,354	(2)	$	18.10	570,773	(3)(4)

(1)

The First Community Bancorp 2003 Stock Incentive Plan (the "Incentive Plan") was approved by the shareholders of the Company at our 2003 Annual Meeting of Shareholders and is a successor plan to First Community Bancorp 2000 Stock Incentive Plan and under which no additional awards will be granted.

(2)

Amount represents outstanding options, warrants and rights only and does not include the 460,000 shares of restricted and performance stock awarded in 2003 and outstanding at December 31, 2003 with an exercise price of zero.

(3)

The total number of shares of common stock that have been approved for issuance pursuant to awards granted or which may be granted in the future under the Incentive Plan is 2,500,000 shares. The number of securities remaining available for future issuance has been reduced by the 460,000 shares of restricted and performance stock awards outstanding at December 31, 2003.

(4)

All of the 570,773 shares remaining available for issuance under the Incentive Plan may be issued not only for future grants of options, warrants and rights, but also for future grants of restricted and performance stock awards. Grants of restricted and performance stock awards replace the practice of granting stock options.

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Recent Sales of Unregistered Securities and Use of Proceeds

        During the past three years, the Company has issued unregistered debt securities through seven offerings of trust preferred securities. The details of those offerings are set forth below:

			Consideration
							Exemption from Registration Claimed
Securities Sold	Date Offering Completed	Underwriters or Other Purchasers	Aggregate Offering Price		Underwriting Discounts/ Commissions			Terms of Conversion or Exercise	Use of Proceeds
	(In thousands)
Trust Preferred Securities	9/7/2000	First Tennessee Capital Markets/Keefe, Bruyette and Woods, Inc.	$	8,248	$	240	Yes	N/A	Acquisition financing
Trust Preferred Securities	12/18/2001	First Tennessee Capital Markets/Keefe, Bruyette and Woods, Inc.		10,310		300	Yes	N/A	Acquisition financing
Trust Preferred Securities	11/28/2001	Sandler O'Neill & Partners, L.P.		10,310		300	Yes	N/A	Acquisition financing
Trust Preferred Securities	6/26/2002	First Tennessee Capital Markets/Keefe, Bruyette and Woods, Inc.		10,310		200	Yes	N/A	Acquisition financing
Trust Preferred Securities	8/15/2003	First Tennessee Capital Markets/Keefe, Bruyette and Woods, Inc.		10,310		150	Yes	N/A	Acquisition financing
Trust Preferred Securities	9/3/2003	Trapeza CDO IV, LLC		10,310		—	Yes	N/A	Acquisition financing
Trust Preferred Securities	2/5/2004	Cohen Bros. & Co./Friedman, Billings, Ramsey & Co., Inc.		61,856		300	Yes	N/A	Acquisition financing

        Additional information regarding the offering of our debt securities and the trust preferred securities is set forth in Notes 9 and 22 of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

Repurchases of Common Stock

        Through the Company's Directors Deferred Compensation Plan, or the DDCP, participants in the plan may reinvest deferred amounts in the Company's common stock. The Company has the discretion whether to track purchases of Common stock as if made, or to fully fund the DDCP via purchases of stock with deferred amounts. Purchases of Company common stock by the rabbi trust of the DDCP are considered repurchases of common stock by the Company since the rabbi trust is an asset of the Company. Actual purchases of Company common stock via the DDCP are made through open market purchases pursuant to the terms of the DDCP, which since the amendment of the DDCP in August 2003 includes a predetermined formula and schedule for the purchase of such stock in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. Pursuant to the terms of the DDCP, generally purchases are actually made or deemed to be made in the open market on the 15^th of the month (or the next trading day), beginning March 15^th, following the day on which deferred amounts are contributed to the DDCP. Listed in the table below are the purchases made by the DDCP for each quarter during the calendar year 2003:

	Total Shares Purchased	Average Price Per Share		Shares Purchased As Part of a Publicly-Announced Program	Maximum Shares Still Available for Repurchase
January 1 - March 31, 2003	9,100	$	28.86	N/A	N/A
April 1 - June 30, 2003	12,359		30.05	N/A	N/A
July 1 - September 30, 2003	—		—	N/A	N/A
October 1 - December 31, 2003	3,943		35.44	N/A	N/A

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ITEM 6. SELECTED FINANCIAL DATA

        The following table sets forth our statistical information for each of the years in the five-year period ended December 31, 2003. This data should be read in conjunction with our audited consolidated financial statements as of December 31, 2003 and 2002 and for each of the years in the three-year period ended December 31, 2003 and related Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

			At or for the Years Ended December 31,
			2003			2002			2001			2000			1999
			(In thousands, except per share data and percentages)
Results of Operations(1):
	Interest income		$	112,881		$	83,903		$	43,114		$	28,831		$	23,405
	Interest expense			12,647			14,156			11,279			7,932			5,688
NET INTEREST INCOME				100,234			69,747			31,835			20,899			17,717
	Provision for loan losses			300			—			639			520			518
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES				99,934			69,747			31,196			20,379			17,199
	Noninterest income			19,456			12,684			5,205			2,462			2,304
	Noninterest expense			65,639			54,302			25,915			18,134			12,073
EARNINGS BEFORE INCOME TAXES				53,751			28,129			10,486			4,707			7,430
	Income taxes			21,696			11,217			4,376			2,803			3,166
NET EARNINGS			$	32,055		$	16,912		$	6,110		$	1,904		$	4,264
Share Data:
	Earnings per common share:
		Basic	$	2.08		$	1.64		$	1.30		$	0.49		$	1.10
		Diluted		2.02			1.58			1.23			0.47			1.05
	Dividends declared per share			0.68			0.54			0.36			0.36			0.30
	Book value per share(2)		$	21.24		$	20.68		$	10.48		$	6.99		$	6.67
	Shares outstanding at the end of the year(2)			15,893			15,297			5,277			3,971			3,878
	Average shares outstanding for basic EPS			15,382			10,302			4,696			3,908			3,863
	Average diluted shares outstanding for diluted EPS			15,868			10,692			4,958			4,090			4,077
Ending Balance Sheet Data:
		Assets	$	2,422,327		$	2,117,102		$	770,506		$	358,349		$	304,362
		Time deposits in financial institutions		311			1,041			190			495			7,502
		Securities		432,318			325,858			128,593			46,313			50,363
		Loans, net of deferred fees		1,595,837			1,424,396			501,740			250,552			206,102
		Allowance for loan losses		25,752			24,294			11,209			3,930			4,025
		Intangibles		221,956			188,050			9,793			—			—
		Deposits		1,949,669			1,738,621			677,167			316,938			274,232
		Borrowings		53,700			1,223			1,102			1,689			1,657
		Subordinated debentures		59,798			39,178			28,868			8,248			—
		Common shareholders' equity		337,563			316,292			55,297			27,772			25,855
Selected Financial Ratios:
	Dividend payout ratio			33.4	%		34.2	%		29.3	%		76.6	%		28.6	%
	Shareholders' equity to assets at period end			13.94			14.94			7.18			7.75			8.49
	Return on average assets			1.41			1.14			0.92			0.56			1.44
	Return on average equity			9.84			9.66			16.33			7.01			17.46
	Average equity/average assets			14.29			11.78			5.61			7.99			8.27
	Net interest margin			5.24			5.41			5.32			6.81			6.60

(1)

Operating results of acquired companies are included from the respective acquisition dates. See Note 2 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

(2)

Includes 460,000 shares of restricted and performance stock outstanding at December 31, 2003.

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ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section should be read in conjunction with the disclosure regarding "Forward-Looking Statements" set forth in "Item 1. Business—Forward-Looking Statements", as well as the discussion set forth in "Business—Certain Business Risks" and "Item 8. Financial Statements and Supplementary Data."

Overview

        We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as the holding company for our subsidiary banks, First National Bank and Pacific Western National Bank, which we refer to as the Banks. Through the holding company structure, First Community attempts to create operating efficiencies for the Banks by consolidating core administrative, operational and financial functions that serve both of the Banks. The Banks are charged reasonable fees by the holding company for the services performed on their behalf, pursuant to an expense allocation agreement, which the Company believes are substantially lower than the Banks would incur absent the holding company structure. See "Item 1. Business—General" above.

        The Banks are full-service community banks offering a broad range of banking products and services including: accepting time and demand deposits, originating commercial loans, including asset-based lending and factoring, real estate and construction loans, Small Business Administration guaranteed loans, or SBA loans, consumer loans, mortgage loans, international loans for trade finance and other business-oriented products. At December 31, 2003, our gross loans totaled $1,600.6 million of which approximately 30% consisted of commercial loans, 67% consisted of commercial real estate loans, including construction loans, and 3% consisted of consumer and other loans. Accordingly, the portfolio's value and credit quality is affected in large part by real estate trends in Southern California. These percentages include some foreign loans, primarily to individuals or entities with business in Mexico representing 5% of total loans. Special services and requests beyond the lending limits of the Banks can be arranged through correspondent banks.

        The Banks compete actively for deposits, and we tend to solicit noninterest-bearing deposits. In managing the top line of our business, we focus on loan growth and loan yield, deposit cost, and net interest margin, as net interest income accounts for 84% of our net revenues (net interest income plus noninterest income).

        On March 1, 2004, we acquired First Community Financial Corporation, or FC Financial, and established FC Financial as a wholly-owned operating subsidiary of First National. On December 1, 2003, we announced the acquisition of Harbor National Bank, or Harbor National, and our intention to merge Harbor National into Pacific Western. The Harbor National acquisition is currently expected to close in the second quarter of 2004. Discussions about the Company and the Banks as of and for the year ended December 31, 2003 do not include FC Financial or Harbor National.

Key Performance Indicators

        Among other factors, our operating results depend generally on the following:

The Level of Our Net Interest Income

        Net interest income is the excess of interest earned on our interest-earning assets over the interest paid on our interest-bearing liabilities. Our primary interest-earning assets are loans and investment securities. Our primary interest-bearing liabilities are deposits, borrowings, and subordinated debentures. We attempt to increase our net interest income by maintaining a high level of noninterest-bearing deposits. At December 31, 2003, approximately 42% of our deposits were noninterest-bearing. We further reduce interest expense by limiting our borrowings, and funding our loans through deposits.

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Although we have borrowing capacity under various credit lines, we have traditionally borrowed funds only for short term liquidity needs such as managing deposit flows and interim acquisition financing. Our general policy is to price our deposits in the bottom half or third-quartile of our competitive peer group, resulting in deposit products that bear interest rates at somewhat lower yields. While our deposit balances will fluctuate depending on deposit holders' perceptions of alternative yields available in the market, we attempt to minimize these variances by attracting a high percentage of noninterest-bearing deposits, which have no expectation of yield.

Loan Growth

        We generally seek new lending opportunities in the $500,000 to $5 million range, try to limit loan maturities for commercial loans to one year, for construction loans up to 18 months, and for commercial real estate loans up to ten years, and to price lending products so as to preserve our interest spread and net interest margin. We sometimes encounter strong competition in pursuing lending opportunities such that potential borrowers obtain loans elsewhere at lower rates than those we offer.

The Magnitude of Credit Losses

        We maintain an allowance for loan losses. Loss provisions are charged to operations as and when needed, actual loan losses are charged to the allowance, and recoveries on loans previously charged off are credited to the allowance. We stress credit quality in originating and monitoring the loans we make and measure our success by the level of our nonperforming assets and the corresponding level of our allowance. See "—Financial Condition—Nonperforming Assets" below. Through focusing on credit quality, the loan portfolio of the Company is generally better than the quality of the loan portfolios we have acquired. Following acquisitions, we generally work to remove problem loans from the portfolio or allow lower credit quality loans to mature, and seek to replace such loans with obligations from borrowers with higher quality credit. Changes in economic conditions, however, such as increases in the general level of interest rates, could negatively impact our customers and lead to increased provision for loan losses.

The Level of Our Noninterest Expense

        Our noninterest expense includes fixed and controllable overhead, the major components of which are compensation, occupancy, data processing and communications. We measure success in controlling such costs through monitoring of the efficiency ratio. We calculate the efficiency ratio by dividing noninterest expense by the sum of net interest income and noninterest income. The consolidated efficiency ratios have been as follows:

Quarterly Period in 2003	Ratio
First	56.8%
Second	52.0%
Third	56.8%
Fourth	53.9%

        Additionally, our operating results have been influenced significantly by acquisitions. The nine acquisitions we completed since January 1, 2001, added approximately $2.1 billion in assets. Our assets at December 31, 2003 total approximately $2.4 billion. Our noninterest expenses have increased for all periods presented because of our acquisitions. However, our expense control programs and merger integration routines have enabled us to reduce our efficiency ratios as shown above and to reduce noninterest expense as a percent of average assets to 2.88% in 2003 from 3.65% in 2002 and from 3.88% in 2001.

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Critical Accounting Policies

        The following discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, and the notes thereto, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various other factors and circumstances. We believe that our estimates and assumptions are reasonable; however, actual results may differ significantly from these estimates and assumptions which could have a material impact on the carrying value of assets and liabilities at the balance sheet dates and on our results of operations for the reporting periods.

        Our significant accounting policies and practices are described in Note 1 to the Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data." The accounting policies that involve significant estimates and assumptions by management, which have a material impact on the carrying value of certain assets and liabilities, are considered critical accounting policies. We have identified our policies for the allowance for loan losses, the fair value of financial instruments, and the carrying values of goodwill, other intangible assets and deferred tax assets as critical accounting policies.

Allowance for Loan Losses

        We maintain an allowance for loan losses at an amount which we believe is sufficient to provide adequate protection against losses inherent in the loan portfolio. Our periodic evaluation of the adequacy of the allowance is based on such factors as our past loan loss experience, known and inherent risks in the portfolio, adverse situations that have occurred but are not yet known that may affect the borrowers' ability to repay, the estimated value of underlying collateral, and economic conditions. As we utilize information currently available to evaluate the allowance for loan losses, the allowance for loan losses is subjective and may be adjusted in the future depending on changes in economic conditions or other factors.

        Although we have established an allowance for loan losses that we consider adequate, there can be no assurance that the established allowance for loan losses will be sufficient to offset losses on loans in the future. Please see "—Financial Condition—Allowance for Loan Losses" and Note 6 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" for more information.

Fair Value of Financial Instruments

        We estimate the fair value of our financial instruments for purposes of our accounting and preparation of our financial statements. We make assessments of fair value with respect to numerous items, including interest-bearing deposits in financial institutions, investment securities, loans, deposits, borrowings, subordinated debt and commitments to extend credit and standby letters of credit.

        Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a portion of our financial instruments, fair value estimates are based on what management believes to be conservative judgments regarding expected future cash flows, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Since the fair values have been estimated as of December 31, 2003, the amounts that will actually be realized or paid at settlement or maturity of the

29

instruments could be significantly different. Please see Note 11 of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" for more information regarding our financial instruments and the estimation of fair value.

Goodwill and Other Intangible Assets

        As a result of our acquisition activity, goodwill and core deposit intangible assets have been added to our balance sheet. While the core deposit intangibles arising from several acquisitions will be amortized over their estimated useful lives of 10 years, the amortization of goodwill was discontinued for periods after December 31, 2001 in accordance with generally accepted accounting principles. Instead, goodwill, a long-lived asset, is required to be evaluated for impairment at least annually. We selected June 30th as our interim impairment analysis date to annually evaluate the carrying value of goodwill for each year.

        The process of evaluating goodwill for impairment requires us to make several assumptions and estimates. We begin the valuation process by identifying the reporting units related to the goodwill. We identified one reporting unit, banking operations, in relation to our goodwill asset. If our impairment analysis indicates that the fair value of our reporting unit is less than its carrying amount, then we will have to writedown the amount of goodwill we carry on our balance sheet through a charge to our operations.

        Our impairment analysis estimated the value of our reporting unit using three methods: an income approach which is a discounted cash flow model, a market comparison approach and a market transaction approach. Each of these valuation methods include several assumptions, including forecasts of future earnings of our reporting unit, discount rates, market trends and market multiples of companies engaged in similar lines of business. If any of the assumptions used in the valuation of our goodwill change over time, the estimated value assigned to our goodwill could differ significantly, including a decrease in the value of goodwill which would result in a charge to our operations. The most significant element in the goodwill evaluation is the level of our earnings. If our earnings were to decline and cause our market capitalization to decline also, the market value of our Company may not support the carrying value of goodwill. The goodwill for our one reporting unit was last evaluated as of June 30, 2003 for impairment and no impairment was identified.

        The calculation and subsequent amortization of a core deposit intangible also requires several assumptions including, among other things, the estimated cost to service deposits acquired, discount rates, estimated attrition rates of the acquired deposits and its estimated useful life. If the value of the core deposit intangible is determined to be less than the carrying value in future periods, a writedown would be taken of the core deposit intangible through a charge to our earnings. The most significant element in the core deposit intangible evaluation is the attrition rate of the acquired deposits. If such attrition rate were to accelerate from that which we expected, the core deposit intangible may have to be reduced by a charge to operations. The attrition rate related to deposit flows is influenced by many factors, the most significant of which are alternative yields available to customers and the level of competition from other financial institutions and financial services companies.

Deferred Income Tax Assets

        Our deferred income tax assets arise from mainly two items: (1) differences in the dates that items of income and expense enter into our reported income and taxable income and (2) net operating loss carryforwards. Deferred tax assets are established for these items as they arise based on our judgments that they are realizable. From an accounting standpoint, we determine whether a deferred tax asset is realizable based on the historical level of our taxable income and estimates of our future taxable income. In most cases, the realization of the deferred tax asset is based on our future profitability. If we were to experience either reduced profitablility or operating losses in a future period, the realization

30

of our deferred tax assets would be questionable. In such an instance, we could be required to increase the valuation reserve on our deferred tax assets by charging operations.

Results of Operations

Earnings Performance

        We analyze our performance based on net income determined in accordance with accounting principles generally accepted in the United States. The comparability of financial information is affected by our acquisitions. Operating results include the operations of acquired entities from the dates of acquisition. Pacific Western National Bank ($282 million in assets) was acquired January 2002, W.H.E.C., Inc. ($166 million in assets) was acquired in March 2002, Upland Bank and Marathon Bancorp ($249 million in combined assets) were acquired in August 2002, First National Bank ($804 million in assets) was acquired in September 2002, and Bank of Coronado ($88 million in assets) and Verdugo Banking Company ($212 million in assets) were acquired in January 2003 and August 2003, respectively. The following table presents net income and summarizes per share data and key financial ratios:

	For the Years Ended December 31,
	2003			2002			2001
	(Dollars in thousands, except share data)
Net income	$	32,055		$	16,912		$	6,110
Profitability measures:
Basic net income per share	$	2.08		$	1.64		$	1.30
Diluted net income per share	$	2.02		$	1.58		$	1.23
Return on average assets		1.41	%		1.14	%		0.92	%
Return on average equity		9.84	%		9.66	%		16.33	%
Dividend payout ratio		33.4	%		34.2	%		29.3	%

        The 90% increase in net income during 2003 as compared to 2002 was due mainly to our 2002 and 2003 acquisition activity which resulted in a 45% increase in our revenues offset by a 21% increase in our noninterest expense. Our net interest income increased during 2003 largely due to a $623 million increase in our average interest-earning assets over the same period. The increase in loan and deposit balances as a result of our acquisition activity contributed to the 50% increase in income generated from service charges and fees on deposit accounts and commissions and fee income on deposit and loan accounts. Net gains on asset sales were $510,000 higher in 2003 compared to 2002. Other income included legal settlements totaling $825,000. The increases in noninterest expenses were also a result of our acquisitions as well as the need to support customer service and other growth.

        The increase in net income for 2002 compared to 2001 was primarily due to acquisition activity and organic loan growth (organic growth is defined as growth excluding loans acquired in our acquisitions).

Net Interest Income

        Net interest income, which is one of our principal sources of income, represents the difference between interest earned on assets and interest paid on liabilities. Net interest margin is net interest income expressed as a percentage of average interest-earning assets. Net interest income is affected by changes in both interest rates and the volume of average interest-earning assets and interest-bearing liabilities. The following table presents, for the periods indicated, the distribution of average assets, liabilities and shareholders' equity, as well as interest income and yields earned on average interest-earning assets and interest expense on average interest-bearing liabilities.

31

Analysis of Average Rates and Balances

	For the Years Ended December 31,
	2003					2002					2001
	Average Balance		Interest Income/ Expense		Yields and Rates	Average Balance		Interest Income/ Expense		Yields and Rates	Average Balance		Interest Income/ Expense		Yields and Rates
	(Dollars in thousands)
ASSETS
Loans, net of fees and costs(1)(2)	$	1,493,211	$	101,879	6.82%	$	1,023,699	$	74,617	7.29%	$	395,337	$	33,052	8.36%
Investment securities(2)		349,837		10,272	2.94%		202,290		8,300	4.10%		107,277		6,335	5.91%
Federal funds sold		68,742		718	1.04%		61,439		931	1.52%		95,260		3,713	3.90%
Other earning assets		1,168		12	1.03%		2,435		55	2.26%		286		14	4.90%
Total interest-earning assets		1,912,958		112,881	5.90%		1,289,863		83,903	6.50%		598,160		43,114	7.21%
Noninterest-earning assets		366,785					196,437					68,729
Total assets	$	2,279,743				$	1,486,300				$	666,889
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest checking		166,316		206	0.12%		109,231		282	0.26%		57,325		485	0.85%
Money market		584,840		3,607	0.62%		389,626		4,586	1.18%		175,147		4,386	2.50%
Savings		78,053		348	0.45%		51,708		319	0.62%		30,158		431	1.43%
Time certificates of deposit		309,165		5,418	1.75%		229,992		6,276	2.73%		98,787		4,558	4.61%
Total deposits		1,138,374		9,579	0.84%		780,557		11,463	1.47%		361,417		9,860	2.73%
Other interest-bearing liabilities		51,967		3,068	5.90%		39,487		2,693	6.82%		17,586		1,419	8.07%
Total interest-bearing liabilities		1,190,341		12,647	1.06%		820,044		14,156	1.73%		379,003		11,279	2.98%
Non interest-bearing liabilities
Demand deposits		733,536					466,689					239,394
Other liabilities		30,145					24,430					11,066
Total liabilities		1,954,022					1,311,163					629,463
Shareholders' equity		325,721					175,137					37,426
Total liabilities and shareholders' equity	$	2,279,743				$	1,486,300				$	666,889
Net interest income			$	100,234				$	69,747				$	31,835
Net interest spread					4.84%					4.77%					4.23%
Net interest margin					5.24%					5.41%					5.32%

(1)

Includes nonaccrual loans and loan fees.

(2)

Yields on loans and securities have not been adjusted to a tax-equivalent basis because the impact is not material.

        Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a "volume change," as well as changes in the yields earned on interest-earning assets and rates paid on deposits and other borrowed funds, referred to as a "rate change." The change in interest income/expense attributable to volume reflects the change in volume multiplied by the prior year's rate and the change in interest income/expense attributable to rate reflects the change in rates multiplied by the prior year's volume. The changes in interest income and expense which are not attributable specifically to either volume or rate are allocated ratably between the two categories. The following table presents, for the years indicated, changes in interest income and expense and the amount of change attributable to changes in volume and rates.

32

Analysis of Volume and Interest Rates

		2003 Compared to 2002									2002 Compared to 2001
					Increase (Decrease) Due to									Increase (Decrease) Due to
		Total Increase (Decrease)									Total Increase (Decrease)
					Volume			Rate						Volume			Rate
		(Dollars in thousands)
Loans, net of fees and costs		$	27,262		$	32,302		$	(5,040	)	$	41,565		$	46,303		$	(4,738	)
Investment securities			1,972			4,815			(2,843	)		1,965			4,337			(2,372	)
Federal funds sold			(213	)		101			(314	)		(2,782	)		(1,022	)		(1,760	)
Other earning assets			(43	)		(21	)		(22	)		41			52			(11	)
	Total interest income		28,978			37,197			(8,219	)		40,789			49,670			(8,881	)
Interest checking			(76	)		109			(185	)		(203	)		266			(469	)
Money market			(979	)		1,737			(2,716	)		200			3,384			(3,184	)
Savings			29			133			(104	)		(112	)		210			(322	)
Time certificates of deposit			(858	)		1,781			(2,639	)		1,718			4,162			(2,444	)
Other interest-bearing liabilities			375			771			(396	)		1,274			1,524			(250	)
Total interest expense			(1,509	)		4,531			(6,040	)		2,877			9,546			(6,669	)
Net interest income		$	30,487		$	32,666		$	(2,179	)	$	37,912		$	40,124		$	(2,212	)

2003 compared to 2002

        The increase in net interest income for 2003 compared to 2002 resulted largely from our acquisition activity, notwithstanding a decline in interest rates. As a result of our efforts to maintain and attract a significant amount of noninterest-bearing demand deposits, which averaged $733.5 million during 2003 or 39% of total average deposits, our overall cost of deposits for 2003 was 0.51%. This cost declined from the 0.92% experienced during 2002 largely because of the low interest rate environment of 2003 and the increase in our noninterest-bearing deposits as a percentage of total deposits year-over-year.

        The increase in interest income in 2003 over 2002 was due largely to an increase in assets from acquisitions, in addition to $50 million in organic loan growth during the fourth quarter of 2003. The increase in interest income was offset by a 60 basis point decline in yield on interest-earning assets which resulted primarily from loan repayment activity which, when coupled with the interest rate environment, caused the average loan yield to decline to 6.82% for 2003 compared to 7.29% for 2002. An increase in loan balances is crucial to increasing interest income and maintaining the net interest margin, since loan yields are usually higher than yields on investment securities. If the low interest rate environment continues, interest income and net interest margin could be adversely affected as existing loans mature and reprice at lower rates.

        During 2003, our interest expense decreased compared with 2002 largely as a result of the decline in interest rates generally during 2003. This year-over-year decline in interest expense occurred because the cost of interest-bearing liabilities declined 67 basis points in 2003 to 1.06%, despite a 45% increase in our average interest-bearing liabilities. This decline in the cost of interest-bearing liabilities is due primarily to two factors. First, we actively managed our net interest margin in the declining interest rate environment by lowering rates paid on interest-bearing deposits. The average cost of interest-bearing deposits declined 63 basis points to 0.84% for 2003 compared to 1.47% for 2002. Second, we actively sought to maintain a high percentage of noninterest-bearing deposits. Average demand deposits as a percentage of total deposits was 39% for 2003 compared to 37% for 2002. This reduction in cost was offset partially by the addition of higher cost interest-bearing liabilities such as the subordinated debentures. We increased our subordinated debentures $20.6 million through two offerings of trust preferred securities in the third quarter of 2003 with interest rates that float at 3-month LIBOR plus a margin. Interest expense related to our subordinated debentures totaled $2.9 million for 2003 and

33

$2.5 million for 2002. For 2004, in a continued low interest rate environment, we expect that our current deposit and pricing structure would tend to compress our net interest margin as we have limited ability to reprice our deposits downward.

2002 compared to 2001

        The increase in net interest income in 2002 over 2001 was due primarily to a 116% increase in average interest-earning assets, resulting from our acquisition activity, notwithstanding a decline in market interest rates. Our net interest margin increased to 5.41% for 2002 from 5.32% for 2001, due primarily to the change in our earning asset mix, offset partially by a decline in interest rates.

        Although interest income increased in 2002, the average asset yield declined. The decrease in yield was attributed to a general decline in market interest rates in 2002 as compared to 2001.

        Interest expense increased in 2002 largely due to our acquisition activity. The cost of interest-bearing liabilities decreased as a result of deposits generally repricing in the lower interest rate environment offset partially by the addition of higher cost interest-bearing liabilities such as the subordinated debt. Maintaining our portfolio of noninterest-bearing deposits, which averaged 37% of average total deposits during 2002, also contributed to a decrease in the overall cost of average deposits to 0.92% for 2002.

Provision for Loan Losses

        The amount of the provision for loan losses in each year is a charge against earnings in that year. The amount of provision is based upon management's evaluation of the loan portfolio, past loan loss experience, general economic conditions and other pertinent factors.

        We had a provision for loan losses of $300,000 during 2003 and none for 2002. During 2002, no provision was considered necessary based on the credit quality indicators in the loan portfolio and the application of our allowance for loan losses methodology. The allowance for loan losses was $25.8 million at December 31, 2003 and represented 1.61% of loans, net of deferred fees and costs, and 347.5% of nonaccrual loans as of that date. At December 31, 2002, the allowance for loan losses totaled $24.3 million, or 1.71% of loans, net of deferred fees and costs, and 237.8% of nonaccrual loans. The higher ratio at the end of 2002 in the allowance for loan losses as a percentage of total loans was deemed appropriate as we continued to work through the five loan portfolios acquired during 2002. Net loans charged off in 2003 decreased by $121,000 to $1.5 million compared to $1.6 million in net loans charged off for the year ended December 31, 2002. See "—Critical Accounting Policies," "—Financial Condition—Allowance for Loan Losses," and Note 6 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data.".

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Noninterest Income

        The following table sets forth the details of noninterest income for the years indicated. The columns entitled "Increase (Decrease)" set forth the year-over-year changes between 2003 and 2002 and between 2002 and 2001.

		For the Years Ended December 31,
		2003		Increase (Decrease)			2002			Increase (Decrease)			2001
				(Dollars in thousands)
Noninterest income:
	Service charges on deposit accounts	$	8,994	$	2,914		$	6,080		$	3,520		$	2,560
	Other commissions and fees		3,991		1,420			2,571			877			1,694
	Gain (loss) on sale of loans		913		1,228			(315	)		(759	)		444
	Gain on sale of securities		1,756		148			1,608			1,608			—
	Gain on sale of other real estate owned		340		68			272			272			—
	Gain on sale of merchant card processing		—		(934	)		934			934			—
	Increase in cash surrender value of life insurance		1,863		1,108			755			498			257
Other income			1,599		820			779			529			250
Total noninterest income		$	19,456	$	6,772		$	12,684		$	7,479		$	5,205

2003 compared to 2002

        Income generated from both service charges on deposit accounts as well as other commissions and fees on loans and deposit activity increased as our loans and deposit base increased through the completion of several acquisitions since the end of the second quarter of 2002. Other commissions and fees for 2003 and 2002 included income earned from foreign exchange fees. Foreign exchange fees increased $644,000 to $940,000 for 2003. We earned $235,000 in escrow fees in 2003 as a result of the Bank of Coronado acquisition; as of 2004, we no longer offer escrow services and therefore this income and any related expense will not reoccur. Also included in other commissions and fees income is net merchant discount fees, which decreased $303,000 to $118,000 for 2003 compared to 2002; this decline was expected as a result of the May 2002 sale of our merchant card processing operations.

        Gain on sale of loans relates primarily to selling the guaranteed portion of SBA loans in the amount of $7.6 million for 2003 and $4.3 million for 2002. The increase in SBA sales is attributed to selling the guaranteed portion of SBA loans from acquired banks' portfolios. Our program of selling the guaranteed portion of SBA loans is dependent on numerous factors; there is no assurance that we will experience similar volumes and gains in 2004. This category for 2002 includes a loss of $708,000 from the sale of substantially all of our indirect auto loan portfolio. We sold indirect auto loans with aggregate principal loan balances of $48.3 million. We retained less than 10% of the loans in the portfolio and engaged a third party to service those remaining loans.

        We recognized a gain on sale of securities in both 2003 and 2002 as we restructured our securities portfolio in two phases. The first phase was undertaken after the 2002 acquisitions had been consummated and the portfolios could be evaluated on a combined basis. In 2002, we sold smaller odd-lot and other securities to generally reposition the securities portfolio into shorter duration vehicles. The second phase was to shift out of fixed-rate mortgage-backed securities and into adjustable rate mortgage securities and, in general, complete the restructuring of the securities portfolios of our acquired banks. Due to the sustained low interest rate environment, the fixed-rate mortgage-backed securities were experiencing declining yields as a result of increased prepayments and the resulting accelerated amortization of book premiums. We sold several of these securities in order to shift the proceeds primarily to adjustable rate mortgage-backed securities. Although we had substantial securities sales and purchases in both 2002 and 2003, this is not a line of business for the Company and may not

35

occur in future periods. We use the available-for-sale securities portfolio primarily to augment earnings as we invest excess liquidity, to supply collateral to secure public funds on deposit and borrowing lines of credit, and to manage our balance sheet risk.

        Income from cash surrender value of life insurance policies increased in 2003, as a result of our additional investment in life insurance policies in late 2002 and April 2003. The income recognized on the appreciation of the cash surrender value of life insurance policies is noncash income and not subject to income tax. The after-tax yield for our life insurance policies was 7.33% during 2003 compared to 9.34% for 2002. We do not expect to make any further investments in such life insurance programs. The increase in other income in 2003 compared to 2002 is due primarily to $825,000 received in legal settlements during 2003. Other income also included fees related to two ongoing loan referral programs for SBA loans and single family mortgages totaling $353,000 for 2003 compared to $232,000 for 2002. The increase during 2003 for this type of income is attributed to the low interest rate environment and increased refinance activity for single family mortgages. If interest rates increase and repayment activity slows, this type of income will decline. Other income for 2002 included data processing fees of $116,000; this income related to third party data and item processing services provided by InfoServ, the in-house data processing division of First National Bank. InfoServ was sold September 30, 2002, and therefore, this type of income and any related expenses will not reoccur.

2002 compared to 2001

        The increase in noninterest income is due primarily to the increase in combined service charges on deposits and other commissions and fees for 2002 compared to 2001 as we increased our loans and deposit base primarily through the 2002 acquisitions. Other commissions and fees included foreign exchange income of $296,000 for 2002 generated subsequent to the First National Bank acquisition. In addition, other commissions and fees included net merchant discount fee income which increased $94,000 in 2002 compared to 2001 due to the timing of the First Charter acquisition and the sale of our merchant card processing operations in May 2002. Merchant card processing was a business focus for First Charter.

        The decline in gain on sale of loans in 2002 compared to 2001 is due to the sale of the majority of our indirect auto loans at a discount during 2002 as described above. The 2001 loan sale gains relate to selling the guaranteed portion of SBA loans. Income from cash surrender value of life insurance policies increased due to the timing of our initial $10.0 million investment in July 2001 and other increases in our investment in life insurance policies through our 2002 acquisitions. The after-tax yield on the life insurance policies was 9.25% for 2001. Other income for 2001 includes $166,000 in fees related to the referral program for single family mortgages.

36

Noninterest Expense

        The following table sets forth the details of noninterest expense for the years indicated. The columns entitled "Increase (Decrease)" set forth the year-over-year changes between 2003 and 2002 and between 2002 and 2001.

		For the Years Ended December 31,
		2003			Increase (Decrease)			2002			Increase (Decrease)			2001
					(Dollars in thousands)
Noninterest expense:
	Salaries and employee benefits	$	32,407		$	5,667		$	26,740		$	13,810		$	12,930
	Occupancy		9,411			2,970			6,441			3,148			3,293
	Furniture and equipment		3,257			293			2,964			1,726			1,238
	Data processing		4,864			1,157			3,707			1,967			1,740
	Other professional services		2,210			(652	)		2,862			1,540			1,322
	Business development		1,010			(34	)		1,044			379			665
	Communications		2,196			(1	)		2,197			1,266			931
	Insurance and assessments		1,507			354			1,153			327			826
	Cost of real estate owned		168			(346	)		514			467			47
	Goodwill amortization		—			—			—			(207	)		207
	Core deposit intangible amortization		2,529			1,260			1,269			1,269			—
	Other		6,080			669			5,411			2,695			2,716
Total noninterest expense		$	65,639		$	11,337		$	54,302		$	28,387		$	25,915
Efficiency ratio			54.8	%		(11.1	)%		65.9	%		(4.1	)%		70.0	%
Noninterest expense as a percentage of average assets			2.9	%		(0.8	)%		3.7	%		(0.2	)%		3.9	%

2003 compared to 2002

        The overall increase in noninterest expense is due mainly to the completion of five bank acquisitions since the end of the second quarter of 2002 which added $1.5 billion in assets. This increase was partially offset by planned staff reductions and other savings achieved as a result of scheduled branch consolidations and data systems conversions following these acquisitions. During 2003, five branches were closed with the deposits consolidated into our other branches. Additionally, three system conversions have occurred during 2003 whereby the acquired banks' systems were merged onto our loan, deposit and other system platforms. Other professional services decreased due mainly to a decline in legal expenses as we concluded the legal settlements recognized during 2003 and eliminated our other real estate owned assets. Communication expense remained flat as we consolidated vendors to use the buying power of our larger company in addition to a decline in telephone and armored car expense offset by increased postage costs. The increases in most other categories of expense were due to the combination of acquisitions and the need to support our customer service and growth. Other expense includes ongoing loan-related costs, customer-related expenses, correspondent bank charges, operating losses, shareholder expenses, director fees and other staff-related costs.

        Noninterest expense includes the following noncash items: (i) core deposit intangible, or CDI, amortization, (ii) stock-based compensation amortization and (iii) accrued retrofit costs for leased premises. CDI amortization expense relates to the periods since each acquisition and, therefore, the annual amortization charge naturally increased due to the volume of acquisitions. We estimate the amortization expense for CDI related to our completed acquisitions to be approximately $2.6 million for 2004. Stock compensation expense of $1.0 million related to 460,000 shares of restricted stock and performance stock granted to employees during the latter half of 2003 is included in salary and benefits expense for 2003. Stock compensation expense related to these grants is expected to be $2.6 million for

37

2004. Occupancy expense for 2003 includes $232,000 in noncash accrued retrofit expenses related to our contractual obligation to restore certain leased premises at the end of the leases.

        Current generally accepted accounting principles discontinued the amortization of goodwill after December 31, 2001 and instead goodwill is now evaluated for impairment at least annually. We performed the impairment tests of goodwill during 2003 and concluded there was no impairment. See "—Critical Accounting Policies" and Notes 1(m) and 3 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" for a discussion on certain estimates associated with evaluating goodwill for impairment and assumptions related to determining a core deposit intangible and the related amortization.

        While noninterest expense increased year-over-year, we improved our efficiency ratio to 54.8% for 2003 compared to 65.9% for 2002 despite a 17 basis point compression of our net interest margin. See "—Key Performance Indicators—The Level of Our Noninterest Expense." In addition, our ratio of noninterest expenses to average assets declined to 2.9% for 2003 compared to 3.7%, indicating a lower expense base relative to our average asset size.

2002 compared to 2001

        The increase in almost each noninterest expense category for 2002 compared to 2001 is due primarily to the completion of five acquisitions since the end of the third quarter of 2001. The most significant increase relates to salary and benefit costs due to the increased staff levels necessary to accommodate the increased level of business and to manage a larger company. The increase in other professional services is due primarily to the increased size of the Company as well as the aforementioned timing and nature of legal expenses experienced in 2002. The increase in "other" expenses is attributable to increases in expenses associated with the growth in loans and deposits such as loan expense and customer service expenses, including courier costs and customer analysis expense.

        Noninterest expense includes noncash CDI amortization expense of $1.3 million for 2002 and none for 2001 based on the 2002 and 2001 acquisition activity. Noninterest expense during 2001 includes noncash goodwill amortization; as stated above we discontinued the amortization of goodwill after December 31, 2001 and performed the initial impairment test of goodwill during 2002. We concluded there was no impairment of this intangible asset.

        The ratio of noninterest expense to average assets was 3.7% for 2002 compared to 3.9% for 2001 and our operating efficiency ratio declined to 65.9% for 2002 from 70.0% for 2001. We completed five bank system conversions and two application conversions during 2002 to reflect our current structure with two banking subsidiaries. These conversions created operating efficiencies to minimize the increase in expense categories, such as data processing and salaries expense, the benefits of which are more evident in the 2003 ratios.

Income Taxes

        Effective income tax rates were 40.4%, 39.9%, and 41.7% for the years ended December 31, 2003, 2002 and 2001, respectively. The difference in the effective tax rates between the years relates mainly to the amount of tax exempt income recorded in each of the years and, for 2001, the effect of nondeductible goodwill amortization expense. For further information on income taxes, see Note 13 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

38

Financial Condition

Loans

        The following table presents the balance of each major category of loans at December 31:

		2003					2002					2001					2000					1999
		Amount			% of Loans		Amount			% of Loans		Amount			% of Loans		Amount			% of Loans		Amount			% of Loans
										(Dollars in thousands)
Loan Category:
Domestic:
	Commercial	$	426,796		26	%	$	382,584		27	%	$	245,748		49	%	$	118,827		47	%	$	94,657		46	%
	Real estate—construction		347,321		22			354,296		25			84,241		17			47,989		19			38,464		19
	Real estate—mortgage		712,390		45			578,556		40			160,521		32			79,458		32			67,235		32
	Consumer		31,383		2			35,393		3			11,580		2			4,911		2			6,293		3
Foreign:
	Commercial		67,821		4			59,995		4			—		—			—		—			—		—
	Other		14,895		1			18,504		1			—		—			—		—			—		—
Total gross loans			1,600,606		100	%		1,429,328		100	%		502,090		100	%		251,185		100	%		206,649		100	%
Less allowance for loan losses			(25,752	)				(24,294	)				(11,209	)				(3,930	)				(4,025	)
Less net deferred loan fees			(4,769	)				(4,932	)				(350	)				(633	)				(547	)
Total net loans		$	1,570,085				$	1,400,102				$	490,531				$	246,622				$	202,077

2003 compared to 2002

        In 2003 we acquired $211.4 million in total net loans. During 2003, we also continued to improve credit quality by removing lower quality loans from portfolios acquired during the 2002 and 2003 acquisitions. During the fourth quarter of 2003 we had $50 million in organic net loan growth. Although we expect organic loan growth to continue, substantial organic growth is highly dependent on market conditions and accordingly fourth quarter 2003 performance cannot be considered a trend at this point in time. While the majority of our loan portfolio is concentrated in commercial and real estate loans, we acquired foreign loans through the First National Bank acquisition and continue to originate foreign commercial and foreign real estate loans as part of our ongoing services. Our foreign loans are primarily to individuals and entities located in Mexico. All of our foreign loans are denominated in U.S. dollars and the majority are collateralized by assets located in the United States or guaranteed or insured by businesses located in the United States. Our foreign loan commitments totaled $5.3 million at December 31, 2003. On March 1, 2004, we completed the acquisition of FC Financial and FC Financial became a wholly-owned subsidiary of First National Bank. Through FC Financial, the Company expects to increase its asset-based lending and factoring during 2004.

2002 compared to 2001

        The 2002 acquisitions represent $848.4 million of the increase in gross loans, net of deferred fees and the remaining increase, $74.2 million, is attributed to organic growth. The 2002 internal growth rate represents a 14.8% increase in loans, net of deferred loan fees and costs compared to the end of 2001. Loans have increased consistently over the past five years. In 2001, net loans increased $243.9 million, or 99%, compared with 2000.

39

Loan Interest Rate Sensitivity

        The following table presents our interest rate sensitivity analysis at the date indicated with respect to certain individual categories of loans and provides separate analyses with respect to fixed rate loans and floating rate loans:

Certain Loans Repricing or Maturing
As of December 31, 2003

		Repricing or Maturing In
		1 year or less		Over 1 to 5 years		Over 5 years		Total
		(Dollars in thousands)
Loan Category:
Domestic:
	Commercial	$	401,352	$	16,825	$	8,619	$	426,796
	Real estate—construction		342,303		4,706		312		347,321
Foreign			72,312		3,871		6,533		82,716
Total		$	815,967	$	25,402	$	15,464	$	856,833

		Fixed Rate		Floating Rate		Total
		(Dollars in thousands)
Domestic:
	Commercial	$	33,786	$	393,010	$	426,796
	Real estate—construction		28,260		319,061		347,321
Foreign			17,228		65,488		82,716
Total		$	79,274	$	777,559	$	856,833

Nonperforming Assets

        The following table sets forth certain information with respect to our nonaccrual loans and accruing loans for which payments of principal and interest were contractually past due 90 days or more as well as other nonperforming assets:

Nonperforming Assets

	December 31,
	2003			2002			2001			2000			1999
				(Dollars in thousands)
Nonaccrual loans	$	7,411		$	10,216		$	4,672		$	2,271		$	1,845
Loans past due 90 days or more and still accruing		—			—			—			—			75
Nonperforming loans		7,411			10,216			4,672			2,271			1,920
Other real estate owned		—			3,117			3,075			1,031			1,315
Total nonperforming assets	$	7,411		$	13,333		$	7,747		$	3,302		$	3,235
Nonperforming loans to loans, net of deferred fees and costs		0.46	%		0.72	%		0.93	%		0.91	%		0.93	%
Nonperforming assets to loans and other real estate owned		0.46	%		0.93	%		1.53	%		1.31	%		1.56	%

        The percentage of nonaccrual loans to loans has declined or remained relatively flat over the past four years due mainly to the growth in the loan portfolio. As described above, the growth in our loan portfolio is substantially due to our acquisition activity.

        Loans are generally placed on nonaccrual status when the borrowers are past due 90 days and/or when payment in full of principal or interest is not expected. At the time a loan is placed on

40

nonaccrual status, any interest income previously accrued but not collected is reversed and charged against current period income. Income on nonaccrual loans is subsequently recognized only to the extent cash is received and the loan's principal balance is deemed collectible. Loans are restored to accrual status only when the loans become both well secured and are in the process of collection.

        A loan is considered impaired when it is probable that a creditor will be unable to collect all amounts due according to the original contractual terms of the loan agreement. If the measurement of impairment for the loan is less than the recorded investment in the loan, a valuation allowance is established with a corresponding charge to operations to increase the allowance for loan losses.

        On December 31, 2003, we had $7.4 million of loans on nonaccrual status, including $259,000 of foreign loans, compared to $10.2 million and $4.7 million on December 31, 2002 and 2001. As of December 31, 2003, 2002 and 2001, there were no loans past due over 90 days and still accruing interest. Additional interest income of $385,000, $640,000, and $596,000 would have been recorded for the years ended December 31, 2003, 2002 and 2001 if nonaccrual loans had been performing in accordance with their original terms. Interest income of $214,000, $273,000 and $110,000 was recorded on loans subsequently transferred to a nonaccrual status for the years ended December 31, 2003, 2002 and 2001. The interest income related to foreign loans that would have been recorded in 2003 if the foreign loans had been current in accordance with their original terms was $12,000. The amount of interest income on these foreign loans that was included in net income for 2003 was $15,000.

Allowance for Loan Losses

        The following table presents the changes in our allowance for loan losses as of the dates indicated:

Analysis of Allowance for Loan Losses

		For the Years Ended December 31,
		2003			2002			2001			2000			1999
					(Dollars in thousands)
Balance at beginning of year		$	24,294		$	11,209		$	3,930		$	4,025		$	3,785
Loans charged off:
Domestic:
	Commercial		(3,331	)		(2,764	)		(6,839	)		(591	)		(480	)
	Real estate—construction		—			—			—			—			—
	Real estate—mortgage		—			(537	)		(140	)		—			(60	)
	Consumer		(1,145	)		(1,488	)		(490	)		(18	)		(52	)
	Small Business Administration, unguaranteed portion held for investment		—			—			(52	)		(99	)		—
Foreign			—			—			—			—			—
	Total loans charged off		(4,476	)		(4,789	)		(7,521	)		(708	)		(592	)
Recoveries on loans charged off:
Domestic:
	Commercial		2,453			2,036			1,168			88			277
	Real estate—construction		—			—			—			—			—
	Real estate—mortgage		84			737			6			—			—
	Consumer		468			418			29			5			37
	Small Business Administration, unguaranteed portion held for investment		—			—			—			—			—
Foreign			—			6			—			—			—
	Total recoveries on loans charged off		3,005			3,197			1,203			93			314
Net loans charged off			(1,471	)		(1,592	)		(6,318	)		(615	)		(278	)
Provision for loan losses			300			—			639			520			518
Additions due to acquisitions			2,629			14,677			12,958			—			—
Balance at end of year		$	25,752		$	24,294		$	11,209		$	3,930		$	4,025
Ratios:
Allowance for loan losses as a percentage of total loans at year end			1.61	%		1.71	%		2.23	%		1.56	%		1.95	%
Net loans charged off as a percentage of average loans			0.10	%		0.16	%		1.60	%		0.26	%		0.15	%

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        The increase in the allowance for loan losses in 2003 compared to 2002 is due primarily to the 2003 acquisitions, offset partially by net charge-offs of $1.5 million. The decrease in the percentage of allowance for loan losses to loans, net of deferred fees and costs, is due to a reduction in problem loans that we acquired through our acquisitions. We have successfully settled, worked-out of or otherwise resolved a substantial amount of those problem loans. Following the acquisitions made during 2003 and 2002, our loan portfolio increased substantially, as well as the dollar amount of problem loans, however these problem loans represent a smaller percentage of our overall loan portfolio. Based on our experience, we believe that the allowance for loan losses of $25.8 million at December 31, 2003 is adequate to cover known and inherent risks in the loan portfolio. See "—Critical Accounting Policies" and Note 6 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data.".

        The following table allocates the allowance for loan losses based on our judgment of inherent losses in the respective categories. While we have allocated the allowance to various portfolio segments for purposes of this table, the allowance for loan losses is general and is available for the portfolio in its entirety:

Allocation of Allowance for Loan Losses

	Commercial			Real Estate			Consumer			Small Business Administration			Foreign			Total
	(Dollars in thousands)
At December 31,
2003
Allowance for loan losses	$	12,225		$	11,657		$	574		$	797		$	499		$	25,752
% of loans to total loans		24	%		67	%		2	%		2	%		5	%		100	%
2002
Allowance for loan losses	$	11,225		$	10,788		$	652		$	1,131		$	498		$	24,294
% of loans to total loans		24	%		65	%		3	%		3	%		5	%		100	%
2001
Allowance for loan losses	$	7,182		$	3,604		$	170		$	253			—		$	11,209
% of loans to total loans		45	%		49	%		2	%		4	%		—			100	%
2000
Allowance for loan losses	$	1,563		$	2,006		$	84		$	277			—		$	3,930
% of loans to total loans		40	%		51	%		2	%		7	%		—			100	%
1999
Allowance for loan losses	$	1,622		$	1,430		$	356		$	617			—		$	4,025
% of loans to total loans		42	%		51	%		3	%		4	%		—			100	%

Investment Portfolio

        Our investment activities are designed to assist in maximizing income consistent with quality and liquidity requirements, to supply collateral to secure public funds on deposit and borrowing lines of credit, and to provide a means for balancing market and credit risks through changing economic times.

        Our portfolio consists of U.S. Treasury and U.S. Government agency obligations, mortgage-backed securities, obligations of states and political subdivisions, and Federal Reserve Bank and Federal Home Loan Bank stock. Our investment portfolio contains no investments in any one issuer in excess of 10% of our total shareholders' equity. We excluded securities of the U.S. Treasury and U.S. government agencies from this calculation. We do, however, own FNMA and FHLMC guaranteed mortgage-backed securities that have carrying values of $230.9 million and $74.0 million at December 31, 2003.

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        The following table presents the composition of our investment portfolio at the dates indicated:

Investment Portfolio

		At December 31,
		2003		2002		2001
		(Dollars in thousands)
U.S. Treasury and government agency securities		$	52,670	$	190,499	$	11,920
States and political subdivisions			13,541		18,289		2,896
Mortgage-backed and other securities			351,445		110,079		111,640
Subtotal			417,656		318,867		126,456
Federal Reserve and Federal Home Loan Bank stock			14,662		6,991		2,137
	Total investments	$	432,318	$	325,858	$	128,593

        The following table presents a summary of yields and maturities:

Analysis of Investment Yields and Maturities
December 31, 2003

		One Year or Less				One Year Through Five Years				Five Years Through Ten Years				Over Ten Years				Total
		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
		(Dollars in thousands)
U.S. Treasury and government agency securities		$	1,041	5.69	%	$	51,544	2.91	%	$	85	2.90	%	$	—	—		$	52,670	2.96	%
States and political subdivisions			647	8.30	%		5,397	4.70	%		6,979	5.29	%		518	6.31	%		13,541	5.24	%
Mortgage-backed and other securities			1,027	7.09	%		37,635	3.83	%		24,505	4.68	%		288,278	3.65	%		351,445	3.74	%
	Total investments(1)	$	2,715	6.84	%	$	94,576	3.37	%	$	31,569	4.81	%	$	288,796	3.65	%	$	417,656	3.69	%

(1)

Yields on securities have not been adjusted to a fully tax-equivalent basis because the impact is not material.

Deposits

        The following table presents a summary of our average deposits as of the dates indicated and average rates paid:

Analysis of Average Deposits

	For the Years Ended December 31,
	2003 Amount		Rate		2002 Amount		Rate		2001 Amount		Rate
	(Dollars in thousands)
Non-interest bearing	$	733,536	—		$	466,689	—		$	239,394	—
Interest checking		166,316	0.12	%		109,231	0.26	%		57,325	0.85	%
Money market		584,840	0.62	%		389,626	1.18	%		175,147	2.50	%
Savings		78,053	0.45	%		51,708	0.62	%		30,158	1.43	%
Time		309,165	1.75	%		229,992	2.73	%		98,787	4.61	%
Total deposits	$	1,871,910	0.51	%	$	1,247,246	0.92	%	$	600,811	1.64	%

        The increase in average deposits in 2003 is due primarily to having the full year impact of the deposits acquired in the three acquisitions completed during the third quarter of 2002. Deposit growth in 2002 is attributed mainly to the five acquisitions between the end the third quarter of 2001 and September 30, 2002.

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        Deposits by foreign customers, primarily located in Mexico and Canada, totaled $108.6 million, or approximately 6% of total deposits, as of December 31, 2003.

        For time deposits of $100,000 or more, the following table presents a summary of maturities for the time periods indicated:

Maturity of Time Deposits of $100,000 or More

	3 Months or Less		Over 3 Months Through 6 Months		Over 6 Months Through 12 Months		Over 12 Months		Total
	(Dollars in thousands)
December 31, 2003	$	94,723	$	45,656	$	29,313	$	15,165	$	184,857

Borrowings

        The holding company and the Banks have various lines of credit available. These include the ability to borrow funds from time to time on a short term or overnight basis from the Federal Home Loan Bank or other financial institutions. See "—Liquidity" and Note 9 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" for information on our borrowings.

Capital Resources

        Bank regulatory agencies measure capital adequacy through standardized risk-based capital guidelines which compare different levels of capital (as defined by such guidelines) to risk-weighted assets and off-balance sheet obligations. Banks are required to maintain a minimum total risk-based capital ratio of 8% of which at least 4.0% must be Tier 1 capital. Banking organizations considered to be "well capitalized" must maintain a minimum leverage ratio of 5% and a minimum risk-based capital ratio of 10% of which at least 6.0% must be Tier 1 capital.

        The following table presents regulatory capital requirements and our regulatory capital ratios:

	Regulatory Requirements				Actual
	Adequately Capitalized		Well Capitalized		The Company
As of December 31, 2003:
Tier 1 leverage capital ratio	4.00	%	5.00	%	8.23	%
Tier 1 risk-based capital ratio	4.00	%	6.00	%	9.83	%
Total risk-based capital	8.00	%	10.00	%	11.08	%

        As of December 31, 2003, we exceeded each of the capital requirements of the Federal Reserve Board and were deemed to be "well capitalized." In addition, each of our banks exceeded the capital requirements of its primary federal banking regulator and was deemed to be "well capitalized." For further information on regulatory capital, see Note 19 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

        The Company previously issued $58 million of trust preferred securities. As further explained in Note 1(a) of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data", we deconsolidated our trust preferred entities at December 31, 2003. As a result, our 2003 balance sheet includes $59.8 million of subordinated debt, which was previously included on our balance sheet as $58 million in trust preferred securities after a consolidation elimination of $1.8 million.

        Trust preferred securities are considered regulatory capital for purposes of determining the Company's Tier I capital ratios. The Company believes that the Board of Governors of the Federal

44

Reserve System, which is the holding company's banking regulator, may rule on continued inclusion of trust preferred securities in regulatory capital. At this time, it is not possible to estimate the effect, if any, on the Company's Tier I regulatory capital as a result of any future action taken by the Board of Governors of the Federal Reserve System. See Note 19 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

Liquidity

        The goals of our liquidity management are to ensure the ability of the Company to meet their financial commitments when contractually due and to respond to other demands for funds such as the ability to meet the cash flow requirements of customers who may be either depositors wanting to withdraw funds or borrowers who may need assurance that sufficient funds will be available to meet their credit needs. We have an Asset/Liability Management Committee, or ALM Committee, responsible for managing balance sheet and off-balance sheet commitments to meet the needs of customers while achieving our financial objectives. Our ALM Committee meets regularly to review funding capacities, current and forecasted loan demand and investment opportunities.

        Historically, the overall liquidity source of the Banks is their core deposit base. The Banks have not relied on large denomination time deposits. To meet short-term liquidity needs, the Banks maintain what we believe are adequate balances in Federal funds sold, interest-bearing deposits in other financial institutions and investment securities having maturities of five years or less. On a consolidated basis, liquid assets (cash, Federal funds sold, interest-bearing deposits in financial institutions and investment securities available-for-sale) as a percent of total deposits were 26.8% as of December 31, 2003.

        As an additional source of liquidity, the Banks maintain unsecured lines of credit of $100 million with correspondent banks for purchase of overnight funds. These lines are subject to availability of funds. The Banks have also established secured borrowing relationships with the Federal Home Loan Bank of San Francisco which would allow the Banks to borrow approximately $322 million in the aggregate. Historically, the Banks have rarely used these borrowing capabilities.

        The primary sources of liquidity for the Company, on a stand-alone basis, include the dividends from the Banks, and our ability to raise capital, issue subordinated debt and secure outside borrowings. See Note 9 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data." The ability of the Company to obtain funds for the payment of dividends to our shareholders and for other cash requirements is largely dependent upon the Banks' earnings. The availability of dividends from the Banks is limited by various statutes and regulations of state and federal law. Dividends paid by national banks such as First National and Pacific Western are regulated by the Office of the Comptroller of the Currency under its general supervisory authority as it relates to a bank's capital requirements. A national bank may declare a dividend without the approval of the Office of the Comptroller of the Currency as long as the total dividends declared in a calendar year do not exceed the total of net profits for that year combined with the retained profits for the preceding two years. See "Item 5. Market For Registrant's Common Equity and Related Stockholders Matters—Dividends." During 2003, First Community received dividends of $24.0 million from the Banks. The amount of dividends available for payment by the Banks to the holding company at December 31, 2003, was $29.5 million. See Note 18 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

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Contractual Obligations

        The known contractual obligations of the Company at December 31, 2003 are as follows:

		At December 31, 2003
		Within One Year		One to Three Years		Three to Five Years		After Five Years		Total
Short-term debt obligations		$	53,700	$	—	$	—	$	—	$	53,700
Long-term debt obligations			—		—		—		59,798		59,798
Operating lease obligations			6,527		11,873		9,231		8,481		36,112
Other contractual obligations			3,331		6,663		1,666		—		11,660
	Total	$	63,558	$	18,536	$	10,897	$	68,279	$	161,270

        Debt obligations and operating lease obligations are discussed in Notes 9 and 12 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data." The other contractual obligations relate to our minimum liability associated with our data and item processing contract with a third-party provider.

        Not included in the above table is our merger-related liability which was $5.9 million at December 31, 2003. See Note 2 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

        We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity, and continued deposit gathering activities. We have in place various borrowing mechanisms for shorter-term liquidity needs.

Off-Balance Sheet Arrangements

        Our obligations also include off-balance sheet arrangements consisting of loan-related commitments, of which only a portion are expected to be funded. At December 31, 2003, our loan-related commitments, including standby letters of credit and financial guarantees, totaled $601.4 million. The commitments which result in a funded loan increase our profitability through net interest income. Therefore, during the year, we manage our overall liquidity taking into consideration funded and unfunded commitments as a percentage of our liquidity sources. Our liquidity sources, as described in "—Liquidity," have been and are expected to be sufficient to meet the cash requirements of our lending activities. For further information on loan commitments see Note 10 of Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data."

Recent Accounting Pronouncements

        See Note 1 of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" for information on recent accounting pronouncements and their impact, if any, on our consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Our market risk arises primarily from credit risk and interest rate risk inherent in our lending and deposit gathering activities. To manage our credit risk, we rely on adherence to our strong underwriting standards and loan policies as well as our allowance for loan losses methodology. To manage our exposure to changes in interest rates, we perform asset and liability management activities which are governed by guidelines pre-established by our ALM Committee and approved by our Board of Directors. Our ALM Committee monitors our compliance with our asset/liability policies. These

46

policies focus on providing sufficient levels of net interest income while considering acceptable levels of interest rate exposure as well as liquidity and capital constraints.

        Market risk sensitive instruments are generally defined as derivatives and other financial instruments, which include investment securities, loans, deposits and borrowings. At December 31, 2003 and 2002, we had not used any derivatives to alter our interest rate risk profile. However, both the repricing characteristics of our fixed rate loans and floating rate loans which have reached their floors, as well as our significant percentage of noninterest-bearing deposits compared to interest-earning assets may influence our interest rate risk profile. Our financial instruments include loans receivable, Federal funds sold, interest-bearing deposits in financial institutions, Federal Reserve Bank and Federal Home Loan Bank stock, investment securities, deposits, borrowings and subordinated debentures. At December 31, 2003 and 2002, we had interest-sensitive assets of $2,031.1 million and $1,778.0 million compared to interest-sensitive liabilities of $1,248.8 at year end 2003 and $1,121.6 million at year end 2002.

        We measure our interest rate risk position on a quarterly basis using three methods: (i) net interest income simulation analysis; (ii) market value of equity modeling; and (iii) traditional gap analysis. The results of these analyses are reviewed by the ALM Committee quarterly. If hypothetical changes to interest rates cause changes to our simulated net present value of market equity and/or net interest income outside our pre-established limits, we may adjust our asset and liability mix in an effort to bring our interest rate risk exposure within our established limits. We evaluated the results of our net interest income simulation and market value of equity model prepared as of December 31, 2003. These models indicate that our interest rate sensitivity is within limits set by our Board of Directors and that our balance sheet is asset-sensitive. An asset-sensitive balance sheet suggests that in a rising interest rate environment, our net interest margin would increase and during a falling or sustained low interest rate environment, our net interest margin would decrease. The models assume, however, a static balance sheet, i.e., no change in the mix or size of the loan, investment and deposit portfolios.

        Net interest income simulation.    We used a simulation model to measure the estimated changes in net interest income that would result over the next 12 months from immediate and sustained changes in interest rates as of December 31, 2003. This model is an interest rate risk management tool and the results are not necessarily an indication of our future net interest income. This model has inherent limitations and these results are based on a given set of rate changes and assumptions at one point in time. We have assumed no growth in either our interest-sensitive assets or liabilities over the next 12 months; therefore, the results reflect an interest rate shock to a static balance sheet.

        This analysis calculates the difference between net interest income forecasted using an increasing and declining interest rate scenario and net interest income forecasted using a base market interest rate derived from the current treasury yield curve. In order to arrive at the base case, we extend our balance sheet at December 31, 2003 one year and reprice any assets and liabilities that would contractually reprice or mature during that period using the products' pricing as of December 31, 2003. Based on such repricings, we calculated an estimated net interest income and net interest margin. The effects of certain balance sheet attributes, such as fixed-rate loans, floating rate loans that have reached their floors and the volume of noninterest-bearing deposits as a percentage of earning assets, impact our assumptions and consequently the results of our interest rate risk management model. Changes that vary significantly from our assumptions include loan and deposit growth or contraction, changes in the mix of our earning assets or funding sources, and future asset/liability management decisions all of which may have significant effects on our net interest income.

        The net interest income simulation model includes various assumptions regarding the repricing relationship for each of our assets and liabilities. Many of our assets are floating rate loans, which are assumed to reprice immediately and to the same extent as the change in market rates according to their contracted index. Some loans and investment vehicles include the opportunity of prepayment

47

(imbedded options) and the simulation model uses national indexes to estimate these prepayments and reinvest these proceeds at current simulated yields. Our non-term deposit products reprice more slowly, usually changing less than the change in market rates and at our discretion.

        Further, the simulation analysis assumes no growth in the balance sheet and that its structure will remain similar to the structure at year-end. It does not account for all factors that impact this analysis, including changes by management to mitigate the impact of interest rate changes or the impact a change in interest rates may have on our credit risk profile, loan prepayment estimates and spread relationships which can change regularly. Interest rate changes create changes in actual loan prepayment rates which will differ from the market estimates we used in this analysis. Management reviews the model assumptions for reasonableness on a quarterly basis.

        The following table presents forecasted net interest income and net interest margin using a base market rate and the estimated change to the base scenario given an immediate and sustained upward and downward movement in interest rates of 100, 200 and 300 basis points.

Sensitivity of Net Interest Income
(Dollars in thousands)

Interest Rate Scenario	Estimated Net Interest Income		Percentage Change from Base		Estimated Net Interest Margin		Estimated Net Interest Margin change from Base
Up 300 basis points	$	116,134	12.6	%	5.54	%	0.61	%
Up 200 basis points	$	110,412	7.0	%	5.27	%	0.34	%
Up 100 basis points	$	105,123	1.9	%	5.02	%	0.09	%
BASE	$	103,159			4.93	%
Down 100 basis points	$	99,452	(3.6	)%	4.75	%	(0.18	)%
Down 200 basis points	$	92,572	(10.3	)%	4.43	%	(0.50	)%
Down 300 basis points	$	86,255	(16.4	)%	4.13	%	(0.80	)%

        Our simulation results as of December 31, 2003 indicate our interest rate risk position was asset sensitive as the simulated impact of an immediate upward movement in interest rates results in increases in net interest income over the subsequent 12 month period while an immediate downward movement in interest rates would result in a decrease in net interest income over the next 12 months. We tend to discount the simulated results of a downward movement in interest rates as not realistic given current market interest rates. However, our net interest margin may compress in future periods if our financial instruments continue to reprice into this sustained low interest rate environment.

        As of December 31, 2002, our net interest income simulation indicated that an immediate and sustained 200 basis point shift in market interest rates upward and downward would cause our net interest income to decrease by 1.6% and 11.8%, respectively. These results are not necessarily based on the same set of assumptions used to perform our 2003 simulation.

        Market value of equity.    We measure the impact of market interest rate changes on the net present value of estimated cash flows from our assets, liabilities and off-balance sheet items, defined as the market value of equity, using a simulation model. This simulation model assesses the changes in the market value of our interest-sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease in market interest rates of 100, 200 and 300 basis points. This analysis assigns significant value to our noninterest-bearing deposit balances. The projections are by their nature forward-looking and therefore inherently uncertain, and include various assumptions regarding cash flows and interest rates. This model is an interest rate risk management tool and the results are not necessarily an indication of our actual future results. Actual results may vary significantly from the results suggested by the market value of equity table. Loan prepayments and

48

deposit attrition, changes in the mix of our earning assets or funding sources, and future asset/liability management decisions, among others, may vary significantly from our assumptions.

        The base case is determined by applying various current market discount rates to the estimated cash flows from the different types of assets, liabilities and off-balance sheet items existing at December 31, 2003. The following table shows the projected change in the market value of equity for the set of rate shocks presented as of December 31, 2003.

Estimated Market Value of Equity
(Dollars in thousands)

Interest Rate Scenario	Estimated Market Value		Percentage Change from Base		Percentage of Total Assets		Ratio of Estimated Market Value to Book Value
Up 300 basis points	$	548,231	9.1	%	22.6	%	162.4	%
Up 200 basis points	$	538,728	7.2	%	22.2	%	159.6	%
Up 100 basis points	$	526,416	4.8	%	21.7	%	155.9	%
BASE	$	502,504			20.7	%	148.9	%
Down 100 basis points	$	474,325	(5.6	)%	18.4	%	140.5	%
Down 200 basis points	$	445,429	(11.4	)%	18.4	%	132.0	%
Down 300 basis points	$	411,799	(18.1	)%	17.0	%	122.0	%

        The results of our market value of equity model indicate that an immediate and sustained increase in interest rates would increase the market value of equity from the base case while a decrease in interest rates would decrease the market value of equity. At December 31, 2003, the market value of equity changes from the base case were within the current Board-approved guidelines.

        As of December 31, 2002, our market value of equity model indicated that an immediate and sustained 200 basis point shift upward in interest rates would cause our market value of equity to decrease by 1.1% while a 200 basis point shift downward in interest rates would cause our market value of equity to increase by 0.5%. These results are not necessarily based on the same set of assumptions used to perform our 2003 simulation.

        Gap analysis.    As part of the interest rate management process we use a gap analysis. A gap analysis provides information about the volume and repricing characteristics and relationship between the amounts of interest-sensitive assets and interest-bearing liabilities at a particular point in time. An effective interest rate strategy attempts to match the volume of interest sensitive assets and interest bearing liabilities repricing over different time intervals. The main focus of this interest rate management tool is the gap sensitivity identified as the cumulative one year gap.

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Interest Rate Sensitivity
December 31, 2003
Amounts Maturing or Repricing In

		3 Months Or Less			Over 3 Months to 12 Months			Over 1 Year to 5 Years			Over 5 Years			NonSensitive(1)			Total
		(Dollars in thousands)
ASSETS
Cash and due from banks		$	21		$	290		$	—		$	—		$	101,968		$	102,279
Federal funds sold			2,600			—			—			—			—			2,600
Investment securities			15,167			46,688			330,488			39,975			—			432,318
Loans and leases			1,086,093			103,988			371,278			34,478			—			1,595,837
Other assets			—			—			—			—			289,293			289,293
	Total assets	$	1,103,881		$	150,966		$	701,766		$	74,453		$	391,261		$	2,422,327
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest bearing demand deposits		$	—		$	—		$	—		$	—		$	814,365		$	814,365
Interest-bearing demand, money market and savings			839,727			—			—			—			—			839,727
Time certificates of deposit			149,264			127,384			13,398			5,531			—			295,577
Short term debt			53,700			—			—			—			—			53,700
Long term debt			51,550			—			—			8,248			—			59,798
Other liabilities			—			—			—			—			21,597			21,597
Shareholders' equity			—			—			—			—			337,563			337,563
	Total liabilities and shareholders' equity	$	1,094,241		$	127,384		$	13,398		$	13,779		$	1,173,525		$	2,422,327
Period gap		$	9,640		$	23,582		$	688,368		$	60,674		$	(782,264	)
Cumulative interest earning assets			1,103,881			1,254,847			1,956,613		$	2,031,066
Cumulative interest earning liabilities			1,094,241			1,221,625			1,235,023			1,248,802
Cumulative Gap			9,640			33,222			721,590			782,264
Cumulative interest earning assets to cumulative interest bearing liabilities			100.9	%		102.7	%		158.4	%		162.6	%
Cumulative gap as a percent of:
Total assets			0.4	%		1.4	%		29.8	%		32.3	%
Interest earning assets			0.5	%		1.6	%		35.5	%		38.5	%

(1)

Assets or liabilities which are not interest rate-sensitive

        Note: All amounts are reported at their contractual maturity or repricing periods. This analysis makes certain assumptions as to interest rate sensitivity of savings and NOW accounts which have no stated maturity and have had very little price fluctuation in the past three years. Money market accounts are repriced at management's discretion and generally are more rate sensitive.

50

        The preceding table indicates that we had a positive one year cumulative gap of $33.2 million, or 1.4% total assets, at December 31, 2003. This gap position suggests that we are asset-sensitive and if rates were to increase, our net interest margin would most likely increase. Conversely, if rates were to fall during this period, interest income would decline by a greater amount than interest expense and net income would decrease. The ratio of interest-earning assets to interest-bearing liabilities maturing or repricing within one year at December 31, 2003 is 102.7%. This one year gap position indicates that interest income is likely to be affected to a greater extent than interest expense for any changes in interest rates within one year from December 31, 2003.

        The gap table has inherent limitations and actual results may vary significantly from the results suggested by the gap table. The gap table is unable to incorporate certain balance sheet characteristics or factors. The gap table assumes a static balance sheet, like the net interest income simulation, and, accordingly, looks at the repricing of existing assets and liabilities without consideration of new loans and deposits that reflect a more current interest rate environment. Unlike the net interest income simulation, however, the interest rate risk profile of certain deposit products and floating rate loans that have reached their floors cannot be captured effectively in a gap table. Although the table shows the amount of certain assets and liabilities scheduled to reprice in a given time frame, it does not reflect when or to what extent such repricings actually may occur. For example, interest-bearing demand, money market and savings deposits are shown to reprice in the first 3 months, but we may choose to reprice these deposits more slowly and incorporate only a portion of the movement in market rates based on market conditions at that time. Alternatively, a loan which has reached its floor may not reprice even though market rates change causing such loan to act like a fixed rate loan regardless of its scheduled repricing date. For example, a loan already at its floor would not reprice if the adjusted rate was less than its floor. The gap table as presented is not able to factor in the flexibility we believe we have in repricing either deposits or the floors on our loans.

        We believe the estimated effect of a change in interest rates is better reflected in our net interest income and market value of equity simulations which incorporate many of the factors mentioned.

51

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Contents
Independent Auditors' Report	53
Consolidated Balance Sheets as of December 31, 2003 and 2002	54
Consolidated Statements of Earnings for the years ended December 31, 2003, 2002 and 2001	55
Consolidated Statements of Shareholders' Equity and Comprehensive Income for the years ended December 31, 2003, 2002 and 2001	56
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001	57
Notes to Consolidated Financial Statements	58

52

Independent Auditors' Report

The Board of Directors
First Community Bancorp:

        We have audited the accompanying consolidated balance sheets of First Community Bancorp and subsidiaries (the Company) as of December 31, 2003 and 2002 and the related consolidated statements of earnings, shareholders' equity and comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2003. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Community Bancorp and subsidiaries as of December 31, 2003 and 2002 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America.

        As discussed in Note 1 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting (SFAS) No. 123, Accounting for Stock-Based Compensation, in 2003 and SFAS No. 142, Goodwill and Other Intangible Assets, in 2002.

/s/ KPMG LLP

San Diego, California
March 1, 2004

53

FIRST COMMUNITY BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets at December 31, 2003 and 2002

			2003			2002
			(Dollars in thousands)
Assets
Cash and due from banks (note 17)			$	101,968		$	97,666
Federal funds sold				2,600			26,700
		Total cash and cash equivalents		104,568			124,366
Interest-bearing deposits in financial institutions				311			1,041
Investments:
	Federal Reserve Bank and Federal Home Loan Bank stock, at cost			14,662			6,991
	Securities available-for-sale, at fair value (notes 4 and 9)			417,656			312,183
	Securities held-to-maturity, at amortized cost (note 5)			—			6,684
		Total investments		432,318			325,858
Loans, net of fees (notes 6 and 10)				1,595,837			1,424,396
	Less allowance for loan losses (note 6)			(25,752	)		(24,294	)
		Net loans		1,570,085			1,400,102
Premises and equipment, net (note 7)				14,004			13,397
Other real estate owned, net (note 6)				—			3,117
Deferred income taxes (note 13)				15,577			15,673
Accrued interest				7,432			6,961
Goodwill (note 3)				199,919			168,573
Core deposit intangible (note 3)				22,037			19,477
Cash surrender value of life insurance				50,287			27,923
Other assets				5,789			10,614
		Total assets	$	2,422,327		$	2,117,102
Liabilities and Shareholders' Equity
Deposits (note 8):
	Noninterest-bearing		$	814,365		$	657,443
	Interest-bearing			1,135,304			1,081,178
		Total deposits		1,949,669			1,738,621
Interest payable and other liabilities				21,597			21,788
Borrowings (note 9)				53,700			1,223
Subordinated debentures (note 9)				59,798			39,178
		Total liabilities		2,084,764			1,800,810
Shareholders' equity (notes 16, 18, 19 and 20):
	Preferred stock, no par value. Authorized 5,000,000 shares; none issued and outstanding			—			—
	Common stock, no par value. Authorized 30,000,000 shares; issued and outstanding, 15,893,141 (includes 460,000 shares of restricted stock) and 15,297,037 shares as of December 31, 2003 and 2002, respectively			308,336			291,803
	Unearned equity compensation			(13,811	)		—
	Retained earnings			44,706			23,039
	Accumulated other comprehensive income (loss)—net unrealized gains (loss) on securities available-for-sale, net (notes 4 and 15)			(1,668	)		1,450
		Total shareholders' equity		337,563			316,292
Commitments and contingencies (notes 10 and 12)
		Total liabilities and shareholders' equity	$	2,422,327		$	2,117,102

See accompanying Notes to Consolidated Financial Statements.

54

FIRST COMMUNITY BANCORP AND SUBSIDIARIES

Consolidated Statements of Earnings for the Years ended December 31, 2003, 2002 and 2001

		2003		2002			2001
		(Dollars in thousands, except per share data)
Interest income:
Interest and fees on loans		$	101,879	$	74,617		$	33,052
Interest on federal funds sold			718		931			3,713
Interest on time deposits in financial institutions			12		55			14
Interest on investment securities			10,272		8,300			6,335
	Total interest income		112,881		83,903			43,114
Interest expense:
Deposits (note 8)			9,579		11,463			9,860
Short-term borrowings (note 9)			156		171			429
Subordinated debt (note 9)			2,912		2,522			990
	Total interest expense		12,647		14,156			11,279
	Net interest income before provision for loan losses		100,234		69,747			31,835
Provision for loan losses (note 6)			300		—			639
	Net interest income after provision for loan losses		99,934		69,747			31,196
Noninterest income:
Service charges on deposit accounts			8,994		6,080			2,560
Other commissions and fees			3,991		2,571			1,694
Gain (loss) on sale of loans, net			913		(315	)		444
Gain on sale of securities, net (notes 4 and 5)			1,756		1,608			—
Gain on sale of other real estate owned			340		272			—
Gain on sale of merchant card processing			—		934			—
Increase in cash surrender value of life insurance			1,863		755			257
Other			1,599		779			250
	Total noninterest income		19,456		12,684			5,205
Noninterest expense:
Salaries and employee benefits			32,407		26,740			12,930
Occupancy			9,411		6,441			3,293
Furniture and equipment			3,257		2,964			1,238
Data processing			4,864		3,707			1,740
Other professional services			2,210		2,862			1,322
Business development			1,010		1,044			665
Communications			2,196		2,197			931
Insurance and assessments			1,507		1,153			826
Cost of OREO			168		514			47
Goodwill amortization (note 3)			—		—			207
CDI amortization (note 3)			2,529		1,269			—
Other			6,080		5,411			2,716
	Total noninterest expense		65,639		54,302			25,915
	Earnings before income taxes		53,751		28,129			10,486
Income taxes (note 13)			21,696		11,217			4,376
	Net earnings	$	32,055	$	16,912		$	6,110
Basic earnings per share (note 14)		$	2.08	$	1.64		$	1.30
Diluted earnings per share (note 14)		$	2.02	$	1.58		$	1.23

See accompanying Notes to Consolidated Financial Statements.

55

FIRST COMMUNITY BANCORP AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Comprehensive Income
for the Years ended December 31, 2003, 2002 and 2001

	Common Stock									Accumulated Other Comprehensive Income (loss)
				Unearned Equity Compensation			Retained Earnings									Comprehensive Income
	Shares	Amount											Total
				(Dollars in thousands)
Balance at December 31, 2000	3,971,421	$	20,402	$	—		$	7,432		$	(62	)	$	27,772		$	2,407
Net earnings	—		—		—			6,110			—			6,110		$	6,110
Exercise of stock options	139,583		1,035		—			—			—			1,035			—
Equity issuance—Professional acquisition	504,747		7,475		—			—			—			7,475			—
Equity issuance—First Charter acquisition	661,609		14,225		—			—			—			14,225			—
Cash dividends paid	—		—		—			(1,690	)		—			(1,690	)		—
Other comprehensive income, net unrealized gains on securities available-for-sale, net of tax effect of $267,000	—		—		—			—			370			370			370
Balance at December 31, 2001	5,277,360		43,137		—			11,852			308			55,297		$	6,480
Net earnings	—		—		—			16,912			—			16,912		$	16,912
Exercise of stock options and warrants	127,715		1,345		—			—			—			1,345			—
Rights offering	1,194,805		23,000		—			—			—			23,000			—
Convertible debt	23,989		557		—			—			—			557			—
Registered public offering	3,910,000		89,347		—			—			—			89,347			—
Equity issuance—W.H.E.C., Inc. acquisition	1,043,799		24,523		—			—			—			24,523			—
Equity issuance—Upland Bank acquisition	419,059		12,723		—			—			—			12,723			—
Equity issuance—Marathon Bancorp acquisition	537,770		16,063		—			—			—			16,063			—
Equity issuance—First National Bank acquisition	2,762,540		81,108		—			—			—			81,108			—
Cash dividends paid	—		—		—			(5,725	)		—			(5,725	)		—
Other comprehensive income, net unrealized gains on securities available-for-sale, net of tax effect of $827,000	—		—		—			—			1,142			1,142			1,142
Balance at December 31, 2002	15,297,037		291,803		—			23,039			1,450			316,292		$	18,054
Net earnings	—		—		—			32,055			—			32,055		$	32,055
Exercise of stock options	136,104		1,716		—			—			—			1,716			—
Restricted stock issued	460,000		14,817		(14,817	)		—			—			—			—
Earned stock award compensation	—		—		1,006			—			—			1,006			—
Cash dividends paid	—		—		—			(10,388	)		—			(10,388	)		—
Other comprehensive income- net unrealized losses on securities available-for-sale, net of tax benefit of $2.3 million	—		—		—			—			(3,118	)		(3,118	)		(3,118	)
Balance at December 31, 2003	15,893,141	$	308,336	$	(13,811	)	$	44,706		$	(1,668	)	$	337,563		$	28,937

See accompanying Notes to Consolidated Financial Statements.

56

FIRST COMMUNITY BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows for the Years ended December 31, 2003, 2002 and 2001

			2003			2002			2001
			(Dollars in thousands)
Cash flows from operating activities:
	Net earnings		$	32,055		$	16,912		$	6,110
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation and amortization		8,982			6,017			1,952
		Provision for loan losses		300			—			639
		Gain on sale of OREO		(340	)		(272	)		—
		(Gain) loss on sale of loans		(913	)		315			(444	)
		Gain on sale of securities		(1,756	)		(1,608	)		—
		Real estate valuation adjustments		153			330			—
		Gain on sale of premises and equipment		(9	)		(21	)		(29	)
		Amortization of unearned compensation related to restricted stock		1,006			—			—
		(Increase) decrease in other assets		(9,865	)		12,653			(10,216	)
		Decrease in accrued interest payable and other liabilities		(15,542	)		(46,016	)		(3,125	)
		Dividends on FHLB stock		(85	)		(83	)		(65	)
		Net cash provided by (used in) operating activities		13,986			(11,773	)		(5,178	)
Cash flows provided by (used in) investing activities:
	Net cash and cash equivalents acquired (paid) in the acquisition of:
		Bank of Coronado		372			—			—
		Verdugo Banking Company		(1,178	)		—			—
		Pacific Western Bank		—			1,401			—
		WHEC, Inc.		—			24,853			—
		Upland Bank		—			(2,970	)		—
		Marathon Bancorp		—			11,351			—
		First National Bank		—			48,900			—
		Professional Bancorp		—			—			84,016
		First Charter		—			—			32,316
	Net decrease (increase) in loans outstanding			32,868			(80,874	)		(92,997	)
	Proceeds from sale of loans			9,124			4,384			7,363
	Net decrease in interest-bearing deposits in financial institutions			830			529			3,746
	Securities held-to-maturity:
		Proceeds from sale		3,452			—			—
		Maturities		3,360			2,905			9,877
	Securities available-for-sale:
		Proceeds from sale		179,916			52,386			—
		Maturities		194,550			187,685			47,080
		Purchases		(484,603	)		(216,669	)		(52,002	)
	Net (purchases) sales of FRB and FHLB stock			(7,161	)		1,551			(111	)
	Proceeds from sale of other real estate owned			3,570			3,339			1,329
	Purchases of premises and equipment			(3,576	)		(3,413	)		(1,469	)
	Proceeds from sale of premises and equipment			58			893			378
	Net cash (used in) provided by investing activities			(68,418	)		36,251			39,526
Cash flows from financing activities:
	Net increase (decrease) in deposits:
		Noninterest-bearing		91,201			70,158			(8,102	)
		Interest-bearing		(120,992	)		(125,928	)		13,103
	Proceeds from subordinated debentures			20,620			10,310			20,620
	Proceeds from sale of common stock			—			112,347			—
	Proceeds from exercise of stock options			1,716			1,345			1,035
	Net increase (decrease)in short-term borrowings			52,477			(67,208	)		(7,266	)
	Convertible debt payment			—			(114	)		—
	Cash dividends paid			(10,388	)		(5,725	)		(1,690	)
	Net cash provided by (used in) financing activities			34,634			(4,815	)		17,700
	Net (decrease) increase in cash and cash equivalents			(19,798	)		19,663			52,048
Cash and cash equivalents at beginning of year				124,366			104,703			52,655
Cash and cash equivalents at end of year			$	104,568		$	124,366		$	104,703
Supplemental disclosure of cash flow information:
Cash paid during the year for:
	Interest		$	12,684		$	13,969		$	11,565
	Income taxes			13,226			5,970			2,250
Supplemental disclosure of noncash investing and financing activities:
	Transfer of loans to other real estate owned			—			1,443			2,084
	Transfer from loans to loans held-for-sale			8,481			3,996			6,919
	Conversion of convertible debt			—			557			17

See accompanying Notes to Consolidated Financial Statements.

57

FIRST COMMUNITY BANCORP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2003 and 2002

(1)    Nature of Operations and Summary of Significant Accounting Policies

        We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as a holding company for our banking subsidiaries. As of December 31, 2003, those subsidiaries were First National Bank, which we refer to as First National, and Pacific Western National Bank, or Pacific Western. We refer to Pacific Western and First National herein as the "Banks" and when we say "we", "our" or the "Company", we mean the Company on a consolidated basis with the Banks. When we refer to "First Community" or to the holding company, we are referring to the parent company on a standalone basis.

        We have completed twelve acquisitions since May 2000. This includes the merger whereby the former Rancho Santa Fe National Bank and First Community Bank of the Desert became wholly-owned subsidiaries of the Company in a pooling-of-interests transaction. Accordingly, all of our financial statements for the periods prior to these acquisitions have been restated as if they had occurred at the beginning of the earliest period presented. The following acquisitions have been accounted for using the purchase method of accounting and, accordingly, their operating results have been included in the consolidated financial statements from their respective dates of acquisition. We completed Professional Bancorp and First Charter Bank during 2001, Pacific Western National Bank, W.H.E.C., Inc., Upland Bank, Marathon Bancorp and First National Bank during 2002, and Bank of Coronado and Verdugo Banking Company during 2003. We acquired FC Financial on March 1, 2004 using the purchase method of accounting. Please see Notes 2 and 22 for more information about these acquisitions.

(a) Basis of Presentation

        The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America. All significant intercompany balances and transactions have been eliminated.

        The Company previously issued $58 million of trust preferred securities. Pursuant to FASB Interpretation No. 46R ("FIN 46R"), Consolidation of Variable Interest Entities, issued in December 2003, we deconsolidated our trust preferred entities at December 31, 2003 and restated the 2002 balance sheet to reflect such deconsolidation. As a result, our 2003 balance sheet includes $59.8 million of subordinated debt, which was previously included on our balance sheet as $58 million in trust preferred securities after a consolidation elimination of $1.8 million. The overall effect of the deconsolidation on our financial position and operating results was not material.

(b) Use of Estimates

        Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates. Material estimates subject to change in the near term include, among other items, the allowance for loan losses, the carrying values of goodwill, and the core deposit intangible, and the realization of deferred tax assets.

58

(c) Reclassifications

        Certain prior year amounts have been reclassified to conform to the current year's presentation.

(d) Investment Securities and Securities Available-for-Sale

        Management determines the classification of securities at the time of purchase. If management has the intent and the Company has the ability at the time of purchase to hold securities until maturity, they are classified as held-to-maturity. Investment securities held-to-maturity are stated at amortized cost. Securities to be held for indefinite periods of time, but not necessarily to be held-to-maturity or on a long-term basis, are classified as available-for-sale and carried at fair value with unrealized gains or losses reported as a separate component of shareholders' equity in accumulated other comprehensive income, net of applicable income taxes. The carrying values of all securities are adjusted for amortization of premiums and accretion of discounts over the shorter of the period to call or maturity of the related security using the interest method. Realized gains or losses on the sale of securities, if any, are determined using the amortized cost of the specific securities sold. If a decline in the fair value of a security below its amortized cost is judged by management to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in operations. Securities available-for-sale include securities that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates, prepayment risk and other related factors. Securities are individually evaluated for appropriate classification, when acquired; consequently, similar types of securities may be classified differently depending on factors existing at the time of purchase.

        Investments in Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) stock, which are carried at cost because they can only be redeemed at par, are required investments based on the Banks' capital stock or the amount of borrowing.

(e) Loans and Loan Fees

        Loans are stated at the principal amount outstanding. Interest income is recorded on the accrual basis in accordance with the terms of the respective loan. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. The accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to the collectibility in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan's principal balance is deemed collectible. Loans are restored to accrual status when the loans become both well-secured and are in the process of collection.

        Nonrefundable loan fees and related direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees is discontinued on nonaccrual loans.

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(f) Transfers and Servicing of Financial Assets and Extinguishments of Liabilities

        Gains or losses resulting from sales of loans are recognized at the date of settlement and are based on the difference between the cash received and the carrying value of the related loans less related transaction costs. A transfer of financial assets in which control is surrendered is accounted for as a sale to the extent that consideration other than beneficial interests in the transferred assets is received in the exchange. Liabilities and derivative financial instruments issued or obtained through the sale of financial assets are measured at fair value, if practicable. Assets or other retained interests received through the sale are measured by allocating the previous carrying value between the asset sold and the asset or retained interest received, if any, based on their relative fair values at the date of the sale.

(g) Comprehensive Income

        Comprehensive income consists of net earnings and net unrealized gains (losses) on securities available-for-sale, net and is presented in the consolidated statements of shareholders' equity and comprehensive income.

(h) Allowance for Loan Losses

        An allowance for loan losses is maintained at a level deemed appropriate by management to adequately provide for known and inherent risks in the loan portfolio and other extensions of credit, including off-balance sheet credit extensions. The allowance is based upon a continuing review of the portfolio, past loan loss experience, current economic conditions which may affect the borrowers' ability to pay, and the underlying collateral value of the loans. We also consider the credit risk related to off-balance sheet loan commitments and letters of credit and determine the amount of credit loss liability that should be recorded. The liability for off-balance sheet credit exposure associated with loan commitments is included in the allowance for loan losses. Loans which are deemed to be uncollectible are charged off and deducted from the allowance. The provision for loan losses and recoveries on loans previously charged off are added to the allowance.

        A loan is considered impaired when it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. We measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price or the fair value of the collateral if the loan is collateral-dependent, depending on the circumstances. If the measurement of impairment for the loan is less than the recorded investment in the loan, a valuation allowance is established with a corresponding charge to the provision for loan losses.

        Management believes that the allowance for loan losses is adequate. In making its evaluation of the adequacy of the allowance for loan losses, management considers the Company's historical loan loss experience, the volume and type of lending conducted by the Company, the amounts of classified and nonperforming assets, regulatory policies, general economic conditions, underlying collateral values, and other factors regarding the collectibility of loans in the Company's portfolio. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses. These agencies may require the Company to recognize additions to the

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allowance based on their judgments related to information available to them at the time of their examinations.

(i) Premises and Equipment

        Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is charged to noninterest expense using the straight-line method over the estimated useful lives of the assets which range from three to thirty years. Leasehold improvements are capitalized and amortized to noninterest expense on a straight-line basis over the terms of the leases or the estimated useful lives of the improvements, whichever is shorter.

(j) Other Real Estate Owned

        Other real estate owned is recorded at the fair value of the property at the time of acquisition. Fair value is based on current appraisals less estimated selling and holding costs. The excess of the recorded loan balance over the estimated fair value of the property at the time of acquisition is charged to the allowance for loan losses. Any subsequent write downs are charged to noninterest expense and recognized as a valuation allowance. Subsequent increases in the fair value of the asset less selling costs reduce the valuation allowance, not below zero, and are credited to income. Operating expenses of such properties and gains and losses on their disposition are included in noninterest income and expense.

(k) Cash and Cash Equivalents

        For purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash, due from banks and federal funds sold. Generally, federal funds are sold for one-day periods.

(l) Income Taxes

        Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date.

(m) Goodwill and Other Intangible Assets

        Goodwill represents the excess of cost over the fair value of the net assets of businesses acquired. We adopted the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, as of January 1, 2002, and ceased amortization of goodwill as of that date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually. Intangible assets with estimable useful lives are amortized over such useful lives to their estimated residual values, and reviewed annually for impairment.

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        In connection with SFAS No. 142's transitional goodwill impairment evaluation, we were required to perform an assessment of whether there was an indication that our goodwill was impaired as of the date of adoption and then again at an interim valuation date. To accomplish the impairment analyses, we were required to identify our reporting units and determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. We identified one reporting unit—banking operations. We initially determined the fair value of our reporting unit and compared it to the carrying amount of this reporting unit as of January 1, and June 30, 2002 and did not identify any impairment to our goodwill as of either of these dates. If the carrying amount of a reporting unit exceeded its fair value, we would have been required to perform a second step to the impairment test. We perform our annual impairment analyses of goodwill as of June 30th each year. We last performed our annual test as of June 30, 2003, and concluded that there was no impairment in our goodwill at that time.

        Prior to the adoption of SFAS No. 142, goodwill was amortized on a straight-line basis over the expected periods to be benefited, generally 15 years, and assessed for recoverability by determining whether the amortization of the goodwill balance over its remaining life could be recovered through undiscounted future operating cash flows of the acquired operation. The amount of goodwill impairment, if any, was measured based on projected discounted future operating cash flows using a discount rate reflecting our average cost of funds.

        Core deposit intangible assets, which we refer to as CDI, are recognized apart from goodwill at the time of acquisition based on market valuations prepared by independent third parties. In preparing such valuations, the third parties consider variables such as deposit servicing costs, attrition rates, and market discount rates. CDI are amortized to expense over their useful lives, which we have estimated to be 10 years. CDI are reviewed for impairment at least annually. If the recoverable amount of CDI is determined to be less than its carrying value, we would then measure the amount of impairment based on an estimate of the CDI's fair value at that time. If the fair value is below the carrying value, the CDI would be reduced to such fair value and a loss recognized by a charge to operations.

(n) Stock Incentive Plan

        The Company had a stock-based compensation plan as of December 31, 2003 which is described in Note 16. We adopted the fair value method of accounting for stock options effective January 1, 2003, using the prospective method of transition specified in SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure—and amendment of FASB Statement No. 123. The cost of all stock options granted on or after January 1, 2003 is based on their fair value and is included as a component of salaries and employee benefits costs over the vesting period for such options. For stock options granted prior to January 1, 2003, the Company continues to apply the intrinsic value-based method of accounting prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees. Accordingly, no compensation cost has been recognized for fixed stock option awards granted prior to January 1, 2003 with an exercise price equal to or greater than the fair market value of the underlying stock on the date of grant.

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        Had we determined compensation expense for our stock-based compensation plan consistent with SFAS No. 123, Accounting for Stock-Based Compensation, our net earnings and earnings per share would have been reduced to the pro forma amounts indicated in the table below.

	For the Years Ended December 31,
	2003			2002			2001
	(Dollars in thousands, except per share amounts)
Net earnings, as reported	$	32,055		$	16,912		$	6,110
Add: Stock-based compensation expense included in net income, net of related tax effects		583			—			—
Deduct: All stock-based compensation expense calculated using the fair value based method for all awards, net of related taxes		(1,194	)		(478	)		(409	)
Pro forma net earnings	$	31,444		$	16,434		$	5,701
Earnings per share:
Basic—as reported	$	2.08		$	1.64		$	1.30
Basic—pro forma	$	2.04		$	1.60		$	1.21
Diluted—as reported	$	2.02		$	1.58		$	1.23
Diluted—pro forma	$	1.98		$	1.54		$	1.15

(o) Business Segments

        We have determined that we have one reportable business segment, banking.

(p) Earnings Per Share

        Basic earnings per share is calculated by dividing net earnings by the weighted average number of common shares outstanding (excluding unvested restricted stock) during the year. Diluted earnings per share is calculated by adjusting net earnings and average outstanding shares, assuming conversion of all potentially dilutive common stock equivalents, which include stock options, warrants, restricted shares and convertible subordinated debentures, using the treasury stock method.

(q) Recently Issued Accounting Standards

        In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the assets. The Company also records a corresponding asset that is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation will be adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. We adopted SFAS No. 143 on January 1, 2003. The adoption of SFAS No. 143 did not have a material effect on our consolidated financial statements.

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        In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections. SFAS No. 145 amends existing guidance on reporting gains and losses on the extinguishment of debt to prohibit the classification of the gain or loss as extraordinary, as the use of such extinguishments have become part of the risk management strategy of many companies. SFAS No. 145 also amends SFAS No. 13 to require sale-leaseback accounting for certain lease modifications that have economic effects similar to sale-leaseback transactions. The provisions of the Statement related to the rescission of Statement No. 4 are applied in fiscal years beginning after May 15, 2002. Earlier application of these provisions is encouraged. The provisions of the Statement related to Statement No. 13 were effective for transactions occurring after May 15, 2002, with early application encouraged. The adoption of SFAS No. 145 did not have a material effect on our consolidated financial statements.

        In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity. The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. The adoption of SFAS No. 146 did not have a material effect on our consolidated financial statements.

        In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34. This Interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. The Interpretation also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken. The initial recognition and measurement provisions of the Interpretation are applicable to guarantees issued or modified after December 15, 2002; adoption did not have a material effect on our consolidated financial statements.

        In December 2003, the FASB modified and reissued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46R). The original Interpretation 46 issued in January 2003 was adopted by us in the first quarter of 2003 and had no effect on our financial position or operating results. FIN 46R requires the deconsolidation of trust preferred entities, and we adopted this pronouncement on December 31, 2003. As a result of adoption, we deconsolidated our trust preferred entities at December 31, 2003 and 2002. See Note 1(a) above for further information. Based on our current operations and structure, FIN 46R is not expected to have any further effect on our financial position and operating results.

        Statement of Position (SOP) 03-3, Accounting for Loans or Certain Debt Securities Acquired in a Transfer, was issued in December 2003, and will be effective for us prospectively on January 1, 2005. This SOP will affect loans purchased and loans acquired in business combinations. It will no longer be acceptable to carry forward the allowance for loan losses established by the acquired company. At the time of acquisition, the initial carrying value of the acquired loans is to be the present value of expected amounts of principal and interest to be received, i.e., fair value. This initial carrying amount would be net of an accretable yield and a nonaccretable difference. The accretable yield would not be

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displayed separately in the financial statements and is to be taken into interest income over the life of the loans by the interest method. The nonaccretable difference would function as an allowance for loan losses but would not be displayed as such on the balance sheet. Losses on acquired loans that arise subsequent to their acquisition date would be provided for through charges to current earnings. These accounting treatments may be applied to groups of loans acquired in the same fiscal quarter if such loans share common risk characteristics. Otherwise, these accounting treatments are to be applied to loans acquired on an individual basis. We expect that adoption of this accounting pronouncement will affect the comparability of financial statements as discounts, premiums, and acquired allowances for loan losses on loans acquired either through direct purchase or merger after December 31, 2004, will no longer be displayed separately.

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(2)    Acquisitions

        We completed the following acquisitions during the time period of January 1, 2001 to December 31, 2003, using the purchase method of accounting, and accordingly, their operating results have been included in the consolidated financial statements from their respective dates of acquisition:

								Pacific Western National Bank									Marathon Bancorp									Verdugo Banking Company
		Professional Bancorp			First Charter						WHEC			Upland Bank						First National Bank			Bank of Coronado
Acquisition Date Acquired
		January 2001			October 2001			January 2002			March 2002			August 2002			August 2002			September 2002			January 2003			August 2003
		(Dollars in thousands)
Assets Acquired:
	Cash & cash equivalents	$	92,871		$	32,316		$	38,026		$	24,853		$	3,812		$	18,056		$	123,409		$	11,974		$	33,075
	Interest-bearing deposits in other banks		325			3,061			—			450			594			—			336			100			—
	Investment securities		61,022			25,769			20,644			24,393			1,750			25,721			151,015			2,699			—
	Loans		98,713			61,841			193,042			92,526			101,956			61,611			384,627			63,891			147,471
	Premises and equipment		673			290			3,042			1,185			214			176			3,918			261			82
	Goodwill		4,358			7,370			19,275			13,803			10,039			11,100			106,431			7,250			22,080
	Core deposit intangible		—			—			3,646			4,182			994			2,243			9,681			714			4,376
	Other assets		7,754			3,943			3,922			4,320			4,006			7,141			24,185			1,601			4,467
			265,716			134,590			281,597			165,712			123,365			126,048			803,602			88,490			211,551
Liabilities Assumed:
	Non-interest bearing deposits		(134,792	)		(34,883	)		(42,662	)		(47,030	)		(28,377	)		(36,312	)		(157,288	)		(17,079	)		(48,642	)
	Interest bearing deposits		(109,691	)		(75,862	)		(196,204	)		(87,768	)		(65,598	)		(60,941	)		(395,044	)		(56,007	)		(119,111	)
	Accrued interest payable and other liabilities		(4,224	)		(9,620	)		(6,106	)		(6,391	)		(9,885	)		(6,027	)		(95,653	)		(3,802	)		(9,545	)
	Convertible debt		(679	)		—			—			—			—			—			—			—			—
Total liabilities assumed			(249,386	)		(120,365	)		(244,972	)		(141,189	)		(103,860	)		(103,280	)		(647,985	)		(76,888	)		(177,298	)
Total consideration paid		$	16,330		$	14,225		$	36,625		$	24,523		$	19,505		$	22,768		$	155,617		$	11,602		$	34,253
Total consideration paid:
Cash paid for common stock			8,855			—			36,625			—			6,782			6,705			74,509			11,602			34,253
Fair value of common stock issued for common stock			7,475			14,225			—			24,523			12,723			16,063			81,108			—			—
Total consideration paid		$	16,330		$	14,225		$	36,625		$	24,523		$	19,505		$	22,768		$	155,617		$	11,602		$	34,253

Professional Bancorp Acquisition

        On January 16, 2001, we acquired Professional Bancorp, Inc., which we refer to as Professional, and its wholly-owned subsidiary, First Professional Bank, N.A., which we refer to as First Professional. Shareholders of Professional had the option to choose either $8.00 in cash or 0.55 shares of Company common stock in exchange for each share of Professional common stock. The purchase price received by shareholders of Professional totaled approximately 504,747 shares of our common stock and approximately $8.9 million in cash, resulting in a total purchase price of approximately $16.3 million.

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First Charter Acquisition

        On October 8, 2001, we acquired First Charter Bank, N.A., which we refer to as First Charter. Shareholders of First Charter received 0.008635 of a share of our common stock for each share of First Charter common stock. Approximately 661,609 shares were issued in this acquisition, resulting in a total purchase price of approximately $14.2 million. First Charter was merged into First Professional with First Professional as the surviving entity.

Pacific Western Acquisition

        On January 31, 2002, we acquired Pacific Western National Bank. References to Pacific Western National Bank refer to the bank acquired on January 31, 2002. The shareholders and option holders of Pacific Western National Bank were paid approximately $36.6 million in cash. Upon completion of the acquisition, Pacific Western National Bank and First Community Bank of the Desert were merged with First Professional. The resulting bank was renamed Pacific Western National Bank and is headquartered in Santa Monica, California. When we refer to Pacific Western, we are referring to the surviving bank formed through the merger of Pacific Western National Bank, First Community Bank of the Desert and First Professional.

W.H.E.C., Inc. Acquisition

        On March 7, 2002, we acquired W.H.E.C., Inc., which we refer to as WHEC, and its wholly-owned subsidiary, Capital Bank of North County, which we refer to as Capital Bank. We issued 1,043,799 shares of our common stock in exchange for all of the outstanding common shares and options of WHEC and an aggregate purchase price of $24.5 million. At the time of the merger, Capital Bank, was merged into Rancho Santa Fe National Bank, with the surviving bank retaining the name Rancho Santa Fe National Bank.

Upland Bank Acquisition

        On August 22, 2002, we acquired Upland Bank. We issued 419,059 shares of our common stock and $6.8 million in cash in exchange for all of the outstanding shares and options of Upland Bank. The aggregate purchase price of Upland Bank amounted to $19.5 million. At the time of the merger, Upland Bank was merged into Pacific Western.

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Marathon Bancorp Acquisition

        On August 23, 2002, we acquired Marathon Bancorp, the holding company of Marathon Bank. We issued 537,770 shares of our common stock and $6.7 million in cash in exchange for all of the outstanding shares and options of Marathon Bancorp. The aggregate purchase price of Marathon Bancorp amounted to $22.8 million. At the time of the merger, Marathon Bank was merged into Pacific Western.

First National Bank Acquisition

        On September 10, 2002, we acquired First National Bank. We issued 2,762,540 shares of our common stock, representing approximately 18% of the then outstanding shares of First Community common stock, and $74.5 million in cash in exchange for all of the outstanding preferred shares, common shares, warrants and options of First National Bank. The aggregate purchase price of First National Bank amounted to approximately $155.6 million based on the closing price of First Community's stock on September 10, 2002 of $29.36. At the time of the merger, First National Bank was merged into Rancho Santa Fe National Bank and was renamed First National Bank. References to First National Bank refer to the bank acquired on September 10, 2002. When we refer to First National, we are referring to the surviving bank formed through the merger of First National Bank and Rancho Santa Fe National Bank.

Bank of Coronado Acquisition

        On January 9, 2003, we acquired Bank of Coronado. We paid $11.6 million in cash in exchange for all of the outstanding common shares and options of Bank of Coronado. At the time of the merger, Bank of Coronado was merged into First National.

Verdugo Banking Company Acquisition

        On August 22, 2003, we acquired Verdugo Banking Company. We paid approximately $34.3 million in cash for all outstanding shares of common stock and options. At the time of the merger, Verdugo Banking Company was merged into Pacific Western.

Merger-related charges

        All of the acquisitions consummated after December 31, 2000 were completed using the purchase method of accounting. Accordingly, we recorded the estimated merger-related charges associated with each acquisition as a liability at closing when allocating the related purchase price.

        For each acquisition we developed an integration plan for the consolidated Company which addressed, among other things, requirements for staffing, systems platforms, branch locations and other facilities. The established plans are evaluated regularly during the integration process and modified as required. Merger and integration expenses are summarized in the following primary categories: (i) severance and employee-related charges; (ii) system conversion and integration costs, including contract termination charges; (iii) asset write-downs, lease termination costs for abandoned space and other facilities-related costs; and (iv) other charges. Other charges include investment banking fees, legal fees, other professional fees relating to due diligence activities and shareholder expenses

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associated with preparation of securities filings, as appropriate. These costs were included in the allocation of the purchase price at the acquisition date based on our formal integration plans.

        The following table presents the activity in the merger-related liability account for 2002 and 2003:

	Severance and Employee- related			System Conversion and Integration			Asset Write- downs, Lease Terminations and Other Facilities-related			Other			Total
	(Dollars in thousands)
Balance at December 31, 2001	$	400		$	50		$	17		$	34		$	501
Additions related to 2002 acquisitions		10,170			2,700			3,192			15,443			31,505
Adjustments related to 2001 acquisitions		69			—			518			222			809
Noncash write-downs and other		—			(59	)		(1,755	)		(263	)		(2,077	)
Cash outlays		(6,225	)		(2,238	)		(853	)		(13,850	)		(23,166	)
Balance at December 31, 2002		4,414			453			1,119			1,586			7,572
Additions related to 2003 acquisitions		1,993			1,127			1,727			3,324			8,171
Adjustments related to 2002 acquisitions		1,545			277			1,600			—			3,422
Reversals to goodwill		(700	)		—			—			—			(700	)
Noncash write-downs and other		—			(316	)		(155	)		(6	)		(477	)
Cash outlays		(6,074	)		(1,110	)		(579	)		(4,288	)		(12,051	)
Balance at December 31, 2003	$	1,178		$	431		$	3,712		$	616		$	5,937

        As of December 31, 2003, the integration of our 2002 and 2003 acquisitions, including First National, and our most recent acquisition of Verdugo, was substantially complete; no additional merger-related charges are expected going forward related to our completed acquisitions, with the exception of an evaluation of the abandoned space associated with the First National Bank and Verdugo mergers. Severance costs will continue to be paid in accordance with severance pay plans and employment termination contracts. Additions to the merger-related liability will be made in 2004 in connection with the FC Financial and Harbor National acquisitions. See also Note 22.

Pro Forma Information for Purchase Acquisitions

        The following table presents our unaudited pro forma condensed results of operations for the years ended December 31, 2003 and 2002 as if each of the 2003 acquisitions had been effective at the beginning of each of the periods presented and the 2002 acquisitions had been effective at the beginning of the 2002 period. The unaudited pro forma results include (1) the historical accounts of the Company and of the acquired businesses and (2) pro forma adjustments, as may be required, including the amortization of intangibles with definite lives, net of applicable taxes. The unaudited combined pro forma condensed results of operations is intended for informational purposes only and is not

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necessarily indicative of our future operating results or operating results that would have occurred had these acquisitions been in effect for all the periods presented.

Unaudited Combined Pro Forma Condensed Results of Operations

		For the Years Ended December 31,
		2003		2002
		(Dollars in thousands, except per share data)
Interest income		$	119,177	$	135,567
Interest expense			14,407		28,209
	Net interest income		104,770		107,358
Provision for loan losses			780		3,260
	Net interest income after provision for loan losses		103,990		104,098
Noninterest income			19,841		23,522
Noninterest expense			69,592		91,617
	Earnings before income taxes		54,239		36,003
Income taxes			22,092		14,041
	Net earnings from continuing operations	$	32,147	$	21,962
Net earnings per share:
	Basic	$	2.09	$	1.45
	Diluted	$	2.03	$	1.41
Weighted average shares outstanding:
	Basic		15,382.1		15,196.2
	Diluted		15,868.4		15,586.0

        As with our other acquisitions, the Bank of Coronado and Verdugo Banking Company acquisitions were accomplished to expand our community banking base in geographic areas that are complementary to our existing locations, loan portfolio composition, and deposit structure. These two acquisitions resulted in $34.4 million in intangible assets, composed of $29.3 million in goodwill not subject to amortization and $5.1 million in core deposit intangibles that are being amortized over 10 years. All of the goodwill has been assigned to our one reportable segment, banking. None of the goodwill is deductible for income tax purposes.

(3)    Goodwill and Other Intangible Assets

        Goodwill and intangible assets arise from purchase business combinations. Goodwill and other intangible assets deemed to have indefinite lives generated from purchase business combinations are tested for impairment no less than annually. We performed the initial and interim impairment tests of goodwill, which resulted in no impact on our results of operations and financial position.

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        Intangible assets with definite lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment annually. We determined the value of the core deposit intangible assets related to the acquisitions of Pacific Western National Bank, W.H.E.C., Inc., Upland Bank, Marathon Bancorp, First National Bank, Bank of Coronado and Verdugo Banking Company by using an independent third party that specializes in valuation work. We recorded the value of the core deposit intangible assets separate from goodwill and we are amortizing them over their estimated useful lives of 10 years. The amortization expense represents the estimated decline in the value of the underlying deposits acquired. We recorded an expense of approximately $2.5 million for 2003 and estimate the expense related to the core deposit intangible assets will range from $2.5 million to $2.7 million per year for the next five years.

        The following is a reconciliation of net earnings to net earnings, excluding goodwill amortization, as well as a reconciliation of basic and diluted per share information on the same basis for the three year period ended December 31, 2003. Goodwill amortization for 2001 relates to an acquisition consummated in January 2001. Such amortization ceased upon adoption of SFAS No. 142, Goodwill and Other Intangible Assets, described in Note 1(m).

	For the Years Ended December 31,
	2003		2002		2001
	(Dollars in thousands, except per share data)
Net earnings	$	32,055	$	16,912	$	6,110
Add back: goodwill amortization		—		—		207
Net earnings, excluding goodwill amortization	$	32,055	$	16,912	$	6,317
Basic earnings per share:
Net earnings	$	2.08	$	1.64	$	1.30
Goodwill amortization		—		—		0.04
Net earnings, excluding goodwill amortization	$	2.08	$	1.64	$	1.34
Diluted earnings per share:
Net earnings	$	2.02	$	1.58	$	1.23
Goodwill amortization		—		—		0.04
Net earnings, excluding goodwill amortization	$	2.02	$	1.58	$	1.27

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        The changes in the carrying amount of goodwill and core deposit intangible for the years ended December 31, 2003 and 2002 are as follows:

	2003					2002
	Goodwill		Core Deposit Intangible			Goodwill		Core Deposit Intangible
			(Dollars in thousands)
Balance as of January 1,	$	168,573	$	19,477		$	9,793	$	—
Acquisitions		29,330		5,089			158,632		20,746
Core deposit intangible amortization		—		(2,529	)		—		(1,269	)
Increase related to liabilities for severance, contractual obligations and vacant premises		2,016		—			148		—
Balance as of December 31,	$	199,919	$	22,037		$	168,573	$	19,477

(4)    Securities Available-for-Sale

        The amortized cost, gross unrealized gains and losses, and fair value of securities available-for-sale as of December 31, 2003 and 2002 are as follows:

	2003
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
			(Dollars in thousands)
U.S. Treasury and government agency securities	$	52,611	$	168	$	109	$	52,670
Municipal securities		13,266		309		34		13,541
Mortgage-backed and other securities		354,654		1,049		4,258		351,445
Total	$	420,531	$	1,526	$	4,401	$	417,656

	2002
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
			(Dollars in thousands)
U.S. Treasury and government agency securities	$	187,696	$	564	$	14	$	188,246
Municipal securities		17,752		268		75		17,945
Mortgage-backed securities		104,233		1,810		51		105,992
Total	$	309,681	$	2,642	$	140	$	312,183

        The maturity distribution based on amortized cost and fair value as of December 31, 2003, by contractual maturity, is shown below. Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities may differ from

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contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Maturity Distribution as of December 31, 2003
	Amortized Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	2,684	$	2,715
Due after one year through five years		94,365		94,576
Due after five years through ten years		31,026		31,569
Due after ten years		292,456		288,796
Total	$	420,531	$	417,656

        Proceeds from the sale of securities totaled $179.9 million for 2003 and $52.4 million for 2002. There were no sales of securities during 2001. Gross gains on the sale of securities totaled $1.6 million and gross losses on the sale of securities totaled $14,000 in 2003. Gross gains on the sale of securities totaled $1.7 million and gross losses on the sale of securities totaled $69,000 in 2002.

        As of December 31, 2003 and 2002, securities available-for-sale with a fair value of $396.7 million and $32.6 million were pledged as security for borrowings, public deposits and other purposes as required by various statutes and agreements.

        The following table presents the fair value and the unrealized loss on securities that were temporarily impaired as of December 31, 2003.

	Impairment Period
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in thousands)
U.S. Treasury and government agency securities	$	4,891	$	(109	)	$	—	$	—		$	4,891	$	(109	)
Municipal securities		2,582		(17	)		2,063		(17	)		4,645		(34	)
Mortgage-backed securities		264,991		(4,258	)		—		—			264,991		(4,258	)
Total temporarily impaired securities	$	272,464	$	(4,384	)	$	2,063	$	(17	)	$	274,527	$	(4,401	)

        The temporary impairment is a result of the change in market interest rates and is not a result of the underlying issuers' ability to repay. Accordingly, we have not recognized the temporary impairment in our consolidated results of operations.

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(5)    Investment Securities Held-to-Maturity

        The Company had no held-to-maturity investment securities as of December 31, 2003. The amortized cost, gross unrealized gains and losses and fair value of investment securities held-to-maturity as of December 31, 2002 are as follows:

	2002
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses	Fair Value
			(Dollars in thousands)
U.S. Treasury and government agency securities	$	2,253	$	13	—	$	2,266
Municipal securities		344		36	—		380
Mortgage-backed securities		4,087		210	—		4,297
Total	$	6,684	$	259	—	$	6,943

        During 2003, we sold securities with a carrying value of $3.3 million, as we continued to restructure our securities portfolio to shift out of fixed-rate mortgage-backed securities and into adjustable-rate mortgage-backed securities. Proceeds from the sale of our entire held-to-maturity investment securities portfolio totaled $3.5 million for 2003. Gross gains on the sale of securities totaled $164,000 and gross losses on the sale of securities totaled $7,000 in 2003. There were no securities held-to-maturity sold during 2002 and 2001.

        As of December 31, 2002, investment securities held-to-maturity with an amortized cost $2.0 million were pledged as security for borrowings, public deposits and other purposes as required by various statutes and agreements.

(6)    Loans and Related Allowance for Loan Losses and Other Real Estate Owned

        As of December 31, 2003 and 2002, loans consisted of the following:

		2003			2002
		(Dollars in thousands)
Commercial		$	456,869		$	404,606
Real estate, construction			347,321			354,296
Real estate, mortgage			727,265			594,253
Consumer			31,404			37,716
Investment in leveraged and direct leases			—			484
SBA, portion held for investment			37,747			37,973
Gross loans and leases			1,600,606			1,429,328
Less:
	Deferred loan fees, net		(4,769	)		(4,932	)
	Allowance for loan losses		(25,752	)		(24,294	)
Total loans and leases		$	1,570,085		$	1,400,102

        The Company grants commercial, real estate and consumer loans to customers in the regions the Banks serve in Southern California, and to a lesser extent foreign credits related to Mexico. We

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acquired foreign loans through the First National Bank acquisition and continue to originate both foreign commercial and foreign real estate loans as part of our ongoing services. Our foreign loans are primarily to individuals and entities located in Mexico. All of our foreign loans are denominated in U.S. dollars and the majority are collateralized by assets located in the United States or guaranteed or insured by businesses located in the United States. As of December 31, 2003 and 2002, foreign loan balances totaled $82.7 million and $78.5 million, respectively. Although the Company has a diversified loan portfolio, a substantial portion of its debtors' ability to honor their contracts is dependent upon the strength of the real estate market and the economy in general in the Banks' primary service areas. Should the real estate market experience an overall decline in property values or should other events occur, including, but not limited to, adverse economic conditions (which may or may not affect real property values), the ability of borrowers to make timely scheduled principal and interest payments on the Company's loans may be adversely affected, and in turn may result in increased delinquencies and foreclosures. In the event of foreclosures under such conditions, the value of the property acquired may be less than the appraised value when the loan was originated and may, in some instances, result in insufficient proceeds upon disposition to recover the Company's investment in the foreclosed property.

        Nonaccrual loans totaling $7.4 million, $10.2 million and $4.7 million were outstanding as of December 31, 2003, 2002 and 2001, respectively. There were no loans that were past due 90 days or more and still accruing interest as of December 31, 2003, 2002 and 2001. Interest income of $385,000, $640,000 and $596,000 would have been recorded for the years ended December 31, 2003, 2002 and 2001, respectively, if nonaccrual loans had been performing in accordance with their original terms. Interest income of $214,000, $273,000 and $110,000 was recorded on loans subsequently transferred to a nonaccrual status for the years ended December 31, 2003, 2002 and 2001, respectively.

        A summary of the activity in the allowance for loan losses is as follows:

	For the Years Ended December 31,
	2003			2002			2001
	(Dollars in thousands)
Balance, beginning of year	$	24,294		$	11,209		$	3,930
Provision for loan losses		300			—			639
Loans charged off		(4,476	)		(4,789	)		(7,521	)
Recoveries on loans previously charged off		3,005			3,197			1,203
Loans charged off, net of recoveries		(1,471	)		(1,592	)		(6,318	)
Additions due to acquisitions		2,629			14,677			12,958
Balance, end of year	$	25,752		$	24,294		$	11,209

        The credit risk associated with unfunded commitments and letters of credit are included as a component of our allowance for loan losses and amounted to $3.1 million at December 31, 2003.

        The Company measures its impaired loans by using the fair value of the collateral if the loan is collateral-dependent and the present value of the expected future cash flows discounted at the loan's effective interest rate if the loan is not collateral-dependent. As of December 31, 2003 and 2002, all impaired loans were collateral-dependent. The Company recognizes income from impaired loans on an

75

accrual basis unless the loan is on nonaccrual status. Income from loans on nonaccrual status is recognized to the extent cash is received and the loan's principal balance is deemed collectible. The following table presents a breakdown of impaired loans and any impairment allowance related to impaired loans as of December 31, 2003 and 2002:

	2003				2002
	Recorded investment		Impairment Allowance		Recorded investment		Impairment Allowance
	(Dollars in thousands)
Loans with impairment allowance—other collateral	$	4,901	$	2,138	$	6,184	$	2,814
Loans with impairment allowance—real estate		230		129		1,420		213
Loans without impairment allowance—other collateral		2,280		—		2,612		—
Total impaired loans	$	7,411	$	2,267	$	10,216	$	3,027

        Based on the Company's evaluation process to determine the level of the allowance for loan losses mentioned previously and the fact that a majority of the Company's nonperforming loans are secured, management believes the allowance level to be adequate as of December 31, 2003 to absorb the estimated known and inherent risks identified through its analysis. For the years ended December 31, 2003, 2002 and 2001, no interest income was recorded on impaired loans, and the average balance of impaired loans was $9.9 million, $7.5 million and $8.4 million, respectively.

        The following is the activity in the valuation allowance for other real estate owned:

	For the Years Ended December 31,
	2003		2002		2001
	(Dollars in thousands)
Balance, beginning of year	$	690	$	360	$	510
Additions from acquisitions		—		—		272
Adjustments to the market value of real estate owned		—		330		88
Reductions related to sales of real estate owned		690		—		510
Balance, end of year	$	—	$	690	$	360

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(7)    Premises and Equipment

        Premises and equipment as of December 31, 2003 and 2002 are as follows:

	For the Years Ended December 31,
	2003		2002
	(Dollars in thousands)
Land	$	870	$	870
Buildings		2,973		2,619
Furniture, fixtures and equipment		8,122		7,237
Leasehold improvements		6,331		5,137
Vehicles		247		389
Premises and equipment		18,543		16,252
Less accumulated depreciation and amortization		4,539		2,855
Premises and equipment, net	$	14,004	$	13,397

        Depreciation and amortization expense for the years ended December 31, 2003, 2002 and 2001 was $3.3 million, $2.6 million and $1.3 million, respectively. Our leasehold improvements are amortized over their estimated useful lives, or the life of the lease, whichever is shorter. Our furniture, fixtures and equipment are depreciated over their estimated useful lives ranging from 3 years to 10 years. Land is not depreciated and buildings are depreciated over 30 years.

(8)    Deposits

        Interest-bearing deposits as of December 31, 2003 and 2002 are comprised of the following:

	For the Years Ended December 31,
	2003		2002
	(Dollars in thousands)
Interest checking deposits	$	181,223	$	148,221
Money market deposits		585,628		547,941
Savings deposits		72,876		71,713
Time deposits under $100,000		110,720		127,591
Time deposits of $100,000 or more		184,857		185,712
Total	$	1,135,304	$	1,081,178

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        The following summarizes the maturity of time deposits as of December 31, 2003 (in thousands):

2004	$	276,648
2005		10,121
2006		3,277
2007		4,847
2008		563
Thereafter		121
Total	$	295,577

        Interest expense on deposits for the years ended December 31, 2003, 2002 and 2001 is comprised of the following:

	For the Years Ended December 31,
	2003		2002		2001
	(Dollars in thousands)
Interest checking deposits	$	206	$	282	$	485
Money market deposits		3,607		4,586		4,386
Savings deposits		348		319		431
Time deposits under $100,000		2,126		2,593		1,811
Time deposits of $100,000 or more		3,292		3,683		2,747
Interest expense on deposits	$	9,579	$	11,463	$	9,860

(9)    Borrowings and Subordinated Debentures

Borrowings

        We and our Banks have various lines of credit available. We also borrow funds from time to time on a short term or overnight basis from the Federal Home Loan Bank or other financial institutions.

        Federal Funds Arrangements with Commercial Banks.    As of December 31, 2003, 2002 and 2001, we had unsecured lines of credit with correspondent banks in the amounts of $100 million, $42.0 million and $23.0 million. These lines are renewable annually. As of December 31, 2003, 2002 and 2001, there were no balances outstanding and the average balances outstanding were $19,000, $153,000 and $11,000 for 2003, 2002 and 2001. The highest balance at any month-end was zero in 2003, 2002 and 2001. The average rate paid was 1.74%, 2.04% and 1.70% during 2003, 2002 and 2001.

        Federal Home Loan Bank Lines of Credit.    As of December 31, 2003, 2002 and 2001, we had Federal Home Loan Bank collateralized borrowing limits of approximately $321.6 million, $64.1 million and $9.9 million, of which $46.7 million was outstanding at December 31, 2003 and none of which was outstanding as of December 31, 2002 and 2001. The borrowing arrangements with the Federal Home Loan Bank are collateralized by the majority of our securities available-for sale, which are safekept with the Federal Home Loan Bank, and to a lesser extent by certain qualifying mortgages. The average balances outstanding were $1.4 million in 2003, $2.0 million in 2002 and none in 2001. The average rate

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paid was 1.28% in 2003, 3.99% in 2002 and none in 2001. The highest balance at any month-end during 2003 was $46.7 million, $10.0 million in 2002 and none in 2001. The availability of the lines of credit, as well as adjustments in deposit programs, provide for liquidity in the event that the level of our deposits should fall abnormally low. We used our Federal Home Loan Bank lines of credit in 2003 and 2002 for short term liquidity to manage normal monthly fluctuations in our deposit base.

        Borrowing Arrangements at the Federal Reserve Discount Window.    As of December 31, 2001, we had a Fed discount limit of approximately $4.0 million, none of which was outstanding as of December 31, 2001. We did not use this line in 2002 and closed it during 2002.

        Treasury, Tax and Loan.    At the beginning of 2003 and in previous years, we were a participant in the Treasury, Tax and Loan Note program, which we refer to as the Note program. We exited the Note program during 2003. The Note program provided a borrowing line with a limit at the Federal Reserve Bank. Note balances fluctuate based on the amounts deposited by customers and the amounts called for payment by the Federal Reserve Bank. As of December 31, 2003, 2002 and 2001, the balance outstanding under the Note program was $0, $1.2 million and $431,000. The average balances under the Note program were $203,000 in 2003, $827,000 in 2002 and $719,000 in 2001. The highest balance at any month-end was $1.7 million in 2003, $1.5 million in 2002 and $1.4 million in 2001. The average rate paid was 1.05%, 1.37% and 3.78% in 2003, 2002 and 2001.

        Revolving Lines of Credit.    In August 2003, we executed an amended and restated Revolving Credit Agreement with The Northern Trust Company for $12.5 million and a Revolving Credit Agreement with U.S. Bank, N.A. for $17.5 million. All of the shares of common stock of First National have been pledged as collateral against these revolving credit lines. The credit agreements contain covenants that impose certain restrictions on our activities and financial condition. Such covenants include minimum net worth ratios, maximum debt ratios, a minimum return on average assets, and minimum and maximum credit quality ratios. As of December 31, 2003, we, and where applicable, the Banks, were in compliance with all covenants covering both agreements. The highest balance at any month-end during 2003, 2002 and 2001 was $24.0 million, $6.0 million and $7.7 million. The average outstanding amount during 2003, 2002 and 2001 was $3.8 million, $863,000 and $5.4 million. As of December 31, 2003, 2002 and 2001, the interest rates were 2.50%, 3.50% and 4.00%. We pay a quarterly fee of 25 basis points on the unused amounts. The amount outstanding at December 31, 2003, was $7.0 million. At December 31, 2002 and 2001, there were no amounts outstanding under these lines of credit.

Subordinated Debentures

        The Company had an aggregate of $59.8 million and $39.2 million of subordinated debentures outstanding at December 31, 2003 and 2002. The subordinated debentures were issued in six separate series. Each issuance has a maturity of thirty years from its date of issue. The subordinated debentures were issued to trusts established by us, which in turn issued trust preferred securities. These trust preferred securities are presently considered Tier 1 capital for regulatory purposes. With the exception of Trust I, the subordinated debentures are callable at par, only by the issuer, five years from the date of issuance, subject to certain exceptions. We are permitted to call the debentures in the first five years if the prepayment election relates to one of the following three events: (i) a change in the tax treatment of the debentures stemming from a change in the IRS laws; (ii) a change in the regulatory

79

treatment of the underlying trust preferred securities as Tier 1 capital; and (iii) a requirement to register the underlying trust as a registered investment company. However, redemption in the first five years will be subject to a prepayment penalty. Trust I may not be called for 10 years from the date of issuance unless one of the three events described above has occurred and then a prepayment penalty applies. In addition, there is a prepayment penalty if this debenture is called 10 to 20 years from the date of its issuance and it may be called at par after 20 years. The proceeds of the subordinated debentures were used primarily to fund several of our acquisitions.

        The following table summarizes the terms of each subordinated debenture issuance.

Series	Date issued	Amount		Maturity Term	Fixed or Variable Rate	Rate Adjuster	Current Rate	Next Reset Date
				(Dollars in thousands)
Trust I	9/7/2000	$	8,248	9/7/2030	Fixed	N/A	10.60%	N/A
Trust II	12/18/2001		10,310	12/18/2031	Variable	3-month LIBOR + 3.60%	4.77%	3/18/2004
Trust III	11/28/2001		10,310	12/8/2031	Variable	6-month LIBOR + 3.75	4.98%	6/8/2004
Trust IV	6/26/2002		10,310	6/26/2032	Variable	3-month LIBOR + 3.55	4.72%	3/26/2004
Trust V	8/15/2003		10,310	9/17/2033	Variable	3-month LIBOR + 3.10	4.27%	3/17/2004
Trust VI	9/3/2003		10,310	9/15/2033	Variable	3-month LIBOR + 3.05	4.22%	3/15/2004
Total		$	59,798

(10)    Commitments and Contingencies

        The Banks are party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement the Company has in those particular classes of financial instruments.

        Commitments to extend credit amounting to $570.0 million and $540.8 million were outstanding as of December 31, 2003 and 2002, respectively. Of the $570.0 million, approximately $21.0 million were fixed rate commitments and $549.0 were variable rate commitments. Additionally, $5.3 million of the $570.0 million is related to foreign loan commitments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

        Standby letters of credit and financial guarantees amounting to $31.4 million and $21.8 million were outstanding as of December 31, 2003 and 2002, respectively. Standby letters of credit and financial guarantees are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements. Most guarantees will expire within one year. The Company generally requires collateral or other security to support financial instruments with credit risk.

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        The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company.

(11)    Fair Value of Financial Instruments

        Estimated fair values for the Company's financial instruments and a description of the methodologies and assumptions used to determine such amounts follow:

(a) Cash and Due from Banks and Federal Funds Sold

        The carrying amount is assumed to be the fair value because of the liquidity of these instruments.

(b) Interest-bearing Deposits in Financial Institutions

        The carrying amount is assumed to be the fair value given the short-term nature of these deposits.

(c) Investment Securities and Securities Available-for-Sale

        Fair values are based on quoted market prices available as of the balance sheet date. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Fair values of Federal Home Loan Bank Stock and Federal Reserve Bank stock are based on current redemption prices which are equal to the carrying amount.

(d) Loans

        Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type and further segmented into fixed and adjustable rate interest terms and by credit risk categories. The fair value estimates do not take into consideration the value of the loan portfolio in the event the loans have to be sold outside the parameters of normal operating activities.

        The fair value of fixed rate loans and non-performing or adversely classified adjustable rate loans is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loans. The discount rates used for performing fixed rate loans are the Company's current offer rates for comparable instruments with similar terms.

        The fair value of performing adjustable rate loans is estimated to be carrying value. These loans reprice frequently at market rates and the credit risk is not considered to be greater than normal.

(e) Deposits

        The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings and checking accounts, is equal to the amount payable on demand as of the balance sheet date. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. No value has been separately assigned to the Company's long-term relationships with its deposit customers, such as core deposit intangible.

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(f) Borrowings

        The carrying amount is assumed to be the fair value because rates paid are the same as rates currently offered for borrowings with similar remaining maturities and characteristics.

(g) Subordinated Debentures

        The fair value of the subordinated debentures is based on the discounted value of contractual cash flows for fixed rate securities. The discount rate is estimated using the rates currently offered for similar securities of similar maturity. The fair value of subordinated debentures with variable rates is deemed to be the carrying value.

(h) Commitments to Extend Credit and Standby Letters of Credit

        The majority of our commitments to extend credit carry current market interest rates if converted to loans. Because these commitments are generally unassignable by either the borrower or us, they only have value to the borrower and us. The estimated fair value approximates the recorded deferred fee amounts and is excluded from the following table because it is not material.

(i) Limitations

        Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect income taxes or any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Because no market exists for a portion of the Company's financial instruments, fair value estimates are based on what management believes to be conservative judgments regarding expected future cash flows, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimated fair values are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Since the fair values have been estimated as of December 31, 2003 and 2002, the amounts that will actually be realized or paid at settlement or maturity of the instruments could be significantly different.

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        The fair values of the Company's financial instruments as of December 31, 2003 and 2002 are as follows:

		2003				2002
		Carrying or Contract Amount		Fair Value Estimates		Carrying or Contract Amount		Fair Value Estimates
				(Dollars in thousands)
Financial Assets:
	Cash and due from banks	$	101,968	$	101,968	$	97,666	$	97,666
	Federal funds sold		2,600		2,600		26,700		26,700
	Investment in Federal Reserve Bank and Federal Home Loan Bank Stock		14,662		14,662		6,991		6,991
	Interest-bearing deposits in financial institutions		311		311		1,041		1,040
	Securities available-for-sale		417,656		417,656		312,183		312,183
	Securities held-to-maturity		—		—		6,684		6,943
	Loans, net		1,570,085		1,569,399		1,400,102		1,400,006
Financial Liabilities:
	Deposits		1,949,669		1,951,117		1,738,621		1,740,273
	Borrowings		53,700		53,700		1,223		1,223
	Subordinated debentures		59,798		60,894		39,178		40,526

(12)    Lease Commitments

        As of December 31, 2003, aggregate minimum rental commitments for certain real property under noncancellable operating leases having initial or remaining terms of more than one year are as follows (in thousands):

2004	$	6,527
2005		6,188
2006		5,685
2007		5,083
2008		4,148
Thereafter		8,481
Total	$	36,112

        Total gross rental expense for the years ended December 31, 2003, 2002 and 2001 was $6.5 million, $4.3 million and $2.1 million, respectively. Most of the leases provide that the Company pay maintenance, insurance and certain other operating expenses applicable to the leased premises in addition to the monthly minimum payments. Management expects that in the normal course of business, leases that expire will be renewed or replaced by other leases. Total rental income for the years ended December 31, 2003, 2002 and 2001 was approximately $306,000, $137,000 and $4,000, respectively.

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(13)    Income Taxes

        The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2003 and 2002 are as follows:

			2003			2002
			(Dollars in thousands)
Deferred tax assets:
	Lease income		$	989		$	1,003
	Loan loss allowance, due to differences in computation of bad debts			9,449			8,011
	Other real estate and investment in property held-for-sale			—			477
	Interest on nonaccrual loans			150			966
	Deferred loan fees and costs			320			320
	Deferred compensation			1,985			1,995
	Net operating losses			5,253			7,602
	Accrued liabilities			3,706			4,552
	Unrealized loss on securities available-for-sale			1,207			—
	State tax benefit			1,392			312
	Foreign tax credits			111			389
	Other			401			474
		Total gross deferred tax assets		24,963			26,101
		Valuation allowance		(5,170	)		(5,170	)
		Total deferred tax assets, net		19,793			20,931
Deferred tax liabilities:
	Core deposit intangible premium			3,538			2,690
	Premises and equipment, principally due to differences in depreciation			589			592
	Unrealized gain on securities available-for-sale			—			1,048
	Stock dividends			89			728
	Other			—			200
		Total gross deferred tax liabilities		4,216			5,258
		Total net deferred taxes	$	15,577		$	15,673

        Based upon our tax paying history and estimates of taxable income over the years in which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences. The valuation allowance applies to net operating loss carryforwards of acquired entities. As and when such net operating loss carryforwards are utilized, the related valuation allowance will be credited to goodwill.

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        For the years ended December 31, 2003, 2002 and 2001, the components of income taxes consist of the following:

		For the Years Ended December 31,
		2003		2002		2001
		(Dollars in thousands)
Current income taxes:
	Federal	$	12,698	$	1,319	$	1,882
	State		4,858		954		573
			17,556		2,273		2,455
Deferred income taxes:
	Federal		3,243		7,434		1,312
	State		897		1,510		609
			4,140		8,944		1,921
		$	21,696	$	11,217	$	4,376

        The following table is a reconciliation of total income taxes to the amount of taxes computed by applying the applicable statutory federal income tax rate of (35% for 2003 and 2002, and 34% for 2001) to earnings before income taxes for the years ended December 31, 2003, 2002 and 2001:

	For the Years Ended December 31,
	2003			2002			2001
	(Dollars in thousands)
Computed expected income taxes	$	18,813		$	9,845		$	3,565
State tax, net of federal tax benefit		3,741			1,601			780
Rate change		—			(67	)		—
Merger related costs		—			—			(358	)
BOLI income		(784	)		(307	)		(106	)
Other, net		(74	)		145			495
Recorded income taxes	$	21,696		$	11,217		$	4,376

        As of December 31, 2003 and 2002, taxes receivable totaled $276,000 and $4.5 million.

        The Company has available at December 31, 2003 approximately $22.9 million of unused federal net operating loss carryforwards that may be applied against future taxable income through 2022. The Company has available at December 31, 2003 approximately $13.2 million of unused state net operating loss carryforwards that may be applied against future taxable income through 2007. The applications of the net operating loss and other carryforwards are subject to annual IRC Section 382 limitations.

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(14)    Net Earnings Per Share

        The following is a summary of the calculation of basic and diluted net earnings per share for the years ended December 31, 2003, 2002 and 2001.

			For the Years Ended December 31,
			2003		2002		2001
			(Dollars in thousands, except per share data)
Net earnings used for basic net income per share			$	32,055	$	16,912	$	6,110
	Convertible debt interest expense, net of tax			—		13		—
		Adjusted net earnings used for diluted net earnings per share	$	32,055	$	16,925	$	6,110
Weighted average shares outstanding used for basic net earnings per share				15,382		10,302		4,696
	Effect of dilutive stock options, warrants and restricted stock			486		390		233
	Effect of convertible debt			—		—		29
		Diluted weighted average shares outstanding		15,868		10,692		4,958
	Basic net earnings per share		$	2.08	$	1.64	$	1.30
	Diluted net earnings per share		$	2.02	$	1.58	$	1.23

        Diluted earnings per share does not include all potentially dilutive shares that may result from outstanding stock options, warrants and restricted stock awards which may eventually vest. For the years ended December 31, 2003, 2002 and 2001, the number of stock options, warrants and restricted shares which are outstanding but not included in the calculation of diluted net earnings per share were 1,029,023, 877,379 and 239,160.

(15)    Comprehensive Income

			For the Years Ended December 31,
			2003			2002		2001
			(Dollars in thousands)
Net earnings			$	32,055		$	16,912	$	6,110
Other comprehensive income, net of related income taxes:
	Unrealized gains (losses) on securities:
		Unrealized holding gains (losses) arising during the period		(2,479	)		1,271		370
		Less reclassifications of realized gains included in income		639			129		—
				(3,118	)		1,142		370
Comprehensive income			$	28,937		$	18,054	$	6,480

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(16)    Benefit Plans

Stock-Based Compensation

        The Company has an employee incentive compensation plan, the Company's 2003 Stock Incentive Plan (the "Incentive Plan"), pursuant to which the Company's Board of Directors may grant stock-based compensation awards to officers, directors, key employees and consultants under the terms described in the Incentive Plan. The Incentive Plan, which was approved and adopted at the Company's 2003 Annual Meeting of Shareholders, amended and restated the Company's 2000 Stock Incentive Plan. The allowable stock-based compensation awards include stock options (within the meaning of Section 422 of the Internal Revenue code), nonqualified stock options, restricted stock awards, performance stock awards and stock appreciation rights. The Incentive Plan authorizes grants of stock-based compensation instruments to purchase or issue up to 2,500,000 shares of authorized but unissued Company common stock, subject to adjustments provided by the Incentive Plan. As of December 31, 2003, there were 570,773 shares available for grant under the Incentive Plan.

        Stock Options.    Under the Incentive Plan, the exercise price of an option shall not be less than the market price of a share of Company common stock on the date of grant and the maximum term of any option is ten years measured from the date of grant. Options generally vest over a period of 3 to 4 years as determined at the date of grant and under the Incentive Plan must become fully exercisable in installments of at least 20% per year.

        The fair value of all option grants are estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for all fixed option grants in 2003, 2002 and 2001:

	2003	2002	2001
Expected dividend yield	2.00%	2.37%	2.01%
Risk-free interest rate	2.90%	2.90%	4.85%
Volatility	33%	33%	26%
Expected lives	2.5 years	2.5 years	2.5 years
Estimated fair value	$6.11	$5.12	$3.37

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        A summary of the status of our stock options as of December 31, 2003, 2002 and 2001 and the changes during the years then ended is presented in the table below.

	2003				2002				2001
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of year	1,267,217		$	17.86	780,011		$	12.89	648,576		$	11.27
Granted	1,000			29.97	648,558			21.92	292,079			16.52
Exercised	(136,104	)		12.61	(105,186	)		12.77	(139,583	)		7.25
Cancelled	(71,756	)		24.65	(56,166	)		17.94	(5,061	)		25.04
Forfeited	(5,003	)		14.46	—			—	(16,000	)		11.37
Outstanding at year-end	1,055,354		$	18.10	1,267,217		$	17.86	780,011		$	12.89
Options exercisable at year-end	726,822		$	15.23	619,945		$	12.17	396,694		$	11.49
Weighted-average fair value of options granted during the year			$	6.11			$	5.12			$	3.37

        The following table summarizes information about stock options outstanding at December 31, 2003.

	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding at December 31, 2003	Weighted- Average Remaining Contractual life (years)	Weighted- Average Exercise Price		Number Exercisable at December 31, 2003	Weighted- Average Exercise Price
$4.00 to $10.00	220,405	3.67	$	8.52	219,153	$	8.52
$10.01 to $20.00	471,982	2.80	$	15.89	390,340	$	15.52
$20.01 to $30.66	362,967	4.09	$	26.80	117,329	$	26.79
$4.00 to $30.66	1,055,354	3.43	$	18.10	726,822	$	15.23

        Stock Warrants.    As a result of the First Professional acquisition in 2001, the Company assumed 79,511 warrants with an exercise price of $22.01; these warrants were all exercised during 2002.

        Restricted Stock.    The Incentive Plan provides that employees may be granted restricted shares of Company common stock which are subject to forfeiture until the restrictions lapse or terminate. During 2003, the Compensation Committee of the Company's Board of Directors awarded 205,000 shares of restricted common stock with a corresponding market value of $6,645,000. The awarded shares of restricted common stock will vest over a service period of three to four years. The portion of the market value of the restricted stock related to current service was recognized as compensation expense in 2003 and that portion of the market value relating to future service (unearned equity compensation) will be amortized over the remaining vesting period. The compensation expense for 2003 was $513,000. All 205,000 shares of restricted common stock awarded during 2003 were outstanding at December 31, 2003.

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        Performance Stock.    The Incentive Plan provides that employees may be granted shares of performance common stock which are subject to forfeiture until the restrictions lapse or terminate. During 2003, the Compensation Committee of the Company's Board of Directors awarded 255,000 of performance common stock with a corresponding market value of $8,172,000. The granted shares of performance common stock will vest in full, or in part, on the date the Compensation Committee, as Administrator of the Incentive Plan, determines that the Company achieved certain financial targets determined by the Compensation Committee. The granted shares of performance common stock expire seven years from the date of grant. The unearned equity compensation is being amortized to compensation expense over the estimated vesting period using the straight-line method. The vesting of the performance stock awards and recognition of compensation expense may occur over a shorter period if related financial targets are achieved earlier than anticipated. Compensation expense for performance stock awards for 2003 was $493,000. All 255,000 shares of performance common stock awarded during 2003 were outstanding at December 31, 2003.

        Prior to vesting of the restricted or performance common stock, each grant recipient is entitled to dividends and voting rights with respect to the shares of granted stock, subject to termination of such rights under the terms of the Incentive Plan. The grants of restricted and performance stock were made in the latter half of 2003 and replace the practice of granting stock options.

Directors Deferred Compensation Plan

        The Company has a deferred compensation plan, known as the DDCP, in which the Company's directors and executive officers may participate. The DDCP is administered by an administrative committee, which consists of certain non-director executive officers of the Company.

        The DDCP allows all directors of the Company, including executive officers who are directors of the Company or its subsidiaries, to defer payment of all or a portion of their directors' fees, in the case of outside directors, or base salary, bonus or other compensation, including restricted and performance stock awards, in the case of employee directors, for the next succeeding calendar year. Participation in the DDCP is voluntary and participants may change their elections annually.

        Participants may elect to have their contributions used to purchase Company common stock. The DDCP held 55,199 shares of Company common stock at December 31, 2003.

401(K) Plans

        The Banks have separate 401(k) plans, which include several 401(k) plans that were in place at banks acquired by the Company. We are currently working towards consolidating all of the plans into one 401(k) plan for all employees of the Company. The Company accrued to expense employer-related 401(k) contributions in the amount of $263,000, $309,000 and $57,000 for the years ended December 31, 2003, 2002, and 2001.

(17)    Restricted Cash Balances

        The Company is required to maintain reserve balances with the Federal Reserve Bank. Reserve requirements are based on a percentage of deposit liabilities and may be satisfied by cash on hand. The

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average reserves required to be held at the Federal Reserve Bank for the years ended December 31, 2003 and 2002 were zero and $5.0 million.

(18)    Dividend Availability

        Holders of Company common stock are entitled to receive dividends declared by the Board of Directors out of funds legally available under state law governing the Company and certain federal laws and regulations governing the banking and financial services business. In addition, the Banks are subject to certain restrictions under certain federal laws and regulations governing banks which limit their ability to transfer funds to the Company through intercompany loans, advances or cash dividends.

        During 2003, 2002 and 2001, the Company paid $10.4 million, $5.7 million and $1.7 million, respectively, in dividends.

        Our ability to pay dividends is also limited by certain covenants contained in the indentures governing trust preferred securities that we have issued, and the debentures underlying the trust preferred securities. The indentures provide, if an Event of Default (as defined in the indentures) has occurred and is continuing, or if we are in default with respect to any obligations under our guarantee agreement which covers payments of the obligations on the trust preferred securities, or if we give notice of any intention to defer payments of interest on the debentures underlying the trust preferred securities, then we may not, among other restrictions, declare or pay any dividends (other than a dividend payable by the Banks to the holding company) with respect to our common stock. In addition, our ability to pay dividends is limited by the terms of the revolving lines of credit such that we may not declare or pay any dividend other than dividends payable on the company's common stock or in the ordinary course of business exceeding 50% of net earnings per fiscal quarter of the company before intangibles amortization and any restructuring charges incurred in connection with any merger, consolidation or other restructuring contemplated by transactions similar to a merger.

(19)    Regulatory Matters

        First Community, as a bank holding company, is subject to regulation by the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended.

        The Banks are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Banks must meet specific capital guidelines that involve quantitative measures of the Company's and the Banks' assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

        Quantitative measures established by regulation to ensure capital adequacy require the Company and the Banks to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital

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(as defined) to average assets (as defined). Management believes, as of December 31, 2003, that the Company and the Banks have met all capital adequacy requirements to which they are subject.

        As of December 31, 2003, the most recent notification from the regulatory agencies categorized the Company and each of the Banks as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Company and the Banks must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Company's or any of the Banks' categories.

        Actual capital amounts and ratios for the Company and each of the Banks as of December 31, 2003 and 2002 are presented in the following table:

Capital Requirements

							Adequately Capitalized
											Well capitalized
			Actual Amount
					Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2003
	Total Capital (to Risk-Weighted Assets):
		Consolidated Company	$	208,010	11.08	%	$	150,188	8.00	%	$	187,735	10.00	%
		Pacific Western Bank		114,525	10.95			83,671	8.00			104,589	10.00
		First National Bank		96,488	11.68			66,088	8.00			82,610	10.00
	Tier I Capital (to Risk-Weighted Assets):
		Consolidated Company		184,520	9.83			75,084	4.00			112,627	6.00
		Pacific Western Bank		102,354	9.79			41,820	4.00			62,730	6.00
		First National Bank		86,121	10.42			33,060	4.00			49,590	6.00
	Tier I Capital (to Average Assets):
		Consolidated Company		184,520	8.23			89,682	4.00			112,102	5.00
		Pacific Western Bank		102,354	8.23			49,747	4.00			62,183	5.00
		First National Bank		86,121	8.63			39,917	4.00			49,896	5.00
As of December 31, 2002
	Total Capital (to Risk-Weighted Assets):
		Consolidated Company	$	192,870	12.14	%	$	127,097	8.00	%	$	158,871	10.00	%
		Pacific Western Bank		93,587	11.46			65,331	8.00			81,664	10.00
		First National Bank		84,921	11.06			61,426	8.00			76,782	10.00
	Tier I Capital (to Risk-Weighted Assets):
		Consolidated Company		172,960	10.89			63,530	4.00			95,295	6.00
		Pacific Western Bank		83,363	10.21			32,659	4.00			48,989	6.00
		First National Bank		75,284	9.81			30,697	4.00			46,045	6.00
	Tier I Capital (to Average Assets):
		Consolidated Company		172,960	8.63			80,167	4.00			100,209	5.00
		Pacific Western Bank		83,363	8.19			40,715	4.00			50,893	5.00
		First National Bank		75,284	8.28			36,369	4.00			45,461	5.00

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        The Company previously issued $58 million of trust preferred securities. As further explained in Note 1(a), we deconsolidated our trust preferred entities at December 31, 2003. As a result, our 2003 balance sheet includes $59.8 million of subordinated debt, which was previously included on our balance sheet as $58 million in trust preferred securities after a consolidation elimination of $1.8 million.

        Trust preferred securities are considered regulatory capital for purposes of determining the Company's Tier I capital ratios. The Company believes that the Board of Governors of the Federal Reserve System, which is the holding Company's banking regulator, may rule on continued inclusion of trust preferred securities in regulatory capital following the issuance of FIN 46R. At this time, it is not possible to estimate the effect, if any, on the Company's Tier I regulatory capital as a result of any future action taken by the Board of Governors of the Federal Reserve System.

        First National has received a draft informal memorandum of understanding from the OCC with respect to First National's compliance with Bank Secrecy Act/Anti-Money Laundering ("BSA/AML") regulations pursuant to the Patriot Act. Management expects that the final informal memorandum will require us to evaluate and strengthen our BSA/AML program and processes. Based on discussions with the OCC, management believes the informal memorandum is limited in scope to addressing BSA/AML issues and that it will have no material impact on our operating results or financial condition and that, unless we fail to adequately address the concerns of the OCC, the informal memorandum will not constrain our business. Management has committed to resolving the issues addressed in the informal memorandum as promptly as possible.

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(20)    Condensed Financial Information of Parent Company

        The parent company only condensed balance sheets as of December 31, 2003 and 2002 and the related condensed statements of earnings and condensed statements of cash flows for each of the years in the three-year period ended December 31, 2003 are presented below.

			At December 31,
			2003		2002
			(Dollars in thousands)
Condensed Balance Sheets
Assets:
	Cash and due from banks		$	2,479	$	14,959
	Investments in subsidiaries			399,518		339,978
	Other assets			4,308		5,628
		Total assets	$	406,305	$	360,565
Liabilities:
	Short-term borrowings		$	7,000	$	—
	Subordinated debentures			59,798		39,178
	Other liabilities			1,944		5,095
		Total liabilities		68,742		44,273
Shareholders' equity				337,563		316,292
		Total liabilities and shareholders' equity	$	406,305	$	360,565

		For the Years Ended December 31,
		2003			2002			2001
		(Dollars in thousands)
Condensed Statements of Earnings
Interest income		$	9		$	16		$	43
Other income			98			67			28
Dividend income from subsidiaries			24,000			9,500			2,000
	Total income		24,107			9,583			2,071
Interest expense			3,047			2,599			1,341
Other expense			7,911			7,301			2,988
	Total expense		10,958			9,900			4,329
	Earnings before income taxes and equity in undistributed earnings of subsidiaries		13,149			(317	)		(2,258	)
Income tax benefit			(4,557	)		(4,243	)		(1,787	)
	Earnings (loss) before equity in undistributed earnings of subsidiaries		17,706			3,926			(471	)
Equity in undistributed income of subsidiaries			14,349			12,986			6,581
	Net earnings	$	32,055		$	16,912		$	6,110

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		For the Years Ended December 31,
		2003			2002			2001
		(Dollars in thousands)
Condensed Statements of Cash Flows
Net income		$	32,055		$	16,912		$	6,110
Change in other assets			1,325			(2,378	)		(1,743	)
Change in other liabilities			(2,145	)		4,008			717
Undistributed earnings of subsidiaries			(14,349	)		(12,986	)		(6,581	)
	Cash flows provided by operating activities		16,886			5,556			1,497
Increase in investment in subsidiaries			(48,309	)		(119,175	)		(11,180	)
Other investing activities			(5	)		(2,536	)		—
	Cash flows used in investing activities		(48,314	)		(121,711	)		(11,180	)
Proceeds from exercise of common stock options and warrants			1,716			1,345			1,035
Dividends paid			(10,388	)		(5,725	)		(1,690	)
Issuance of subordinated debentures			20,620			10,310			20,620
Increase in borrowed funds			7,000			—			—
Proceeds from issuance of common stock			—			112,347			—
Other financing activities			—			(114	)		—
	Cash flows provided by financing activities		18,948			118,163			19,965
Net (decrease) increase in cash			(12,480	)		2,008			7,288
Cash, beginning of the period			14,959			12,951			5,663
Cash, end of the period		$	2,479		$	14,959		$	12,951
Supplemental disclosure of noncash investing and financing activities:
	Conversion of convertible debt		—		$	557		$	—
	Conversion of investment shares		—			—			425
	Loans from subsidiary		—			—			350
	Debt obtained in acquisition		—			—			671
	Common stock issued for acquisitions		—			134,417			21,700

(21)    Related Party Transactions

        Castle Creek Financial, LLC, which we refer to as Castle Creek, serves as the exclusive financial advisor for the Company pursuant to an engagement letter dated May 14, 2003 between Castle Creek and the Company. Castle Creek is an affiliate of Castle Creek Capital, LLC. During 2003, the Company paid Castle Creek $1.3 million for financial advice relating to the 2003 acquisitions. Castle Creek is also entitled to reimbursement of expenses and a quarterly retainer. These amounts totaled $59,000 in 2003. During 2002, pursuant to a previous engagement letter, the Company paid Castle Creek, $4.2 million and Belle Plaine Partners, Inc., the predecessor entity to Castle Creek Financial $932,000 for financial advice relating to the 2002 acquisitions. Belle Plaine Partners, Inc. and Castle Creek were also entitled to reimbursement of expenses and a quarterly retainer. These amounts totaled $70,000 in 2002. Belle Plaine Partners, Inc. was paid a fee of $458,000 in 2001 for financial advice

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provided to the Company relating to the First Charter acquisition. Belle Plaine Partners, Inc. provided financial advice, but was not paid a fee for the Professional acquisition.

(22)    Subsequent Events

        On December 1, 2003, we announced the signing of a definitive agreement to acquire all of the outstanding capital stock and options of Harbor National for $35.5 million in cash or, depending on the number of stock options outstanding at closing, approximately $13.28 per share after all outstanding stock options are cashed-out. Harbor National, which is located in Newport Beach, California, had $182.6 million in assets at December 31, 2003. This transaction, which is subject to regulatory approvals and the approval of Harbor National's shareholders, is expected to close early in the second quarter of 2004.

        We acquired First Community Financial Corporation, or FC Financial, a commercial finance company based in Phoenix, Arizona on March 1, 2004. We paid $40.0 million in cash for all of the outstanding common stock and options of FC Financial. As of March 1, 2004, FC Financial had approximately $80 million in assets and approximately $61.0 million in debt, which it used to finance its lending activity. FC Financial is an asset-based lender and factoring company with 40 employees and lending production offices in Phoenix, Arizona, Los Angeles and Orange, California, and Houston and Dallas, Texas.

        An unaudited summary of our allocation of the respective purchase prices follows. The allocation is preliminary and will change as further information is obtained.

		Harbor National			FC Financial
		(Dollars in thousands)
Cash and cash equivalents		$	47,821		$	5,998
Securities			13,314			—
Net loans			118,784			72,959
Premises and equipment			1,373			155
Other assets			1,335			1,262
Intangible assets			21,625			22,301
Deposits			(166,169	)		—
Notes payable			—			(60,740	)
Other liabilities			(2,583	)		(1,935	)
	Total purchase price	$	35,500		$	40,000

        We issued $61.9 million of subordinated debentures on February 5, 2004. The proceeds from this issuance were used to help fund the FC Financial acquisition and will be used in part to fund the Harbor National acquisition.

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(23)    Quarterly Results of Operations (Unaudited)

		For the Quarters Ended
		Mar 31, 2003		Jun 30, 2003		Sep 30, 2003		Dec 31, 2003
		(Dollars in thousands, except per share data)
Interest income		$	27,998	$	27,619	$	27,990	$	29,274
Interest expense			3,557		3,182		2,944		2,964
	Net interest income		24,441		24,437		25,046		26,310
Provision for loan losses			120		180		—		—
	Net interest income after provision for loan losses		24,321		24,257		25,046		26,310
Other income			4,076		6,104		4,897		4,379
Other expenses			16,200		15,869		17,020		16,550
	Earnings before income taxes		12,197		14,492		12,923		14,139
Income taxes			4,964		5,849		5,182		5,701
	Net earnings	$	7,233	$	8,643	$	7,741	$	8,438
Net earnings per share:
	Basic	$	0.47	$	0.56	$	0.50	$	0.55
	Diluted	$	0.46	$	0.55	$	0.49	$	0.53
Dividends per common share declared and paid		$	0.15	$	0.15	$	0.1875	$	0.1875
Common stock price range:
	High	$	32.29	$	31.75	$	34.45	$	37.13
	Low	$	28.05	$	28.86	$	30.13	$	34.55

96

		For the Quarters Ended
		Mar 31, 2002		Jun 30, 2002		Sep 30, 2002		Dec 31, 2002
		(Dollars in thousands, except per share data)
Interest income		$	13,944	$	17,720	$	22,367	$	29,872
Interest expense			3,001		3,157		3,641		4,357
	Net interest income		10,943		14,563		18,726		25,515
Provision for loan losses			—		—		—		—
	Net interest income after provision for loan losses		10,943		14,563		18,726		25,515
Other income			1,984		3,018		2,553		5,129
Other expenses			9,291		11,190		13,763		20,058
	Earnings before income taxes		3,636		6,391		7,516		10,586
Income taxes			1,474		2,531		3,034		4,178
	Net earnings	$	2,162	$	3,860	$	4,482	$	6,408
Net earnings per share:
	Basic	$	0.33	$	0.51	$	0.38	$	0.42
	Diluted	$	0.32	$	0.49	$	0.37	$	0.41
Dividends per common share declared and paid		$	0.09	$	0.15	$	0.15	$	0.15
Common stock price range:
	High	$	26.30	$	28.96	$	31.50	$	34.00
	Low	$	19.25	$	23.21	$	23.74	$	28.02

        Comparison of quarterly results may not be meaningful due to acquisitions. See Note 2 for further information.

97

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        Not Applicable.

ITEM 9A. CONTROLS AND PROCEDURES

        As of the end of the period covered by this report, an evaluation was carried out by the Company's management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, these disclosure controls and procedures were effective.

        There has been no change in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during our most recent fiscal quarter ending December 31, 2003 that has materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

98

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        Information required by this Item regarding the Company's directors and executive officers, including information with respect to beneficial ownership reporting compliance, will appear in the Proxy Statement we will deliver to our stockholders in connection with our Annual Meeting of Stockholders to be held on May 26, 2004. We are incorporating herein by reference the information contained in that section. Information relating to the registrant's Code of Business Conduct and Ethics that applies to its employees, including its senior financial officers, is included in Part I of this Annual Report on Form 10-K under "Item 1. Business—Available Information."

ITEM 11. EXECUTIVE COMPENSATION

        The information required by this Item will appear in the Proxy Statement we will deliver to our stockholders in connection with our Annual Meeting of Stockholders to be held on May 26, 2004. We are incorporating herein by reference the information contained in that section.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information required by this Item will appear in the Proxy Statement we will deliver to our stockholders in connection with our Annual Meeting of Stockholders to be held on May 26, 2004. We are incorporating herein by reference the information contained in that section.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        The information required by this Item will appear in the Proxy Statement we will deliver to our stockholders in connection with our Annual Meeting of Stockholders to be held on May 26, 2004. We are incorporating herein by reference the information contained in that section.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

        The information required by this Item will appear in the Proxy Statement we will deliver to our stockholders in connection with our Annual Meeting of Stockholders to be held on May 26, 2004. We are incorporating herein by reference the information contained in that section.

99

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)   1.    Financial Statements

        The consolidated financial statements of First Community Bancorp and its subsidiaries and independent auditors' report are included in Part II (Item 8) of this Form 10-K.

        2.     Financial Statement Schedules

        All financial statement schedules have been omitted, as inapplicable.

        3.     Exhibits

        The following documents are included or incorporated by reference in this Annual Report on Form 10-K:

3.1	Articles of Incorporation of First Community Bancorp, as amended to date (Exhibit 3.1 to Form 10-Q filed on November 14, 2002 and incorporated herein by this reference).
3.2	Bylaws of First Community Bancorp, as amended to date (Exhibit 4.2 to Form S-3 filed on June 11, 2002 and incorporated herein by this reference).
4.1	Indenture between State Street Bank and Trust Company of Connecticut, National Association and First Community Bancorp dated as of September 7, 2000 (Exhibit 10.6 of Form 10Q filed on November 13, 2000 and incorporated herein by this reference).
4.2	Indenture between First Community Bancorp as Issuer and Wilmington Trust Company as Trustee Dated as of November 28, 2001 (Exhibit 10.2 to Form 10-Q filed on May 15, 2002 and incorporated herein by this reference).
4.3	Indenture between State Street Bank and Trust Company of Connecticut, National Association, as Trustee and First Community Bancorp, as Issuer dated as of December 18, 2001 (Exhibit 10.5 to Form 10-Q filed on May 15, 2002 and incorporated herein by this reference).
4.4	Indenture between State Street Bank and Trust Company of Connecticut, National Association, as Trustee, and First Community Bancorp, as Issuer, dated as of June 26, 2002 (Exhibit 10.2 to Form 10-Q filed on August 14, 2002 and incorporated herein by this reference).
4.5	Indenture between First Community Bancorp, as Issuer, and U.S. Bank, N.A., as Trustee, dated as of August 15, 2003 (Exhibit 4.5 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).
4.6	Indenture between First Community Bancorp, as Issuer, and The Bank of New York, as Trustee, dated as of September 3, 2003 (Exhibit 4.6 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).
4.7	Indenture between First Community Bancorp, as Issuer and JPMorgan Chase Bank, as Trustee, dated as of February 5, 2004.
10.1*	First Community Bancorp 2003 Stock Incentive Plan (Exhibit 10.1 to Form 10-Q filed on August 10, 2003 and incorporated herein by this reference).
10.2*	Amended and Restated Directors' Deferred Compensation Plan, dated as of August 29, 2003 .
10.3	Amended and Restated Directors Deferred Compensation Plan Trust, dated as of December 8, 2003.
10.4	Amended and Restated Revolving Credit Agreement, dated August 15, 2003, by and between First Community Bancorp and the Northern Trust Company (Exhibit 10.3 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).

100

10.5	Revolving Credit Agreement, dated as of August 15, 2003, by and between First Community Bancorp and U.S. Bank, N.A.. (Exhibit 10.4 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).
10.6	Amended and Restated Pledge Agreement, dated as of August 15, 2003, between First Community Bancorp and The Northern Trust Company (Exhibit 10.5 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).
10.7	Amended and Restated Declaration of Trust of First Community/CA Statutory Trust I, dated September 7, 2000, By and Among State Street Bank and Trust Company of Connecticut, National Association as Institutional Trustee, First Community Bancorp, as Sponsor and Mark Christian and Arnold C. Hahn, as Administrators (Exhibit 10.5 of Form 10Q filed on November 13, 2000 and incorporated herein by this reference).
10.8	Guarantee Agreement By and Between First Community Bancorp and State Street Bank and Trust Company of Connecticut, National Association Dated as of September 7, 2000 (Exhibit 10.4 of Form 10Q filed on November 13, 2000 and incorporated herein by this reference).
10.9	Amended and Restated Declaration of Trust of First Community/CA Statutory Trust III, dated November 28, 2001 (Exhibit 10.1 to Form 10-Q filed on May 15, 2002 and incorporated herein by this reference).
10.10	Guarantee Agreement By and Between First Community Bancorp and Wilmington Trust Company Dated as of November 28, 2001 (Exhibit 10 to Form 10-Q filed on May 15, 2002 and incorporated herein by this reference).
10.11	Amended and Restated Declaration of Trust of First Community/CA Statutory Trust II By and Among State Street Bank and Trust Company of Connecticut, National Association, as Institutional Trustee, First Community Bancorp, as Sponsor, and Matthew P. Wagner, Robert Borgman and Mark Christian, as Administrators, dated December 18, 2001 (Exhibit 10.4 to Form 10-Q filed on May 15, 2002 and incorporated herein by this reference).
10.12	Guarantee Agreement By and Between First Community Bancorp and State Street Bank and Trust Company of Connecticut, National Association Dated as of December 18, 2001 (Exhibit 10.3 to Form 10-Q filed on May 15, 2002 and incorporated herein by this reference).
10.13	Amended and Restated Declaration of Trust of First Community/CA Statutory Trust IV, dated June 26, 2002, By and Among State Street Bank and Trust Company of Connecticut, National Association, as Institutional Trustee, First Community Bancorp, as Sponsor, and Matthew P. Wagner, Lynn M. Hopkins and Robert Borgman, as Administrators (Exhibit 10.1 to Form 10-Q filed on August 14, 2002 and incorporated herein by this reference).
10.14	Guarantee Agreement By and Between First Community Bancorp and State Street Bank and Trust Company of Connecticut, National Association Dated as of June 26, 2002 (Exhibit 10 to Form 10-Q filed on August 14, 2002 and incorporated herein by this reference).
10.15	Amended and Restated Declaration of Trust of First Community/CA Statutory Trust V by and among U.S. Bank, N.A. as Institutional Trustee, First Community Bancorp, as Sponsor and Matthew P. Wagner, Lynn M. Hopkins and Jared M. Wolff, as Administrators dated as of August 15, 2003 (Exhibit 10.6 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).
10.16	Guarantee Agreement by and between First Community Bancorp and U.S. Bank, N.A. dated as of August 15, 2003 (Exhibit 10.18 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).

101

10.17	Amended and Restated Trust Agreement of First Community/CA Statutory Trust VI among First Community Bancorp as Depositor, The Bank of New York as Property Trustee, The Bank of New York (Delaware) as the Delaware Trustee, and the Administrative Trustees named therein, dated as of September 3, 2003 (Exhibit 10.7 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).
10.18	Guarantee Agreement between First Community Bancorp and The Bank of New York, dated as of September 3, 2003 (Exhibit 10.19 to Form 10-Q filed on November 7, 2003 and incorporated herein by this reference).
10.19	Amended and Restated Trust Agreement of First Community/CA Statutory Trust VII among First Community Bancorp as Sponsor, Chase Manhattan Bank USA, N.A. as Delaware Trustee, JPMorgan Chase Bank, as Institutional Trustee, and the Administrators named therein, dated as of February 5, 2004.
10.20	Guarantee Agreement between First Community Bancorp and JPMorgan Chase Bank, dated as of February 5, 2004.
10.21	Services Agreement, dated as of May 14, 2003, between First Community Bancorp and Castle Creek Financial LLC.
10.22*	Change in Control Severance Agreement, as amended, applicable to the executive officers of First Community Bancorp and certain senior officers of the First Community Bancorp and its subsidiaries.
10.23*	Executive Incentive Bonus Plan, as amended.
10.24*	Indemnification Agreement, as amended, applicable to the directors and executive officers of First Community Bancorp.
11.1	Statement re: Computation of Per Share Earnings (See Note 14 of the Notes to Consolidated Financial Statements contained in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K).
12.1	Statement re: Computation of Ratios (See "Item 6. Selected Financial Data" of this Annual Report on Form 10-K).
21.1	Subsidiaries of the Registrant.
23.1	Consent of KPMG LLP.
24.1	Powers of Attorney (included on signature page).
31.1	Section 302 Certifications.
32.1	Section 906 Certifications.

*

Management contract or compensatory plan or arrangement.

(b)   Reports on Form 8-K

        On October 23, 2003, the Company filed a Current Report on Form 8-K including the press release, dated October 22, 2003, announcing results of operations and financial condition for the quarter and nine months ended September 30, 2003.

        On November 20, 2003, the Company filed a Current Report on Form 8-K including the press release, dated November 19, 2003, announcing the appointment of Robert G. Dyck as the Company's Executive Vice President and Chief Credit Officer.

        On December 2, 2003, the Company filed a Current Report on Form 8-K including the press release, dated December 1, 2003, announcing the Company's signing of a definitive agreement and plan of merger to acquire Harbor National Bank.

        On December 4, 2003, the Company filed a Current Report on Form 8-K including (i) a presentation made by Matthew P. Wagner at the Friedman Billings Ramsey 10^th Annual Investor Conference in New York, NY on December 3, 2003 and (ii) the text of an interview conducted with Mr. Wagner on October 30, 2003 that was made available to those attending the conference.

(c)   Exhibits

        The exhibits listed in Item 15(a)3 are incorporated by reference or attached hereto.

(d)   Excluded Financial Statements

        Not Applicable.

102

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST COMMUNITY BANCORP
Dated: March 10, 2004	By:	/s/  MATTHEW P. WAGNER Matthew P. Wagner (President and Chief Executive Officer)

        KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John M. Eggemeyer, Matthew P. Wagner, Timothy B. Matz, Victor R. Santoro and Jared M. Wolff, and each of them severally, his or her true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his or her name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission in connection with this Annual Report on Form 10-K and any and all amendments hereto, as fully for all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature		Date
/s/  JOHN M. EGGEMEYER John M. Eggemeyer	Chairman of the Board of Directors	March 10, 2004
/s/  MATTHEW P. WAGNER Matthew P. Wagner	President, Chief Executive Officer and Director (Principal Executive Officer)	March 10, 2004
/s/  VICTOR R. SANTORO Victor R. Santoro	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	March 10, 2004
/s/  STEPHEN M. DUNN Stephen M. Dunn	Director	March 10, 2004
/s/  BARRY C. FITZPATRICK Barry C. Fitzpatrick	Director	March 10, 2004
/s/  CHARLES H. GREEN Charles H. Green	Director	March 10, 2004
/s/  SUSAN E. LESTER Susan E. Lester	Director	March 10, 2004

103

/s/  TIMOTHY B. MATZ Timothy B. Matz	Director	March 10, 2004
/s/  DANIEL B. PLATT Daniel B. Platt	Director	March 10, 2004
/s/  ROBERT A. STINE Robert A. Stine	Director	March 10, 2004
/s/  DAVID S. WILLIAMS David S. Williams	Director	March 10, 2004

104

QuickLinks

PART I

ITEM 1. BUSINESS

ITEM 2. PROPERTIES
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

ITEM 6. SELECTED FINANCIAL DATA

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Independent Auditors' Report
FIRST COMMUNITY BANCORP AND SUBSIDIARIES Consolidated Balance Sheets at December 31, 2003 and 2002
FIRST COMMUNITY BANCORP AND SUBSIDIARIES Consolidated Statements of Earnings for the Years ended December 31, 2003, 2002 and 2001
FIRST COMMUNITY BANCORP AND SUBSIDIARIES Consolidated Statements of Shareholders' Equity and Comprehensive Income for the Years ended December 31, 2003, 2002 and 2001
FIRST COMMUNITY BANCORP AND SUBSIDIARIES Consolidated Statements of Cash Flows for the Years ended December 31, 2003, 2002 and 2001
FIRST COMMUNITY BANCORP AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2003 and 2002

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

SIGNATURES

EX-4.7

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Exhibit 4.7

First Community Bancorp
as Issuer

INDENTURE
Dated as of February 5, 2004

JPMORGAN CHASE BANK
As Trustee

JUNIOR SUBORDINATED DEBT SECURITIES
Due April 23, 2034

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS
SECTION 1.01.                Definitions		1
	Additional Interest	1
	Additional Provisions	1
	Authenticating Agent	1
	Bankruptcy Law	1
	Board of Directors	1
	Board Resolution	1
	Business Day	1
	Calculation Agent	1
	Capital Securities	1
	Capital Securities Guarantee	2
	Capital Treatment Event	2
	Certificate	2
	Common Securities	2
	Company	2
	Debt Security	2
	Debt Security Register	2
	Declaration	2
	Default	3
	Defaulted Interest	3
	Deferred Interest	3
	Depositary	3
	Depositary Participant	3
	DTC	3
	Event of Default	3
	Extension Period	3
	Federal Reserve	3
	Global Debenture	3
	Indenture	3
	Initial Purchaser	3
	Institutional Trustee	3
	Interest Payment Date	3
	Interest Rate	3
	Investment Company Event	3
	LIBOR	3
	LIBOR Banking Day	3
	LIBOR Business Day	4
	LIBOR Determination Date	4
	Liquidation Amount	4
	Maturity Date	4
	Notice	4
	Officers' Certificate	4
	Opinion of Counsel	4
	OTS	4
	Outstanding	4
	Paying Agent	4

ii

Person	4
Predecessor Security	4
Principal Office of the Trustee	5
Redemption Date	5
Redemption Price	5
Responsible Officer	5
Securityholder	5
Senior Indebtedness	5
Special Event	5
Special Redemption Date	5
Special Redemption Price	5
Subsidiary	5
Tax Event	6
Trust	6
Trust Indenture Act	6
Trust Securities	6
Trustee	6
United States	6
U.S. Person	6

ARTICLE II DEBT SECURITIES
SECTION 2.01.	Authentication and Dating	6
SECTION 2.02.	Form of Trustee's Certificate of Authentication	7
SECTION 2.03.	Form and Denomination of Debt Securities	7
SECTION 2.04.	Execution of Debt Securities	7
SECTION 2.05.	Exchange and Registration of Transfer of Debt Securities	8
SECTION 2.06.	Mutilated, Destroyed, Lost or Stolen Debt Securities	11
SECTION 2.07.	Temporary Debt Securities	11
SECTION 2.08.	Payment of Interest	12
SECTION 2.09.	Cancellation of Debt Securities Paid, etc	13
SECTION 2.10.	Computation of Interest	13
SECTION 2.11.	Extension of Interest Payment Period	14
SECTION 2.12.	CUSIP Numbers	15
SECTION 2.13.	Global Debenture	15
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01.	Payment of Principal, Premium and Interest; Agreed Treatment of the Debt Securities	17
SECTION 3.02.	Offices for Notices and Payments, etc	18
SECTION 3.03.	Appointments to Fill Vacancies in Trustee's Office	18
SECTION 3.04.	Provision as to Paying Agent	18
SECTION 3.05.	Certificate to Trustee	19
SECTION 3.06.	Additional Interest	19
SECTION 3.07.	Compliance with Consolidation Provisions	20
SECTION 3.08.	Limitation on Dividends	20
SECTION 3.09.	Covenants as to the Trust	20
ARTICLE IV LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 4.01.	Securityholders' Lists	21
SECTION 4.02.	Preservation and Disclosure of Lists	21

iii

ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT
SECTION 5.01.	Events of Default	22
SECTION 5.02.	Payment of Debt Securities on Default; Suit Therefor	24
SECTION 5.03.	Application of Moneys Collected by Trustee	25
SECTION 5.04.	Proceedings by Securityholders	25
SECTION 5.05.	Proceedings by Trustee	25
SECTION 5.06.	Remedies Cumulative and Continuing	26
SECTION 5.07.	Direction of Proceedings and Waiver of Defaults by Majority of Securityholders	26
SECTION 5.08.	Notice of Defaults	27
SECTION 5.09.	Undertaking to Pay Costs	27
ARTICLE VI CONCERNING THE TRUSTEE
SECTION 6.01.	Duties and Responsibilities of Trustee	27
SECTION 6.02.	Reliance on Documents, Opinions, etc	28
SECTION 6.03.	No Responsibility for Recitals, etc	29
SECTION 6.04.	Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debt Securities	29
SECTION 6.05.	Moneys to be Held in Trust	29
SECTION 6.06.	Compensation and Expenses of Trustee	30
SECTION 6.07.	Officers' Certificate as Evidence	30
SECTION 6.08.	Eligibility of Trustee	31
SECTION 6.09.	Resignation or Removal of Trustee, Calculation Agent, Paying Agent or Debt Security Registrar	31
SECTION 6.10.	Acceptance by Successor	32
SECTION 6.11.	Succession by Merger, etc	33
SECTION 6.12.	Authenticating Agents	33
ARTICLE VII CONCERNING THE SECURITYHOLDERS
SECTION 7.01.	Action by Securityholders	34
SECTION 7.02.	Proof of Execution by Securityholders	35
SECTION 7.03.	Who Are Deemed Absolute Owners	35
SECTION 7.04.	Debt Securities Owned by Company Deemed Not Outstanding	35
SECTION 7.05.	Revocation of Consents; Future Securityholders Bound	35
ARTICLE VIII SECURITYHOLDERS' MEETINGS
SECTION 8.01.	Purposes of Meetings	36
SECTION 8.02.	Call of Meetings by Trustee	37
SECTION 8.03.	Call of Meetings by Company or Securityholders	37
SECTION 8.04.	Qualifications for Voting	37
SECTION 8.05.	Regulations	37
SECTION 8.06.	Voting	38
SECTION 8.07.	Quorum; Actions	38
ARTICLE IX SUPPLEMENTAL INDENTURES
SECTION 9.01.	Supplemental Indentures without Consent of Securityholders	39
SECTION 9.02.	Supplemental Indentures with Consent of Securityholders	40

iv

SECTION 9.03.	Effect of Supplemental Indentures	41
SECTION 9.04.	Notation on Debt Securities	41
SECTION 9.05.	Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee	41
ARTICLE X REDEMPTION OF SECURITIES
SECTION 10.01.	Optional Redemption	41
SECTION 10.02.	Special Event Redemption	41
SECTION 10.03.	Notice of Redemption; Selection of Debt Securities	42
SECTION 10.04.	Payment of Debt Securities Called for Redemption	42
ARTICLE XI CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 11.01.	Company May Consolidate, etc., on Certain Terms	43
SECTION 11.02.	Successor Entity to be Substituted	43
SECTION 11.03.	Opinion of Counsel to be Given to Trustee	44
ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 12.01.	Discharge of Indenture	44
SECTION 12.02.	Deposited Moneys to be Held in Trust by Trustee	45
SECTION 12.03.	Paying Agent to Repay Moneys Held	45
SECTION 12.04.	Return of Unclaimed Moneys	45
ARTICLE XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 13.01.	Indenture and Debt Securities Solely Corporate Obligations	45
ARTICLE XIV MISCELLANEOUS PROVISIONS
SECTION 14.01.	Successors	45
SECTION 14.02.	Official Acts by Successor Entity	45
SECTION 14.03.	Surrender of Company Powers	46
SECTION 14.04.	Addresses for Notices, etc	46
SECTION 14.05.	Governing Law	46
SECTION 14.06.	Evidence of Compliance with Conditions Precedent	46
SECTION 14.07.	Non-Business Days	46
SECTION 14.08.	Table of Contents, Headings, etc	47
SECTION 14.09.	Execution in Counterparts	47
SECTION 14.10.	Separability	47
SECTION 14.11.	Assignment	47
SECTION 14.12.	Acknowledgment of Rights	47
ARTICLE XV SUBORDINATION OF DEBT SECURITIES
SECTION 15.01.	Agreement to Subordinate	48
SECTION 15.02.	Default on Senior Indebtedness	48
SECTION 15.03.	Liquidation; Dissolution; Bankruptcy	48
SECTION 15.04.	Subrogation	49
SECTION 15.05.	Trustee to Effectuate Subordination	50
SECTION 15.06.	Notice by the Company	50
SECTION 15.07.	Rights of the Trustee, Holders of Senior Indebtedness	51
SECTION 15.08.	Subordination May Not Be Impaired	51
EXHIBITS
EXHIBIT A	FORM OF DEBT SECURITY

v

        THIS INDENTURE, dated as of February 5, 2004, between First Community Bancorp, a bank holding company incorporated in California (hereinafter sometimes called the "Company"), and JPMorgan Chase Bank as trustee (hereinafter sometimes called the "Trustee").

        W I T N E S S E T H:

        WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its Junior Subordinated Debt Securities due April 23, 2034 (the "Debt Securities") under this Indenture and to provide, among other things, for the execution and authentication, delivery and administration thereof, the Company has duly authorized the execution of this Indenture.

        NOW, THEREFORE, in consideration of the premises, and the purchase of the Debt Securities by the holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Debt Securities as follows:

ARTICLE I

DEFINITIONS

        SECTION 1.01.    Definitions.

        The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles and the term "generally accepted accounting principles" means such accounting principles as are generally accepted in the United States at the time of any computation. The words "herein," "hereof' and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

        "Additional Interest" shall have the meaning set forth in Section 3.06.

        "Additional Provisions" shall have the meaning set forth in Section 15.01.

        "Applicable Depository Procedures" means, with respect to any transfer or transaction involving a Global Debenture or beneficial interest therein, the rules and procedures of the Depositary for such Global Debenture, in each case to the extent applicable to such transaction and as in effect from time to time.

        "Authenticating Agent" means any agent or agents of the Trustee which at the time shall be appointed and acting pursuant to Section 6.12.

        "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

        "Board of Directors" means the board of directors or the executive committee or any other duly authorized designated officers of the Company.

        "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Trustee.

        "Business Day" means any day other than a Saturday, Sunday or any other day on which banking institutions in Wilmington, Delaware, New York City or the city of the Principal Office of the Trustee are permitted or required by any applicable law or executive order to close.

        "Calculation Agent" means the Person identified as "Trustee" in the first paragraph hereof with respect to the Debt Securities and the Institutional Trustee with respect to the Trust Securities.

        "Capital Securities" means undivided beneficial interests in the assets of the Trust which are designated as "TP Securities" and rank pari passu with Common Securities issued by the Trust;

provided, however, that if an Event of Default (as defined in the Declaration) has occurred and is continuing, the rights of holders of such Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights of holders of such Capital Securities.

        "Capital Securities Guarantee" means the guarantee agreement that the Company will enter into with JPMorgan Chase Bank or other Persons that operates directly or indirectly for the benefit of holders of Capital Securities of the Trust.

        "Capital Treatment Event" means, if the Company is organized and existing under the laws of the United States or any state thereof or the District of Columbia, the receipt by the Company and the Trust of an Opinion of Counsel experienced in such matters to the effect that, as a result of any amendment to, or change in, the laws, rules or regulations of the United States or any political subdivision thereof or therein, or as the result of any official or administrative pronouncement or action or decision interpreting or applying such laws, rules or regulations, which amendment or change is effective or which pronouncement, action or decision is announced on or after the date of original issuance of the Debt Securities, there is more than an insubstantial risk that the Company will not, within 90 days of the date of such opinion, be entitled to treat an amount equal to the aggregate Liquidation Amount of the Capital Securities as "Tier 1 Capital" (or the then equivalent thereof) for purposes of the capital adequacy guidelines of the Federal Reserve (or any successor regulatory authority with jurisdiction over bank holding companies), as then in effect and applicable to the Company; provided, however, that the inability of the Company to treat all or any portion of the Liquidation Amount of the Debt Securities as Tier 1 Capital shall not constitute the basis for a Capital Treatment Event, if such inability results from the Company having cumulative preferred stock, minority interests in consolidated subsidiaries, or any other class of security or interest which the Federal Reserve (or any successor regulatory authority with jurisdiction over bank holding companies), as applicable, may now or hereafter accord Tier 1 Capital treatment in excess of the amount which may now or hereafter qualify for treatment as Tier 1 Capital under applicable capital adequacy guidelines (unless the inability is a result of an event that decreases the percentage of Capital Securities that may be included in Tier 1 Capital); provided further, however, that the distribution of the Debt Securities in connection with the liquidation of the Trust by the Company shall not in and of itself constitute a Capital Treatment Event unless such liquidation shall have occurred in connection with a Tax Event or an Investment Company Event.

        "Certificate" means a certificate signed by any one of the principal executive officer, the principal financial officer or the principal accounting officer of the Company.

        "Common Securities" means undivided beneficial interests in the assets of the Trust which are designated as "Common Securities" and rank pari passu with Capital Securities issued by the Trust; provided, however, that if an Event of Default (as defined in the Declaration) has occurred and is continuing, the rights of holders of such Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights of holders of such Capital Securities.

        "Company" means First Community Bancorp, a bank holding company incorporated in California, and, subject to the provisions of Article XI, shall include its successors and assigns.

        "Debt Security" or "Debt Securities" has the meaning stated in the first recital of this Indenture.

        "Debt Security Register" has the meaning specified in Section 2.05.

        "Declaration" means the Amended and Restated Declaration of Trust of the Trust dated as of February 5, 2004, as amended or supplemented from time to time.

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        "Default" means any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

        "Defaulted Interest" has the meaning set forth in Section 2.08.

        "Deferred Interest" has the meaning set forth in Section 2.11.

        "Depositary" means an organization registered as a clearing agency under the Exchange Act that is designated as Depositary by the Company or any successor thereto. DTC will be the initial Depositary.

        "Depositary Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book-entry transfers and pledges of securities deposited with the Depositary.

        "DTC" means The Depository Trust Company, a New York corporation.

        "Event of Default" means any event specified in Section 5.01, which has continued for the period of time, if any, and after the giving of the notice, if any, therein designated.

        "Extension Period" has the meaning set forth in Section 2.11.

        "Federal Reserve" means the Board of Governors of the Federal Reserve System.

        "Global Debenture" means a security that evidences all or part of the Debt Securities, the ownership and transfers of which shall be made through book entries by a Depositary.

        "Indenture" means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented, or both.

        "Initial Purchaser" means the initial purchaser of the Capital Securities.

        "Institutional Trustee" has the meaning set forth in the Declaration.

        "Interest Payment Date" means January 23, April 23, July 23 and October 23 of each year, commencing on April 23, 2004, during the term of this Indenture.

        "Interest Payment Period" means the period from and including an Interest Payment Date, or in the case of the first Interest Payment Period, the original date of issuance of the Debt Securities, to, but excluding, the next succeeding Interest Payment Date or, in the case of the last Interest Payment Period, the Redemption Date, Special Redemption Date or Maturity Date, as the case may be.

        "Interest Rate" means, with respect to any Interest Payment Period, a per annum rate of interest, equal to LIBOR, as determined on the LIBOR Determination Date for such Interest Payment Date, plus 2.75%; provided, however, that the Interest Rate for any Interest Payment Period may not exceed 12% through the Interest Payment Date in April, 2009, and may also not exceed the highest rate permitted by New York law, as the same may be modified by United States law of general application.

        "Investment Company Event" means the receipt by the Company and the Trust of an Opinion of Counsel experienced in such matters to the effect that, as a result of a change in law or regulation or written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Trust is or, within 90 days of the date of such opinion will be, considered an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended, which change or prospective change becomes effective or would become effective, as the case may be, on or after the date of the original issuance of the Debt Securities.

        "LIBOR" means the London Interbank Offered Rate for U.S. Dollar deposits in Europe as determined by the Calculation Agent according to Section 2.10(b).

        "LIBOR Banking Day" has the meaning set forth in Section 2.10(b)(1).

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        "LIBOR Business Day" has the meaning set forth in Section 2.10(b)(1).

        "LIBOR Determination Date" has the meaning set forth in Section 2.10(b).

        "Liquidation Amount" means the liquidation amount of $1,000 per Trust Security.

        "Maturity Date" means April 23, 2034.

        "Notice" has the meaning set forth in Section 2.11.

        "Officers' Certificate" means a certificate signed by the Chairman of the Board, the Vice Chairman, the Chief Executive Officer, the President, any Executive Vice President or any Vice President, and by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. Each such certificate shall include the statements provided for in Section 14.06 if and to the extent required by the provisions of such Section.

        "Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or may be other counsel reasonably satisfactory to the Trustee. Each such opinion shall include the statements provided for in Section 14.06 if and to the extent required by the provisions of such Section.

        "OTS" means the Office of Thrift Supervision and any successor federal agency that is primarily responsible for regulating the activities of savings and loan holding companies.

        "Outstanding," means, when used with reference to Debt Securities, subject to the provisions of Section 7.04, as of any particular time, all Debt Securities authenticated and delivered by the Trustee or the Authenticating Agent under this Indenture, except

        (a)   Debt Securities theretofore canceled by the Trustee or the Authenticating Agent or delivered to the Trustee for cancellation;

        (b)   Debt Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent); provided, that, if such Debt Securities, or portions thereof, are to be redeemed prior to maturity thereof, notice of such redemption shall have been given as provided in Articles X and XIV or provision satisfactory to the Trustee shall have been made for giving such notice; and

        (c)   Debt Securities paid pursuant to Section 2.06 or in lieu of or in substitution for which other Debt Securities shall have been authenticated and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to the Company and the Trustee is presented that any such Debt Securities are held by bona fide holders in due course.

        "Paying Agent" has the meaning set forth in Section 3.04(e).

        "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

        "Predecessor Security" of any particular Debt Security means every previous Debt Security evidencing all or a portion of the same debt as that evidenced by such particular Debt Security; and, for the purposes of this definition, any Debt Security authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Debt Security.

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        "Principal Office of the Trustee" means the office of the Trustee, at which at any particular time its corporate trust business shall be principally administered, which at all times shall be located within the United States and at the time of the execution of this Indenture shall be 600 Travis Street, 50^th Floor, Houston, Texas 77002.

        "Redemption Date" has the meaning set forth in Section 10.01.

        "Redemption Price" means 100% of the principal amount of the Debt Securities being redeemed plus accrued and unpaid interest on such Debt Securities to the Redemption Date.

        "Responsible Officer" means, with respect to the Trustee, any officer within the Principal Office of the Trustee with direct responsibility for the administration of the Indenture, including any vice-president, any assistant vice-president, any secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of the Principal Office of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject.

        "Securityholder," "holder of Debt Securities" or other similar terms, means any Person in whose name at the time a particular Debt Security is registered on the Debt Security Register.

        "Senior Indebtedness" means, with respect to the Company, (i) the principal, premium, if any, and interest in respect of (A) indebtedness of the Company for money borrowed and (B) indebtedness evidenced by securities, debentures, notes, bonds or other similar instruments issued by the Company; (ii) all capital lease obligations of the Company; (iii) all obligations of the Company issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Company and all obligations of the Company under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) all obligations of the Company for the reimbursement of any letter of credit, any banker's acceptance, any security purchase facility, any repurchase agreement or similar arrangement, any interest rate swap, any other hedging arrangement, any obligation under options or any similar credit or other transaction; (v) all obligations of the type referred to in clauses (i) through (iv) above of other Persons for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise; and (vi) all obligations of the type referred to in clauses (i) through (v) above of other Persons secured by any lien on any property or asset of the Company (whether or not such obligation is assumed by the Company), whether incurred on or prior to the date of this Indenture or thereafter incurred, unless, with the prior approval of the Federal Reserve if not otherwise generally approved, it is provided in the instrument creating or evidencing the same or pursuant to which the same is outstanding, that such obligations are not superior or are pari passu in right of payment to the Debt Securities; provided, however, that Senior Indebtedness shall not include (A) any debt securities issued to any trust other than the Trust (or a trustee of such trust) that is a financing vehicle of the Company (a "financing entity"), in connection with the issuance by such financing entity of equity or other securities in transactions substantially similar in structure to the transactions contemplated hereunder and in the Declaration or (B) any guarantees of the Company in respect of the equity or other securities of any financing entity referred to in clause (A) above.

        "Special Event" means any of a Tax Event, an Investment Company Event or a Capital Treatment Event.

        "Special Redemption Date" has the meaning set forth in Section 10.02.

        "Special Redemption Price" means 100% of the principal amount of the Debt Securities being redeemed plus accrued and unpaid interest on such Debt Securities to the Special Redemption Date.

        "Subsidiary" means, with respect to any Person, (i) any corporation, at least a majority of the outstanding voting stock of which is owned, directly or indirectly, by such Person or by one or more of

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its Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of the outstanding partnership or similar interests of which shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries, and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner. For the purposes of this definition, "voting stock" means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

        "Tax Event" means the receipt by the Company and the Trust of an Opinion of Counsel experienced in such matters to the effect that, as a result of any amendment to or change (including any announced prospective change) in the laws or any regulations thereunder of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement (including any private letter ruling, technical advice memorandum, regulatory procedure, notice or announcement (an "Administrative Action")) or judicial decision interpreting or applying such laws or regulations, regardless of whether such Administrative Action or judicial decision is issued to or in connection with a proceeding involving the Company or the Trust and whether or not subject to review or appeal, which amendment, clarification, change, Administrative Action or decision is enacted, promulgated or announced, in each case on or after the date of original issuance of the Debt Securities, there is more than an insubstantial risk that: (i) the Trust is, or will be within 90 days of the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Debt Securities; (ii) interest payable by the Company on the Debt Securities is not, or within 90 days of the date of such opinion, will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes; or (iii) the Trust is, or will be within 90 days of the date of such opinion, subject to or otherwise required to pay, or required to withhold from distributions to holders of Trust Securities, more than a de minimis amount of other taxes (including withholding taxes), duties, assessments or other governmental charges.

        "Trust" means First Community Bancorp/CA Statutory Trust VII, the Delaware statutory trust, or any other similar trust created for the purpose of issuing Capital Securities in connection with the issuance of Debt Securities under this Indenture, of which the Company is the sponsor.

        "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from time-to-time, or any successor legislation.

        "Trust Securities" means Common Securities and Capital Securities of First Community Bancorp/CA Statutory Trust VII.

        "Trustee" means the Person identified as "Trustee" in the first paragraph hereof, and, subject to the provisions of Article VI hereof, shall also include its successors and assigns as Trustee hereunder.

        "United States" means the United States of America and the District of Columbia.

        "U.S. Person" has the meaning given to United States Person as set forth in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

ARTICLE II

DEBT SECURITIES

        SECTION 2.01.    Authentication and Dating.

        Upon the execution and delivery of this Indenture, or from time to time thereafter, Debt Securities in an aggregate principal amount not in excess of $61,856,000 may be executed and delivered

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by the Company to the Trustee for authentication, and the Trustee shall thereupon authenticate and make available for delivery said Debt Securities to or upon the written order of the Company, signed by its Chairman of the Board of Directors, Vice Chairman, Chief Executive Officer, President or Chief Financial Officer or one of its Vice Presidents, without any further action by the Company hereunder. In authenticating such Debt Securities, and accepting the additional responsibilities under this Indenture in relation to such Debt Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon a copy of any Board Resolution or Board Resolutions relating thereto and, if applicable, an appropriate record of any action taken pursuant to such resolution, in each case certified by the Secretary or an Assistant Secretary or other officers with appropriate delegated authority of the Company as the case may be.

        The Trustee shall have the right to decline to authenticate and deliver any Debt Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if a Responsible Officer of the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to existing Securityholders. The Trustee shall also be entitled to receive an opinion of counsel to the effect that (1) all conditions precedent to the execution, delivery and authentication of the Securities have been complied with; (2) the Securities are not required to be registered under the Securities Act; and (3) the Indenture is not required to be qualified under the Trust Indenture Act.

        The definitive Debt Securities shall be typed, printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Debt Securities, as evidenced by their execution of such Debt Securities.

        SECTION 2.02.    Form of Trustee's Certificate of Authentication.

        The Trustee's certificate of authentication on all Debt Securities shall be in substantially the following form:

        This is one of the Debt Securities referred to in the within-mentioned Indenture.

        JPMorgan Chase Bank, not in its individual capacity but solely as Trustee

By Authorized Signatory

        SECTION 2.03.    Form and Denomination of Debt Securities.

        The Debt Securities shall be substantially in the form of Exhibit A hereto. The Debt Securities shall be in registered, certificated form without coupons and in minimum denominations of $100,000 and any multiple of $1,000 in excess thereof. The Debt Securities shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the officers executing the same may determine with the approval of the Trustee as evidenced by the execution and authentication thereof.

        SECTION 2.04.    Execution of Debt Securities.

        The Debt Securities shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chairman of the Board of Directors, Vice Chairman, Chief Executive Officer, President or Chief Financial Officer or one of its Executive Vice Presidents, Senior Vice Presidents or Vice Presidents, under its corporate seal (if legally required), which may be affixed thereto or printed, engraved or otherwise reproduced thereon, by facsimile or otherwise, and which need not be attested. Only such Debt Securities as shall bear thereon a certificate of authentication substantially in the form herein before recited, executed by the Trustee or the Authenticating Agent by the manual signature of an authorized officer, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee or the Authenticating Agent upon any Debt Security executed

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by the Company shall be conclusive evidence that the Debt Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture.

        In case any officer of the Company who shall have signed any of the Debt Securities shall cease to be such officer before the Debt Securities so signed shall have been authenticated and delivered by the Trustee or the Authenticating Agent, or disposed of by the Company, such Debt Securities nevertheless may be authenticated and delivered or disposed of as though the Person who signed such Debt Securities had not ceased to be such officer of the Company; and any Debt Security may be signed on behalf of the Company by such Persons as, at the actual date of the execution of such Debt Security, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.

        Every Debt Security shall be dated the date of its authentication.

        SECTION 2.05.    Exchange and Registration of Transfer of Debt Securities.

        The Company shall cause to be kept, at the office or agency maintained for the purpose of registration of transfer and for exchange as provided in Section 3.02, a register (the "Debt Security Register") for the Debt Securities issued hereunder in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration and transfer of all Debt Securities as provided in this Article II. Such register shall be in written form or in any other form capable of being converted into written form within a reasonable time.

        Debt Securities to be exchanged may be surrendered at the Principal Office of the Trustee or at any office or agency to be maintained by the Company for such purpose as provided in Section 3.02, and the Company shall execute, the Company or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange therefor the Debt Security or Debt Securities which the Securityholder making the exchange shall be entitled to receive. Upon due presentment for registration of transfer of any Debt Security at the Principal Office of the Trustee or at any office or agency of the Company maintained for such purpose as provided in Section 3.02, the Company shall execute, the Company or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in the name of the transferee or transferees a new Debt Security for a like aggregate principal amount. Registration or registration of transfer of any Debt Security by the Trustee or by any agent of the Company appointed pursuant to Section 3.02, and delivery of such Debt Security, shall be deemed to complete the registration or registration of transfer of such Debt Security.

        All Debt Securities presented for registration of transfer or for exchange or payment shall (if so required by the Company or the Trustee or the Authenticating Agent) be duly endorsed by, or be accompanied by, a written instrument or instruments of transfer in form satisfactory to the Company and either the Trustee or the Authenticating Agent duly executed by, the holder or such holder's attorney duly authorized in writing.

        No service charge shall be made for any exchange or registration of transfer of Debt Securities, but the Company or the Trustee may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in connection therewith.

        The Company or the Trustee shall not be required to exchange or register a transfer of any Debt Security for a period of 15 days immediately preceding the date of selection of Debt Securities for redemption.

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        Notwithstanding the foregoing, Debt Securities may not be transferred except in compliance with the restricted securities legend set forth below, unless otherwise determined by the Company in accordance with applicable law, which legend shall be placed on each Debt Security:

        [If the Debt Security is to be Global Debenture—THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

        UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO FIRST COMMUNITY BANCORP/CA STATUTORY TRUST VII OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

        THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED

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FROM THE COMPANY. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,95-60,91-38,90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

        IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE COMPANY AND TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

        THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

        THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORS AND THE CLAIMS OF GENERAL

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AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS NOT SECURED.

        SECTION 2.06.    Mutilated, Destroyed, Lost or Stolen Debt Securities.

        In case any Debt Security shall become mutilated or be destroyed, lost or stolen, the Company shall execute, and upon its written request the Trustee shall authenticate and deliver, a new Debt Security bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Debt Security, or in lieu of and in substitution for the Debt Security so destroyed, lost or stolen. In every case the applicant for a substituted Debt Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of such Debt Security and of the ownership thereof.

        The Trustee may authenticate any such substituted Debt Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Debt Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Debt Security which has matured or is about to mature or has been called for redemption in full shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Debt Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Debt Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless and, in case of destruction, loss or theft, evidence satisfactory to the Company and to the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.

        Every substituted Debt Security issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any such Debt Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Debt Security shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Debt Securities duly issued hereunder. All Debt Securities shall be held and owned upon the express condition that, to the extent permitted by applicable law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Debt Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

        SECTION 2.07.    Temporary Debt Securities.

        Pending the preparation of definitive Debt Securities, the Company may execute and the Trustee shall authenticate and make available for delivery temporary Debt Securities that are typed, printed or lithographed. Temporary Debt Securities shall be issuable in any authorized denomination, and substantially in the form of the definitive Debt Securities but with such omissions, insertions and variations as may be appropriate for temporary Debt Securities, all as may be determined by the Company. Every such temporary Debt Security shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Debt Securities. Without unreasonable delay, the Company will execute and deliver to the Trustee or the Authenticating Agent definitive Debt Securities and thereupon any or all temporary Debt Securities may be surrendered in exchange therefor, at the Principal Office of the Trustee or at any office or agency maintained by the Company for such purpose as provided in Section 3.02, and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange for such temporary Debt Securities a like aggregate principal amount of such

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definitive Debt Securities. Such exchange shall be made by the Company at its own expense and without any charge therefor except that in case of any such exchange involving a registration of transfer the Company may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Debt Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Debt Securities authenticated and delivered hereunder.

        SECTION 2.08.    Payment of Interest.

        Each Debt Security will bear interest at the then applicable Interest Rate from and including each Interest Payment Date or, in the case of the first Interest Payment Period, the original date of issuance of such Debt Security to, but excluding, the next succeeding Interest Payment Date or, in the case of the last Interest Payment Period, the Redemption Date, Special Redemption Date or Maturity Date, as applicable, on the principal thereof, on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on Deferred Interest and on any overdue installment of interest (including Defaulted Interest), payable (subject to the provisions of Article XV) on each Interest Payment Date commencing on April 23, 2004. Interest and any Deferred Interest on any Debt Security that is payable, and is punctually paid or duly provided for by the Company, on any Interest Payment Date shall be paid to the Person in whose name said Debt Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment, except that interest and any Deferred Interest payable on the Maturity Date shall be paid to the Person to whom principal is paid. In case (i) the Maturity Date of any Debt Security or (ii) any Debt Security or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and either on or prior to such Interest Payment Date, interest on such Debt Security will be paid upon presentation and surrender of such Debt Security.

        Any interest on any Debt Security, other than Deferred Interest, that is payable, but is not punctually paid or duly provided for by the Company, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder, and such Defaulted Interest shall be paid by the Company to the Persons in whose names such Debt Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Debt Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements reasonably satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than fifteen nor less than ten days prior to the date of the proposed payment and not less than ten days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Debt Security Register, not less than ten days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Debt Securities (or their respective Predecessor Securities) are registered on such special record date and thereafter the Company shall have no further payment obligation in respect of the Defaulted Interest.

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        Any interest scheduled to become payable on an Interest Payment Date occurring during an Extension Period shall not be Defaulted Interest and shall be payable on such other date as may be specified in the terms of such Debt Securities.

        The term "regular record date" as used in this Section shall mean the fifteenth day prior to the applicable Interest Payment Date whether or not such date is a Business Day.

        Subject to the foregoing provisions of this Section, each Debt Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Debt Security.

        SECTION 2.09.    Cancellation of Debt Securities Paid, etc.

        All Debt Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer, shall, if surrendered to the Company or any Paying Agent, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no Debt Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall retain all canceled Debt Securities in accordance with its customary practices, unless the Company otherwise directs the Trustee in writing, in which case the Trustee shall dispose of such Debt Securities as directed by the Company. If the Company shall acquire any of the Debt Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Debt Securities unless and until the same are surrendered to the Trustee for cancellation.

        SECTION 2.10.    Computation of Interest.

        (a)   The amount of interest payable for any Interest Payment Period will be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period; provided, however, that upon the occurrence of a Special Event Redemption pursuant to Section 10.02 the amounts payable pursuant to this Indenture shall be calculated as set forth in the definition of Special Redemption Price.

        (b)   LIBOR, for any Interest Payment Period, shall be determined by the Calculation Agent in accordance with the following provisions:

        (1)   On the second LIBOR Business Day (provided, that on such day commercial banks are open for business (including dealings in foreign currency deposits) in London (a "LIBOR Banking Day"), and otherwise the next preceding LIBOR Business Day that is also a LIBOR Banking Day) prior to each January 30, April 30, July 30 and October 30 immediately succeeding the commencement of such Interest Payment Period (or, with respect to the first Interest Payment Period, on February 3, 2004) (each such day, a "LIBOR Determination Date" for such Interest Payment Period), the Calculation Agent shall obtain the rate for three-month U.S. Dollar deposits in Europe, which appears on Telerate Page 3750 (as defined in the International Swaps and Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange Definitions) or such other page as may replace such Telerate Page 3750 on the Moneyline Telerate, Inc. service (or such other service or services as may be nominated by the British Banker's Association as the information vendor for the purpose of displaying London interbank offered rates for U.S. dollar deposits), as of 11:00 a.m. (London time) on such LIBOR Determination Date, and the rate so obtained shall be LIBOR for such Interest Payment Period. "LIBOR Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banking institutions in The City of New York or Wilmington, Delaware are authorized or obligated by law or executive order to be closed. If such rate is superseded on Telerate Page 3750 by a corrected rate before 12:00 noon (London time) on the same LIBOR Determination Date, the corrected rate as so substituted will be LIBOR for that Interest Payment Period.

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        (2)   If, on any LIBOR Determination Date, such rate does not appear on Telerate Page 3750 or such other page as may replace such Telerate Page 3750 on the Moneyline Telerate, Inc. service (or such other service or services as may be nominated by the British Banker's Association as the information vendor for the purpose of displaying London interbank offered rates for U.S. dollar deposits), the Calculation Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks (as defined below) to leading banks in the London Interbank market for three-month U.S. Dollar deposits in Europe (in an amount determined by the Calculation Agent) by reference to requests for quotations as of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by the Calculation Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean of such quotations. If, on any LIBOR Determination Date, only one or none of the Reference Banks provide such a quotation, LIBOR shall be deemed to be the arithmetic mean of the offered quotations that at least two leading banks in the City of New York (as selected by the Calculation Agent) are quoting on the relevant LIBOR Determination Date for three-month U.S. Dollar deposits in Europe at approximately 11:00 a.m. (London time) (in an amount determined by the Calculation Agent). As used herein, "Reference Banks" means four major banks in the London Interbank market selected by the Calculation Agent.

        (3)   If the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures provided above, LIBOR for the applicable Interest Payment Period shall be LIBOR in effect for the immediately preceding Interest Payment Period.

        (c)   All percentages resulting from any calculations on the Debt Securities will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward).

        (d)   On each LIBOR Determination Date, the Calculation Agent shall notify, in writing, the Company and the Paying Agent of the applicable Interest Rate in effect for the related Interest Payment Period. The Calculation Agent shall, upon the request of the holder of any Debt Securities, provide the Interest Rate then in effect. All calculations made by the Calculation Agent in the absence of manifest error shall be conclusive for all purposes and binding on the Company and the Holders of the Debt Securities. The Paying Agent shall be entitled to rely on information received from the Calculation Agent or the Company as to the Interest Rate. The Company shall, from time to time, provide any necessary information to the Paying Agent relating to any original issue discount and interest on the Debt Securities that is included in any payment and reportable for taxable income calculation purposes.

        SECTION 2.11.    Extension of Interest Payment Period.

        So long as no Event of Default has occurred and is continuing, the Company shall have the right, from time to time and without causing an Event of Default, to defer payments of interest on the Debt Securities by extending the interest distribution period on the Debt Securities at any time and from time to time during the term of the Debt Securities, for up to twenty consecutive quarterly periods (each such extended interest distribution period, an "Extension Period"), during which Extension Period no interest shall be due and payable (except any Additional Interest that may be due and payable). No Extension Period may end on a date other than an Interest Payment Date or extend beyond the Maturity Date, any Redemption Date or any Special Redemption Date, as the case may be. During any Extension Period, interest will continue to accrue on the Debt Securities, and interest on such accrued interest (such accrued interest and interest thereon referred to herein as "Deferred Interest") will accrue at an annual rate equal to the Interest Rate applicable during such Extension Period, compounded quarterly from the date such Deferred Interest would have been payable were it

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not for the Extension Period, to the extent permitted by law. No interest or Deferred Interest shall be due and payable during an Extension Period, except at the end thereof. At the end of any such Extension Period the Company shall pay all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that no Extension Period may extend beyond the Maturity Date; and provided further, however, that during any such Extension Period, the Company shall be subject to the restrictions set forth in Section 3.08 of this Indenture. Prior to the termination of any Extension Period, the Company may further extend such period, provided, that such period together with all such previous and further consecutive extensions thereof shall not exceed twenty consecutive quarterly periods, or extend beyond the Maturity Date. Upon the termination of any Extension Period and upon the payment of all Deferred Interest, the Company may commence a new Extension Period, subject to the foregoing requirements. The Company must give the Trustee notice of its election to begin such Extension Period ("Notice") at least one Business Day prior to the earlier of (i) the next succeeding date on which interest on the Debt Securities would have been payable except for the election to begin such Extension Period or (ii) the date such interest is payable, but in any event not later than the related regular record date. The Notice shall describe, in reasonable detail, why the company has elected to begin an Extension Period. The Notice shall acknowledge and affirm the Company's understanding that it is prohibited from issuing dividends and other distributions during the Extension Period. Upon receipt of the Notice, an Initial Purchaser shall have the right, at its sole discretion, to disclose the name of the Company, the fact that the Company has elected to begin an Extension Period and other information that such Initial Purchaser, at its sole discretion, deems relevant to the company's election to begin an Extension Period. The Trustee shall give notice of the Company's election to begin a new Extension Period to the Securityholders.

        SECTION 2.12.    CUSIP Numbers.

        The Company in issuing the Debt Securities may use a "CUSIP" number (if then generally in use), and, if so, the Trustee shall use a "CUSIP" number in notices of redemption as a convenience to Securityholders; provided, that any such notice may state that no representation is made as to the correctness of such number either as printed on the Debt Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP number.

        SECTION 2.13.    Global Debentures.

        (a)   Upon the election of the holder of Outstanding Debt Securities, which election need not be in writing, the Debt Securities owned by such holder shall be issued in the form of one or more Global Debentures registered in the name of the Depositary or its nominee. Each Global Debenture issued under this Indenture shall be registered in the name of the Depositary designated by the Company for such Global Debenture or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Debenture shall constitute a single Debt Security for all purposes of this Indenture.

        (b)   Notwithstanding any other provision in this Indenture, no Global Debenture may be exchanged in whole or in part for Debt Securities registered, and no transfer of a Global Debenture in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Debenture or a nominee thereof unless (i) such Depositary advises the Trustee and the Company in writing that such Depositary is no longer willing or able to properly discharge its responsibilities as Depositary with respect to such Global Debenture, and no qualified successor is appointed by the Company within ninety (90) days of receipt by the Company of such notice, (ii) such Depositary ceases to be a clearing agency registered under the Exchange Act and no successor is appointed by the Company within ninety (90) days after obtaining knowledge of such event, (iii) the

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Company executes and delivers to the Trustee a Company Order stating that the Company elects to terminate the book-entry system through the Depositary or (iv) an Event of Default shall have occurred and be continuing. Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv) above, the Trustee shall notify the Depositary and instruct the Depositary to notify all owners of beneficial interests in such Global Debenture of the occurrence of such event and of the availability of Debt Securities to such owners of beneficial interests requesting the same. Upon the issuance of such Debt Securities and the registration in the Debt Security Register of such Debt Securities in the names of the Holders of the beneficial interests therein, the Trustee shall recognize such holders of beneficial interests as Holders.

        (c)   If any Global Debenture is to be exchanged for other Debt Securities or canceled in part, or if another Debt Security is to be exchanged in whole or in part for a beneficial interest in any Global Debenture, then either (i) such Global Debenture shall be so surrendered for exchange or cancellation as provided in this Article II or (ii) the principal amount thereof shall be reduced or increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Debt Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Debt Security registrar, whereupon the Trustee, in accordance with the Applicable Depository Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Debenture by the Depositary, accompanied by registration instructions, the Company shall execute and the Trustee shall authenticate and deliver any Debt Securities issuable in exchange for such Global Debenture (or any portion thereof) in accordance with the instructions of the Depositary. The Trustee shall not be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions.

        (d)   Every Debt Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Debenture or any portion thereof shall be authenticated and delivered in the form of, and shall be, a Global Debenture, unless such Debt Security is registered in the name of a Person other than the Depositary for such Global Debenture or a nominee thereof.

        (e)   Debt Securities distributed to holders of Book-Entry Capital Securities (as defined in the Trust Agreement) upon the dissolution of the Trust shall be distributed in the form of one or more Global Debentures registered in the name of a Depositary or its nominee, and deposited with the Debt Securities registrar, as custodian for such Depositary, or with such Depositary, for credit by the Depositary to the respective accounts of the beneficial owners of the Debt Securities represented thereby (or such other accounts as they may direct). Debt Securities distributed to holders of Capital Securities other than Book-Entry Capital Securities upon the dissolution of the Trust shall not be issued in the form of a Global Debenture or any other form intended to facilitate book-entry trading in beneficial interests in such Debt Securities.

        (f)    The Depositary or its nominee, as the registered owner of a Global Debenture, shall be the Holder of such Global Debenture for all purposes under this Indenture and the Debt Securities, and owners of beneficial interests in a Global Debenture shall hold such interests pursuant to the Applicable Depository Procedures. Accordingly, any such owner's beneficial interest in a Global Debenture shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Depositary Participants. The Debt Securities registrar and the Trustee shall be entitled to deal with the Depositary for all purposes of this Indenture relating to a Global Debenture (including the payment of principal and interest thereon and the giving of instructions or directions by owners of beneficial interests therein and the giving of notices) as the sole Holder of the Debt Security and shall have no obligations to the owners of beneficial interests therein. Neither the Trustee nor the Debt Securities registrar shall have any liability in respect of any transfers affected by the Depositary.

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        (g)   The rights of owners of beneficial interests in a Global Debenture shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its Depositary Participants.

        (h)   No holder of any beneficial interest in any Global Debenture held on its behalf by a Depositary shall have any rights under this Indenture with respect to such Global Debenture, and such Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner of such Global Debenture for all purposes whatsoever. None of the Company, the Trustee nor any agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Debenture or maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the exercise of the rights of the Depositary (or its nominee) as holder of any Debt Security.

ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY

        SECTION 3.01.    Payment of Principal, Premium and Interest; Agreed Treatment of the Debt Securities.

        (a)   The Company covenants and agrees that it will duly and punctually pay or cause to be paid all payments due on the Debt Securities at the place, at the respective times and in the manner provided in this Indenture and the Debt Securities. At the option of the Company, each installment of interest on the Debt Securities may be paid (i) by mailing checks for such interest payable to the order of the holders of Debt Securities entitled thereto as they appear on the Debt Security Register or (ii) by wire transfer to any account with a banking institution located in the United States designated by such holders to the Paying Agent no later than the related record date. Notwithstanding anything to the contrary contained in this Indenture or any Debt Security, if the Trust or the trustee of the Trust is the holder of any Debt Security, then all payments in respect of such Debt Security shall be made by the Company in immediately available funds when due.

        (b)   The Company will treat the Debt Securities as indebtedness, and the interest payable in respect of such Debt Securities as interest, for all U.S. federal income tax purposes. As a condition to the payment of any principal of or interest on any Debt Security without the imposition of withholding tax, the Company shall require the previous delivery of properly completed and signed applicable U.S. federal income tax certifications (generally, an Internal Revenue Service Form W-9 (or applicable successor form) in the case of a persona that is a "United States person" within the meaning of Section 770(a)(30) of the Code or an Internal Revenue Service Form W-8 (or applicable successor form) in the case of a person that is not a "United States person" within the meaning of Section 770(a)(30) of the Code) and any other certification acceptable to it to enable the Company and the Trustee to determine their respective duties and liabilities with respect to any taxes or other charges that they may be required to pay or withhold in respect of such Debt Security or the holder of such Debt Security under any present or future law or regulation of the United States or any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation.

        (c)   As of the date of this Indenture, the Company represents that it has no intention to exercise its right under Section 2.11 to defer payments of interest on the Debt Securities by commencing an Extension Period.

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        (d)   As of the date of this Indenture, the Company represents that the likelihood that it would exercise its right under Section 2.11 to defer payments of interest on the Debt Securities by commencing an Extension Period at any time during which the Debt Securities are outstanding is remote because of the restrictions that would be imposed on the Company's ability to declare or pay dividends or distributions on, or to redeem, purchase or make a liquidation payment with respect to, any of its outstanding equity and on the Company's ability to make any payments of principal of or interest on, or repurchase or redeem, any of its debt securities that rank pari passu in all respects with (or junior in interest to) the Debt Securities.

        SECTION 3.02.    Offices for Notices and Payments, etc.

        So long as any of the Debt Securities remain outstanding, the Company will maintain in New York, New York an office or agency where the Debt Securities may be presented for payment, an office or agency where the Debt Securities may be presented for registration of transfer and for exchange as provided in this Indenture and an office or agency where notices and demands to or upon the Company in respect of the Debt Securities or of this Indenture may be served. The Company hereby appoints the Trustee at its Unit Trust Window, 4 New York Plaza, Ground Floor, New York, New York 10004, attention: ITS (Houston)—First Community Bancorp/CA Statutory Trust VII as such office or agency. In case the Company shall fail to maintain any such office or agency in New York, New York or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the Principal Office of the Trustee.

        In addition to any such office or agency, the Company may from time to time designate one or more offices or agencies outside Wilmington, Delaware or where the Debt Securities may be presented for registration of transfer and for exchange in the manner provided in this Indenture, and the Company may from time to time rescind such designation, as the Company may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain any such office or agency in New York, New York for the purposes above mentioned. The Company will give to the Trustee prompt written notice of any such designation or rescission thereof.

        SECTION 3.03.    Appointments to Fill Vacancies in Trustee's Office.

        The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.09, a Trustee, so that there shall at all times be a Trustee hereunder.

        SECTION 3.04.    Provision as to Paying Agent.

        (a)   If the Company shall appoint a Paying Agent other than the Trustee, it will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provision of this Section 3.04:;

        (1)   that it will hold all sums held by it as such agent for the payment of all payments due on the Debt Securities (whether such sums have been paid to it by the Company or by any other obligor on the Debt Securities) in trust for the benefit of the holders of the Debt Securities;

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        (2)   that it will give the Trustee prompt written notice of any failure by the Company (or by any other obligor on the Debt Securities) to make any payment on the Debt Securities when the same shall be due and payable; and

        (3)   that it will, at any time during the continuance of any Event of Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

        (b)   If the Company shall act as its own Paying Agent, it will, on or before each due date of the payments due on the Debt Securities, set aside, segregate and hold in trust for the benefit of the holders of the Debt Securities a sum sufficient to pay such payments so becoming due and will notify the Trustee in writing of any failure to take such action and of any failure by the Company (or by any other obligor under the Debt Securities) to make any payment on the Debt Securities when the same shall become due and payable.

        Whenever the Company shall have one or more Paying Agents for the Debt Securities, it will, on or prior to each due date of the payments on the Debt Securities, deposit with a Paying Agent a sum sufficient to pay all payments so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee in writing of its action or failure to act.

        (c)   Anything in this Section 3.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge with respect to the Debt Securities, or for any other reason, pay, or direct any Paying Agent to pay to the Trustee all sums held in trust by the Company or any such Paying Agent, such sums to be held by the Trustee upon the same terms and conditions herein contained.

        (d)   Anything in this Section 3.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 3.04 is subject to Sections 12.03 and 12.04.

        (e)   The Company hereby initially appoints the Trustee to act as Paying Agent (the "Paying Agent").

        SECTION 3.05.    Certificate to Trustee.

        The Company will deliver to the Trustee on or before 120 days after the end of each fiscal year, so long as Debt Securities are outstanding hereunder, a Certificate stating that in the course of the performance by the signers of their duties as officers of the Company they would normally have knowledge of any default by the Company in the performance of any covenants of the Company contained herein, stating whether or not they have knowledge of any such default and, if so, specifying each such default of which the signers have knowledge and the nature thereof.

        SECTION 3.06.    Additional Interest.

        If and for so long as the Trust is the holder of all Debt Securities and is subject to or otherwise required to pay, or is required to withhold from distributions to holders of Trust Securities, any additional taxes (including withholding taxes), duties, assessments or other governmental charges as a result of a Tax Event, the Company will pay such additional amounts (the "Additional Interest") on the Debt Securities as shall be required so that the net amounts received and retained by the Trust for distribution to holders of Trust Securities after paying all taxes (including withholding taxes), duties, assessments or other governmental charges will be equal to the amounts the Trust would have received and retained for distribution to holders of Trust Securities after paying all taxes (including withholding taxes on distributions to holders of Trust Securities), duties, assessments or other governmental charges if no such additional taxes, duties, assessments or other governmental charges had been imposed. Whenever in this Indenture or the Debt Securities there is a reference in any context to the payment of principal of or premium, if any, or interest on the Debt Securities, such mention shall be deemed to include mention of payments of the Additional Interest provided for in this paragraph to the extent

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that, in such context, Additional Interest is, was or would be payable in respect thereof pursuant to the provisions of this paragraph and express mention of the payment of Additional Interest (if applicable) in any provisions hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made, provided, however, that, notwithstanding anything to the contrary contained in this Indenture or any debt Security, the deferral of the payment of interest during an Extension Period pursuant to Section 2.11 shall not defer the payment of any Additional Interest that may be due and payable.

        SECTION 3.07.    Compliance with Consolidation Provisions.

        The Company will not, while any of the Debt Securities remain outstanding, consolidate with, or merge into any other Person, or merge into itself, or sell, convey, transfer or otherwise dispose of all or substantially all of its property or capital stock to any other Person unless the provisions of Article XI hereof are complied with.

        SECTION 3.08.    Limitation on Dividends.

        If Debt Securities are initially issued to the Trust or a trustee of such Trust in connection with the issuance of Trust Securities by the Trust (regardless of whether Debt Securities continue to be held by such Trust) and (i) there shall have occurred and be continuing an Event of Default, (ii) the Company shall be in default with respect to its payment of any obligations under the Capital Securities Guarantee or (iii) the Company shall have given notice of its election to defer payments of interest on the Debt Securities by extending the interest distribution period as provided herein and such period, or any extension thereof, shall have commenced and be continuing, then the Company may not (A) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company's capital stock or (B) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Debt Securities or (C) make any payment under any guarantees of the Company that rank pari passu in all respects with or junior in interest to the Capital Securities Guarantee (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company (I) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, (II) in connection with a dividend reinvestment or stockholder stock purchase plan or (III) in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock), as consideration in an acquisition transaction entered into prior to the occurrence of (i), (ii) or (iii) above, (b) as a result of any exchange, reclassification, combination or conversion of any class or series of the Company's capital stock (or any capital stock of a subsidiary of the Company) for any class or series of the Company's capital stock or of any class or series of the Company's indebtedness for any class or series of the Company's capital stock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock).

        SECTION 3.09.    Covenants as to the Trust.

        For so long as such Trust Securities remain outstanding, the Company shall maintain 100% ownership of the Common Securities; provided, however, that any permitted successor of the Company under this Indenture may succeed to the Company's ownership of such Common Securities. The Company, as owner of the Common Securities, shall use commercially reasonable efforts to cause the

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Trust (a) to remain a statutory trust, except in connection with a distribution of Debt Securities to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities or certain mergers, consolidations or amalgamations, each as permitted by the Declaration, (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes and (c) to cause each holder of Trust Securities to be treated as owning an undivided beneficial interest in the Debt Securities.

ARTICLE IV

LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

        SECTION 4.01.    Securityholders' Lists.

        The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee:

        (a)   on each regular record date for an Interest Payment Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Securityholders of the Debt Securities as of such record date; and

        (b)   at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, except that no such lists need be furnished under this Section 4.01 so long as the Trustee is in possession thereof by reason of its acting as Debt Security registrar.

        SECTION 4.02.    Preservation and Disclosure of Lists.

        (a)   The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Debt Securities (1) contained in the most recent list furnished to it as provided in Section 4.01 or (2) received by it in the capacity of Debt Securities registrar (if so acting) hereunder. The Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a new list so furnished.

        (b)   In case three or more holders of Debt Securities (hereinafter referred to as "applicants") apply in writing to the Trustee and furnish to the Trustee reasonable proof that each such applicant has owned a Debt Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Debt Securities with respect to their rights under this Indenture or under such Debt Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall within five Business Days after the receipt of such application, at the election of the Company, either:

        (1)   afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.02, or

        (2)   inform such applicants as to the approximate number of holders of Debt Securities whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.02, and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application.

        If the Company shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Securityholder of Debt Securities whose name and address appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.02 a copy of the form of proxy or other communication which is specified in such request with reasonable promptness after a tender to the

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Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, if permitted or required by applicable law, together with a copy of the material to be mailed, a written statement of the Company to the effect that, such mailing would be contrary to the best interests of the holders of all Debt Securities, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission, as permitted or required by applicable law, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Securityholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.

        (c)   Each and every holder of Debt Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any Paying Agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Debt Securities in accordance with the provisions of subsection (b) of this Section 4.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b).

ARTICLE V

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT

        SECTION 5.01.    Events of Default.

        The following events shall be "Events of Default" with respect to Debt Securities:

        (a)   the Company defaults in the payment of any interest upon any Debt Security when it becomes due and payable, and continuance of such default for a period of 30 days; for the avoidance of doubt, an extension of any interest distribution period by the Company in accordance with Section 2.11 of this Indenture shall not constitute a default under this clause 5.01(a); or

        (b)   the Company defaults in the payment of all or any part of the principal of (or premium, if any, on) any Debt Securities as and when the same shall become due and payable either at maturity, upon redemption, by declaration of acceleration pursuant to Section 5.01 of this Indenture or otherwise; or

        (c)   the Company defaults in the performance of, or breaches, any of its covenants or agreements in Sections 3.06, 3.07, 3.08 or 3.09 of this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the holders of not less than 25% in aggregate principal amount of the outstanding Debt Securities, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default' hereunder; or

        (d)   a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company or for any substantial part of its property,

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or orders the winding-up or liquidation of its affairs and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or

        (e)   the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Company or of any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

        (f)    the Trust shall have voluntarily or involuntarily liquidated, dissolved, wound-up its business or otherwise terminated its existence except in connection with (1) the distribution of the Debt Securities to holders of the Trust Securities in liquidation of their interests in the Trust, (2) the redemption of all of the outstanding Trust Securities or (3) certain mergers, consolidations or amalgamations, each as permitted by the Declaration.

        If an Event of Default occurs and is continuing with respect to the Debt Securities, then, and in each and every such case, unless the principal of the Debt Securities shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debt Securities then outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of the Debt Securities and any premium and interest accrued, but unpaid, thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default occurs, then, in each and every such case, the entire principal amount of the Debt Securities and any premium and interest accrued, but unpaid, thereon shall ipso facto become immediately due and payable without further action.

        The foregoing provisions, however, are subject to the condition that if, at any time after the principal of the Debt Securities shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, (i) the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Debt Securities and all payments on the Debt Securities which shall have become due otherwise than by acceleration (with interest upon all such payments and Deferred Interest, to the extent permitted by law) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and all other amounts due to the Trustee pursuant to Section 6.06, if any, and (ii) all Events of Default under this Indenture, other than the non-payment of the payments on Debt Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, and in each and every such case the holders of a majority in aggregate principal amount of the Debt Securities then outstanding, by written notice to the Company and to the Trustee, may waive all defaults and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon; provided, however, that if the Debt Securities are held by the Trust or a trustee of the Trust, such waiver or rescission and annulment shall not be effective until the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall have consented to such waiver or rescission and annulment.

        In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Trustee and the holders of the Debt Securities shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the

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Trustee and the holders of the Debt Securities shall continue as though no such proceeding had been taken.

        SECTION 5.02.    Payment of Debt Securities on Default; Suit Therefor.

        The Company covenants that upon the occurrence of an Event of Default pursuant to clause 5.01(a) or 5.01(b) and upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Debt Securities, the whole amount that then shall have become due and payable on all Debt Securities including Deferred Interest accrued on the Debt Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including a reasonable compensation to the Trustee, its agents, attorneys and counsel, and any other amounts due to the Trustee under Section 6.06. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor on such Debt Securities and collect in the manner provided by law out of the property of the Company or any other obligor on such Debt Securities wherever situated the moneys adjudged or decreed to be payable.

        In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Debt Securities under Bankruptcy Law, or in case a receiver or trustee shall have been appointed for the property of the Company or such other obligor, or in the case of any other similar judicial proceedings relative to the Company or other obligor upon the Debt Securities, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Debt Securities shall then be due and payable as therein expressed or by declaration of acceleration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Debt Securities and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all other amounts due to the Trustee under Section 6.06) and of the Securityholders allowed in such judicial proceedings relative to the Company or any other obligor on the Debt Securities, or to the creditors or property of the Company or such other obligor, unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Debt Securities in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or Person performing similar functions in comparable proceedings, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and expenses; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the Securityholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other amounts due to the Trustee under Section 6.06.

        Nothing herein contained shall be construed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Debt Securities or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

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        All rights of action and of asserting claims under this Indenture, or under any of the Debt Securities, may be enforced by the Trustee without the possession of any of the Debt Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the holders of the Debt Securities.

        In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the holders of the Debt Securities, and it shall not be necessary to make any holders of the Debt Securities parties to any such proceedings.

        SECTION 5.03.    Application of Moneys Collected by Trustee.

        Any moneys collected by the Trustee shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such moneys, upon presentation of the several Debt Securities in respect of which moneys have been collected, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid:

        First: To the payment of costs and expenses incurred by, and reasonable fees of, the Trustee, its agents, attorneys and counsel, and of all other amounts due to the Trustee under Section 6.06;

        Second: To the payment of all Senior Indebtedness of the Company if and to the extent required by Article XV;

        Third: To the payment of the amounts then due and unpaid upon Debt Securities, in respect of which or for the benefit of which money has been collected, ratably, without preference or priority of any kind, according to the amounts due on such Debt Securities; and

        Fourth: The balance, if any, to the Company.

        SECTION 5.04.    Proceedings by Securityholders.

        No holder of any Debt Security shall have any right to institute any suit, action or proceeding for any remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default with respect to the Debt Securities and unless the holders of not less than 25% in aggregate principal amount of the Debt Securities then outstanding shall have given the Trustee a written request to institute such action, suit or proceeding and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred thereby, and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action, suit or proceeding; provided, that no holder of Debt Securities shall have any right to prejudice the rights of any other holder of Debt Securities, obtain priority or preference over any other such holder or enforce any right under this Indenture except in the manner herein provided and for the equal, ratable and common benefit of all holders of Debt Securities.

        Notwithstanding any other provisions in this Indenture, however, the right of any holder of any Debt Security to receive payment of the principal of, premium, if any, and interest on such Debt Security when due, or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the consent of such holder. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

        SECTION 5.05.    Proceedings by Trustee.

        In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any

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covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

        SECTION 5.06.    Remedies Cumulative and Continuing.

        Except as otherwise provided in Section 2.06, all powers and remedies given by this Article V to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Debt Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to the Debt Securities, and no delay or omission of the Trustee or of any holder of any of the Debt Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 5.04, every power and remedy given by this Article V or by law to the Trustee or to the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

        SECTION 5.07.    Direction of Proceedings and Waiver of Defaults by Majority of Securityholders.

        The holders of a majority in aggregate principal amount of the Debt Securities affected (voting as one class) at the time outstanding and, if the Debt Securities are held by the Trust or a trustee of the Trust, the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such Debt Securities; provided, however, that if the Debt Securities are held by the Trust or a trustee of the Trust, such time, method and place or such exercise, as the case may be, may not be so directed until the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall have directed such time, method and place or such exercise, as the case may be; provided, further, that (subject to the provisions of Section 6.01) the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by counsel shall determine that the action so directed would be unjustly prejudicial to the holders not taking part in such direction or if the Trustee being advised by counsel determines that the action or proceeding so directed may not lawfully be taken or if a Responsible Officer of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability. Prior to any declaration of acceleration, or ipso facto acceleration, of the maturity of the Debt Securities, the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding may on behalf of the holders of all of the Debt Securities waive (or modify any previously granted waiver of) any past default or Event of Default and its consequences, except a default (a) in the payment of principal of, premium, if any, or interest on any of the Debt Securities, (b) in respect of covenants or provisions hereof which cannot be modified or amended without the consent of the holder of each Debt Security affected, or (c) in respect of the covenants contained in Section 3.09; provided, however, that if the Debt Securities are held by the Trust or a trustee of the Trust, such waiver or modification to such waiver shall not be effective until the holders of a majority in Liquidation Amount of the Trust Securities of the Trust shall have consented to such waiver or modification to such waiver; provided, further, that if the consent of the holder of each outstanding Debt Security is required, such waiver or modification to such waiver shall not be effective until each holder of the outstanding Capital Securities of the Trust shall have consented to such waiver or modification to such waiver. Upon any such waiver or modification to such waiver, the Default or Event of Default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Debt Securities shall be restored to their former positions and rights hereunder, respectively; but no such waiver or modification to such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder

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shall have been waived as permitted by this Section 5.07, said default or Event of Default shall for all purposes of the Debt Securities and this Indenture be deemed to have been cured and to be not continuing.

        SECTION 5.08.    Notice of Defaults.

        The Trustee shall, within 90 days after a Responsible Officer of the Trustee shall have actual knowledge or received written notice of the occurrence of a default with respect to the Debt Securities, mail to all Securityholders, as the names and addresses of such holders appear upon the Debt Security Register, notice of all defaults with respect to the Debt Securities known to the Trustee, unless such defaults shall have been cured before the giving of such notice (the term "defaults" for the purpose of this Section 5.08 being hereby defined to be the events specified in subsections (a), (b), (c), (d) and (e) of Section 5.01, not including periods of grace, if any, provided for therein); provided, that, except in the case of default in the payment of the principal of, premium, if any, or interest on any of the Debt Securities, the Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders.

        SECTION 5.09.    Undertaking to Pay Costs.

        All parties to this Indenture agree, and each holder of any Debt Security by such holder's acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.09 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding in the aggregate more than 10% in principal amount of the Debt Securities (or, if such Debt Securities are held by the Trust or a trustee of the Trust, more than 10% in liquidation amount of the outstanding Capital Securities), to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Debt Security against the Company on or after the same shall have become due and payable, or to any suit instituted in accordance with Section 14.12.

ARTICLE VI

CONCERNING THE TRUSTEE

        SECTION 6.01.    Duties and Responsibilities of Trustee.

        With respect to the holders of Debt Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Debt Securities and after the curing or waiving of all Events of Default which may have occurred, with respect to the Debt Securities, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Debt Securities has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.

        No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

        (a)   prior to the occurrence of an Event of Default with respect to the Debt Securities and after the curing or waiving of all Events of Default which may have occurred

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        (1)   the duties and obligations of the Trustee with respect to the Debt Securities shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations with respect to the Debt Securities as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

        (2)   in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform on their face to the requirements of this Indenture;

        (b)   the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

        (c)   the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith, in accordance with the direction of the Securityholders pursuant to Section 5.07, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

        (d)   the Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Debt Securities unless either (1) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) written notice of such Default or Event of Default shall have been given to the Trustee by the Company or any other obligor on the Debt Securities or by any holder of the Debt Securities, except with respect to an Event of Default pursuant to Sections 5.01 (a) or 5.01 (b) hereof (other than an Event of Default resulting from the default in the payment of Additional Interest or premium, if any, if the Trustee does not have actual knowledge or written notice that such payment is due and payable), of which the Trustee shall be deemed to have knowledge; and

        (e)   in the absence of bad faith on the part of the Trustee, the Trustee may seek and rely on reasonable instructions from the Company.

        None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.

        SECTION 6.02.    Reliance on Documents, Opinions, etc.

        Except as otherwise provided in Section 6.01:

        (a)   the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

        (b)   any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

        (c)   the Trustee may consult with counsel of its selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken,

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suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

        (d)   the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby;

        (e)   the Trustee shall not be liable for any action taken or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to the Debt Securities (that has not been cured or waived) to exercise with respect to the Debt Securities such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs;

        (f)    the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, coupon or other paper or document, unless requested in writing to do so by the holders of not less than a majority in aggregate principal amount of the outstanding Debt Securities affected thereby; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expense or liability as a condition to so proceeding; and

        (g)   the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents (including any Authenticating Agent) or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed by it with due care.

        SECTION 6.03.    No Responsibility for Recitals, etc.

        The recitals contained herein and in the Debt Securities (except in the certificate of authentication of the Trustee or the Authenticating Agent) shall be taken as the statements of the Company and the Trustee and the Authenticating Agent assume no responsibility for the correctness of the same. The Trustee and the Authenticating Agent make no representations as to the validity or sufficiency of this Indenture or of the Debt Securities. The Trustee and the Authenticating Agent shall not be accountable for the use or application by the Company of any Debt Securities or the proceeds of any Debt Securities authenticated and delivered by the Trustee or the Authenticating Agent in conformity with the provisions of this Indenture.

        SECTION 6.04.    Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debt Securities.

        The Trustee or any Authenticating Agent or any Paying Agent or any transfer agent or any Debt Security registrar, in its individual or any other capacity, may become the owner or pledgee of Debt Securities with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, transfer agent or Debt Security registrar.

        SECTION 6.05.    Moneys to be Held in Trust.

        Subject to the provisions of Section 12.04, all moneys received by the Trustee or any Paying Agent shall, until used or applied as herein provided, be held in trust for the purpose for which they were

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received, but need not be segregated from other funds except to the extent required by law. The Trustee and any Paying Agent shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. So long as no Event of Default shall have occurred and be continuing, all interest allowed on any such moneys, if any, shall be paid from time to time to the Company upon the written order of the Company, signed by the Chairman of the Board of Directors, the President, the Chief Operating Officer, a Vice President, the Treasurer or an Assistant Treasurer of the Company.

        SECTION 6.06.    Compensation and Expenses of Trustee.

        The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation as shall be agreed to in writing between the Company and the Trustee (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and the Company will pay or reimburse the Trustee upon its written request for all documented reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the reasonable expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance that arises from its negligence, willful misconduct or bad faith. The Company also covenants to indemnify each of the Trustee (including in its individual capacity) and any predecessor Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any and all loss, damage, claim, liability or expense including taxes (other than taxes based on the income of the Trustee), except to the extent such loss, damage, claim, liability or expense results from the negligence, willful misconduct or bad faith of such indemnitee, arising out of or in connection with the acceptance or administration of this Trust, including the costs and expenses of defending itself against any claim or liability in the premises. The obligations of the Company under this Section 6.06 to compensate and indemnify the Trustee and to pay or reimburse the Trustee for documented expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by (and the Company hereby grants and pledges to the Trustee) a lien prior to that of the Debt Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Debt Securities.

        Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in subsections (d), (e) or (f) of Section 5.01, the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.

        The provisions of this Section shall survive the resignation or removal of the Trustee and the defeasance or other termination of this Indenture.

        Notwithstanding anything in this Indenture or any Debt Security to the contrary, the Trustee shall have no obligation whatsoever to advance funds to pay any principal of or interest on or other amounts with respect to the Debt Securities or otherwise advance funds to or on behalf of the Company.

        SECTION 6.07.    Officers' Certificate as Evidence.

        Except as otherwise provided in Sections 6.01 and 6.02, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence, willful misconduct or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such certificate, in the absence of negligence, willful misconduct or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

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        SECTION 6.08.    Eligibility of Trustee.

        The Trustee hereunder shall at all times be a U.S. Person that is a banking corporation or national association organized and doing business under the laws of the United States of America or any state thereof or of the District of Columbia and authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000) and subject to supervision or examination by federal, state, or District of Columbia authority. If such corporation or national association publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 6.08 the combined capital and surplus of such corporation or national association shall be deemed to be its combined capital and surplus as set forth in its most recent records of condition so published.

        The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee, notwithstanding that such corporation or national association shall be otherwise eligible and qualified under this Article.

        In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.08, the Trustee shall resign immediately in the manner and with the effect specified in Section 6.09.

        If the Trustee has or shall acquire any "conflicting interest" within the meaning of § 310(b) of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to this Indenture.

        SECTION 6.09.    Resignation or Removal of Trustee, Calculation Agent, Paying Agent or Debt Security Registrar.

        (a)   The Trustee, or any trustee or trustees hereafter appointed, the Calculation Agent, the Paying Agent and any Debt Security Registrar may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof, at the Company's expense, to the holders of the Debt Securities at their addresses as they shall appear on the Debt Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor or successors by written instrument, in duplicate, executed by order of its Board of Directors, one copy of which instrument shall be delivered to the resigning party and one copy to the successor. If no successor shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation to the affected Securityholders, the resigning party may petition any court of competent jurisdiction for the appointment of a successor, or any Securityholder who has been a bona fide holder of a Debt Security or Debt Securities for at least six months may, subject to the provisions of Section 5.09, on behalf of himself or herself and all others similarly situated, petition any such court for the appointment of a successor. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor.

        (b)   In case at any time any of the following shall occur—

        (1)   the Trustee shall fail to comply with the provisions of the last paragraph of Section 6.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Debt Security or Debt Securities for at least six months,

        (2)   the Trustee shall cease to be eligible in accordance with the provisions of Section 6.08 and shall fail to resign after written request therefor by the Company or by any such Securityholder, or

        (3)   the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

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then, in any such case, the Company may remove the Trustee and appoint a successor Trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor Trustee, or, subject to the provisions of Section 5.09, if no successor Trustee shall have been so appointed and have accepted appointment within 30 days of the occurrence of any of (1), (2) or (3) above, any Securityholder who has been a bona fide holder of a Debt Security or Debt Securities for at least six months may, on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor Trustee.

        (c)   Upon prior written notice to the Company and the Trustee, the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding may at any time remove the Trustee and nominate a successor Trustee, which shall be deemed appointed as successor Trustee unless within ten Business Days after such nomination the Company objects thereto, in which case or in the case of a failure by such holders to nominate a successor Trustee, the Trustee so removed or any Securityholder, upon the terms and conditions and otherwise as in subsection (a) of this Section 6.09 provided, may petition any court of competent jurisdiction for an appointment of a successor.

        (d)   Any resignation or removal of the Trustee, the Calculation Agent, the Paying Agent and any Debt Security Registrar and appointment of a successor pursuant to any of the provisions of this Section 6.09 shall become effective upon acceptance of appointment by the successor as provided in Section 6.10.

        SECTION 6.10.    Acceptance by Successor.

        Any successor Trustee, Calculation Agent, Paying Agent or Debt Security Registrar appointed as provided in Section 6.09 shall execute, acknowledge and deliver to the Company and to its predecessor an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the retiring party shall become effective and such successor, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations with respect to the Debt Securities of its predecessor hereunder, with like effect as if originally named herein; but, nevertheless, on the written request of the Company or of the successor, the party ceasing to act shall, upon payment of the amounts then due it pursuant to the provisions of Section 6.06, execute and deliver an instrument transferring to such successor all the rights and powers of the party so ceasing to act and shall duly assign, transfer and deliver to such successor all property and money held by such retiring party hereunder. Upon request of any such successor, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor all such rights and powers. Any party ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected to secure any amounts then due it pursuant to the provisions of Section 6.06.

        If a successor Trustee is appointed, the Company, the retiring Trustee and the successor Trustee shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Debt Securities as to which the predecessor Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the Trust hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee.

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        No successor Trustee shall accept appointment as provided in this Section 6.10 unless at the time of such acceptance such successor Trustee shall be eligible and qualified under the provisions of Section 6.08.

        In no event shall a retiring Trustee, Calculation Agent, Paying Agent or Debt Security Registrar be liable for the acts or omissions of any successor hereunder.

        Upon acceptance of appointment by a successor Trustee, Calculation Agent, Paying Agent or Debt Security Registrar as provided in this Section 6.10, the Company shall mail notice of the succession to the holders of Debt Securities at their addresses as they shall appear on the Debt Security Register. If the Company fails to mail such notice within ten Business Days after the acceptance of appointment by the successor, the successor shall cause such notice to be mailed at the expense of the Company.

        SECTION 6.11.    Succession by Merger, etc.

        Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided, that such Person shall be otherwise eligible and qualified under this Article.

        In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Debt Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee, and deliver such Debt Securities so authenticated; and in case at that time any of the Debt Securities shall not have been authenticated, any successor to the Trustee may authenticate such Debt Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Debt Securities or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Debt Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

        SECTION 6.12.    Authenticating Agents.

        There may be one or more Authenticating Agents appointed by the Trustee upon the request of the Company with power to act on its behalf and subject to its direction in the authentication and delivery of Debt Securities issued upon exchange or registration of transfer thereof as fully to all intents and purposes as though any such Authenticating Agent had been expressly authorized to authenticate and deliver Debt Securities; provided, that the Trustee shall have no liability to the Company for any acts or omissions of the Authenticating Agent with respect to the authentication and delivery of Debt Securities. Any such Authenticating Agent shall at all times be a Person organized and doing business under the laws of the United States or of any state or territory thereof or of the District of Columbia authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of at least $50,000,000 and being subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such Person publishes reports of condition at least annually pursuant to law or the requirements of such authority, then for the purposes of this Section 6.12 the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect herein specified in this Section.

        Any Person into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, consolidation or conversion to which

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any Authenticating Agent shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, if such successor Person is otherwise eligible under this Section 6.12 without the execution or filing of any paper or any further act on the part of the parties hereto or such Authenticating Agent.

        Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of any Authenticating Agent with respect to the Debt Securities by giving written notice of termination to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section 6.12, the Trustee may, and upon the request of the Company shall, promptly appoint a successor Authenticating Agent eligible under this Section 6.12, shall give written notice of such appointment to the Company and shall mail notice of such appointment to all holders of Debt Securities as the names and addresses of such holders appear on the Debt Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers, duties and responsibilities with respect to the Debt Securities of its predecessor hereunder, with like effect as if originally named as Authenticating Agent herein.

        The Company agrees to pay to any Authenticating Agent from time to time reasonable compensation for its services. Any Authenticating Agent shall have no responsibility or liability for any action taken by it as such in accordance with the directions of the Trustee and shall receive such reasonable indemnity as it may require against the costs, expenses and liabilities incurred in furtherance of its duties under this Section 6.12.

ARTICLE VII

CONCERNING THE SECURITYHOLDERS

        SECTION 7.01.    Action by Securityholders.

        Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Debt Securities or aggregate liquidation amount of the Capital Securities may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by such Securityholders or holders of Capital Securities, as the case may be, in person or by agent or proxy appointed in writing, or (b) by the record of such holders of Debt Securities voting in favor thereof at any meeting of such Securityholders duly called and held in accordance with the provisions of Article VIII or of such holders of Capital Securities duly called and held in accordance with the provisions of the Declaration, or (c) by a combination of such instrument or instruments and any such record of such a meeting of such Securityholders or holders of Capital Securities, as the case may be, or (d) by any other method the Trustee deems satisfactory.

        If the Company shall solicit from the Securityholders any request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, the Company may, at its option, as evidenced by an Officers' Certificate, fix in advance a record date for such Debt Securities for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite

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proportion of outstanding Debt Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, and for that purpose the outstanding Debt Securities shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

        SECTION 7.02.    Proof of Execution by Securityholders.

        Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the execution of any instrument by a Securityholder or such Securityholder's agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The ownership of Debt Securities shall be proved by the Debt Security Register or by a certificate of the Debt Security Registrar. The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

        The record of any Securityholders' meeting shall be proved in the manner provided in Section 8.06.

        SECTION 7.03.    Who Are Deemed Absolute Owners.

        Prior to due presentment for registration of transfer of any Debt Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer agent and any Debt Security registrar may deem the Person in whose name such Debt Security shall be registered upon the Debt Security Register to be, and may treat such Person as, the absolute owner of such Debt Security (whether or not such Debt Security shall be overdue) for the purpose of receiving payment of or on account of the principal of, premium, if any, and interest on such Debt Security and for all other purposes; and neither the Company nor the Trustee nor any Authenticating Agent nor any Paying Agent nor any transfer agent nor any Debt Security registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being or upon such holder's order shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Debt Security.

        SECTION 7.04.    Debt Securities Owned by Company Deemed Not Outstanding.

        In determining whether the holders of the requisite aggregate principal amount of Debt Securities have concurred in any direction, consent or waiver under this Indenture, Debt Securities which are owned by the Company or any other obligor on the Debt Securities or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company (other than the Trust) or any other obligor on the Debt Securities shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided, that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Debt Securities which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Debt Securities so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 7.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Debt Securities and that the pledgee is not the Company or any such other obligor or Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

        SECTION 7.05.    Revocation of Consents; Future Securityholders Bound.

        At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01, of the taking of any action by the holders of the percentage in aggregate principal amount of the Debt

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Securities specified in this Indenture in connection with such action, any holder (in cases where no record date has been set pursuant to Section 7.01) or any holder as of an applicable record date (in cases where a record date has been set pursuant to Section 7.01) of a Debt Security (or any Debt Security issued in whole or in part in exchange or substitution therefor) the serial number of which is shown by the evidence to be included in the Debt Securities the holders of which have consented to such action may, by filing written notice with the Trustee at the Principal Office of the Trustee and upon proof of holding as provided in Section 7.02, revoke such action so far as concerns such Debt Security (or so far as concerns the principal amount represented by any exchanged or substituted Debt Security). Except as aforesaid any such action taken by the holder of any Debt Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Debt Security, and of any Debt Security issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon such Debt Security or any Debt Security issued in exchange or substitution therefor.

ARTICLE VIII

SECURITYHOLDERS' MEETINGS

        SECTION 8.01.    Purposes of Meetings.

        A meeting of Securityholders may be called at any time and from time to time pursuant to the provisions of this Article VIII for any of the following purposes:

        (a)   to give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by Securityholders pursuant to any of the provisions of Article V;

        (b)   to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article VI;

        (c)   to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 9.02; or

        (d)   to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of such Debt Securities under any other provision of this Indenture or under applicable law.

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        SECTION 8.02.    Call of Meetings by Trustee.

        The Trustee may at any time call a meeting of Securityholders to take any action specified in Section 8.01, to be held at such time and at such place in The City of New York, the Borough of Manhattan, or Houston, Texas, as the Trustee shall determine. Notice of every meeting of the Securityholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed to holders of Debt Securities affected at their addresses as they shall appear on the Debt Securities Register. Such notice shall be mailed not less than 20 nor more than 180 days prior to the date fixed for the meeting.

        SECTION 8.03.    Call of Meetings by Company or Securityholders.

        In case at any time the Company pursuant to a Board Resolution, or the holders of at least 25% in aggregate principal amount of the Debt Securities, as the case may be, then outstanding, shall have requested the Trustee to call a meeting of Securityholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of such request, then the Company or such Securityholders may determine the time and the place in for such meeting and may call such meeting to take any action authorized in Section 8.01, by mailing notice thereof as provided in Section 8.02.

        SECTION 8.04.    Qualifications for Voting.

        To be entitled to vote at any meeting of Securityholders a Person shall be (a) a holder of one or more Debt Securities with respect to which the meeting is being held or (b) a Person appointed by an instrument in writing as proxy by a holder of one or more such Debt Securities. The only Persons who shall be entitled to be present or to speak at any meeting of Securityholders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

        SECTION 8.05.    Regulations.

        Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Securityholders, in regard to proof of the holding of Debt Securities and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate.

        The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Securityholders as provided in Section 8.03, in which case the Company or the Securityholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote at the meeting.

        Subject to the provisions of Section 7.04, at any meeting each holder of Debt Securities with respect to which such meeting is being held or proxy therefor shall be entitled to one vote for each $1,000 principal amount of Debt Securities held or represented by such holder; provided, however, that no vote shall be cast or counted at any meeting in respect of any Debt Security challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Debt Securities held by such chairman or instruments in writing as aforesaid duly designating such chairman as the Person to vote on behalf of other Securityholders. Any meeting of Securityholders duly called pursuant to the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a majority of those present, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

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        SECTION 8.06.    Voting.

        The vote upon any resolution submitted to any meeting of holders of Debt Securities with respect to which such meeting is being held shall be by written ballots on which shall be subscribed the signatures of such holders or of their representatives by proxy and the serial number or numbers of the Debt Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Securityholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 8.02. The record shall show the serial numbers of the Debt Securities voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.

        SECTION 8.07.    Quorum; Actions.

        The Persons entitled to vote a majority in outstanding principal amount of the Debt Securities shall constitute a quorum for a meeting of Securityholders; provided, however, that if any action is to be taken at such meeting with respect to a consent, waiver, request, demand, notice, authorization, direction or other action which may be given by the holders of not less than a specified percentage in outstanding principal amount of the Debt Securities, the Persons holding or representing such specified percentage in outstanding principal amount of the Debt Securities will constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Securityholders, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the permanent chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the permanent chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 8.02, except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the outstanding principal amount of the Debt Securities which shall constitute a quorum.

        Except as limited by the proviso in the first paragraph of Section 9.02, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted by the affirmative vote of the holders of not less than a majority in outstanding principal amount of the Debt Securities; provided, however, that, except as limited by the proviso in the first paragraph of Section 9.02, any resolution with respect to any consent, waiver, request, demand, notice, authorization, direction or other action that this Indenture expressly provides may be given by the holders of not less than a specified percentage in outstanding principal amount of the Debt Securities may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the holders of not less than such specified percentage in outstanding principal amount of the Debt Securities.

        Any resolution passed or decision taken at any meeting of holders of Debt Securities duly held in accordance with this Section shall be binding on all the Securityholders, whether or not present or represented at the meeting.

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ARTICLE IX

SUPPLEMENTAL INDENTURES

        SECTION 9.01.    Supplemental Indentures without Consent of Securityholders.

        The Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto, without the consent of the Securityholders, for one or more of the following purposes:

        (a)   to evidence the succession of another Person to the Company, or successive successions, and the assumption by the successor Person of the covenants, agreements and obligations of the Company, pursuant to Article XI hereof;

        (b)   to add to the covenants of the Company such further covenants, restrictions or conditions for the protection of the holders of Debt Securities as the Board of Directors shall consider to be for the protection of the holders of such Debt Securities, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default;

        (c)   to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make or amend such other provisions in regard to matters or questions arising under this Indenture; provided, that any such action shall not adversely affect the interests of the holders of the Debt Securities in any material respect;

        (d)   to add to, delete from, or revise the terms of Debt Securities, including, without limitation, any terms relating to the issuance, exchange, registration or transfer of Debt Securities, including to provide for transfer procedures and restrictions substantially similar to those applicable to the Capital Securities, as required by Section 2.05 (for purposes of assuring that no registration of Debt Securities is required under the Securities Act of 1933, as amended); provided, that any such action shall not adversely affect the interests of the holders of the Debt Securities then outstanding in any material respect (it being understood, for purposes of this proviso, that transfer restrictions on Debt Securities substantially similar to those applicable to Capital Securities shall not be deemed to adversely affect the holders of the Debt Securities in any material respect);

        (e)   to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Debt Securities and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.10;

        (f)    to make any change (other than as elsewhere provided in this paragraph) that does not adversely affect the rights of any Securityholder in any material respect;

        (g)   to provide for the issuance of and establish the form and terms and conditions of the Debt Securities, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or the Debt Securities, or to add to the rights of the holders of Debt Securities; or

        (h)   to modify, eliminate or add to any provisions of the Indenture or the Debt Securities to such extent as shall be necessary to ensure that the Debt Securities are treated as indebtedness of

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the Company for United States income tax purposes, provided, that such action pursuant to this clause (h) shall not adversely affect in any material respect the interests of any holders of Debt Securities.

        The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.

        Any supplemental indenture authorized by the provisions of this Section 9.01 may be executed by the Company and the Trustee without the consent of the holders of any of the Debt Securities at the time outstanding, notwithstanding any of the provisions of Section 9.02.

        SECTION 9.02.    Supplemental Indentures with Consent of Securityholders.

        With the consent (evidenced as provided in Section 7.01) of the holders of not less than a majority in aggregate principal amount of the Debt Securities at the time outstanding affected by such supplemental indenture (voting as a class), the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act, then in effect, applicable to indentures qualified thereunder) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debt Securities; provided, however, that no such supplemental indenture shall without such consent of the holders of each Debt Security then outstanding and affected thereby (i) change the Maturity Date of any Debt Security, or reduce the principal amount thereof or any premium thereon, or reduce the rate (or manner of calculation of the rate) or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof or make the principal thereof or any interest or premium thereon payable in any coin or currency other than that provided in the Debt Securities, or impair or affect the right of any Securityholder to institute suit for payment thereof or impair the right of repayment, if any, at the option of the holder, or (ii) reduce the aforesaid percentage of Debt Securities the holders of which are required to consent to any such supplemental indenture; and provided, further, that if the Debt Securities are held by the Trust or a trustee of such trust, such supplemental indenture shall not be effective until the holders of a majority in Liquidation Amount of the outstanding Capital Securities shall have consented to such supplemental indenture; provided, further, that if the consent of the Securityholder of each outstanding Debt Security is required, such supplemental indenture shall not be effective until each holder of the outstanding Capital Securities shall have consented to such supplemental indenture.

        Upon the request of the Company accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders (and holders of Capital Securities, if required) as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

        Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, prepared by the Company, setting forth in general terms the substance of such supplemental indenture, to the Securityholders as their names and addresses appear upon the Debt Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

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        It shall not be necessary for the consent of the Securityholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

        SECTION 9.03.    Effect of Supplemental Indentures.

        Upon the execution of any supplemental indenture pursuant to the provisions of this Article IX, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Debt Securities shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

        SECTION 9.04.    Notation on Debt Securities.

        Debt Securities authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article IX may bear a notation as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Debt Securities so modified as to conform, in the opinion of the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee or the Authenticating Agent and delivered in exchange for the Debt Securities then outstanding.

        SECTION 9.05.    Evidence of Compliance of Supplemental Indenture to be furnished to Trustee.

        The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall, in addition to the documents required by Section 14.06, receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article IX. The Trustee shall receive an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article IX is authorized or permitted by, and conforms to, the terms of this Article IX and that it is proper for the Trustee under the provisions of this Article IX to join in the execution thereof.

ARTICLE X

REDEMPTION OF SECURITIES

        SECTION 10.01.    Optional Redemption.

        At any time the Company shall have the right, subject to the receipt by the Company of prior approval from any regulatory authority with jurisdiction over the Company if such approval is then required under applicable capital guidelines or policies of such regulatory authority, to redeem the Debt Securities, in whole or in part, on any January 23, April 23, July 23 or October 23 on or after April 23, 2009 (the "Redemption Date"), at the Redemption Price.

        SECTION 10.02.    Special Event Redemption.

        If a Special Event shall occur and be continuing, the Company shall have the right, subject to the receipt by the Company of prior approval from any regulatory authority with jurisdiction over the Company if such approval is then required under applicable capital guidelines or policies of such regulatory authority, to redeem the Debt Securities, in whole or in part, at any time within 120 days following the occurrence of such Special Event (the "Special Redemption Date"), at the Special Redemption Price.

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        SECTION 10.03.    Notice of Redemption; Selection of Debt Securities.

        In case the Company shall desire to exercise the right to redeem all, or, as the case may be, any part of the Debt Securities, it shall fix a date for redemption and shall mail, or cause the Trustee to mail (at the expense of the Company) a notice of such redemption at least 30 and not more than 60 days prior to the date fixed for redemption to the holders of Debt Securities so to be redeemed as a whole or in part at their last addresses as the same appear on the Debt Security Register. Such mailing shall be by first class mail. The notice if mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Debt Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Debt Security.

        Each such notice of redemption shall specify the CUSIP number, if any, of the Debt Securities to be redeemed, the date fixed for redemption, the redemption price at which Debt Securities are to be redeemed, the place or places of payment, that payment will be made upon presentation and surrender of such Debt Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. If less than all the Debt Securities are to be redeemed the notice of redemption shall specify the numbers of the Debt Securities to be redeemed. In case the Debt Securities are to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Debt Security, a new Debt Security or Debt Securities in principal amount equal to the unredeemed portion thereof will be issued.

        Prior to 10:00 a.m. New York City time on the Redemption Date or the Special Redemption Date specified in the notice of redemption given as provided in this Section, the Company will deposit with the Trustee or with one or more Paying Agents an amount of money sufficient to redeem on the redemption date all the Debt Securities so called for redemption at the appropriate redemption price, together with unpaid interest accrued to such date.

        The Company will give the Trustee notice not less than 45 nor more than 60 days prior to the redemption date as to the redemption price at which the Debt Securities are to be redeemed and the aggregate principal amount of Debt Securities to be redeemed and the Trustee shall select, in such manner as in its sole discretion it shall deem appropriate and fair, the Debt Securities or portions thereof (in integral multiples of $1,000) to be redeemed.

        SECTION 10.04.    Payment of Debt Securities Called for Redemption.

        If notice of redemption has been given as provided in Section 10.03, the Debt Securities or portions of Debt Securities with respect to which such notice has been given shall become due and payable on the Redemption Date or the Special Redemption Date (as the case may be) and at the place or places stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said Redemption Date or the Special Redemption Date (unless the Company shall default in the payment of such Debt Securities at the redemption price, together with unpaid interest accrued thereon to said date) interest on the Debt Securities or portions of Debt Securities so called for redemption shall cease to accrue. On presentation and surrender of such Debt Securities at a place of payment specified in said notice, such Debt Securities or the specified portions thereof shall be paid and redeemed by the Company at the applicable redemption price, together with unpaid interest accrued thereon to the Redemption Date or the Special Redemption Date (as the case may be).

        Upon presentation of any Debt Security redeemed in part only, the Company shall execute and the Trustee shall authenticate and make available for delivery to the holder thereof, at the expense of the

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Company, a new Debt Security or Debt Securities of authorized denominations in principal amount equal to the unredeemed portion of the Debt Security so presented.

ARTICLE XI

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

        SECTION 11.01.    Company May Consolidate, etc., on Certain Terms.

        Nothing contained in this Indenture or in the Debt Securities shall prevent any consolidation or merger of the Company with or into any other corporation or corporations (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of all or substantially all of the property or capital stock of the Company or its successor or successors to any other corporation (whether or not affiliated with the Company, or its successor or successors) authorized to acquire and operate the same; provided, however, that the Company hereby covenants and agrees that, (i) upon any such consolidation, merger (where the Company is not the surviving corporation), sale, conveyance, transfer or other disposition, the successor entity shall be a corporation organized and existing under the laws of the United States or any state thereof or the District of Columbia (unless such corporation has (1) agreed to make all payments due in respect of the Debt Securities or, if outstanding, the Capital Securities and Capital Securities Guarantee without withholding or deduction for, or on account of, any taxes, duties, assessments or other governmental charges under the laws or regulations of the jurisdiction of organization or residence (for tax purposes) of such corporation or any political subdivision or taxing authority thereof or therein unless required by applicable law, in which case such corporation shall have agreed to pay such additional amounts as shall be required so that the net amounts received and retained by the holders of such Debt Securities or Capital Securities, as the case may be, after payment of all taxes (including withholding taxes), duties, assessments or other governmental charges, will be equal to the amounts that such holders would have received and retained had no such taxes (including withholding taxes), duties, assessments or other governmental charges been imposed, (2) irrevocably and unconditionally consented and submitted to the jurisdiction of any United States federal court or New York state court, in each case located in The City of New York, Borough of Manhattan, in respect of any action, suit or proceeding against it arising out of or in connection with this Indenture, the Debt Securities, the Capital Securities Guarantee or the Declaration and irrevocably and unconditionally waived, to the fullest extent permitted by law, any objection to the laying of venue in any such court or that any such action, suit or proceeding has been brought in an inconvenient forum and (3) irrevocably appointed an agent in The City of New York for service of process in any action, suit or proceeding referred to in clause (2) above) and such corporation expressly assumes all of the obligations of the Company under the Debt Securities, this Indenture, the Capital Securities Guarantee and the Declaration and (ii) after giving effect to any such consolidation, merger, sale, conveyance, transfer or other disposition, no Event of Default shall have occurred and be continuing.

        SECTION 11.02.    Successor Entity to be Substituted.

        In case of any such consolidation, merger, sale, conveyance, transfer or other disposition contemplated in Section 11.01 and upon the assumption by the successor entity, by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium, if any, and interest on all of the Debt Securities and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Company, such successor entity shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as the Company, and thereupon the predecessor entity shall be relieved of any further liability or obligation hereunder or upon the Debt Securities. Such successor entity thereupon may cause to be signed, and

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may issue either in its own name or in the name of the Company, any or all of the Debt Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee or the Authenticating Agent; and, upon the order of such successor entity instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate and deliver any Debt Securities which previously shall have been signed and delivered by the officers of the Company, to the Trustee or the Authenticating Agent for authentication, and any Debt Securities which such successor entity thereafter shall cause to be signed and delivered to the Trustee or the Authenticating Agent for that purpose. All the Debt Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Debt Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Debt Securities had been issued at the date of the execution hereof.

        SECTION 11.03.    Opinion of Counsel to be Given to Trustee.

        The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall receive, in addition to the Opinion of Counsel required by Section 9.05, an Opinion of Counsel as conclusive evidence that any consolidation, merger, sale, conveyance, transfer or other disposition, and any assumption, permitted or required by the terms of this Article XI complies with the provisions of this Article XI.

ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE

        SECTION 12.01.    Discharge of Indenture.

        When (a) the Company shall deliver to the Trustee for cancellation all Debt Securities theretofore authenticated (other than any Debt Securities which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.06) and not theretofore canceled, or (b) all the Debt Securities not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit with the Trustee, in trust, funds, which shall be immediately due and payable, sufficient to pay at maturity or upon redemption all of the Debt Securities (other than any Debt Securities which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.06) not theretofore canceled or delivered to the Trustee for cancellation, including principal and premium, if any, and interest due or to become due to such date of maturity or redemption date, as the case may be, but excluding, however, the amount of any moneys for the payment of principal of, and premium, if any, or interest on the Debt Securities (1) theretofore repaid to the Company in accordance with the provisions of Section 12.04, or (2) paid to any state or to the District of Columbia pursuant to its unclaimed property or similar laws, and if in the case of either clause (a) or clause (b) the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect except for the provisions of Sections 2.05, 2.06, 3.01, 3.02, 3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt Securities shall mature or are redeemed, as the case may be, and are paid. Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and the Trustee, on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with, and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture, the Company, however, hereby agreeing to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee in connection with this Indenture or the Debt Securities.

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        SECTION 12.02.    Deposited Moneys to be Held in Trust by Trustee.

        Subject to the provisions of Section 12.04, all moneys deposited with the Trustee pursuant to Section 12.01 shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the holders of the particular Debt Securities for the payment of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal, and premium, if any, and interest.

        SECTION 12.03.    Paying Agent to Repay Moneys Held.

        Upon the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent of the Debt Securities (other than the Trustee) shall, upon demand of the Company, be repaid to the Company or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

        SECTION 12.04.    Return of Unclaimed Moneys.

        Any moneys deposited with or paid to the Trustee or any Paying Agent for payment of the principal of, and premium, if any, or interest on Debt Securities and not applied but remaining unclaimed by the holders of Debt Securities for two years after the date upon which the principal of, and premium, if any, or interest on such Debt Securities, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee or such Paying Agent on written demand; and the holder of any of the Debt Securities shall thereafter look only to the Company for any payment which such holder may be entitled to collect and all liability of the Trustee or such Paying Agent with respect to such moneys shall thereupon cease.

ARTICLE XIII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

        SECTION 13.01.    Indenture and Debt Securities Solely Corporate Obligations.

        No recourse for the payment of the principal of or premium, if any, or interest on any Debt Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture, or in any such Debt Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or agent, as such, past, present or future, of the Company or of any predecessor or successor corporation of the Company, either directly or through the Company or any successor corporation of the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debt Securities.

ARTICLE XIV

MISCELLANEOUS PROVISIONS

        SECTION 14.01.    Successors.

        All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.

        SECTION 14.02.    Official Acts by Successor Entity.

        Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee, officer or other authorized Person of any entity that shall at the time be the lawful successor of the Company.

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        SECTION 14.03.    Surrender of Company Powers.

        The Company by instrument in writing executed by authority of ²/3 (two-thirds) of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company and thereupon such power so surrendered shall terminate both as to the Company and as to any permitted successor.

        SECTION 14.04.    Addresses for Notices, etc.

        Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Securityholders on the Company may be given or served in writing duly signed by the party giving such notice, and shall be delivered, telecopied (which telecopy shall be followed by notice delivered or mailed by first class mail) or mailed by first class mail to the Company at:

First Community Bancorp
120 Wilshire Blvd.
Santa Monica, CA 90401
Attention: Victor Santoro

        Any notice, direction, request or demand by any Securityholder or the Company to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the office of JPMorgan Chase Bank at:

600 Travis Street, 50^th Floor
Houston, TX 77002
Attn: Institutional Trust Services—
First Community Bancorp/CA Statutory Trust VIII

        SECTION 14.05.    Governing Law.

        This Indenture and the Debt Securities shall each be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflict of laws principles of said State other than Section 5-1401 of the New York General Obligations Law.

        SECTION 14.06.    Evidence of Compliance with Conditions Precedent.

        Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that in the opinion of the signers all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with (except that no such Opinion of Counsel is required to be furnished to the Trustee in connection with the authentication and issuance of Debt Securities issued on the date of this Indenture).

        Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture (except certificates delivered pursuant to Section 3.05) shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition and the definitions relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

        SECTION 14.07.    Non-Business Days.

        Notwithstanding anything to the contrary contained herein, if any Interest Payment Date, other than on the Maturity Date, any Redemption Date or the Special Redemption Date, falls on a day that

46

is not a Business Day, then any interest payable will be paid on, and such Interest Payment Date will be moved to, the next succeeding Business Day, and additional interest will accrue for each day that such payment is delayed as a result thereof. If the Maturity Date, any Redemption Date or the Special Redemption Date falls on a day that is not a Business Day, then the principal, premium, if any, and/or interest payable on such date will be paid on the next succeeding Business Day, and no additional interest will accrue in respect of such payment made on such next succeeding Business Day.

        SECTION 14.08.    Table of Contents, Headings, etc.

        The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

        SECTION 14.09.    Execution in Counterparts.

        This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

        SECTION 14.10.    Severability.

        In case any one or more of the provisions contained in this Indenture or in the Debt Securities shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Debt Securities, but this Indenture and such Debt Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

        SECTION 14.11.    Assignment.

        Subject to Article XI, the Company will have the right at all times to assign any of its rights or obligations under this Indenture and the Debt Securities to a direct or indirect wholly owned Subsidiary of the Company, provided, however, that, in the event of any such assignment, the Company will remain liable for all such obligations. Subject to the foregoing, this Indenture is binding upon and inures to the benefit of the parties hereto and their respective successors and assigns. This Indenture may not otherwise be assigned by the parties thereto.

        SECTION 14.12.    Acknowledgment of Rights.

        The Company acknowledges that, with respect to any Debt Securities held by the Trust or the Institutional Trustee of the Trust, if the Institutional Trustee of the Trust fails to enforce its rights under this Indenture as the holder of Debt Securities held as the assets of the Trust after the holders of a majority in Liquidation Amount of the Capital Securities of the Trust have so directed in writing such Institutional Trustee, a holder of record of such Capital Securities may to the fullest extent permitted by law institute legal proceedings directly against the Company to enforce such Institutional Trustee's rights under this Indenture without first instituting any legal proceedings against such Institutional Trustee or any other Person. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Company to pay interest (or premium, if any) or principal on the Debt Securities on the date such interest (or premium, if any) or principal is otherwise due and payable (or in the case of redemption, on the redemption date), the Company acknowledges that a holder of record of Capital Securities of the Trust may directly institute a proceeding against the Company for enforcement of payment to such holder directly of the principal of (or premium, if any) or interest on the Debt Securities having an aggregate principal amount equal to the aggregate Liquidation Amount of the Capital Securities of such holder on or after the respective due date specified in the Debt Securities.

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ARTICLE XV

SUBORDINATION OF DEBT SECURITIES

        SECTION 15.01.    Agreement to Subordinate.

        The Company covenants and agrees, and each holder of Debt Securities issued hereunder and under any supplemental indenture (the "Additional Provisions") by such Securityholder's acceptance thereof likewise covenants and agrees, that all Debt Securities shall be issued subject to the provisions of this Article XV; and each holder of a Debt Security, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.

        The payment by the Company of the payments due on all Debt Securities issued hereunder and under any Additional Provisions shall, to the extent and in the manner hereinafter set forth, be subordinated and junior in right of payment to the prior payment in full of all Senior Indebtedness of the Company, whether outstanding at the date of this Indenture or thereafter incurred provided, however, that the Debt Securities shall rank pari passu in right of payment with the Company's debt securities issued pursuant to the (i) Indenture between State Street Bank and Trust Company of Connecticut, National Association and First Community Bancorp dated as of September 7, 2000, (ii) Indenture between First Community Bancorp, as Issuer and Wilmington Trust Company, as Trustee, dated as of November 28, 2001, (iii) Indenture between State Street Bank and Trust Company of Connecticut, National Association, as Trustee and First Community Bancorp, as Issuer dated as of December 18, 2001, (iv) Indenture between State Street Bank and Trust Company of Connecticut, National Association, as Trustee, and First Community Bancorp, as Issuer, dated as of June 26, 2002, (v) Indenture between First Community Bancorp, as Issuer and U.S. Bank, N.A., as Trustee, dated as of August 15, 2003, and (vi) Indenture between First Community Bancorp and The Bank of New York, as Trustee, dated as of September 3, 2003.

        No provision of this Article XV shall prevent the occurrence of any default or Event of Default hereunder.

        SECTION 15.02.    Default on Senior Indebtedness.

        In the event and during the continuation of any default by the Company in the payment of principal, premium, interest or any other payment due on any Senior Indebtedness of the Company following any applicable grace period, or in the event that the maturity of any Senior Indebtedness of the Company has been accelerated because of a default, and such acceleration has not been rescinded or canceled and such Senior Indebtedness has not been paid in full, then, in either case, no payment shall be made by the Company with respect to the payments due on the Debt Securities.

        In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee when such payment is prohibited by the preceding paragraph of this Section 15.02, such payment shall, subject to Section 15.06, be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, but only to the extent that the holders of the Senior Indebtedness (or their representative or representatives or a trustee) notify the Trustee in writing within 90 days of such payment of the amounts then due and owing on the Senior Indebtedness and only the amounts specified in such notice to the Trustee shall be paid to the holders of Senior Indebtedness.

        SECTION 15.03.    Liquidation; Dissolution; Bankruptcy.

        Upon any payment by the Company or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding- up or liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due upon all Senior Indebtedness of the Company shall first be paid in full, or payment thereof provided for in money in accordance with its

48

terms, before any payment is made by the Company on the Debt Securities; and upon any such dissolution or winding-up or liquidation or reorganization, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Securityholders or the Trustee would be entitled to receive from the Company, except for the provisions of this Article XV, shall be paid by the Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Securityholders or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Indebtedness of the Company (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders, as calculated by the Company) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay such Senior Indebtedness in full, in money or money's worth, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness, before any payment or distribution is made to the Securityholders.

        In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, prohibited by the foregoing, shall be received by the Trustee before all Senior Indebtedness of the Company is paid in full, or provision is made for such payment in money in accordance with its terms, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of such Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Indebtedness of the Company remaining unpaid to the extent necessary to pay such Senior Indebtedness in full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Indebtedness.

        For purposes of this Article XV, the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article XV with respect to the Debt Securities to the payment of all Senior Indebtedness of the Company, that may at the time be outstanding, provided, that (a) such Senior Indebtedness is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (b) the rights of the holders of such Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance, transfer or other disposition of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article IX of this Indenture shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 15.03 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article IX of this Indenture. Nothing in Section 15.02 or in this Section 15.03 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.06 of this Indenture.

        SECTION 15.04.    Subrogation.

        Subject to the payment in full of all Senior Indebtedness of the Company, the Securityholders shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to such Senior Indebtedness until all payments due on the Debt Securities shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of such Senior Indebtedness of any cash, property or securities to which the Securityholders or the Trustee would be entitled except for the provisions of this Article XV, and no payment over pursuant to the provisions of this Article XV to or

49

for the benefit of the holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness of the Company, and the holders of the Debt Securities be deemed to be a payment or distribution by the Company to or on account of such Senior Indebtedness. It is understood that the provisions of this Article XV are and are intended solely for the purposes of defining the relative rights of the holders of the Debt Securities, on the one hand, and the holders of such Senior Indebtedness, on the other hand.

        Nothing contained in this Article XV or elsewhere in this Indenture, any Additional Provisions or in the Debt Securities is intended to or shall impair, as between the Company, its creditors other than the holders of Senior Indebtedness of the Company, and the holders of the Debt Securities, the obligation of the Company, which is absolute and unconditional, to pay to the holders of the Debt Securities all payments on the Debt Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the holders of the Debt Securities and creditors of the Company, other than the holders of Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or the holder of any Debt Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article XV of the holders of such Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy.

        Upon any payment or distribution of assets of the Company referred to in this Article XV, the Trustee, subject to the provisions of Article VI of this Indenture, and the Securityholders shall be entitled to conclusively rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding- up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment or distribution, delivered to the Trustee or to the Securityholders, for the purposes of ascertaining the Persons entitled to participate in such distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XV.

        SECTION 15.05.    Trustee to Effectuate Subordination.

        Each Securityholder by such Securityholder's acceptance thereof authorizes and directs the Trustee on such Securityholder's behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XV and appoints the Trustee such Securityholder's attorney-in-fact for any and all such purposes.

        SECTION 15.06.    Notice by the Company.

        The Company shall give prompt written notice to a Responsible Officer of the Trustee at the Principal Office of the Trustee of any fact known to the Company that would prohibit the making of any payment of moneys to or by the Trustee in respect of the Debt Securities pursuant to the provisions of this Article XV. Notwithstanding the provisions of this Article XV or any other provision of this Indenture or any Additional Provisions, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Trustee in respect of the Debt Securities pursuant to the provisions of this Article XV, unless and until a Responsible Officer of the Trustee at the Principal Office of the Trustee shall have received written notice thereof from the Company or a holder or holders of Senior Indebtedness or from any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Article VI of this Indenture, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section 15.06 at least two Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (or premium, if any) or interest on any Debt Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the

50

purposes for which they were received, and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date.

        The Trustee, subject to the provisions of Article VI of this Indenture, shall be entitled to conclusively rely on the delivery to it of a written notice by a Person representing himself or herself to be a holder of Senior Indebtedness of the Company (or a trustee or representative on behalf of such holder) to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of such Senior Indebtedness to participate in any payment or distribution pursuant to this Article XV, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XV, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

        SECTION 15.07.    Rights of the Trustee, Holders of Senior Indebtedness.

        The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article XV in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture or any Additional Provisions shall deprive the Trustee of any of its rights as such holder.

        With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article XV, and no implied covenants or obligations with respect to the holders of such Senior Indebtedness shall be read into this Indenture or any Additional Provisions against the Trustee. The Trustee shall not owe or be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Article VI of this Indenture, the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall pay over or deliver to Securityholders, the Company or any other Person money or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article XV or otherwise.

        Nothing in this Article XV shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.06.

        SECTION 15.08.    Subordination May Not Be Impaired.

        No right of any present or future holder of any Senior Indebtedness of the Company to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company, or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company, with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with.

        Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of the Company may, at any time and from time to time, without the consent of or notice to the Trustee or the Securityholders, without incurring responsibility to the Securityholders and without impairing or releasing the subordination provided in this Article XV or the obligations hereunder of the holders of the Debt Securities to the holders of such Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (c) release any Person liable in any manner for the collection of such Senior Indebtedness; and (d) exercise or refrain from exercising any rights against the Company, and any other Person.

        JPMorgan Chase Bank, in its capacity as Trustee, hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions herein above set forth.

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        IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers thereunto duly authorized, as of the day and year first above written.

FIRST COMMUNITY BANCORP
By:	/s/  VICTOR R. SANTORO
Name:	Victor R. Santoro
Title:	Executive Vice President and Chief Financial Officer
JPMORGAN CHASE BANK, AS TRUSTEE
By:	/s/  MARIA D. CALZADO
Name:	Maria D. Calzado
Title:	Vice President

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EXHIBIT A

FORM OF JUNIOR SUBORDINATED DEBT SECURITY
DUE 2034

[FORM OF FACE OF SECURITY]

        THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,95-60,91-38,90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS

A-1

SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

        IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE COMPANY AND TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

        THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

        THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS NOT SECURED.

A-2

Form of Junior Subordinated Debt Security due 2034

of

First Community Bancorp

        First Community Bancorp, a bank holding company incorporated in California (the "Company"), for value received promises to pay to JPMorgan Chase Bank, not in its individual capacity but solely as Institutional Trustee for First Community Bancorp/CA Statutory Trust VII, a Delaware statutory trust (the "Holder"), or registered assigns, the principal sum of Sixty One Million Eight Hundred Fifty Six Thousand Dollars on April 23, 2034 and to pay interest on said principal sum from February 5, 2004, or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on January 23, April 23, July 23 and October 23 of each year commencing April 23, 2004, at a variable per annum rate equal to LIBOR (as defined in the Indenture) plus 2.75% (the "Interest Rate") (provided, however, that the Interest Rate for any Interest Payment Period may not exceed 12% through the Interest Payment Date in April, 2009, and provided further, that the Interest Rate may not exceed the highest rate permitted by New York law, as the same may be modified by United States law of general applicability) until the principal hereof shall have become due and payable, and on any overdue principal and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at an annual rate equal to the Interest Rate in effect for each such Extension Period compounded quarterly. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. Notwithstanding anything to the contrary contained herein, if any Interest Payment Date, other than on the Maturity Date, any Redemption Date or the Special Redemption Date, falls on a day that is not a Business Day, then any interest payable will be paid on, and such Interest Payment Date will be moved to, the next succeeding Business Day, and additional interest will accrue for each day that such payment is delayed as a result thereof. If the Maturity Date, any Redemption Date or the Special Redemption Date falls on a day that is not a Business Day, then the principal, premium, if any, and/or interest payable on such date will be paid on the next succeeding Business Day, and no additional interest will accrue in respect of such payment made on such next succeeding Business Day. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Debt Security (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the regular record date for such interest installment, except that interest and any Deferred Interest payable on the Maturity Date shall be paid to the Person to whom principal is paid. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered holders on such regular record date and may be paid to the Person in whose name this Debt Security (or one or more Predecessor Debt Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered holders of the Debt Securities not less than 10 days prior to such special record date, all as more fully provided in the Indenture. The principal of and interest on this Debt Security shall be payable at the office or agency of the Trustee (or other Paying Agent appointed by the Company) maintained for that purpose in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Debt Security Register or by wire transfer or immediately available funds to an account appropriately designated by the holder hereof. Notwithstanding the foregoing, so long as the holder of this Debt Security is the Institutional Trustee, payment of the principal of and premium, if any, and interest on this Debt Security shall be made in immediately available funds when due at such place and to such account as may be designated by the Institutional Trustee. All payments in respect of this Debt

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Security shall be payable in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts.

        Upon submission of Notice (as defined in the Indenture) and so long as no Event of Default has occurred and is continuing, the Company shall have the right, from time to time and without causing an Event of Default, to defer payments of interest on the Debt Securities by extending the interest distribution period on the Debt Securities at any time and from time to time during the term of the Debt Securities, for up to 20 consecutive quarterly periods (each such extended interest distribution period, an "Extension Period"), during which Extension Period no interest shall be due and payable (except any Additional Interest that may be due and payable). During any Extension Period, interest will continue to accrue on the Debt Securities, and interest on such accrued interest (such accrued interest and interest thereon referred to herein as "Deferred Interest") will accrue at an annual rate equal to the Interest Rate applicable during such Extension Period, compounded quarterly from the date such Deferred Interest would have been payable were it not for the Extension Period, to the extent permitted by law. No Extension Period may end on a date other than an Interest Payment Date. At the end of any such Extension Period the Company shall pay all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that no Extension Period may extend beyond the Maturity Date and provided, further, however, during any such Extension Period, the Company may not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company's capital stock or (ii) make any payment of principal of or premium, if any, or interest on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Debt Securities or (iii) make any payment under any guarantees of the Company that rank in all respects pari passu with or junior in respect to the Capital Securities Guarantee (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company (A) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, (B) in connection with a dividend reinvestment or stockholder stock purchase plan or (C) in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock), as consideration in an acquisition transaction entered into prior to the applicable Extension Period, (b) as a result of any exchange, reclassification, combination or conversion of any class or series of the Company's capital stock (or any capital stock of a subsidiary of the Company) for any class or series of the Company's capital stock or of any class or series of the Company's indebtedness for any class or series of the Company's capital stock, (c) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). Prior to the termination of any Extension Period, the Company may further extend such Extension Period, provided, that no Extension Period (including all previous and further consecutive extensions that are part of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon the termination of any Extension Period and upon the payment of all Deferred Interest, the Company may commence a new Extension Period, subject to the foregoing requirements. No interest or Deferred Interest shall be due and payable during an Extension Period, except at the end thereof, but Deferred Interest shall accrue upon each installment of interest that would otherwise have been due and payable during such Extension Period until such installment is paid. The Company must give the Trustee notice of its election to begin or extend an Extension Period at least one Business Day prior to the regular record date applicable to the next succeeding Interest Payment Date.

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        The indebtedness evidenced by this Debt Security is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness, and this Debt Security is issued subject to the provisions of the Indenture with respect thereto. Each holder of this Debt Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on such holder's behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee such holder's attorney-in-fact for any and all such purposes. Each holder hereof, by such holder's acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.

        The Company waives diligence, presentment, demand for payment, notice of nonpayment, notice of protest, and all other demands and notices.

        This Debt Security shall not be entitled to any benefit under the Indenture hereinafter referred to and shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by or on behalf of the Trustee.

        The provisions of this Debt Security are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

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        IN WITNESS WHEREOF, the Company has duly executed this certificate.

	FIRST COMMUNITY BANCORP
	By:
	Name:
	Title:
Dated:                        , 2004

CERTIFICATE OF AUTHENTICATION

        This is one of the Debt Securities referred to in the within-mentioned Indenture.

	JPMORGAN CHASE BANK, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS TRUSTEE
	By:	Authorized Signatory
Dated:                        , 2004

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[FORM OF REVERSE OF SECURITY]

        This Debt Security is one of a duly authorized series of Debt Securities of the Company, all issued or to be issued pursuant to an Indenture (the "Indenture"), dated as of February 5, 2004, duly executed and delivered between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Debt Securities (referred to herein as the "Debt Securities") of which this Debt Security is a part. The summary of the terms of this Debt Security contained herein does not purport to be complete and is qualified by reference to the Indenture.

        Upon the occurrence and continuation of a Tax Event, an Investment Company Event or a Capital Treatment Event (each a "Special Event"), this Debt Security may become due and payable, in whole but not in part, at any time, within 120 days following the occurrence of such Tax Event, Investment Company Event or Capital Treatment Event (the "Special Redemption Date"), as the case may be, at the Special Redemption Price. In the event that the Special Redemption Date falls on a day prior to the LIBOR Determination Date for any Interest Period, then the Company shall be required to pay to Securityholders, on the Business Day following such LIBOR Determination Date, any additional amount of interest that would have been payable on the Special Redemption Date had the amount of interest determined on such LIBOR Determination Date been known on the first day of such Interest Period.

        The Company shall also have the right to redeem this Debt Security at the option of the Company, in whole or in part, on any January 23, April 23, July 23 or October 23 on or after April 23, 2009 (a "Redemption Date"), at the Redemption Price.

        Any redemption pursuant to the preceding paragraph will be made, subject to the receipt by the Company of prior approval from any regulatory authority with jurisdiction over the Company if such approval is then required under applicable capital guidelines or policies of such regulatory authority, upon not less than 30 days' nor more than 60 days' notice. If the Debt Securities are only partially redeemed by the Company, the Debt Securities will be redeemed pro rata or by lot or by any other method utilized by the Trustee.

        "Redemption Price" means 100% of the principal amount of the Debt Securities being redeemed plus accrued and unpaid interest on such Debt Securities to the Redemption Date.

        "Special Redemption Price" means 100% of the principal amount of the Debt Securities being redeemed plus accrued and unpaid interest on such Debt Securities to the Special Redemption Date.

        In the event of redemption of this Debt Security in part only, a new Debt Security or Debt Securities for the unredeemed portion hereof will be issued in the name of the holder hereof upon the cancellation hereof.

        In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debt Securities may be declared, and, in certain cases, shall ipso facto become, due and payable, and upon such declaration of acceleration shall become due and payable, in each case, in the manner, with the effect and subject to the conditions provided in the Indenture.

        The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the Debt Securities at the time outstanding affected thereby, as specified in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debt Securities; provided, however, that no such supplemental indenture shall, among other things, without the consent of the holders of each Debt Security then outstanding and affected

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thereby (i) change the Maturity Date of any Debt Security, or reduce the principal amount thereof or any premium thereon, or reduce the rate (or manner of calculation of the rate) or extend the time of payment of interest thereon, or reduce (other than as a result of the maturity or earlier redemption of any such Debt Security in accordance with the terms of the Indenture and such Debt Security) or increase the aggregate principal amount of Debt Securities then outstanding, or change any of the redemption provisions, or make the principal thereof or any interest or premium thereon payable in any coin or currency other than United States Dollars, or impair or affect the right of any holder of Debt Securities to institute suit for the payment thereof, or (ii) reduce the aforesaid percentage of Debt Securities, the holders of which are required to consent to any such supplemental indenture. The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding, on behalf of all of the holders of the Debt Securities, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture, and its consequences, except (a) a default in payments due in respect of any of the Debt Securities, (b) in respect of covenants or provisions of the Indenture which cannot be modified or amended without the consent of the holder of each Debt Security affected, or (c) in respect of the covenants of the Company relating to its ownership of Common Securities of the Trust. Any such consent or waiver by the registered holder of this Debt Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Debt Security and of any Debt Security issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Debt Security.

        No reference herein to the Indenture and no provision of this Debt Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay all payments due on this Debt Security at the time and place and at the rate and in the money herein prescribed.

        As provided in the Indenture and subject to certain limitations herein and therein set forth, this Debt Security is transferable by the registered holder hereof on the Debt Security Register of the Company, upon surrender of this Debt Security for registration of transfer at the office or agency of the Trustee in Wilmington, Delaware accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered holder hereof or such holder's attorney duly authorized in writing, and thereupon one or more new Debt Securities of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be made for any such registration of transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto.

        Prior to due presentment for registration of transfer of this Debt Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer agent and the Debt Security registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Debt Security shall be overdue and notwithstanding any notice of ownership or writing hereon) for the purpose of receiving payment of the principal of and premium, if any, and interest on this Debt Security and for all other purposes, and neither the Company nor the Trustee nor any Authenticating Agent nor any Paying Agent nor any transfer agent nor any Debt Security registrar shall be affected by any notice to the contrary.

        No recourse shall be had for the payment of the principal of or the interest on this Debt Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such

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liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.

        The Debt Securities are issuable only in registered certificated form without coupons. As provided in the Indenture and subject to certain limitations herein and therein set forth, Debt Securities are exchangeable for a like aggregate principal amount of Debt Securities of a different authorized denomination, as requested by the holder surrendering the same.

        All terms used in this Debt Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

        THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE DEBT SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

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Exhibit 4.7

TABLE OF CONTENTS
ARTICLE I DEFINITIONS
ARTICLE II DEBT SECURITIES
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY
ARTICLE IV LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT
ARTICLE VI CONCERNING THE TRUSTEE
ARTICLE VII CONCERNING THE SECURITYHOLDERS
ARTICLE VIII SECURITYHOLDERS' MEETINGS
ARTICLE IX SUPPLEMENTAL INDENTURES
ARTICLE X REDEMPTION OF SECURITIES
ARTICLE XI CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE
ARTICLE XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
ARTICLE XIV MISCELLANEOUS PROVISIONS
ARTICLE XV SUBORDINATION OF DEBT SECURITIES
EXHIBIT A FORM OF JUNIOR SUBORDINATED DEBT SECURITY DUE 2034 [ FORM OF FACE OF SECURITY ]
CERTIFICATE OF AUTHENTICATION

EX-10.2

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Exhibit 10.2

FIRST COMMUNITY BANCORP
DIRECTORS DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED AS OF AUGUST 29, 2003)

        This First Community Bancorp Directors Deferred Compensation Plan (this "Plan"), formerly known as the Rancho Santa Fe National Bank Directors Deferred Compensation Plan, is amended and restated effective as of August 29, 2003.

        1. DEFERRAL OF FEES.

        a.     The directors ("Directors") of First Community Bancorp (the "Company") and any of its subsidiaries that have been selected by the Board of Directors (the "Board") of the Company to participate in this Plan, including employee Directors, shall be eligible to participate in this Plan. From time to time, the eligible Directors may, by written notice given in accordance with this Plan, elect to have deferred as herein provided up to:

        (1)   100% of their Director's fees and bonuses (collectively, "Eligible Cash Amounts");

        (2)   100% of their Stock Awards (as defined in the First Community Bancorp 2003 Stock Incentive Plan (the "Stock Incentive Plan") and SARs (as defined in the Stock Incentive Plan) (or awards similar to Stock Awards and SARs under any successor equity based award plan of the Company) (collectively, "Eligible Equity Amounts" and, together with Eligible Cash Amounts, "Eligible Amounts"); and

        (3)   such percentage of such other amounts (including, but not limited to, base salary) as the Committee (as defined herein) may determine in its sole discretion.

        Any such Eligible Amounts which are deferred in accordance with this Plan shall be referred to herein as "Deferred Amounts".

        b.     Any deferral elections with respect to Eligible Cash Amounts shall be exercised in writing by the Director in accordance with this Plan prior to the later to occur of the following:

        (1)   the first day of the calendar year in which the Director begins earning the Eligible Amounts; and

        (2)   the first day of the calendar month next following the date the Director first becomes eligible to participate in this Plan; provided, however, that any election made after the first day of the calendar year in which the Director begins earning the Eligible Amounts shall only apply to Eligible Amounts earned after the first day of the calendar quarter following the date of election.

        c.     Any deferral election with respect to Eligible Equity Amounts shall be exercised in writing by the Director in accordance with this Plan on the earliest to occur of the following:

        (1)   Immediately prior to the date on which the Director would otherwise have vested therein (other than a Stock Award that is in the form of a restricted stock award);

        (2)   December 31^st of the year prior to the calendar year in which a restricted stock award (or the first tranche of such restricted stock award) is scheduled to vest; and

        (3)   an earlier date elected by the Director.

        Each Director's initial election to defer any Eligible Cash Amount or Eligible Equity Amount under this Plan shall also state whether the Deferred Amounts subject to such deferral election (and each subsequent deferral election) shall be payable in a lump sum or annual installments for a period not to exceed ten years. An election to defer Eligible Cash Amounts, once made, shall continue to be effective for Eligible Cash Amounts earned during succeeding calendar years until revoked or amended

by the Director prior to the first day of the calendar year to which such revocation or amendment applies.

        d.     Deferred Amounts shall be subject to the rules set forth in this Plan or as prescribed by the Committee pursuant to Section 2, any deferral election and allocation form (each, an "Election Form") required by the Committee to be entered into in connection herewith, and each Director shall have the right to receive cash or in kind payments on account of previously Deferred Amounts only in the amounts and under the circumstances set forth in this Plan and each applicable Election Form.

        e.     This Plan, in conjunction with each applicable Election Form, is intended to meet the requirements for the affirmative defense set forth in Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with respect to any Deferred Amounts which are deemed to be invested in the Company's common stock, no par value per share ("Common Stock), pursuant to this Plan.

        2. COMMITTEE.    Full power and authority to construe, interpret and administer this Plan, shall be vested in a committee (the "Committee" or "Plan Administrator") comprised entirely of non-director executive officers of the Company and chaired by the Chief Financial Officer of the Company. The other members of the Committee shall be the Company's General Counsel, the Company's Director of Human Resources and the Chief Financial Officer(s) of the Company's subsidiary banks. Any member of the Committee may bind the Administrator. The Committee may delegate authority to any officer of the Company to carry out its functions from time to time. The Committee shall have full power and authority to make each determination provided for under this Plan, and in this connection, to promulgate such rules and regulations as the Committee considers necessary, appropriate or desirable for the implementation and management of this Plan. Notwithstanding the terms of this Plan or any Election Form entered into by a Director to the contrary, the Committee may, prior to the occurrence of a Change in Control (as defined below), determine in its sole discretion to pay a Director's Account balance in single lump sum payment. All determinations made by the Committee prior to a Change in Control shall be conclusive upon the Company, each current and former Director and their respective estates, beneficiaries, heirs, assigns, trusts and legal representatives.

        3. DEFERRED COMPENSATION ACCOUNTS.    Except as provided in Section 4, any Eligible Amounts deferred by a Director shall not be funded or set aside for future payment by the Company. Instead, the Company shall establish on its books a separate bookkeeping account (each, an "Account") for each Director who participates in this Plan. Each such Account shall be maintained as follows:

        a.     Each Account shall be credited with the Eligible Amounts elected to be deferred by the Director for whom such Account is established, in the case of Deferred Amounts that Eligible Cash Amounts, as of the date on which such Eligible Cash Amounts would otherwise have been paid to the Director and, in the case of Deferred Amounts that are Eligible Equity Amounts, as of the date determined in accordance with Section 1(c) hereof. Dividends payable with respect to any Stock Award that has been credited to a Director's Account shall be automatically credited to such Director's Account as of the date such dividend would otherwise have been paid to the Director and shall be deemed to be invested in the same form and in the same manner as such Director's Eligible Cash Amounts as in effect for the Plan year during which such dividends are paid; provided, however, that in the event such Director has not elected to defer any Eligible Cash Amounts for such Plan year, the dividends shall be deemed to be invested in Common Stock in accordance with the provisions of Section 3(b)(3) hereof.

        b.     Each Director shall have the option to elect to have any Deferred Amounts relating to Eligible Cash Amounts deemed to be invested in either Common Stock or a money market mutual fund selected by the Committee in its sole discretion (an "Investment Election") and shall be

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credited with the performance of each such hypothetical investment as if the Deferred Amounts in such Account had actually been invested in accordance with such Investment Election. Each Investment Election shall be made in the following manner:

        (1)   With respect to a Director's initial deferral of an Eligible Cash Amount, such Director shall make an Investment Election by designating a fixed dollar amount (including zero) or a percentage (expressed in whole percentages) of any Deferred Amounts relating to Eligible Cash Amounts to be credited to such Director's Account during the succeeding calendar year and each successive calendar year thereafter (until such Investment Election is terminated or amended by the Director in accordance with the terms of subsection (2) below) that shall be deemed to be invested in Common Stock;

        (2)   With respect to each subsequent Investment Election, prior to December 15^th of each calendar year, each Director participating in this Plan shall be eligible to designate (a) a fixed dollar amount (including zero) or a percentage (expressed in whole percentages) of any Deferred Amounts relating to Eligible Cash Amounts to be credited to such Director's Account during the succeeding calendar year and each successive calendar year thereafter (until such Investment Election is changed by the Director in accordance with the terms of this subsection (2)) that shall be deemed to be invested in Common Stock and (b) a fixed dollar amount (including zero) or a percentage (expressed in whole percentages) of any such Deferred Amounts already credited to such Director's Account in prior calendar years that shall be deemed to be invested in Common Stock;

        (3)   The Investment Elections described in subsections (1) and (2)(a) above shall be effective (i) on March 15^th (or if such day is not a trading day on the first trading day thereafter and shall be based on the average trading price of the Common Stock on the National Association of Securities Dealers Automated Quotations National Market (the "Nasdaq National Market") for such day) of the calendar year following the year such election was made for Deferred Amounts first credited to such Director's Account between January 1^st to March 10^th of such calendar year, (ii) on the 15^th of April (or if such day is not a trading day on the first trading day thereafter and shall be based on the average trading price of the Common Stock on the Nasdaq National Market for such day) for amounts first credited to such Director's Account between March 11^th and April 10^th, and (iii) on the 15^th of each subsequent month (or if such day is not a trading day on the first trading day thereafter and shall be based on the average trading price of the Common Stock on the Nasdaq National Market for such day) during such calendar year, to the extent such Deferred Amounts were first credited to such Director's between the 11^th day of the immediately preceding month and the 10^th day of such subsequent month.

        c.     Until such time as Deferred Amounts that are first credited to a Director's Account prior to March 11^th or the 11^th day of a subsequent month can be deemed to be invested in Common Stock as described in subsection b. above, such Deferred Amounts shall be deemed to be invested in the money market mutual fund selected by the Committee. Any Deferred Amounts relating to Eligible Equity Amounts shall be deemed to be invested in Common Stock beginning on the date on which such Eligible Equity Amounts are credited to the Director's Account.

        d.     Each Director, and each beneficiary (as described in Section 6 below) of a Director's Account, shall, at all times, be and remain an unsecured general creditor of the Company with respect to any payments due and owing to such Director hereunder.

        4. TRUST.

        a.     The Company may establish a "rabbi trust" (the "Trust") to aid in the accumulation of assets for payment of the Account balances. At any time prior to a Change in Control (as defined

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below), the Company may, in its discretion, contribute any amount (or no amount) to the Trust. The trustee of the Trust shall be a corporate trustee independent of the Company. Nothing herein shall be construed as requiring the Company to make any contributions to the Trust prior to a Change in Control. To the extent such contributions are actually made, the Trust's assets shall remain subject to the claims of the Company's general creditors in the event of its insolvency. Within thirty (30) days of the occurrence of a Change in Control, and within thirty (30) days of each anniversary of the Change in Control, the Company shall contribute to a separate Trust account maintained for each Director under the Trust, in cash or Common Stock, an amount equal to at least 100% of the then current value of each such Director's Account, less any amount already credited to such Director's Trust account as of the date of each such contribution. Amounts paid to Directors from the Trust shall discharge the obligations of the Company hereunder to the Directors to the extent of the payments so made.

        b.     For purposes of this Plan, "Change in Control" shall mean the occurrence of any of the following:

          (i)  Any "person" (for purposes of this definition, as such term is defined in Section 13(d) of the Exchange Act) is or becomes the "beneficial owner" (for purposes of this definition, as such term is defined in 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 to be an Existing Director if such individual initially assumed office as a result of either an actual or threatened election contest ("Election Contest") 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).

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        5. PAYMENT OF ACCOUNT BALANCES AND HARDSHIP/OTHER DISTRIBUTIONS.

        a.     Payout of a Director's Account balance shall commence during the earlier of (i) the month following the later of (A) the month during which the Director ceases to be a member of the Board and any board of any of the Company's subsidiaries that have been selected by the Board to participate in this Plan and (B) the month during which the Director ceases to be an employee of the Company and any of the Company's subsidiaries that have been selected by the Board to participate in this Plan, and (ii) January of the year following the year in which the Director attains age 70. Subject to Section 2, such Account balance shall be paid in either a lump sum or in substantially equal annual installments over a period of years not to exceed ten years as previously elected by the Director. Each annual installment shall include investment gains (or losses) on the remaining Account balance during the previous year until the Account shall have been paid in full. A Director may continue to make new investment elections with respect Deferred Amounts in such Director's Account as provided in Section 3 during the period that the Account is being distributed. The amount or amounts paid out of the Director's Account shall be (i) in kind, in the case of Deferred Amounts deemed invested in Common Stock or relating to Eligible Equity Amounts and (ii) in cash, in the case of Deferred Amounts deemed invested in a money market mutual fund account.

        b.     Notwithstanding the foregoing, in the event that the Internal Revenue Service or any court of competent jurisdiction shall finally determine that part or all of the value of a Director's Account balance which has not been distributed to the Director is nevertheless required to be included in the Director's gross income for federal or state income tax purposes, then such Account balance or the part thereof that is determined to be includible in gross income shall be distributed to the Director in a lump sum payment as soon as practicable after such determination without any action or approval by the Director. This amount shall be (i) in kind, in the case of Deferred Amounts deemed invested in Common Stock or relating to Eligible Equity Amounts and (ii) in cash, in the case of Deferred Amounts deemed invested in a money market mutual fund account. A "final determination" of the Internal Revenue Service or a court of competent jurisdiction for purposes of this subsection is a determination in writing by said Service or court ordering the payment of additional tax, reporting of additional gross income or otherwise requiring Deferred Amounts to be included in gross income, which is not appealable or which the Director does not appeal within the time period prescribed for appeals.

        c.     The Committee may, in its discretion, accelerate payments to a Director in an amount up to fifty percent (50%) of the Director's Account balance in the event of demonstrated severe financial hardship (or any similar circumstances under which a payment would be permitted without causing the imposition of federal income taxes on the Director's remaining Account balance or any other Director's Account balance that has not been distributed, pursuant to Revenue Procedure 92-65 or any successor Revenue Procedure, Revenue Ruling, regulation or other applicable administrative determination issued by the Internal Revenue Service). Any such payments made will be limited to the amount needed to meet the demonstrated financial need of the Director and shall be made in cash. A Director seeking a financial hardship withdrawal from his or her Account must request a hearing with the Committee or its designee to discuss the facts needed for the Committee to render a decision.

        d.     A Director may, by written request on a form provided by the Committee, withdraw all or any portion of any of such Director's Account balance, provided that such Director shall forfeit 10% of the amount withdrawn as a penalty. This amount shall be (i) in kind, in the case of Deferred Amounts deemed invested in Common Stock or relating to Eligible Equity Amounts and (ii) in cash, in the case of Deferred Amounts deemed invested in a money market mutual fund account.

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        6. BENEFICIARY.

        a.     In the event of a Director's death, payments shall be made to the person or persons (including a trustee or trustees) named in the last written instrument signed by the Director and received by the Committee prior to the Director's death, or if the Director fails to so name any person, the amounts shall be paid to the Director's estate or the appropriate distributee thereof in accordance with applicable law. The Committee's determination with respect to making any payments due hereunder in accordance with what the Committee believes to be such last written instrument received by it shall be binding on a deceased Director's estate, beneficiaries, heirs, assigns, trusts and legal representatives.

        b.     Payments due to a legally incompetent person may be made in any of the following ways as the Committee shall determine in its sole discretion:

          (i)  directly to such incompetent person;

         (ii)  to the legal representative of such incompetent person; or

        (iii)  to a near relative of the incompetent person to be held in trust for such incompetent person.

        c.     Except as otherwise provided in subsections a. and b. above, all payments to persons entitled to benefits hereunder shall be made to such persons in person or upon their personal receipt or endorsement, and shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of such person or such person's beneficiaries.

        d.     All payments to persons entitled to benefits hereunder shall be made out of the Company's general assets and shall be the sole obligations of the Company, except to the extent that such payments are made out of the Trust. A Director's hypothetical Account balance represents a mere promise to pay benefits in the future and it is the intention of the parties that all amounts deferred under this Plan shall be "unfunded" for tax purposes (and for the purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")).

        7. CLAIMS PROCEDURES.

        a.     Presentation of Claim. Any Director or beneficiary of a deceased Director or duly authorized representative of either (such Director or beneficiary or duly authorized representative being referred to below as a "Claimant") may deliver to the Committee a written claim for a determination with respect to the amounts (i) credited to (or deducted from) such Claimant's Account or (ii) distributable to such Claimant from the Claimant's Account. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. The claim must state with particularity the benefit determination desired by the Claimant.

        b.     Notification of Decision. The Committee shall consider a Claimant's claim within a reasonable time, but not later than ninety (90) days after receipt of the claim by the Committee, unless the Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determines that an extension of time for processing the claim is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial ninety (90)-day period. In no event shall such extension exceed a period of ninety (90) days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. Once the benefit determination is made in accordance with

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the foregoing, the Committee shall notify the Claimant in writing that the Claimant's requested benefit determination has been made and:

          (i)  that the claim has been allowed in full; or

         (ii)  that the Committee has reached a conclusion adverse, in whole or in part, to the Claimant's requested benefit determination. The Committee's notice of adverse benefit determination must be written in a manner calculated to be understood by the Claimant, and it must contain:

        A. the specific reason(s) for the adverse benefit determination;

        B. reference to the specific provisions of this Plan upon which such adverse benefit determination was based;

        C. a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

        D. a description of this Plan's claim review procedures set forth in Section 7c. and the time limits applicable to such procedures, including a statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

        c.     Review of a Denied Claim. Within sixty (60) days after receiving a notice from the Committee of an adverse benefit determination, a Claimant may file with the Compensation Committee (the "Compensation Committee") of the Board a written request for a review of such adverse determination. Thereafter, but not later than thirty (30) days after the review procedure began, the Claimant:

          (i)  may submit written comments, documents, records and other information relating to the claim for benefits;

         (ii)  shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant's claim; and

        (iii)  may request a hearing, which the Board, in its discretion, may grant.

        The Compensation Committee shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

        d.     Decision on Review. The Compensation Committee shall render its decision on review within a reasonable time, and not later than sixty (60) days after the receipt of the Claimant's review request, unless a hearing is held or other special circumstances require additional time, in which case the Compensation Committee's decision must be rendered within one hundred twenty (120) days after the receipt of the Claimant's review request. If the Compensation Committee determines that an extension of time for processing the review is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial sixty (60)-day period. In no event shall such extension exceed a period of sixty (60) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Compensation Committee expects to render the benefit determination on review. The Compensation Committee's decision must be written in a manner calculated to be understood by the Claimant and it must contain:

          (i)  specific reasons for the decision;

         (ii)  reference to the specific Plan provisions upon which the decision was based;

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        (iii)  a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim;

        (iv)  a statement of the Claimant's right to bring an action under ERISA Section 502(a) concerning an adverse benefit determination; and

         (v)  such other matters as the Compensation Committee deems relevant.

        For purposes of this Section 7, a document, record or other information shall be considered "relevant" to a Claimant's claim if such document, record or other information:

          (i)  was relied upon in making the benefit determination;

         (ii)  was submitted, considered or generated in the course of making the benefit determination (without regard to whether such document, record or other information was relied upon in making the benefit determination); or

        (iii)  demonstrates compliance with the administrative processes and safeguards required under ERISA in making the benefit determination.

        8. MISCELLANEOUS.

        a.     Except as limited by Section 6c. above and except that a Director shall have a continuing power to designate a new beneficiary in the event of the Director's death at any time prior to such death without the consent or approval of any person theretofore named as Director's beneficiary by an instrument meeting the requirements of Section 6a. above, this Plan shall be binding upon and inure to the benefit of the Company and its successors and assigns and the Directors and their respective estates, beneficiaries, heirs, assigns, trusts and legal representatives. The term "successors" as used herein shall include any corporation or other business entity which shall, whether by merger, consolidation, purchase of assets or otherwise, acquire all or substantially all of the business or assets of the Company, and successors of any such corporation or other business entity.

        b.     Any notice given in connection with this document shall be in writing and shall be delivered in person or by certified or registered mail, return receipt requested. Any notice given by certified or registered mail shall be deemed to have been given upon the date of delivery indicated on the return receipt, if correctly addressed.

        c.     Nothing in this document shall interfere with the rights of any employee Director to participate or share in any profit sharing or pension plan which is now in force or which may at some future time become a recognized plan of the Company.

        d.     Nothing in this document shall be construed as an employment agreement nor as in any way impairing the right of the Company, the Board or any committee thereof, the board of any subsidiary on which the Director serves or the shareholders of the Company or any such subsidiary to remove the Director from service as a director, to refuse to renominate or reelect such person as a director or to enforce the duly adopted retirement policies of the Company or such subsidiary.

        9. TERMINATION OR AMENDMENT.    Prior to a Change in Control, the Board may, in its discretion, terminate or amend this Plan at any time, provided, however, that no such termination or amendment shall (without such Director's consent) alter any Director's right to payments of amounts previously credited to such Director's Account or delay the time at which a Director is entitled to receive distributions with respect to such Director's Account balance. After the occurrence of a Change in Control, no amendment to this Plan may be made that would adversely affect the rights of any Director without the consent of such Director, except for such changes that the Board reasonably determines, upon the advice of nationally recognized tax counsel, are necessary to fulfill the intent of

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this Plan to defer federal income taxation of Directors' Accounts until such Accounts are paid in accordance with the terms of this Plan. After the occurrence of a Change in Control, the Board may at any time terminate this Plan in its entirety, in which event no new Deferred Amounts shall be allowed to be made, but the obligations of the Company under this Plan, under existing Deferred Amounts and under the Trust shall continue.

        10. TERMS.    Use of the masculine, feminine and neuter pronouns in this Plan are intended to be interchangeable and use of the singular will include the plural, unless the context clearly indicates otherwise.

        11. CAPTIONS.    The captions of the sections, subsections and paragraphs of this Plan are for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions of this Plan.

        12. GOVERNING LAW/STANDARD OF REVIEW.    This Plan shall be governed by the laws of the United States and, to the extent not preempted thereby, the laws of the State of California; provided, however, that after a Change in Control, any court or tribunal that adjudicates any dispute, controversy or claim arising between or among any Director and the Committee, Compensation Committee, Board, Company or any of their delegates, successors or assigns, relating to or concerning the provisions of this Plan, will apply a de novo standard of review to any determinations made after a Change in Control by such person. Such de novo standard shall apply notwithstanding the grant of full discretion hereunder to any such person or the characterization of any decision by such person as final, binding or conclusive on any party.

        13. VALIDITY.    The illegality or invalidity of any provision of this Plan shall not affect its remaining parts, but this Plan shall be construed and enforced without such illegal or invalid provisions.

        IN WITNESS WHEREOF, the Company has caused this First Community Bancorp Directors Deferred Compensation Plan to be amended and restated as of the 29th of August, 2003.

FIRST COMMUNITY BANCORP
By:	/s/  MICHAEL L. THOMPSON
	Name:	Michael L. Thompson
	Title:	Executive Vice President and Director, Human Resources

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Exhibit 10.3

FIRST COMMUNITY BANCORP
DIRECTORS DEFERRED COMPENSATION TRUST
(AMENDED AND RESTATED AS OF DECEMBER 8, 2003)

        This Agreement is amended and restated as of December 8, 2003 by and between First Community Bancorp, a California corporation (the "Company"), and the trustee whose name appears on the signature page hereto (the "Trustee");

        WHEREAS, the Company has adopted the First Community Bancorp Directors Deferred Compensation Plan, formerly known as the Rancho Santa Fe National Bank Directors Deferred Compensation Plan (the "Plan");

        WHEREAS, the Company has incurred or expects to incur liability under the terms of such Plan with respect to the individuals participating in such Plan;

        WHEREAS, the Company has established a trust, known as the Rancho Santa Fe National Bank Directors Deferred Compensation Trust and intends hereby to amend and restate such trust pursuant to the terms hereof and to rename such trust the First Community Bancorp Directors Deferred Compensation Trust (hereinafter referred to as the "Trust") and shall contribute to the Trust assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan;

        WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended;

        WHEREAS, it is the intention of the Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan;

        NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows:

        1. ESTABLISHMENT OF TRUST.

        (a)   The Company hereby deposits with Trustee in trust cash or shares of common stock ("Common Stock") of the Company which shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement.

        (b)   The Trust hereby established is revocable by the Company; it shall become irrevocable upon the occurrence of a Change in Control (as defined in the Plan).

        (c)   The trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.

        (d)   The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of Plan participants and the general creditors of the Company as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against the Company. Any assets held by the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein.

        (e)   The Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property (including, but not limited to, Common Stock) in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan participant or beneficiary shall have any right to compel such additional deposits.

        (f)    Upon a Change in Control (as defined under the Plan), the Company shall, as soon as possible, but in no event longer than thirty (30) days following the occurrence of a Change in Control make an irrevocable contribution to the Trust in an amount that is sufficient to fund the Trust in an amount equal to no less than 100% of the amount necessary to pay each Plan participant or beneficiary the benefits to which participants or their beneficiaries would have accrued pursuant to the terms of the Plan which, as of the date on which the Change in Control occurred, provide for funding of the Trust (or if payments have already been made to a Participant, the amount of the remaining payments), less any amounts credited to each such participant's account under the Trust as of the date of such contribution.

        (g)   Within thirty (3) days following each anniversary of the Change in Control, the Company shall make an irrevocable contribution to the Trust in an amount that is sufficient to fund the Trust in an amount equal to no less than 100% of the amount necessary to pay each Plan participant or beneficiary the benefits to which such participants or beneficiaries have accrued pursuant to the Plan as of such anniversary (or if payments have already been made to a participant, the amount of the remaining payments), less any amounts credited to each such participant's account under the Trust as of the date of such contribution.

        (h)   In the event that any of the contributions described in Sections 1(f) or (g) above have not been received by the Trustee within sixty (60) days from the date of a Change in Control and each anniversary thereof, as the case may be, the Trustee shall notify the Company in writing. In the event any such contributions are not received by the Trust within ten (10) business days of the date of delivery of such notice, the Trustee shall institute an action to collect such contributions.

        2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.

        (a)   The Company shall deliver to Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in respect of each Plan participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan(s)), and the time of commencement for payment of such amounts. Payments reflected on such Payment Schedule may not be reduced after a Change in Control without the consent of the affected Plan participant (or others with an entitlement under the Plan if such participant is not living), except to reflect payments made to the Plan participant in accordance with the Plan and notional investment losses (netted against notional investment gains) credited in accordance with the Plan. Except as otherwise provided herein, Trustee shall make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company.

        (b)   The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan shall be determined by the Company or such party as it shall designate under the Plan and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan.

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        (c)   The Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan. The Company shall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, the Company shall make the balance of each such payment as it falls due. Trustee shall notify the Company where principal and earnings are not sufficient.

        3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN THE COMPANY IS INSOLVENT.

        (a)   Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to pay its debts as they become due, or (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

        (b)   At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below.

          (i)  The Compensation Committee (as defined in the Plan) and the Chief Executive Officer of the Company shall have the duty to inform Trustee in writing of the Company's Insolvency. If a person claiming to be a creditor of the Company alleges in writing to Trustee that the Company has become Insolvent, Trustee shall determine whether the Company is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries.

         (ii)  Unless Trustee has actual knowledge of the Company's Insolvency, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, Trustee shall have no duty to inquire whether the Company is Insolvent. Trustee may in all events rely on such evidence concerning the Company's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning the Company's solvency.

        (iii)  If at any time Trustee has determined that the Company is Insolvent, Trustee shall discontinue payments to Plan participants or their beneficiaries and shall hold the assets of the Trust for the benefit of the Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights as of Plan participants or their beneficiaries as general creditors of the Company with respect to benefits due under the Plan or otherwise.

        (iv)  Trustee shall resume the payment of benefits to Plan participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent).

        (c)   Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by the Company in lieu of the payments provided for hereunder during any such period of discontinuance.

        4. PAYMENTS TO THE COMPANY.    Except as provided in Section 3 hereof, after the Trust has become irrevocable, the Company shall have no right or power to direct Trustee to return to the

3

Company or to divert to others any of the Trust assets before all payments of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan.

        5. INVESTMENT AUTHORITY.    Trustee may invest in securities (including Common Stock or rights to acquire Common Stock), obligations issued by the Company and other investments such as money market mutual funds, other mutual funds and other investments as may be approved by the Administrator fo the Plan from time to time. All rights associated with assets of the Trust shall be exercised by Trustee or the person designated by Trustee, and shall in no event be exercisable by or rest with Plan participants except that the voting rights with respect to Trust assets will be exercised by the management of the Company prior to a Change in Control and by the Trustee following a Change in Control. The Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity.

        6. DISPOSITION OF INCOME.    During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested within the Trust.

        7. ACCOUNTING BY TRUSTEE.    Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and Trustee. Within 90 days following the close of each calendar year and within 30 days after the removal or resignation of Trustee, Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation. setting forth all investments, receipts, disbursements, and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be.

        8. RESPONSIBILITY OF TRUSTEE.

        (a)   Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company which is contemplated by, and in conformity, the terms of the Plan or this Trust and is given in writing by the Company. In the event of a dispute between the Company and a party, Trustee may apply to a court of competent jurisdiction to resolve the dispute.

        (b)   If Trustee undertakes or defends any litigation arising in connection with this Trust, the Company agrees to indemnify Trustee against Trustee's costs, expenses and liabilities (including, without limitation, reasonable attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If the Company does not pay such costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain payment from the Trust.

        (c)   Trustee may consult with legal counsel (who, to the extent permitted by law, may also be counsel for the Company generally) with respect to any of its duties or obligations hereunder.

        (d)   Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder and may rely on any determinations made by such agents and information provided by the Company.

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        (e)   Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein; provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy.

        (f)    Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trustee the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulation promulgated pursuant to the Internal Revenue Code.

        5. COMPENSATION AND EXPENSES OF TRUSTEE.    Company shall pay all administrative and Trustee's fees and expenses. If not so paid, the fees and expenses shall be paid from the Trust.

        6. RESIGNATION AND REMOVAL OF TRUSTEE.

        (a)   Prior to a Change in Control, Trustee may resign at any time by written notice to the Company, which shall be effective 30 days after receipt of such notice unless the Company and Trustee agree otherwise. Following a Change in Control, Trustee may resign only after the appointment of a successor Trustee.

        (b)   Prior to a Change in Control, Trustee may be removed by the Company on 30 days notice or upon shorter notice accepted by Trustee.

        (c)   Upon a Change in Control, as defined herein, Trustee may only be removed by the Company with the consent of a two-thirds of the Plan participants.

        (d)   If Trustee resigns following a Change in Control or is removed as provided in Section b(c) above, Trustee shall select a successor Trustee in accordance with the provisions of Section 7(b) hereof prior to the effective date of Trustee's resignation or removal.

        (e)   Upon resignation or removal of Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 30 days after receipt of notice of resignation, removal, or transfer, unless the Company extends the time limit.

        (f)    If Trustee resigns or is removed, a successor shall be appointed, in accordance with section 11 hereof, by the effective date of resignation or removal under paragraph (a) or (b) of this section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust.

        7. RESIGNATION AND REMOVAL OF TRUSTEE.

        (a)   If Trustee resigns or is removed in accordance with Section 6(a) or (b) hereof, the Company may appoint any third party, such as a Company trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the Company or the successor Trustee to evidence the transfer.

        (b)   If Trustee resigns or is removed pursuant to the provisions of Section 6(d) hereof and selects a successor Trustee, Trustee may appoint any third party such as a bank trust department or

5

other party that may be granted corporate trustee powers under state law. The appointment of a successor Trustee shall be effective when accepted in writing by the new Trustee. The new Trustee shall have all the rights and powers of the former Trustee, including ownership rights in Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the successor Trustee to evidence the transfer.

        (c)   The successor Trustee need not examine the records and acts of any prior Trustee and may retain or dispose of existing Trust assets, subject to Sections 3 and 4 hereof. The successor Trustee shall not be responsible for and the Company shall indemnify and defend the successor Trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee.

        8. AMENDMENT OR TERMINATION.

        (a)   This Trust agreement may be amended by a written instrument executed by Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable after it has become irrevocable in accordance with Section 1(b) hereof.

        (b)   The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust, any assets in the Trust shall be returned to the Company.

        (c)   Upon written approval of Plan participants or beneficiaries entitled to payment of benefits pursuant to the terms of the Plan, the Company may terminate this Trust prior to the time all benefit payments under the Plan have been made. All assets in the Trust at termination shall be returned to the Company.

        (d)   The terms of this Trust Agreement may not be amended by the Company for three years following a Change in Control without the approval of a majority of the Plan participants.

        9. MISCELLANEOUS.

        (a)   Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

        (b)   Benefits payable to Plan participants and their beneficiaries under the Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.

        (c)   This Trust Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflict of laws principles.

        10. EFFECTIVE DATE.    This Trust Agreement is amended and restated as of December 8, 2003. This Trust Agreement was originally effective as of July 1, 1995.

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        In Witness Whereof, the Company has caused this Trust Agreement to be amended and restated as of December 8, 2003.

First Community Bancorp, a California corporation

/s/  JARED M. WOLFF

Accepted by:

First American Trust

/s/  DENISE MEHUSE

/s/  STEVEN R. HUBBS

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U.S. Bank
Institutional Trust & Custody
15 West South Temple
Suite 200
Salt Lake City, UT 84101

January 23, 2004

Denise Mehus
First American Trust
2100 Fifth Avenue
San Diego, CA 92101

Re:

Acceptance of Successor Trustee of the First Community Bancorp Directors Deferred Compensation Trust

Dear Denise:

        U.S. Bank National Association hereby accepts the appointment as successor Trustee of the First Community Bancorp Directors Deferred Compensation Trust and acknowledges that it will become a fiduciary of the Plan effective January 29, 2004 or upon receipt of trust assets from First American Trust.

/s/ Karl Wilson

Senior Vice President
U.S. Bank National Association
Successor Trustee

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Exhibit 10.19

AMENDED AND RESTATED DECLARATION

OF TRUST

First Community Bancorp/CA Statutory Trust VII

Dated as of February 5, 2004

TABLE OF CONTENTS

		Page
ARTICLE I INTERPRETATION AND DEFINITIONS
SECTION 1.1.	Definitions	1
ARTICLE II ORGANIZATION
SECTION 2.1.	Name	7
SECTION 2.2.	Office	7
SECTION 2.3.	Purpose	7
SECTION 2.4.	Authority	7
SECTION 2.5.	Title to Property of the Trust	7
SECTION 2.6.	Powers and Duties of the Trustees and the Administrators	8
SECTION 2.7.	Prohibition of Actions by the Trust and the Trustees	11
SECTION 2.8.	Powers and Duties of the Institutional Trustee	12
SECTION 2.9.	Certain Duties and Responsibilities of the Trustees and the Administrators	13
SECTION 2.10.	Certain Rights of Institutional Trustee	14
SECTION 2.11.	Delaware Trustee	16
SECTION 2.12.	Execution of Documents	17
SECTION 2.13.	Not Responsible for Recitals or Issuance of Securities	17
SECTION 2.14.	Duration of Trust	17
SECTION 2.15.	Mergers	17
ARTICLE III SPONSOR
SECTION 3.1.	Sponsor's Purchase of Common Securities	18
SECTION 3.2.	Responsibilities of the Sponsor	18
ARTICLE IV TRUSTEES AND ADMINISTRATORS
SECTION 4.1.	Number of Trustees	19
SECTION 4.2.	Delaware Trustee	19
SECTION 4.3.	Institutional Trustee; Eligibility	19
SECTION 4.4.	Certain Qualifications of the Delaware Trustee Generally	20
SECTION 4.5.	Administrators	20
SECTION 4.6.	Initial Delaware Trustee	20
SECTION 4.7.	Appointment, Removal and Resignation of the Trustees and the Administrators	20
SECTION 4.8.	Vacancies Among Trustees	21
SECTION 4.9.	Effect of Vacancies	22
SECTION 4.10.	Meetings of the Trustees and the Administrators	22
SECTION 4.11.	Delegation of Power	22
SECTION 4.12.	Merger, Conversion, Consolidation or Succession to Business	22
ARTICLE V DISTRIBUTIONS
SECTION 5.1.	Distributions	23

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ARTICLE VI ISSUANCE OF SECURITIES
SECTION 6.1.	General Provisions Regarding Securities	23
SECTION 6.2.	Paying Agent, Transfer Agent, Calculation Agent and Registrar	24
SECTION 6.3.	Form and Dating	24
SECTION 6.4.	Book-Entry Capital Securities	25
SECTION 6.5.	Mutilated, Destroyed, Lost or Stolen Certificates	26
SECTION 6.6.	Temporary Securities	27
SECTION 6.7.	Cancellation	27
SECTION 6.8.	Rights of Holders; Waivers of Past Defaults	27
ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST
SECTION 7.1.	Dissolution and Termination of Trust	28
ARTICLE VIII TRANSFER OF INTERESTS
SECTION 8.1.	General	29
SECTION 8.2.	Transfer Procedures and Restrictions	30
SECTION 8.3.	Deemed Security Holders	33
ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 9.1.	Liability	33
SECTION 9.2.	Exculpation	33
SECTION 9.3.	Fiduciary Duty	34
SECTION 9.4.	Indemnification	34
SECTION 9.5.	Outside Businesses	36
SECTION 9.6.	Compensation; Fee	37
ARTICLE X ACCOUNTING
SECTION 10.1.	Fiscal Year	37
SECTION 10.2.	Certain Accounting Matters	38
SECTION 10.3.	Banking	38
SECTION 10.4.	Withholding	38
ARTICLE XI AMENDMENTS AND MEETINGS
SECTION 11.1.	Amendments	39
SECTION 11.2.	Meetings of the Holders of the Securities; Action by Written Consent	40
ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 12.1.	Representations and Warranties of Institutional Trustee	41
SECTION 12.2.	Representations and Warranties of Delaware Trustee	42
ARTICLE XIII MISCELLANEOUS
SECTION 13.1.	Notices	43

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SECTION 13.2.	Governing Law	44
SECTION 13.3.	Submission to Jurisdiction	44
SECTION 13.4.	Intention of the Parties	44
SECTION 13.5.	Headings	44
SECTION 13.6.	Successors and Assigns	44
SECTION 13.7.	Partial Enforceability	44
SECTION 13.8.	Counterparts	44
	ANNEXES AND EXHIBITS
ANNEX I	Terms of TP Securities and Common Securities
EXHIBIT A-1	Form of Capital Security Certificate
EXHIBIT A-2	Form of Common Security Certificate

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AMENDED AND RESTATED DECLARATION OF TRUST

OF

First Community Bancorp/CA Statutory Trust VII

February 5, 2004

        AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration"), dated and effective as of February 5, 2004, by the Trustees (as defined herein), the Administrators (as defined herein), the Sponsor (as defined herein) and the holders from time to time of undivided beneficial interests in the assets of the Trust (as defined herein) to be issued pursuant to this Declaration.

        WHEREAS, certain of the Trustees, the Administrators and the Sponsor established First Community Bancorp/CA Statutory Trust VII (the "Trust"), a statutory trust under the Statutory Trust Act (as defined herein), pursuant to a Declaration of Trust, dated as of February 3, 2004 (the "Original Declaration"), and a Certificate of Trust filed with the Secretary of State of the State of Delaware on February 3, 2004, for the sole purpose of issuing and selling certain securities representing undivided beneficial interests in the assets of the Trust and investing the proceeds thereof in the Debentures (as defined herein) of the Debenture Issuer (as defined herein) in connection with the issuance of the Capital Securities (as defined herein);

        WHEREAS, as of the date hereof, no interests in the assets of the Trust have been issued; and

        WHEREAS, all of the Trustees, the Administrators and the Sponsor, by this Declaration, amend and restate each and every term and provision of the Original Declaration.

        NOW, THEREFORE, it being the intention of the parties hereto to continue the Trust as a statutory trust under the Statutory Trust Act and that this Declaration constitutes the governing instrument of such statutory trust, and that all assets contributed to the Trust will be held in trust for the benefit of the holders, from time to time, of the securities representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to the provisions of this Declaration, and, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties, intending to be legally bound hereby, amend and restate in its entirety the Original Declaration and agree as follows:

ARTICLE I
INTERPRETATION AND DEFINITIONS

        SECTION 1.1.    Definitions.    Unless the context otherwise requires:

        (a)   capitalized terms used in this Declaration but not defined in the preamble above or elsewhere herein have the respective meanings assigned to them in this Section 1.1 or, if not defined in this Section 1.1 or elsewhere herein, in the Indenture;

        (b)   a term defined anywhere in this Declaration has the same meaning throughout;

        (c)   all references to "the Declaration" or "this Declaration" are to this Declaration as modified, supplemented or amended from time to time;

        (d)   all references in this Declaration to Articles and Sections and Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to this Declaration unless otherwise specified;

        (e)   a term defined in the Trust Indenture Act (as defined herein) has the same meaning when used in this Declaration unless otherwise defined in this Declaration or unless the context otherwise requires; and

        (f)    a reference to the singular includes the plural and vice versa.

        "Additional Interest" has the meaning set forth in Section 3.06 of the Indenture.

        "Administrative Action" has the meaning set forth in paragraph 4(a) of Annex I.

        "Administrators" means each of Jared M. Wolff and Victor R. Santoro, solely in such Person's capacity as Administrator of the Trust continued hereunder and not in such Person's individual capacity, or such Administrator's successor in interest in such capacity, or any successor appointed as herein provided.

        "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder.

        "Applicable Depositary Procedures" means, with respect to any transfer or transaction involving a Book-Entry Capital Security, the rules and procedures of the Depositary for such Book-Entry Capital Security, in each case to the extent applicable to such transaction and as in effect from time to time.

        "Authorized Officer" of a Person means any Person that is authorized to bind such Person.

        "Bankruptcy Event" means, with respect to any Person:

        (a)   a court having jurisdiction in the premises enters a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or for any substantial part of its property, or orders the winding-up or liquidation of its affairs, and such decree, appointment or order remains unstayed and in effect for a period of 90 consecutive days; or

        (b)   such Person commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, consents to the entry of an order for relief in an involuntary case under any such law, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of such Person of any substantial part of its property, or makes any general assignment for the benefit of creditors, or fails generally to pay its debts as they become due.

        "Book-Entry Capital Security" means a Capital Security, the ownership and transfers of which shall be made through book entries by a Depositary.

        "Business Day" means any day other than Saturday, Sunday or any other day on which banking institutions in Wilmington, Delaware, New York City or the city of the Corporate Trust Office are permitted or required by any applicable law or executive order to close.

        "Calculation Agent" has the meaning set forth in Section 1.01 of the Indenture.

        "Capital Securities" has the meaning set forth in Section 6.1(a).

        "Capital Security Certificate" means a definitive Certificate registered in the name of the Holder representing a Capital Security substantially in the form of Exhibit A 1.

        "Capital Treatment Event" has the meaning set forth in paragraph 4(a) of Annex I.

        "Certificate" means any certificate evidencing Securities.

        "Certificate of Trust" means the certificate of trust filed with the Secretary of State of the State of Delaware with respect to the Trust, as amended and restated from time to time.

        "Closing Date" has the meaning set forth in the Purchase Agreement.

        "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation.

        "Commission" means the United States Securities and Exchange Commission.

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        "Common Securities" has the meaning set forth in Section 6.1(a).

        "Common Security Certificate" means a definitive Certificate registered in the name of the Holder representing a Common Security substantially in the form of Exhibit A-2.

        "Company Indemnified Person" means (a) any Administrator; (b) any Affiliate of any Administrator; (c) any officers, directors, shareholders, members, partners, employees, representatives or agents of any Administrator; or (d) any officer, employee or agent of the Trust or its Affiliates.

        "Corporate Trust Office" means the office of the Institutional Trustee at which the corporate trust business of the Institutional Trustee shall, at any particular time, be principally administered, which office shall at all times be located in the United States and at the date of execution of this Declaration is located at 600 Travis Street, 50^th Floor, Houston, TX 77002, Attn: Institutional Trust Services—First Community Bancorp/CA Statutory Trust VII.

        "Coupon Rate" has the meaning set forth in paragraph 2(a) of Annex I.

        "Covered Person" means: (a) any Administrator, officer, director, shareholder, partner, member, representative, employee or agent of (i) the Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.

        "Debenture Issuer" means First Community Bancorp, a bank holding company incorporated in California, in its capacity as issuer of the Debentures under the Indenture.

        "Debenture Trustee" means JPMorgan Chase Bank, not in its individual capacity but solely as trustee under the Indenture until a successor is appointed thereunder, and thereafter means such successor trustee.

        "Debentures" means the Junior Subordinated Debt Securities due April 23, 2034 to be issued by the Debenture Issuer under the Indenture.

        "Deferred Interest" means any interest on the Debentures that would have been overdue and unpaid for more than one Distribution Payment Date but for the imposition of an Extension Period, and the interest that shall accrue (to the extent that the payment of such interest is legally enforceable) on such interest at the Coupon Rate applicable during such Extension Period, compounded quarterly from the date on which such Deferred Interest would otherwise have been due and payable until paid or made available for payment.

        "Definitive Capital Securities" means any Capital Securities in definitive form issued by the Trust.

        "Depositary" means an organization registered as a clearing agency under the Exchange Act that is designated as Depositary by the Sponsor or any successor thereto. DTC will be the initial Depositary.

        "Depositary Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book-entry transfers and pledges of securities deposited with the Depositary.

        "Delaware Trustee" has the meaning set forth in Section 4.2.

        "Direct Action" has the meaning set forth in Section 2.8(e).

        "Distribution" means a distribution payable to Holders of Securities in accordance with Section 5.1.

        "Distribution Payment Date" has the meaning set forth in paragraph 2(e) of Annex I.

        "Distribution Payment Period" means the period from and including a Distribution Payment Date, or in the case of the first Distribution Payment Period, the original date of issuance of the Securities, to, but excluding, the next succeeding Distribution Payment Date or, in the case of the last Distribution

3

Payment Period, the Redemption Date, Special Redemption Date or Maturity Date (each as defined in the Indenture), as the case may be, for the related Debentures.

        "DTC" means The Depository Trust Company or any successor thereto.

        "Event of Default" means the occurrence of an Indenture Event of Default.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation.

        "Extension Period" has the meaning set forth in paragraph 2(e) of Annex I.

        "Fiduciary Indemnified Person" shall mean each of the Institutional Trustee (including in its individual capacity), the Delaware Trustee (including in its individual capacity), any Affiliate of the Institutional Trustee or the Delaware Trustee, and any officers, directors, shareholders, members, partners, employees, representatives, custodians, nominees or agents of the Institutional Trustee or the Delaware Trustee.

        "Fiscal Year" has the meaning set forth in Section 10.1.

        "Global Capital Security" means a Capital Securities Certificate evidencing ownership of Book-Entry Capital Securities.

        "Guarantee" means the Guarantee Agreement, dated as of the Closing Date, of the Sponsor (the "Guarantor") in respect of the Capital Securities.

        "Holder" means a Person in whose name a Certificate representing a Security is registered on the register maintained by or on behalf of the Registrar, such Person being a beneficial owner within the meaning of the Statutory Trust Act.

        "Indemnified Person" means a Company Indemnified Person or a Fiduciary Indemnified Person.

        "Indenture" means the Indenture, dated as of the Closing Date, between the Debenture Issuer and the Debenture Trustee, and any indenture supplemental thereto pursuant to which the Debentures are to be issued.

        "Indenture Event of Default" means an "Event of Default" as defined in the Indenture.

        "Institutional Trustee" means the Trustee meeting the eligibility requirements set forth in Section 4.3.

        "Investment Company" means an investment company as defined in the Investment Company Act.

        "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation.

        "Investment Company Event" has the meaning set forth in paragraph 4(a) of Annex I.

        "Legal Action" has the meaning set forth in Section 2.8(e).

        "LIBOR" means the London Interbank Offered Rate for U.S. Dollar deposits in Europe as determined by the Calculation Agent according to paragraph 2(b) of Annex I.

        "LIBOR Banking Day" has the meaning set forth in paragraph 2(b)(1) of Annex I.

        "LIBOR Business Day" has the meaning set forth in paragraph 2(b)(1) of Annex I.

        "LIBOR Determination Date" has the meaning set forth in paragraph 2(b)(1) of Annex I.

        "Liquidation" has the meaning set forth in paragraph 3 of Annex I.

        "Liquidation Distribution" has the meaning set forth in paragraph 3 of Annex I.

4

        "Majority in liquidation amount of the Securities" means Holders of outstanding Securities voting together as a single class or, as the context may require, Holders of outstanding Capital Securities or Holders of outstanding Common Securities voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class.

        "Notice" has the meaning set forth in Section 2.11 of the Indenture.

        "Officers' Certificate" means, with respect to any Person, a certificate signed by two Authorized Officers of such Person. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Declaration shall include:

        (a)   a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto;

        (b)   a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate;

        (c)   a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and

        (d)   a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with.

        "Owner" means each Person who is the beneficial owner of Book-Entry Capital Securities as reflected in the records of the Depositary or, if a Depositary Participant is not the beneficial owner, then the beneficial owner as reflected in the records of the Depositary Participant.

        "Paying Agent" has the meaning set forth in Section 6.2.

        "Payment Amount" has the meaning set forth in Section 5.1.

        "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

        "Purchase Agreement" means the Purchase Agreement relating to the offering and sale of Capital Securities.

        "PORTAL" has the meaning set forth in Section 2.6(a)(i)(E).

        "Property Account" has the meaning set forth in Section 2.8(c).

        "Pro Rata" has the meaning set forth in paragraph 8 of Annex I.

        "QIB" means a "qualified institutional buyer" as defined under Rule 144A.

        "Quorum" means a majority of the Administrators or, if there are only two Administrators, both of them.

        "Redemption/Distribution Notice" has the meaning set forth in paragraph 4(e) of Annex I.

        "Redemption Price" has the meaning set forth in paragraph 4(a) of Annex I.

        "Registrar" has the meaning set forth in Section 6.2.

        "Relevant Trustee" has the meaning set forth in Section 4.7(a).

5

        "Responsible Officer" means, with respect to the Institutional Trustee, any officer within the Corporate Trust Office of the Institutional Trustee with direct responsibility for the administration of this Declaration, including any vice-president, any assistant vice-president, any secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of the Corporate Trust Office of the Institutional Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject.

        "Restricted Securities Legend" has the meaning set forth in Section 8.2(c).

        "Rule 144A" means Rule 144A under the Securities Act.

        "Rule 3a-5" means Rule 3a-5 under the Investment Company Act.

        "Rule 3a-7" means Rule 3a-7 under the Investment Company Act.

        "Securities" means the Common Securities and the Capital Securities, as applicable.

        "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation.

        "Sponsor" means First Community Bancorp, a bank holding company that is a U.S. Person incorporated in California, or any successor entity in a merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.

        "Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq., as it may be amended from time to time, or any successor legislation.

        "Successor Delaware Trustee" has the meaning set forth in Section 4.7(e).

        "Successor Entity" has the meaning set forth in Section 2.15(b).

        "Successor Institutional Trustee" has the meaning set forth in Section 4.7(b).

        "Successor Securities" has the meaning set forth in Section 2.15(b).

        "Super Majority" has the meaning set forth in paragraph 5(b) of Annex I.

        "Tax Event" has the meaning set forth in paragraph 4(a) of Annex I.

        "10% in liquidation amount of the Securities" means Holders of outstanding Securities voting together as a single class or, as the context may require, Holders of outstanding Capital Securities or Holders of outstanding Common Securities voting separately as a class, who are the record owners of 10% or more of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which the voting percentages are determined) of all outstanding Securities of the relevant class.

        "Transfer Agent" has the meaning set forth in Section 6.2.

        "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from time-to-time, or any successor legislation.

        "Trustee" or "Trustees" means each Person who has signed this Declaration as a trustee, so long as such Person shall continue in office in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder.

6

        "Trust Property" means (a) the Debentures, (b) any cash on deposit in, or owing to, the Property Account and (c) all proceeds and rights in respect of the foregoing and any other property and assets for the time being held or deemed to be held by the Institutional Trustee pursuant to the trusts of this Declaration.

        "U.S. Person" means a United States Person as defined in Section 7701(a)(30) of the Code.

ARTICLE II
ORGANIZATION

        SECTION 2.1.    Name.    The Trust is named "First Community Bancorp/CA Statutory Trust VII," as such name may be modified from time to time by the Administrators following written notice to the Institutional Trustee and the Holders of the Securities. The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Administrators.

        SECTION 2.2.    Office.    The address of the principal office of the Trust, which shall be in a state of the United States or the District of Columbia, is 120 Wilshire Blvd., Santa Monica, CA 90401. On ten Business Days' written notice to the Institutional Trustee and the Holders of the Securities, the Administrators may designate another principal office, which shall be in a state of the United States or the District of Columbia.

        SECTION 2.3.    Purpose.    The exclusive purposes and functions of the Trust are (a) to issue and sell the Securities representing undivided beneficial interests in the assets of the Trust, (b) to invest the gross proceeds from such sale to acquire the Debentures, (c) to facilitate direct investment in the assets of the Trust through issuance of the Common Securities and the Capital Securities and (d) except as otherwise limited herein, to engage in only those other activities incidental thereto that are deemed necessary or advisable by the Institutional Trustee, including, without limitation, those activities specified in this Declaration. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, pledge any of its assets, or otherwise undertake (or permit to be undertaken) any activity that would cause the Trust not to be classified for United States federal income tax purposes as a grantor trust.

        SECTION 2.4.    Authority.    Except as specifically provided in this Declaration, the Institutional Trustee shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by a Trustee on behalf of the Trust and in accordance with such Trustee's powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Declaration. The Administrators shall have only those ministerial duties set forth herein with respect to accomplishing the purposes of the Trust and are not intended to be trustees or fiduciaries with respect to the Trust or the Holders. The Institutional Trustee shall have the right, but shall not be obligated except as provided in Section 2.6, to perform those duties assigned to the Administrators.

        SECTION 2.5.    Title to Property of the Trust.    Except as provided in Section 2.6(g) and Section 2.8 with respect to the Debentures and the Property Account or as otherwise provided in this Declaration, legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the assets of the Trust, but shall have an undivided beneficial interest in the assets of the Trust.

7

        SECTION 2.6.    Powers and Duties of the Trustees and the Administrators.

        (a)   The Trustees and the Administrators shall conduct the affairs of the Trust in accordance with the terms of this Declaration. Subject to the limitations set forth in paragraph (b) of this Section, and in accordance with the following provisions (i) and (ii), the Administrators and, at the direction of the Administrators, the Trustees, shall have the authority to enter into all transactions and agreements determined by the Administrators to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees or the Administrators, as the case may be, under this Declaration, and to perform all acts in furtherance thereof, including without limitation, the following:

        (i)    Each Administrator shall have the power, duty and authority, and is hereby authorized, to act on behalf of the Trust with respect to the following matters:

        (A)  the issuance and sale of the Securities;

        (B)  to acquire the Debentures with the proceeds of the sale of the Securities; provided, however, that the Administrators shall cause legal title to the Debentures to be held of record in the name of the Institutional Trustee for the benefit of the Holders;

        (C)  to cause the Trust to enter into, and to execute, deliver and perform on behalf of the Trust, such agreements as may be necessary or desirable in connection with the purposes and function of the Trust, including agreements with the Paying Agent, a Debenture subscription agreement between the Trust and the Sponsor and a Common Securities subscription agreement between the Trust and the Sponsor;

        (D)  ensuring compliance with the Securities Act and applicable state securities or blue sky laws;

        (E)  if and at such time determined solely by the Sponsor at the request of the Holders, assisting in the designation of the Capital Securities for trading in the Private Offering, Resales and Trading through the Automatic Linkages ("PORTAL") system if available;

        (F)  the sending of notices (other than notices of default) and other information regarding the Securities and the Debentures to the Holders in accordance with this Declaration, including notice of any notice received from the Debenture Issuer of its election to defer payments of interest on the Debentures by extending the interest payment period under the Indenture;

        (G)  the appointment of a Paying Agent, Transfer Agent and Registrar in accordance with this Declaration;

        (H)  execution and delivery of the Securities in accordance with this Declaration;

        (I)   execution and delivery of closing certificates pursuant to the Purchase Agreement and the application for a taxpayer identification number;

        (J)   unless otherwise determined by the Holders of a Majority in liquidation amount of the Securities or as otherwise required by the Statutory Trust Act, to execute on behalf of the Trust (either acting alone or together with any or all of the Administrators) any documents that the Administrators have the power to execute pursuant to this Declaration;

        (K)  the taking of any action incidental to the foregoing as the Sponsor or an Administrator may from time to time determine is necessary or advisable to give effect to the terms of this Declaration for the benefit of the Holders (without consideration of the effect of any such action on any particular Holder);

        (L)  to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including Distributions, voting rights, redemptions and

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exchanges, and to issue relevant notices to the Holders of Capital Securities and Holders of Common Securities as to such actions and applicable record dates;

        (M) to duly prepare and file on behalf of the Trust all applicable tax returns and tax information reports that are required to be filed with respect to the Trust;

        (N)  to negotiate the terms of, and the execution and delivery of, the Purchase Agreement providing for the sale of the Capital Securities;

        (O)  to employ or otherwise engage employees, agents (who may be designated as officers with titles), managers, contractors, advisors, attorneys and consultants and pay reasonable compensation for such services;

        (P)   to incur expenses that are necessary or incidental to carry out any of the purposes of the Trust;

        (Q)  to give the certificate required by § 314(a)(4) of the Trust Indenture Act to the Institutional Trustee, which certificate may be executed by an Administrator; and

        (R)  to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory trust under the laws of each jurisdiction (other than the State of Delaware) in which such existence is necessary to protect the limited liability of the Holders of the Capital Securities or to enable the Trust to effect the purposes for which the Trust was created.

        (ii)   As among the Trustees and the Administrators, the Institutional Trustee shall have the power, duty and authority, and is hereby authorized, to act on behalf of the Trust with respect to the following matters:

        (A)  the establishment of the Property Account;

        (B)  the receipt of the Debentures;

        (C)  the collection of interest, principal and any other payments made in respect of the Debentures in the Property Account;

        (D)  the distribution through the Paying Agent of amounts owed to the Holders in respect of the Securities;

        (E)  the exercise of all of the rights, powers and privileges of a holder of the Debentures;

        (F)  the sending of notices of default and other information regarding the Securities and the Debentures to the Holders in accordance with this Declaration;

        (G)  the distribution of the Trust Property in accordance with the terms of this Declaration;

        (H)  to the extent provided in this Declaration, the winding up of the affairs of and liquidation of the Trust;

        (I)   after any Event of Default (of which the Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof)) (provided, that such Event of Default is not by or with respect to the Institutional Trustee), the taking of any action incidental to the foregoing as the Institutional Trustee may from time to time determine is necessary or advisable to give effect to the terms of this Declaration and protect and conserve the Trust Property for the benefit of the Holders (without consideration of the effect of any such action on any particular Holder);

        (J)   to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory trust

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under the laws of the State of Delaware to protect the limited liability of the Holders of the Capital Securities or to enable the Trust to effect the purposes for which the Trust was created; and

        (K)  to undertake any actions set forth in § 317(a) of the Trust Indenture Act.

        (iii)  The Institutional Trustee shall have the power and authority, and is hereby authorized, to act on behalf of the Trust with respect to any of the duties, liabilities, powers or the authority of the Administrators set forth in Section 2.6(a)(i)(E) and (F) herein but shall not have a duty to do any such act unless specifically requested to do so in writing by the Sponsor, and shall then be fully protected in acting pursuant to such written request; and in the event of a conflict between the action of the Administrators and the action of the Institutional Trustee, the action of the Institutional Trustee shall prevail.

        (b)   So long as this Declaration remains in effect, the Trust (or the Trustees or Administrators acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, neither the Trustees nor the Administrators may cause the Trust to (i) acquire any investments or engage in any activities not authorized by this Declaration, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Holders, except as expressly provided herein, (iii) take any action that would cause (or in the case of the Institutional Trustee, to the actual knowledge of a Responsible Officer would cause) the Trust to fail or cease to qualify as a "grantor trust" for United States federal income tax purposes, (iv) incur any indebtedness for borrowed money or issue any other debt or (v) take or consent to any action that would result in the placement of a lien on any of the Trust Property. The Institutional Trustee shall, at the sole cost and expense of the Trust, defend all claims and demands of all Persons at any time claiming any lien on any of the Trust Property adverse to the interest of the Trust or the Holders in their capacity as Holders.

        (c)   In connection with the issuance and sale of the Capital Securities, the Sponsor shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Sponsor in furtherance of the following prior to the date of this Declaration are hereby ratified and confirmed in all respects):

        (i)    the taking of any action necessary to obtain an exemption from the Securities Act;

        (ii)   the determination of the States in which to take appropriate action to qualify or register for sale all or part of the Capital Securities and the determination of any and all such acts, other than actions which must be taken by or on behalf of the Trust, and the advisement of and direction to the Trustees of actions they must take on behalf of the Trust, and the preparation for execution and filing of any documents to be executed and filed by the Trust or on behalf of the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such States in connection with the sale of the Capital Securities; and

        (iii)  the taking of any other actions necessary or desirable to carry out any of the foregoing activities.

        (d)   Notwithstanding anything herein to the contrary, the Administrators, the Institutional Trustee and the Holders of a Majority in liquidation amount of the Common Securities are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that (i) the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act (in the case of the Institutional Trustee, to the actual knowledge of a Responsible Officer), and (ii) the Trust will not fail to be classified as a grantor trust for United States federal income tax purposes (in the case of the Institutional Trustee, to the actual knowledge of a Responsible Officer) and (iii) the Trust will not take any action inconsistent with the treatment of the Debentures as indebtedness of the

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Debenture Issuer for United States federal income tax purposes (in the case of the Institutional Trustee, to the actual knowledge of a Responsible Officer). In this connection, the Institutional Trustee, the Administrators and the Holders of a Majority in liquidation amount of the Common Securities are authorized to take any action, not inconsistent with applicable laws or this Declaration, as amended from time to time, that each of the Institutional Trustee, the Administrators and such Holders determine in their discretion to be necessary or desirable for such purposes, even if such action adversely affects the interests of the Holders of the Capital Securities.

        (e)   All expenses incurred by the Administrators or the Trustees pursuant to this Section 2.6 shall be reimbursed by the Sponsor, and the Trustees shall have no obligations with respect to such expenses.

        (f)    The assets of the Trust shall consist of the Trust Property.

        (g)   Legal title to all Trust Property shall be vested at all times in the Institutional Trustee (in its capacity as such) and shall be held and administered by the Institutional Trustee for the benefit of the Trust in accordance with this Declaration.

        (h)   If the Institutional Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Declaration and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Institutional Trustee or to such Holder, then and in every such case the Sponsor, the Institutional Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Institutional Trustee and the Holders shall continue as though no such proceeding had been instituted.

        SECTION 2.7.    Prohibition of Actions by the Trust and the Trustees.    The Trust shall not, and the Institutional Trustee and the Administrators shall not, and the Administrators shall cause the Trust not to, engage in any activity other than as required or authorized by this Declaration. In particular, the Trust shall not, and the Institutional Trustee and the Administrators shall not cause the Trust to:

        (a)   invest any proceeds received by the Trust from holding the Debentures, but shall distribute all such proceeds to Holders of the Securities pursuant to the terms of this Declaration and of the Securities;

        (b)   acquire any assets other than as expressly provided herein;

        (c)   possess Trust Property for other than a Trust purpose;

        (d)   make any loans or incur any indebtedness other than loans represented by the Debentures;

        (e)   possess any power or otherwise act in such a way as to vary the Trust Property or the terms of the Securities;

        (f)    issue any securities or other evidences of beneficial ownership of, or beneficial interest in, the Trust other than the Securities; or

        (g)   other than as provided in this Declaration (including Annex I), (i) direct the time, method and place of exercising any trust or power conferred upon the Debenture Trustee with respect to the Debentures, (ii) waive any past default that is waivable under the Indenture, (iii) exercise any right to rescind or annul any declaration that the principal of all the Debentures shall be due and payable, or (iv) consent to any amendment, modification or termination of the Indenture or the Debentures where such consent shall be required unless the Trust shall have received a written opinion of counsel experienced in such matters to the effect that such amendment, modification or termination will not cause the Trust to cease to be classified as a grantor trust for United States federal income tax purposes.

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        SECTION 2.8.    Powers and Duties of the Institutional Trustee.

        (a)   The legal title to the Debentures shall be owned by and held of record in the name of the Institutional Trustee in trust for the benefit of the Trust. The right, title and interest of the Institutional Trustee to the Debentures shall vest automatically in each Person who may hereafter be appointed as Institutional Trustee in accordance with Section 4.7. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Debentures have been executed and delivered.

        (b)   The Institutional Trustee shall not transfer its right, title and interest in the Debentures to the Administrators or to the Delaware Trustee.

        (c)   The Institutional Trustee shall:

        (i)    establish and maintain a segregated non-interest bearing trust account (the "Property Account") in the United States (as defined in Treasury Regulations § 301.7701-7), in the name of and under the exclusive control of the Institutional Trustee, and maintained in the Institutional Trustee's trust department, on behalf of the Holders of the Securities and, upon the receipt of payments of funds made in respect of the Debentures held by the Institutional Trustee, deposit such funds into the Property Account and make payments to the Holders of the Capital Securities and Holders of the Common Securities from the Property Account in accordance with Section 5.1. Funds in the Property Account shall be held uninvested until disbursed in accordance with this Declaration;

        (ii)   engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Capital Securities and the Common Securities to the extent the Debentures are redeemed or mature; and

        (iii)  upon written notice of distribution issued by the Administrators in accordance with the terms of the Securities, engage in such ministerial activities as shall be necessary or appropriate to effect the distribution of the Debentures to Holders of Securities upon the occurrence of certain circumstances pursuant to the terms of the Securities.

        (d)   The Institutional Trustee shall take all actions and perform such duties as may be specifically required of the Institutional Trustee pursuant to the terms of the Securities.

        (e)   The Institutional Trustee may bring or defend, pay, collect, compromise, arbitrate, resort to legal action with respect to, or otherwise adjust claims or demands of or against, the Trust (a "Legal Action") which arise out of or in connection with an Event of Default of which a Responsible Officer of the Institutional Trustee has actual knowledge or the Institutional Trustee's duties and obligations under this Declaration or the Trust Indenture Act; provided, however, that if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay interest or premium, if any, on or principal of the Debentures on the date such interest, premium, if any, or principal is otherwise payable (or in the case of redemption, on the redemption date), then a Holder of the Capital Securities may directly institute a proceeding for enforcement of payment to such Holder of the principal of or premium, if any, or interest on the Debentures having a principal amount equal to the aggregate liquidation amount of the Capital Securities of such Holder (a "Direct Action") on or after the respective due date specified in the Debentures. In connection with such Direct Action, the rights of the Holders of the Common Securities will be subrogated to the rights of such Holder of the Capital Securities to the extent of any payment made by the Debenture Issuer to such Holder of the Capital Securities in such Direct Action; provided, however, that a Holder of the Common Securities may exercise such right of subrogation only if no Event of Default with respect to the Capital Securities has occurred and is continuing.

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        (f)    The Institutional Trustee shall continue to serve as a Trustee until either:

        (i)    the Trust has been completely liquidated and the proceeds of the liquidation distributed to the Holders of the Securities pursuant to the terms of the Securities and this Declaration (including Annex I) and the certificate of cancellation referenced in Section 7.1(b) has been filed; or

        (ii)   a Successor Institutional Trustee has been appointed and has accepted that appointment in accordance with Section 4.7.

        (g)   The Institutional Trustee shall have the legal power to exercise all of the rights, powers and privileges of a holder of the Debentures under the Indenture and, if an Event of Default occurs and is continuing, the Institutional Trustee may, for the benefit of Holders of the Securities, enforce its rights as holder of the Debentures subject to the rights of the Holders pursuant to this Declaration (including Annex I) and the terms of the Securities.

        (h)   The Institutional Trustee must exercise the powers set forth in this Section 2.8 in a manner that is consistent with the purposes and functions of the Trust set out in Section 2.3, and the Institutional Trustee shall not take any action that is inconsistent with the purposes and functions of the Trust set out in Section 2.3.

        SECTION 2.9.    Certain Duties and Responsibilities of the Trustees and the Administrators.

        (a)   The Institutional Trustee, before the occurrence of any Event of Default (of which the Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof)) and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Declaration and no implied covenants shall be read into this Declaration against the Institutional Trustee. In case an Event of Default (of which the Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof)), has occurred (that has not been cured or waived pursuant to Section 6.8), the Institutional Trustee shall exercise such of the rights and powers vested in it by this Declaration, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

        (b)   The duties and responsibilities of the Trustees and the Administrators shall be as provided by this Declaration and, in the case of the Institutional Trustee, by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Declaration shall require any Trustee or Administrator to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Declaration relating to the conduct or affecting the liability of or affording protection to the Trustees or the Administrators shall be subject to the provisions of this Article. Nothing in this Declaration shall be construed to release a Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct or bad faith. Nothing in this Declaration shall be construed to release an Administrator from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct or bad faith. To the extent that, at law or in equity, a Trustee or an Administrator has duties and liabilities relating to the Trust or to the Holders, such Trustee or Administrator shall not be liable to the Trust or to any Holder for such Trustee's or Administrator's good faith reliance on the provisions of this Declaration. The provisions of this Declaration, to the extent that they restrict the duties and liabilities of the Administrators or the Trustees otherwise existing at law or in equity, are agreed by the Sponsor and the Holders to replace such other duties and liabilities of the Administrators or the Trustees.

        (c)   All payments made by the Institutional Trustee or a Paying Agent in respect of the Securities shall be made only from the revenue and proceeds from the Trust Property and only to the extent that

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there shall be sufficient revenue or proceeds from the Trust Property to enable the Institutional Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Holder, by its acceptance of a Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that the Trustees and the Administrators are not personally liable to it for any amount distributable in respect of any Security or for any other liability in respect of any Security. This Section 2.9(c) does not limit the liability of the Trustees expressly set forth elsewhere in this Declaration or, in the case of the Institutional Trustee, in the Trust Indenture Act.

        (d)   No provision of this Declaration shall be construed to relieve the Institutional Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct or bad faith with respect to matters that are within the authority of the Institutional Trustee under this Declaration, except that:

        (i)    the Institutional Trustee shall not be liable for any error or judgment made in good faith by a Responsible Officer of the Institutional Trustee, unless it shall be proved that the Institutional Trustee was negligent in ascertaining the pertinent facts;

        (ii)   the Institutional Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in liquidation amount of the Capital Securities or the Common Securities, as applicable, relating to the time, method and place of conducting any proceeding for any remedy available to the Institutional Trustee, or exercising any trust or power conferred upon the Institutional Trustee under this Declaration;

        (iii)  the Institutional Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Debentures and the Property Account shall be to deal with such property in a similar manner as the Institutional Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Institutional Trustee under this Declaration and the Trust Indenture Act;

        (iv)  the Institutional Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree in writing with the Sponsor; and money held by the Institutional Trustee need not be segregated from other funds held by it except in relation to the Property Account maintained by the Institutional Trustee pursuant to Section 2.8(c)(í) and except to the extent otherwise required by law; and

        (v)   the Institutional Trustee shall not be responsible for monitoring the compliance by the Administrators or the Sponsor with their respective duties under this Declaration, nor shall the Institutional Trustee be liable for any default or misconduct of the Administrators or the Sponsor.

        SECTION 2.10.    Certain Rights of Institutional Trustee.    Subject to the provisions of Section 2.9.

        (a)   the Institutional Trustee may conclusively rely and shall fully be protected in acting or refraining from acting in good faith upon any resolution, written opinion of counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties;

        (b)   if (i) in performing its duties under this Declaration, the Institutional Trustee is required to decide between alternative courses of action, (ii) in construing any of the provisions of this Declaration, the Institutional Trustee finds the same ambiguous or inconsistent with any other provisions contained herein, or (iii) the Institutional Trustee is unsure of the application of any provision of this Declaration, then, except as to any matter as to which the Holders of Capital Securities are entitled to vote under

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the terms of this Declaration, the Institutional Trustee may deliver a notice to the Sponsor requesting the Sponsor's opinion as to the course of action to be taken and the Institutional Trustee shall take such action, or refrain from taking such action, as the Institutional Trustee in its sole discretion shall deem advisable and in the best interests of the Holders, in which event the Institutional Trustee shall have no liability except for its own negligence or willful misconduct;

        (c)   any direction or act of the Sponsor or the Administrators contemplated by this Declaration shall be sufficiently evidenced by an Officers' Certificate;

        (d)   whenever in the administration of this Declaration, the Institutional Trustee shall deem it desirable that a matter be proved or established before undertaking, suffering or omitting any action hereunder, the Institutional Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Sponsor or the Administrators;

        (e)   the Institutional Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any rerecording, refiling or reregistration thereof;

        (f)    the Institutional Trustee may consult with counsel of its selection (which counsel may be counsel to the Sponsor or any of its Affiliates) and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the Institutional Trustee shall have the right at any time to seek instructions concerning the administration of this Declaration from any court of competent jurisdiction;

        (g)   the Institutional Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Declaration at the request or direction of any of the Holders pursuant to this Declaration, unless such Holders shall have offered to the Institutional Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; provided, that nothing contained in this Section 2.10(g) shall be taken to relieve the Institutional Trustee, upon the occurrence of an Event of Default (of which the Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof)) that has not been cured or waived, of its obligation to exercise the rights and powers vested in it by this Declaration;

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        (h)   the Institutional Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Holders, but the Institutional Trustee may make such further inquiry or investigation into such facts or matters as it may see fit;

        (i)    the Institutional Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys and the Institutional Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent or attorney appointed with due care by it hereunder;

        (j)    whenever in the administration of this Declaration the Institutional Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Institutional Trustee (i) may request instructions from the Holders of the Common Securities and the Capital Securities, which instructions may be given only by the Holders of the same proportion in liquidation amount of the Common Securities and the Capital Securities as would be entitled to direct the Institutional Trustee under the terms of the Common Securities and the Capital Securities in respect of such remedy, right or action, (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be fully protected in acting in accordance with such instructions;

        (k)   except as otherwise expressly provided in this Declaration, the Institutional Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Declaration;

        (l)    when the Institutional Trustee incurs expenses or renders services in connection with a Bankruptcy Event, such expenses (including the fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy law or law relating to creditors rights generally;

        (m)  the Institutional Trustee shall not be charged with knowledge of an Event of Default unless a Responsible Officer of the Institutional Trustee has actual knowledge of such event or the Institutional Trustee receives written notice of such event from any Holder, except with respect to an Event of Default pursuant to Sections 5.01 (a) or 5.01 (b) of the Indenture (other than an Event of Default resulting from the default in the payment of Additional Interest or premium, if any, if the Institutional Trustee does not have actual knowledge or written notice that such payment is due and payable), of which the Institutional Trustee shall be deemed to have knowledge;

        (n)   any action taken by the Institutional Trustee or its agents hereunder shall bind the Trust and the Holders of the Securities, and the signature of the Institutional Trustee or its agents alone shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the authority of the Institutional Trustee to so act or as to its compliance with any of the terms and provisions of this Declaration, both of which shall be conclusively evidenced by the Institutional Trustee's or its agent's taking such action; and

        (o)   no provision of this Declaration shall be deemed to impose any duty or obligation on the Institutional Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal, or in which the Institutional Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Institutional Trustee shall be construed to be a duty.

        SECTION 2.11.    Delaware Trustee.    Notwithstanding any other provision of this Declaration other than Section 4.2, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of any of the Trustees or the Administrators described in this Declaration (except as may be required under the Statutory Trust Act).

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Except as set forth in Section 4.2, the Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of § 3807 of the Statutory Trust Act.

        SECTION 2.12.    Execution of Documents.    Unless otherwise determined in writing by the Institutional Trustee, and except as otherwise required by the Statutory Trust Act, the Institutional Trustee, or any one or more of the Administrators, as the case may be, is authorized to execute and deliver on behalf of the Trust any documents, agreements, instruments or certificates that the Trustees or the Administrators, as the case may be, have the power and authority to execute pursuant to Section 2.6.

        SECTION 2.13.    Not Responsible for Recitals or Issuance of Securities.    The recitals contained in this Declaration and the Securities shall be taken as the statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the value or condition of the property of the Trust or any part thereof. The Trustees make no representations as to the validity or sufficiency of this Declaration, the Debentures or the Securities.

        SECTION 2.14.    Duration of Trust.    The Trust, unless dissolved pursuant to the provisions of Article VII hereof, shall have existence for thirty-five (35) years from the Closing Date.

        SECTION 2.15.    Mergers.

        (a)   The Trust may not consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any corporation or other Person, except as described in this Section 2.15 and except with respect to the distribution of Debentures to Holders of Securities pursuant to Section 7.1(a)(iv) of the Declaration or Section 4 of Annex I.

        (b)   The Trust may, with the consent of the Administrators (which consent will not be unreasonably withheld) and without the consent of the Institutional Trustee, the Delaware Trustee or the Holders of the Capital Securities, consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to a trust organized as such under the laws of any state; provided, that:

        (i)    if the Trust is not the survivor, such successor entity (the "Successor Entity") either:

        (A)  expressly assumes all of the obligations of the Trust under the Securities; or

        (B)  substitutes for the Securities other securities having substantially the same terms as the Securities (the "Successor Securities") so that the Successor Securities rank the same as the Securities rank with respect to Distributions and payments upon Liquidation, redemption and otherwise;

        (ii)   the Sponsor expressly appoints, as the holder of the Common Securities, a trustee of the Successor Entity that possesses the same powers and duties as the Institutional Trustee;

        (iii)  the Capital Securities or any Successor Securities (excluding any securities substituted for the Common Securities) are listed or quoted, or any Successor Securities will be listed or quoted upon notification of issuance, on any national securities exchange or with another organization on which the Capital Securities are then listed or quoted, if any;

        (iv)  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Capital Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, if the Capital Securities are then rated;

        (v)   such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Securities (including any Successor Securities) in any material respect (other than with respect to any dilution

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of such Holders' interests in the Successor Entity as a result of such merger, consolidation, amalgamation or replacement);

        (vi)  such Successor Entity has a purpose substantially identical to that of the Trust;

        (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Trust has received a written opinion of a nationally recognized independent counsel to the Trust experienced in such matters to the effect that:

        (A)  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders of the Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the Holders' interests in the Successor Entity);

        (B)  following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor the Successor Entity will be required to register as an Investment Company; and

        (C)  following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Trust (or the Successor Entity) will continue to be classified as a grantor trust for United States federal income tax purposes;

        (viii) the Sponsor guarantees the obligations of such Successor Entity under the Successor Securities to the same extent provided by the Guarantee, the Debentures and this Declaration; and

        (ix)  prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Institutional Trustee shall have received an Officers' Certificate of the Administrators and an opinion of counsel, each to the effect that all conditions precedent of this paragraph (b) to such transaction have been satisfied.

        (c)   Notwithstanding Section 2.15(b), the Trust shall not, except with the consent of Holders of 100% in liquidation amount of the Securities, consolidate, amalgamate, merge with or into, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to, any other Person or permit any other Person to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or Successor Entity to be classified as other than a grantor trust for United States federal income tax purposes.

ARTICLE III
SPONSOR

        SECTION 3.1.    Sponsor's Purchase of Common Securities.    On the Closing Date, the Sponsor will purchase all of the Common Securities issued by the Trust, in an amount at least equal to 3% of the capital of the Trust, at the same time as the Capital Securities are sold.

        SECTION 3.2.    Responsibilities of the Sponsor.    In connection with the issue and sale of the Capital Securities, the Sponsor shall have the exclusive right and responsibility and sole decision to engage in, or direct the Administrators to engage in, the following activities:

        (a)   to determine the States in which to take appropriate action to qualify or register for sale of all or part of the Capital Securities and to do any and all such acts, other than actions which must be taken by the Trust, and advise the Trust of actions it must take, and prepare for execution and filing any documents to be executed and filed by the Trust, as the Sponsor deems necessary or advisable in order to comply with the applicable laws of any such States;

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        (b)   to prepare for filing and request the Administrators to cause the filing by the Trust, as may be appropriate, of an application to the PORTAL system, for listing or quotation upon notice of issuance of any Capital Securities, as requested by the Holders of not less than a Majority in liquidation amount of the Capital Securities; and

        (c)   to negotiate the terms of and/or execute and deliver on behalf of the Trust, the Purchase Agreement and other related agreements providing for the sale of the Capital Securities.

ARTICLE IV
TRUSTEES AND ADMINISTRATORS

        SECTION 4.1.    Number of Trustees.    The number of Trustees initially shall be two, and:

        (a)   at any time before the issuance of any Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees; and

        (b)   after the issuance of any Securities, the number of Trustees may be increased or decreased by vote of the Holder of a Majority in liquidation amount of the Common Securities voting as a class at a meeting of the Holder of the Common Securities; provided, however, that there shall be a Delaware Trustee if required by Section 4.2; and there shall always be one Trustee who shall be the Institutional Trustee, and such Trustee may also serve as Delaware Trustee if it meets the applicable requirements, in which case Section 2.11 shall have no application to such entity in its capacity as Institutional Trustee.

        SECTION 4.2.    Delaware Trustee.    If required by the Statutory Trust Act, one Trustee (the "Delaware Trustee") shall be:

        (a)   a natural person who is a resident of the State of Delaware; or

        (b)   if not a natural person, an entity which is organized under the laws of the United States or any state thereof or the District of Columbia, has its principal place of business in the State of Delaware, and otherwise meets the requirements of applicable law, including §3807 of the Statutory Trust Act.

        SECTION 4.3.    Institutional Trustee; Eligibility.

        (a)   There shall at all times be one Trustee which shall act as Institutional Trustee which shall:

        (i)    not be an Affiliate of the Sponsor;

        (ii)   not offer or provide credit or credit enhancement to the Trust; and

        (iii)  be a banking corporation or national association organized and doing business under the laws of the United States of America or any state thereof or of the District of Columbia and authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state or District of Columbia authority. If such corporation or national association publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then for the purposes of this Section 4.3(a)(iii), the combined capital and surplus of such corporation or national association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

        (b)   If at any time the Institutional Trustee shall cease to be eligible to so act under Section 4.3(a), the Institutional Trustee shall immediately resign in the manner and with the effect set forth in Section 4.7.

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        (c)   If the Institutional Trustee has or shall acquire any "conflicting interest" within the meaning of § 310(b) of the Trust Indenture Act, the Institutional Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to this Declaration.

        (d)   The initial Institutional Trustee shall be JPMorgan Chase Bank.

        SECTION 4.4.    Certain Qualifications of the Delaware Trustee Generally.    The Delaware Trustee shall be a U.S. Person and either a natural person who is at least 21 years of age or a legal entity that shall act through one or more Authorized Officers.

        SECTION 4.5.    Administrators.    Each Administrator shall be a U.S. Person.

        There shall at all times be at least one Administrator. Except where a requirement for action by a specific number of Administrators is expressly set forth in this Declaration and except with respect to any action the taking of which is the subject of a meeting of the Administrators, any action required or permitted to be taken by the Administrators may be taken by, and any power of the Administrators may be exercised by, or with the consent of, any one such Administrator acting alone.

        SECTION 4.6.    Initial Delaware Trustee.    The initial Delaware Trustee shall be Chase Manhattan Bank USA, National Association.

        SECTION 4.7.    Appointment, Removal and Resignation of the Trustees and the Administrators.

        (a)   No resignation or removal of any Trustee (the "Relevant Trustee") and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of this Section 4.7.

        (b)   Subject to Section 4.7(a), a Relevant Trustee may resign at any time by giving written notice thereof to the Holders of the Securities and by appointing a successor Relevant Trustee, except in the case of the Delaware Trustee's successor which shall be appointed by Holders of a Majority in liquidation amount of the Common Securities. Upon the resignation of the Institutional Trustee, the Institutional Trustee shall appoint a successor by requesting from at least three Persons meeting the eligibility requirements their expenses and charges to serve as the successor Institutional Trustee on a form provided by the Administrators, and selecting the Person who agrees to the lowest expense and charges (the "Successor Institutional Trustee"). If the instrument of acceptance by the successor Relevant Trustee required by this Section 4.7 shall not have been delivered to the Relevant Trustee within 60 days after the giving of such notice of resignation or delivery of the instrument of removal, the Relevant Trustee may petition, at the expense of the Trust, any federal, state or District of Columbia court of competent jurisdiction for the appointment of a successor Relevant Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Relevant Trustee. The Institutional Trustee shall have no liability for the selection of such successor pursuant to this Section 4.7.

        (c)   Unless an Event of Default shall have occurred and be continuing, any Trustee may be removed at any time by an act of the Holders of a Majority in liquidation amount of the Common Securities. If any Trustee shall be so removed, the Holders of the Common Securities, by act of the Holders of a Majority in liquidation amount of the Common Securities delivered to the Relevant Trustee, shall promptly appoint a successor Relevant Trustee, and such successor Trustee shall comply with the applicable requirements of this Section 4.7. If an Event of Default shall have occurred and be continuing, the Institutional Trustee or the Delaware Trustee, or both of them, may be removed by the act of the Holders of a Majority in liquidation amount of the Capital Securities, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). If any Trustee shall be so removed, the Holders of Capital Securities, by act of the Holders of a Majority in liquidation amount of the Capital Securities then outstanding delivered to the Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and such successor Trustee shall comply with the applicable

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requirements of this Section 4.7. If no successor Relevant Trustee shall have been so appointed by the Holders of a Majority in liquidation amount of the Capital Securities and accepted appointment in the manner required by this Section 4.7 within 30 days after delivery of an instrument of removal, the Relevant Trustee or any Holder who has been a Holder of the Securities for at least six months may, on behalf of himself and all others similarly situated, petition any federal, state or District of Columbia court of competent jurisdiction for the appointment of a successor Relevant Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a successor Relevant Trustee or Trustees.

        (d)   The Institutional Trustee shall give notice of each resignation and each removal of a Trustee and each appointment of a successor Trustee to all Holders and to the Sponsor. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Institutional Trustee.

        (e)   Notwithstanding the foregoing or any other provision of this Declaration, in the event a Delaware Trustee who is a natural person dies or is adjudged by a court to have become incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by the Institutional Trustee (provided the Institutional Trustee satisfies the requirements of a Delaware Trustee as set forth in Section 4.2) following the procedures in this Section 4.7 (with the successor being a Person who satisfies the eligibility requirement for a Delaware Trustee set forth in this Declaration) (the "Successor Delaware Trustee").

        (f)    In case of the appointment hereunder of a successor Relevant Trustee, the retiring Relevant Trustee and each successor Relevant Trustee with respect to the Securities shall execute and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Securities and the Trust and (b) shall add to or change any of the provisions of this Declaration as shall be necessary to provide for or facilitate the administration of the Trust by more than one Relevant Trustee, it being understood that nothing herein or in such amendment shall constitute such Relevant Trustees co-trustees and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on request of the Trust or any successor Relevant Trustee, such retiring Relevant Trustee shall duly assign, transfer and deliver to such successor Relevant Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Securities and the Trust subject to the payment of all unpaid fees, expenses and indemnities of such retiring Relevant Trustee.

        (g)   No Institutional Trustee or Delaware Trustee shall be liable for the acts or omissions to act of any Successor Institutional Trustee or Successor Delaware Trustee, as the case may be.

        (h)   The Holders of the Capital Securities will have no right to vote to appoint, remove or replace the Administrators, which voting rights are vested exclusively in the Holders of the Common Securities.

        (i)    Any successor Delaware Trustee shall file an amendment to the Certificate of Trust with the Secretary of State of the State of Delaware identifying the name and principal place of business of such Delaware Trustee in the State of Delaware.

        SECTION 4.8.    Vacancies Among Trustees.    If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced pursuant to Section 4.1, or if the number of Trustees is increased pursuant to Section 4.1, a vacancy shall occur. A resolution certifying the existence of such vacancy by the Trustees or, if there are more than two, a majority of the Trustees shall be conclusive evidence of

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the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 4.7.

        SECTION 4.9.    Effect of Vacancies.    The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to dissolve, terminate or annul the Trust or terminate this Declaration. Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled by the appointment of a Trustee in accordance with Section 4.7, the Institutional Trustee shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration.

        SECTION 4.10.    Meetings of the Trustees and the Administrators.    Meetings of the Trustees or the Administrators shall be held from time to time upon the call of any Trustee or Administrator, as applicable. Regular meetings of the Trustees and the Administrators, respectively, may be in person in the United States or by telephone, at a place (if applicable) and time fixed by resolution of the Trustees or the Administrators, as applicable. Notice of any in-person meetings of the Trustees or the Administrators shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 48 hours before such meeting. Notice of any telephonic meetings of the Trustees or the Administrators or any committee thereof shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 24 hours before a meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of a Trustee or an Administrator, as the case may be, at a meeting shall constitute a waiver of notice of such meeting except where a Trustee or an Administrator, as the case may be, attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Unless provided otherwise in this Declaration, any action of the Trustees or the Administrators, as the case may be, may be taken at a meeting by vote of a majority of the Trustees or the Administrators present (whether in person or by telephone) and eligible to vote with respect to such matter; provided, that, in the case of the Administrators, a Quorum is present, or without a meeting by the unanimous written consent of the Trustees or the Administrators, as the case may be. Meetings of the Trustees and the Administrators together shall be held from time to time upon the call of any Trustee or Administrator.

        SECTION 4.11.    Delegation of Power.

        (a)   Any Trustee or any Administrator, as the case may be, may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 that is a U.S. Person his or her power for the purpose of executing any documents, instruments or other writings contemplated in Section 2.6.

        (b)   The Trustees shall have power to delegate from time to time to such of their number or to any officer of the Trust that is a U.S. Person, the doing of such things and the execution of such instruments or other writings either in the name of the Trust or the names of the Trustees or otherwise as the Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein.

        SECTION 4.12.    Merger, Conversion, Consolidation or Succession to Business.    Any Person into which the Institutional Trustee or the Delaware Trustee, as the case maybe, may be merged or converted or with which either may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Institutional Trustee or the Delaware Trustee, as the case may be, shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Institutional Trustee or the Delaware Trustee, as the case may be, shall be the successor of the Institutional Trustee or the Delaware Trustee, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided such Person shall be otherwise qualified and eligible under this Article and, provided, further, that such Person shall

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file an amendment to the Certificate of Trust with the Secretary of State of the State of Delaware as contemplated in Section 4.7(i).

ARTICLE V
DISTRIBUTIONS

        SECTION 5.1.    Distributions.    Holders shall receive Distributions in accordance with the applicable terms of the relevant Holder's Securities. Distributions shall be made on the Capital Securities and the Common Securities in accordance with the preferences set forth in their respective terms. If and to the extent that the Debenture Issuer makes a payment of interest (including any Additional Interest or Deferred Interest) and/or principal on the Debentures held by the Institutional Trustee (the amount of any such payment being a "Payment Amount"), the Institutional Trustee shall and is directed, to the extent funds are available in the Property Account for that purpose, to make a distribution (a "Distribution") of the Payment Amount to Holders. For the avoidance of doubt, funds in the Property Account shall not be distributed to Holders to the extent of any taxes payable by the Trust, in the case of withholding taxes, as determined by the Institutional Trustee or any Paying Agent and, in the case of taxes other than withholding tax taxes, as determined by the Administrators in a written notice to the Institutional Trustee.

ARTICLE V
ISSUANCE OF SECURITIES

        SECTION 6.1.    General Provisions Regarding Securities.

        (a)   The Administrators shall on behalf of the Trust issue one series of capital securities, evidenced by a certificate substantially in the form of Exhibit A-1, representing undivided beneficial interests in the assets of the Trust and having such terms as are set forth in Annex I (the "Capital Securities"), and one series of common securities, evidenced by a certificate substantially in the form of Exhibit A-2, representing undivided beneficial interests in the assets of the Trust and having such terms as are set forth in Annex I (the "Common Securities"). The Trust shall issue no securities or other interests in the assets of the Trust other than the Capital Securities and the Common Securities. The Capital Securities rank pari passu and payment thereon shall be made Pro Rata with the Common Securities except that, where an Event of Default has occurred and is continuing, the rights of Holders of the Common Securities to payment in respect of Distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights to payment of the Holders of the Capital Securities.

        (b)   The Certificates shall be signed on behalf of the Trust by one or more Administrators. Such signature shall be the facsimile or manual signature of any Administrator. In case any Administrator of the Trust who shall have signed any of the Securities shall cease to be such Administrator before the Certificates so signed shall be delivered by the Trust, such Certificates nevertheless may be delivered as though the person who signed such Certificates had not ceased to be such Administrator. Any Certificate may be signed on behalf of the Trust by such person who, at the actual date of execution of such Security, shall be an Administrator of the Trust, although at the date of the execution and delivery of the Declaration any such person was not such an Administrator. A Capital Security shall not be valid until authenticated by the manual signature of an Authorized Officer of the Institutional Trustee. Such signature shall be conclusive evidence that the Capital Security has been authenticated under this Declaration. Upon written order of the Trust signed by one Administrator, the Institutional Trustee shall authenticate the Capital Securities for original issue. The Institutional Trustee may appoint an authenticating agent that is a U.S. Person acceptable to the Trust to authenticate the Capital Securities. A Common Security need not be so authenticated and shall be valid upon execution by one or more Administrators.

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        (c)   The Capital Securities issued pursuant to registration under the Securities Act, Regulation S of the Securities Act or to QIBs shall be, except as provided in Section 6.4, Book-Entry Capital Securities issued in the form of one or more Global Capital Securities registered in the name of the Depositary, or its nominee and deposited with the Depositary or a custodian for the Depositary for credit by the Depositary to the respective accounts of the Depositary Participants thereof (or such other accounts as they may direct).

        (d)   The consideration received by the Trust for the issuance of the Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust.

        (e)   Upon issuance of the Securities as provided in this Declaration, the Securities so issued shall be deemed to be validly issued, fully paid and non-assessable, and each Holder thereof shall be entitled to the benefits provided by this Declaration.

        (f)    Every Person, by virtue of having become a Holder in accordance with the terms of this Declaration, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Declaration and the Guarantee.

        SECTION 6.2.    Paying Agent, Transfer Agent, Calculation Agent and Registrar.

        (a)   The Trust shall maintain in New York, New York, an office or agency where the Securities may be presented for payment (the "Paying Agent"), and an office or agency where Securities may be presented for registration of transfer or exchange (the "Transfer Agent"). The Trustee hereby appoints the Institutional Trustee as Paying Agent and Transfer Agent at ITS Unit Trust Window 4, New York Plaza, Ground Floor, New York, New York 10004, Attn: ITS (Houston)—First Community Bancorp/CA Statutory Trust VII. The Trust shall also keep or cause to be kept a register for the purpose of registering Securities and transfers and exchanges of Securities, such register to be held by a registrar (the "Registrar"). The Administrators may appoint the Paying Agent, the Registrar and the Transfer Agent, and may appoint one or more additional Paying Agents, one or more co-Registrars, or one or more co-Transfer Agents in such other locations as it shall determine. The term "Paying Agent" includes any additional Paying Agent, the term "Registrar" includes any additional Registrar or co-Registrar and the term "Transfer Agent" includes any additional Transfer Agent or co-Transfer Agent. The Administrators may change any Paying Agent, Transfer Agent or Registrar at any time without prior notice to any Holder. The Administrators shall notify the Institutional Trustee of the name and address of any Paying Agent, Transfer Agent and Registrar not a party to this Declaration. The Administrators hereby initially appoint the Institutional Trustee to act as Registrar for the Capital Securities and the Common Securities at its Corporate Trust Office. The Institutional Trustee or any of its Affiliates in the United States may act as Paying Agent, Transfer Agent or Registrar.

        (b)   The Trust shall also appoint a Calculation Agent, which shall determine the Coupon Rate in accordance with the terms of the Securities. The Trust initially appoints the Institutional Trustee as Calculation Agent.

        SECTION 6.3.    Form and Dating.

        (a)   The Capital Securities and the Institutional Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit A-1, and the Common Securities shall be substantially in the form of Exhibit A-2, each of which is hereby incorporated in and expressly made a part of this Declaration. Certificates may be typed, printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrators, as conclusively evidenced by their execution thereof. The Certificates may have letters, numbers, notations or other marks of identification or designation and such legends or endorsements required by law, stock exchange rule, agreements to which the Trust is subject, if any, or usage (provided, that any such notation, legend or endorsement is in a form acceptable to the Sponsor). The Trust at the direction of the Sponsor shall furnish any such legend not contained in Exhibit A-1 to the Institutional Trustee in writing. Each

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Capital Security shall be dated the date of its authentication. The terms and provisions of the Securities set forth in Annex I and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent applicable, the Institutional Trustee, the Delaware Trustee, the Administrators and the Sponsor, by their execution and delivery of this Declaration, expressly agree to such terms and provisions and to be bound thereby. Capital Securities will be issued only in blocks having a stated liquidation amount of not less than $100,000.

        (b)   The Capital Securities sold by the Trust to the Initial Purchasers pursuant to the Purchase Agreement shall be issued in the form of a Global Capital Security, registered in the name of the Depositary, without coupons and with the Restricted Securities Legend.

        SECTION 6.4.    Book-Entry Capital Securities.

        (a)   A Global Capital Security may be exchanged, in whole or in part, for Definitive Capital Securities Certificates registered in the names of Owners only if such exchange complies with Article VIII and (i) the Depositary advises the Administrators and the Institutional Trustee in writing that the Depositary is no longer willing or able properly to discharge its responsibilities with respect to the Global Capital Security, and no qualified successor is appointed by the Administrators within ninety (90) days of receipt of such notice, (ii) the Depositary ceases to be a clearing agency registered under the Exchange Act and the Administrators fail to appoint a qualified successor within ninety (90) days of obtaining knowledge of such event, (iii) the Administrators at their option advise the Institutional Trustee in writing that the Trust elects to terminate the book-entry system through the Depositary or (iv) an Indenture Event of Default has occurred and is continuing. Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv) above, the Administrators shall notify the Depositary and instruct the Depositary to notify all Owners of Book-Entry Capital Securities and the Institutional Trustee of the occurrence of such event and of the availability of Definitive Capital Securities Certificates to Owners of the Capital Securities requesting the same. Upon the issuance of Definitive Capital Securities Certificates, the Administrators and the Institutional Trustee shall recognize the Holders of the Definitive Capital Securities Certificates as Holders. Notwithstanding the foregoing, if an Owner of a beneficial interest in a Global Capital Security wishes at any time to transfer an interest in such Global Capital Security to a Person other than a QIB, such transfer shall be effected, subject to the Applicable Depository Procedures, in accordance with the provisions of this Section 6.4 and Article VIII, and the transferee shall receive a Definitive Capital Securities Certificate in connection with such transfer. A holder of a Definitive Capital Securities Certificate that is a QIB may upon request, and in accordance with the provisions of this Section 6.4 and Article VIII, exchange such Definitive Capital Securities Certificate for a beneficial interest in a Global Capital Security.

        (b)   If any Global Capital Security is to be exchanged for Definitive Capital Securities Certificates or canceled in part, or if any Definitive Capital Securities Certificate is to be exchanged in whole or in part for any Global Capital Security, then either (i) such Global Capital Security shall be so surrendered for exchange or cancellation as provided in this Section 6.4 and Article VIII or (ii) the aggregate liquidation amount represented by such Global Capital Security shall be reduced, subject to Section 6.3, or increased by an amount equal to the liquidation amount represented by that portion of the Global Capital Security to be so exchanged or canceled, or equal to the liquidation amount represented by such Definitive Capital Securities Certificates to be so exchanged for any Global Capital Security, as the case may be, by means of an appropriate adjustment made on the records of the Securities Registrar, whereupon the Institutional Trustee, in accordance with the Applicable Depositary Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender to the Administrators or the Registrar of any Global Capital Security or Securities by the Depositary, accompanied by registration instructions, the Administrators, or any one of them, shall execute the Definitive Capital Securities Certificates in accordance with the instructions of the Depositary. None of the Registrar, Administrators, or the Institutional Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions.

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        (c)   Every Definitive Capital Securities Certificate executed and delivered upon registration or transfer of, or in exchange for or in lieu of, a Global Capital Security or any portion thereof shall be executed and delivered in the form of, and shall be, a Global Capital Security, unless such Definitive Capital Securities Certificate is registered in the name of a Person other than the Depositary for such Global Capital Security or a nominee thereof.

        (d)   The Depositary or its nominee, as registered owner of a Global Capital Security, shall be the Holder of such Global Capital Security for all purposes under this Declaration and the Global Capital Security, and Owners with respect to a Global Capital Security shall hold such interests pursuant to the Applicable Depositary Procedures. The Registrar, the Administrators and the Institutional Trustee shall be entitled to deal with the Depositary for all purposes of this Declaration relating to the Global Capital Securities (including the payment of the liquidation amount of and Distributions on the Book-Entry Capital Securities represented thereby and the giving of instructions or directions by Owners of Book-Entry Capital Securities represented thereby and the giving of notices) as the sole Holder of the Book-Entry Capital Securities represented thereby and shall have no obligations to the Owners thereof. None of the Administrators, the Institutional Trustee nor the Registrar shall have any liability in respect of any transfers effected by the Depositary.

        (e)   The rights of the Owners of the Book-Entry Capital Securities shall be exercised only through the Depositary and shall be limited to those established by law, the Applicable Depositary Procedures and agreements between such Owners and the Depositary and/or the Depositary Participants; provided, solely for the purpose of determining whether the Holders of the requisite amount of Capital Securities have voted on any matter provided for in this Declaration, to the extent that Capital Securities are represented by a Global Capital Security, the Administrators and the Institutional Trustee may conclusively rely on, and shall be fully protected in relying on, any written instrument (including a proxy) delivered to the Institutional Trustee by the Depositary setting forth the Owners' votes or assigning the right to vote on any matter to any other Persons either in whole or in part. To the extent that Capital Securities are represented by a Global Capital Security, the initial Depositary will make book-entry transfers among the Depositary Participants and receive and transmit payments on the Capital Securities that are represented by a Global Capital Security to such Depositary Participants, and none of the Sponsor, the Administrators or the Institutional Trustee shall have any responsibility or obligation with respect thereto.

        (f)    To the extent that a notice or other communication to the Holders is required under this Declaration, for so long as Capital Securities are represented by a Global Capital Security, the Administrator and the Institutional Trustee shall give all such notices and communications to the Depositary, and shall have no obligations to the Owners.

        SECTION 6.5.    Mutilated, Destroyed, Lost or Stolen Certificates.    If:

        (a)   any mutilated Certificates should be surrendered to the Registrar, or if the Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Certificate; and

        (b)   there shall be delivered to the Registrar, the Administrators and the Institutional Trustee such security or indemnity as may be required by them to keep each of them harmless; then, in the absence of notice that such Certificate shall have been acquired by a bona fide purchaser, an Administrator on behalf of the Trust shall execute (and in the case of a Capital Security Certificate, the Institutional Trustee shall authenticate) and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In connection with the issuance of any new Certificate under this Section 6.5, the Registrar or the Administrators may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of an ownership interest in the

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relevant Securities, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

        SECTION 6.6.    Temporary Securities.    Until definitive Securities are ready for delivery, the Administrators may prepare and, in the case of the Capital Securities, the Institutional Trustee shall authenticate, temporary Securities. Temporary Securities shall be substantially in form of definitive Securities but may have variations that the Administrators consider appropriate for temporary Securities. Without unreasonable delay, the Administrators shall prepare and, in the case of the Capital Securities, the Institutional Trustee shall authenticate definitive Securities in exchange for temporary Securities.

        SECTION 6.7.    Cancellation.    The Administrators at any time may deliver Securities to the Registrar for cancellation. The Registrar shall forward to the Institutional Trustee any Securities surrendered to it for registration of transfer, redemption or payment. The Institutional Trustee shall promptly cancel all Securities surrendered for registration of transfer, payment, replacement or cancellation and shall dispose of such canceled Securities in accordance with its standard procedures or otherwise as the Administrators direct. The Administrators may not issue new Securities to replace Securities that have been paid or that have been delivered to the Institutional Trustee for cancellation.

        SECTION 6.8.    Rights of Holders; Waivers of Past Defaults.

        (a)   The legal title to the Trust Property is vested exclusively in the Institutional Trustee (in its capacity as such) in accordance with Section 2.6(g), and the Holders shall not have any right or title therein other than the undivided beneficial interest in the assets of the Trust conferred by their Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Securities shall be personal property giving only the rights specifically set forth therein and in this Declaration. The Securities shall have no, and the issuance of the Securities shall not be subject to, preemptive or other similar rights and when issued and delivered to Holders against payment of the purchase price therefor, the Securities will be fully paid and nonassessable by the Trust.

        (b)   For so long as any Capital Securities remain outstanding, if, upon an Indenture Event of Default, the Debenture Trustee fails or the holders of not less than 25% in principal amount of the outstanding Debentures fail to declare the principal of all of the Debentures to be immediately due and payable, the Holders of not less than a Majority in liquidation amount of the Capital Securities then outstanding shall have the right to make such declaration by a notice in writing to the Institutional Trustee, the Sponsor and the Debenture Trustee.

        (c)   At any time after a declaration of acceleration of maturity of the Debentures has been made and before a judgment or decree for payment of the money due has been obtained by the Debenture Trustee as provided in the Indenture, if the Institutional Trustee, subject to the provisions hereof, fails to annul any such declaration and waive such default, the Holders of not less than a Majority in liquidation amount of the Capital Securities, by written notice to the Institutional Trustee, the Sponsor and the Debenture Trustee, may rescind and annul such declaration and its consequences if:

        (i)    the Sponsor has paid or deposited with the Debenture Trustee a sum sufficient to pay

        (A)  all overdue installments of interest on all of the Debentures;

        (B)  any accrued Deferred Interest on all of the Debentures;

        (C)  all payments on any Debentures that have become due otherwise than by such declaration of acceleration and interest and Deferred Interest thereon at the rate borne by the Debentures; and

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        (D)  all sums paid or advanced by the Debenture Trustee under the Indenture and the reasonable compensation, documented expenses, disbursements and advances of the Debenture Trustee and the Institutional Trustee, their agents and counsel; and

        (ii)   all Events of Default with respect to the Debentures, other than the non-payment of the principal of or premium, if any, on the Debentures that has become due solely by such acceleration, have been cured or waived as provided in Section 5.07 of the Indenture.

        (d)   The Holders of not less than a Majority in liquidation amount of the Capital Securities may, on behalf of the Holders of all the Capital Securities, waive any past default or Event of Default, except a default or Event of Default in the payment of principal or interest (unless such default or Event of Default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debenture Trustee) or a default or Event of Default in respect of a covenant or provision that under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Debenture. No such rescission shall affect any subsequent default or impair any right consequent thereon.

        (e)   Upon receipt by the Institutional Trustee of written notice declaring such an acceleration, or rescission and annulment thereof, by Holders of any part of the Capital Securities, a record date shall be established for determining Holders of outstanding Capital Securities entitled to join in such notice, which record date shall be at the close of business on the day the Institutional Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day that is 90 days after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice that has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 6.8.

        (f)    Except as otherwise provided in this Section 6.8, the Holders of not less than a Majority in liquidation amount of the Capital Securities may, on behalf of the Holders of all the Capital Securities, waive any past default or Event of Default and its consequences. Upon such waiver, any such default or Event of Default shall cease to exist, and any default or Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST

        SECTION 7.1.    Dissolution and Termination of Trust.

        (a)   The Trust shall dissolve on the first to occur of

        (i)    unless earlier dissolved, on January 30, 2039, the expiration of the term of the Trust;

        (ii)   a Bankruptcy Event with respect to the Sponsor, the Trust or the Debenture Issuer;

        (iii)  (other than in connection with a merger, consolidation or similar transaction not prohibited by the Indenture, this Declaration or the Guarantee, as the case may be) the filing of a certificate of dissolution or its equivalent with respect to the Sponsor or upon the revocation of the

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charter of the Sponsor and the expiration of 90 days after the date of revocation without a reinstatement thereof;

        (iv)  the distribution of the Debentures to the Holders of the Securities, upon exercise of the right of the Holders of all of the outstanding Common Securities to dissolve the Trust as provided in Annex I hereto;

        (v)   the entry of a decree of judicial dissolution of any Holder of the Common Securities, the Sponsor, the Trust or the Debenture Issuer;

        (vi)  when all of the Securities shall have been called for redemption and the amounts necessary for redemption thereof shall have been paid to the Holders in accordance with the terms of the Securities; or

        (vii) before the issuance of any Securities, with the consent of all of the Trustees and the Sponsor.

        (b)   As soon as is practicable after the occurrence of an event referred to in Section 7.1(a), and after satisfaction of liabilities to creditors of the Trust as required by applicable law, including Section 3808 of the Statutory Trust Act, and subject to the terms set forth in Annex I, the Delaware Trustee, when notified in writing of the completion of the winding up of the Trust in accordance with the Statutory Trust Act, shall terminate the Trust by filing, at the expense of the Sponsor, a certificate of cancellation with the Secretary of State of the State of Delaware.

        (c)   The provisions of Section 2.9 and Article IX shall survive the termination of the Trust.

ARTICLE VIII
TRANSFER OF INTERESTS

        SECTION 8.1.    General.

        (a)   Subject to Section 6.4 and Section 8.1(c), where Capital Securities are presented to the Registrar with a request to register a transfer or to exchange them for an equal number of Capital Securities represented by different Certificates, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Trust shall issue and the Institutional Trustee shall authenticate Capital Securities at the Registrar's request.

        (b)   Upon issuance of the Common Securities, the Sponsor shall acquire and retain beneficial and record ownership of the Common Securities and, for so long as the Securities remain outstanding, the Sponsor shall maintain 100% ownership of the Common Securities; provided, however, that any permitted successor of the Sponsor under the Indenture may succeed to the Sponsor's ownership of the Common Securities.

        (c)   Capital Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Declaration and in the terms of the Capital Securities. To the fullest extent permitted by applicable law, any transfer or purported transfer of any Security not made in accordance with this Declaration shall be null and void and will be deemed to be of no legal effect whatsoever and any such transferee shall be deemed not to be the holder of such Capital Securities for any purpose, including but not limited to the receipt of Distributions on such Capital Securities, and such transferee shall be deemed to have no interest whatsoever in such Capital Securities.

        (d)   The Registrar shall provide for the registration of Securities and of transfers of Securities, which will be effected without charge but only upon payment (with such indemnity as the Registrar may require) in respect of any tax or other governmental charges that may be imposed in relation to it. Upon surrender for registration of transfer of any Securities, the Registrar shall cause one or more new

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Securities to be issued in the name of the designated transferee or transferees. Any Security issued upon any registration of transfer or exchange pursuant to the terms of this Declaration shall evidence the same Security and shall be entitled to the same benefits under this Declaration as the Security surrendered upon such registration of transfer or exchange. Every Security surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Registrar duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Security surrendered for registration of transfer shall be canceled by the Institutional Trustee pursuant to Section 6.7. A transferee of a Security shall be entitled to the rights and subject to the obligations of a Holder hereunder upon the receipt by such transferee of a Security. By acceptance of a Security, each transferee shall be deemed to have agreed to be bound by this Declaration.

        (e)   Neither the Trust nor the Registrar shall be required (i) to issue, register the transfer of, or exchange any Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all Holders of the Securities to be redeemed, or (ii) to register the transfer or exchange of any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

        SECTION 8.2.    Transfer Procedures and Restrictions.

        (a)   The Capital Securities shall bear the Restricted Securities Legend (as defined below), which shall not be removed unless there is delivered to the Trust such satisfactory evidence, which may include an opinion of counsel reasonably acceptable to the Institutional Trustee, as may be reasonably required by the Trust or the Institutional Trustee, that neither the legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of the Securities Act or that such Securities are not "restricted" within the meaning of Rule 144 under the Securities Act. Upon provision of such satisfactory evidence, the Institutional Trustee, at the written direction of the Administrators, shall authenticate and deliver Capital Securities that do not bear the Restricted Securities Legend.

        (b)   When Capital Securities are presented to the Registrar (x) to register the transfer of such Capital Securities, or (y) to exchange such Capital Securities for an equal number of Capital Securities represented by different Certificates, the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Capital Securities surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Trust, the Institutional Trustee and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

        (c)   Except as permitted by Section 8.2(a), each Capital Security shall bear a legend (the "Restricted Securities Legend") in substantially the following form:

[If the Capital Security is to be Global Capital Security—THIS CAPITAL SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

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UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO FIRST COMMUNITY BANCORP/CA STATUTORY TRUST VII OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE DEBENTURE ISSUER'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF

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THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTION RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,95-60,91-38,90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

        (d)   Capital Securities may only be transferred in minimum blocks of $100,000 aggregate liquidation amount (100 Capital Securities) and multiples of $1,000 in excess thereof. Any attempted transfer of Capital Securities in a block having an aggregate liquidation amount of less than $100,000 shall be deemed to be void and of no legal effect whatsoever. Any such purported transferee shall be deemed not to be a Holder of such Capital Securities for any purpose, including, but not limited to, the receipt of Distributions on such Capital Securities, and such purported transferee shall be deemed to have no interest whatsoever in such Capital Securities.

        (e)   Each party hereto understands and hereby agrees that the Initial Purchaser is intended solely to be an interim holder of the Capital Securities and is purchasing such securities to facilitate consummation of the transactions contemplated herein and in the documents ancillary hereto. Notwithstanding any provision in this Declaration to the contrary, the Initial Purchaser shall have the right upon notice (a "Transfer Notice") to the Institutional Trustee and the Sponsor to transfer title in and to the Capital Securities, provided the Initial Purchaser shall take reasonable steps to ensure that such transfer is exempt from registration under the Securities Act of 1933, as amended, and rules

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promulgated thereunder. Any Transfer Notice delivered to the Institutional Trustee and Sponsor pursuant to the preceding sentence shall indicate the aggregate liquidation amount of Capital Securities being transferred, the name and address of the transferee thereof (the "Transferee") and the date of such transfer. Notwithstanding any provision in this Declaration to the contrary, the transfer by the Initial Purchaser of title in and to the Capital Securities pursuant to a Transfer Notice shall not be subject to any requirement relating to Opinions of Counsel, Certificates of Transfer or any other Opinion or Certificate applicable to transfers hereunder and relating to Capital Securities.

        SECTION 8.3.    Deemed Security Holders.    The Trust, the Administrators, the Trustees, the Paying Agent, the Transfer Agent or the Registrar may treat the Person in whose name any Certificate shall be registered on the books and records of the Trust as the sole holder of such Certificate and of the Securities represented by such Certificate for purposes of receiving Distributions and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Certificate or in the Securities represented by such Certificate on the part of any Person, whether or not the Trust, the Administrators, the Trustees, the Paying Agent, the Transfer Agent or the Registrar shall have actual or other notice thereof.

ARTICLE IX
LIMITATION OF LIABILITY OF HOLDERS
OF SECURITIES, TRUSTEES OR OTHERS

        SECTION 9.1.    Liability.

        (a)   Except as expressly set forth in this Declaration, the Guarantee and the terms of the Securities, the Sponsor shall not be:

        (i)    personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Securities which shall be made solely from assets of the Trust; and

        (ii)   required to pay to the Trust or to any Holder of the Securities any deficit upon dissolution of the Trust or otherwise.

        (b)   The Holder of the Common Securities shall be liable for all of the debts and obligations of the Trust (other than with respect to the Securities) to the extent not satisfied out of the Trust's assets.

        (c)   Except to the extent provided in Section 9.1(b), and pursuant to § 3803(a) of the Statutory Trust Act, the Holders of the Securities shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware, except as otherwise specifically set forth herein.

        SECTION 9.2.    Exculpation.

        (a)   No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person (other than an Administrator) shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's negligence or willful misconduct or bad faith with respect to such acts or omissions and except that an Administrator shall be liable for any such loss, damage or claim incurred by reason of such Administrator's negligence or willful misconduct or bad faith with respect to such acts or omissions.

        (b)   An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any

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Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and, if selected by such Indemnified Person, has been selected by such Indemnified Person with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Securities might properly be paid.

        SECTION 9.3.    Fiduciary Duty.

        (a)   To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an Indemnified Person acting under this Declaration shall not be liable to the Trust or to any other Covered Person for its good faith reliance on the provisions of this Declaration. The provisions of this Declaration, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity (other than the duties imposed on the Institutional Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other duties and liabilities of the Indemnified Person.

        (b)   Whenever in this Declaration an Indemnified Person is permitted or required to make a decision:

        (i)    in its "discretion" or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or

        (ii)   in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Declaration or by applicable law.

        SECTION 9.4.    Indemnification.    (a) (i) The Sponsor shall indemnify, to the fullest extent permitted by law, any Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Trust) by reason of the fact that such Person is or was an Indemnified Person against expenses (including attorneys' fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by such Person in connection with such action, suit or proceeding if such Person acted in good faith and in a manner such Person reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnified Person did not act in good faith and in a manner which such Person reasonably believed to be in or not opposed to the best interests of the Trust, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such conduct was unlawful.

        (ii)   The Sponsor shall indemnify, to the fullest extent permitted by law, any Indemnified Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Trust to procure a judgment in its favor by reason of the fact that such Person is or was an Indemnified Person against expenses (including attorneys' fees and expenses) actually and reasonably incurred by such Person in connection with the defense or settlement of such action or suit if such Person acted in good faith and in a manner such Person reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Indemnified Person shall have been adjudged to be liable to the Trust unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was

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brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such Person is fairly and reasonably entitled to indemnity for such expenses which such Court of Chancery or such other court shall deem proper.

        (iii)  To the extent that an Indemnified Person shall be successful on the merits or otherwise (including dismissal of an action without prejudice or the settlement of an action without admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a), or in defense of any claim, issue or matter therein, such Person shall be indemnified, to the fullest extent permitted by law, against expenses (including attorneys' fees and expenses) actually and reasonably incurred by such Person in connection therewith.

        (iv)  Any indemnification of an Administrator under paragraphs (i) and (ii) of this Section 9.4(a) (unless ordered by a court) shall be made by the Sponsor only as authorized in the specific case upon a determination that indemnification of the Indemnified Person is proper in the circumstances because such Person has met the applicable standard of conduct set forth in paragraphs (i) and (ii). Such determination shall be made (A) by the Administrators by a majority vote of a Quorum consisting of such Administrators who were not parties to such action, suit or proceeding, (B) if such a Quorum is not obtainable, or, even if obtainable, if a Quorum of disinterested Administrators so directs, by independent legal counsel in a written opinion, or (C) by the Common Security Holder of the Trust.

        (v)   To the fullest extent permitted by law, expenses (including attorneys' fees and expenses) incurred by an Indemnified Person in defending a civil, criminal, administrative or investigative action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by the Sponsor in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Indemnified Person to repay such amount if it shall ultimately be determined that such Person is not entitled to be indemnified by the Sponsor as authorized in this Section 9.4(a). Notwithstanding the foregoing, no advance shall be made by the Sponsor if a determination is reasonably and promptly made (1) in the case of a Company Indemnified Person (A) by the Administrators by a majority vote of a Quorum of disinterested Administrators, (B) if such a Quorum is not obtainable, or, even if obtainable, if a Quorum of disinterested Administrators so directs, by independent legal counsel in a written opinion or (C) by the Common Security Holder of the Trust, that, based upon the facts known to the Administrators, counsel or the Common Security Holder at the time such determination is made, such Indemnified Person acted in bad faith or in a manner that such Person either believed to be opposed to or did not believe to be in the best interests of the Trust, or, with respect to any criminal proceeding, that such Indemnified Person believed or had reasonable cause to believe such conduct was unlawful, or (2) in the case of a Fiduciary Indemnified Person, by independent legal counsel in a written opinion that, based upon the facts known to the counsel at the time such determination is made, such Indemnified Person acted in bad faith or in a manner that such Indemnified Person either believed to be opposed to or did not believe to be in the best interests of the Trust, or, with respect to any criminal proceeding, that such Indemnified Person believed or had reasonable cause to believe such conduct was unlawful. In no event shall any advance be made (i) to a Company Indemnified Person in instances where the Administrators, independent legal counsel or the Common Security Holder reasonably determine that such Person deliberately breached such Person's duty to the Trust or its Common or Capital Security Holders or (ii) to a Fiduciary Indemnified Person in instances where independent legal counsel promptly and reasonably determines in a written opinion that such Person deliberately breached such Person's duty to the Trust or its Common or Capital Security Holders.

        (b)   The Sponsor shall indemnify, to the fullest extent permitted by applicable law, each Indemnified Person from and against any and all loss, damage, liability, tax (other than taxes based on the income of such Indemnified Person), penalty, expense or claim of any kind or nature whatsoever

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incurred by such Indemnified Person arising out of or in connection with or by reason of the creation, administration or termination of the Trust, or any act or omission of such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Declaration, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage, liability, tax, penalty, expense or claim incurred by such Indemnified Person by reason of negligence, willful misconduct or bad faith with respect to such acts or omissions.

        (c)   The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 9.4 shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors of the Sponsor or Capital Security Holders of the Trust or otherwise, both as to action in such Person's official capacity and as to action in another capacity while holding such office. All rights to indemnification under this Section 9.4 shall be deemed to be provided by a contract between the Sponsor and each Indemnified Person who serves in such capacity at any time while this Section 9.4 is in effect. Any repeal or modification of this Section 9.4 shall not affect any rights or obligations then existing.

        (d)   The Sponsor or the Trust may purchase and maintain insurance on behalf of any Person who is or was an Indemnified Person against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of such Person's status as such, whether or not the Sponsor would have the power to indemnify such Person against such liability under the provisions of this Section 9.4.

        (e)   For purposes of this Section 9.4, references to "the Trust" shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger, so that any Person who is or was a director, trustee, officer or employee of such constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee or agent of another entity, shall stand in the same position under the provisions of this Section 9.4 with respect to the resulting or surviving entity as such Person would have with respect to such constituent entity if its separate existence had continued.

        (f)    The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 9.4 shall, unless otherwise provided when authorized or ratified, continue as to a Person who has ceased to be an Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a Person.

        (g)   The provisions of this Section 9.4 shall survive the termination of this Declaration or the earlier resignation or removal of the Institutional Trustee. The obligations of the Sponsor under this Section 9.4 to compensate and indemnify the Trustees and to pay or reimburse the Trustees for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustees as such, except funds held in trust for the benefit of the holders of particular Capital Securities, provided, that the Sponsor is the holder of the Common Securities.

        SECTION 9.5.    Outside Businesses.    Any Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee (subject to Section 4.3(c)) may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders of Securities shall have no rights by virtue of this Declaration in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or improper. None of any Covered Person, the Sponsor, the Delaware Trustee or the Institutional Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the

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Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Covered Person, the Delaware Trustee and the Institutional Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Sponsor or its Affiliates.

        SECTION 9.6.    Compensation; Fee.

        (a)   Subject to the provisions set forth in the Fee Agreement between the Institutional Trustee and the Sponsor of even date herewith, the Sponsor agrees:

        (i)    to pay to the Trustees from time to time such compensation for all services rendered by them hereunder as the parties shall agree in writing from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); and

        (ii)   except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable, documented expenses, disbursements and advances incurred or made by the Trustees in accordance with any provision of this Declaration (including the reasonable compensation and the expenses and disbursements of their respective agents and counsel), except any such expense, disbursement or advance attributable to their negligence or willful misconduct.

        (b)   The provisions of this Section 9.6 shall survive the dissolution of the Trust and the termination of this Declaration and the removal or resignation of any Trustee.

ARTICLE X
ACCOUNTING

        SECTION 10.1.    Fiscal Year.    The fiscal year (the "Fiscal Year") of the Trust shall be the calendar year, or such other year as is required by the Code.

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        SECTION 10.2.    Certain Accounting Matters.

        (a)   At all times during the existence of the Trust, the Administrators shall keep, or cause to be kept at the principal office of the Trust in the United States, as defined for purposes of Treasury Regulations § 301.7701-7, full books of account, records and supporting documents, which shall reflect in reasonable detail each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied.

        (b)   The Administrators shall either (i) cause each Form 10-K and Form 10-Q prepared by the Sponsor and filed with the Commission in accordance with the Exchange Act to be delivered to each Holder of Securities, within 90 days after the filing of each Form 10-K and within 30 days after the filing of each Form 10-Q or (ii) cause to be prepared at the principal office of the Trust in the United States, as defined for purposes of Treasury Regulations § 301.7701-7, and delivered to each of the Holders of Securities, within 90 days after the end of each Fiscal Year of the Trust, annual financial statements of the Trust, including a balance sheet of the Trust as of the end of such Fiscal Year, and the related statements of income or loss.

        (c)   The Administrators shall cause to be duly prepared and delivered to each of the Holders of Securities Form 1099 or such other annual United States federal income tax information statement required by the Code, containing such information with regard to the Securities held by each Holder as is required by the Code and the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Administrators shall endeavor to deliver all such statements within 30 days after the end of each Fiscal Year of the Trust.

        (d)   The Administrators shall cause to be duly prepared in the United States, as defined for purposes of Treasury Regulations § 301.7701-7, and filed an annual United States federal income tax return on a Form 1041 or such other form required by United States federal income tax law, and any other annual income tax returns required to be filed by the Administrators on behalf of the Trust with any state or local taxing authority.

        (e)   The Administrators will cause the Sponsor's reports on Form FRY-9C and FRY-9LP to be delivered to the Holder promptly following their filing with the Federal Reserve.

        SECTION 10.3.    Banking.    The Trust shall maintain one or more bank accounts in the United States, as defined for purposes of Treasury Regulations § 301.7701-7, in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Debentures held by the Institutional Trustee shall be made directly to the Property Account and no other funds of the Trust shall be deposited in the Property Account. The sole signatories for such accounts (including the Property Account) shall be designated by the Institutional Trustee.

        SECTION 10.4.    Withholding.    The Institutional Trustee or any Paying Agent and the Administrators shall comply with all withholding requirements under United States federal, state and local law. As a condition to the payment of any principal of or interest on any Debt Security without the imposition of withholding tax, the Institutional Trustee or any Paying Agent shall require the previous delivery of properly completed and signed applicable U.S. federal income tax certifications (generally, an Internal Revenue Service Form W-9 (or applicable successor form) in the case of a person that is a "United States person" within the meaning of Section 7701(a)(30) of the Code or an Internal Revenue Service Form W-8 (or applicable successor form) in the case of a person that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code) and any other certification acceptable to it to enable the Institutional Trustee or any Paying Agent and the Trustee to determine their respective duties and liabilities with respect to any taxes or other charges that they may be required to pay, deduct or withhold in respect of such Debt Security or the holder of such Debt Security under any present or future law or regulation of the United States or any political subdivision

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thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation. The Administrators shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Institutional Trustee or any Paying Agent is required to withhold and pay over any amounts to any authority with respect to distributions or allocations to any Holder, the amount withheld shall be deemed to be a Distribution to the Holder in the amount of the withholding. In the event of any claimed overwithholding, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from actual Distributions made, the Institutional Trustee or any Paying Agent may reduce subsequent Distributions by the amount of such withholding.

ARTICLE XI
AMENDMENTS AND MEETINGS

        SECTION 11.1.    Amendments.

        (a)   Except as otherwise provided in this Declaration or by any applicable terms of the Securities, this Declaration may only be amended by a written instrument approved and executed by:

        (i)    the Institutional Trustee,

        (ii)   if the amendment affects the rights, powers, duties, obligations or immunities of the Delaware Trustee, the Delaware Trustee,

        (iii)  if the amendment affects the rights, powers, duties, obligations or immunities of the Administrators, the Administrators, and

        (iv)  the Holders of a Majority in liquidation amount of the Common Securities.

        (b)   Notwithstanding any other provision of this Article XI, no amendment shall be made, and any such purported amendment shall be void and ineffective:

        (i)    unless the Institutional Trustee shall have first received

        (A)  an Officers' Certificate from each of the Trust and the Sponsor that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities); and

        (B)  an opinion of counsel (who may be counsel to the Sponsor or the Trust) that such amendment is permitted by, and conforms to, the terms of this Declaration (including the terms of the Securities) and that all conditions precedent to the execution and delivery of such amendment have been satisfied; or

        (ii)   if the result of such amendment would be to

        (A)  cause the Trust to cease to be classified for purposes of United States federal income taxation as a grantor trust;

        (B)  reduce or otherwise adversely affect the powers of the Institutional Trustee in contravention of the Trust Indenture Act;

        (C)  cause the Trust to be deemed to be an Investment Company required to be registered under the Investment Company Act; or

        (D)  cause the Debenture Issuer to be unable to treat an amount equal to the Liquidation Amount of the Capital Securities as "Tier 1 Capital" for purposes of the capital adequacy guidelines of (x) the Federal Reserve (or, if the Debenture Issuer is not a bank holding company, such guidelines or policies applied to the Debenture Issuer as if the Debenture

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Issuer were subject to such guidelines of policies) or of (y) any other regulatory authority having jurisdiction over the Debenture Issuer.

        (c)   Except as provided in Section 11.1(d), (e) or (g), no amendment shall be made, and any such purported amendment shall be void and ineffective, unless the Holders of a Majority in liquidation amount of the Capital Securities shall have consented to such amendment.

        (d)   In addition to and notwithstanding any other provision in this Declaration, without the consent of each affected Holder, this Declaration may not be amended to (i) change the amount or timing of any Distribution on the Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Securities as of a specified date or (ii) restrict the right of a Holder to institute suit for the enforcement of any such payment on or after such date.

        (e)   Sections 9.1 (b) and 9.1 (c) and this Section 11.1 shall not be amended without the consent of all of the Holders of the Securities.

        (f)    The rights of the Holders of the Capital Securities and Common Securities, as applicable, under Article IV to increase or decrease the number of, and appoint and remove, Trustees shall not be amended without the consent of the Holders of a Majority in liquidation amount of the Capital Securities or Common Securities, as applicable.

        (g)   Subject to Section 11.1(a)(ii), this Declaration may be amended by the Institutional Trustee and the Holder of a Majority in liquidation amount of the Common Securities without the consent of the Holders of the Capital Securities to:

        (i)    cure any ambiguity;

        (ii)   correct or supplement any provision in this Declaration that may be defective or inconsistent with any other provision of this Declaration;

        (iii)  add to the covenants, restrictions or obligations of the Sponsor; or

        (iv)  modify, eliminate or add to any provision of this Declaration to such extent as may be necessary or desirable, including, without limitation, to ensure that the Trust will be classified for United States federal income tax purposes at all times as a grantor trust and will not be required to register as an Investment Company under the Investment Company Act (including without limitation to conform to any change in Rule 3a-5, Rule 3a-7 or any other applicable rule under the Investment Company Act or written change in interpretation or application thereof by any legislative body, court, government agency or regulatory authority) which amendment does not have a material adverse effect on the right, preferences or privileges of the Holders of Securities;

provided, however, that no such modification, elimination or addition referred to in clauses (i), (ii), (iii) or (iv) shall adversely affect the powers, preferences or rights of Holders of Capital Securities in any material respect.

        SECTION 11.2.    Meetings of the Holders of the Securities; Action by Written Consent.

        (a)   Meetings of the Holders of any class of Securities may be called at any time by the Administrators (or as provided in the terms of the Securities) to consider and act on any matter on which Holders of such class of Securities are entitled to act under the terms of this Declaration, the terms of the Securities or the rules of any stock exchange on which the Capital Securities are listed or admitted for trading, if any. The Administrators shall call a meeting of the Holders of such class if directed to do so by the Holders of not less than 25% in liquidation amount of such class of Securities. Such direction shall be given by delivering to the Administrators one or more calls in a writing stating that the signing Holders of the Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of the Securities calling a meeting shall specify in writing the Certificates held by the Holders of the Securities exercising the right to call a

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meeting and only those Securities represented by such Certificates shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met.

        (b)   Except to the extent otherwise provided in the terms of the Securities, the following provisions shall apply to meetings of Holders of the Securities:

        (i)    notice of any such meeting shall be given to all the Holders of the Securities having a right to vote thereat at least 7 days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of the Securities is permitted or required under this Declaration or the rules of any stock exchange on which the Capital Securities are listed or admitted for trading, if any, such vote, consent or approval may be given at a meeting of the Holders of the Securities. Any action that may be taken at a meeting of the Holders of the Securities may be taken without a meeting if a consent in writing setting forth the action so taken is signed by the Holders of the Securities owning not less than the minimum amount of Securities that would be necessary to authorize or take such action at a meeting at which all Holders of the Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of the Securities entitled to vote who have not consented in writing. The Administrators may specify that any written ballot submitted to the Holders of the Securities for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Administrators;

        (ii)   each Holder of a Security may authorize any Person to act for it by proxy on all matters in which a Holder of Securities is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder of the Securities executing it. Except as otherwise provided herein, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders of the Securities were stockholders of a Delaware corporation; each meeting of the Holders of the Securities shall be conducted by the Administrators or by such other Person that the Administrators may designate; and

        (iii)  unless the Statutory Trust Act, this Declaration, the terms of the Securities, the Trust Indenture Act or the listing rules of any stock exchange on which the Capital Securities are then listed for trading, if any, otherwise provides, the Administrators, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Securities, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders of the Securities, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote; provided, however, that each meeting shall be conducted in the United States (as that term is defined in Treasury Regulations § 301.7701-7).

ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE

        SECTION 12.1.    Representations and Warranties of Institutional Trustee.    The Trustee that acts as initial Institutional Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Institutional Trustee represents and warrants to the Trust and the

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Sponsor at the time of the Successor Institutional Trustee's acceptance of its appointment as Institutional Trustee, that:

        (a)   the Institutional Trustee is a banking corporation or national association with trust powers, duly organized, validly existing and in good standing under the laws of the State of New York or the United States of America, respectively, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration;

        (b)   the Institutional Trustee has a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000);

        (c)   the Institutional Trustee is not an affiliate of the Sponsor, nor does the Institutional Trustee offer or provide credit or credit enhancement to the Trust;

        (d)   the execution, delivery and performance by the Institutional Trustee of this Declaration has been duly authorized by all necessary action on the part of the Institutional Trustee. This Declaration has been duly executed and delivered by the Institutional Trustee, and under Delaware law (excluding any securities laws) constitutes a legal, valid and binding obligation of the Institutional Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether considered in a proceeding in equity or at law);

        (e)   the execution, delivery and performance of this Declaration by the Institutional Trustee does not conflict with or constitute a breach of the charter or by-laws of the Institutional Trustee; and

        (f)    no consent, approval or authorization of, or registration with or notice to, any state or federal banking authority governing the trust powers of the Institutional Trustee is required for the execution, delivery or performance by the Institutional Trustee of this Declaration.

        SECTION 12.2.    Representations and Warranties of Delaware Trustee.    The Trustee that acts as initial Delaware Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Delaware Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee that:

        (a)   if it is not a natural person, the Delaware Trustee has its principal place of business in the State of Delaware;

        (b)   if it is not a natural person, the execution, delivery and performance by the Delaware Trustee of this Declaration has been duly authorized by all necessary corporate action on the part of the Delaware Trustee. This Declaration has been duly executed and delivered by the Delaware Trustee, and under Delaware law (excluding any securities laws) constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether considered in a proceeding in equity or at law);

        (c)   if it is not a natural person, the execution, delivery and performance of this Declaration by the Delaware Trustee does not conflict with or constitute a breach of the articles of association or by-laws of the Delaware Trustee;

        (d)   it has trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration;

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        (e)   no consent, approval or authorization of, or registration with or notice to, any state or federal banking authority governing the trust powers of the Delaware Trustee is required for the execution, delivery or performance by the Delaware Trustee of this Declaration; and

        (f)    if the Delaware Trustee is a natural person, it is a resident of the State of Delaware.

ARTICLE XIII
MISCELLANEOUS

        SECTION 13.1.    Notices.    All notices provided for in this Declaration shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied (which telecopy shall be followed by notice delivered or mailed by first class mail) or mailed by first class mail, as follows:

        (a)   if given to the Trust, in care of the Administrators at the Trust's mailing address set forth below (or such other address as the Trust may give notice of to the Holders of the Securities):

First Community Bancorp/CA Statutory Trust VII
c/o First Community Bancorp
120 Wilshire Blvd.
Santa Monica, CA 90401
Attention: Victor Santoro
Telecopy: (310) 451-4555
Telephone: (310) 458-1521

        (b)   if given to the Delaware Trustee, at the mailing address set forth below (or such other address as the Delaware Trustee may give notice of to the Holders of the Securities):

Chase Manhattan Bank USA, National Association
500 Stanton Christiana Rd., FL3/OPS4
Newark, DE 19713V Attn: Institutional Trust Services
Telecopy: 302-552-6280
Telephone: 302-552-6279

        (c)   if given to the Institutional Trustee, at the Institutional Trustee's mailing address set forth below (or such other address as the Institutional Trustee may give notice of to the Holders of the Securities):

JPMorgan Chase Bank
600 Travis Street, 50 Floor
Houston, TX 77002
Attention: Institutional Trust Services—
First Community Bancorp/CA Statutory Trust VII
Telecopy: 713-216-2101
Telephone: 713-216-4781

        (d)   if given to the Holder of the Common Securities, at the mailing address of the Sponsor set forth below (or such other address as the Holder of the Common Securities may give notice of to the Trust):

First Community Bancorp
120 Wilshire Blvd.
Santa Monica, CA 90401
Attention: Victor Santoro
Telecopy: (310) 451-4555
Telephone: (310) 458-1521

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        (e)   if given to any other Holder, at the address set forth on the books and records of the Trust.

All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver.

        SECTION 13.2.    Governing Law.    This Declaration and the rights and obligations of the parties hereunder shall be governed by and interpreted in accordance with the law of the State of Delaware and all rights, obligations and remedies shall be governed by such laws without regard to the principles of conflict of laws of the State of Delaware or any other jurisdiction that would call for the application of the law of any jurisdiction other than the State of Delaware.

        SECTION 13.3.    Submission to Jurisdiction.

        (a)   [RESERVED]

        (b)   Each of the Sponsor, the Trustees, the Administrators and the Holder of the Common Securities irrevocably consents to the service of process on it in any such suit, action or proceeding by the mailing thereof by registered or certified mail, postage prepaid, to it at its address given in or pursuant to Section 13.1 hereof.

        (c)   To the extent permitted by law, nothing herein contained shall preclude any party from effecting service of process in any lawful manner or from bringing any suit, action or proceeding in respect of this Declaration in any other state, country or place.

        SECTION 13.4.    Intention of the Parties.    It is the intention of the parties hereto that the Trust be classified for United States federal income tax purposes as a grantor trust. The provisions of this Declaration shall be interpreted to further this intention of the parties.

        SECTION 13.5.    Headings.    Headings contained in this Declaration are inserted for convenience of reference only and do not affect the interpretation of this Declaration or any provision hereof.

        SECTION 13.6.    Successors and Assigns.    Whenever in this Declaration any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all covenants and agreements in this Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether or not so expressed.

        SECTION 13.7.    Partial Enforceability.    If any provision of this Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby.

        SECTION 13.8.    Counterparts.    This Declaration may contain more than one counterpart of the signature page and this Declaration may be executed by the affixing of the signature of each of the Trustees and Administrators to any of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page.

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        IN WITNESS WHEREOF, the undersigned have caused this Declaration to be duly executed as of the day and year first above written.

CHASE MANHATTAN BANK USA, NATIONAL ASSOCIAION,     as Delaware Trustee
By:	/s/ John J. Cashin Name: John J. Cashin Title: Vice-President
JPMORGAN CHASE BANK,     as Institutional Trustee
By:	/s/ Maria D. Calzado Name: Maria D. Calzado Title: Vice President
First Community Bancorp     as Sponsor
By:	/s/ Victor R. Santoro Name: Victor R. Santoro Title: Executive Vice President and Chief Financial Officer
By:	/s/ Jared M. Wolff Administrator
By:	/s/ Victor R. Santoro Administrator

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ANNEX I

TERMS OF
CAPITAL SECURITIES AND
COMMON SECURITIES

        Pursuant to Section 6.1 of the Amended and Restated Declaration of Trust, dated as of February 5, 2004 (as amended from time to time, the "Declaration"), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Capital Securities and the Common Securities are set out below (each capitalized term used but not defined herein has the meaning set forth in the Declaration):

        1.    Designation and Number.

        (a)   Capital Securities.    60,000 Capital Securities of First Community Bancorp/CA Statutory Trust VII (the "Trust"), with an aggregate stated liquidation amount with respect to the assets of the Trust of Sixty Million Dollars ($60,000,000) and a stated liquidation amount with respect to the assets of the Trust of $1,000 per Capital Security, are hereby designated for the purposes of identification only as the "TP Securities" (the "Capital Securities"). The Capital Security Certificates evidencing the Capital Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange on which the Capital Securities are listed, if any.

        (b)   Common Securities.    1,856 Common Securities of the Trust (the "Common Securities") will be evidenced by Common Security Certificates substantially in the form of Exhibit A-2 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice. In the absence of an Event of Default, the Common Securities will have an aggregate stated liquidation amount with respect to the assets of the Trust of One Million Eight Hundred Fifty Six Thousand Dollars ($1,856,000) and a stated liquidation amount with respect to the assets of the Trust of $1,000 per Common Security.

        2.    Distributions.

        (a)   Distributions payable on each Security will be payable at a variable per annum rate of interest, reset quarterly, equal to LIBOR, as determined on the LIBOR Determination Date for such Distribution Payment Period, plus 2.75% (the "Coupon Rate") of the stated liquidation amount of $1,000 per Security, such rate (provided, however, that the Coupon Rate for any Distribution Payment Period may not exceed 12% through the Distribution Payment Date in April, 2009, and provided further, that the Coupon Rate may not exceed the highest rate permitted by New York law, as the same may be modified by United States law of general applicability), such Coupon Rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee. Except as set forth below in respect of an Extension Period, Distributions in arrears for more than one quarterly period will bear interest thereon compounded quarterly at the applicable Coupon Rate for each such quarterly period (to the extent permitted by applicable law). The term "Distributions" as used herein includes cash distributions, any such compounded distributions and any Additional Interest payable on the Debentures unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Institutional Trustee and to the extent the Institutional Trustee has funds legally available in the Property Account therefor. The amount of Distributions payable for any Distribution Payment Period will be computed for any full quarterly Distribution Payment Period on the basis of a 360-day year and the actual number of days elapsed in the relevant Distribution period; provided, however, that upon the occurrence of a Special Event redemption pursuant to paragraph 4(a) below the amounts payable pursuant to this Declaration shall be calculated as set forth in the definition of Special Redemption Price.

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        (b)   LIBOR shall be determined by the Calculation Agent in accordance with the following provisions:

        (1)   On the second LIBOR Business Day (provided, that on such day commercial banks are open for business (including dealings in foreign currency deposits) in London (a "LIBOR Banking Day"), and otherwise the next preceding LIBOR Business Day that is also a LIBOR Banking Day) prior to January 30, April 30, July 30 and October 30 immediately succeeding the commencement of such Distribution Payment Period (or, with respect to the first Distribution Payment Period, on February 3, 2004), (each such day, a "LIBOR Determination Date") for such Distribution Payment Period), the Calculation Agent shall obtain the rate for three-month U.S. Dollar deposits in Europe, which appears on Telerate Page 3750 (as defined in the International Swaps and Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange Definitions) or such other page as may replace such Telerate Page 3750 on the Moneyline Telerate, Inc. service (or such other service or services as may be nominated by the British Banker's Association as the information vendor for the purpose of displaying London interbank offered rates for U.S. dollar deposits), as of 11:00 a.m. (London time) on such LIBOR Determination Date, and the rate so obtained shall be LIBOR for such Distribution Payment Period. "LIBOR Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banking institutions in The City of New York or Wilmington, Delaware are authorized or obligated by law or executive order to be closed. If such rate is superseded on Telerate Page 3750 by a corrected rate before 12:00 noon (London time) on the same LIBOR Determination Date, the corrected rate as so substituted will be the applicable LIBOR for that Distribution Payment Period.

        (2)   If, on any LIBOR Determination Date, such rate does not appear on Telerate Page 3750 or such other page as may replace such Telerate Page 3750 on the Moneyline Telerate, Inc. service (or such other service or services as may be nominated by the British Banker's Association as the information vendor for the purpose of displaying London interbank offered rates for U.S. dollar deposits), the Calculation Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks (as defined below) to leading banks in the London Interbank market for three-month U.S. Dollar deposits in Europe (in an amount determined by the Calculation Agent) by reference to requests for quotations as of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by the Calculation Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean of such quotations. If, on any LIBOR Determination Date, only one or none of the Reference Banks provide such a quotation, LIBOR shall be deemed to be the arithmetic mean of the offered quotations that at least two leading banks in the City of New York (as selected by the Calculation Agent) are quoting on the relevant LIBOR Determination Date for three-month U.S. Dollar deposits in Europe at approximately 11:00 a.m. (London time) (in an amount determined by the Calculation Agent). As used herein, "Reference Banks" means four major banks in the London Interbank market selected by the Calculation Agent.

        (3)   If the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures provided above, LIBOR for the applicable Distribution Payment Period shall be LIBOR in effect for the immediate preceding Distribution Payment Period.

        (c)   All percentages resulting from any calculations on the Securities will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward).

        (d)   On each LIBOR Determination Date, the Calculation Agent shall notify, in writing, the Sponsor and the Paying Agent of the applicable Coupon Rate in effect for the related Distribution

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Payment Period. The Calculation Agent shall, upon the request of the Holder of any Securities, provide the Coupon Rate then in effect. All calculations made by the Calculation Agent in the absence of manifest error shall be conclusive for all purposes and binding on the Sponsor and the Holders of the Securities. The Paying Agent shall be entitled to rely on information received from the Calculation Agent or the Sponsor as to the Coupon Rate. The Sponsor shall, from time to time, provide any necessary information to the Paying Agent relating to any original issue discount and interest on the Securities that is included in any payment and reportable for taxable income calculation purposes.

        (e)   Distributions on the Securities will be cumulative, will accrue from the date of original issuance, and will be payable, subject to extension of Distribution payment periods as described herein, quarterly in arrears on January 23, April 23, July 23 and October 23 of each year, commencing April 23, 2004 (each, a "Distribution Payment Date"). Subject to prior submission of Notice (as defined in the Indenture), the Debenture Issuer has the right under the Indenture to defer payments of interest on the Debentures by extending the interest distribution period for up to 20 consecutive quarterly periods (each, an "Extension Period") at any time and from time to time on the Debentures, subject to the conditions described below, during which Extension Period no interest shall be due and payable (except any Additional Interest that may be due and payable). During any Extension Period, interest will continue to accrue on the Debentures, and interest on such accrued interest (such accrued interest and interest thereon referred to herein as "Deferred Interest") will accrue at an annual rate equal to the Coupon Rate in effect for each such Extension Period, compounded quarterly from the date such Deferred Interest would have been payable were it not for the Extension Period, to the extent permitted by law. No Extension Period may end on a date other than an Interest Payment Date. At the end of any such Extension Period, the Debenture Issuer shall pay all Deferred Interest then accrued and unpaid on the Debentures; provided, however, that no Extension Period may extend beyond the Maturity Date and provided, further, that, during any such Extension Period, the Debenture Issuer may not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Debenture Issuer's capital stock or (ii) make any payment of principal or premium or interest on or repay, repurchase or redeem any debt securities of the Debenture Issuer that rank pari passu in all respects with or junior in interest to the Debentures or (iii) make any payment under any guarantees of the Debenture Issuer that rank in all respects pari passu with or junior in interest to the Guarantee (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Debenture Issuer (A) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, (B) in connection with a dividend reinvestment or stockholder stock purchase plan or (C) in connection with the issuance of capital stock of the Debenture Issuer (or securities convertible into or exercisable for such capital stock), as consideration in an acquisition transaction entered into prior to the applicable Extension Period, (b) as a result of any exchange, reclassification, combination or conversion of any class or series of the Debenture Issuer's capital stock (or any capital stock of a subsidiary of the Debenture Issuer) for any class or series of the Debenture Issuer's capital stock or of any class or series of the Debenture Issuer's indebtedness for any class or series of the Debenture Issuer's capital stock, (c) the purchase of fractional interests in shares of the Debenture Issuer's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto, or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). Prior to the termination of any Extension Period, the Debenture Issuer may further extend such period, provided, that such period together with all such previous and further consecutive extensions thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the Maturity Date. Upon the termination of any Extension Period and upon the

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payment of all Deferred Interest, the Debenture Issuer may commence a new Extension Period, subject to the foregoing requirements. No interest or Deferred Interest shall be due and payable during an Extension Period, except at the end thereof, but Deferred Interest shall accrue upon each installment of interest that would otherwise have been due and payable during such Extension Period until such installment is paid. If Distributions are deferred, the Distributions due shall be paid on the date that the related Extension Period terminates, or, if such date is not a Distribution Payment Date, on the immediately following Distribution Payment Date, to Holders of the Securities as they appear on the books and records of the Trust on the record date immediately preceding such date. Distributions on the Securities must be paid on the dates payable (after giving effect to any Extension Period) to the extent that the Trust has funds legally available for the payment of such distributions in the Property Account of the Trust. The Trust's funds available for Distribution to the Holders of the Securities will be limited to payments received from the Debenture Issuer. The payment of Distributions out of moneys held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

        (f)    Distributions on the Securities will be payable to the Holders thereof as they appear on the books and records of the Registrar on the relevant record dates. The relevant record dates shall be selected by the Administrators, which dates shall be 15 days before the relevant Distribution Payment Date. Distributions payable on any Securities that are not punctually paid on any Distribution Payment Date, as a result of the Debenture Issuer having failed to make a payment under the Debentures, as the case may be, when due (taking into account any Extension Period), will cease to be payable to the Person in whose name such Securities are registered on the relevant record date, and such defaulted Distribution will instead be payable to the Person in whose name such Securities are registered on the special record date or other specified date determined in accordance with the Indenture. If any Distribution Payment Date other than any date of redemption, falls on a day that is not a Business Day, then Distributions payable will be paid on, and such Distribution Payment Date will be moved to, the next succeeding Business Day, and additional Distributions will accrue for each day that such payment is delayed as a result thereof.

        (g)   In the event that there is any money or other property held by or for the Trust that is not accounted for hereunder, such property shall be distributed pro rata (as defined herein) among the Holders of the Securities.

        3.    Liquidation Distribution Upon Dissolution.    In the event of the voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust (each, a "Liquidation") other than in connection with a redemption of the Debentures, the Holders of the Securities will be entitled to receive out of the assets of the Trust available for distribution to Holders of the Securities, after satisfaction of liabilities to creditors of the Trust (to the extent not satisfied by the Debenture Issuer), distributions equal to the aggregate of the stated liquidation amount of $1,000 per Security plus accrued and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"), unless in connection with such Liquidation, the Debentures in an aggregate stated principal amount equal to the aggregate stated liquidation amount of such Securities, with an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid Distributions on, and having the same record date as, such Securities, after paying or making reasonable provision to pay all claims and obligations of the Trust in accordance with Section 3808(e) of the Statutory Trust Act, shall be distributed on a Pro Rata basis to the Holders of the Securities in exchange for such Securities.

        The Sponsor, as the Holder of all of the Common Securities, has the right at any time to dissolve the Trust (including without limitation upon the occurrence of a Tax Event, an Investment Company Event or a Capital Treatment Event), subject to the receipt by the Debenture Issuer of prior approval from any regulatory authority having jurisdiction over the Sponsor that is primarily responsible for regulating the activities of the Sponsor if such approval is then required under applicable capital guidelines or policies of such regulatory authority and, after satisfaction of liabilities to creditors of the

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Trust, cause the Debentures to be distributed to the Holders of the Securities on a Pro Rata basis in accordance with the aggregate stated liquidation amount thereof.

        The Trust shall dissolve on the first to occur of (i) the expiration of the term of the Trust, (ii) a Bankruptcy Event with respect to the Sponsor, the Trust or the Debenture Issuer, (iii) (other than in connection with a merger, consolidation or similar transaction not prohibited by the Indenture, this Declaration or the Guarantee, as the case may be) the filing of a certificate of dissolution of the Sponsor or upon the revocation of the charter of the Sponsor and the expiration of 90 days after the date of revocation without a reinstatement thereof, (iv) the distribution to the Holders of the Securities of the Debentures, upon exercise of the right of the Holder of all of the outstanding Common Securities to dissolve the Trust as set forth above, (v) the entry of a decree of a judicial dissolution of the Sponsor or the Trust, or (vi) when all of the Securities shall have been called for redemption and the amounts necessary for redemption thereof shall have been paid to the Holders in accordance with the terms of the Securities. As soon as practicable after the dissolution of the Trust and upon completion of the winding up of the Trust, the Trust shall terminate upon the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.

        If a Liquidation of the Trust occurs as described in clause (i), (ii), (iii) or (v) in the immediately preceding paragraph, the Trust shall be liquidated by the Institutional Trustee of the Trust as expeditiously as such Trustee determines to be possible by distributing, after satisfaction of liabilities to creditors of the Trust as provided by applicable law, to the Holders of the Securities, the Debentures on a Pro Rata basis to the extent not satisfied by the Debenture Issuer, unless such distribution is determined by the Institutional Trustee not to be practical, in which event such Holders will be entitled to receive out of the assets of the Trust available for distribution to the Holders, after satisfaction of liabilities to creditors of the Trust to the extent not satisfied by the Debenture Issuer, an amount equal to the Liquidation Distribution. An early Liquidation of the Trust pursuant to clause (iv) of the immediately preceding paragraph shall occur if the Institutional Trustee determines that such Liquidation is possible by distributing, after satisfaction of liabilities to creditors of Trust, to the Holders of the Securities on a Pro Rata basis, the Debentures, and such distribution occurs.

        If, upon any such Liquidation, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on such Capital Securities shall be paid to the Holders of the Securities on a Pro Rata basis, except that if an Event of Default has occurred and is continuing, the Capital Securities shall have a preference over the Common Securities with regard to such distributions.

        Upon any such Liquidation of the Trust involving a distribution of the Debentures, if at the time of such Liquidation, the Capital Securities were rated by at least one nationally-recognized statistical rating organization, the Debenture Issuer will use its reasonable best efforts to obtain from at least one such or other rating organization a rating for the Debentures.

        After the date for any distribution of the Debentures upon dissolution of the Trust, (i) the Securities of the Trust will be deemed to be no longer outstanding, (ii) any certificates representing the Capital Securities will be deemed to represent undivided beneficial interests in such of the Debentures as have an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and bearing accrued and unpaid interest equal to accrued and unpaid distributions on, the Securities until such certificates are presented to the Debenture Issuer or its agent for transfer or reissuance (and until such certificates are so surrendered, no payments of interest or principal shall be made to Holders of Securities in respect of any payments due and payable under the Debentures) and (iii) all rights of Holders of Securities under the Capital Securities or the Common Securities, as applicable, shall cease, except the right of such Holders to receive Debentures upon surrender of certificates representing such Securities.

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        4.    Redemption and Distribution.

        (a)   The Debentures will mature on April 23, 2034. The Debentures may be redeemed by the Debenture Issuer, in whole or in part, on any January 23, April 23, July 23 or October 23 on or after April 23, 2009 at the Redemption Price, upon not less than 30 nor more than 60 days' notice to Holders of such Debentures. In addition, upon the occurrence and continuation of a Tax Event, an Investment Company Event or a Capital Treatment Event, the Debentures may be redeemed by the Debenture Issuer in whole or in part, at any time within 120 days following the occurrence of such Tax Event, Investment Company Event or Capital Treatment Event, as the case may be (the "Special Redemption Date"), at the Special Redemption Price, upon not less than 30 nor more than 60 days' notice to Holders of the Debentures so long as such Tax Event, Investment Company Event or Capital Treatment Event, as the case may be, is continuing. In each case, the right of the Debenture Issuer to redeem the Debentures is subject to the Debenture Issuer having received prior approval from any regulatory authority having jurisdiction over the Debenture Issuer, if such approval is then required under applicable capital guidelines or policies of such regulatory authority.

        "Tax Event" means the receipt by the Debenture Issuer and the Trust of an opinion of counsel experienced in such matters to the effect that, as a result of any amendment to or change (including any announced prospective change) in the laws or any regulations thereunder of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement (including any private letter ruling, technical advice memorandum, regulatory procedure, notice or announcement) (an "Administrative Action") or judicial decision interpreting or applying such laws or regulations, regardless of whether such Administrative Action or judicial decision is issued to or in connection with a proceeding involving the Debenture Issuer or the Trust and whether or not subject to review or appeal, which amendment, clarification, change, Administrative Action or decision is enacted, promulgated or announced, in each case on or after the date of original issuance of the Debentures, there is more than an insubstantial risk that: (i) the Trust is, or will be within 90 days of the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Debentures; (ii) interest payable by the Debenture Issuer on the Debentures is not, or within 90 days of the date of such opinion, will not be, deductible by the Debenture Issuer, in whole or in part, for United States federal income tax purposes; or (iii) the Trust is, or will be within 90 days of the date of such opinion, subject to more than a de minimis amount of other taxes (including withholding taxes), duties, assessments or other governmental charges.

        "Investment Company Event" means the receipt by the Debenture Issuer and the Trust of an opinion of counsel experienced in such matters to the effect that, as a result of a change in law or regulation or written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Trust is or, within 90 days of the date of such opinion will be, considered an "investment company" that is required to be registered under the Investment Company Act, which change or prospective change becomes effective or would become effective, as the case may be, on or after the date of the original issuance of the Debentures.

        "Capital Treatment Event" means the receipt by the Debenture Issuer and the Trust of an opinion of counsel experienced in such matters to the effect that, as a result of any amendment to, or change in, the laws, rules or regulations of the United States or any political subdivision thereof or therein, or as the result of any official or administrative pronouncement or action or decision interpreting or applying such laws, rules or regulations, which amendment or change is effective or which pronouncement, action or decision is announced on or after the date of original issuance of the Debentures, there is more than an insubstantial risk that the Debenture Issuer will not, within 90 days of the date of such opinion, be entitled to treat an amount equal to the aggregate Liquidation Amount of the Capital Securities as "Tier 1 Capital" (or the then equivalent thereof) for purposes of the capital adequacy guidelines of the Federal Reserve (or any successor regulatory authority with jurisdiction over

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bank holding companies), as then in effect and applicable to the Debenture Issuer; provided, however, that the inability of the Company to treat all or any portion of the Liquidation Amount of the Capital Securities as Tier 1 Capital shall not constitute the basis for a Capital Treatment Event, if such inability results from the Company having cumulative preferred stock, minority interests in consolidated subsidiaries, or any other class of security or interest which the Federal Reserve (or any successor regulatory authority with jurisdiction over bank holding companies) may now or hereafter accord Tier 1 Capital treatment in excess of the amount which may now or hereafter qualify for treatment as Tier 1 Capital under applicable capital adequacy guidelines (unless the inability is a result of an event that decreases the percentage of Capital Securities that may be included in Tier 1 Capital); provided further, however, that the distribution of the Debentures in connection with the liquidation of the Trust by the Debenture Issuer shall not in and of itself constitute a Capital Treatment Event unless such liquidation shall have occurred in connection with a Tax Event or an Investment Company Event.

        "Special Event" means any of a Capital Treatment Event, a Tax Event or an Investment Company Event.

        "Special Redemption Price" means 100% of the principal amount of the Debentures being redeemed plus accrued and unpaid interest on such Debentures to the Special Redemption Date.

        "Redemption Price" means 100% of the principal amount of the Debentures being redeemed plus accrued and unpaid interest on such Debentures to the Redemption Date.

        "Redemption Date" means the date fixed for the redemption of Capital Securities, which shall be any January 23,April 23, July 23 or October 23 on or after April 23, 2009.

        (b)   Upon the repayment in full at maturity or redemption in whole or in part of the Debentures (other than following the distribution of the Debentures to the Holders of the Securities), the proceeds from such repayment or payment shall concurrently be applied to redeem Pro Rata at the applicable redemption price, Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so repaid or redeemed; provided, however, that holders of such Securities shall be given not less than 30 nor more than 60 days' notice of such redemption (other than at the scheduled maturity of the Debentures).

        (c)   If fewer than all the outstanding Securities are to be so redeemed, the Common Securities and the Capital Securities will be redeemed Pro Rata and the Capital Securities to be redeemed will be as described in Section 4(e)(ii) below.

        (d)   The Trust may not redeem fewer than all the outstanding Capital Securities unless all accrued and unpaid Distributions have been paid on all Capital Securities for all quarterly Distribution periods terminating on or before the date of redemption.

        (e)   Redemption or Distribution Procedures.

          (i)  Notice of any redemption of, or notice of distribution of the Debentures in exchange for, the Securities (a "Redemption/Distribution Notice") will be given by the Trust by mail to each Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than 60 days before the date fixed for redemption or exchange thereof which, in the case of a redemption, will be the date fixed for redemption of the Debentures. For purposes of the calculation of the date of redemption or exchange and the dates on which notices are given pursuant to this Section 4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the day such notice is first mailed by first-class mail, postage prepaid, to Holders of such Securities. Each Redemption/Distribution Notice shall be addressed to the Holders of such Securities at the address of each such Holder appearing on the books and records of the Registrar. No defect in the Redemption/Distribution Notice or in the mailing thereof with respect to any Holder shall affect the validity of the redemption or exchange proceedings with respect to any other Holder.

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         (ii)  In the event that fewer than all the outstanding Securities are to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each Holder of Capital Securities.

        (iii)  If the Securities are to be redeemed and the Trust gives a Redemption/Distribution Notice, which notice may only be issued if the Debentures are redeemed as set out in this Section 4 (which notice will be irrevocable), then, provided, that the Institutional Trustee has a sufficient amount of cash in connection with the related redemption or maturity of the Debentures, the Institutional Trustee will, with respect to Book-Entry Capital Securities, on the Redemption Date, irrevocably deposit with the Depositary for such Book-Entry Capital Securities, to the extent available therefore, funds sufficient to pay the relevant Redemption Price and will give such Depositary irrevocable instructions and authority to pay the Redemption Price to the Owners of the Capital Securities. With respect to Capital Securities that are not Book-Entry Capital Securities, the Institutional Trustee will pay, to the extent available therefore, the relevant Redemption Price to the Holders of such Securities by check mailed to the address of each such Holder appearing on the books and records of the Trust on the redemption date. If a Redemption/Distribution Notice shall have been given and funds deposited as required, then immediately prior to the close of business on the date of such deposit, Distributions will cease to accrue on the Securities so called for redemption and all rights of Holders of such Securities so called for redemption will cease, except the right of the Holders of such Securities to receive the applicable Redemption Price specified in Section 4(a). If any date fixed for redemption of Securities is not a Business Day, then payment of any such Redemption Price payable on such date will be made on the next succeeding day that is a Business Day except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price in respect of any Securities is improperly withheld or refused and not paid either by the Trust or by the Debenture Issuer as guarantor pursuant to the Guarantee, Distributions on such Securities will continue to accrue at the then applicable rate from the original redemption date to the actual date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. In the event of any redemption of the Capital Securities issued by the Trust in part, the Trust shall not be required to (i) issue, register the transfer of or exchange any Security during a period beginning at the opening of business 15 days before any selection for redemption of the Capital Securities and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all Holders of the Capital Securities to be so redeemed or (ii) register the transfer of or exchange any Capital Securities so selected for redemption, in whole or in part, except for the unredeemed portion of any Capital Securities being redeemed in part.

        (iv)  Redemption/Distribution Notices shall be sent by the Administrators on behalf of the Trust (A) in respect of the Capital Securities, to the Holders thereof, and (B) in respect of the Common Securities, to the Holder thereof.

         (v)  Subject to the foregoing and applicable law (including, without limitation, United States federal securities laws), and provided, that the acquiror is not the Holder of the Common Securities or the obligor under the Indenture, the Sponsor or any of its subsidiaries may at anytime and from time to time purchase outstanding Capital Securities by tender, in the open market or by private agreement.

        5.    Voting Rights—Capital Securities.

        (a)   Except as provided under Sections 5(b) and 7 and as otherwise required by law and the Declaration, the Holders of the Capital Securities will have no voting rights. The Administrators are required to call a meeting of the Holders of the Capital Securities if directed to do so by Holders of not less than 25% in liquidation amount of the Capital Securities.

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        (b)   Subject to the requirements of obtaining a tax opinion by the Institutional Trustee in certain circumstances set forth in the last sentence of this paragraph, the Holders of a Majority in liquidation amount of the Capital Securities, voting separately as a class, have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Institutional Trustee, or exercising any trust or power conferred upon the Institutional Trustee under the Declaration, including the right to direct the Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies available under the Indenture as the holder of the Debentures, (ii) waive any past default that is waivable under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable or (iv) consent on behalf of all the Holders of the Capital Securities to any amendment, modification or termination of the Indenture or the Debentures where such consent shall be required; provided, however, that, where a consent or action under the Indenture would require the consent or act of the holders of greater than a simple majority in principal amount of Debentures (a "Super Majority") affected thereby, the Institutional Trustee may only give such consent or take such action at the written direction of the Holders of not less than the proportion in liquidation amount of the Capital Securities outstanding which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. If the Institutional Trustee fails to enforce its rights under the Debentures after the Holders of a Majority in liquidation amount of such Capital Securities have so directed the Institutional Trustee, to the fullest extent permitted by law, a Holder of the Capital Securities may institute a legal proceeding directly against the Debenture Issuer to enforce the Institutional Trustee's rights under the Debentures without first instituting any legal proceeding against the Institutional Trustee or any other person or entity. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Debenture Issuer to pay interest or principal on the Debentures on the date the interest or principal is payable (or in the case of redemption, the redemption date), then a Holder of record of the Capital Securities may directly institute a proceeding for enforcement of payment, on or after the respective due dates specified in the Debentures, to such Holder directly of the principal of or interest on the Debentures having an aggregate principal amount equal to the aggregate liquidation amount of the Capital Securities of such Holder. The Institutional Trustee shall notify all Holders of the Capital Securities of any default actually known to the Institutional Trustee with respect to the Debentures unless (x) such default has been cured prior to the giving of such notice or (y) the Institutional Trustee determines in good faith that the withholding of such notice is in the interest of the Holders of such Capital Securities, except where the default relates to the payment of principal of or interest on any of the Debentures. Such notice shall state that such Indenture Event of Default also constitutes an Event of Default hereunder. Except with respect to directing the time, method and place of conducting a proceeding for a remedy, the Institutional Trustee shall not take any of the actions described in clause (i), (ii) or (iii) above unless the Institutional Trustee has obtained an opinion of tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes.

        In the event the consent of the Institutional Trustee, as the holder of the Debentures is required under the Indenture with respect to any amendment, modification or termination of the Indenture, the Institutional Trustee shall request the written direction of the Holders of the Securities with respect to such amendment, modification or termination and shall vote with respect to such amendment, modification or termination as directed by a Majority in liquidation amount of the Securities voting together as a single class; provided, however, that where a consent under the Indenture would require the consent of a Super Majority, the Institutional Trustee may only give such consent at the written direction of the Holders of not less than the proportion in liquidation amount of such Securities outstanding which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. The Institutional Trustee shall not take any such action in accordance with the written directions of the Holders of the Securities unless the Institutional Trustee has obtained an

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opinion of tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes.

        A waiver of an Indenture Event of Default will constitute a waiver of the corresponding Event of Default hereunder. Any required approval or direction of Holders of the Capital Securities may be given at a separate meeting of Holders of the Capital Securities convened for such purpose, at a meeting of all of the Holders of the Securities in the Trust or pursuant to written consent. The Institutional Trustee will cause a notice of any meeting at which Holders of the Capital Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of the Capital Securities. Each such notice will include a statement setting forth the following information (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents. No vote or consent of the Holders of the Capital Securities will be required for the Trust to redeem and cancel Capital Securities or to distribute the Debentures in accordance with the Declaration and the terms of the Securities.

        Notwithstanding that Holders of the Capital Securities are entitled to vote or consent under any of the circumstances described above, any of the Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall not entitle the Holder thereof to vote or consent and shall, for purposes of such vote or consent, be treated as if such Capital Securities were not outstanding.

        In no event will Holders of the Capital Securities have the right to vote to appoint, remove or replace the Administrators, which voting rights are vested exclusively in the Sponsor as the Holder of all of the Common Securities of the Trust. Under certain circumstances as more fully described in the Declaration, Holders of Capital Securities have the right to vote to appoint, remove or replace the Institutional Trustee and the Delaware Trustee.

        6.    Voting Rights—Common Securities.

        (a)   Except as provided under Sections 6(b), 6(c) and 7 and as otherwise required by law and the Declaration, the Common Securities will have no voting rights.

        (b)   The Holders of the Common Securities are entitled, in accordance with Article IV of the Declaration, to vote to appoint, remove or replace any Administrators.

        (c)   Subject to Section 6.8 of the Declaration and only after each Event of Default (if any) with respect to the Capital Securities has been cured, waived or otherwise eliminated and subject to the requirements of the second to last sentence of this paragraph, the Holders of a Majority in liquidation amount of the Common Securities, voting separately as a class, may direct the time, method, and place of conducting any proceeding for any remedy available to the Institutional Trustee, or exercising any trust or power conferred upon the Institutional Trustee under the Declaration, including (i) directing the time, method, place of conducting any proceeding for any remedy available to the Debenture Trustee, or exercising any trust or power conferred on the Debenture Trustee with respect to the Debentures, (ii) waiving any past default and its consequences that are waivable under the Indenture, or (iii) exercising any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable, provided, however, that, where a consent or action under the Indenture would require a Super Majority, the Institutional Trustee may only give such consent or take such action at the written direction of the Holders of not less than the proportion in liquidation amount of the Common Securities which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. Notwithstanding this Section 6(c), the Institutional Trustee shall not revoke any action previously authorized or approved by a vote or consent of the Holders of the Capital Securities. Other than with respect to directing the time, method and place of conducting any proceeding for any remedy available to the Institutional Trustee or the Debenture Trustee as set forth

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above, the Institutional Trustee shall not take any action described in clause (i), (ii) or (iii) above, unless the Institutional Trustee has obtained an opinion of tax counsel to the effect that for the purposes of United States federal income tax the Trust will not be classified as other than a grantor trust on account of such action. If the Institutional Trustee fails to enforce its rights under the Declaration, to the fullest extent permitted by law any Holder of the Common Securities may institute a legal proceeding directly against any Person to enforce the Institutional Trustee's rights under the Declaration, without first instituting a legal proceeding against the Institutional Trustee or any other Person.

        Any approval or direction of Holders of the Common Securities may be given at a separate meeting of Holders of the Common Securities convened for such purpose, at a meeting of all of the Holders of the Securities in the Trust or pursuant to written consent. The Administrators will cause a notice of any meeting at which Holders of the Common Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of the Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting or the date by which such action is to be taken, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote or of such matter upon which written consent is sought and (iii) instructions for the delivery of proxies or consents.

        No vote or consent of the Holders of the Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute the Debentures in accordance with the Declaration and the terms of the Securities.

        7.    Amendments to Declaration and Indenture.

        (a)   In addition to any requirements under Section 11.1 of the Declaration, if any proposed amendment to the Declaration provides for, or the Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Securities, whether by way of amendment to the Declaration or otherwise, or (ii) the Liquidation of the Trust, other than as described in Section 7.1 of the Declaration, then the Holders of outstanding Securities, voting together as a single class, will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of not less than a Majority in liquidation amount of the Securities affected thereby; provided, however, if any amendment or proposal referred to in clause (i) above would adversely affect only the Capital Securities or only the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of a Majority in liquidation amount of such class of Securities.

        (b)   In the event the consent of the Institutional Trustee as the holder of the Debentures is required under the Indenture with respect to any amendment, modification or termination of the Indenture or the Debentures, the Institutional Trustee shall request the written direction of the Holders of the Securities with respect to such amendment, modification or termination and shall vote with respect to such amendment, modification, or termination as directed by a Majority in liquidation amount of the Securities voting together as a single class; provided, however, that where a consent under the Indenture would require a Super Majority, the Institutional Trustee may only give such consent at the written direction of the Holders of not less than the proportion in liquidation amount of the Securities which the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding.

        (c)   Notwithstanding the foregoing, no amendment or modification may be made to the Declaration if such amendment or modification would (i) cause the Trust to be classified for purposes of United States federal income taxation as other than a grantor trust, (ii) reduce or otherwise adversely affect the powers of the Institutional Trustee or (iii) cause the Trust to be deemed an "investment company" which is required to be registered under the Investment Company Act.

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        (d)   Notwithstanding any provision of the Declaration, the right of any Holder of the Capital Securities to receive payment of distributions and other payments upon redemption or otherwise, on or after their respective due dates, or to institute a suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. For the protection and enforcement of the foregoing provision, each and every Holder of the Capital Securities shall be entitled to such relief as can be given either at law or equity.

        8.    Pro Rata.    A reference in these terms of the Securities to any payment, distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder of the Securities according to the aggregate liquidation amount of the Securities held by the relevant Holder in relation to the aggregate liquidation amount of all Securities outstanding unless, in relation to a payment, an Event of Default has occurred and is continuing, in which case any funds available to make such payment shall be paid first to each Holder of the Capital Securities Pro Rata according to the aggregate liquidation amount of the Capital Securities held by the relevant Holder relative to the aggregate liquidation amount of all Capital Securities outstanding, and only after satisfaction of all amounts owed to the Holders of the Capital Securities, to each Holder of the Common Securities Pro Rata according to the aggregate liquidation amount of the Common Securities held by the relevant Holder relative to the aggregate liquidation amount of all Common Securities outstanding.

        9.    Ranking.    The Capital Securities rank pari passu with, and payment thereon shall be made Pro Rata with, the Common Securities except that, where an Event of Default has occurred and is continuing, the rights of Holders of the Common Securities to receive payment of Distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights of the Holders of the Capital Securities with the result that no payment of any Distribution on, or Redemption Price or Special Redemption Price of, any Common Security, and no other payment on account of redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions on all outstanding Capital Securities for all distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price or Special Redemption Price the full amount of such Redemption Price or the Special Redemption Price on all outstanding Capital Securities then called for redemption, shall have been made or provided for, and all funds immediately available to the Institutional Trustee shall first be applied to the payment in full in cash of all Distributions on, or the Redemption Price or the Special Redemption Price of, the Capital Securities then due and payable.

        10.    Acceptance of Guarantee and Indenture.    Each Holder of the Capital Securities and the Common Securities, by the acceptance of such Securities, agrees to the provisions of the Guarantee, including the subordination provisions therein and to the provisions of the Indenture.

        11.    No Preemptive Rights.    The Holders of the Securities shall have no, and the issuance of the Securities is not subject to, preemptive or similar rights to subscribe for any additional securities.

        12.    Miscellaneous.    These terms constitute a part of the Declaration. The Sponsor will provide a copy of the Declaration, the Guarantee, and the Indenture to a Holder without charge on written request to the Sponsor at its principal place of business.

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EXHIBIT A-1

FORM OF CAPITAL SECURITY CERTIFICATE

[FORM OF FACE OF SECURITY]

        [If the Capital Security is to be Global Capital Security—THIS CAPITAL SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

        UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO FIRST COMMUNITY BANCORP/CA STATUTORY TRUST VII OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

        THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE DEBENTURE ISSUER'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE

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DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTION RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,95-60,91-38,90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

        IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

        THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

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Certificate Number [P-001] Number of Capital Securities 60,000

Certificate Evidencing Capital Securities

of

First Community Bancorp/CA Statutory Trust VII

TP Securities

(liquidation amount $1,000 per Capital Security)

        First Community Bancorp/CA Statutory Trust VII, a statutory trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co., as nominee on behalf of The Depository Trust Company (the "Holder"), is the registered owner of 60,000 capital securities of the Trust representing undivided beneficial interests in the assets of the Trust, designated the TP Securities (liquidation amount $1,000 per Capital Security) (the "Capital Securities"). Subject to the Declaration (as defined below), the Capital Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this Certificate duly endorsed and in proper form for transfer. The Capital Securities represented hereby are issued pursuant to, and the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Capital Securities shall in all respects be subject to, the provisions of the Amended and Restated Declaration of Trust of the Trust, dated as of February 5, 2004, among Jared M. Wolff and Victor R. Santoro, as Administrators, Chase Manhattan Bank USA, National Association, as Delaware Trustee, JPMorgan Chase Bank, as Institutional Trustee, First Community Bancorp, as Sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Trust, including the designation of the terms of the Capital Securities as set forth in Annex I to the Declaration, as the same may be amended from time to time (the "Declaration"). Capitalized terms used herein but not defined shall have the meaning given them in the Declaration. The Holder is entitled to the benefits of the Guarantee to the extent provided therein. The Sponsor will provide a copy of the Declaration, the Guarantee, and the Indenture to the Holder without charge upon written request to the Sponsor at its principal place of business.

        By acceptance of this Security, the Holder is bound by the Declaration and is entitled to the benefits thereunder.

        By acceptance of this Security, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Capital Securities as evidence of beneficial ownership in the Debentures.

        This Capital Security is governed by, and shall be construed in accordance with, the laws of the State of Delaware, without regard to principles of conflict of laws.

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        IN WITNESS WHEREOF, the Company has duly executed this certificate.

FIRST COMMUNITY BANCORP/CA STATUTORY TRUST VII
By:	Name: Title: Administrator
Dated:

CERTIFICATE OF AUTHENTICATION

        This is one of the Capital Securities referred to in the within-mentioned Declaration.

JPMORGAN CHASE BANK, not in its individual capacity but solely as Institutional Trustee
By:	Authorized Signatory
Dated:

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[FORM OF REVERSE OF SECURITY]

        Distributions payable on each Capital Security will be payable at a variable per annum rate of interest, reset quarterly, equal to LIBOR (as defined in the Declaration) plus 2.75% (the "Coupon Rate") of the stated liquidation amount of $1,000 per Capital Security, such rate (provided, however, that the Coupon Rate for any Distribution Payment Period may not exceed 12% through the Distribution Payment Date in April, 2009, and provided further, that the Coupon Rate may not exceed the highest rate permitted by New York law, as the same may be modified by United States law of general applicability), such Coupon Rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee. Distributions in arrears for more than one quarterly period will bear interest thereon compounded quarterly at the then applicable Coupon Rate for each such quarterly period (to the extent permitted by applicable law). The term "Distributions" as used herein includes cash distributions, any such compounded distributions and any Additional Interest payable on the Debentures unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Institutional Trustee and to the extent the Institutional Trustee has funds legally available in the Property Account therefor. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year and the actual number of days elapsed in the relevant Distribution Payment Period.

        Except as otherwise described below, Distributions on the Capital Securities will be cumulative, will accrue from the date of original issuance and will be payable quarterly in arrears on January 23, April 23, July 23 and October 23 of each year, commencing on April 23, 2004 (each, a "Distribution Payment Date"). Upon submission of Notice, the Debenture Issuer has the right under the Indenture to defer payments of interest on the Debentures by extending the interest distribution period for up to 20 consecutive quarterly periods (each, an "Extension Period") at any time and from time to time on the Debentures, subject to the conditions described below, during which Extension Period no interest shall be due and payable (except any Additional Interest that may be due and payable). During any Extension Period, interest will continue to accrue on the Debentures, and interest on such accrued interest (such accrued interest and interest thereon referred to herein as "Deferred Interest") will accrue at an annual rate equal to the Coupon Rate in effect for each such Extension Period, compounded quarterly from the date such Deferred Interest would have been payable were it not for the Extension Period, to the extent permitted by law. No Extension Period may end on a date other than a Distribution Payment Date. At the end of any such Extension Period, the Debenture Issuer shall pay all Deferred Interest then accrued and unpaid on the Debentures; provided, however, that no Extension Period may extend beyond the Maturity Date. Prior to the termination of any Extension Period, the Debenture Issuer may further extend such period, provided, that such period together with all such previous and further consecutive extensions thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the Maturity Date. Upon the termination of any Extension Period and upon the payment of all Deferred Interest, the Debenture Issuer may commence a new Extension Period, subject to the foregoing requirements. No interest or Deferred Interest (except any Additional Interest that may be due and payable) shall be due and payable during an Extension Period, except at the end thereof, but Deferred Interest shall accrue upon each installment of interest that would otherwise have been due and payable during such Extension Period until such installment is paid. If Distributions are deferred, the Distributions due shall be paid on the date that the related Extension Period terminates to Holders of the Securities as they appear on the books and records of the Trust on the record date immediately preceding such date. Distributions on the Securities must be paid on the dates payable (after giving effect to any Extension Period) to the extent that the Trust has funds legally available for the payment of such distributions in the Property Account of the Trust. The Trust's funds available for Distribution to the Holders of the Securities will be limited to payments received from the Debenture Issuer. The payment of Distributions out of moneys held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

        The Capital Securities shall be redeemable as provided in the Declaration.

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ASSIGNMENT

        FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security Certificate to:

(Insert assignee's social security or tax identification number)

(Insert address and zip code of assignee),

and irrevocably appoints                                  as agent to transfer this Capital Security Certificate on the books of the Trust. The agent may substitute another to act for it, him or her.

Date:

Signature:

        (Sign exactly as your name appears on the other side of this Capital Security Certificate)

Signature Guarantee:(1)

(1)

Signature must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Security registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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EXHIBIT A-2

FORM OF COMMON SECURITY CERTIFICATE

        THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.

        EXCEPT AS SET FORTH IN SECTION 8.1 (b) OF THE DECLARATION (AS DEFINED BELOW), THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED.

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Certificate Number [C-001] Number of Common Securities 1,856

Certificate Evidencing Common Securities
of
First Community Bancorp/CA Statutory Trust VII

        First Community Bancorp/CA Statutory Trust VII, a statutory trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that First Community Bancorp (the "Holder") is the registered owner of 1,856 common securities of the Trust representing undivided beneficial interests in the assets of the Trust (liquidation amount $1,000 per Common Security)(the "Common Securities"). The Common Securities represented hereby are issued pursuant to, and the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities shall in all respects be subject to, the provisions of the Amended and Restated Declaration of Trust of the Trust, dated as of February 5, 2004, among Jared M. Wolff and Victor R. Santoro, as Administrators, Chase Manhattan Bank USA, National Association, as Delaware Trustee, JPMorgan Chase Bank, as Institutional Trustee, the Holder, as Sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Trust, including the designation of the terms of the Common Securities as set forth in Annex I to the Declaration, as the same may be amended from time to time (the "Declaration"). Capitalized terms used herein but not defined shall have the meaning given them in the Declaration. The Sponsor will provide a copy of the Declaration and the Indenture to the Holder without charge upon written request to the Sponsor at its principal place of business.

        As set forth in the Declaration, when an Event of Default has occurred and is continuing, the rights of Holders of Common Securities to payment in respect of Distributions and payments upon Liquidation, redemption or otherwise are subordinated to the rights of payment of Holders of the Capital Securities.

        By acceptance of this Certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder.

        By acceptance of this Certificate, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Common Securities as evidence of undivided beneficial ownership in the Debentures.

        This Common Security is governed by, and shall be construed in accordance with, the laws of the State of Delaware, without regard to principles of conflict of laws.

        IN WITNESS WHEREOF, the Trust has executed this certificate February 5, 2004.

First Community Bancorp/CA Statutory Trust VII
By:
	Name:
	Title: Administrator

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[FORM OF REVERSE OF SECURITY]

        Distributions payable on each Common Security will be identical in amount to the Distributions payable on each Capital Security, which is at a variable per annum rate of interest, reset quarterly, equal to LIBOR (as defined in the Declaration) plus 2.75% (the "Coupon Rate") of the stated liquidation amount of $1,000 per Capital Security, such rate (provided, however, that the Coupon Rate for any Distribution Payment Period may not exceed 12% through the Distribution Payment Date in April, 2009, and provided further, that the Coupon Rate may not exceed the highest rate permitted by New York law, as the same may be modified by United States law of general applicability), such Coupon Rate being the rate of interest payable on the Debentures to be held by the Institutional Trustee. Distributions in arrears for more than one quarterly period will bear interest thereon compounded quarterly at the then applicable Coupon Rate for each such quarterly period (to the extent permitted by applicable law). The term "Distributions" as used herein includes cash distributions, any such compounded distributions and any Additional Interest payable on the Debentures unless otherwise stated. A Distribution is payable only to the extent that payments are made in respect of the Debentures held by the Institutional Trustee and to the extent the Institutional Trustee has funds legally available in the Property Account therefor. The amount of Distributions payable for any period will be computed for any full quarterly Distribution period on the basis of a 360-day year and the actual number of days elapsed in the relevant Distribution Payment Period.

        Except as otherwise described below, Distributions on the Common Securities will be cumulative, will accrue from the date of original issuance and will be payable quarterly in arrears on January 23, April 23, July 23 and October 23 of each year, commencing on April 23, 2004 (each, a "Distribution Payment Date"). Upon submission of Notice, the Debenture Issuer has the right under the Indenture to defer payments of interest on the Debentures by extending the interest distribution period for up to 20 consecutive quarterly periods (each, an "Extension Period") at any time and from time to time on the Debentures, subject to the conditions described below, during which Extension Period no interest shall be due and payable (except any Additional Interest that may be due and payable). During any Extension Period, interest will continue to accrue on the Debentures, and interest on such accrued interest (such accrued interest and interest thereon referred to herein as "Deferred Interest") will accrue at an annual rate equal to the Coupon Rate in effect for each such Extension Period, compounded quarterly from the date such Deferred Interest would have been payable were it not for the Extension Period, to the extent permitted by law. No Extension Period may end on a date other than a Distribution Payment Date. At the end of any such Extension Period, the Debenture Issuer shall pay all Deferred Interest then accrued and unpaid on the Debentures; provided, however, that no Extension Period may extend beyond the Maturity Date. Prior to the termination of any Extension Period, the Debenture Issuer may further extend such period, provided, that such period together with all such previous and further consecutive extensions thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the Maturity Date. Upon the termination of any Extension Period and upon the payment of all Deferred Interest, the Debenture Issuer may commence a new Extension Period, subject to the foregoing requirements. No interest or Deferred Interest shall be due and payable during an Extension Period, except at the end thereof, but Deferred Interest shall accrue upon each installment of interest that would otherwise have been due and payable during such Extension Period until such installment is paid. If Distributions are deferred, the Distributions due shall be paid on the date that the related Extension Period terminates to Holders of the Securities as they appear on the books and records of the Trust on the record date immediately preceding such date.

        Distributions on the Securities must be paid on the dates payable (after giving effect to any Extension Period) to the extent that the Trust has funds legally available for the payment of such distributions in the Property Account of the Trust. The Trust's funds legally available for Distribution to the Holders of the Securities will be limited to payments received from the Debenture Issuer. The

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payment of Distributions out of moneys held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

        The Common Securities shall be redeemable as provided in the Declaration.

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ASSIGNMENT

        FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security Certificate to:

(Insert assignee's social security or tax identification number)

(Insert address and zip code of assignee),

and irrevocably appoints            as agent to transfer this Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

        (Sign exactly as your name appears on the other side of this Common Security Certificate)

Signature Guarantee:(1)

(1)

Signature must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Security registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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QuickLinks

Exhibit 10.19

AMENDED AND RESTATED DECLARATION OF TRUST First Community Bancorp/CA Statutory Trust VII Dated as of February 5, 2004
TABLE OF CONTENTS
AMENDED AND RESTATED DECLARATION OF TRUST OF First Community Bancorp/CA Statutory Trust VII February 5, 2004
ARTICLE I INTERPRETATION AND DEFINITIONS
ARTICLE II ORGANIZATION
ARTICLE III SPONSOR
ARTICLE IV TRUSTEES AND ADMINISTRATORS
ARTICLE V DISTRIBUTIONS
ARTICLE V ISSUANCE OF SECURITIES
ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST
ARTICLE VIII TRANSFER OF INTERESTS
ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
ARTICLE X ACCOUNTING
ARTICLE XI AMENDMENTS AND MEETINGS
ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
ARTICLE XIII MISCELLANEOUS
ANNEX I
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE [FORM OF FACE OF SECURITY]
CERTIFICATE OF AUTHENTICATION
[FORM OF REVERSE OF SECURITY]
ASSIGNMENT
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE
ASSIGNMENT

EX-10.20

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Exhibit 10.20

GUARANTEE AGREEMENT

First Community Bancorp

Dated as of February 5, 2004

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS AND INTERPRETATION
SECTION 1.1.	Definitions and Interpretation	1
ARTICLE II POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 2.1.	Powers and Duties of the Guarantee Trustee	3
SECTION 2.2.	Certain Rights of the Guarantee Trustee	4
SECTION 2.3.	Not Responsible for Recitals or Issuance of Guarantee	6
SECTION 2.4.	Events of Default; Waiver	6
SECTION 2.5.	Events of Default; Notice	6
ARTICLE III THE GUARANTEE TRUSTEE
SECTION 3.1.	The Guarantee Trustee; Eligibility	6
SECTION 3.2.	Appointment, Removal and Resignation of the Guarantee Trustee	7
ARTICLE IV GUARANTEE
SECTION 4.1.	Guarantee	7
SECTION 4.2.	Waiver of Notice and Demand	8
SECTION 4.3.	Obligations Not Affected	8
SECTION 4.4.	Rights of Holders	9
SECTION 4.5.	Guarantee of Payment	9
SECTION 4.6.	Subrogation	9
SECTION 4.7.	Independent Obligations	9
SECTION 4.8.	Enforcement	10

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ARTICLE V LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1.	Limitation of Transactions	10
SECTION 5.2.	Ranking	10
ARTICLE VI TERMINATION
SECTION 6.1.	Termination	11
ARTICLE VII INDEMNIFICATION
SECTION 7.1.	Exculpation	11
SECTION 7.2.	Indemnification	11
SECTION 7.3.	Compensation; Reimbursement of Expenses	12
ARTICLE VIII MISCELLANEOUS
SECTION 8.1.	Successors and Assigns	13
SECTION 8.2.	Amendments	13
SECTION 8.3.	Notices	13
SECTION 8.4.	Benefit	14
SECTION 8.5.	Governing Law	14
SECTION 8.6.	Counterparts	14

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GUARANTEE AGREEMENT

        This GUARANTEE AGREEMENT (the "Guarantee"), dated as of February 5, 2004, is executed and delivered by First Community Bancorp, incorporated in California (the "Guarantor"), and JPMorgan Chase Bank, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Capital Securities (as defined herein) of First Community Bancorp/CA Statutory Trust VII, a Delaware statutory trust (the "Issuer").

        WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of February 5, 2004, among the trustees named therein of the Issuer, First Community Bancorp, as sponsor, and the Holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof securities, having an aggregate liquidation amount of up to $60,000,000, designated the TP Securities (the "Capital Securities"); and

        WHEREAS, as incentive for the Holders to purchase the Capital Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Guarantee, to pay to the Holders of Capital Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein.

        NOW, THEREFORE, in consideration of the purchase by each Holder of the Capital Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of the Holders.

ARTICLE I
DEFINITIONS AND INTERPRETATION

        SECTION 1.1.    Definitions and Interpretation.

        In this Guarantee, unless the context otherwise requires:

        (a)   capitalized terms used in this Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.1;

        (b)   a term defined anywhere in this Guarantee has the same meaning throughout;

        (c)   all references to "the Guarantee" or "this Guarantee" are to this Guarantee as modified, supplemented or amended from time to time;

        (d)   all references in this Guarantee to Articles and Sections are to Articles and Sections of this Guarantee, unless otherwise specified;

        (e)   terms defined in the Declaration as of the date of execution of this Guarantee have the same meanings when used in this Guarantee, unless otherwise defined in this Guarantee or unless the context otherwise requires; and

        (f)    a reference to the singular includes the plural and vice versa.

        "Beneficiaries" means any Person to whom the Issuer is or hereafter becomes indebted or liable.

        "Corporate Trust Office" means the office of the Guarantee Trustee at which the corporate trust business of the Guarantee Trustee shall, at any particular time, be principally administered.

        "Covered Person" means any Holder of Capital Securities.

        "Debentures" means the junior subordinated debentures of First Community Bancorp, designated the Junior Subordinated Debt Securities due 2034, held by the Institutional Trustee (as defined in the Declaration) of the Issuer.

        "Event of Default" has the meaning set forth in Section 2.4.

        "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Capital Securities, to the extent not paid or made by the Issuer: (i) any accrued and

unpaid Distributions (as defined in the Declaration) which are required to be paid on such Capital Securities to the extent the Issuer has funds available in the Property Account (as defined in the Declaration) therefor at such time, (ii) the Redemption Price (as defined in the Indenture) to the extent the Issuer has funds available in the Property Account therefor at such time, with respect to any Capital Securities called for redemption by the Issuer, (iii) the Special Redemption Price (as defined in the Indenture) to the extent the Issuer has funds available in the Property Account therefor at such time, with respect to Capital Securities called for redemption upon the occurrence of a Special Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary liquidation, dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Debentures to the Holders of the Capital Securities in exchange therefor as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid Distributions on the Capital Securities to the date of payment, to the extent the Issuer has funds available in the Property Account therefor at such time, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer after satisfaction of liabilities to creditors of the Issuer as required by applicable law (in either case, the "Liquidation Distribution").

        "Guarantee Trustee" means JPMorgan Chase Bank, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee and thereafter means each such Successor Guarantee Trustee.

        "Holder" means any holder, as registered on the books and records of the Issuer, of any Capital Securities; provided, however, that, in determining whether the holders of the requisite percentage of Capital Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor.

        "Indemnified Person" means the Guarantee Trustee (including in its individual capacity), any Affiliate of the Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Guarantee Trustee.

        "Indenture" means the Indenture, dated as of February 5, 2004, between the Guarantor and JPMorgan Chase Bank, not in its individual capacity but solely as trustee, and any indenture supplemental thereto pursuant to which the Debentures are to be issued to the Institutional Trustee of the Issuer.

        "Liquidation Distribution" has the meaning set forth in the definition of "Guarantee Payments" herein.

        "Majority in liquidation amount of the Capital Securities" means Holder(s) of outstanding Capital Securities, voting together as a class, but separately from the holders of Common Securities, of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to, but excluding, the date upon which the voting percentages are determined) of all Capital Securities then outstanding.

        "Obligations" means any costs, expenses or liabilities (but not including liabilities related to taxes) of the Issuer, other than obligations of the Issuer to pay to holders of any Trust Securities the amounts due such holders pursuant to the terms of the Trust Securities.

        "Officer's Certificate" means, with respect to any Person, a certificate signed by one Authorized Officer of such Person. Any Officer's Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee shall include:

        (a)   a statement that each officer signing the Officer's Certificate has read the covenant or condition and the definitions relating thereto;

        (b)   a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officer's Certificate;

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        (c)   a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and

        (d)   a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with.

        "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

        "Responsible Officer" means, with respect to the Guarantee Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee with direct responsibility for the administration of any matters relating to this Guarantee, including any vice president, any assistant vice president, any secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of the Corporate Trust Office of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject.

        "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 3.1.

        "Trust Securities" means the Common Securities and the Capital Securities.

ARTICLE II
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

        SECTION 2.1.    Powers and Duties of the Guarantee Trustee.

        (a)   This Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders of the Capital Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Capital Securities exercising his or her rights pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.

        (b)   If an Event of Default actually known to a Responsible Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders of the Capital Securities.

        (c)   The Guarantee Trustee, before the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee, and no implied covenants shall be read into this Guarantee against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.4(b)) and is actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

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        (d)   No provision of this Guarantee shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

        (i)    prior to the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred:

        (A)  the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee, and no implied covenants or obligations shall be read into this Guarantee against the Guarantee Trustee; and

        (B)  in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee; but in the case of any such certificates or opinions furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not on their face they conform to the requirements of this Guarantee;

        (ii)   the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that such Responsible Officer of the Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made;

        (iii)  the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the written direction of the Holders of not less than a Majority in liquidation amount of the Capital Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and

        (iv)  no provision of this Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds is not reasonably assured to it under the terms of this Guarantee, or security and indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is not reasonably assured to it.

        SECTION 2.2.    Certain Rights of the Guarantee Trustee.

        (a)   Subject to the provisions of Section 2.1:

        (i)    The Guarantee Trustee may conclusively rely, and shall be fully protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties.

        (ii)   Any direction or act of the Guarantor contemplated by this Guarantee shall be sufficiently evidenced by an Officer's Certificate.

        (iii)  Whenever, in the administration of this Guarantee, the Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in

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the absence of bad faith on its part, request and conclusively rely upon an Officer's Certificate of the Guarantor which, upon receipt of such request, shall be promptly delivered by the Guarantor.

        (iv)  The Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument or other writing (or any rerecording, refiling or reregistration thereof).

        (v)   The Guarantee Trustee may consult with counsel of its selection, and the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee from any court of competent jurisdiction.

        (vi)  The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such security and indemnity, reasonably satisfactory to the Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses and the expenses of the Guarantee Trustee's agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided, however, that nothing contained in this Section 2.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee.

        (vii) The Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit.

        (viii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

        (ix)  Any action taken by the Guarantee Trustee or its agents hereunder shall bind the Holders of the Capital Securities, and the signature of the Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Guarantee, both of which shall be conclusively evidenced by the Guarantee Trustee's or its agent's taking such action.

        (x)   Whenever in the administration of this Guarantee the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders of a Majority in liquidation amount of the Capital Securities, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received and (C) shall be protected in conclusively relying on or acting in accordance with such instructions.

        (xi)  The Guarantee Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee.

        (b)   No provision of this Guarantee shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred

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or imposed on it, in any jurisdiction in which it shall be illegal or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty.

        SECTION 2.3.    Not Responsible for Recitals or Issuance of Guarantee.

        The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness. The Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee.

        SECTION 2.4.    Events of Default; Waiver.

        (a)   An Event of Default under this Guarantee will occur upon the failure of the Guarantor to perform any of its payment or other obligations hereunder.

        (b)   The Holders of a Majority in liquidation amount of the Capital Securities may, voting or consenting as a class, on behalf of the Holders of all of the Capital Securities, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and shall be deemed to have been cured, for every purpose of this Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

        SECTION 2.5.    Events of Default; Notice.

        (a)   The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Capital Securities, notices of all Events of Default actually known to a Responsible Officer of the Guarantee Trustee, unless such defaults have been cured before the giving of such notice, provided, however, that the Guarantee Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Capital Securities.

        (b)   The Guarantee Trustee shall not be charged with knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice thereof from the Guarantor or a Holder of the Capital Securities, or a Responsible Officer of the Guarantee Trustee charged with the administration of this Guarantee shall have actual knowledge thereof.

ARTICLE III
THE GUARANTEE TRUSTEE

        SECTION 3.1.    The Guarantee Trustee; Eligibility.

        (a)   There shall at all times be a Guarantee Trustee which shall:

        (i)    not be an Affiliate of the Guarantor; and

        (ii)   be a corporation or national association organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or Person authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation or national association publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 3.1(a)(ii), the combined capital and surplus of such corporation or national association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

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        (b)   If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 3.1(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set forth in Section 3.2(c).

        (c)   If the Guarantee Trustee has or shall acquire any "conflicting interest' within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee shall either eliminate such interest or resign to the extent and in the manner provided by, and subject to, this Guarantee.

        SECTION 3.2.    Appointment, Removal and Resignation of the Guarantee Trustee.

        (a)   Subject to Section 3.2(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor except during an Event of Default.

        (b)   The Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until a Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor.

        (c)   The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by an instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee.

        (d)   If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 3.2 within 60 days after delivery of an instrument of removal or resignation, the Guarantee Trustee resigning or being removed may petition any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.

        (e)   No Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Guarantee Trustee.

        (f)    Upon termination of this Guarantee or removal or resignation of the Guarantee Trustee pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3 accrued to the date of such termination, removal or resignation.

ARTICLE IV
GUARANTEE

        SECTION 4.1.    Guarantee.

        (a)   The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when due, regardless of any defense (except as defense of payment by the Issuer), right of set-off or counterclaim that the Issuer may have or assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders.

        (b)   The Guarantor hereby also agrees to assume any and all Obligations of the Issuer and in the event any such Obligation is not so assumed, subject to the terms and conditions hereof, the Guarantor hereby irrevocably and unconditionally guarantees to each Beneficiary the full payment, when and as due, of any and all Obligations to such Beneficiaries. This Guarantee is intended to be for the Beneficiaries who have received notice hereof.

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        SECTION 4.2.    Waiver of Notice and Demand.

        The Guarantor hereby waives notice of acceptance of this Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

        SECTION 4.3.    Obligations Not Affected.

        The obligations, covenants, agreements and duties of the Guarantor under this Guarantee shall in no way be affected or impaired by reason of the happening from time to time of any of the following:

        (a)   the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Capital Securities to be performed or observed by the Issuer;

        (b)   the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Special Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Capital Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Capital Securities (other than an extension of time for the payment of the Distributions, Redemption Price, Special Redemption Price, Liquidation Distribution or other sums payable that results from the extension of any interest payment period on the Debentures or any extension of the maturity date of the Debentures permitted by the Indenture);

        (c)   any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Capital Securities, or any action on the part of the Issuer granting indulgence or extension of any kind;

        (d)   the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer;

        (e)   any invalidity of, or defect or deficiency in, the Capital Securities;

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        (f)    the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or

        (g)   any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 4.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances.

        There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing.

        SECTION 4.4.    Rights of Holders.

        (a)   The Holders of a Majority in liquidation amount of the Capital Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under this Guarantee; provided, however, that (subject to Sections 2.1 and 2.2) the Guarantee Trustee shall have the right to decline to follow any such direction if the Guarantee Trustee, being advised by legal counsel, shall determine that the actions so directed would be unjustly prejudicial to the Holders not taking part in such direction or if the Guarantee Trustee being advised by legal counsel determines that the action or proceeding so directed may not lawfully be taken or if the Guarantee Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors or trustees and/or Responsible Officers shall determine that the action or proceeding so directed would involve the Guarantee Trustee in personal liability.

        (b)   Any Holder of Capital Securities may institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee's rights under this Guarantee, without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other Person. The Guarantor waives any right or remedy to require that any such action be brought first against the Issuer, the Guarantee Trustee or any other Person before so proceeding directly against the Guarantor.

        SECTION 4.5.    Guarantee of Payment.

        This Guarantee creates a guarantee of payment and not of collection.

        SECTION 4.6.    Subrogation.

        The Guarantor shall be subrogated to all (if any) rights of the Holders of Capital Securities against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by applicable provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee, if, after giving effect to any such payment, any amounts are due and unpaid under this Guarantee. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders.

        SECTION 4.7.    Independent Obligations.

        The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Capital Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 4.3 hereof.

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        SECTION 4.8.    Enforcement.

        A Beneficiary may enforce the Obligations of the Guarantor contained in Section 4.1 (b) directly against the Guarantor, and the Guarantor waives any right or remedy to require that any action be brought against the Issuer or any other person or entity before proceeding against the Guarantor.

        The Guarantor shall be subrogated to all rights (if any) of any Beneficiary against the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by applicable provisions of law) be entitled to enforce or exercise any rights that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee, if, after giving effect to such payment, any amounts are due and unpaid under this Guarantee.

ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION

        SECTION 5.1.    Limitation of Transactions.

        So long as any Capital Securities remain outstanding, if (a) there shall have occurred and be continuing an Event of Default or (b) the Guarantor shall have selected an Extension Period as provided in the Declaration and such period, or any extension thereof, shall have commenced and be continuing, then the Guarantor may not (x) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Guarantor's capital stock or (y) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Guarantor that rank pari passu in all respects with or junior in interest to the Debentures (other than (i) payments under this Guarantee, (ii) repurchases, redemptions or other acquisitions of shares of capital stock of the Guarantor (A) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors, or consultants, (B) in connection with a dividend reinvestment or stockholder stock purchase plan or (C) in connection with the issuance of capital stock of the Guarantor (or securities convertible into or exercisable for such capital stock), as consideration in an acquisition transaction entered into prior to the occurrence of the Event of Default or the applicable Extension Period, (iii) as a result of any exchange, reclassification, combination or conversion of any class or series of the Guarantor's capital stock (or any capital stock of a subsidiary of the Guarantor) for any class or series of the Guarantor's capital stock or of any class or series of the Guarantor's indebtedness for any class or series of the Guarantor's capital stock, (iv) the purchase of fractional interests in shares of the Guarantor's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (v) any declaration of a dividend in connection with any stockholder's rights plan, or the issuance of rights, stock or other property under any stockholder's rights plan, or the redemption or repurchase of rights pursuant thereto, or (vi) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock).

        SECTION 5.2.    Ranking.

        This Guarantee will constitute an unsecured obligation of the Guarantor and will rank subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined in the Indenture) of the Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees to the foregoing provisions of this Guarantee and the other terms set forth herein.

        The right of the Guarantor to participate in any distribution of assets of any of its subsidiaries upon any such subsidiary's liquidation or reorganization or otherwise is subject to the prior claims of creditors of that subsidiary, except to the extent the Guarantor may itself be recognized as a creditor of

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that subsidiary. Accordingly, the Guarantor's obligations under this Guarantee will be effectively subordinated to all existing and future liabilities of the Guarantor's subsidiaries, and claimants should look only to the assets of the Guarantor for payments thereunder. This Guarantee does not limit the incurrence or issuance of other secured or unsecured debt of the Guarantor, including Senior Indebtedness of the Guarantor, under any indenture or agreement that the Guarantor may enter into in the future or otherwise.

ARTICLE VI
TERMINATION

        SECTION 6.1.    Termination.

        This Guarantee shall terminate as to the Capital Securities (i) upon full payment of the Redemption Price or the Special Redemption Price, as the case may be, of all Capital Securities then outstanding, (ii) upon the distribution of all of the Debentures to the Holders of all of the Capital Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon dissolution of the Issuer. This Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Capital Securities must restore payment of any sums paid under the Capital Securities or under this Guarantee.

ARTICLE VII
INDEMNIFICATION

        SECTION 7.1.    Exculpation.

        (a)   No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission of such Indemnified Person in good faith in accordance with this Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's negligence or willful misconduct with respect to such acts or omissions.

        (b)   An Indemnified Person shall be fully protected in relying in good faith upon the records of the Issuer or the Guarantor and upon such information, opinions, reports or statements presented to the Issuer or the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who, if selected by such Indemnified Person, has been selected with reasonable care by such Indemnified Person, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Capital Securities might properly be paid.

        SECTION 7.2.    Indemnification.

        (a)   The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against, any and all loss, liability, damage, claim or expense incurred without negligence, willful misconduct or bad faith on the part of the Indemnified Person, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including but not limited to the costs and expenses (including reasonable legal fees and expenses) of the Indemnified Person defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of the Indemnified Person's powers or duties hereunder. The obligation to indemnify as set forth in this Section 7.2 shall survive the resignation or removal of the Guarantee Trustee and the termination of this Guarantee.

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        (b)   Promptly after receipt by an Indemnified Person under this Section 7.2 of notice of the commencement of any action, such Indemnified Person will, if a claim in respect thereof is to be made against the Guarantor under this Section 7.2, notify the Guarantor in writing of the commencement thereof; but the failure so to notify the Guarantor (i) will not relieve the Guarantor from liability under paragraph (a) above unless and to the extent that the Guarantor did not otherwise learn of such action and such failure results in the forfeiture by the Guarantor of substantial rights and defenses and (ii) will not, in any event, relieve the Guarantor from any obligations to any Indemnified Person other than the indemnification obligation provided in paragraph (a) above. The Guarantor shall be entitled to appoint counsel of the Guarantor's choice at the Guarantor's expense to represent the Indemnified Person in any action for which indemnification is sought (in which case the Guarantor shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the Indemnified Person or Persons except as set forth below); provided, however, that such counsel shall be satisfactory to the Indemnified Person. Notwithstanding the Guarantor's election to appoint counsel to represent the Indemnified Person in any action, the Indemnified Person shall have the right to employ separate counsel (including local counsel), and the Guarantor shall bear the reasonable fees, costs and expenses of such separate counsel (and local counsel), if (i) the use of counsel chosen by the Guarantor to represent the Indemnified Person would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Indemnified Person and the Guarantor and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnified Persons which are different from or additional to those available to the Guarantor, (iii) the Guarantor shall not have employed counsel satisfactory to the Indemnified Person to represent the Indemnified Person within a reasonable time after notice of the institution of such action or (iv) the Guarantor shall authorize the Indemnified Person to employ separate counsel at the expense of the Guarantor. The Guarantor will not, without the prior written consent of the Indemnified Persons, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Persons are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Person from all liability arising out of such claim, action, suit or proceeding.

        SECTION 7.3.    Compensation; Reimbursement of Expenses.

        The Guarantor agrees:

        (a)   to pay to the Guarantee Trustee from time to time such compensation for all services rendered by it hereunder as the parties shall agree to from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); and

        (b)   except as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon request for all reasonable expenses, disbursements and advances incurred or made by it in accordance with any provision of this Guarantee (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct.

        The provisions of this Section 7.3 shall survive the resignation or removal of the Guarantee Trustee and the termination of this Guarantee.

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ARTICLE VIII
MISCELLANEOUS

        SECTION 8.1.    Successors and Assigns.

        All guarantees and agreements contained in this Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Capital Securities then outstanding. Except in connection with any merger or consolidation of the Guarantor with or into another entity or any sale, transfer or lease of the Guarantor's assets to another entity, in each case to the extent permitted under the Indenture, the Guarantor may not assign its rights or delegate its obligations under this Guarantee without the prior approval of the Holders of not less than a Majority in liquidation amount of the Capital Securities.

        SECTION 8.2.    Amendments.

        Except with respect to any changes that do not adversely affect the rights of Holders of the Capital Securities in any material respect (in which case no consent of Holders will be required), this Guarantee may be amended only with the prior approval of the Holders of not less than a Majority in liquidation amount of the Capital Securities. The provisions of the Declaration with respect to amendments thereof shall apply equally with respect to amendments of the Guarantee.

        SECTION 8.3.    Notices.

        All notices provided for in this Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows:

        (a)   If given to the Guarantee Trustee, at the Guarantee Trustee's mailing address set forth below (or such other address as the Guarantee Trustee may give notice of to the Holders of the Capital Securities):

JPMorgan Chase Bank
600 Travis Street, 50 Floor
Houston, TX 77002
Attention: Institutional Trust Services—
First Community Bancorp/CA Statutory Trust
Telecopy: 713-216-2101
Telephone: 713-216-4181

        (b)   If given to the Guarantor, at the Guarantor's mailing address set forth below (or such other address as the Guarantor may give notice of to the Holders of the Capital Securities and to the Guarantee Trustee):

First Community Bancorp
120 Wilshire Blvd.
Santa Monica, CA 90401
Attention: Victor Santoro
Telecopy: (310) 451-4555
Telephone: (310) 458-1521

        (c)   If given to any Holder of the Capital Securities, at the address set forth on the books and records of the Issuer.

        All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice

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was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver.

        SECTION 8.4.    Benefit.

        This Guarantee is solely for the benefit of the Holders of the Capital Securities and, subject to Section 2.1(a), is not separately transferable from the Capital Securities.

        SECTION 8.5.    Governing Law.

        THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

        SECTION 8.6.    Counterparts.

        This Guarantee may contain more than one counterpart of the signature page and this Guarantee may be executed by the affixing of the signature of the Guarantor and the Guarantee Trustee to any of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page.

        THIS GUARANTEE is executed as of the day and year first above written.

First Community Bancorp, as Guarantor
By:	/s/ Victor R. Santoro
Name:	Victor R. Santoro
Title:	Executive Vice President and
	Chief Financial Officer
JPMORGAN CHASE BANK, as Guarantee Trustee
By:	/s/ Maria D. Calzado
Name:	Maria D. Calzado
Title:	Vice President

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Exhibit 10.20

TABLE OF CONTENTS
GUARANTEE AGREEMENT
ARTICLE I DEFINITIONS AND INTERPRETATION
ARTICLE II POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
ARTICLE III THE GUARANTEE TRUSTEE
ARTICLE IV GUARANTEE
ARTICLE V LIMITATION OF TRANSACTIONS; SUBORDINATION
ARTICLE VI TERMINATION
ARTICLE VII INDEMNIFICATION
ARTICLE VIII MISCELLANEOUS

EX-10.21

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Exhibit 10.21

Castle Creek Financial
P.O. Box 1329, 6051 El Tordo
Rancho Santa Fe, California 92067

May 14, 2003

Matthew P. Wagner
President and Chief Executive Officer
First Community Bancorp
6110 El Tordo
Rancho Santa Fe, CA 92067

Dear Matthew:

        This letter will confirm that First Community Bancorp ("First Community") has engaged Castle Creek Financial LLC ("Castle Creek") as the exclusive financial advisor to First Community and any entities it may form, acquire or invest in (collectively, the "Company") in connection with the Company's efforts to (a) acquire or invest in other financial institutions, excepting therefrom the opening of individual bank branches in the ordinary course of business; (b) effect a sale of the Company or a material amount of its assets; or (c) pursue a financing or recapitalization transaction (collectively, the "Transaction"). As the exclusive financial advisor to the Company, Castle Creek will, in addition to providing services in connection with a proposed Transaction provide other services pursuant to paragraph 9.

1.

In connection with a proposed Transaction, at the request of the Company, Castle Creek will provide such services as the Company shall reasonably request including: (i) assisting the Company in the structuring of the financial aspects of a Transaction; (ii) identifying alternative potential parties and contacting such parties as the Company may designate; (iii) negotiating the terms of a Transaction with such parties; (iv) assisting the Company in communicating the strategic implications of the Transaction to the investment community; and (v) advising the Company in connection with its efforts to raise any additional capital that may be required to facilitate the Transaction. Further, Castle Creek and the Company expressly acknowledge that the fees provided for under paragraph 3 for a completed Transaction were determined in light of the fact that significant financial advisory services are rendered to the Company in connection with potential Transactions that are not successfully completed. Thus, such fees earned pursuant to paragraph 3 will serve as compensation for services rendered in connection with a completed Transaction and in connection with potential Transactions that are not successfully completed.

2.

In connection with a proposed Transaction, you will furnish Castle Creek with such material regarding the business and financial condition of the Company as we request, all of which will be accurate and complete in all material respects at the time furnished in writing. The Company will also use its best efforts to assure that its personnel, consultants, experts, attorneys and accountants are made available to Castle Creek upon Castle Creek's reasonable request in connection with services provided or to be provided by Castle Creek. During the term of this agreement, the Company shall promptly notify Castle Creek of (i) any material changes in the business or financial condition of the Company from the information provided to Castle Creek, and (ii) any material events or developments relating to the financial condition or business operations or prospects of the Company and promptly make available for Castle Creek's review copies of all filings related to the Transaction made by the Company with any regulatory agency and copies of all press releases related to the Transaction issued by the Company. We are relying, without independent verification, on the accuracy and completeness of all information furnished to us in writing by the Company or any other party or potential party to any Transaction. Castle Creek agrees that all requests for information from the Company will be directed only to the President or

Chairman of the Board of the Company or such other persons as the President and Chairman shall specifically designate and that it will not treat information obtained from any other person or source as having been provided by the Company. Castle Creek and the Company agree to be bound by the terms Confidentiality Agreement, executed by both parties in connection with the execution of this agreement, and attached hereto as Appendix B.

3.

In consideration of the services to be provided hereunder, the Company agrees to pay to Castle Creek the following cash fees:

(A)

$9,000 at the beginning of each fiscal quarter (which initial payment shall be made upon the execution hereof),

(B)

In the event that a sale of the Company is completed, an amount equal to two percent (2.0%) of the Transaction Value (as defined below) for the Transaction, net of the cost of a "fairness opinion" if such opinion is deemed necessary,

(C)

In the event that an acquisition of or investment in another financial institution is completed by the Company, an amount based upon the following schedule will be owed to Castle Creek upon the consummation of the acquisition or investment based upon the Transaction Value for the Transaction, net of the cost of a "fairness opinion" if such opinion is deemed necessary:

			Deal Value ($ in millions)		Fees
(1	)	If	$0 to $20	then	1.5% of the Transaction Value
(2	)	If	Over $20	then	$300,000, plus 1.0% of the amount of the Transaction Value in excess of $20 million

(D)

In the event of a financing or recapitalization, the fees will be determined in accordance with paragraph 8 below.



(E)

Fees payable pursuant to paragraphs 3 (B), (C) and (D) shall be paid upon and only upon the closing of the Transaction.

For purposes of this agreement, "Transaction Value" means the sum of (i) with respect to each class of capital stock of the Company in the event of a sale of the Company or of the financial institution which is acquired by the Company or in which the Company invests, the product of (a) the highest consideration paid or payable for a share of such class of capital stock determined as described in the following paragraph and (b) the sum, determined as of the fifth trading day immediately preceding the closing date, of (1) the total number of shares of such class of capital stock of the Company or such financial institution plus (2) the number of shares of such class issuable upon exercise of options, warrants or other rights, or conversion or exchange of securities to the extent that such options are then exercisable; (ii) in the case of an acquisition or sale, the aggregate liquidation value of any preferred stock or other preferential interests redeemed or remaining outstanding; (iii) the fair market value of any assets distributed to the shareholders of the Company or such financial institution that is purchased; (iv) the consideration paid or payable for the assets of the Company or the assets of another financial institution, as the case may be and (v) in the case of an acquisition or sale, the aggregate face value of all liabilities, including accounts payable, accruals and income taxes payable of the Company, or the financial institution, as the case may be.

The determination of the "consideration paid or payable for a share of such class of capital stock" in connection with the Transaction shall include cash, securities (valued in accordance with the following paragraph), or other assets or consideration paid or payable by the purchaser or any of its affiliates, as the case may be, determined without regard to any allocations between the

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Company or its affiliates in the event of a sale of the Company or between the financial institution or its affiliates in the event such financial institution is acquired by the Company or the Company invests in such financial institution, including but not limited to (i) assets (net of debt or payables) of the Company or such financial institution retained by the Company or such financial institution or their respective stockholders and affiliates, as the case may be, (ii) any deferred installments of the purchase price, (iii) any portion of the purchase price held in escrow subsequent to closing which is payable pursuant to the terms of the escrow arrangement, irrespective of whether such amounts are in fact paid, (iv) any extraordinary compensation paid directly or indirectly by the purchaser to principals, management or employees of the Company or affiliates of the Company in connection with or in anticipation of the Transaction or by the Company to principals, management or employees of a financial institution acquired by the Company or in which the Company invests, including but not limited to cash payments, stock or option grants, consulting arrangements and non-competition arrangements, (v) any payments to the Company or the financial institution and their respective affiliates for non-competition agreements, (vi) any payments pursuant to earn-outs, royalties or other similar arrangements, (vii) any payments payable after closing upon the occurrence of certain contingencies or conditions or the satisfaction of certain earnings, sales levels or other performance objectives which are agreed to on or before the closing, irrespective of whether such amounts are in fact paid, (vii) the amount of any dividends or other extraordinary payments or distributions to stockholders of the Company or the financial institution in connection with or in anticipation of the Transaction, and (iv) consideration paid by the purchaser or its affiliates as a deposit, reimbursement of expenses, liquidated damages, walk-away fee or other arrangement.

In the event that all or any portion of the Transaction Value for a Transaction is paid in stock or other securities, deferred installments or other non-cash consideration, the amount of the fee payable with respect to such items shall be determined on the basis of the fair market cash equivalent value of such non-cash consideration as of the day preceding the closing date of the Transaction as reasonably determined by Castle Creek and the Company, provided that the value of securities (received as consideration) which have an existing public trading market shall be determined by the average closing sale (trade) price for such securities during the five trading days immediately preceding the closing date.

Any portion of the fee which is payable with respect to any earn-out, royalty or similar arrangement where the amount payable is not a certain amount, shall be calculated and paid at the closing based upon the estimated net present value thereof as reasonably determined by Castle Creek and the Company.

If a Transaction takes the form of a purchase of assets and an assumption of liabilities, then the "Transaction Value" of the Company or the financial institution shall be deemed to include the amount of cash, securities, or other consideration paid to the Company or the financial institution and their respective shareholders, and affiliates, as the case may be, in respect of the assets, plus the aggregate face amount of all liabilities, including accounts payable, accruals, and income taxes payable of the Company, or the financial institution, assumed by the purchaser and its affiliates or the Company, as the case may be.

If a Transaction involves the acquisition of less than all of the Company's outstanding equity securities, then the fee payable pursuant to Section 3(B) shall nonetheless be calculated as though all such equity securities had been so acquired by the purchaser.

4.

Regardless of whether a Transaction is completed, the Company will reimburse Castle Creek, upon its demand, for all reasonable out-of-pocket expenses (including travel expenses and fees and disbursements of counsel retained by Castle Creek in connection with this engagement). In addition to professional fees, our billing statements include reimbursable expenses normally

3

incurred in the conduct of the work. The reimbursable expenses will include a flat ten percent of Castle Creek's monthly costs for data services, telephone, fax, postage and general office expenses which will be categorized on our statement as indirect expenses. These indirect expenses shall not include any allocation for employee costs or debt service costs, rent, lease obligations, utilities or other pre-existing overhead items; provided, however, that Castle Creek may seek reimbursement from the Company for any the identifiable increase in any pre-existing overhead items (other than employee costs or debt service costs, rent, lease obligations, utilities) incurred as a result of the services provided under this agreement.

5.

The Company agrees to indemnify and hold Castle Creek harmless in accordance with the terms and conditions of Appendix A attached hereto and made a part hereof as though fully set forth in this agreement. No termination or modification hereof, or completion of Castle Creek's engagement hereunder, shall limit or affect such indemnification.

6.

Castle Creek's services hereunder may be terminated by the Company or Castle Creek at any time upon 30 days written notice, provided that Castle Creek shall be entitled to any fees payable pursuant to Section 3 and Section 8 hereof in the event that the Company completes a Transaction (i) on which Castle Creek provided advice or participated in discussions with any of the investors in such Transaction or (ii) with any of the parties as to which Castle Creek advised the Company or with whom the Company engaged in discussions regarding a possible Transaction prior to the termination of this letter agreement, providing that such Transaction is completed within two years following the termination of this letter agreement. In addition, Castle Creek shall remain entitled to the reimbursement of fees and expenses under the terms and conditions described in Section 4 hereof, to the extent the same have been incurred on or prior to the date of such termination and to the quarterly retainer fee under Section 3(A) to the extent payable prior to the termination date. Furthermore, the provisions of this Section 6, and Sections 5 (including Appendix A), 10, 11, 12, 13, 14, 15 and 16, as well as the Confidentiality Agreement, shall survive any termination of this agreement.

7.

In order to coordinate our efforts with respect to any Transaction, during the period of our engagement hereunder neither the Company nor any representative thereof (other than Castle Creek) will initiate discussions regarding a Transaction except through Castle Creek. If the Company or its management receives an inquiry regarding a Transaction, they will promptly advise Castle Creek of such inquiry in order that we can evaluate such prospective party and its interest and assist the Company in any resulting negotiations.

8.

Pursuant to section 3(D) hereinabove, it is understood and agreed that if the Company decides to pursue a financing or recapitalization Transaction for which Castle Creek is to provide any of the financial advisory services described above in Section 1 hereof, the Company and Castle Creek shall negotiate in good faith acceptable compensation for Castle Creek in consideration of such services, which compensation will take into account, among other things, the results obtained and the custom and practice among investment bankers acting in similar situations. The compensation owed to Castle Creek in accordance with the fee structure agreed upon by the Company and Castle Creek in respect of a financing or recapitalization Transaction shall be paid to Castle Creek in cash upon the consummation of any such Transaction.

9.

It is understood and agreed that Castle Creek will provide such other services that may from time to time be mutually agreed upon by Castle Creek and the Company. Castle Creek expressly acknowledges that it will not be compensated specifically for these services other than the reimbursement for all reasonable out-of-pocket expenses, but that such fees earned from acting as a financial advisor to the Company for a Transaction will serve as compensation to Castle Creek for such non-Transaction services rendered. Such services rendered to the Company not directly related to a specific Transaction may include, but are not exclusive to (i) the development and

4

preparation of long term financial and strategic plans, (ii) assistance with investor and public relations, and (iii) capital management advisory services.

10.

Except as expressly provided herein, no fee paid or payable to Castle Creek or any of its affiliates shall be used as an offset or credit against any other fee paid or payable to Castle Creek or any of its affiliates.

11.

This agreement, including the indemnity in Appendix A and the confidentiality agreement in Appendix B, embodies the sole terms of the agreement between the Company and Castle Creek with respect to the subject matter hereof and supersedes all previous agreements, whether oral or written, between the Company and Castle Creek with respect to the subject matter hereof. This agreement may not be altered, varied, revised or amended, except by an instrument in writing signed by both the Company and Castle Creek after the date first written above. The Company and Castle Creek have not made any other agreements or representations of any kind with respect to such subject matter.

12.

This letter agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflict of laws. Any right to trial by jury with respect to any claim or proceeding related to or arising out of this engagement or any transaction or conduct in connection herewith, is waived. Any claim or dispute arising out of this agreement or the alleged breach thereof shall be submitted by the parties to binding and nonappealable arbitration by the American Arbitration Association ("AAA") in San Diego, California, under the commercial rules then in effect for the AAA, except as provided herein. The AAA shall recommend three arbitrators who are knowledgeable in the field of investment banking. The parties shall agree upon one of the three arbitrators or, if no arbitrator is mutually agreed upon, the AAA shall appoint one of the three arbitrators within 30 days of such failure. The award rendered by the arbitrator shall include costs of arbitration, reasonable attorneys' fees and fees of experts and other witnesses, but shall not include punitive damages against either party. Each party shall have the right to request the arbitrator to order reasonable and limited discovery. Notwithstanding this provision, either party may seek appropriate injunctive relief.

13.

This agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall continue one and the same instrument.

14.

The obligations of the Company hereunder shall be the joint and several obligations of the entities comprising the term Company.

15.

The Company expressly acknowledges that Castle Creek has been retained solely as an advisor to the Company, and not as an advisor to or agent of any other person, and that the Company's engagement of Castle Creek is not intended to confer rights upon any persons not a party hereto (including shareholders, employees or creditors of the Company) as against Castle Creek, Castle Creek's affiliates or their respective directors, officers, agents and employees. Any advice provided to the Company by Castle Creek pursuant to this agreement is solely for the information and assistance of the Board of Directors of the Company. Such advice shall be treated as confidential information, shall not be disclosed publicly in any manner without Castle Creek's prior written approval and shall not be relied upon by the Company's shareholders or any third party. Any reference to Castle Creek or to any affiliate of Castle Creek in any release or communication to any party outside the Company is subject to Castle Creek's prior written approval, which approval shall not be unreasonably withheld or delayed. If this agreement is terminated prior to any release or communication, no reference shall be made to Castle Creek without Castle Creek's prior written approval.

16.

Neither the Company nor Castle Creek may assign, transfer, license, or sublicense its rights under this agreement without the other party's prior written consent, which may be granted or withheld

5

in the other party's sole and absolute discretion. Subject to the limitation in this paragraph, this agreement will inure to the benefit of and be binding upon both the Company and Castle Creek and their respective successors and assigns.

17.

Castle Creek represents that it has the necessary expertise to provide the services contemplated by this agreement and that the compensation provided for herein is fair and reasonable and comparable to the compensation that would be charged by an independent provider of such services with the same type, level and quality of expertise. The Company acknowledges that the services contemplated herein will meet legitimate needs of the Company and that it is in the best interests of the Company to obtain such services.

18.

After closing a Transaction, Castle Creek shall have the right to place advertisements in financial and other newspapers and other newspapers and journals at its own expense describing its services to the Company under this agreement, provided that Castle Creek shall have submitted a copy of any such proposed advertisements to the Company for its prior approval, which approval shall not be unreasonably withheld or delayed.

Please confirm that the foregoing is in accordance with your understanding by signing and returning to us the duplicates of this agreement and the related indemnification agreement which shall thereupon constitute binding agreements.

Very truly yours,

Castle Creek Financial LLC

/s/ William J. Ruh

William J. Ruh
Executive Vice President

Accepted and agreed:

First Community Bancorp

on its behalf and on behalf of the Company,
as defined above.

By:	/s/ Matthew P. Wagner
Name:	Matthew P. Wagner
Title:	President and CEO
Date:	May 19, 2003

6

APPENDIX A

        This Appendix A is a part of and is incorporated into that certain letter agreement dated May 14, 2003, between First Community Bancorp (the "Company") and Castle Creek Financial LLC ("Castle Creek") (the letter agreement and this Appendix A are referred to herein as the "Agreement"). Capitalized terms used herein without definition shall have the meanings ascribed to them in such letter agreement.

        The Company agrees to indemnify and hold harmless Castle Creek, any affiliates and their respective officers, directors, members, representatives and agents and any other persons controlling Castle Creek or any of its affiliates (Castle Creek and each such other person or entity each being referred to as an "Indemnified Person"), to the fullest extent lawful, from and against all claims, liabilities, losses, damages, and expenses (including without limitation and as incurred, reimbursement of all costs of investigating, preparing, pursuing, or defending any such claim or action, including reasonable fees and expenses of counsel to, and the per diem costs and expenses of personnel of, the Indemnified Person, whether or not arising out of pending litigation, governmental investigation, arbitration or other alternative dispute resolution, or other action or proceeding or threatened litigation, governmental investigation, arbitration or other alternative dispute resolution, or other action or proceeding) directly or indirectly related to or arising out of, or in connection with (i) actions taken or omitted to be taken by the Company, its affiliates, employees, directors, partners, representatives or agents in connection with any Transaction or activities contemplated by this Agreement; (ii) actions taken or omitted to be taken by any Indemnified Person pursuant to the terms of, or in connection with services rendered pursuant to, this Agreement, provided that in the case of this subsection (ii), the Company shall not be responsible for any claim, liability, loss, damage or expense arising primarily out of or based primarily upon the fraud, misrepresentation, willful misconduct or gross negligence (as determined by the judgment of a court of competent jurisdiction, no longer subject to appeal or further review) of or by such Indemnified Person; and (iii) any untrue statement or alleged untrue statement of a material fact contained in any information provided to Castle Creek in writing by the Company under the Agreement in connection with a Transaction or proposed Transaction or any omission or alleged omission to state a material fact necessary to make the statements therein provided by the Company in writing to Castle Creek in connection with any Transaction or Proposed Transaction not misleading (other than untrue statements or alleged untrue statements in, or omissions or alleged omissions from, information relating to an Indemnified Person furnished in writing by or on behalf of such Indemnified Person expressly for use by the Company). If multiple claims are brought against an Indemnified Person in an arbitration with respect to at least one of which indemnification is permitted under applicable law and provided for under this Agreement, the Company agrees that any arbitration award shall be conclusively deemed to be based on claims as to which indemnification is permitted and provided for, except to the extent that the arbitration award expressly states that the award, or any portion thereof, is based solely on a claim as to which indemnification is not available.

        If the indemnification provided for herein is unavailable to an Indemnified Person in respect of any claims, liabilities, losses, damages or expenses, then the Company, in lieu of indemnifying such Indemnified Person, shall contribute to the amount paid or payable by such Indemnified Person as a result of such claims, liabilities, losses, damages or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Indemnified Person on the other, as well as any other relevant equitable considerations. It is further agreed that the relative benefits to the Company on the one hand and Castle Creek on the other hand with respect to the services rendered under this Agreement shall be deemed to be in the same proportion as (i) the aggregate Transaction Value bears to (ii) the fees actually paid to Castle Creek with respect to the services provided pursuant to this Agreement in connection with the Transaction. The Company also agrees that no Indemnified Person shall have any liability to the Company for or in connection with this Agreement and the engagement of Castle Creek hereunder, except for such claims, liabilities,

A-1

losses, damages, or expenses incurred by the Company to the extent they are appropriately judicially determined (without possibility of appeal or review) to have resulted from such Indemnified Person's fraud, misrepresentation (other than a representation of information provided by the Company to Castle Creek in writing under the terms hereof), willful misconduct or gross negligence, and the Company agrees that in no event shall the Indemnified Persons be required to contribute an amount in the aggregate greater than the fees actually received by Castle Creek for its services performed under this Agreement.

        If any action or other proceeding or investigation is commenced as to which an Indemnified Person demands indemnification, the Indemnified Person shall have the right to retain counsel of its own choice to represent it, the Company shall pay the reasonable fees and expenses of such counsel, and such counsel shall to the extent consistent with its professional responsibilities cooperate with the Company and any counsel designated by the Company, provided, that in no event shall the Company be required to pay fees and expenses under this indemnity for more than one firm of attorneys for the Indemnified Person in any jurisdiction in any one legal action or group or related legal actions. The Company shall be liable as provided herein for any settlement of any claim against Castle Creek or any Indemnified Person made with the Company's written consent, which consent shall not be unreasonably withheld. The Company agrees that it will not, without the prior written consent of Castle Creek, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by Castle Creek's engagement (whether or not any Indemnified Person is a party thereto) unless such settlement, compromise or consent includes an unconditional release of Castle Creek and each other Indemnified Person from all liability arising or that may arise out of such claim, action, or proceeding.

        The indemnity and contribution obligations of the Company set forth herein shall be in addition to any liability or obligation the Company may otherwise have to any Indemnified Person. The Company and the Indemnified Persons hereby consent to personal jurisdiction, service and venue in any of the State or Federal Courts in the Central District or Southern Districts of California.

        It is understood that, in addition to Castle Creek's engagement pursuant to this Agreement, Castle Creek may also be engaged to act for the Company in one or more additional capacities, and that the terms of such additional engagements may be embodied in one or more separate written agreements. The provisions of this Appendix A shall apply to any such separate agreements, any modification to this Agreement, and any modifications of such separate agreements, and the provisions of this Appendix A shall remain in full force and effect following the completion, expiration or termination of this Agreement or such additional agreements or modifications of any of the foregoing.

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Appendix B

CONFIDENTIALITY AGREEMENT

May 14, 2003

        First Community Bancorp and/or its affiliates (collectively the "Company") and Castle Creek Financial LLC ("Castle Creek") have entered into an agreement, dated of even date herewith (the "Engagement Letter") whereby the Company has engaged Castle Creek to be its exclusive financial advisor in connection with a variety of Transactions (as defined in the Engagement Letter) and other services to be provided by Castle Creek, as set forth in the Engagement Letter ("Services"). In connection therewith and the undertakings of each of the Company and Castle Creek pursuant to the Engagement Letter, each party is interested in protecting the confidentiality of certain information revealed to the other in furtherance of the Engagement Letter. Therefore, the Company and Castle Creek hereby agree to permit certain directors, officers, employees, and advisers of the other party to review and discuss such information, subject to the following terms and conditions:

1.

Definition of Confidential Information. The term "Confidential Information" as used in this Confidentiality Agreement shall mean all information, trade secrets and documents concerning the Company, Castle Creek or any Transaction or Services, which is furnished or otherwise disclosed by either party or its representatives to the receiving party (together with all analyses, compilations, notes, studies, or other documents, whether prepared by the receiving party or others, which contain or otherwise are derived from such information) either before or after the date of this Confidentiality Agreement, and regardless of the manner in which it is furnished and whether or not it is labeled "confidential". Confidential Information shall also include any "nonpublic personal information," provided by the Company to Castle Creek as that term is defined under Title V of the Gramm-Leach-Bliley Act of 1999, as it may be amended from time to time, the regulations promulgated thereunder or other applicable law (collectively, "Privacy Laws").

2.

Use of Confidential Information. The Confidential Information shall be used solely for the purpose of the Company's and Castle Creek's analysis of the Transaction or in furtherance of the Services. All Confidential Information will be kept confidential by the receiving party; provided, however, the receiving party may disclose the Confidential Information or portions of the Confidential Information to such of its directors, officers, employees, and advisers who need to know such information for the purposes of discussion and analysis of the Transaction or Services, each of whom shall be advised of the terms of this Confidentiality Agreement and who shall be bound by this Confidentiality Agreement upon their receipt of the Confidential Information. The parties agree that any advice rendered by Castle Creek pursuant to the Engagement Letter shall not be disclosed in any manner without Castle Creek's prior written approval and will be treated by the Company and Castle Creek as confidential.

3.

Legally Required Disclosures. If either the Company or Castle Creek is requested or required by applicable law or regulation (including any requirement of law arising by means of deposition, interrogatory, request for documents or information, subpoena, civil investigative demand or similar process, or by a regulatory body or agency or other legal entity with applicable jurisdiction) to disclose any of the Confidential Information, the disclosing party shall, unless prohibited by law or regulation, provide the resisting party with prompt prior written notice of such request or requirement and shall cooperate with the resisting party, at the resisting party's expense, so that the resisting party may seek a protective order or other appropriate remedy to avoid disclosure and, if requested by the resisting party, shall cooperate in lawfully resisting such disclosure. If such protective order or other remedy is not obtained, or if the resisting party waives compliance with the provisions of this paragraph, the disclosing party may disclose only that portion of the Confidential Information which, as advised by its counsel, is legally required to be disclosed, and

B-1

shall exercise reasonable efforts to obtain assurance that confidential treatment will be accorded such Confidential Information.

4.

Nondisclosure of and Treatment of Confidential Information. Neither the Company nor Castle Creek shall disclose to any person not otherwise permitted under this Confidentiality Agreement any of the Confidential Information or any other terms, conditions or other facts with respect to any Transaction or Services, including the status of any such Transaction or Services. Each party shall at all times protect the Confidential Information from inadvertent disclosure and keep such information confidential. If any applicable Privacy Law or other applicable law now or hereafter imposes a higher standard of confidentiality to Confidential Information than the standard set forth in this Confidentiality Agreement, such standard shall prevail over this Confidentiality Agreement with respect to such Confidential Information. Notwithstanding the foregoing or anything in this Confidentiality Agreement or the Engagement Letter to the contrary, no disclosure by the Company of the existence or status of i) any proposed or actual Transaction, ii) the Services or iii) this Confidentiality Agreement or the Engagement Letter shall be deemed to be in violation of this Confidentiality Agreement or the Engagement Letter.

5.

Exceptions. The term "Confidential Information" shall not include any information which:

(i)

at or after the time of disclosure is generally available to the public (other than as a result of a disclosure by the Company or Castle Creek in breach of this Confidentiality Agreement);

(ii)

was available to the Company or Castle Creek on a non-confidential basis from a source other than directors, officers, employees, or advisers of the disclosing party who, insofar as is known to the receiving party, was not prohibited from transmitting the information to the receiving party by a contractual, legal or fiduciary obligation to the disclosing party; or

(iii)

has been independently developed by the Company or Castle Creek without violation of any obligation under this Confidentiality Agreement.

6.

No Representation or Warranty. Although the Company and Castle Creek have each endeavored to include in the Confidential Information that information known to them which they believe to be relevant for the other party's purposes, both the Company and Castle Creek understand and agree that neither the other party nor any of the other party's representatives have made or are making any representation or warranty, express or implied, as to the accuracy or completeness of the Confidential Information, except with respect to information provided to the other in writing. the Company and Castle Creek each agree that neither the other party nor any of the other party's representatives will have any liability to the receiving party or to any other person resulting from the delivery or use of the Confidential Information, except to the extent such Confidential Information is delivered in writing, is materially inaccurate or misleading and the delivering party knows that the receiving party intends to make use of the information in furtherance of any Transaction or Services.

7.

Return or Destruction of Materials. Should either the Company or Castle Creek not proceed with the Transaction, the Company and Castle Creek both agree, that upon written request, each will turn over to the other party, or upon request destroy, all copies of the Confidential Information provided to it by the other. If so requested in writing by the other party, the Company and Castle Creek will each certify to the other that such party has in fact returned or destroyed such documents required hereunder to be so treated. This provision shall only apply with respect to information provided to the other pursuant to the terms of the Engagement Letter and the services provided pursuant thereto and not information provided to any member or employee of the other acting in any other capacity (e.g., as a director of the Company).

8.

No Waiver. It is further understood and agreed that no failure or delay in exercising any right, power or privilege under this Confidentiality Agreement shall operate as a waiver of any right,

B-2

power or privilege, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise of any right, power or privilege or the exercise of any other right, power or privilege under this Confidentiality Agreement.

9.

Enforceability. To the extent any provision of this Confidentiality Agreement shall be determined to be void, illegal or otherwise unenforceable, the same shall have no effect on the enforceability of the balance of this Confidentiality Agreement.

10.

Entire Agreement; Amendments. This Confidentiality Agreement, along with the Engagement Letter, contains the entire understanding between the Company and Castle Creek with respect to the subject matter of this Confidentiality Agreement and the Engagement Letter, and neither may be altered, varied, revised or amended, except by an instrument in writing signed by both the Company and Castle Creek after the date first written above. The Company and Castle Creek have not made any other agreements or representations of any kind with respect to such subject matter.

11.

Remedies. The Company and Castle Creek each recognize that irreparable injury may result to the non-breaching party in the event that this Confidentiality Agreement is breached by the breaching party or by any director, officer, employee, or adviser of the breaching party, or by any person given access to the Confidential Information in violation of the terms and conditions of this Confidentiality Agreement. Accordingly, in addition to any and all other remedies at law or in equity to which the non-breaching party may be entitled, the non-breaching party shall also have the right to obtain equitable relief, including without limitation injunctive relief, to prevent any disclosure of any Confidential Information, or to prevent any other breach of this Confidentiality Agreement, plus reasonable attorney's fees and other litigation costs and expenses incurred in connection with successfully obtaining any such remedies and/or relief.

12.

Assignment; Benefit; Duration. Neither the Company nor Castle Creek may assign, transfer, license, or sublicense its rights under this Confidentiality Agreement without the other party's prior written consent, which may be granted or withheld in the other party's sole and absolute discretion. Subject to the limitation in this paragraph, this Confidentiality Agreement will inure to the benefit of and be binding upon both the Company and Castle Creek and their respective successors and assigns, and shall remain in effect until one year after the last to terminate of the Engagement Letter or such other agreements as specified in Section 14 below.

13.

Governing Law; Disputes. This Confidentiality Agreement will be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law principles thereof. The Company and Castle Creek each voluntarily and knowingly waives any right it may have to a trial by jury in any such adjudication. The prevailing party in any such adjudication will have its reasonable attorney's fees and other litigation costs and expenses paid by the non-prevailing party.

14.

Other Agreements. It is understood that, in addition to Castle Creek's engagement pursuant to this Engagement Letter, Castle Creek may also be engaged to act for the Company in one or more additional capacities, and that the terms of such additional engagements may be embodied in one or more separate written agreements. The provisions of this Confidentiality Agreement shall apply to any such separate agreements (whether or not specifically referenced therein), any modification to the Engagement Letter, and any modifications of such separate agreements, and the provisions of this Confidentiality Agreement shall remain in full force and effect following the completion, expiration or termination of this Agreement or such additional agreements or modifications of any of the foregoing for a period of one year after the last of such agreements to expire.

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        IN WITNESS WHEREOF, the undersigned being the duly authorized representatives of the respective party, intending such party to be bound hereby, executes this Confidentiality Agreement as of the date first set forth above.

Castle Creek Financial, LLC		First Community Bancorp
By:	/s/ William J. Ruh	By:	/s/ Matthew P. Wagner
Name:	William J. Ruh	Name:	Matthew P. Wagner
Title:	Executive Vice President	Title:	President and CEO

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Castle Creek Financial P.O. Box 1329, 6051 El Tordo Rancho Santa Fe, California 92067

EX-10.22

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Exhibit 10.22

FIRST COMMUNITY BANCORP
EXECUTIVE SEVERANCE PAY PLAN
(as amended and restated effective February 4, 2004)

        The purpose of the First Community Bancorp Executive Severance Pay Plan, as amended and restated effective February 4, 2004 (the "Plan") is to secure the continued services of certain senior executives of the Company and to ensure their continued dedication to their duties in the event of any threat or occurrence of a Change in Control (as defined below).

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 ("Election Contest") 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

1

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 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 for such year), 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. Notwithstanding anything herein to the contrary, "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) days in any two hundred seventy (270)) day period, 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 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 Change in Control severance payments.



(i)

"Good Reason" means, without your express written consent, 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 your annual base salary as in effect immediately before such reduction; or

         (ii)  (A) any change in your duties and responsibilities that is inconsistent in any adverse respect with your position(s), duties or 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; provided, however, that Good Reason shall not be deemed to occur upon a change in duties or responsibilities (other than reporting responsibilities) that is solely and directly a result of the Company no longer being a publicly traded entity and does not involve any other

2

event set forth in this paragraph (i), or (B) a material and adverse change in your titles or offices (including, if applicable, membership on the Board) with the Company as in effect immediately prior to such Change in Control; 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)  the failure of the Company or its Subsidiaries to continue in effect any employee benefit plan, compensation plan, welfare benefit plan or material fringe benefit plan in which you or your dependents are participating immediately prior to such Change in Control or the taking of any action by the Company which would adversely affect your or your dependents' participation in or reduce your or your dependents' benefits under any such plan, unless you and your dependents are permitted to participate in other plans providing substantially equivalent benefits in the aggregate (at substantially equivalent cost with respect to welfare benefit plans); or

         (v)  the failure of the Company or its Subsidiaries to (A) 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 (B) provide you with paid annual leave in accordance with the most favorable annual leave policies of the Company or any of its Subsidiaries as in effect for you immediately prior to such Change in Control; or

        (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; or

       (vii)  the failure of the Company to obtain the assumption agreement from any successor as contemplated in Article V hereof.




An isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by you shall not constitute Good Reason. Your right to terminate employment for Good Reason shall not be affected by incapacities due to mental or physical illness and your continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason.



(k)

"Just Cause" means:

          (i)  the willful and continued failure by you to perform substantially your duties with the Company and its Subsidiaries (other than any such failure resulting from your incapacity due to physical or mental illness or any such failure subsequent to the delivery to you of a notice of the Company's intent to terminate your employment without Just Cause or subsequent to your delivery to the Company of a notice of your intent to terminate employment for Good Reason), 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;

         (ii)  the willful engaging by you in illegal conduct or gross misconduct 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. Any act, or failure to act, based upon authority

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given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company or upon the instructions to you by a more senior officer of the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company. Just Cause shall not exist unless and until the Company has delivered to you a copy of a resolution duly adopted by two-thirds (²/3) of the entire Board (excluding you if you are a Board member) at a meeting of the Board called and held for such purpose (after reasonable notice to you and an opportunity for you, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board an event set forth in clauses (i) or (ii) has occurred and specifying the particulars thereof in detail. The Company must notify you of any event constituting Just Cause within ninety (90) days following the Company's knowledge of its existence or such event shall not constitute Just Cause under this Plan.

(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.

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, interest and penalties) 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 income tax law (the "Excise Tax"), to the end that you shall be placed in the same after-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 imposed. 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

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taxes shown due on such returns and any tax liability, including interest and penalties, unrelated to the Excise Tax or the Gross-Up Payment), you shall be placed in the same after-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 imposed. 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 federal, state or local taxing authority (a "Taxing Authority"), or a judgment 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 (including income taxes and Excise Tax imposed on such additional 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 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 judgment. 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

        The Company shall provide you with a written statement showing the computation of such Gross-Up Payment and the Excess Parachute Payments and Excise Tax to which it relates, and setting forth the 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.

        All computations and determinations required to be made under this Article II, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such computations and determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and you within fifteen (15) business days of the receipt of notice from the Company or you that there has been a Payment, or such earlier time as is requested by the Company (the "Determination"). For purposes of the Determination, you shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

        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.

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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. You shall be represented in any 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   Underpayments/Overpayments

        As a result of the uncertainty in the application of Section 4999 of the Code at the time of a Determination, it is possible that Gross-Up Payments which should have been made by the Company may not have been made (an "Underpayment") or Gross-Up Payments are made by the Company which should not have been made (an "Overpayment"), consistent with the calculations required to be made hereunder. In the event that you are thereafter required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Company to or for your benefit. You shall pay over to the Company, within ten (10) days after your receipt thereof, any refund of an Overpayment that you receive from any Taxing Authority (together with interest at the rate provided in Section 1274(b)(2) of the Code). 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 an Overpayment. If you would have received an Overpayment of all or any portion of the Gross-Up Payment or the Excise Tax, except that a Taxing Authority offset the amount of such Overpayment against other tax liabilities, interest, or penalties, you shall pay the amount of such offset over to the Company (together with interest at the rate provided in Section 1274(b)(2) of the Code) 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

6

(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 is terminated before the occurrence of a Change in Control for any reason other than one of those enumerated immediately above, your employment will be deemed to have been terminated by the Company without Just Cause on the day after the occurrence of the Change in Control if (i) within ninety (90) days before a Change in Control actually occurs, your employment is terminated by the Company other than for Just Cause or by you for a reason that would have constituted Good Reason if the Change in Control had already occurred 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 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 one lump sum cash payment, 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 (including the expiration of any applicable revocation period). 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 and your dependents will also be entitled to receive, during your Severance Period, the same level of medical, dental, disability and life insurance benefits upon substantially the same terms and conditions (including employee

7

contributions for such benefits) as existed immediately prior to your termination date or, if more favorable to you, as such benefits and terms and conditions existed immediately prior to the Change in Control; provided, that, if you or dependents cannot continue to participate in the Company plans providing such benefits, the Company shall otherwise provide such benefits on the same after-tax basis as if continued participation had been permitted. Notwithstanding the foregoing, your right to medical, dental, disability or life insurance benefits shall be subject to cancellation by the Company if you or your dependents obtain alternative coverage of a similar type during the Severance Period; provided, 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 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 lowest wholesale Kelley Blue Book value from a range determined based on the actual mileage, condition and features of the automobile you use, 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 as in effect immediately prior to the Change in Control or, if more favorable to you, in accordance with the Company's usual practice for Executives as in effect immediately prior to your termination of employment.

3.8   Withholding of Taxes

        The Company may withhold from any amounts payable to you 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

        No payment hereunder shall 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 employee benefit, incentive, retirement, welfare, stock option,

8

stock bonus or stock-based, or stock purchase plan, program, policy or arrangement or any written employment agreement or other plan, program policy or arrangement not related to severance.

4.2   Other Severance Plans Superseded

        As of the date of adoption of this Plan, the terms and provisions of this Plan will supersede any and all other severance plans maintained by 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. To the extent you are a party to an individual severance agreement with the Company or any of its Subsidiaries, you shall be entitled to receive the severance payments and benefits under such agreement, unless you elect to receive the payments and benefits under this Plan.

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 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

9

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 of 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 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

        Subject to the provisions of Section 6.3, any controversy or claim between you and the Company arising out of or relating to or concerning this Plan (including the covenants contained in Section 6) and any dispute regarding your employment or the termination of your employment or any dispute regarding the application, interpretation or validity of this Plan (each, an "Employment Matter") will

10

be finally settled by arbitration in a location determined by you (which location must be located within the County in which you primarily work) and administered by the American Arbitration Association (the "AAA") under its Commercial Arbitration Rules then in effect. 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 of seven arbitrators designated by the office of the American Arbitrator Association having responsibility for the location selected by you, 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 such forum. 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 AAA's Commercial Arbitration Rules will be modified in the following ways: (i) each arbitrator will agree to treat as confidential evidence and other information presented to them, (ii) there will be no authority to award punitive damages, (iii) there will be no authority to amend or modify the terms of the Plan and (iv) a decision must be rendered within ten business days of the parties' closing statements or submission of post-hearing briefs. To the extent permitted by law, the Company will pay or reimburse any reasonable expenses, including reasonable attorney's fees, you incur as a result of any Employment Matter. You or the Company may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in Los Angeles County, California or such other jurisdiction as you may determine in your discretion to enforce any arbitration award under Article VII.

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.

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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 majority vote before the commencement of a Change in Control Period (as defined below); 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) (i) is conducting negotiations to effect a Change in Control, (ii) 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, or (iii) during the period between execution of a definitive agreement to effect a Change in Control and the consummation of the transactions contemplated thereunder (the first to occur of (i), (ii) or (iii) shall commence a "Change in Control Period"). A Change in Control Period shall expire upon the first to occur of (A) the occurrence of a Change in Control and (B) the first anniversary of the commencement of the Change in Control Period.

8.7   Amendment/Termination

        This Plan may be amended in any respect by resolution adopted by the Board with at least a majority until the commencement of a Change in Control Period; provided, however, that this Section 8.7 shall not be amended, and no amendment shall be effective if made during a Change in Control Period. 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 until the second anniversary of such Change in Control. 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.

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   Interpretation and Administration

        This Plan shall be administered by the Board. The Board may delegate any of its powers under the Plan to a subcommittee of the Board. The Board or a subcommittee thereof shall have the authority (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan, (iii) to prescribe, amend and rescind rules and regulations relating to the Plan, (iv) to make all determinations necessary or advisable in administration of the Plan and (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan. Actions of the Board or a subcommittee thereof shall be taken by a majority vote of its members.

Dated: February 4, 2004

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Exhibit A

Separation and General Release Agreement

        In connection with the termination of your employment by First Community Bancorp (the "Company"), effective                , 200    , and in accordance with the terms and conditions of the First Community Bancorp Executive Severance Pay Plan, as amended and restated effective February 4, 2004 (the "Plan"), the Company agrees to provide you, contingent upon your execution of this agreement, with the following severance payment and benefits:

[Insert description of severance payment and benefits]

        In consideration of the payment and benefits set forth above, you agree knowingly and voluntarily as follows:

        You knowingly and voluntarily waive and release forever whatever claims you ever had, now have or hereafter may have against the Company and any subsidiary or affiliate of the Company, any of their successors or assigns and any of their present and former employees, directors, officers and agents (collectively referred to as "Releasees"), based upon any matter, occurrence or event existing or occurring prior to the execution of this agreement, including anything relating to your employment with the Company and any of its subsidiaries or affiliates or to the termination of such employment or to your status as a shareholder or creditor of the Company.

        This release and waiver includes but is not limited to any rights or claims under United States federal, state or local law and the national or local law of any foreign country (statutory or decisional), for wrongful or abusive discharge, for breach of any contract, for misrepresentation, for breach of any securities laws, or for discrimination based upon race, color, ethnicity, sex, age, national origin, religion, disability, sexual orientation, or any other unlawful criterion or circumstance, including rights or claims under the Age Discrimination in Employment Act of 1967 ("ADEA")(except that you do not waive ADEA rights or claims that may arise after the date of this agreement).

        You agree never to institute any claim, suit or action at law or in equity against any Releasee in any way by reason of any claim you ever had, now have or hereafter may have relating to the matters described in the two preceding paragraphs. You hereby acknowledge that you are familiar with the provisions of California Civil Code Section 1542 and that you expressly waive and relinquish any and all rights or benefits you may have under said Section 1542, to the full extent permitted by law. Said Section 1542 states:

"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor."

        The payment and benefits described herein shall be in lieu of any and all other amounts to which you might be, are now or may become entitled from the Company, its subsidiaries and affiliates and, without limiting the generality of the foregoing, you hereby expressly waive any right or claim that you may have or assert to payment for salary, bonuses, medical, dental or hospitalization benefits, life insurance benefits or attorneys' fees; provided, however, that notwithstanding any other provision of this agreement, you do not waive any of your rights and the Company shall comply with its obligations with respect to continuation coverage requirements under Section 4980B of the Internal Revenue Code of 1986, as amended (commonly referred to as "COBRA").

        [Your signature below will also constitute confirmation that (i) you have been given at least twenty-one (21) days within which to consider this release and its consequences, (ii) you have been advised prior to signing this agreement to consult, and have consulted, with an attorney of your choice, and (iii) you have been advised that you may revoke this agreement at any time during the seven (7) day period immediately following the date you signed this letter.][Subject to revision based on circumstances of participant, and in accordance with applicable law]

        This agreement shall be governed by the laws of State of California.

        Please confirm by returning to                        the enclosed copy of this agreement, signed in the place provided, that you have knowingly and voluntarily decided to accept and agree to the foregoing.

	FIRST COMMUNITY BANCORP
	Name: Title:
AGREED AND ACKNOWLEDGED:
Name: Date:

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Exhibit 10.22

EX-10.23

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Exhibit 10.23

HUMAN RESOURCES

EXECUTIVE INCENTIVE PLAN

PURPOSE

        First Community Bancorp is the sponsor of this incentive plan ("the Plan"). First Community Bancorp and its subsidiaries ("the Company") have designed the Plan to focus First Community Bancorp executives on achieving the annual business plan in 2004. The Plan provides aggressive award opportunities and is intended to provide significant rewards to First Community Bancorp's executive team for exceptional corporate performance.

APPROVAL AND ADMINISTRATION

        The Plan has been approved for 2004 by the Compensation, Nominating and Governance ("CNG") Committee of the Board of Directors and will be administered by the Incentive Plan Committee ("the IP Committee") which is comprised of First Community Bancorp's CEO and executives reporting directly to the CEO. The IP Committee will recommend to the CNG Committee, for their approval as early in the Plan Year as possible: the Plan Participants; Plan Performance Measures; Performance Measure Weights; Achievement Levels and corresponding Award Opportunities. At the end of the Plan Year, the IP Committee will review achievements against Performance Measures, present results and recommend Awards to the CNG Committee for their approval. In evaluating any such Awards, the CNG Committee shall do so outside the presence of management, except CNG Committee may request the presence of the CEO when considering Awards to members of executive management other than the CEO. Notwithstanding any recommendations from the IP Committee, the CNG Committee will be solely responsible for determining and granting any Awards pursuant to the Plan.

        Interpretation and application of the Plan to a particular circumstance will be made by the CNG Committee of the Board of Directors in its sole discretion. Subject to any authority granted to the full Board of Directors or a committee of the independent directors thereof, the CNG Committee has the sole and absolute power and authority to make all factual determinations, construe and interpret terms and make eligibility and Award determinations in accordance with its interpretation of the Plan.

PLAN YEAR

        The Plan is an annual plan adopted for the 2004 calendar year.

ELIGIBILITY

        Executives in salary grades 1, 2, 3, A, and B are eligible for participation in the Plan. The IP Committee will review those eligible and recommend Participants to the Board of Directors for their approval. The IP Committee may recommend executives in salary grade C for participation in the Plan on an exception basis for approval by the CNG Committee.

PARTICIPANT

        An individual who has been selected for participation in the Plan by the IP Committee and approved by the CNG Committee.

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PERFORMANCE MEASURES

        The IP Committee will select one to two Performance Measures for the Plan for approval by the CNG Committee. All Performance Measures will be key indicators of financial performance.

        Each Performance Measure will operate independently i.e. it is possible for one Performance Measure to generate an award and not the other; likewise, it is possible for one Performance Measure to be achieved at a higher level than the other. Performance Measures will be individually weighted i.e. one Performance Measure may be counted more heavily in calculating Awards than the other. Weights for each Performance Measure will be established at the beginning of the Plan Year by the IP Committee for approval by the CNG Committee. Achievement Levels will be established for each Performance Measure along with corresponding Award Opportunities.

        For 2004, the IP Committee has recommended and the CNG Committee has approved Cash Earnings Per Share (Cash EPS), as determined by the CNG Committee, as the sole Performance Measure for Grades 1, 2, 3 and A. The Cash EPS Target for 2004 shall be established by resolution of the CNG Committee.

ACHIEVEMENT LEVELS AND AWARD OPPORTUNITIES

        Achievement Levels and Award Opportunities for 2004 have been approved and are expressed as a percentage of base salary. The Achievement Levels represent various percentages of the Cash EPS Target, as established by the CNG Committee, and result in the maximum Award Opportunity for each specified Achievement Level. Mathematical interpolation will be used to calculate Award Opportunities for achievement between the levels established below.

	Achievement of Target
Overall Performance Measure: Cash EPS Achievement Level (% of Plan)
	90%	100%	Over 100%
Award Opportunities
CEO First Community Bancorp (Grade 1)	60% of Base $	100% of Base $	Board Discretion
Other Executives (Grades 2,3 and A)	50% of Base $	80% of Base $	CEO/Board Discretion

	Achievement of Target
Overall Performance Measure: To be determined Achievement Level (% of Plan)
	90%	100%	Over 100%
Award Opportunities
Key Contributors (Grades B)	10% of Base $	30% of Base $		CEO Discretion
Other Key Officers (Grade C)	10% of Base $	20% of Base $	30% of Base $

AWARDS

        Awards under the Plan will be determined by the IP Committee based upon achievement of Performance Measures and will be submitted to the CNG Committee for approval.

        For purposes of the Plan, salary means annual base salary in effect at the end of the performance year. Awards will be made through the payroll system, minus legally required and authorized deductions. Awards under the Plan shall be considered eligible compensation for purposes of employee benefit calculations in each case where permitted under the relevant employee benefit plan.

        Awards for individuals who are Participants for less than a full Plan Year will be prorated using Participant's actual base salary paid during the time of participation in the Plan. Awards for Participants who leave First Community Bancorp during a Plan Year due to retirement, total and permanent disability or death will be prorated using the same method.

        To be eligible to receive an Award under the Plan, a Participant must have a performance rating of "Achieves Expectations" or better for 2004.

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ADJUSTMENTS

        Performance Measures, Achievement Levels and Award Opportunities may be adjusted during the Plan Year only upon approval by the CNG Committee as it deems appropriate. It is anticipated that such adjustments will be made infrequently and only in the most extraordinary circumstances.

        Because the Plan has aggressive Award Opportunities intended for use with below market base salaries, some adjustments may need to be made to Awards to recognize the fact that some Participant base salaries are currently above market. In such cases, the IP Committee may recommend, and the CNG Committee may approve, a reduction in an Award as it deems appropriate to achieve a reasonable level of total compensation for each participant. All adjustments are subject to approval of the CNG Committee, in its sole discretion.

PAYMENT OF AWARDS

        Awards will be paid as soon as administratively feasible after review of performance against targets and approval by the CNG Committee. To be eligible for Award payment, a Participant must have been an employee of First Community Bancorp for at least three months and be an employee of First Community Bancorp on the date that Awards are paid or have left First Community Bancorp during the Performance Period due to retirement, permanent disability or death.

        Participants otherwise eligible to receive an Award and who were assigned to different parts of the organization during the Performance Period will have their Award calculated based upon the part of the organization they are in at the end of the Performance Period and the Performance targets achieved by that group for the Performance Period.

NO RIGHT OF ASSIGNMENT

        No right or interest of any Participant in the Plan is assignable or transferable. In the event of a Participant's death, payment of any earned but unpaid Awards will be made to the Participant's legal successor, if not prohibited by law.

NO RIGHT OF EMPLOYMENT

        The Plan does not give any employee any right to continue in the employment of First Community Bancorp and does not constitute any contract or agreement of employment or interfere in any way with the right the organization has to terminate such person's employment. First Community Bancorp is an "at will" employer and as such, can terminate an employment relationship between itself and any of its employees at will, with or without cause, and with or without notice.

AMENDMENT OR TERMINATION OF THE PLAN

        First Community Bancorp reserves the right to change, amend, modify, suspend, continue or terminate all or any part of the Plan either in an individual case or in general, at any time without notice.

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Exhibit 10.23

EX-10.24

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Exhibit 10.24

INDEMNIFICATION AGREEMENT

        THIS INDEMNIFICATION AGREEMENT (this "Agreement") is entered into, effective as of July 23, 2003 between First Community Bancorp, a California corporation (the "Company"), and                        ("Indemnitee").

        WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;

        WHEREAS, Indemnitee is a director and/or officer of the Company and/or its subsidiaries;

        WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors and officers of corporations; and

        WHEREAS, in recognition of Indemnitee's need for substantial protection against personal liability in order to enhance Indemnitee's continued and effective service to the Company and/or its subsidiaries and in order to induce Indemnitee to provide services to the Company and/or any of its subsidiaries as a director or officer, the Company wishes to provide in this Agreement for the indemnification of, and the advancing of expenses, to Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement and to, the extent insurance is maintained for the coverage of Indemnitee, under the Company's directors' and officers' liability policies.

        NOW, THEREFORE, in consideration of the above premises and of Indemnitee's continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties agree as follows:

        1.     Indemnification.

        (a)   Third Party Proceedings. In the event Indemnitee was or is a party to or other participant in, or is threatened to be made a party to or other participant in, a Proceeding (other than an action by or in the right of the Company to procure a judgment in its favor) by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses, liabilities, losses, judgments, fines, amounts paid or to be paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld), any interest, assessments or other charges imposed thereon and any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, which are actually and reasonably incurred by Indemnitee in connection with such Proceeding; provided, that Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Indemnitee's conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that (i) Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in the best interests of the Company or (ii) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe that Indemnitee's conduct was unlawful.

        (b)   Proceedings by or in the Right of the Company. In the event Indemnitee was or is a party to or other participant in, or is threatened to be made a party to or other participant in, a Proceeding by or in the right of the Company or any subsidiary of the Company to procure a judgment in its favor by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses, liabilities, losses, judgments, fines, and, to the fullest extent permitted by law, amounts paid in settlement, any interest, assessments or other charges imposed thereon and any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, in each case to the extent actually and reasonably incurred by Indemnitee in connection with the

defense or settlement of such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the Company and its shareholders; provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Company in the performance of Indemnitee's duty to the Company and its shareholders unless and only to the extent that the court in which such Proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for Expenses and then only to the extent that the court shall determine.

        2.     Advancement of Expenses; Indemnification Procedure.

        (a)   Advancement of Expenses. The Company shall advance all Expenses incurred by Indemnitee in connection with the investigation, preparation for, defense, settlement or appeal of any Proceeding referenced in Section 1(a) or (b) hereof (but not amounts actually paid in settlement of any such Proceeding). Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company as authorized hereby or elsewhere. The advances to be made hereunder shall be paid by the Company to Indemnitee within ten (10) days following delivery of a written request therefor by Indemnitee to the Company and shall be made without regard to Indemnitee's ability to repay the Expenses and without regard to Indemnitee's ultimate entitlement to indemnification under the provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement. Indemnitee's obligation to reimburse the Company for advances shall be unsecured and no interest shall be charged thereon.

        (b)   Notice/Cooperation by Indemnitee. Indemnitee shall give the Company notice in writing as soon as practicable of any claim made against Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the Company shall be directed to the General Counsel of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee pursuant to Section 15 hereof). Notice shall be deemed received as set forth in Section 15 hereof. In addition, Indemnitee shall give the Company such information and cooperation in the defense of any pending, threatened or completed Proceeding as shall be within Indemnitee's power, except that Indemnitee shall not be required to give the Company information that is privileged or confidential as to Indemnitee. The giving of notice required under this Section 2(b) shall be a condition precedent to Indemnitee's right to be indemnified under this Agreement if the failure to give such notice materially prejudices any right, claim or defense available to the Company.

        (c)   Procedure.

          (i)  Any indemnification provided for in Section 1(a) or 1(b) hereof shall be made no later than sixty (60) days after receipt of the written request of Indemnitee if, and only if, authorized in the specific case upon a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct set forth in Section 1(a) or 1(b), as the case may be, by any of the following:

        A.    a majority vote of a quorum of the Board of Directors of the Company consisting of directors who are not parties to such Proceeding;

        B.    if such a quorum of directors is not obtainable, by independent legal counsel in a written opinion;

        C.    approval of the shareholders of the Company (as defined in §153 of the California General Corporation Law (or any similar successor statute)), with the shares owned by Indemnitee not being entitled to vote thereon; or

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        D.    the court in which the Proceeding is or was pending upon application made by the Company or Indemnitee or the attorney or other person rendering services in connection with the defense thereof, whether or not the application by Indemnitee, attorney or other person is opposed by the Company.

         (ii)  If a claim under this Agreement, under any statute or under any provision of the Company's Articles of Incorporation or By-laws providing for indemnification, is not paid in full by the Company within sixty (60) days after a written request for payment thereof has first been received by the Company, Indemnitee may, but need not, within one (1) year after receipt of such written request by the Company bring an action against the Company to recover the unpaid amount of the claim and, subject to Section 9 of this Agreement, Indemnitee shall also be entitled to be paid for the Expenses (including reasonable attorneys' fees) of bringing such action. It shall be a defense to any such action (other than an action brought to enforce a claim for Expenses incurred in connection with any Proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company, and Indemnitee shall be entitled to receive interim payments of Expenses pursuant to Subsection 2(a) unless and until such defense may be finally adjudicated by court order or judgment from which no further right of appeal exists. It is the parties' intention that if the Company contests Indemnitee's right to indemnification, the question of Indemnitee's right to indemnification shall be for the court to decide on a de novo basis, and neither the failure of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel or its shareholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel or its shareholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable standard of conduct.

        (d)   Notice to Insurers. If, at the time of the receipt of a notice of a claim pursuant to Section 2(b) hereof, the Company has directors' and officers' insurance policies in effect, then the Company shall give prompt notice of the commencement of such Proceeding to the insurers of such policies in accordance with the procedures set forth in such policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

        (e)   Selection of Counsel. Upon notification of the Company of the commencement of any Proceeding as to which indemnification will or could be sought under this Agreement, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding; provided, that (i)  Indemnitee shall have the right to employ his or her counsel in any such Proceeding at Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company shall not within sixty (60) days, in fact, have employed counsel to assume the defense of such Proceeding, then the

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Expenses of Indemnitee's counsel shall be at the expense of the Company. In the event separate counsel is retained by an Indemnitee pursuant to this Section 2(e), the Company shall cooperate with Indemnitee with respect to the defense of the Proceeding, including making documents, witnesses and other reasonable information related to the defense available to Indemnitee and such separate counsel pursuant to joint-defense agreements or confidentiality agreements, as appropriate. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the determination provided for in (ii)(B) above.

        (f)    Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company's written consent. The Company shall not settle any Proceeding (in whole or in part) in any manner which would impose any Expense, judgment, fine, penalty or limitation on Indemnitee without Indemnitee's prior written consent. Neither the Company nor Indemnitee will unreasonably withhold their consent to any proposed settlement. The Company shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action; provided, however, that the Company's liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.

        3.     Additional Indemnification Rights; Nonexclusivity.

        (a)   Scope. Notwithstanding any other provision of this Agreement, the Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company's Articles of Incorporation, the Company's By-laws or by any statute. In the event of any change, after the date of this Agreement, in any applicable law, statute or rule (including any judicial decision) which expands the right of a California corporation to indemnify a member of its board of directors or an officer thereof, such changes shall be, ipso facto, within the purview of Indemnitee's rights and the Company's obligations under this Agreement. In the event of any change in any applicable law, statute or rule (including any judicial decision) which narrows the right of a California corporation to indemnify a member of its board of directors or an officer thereof, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties' rights and obligations hereunder.

        (b)   Nonexclusivity. The indemnification and advancement of Expenses provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company's Articles of Incorporation, the Company's By-laws, any agreement, any vote of shareholders or disinterested directors, the California General Corporation Law or otherwise, both as to action taken in Indemnitee's official capacity and as to action taken in another capacity while holding such office. The indemnification and advancement of Expenses provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity at the time of any Proceeding.

        4.     Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement or otherwise to indemnification by the Company for some or a portion of the Expenses, judgments, fines or penalties actually or reasonably incurred by him in the investigation, preparation for, defense, appeal or settlement of any Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses, judgments, fines or penalties to which Indemnitee is entitled.

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        5.     Mandatory Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any claim, issue or matter therein, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee in connection therewith.

        6.     Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in certain instances, applicable law or public policy may prohibit the Company from indemnifying its directors and officers, and/or the directors and officers of any of its subsidiaries under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company's right under public policy to indemnify Indemnitee.

        7.     Directors' and Officers' Liability Insurance. The Company shall, from time to time, make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company and/or its subsidiaries with coverage for losses from wrongful acts or to ensure the Company's performance of its indemnification obligations under this Agreement. Among other considerations, the Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. In all policies of directors' and officers' liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company's and/or its subsidiaries' directors, if Indemnitee is a director, or of the Company's and/or its subsidiaries' officers, if Indemnitee is not a director of the Company but is an officer thereof. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit or if Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Company.

        8.     Severability. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company's inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. The provisions of this Agreement shall be severable as provided in this Section 8. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the fullest extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms.

        9.     Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

        (a)   Excluded Acts. To indemnify Indemnitee for any acts or omissions or transactions from which a director or officer may not be relieved of liability under applicable law (including, without limitation, the California General Corporation Law and the Federal banking laws); or

        (b)   Claims Initiated by Indemnitee. To indemnify or advance Expenses to Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, except with respect to Proceedings brought to establish or enforce a right to indemnification or advancement of Expenses under this Agreement or any other statute or law or otherwise as required under §317 of the California General Corporation Law (or any similar successor statute), but such indemnification or advancement of Expenses may be provided by the

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Company in specific cases if the Board of Directors of the Company has approved the initiation or bringing of such suit; or

        (c)   Lack of Good Faith. To indemnify Indemnitee for any Expenses incurred by Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such Proceeding was not made in good faith or was frivolous; or

        (d)   Claims Under Section 16(b). To indemnify Indemnitee for Expenses and the payment of profits arising from the purchase and sale, or the sale and purchase, by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

        10.   Effectiveness of Agreement. This Agreement shall be effective as of the date set forth on the first page and may apply to acts or omissions of Indemnitee which occurred prior to such date if Indemnitee was an officer, director, employee or agent of the Company and/or any of its subsidiaries, or was serving at the request of the Company as director, officer, employee or agent of any other foreign or domestic corporation, partnership, joint venture, trust or other enterprise, at the time such act or omission occurred.

        11.   Construction of Certain Phrases. For purposes of this Agreement, references to:

        (a)   the "Company" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents, so that if Indemnitee is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of any other foreign or domestic corporation, partnership, joint venture, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.

        (b)   "other enterprise" shall include employee benefit plans; references to "fines" shall include any excise taxes or penalties assessed on Indemnitee with respect to an employee benefit plan; and references to "serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company and/or any of it subsidiaries which imposes duties on, or involves services by, such person with respect to an employee benefit plan, its participants or the beneficiaries thereof.

        (c)   "Expense" or "Expenses" shall mean any expense, including without limitation, all reasonable attorneys' fees, retainers, court costs, transcript costs, fees and expenses of experts (including accountants and other advisors), witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, filing fees and all other disbursements or expenses of the type typically paid or incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding relating to an Indemnifiable Event, and any expenses of establishing a right to indemnification or advancement of Expenses under this Agreement. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

6

        (d)   "Indemnifiable Event" shall mean any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or officer of the Company and/or its subsidiaries, or by reason of any action taken by him or of any inaction on his part while acting as director or officer of the Company and/or its subsidiaries, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of any other foreign or domestic corporation, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement or advancement of Expenses can be provided under this Agreement.

        (e)   "Proceeding" shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative or legislative hearing or any other actual, threatened or completed proceeding, including any and all appeals, whether of a civil, criminal, administrative, investigative or other nature, and in each case whether or not commenced prior to the date of this Agreement, that relates to an Indemnifiable Event.

        12.   Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile transmission), each of which shall constitute an original.

        13.   Successors and Assigns.

        (a)   This Agreement shall be binding upon the Company and its successors and assigns, and shall inure to the benefit of Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.

        (b)   If Indemnitee is deceased and is entitled to indemnification under any provision of this Agreement, the Company shall indemnify Indemnitee's estate and his or her spouse, heirs, administrators and executors against and shall assume all of the Expenses, judgments, penalties and fines actually and reasonably incurred by or for Indemnitee or his or her estate, in connection with the investigation, defense, settlement or appeal of any such Proceeding; provided, however, that when requested in writing by the spouse of Indemnitee and/or the heirs, executors or administrators of Indemnitee's estate, the Company shall provide appropriate evidence of the agreement set forth herein to indemnify Indemnitee against, and to itself assume, such costs, liabilities and Expenses.

        14.   Attorneys' Fees. In the event that any action is instituted by Indemnitee under this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled to be paid all Expenses, including reasonable attorneys' fees, incurred by Indemnitee with respect to such action, unless as a part of such action, a court of competent jurisdiction determines that each of the material assertions made by Indemnitee as a basis for such action were not made in good faith or were frivolous. In the event of an action instituted by or in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses, including reasonable attorneys' fees, incurred by Indemnitee in defense of such action (including with respect to Indemnitee's counterclaims and cross-claims made in such action), unless as a part of such action a court of competent jurisdiction determines that each of Indemnitee's material defenses to such action were made in bad faith or were frivolous.

        15.   Notice. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by the party addressee, on the date of such receipt, or (ii) if mailed by domestic certified or registered mail, postage prepaid, on the third (3rd) business day after the date postmarked. Addresses for notice to either party are as shown on the signature page of this Agreement or as subsequently modified by written notice given pursuant to this Section 15.

7

        16.   Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of California for all purposes in connection with any Proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in the state courts of the State of California.

        17.   Choice of Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California applicable to contracts made and to be performed in such State without giving effect to the principles of conflicts of laws.

        18.   Subrogation. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company to effectively bring suit to enforce such rights.

        19.   Parties in Interest. Nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Agreement to any persons other than the parties to it and their respective successors and assigns (including an estate of Indemnitee), nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to any party hereto. Furthermore, no provision of this Agreement shall give any third persons any right of subrogation or action against any party hereto.

        20.   Continuation of Indemnification. All agreements and obligations of the Company contained herein shall continue during the period that Indemnitee is a director or officer of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed Proceeding by reason of the fact that Indemnitee was serving in the capacity referred to herein.

        21.   Indemnification by One or More Subsidiaries. If at any time during the application of this Agreement, Indemnitee is also party to a separate indemnity agreement between the Indemnitee and one or more of the Company's subsidiaries, then Indemnitee specifically agrees that all demands and claims for indemnification by Indemnitee shall first be presented to, and either paid or rejected, in whole or in part, by, the appropriate subsidiary or subsidiaries of the Company, and that the indemnification contained in this Agreement shall apply only to the extent that one or more of the subsidiaries for any reason refuses or fails to fully indemnify Indemnitee under the terms of such subsidiary's indemnity agreement, or is prohibited by any policy, statute or regulation.

        22.   Entire Agreement. Except as provided in Sections 3 and 21 hereof, this Agreement represents and contains the entire agreement and understanding between and among the parties, and all previous statements or understandings, whether express or implied, oral or written, relating to the subject matter hereof are fully and completely extinguished and superseded by this Agreement.

        23.   Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

        24.   No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent that Indemnitee has otherwise received payment (under any insurance policy, bylaw or otherwise) of the amounts otherwise indemnifiable under this Agreement.

8

        IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date specified above.

	FIRST COMMUNITY BANCORP
	6110 El Tordo, P.O. Box 2388 Rancho Santa Fe, CA 92067
	By
		Name:	Michael L. Thompson
		Title:	Executive Vice President and Director, Human Resources
AGREED TO AND ACCEPTED:
INDEMNITEE:
6110 El Tordo, P.O. Box 2388 Rancho Santa Fe, CA 92067
Name:

9

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Exhibit 10.24

EX-21.1

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Exhibit 21.1

FIRST COMMUNITY BANCORP

LIST OF SUBSIDIARIES
AT MARCH 1, 2004

SUBSIDIARY	STATE
First National Bank	Federally chartered, doing business in California
Pacific Western National Bank	Federally chartered, doing business in California
First Community Financial Corp. (wholly owned operating subsidiary of First National Bank)	Arizona
First Community/CA Statutory Trust	Connecticut
First Community/CA Statutory Trust II	Connecticut
First Community Statutory Trust III	Delaware
First Community/CA Statutory Trust IV	Connecticut
First Community/CA Statutory Trust V	Connecticut
First Community/CA Statutory Trust VI	Delaware
First Community Statutory Trust VII	Delaware

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Exhibit 21.1

EX-23.1

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Exhibit 23.1

Independent Auditors' Consent

The Board of Directors
First Community Bancorp:

        We consent to incorporation by reference in the registration statements (No. 333-43330, No. 333-47242, No. 333-101025, and No. 333-107636) on Form S-8 and (No. 333-72634 and No. 333-90198) on Form S-3A of our report dated March 1, 2004, relating to the consolidated balance sheets of First Community Bancorp and subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of earnings, shareholders' equity and comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2003, which report appears in the December 31, 2003 annual report on Form 10-K of First Community Bancorp.

        As discussed in Note 1 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting (SFAS) No. 123, Accounting for Stock-Based Compensation, in 2003 and SFAS No. 142, Goodwill and Other Intangible Assets, in 2002.

/s/ KPMG LLP

San Diego, California
March 12, 2004

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Independent Auditors' Consent

EX-31.1

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Exhibit 31.1

Certification
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

I, Matthew P. Wagner, certify that:

1.

I have reviewed this report on Form 10-K for the year ended December 31, 2003 of First Community Bancorp;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involve management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 10, 2004 /s/ MATTHEW P. WAGNER Matthew P. Wagner
President and Chief Executive Officer

105

Certification
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

I, Victor R. Santoro, certify that:

1.

I have reviewed this report on Form 10-K for the year ended December 31, 2003 of First Community Bancorp;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involve management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 10, 2004 /s/ VICTOR R. SANTORO Victor R. Santoro
Executive Vice President and
Chief Financial Officer

106

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Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

EX-32.1

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Exhibit 32.1

Certification of Chief Executive Officer
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

        Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of First Community Bancorp (the "Company"), hereby certifies that the Company's Annual Report on Form 10-K for the year ended December 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 10, 2004	/s/ Matthew P. Wagner
	Name:	Matthew P. Wagner
	Title:	Chief Executive Officer

        The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.

Certification of Chief Financial Officer
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

        Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of First Community Bancorp (the "Company"), hereby certifies that the Company's Annual Report on Form 10-K for the year ended December 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 10, 2004	/s/ Victor R. Santoro
	Name:	Victor R. Santoro
	Title:	Chief Financial Officer

        The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.

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Exhibit 32.1