PACIFIC CAPITAL BANCORP
1998 AMENDED AND RESTATED
KEY EMPLOYEE RETIREE HEALTH PLAN
December 30, 1998
PACIFIC CAPITAL BANCORP
1998 AMENDED AND RESTATED
KEY EMPLOYEE RETIREE HEALTH PLAN
THIS 1998 AMENDED AND RESTATED KEY EMPLOYEE RETIREE HEALTH PLAN
("Plan") is adopted by PACIFIC CAPITAL BANCORP, a California corporation
("bancorp"), with reference to the following facts:
RECITALS:
A. Santa Barbara Bank and Trust, a California corporation ("ASBBT"), is
a wholly owned subsidiary corporation of Bancorp.
B. SBBT originally adopted this Plan effective December 29, 1992, in
order to provide health and dental insurance to retired employees of SBBT, and
later amended this Plan pursuant to (i) that certain First Amendment dated
effective January 1, 1996 (the "First Amendment"), and (ii) that certain Second
Amendment dated effective January 1, 1997 (the "Second Amendment").
C. In a merger transaction (the "Merger Transaction") that closed
effective December 30, 1998, (i) Pacific Capital Bancorp, a California
corporation ("target"), was merged with and into Bancorp, and (ii) Bancorp
changed its name to "Pacific Capital Bancorp," and as a result of that
transaction and name change Bancorp now owns all the outstanding capital stock
of not only SBBT but also other corporations.
D. Bancorp desires to adopt this Plan in order to (i) adopt this Plan
for the benefit of all eligible employees of Bancorp and all of its wholly owned
subsidiary corporations, (ii) incorporate the terms of the First Amendment and
the Second Amendment, and (iii) reflect the Merger Transaction.
PLAN:
NOW, THEREFORE, Bancorp, intending to be legally bound, hereby adopts
the following Plan.
1. DEFINITIONS
For purposes of this Plan, each of the following terms shall have the
meaning set forth below:
1.1 "affiliate" means each corporation in which Bancorp now or
hereafter owns (directly or indirectly through ownership of any subsidiary
corporation) all the outstanding capital stock.
1.2 "bancorp" means PACIFIC CAPITAL BANCORP, a California corporation
formerly known as ASANTA BARBARA BANCORP."
1.3 "cause" means (a) any act of personal dishonesty taken by the
Participant in connection with his or her responsibilities as an Employee and
intended to result in substantial personal enrichment of the
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Participant, (b) the Participant's conviction of a felony, (c) a willful act by
the Participant which constitutes gross misconduct and which is injurious to any
of the Retention Companies, or (d) continued substantial violations by the
Participant of the Participant's employment duties which are demonstrably
willful and deliberate on the Participant's part after there has been delivered
to the Participant a written demand for performance which specifically sets
forth the factual basis for the Retention Company's belief that the Participant
has not substantially performed his or her duties. Notwithstanding the foregoing
or anything in this Plan to the contrary:
1.3.1 Cause shall not be deemed to exist under clause (c) or
(d) of this Section unless and until (i) there shall have been delivered to the
Participant a written notice stating that the Participant was guilty of the
conduct described in such clause and specifying the particulars thereof in
detail and (ii) the Participant shall have been provided an opportunity to be
heard by the Board (with the assistance of the Participant's counsel if the
Participant so desires); and
1.3.2 No act or omission on the Participant's part shall be
considered "willful" or "deliberate" unless the Participant has acted, or failed
to act, with an absence of good faith and without a reasonable belief that his
or her action or failure to act was in the best interest of the Retention
Company.
1.4 "Change of Control" means:
1.4.1 The occurrence of any of the following events:
A. An acquisition (other than directly from the
Retention Company) of any voting securities of the Retention Company by any
person (as that term is used for purposes of Section 13(d) or Section 14(d) of
the Exchange Act), immediately after which such person has beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
thirty-five percent (35%) or more of the combined voting power of the Retention
Company's then outstanding voting securities; provided that in determining
whether a Change of Control has occurred, voting securities which are acquired
in a Non-Control Acquisition shall not constitute an acquisition which would
cause a Change of Control;
B. A cumulative change in the composition of the
Board of Directors of the Retention Company occurring during any two-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors; provided that no individual shall be considered an
Incumbent Director if such individual initially assumed office as a result of
either an actual or threatened Election Contest (as described in Rule 14a-11
promulgated under the Exchange Act) (an "Election Contest") or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board of Directors of the Retention Company (a "Proxy Contest")
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or
C. Approval by the shareholders of the Retention
Company of:
(1) A merger, consolidation or
reorganization involving the Retention Company, unless such merger,
consolidation or reorganization is or would be a Non-Control Transaction;
(2) A complete liquidation or dissolution of
the Retention Company, unless, as evidenced by resolution of the Board of
Directors of the Retention Company, (a) such liquidation or dissolution is
effected primarily for the purpose of consolidating the business and assets of
the liquidating
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or dissolving Retention Company with those of one or more other Retention
Companies and (b) the principal business of the liquidating or dissolving
Retention Company is continued by the surviving Retention Company immediately
after such liquidation or dissolution; or
(3) An agreement for the sale or other
disposition of all or substantially all of the assets of the Retention Company
to any person other than one or more other Retention Companies or one or more
Subsidiaries of a Retention Company.
1.4.2 If any of the events described in Section 1.4.1, above,
occur:
A. With respect to Bancorp or SBBT, then a Change of
Control shall be deemed to have occurred with respect to all of the Retention
Companies; or
B. Only with respect to FNBCC or Mortgage, a Change
of Control shall be deemed to have occurred only with respect to FNBCC or
Mortgage as appropriate.
1.4.3 Notwithstanding the foregoing, a Change of Control shall
not be deemed to occur solely because any person (the "Subject Person") acquired
beneficial ownership of more than the permitted amount of the then outstanding
voting securities of the Retention Company as a result of the acquisition of
voting securities by the Retention Company which, by reducing the number of
voting securities then outstanding, increases the proportional number of voting
securities beneficially owned by the Subject Person; provided that if a Change
of Control would occur (but for the operation of this sentence) as a result of
the acquisition of voting securities by the Retention Company, and, after such
acquisition by the Retention Company, the Subject Person becomes the beneficial
owner of any additional voting securities of such Retention Company which
increases the percentage of the then outstanding voting securities beneficially
owned by the Subject Person, then a Change of Control shall occur.
1.5 "Change of Control Date" means:
1.5.1 The earliest of:
A. The date on which the Change of Control occurs;
B. The date on which the Retention Company executes
an agreement, the consummation of which would result in the occurrence of a
Change of Control;
C. The date on which the Board of Directors of the
Retention Company approves a transaction or series of transactions, the
consummation of which would result in a Change of Control; and
D. The date Bancorp fails to satisfy its obligations
to have this Plan assumed by any successor to a Retention Company involved in
the Change of Control in accordance with Section 7 hereof.
1.5.2 If the Change of Control Date occurs as a result of an
agreement described in Section 1.5.1B, above, or as a result of the approval of
the Board described in Section 1.5.1C, above, and the Change of Control to which
such agreement or approval relates (the "Contemplated Change of Control")
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subsequently is abandoned or does not occur (regardless of the reason for such
abandonment or failure of occurrence), then effective as of the date (the "Reset
Date") of adoption of a resolution of the Board of Directors of the Retention
Company approved by three-fourths (3/4ths) of the Incumbent Directors then in
office certifying that the Contemplated Change of Control is not reasonably
likely to occur, neither the Change of Control nor the Change of Control Date
shall be deemed to have occurred for any purposes under this Plan; provided that
this sentence shall not apply (A) to any Participant whose Termination of
Employment with a Retention Company effected by such Change of Control has
occurred on and after the Change of Control Date and on or prior to the Reset
Date or (B) if the Contemplated Change of Control subsequently occurs within
three (3) months of the Reset Date. Following the Reset Date, the provisions of
the Plan shall remain in effect until the Plan is terminated in accordance with
the provisions of Section 8 hereof, and a new Severance Window Period shall
commence upon the occurrence of a subsequent Change of Control Date.
1.5.3 Notwithstanding Sections 1.5.1 and 1.5.2, above, if a
Participant's employment with a Retention Company effected by such Change of
Control terminates prior to the Change of Control Date (regardless of whether or
not the contemplated Change of Control is subsequently abandoned or does not
occur and whether or not a Reset Date is established) and it is reasonably
demonstrated that such termination of employment (a) was at the request of the
third party who has taken steps reasonably calculated to effect the Change of
Control or (b) otherwise arose in connection with or in anticipation of the
Change of Control, then, solely with respect to the affected Participant, the
Change of Control Date means the date immediately prior to the date of such
Participant's Termination of Employment and the second sentence of Section 2.7.1
shall not apply.
1.6 "code" means the Internal Revenue Code of 1986, as amended.
1.7 "Coverage" means, in each Plan Year, coverage under a Group Health
Insurance Plan.
1.8 "dependent" means, with respect to each Eligible Retiree, each
person other than a Spouse who meets the definition of a "dependent" with
respect to the Eligible Retiree under a Group Health Insurance Plan.
1.9 "Effective Date" means December 30, 1998.
1.10 "Eligible Retiree" means each Former Employee (other than a person
who, in the current Plan Year or any preceding Plan Year, is or has been a Key
Employee) who satisfies the eligibility criteria set forth in Section 2.1.1,
below.
1.11 "employee" means each person who is a common law employee of
Bancorp or any Affiliate of Bancorp.
1.12 "Employer" means Bancorp and each Affiliate of Bancorp.
1.13 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.14 "Excluded Key Employee" means each person who (a) has been a "Key
Employee" during any plan year under any plan previously maintained by SBBT to
provide health insurance coverage to retired employees, and (b) had terminated
employment with SBBT prior to adoption of this Plan on December 29, 1992.
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1.15 "FNBCC" means First National Bank of Central California, a
national banking organization and wholly owned subsidiary of Bancorp, some of
the branches of which operates under the name "South Valley National Bank," as
well as each entity acquired by or merged with or into First National Bank of
Central California.
1.16 "Former Employee" means each person who previously has been an
Employee but who, as of the time the determination of the person's employment
status is being made, no longer is an Employee as a result of an event or
circumstance other than the death of such person.
1.17 "Group Health Insurance Plan" means, in each Plan Year, each group
medical insurance plan and each group dental insurance plan under which Bancorp
offers medical or dental insurance coverage to Employees in such Plan Year.
1.18 "Hour of Service" means each hour for which an Employee (a) is
directly or indirectly compensated or entitled to compensation from the Employer
for the performance of duties during the applicable computation period; (b) is
directly or indirectly compensated or entitled to compensation by the Employer
(irrespective of whether the initial employment relationship has terminated) for
reasons other than the performance of duties (e.g., such as vacation, holidays,
sickness, jury duty, disability, lay-off, military duty or leave of absence)
during the applicable computation period; or (c) is awarded back pay or for
which the Employer agrees to pay back pay without regard to mitigation of
damages.
1.18.1 Period To Which Credited. All hours shall be credited
to the Employee for the computation period to which the award or agreement
concerning back pay pertains rather than to the computation period in which the
award, agreement, or payment is made. The same Hours of Service shall not be
credited under (a) or (b), as the case may be, and under (c), above.
1.18.2 Limitations on Crediting. Notwithstanding any provision
of this Plan to the contrary, (a) no more than 501 Hours of Service shall be
credited to an Employee on an account of any single continuous period during
which the Employee performs no duties (whether or not such period occurs in a
single computation period); (b) an hour for which an Employee is directly or
indirectly paid or entitled to payment, on account of a period during which no
duties are performed, is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, or unemployment compensation or
disability insurance, laws; and (c) Hours of Service are not required to be
credited for a payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
1.18.3 Regulations. The definition of "Hours of Service" shall
be determined in accordance with the definition of that term set forth in
Department of Labor Regulations '2530.200b-2(b)&(c), the terms of which are
incorporated herein by this reference.
1.19 "Incumbent Directors" for any Retention Company means Directors of
the Retention Company who either (a) are Directors of the Retention Company as
of the Effective Date, or (b) are elected, or nominated for election, to the
Board of the Retention Company by the affirmative vote of at least a majority of
the Incumbent Directors at the time of such election or nomination; provided
that, for purposes of clause (b) of this Section, an individual whose election
or nomination is effected in connection with an
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actual or threatened Proxy Contest relating to the election of Directors to the
Retention Company shall not be considered an Incumbent Director.
1.20 "Involuntary Termination" shall have the same meaning as is
ascribed to such term under the Management Retention Plan of Bancorp as in
effect from time to time.
1.20.1 A Termination of Employment for Cause or as a result of
Employee's death or Disability;
1.20.2 Without the Participant's express written consent, the
significant reduction of the Participant's duties or responsibilities relative
to the Participant's duties or responsibilities in effect immediately prior to
such reduction;
1.20.3 A reduction by more than twenty-five percent (25%) in
the aggregate amount of the annual base salary and annual cash bonuses or
commissions payable to the Participant for any Fiscal Year relative to his or
her annual base salary and annual cash bonuses or commissions for the
immediately preceding Fiscal Year, unless the reduction in such bonuses and
commissions results primarily from a proportionate reduction in the bonus or
commission pool available to Employee based on the performance of any or all of
the Retention Companies;
1.20.4 A material reduction in the kind or level of employee
benefits to which the Participant is entitled with the result that the
Participant's overall benefits package is significantly reduced from that to
which he or she was entitled immediately prior to such reduction;
1.20.5 Without the Participant's express written consent, the
termination of the Participant's status as a member of the Senior Leadership
Team of any Retention Company;
1.20.6 Without the Participant's express written consent, the
relocation of the Participant's principal place of employment to a facility or a
location more than thirty-five (35) miles from the Participant's then present
principal place of employment;
1.20.7 Any purported termination of the Participant;
employment which is not effected for Cause or as a result of the Participant's
death or Disability; or
1.20.8 The failure of Bancorp to obtain the assumption of this
Plan by any successor to a Retention Company which is involved in the Change of
Control.
Notwithstanding anything in the Plan to the contrary, the transfer of a
Participant's employment from any Retention Company to any other Retention
Company shall not by itself be considered an Involuntary Termination described
in Section 1.20.4 or 1.20.5, above.
1.21 "Key Employee" means each Employee other than an Excluded Key
Employee who, at any time during any Plan Year under this Plan or any plan year
under any plan previously maintained by the Employer to provide health insurance
coverage to retired employees, meets the requirements of either Sections 1.21.1,
1.21.2, 1.21.3, or 1.21.4:
1.21.1 Is an officer of the Employer having annual
compensation greater than fifty percent
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(50.0%) of the limit on the amount of benefits payable under a defined benefit
plan, as set forth in Code Section 415(b)(1)(A). For purposes of this Section
1.16.1, the term "officer" shall mean only those persons who have officer-type
titles and exercise administrative executive authority, and the persons who
qualify as "officers" under such definition shall be determined by the board of
directors of the Employer or its designee;
1.21.2 Is one of the ten (10) employees of the Employer who
(a) has annual compensation from the Employer in an amount greater than the
limitation on the maximum contributions which can be made to defined
contribution plans under Code Section 415(c)(1)(A), and (b) owns (or by reason
of the constructive ownership rules of Code Section 318) is deemed to own the
largest portions of the outstanding shares of the Employer's common capital
stock;
1.21.3 An Employee of the Corporation who owns more than five
percent (5.0%) of the outstanding capital stock of the Employer or capital stock
possessing more than five percent (5.0%) of the total combined voting power of
all capital stock of the Employer; or
1.21.4 An Employee of the Corporation who both (a) owns more
than one percent (1.0%) of the outstanding capital stock of the Employer, or
owns capital stock of the Employer possessing more than one percent (1.0%) of
the total combined voting power of all outstanding shares of the Employer's
capital stock, and (b) receives from the Employer compensation of more than One
Hundred Fifty Thousand Dollars ($150,000) per year.
1.22 "Merger Transaction" means that certain merger transaction in
which Target merged with and into Bancorp effective as of December 30, 1998.
1.23 "Mortgage" means Pacific Capital Commercial Mortgage, Inc., a
California corporation and a wholly owned subsidiary of Bancorp.
1.24 "Non-Control Acquisition" means an acquisition of any voting
securities of a Retention Company by (a) an employee benefit plan (or a trust
forming a part thereof) maintained by Bancorp, (b) Bancorp or any of its
Subsidiaries, or (c) any person in connection with a Non-Control Transaction.
1.25 "Non-Control Transaction" means:
1.25.1 A merger, consolidation or reorganization of a
Retention Company in which:
A. The shareholders of the Retention Company,
immediately before such merger, consolidation or reorganization, own, directly
or indirectly, immediately after such merger, consolidation or reorganization,
in substantially the same proportion as their ownership of the voting securities
of the Retention Company immediately before such merger, consolidation or
reorganization, at least fifty-one percent (51%) of the combined voting power of
the outstanding voting securities of (i) the corporation resulting from such
merger, consolidation or reorganization (the "Surviving Corporation") or (ii)
the immediate parent corporation of the Surviving Corporation; and
B. The individuals who were Incumbent Directors of
the Retention Company at the time of the execution of the agreement providing
for such merger, consolidation or reorganization constitute at least two-thirds
(2/3) of the members of the board of directors of (i) the Surviving Corporation
or (ii) a corporation beneficially owning, directly or indirectly, a majority of
the voting securities of
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the Surviving Corporation; and
C. No person other than (i) another Retention
Company, (ii) any employee benefit plan (or any trust forming a part thereof)
maintained by any Retention Company or the Surviving Corporation or any
subsidiary of a Retention Company or the Surviving Corporation, or (iii) any
person who, immediately prior to such merger, consolidation or reorganization
had beneficial ownership of thirty-five percent (35%) or more of the then
outstanding voting securities of the effected Retention Company, has beneficial
ownership of thirty-five percent (35%) or more of the combined voting power of
the Surviving Corporation's voting securities outstanding immediately after such
merger, consolidation or reorganization.
1.25.2 A merger, consolidation or reorganization involving
only Retention Companies shall be considered a "Non-Control Transaction"
regardless of the composition of the Board of Directors of the Retention
Companies immediately following such transaction.
1.25.3 A sale or transfer of all or substantially all of the
assets of a Retention Company to one or more other Retention Companies shall be
considered a "Non-Control Transaction" regardless of whether such sale or
transfer is as a result of liquidation of the Retention Company or otherwise.
1.26 "Non-Key Employee" means each Employee other than a Key Employee.
1.27 "Participant" means each person who satisfies the eligibility
criteria set forth in Sections 2.1.1, 2.1.2, or 2.1.3, below.
1.28 "plan" means this Pacific Capital Bancorp 1998 Amended and
Restated Key Employee Retiree Health Plan, as amended from time to time.
1.29 "Plan Administrator" means Bancorp, or such other person or
committee as Bancorp may appoint or retain from time-to-time to supervise the
administration of this Plan.
1.30 "Plan Year" means (a) the period that commenced with the original
effective date of this Plan on December 29, 1992, and ended September 30, 1993,
and (b) thereafter, each twelve-month period commencing on October 1 and ending
on September 30 in the next subsequent calendar year.
1.31 "Post-Retirement Contribution" means, with respect to each
Participant, the amount determined under Section 3.2, below, which shall be paid
under this Plan toward the cost of Coverage for such Participant.
1.32 "Pre-Retirement Contribution" means, with respect to:
1.32.1 Grandfathered Current Retiree and Spouse. Each Eligible
Retiree who satisfies the eligibility requirements set forth in Section 2.1.1A,
below, and such Retiree's Spouse, subject to Section 3.2.2, below, the amount
which SBBT was contributing toward the cost of Coverage for each such
Participant immediately prior to the original effective date of this Plan on
December 29, 1992; and
1.33 Other Eligible Retiree and Spouse. Each other Eligible Retiree and
such retiree's Spouse, the amount, determined as of the calendar month in which
the Eligible Retiree becomes a Former Employee, which the Employer is obligated
to contribute (under its Group Health Insurance Plan for Employees) in each
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month toward the cost of Coverage for such Former Employee and Spouse.
1.34 "Restricted Period" shall mean the period which:
1.34.1 Commencement. Commences on the date on which (a)
Bancorp executes with another Person a written agreement (the "Reorganization
Agreement") to acquire all or substantially all the assets of Bancorp, or to
merge, consolidate, combine, or otherwise reorganize Bancorp with any one or
more other Persons (as such term is defined for purposes of Section 13(d) or 14
of the Securities Exchange Act of 1934) in any transaction in which the
Reorganization Agreement contemplates that those Persons who are shareholders of
Bancorp as of the date such Reorganization Agreement is executed will own less
than sixty-five percent (65%) of the combined voting power of all common stock
and other voting securities of the surviving entity immediately after the
effective date of such merger, consolidation, combination, or other
reorganization; or (b) any Person other than Bancorp announces that such Person
intends to conduct a tender offer to acquire more than thirty-five percent (35%)
of the outstanding common stock and other voting securities of Bancorp; and
1.34.2 Expiration. Expires on the last day of the period of
twenty-four (24) consecutive calendar months commencing on the date of any
Change of Control.
1.35 "Retention Company" means individually any of, and "Retention
Companies" means collectively all of, Bancorp, SBBT, FNBCC and Mortgage. When
used in reference to an Employee or Participant, "Retention Company" means
whichever of Bancorp, SBBT, FNBCC and Mortgage employs the Employee or
Participant.
1.36 "SBBT" means SANTA BARBARA BANK & TRUST, a California corporation,
which is a wholly owned subsidiary of Bancorp.
1.37 "Senior Leadership Team" means the most senior management
employees of Bancorp and each Affiliate, as designated from time to time by the
Board of Directors of Bancorp or its designee.
1.38 "service" means service as a common law employee of any Employer;
provided that, for purposes of this Plan, the term "service" shall not include
(a) any service prior to January 1, 1999, with either Target or any subsidiary
corporation, all of whose outstanding capital stock was owned by Target, (b) any
service with any Target company acquired by or merged with or into Bancorp or
any Affiliate prior to the effective date of such requisition or merger only if
such employee is entitled to credit for such service under Section 1.42.5,
below, or (c) any Service prior to the occurrence of a Break in Service (as
defined in Section 1.42.3, below).
1.39 "spouse" means each person who satisfies the requirements of
Section 2.1.2, below.
1.40 "Supplemental Coverage" shall mean, for each Participant who
becomes eligible to receive Medicare coverage, individual or group health
insurance coverage (a) which provides coverage supplementing that available
under Medicare, and (b) which, when considered together with Medicare coverage
available to the Participant, provides to the Participant health insurance
coverage substantially equal to the Coverage the Participant was receiving under
this Plan immediately prior to the date on which the Participant became eligible
for Medicare.
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1.41 "target" shall mean PACIFIC CAPITAL BANCORP, a California
corporation, which merged with and into Bancorp in the Merger Transaction
effective December 30, 1998.
1.42 "Year of Service" means each computation period of twelve
consecutive months during which an Employee has one thousand (1,000) Hours of
Service.
1.42.1 Initial Computation Period. Each Employee's initial
computation period shall be the twelve-month period beginning on the date on
which the Employee first performs any Hour of Service.
1.42.2 Subsequent Computation Period. The computation period
shall shift to the Plan Year beginning with the first day of the Plan Year that
includes the first annual anniversary of the date on which the Employee first
performs an Hour of Service. An Employee who is credited with one thousand
(1,000) Hours of Service in both the initial computation period and the Plan
Year which includes such anniversary date shall be credited with two (2) Years
of Service as of the last day of such Plan Year.
1.42.3 Service Prior to Break in Service. For purposes of this
Plan, Service prior to a Break in Service shall not be taken into account in
determining the Years of Service of an Employee or former Employee with the
Employer. For purposes of this Plan, a "Break in Service" shall occur with
respect to any Employee or former Employee if (a) the employment of the Employee
with the Employer is terminated for any reason, and (b) the Employee thereafter
is not re-employed with any Employer during the one-year period following the
effective date of such termination of employment.
1.42.4 Reemployed Employee. If an Employee terminates
employment with the Employer and subsequently again becomes an Employee, then
upon reemployment (a) the computation period initially shall be the twelve-month
period commencing with the day on which the Employee first performs an Hour of
Service upon reemployment, (b) the computation period shall shift to the Plan
Year beginning with the first day of the Plan Year that includes the first
annual anniversary of the date on which the Employee resumed employment, and (c)
any such Employee who is credited with one thousand (1,000) Hours of Service in
both the initial computation period and the Plan Year which includes such
anniversary shall be credited with two (2) Years of Service as of the last day
of such Plan Year.
1.42.5 Prior Service Credit. There shall be recognized as
"Years of Service" under this Plan (a) all Years of Service by the Employee with
Community Bank of Santa Ynez Valley; and (b) all Years of Service by the
Employee with any entity acquired by Bancorp or any Affiliate (as defined below)
if the terms and conditions of such acquisition expressly require that such
prior Years of Service be credited as such under this Plan. For purposes of this
Section 1.32.4, an entity shall be deemed to be "acquired by Bancorp or any
Affiliate" if (i) that entity is merged into Bancorp or any Affiliate, or (ii)
Bancorp or any Affiliate purchases or otherwise acquires at least eighty percent
(80%) of the outstanding voting equity interests in such entity, or (iii)
Bancorp or any Affiliate acquires substantially all the assets of such entity.
Notwithstanding the foregoing, in accordance with the definition of "service" in
Section 1.28, above, no credit shall be provided under this Plan for service
prior to January 1, 1999, as an employee of Target or any wholly owned
subsidiary of Target.
2. PARTICIPATION
2.1 Eligibility Criteria. Each person who satisfies the criteria set
forth in Sections 2.1.1, 2.1.2, or 2.1.3, below, shall be eligible to
participate in this Plan.
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2.1.1 Eligible Retirees. A person shall be deemed to satisfy
the requirements of this Section 2.1.1 if that person satisfies the requirements
of either Paragraph A or Paragraph B of this Section 2.1.1.
A. A person satisfies the requirements of this
Paragraph A only if (1) that person is a Former Employee who at any time while
employed by the Employer was a Key Employee; and (2) both of the following
requirements are satisfied as of the effective date as of which that person
terminates employment with the Employer: (a) that person has completed at least
eight (8) Years of Service, and (b) that person has attained at least the age of
fifty-five (55).
B. A person shall be deemed to satisfy the
requirements of this Paragraph B if, during the Restricted Period, either (i)
the Employer terminates (or delivers to the person notice of the termination of)
such person's employment with the Employer other than for cause, or (ii) there
occurs an Involuntary Termination of such person's employment with the Employer.
2.1.2 Spouses of Eligible Retirees. A person shall be deemed
to be a Spouse satisfying the requirements of this Section 2.1.2 if either:
A. That person is married to an Employee as of the
date such Employee becomes an Eligible Retiree (provided, if such person is
treated as the Spouse of the Eligible Retiree as of the date of the Eligible
Retiree's death, then such person thereafter will be deemed to continue to be a
Spouse after the date of the Eligible Retiree's death, without regard to whether
such Spouse subsequently remarries); or
B. That person was married to an Employee as of the
date of that Employee's death, and such Employee died at a point in time at
which such Employee would have been an Eligible Retiree (as defined in Section
1.8, above) if that Employee had terminated employment with the Employer on the
day prior to the day on which such Employee died (provided, a person who is
treated as a Spouse under this Paragraph B will be deemed to continue to be a
Spouse without regard to whether such Spouse subsequently remarries).
2.1.3 Dependents of Eligible Retirees. A person shall be
deemed to satisfy the requirements of this Section 2.1.3 if either:
A. That person is a Dependent; or
B. All of the following requirements are satisfied
with respect to such person: (1) such person qualified as a "dependent" (under a
Group Health Insurance Plan) of a deceased Employee as of the date of that
Employee's death; (2) the deceased Employee would have been treated as an
Eligible Retiree if that Employee had terminated employment with the Employer on
the day prior to the date of the Employee's death; and (3) such person, in the
event the deceased Employee had become an Eligible Retiree as of such day
preceding the date on which the Employee died, would have been treated as a
Dependent of such Eligible Retiree.
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3. BENEFITS AND COMPANY CONTRIBUTION
3.1 Purchase of Coverage. In each Plan Year, each Participant shall be
eligible to purchase Coverage.
3.1.1 Mandatory Participant Contribution. If the cost of
Coverage for a Participant exceeds the amount of the Post-Retirement
Contribution which the Participant is entitled to receive pursuant to Section
3.2, below, then such Participant shall be eligible to purchase Coverage only if
that Participant pays such excess amount at the time and in the manner required
by the Plan Administrator.
3.1.2 Dependents. A Participant who is a Dependent shall be
eligible to purchase Coverage only under those Group Health Insurance Plans
under which such person qualifies as a "dependent."
3.2 Post-Retirement Contribution. Subject to Sections 3.3, 3.4, and
3.8, below, the amount of the Post-Retirement Contribution for each Participant
shall be determined under this Section 3.2. In no event shall the amount of the
Post-Retirement Contribution with respect to any Participant exceed the actual
cost of Coverage for such Participant.
3.2.1 Eligible Retirees. The Post-Retirement Contribution for
each Eligible Retiree shall be an amount equal to one hundred percent (100%) of
the Eligible Retiree's Pre-Retirement Contribution.
3.2.2 Spouses of Eligible Retirees. During the lifetime of
each Eligible Retiree, the Post-Retirement Contribution for the Spouse of such
Eligible Retiree shall be equal to one hundred percent (100%) of the Spouse's
Pre-Retirement Contribution. After the death of the Eligible Retiree, the
Post-Retirement Contribution for the surviving Spouse shall be one hundred
percent (100%) of the lesser of (a) the actual cost of Coverage for the Spouse,
or (b) the amount of the Post-Retirement Contribution for the Eligible Retiree
as of the date of the Eligible Retiree's death.
3.2.3 Dependents. An Eligible Retiree's Dependents shall not
be entitled to receive any Post-Retirement Contribution under this Plan. In
order for a Dependent to receive Coverage under this Plan, the entire cost of
Coverage for such Dependent must be paid, at the time and in the manner that the
Plan Administrator shall require, by someone other than the Employer.
3.3 Effect of Spouse's Death. Notwithstanding any other provision of
this Plan to the contrary, (a) the death of the Spouse of an Eligible Retiree
shall not affect the amount of the Post-Retirement Contribution for the Eligible
Retiree, and (b) after the date of the Spouse's death, the surviving Eligible
Retiree shall not be entitled to receive any portion of the Post-Retirement
Contribution which the deceased Spouse had been entitled to receive prior to
death.
3.4 Effect of Eligibility for Medicare. If a Participant becomes
eligible for health insurance coverage under Medicare, then effective on the
first date as of which the Participant is eligible for that coverage, the amount
of the Post-Retirement Contribution for the Participant under Section 3.2,
above, shall not exceed the cost of Supplemental Coverage (as defined in Section
1.30, above) for the Participant under a Group Health Insurance Plan then
sponsored by the Employer.
3.5 Deemed Spouses and Dependents. Each person who, by virtue of the
death of an Employee,
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is eligible to participate in the Plan as a Spouse under Section 2.1.2B, above,
or as a Dependent under Section 2.1.3B, above, shall be entitled to receive the
same Coverage and Post-Retirement Contribution (if any) under this Plan which
such person would have been entitled to receive under Section 3.2, above, if the
decedent had terminated employment with the Employer on the day prior to the
date of the decedent's death.
3.6 Increases in Post-Retirement Contribution. Bancorp may increase
from time-to-time, in its sole discretion, the amount of the Post-Retirement
Contribution payable under this Plan. In no event, however, shall the amount of
any such Post-Retirement Contribution in any Plan Year exceed by more than five
percent (5.0%) the amount of such Post-Retirement Contribution payable in the
immediately preceding Plan Year.
3.7 Unfunded Arrangement. This Plan is an unfunded arrangement to
provide health insurance coverage to Eligible Retirees, their spouses, and their
dependents. Therefore, the amount of each Post-Retirement Contribution payable
under this Plan shall be payable solely from the general assets of Bancorp. Such
Post-Retirement Contribution may be paid either directly to the insurance
company providing the Group Health Insurance Plan, or as a reimbursement to the
Participant for such, or in such other manner as is administratively convenient
to Bancorp.
3.8 Application for Participation and Contribution. In order to be
eligible to purchase Coverage and receive any applicable Post-Retirement
Contribution under this Plan, each Participant shall submit an application to
Bancorp at such time, and in such manner, as the Plan Administrator shall
announce, from time-to-time, in advance of the deadline for submitting such
applications.
3.9 Purpose and Maximum Benefit. This Plan is not intended to be, and
shall not operate as, a plan of deferred compensation. Consequently,
notwithstanding any other provision of this Plan to the contrary:
3.9.1 No Deferred Compensation. A Participant who is entitled
to receive a Post-Retirement Contribution under Section 3.2, above, shall be
entitled to receive such Post-Retirement Contribution only if the Participant
timely elects to purchase Coverage under this Plan; and
3.9.2 Limit. No Participant shall be entitled to receive under
this Plan any amount which exceeds lesser of (a) the Post-Retirement
Contribution payable for such Participant pursuant to Section 3.2, above, or (b)
the actual cost of Coverage for such Participant.
4. ADMINISTRATION
4.1 Duties of Plan Administrator. The Plan Administrator shall
administer the Plan in accordance with its terms for the exclusive benefit of
Participants.
4.2 Powers of Plan Administrator. The Plan Administrator shall have
full power and authority to administer and carry into effect the terms and
conditions of this Plan, subject to applicable requirements of law. Such power
shall include, but not be limited to, the power:
4.2.1 Rules and Regulations. To make and enforce such
reasonable rules and regulations as the Plan Administrator deems necessary or
proper for the efficient administration of the Plan, including the establishment
of any claims procedures that may be required by applicable provisions of law;
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4.2.2 Interpretation. To interpret in good faith the terms and
conditions of this Plan;
4.2.3 Resolution. To resolve all questions concerning the Plan
and the eligibility of any Former Employee to participate in the same; and
4.2.4 Agents. To appoint and retain such agents, counsel,
accountants, consultants, and other persons as may be necessary or appropriate
to assist in the administration of the Plan.
4.3 Records. The Plan Administrator shall establish and maintain such
records as are necessary or appropriate to the efficient administration of the
Plan. Each Participant, upon reasonable advance notice to the Plan
Administrator, shall be entitled to inspect such of those records as pertain to
that Participant.
4.4 Appeals Procedure. If a claim for Coverage or a contribution from
Bancorp is partially or fully denied by the Plan Administrator, then the
Participant may request a review of that decision by submitting to the Plan
Administrator, not later than sixty (60) days after receiving notice of the Plan
Administrator's decision, a written request for review of the decision. Within
sixty (60) days after receiving such request, Bancorp shall review the request,
hold such hearings as Bancorp, in its sole discretion, deems appropriate, and
advise the Participant, in writing, of its decision. If the decision on review
is not provided within such sixty-day period, then the application for appeal
shall be deemed to be denied.
4.5 Filing. The Plan Administrator shall timely file all forms required
to be filed with respect to the Plan pursuant to the Code, ERISA, and all
counterpart provisions of California law.
4.6 Indemnification. Bancorp shall indemnify, defend, and hold the Plan
Administrator free and harmless from and against any and all liabilities,
damages, costs and expenses, including reasonable attorneys' fees, occasioned by
any actions which the Plan Administrator takes, or fails to take, reasonably and
in good faith, in connection with the administration of the Plan.
5. PRIOR PLANS; AMENDMENT AND TERMINATION
5.1 Prior Plans. This Plan supersedes the terms of any plan or policy
previously sponsored, maintained, or announced by Bancorp to provide health or
dental benefits to Former Employees of Bancorp.
5.2 Amendment and Termination. Bancorp shall have sole and absolute
discretion to amend or modify this Plan in any regard, and to terminate this
Plan altogether, at any time; provided, notwithstanding the foregoing or any
other provision of this Plan, during any Restricted Period Bancorp may not (a)
revoke the Plan, or (b) modify the provisions of Paragraph B of Section 2.1.1 of
the Plan, or (c) otherwise modify or amend the Plan in any manner (whether
directly or indirectly such as by amending any other employee benefit
arrangement that benefits any person who is affected by the provisions of
Paragraph B of Section 2.1.1, above) that has the effect of eliminating or
reducing the protections afforded by Paragraph B of Section 2.1.1 hereof.
6. MISCELLANEOUS
6.1 No Employment Rights. Neither the adoption and maintenance of this
Plan, nor any express or implicit provision of this Plan, shall be deemed:
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6.1.1 Contract. To constitute a contract between any Employer
and any other person, or to be a consideration for or an inducement or condition
of, the employment of any person;
6.1.2 Right. To give any person the right to be retained in
the employ of Bancorp or any Affiliate;
6.1.3 Discharge. To interfere with the right of any Employer
to discharge any Employee (including any Participant) at any time; or
6.1.4 Continuing Employment. To give any Employer the right to
require an Employee to remain in the employ of such Employer, or to interfere
with an Employee's right to terminate his employment at any time.
6.2 Enforceability; Exclusive Benefit. Subject to the provisions of
Sections 5 and 6.1, above, Bancorp:
6.2.1 Legally Enforceable. Represents that the rights created
in this Plan in favor of Participants are intended to be legally enforceable;
and
6.2.2 Exclusive Benefit. Agrees to administer or cause this
Plan to be administered for the exclusive benefit of Participants.
6.3 Interpretation. As used in this Plan, the masculine, feminine, and
neuter gender and the singular and plural numbers each shall be deemed to
include the other whenever the context indicates or requires. The captions to
various sections of this Plan are included in this Plan solely for convenience
of reference, and shall not affect in any way the meaning or interpretation of
this Plan.
6.4 Governing Law. This Plan shall be construed, administered, and
enforced in accordance with the Code, ERISA, and the laws of the State of
California.
6.5 Binding Effect. This Plan shall be binding upon all successors and
assigns of Bancorp.
(Signature appears on the following page.)
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IN WITNESS WHEREOF, Bancorp has caused this Plan to be adopted,
effective on the Effective Date as set forth above.
PACIFIC CAPITAL BANCORP, a
California corporation
- - --------------------------------- By
Date -----------------------------------
Jay D. Smith, Senior Vice President
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