PACIFIC CAPITAL BANCORP
1998 AMENDED AND RESTATED RETIREE HEALTH PLAN
(Non-Key Employees)
December 30, 1998
1998 AMENDED AND RESTATED RETIREE HEALTH PLAN
(Non-Key Employees)
THIS 1998 AMENDED AND RESTATED RETIREE HEALTH 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 ("SBBT"), 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, the 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 "SANTA 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 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:
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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 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.
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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 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Coverage" means, in each Plan Year, coverage under a Group Health
Insurance Plan.
1.7 "Covered Key Employee" means each person who (a) has been a "key
employee," as that term is defined for purposes of Code Section 419A(d)(3),
during any plan year under any plan previously maintained by Bancorp to provide
health insurance coverage to retired employees, (b) had terminated employment
with Bancorp prior to adoption of this Plan on December 29, 1992, and (c) as of
that date satisfied the eligibility requirements set forth in Section 2.1.1A,
below.
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.
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1.14 "FNBCC" means First National Bank of Central California, a
national banking organization and wholly owned subsidiary of Bancorp, one 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.
1.15 "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.
1.16 "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.
1.17 "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.
1.17.1 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.
1.17.2 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.
1.17.3 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.
1.18 "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 actual or threatened Proxy
Contest relating to the election of Directors to the Retention Company shall not
be considered an Incumbent Director.
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1.19 "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 1.16.1,
1.16.2, 1.16.3, or 1.16.4, below:
1.19.1 Is an officer of the Employer having annual
compensation greater than fifty percent (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;
1.19.2 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;
1.19.3 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
1.19.4 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.
1.20 "Merger Transaction" means that certain merger transaction in
which Target merged with and into Bancorp effective as of December 30, 1998.
1.21 "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.
1.22 "Non-Control Transaction" means:
1.22.1 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
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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 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.
1.22.2 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.
1.22.3 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.
1.23 "Non-Key Employee" means each (a) Covered Key Employee, and (b)
each other Employee who is not a Key Employee.
1.24 "Participant" means each person who satisfies the eligibility
criteria set forth in Sections 2.1.1, 2.1.2, or 2.1.3, below.
1.25 "Plan" means this Pacific Capital Bancorp 1998 Amended and
Restated Retiree Health Plan, as amended from time to time.
1.26 "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.
1.27 "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.
1.28 "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.
1.29 "Pre-Retirement Contribution" means, with respect to:
1.29.1 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,
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below, the amount which Bancorp 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
1.29.2 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, the
Employer is obligated to contribute (under its Group Health Insurance Plan for
Employees) in each month toward the cost of Coverage for such Former Employee
and Spouse.
1.30 "Restricted Period" shall mean the period which:
1.30.1 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
1.30.2 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.
1.31 "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.
1.32 "SBBT" means SANTA BARBARA BANK & TRUST, a California corporation,
which is a wholly owned subsidiary of Bancorp.
1.33 "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 acquisition or merger only if
such employee is entitled to credit for such service under Section 1.32.5,
below, or (c) any Service prior to the occurrence of a Break in Service (as
defined in Section 1.32.3, below).
1.34 "Spouse" means each person who satisfies the requirements of
Section 2.1.2, below.
1.35 "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
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Coverage the Participant was receiving under this Plan immediately prior to the
date on which the Participant became eligible for Medicare.
1.36 "Target" shall mean PACIFIC CAPITAL BANCORP, a California
corporation, which merged with and into Bancorp in the Merger Transaction
effective December 30, 1998.
1.37 "VEBA" means the PACIFIC CAPITAL BANCORP VOLUNTARY EMPLOYEES'
BENEFICIARY ASSOCIATION, which has been adopted by Bancorp concurrently with
Bancorp's adoption of this Plan, as amended from time to time.
1.38 "Year of Service" means each computation period of twelve
consecutive months during which an Employee has one thousand (1,000) Hours of
Service.
1.38.1 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.
1.38.2 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.
1.38.3 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 period of one (1) year following
the effective date of such termination of employment.
1.38.4 Reemployed Employee. If an Employee terminates
employment with the Employer and subsequently 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.
1.38.5 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 1.25.4, 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 1.26, above, no credit shall be
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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.
2.1.1 Eligible Retirees. A person shall be deemed to satisfy
the requirements of this Section 2.1.1 if that person (a) is a Former Employee
who at all times while employed by Bancorp or its Affiliates was a Non-Key
Employee, and (b) satisfies the requirements of Paragraph A, B, or C below.
A. Grandfathered Current Retiree. A person satisfies
the requirements of this Paragraph A if, as of the date this Plan originally was
adopted by SBBT on December 29, 1992, such person (i) was a Former Employee, and
(2) was eligible for coverage under the terms of the retiree health plan being
sponsored by SBBT immediately prior to the adoption of this Plan.
B. Grandfathered Future Retiree. A person satisfies
the requirements of this Paragraph B if (i) the person became a Former Employee
during the period between the date on which this Plan originally was adopted by
SBBT on December 29, 1992, and October 1, 1993, and (ii) as of the date such
person becomes a Former Employee, (x) such person has completed at least eight
(8) Years of Service, (y) such person has attained at least the age of
fifty-five (55), and (z) the sum of the number of the person's Years of Service
plus the person's age is equal to at least seventy-five (75).
C. Other Retirees. Subject to the last sentence of
this Paragraph C, a person satisfies the requirements of this Paragraph A only
if all of the following requirements are satisfied as of the effective date as
of which that person terminates employment with the Employer (i) that person has
completed at least eight (8) Years of Service, (ii) that person has attained at
least the age of fifty-five (55), and (iii) the sum of the number of the
person's Years of Service plus the person's age is equal to at least
seventy-five (75). In determining whether a person has satisfied the
requirements of this Paragraph C, such person (for all purposes under this
Paragraph C) shall be credited with five (5) Years of Service in addition to
such person's actual Years of Service, and shall be deemed to be five (5) years
older than such person's actual chronological age, if during the Restricted
Period the Employer terminates (or delivers to Employee notice of the
termination of) Employee's employment with the Employer other than for Cause.
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
1.7, above) if that Employee had terminated employment with the Employer
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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 was treated 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.
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
3.10, 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 determined under this Section 3.2.1.
A. Grandfathered Current Retirees. The
Post-Retirement Contribution for each Eligible Retiree who satisfies the
eligibility criteria set forth in Section 2.1.1A, above, shall be:
(1) During the period beginning with the
Effective Date of this Plan and ending September 30, 1993, an amount equal to
one hundred percent (100%) of the Pre-Retirement Contribution for such Eligible
Retiree; and
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(2) Beginning October 1, 1993, such amount
as the Employer determined prior to October 1, 1993; provided, in no event shall
such amount be less than one hundred percent (100%) of the cost of Coverage (as
of October 1, 1992) for the Eligible Retiree under that Group Health Insurance
Plan which (a) was being sponsored by SBBT as of the original effective date of
this Plan, and (b) under which the cost of Coverage for the Eligible Retiree
would be the lowest of that for all Group Health Insurance Plans being sponsored
by SBBT as of such date.
B. Grandfathered Future Retirees. The Post-Retirement
Contribution for each Eligible Retiree who satisfies the eligibility criteria
set forth in Section 2.1.1B, above, shall be an amount equal to one hundred
percent (100%) of the Eligible Retiree's Pre-Retirement Contribution.
C. Other Retirees. The Post-Retirement Contribution
for each Eligible Retiree who satisfies the eligibility criteria set forth in
Section 2.1.1C, above, shall be an amount determined by multiplying (a) the
Pre-Retirement Contribution for such Eligible Retiree, as determined under
Section 1.20.2, above, times (b) the percentage determined under the table set
forth below in this Section 3.2.1. For purposes of interpreting the following
table, the term "Retirement" shall mean the date on which the Eligible Retiree
becomes a Former Employee.
EMPLOYEE'S PERCENTAGE OF
EMPLOYEE'S AGE COMPLETED YEARS OF SERVICE AT CONTRIBUTION
AT RETIREMENT RETIREMENT MADE BY EMPLOYER
-------------- ---------- ----------------
55-59 20+ 80%
55-59 16-19 60%
60-64 20+ 100%
60-64 16-19 80%
60-64 11-15 60%
65-69 16+ 100%
65-69 12-15 80%
65-69 8-11 60%
70+ 12+ 100%
70+ 8-11 80%
3.2.2 Spouses of Eligible Retirees. The Post-Retirement
Contribution for the Spouse of each Eligible Retiree shall be determined under
this Section 3.2.2.
A. Spouse of Grandfathered Current Retirees.
(1) During the lifetime of each Eligible
Retiree who satisfies the criteria set forth in Section 2.1.1A, above, the
Post-Retirement Contribution for the Spouse of such Eligible Retiree shall be
(a) during the period beginning with the Effective Date of this Plan and ending
September 30, 1993, an amount equal to one hundred percent (100%) of the
Pre-Retirement Contribution for such Spouse, as
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determined under Section 1.20.2, above; and (b) beginning October 1, 1993, such
amount as the Employer determines prior to October 1, 1993; provided, in no
event shall such amount be less than one hundred percent (100%) of the cost of
Coverage (as of October 1, 1992) for the Spouse under that Group Health
Insurance Plan which (i) was being sponsored by SBBT of the original effective
date on which this Plan was adopted by SBBT, and (ii) under which the cost of
Coverage for the Spouse would be the lowest of that for all Group Health
Insurance Plans being sponsored by SBBT as of such date.
(2) After the death of such Eligible
Retiree, the Post-Retirement Contribution for the surviving Spouse shall be one
hundred percent (100%) of the lesser of (1) the actual cost of Coverage for the
Spouse, or (2) the amount of the Post-Retirement Contribution for the Eligible
Retiree immediately prior to the date of the Eligible Retiree's death.
B0 Spouse of Grandfathered Future Retirees. During
the lifetime of each Eligible Retiree who satisfies the criteria set forth in
Section 2.1.1B, above, 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 (1) the actual cost of Coverage for the Spouse,
or (2) the amount of the Post-Retirement Contribution for the Eligible Retiree
as of the date of the Eligible Retiree's death.
C0 Spouse of Other Retirees. During the lifetime of
each Eligible Retiree who satisfies the eligibility criteria set forth in
Section 2.1.1C, above, the Post-Retirement Contribution for such Eligible
Retiree's Spouse shall be the same percentage of such Spouse's Pre-Retirement
Contribution as the percentage which such Eligible Retiree is entitled to
receive under Section 3.2.1C, above.
(1) After the death of such Eligible
Retiree, the Post-Retirement Contribution for the surviving Spouse shall be the
applicable percentage of the lesser of (a) the actual cost of Coverage for the
surviving Spouse, or (b) the amount of the Post-Retirement Contribution for the
Eligible Retiree immediately prior to the date of the Eligible Retiree's death.
(2) For purposes of this Paragraph C, the
term "applicable percentage" shall mean the lesser of (a) the percentage of the
Spouse's Post-Retirement Contribution which the Spouse was entitled to receive
immediately prior to the date of the Eligible Retiree's death, or (b) the
percentage determined under the following table:
AGE OF SURVIVING PERCENTAGE OF COST
SPOUSE A RETIREE'S DEATH PAID BY EMPLOYER
------------------------ ----------------
65 & over 100%
60 - 64 80%
55 - 59 60%
50 - 54 40%
46 - 49 20%
45 & under -0-
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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 or the
VEBA.
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
1.2.2, above) for the Participant under a Group Health Insurance Plan then
sponsored by the Employer.
3.5 Deemed Spouses and Dependents. Each person who is eligible to
participate in the Plan as a Spouse under Section 2.1.2(b), above, or as a
Dependent under Section 2.1.3B, above, by virtue of the death of an Employee,
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%) the amount of such Post-Retirement Contribution payable in the
immediately preceding Plan Year.
3.7 Funding of Post-Retirement Contribution. The amount of each
Post-Retirement Contribution payable under this Plan:
3.7.1 Source. Shall be paid (a) first, from the VEBA, to the
extent of the assets thereof, and (b) thereafter, from the general assets of
Bancorp.
3.7.2 Advance or Reimbursement. 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 and the VEBA.
3.8 Key Employees. No Key Employee shall be entitled to receive
Coverage or other benefits under this Plan or the VEBA.
3.8.1 Determination of Status. The determination of whether
an Employee is a Key Employee shall be made in each Plan Year.
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3.8.2 Effect of Status. If a person who is a Non-Key
Employee becomes a Key Employee, then effective at the time of that change in
status, such person no longer shall be entitled to receive Coverage or any other
benefits under this Plan or the VEBA at any time.
3.8.3 Bancorp Contribution. Bancorp shall not contribute to
the VEBA in any Plan Year any amount attributable to funding the cost of
Coverage for any Key Employee.
3.9 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 or the VEBA 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.
3.10 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:
3.10.1 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
3.10.2 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 and in a manner which satisfies the nondiscrimination requirements
imposed upon voluntary employees' beneficiary associations by Section 505 of the
Code.
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;
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.
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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:
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
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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.
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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