Exhibit 10.2

November 21, 2008

United States Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220

Pacific Capital Bancorp

1021 Anacapa Street

Santa Barbara, CA 93101

Ladies and Gentlemen:

Reference is made to that certain Letter Agreement incorporating the Securities
Purchase Agreement – Standard Terms dated of even date herewith (the “Securities
Purchase Agreement”) by and among United States Department of Treasury
(“Investor”) and Pacific Capital Bancorp (“Company”). Investor and Company
desire to set forth herein certain additional agreements regarding Company’s
commitment to the holder of the Preferred Shares after the closing of the
transactions contemplated by the Securities Purchase Agreement. Terms that are
defined in the Securities Purchase Agreement are used in this letter agreement
as so defined.

In order to comply with California Corporations Code §212(a), the Company has
modified section 7(b) of the Standard Provisions of the Certificate of
Designations attached as Exhibit A to the Securities Purchase Agreement (the
“Certificate of Designations”) to provide in pertinent part as follows:

“Whenever, at any time or times, dividends payable on the shares of Designated
Preferred Stock have not been paid for an aggregate of six quarterly Dividend
Periods or more, whether or not consecutive, the holders of the Designated
Preferred Stock shall have the right, with holders of shares of any one or more
other classes or series of Voting Parity Stock outstanding at the time, voting
together as a class, to elect two directors…”

By its execution hereof, the Company hereby confirms and agrees that as of the
date hereof and at all times while any shares of the Designated Preferred Stock
are outstanding it shall maintain a range of directors of the Company that will
permit the holder of the Preferred Shares to elect two directors in accordance
with said section 7(b). Currently, Section 3.2.1 (the “Applicable Provision”) of
the Company’s bylaws (the “Bylaws”) provides for a range of directors of no less
than nine (9) and no more than seventeen (17). At all times while any shares of
the Designated Preferred Stock are outstanding, the Company shall not fill more
than fifteen (15) director positions. In the event the Company desires to
increase the number of directors beyond fifteen (15), then the Company shall be
required to amend the Bylaws to increase the maximum directors to always allow
for at least two open director seats for the holders of the Preferred Shares to
elect in accordance with Section 7(b) of the Standard Terms of the Certificate
of Determination of Preferences of Series B Fixed Rate Cumulative Perpetual
Preferred Stock of Pacific Capital Bancorp (and to amend the bylaws to provide
that such provision may not be modified, amended or repealed by the Company’s
board of directors (or any committee thereof)

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United States Department of Treasury

Pacific Capital Bancorp

November 21, 2008

 

or without the affirmative vote and approval of (x) the stockholders and (y) the
holders of at least a majority of the shares of Designated Preferred Stock
outstanding at the time of such vote and approval).

In addition, by its execution hereof, the Company hereby confirms and agrees
that it will, within 15 days after the date of this letter agreement, amend the
Applicable Provision by adding the following sentence at the end thereof:

“Notwithstanding anything in these bylaws to the contrary, for so long as the
Series B Fixed Rate Cumulative Perpetual Preferred Stock (the “Designated
Preferred Stock”) is outstanding: (i) whenever, at any time or times, dividends
payable on the shares of Designated Preferred Stock have not been paid for an
aggregate of six quarterly Dividend Periods (as defined in the Certificate of
Determination for the Designated Preferred Stock) or more, whether or not
consecutive, the authorized number of directors shall automatically be increased
by two (but shall in no event be increased to a number of directors that is
greater than the maximum number of directors set forth in Section 3.2.1 of these
bylaws); and (ii) this sentence may not be modified, amended or repealed by the
board of directors (or any committee thereof) or without the affirmative vote
and approval of (x) the stockholders and (y) the holders of at least a majority
of the shares of Designated Preferred Stock outstanding at the time of such vote
and approval.”

The parties hereto acknowledge that there would be no adequate remedy at law if
the Company fails to perform any of its obligations under this letter agreement
and that the Investor may be irreparably harmed by any such failure, and
accordingly agree that the Investor, in addition to any other remedy to which it
may be entitled at law or in equity, to the fullest extent permitted and
enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this letter agreement
without the necessity of proving the inadequacy of monetary damages as a remedy
or the posting of a bond.

This letter agreement and the Certificate of Designations constitute the entire
agreement, and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties with
respect to the subject matter hereof.

This letter agreement may be executed in counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the same
instrument. This letter agreement shall be governed in all respects, including
as to validity, interpretation and effect, by the internal laws of the State of
California, without giving effect to the conflict of laws rules thereof.

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United States Department of Treasury

Pacific Capital Bancorp

November 21, 2008

Signature Page

 

In witness whereof, this letter agreement has been duly executed by the
authorized representatives of the parties hereto as of the date first above
written.

 

PACIFIC CAPITAL BANCORP By:  

/s/ GEORGE S. LEIS

Name:   George S. Leis Title:   President & CEO By:  

/s/ STEPHEN V. MASTERSON

Name:   Stephen V. Masterson Title:   Executive Vice President & CFO

UNITED STATES DEPARTMENT OF

THE TREASURY

By:  

/s/ NEEL KASHKARI

Name:   Neel Kashkari Title:  

Interim Assistant Secretary for

Financial Stability