Exhibit 10.2

1998 AMENDED AND RESTATED TRUST AGREEMENT

OF

PACIFIC CAPITAL BANCORP

VOLUNTARY EMPLOYEES’ BENEFICIARY ASSOCIATION

December 30, 1998

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1998 AMENDED AND RESTATED TRUST AGREEMENT

OF

PACIFIC CAPITAL BANCORP

VOLUNTARY EMPLOYEES’ BENEFICIARY ASSOCIATION

THIS AMENDED AND RESTATED TRUST AGREEMENT (the “Agreement”) is made and entered
into, effective on the date set forth below, by and between PACIFIC CAPITAL
BANCORP, a California corporation, in its capacity as the sponsor of the Trust
created in this Agreement (“Bancorp”), and SANTA BARBARA BANK & TRUST, a
California corporation, in its capacity as Trustee of that Trust (the
“Trustee”), with reference to the following facts:

RECITALS:

A. SANTA BARBARA BANK & TRUST, a California corporation (“SBBT”), (i) on
December 29, 1992, executed a “Trust Agreement” and a “First Amendment to Trust
Agreement” (together, the “Original Trust Agreement”) in order to establish the
terms and conditions on which the Trustee would act as trustee of a Trust
holding contributions to pay the obligations of SBBT under that certain “Santa
Barbara Bank & Trust Retiree Health Plan” (the “Plan”), and (ii) amended and
restated that Prior Trust Agreement effective January 1, 1996, pursuant to that
certain “Amended and Restated Trust Agreement” (the “First Restated Trust
Agreement”) (the Original Trust Agreement and the First Restated Trust Agreement
together are referred to as the “Prior Trust Agreement”).

B. Effective December 30, 1998, (i) Pacific Capital Bancorp, a California
corporation (“Target”), was merged with and into Bancorp, (ii) Bancorp changed
its name to “Pacific Capital Bancorp,” and (iii) Bancorp became the sponsor of
the Plan for the benefit of Bancorp and all of its subsidiary corporations.

C. Bancorp and the Trust have agreed to execute this Agreement in order to
reflect that Bancorp has become the sponsor of the Plan and the results of the
Merger Transaction.

AGREEMENTS:

NOW, THEREFORE, the parties hereto, intending to be legally bound, do hereby
agree as follows:

 

1. CREATION OF TRUST

1.1 Creation. Bancorp and the Trustee hereby confirm the establishment of the
Trust as of December 29, 1992, and that Bancorp has become sponsor of the Trust
as of December 30, 1998.

1.2 Purpose and Interpretation. The purpose of the Trust is to pay the
Post-Retirement Contribution toward the cost of Coverage pursuant to the terms
of the Plan. This

 

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Agreement shall be interpreted, and the Trust shall be operated, in such manner
as to ensure that the Trust qualifies as a VEBA satisfying the requirements of
Section 501(c)(9) of the Code and all regulations promulgated thereunder, and
the requirements of the Employee Retirement Income Security Act of 1976, as
amended (“ERISA”).

 

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings
indicated below:

2.1 “Affiliate” shall mean each corporation in which Bancorp owns all the
outstanding capital stock.

2.2 “Bancorp” means PACIFIC CAPITAL BANCORP, a California corporation formerly
known as “Santa Barbara Bancorp.”

2.3 “Code” means the Internal Revenue Code of 1986, as amended.

2.4 “Coverage” means coverage under a Group Health Insurance Plan.

2.5 “Covered Key Employees” 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 or SBBT to provide health
insurance coverage to retired employees, (b) had terminated employment with SBBT
prior to adoption of the predecessor Plan on December 29, 1992, and (c) as of
that date satisfied the eligibility requirements set forth in Section 2.1.1A of
the Plan (as then in effect).

2.6 “Effective Date” means December 30, 1998.

2.7 “Employee” means each person who is a common law employee of any Employer.

2.8 “Employer” means Bancorp and each Affiliate of Bancorp.

2.9 “ERISA” means the Employee Retirement Income Security Act of 1976, as
amended.

2.10 “Group Health Insurance Plan” means, in each Plan Year, each group medical
insurance plan and each group dental insurance plan under which any Employer
offers medical or dental insurance coverage to Employees in such Plan Year.

2.11 “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 Section 2.11.1, 2.11.2, 2.11.3, or
2.11.4, below:

2.11.1 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,

 

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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;

2.11.2 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.

2.11.3 Is 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.

2.11.4 Is 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.

2.12 “Participant” means each person who qualifies as a “Participant” under the
terms of the Plan.

2.13 “Plan” means the Pacific Capital Bancorp 1998 Amended and Restated Retiree
Health Plan (for Non-Key Employees) adopted effective December 30, 1998, as
amended from time to time.

2.14 “Plan Administrator” means the person serving as the “Plan Administrator”
of the Plan.

2.15 “Plan Year” shall have the same meaning ascribed to such term in the Plan.

2.16 “SBBT” means SANTA BARBARA BANK & TRUST, a California corporation.

2.17 “Trust” means the Trust established under this Agreement.

2.18 “Trustee” means SBBT, and each additional or successor trustee serving as a
trustee of the Trust.

2.19 “Trust Fund” means all contributions made by Bancorp to the Trust, all
earnings from the investment of such contributions, and all other assets
acquired by the Trustee in its capacity as Trustee or otherwise held by the
Trustee pursuant to this Agreement.

2.20 “VEBA” means a Voluntary Employees’ Beneficiary Association satisfying the
requirements of Section 501(c)(9) of the Code, and the regulations promulgated
thereunder.

 

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3. CONTRIBUTIONS

3.1 Receipt of Contributions. The Trustee shall receive such contributions as
are paid to it in cash or in kind, from time to time, by Bancorp. Upon receipt,
all such contributions, together with all income and other gains from such
contributions, shall be held, invested, reinvested, and administered by the
Trustee pursuant to the terms of this Agreement without distinction between
principal and income.

3.2 Limitation of Trustee Responsibility. The Trustee shall not be responsible
for the calculation or collection of any contribution under the Plan, but rather
shall be responsible only for such property as is actually received by the
Trustee pursuant to this Agreement.

 

4. POWERS OF TRUSTEE

4.1 Investment of Funds. Pursuant to the Plan, Bancorp shall establish and
implement a funding policy consistent with the purposes of the Plan and the
requirements of law, and from time to time may direct the Trustee to exercise
its investment discretion in such manner as Bancorp determines to be
appropriate. Subject to such funding policy and periodic directions from
Bancorp, the Trustee shall invest the funds held in Trust as follows:

4.1.1 Permitted Investments. The Trustee shall invest and reinvest the Trust
Fund, without distinction between principal and income, in such securities or
other property, real or personal, wherever situated, as the Trustee may deem
advisable, including but not limited to stocks, common or preferred, bonds, and
other evidences of indebtedness, and real estate or any interest therein. In
making investments, the Trustee shall:

A. Consider, among other factors, the short-term and long-term needs of the
Plan; and

B. Not be restricted to securities or other property of a character expressly
authorized by applicable law for trust investments.

4.1.2 Employment of Custodian. The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency agreement, under
which the duties of such bank or trust company shall be of a custodial,
clerical, and record-keeping nature.

4.1.3 Pooled Funds. From time to time the Trustee may transfer to a common,
collective, or pooled trust fund maintained by any person serving as a corporate
trustee hereunder all or such part of the assets held under this Agreement as
the Trustee may deem advisable, and any such monies so transferred shall be
subject to all the terms of provisions of the common, collective, or pooled
trust fund which contemplate the commingling for investment purposes of such
Trust assets with the assets of other trusts. The Trustee may, from time to
time, withdraw from such common, collective, or pool trust fund all or any part
of the monies so invested.

4.1.4 Life Insurance Policies. The Trustee may apply for, own, and pay premiums
on life insurance policies insuring the lives of Participants.

 

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4.2 Other Powers. In addition to the powers expressly or impliedly granted to
the Trustee in other provisions of this Agreement, the Trustee shall have the
power:

4.2.1 Borrow. To borrow money upon such terms and conditions, at any time or
times, and for such purposes of the Trust, as the Trustee may deem proper or
desirable. For sums borrowed, the Trustee may issue promissory notes and secure
the payment thereof by mortgaging or pledging all or any part of the assets of
the Trust.

4.2.2 Real Estate. To buy, sell, and hold title to real estate and interests
therein in the name of the Trustee or in the name of the Trustee’s nominee. In
accepting title to real estate, neither the Trustee nor the Trustee’s nominee
shall be held to have assumed the obligation to make payment of any encumbrances
thereon from its personal assets, nor any responsibility as to the validity of
the title conveyed to or held by the Trustee’s nominee. All conveyances executed
and delivered by the Trustee or the Trustee’s nominee shall be made without
covenants or warranty, except as against the Trustee’s own acts.

4.2.3 Voting. With respect to all stocks, bonds, and other securities held in
the Trust, (a) to exercise all voting rights with respect to such securities;
(b) to give general and special powers of attorney without power of substitution
in order to exercise such voting rights; (c) to exercise any conversion
privileges, subscription rights or other options and to make any payments
incidental thereto; (d) to consent to or otherwise participate in corporate
reorganizations and other changes affecting corporate securities held by the
Trust; (e) to delegate discretionary powers and to pay any assessments or
charges in connection therewith; and (f) generally to exercise any of the rights
and powers otherwise exercisable by any other owner of such securities.

4.2.4 Prosecute and Defend Claims. To sue and defend in any suit or legal
proceedings by or against the Trust. The Trustee shall have full power in the
Trustee’s discretion to compromise and adjust all claims and demands in favor of
or against the Trust upon such terms as the Trustee may deem appropriate. In the
administration of the Trust, the Trustee shall not be obligated to take any
action which may subject the Trustee to any expense or liability unless the
Trustee is first indemnified to the satisfaction of the Trustee for all expenses
and liabilities, including attorneys’ fees, which the Trustee may incur in
connection with such action.

4.2.5 Nominee. To register in the name of the Trustee or the Trustee’s nominee
any investment held by the Trust and to hold any investment in bearer form;
provided, however, (a) the books and records of the Trustee at all times shall
show that all such investments are part of the Trust Fund, and (b) such form of
registration or holding shall neither increase nor decrease the liability of the
Trustee.

4.2.6 Employment of Agents. To employ such agents, attorneys-in-fact, experts,
and investment and legal counsel, including any firm or corporation with which
the Trustee may be associated as a partner, director, stockholder, or otherwise,
and to delegate discretionary powers to or rely upon information or advice
furnished by, such agents, attorneys-in-fact, experts, or counsel.

 

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4.2.7 Execution of Instruments. To make, execute and deliver any and all
documents of transfer and conveyance and any and all other instruments that may
be necessary or appropriate to carry out the powers granted in this Agreement.

4.2.8 Necessary Acts. To do all acts, whether or not expressly authorized in
this Agreement, which may be necessary or proper for the protection of the Trust
Fund or for the carrying out of any duty under the Plan or this Agreement.

 

5. ADMINISTRATION OF TRUST

5.1 Standard of Care. The Trustee shall discharge its duties under this
Agreement (a) in a manner which satisfies the duties imposed upon “fiduciaries”
by ERISA, and (b) subject to such duties, (1) in the best interests of
Participants, (2) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims, and (3) by diversifying the investments of
the Trust so as to minimize the risk of large losses, unless under the
circumstances it is clearly not prudent to do so.

5.2 Accounts and Records. The Trustee shall maintain accurate and detailed
accounts of all investments, receipts, disbursements, and other transactions
under this Agreement, and all such accounts and other records relating thereto
shall be open to inspection and audit at all reasonable times by Bancorp and any
person designated by Bancorp.

5.2.1 Exclusion of Key Employees. Except for Covered Key Employees, Bancorp and
the Trustee acknowledge and agree that (a) under the terms of the Plan, no Key
Employee is entitled to receive Coverage or any other benefits under the Plan or
this VEBA; and (b) the Trustee shall not make any payment from the Trust to or
for the benefit of any Key Employee. With respect to the Covered Key Employees,
the Trustee at all times shall comply fully with the requirements of Code
Section 419A(d) (regarding the maintenance of separate accounts for “key
employees,” as that term is defined in Code Section 419A(c)(3)) and any other
provision of the Code requiring that contributions to the Trust and benefits
paid by the Trust with respect to “key employees” (as that term is defined in
Code Section 419A(c)(3)) be separately accounted for or subject to other special
restrictions.

5.2.2 Annual Accounting. Within sixty (60) days after the end of each Plan Year,
the Trustee shall furnish the Plan Administrator a written statement of account
setting forth all receipts and disbursements during such Plan Year. The Plan
Administrator shall acknowledge in writing receipt of such statement, and shall
advise the Trustee of its approval or disapproval of the statement. If, within
sixty (60) days after receiving such statement, the Plan Administrator fails to
disapprove the statement, then such statement shall be deemed approved. The
actual or deemed approval of the statement of account by the Plan Administrator
shall serve to release and discharge the Trustee from any liability or
accountability to the Plan Administrator with respect to the propriety of the
Trustee’s acts or transactions shown on the statement of account, except with
respect to any acts or transactions as to which the Plan Administrator shall
file written objections with the Trustee within such 60-day time period.

 

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5.3 Exempt Function Income. Prior to filing the Trust’s annual income tax return
for each taxable year, the Trustee shall designate that portion of the Trust’s
income for such year as qualifies as “exempt function income” (as such term is
defined in Section 512(a)(3) of the Code). All such exempt function income shall
be segregated from the general assets of the Trust, accounted for separately on
the Trust’s books and records, and used solely for the payment of the cost of
Coverage and those reasonable costs of administering the Trust which are
directly connected with the payment of the cost of the Coverage.

5.4 Payment of Benefits. Subject to Sections 5.2.1 and 8 hereof, the Trustee
shall apply the assets of the Trust to pay the Post Retirement Contribution
toward the cost of Coverage for Participants (as required by the Plan) at such
times, in such amounts, and to such persons, as the Plan Administrator
designates.

5.5 Expenses of Administration. Subject to Section 8.3, below, (a) the Trustee’s
compensation, if any, shall be fixed from time to time by agreement with
Bancorp, provided, no such compensation shall be paid if the payment or receipt
of such funds would constitute a “prohibited transaction” under the Code or
ERISA; and (b) the Trustee shall be entitled to be reimbursed, by Bancorp or
from the Trust Fund, for its reasonable expenses.

 

6. RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE

6.1 Resignation or Removal. Bancorp may remove the Trustee at any time, without
cause, by delivering a written notice of removal to the Trustee. The Trustee may
resign as a trustee under this Agreement by delivering to Bancorp a written
notice of resignation. Any such removal or resignation shall be effective on the
later of (a) the date specified in the notice of removal or resignation, or
(b) the fifteenth (15th) day after the delivery of such notice.

6.2 Successor Trustee. Upon the removal, resignation, death, or inability of any
Trustee to serve under this Agreement, a successor shall be appointed (a) by
Bancorp, or (b) if Bancorp does not then exist or is in bankruptcy proceedings
or its assets are being managed by a receiver, then by a majority of the
Participants then having an interest in the Trust. Upon accepting appointment as
a successor Trustee, the successor Trustee shall be vested with the same powers,
duties, privileges, and immunities that such Trustee would have possessed if it
originally had been named as the initial trustee in this Agreement. Upon
acceptance of such appointment by the successor Trustee, each Trustee who shall
have resigned or been removed shall assign, transfer, and pay over to the
successor Trustee all funds and properties of the Trust.

6.3 Report by Trustee. Within sixty (60) days after resigning or being removed,
the Trustee who has so resigned or been removed shall furnish to the Plan
Administrator a written statement of account with respect to the portion of the
Plan Year for which the Trustee has served. Upon receipt of such statement, the
Plan Administrator shall acknowledge receipt thereof in writing and shall advise
the Trustee whether the Plan Administrator approves or disapproves such
statement. If the Plan Administrator fails to approve any such statement of
account within sixty (60) days after receiving the statement, then such
statement shall be deemed to be approved. The actual or deemed approval of any
such statement shall serve to release and discharge such Trustee from any
liability or accountability to Bancorp with respect to the propriety of the
Trustee’s acts or transactions as shown in the statement of account.

 

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6.4 Waiver of Notice. The Trustee and Bancorp may, by mutual agreement, waive
any required advance notice of resignation or removal set forth in Section 6.1
above.

 

7. AMENDMENT AND TERMINATION OF AGREEMENT

Subject to the prohibitions set forth in Section 8, below:

7.1 Amendment. This Agreement may be amended at any time, in whole or in part,
by a written instrument executed by Bancorp and the Trustee.

7.2 Termination. This Agreement may be terminated at any time by Bancorp. Upon
such termination, the assets of the Trust shall be applied in the manner
directed by the Plan Administrator.

 

8. PROHIBITION AGAINST DISCRIMINATION, REVERSION OR INUREMENT

Notwithstanding any other provision of this Agreement to the contrary:

8.1 Discrimination. The assets of the Trust shall be applied in a manner which
satisfies the nondiscrimination requirements of Section 505 of the Code;

8.2 Exclusive Benefit. The assets of the Trust at all times shall be applied and
invested for the exclusive purpose of paying the Post-Retirement Contribution
toward the cost of Coverage under the Plan and the reasonable costs of
administering the Trust;

8.3 Prohibited Reversion and Inurement. Except to the extent Bancorp may make a
good faith mathematical or other computational error in determining the amount
of its contribution in any Plan Year and except as otherwise provided in
Section 9.1, below, under no circumstances shall any assets or net earnings of
the Trust, either during the existence of the Trust or at the termination
thereof:

8.3.1 Reversion. Revert to Bancorp or be applied to or from the benefit of
Bancorp (except to the extent the Trust Fund is applied to pay the cost of
Coverage pursuant to the Plan); or;

8.3.2 Inurement. Otherwise be paid to, or inure to the benefit of, any private
individual, shareholder or other person, except through the payment of the cost
of Coverage pursuant to the Plan and the costs of administering the Trust.

 

9. MISCELLANEOUS

9.1 Qualification and Initial Contribution. Bancorp and the Trustee shall
cooperate in preparing and submitting to the Internal Revenue Service all
documents that may be necessary to obtain from the Internal Revenue Service a
letter determining that the Trust, in operation with the Plan, constitutes a
VEBA and is exempt from federal income taxes under Section 501(a) of the Code.

 

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9.1.1 Amendment. Bancorp and the Trustee shall execute any amendment to this
Agreement that may be necessary to obtain such determination letter, and any
such amendment shall have retroactive effect to the extent necessary to ensure
the qualification of the Trust as a tax-exempt VEBA as of the effective date of
this Agreement.

9.1.2 Contributions. Bancorp and the Trustee acknowledge and agree that all
contributions made by Bancorp to the Trust are made on condition that such
contributions are deductible by Bancorp under Section 419 of the Code. If a
deduction is not allowable under that Section for any portion of any such
contribution for the taxable year of Bancorp with respect to which a
contribution is made, then the non-deductible portion of such contribution shall
be returned to Bancorp if Bancorp demands such portion within one year following
(a) the last day of Bancorp’s taxable year with respect to which such
contribution was made, or (b) if later, the date on which the Internal Revenue
Service disallows a deduction for all or any portion of such contribution;
provided, no portion of the earnings on such excess contribution may be returned
to the Bank, and any losses attributable to such excess contribution shall
reduce the amount which otherwise would have been returned to Bancorp under this
Section 9.1.2.

9.2 No Employment Rights. Neither the adoption and maintenance of this
Agreement, nor any express or implicit provision of this Agreement, shall be
deemed:

9.2.1 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;

9.2.2 Right. To give any person the right to be retained in the employ of any
Employer;

9.2.3 Discharge. To interfere with the right of any Employer to discharge any
Employee at any time; or

9.2.4 Continuing Employment. To give any Employer the right to require an
Employee to remain in the employ of any Employer, or to interfere with an
Employee’s right to terminate employment with any Employer at any time.

9.3 Interpretation. As used in this Agreement, the masculine, feminine, and
neuter gender and the singular and plural numbers each shall be deemed to
include the other whenever the context so indicates or requires. The captions to
the Sections of this Agreement are only for reference purposes, and shall not
affect in any way the meaning or interpretation of this Plan. Any capitalized
term which is set forth in this Agreement and not defined herein shall have the
meaning ascribed to such term in the Plan.

9.4 Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the state of California, in a manner consistent with the
requirements of the Code applicable to tax-exempt VEBAs and the requirements of
ERISA applicable to welfare benefit plans and the fiduciaries of such plans.

9.5 Effective Date. The effective date of this Agreement shall be December 30,
1998.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective
on the Effective Date set forth above.

 

“BANCORP”     “TRUSTEE:”

PACIFIC CAPITAL BANCORP,

a California corporation

   

SANTA BARBARA BANK & TRUST,

a California corporation

By   /s/ Jay D. Smith     By   /s/ Janice Kroekel Name:   Jay D. Smith     Name:
  Janice Kroekel Title:   Sr. VP     Title:   Vice President

 

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