Pacific Capital Bancorp










Exhibit 10.1 



PACIFIC CAPITAL BANCORP 



MANAGEMENT RETENTION
PLAN
(As Amended and Restated, effective October 25, 2004) 


 









  







PACIFIC CAPITAL BANCORP 



MANAGEMENT RETENTION
PLAN
(As Amended and Restated, effective October 25, 2004) 



TABLE OF CONTENTS 



	  1.	Introduction	 	 	 	1	 
	 	 	 	 	 	 	 
	  2.	Purpose	 	 	 	1	 
	 	 	 	 	 	 	 
	  3.	Eligibility
      to Participate	 	 	 	1	 
	 	 	 	 	 	 	 
	  4.	When
      Participation Ends	 	 	 	2	 
	 	 	 	 	 	 	 
	  5.	Severance
      Benefits	 	 	 	2	 
	 	 	 	 	 	 	 
		           Eligibility
      to Receive Benefits	 	 	 	2	 
		           Involuntarily
      Terminated	 	 	 	2	 
		           Other
      Pay/Benefits	 	 	 	2	 
		           Retiree
      Health Plan Benefits	 	 	 	3	 
		           Exclusion
      of Benefits	 	 	 	3	 
		           Limitation
      on Benefits	 	 	 	3	 
	 	 	 	 	 	 	 
	  6.	Exclusions
      for Severance Payment	 	 	 	3	 
	 	 	 	 	 	 	 
	  7.	Severance
      Payment	 	 	 	4	 
	 	 	 	 	 	 	 
	  8.	Rules
      for Determining Annual Compensation	 	 	 	4	 
	 	 	 	 	 	 	 
		           Annual
      Average Compensation	 	 	 	4	 
		           Cash
      Bonus	 	 	 	4	 
		           Cash
      Commissions	 	 	 	4	 
		           No
      Fringe Benefits	 	 	 	4	 
		           No
      Stock Options	 	 	 	4	 
	 	 	 	 	 	 	 
	  9.	Time
      and Form of Severance Payment	 	 	 	4	 
	 	 	 	 	 	 	 
	10.	Withholding	 	 	 	5	 
	 	 	 	 	 	 	 
	11.	Excise
      Tax and Non-Deductibility Limitations	 	 	 	5	 
	 	 	 	 	 	 	 
	12.	Retiree
      Health Plan	 	 	 	5	 
	 	 	 	 	 	 	 
	13.	Employment
      Status	 	 	 	5	 
	 	 	 	 	 	 	 
		           Transfer
      of Employment	 	 	 	5	 




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	14.	Successors	 	 	 	6	 
	 	 	 	 	 	 	 
		           Company's
      Successors	 	 	 	6	 
		           Failure
      to Obtain Assumption	 	 	 	6	 
		           Successor
      Fund	 	 	 	6	 
	 	 	 	 	 	 
	Definitions	 	 	 	7-10	 
	 	 	 	 	 	 	 
		           Administration
      of the Plan ERISA Required Information	 	 	 		 
		           Cause	 	 	 		 
		           Change
      of Control	 	 	 		 
		           Change
      of Control Date	 	 	 		 
		           Code	 	 	 		 
		           Determination	 	 	 		 
		           Disability	 	 	 		 
		           Exchange
      Act	 	 	 		 
		           Good
      Reason	 	 	 		 
		           Governing
      Law	 	 	 		 
		           Incumbent
      Directors	 	 	 		 
		           Plan
      Year	 	 	 		 
		           Severance
      Window Period	 	 	 		 





ii 










  





PACIFIC CAPITAL BANCORP 



MANAGEMENT RETENTION
PLAN
(As Amended and Restated, effective October 25, 2004)  



	1.  	Introduction 






On November 24, 1998, Pacific Capital
Bancorp, a California corporation (hereinafter referred to as Pacific Capital),
established a management retention plan entitled “Pacific Capital Bancorp Management
Retention Plan” (hereinafter referred to as the “Plan”) for the benefit of
certain eligible executives of Pacific Capital and its subsidiaries (hereinafter referred
to as “Pacific Capital”). The Compensation & Nominating Committee of the
Board of Directors of Pacific Capital (the “Committee”) approved the amended and
restated Plan on October 25, 2004. 



The Plan shall remain in effect until
terminated by the Board of Directors by resolution adopted by three-fourths of the
Incumbent Directors. 



This document (“Plan
Document”) is intended to give participants an easily understood explanation of the
Plan. This Plan Document, in conjunction with any future amendments, constitutes the
official Plan Document for the Plan. You may request an additional copy of this Plan
Document by sending a written request to the address below. Please note that capitalized
terms have specialized meanings which are defined in either the section where it is first
used or at the end of the Plan Document. 



Neither the receipt of the Plan
Document nor the use of the term “you” indicates that you are eligible for a
retention benefit under the Plan. Only those executives who are selected for participation
and satisfy the requirements for a retention payment contained in the Plan are eligible
for a benefit. 



If you have questions regarding the
Plan, you may contact the Corporate Secretary at: 



Pacific Capital Bancorp

1021 Anacapa Street 
Santa Barbara, CA 93106 
Telephone: 805-564-6298  


 









  






	2.  	Purpose 






The purpose of this Plan is to:  



	    	     •  	enhance
the ability of Pacific Capital to retain existing executive             management and,
if needed, attract new executives;






	    	      •    	provide
reasonable severance benefits for eligible executives in the             event of
termination of employment following a Change of Control of             Pacific Capital,
and;






	    	      •    	enhance
executive morale.







	3.  	Eligibility
to Participate 






You become eligible to participate in
the Plan if Pacific Capital employs you within a position or salary grade (or similar
category) selected by the Compensation & Nominating Committee of the Board of
Directors (“Committee”) to participate in the Plan. If you are among the
executive employees whose rank, position or salary grade (or similar category) is selected
for participation, you will be notified in writing. Employment in an executive capacity
does not entitle you to selection for participation in the Plan. The Committee shall not
select any category of employees for participation unless it determines that each person
in that category is a member of a select group of management or highly-compensated
employees. The Committee’s selection of a category of executive employees for
participation shall be made solely in its discretion and shall be conclusive and binding. 



If you are covered under the terms of
an employment agreement, change in control agreement, or other similar agreement entered
into between you and Pacific Capital, or another subsidiary or entity subsequently
acquired, you are not eligible to participate in this Plan until the terms of such other
agreement expire. 



If you are selected for
participation, you will receive a written Notice of Participation from the Corporate
Secretary to be executed and returned by you. 



	4. 	When
Participation Ends 






You will cease to be a participant in
the Plan as of the first to occur of the following events: 



the date you receive all of the
Severance Payments due under the Plan in the event you are eligible for severance;
 the
date the Committee notifies you that as a result of a change in your employment status,
you are no longer included in a category selected to be a participant in the Plan;
the
date your employment ends for any reason, which does not result in your eligibility for
severance;
 the Board of Directors terminates the Plan; 


 









  






	5.  	Severance
Benefits 






Eligibility  to
Receive Benefits: You are eligible to receive benefits following a Change of
Control only if: 



	•  	you
are a participant in the Plan at the time of your termination of       employment; and 






	•    	you
have signed and returned the Notice of Participation form; 






	•    	your
employment is Involuntarily Terminated by Pacific Capital.       Involuntarily Terminated
shall have the following meaning: 






		      •   	your
employment is terminated by Pacific Capital other than for Cause, 






		      •   	your
employment is terminated by Pacific Capital as a result of your death or your
Disability, or 






		      •   	you
terminate your employment for Good Reason within the Severance             Window Period. 






Other Pay/Benefits. If (1) your
employment is terminated at any time during the Severance Window Period and you are
entitled to receive a Severance Payment, (2) you participate in any Retiree Health Plan,
and/or (3) you timely exercise your rights under Title X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”) to continue to participate in Pacific
Capital’s Health/Dental/Vision (“H/D/V”) plans after your termination of
employment, Pacific Capital will continue to pay all premiums and costs associated with
your participation (and your spouse and dependents) in Company H/D/V plans according to
your elections and the terms/conditions of those plans for the period beginning as of the
date of your termination of employment. Payments end the earlier of: 



	• 	the
date you and your spouse and dependents become covered under another employer’s
health and/or dental insurance plans, or 






	• 	the
last day of the period you and/or your spouse and dependents are eligible to participate
in Pacific Capital’s H/V/D plans as provided under COBRA. 






Retiree Health Plan
Benefits 



If you participate in any Retiree
Health Plan, Pacific Capital shall have no obligation to make any payment to you or your
spouse and dependents under this section with respect to their participation. 



Exclusion of Benefits 



In the event your employment is
terminated for any reason, either prior to the occurrence of a Change of Control Date or
after the expiration of the Severance Window Period following a Change of Control Date,
you are not entitled to receive any benefits under this Plan. Other than this Plan, you
may be entitled to receive Severance Benefits that may apply under existing benefit plans
and policies of Pacific Capital. 




 









  






Limitation on Benefits 



By executing and returning to Pacific
Capital a Notice of Participation, you acknowledge that payment of benefits to you under
this Plan, if any, is the only compensation that you are entitled to as a result of
Involuntary Termination following a Change of Control. You have no right to bring or
maintain any suit, action, or other proceeding seeking compensation or damages based on
any alleged wrongful termination of your employment with Pacific Capital. Employee waives
and releases any rights that he/she may have under California Civil Code Section 1542 to
the full extent that all such rights may lawfully be waived. 



	6.  	Exclusions
for Severance Payment 






You are not eligible for Severance
Benefits, if any of the following conditions apply: 



	• 	You
fail to report to work or resign from employment prior to the effective date of your
termination of employment set forth in the notice of termination; 






	• 	You
announce in writing your intention to terminate employment or retire prior to the date
Pacific Capital announces that your employment will terminate; 






	•   	Your
termination of employment is due to Cause;






	•   	You
voluntarily resign or terminate your employment other than for Good       Reason,






	• 	Your
employment ends in connection with the sale of assets or a change in ownership of any
part of Pacific Capital’s operations and you are offered a comparable position with
comparable pay with the acquirer. 






	7.  	Severance
Payment 






The Severance Payment is equal to an
amount multiplied by your Severance Payment Percentage based on your position at the time
of your termination of employment times your Average Annual Compensation. 



	Position
      

    	Severance
      Payment Percentage
      

    
	 	 	 	 	 
	President
      & Chief Executive Officer	 	 	 	300%
	Leadership
      Council	 	 	 	200%
	Executive
      Vice President	 	 	 	150%
	Grade 19
      or T6	 	 	 	100%
	Grade 18
      (grandfathered prior to the amended and	 	 	 		 
	         restated
      October 25, 2004 Plan	 	 	 	100%





 









  





	8.  	Rules
for Determining Annual Compensation 






	 	
Annual
Average Compensation.  The average of your annual base salary, cash bonuses, and
commissions paid for the last three full Plan Years (or your actual full Plan Years of
employment if employed for less than three years). 






	 	
Cash
Bonus. A cash bonus, if any, is determined after the close of a Plan Year and
normally is paid during the first quarter of the following Plan Year. 






	 	
Cash
Commissions. Any cash commission is determined and paid after the close of a Plan
Year, and the amount, if any, is paid during the following Plan Year.  






	 	
No
Fringe Benefits. Your Annual Average Compensation for any Plan Year does not
include any fringe benefits provided by Pacific Capital, including Pacific Capital’s
I & I Plan or Employee Stock Ownership Plan, any matching contributions to any 401(k)
plan, any contributions or accruals to the Retiree Health Plans, and any premiums on
life, disability, or medical insurance. 






	 	
No Stock Options. Your
Annual Average Compensation for any Plan Year does not include any income or gain
realized by any stock options or other securities or rights granted to you by Pacific
Capital under any stock option plan or other incentive plan in effect at any time. 






	9.  	Time
and Form of Severance Payment 






Any Severance Payment that you are
entitled to receive under this Plan will be paid by Pacific Capital in a lump sum by the
later of (1) if no Dispute is made with respect to the Determination, (as those terms are
used in the Plan), 15 business days after the date of the delivery of the Determination,
and (2) if a Dispute is made with respect to the Determination, 15 business days after the
date of the Dispute resolution. 



	10.  	Withholding 






        All
amounts paid by Pacific Capital to you under this Plan are subject to all applicable
federal, state, and local payroll and withholding taxes, including any withholding
obligations under Section 4999 of the Excise Tax. 



	11.  	Excise
Tax and Non-Deductibility Limitations 






If a determination is made that
payments and benefits payable to any participant under this Plan, when aggregated with any
other payments or benefits received or to be received under any other plan by reason of
the occurrence of the Change of Control would be subject to the Excise Tax imposed by
Section 4999 of the Code, the participant is entitled to an additional payment (a
“Gross-Up Payment”) in an amount that will place the participant in the same
after-tax economic position that the participant would have been in if the Excise Tax had
not applied to the payments. The Accountants shall determine the amount of the Gross-Up
Payment. If the Accountants determine that payments are not subject to an Excise Tax, no
Gross-Up Payments will be paid to a participant. 




 









  





	12.  	Retiree
Health Plan 






Your rights and benefits under this
Plan are in addition to any rights under any Retiree Health Plan. Nothing in this Plan
shall limit your rights under any Retiree Health Plan and nothing in any Retiree Health
Plan shall limit your rights under this Plan. 



	13.  	Employment
Status






This Plan does not constitute a
contract of employment or impose on Pacific Capital any obligation to: 



           retain you as an employee,

           change status of your employment, or

           change
Pacific Capital’s policies regarding termination of employment.  



This Plan does not constitute a
contract of employment or impose on you any obligation to continue your employment with
Pacific Capital for any particular period of time. 



Subject to the provisions of any
written employment agreement between you and Pacific Capital, your employment is and
continues to be at-will, as defined under applicable law. If your employment with Pacific
Capital terminates for any reason at any time other than during the Severance Window
Period, including any termination prior to a Change of Control Date, you are not entitled
to any payments, benefits, damages, awards, or other compensation under this Plan. You
will only be entitled to payments, benefits, damages, awards, and other compensation that
are available under Pacific Capital’s established employee plans and practices at the
time of termination. 



Transfer of Employment. Notwithstanding anything in this Plan to the contrary, the reassignment
of your employment from Pacific Capital to any subsidiary, shall not, by itself, be
considered a Termination of Employment. 



	14.  	Successors 






Company’s Successors. Pacific Capital requires any successor to Pacific Capital (whether by
purchase, lease, merger, consolidation, liquidation, or otherwise) or to all (or
substantially all) of Pacific Capital’s business and/or assets, to assume this Plan
and expressly agree to perform all of the obligations of Pacific Capital under this Plan.
For all purposes under this Plan, references to Pacific Capital include any successor to
Pacific Capital and its business and/or assets, as appropriate. Any corporation,
partnership, limited liability company, or other person or entity which is the successor
of Pacific Capital (whether by purchase, lease, merger, consolidation, liquidation or
otherwise) or successor to all (or substantially all) of the business and/or assets of
Pacific Capital (including the stock of any subsidiary of Pacific Capital) is considered
to have assumed all of Pacific Capital’s obligations under this Plan. This assumption
applies regardless of whether or not any successor specifically acknowledges in writing
that it is assuming all obligations under this Plan. 


 









  






Failure to Obtain Assumption. The failure of Pacific Capital to obtain the assumption
of this Plan by its successor prior to the effectiveness of any succession will be
considered to be the Involuntary Termination of the participants in this Plan. The
Involuntary Termination of each effected participant is effective as of the day before the
succession effective date. Effected participants are entitled to receive the same
Severance Payment and other benefits under this Plan that they would have been entitled to
receive had their employment been terminated in an Involuntary Termination after the
succession effective date and after the occurrence of a Change of Control. 



Successor Fund. If a
transaction occurs in which any person or entity is considered a successor to Pacific
Capital and the successor does not specifically assume all of Pacific Capital’s
obligations under this Plan, Pacific Capital: 



	• 	will
retain a sufficient amount to pay, based on the compensation levels of the participants
who are Pacific Capital employees as of the date immediately preceding the close of the
transaction, all of the Severance Payments and other benefits that are then payable, and 






	•   	within
two years from the closing date may be payable to participants, and






	• 	promptly
after the close of the transaction will use the assets and/or consideration to pay the
Severance Payments and other benefits payable to the participants. 





 









  






DEFINITIONS 



Administration of the
Plan ERISA Required Information 



The sponsor and Administrator of
this Plan is: 
Pacific Capital Bancorp 
1021 Anacapa Street 
Santa Barbara, California 93101

Attn:  William S. Thomas, Jr., President & CEO 
(805) 564-6216  





The Designated Agent for service of
process: 
General Counsel 
Pacific Capital Bancorp 
1021 Anacapa Street 
Santa Barbara,
California 9311  



Pacific Capital may change the name and position of the
Administrator or Designated Agent at any time. 



CAUSE 



Cause for termination of the
participant’s employment by Pacific Capital is based upon: 



		• 	the
continued failure by the participant to substantially perform the participant’s
duties (unless such failure is due to participant’s Disability) after written
documentation specifying the participant’s performance failures is delivered to the
participant and a period of at least 14 business days is given to the participant to cure
such failures; 






		      • 	any
act of dishonesty, breach of confidentiality or ethics             violation, or fraud by
the participant;






		• 	the
participant’s conviction of a felony, or commission of a criminal or other act that
will probably cause substantial economic damage to Pacific Capital or substantial injury
to its business reputation; or 






		      • 	the
order of a regulatory agency.






CHANGE OF CONTROL 



Change of Control is the occurrence
of any of the following events: 



	• 	An
acquisition of any voting securities of Pacific Capital 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 20% or more of the combined voting power of
Pacific Capital’s then outstanding voting securities. 






 









  





	• 	  	
A cumulative change in the composition of the Board of Directors of Pacific Capital
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
Pacific Capital (a “Proxy Contest”) including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or 






	• 	Approval
by the shareholders of Pacific Capital of: 






		a. 	A
merger, consolidation or reorganization involving Pacific Capital. 






		b. 	A
complete liquidation or dissolution of Pacific Capital unless (as evidenced by
               resolution of the Board of Directors of Pacific Capital) (x) such
liquidation or                dissolution is effected primarily for the purpose of
consolidating the business                and assets of Pacific Capital with those of one
or more subsidiaries of Pacific                Capital and (y) the principal business of
Pacific Capital is continued by such                subsidiary immediately after such
liquidation or dissolution; or 






		c. 	An
agreement for the sale or other disposition of all or substantially all of
               the assets of Pacific Capital to any person other than one or more
subsidiaries                of Pacific Capital. 






Change of Control Date 



Change of Control Date is the
earliest of: 



	• 	the
date on which the Change of Control occurs;






	• 	the
date on which Pacific Capital executes an agreement which would result       in the
occurrence of a Change of Control;






	• 	the
date on which the Board of Directors of Pacific Capital approves a transaction which, if
completed, would result in a Change of Control; or 






	• 	the
date Pacific Capital fails to satisfy its obligations to have this Plan assumed by any
successor to Pacific Capital involved in the Change of Control. 





 









  






Code 



Code means the Internal Revenue Code
of 1986, as amended. 



Determination 



Initial Determination. An
initial determination as to whether any payments would be subject to the Excise Tax shall
be made at Pacific Capital’s expense by an accounting firm selected by Pacific
Capital (which firm may be Pacific Capital’s regular outside auditors) (the
“Accountants”). The Accountants shall provide their determination (the
“Determination”), together with supporting calculations and documentation, to
Pacific Capital and the participant within 30 days after the date of the
participant’s Termination of Employment. For purposes of making the calculations, the
Accountants may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. Pacific Capital and the participant shall furnish
information and documents to the Accountants as they may reasonably request in order to
make a Determination. Pacific Capital shall bear all costs that the Accountants may
reasonably incur in connection with any calculations contemplated by this section. If the
Accountants determine that no Excise Tax is payable by a participant, Pacific Capital
shall cause the Accountants to provide the participant an opinion that the Accountants
have substantial authority under the Code not to report an Excise Tax on the
participant’s federal income tax return. 



     Dispute.
          The Participant and Pacific Capital shall have the right to dispute the
          Determination (the “Dispute”). The participant and/or Pacific Capital
          shall initiate the Dispute, if at all, by delivering to the Administrator
          written notice of the Dispute within 10 days after the delivery of the
          Determination by the Accountants. If a written notice of Dispute is not
          delivered to the Administrator within such 10-day period, it shall be
          conclusively presumed that there is no Dispute and the Determination shall be
          binding, final, and conclusive upon the participant and Pacific Capital. If
          Pacific Capital initiates the Dispute, they shall promptly deliver to the
          participant a copy of the written notice delivered to the Administrator. Pacific
          Capital shall pay the reasonable attorney fees, costs, and expenses incurred in
          good faith by the participant in connection with the resolution of any Dispute,
          regardless of the outcome of the Dispute. 



DISABILITY 



Disability shall have the same
meaning as that term is defined in Pacific Capital’s Long-Term Disability Plan. 



EXCHANGE ACT 



Exchange Act means the Securities
Exchange Act of 1934, as amended. 



 









  





GOOD REASON 



Good Reason is the occurrence of any
of the following events, without the participant’s express written consent: 



	• 	the
assignment to the participant of duties that are inconsistent with the
      participant's position and salary;






	• 	a
significant reduction of the participant's duties or responsibilities;






	• 	a
reduction of the participant’s base pay and annual cash bonuses or commissions,
unless the reduction in such bonuses and commissions results primarily from a
proportionate reduction in the bonus and/or commission pool available to employees based
on the performance of Pacific Capital Bancorp or the performance of the participant, or a
material reduction in the kind or level of employee benefits to which the participant is
entitled; 






	• 	the
termination of the participant's status as a member of the Leadership       Council of
Pacific Capital;






	• 	the
relocation of the participant’s principal place of employment more than 35 miles
from the present principal place of employment. 






GOVERNING LAW 



This Plan Document shall be governed
and interpreted in accordance with California law. 



INCUMBANT DIRECTORS  



Incumbent Directors means directors
of Pacific Capital who are elected (or nominated for election) to the Board by the
affirmative vote of at least a majority of the Incumbent Directors at the time of such
election or nomination. An individual who is elected or nominated in connection with an
actual or threatened Proxy Contest relating to the election of directors shall not be
considered an Incumbent Director. 



PLAN YEAR 



Plan Year means the period beginning
January 1st and ending December 31st of each year. 



SEVERANCE WINDOW PERIOD 



The Severance Window Period is a
period of 24 months immediately following the Change of Control Date.