Document:

First Amended & Restated Pacific Capital Bancorp Trust Agreement

 Exhibit 10.1.13.1 
  

  
 FIRST AMENDED AND RESTATED TRUST AGREEMENT 
  
 UNDER 
  
 PACIFIC CAPITAL BANCORP DEFERRED
COMPENSATION PLAN 
  
 October 1, 2000 
  

 FIRST AMENDED AND RESTATED TRUST AGREEMENT 
  
 THIS FIRST AMENDED AND RESTATED TRUST AGREEMENT UNDER PACIFIC CAPITAL
BANCORP DEFERRED COMPENSATION PLAN (the “Agreement”) is made and entered into, effective on the date set forth below, by and between PACIFIC CAPITAL BANCORP, a California corporation (“Pacific Capital” or
“Employer”, and SANTA BARBARA BANK & TRUST, a California corporation (“Trustee”), with reference to the following facts: 
  
 RECITALS: 
  
 A. Pacific Capital is the owner of all the outstanding capital stock of certain “Affiliates,” as defined below, and has adopted that certain
“Deferred Compensation Plan” effective December 15, 1999 (the “Plan”), to provide deferred compensation benefits to a select group of management or highly compensated employees of Pacific Capital and those Affiliates. 

 
 B. Pacific Capital has incurred liability, and expects to incur further
liability, under the terms of the Plan, and it is the intention of Pacific Capital to make contributions to the Trust in order to provide a source of funds to assist Pacific Capital in meeting its liabilities under the Plan. 
  
 C. Pacific Capital periodically adopted that certain “Trust Agreement
Under Pacific Capital Bancorp Deferred Compensation Plan” dated effective as of December 15, 1999 (the “Original Trust Agreement”), pursuant to which Pacific Capital established a trust (the “Trust”) and certain
“Subtrusts” to hold certain assets, subject to the claims of the creditors of Pacific Capital or its Affiliates in the event of the “Insolvency” (as herein defined) of Pacific Capital or such Affiliate (as the case may be) which
employs any Participant, until paid to participants in the Plan (the “Participants”) in such manner and at such time specified in the Plan document. 
  

D. Pacific Capital and Trustee have agreed to execute this Agreement in order to memorialize certain amendments to the Original Trust Agreement.

  
 E. It is the intention of Pacific Capital and each Affiliate
that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan for the payment of deferred compensation. 
  
 AGREEMENTS: 
  
 NOW, THEREFORE, the parties hereto do hereby establish the Trust and agree that the Trust shall be comprised, held, and disposed of as follows:

  
 1. DEFINITIONS 
  
 For purposes of this Agreement: 
  
 1.1 “Administrator” shall mean Pacific
Capital or such other entity or person as Pacific Capital may designate from time to time as the administrator of the Plan. 
  
 1.2 “Administrative Committee” shall mean the committee constituted by Pacific Capital from time to time to supervise the
administration of the Plan. 
  

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 1.3 “Acquired Company Deferred Compensation Plans” shall mean (a) that certain
Executive Compensation Deferral Plan sponsored by South Valley National Bank, a California corporation, pursuant to certain resolutions adopted by the Board of Directors of South Valley National Bank as of March 24, 1998, and (b) that certain
Executive Compensation Deferral Plan sponsored by First National Bank of Central California as adopted by the Board of Directors of First National Bank of Central California as of March 24, 1998, (c) that certain Executive Compensation Deferral Plan
formerly sponsored by Pacific Capital Bancorp, a California corporation that was acquired by Employer in a transaction that closed effective December 30, 1998, as adopted by the Board of Directors of such corporation as of March 24, 1998, and (d)
such deferred compensation plans as (i) are sponsored by other corporations which are hereafter acquired by Pacific Capital (whether by asset purchase, stock purchase, merger, or other reorganization), and (ii) some or all of the assets for which
Pacific Capital permits to be transferred to this Trust. 
  
 1.4 “Affiliate” means each corporation, all the outstanding capital stock which is owned by Employer. 
  
 1.5 “Change in Control” means the occurrence of any of the following events with respect to Pacific Capital: (a) a change in
control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14.A of Regulation 14A promulgated under the Securities Exchange Act of 1934 (“Exchange Act”), as amended, or in response to any other form or
report to the regulatory agencies or governmental authorities having jurisdiction over Pacific Capital or any stock exchange on which Pacific Capital’s shares are listed which requires the reporting of a change in control; (b) any merger,
consolidation, or reorganization of Pacific Capital in which Pacific Capital does not survive; (c) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition (in one transaction or a series of transactions) of any assets of Pacific
Capital having an aggregate fair market value of fifty percent (50%) of the total value of the assets of Pacific Capital, reflected in the most recent balance sheet of Pacific Capital; (d) a transaction whereby any “person” (as such term
is defined in the Exchange Act) or any individual, corporation, partnership, trust, or any other entity becomes the beneficial owner, directly or indirectly, of securities of Pacific Capital representing twenty-five percent (25%) or more of the
combined voting power of Pacific Capital’s then outstanding securities; or (e) a situation where, in any one-year period, individuals who at the beginning of such period constitute the Board of Directors of Pacific Capital cease for any reason
to constitute at least a majority thereof, unless the election, or the nomination for election by Pacific Capital’s shareholders, of each new director is approved by a vote of at least three-quarters (3/4) of the directors then still in office
who were directors at the beginning of the period. Notwithstanding the foregoing or anything else contained herein to the contrary, there shall not be a Change in Control for purposes of this Trust if the event which would otherwise come within the
meaning of the term Change in Control involves (x) a reorganization at the direction of Pacific Capital solely to form a parent bank holding company which owns one hundred percent (100%) of Pacific Capital’s common stock following
reorganization, and (y) an Employee Stock Ownership Plan sponsored by Pacific Capital or its parent holding company which is the party that acquires control or is the principal participant in the transaction constituting the Change in Control.

  
 1.6 “Insolvency” means that the
Participating Company (a) is unable to pay its debts as they become due, or (b) is subject to a pending proceeding as debtor under the United States Bankruptcy Code, as amended. 
  
 1.7 “Pacific Capital” means PACIFIC CAPITAL BANCORP, a California corporation, which is the
sponsor and a trustor of this Trust. 
  

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 1.8 “Participant” shall have the meaning ascribed to such term in the Plan.

  
 1.9 “Participating Company” shall mean
Pacific Capital and each Affiliate. 
  
 1.10
“Participating Company Trust” shall mean a separate Trust established for Pacific Capital and for each of its Affiliates which employs a Participant in the Plan on whose behalf contributions are made to this Trust. 

 
 1.11 “Plan” means the Pacific Capital Bancorp
Deferred Compensation Plan dated effective December 15, 1999, as amended from time to time. 
  
 1.12 “Subtrust” shall mean a separate subtrust established for each Participant pursuant to Section 3.3, below. 
  
 Each other capitalized term which appears in this Agreement and is not defined herein shall have the meaning ascribed to such term in the
Plan. 
  
 2. ESTABLISHMENT OF TRUST 
  
 2.1 Deposit. Pacific Capital hereby deposits with
Trustee in trust the sum of One Dollar ($1.00), which shall become the principal of the Trust to be held, administered, and disposed of by the Trustee as provided in this Trust Agreement. 
  
 2.2 Irrevocable. The Trust hereby established shall be irrevocable by any Participating Company.

  
 2.3 Grantor Trust. The Trust is intended
to be a grantor trust, of which Pacific Capital and each Affiliate, in each instance as an Participating Company and only to the extent of contributions actually made by the Participating Company, is the grantor, within the meaning of Subpart E,
Part I, Subchapter J, Chapter 1, Subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. 
  
 3. FUNDING 
  
 3.1 Contributions. 
  
 3.1.1 Amount. Each Participating Company shall contribute to the Trust an amount equal to the amount deferred for the Plan Year by each
Participant. Each Participating Company may also contribute cash to the Trust an amount approximately equal to the “cost of insurance” (as defined in the pertinent insurance policy owned by the Participating Company Trust) needed to fund
the death benefits described in Section 4.2.4 of the Plan; provided that such obligation shall not apply with respect to any insurance policy if the Administrator has directed the Trustee to discontinue such policy. The Administrator
may direct the Trustee to discontinue the policy for any reason, without regard to whether Section 4.2.4 of the Plan is in effect, whether a policy has been issued on the Participant or otherwise. 
  
 3.1.2 Principal and Income. Except as otherwise provided
herein, all contributions received pursuant to Section 3.1.1, above, together with the income therefrom and any increment thereon, shall be held, managed and administered by Trustee as a Participating Company Trust pursuant to the terms of this
Trust Agreement without distinction between principal and income. 
  

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 3.1.3 Trust Assets. The principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Participating Company and shall be used exclusively for the uses and purposes of Plan Participants and general creditors as herein set forth. Trust Beneficiaries shall not have any preferred claim on, or any
beneficial ownership interest in, any assets of the Trust prior to the time such assets are paid to Trust Beneficiaries as benefits as provided in Section 4, below, and all rights created under this Trust Agreement shall be mere unsecured
contractual rights of Trust Beneficiaries against the Participating Company or Participating Company Trust. Any assets held by the Trust will be subject to the claims of the Participating Company’s general creditors under federal and state law
in the event of the Insolvency of the Participating Company, provided however, that the only Trust Assets subject to the claims of a Participating Employee’s general creditors shall be those assets allocated to the Participating Company
Trust maintained for such Participating Company. 
  
 3.2
Participating Company Trusts 
  
 3.2.1
Creation. The Trustee shall establish a separate Participating Company Trust for each Participating Company and credit the amount of contributions made by each Participating Company to that Participating Company’s Trust. Each
Participating Company Trust shall reflect a Participating Company’s interest in the assets of the Trust Fund and shall not require any segregation of particular assets. 
  
 3.2.2 Asset Rollovers. In addition to holding in such Participating Company Trusts the contributions made
thereto by the Participating Company from time to time, the Trustee shall deposit into each such Participating Company Trusts the amounts designated by the Participating Company as rollover assets from trusts that were created under any Acquired
Company Plan to hold assets corresponding to the accounts of those participants under such Acquired Company Plans who, pursuant to Section 2.6 of the Plan, have elected to rollover their account balances from an Acquired Company Plan to the Plan.

  
 3.2.3 Allocations. Following the allocation of
assets to the Participating Company Trusts pursuant to Section 3.2.1, above, the Trustee shall allocate investment earnings and losses of the Trust Fund among the Participating Company Trusts in accordance with Section 7.2, below, and as directed by
the Administrator. Payments to general creditors pursuant to Section 5, below, shall be charged against the particular Participating Company Trust and not the Trust as a whole. 
  
 3.3 Subtrusts. If directed by the Administrator, the Trustee shall establish a separate Subtrust for a
Participant and credit the amount of such contribution to that Participant’s Subtrust. Each Subtrust shall reflect an individual interest in the assets of the Trust fund and shall not require any segregation of particular assets. 
  
 3.3.1 Allocations. Following the allocation of assets to
Subtrusts pursuant to this Section 3.3, the Trustee shall allocate investment earnings and losses of the Trust fund among the Subtrusts in accordance with Section 7, below, and as directed by Company. Payments to general creditors pursuant to
Section 5, below, shall be charged against the Subtrusts in proportion to their account balances, except that the payment of benefits to a Trust Beneficiary shall be charged against the Subtrust established or maintained for such Trust Beneficiary.

  
 3.3.2 Allocations to Subtrust. Amounts allocated
to a Participant’s Subtrust may not be utilized to pay benefits to another Participant (or to a Beneficiary of another Participant). Following payment of a Participant’s entire benefit under the Plan, including payment of a non-scheduled
in-service distribution 

  

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pursuant to Section 6.2.3 of the Plan (whether by the Trustee pursuant to the terms of this Trust Agreement or by the Participating Company or by a
combination thereof), any amounts remaining allocated to that Participant’s Subtrust shall be transferred by the Trustee to the Participating Company. In lieu of transferring such amounts, the Administrator may direct the Trustee to retain and
allocate such amounts in the Trust in accordance with Section 7.3, below. Following payment of a Participant’s entire benefit under the Plan, including payment of under Section 6.2.3 of the Plan (whether by the Trustee pursuant to the terms of
this Trust Agreement or by the Participating Company or by a combination thereof), any life insurance policy held with respect to such Participant shall be transferred by the Trustee to the Participating Company. In lieu of transferring the policy,
the Administrator may direct the Trustee to designate a new beneficiary (which may be the Participating Company) under the policy or cash in the applicable Policy and cause such proceeds to be retained in Trust and allocated in accordance with
Section 7.3, below. 
  
 4. PAYMENTS TO PARTICIPANTS AND BENEFICIARIES

  
 4.1 Payment Schedule. Pacific Capital shall
deliver to the Trustee a schedule (the “Payment Schedule”) that (a) indicates the amounts payable to each Participant and Beneficiary, and (b) provides a formula or other instructions acceptable to the Trustee for determining the amount so
payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time for commencement of payment of such amounts. Except as otherwise provided in this Agreement, the Trustee shall make payments to the
Participants and Beneficiaries in accordance with such Payment Schedule. If Subtrusts have been established for Participants, then the payment being made to any Participant (or his beneficiary) shall be made solely from the Subtrust established for
the benefit of such Participant. The Trustee shall make provisions for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of such amounts pursuant to the Plan and shall
pay amounts so withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Pacific Capital. 
  
 4.2 Determination of Entitlement. The entitlement of a Participant (or the Participant’s Beneficiaries) to payments under the Plan
shall be determined by the Administrator, and any claim for such payments shall be considered and reviewed under the procedures set out in the Plan. 
  
 4.3 Payments by Participating Company. A Participating Company may make payment directly to the Participants and Beneficiaries of amounts
that become due under the terms of the Plan. The Participating Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to Participants and their Beneficiaries. In addition, if the
principal of the Trust, and any earnings thereon, are not sufficient to make payment of benefits in accordance with the terms of the Plan, then the Participating Company shall make the balance of each such payment as it becomes due. The Trustee
shall notify the Participating Company whenever the principal of the Trust and earnings thereon are not sufficient to make required payments. 
  
 5. PAYMENTS UPON PARTICIPATING COMPANY INSOLVENCY 
  
 5.1 Insolvent. If any Participating Company becomes Insolvent, then the Trustee shall cease making payments to any Participants (and their
Beneficiaries) from the Participating Company Trust maintained on behalf of such Participating Company. 
  
 5.2 Claims of General Creditors. At all times during the continuance of this Trust, the principal and income of each Participating Company
Trust shall be subject under federal and state law to the extent set forth below to claims of general creditors of the Participating Company on whose behalf such Participating Company Trust is maintained. 
  

 -5- 

 5.2.1 Notice to Trustee. The Board of Trustees and the Chief Executive Officer of each
Participating Company shall have the duty to inform the Trustee, in writing, if such Participating Company becomes Insolvent. 
  
 5.2.2 Claim by Creditor. If a person claiming to be a creditor of a Participating Employer alleges in writing to the Trustee that such
Participating Company has become Insolvent, then the Trustee shall determine whether such Participating Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to the Participants (and their
Beneficiaries) on whose behalf such Participating Company made contributions to the Trust. 
  
 5.3 Trustee Inquiries and Reliance. Unless the Trustee has actual knowledge of a Participating Company’s Insolvency, or has received notice from a Participating Company or a person claiming to be a
creditor of a Participating Company alleging that such Participating Company is Insolvent, the Trustee shall have no duty to inquire whether a Participating Company is Insolvent. The Trustee in all events may rely on such evidence concerning a
Participating Company’s solvency that is furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination regarding a Participating Company’s solvency. 
  
 5.4 Disposition of Assets. If at any time the Trustee has
determined that a Participating Company is Insolvent, then the Trustee shall discontinue payments from the Participating Company Trust maintained for such Participating Company. 
  
 5.4.1 Status of Participants. Nothing in this Trust Agreement in any way shall diminish any rights of
Participants and their Beneficiaries to pursue their rights as general creditors of any Insolvent Participating Company with respect to benefits due under the Plan or otherwise. 
  
 5.4.2 Resumption of Payments. The Trustee shall resume the payment of benefits to Participants (and their
Beneficiaries) in accordance with Section 4 of this Agreement only after the Trustee has determined that the Insolvent Participating Company is not Insolvent (or is no longer Insolvent). 
  
 5.5 Post-Insolvency Payment. Provided that there are sufficient assets in the pertinent Participating
Company Trust, if the Trustee discontinues the payment of benefits from the Trust pursuant to Sections 5.1 or 5.2.2, above, and thereafter resumes such payments, then the first payment following such discontinuance shall include the aggregate amount
of all payments due to Participants and their Beneficiaries for the period of such discontinuance, less the aggregate amount of any payments made to Participants and their Beneficiaries in lieu of the payments provided for hereunder during any such
period of discontinuance. 
  
 6. PAYMENTS TO PARTICIPATING COMPANIES

  
 Except as provided in Section 5, above, neither Pacific
Capital nor any other Participating Company shall have any right or power to direct the Trustee to return to any such entity or to divert to others any of the Trust assets before all payment of benefits have been made to Participants and their
Beneficiaries pursuant to the terms of the Plan. 
  

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 7. INVESTMENT AUTHORITY 
  
 7.1 Investment. The Trustee shall invest the assets of the Trust (and each Subtrust, if any) in such
stock, securities, obligations, and other assets as Pacific Capital shall direct from time to time, provided, in no event shall the Trustee invest in securities or obligations issued by Pacific Capital (other than an amounts held in common
investment vehicles in which the Trustee may invest). All rights associated with assets of the Trust shall be exercised by the Trustee or the person designated by the Trustee in such manner as Pacific Capital shall direct, but in no event shall any
such rights be exercisable by or rest with Plan Participants. 
  
 7.2 Disposition of Income and Losses. Subject to Section 7.3, below, all income received by the Trust, net of expenses, shall be accumulated and reinvested. Any income or loss attributable to the amount credited to a
Participating Company Trust in accordance with Section 3.1.2, above, and any income or loss thereon, shall be credited to such Participating Company Trust and reinvested therein. Any income or loss attributable to the amount credited to a Subtrust
pursuant to Section 3.3, above, and the income or loss thereon, shall be credited to and reinvested in such Subtrust. 
  
 7.3 Excess Assets. If any assets remain in a Subtrust after death benefits are paid to a Beneficiary in accordance with the terms of
the Plan, such excess assets which remain in the Trust shall be allocated to the Participating Company’s Trust in such manner as the Administrator may designate.  
  
 8. DISPOSITION OF INCOME 
  
 During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. 
  
 9. ACCOUNTING BY TRUSTEE 
  
 The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing by the Trustee and Pacific Capital. Within forty-five (45) days following the close of each calendar year and
within forty-five (45) days after the removal or resignation of the Trustee, the Trustee shall deliver to Pacific Capital a written account of its administration of the Trust during such year or during the period from the close of the last preceding
year to the date of such removal or resignation, setting forth all investments, receipts, disbursements, and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net
proceeds of such purchases or sales (including interest paid or receivable being shown separately), and showing all cash, securities, and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as
the case may be. 
  
 10. RESPONSIBILITY OF TRUSTEE 
  
 10.1 Standard of Care. The Trustee shall act 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, provided,
however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by Pacific Capital which is contemplated by, and in conformity with, the terms of the Plan or this Agreement and
is given in writing by Pacific Capital. In the event of a dispute between Pacific Capital and any other party regarding the amount payable, the Trustee may apply to a court of competent jurisdiction to resolve the dispute. 
  

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 10.2 Attorneys’ Fees. If the Trustee undertakes or defends any litigation arising in
connection with this Trust, then Pacific Capital agrees to indemnify the Trustee against the Trustee’s costs, expenses, and liabilities (including, without limitation, attorneys’ fees and expenses) relating thereto, and to be primarily
liable for such payments. If Pacific Capital does not pay such costs, expenses, and liabilities within sixty (60) days of demand therefor and presentation of an invoice by the person to whom the payment was made or incurred, then the Trustee may
obtain payment of the same from the Trust assets. 
  
 10.3
Agents. The Trustee may consult with legal counsel (who also may be counsel for Pacific Capital generally) with respect to any of its duties or obligations under this Agreement. The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants, or other professionals to assist in the performance of any of its duties or obligations under this Agreement. 
  
 10.4 Powers. Subject to Section 10.5, below, the Trustee shall have, without exclusion all powers conferred on Trustee by applicable law,
unless expressly provided otherwise in this Agreement, provided, however, that if an insurance policy is held as an asset of the Trust, then the Trustee shall have no power to name a beneficiary of the policy other than the Trust or to assign
the policy (as distinct from conversion of the policy to a different form) other than to a successor trustee, or to loan to any person the proceeds of any borrowing against such policy. 
  
 10.5 Limitation on Powers. Notwithstanding any powers granted to the Trustee pursuant to this Agreement or
applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative Regulations
promulgated pursuant to the Internal Revenue Code. 
  
 11. COMPENSATION AND
EXPENSES OF TRUSTEE 
  
 Pacific Capital shall pay all
administrative and Trustee’s expenses. If such fees and expenses are not paid within forty-five (45) days after presentation of an invoice therefor, then the amount of the fees and expenses shall be paid from the Trust assets. 
  
 12. RESIGNATION AND REMOVAL OF TRUSTEE 
  
 12.1 Resignation. The Trustee may resign at any time by
written notice to Pacific Capital, which shall be effective thirty (30) days after receipt of such notice by Pacific Capital, unless Pacific Capital and the Trustee agree otherwise. 
  
 12.2 Removal. The Trustee may be removed by Pacific Capital upon thirty (30) days’ notice or upon shorter
notice accepted by Trustee. 
  
 12.3 Transfer of
Assets. Upon the resignation or removal of the Trustee and appointment of a successor Trustee, all assets of the Trust shall subsequently be transferred to the successor Trustee. The transfer shall be completed within forty-five (45) days
after receipt of notice of resignation, removal, or transfer unless Pacific Capital extends such time limit. 
  

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 12.4 Successor. If the Trustee resigns or is removed, then a successor shall be appointed,
in accordance with Section 13, below, prior to the effective date of such resignation or removal under Sections 12.4 or 12.2, above. If no such appointment has been made by such time, then the Trustee may apply to a court of competent jurisdiction
for appointment of a successor or for instructions. All expenses of the Trustee in connection with such proceeding shall be allowed as administrative expenses of the Trust. 
  
 12.5 Change in Control. If, at the time of a Change in Control (as defined herein), the then acting Trustee is
an affiliate of Pacific Capital, the Board of Directors of Pacific Capital, as in existence immediately prior to the Change in Control, shall designate an independent third party with corporate trustee powers to act as successor trustee and upon
such appointment, the trustee acting prior to such Change in Control shall resign. The successor trustee appointed by the Board of Directors may not be removed by such successor for two (2) years following the date of Change in Control, except in
connection with the termination of the Trust under Section 14.2 
  
 13.
APPOINTMENT OF SUCCESSOR 
  
 13.1
Appointment. If the Trustee resigns or is removed in accordance with Sections 12.1 or 12.2, above, then Pacific Capital may appoint any third party, such as a bank or trust department or other party that may be granted corporate trustee
powers under state law, as a successor to replace the Trustee upon resignation and removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by Pacific Capital or the successor Trustee to evidence the transfer. 
  
 13.2 Examination and Indemnity. The successor Trustee need not
examine the records and acts of any prior Trustee and (subject to the express limitations imposed by this Agreement) may retain or dispose of existing Trust assets. The successor Trustee shall not be responsible for and Pacific Capital shall
indemnify and defend the successor Trustee from, any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee. 
  
 14. AMENDMENT OR TERMINATION 
  
 14.1 Amendment. This Agreement may be amended by a written
instrument executed by the Trustee and Pacific Capital. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or make the Trust revocable after it has become irrevocable. 
  
 14.2 Termination. The Trust shall not terminate until the date
on which Plan Participants and their Beneficiaries no longer are entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust, any assets remaining in the Trust shall be returned to Pacific Capital. 
  
 14.3 Ratification. Upon written approval of Plan Participants
or Beneficiaries entitled to payment of Benefits under the Plan, Pacific Capital may terminate this Trust prior to the time all benefit payments under the Plan have been made. All assets in the Trust at termination of the Trust shall be returned to
Pacific Capital. 
  
 15. MISCELLANEOUS 
  
 15.1 Effect of Law. Any provision of this Trust Agreement
prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions of this Agreement. 
  

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 15.2 Prohibition Against Assignment. Any benefits payable to Plan Participants and their
Beneficiaries pursuant to this Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. 
  
 15.3 Governing Law. This Agreement shall be governed by and is
construed in accordance with the terms of the laws of the State of California. 
  
 16. EFFECTIVE DATE 
  
 The effective date
of this Agreement shall be October 1, 2000. 
  
 IN WITNESS
WHEREOF, the parties hereto have executed this First Amended and Restated Trust Agreement, effective on the date set forth above. 
  

							
	“PACIFIC CAPITAL:”	 	“TRUSTEE:”
		
	 PACIFIC CAPITAL BANCORP, a California corporation
	 	SANTA BARBARA BANK & TRUST, a California corporation
				
	 By
	 	  

	 	By	 	  

	 	 	             Jay D. Smith, Senior Vice President
	 	 	 	Name & Title:
	  

	 	

	 	 	                                 Date
	 	 	 	                                 Date

  
  

 -10-Employment Agreement

 Exhibit 10.1 
  
 PROPOSED FORM OF 
 EMPLOYMENT AGREEMENT 
  
 THIS AGREEMENT
(the “Agreement”), made this 21st day of December, 2004, by and between OCEAN SHORE HOLDING CO., a
federally chartered corporation (the “Company”), OCEAN CITY HOME BANK, a federally chartered savings association (the “Bank”), and STEVEN E. BRADY (the “Executive”). 
  
 WHEREAS, Executive serves in a position of substantial responsibility;

  
 WHEREAS, the Company and the Bank wish to assure the
services of Executive for the period provided in this Agreement; and 
  
 WHEREAS, Executive is willing to serve in the employ of the Bank on a full-time basis for said period. 
  
 NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows: 
  
 1. Employment.
Executive is employed as the President and Chief Executive Officer of the Company and the Bank. Executive shall perform all duties and shall have all powers which are commonly incident to the offices of President and Chief Executive Officer or
which, consistent with those offices, are delegated to him by the Board of Directors of the Bank or the Company. During the term of this Agreement, Executive also agrees to serve, if elected, as an officer and/or director of any subsidiary of the
Company and the Bank and in such capacity will carry out such duties and responsibilities reasonably appropriate to that office. 
  
 2. Location and Facilities. Executive will be furnished with the working facilities and staff customary for executive officers with the
title and duties set forth in Section 1 and as are necessary for him to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Company and the Bank, or at such other site or sites
customary for such offices. 
  
 3. Term. 

 

	 	a.	The term of this Agreement shall be (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and ending on the third
anniversary of the Effective Date, plus (ii) any and all extensions of the initial term made pursuant to this Section 3. 

  

	 	b.	Commencing on the first year anniversary date of this Agreement, and continuing on each anniversary thereafter, the disinterested members of the boards of directors of the Bank and
the Company may extend the Agreement an additional year such that the remaining term of the Agreement shall be thirty-six (36) months, unless Executive elects not to extend the term of this Agreement by giving written notice in accordance with
Section 19 of this Agreement. The Board of Directors of the Bank (the “Board”) will review the Agreement and Executive’s performance annually for purposes of determining whether to extend the Agreement and the rationale and results
thereof shall be included in the minutes of the Board’s meeting. The Board of Directors of the Bank shall give notice to Executive as soon as possible after such review as to whether the Agreement is to be extended. 

  
 4. Base Compensation. 
  

	 	a.	The Company and the Bank agree to pay Executive during the term of this Agreement a base salary at the rate of $325,000 per year, payable in accordance with customary payroll
practices. 

  

	 	b.	The Board shall review annually the rate of Executive’s base salary based upon factors they deem relevant, and may maintain or increase his salary, provided that no such action
shall reduce the rate of salary below the rate in effect on the Effective Date. 

  

	 	c.	In the absence of action by the Board, Executive shall continue to receive salary at the annual rate specified on the Effective Date or, if another rate has been established under
the provisions of this Section 4, the rate last properly established by action of the Board under the provisions of this Section 4. 

  
 5. Bonuses. Executive shall be entitled to participate in discretionary bonuses or other incentive compensation programs that the Company
and the Bank may award from time to time to senior management employees pursuant to bonus plans or otherwise. 
  
 6. Benefit Plans. Executive shall be entitled to participate in such life insurance, medical, dental, pension, profit sharing, retirement
and stock-based compensation plans and other programs and arrangements as may be approved from time to time by the Company and the Bank for the benefit of their employees. 
  
 7. Vacation and Leave. 
  

	 	a.	Executive shall be entitled to vacations and other leave in accordance with policy for senior executives, or otherwise as approved by the Board. 

  

	 	b.	 In addition to paid vacations and other leave, Executive shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his
employment for such 

  

 2 

	 	 
additional periods of time and for such valid and legitimate reasons as the Board may, in its discretion, determine. Further, the Board may grant to
Executive a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the Board in its discretion may determine. 

  
 8. Expense Payments, Reimbursements and Memberships. 
  

	 	a.	Executive shall be reimbursed for all reasonable out-of-pocket business expenses that he shall incur in connection with his services under this Agreement upon substantiation of such
expenses in accordance with applicable policies of the Company and the Bank. 

  

	 	b.	The Bank shall continue to pay the annual dues for a golf membership for Executive (in his own name) at Hidden Creek Golf Club in Egg Harbor Township, New Jersey (“Golf
Membership”). Executive shall use the membership to further the best interests of the Bank. The Membership Deposit, in the amount of $31,000, has been paid by the Bank and Executive vests in one-eighth of the refundable portion of the
Membership Deposit over a period of eight (8) years ending in 2009. In the event Executive ceases being a member of Hidden Creek Golf Club prior to the end of 2009, the refundable portion of the Membership Deposit shall be apportioned between the
Bank and Executive with Executive’s share calculated at $3,100 per year for each year that has elapsed since 2002. In the event of termination of Executive by the Bank prior to the end of 2009, Executive shall have the option of terminating his
Golf Membership or continuing this Golf Membership. In the event Executive opts to terminate his Golf Membership, the refundable Membership Deposit shall be apportioned between the Bank and Executive with Executive’s share calculated at $3,100
per year for each year that has elapsed since 2002. In the event Executive opts to continue his Golf Membership, Executive shall be entitled to the entire Membership Deposit. Executive shall reimburse the Bank $3,100 per year for each post-2001 year
between the year of termination and 2009. In addition, the Bank shall provide Executive with a health club membership. 

  
 9. Automobile Allowance. During the term of this Agreement, Executive shall be entitled to an automobile allowance on terms no
less favorable that those in effect immediately prior to the execution of this Agreement. Executive shall comply with reasonable reporting and expense limitations on the use of such automobile as may be established by the Company or the Bank from
time to time, and the Company or the Bank shall annually include on Executive’s Form W-2 any amount of income attributable to Executive’s personal use of such automobile. 
  
 10. Loyalty and Confidentiality. 
  

	 	a.	 During the term of this Agreement Executive: (i) shall devote all his time, attention, skill, and efforts to the faithful performance of his duties hereunder;
provided, however, that from time to time, Executive may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations which will not 

  

 3 

	 	 
present any conflict of interest with the Company and the Bank or any of their subsidiaries or affiliates, unfavorably affect the performance of
Executive’s duties pursuant to this Agreement, or violate any applicable statute or regulation and (ii) shall not engage in any business or activity contrary to the business affairs or interests of the Company and the Bank.

  

	 	b.	Nothing contained in this Agreement shall prevent or limit Executive’s right to invest in the capital stock or other securities of any business dissimilar from that of the
Company and the Bank, or, solely as a passive, minority investor, in any business. 

  

	 	c.	Executive agrees to maintain the confidentiality of any and all information concerning the operation or financial status of the Company and the Bank; the names or addresses of any
of its borrowers, depositors and other customers; any information concerning or obtained from such customers; and any other information concerning the Company and the Bank to which he may be exposed during the course of his employment. Executive
further agrees that, unless required by law or specifically permitted by the Board in writing, he will not disclose to any person or entity, either during or subsequent to his employment, any of the above-mentioned information which is not generally
known to the public, nor shall he employ such information in any way other than for the benefit of the Company and the Bank. 

  
 11. Termination and Termination Pay. Subject to Section 12 of this Agreement, Executive’s employment under this Agreement may be
terminated in the following circumstances: 
  

	 	a.	Death. Executive’s employment under this Agreement shall terminate upon his death during the term of this Agreement, in which event Executive’s estate shall be
entitled to receive the compensation due to Executive through the last day of the calendar month in which his death occurred. 

  

	 	b.	Retirement. This Agreement shall be terminated upon Executive’s retirement under the retirement benefit plan or plans in which he participates pursuant to Section 6 of
this Agreement or otherwise. 

  

	 	c.	Disability. 

  

	 	i.	 The Board or Executive may terminate Executive’s employment after having determined Executive has a Disability. For purposes of this Agreement,
“Disability” means a physical or mental infirmity that impairs Executive’s ability to substantially perform his duties under this Agreement and that results in Executive becoming eligible for long-term disability benefits under any
long-term disability plans of the Company and the Bank (or, if there are no such plans in effect, that impairs Executive’s ability to substantially perform his duties under this Agreement for a period of one hundred eighty (180) consecutive
days). The Board shall determine whether or not Executive is and continues to be permanently disabled for purposes of this Agreement in 

  

 4 

	 	 
good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant. As a condition to any benefits, the Board may
require Executive to submit to such physical or mental evaluations and tests as it deems reasonably appropriate. 

  

	 	ii.	In the event of such Disability, Executive’s obligation to perform services under this Agreement will terminate. The Bank will pay Executive, as Disability pay, an amount equal
to one hundred percent (100%) of Executive’s bi-weekly rate of base salary in effect as of the date of his termination of employment due to Disability. Disability payments will be made on a monthly basis and will commence on the first day of
the month following the effective date of Executive’s termination of employment for Disability and end on the earlier of: (A) the date he returns to full-time employment at the Bank in the same capacity as he was employed prior to his
termination for Disability; (B) his death; or (C) upon his attainment of age 65 or (D) the date this Agreement would have expired had Executive’s employment not terminated by reason of disability. Such payments shall be reduced by the amount of
any short- or long-term disability benefits payable to Executive under any other disability programs sponsored by the Company and the Bank. In addition, during any period of Executive’s Disability, Executive and his dependents shall, to the
greatest extent possible, continue to be covered under all benefit plans (including, without limitation, retirement plans and medical, dental and life insurance plans) of the Company and the Bank, in which Executive participated prior to his
Disability on the same terms as if Executive were actively employed by the Company and the Bank. 

  

	 	d.	Termination for Cause. 

  

	 	i.	The Board may, by written notice to Executive in the form and manner specified in this paragraph, immediately terminate his employment at any time, for “Cause.” Executive
shall have no right to receive compensation or other benefits for any period after termination for Cause except for vested benefits. Termination for Cause shall mean termination because of, in the good faith determination of the Board,
Executive’s: 

  

	 	(1)	Personal dishonesty; 

  

	 	(2)	Incompetence; 

  

	 	(3)	Willful misconduct; 

  

	 	(4)	Breach of fiduciary duty involving personal profit; 

  

	 	(5)	Intentional failure to perform stated duties under this Agreement; 

  

 5 

	 	(6)	Willful violation of any law, rule or regulation (other than traffic violations or similar offenses) that reflects adversely on the reputation of the Company and the Bank, any
felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or 

  

	 	(7)	Material breach by Executive of any provision of this Agreement. 

  

	 	ii.	Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause by the Company and the Bank unless there shall have been delivered to Executive a copy
of a resolution duly adopted by the affirmative vote of a majority of the entire membership of the Board at a meeting of such Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive to be heard
before the Board with counsel), of finding that, in the good faith opinion of the Board, Executive was guilty of the conduct described above and specifying the particulars thereof. 

  

	 	e.	Voluntary Termination by Executive. In addition to his other rights to terminate under this Agreement, Executive may voluntarily terminate employment during the term of this
Agreement upon at least sixty (60) days prior written notice to the Board. Following a voluntary termination of employment under this Section 11(e), Executive will be subject to the restrictions set forth in Sections 11(g)(i) and 11(g)(ii) of this
Agreement for a period of four months from his termination date. Executive will be entitled to receive his vested rights and employee benefits up to his date of termination and his base salary through the last day of the four-month period.

  

	 	f.	Without Cause or With Good Reason. 

  

	 	i.	In addition to termination pursuant to Sections 11(a) through 11(e), the Board may, by written notice to Executive, immediately terminate his employment at any time for a reason
other than Cause (a termination “Without Cause”) and Executive may, by written notice to the Board, immediately terminate this Agreement at any time within ninety (90) days following an event constituting “Good Reason,” as
defined below (a termination “With Good Reason”). 

  

	 	ii.	 Subject to Section 12 of this Agreement, in the event of termination under this Section 11(f), Executive shall be entitled to receive his base salary for the
remaining term of the Agreement paid in one lump sum within ten (10) calendar days of such termination. Also, in such event, Executive shall, for the remaining term of the Agreement, receive the benefits he would have received during the remaining
term of the Agreement under any retirement programs (whether tax-qualified or non-qualified) in which Executive participated prior to his termination (with the amount of the benefits determined by reference to the benefits received by Executive or
accrued on his behalf under such programs during the twelve (12) months preceding his termination) and continue to participate in any benefit plans of the Company and the Bank that provide health (including medical and dental), life or 

  

 6 

	 	 
disability insurance, or similar coverage, upon terms no less favorable than the most favorable terms provided to senior executives of the Company and the
Bank during such period. In the event that the Company and the Bank are unable to provide such coverage by reason of Executive no longer being an employee, the Company and the Bank shall provide Executive with comparable coverage on an individual
policy basis. 

  

	 	iii.	“Good Reason” shall exist if, without Executive’s express written consent, the Company and the Bank materially breach any of their respective obligations under this
Agreement. Without limitation, such a material breach shall be deemed to occur upon any of the following: 

  

	 	(1)	A material reduction in Executive’s responsibilities or authority in connection with his employment with the Company or the Bank; 

  

	 	(2)	Assignment to Executive of duties of a non-executive nature or duties for which he is not reasonably equipped by his skills and experience; 

  

	 	(3)	Failure of Executive to be nominated or renominated to the Board; 

  

	 	(4)	A reduction in salary or benefits contrary to the terms of this Agreement, or, following a Change in Control as defined in Section 12 of this Agreement, any reduction in salary or
material reduction in benefits below the amounts to which Executive was entitled prior to the Change in Control; 

  

	 	(5)	Termination of incentive and benefit plans, programs or arrangements, or reduction of Executive’s participation to such an extent as to materially reduce their aggregate value
below their aggregate value as of the Effective Date; 

  

	 	(6)	A requirement that Executive relocate his principal business office or his principal place of residence outside of the area consisting of a twenty-five (25) mile radius from the
current main office and any branch of the Bank, or the assignment to Executive of duties that would reasonably require such a relocation; or 

  

	 	(7)	Liquidation or dissolution of the Company or the Bank. 

  

	 	iv.	 Notwithstanding the foregoing, a reduction or elimination of Executive’s benefits under one or more benefit plans maintained by the Company and the Bank as
part of a good faith, overall reduction or elimination of such plans or plans or benefits thereunder applicable to all participants in a manner that does not discriminate against Executive (except as such discrimination may be necessary to comply
with law) shall not constitute an event of Good Reason 

  

 7 

	 	 
or a material breach of this Agreement, provided that benefits of the type or to the general extent as those offered under such plans prior to such reduction
or elimination are not available to other officers of the Company and the Bank or any company that controls either of them under a plan or plans in or under which Executive is not entitled to participate. 

  

	 	g.	Continuing Covenant Not to Compete or Interfere with Relationships. Regardless of anything herein to the contrary, following a termination by the Company, the Bank or
Executive pursuant to Section 11(f): 

  

	 	i.	Executive’s obligations under Section 10(c) of this Agreement will continue in effect; and 

  

	 	ii.	During the period ending on the first anniversary of such termination, Executive shall not serve as an officer, director or employee of any bank holding company, bank, savings
association, savings and loan holding company, or mortgage company (any of which, a “Financial Institution”) which Financial Institution offers products or services competing with those offered by the Bank from any office within fifty (50)
miles from the main office or any branch of the Bank and shall not interfere with the relationship of the Company and the Bank and any of its employees, agents, or representatives. 

  
 12. Termination in Connection with a Change in Control.

  

	 	a.	For purposes of this Agreement, a “Change in Control” means any of the following events: 

  

	 	i.	Merger: The Company merges into or consolidates with another corporation, or merges another corporation into the Company, and as a result less than a majority of the combined
voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company immediately before the merger or consolidation. 

  

	 	ii.	Acquisition of Significant Share Ownership: The Company files, or is required to file, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required
under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company’s voting
securities, but this clause (b) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting
securities. 

  

 8 

	 	iii.	Change in Board Composition: During any period of two consecutive years, individuals who constitute the Company’s Board of Directors at the beginning of the two-year
period cease for any reason to constitute at least a majority of the Company’s Board of Directors; provided, however, that for purposes of this clause (iii), each director who is first elected by the board (or first nominated by the board for
election by the stockholders) by a vote of at least two-thirds (2/3) of the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period; or

  

	 	iv.	Sale of Assets: The Company sells to a third party all or substantially all of its assets. 

  
 A Change in Control shall not occur as a result of a mutual holding company reorganization or second-step conversion of the
Bank from the mutual to the stock form of ownership. 
  

	 	b.	 Termination. If within the period ending two (2) years after a Change in Control, (i) the Company and the Bank shall terminate Executive’s employment
Without Cause, or (ii) Executive voluntarily terminates his employment With Good Reason, the Company and the Bank shall, within ten calendar days of the termination of Executive’s employment, make a lump-sum cash payment to him equal to 2.99
times Executive’s average Annual Compensation over the five (5) most recently completed calendar years ending with the year immediately preceding the effective date of the Change in Control. In determining Executive’s average Annual
Compensation, Annual Compensation shall include base salary and any other taxable income, including, but not limited to, amounts related to the granting, vesting or exercise of restricted stock or stock option awards, commissions, bonuses (whether
paid or accrued for the applicable period), as well as, retirement benefits, director or committee fees and fringe benefits paid or to be paid to Executive or paid for Executive’s benefit during any such year, profit sharing, employee stock
ownership plan and other retirement contributions or benefits, including to any tax-qualified plan or arrangement (whether or not taxable) made or accrued on behalf of Executive of such year. The cash payment made under this Section 12(b)
shall be made in lieu of any payment also required under Section 11(f) of this Agreement because of a termination in such period. Executive’s rights under Section 11(f) are not otherwise affected by this Section 12. Also, in such event,
Executive shall, for a thirty-six (36) month period following his termination of employment, receive the benefits he would have received over such period under any retirement programs (whether tax-qualified or nonqualified) in which Executive
participated prior to his termination (with the amount of the benefits determined by reference to the benefits received by Executive or accrued on his behalf under such programs during the twelve (12) months preceding the Change in Control) and
continue to participate in any benefit plans of the Company and the Bank that provide health (including medical and dental), life or disability insurance, or similar coverage upon terms no less favorable than the most 

  

 9 

	 	 
favorable terms provided to senior executives during such period. In the event that the Company and the Bank are unable to provide such coverage by reason of
Executive no longer being an employee, the Company and the Bank shall provide Executive with comparable coverage on an individual policy. 

  

	 	c.	The provisions of Section 12 and Sections 14 through 25, including the defined terms used in such sections, shall continue in effect until the later of the expiration of this
Agreement or two years following a Change in Control. 

  
 13. Indemnification and Liability Insurance. 
  

	 	a.	Indemnification. The Company and the Bank agree to indemnify Executive (and his heirs, executors, and administrators), and to advance expenses related thereto, to the fullest
extent permitted under applicable law and regulations against any and all expenses and liabilities reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by reason of his having
been a director or Executive of the Company, the Bank or any of their subsidiaries (whether or not he continues to be a director or Executive at the time of incurring any such expenses or liabilities) such expenses and liabilities to include, but
not be limited to, judgments, court cost, and attorney’s fees and the costs of reasonable settlements, such settlements to be approved by the Board, if such action is brought against Executive in his capacity as an Executive or director of the
Company and the Bank or any of their subsidiaries. Indemnification for expenses shall not extend to matters for which Executive has been terminated for Cause. Nothing contained herein shall be deemed to provide indemnification prohibited by
applicable law or regulation. Notwithstanding anything herein to the contrary, the obligations of this Section 13 shall survive the term of this Agreement by a period of six (6) years. 

  

	 	b.	Insurance. During the period in which indemnification of Executive is required under this Section, the Company and the Bank shall provide Executive (and his heirs, executors,
and administrators) with coverage under a directors’ and officers’ liability policy at the expense of the Company and the Bank, at least equivalent to such coverage provided to directors and senior executives of the Company and the Bank.

  
 14. Reimbursement of Executive’s
Expenses to Enforce this Agreement. The Company and the Bank shall reimburse Executive for all out-of-pocket expenses, including, without limitation, reasonable attorney’s fees, incurred by Executive in connection with successful
enforcement by Executive of the obligations of the Company and the Bank to Executive under this Agreement. Successful enforcement shall mean the grant of an award of money or the requirement that the Company and the Bank take some action specified
by this Agreement: (i) as a result of court order; or (ii) otherwise by the Company and the Bank following an initial failure of the Company and the Bank to pay such money or take such action promptly after written demand therefor from Executive
stating the reason that such money or action was due under this Agreement at or prior to the time of such demand. 
  

 10 

 15. Limitation of Benefits under Certain Circumstances. If the payments and benefits
pursuant to Section 12 of this Agreement, either alone or together with other payments and benefits which Executive has the right to receive from the Company and the Bank, would constitute a a “parachute payment” under Section 280G of the
Code, the payments and benefits pursuant to Section 12 shall be reduced or revised, in the manner determined by Executive, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits under Section 12
being non-deductible to the Company and the Bank pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code. The determination of any reduction in the payments and benefits to be made pursuant to
Section 12 shall be based upon the opinion of the Company and the Bank’s independent public accountants and paid for by the Company and the Bank. In the event that the Company, the Bank and/or Executive do not agree with the opinion of such
counsel, (i) the Company and the Bank shall pay to Executive the maximum amount of payments and benefits pursuant to Section 12, as selected by Executive, which such opinion indicates there is a high probability do not result in any of such payments
and benefits being non-deductible to the Company and the Bank and subject to the imposition of the excise tax imposed under Section 4999 of the Code and (ii) the Company and the Bank may request, and Executive shall have the right to demand that
they request, a ruling from the IRS as to whether the disputed payments and benefits pursuant to Section 12 have such consequences. Any such request for a ruling from the IRS shall be promptly prepared and filed by the Company and the Bank, but in
no event later than thirty (30) days from the date of the opinion of counsel referred to above, and shall be subject to Executive’s approval prior to filing, which shall not be unreasonably withheld. The Company, the Bank and Executive agree to
be bound by any ruling received from the IRS and to make appropriate payments to each other to reflect any such rulings, together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. Nothing contained herein
shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment other than pursuant to Section 12 hereof, or a reduction in the payments and benefits specified in Section 12 below zero.

  
 16. Injunctive Relief. If there is a breach or
threatened breach of Section 11(g) of this Agreement or the prohibitions upon disclosure contained in Section 10(c) of this Agreement, the parties agree that there is no adequate remedy at law for such breach, and that the Company and the Bank shall
be entitled to injunctive relief restraining Executive from such breach or threatened breach, but such relief shall not be the exclusive remedy hereunder for such breach. The parties hereto likewise agree that Executive, without limitation, shall be
entitled to injunctive relief to enforce the obligations of the Company and the Bank under this Agreement. 
  
 17. Successors and Assigns. 
  

	 	a.	This Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Company and the Bank which shall acquire, directly or indirectly, by merger,
consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Company and the Bank. 

  

	 	b.	 Since the Company and the Bank are contracting for the unique and personal skills of Executive, Executive shall be precluded from assigning or delegating his rights
or 

  

 11 

	 	 
duties hereunder without first obtaining the written consent of the Company and the Bank. 

  
 18. No Mitigation. Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment.

  
 19. Notices. All notices, requests, demands and
other communications in connection with this Agreement shall be made in writing and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States Post Office, by registered or certified
mail, postage prepaid, addressed to the Company and/or the Bank at their principal business offices and to Executive at his home address as maintained in the records of the Company and the Bank. 
  
 20. No Plan Created by this Agreement. Executive, the Company
and the Bank expressly declare and agree that this Agreement was negotiated among them and that no provision or provisions of this Agreement are intended to, or shall be deemed to, create any plan for purposes of the Employee Retirement Income
Security Act or any other law or regulation, and each party expressly waives any right to assert the contrary. Any assertion in any judicial or administrative filing, hearing, or process that such a plan was so created by this Agreement shall be
deemed a material breach of this Agreement by the party making such an assertion. 
  
 21. Amendments. No amendments or additions to this Agreement shall be binding unless made in writing and signed by all of the parties, except as herein otherwise specifically provided. 
  
 22. Applicable Law. Except to the extent preempted by Federal
law, the laws of the State of New Jersey shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise. 
  
 23. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 
  
 24. Headings. Headings contained herein are for convenience of reference only. 
  
 25. Entire Agreement. This Agreement, together with any understanding or modifications thereof as agreed to in
writing by the parties, shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, other than written agreements with respect to specific plans, programs or arrangements described in Sections 5 and 6.

  

 12 

 26. Required Provisions. In the event any of the foregoing provisions of this Section 26
are in conflict with the terms of this Agreement, this Section 26 shall prevail. 
  

	 	a.	The Bank may terminate Executive’s employment at any time, but any termination by the Bank, other than Termination for Cause, shall not prejudice Executive’s right to
compensation or other benefits under this Agreement. Executive shall not have the right to receive compensation or other benefits for any period after Termination for Cause as defined in Section 7 hereinabove. 

  

	 	b.	If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1)
of the Federal Deposit Insurance Act, 12 U.S.C. Section 1818(e)(3) or (g)(1); the Bank’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may, in its discretion: (i) pay Executive all or part of the compensation withheld while their contract obligations were suspended; and (ii) reinstate (in whole or in part) any of the obligations which were suspended.

  

	 	c.	If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. Section 1818(e)(4) or (g)(1), all obligations of the Bank under this contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

  

	 	d.	If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1813(x)(1) all obligations of the Bank under this contract shall
terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties. 

  

	 	e.	All obligations of the Bank under this contract shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of
the institution: (i) by the Director of the OTS (or his designee), the FDIC or the Resolution Trust Corporation, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section
13(c) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1823(c); or (ii) by the Director of the OTS (or his designee) at the time the Director (or his designee) approves a supervisory merger to resolve problems related to the operations of the
Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by such action. 

  

	 	f.	Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R. Section 545.121
and any rules and regulations promulgated thereunder. 

  
 27. Source of Payments. Unless otherwise determined by the Board of Directors of the Company, all payments and benefits provided in this Agreement shall be paid or provided solely by the Bank. Notwithstanding anything in this
Agreement to the contrary, no provision of this Agreement shall be construed so as to result in the duplication of any payment or benefit. Unless otherwise determined by the Board of Directors of the Company, the Company’s sole obligation under
this Agreement shall be to unconditionally guarantee the payment and provision of all amounts and benefits due hereunder to Executive and, if such amounts and benefits due from the Bank are not timely paid or provided by the Bank, such amounts and
benefit shall be paid or provided by the Company. 
  

 13 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first set forth
above. 
  

							
	 ATTEST:
	 	 	 	OCEAN SHORE HOLDING CO.
				
	 /s/    Kim M. Davidson
	 	 	 	By:	 	/s/    Roy Gillian
	 Corporate Secretary
	 	 	 	 	 	 For the Entire Board of Directors

			
	 ATTEST:
	 	 	 	OCEAN CITY HOME BANK
				
	 /s/    Kim M. Davidson
	 	 	 	By:	 	/s/    Roy Gillian
	 Corporate Secretary
	 	 	 	 	 	 For the Entire Board of Directors

			
	 WITNESS:
	 	 	 	EXECUTIVE
				
	 /s/    Kim M. Davidson
	 	 	 	By:	 	 /s/    Steven E. Brady

	 Corporate Secretary
	 	 	 	 	 	 Steven E. Brady

  

 14

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